EXHIBIT (10)(d)
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Credit Agreement
Dated as of December 21, 1999
among
K2 Inc.,
Bank of America, N.A.,
as Administrative Agent, Swing Line Lender
and
Letter of Credit Issuing Lender
and
The Other Financial
Institutions Party Hereto
Banc of America Securities LLC,
as Sole Lead Arranger and Sole Book Manager
[BANK OF AMERICA LOGO]
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TABLE OF CONTENTS
SECTION PAGE
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SECTION 1. DEFINITIONS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.01 Certain Defined Terms.. . . . . . . . . . . . . . . . . . . . . . . . .1
1.02 Use of Certain Terms. . . . . . . . . . . . . . . . . . . . . . . . . 23
1.03 Accounting Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . 24
1.04 Rounding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
1.05 Exhibits and Schedules. . . . . . . . . . . . . . . . . . . . . . . . 24
1.06 References to Agreements and Laws.. . . . . . . . . . . . . . . . . . 24
SECTION 2. THE COMMITMENTS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.01 Amounts and Terms of Commitments. . . . . . . . . . . . . . . . . . . 24
2.02 Borrowings, Conversions and Continuations of Loans. . . . . . . . . . 25
2.03 Letters of Credit.. . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.04 The Swing Line. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.05 Prepayments.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.06 Reduction or Termination of Commitments.. . . . . . . . . . . . . . . 31
2.07 Principal and Interest. . . . . . . . . . . . . . . . . . . . . . . . 32
2.08 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.09 Computation of Fees and Interest. . . . . . . . . . . . . . . . . . . 33
2.10 Making Payments.. . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.11 Funding Sources.. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.12 Increase in Commitments.. . . . . . . . . . . . . . . . . . . . . . . 34
2.13 Master Subsidiary Guaranty. . . . . . . . . . . . . . . . . . . . . . 35
SECTION 3. TAXES, YIELD PROTECTION AND ILLEGALITY. . . . . . . . . . . . . . . . . 36
3.01 Taxes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.02 Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.03 Inability to Determine Rates. . . . . . . . . . . . . . . . . . . . . 37
3.04 Increased Cost and Reduced Return; Capital Adequacy.. . . . . . . . . 37
3.05 Breakfunding Costs. . . . . . . . . . . . . . . . . . . . . . . . . . 38
3.06 Matters Applicable to all Requests for Compensation.. . . . . . . . . 38
3.07 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 4. CONDITIONS TO EFFECTIVENESS OF AGREEMENT AND EXTENSIONS OF
CREDIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.01 Conditions of Initial Loans.. . . . . . . . . . . . . . . . . . . . . 39
4.02 Conditions to all Extensions of Credit. . . . . . . . . . . . . . . . 40
SECTION 5. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . 42
5.01 Corporate Existence and Power.. . . . . . . . . . . . . . . . . . . . 42
5.02 Corporate Authorization; No Contravention.. . . . . . . . . . . . . . 42
5.03 Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.04 Subsidiaries; Subsidiary Guarantors.. . . . . . . . . . . . . . . . . 42
5.05 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . 43
5.06 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.07 Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.08 Pending Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.09 Title to Properties.. . . . . . . . . . . . . . . . . . . . . . . . . 44
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5.10 Patents and Trademarks. . . . . . . . . . . . . . . . . . . . . . . . 44
5.11 Governmental Consent. . . . . . . . . . . . . . . . . . . . . . . . . 44
5.12 Taxes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.13 Use of Proceeds.. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.14 ERISA.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.15 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . 45
5.16 Compliance with Environmental Laws. . . . . . . . . . . . . . . . . . 45
5.17 Regulated Entities. . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.18 No Burdensome Restrictions. . . . . . . . . . . . . . . . . . . . . . 46
5.19 Labor Relations.. . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.20 Insurance.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.21 No Restrictions on Subsidiaries.. . . . . . . . . . . . . . . . . . . 46
5.22 Year 2000.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 6. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.01 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . 47
6.02 Notices.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.03 Corporate Existence, Etc. . . . . . . . . . . . . . . . . . . . . . . 49
6.04 Insurance.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.05 Taxes, Claims for Labor and Materials, Compliance with Laws.. . . . . 50
6.06 Maintenance, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.07 Payment of Obligations. . . . . . . . . . . . . . . . . . . . . . . . 51
6.08 Environmental Laws. . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.09 Inspection of Property and Books and Records. . . . . . . . . . . . . 51
6.10 Guaranties by New Domestic Subsidiaries.. . . . . . . . . . . . . . . 51
SECTION 7. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.01 Limitation on Liens.. . . . . . . . . . . . . . . . . . . . . . . . . 51
7.02 Limitations on Indebtedness.. . . . . . . . . . . . . . . . . . . . . 52
7.03 No Restrictions on Subsidiaries.. . . . . . . . . . . . . . . . . . . 53
7.04 Fundamental Changes.. . . . . . . . . . . . . . . . . . . . . . . . . 53
7.05 Dispositions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.06 Acquisitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.07 Operating Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.08 Loans and Investments.. . . . . . . . . . . . . . . . . . . . . . . . 55
7.09 Restricted Payments.. . . . . . . . . . . . . . . . . . . . . . . . . 55
7.10 Termination of Pension Plans. . . . . . . . . . . . . . . . . . . . . 56
7.11 Compliance with ERISA.. . . . . . . . . . . . . . . . . . . . . . . . 56
7.12 Capital Expenditures. . . . . . . . . . . . . . . . . . . . . . . . . 56
7.13 Consolidated Net Worth. . . . . . . . . . . . . . . . . . . . . . . . 56
7.14 Leverage Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.15 Interest Coverage Ratio.. . . . . . . . . . . . . . . . . . . . . . . 57
7.16 Transactions with Affiliates. . . . . . . . . . . . . . . . . . . . . 57
7.17 Nature of Business. . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.18 Accounting Changes. . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.01 Events of Default.. . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.02 Remedies Upon Event of Default. . . . . . . . . . . . . . . . . . . . 60
SECTION 9. ADMINISTRATIVE AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . 61
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9.01 Appointment and Authorization of Administrative Agent.. . . . . . . . 61
9.02 Delegation of Duties. . . . . . . . . . . . . . . . . . . . . . . . . 62
9.03 Liability of Administrative Agent.. . . . . . . . . . . . . . . . . . 62
9.04 Reliance by Administrative Agent. . . . . . . . . . . . . . . . . . . 62
9.05 Notice of Default.. . . . . . . . . . . . . . . . . . . . . . . . . . 63
9.06 Credit Decision; Disclosure of Information by Administrative
Agent.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
9.07 Indemnification of Administrative Agent.. . . . . . . . . . . . . . . 64
9.08 Administrative Agent in Individual Capacity.. . . . . . . . . . . . . 64
9.09 Successor Administrative Agent. . . . . . . . . . . . . . . . . . . . 64
SECTION 10. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
10.01 Amendments; Consents. . . . . . . . . . . . . . . . . . . . . . . . . 65
10.02 Transmission and Effectiveness of Notices and Signatures. . . . . . . 66
10.03 Attorney Costs, Expenses and Taxes. . . . . . . . . . . . . . . . . . 67
10.04 Binding Effect; Assignment. . . . . . . . . . . . . . . . . . . . . . 67
10.05 Set-off.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
10.06 Sharing of Payments.. . . . . . . . . . . . . . . . . . . . . . . . . 69
10.07 No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . . . . . . 70
10.08 Usury.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
10.09 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
10.10 Integration.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
10.11 Nature of Lenders' Obligations. . . . . . . . . . . . . . . . . . . . 71
10.12 Survival of Representations and Warranties. . . . . . . . . . . . . . 71
10.13 Indemnity by Borrower.. . . . . . . . . . . . . . . . . . . . . . . . 71
10.14 Nonliability of Lenders.. . . . . . . . . . . . . . . . . . . . . . . 71
10.15 No Third Parties Benefited. . . . . . . . . . . . . . . . . . . . . . 72
10.16 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.17 Confidentiality.. . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.18 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.19 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.20 Time of the Essence.. . . . . . . . . . . . . . . . . . . . . . . . . 73
10.21 Foreign Lenders and Participants. . . . . . . . . . . . . . . . . . . 73
10.22 Governing Law.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.23 Waiver of Right to Trial by Jury. . . . . . . . . . . . . . . . . . . 75
10.24 ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 75
10.25 Termination of Existing Syndicated Agreement. . . . . . . . . . . . . 75
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EXHIBITS
FORM OF:
A Request for Extension of Credit
B Compliance Certificate
C Note
D Notice of Assignment and Acceptance
E Guaranty
F Intercreditor Agreement
SCHEDULES
2.01 Commitments and Pro Rata Shares
5.04 Subsidiaries as of Closing Date
5.06 Existing Indebtedness
5.08 Certain Litigation
5.12 Tax Assessments
5.14 Certain ERISA Matters
5.16 Environmental Liabilities
7.01 Existing Liens
7.08 Existing Investments
10.02 Offshore and Domestic Lending Offices, Addresses for Notices
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "AGREEMENT") is dated as of December 21, 1999
and is entered into by and among K2 INC., a Delaware corporation ("BORROWER"),
THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (individually
referred to herein as a "LENDER" and collectively as "LENDERS"), and BANK OF
AMERICA, N.A. as Administrative Agent for Lenders ("ADMINISTRATIVE AGENT").
RECITAL
Lenders and Administrative Agent have agreed to make available a
revolving credit facility to Borrower upon the terms and conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:
SECTION 1.
DEFINITIONS.
1.01 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the following
meanings:
"ACQUISITION" means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of 50% of the capital
stock, partnership interests or equity of any Person or otherwise causing any
Person to become a Subsidiary of Borrower, or (c) a merger or consolidation or
any other combination with another Person (other than a Person that is a
Subsidiary of Borrower) provided that Borrower or Borrower's Subsidiary is the
surviving entity; PROVIDED, HOWEVER, that "Acquisition" shall not include any of
the foregoing transactions between Borrower and any Subsidiary that is a
Subsidiary Guarantor prior to such transaction or between companies that are
Subsidiary Guarantors prior to such transaction; PROVIDED, FURTHER, that
"Acquisition" shall not include Investments.
"ADMINISTRATIVE AGENT" means Bank of America, N.A., in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
"ADMINISTRATIVE AGENT'S OFFICE" means Administrative Agent's address and,
as appropriate, account as set forth on SCHEDULE 10.02, or such other address or
account as Administrative Agent hereafter may designate by written notice to
Borrower and Lenders.
"ADMINISTRATIVE AGENT-RELATED PERSONS" means Administrative Agent
(including any successor agent), together with its Affiliates (including, in the
case of Administrative Agent, the Arranger), and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
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"AFFILIATE" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. Without
limitation, any director, executive officer or beneficial owner of 5% or more of
the equity of a Person shall for the purposes of this Agreement, be deemed to
control such Person.
"AGREEMENT" means this Credit Agreement, as it may hereafter be amended,
supplemented, restated or otherwise modified from time to time.
"APPLICABLE MARGIN" means, for any period, from and after the Closing
Date, the amounts set forth in the following pricing grid:
OFFSHORE
RATE LOANS
-----------
FINANCIAL PERFORMANCE
LETTER OF LETTER OF COMMITMENT
LEVEL LEVERAGE RATIO CREDIT FEES CREDIT FEES FEE
----- -------------------------------------- ----------- ----------- ----------
5 greater-than4.00:1 2.000% 1.000% 0.500%
4 less-than4.00:1 but greater-than3.50:1 1.750% 0.875% 0.375%
3 less-than3.50:1 but greater-than3.00:1 1.500% 0.750% 0.325%
2 less-than3.00:1 but greater-than2.50:1 1.250% 0.625% 0.275%
1 less-than2.50:1 1.000% 0.500% 0.225%
The Applicable Margin shall be based upon the Leverage Ratio set forth in
the most recent Compliance Certificate delivered to Administrative Agent, and
shall be effective during the Pricing Period (as defined in the chart below)
applicable to such Compliance Certificate as indicated in the chart below. If
Administrative Agent does not receive a Compliance Certificate by the date
required by SECTION 6.01(F), the Applicable Margin shall, effective as of the
first day of the Pricing Period that would be applicable, be the highest Level
set forth above to but excluding the date Administrative Agent receives such
Compliance Certificate. Thereafter, and for the remaining portion of the
applicable Pricing Period, the Applicable Margin shall be that indicated by the
Leverage Ratio in such late Compliance Certificate. The initial Applicable
Margin shall be based on Level 5 from the Closing Date through and including
December 31, 1999.
FOR COMPLIANCE CERTIFICATE
RECEIVED IN RESPECT OF FISCAL
PERIOD ENDING: THE APPLICABLE PRICING PERIOD IS:
----------------------------- ---------------------------------
March 31 April 1 through next June 30
June 30 July 1 through next September 30
September 30 October 1 through next December 31
December 31 January 1 through next March 31
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"APPLICABLE PAYMENT DATE" means, (a) as to any Offshore Rate Loan, the
last day of the relevant Interest Period and any date that such Loan is prepaid
or converted in whole or in part and the Maturity Date; PROVIDED, HOWEVER, that
if any Interest Period for an Offshore Rate Loan exceeds three months, interest
shall also be paid on the date which falls every three months after the
beginning of such Interest Period, and (b) as to any other Obligations, the last
Business Day of each calendar quarter and the Maturity Date; PROVIDED, FURTHER,
that interest accruing at the Default Rate shall be payable from time to time at
any time upon demand of Administrative Agent.
"ARRANGER" means Banc of America Securities LLC, in its capacity as sole
arranger and sole book manager.
"ATTORNEY COSTS" means and includes all reasonable fees and disbursements
of any law firm or other external counsel and the allocated cost of internal
legal services and all disbursements of internal counsel.
"BANK OF AMERICA" means Bank of America, N.A.
"BASE RATE" means a fluctuating rate per annum equal to the higher of (a)
the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for
such day as publicly announced from time to time by Bank of America as its
"prime rate." Such rate is a rate set by Bank of America based upon various
factors including Bank of America'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. Any change
in such rate announced by Bank of America shall take effect at the opening of
business on the day specified in the public announcement of such change.
"BASKET TOTAL DEBT" means Total Debt excluding Indebtedness permitted
under SECTION 7.02(A), (B), (C) and (D).
"BASE RATE LOAN" means a Loan which bears interest based on the Base
Rate.
"BORROWER" means K2 Inc.
"BORROWER PARTY" means Borrower, each Subsidiary Guarantor or any Person
other than Lenders and any Affiliates of Lenders, Administrative Agent, or
Issuing Lender from time to time party to a Loan Document.
"BORROWING" and "BORROW" each mean a borrowing hereunder consisting of
Loans of the same type made on the same day and, in the case of Offshore Rate
Loans, having the same Interest Periods.
"BORROWING DATE" means the date that a Loan is made, which shall be a
Business Day.
"BUSINESS DAY" means any day other than a Saturday, Sunday, or other
day on which commercial banks are authorized to close under the Laws of, or
are in fact closed in, the state where Administrative Agent's Office is
located and, if such day relates to any Offshore Rate
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Loan, means any such day on which dealings in Dollar deposits are conducted
by and between banks in the offshore Dollar interbank market.
"CAPITAL EXPENDITURES" means any expenditure that is considered a capital
expenditure under GAAP, including any amount which is required to be treated as
an asset subject to a Capital Lease.
"CAPITALIZED LEASES" means all leases which contain Capitalized Lease
Obligations.
"CAPITALIZED LEASE OBLIGATION" means any rental obligation which, under
generally accepted accounting principles, is or will be required to be
capitalized on the books of Borrower or any Subsidiary, taken at the amount
thereof accounted for as indebtedness (net of interest expense) in accordance
with such principles.
"CERCLA" has the meaning specified in the definition of "Environmental
Laws."
"CHANGE IN CONTROL" means each and every issue, sale or other disposition
of shares of stock of the Borrower which results in any person (as such term is
used in Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended) or related person constituting a group (as such term is used in Section
13d-5 of the Securities Exchange Act of 1934, as amended) (herein, an "ACQUIRING
PERSON") becoming the "beneficial owners" (as such term is used in Section 13d-3
of the Securities Exchange Act of 1934 as in effect on the Closing Date),
directly or indirectly, of more than 50% or more of the outstanding Voting Stock
of Borrower.
"CLOSING DATE" means the date on which this Agreement becomes effective
and all the conditions in SECTION 4.01 are satisfied or waived.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
"COMMERCIAL LETTER OF CREDIT" means a commercial Letter of Credit issued
for the purpose of providing a payment mechanism in connection with the conduct
of Borrower's or any of its Subsidiary's ordinary course of business.
"COMMITMENT" means, for each Lender, the obligation of such Lender to
make Extensions of Credit in an aggregate principal amount not exceeding the
amount set forth opposite such Lender's name on SCHEDULE 2.01 at any one time
outstanding, as such amount may be reduced or adjusted from time to time in
accordance with this Agreement (collectively, the "COMBINED COMMITMENTS").
"COMPLIANCE CERTIFICATE" means a certificate in the form of EXHIBIT B,
properly completed and signed by a Responsible Officer of Borrower.
"CONSOLIDATED EBITDA" means, for the period of the four fiscal quarters
ending on any date of determination (the "measurement period"), for Borrower and
its Subsidiaries on a consolidated basis, an amount equal to (i) the sum of
(a) Consolidated Net Income for such measurement period, (b) Consolidated
Interest Expense for such measurement period, (c) the amount of taxes, based on
or measured by income, used or included in the determination of such
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Consolidated Net Income for such measurement period, (d) the amount of
depreciation and amortization expense deducted in determining such
Consolidated Net Income for such measurement period and (e) non-cash
nonrecurring charges and expenses included in the determination of
Consolidated Net Income for such measurement period to the extent relating to
items originally purchased in periods prior to the measurement period;
PROVIDED, HOWEVER, that charges and expenses related to inventory excluded
from the determination of Consolidated EBITDA by this clause (e) shall not
exceed $5,000,000 in any measurement period, LESS (ii) non-cash nonrecurring
gains included in the determination of Consolidated Net Income for such
measurement period to the extent relating to items originally purchased in
periods prior to the measurement period; PROVIDED, FURTHER, that, with
respect to the Acquisition of a Subsidiary within such measurement period
which would have added at least $3,000,000 to Consolidated EBITDA had it been
included in the calculation thereof for such measurement period, Borrower may
also include items (i) and (ii) above for such Subsidiary for such
measurement period in Consolidated EBITDA if Borrower has provided to
Administrative Agent (who shall promptly deliver the same to all Lenders) (x)
the most recent year-end audited financial statements for that Subsidiary
(which audited statements must be as of a date occurring within five fiscal
quarters prior to the date of such Acquisition (even if such date is prior to
the measurement period and, therefore, such audited statements are not
actually used in computing Consolidated EBITDA for such measurement period))
and (y) company-prepared financial statements for that Subsidiary for any
portion of such measurement period to be included; PROVIDED, FURTHER, that
the items in the foregoing proviso may only be included if the items set
forth in the proviso to Consolidated Interest Expense relating to such
Subsidiary are also included when determining any covenant hereunder.
"CONSOLIDATED INTEREST EXPENSE" means, for the period of the four
fiscal quarters ending on any date of determination (the "measurement
period"), the sum, without duplication, of (a) total interest expense
(including that portion attributable to Capitalized Leases in conformity with
GAAP) of Borrower and its Subsidiaries for such measurement period on a
consolidated basis and (b) fees, commissions and interest related to
Permitted Accounts Receivable Financing Facilities for such measurement
period; PROVIDED, HOWEVER, that, with respect to the Acquisition of a
Subsidiary within such measurement period which would have added at least
$3,000,000 to Consolidated EBITDA had it been included in the calculation
thereof for such measurement period, Borrower may also include items (a) and
(b) above for such Subsidiary for such measurement period in Consolidated
Interest Expense if Borrower has provided to Administrative Agent (who shall
promptly deliver the same to all Lenders) (i) the most recent year-end
audited financial statements for that Subsidiary (which audited statements
must be as of a date occurring within five fiscal quarters prior to the date
of such Acquisition (even if such date is prior to the measurement period
and, therefore, such audited statements are not actually used in computing
Consolidated Interest Expense for such measurement period)) and (ii)
company-prepared financial statements for that Subsidiary for any portion of
such measurement period to be included.
"CONSOLIDATED NET INCOME" means, for any period, the net income of
Borrower and its Subsidiaries on a consolidated basis for such period,
determined in accordance with GAAP, but excluding in any event:
-5-
(a) any extraordinary gains or losses as defined in APBO Nos. 11, 16
and 30 and FASB Statement No. 4;
(b) net earnings and losses of any Subsidiary accrued prior to the
date it became a Subsidiary;
(c) net earnings and losses of any corporation (other than a
Subsidiary), substantially all the assets of which have been acquired in any
manner by Borrower or any Subsidiary, accrued by such corporation prior to the
date of such Acquisition;
(d) net earnings and losses of any corporation (other than a
Subsidiary) with which Borrower or a Subsidiary shall have consolidated or which
shall have merged into or with Borrower or a Subsidiary, accrued by such
corporation prior to the date of such consolidation or merger;
(e) net earnings of any business entity (other than a Subsidiary) in
which Borrower or any Subsidiary has an ownership interest unless such net
earnings shall have actually been received or are receivable by Borrower or such
Subsidiary in the form of cash distributions;
(f) any portion of the net earnings of any Subsidiary which for any
reason is unavailable for payment of dividends to Borrower or any other
Subsidiary except to the extent applied to the repayment of Indebtedness of such
Subsidiary to Borrower or any other Subsidiary;
(g) earnings or amortization resulting from any reappraisal,
revaluation or write-up of assets (other than pursuant to any purchase
accounting adjustments made to the book value of assets of an acquired Person in
connection with an Acquisition);
(h) to the extent not otherwise excluded pursuant to clause (a) above,
any aggregate net gain (or any aggregate net loss) during such period arising
from the sale, conversion, exchange or other disposition of capital assets (such
term to include, without limitation (i) all noncurrent assets and, without
duplication, (ii) the following, whether or not current: all fixed assets,
whether tangible or intangible, all inventory sold in the conjunction with the
disposition of fixed assets, and all securities);
(i) any deferred or other credit or amortization thereof representing
any excess of the equity in any Subsidiary at the date of Acquisition thereof
over the amount invested in such Subsidiary; and
(j) any gain arising from the acquisition of any securities of
Borrower or any Subsidiary.
"CONSOLIDATED NET WORTH" means, as of the date of any determination
thereof, the total consolidated assets of Borrower and its Subsidiaries on a
consolidated basis less the total liabilities of Borrower and its Subsidiaries
on a consolidated basis determined in accordance with GAAP.
-6-
"CONSOLIDATED TANGIBLE NET WORTH" means at any date Consolidated Net
Worth LESS the Intangible Assets of Borrower and its Subsidiaries on a
consolidated basis, all determined as of such date. For purposes of this
definition, "Intangible Assets" means the amount (to the extent reflected in
determining such Consolidated Net Worth) of all unamortized debt discount and
expense, unamortized deferred charges (other than deferred employee benefit
liabilities), goodwill, patents, trademarks, service marks, trade names,
copyrights, organization or development expenses and other intangible items.
"CONSOLIDATED TOTAL ASSETS" mean, as of the date of any determination
thereof, the total assets of Borrower and its Subsidiaries on a consolidated
basis determined in accordance with GAAP.
"CONTINUATION" and "CONTINUE" mean, with respect to any Offshore Rate
Loan, the continuation of such Offshore Rate Loan as an Offshore Rate Loan on
the last day of the Interest Period for such Loan.
"CONTRACTUAL OBLIGATION," as applied to any Person, means any provision
of any security issued by that Person or of any material indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"CONTROLLED GROUP" means Borrower and all Persons (whether or not
incorporated) under common control or treated as a single employer with Borrower
or any of its Subsidiaries pursuant to Section 414(b) or (c) of the Code.
"CONVERSION" and "CONVERT" mean, with respect to any Loan, the conversion
of such Loan from or into another type of Loan.
"COVERED DISPOSITION" is any Disposition, the proceeds of which are used
to make Investments otherwise permitted hereunder within 180 days from the date
of such Disposition.
"DEBTOR RELIEF LAWS" means the Bankruptcy Code of the United States of
America, and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States of America or
other applicable jurisdictions from time to time in effect affecting the rights
of creditors generally.
"DEFAULT" means any event which, with the giving of notice, the lapse of
time, or both, would constitute an Event of Default.
"DEFAULT RATE" means an interest rate equal to the Base Rate PLUS the
Applicable Margin, if any, applicable to Base Rate Loans PLUS 2% per annum, to
the fullest extent permitted by applicable Laws; PROVIDED, HOWEVER, that with
respect to an Offshore Rate Loan, the Default Rate shall be an interest rate
equal to the interest rate (including any Applicable Margin) otherwise
applicable to such Loan plus 2% per annum.
-7-
"DESIGNATED DEPOSIT ACCOUNT" means a deposit account to be maintained by
Borrower with Bank of America, as from time to time designated by Borrower by
written notification to Administrative Agent.
"DISPOSITION" or "DISPOSE" means the sale, transfer, license or other
disposition (including any sale and leaseback transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal with or
without recourse of any notes or accounts receivable or any rights and claims
associated therewith.
"DOLLARS" means lawful money of the United States of America.
"DOMESTIC LENDING OFFICE" means, with respect to each Lender, the office
of that Lender designated as such on SCHEDULE 10.02 hereto or such other office
of Lender as it may from time to time specify in writing to Borrower and
Administrative Agent.
"DOMESTIC SUBSIDIARIES" means those Subsidiaries of Borrower which are
incorporated under the laws of any State of the United States and which are
engaged in business primarily in the United States, other than Subsidiaries
which are Subsidiaries of a Foreign Subsidiary.
"ELIGIBLE ASSIGNEE" means (a) a financial institution organized under the
laws of the United States, or any state thereof, and having a combined capital
and surplus of at least $100,000,000; (b) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of any such country, and
having a combined capital and surplus of at least $100,000,000, provided that
such bank is acting through a branch or agency located in the United States; (c)
a Person that is primarily engaged in the business of commercial banking and
that is (i) a Subsidiary of a Lender, (ii) a Subsidiary of a Person of which a
Lender is a Subsidiary, or (iii) a Person of which a Lender is a Subsidiary; (d)
another Lender; (e) any other entity which is an "accredited investor" (as
defined in Regulation D under the Securities Exchange Act of 1934, as amended)
which extends credit or buys loans as one of its businesses, including but not
limited to, insurance companies, mutual funds and lease financing companies; or
(f) other lenders or institutional investors consented to in writing in advance
by Administrative Agent and Borrower. No Borrower Party or any Affiliate of a
Borrower Party shall be an Eligible Assignee.
"ENVIRONMENTAL CLAIM" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law or for release or injury
to the environment or otherwise alleging liability or responsibility for damages
(punitive or otherwise), cleanup, removal, remedial or response costs,
restitution, civil or criminal penalties, injunctive relief, or other type of
relief, resulting from or based upon (a) the presence, placement, discharge,
emission or release (including intentional and unintentional, negligent and
non-negligent, sudden or non-sudden, accidental or non-accidental placement,
spills, leaks, discharges, emissions or releases) of any Hazardous Material at,
in or from property, whether or not owned by Borrower or any of its
Subsidiaries, or (b) any other circumstances forming the basis of any violation,
or alleged violation, of any Environmental Laws.
-8-
"ENVIRONMENTAL LAWS" means 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, matters; including the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA"), the Clean Air Act,
the Federal Water Pollution Control Act of 1972, the Solid Waste Disposal Act,
the Federal Resource Conservation and Recovery Act, the Toxic Substances Control
Act, the Emergency Planning and Community Right-to-Know Act.
"ERISA" means the Employee Retirement Income Security Act of 1974 and any
regulation promulgated thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with Borrower within the meaning of Sections
414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes
of provisions relating to Section 412 of the Code).
"ERISA EVENT" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations which is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by Borrower or any ERISA Affiliate
from a Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment
of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or
the commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which might reasonably be expected
to constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
or (f) the imposition of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon Borrower or
any ERISA Affiliate.
"EVENT OF DEFAULT" means any of the events set forth in SECTION 8.01.
"EXCHANGE ACT" means, at any time, the Securities Exchange Act of 1934,
as amended from time to time, and any successor statute.
"EXISTING SYNDICATED AGREEMENT" means that certain Credit Agreement dated
as of May 21, 1996, as amended, among Borrower, the lenders party thereto, and
Bank of America as agent for such lenders.
"EXTENSION OF CREDIT" means (a) a Borrowing, Conversion or Continuation
of Loans, (b) a Letter of Credit Action wherein a new Letter of Credit is issued
or which has the effect of increasing the amount of, extending the maturity of,
or making a material modification to an outstanding Letter of Credit or the
reimbursement of drawings thereunder, (c) each Lender's purchase of a risk
participation in a new Letter of Credit, or (d) each Lender's purchase of a risk
participation in a Swing Line Loan made by Swing Line Lender (collectively, the
"EXTENSIONS OF CREDIT").
-9-
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards to the nearest 1/100 of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank on the Business Day next succeeding such day;
PROVIDED that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if
no such rate is so published on such next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate charged to Bank of
America on such day on such transactions as determined by Administrative
Agent.
"FINANCIAL LETTER OF CREDIT" means any standby letter of credit covering
the potential default of a financial contractual obligation, and includes
without limitation all letters of credit required to be classified as such by
the Federal Reserve Board or by the Office of the Comptroller of the Currency.
"FINANCIAL LETTER OF CREDIT SUBLIMIT" means an amount equal to the lesser
of the combined Commitments and $10,000,000.
"FOREIGN SUBSIDIARIES" means those Subsidiaries of Borrower which are not
Domestic Subsidiaries.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession, that are applicable to the circumstances as of the date of
determination, consistently applied. If at any time any change in GAAP would
affect the computation of any financial ratio or requirement set forth in any
Loan Document, and either Borrower or the Requisite Lenders shall so request,
Administrative Agent, Lenders and Borrower shall negotiate in good faith to
amend such ratio or requirement to preserve the original intent thereof in
light of reflect such change in GAAP (subject to the approval of the
Requisite Lenders), provided that, until so amended, (a) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to
such change therein and (b) Borrower shall provide to Administrative Agent,
and Lenders financial statements and other documents required under this
Agreement or as reasonably requested hereunder setting forth a reconciliation
between calculations of such ratio or requirement made before and after
giving effect to such change in GAAP.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, any central Lender (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"GUARANTY OBLIGATION" means, as to any Person, any (a) guaranty by that
Person of Indebtedness of, or other obligation payable or performable by, any
other Person or (b) assurance, agreement, letter of responsibility, letter of
awareness, undertaking or arrangement given by that Person to an obligee of any
other Person with respect to the payment or
-10-
performance of an obligation by, or the financial condition of, such other
Person, whether direct, indirect or contingent, including any purchase or
repurchase agreement covering such obligation or any collateral security
therefor, any agreement to provide funds (by means of loans, capital
contributions or otherwise) to such other Person, any agreement to support
the solvency or level of any balance sheet item of such other Person or any
"keep-well" or other arrangement of whatever nature given for the purpose of
assuring or holding harmless such obligee against loss with respect to any
obligation of such other Person; PROVIDED, HOWEVER, that the term Guaranty
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Guaranty
Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the related primary obligation, or portion thereof,
covered by such Guaranty Obligation or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by
the Person in good faith.
"HAZARDOUS MATERIALS" means all those substances which are regulated by,
or which may form the basis of liability under, any Environmental Laws,
including all substances identified under any Environmental Laws as a pollutant,
contaminant, hazardous waste, hazardous constituent, special waste, hazardous
substance, hazardous material, or toxic substance, or petroleum or petroleum
derived substance or waste.
"INDEBTEDNESS" means as to any Person at a particular time, all items
which would, in conformity with GAAP, be classified as liabilities on a balance
sheet of such Person as at such time (excluding trade and other accounts payable
in the ordinary course of business in accordance with customary trade terms and
which are not overdue for a period of more than 60 days and excluding deferred
taxes), but in any event including, without duplication:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;
(b) any direct or contingent obligations of such Person arising under
letters of credit (including standby and commercial), banker's acceptances, bank
guaranties, surety bonds and similar instruments;
(c) net obligations under any Swap Contract in an amount equal to
(i) if such Swap Contract has been closed out, the termination value thereof,
or (ii) if such Swap Contract has not been closed out, the mark-to-market
value thereof determined on the basis of readily available quotations
provided by any recognized dealer in such Swap Contract;
(d) 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 (excluding prepaid interest thereon) 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;
(e) lease payment obligations under Capitalized Leases or Synthetic
Lease Obligations; and
-11-
(f) all Guaranty Obligations of such Person in respect of any of the
foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall
include the Indebtedness of any partnership or joint venture in which such
Person is a general partner or a joint venturer, unless such Indebtedness is
expressly made non-recourse to such Person except for customary exceptions
acceptable to the Requisite Lenders.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement
substantially in the form of EXHIBIT F hereto, as amended, supplemented or
otherwise modified from time to time.
"INTEREST COVERAGE RATIO" means, as of any date of determination, the
ratio of (a) Consolidated EBITDA for the period of the four prior fiscal
quarters ending on such date TO (b) Consolidated Interest Expense during such
period.
"INTEREST PERIOD" means, for each Offshore Rate Loan as requested by
Borrower, (a) initially, the period commencing on the date such Offshore Rate
Loan is disbursed, Continued as, or Converted into, an Offshore Rate Loan and
(b) thereafter, the period commencing on the last day of the preceding Interest
Period, and ending, in each case, on the earlier of (x) the scheduled Maturity
Date, or (y) one, two, three or six months thereafter; PROVIDED that:
(i) any Interest Period that would otherwise end on a day that
is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day;
(ii) any Interest Period which begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period; and
(iii) unless Administrative Agent otherwise consents, there
may not be more than 10 Interest Periods in effect at any time.
"INVESTMENTS" means all investments, in cash or by delivery of property
made, directly or indirectly in any Person, whether by acquisition of shares of
capital stock, indebtedness or other obligations or securities or by loan,
advance, capital contribution or otherwise; PROVIDED, HOWEVER, that
"Investments" shall not include Acquisitions. In valuing any Investments for
purposes of this Agreement, such Investments shall be taken at the original cost
thereof, without allowance for any subsequent write-offs or appreciation or
depreciation therein, but less any amount repaid or recovered on account of
capital or principal.
"IRS" means the Internal Revenue Service.
"ISSUING LENDER" means Bank of America, or any successor issuing lender
hereunder.
"K2 FUNDING" means K2 Funding, Inc., a Delaware corporation, which is a
Subsidiary.
-12-
"LAWS" or "LAW" means, collectively, all international, foreign, federal,
state and local statutes, treaties, rules, guidelines, regulations, ordinances,
codes and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, in each case
whether or not having the force of law.
"LENDER" means each lender from time to time party hereto and, as the
context requires, Swing Line Lender and Issuing Lender.
"LENDING OFFICE" means, as to any Lender, the office or offices of such
Lender described as such on SCHEDULE 10.02, or such other office or offices as a
Lender may from time to time notify Administrative Agent.
"LETTER OF CREDIT" means any letter of credit issued or outstanding
hereunder. A Letter of Credit may be a Commercial Letter of Credit, a
Performance Letter of Credit or a Financial Letter of Credit.
"LETTER OF CREDIT ACTION" means the issuance, supplement, amendment,
renewal, extension, modification or other action relating to a Letter of Credit.
"LETTER OF CREDIT APPLICATION" means an application for a Letter of
Credit Action as shall at any time be in use by Issuing Lender.
"LETTER OF CREDIT CASH COLLATERAL ACCOUNT" means a blocked deposit
account at Bank of America with respect to which Borrower hereby grants a
security interest in such account to Administrative Agent for and on behalf of
Lenders as security for Letter of Credit Usage and with respect to which
Borrower agrees to execute and deliver from time to time such documentation as
Administrative Agent may reasonably request to further assure and confirm such
security interest.
"LETTER OF CREDIT EXPIRATION DATE" means the date which is 30 days
prior to the Maturity Date.
"LETTER OF CREDIT USAGE" means, as at any date of determination, the
aggregate undrawn face amount of outstanding Letters of Credit PLUS the
aggregate amount of all drawings under the Letters of Credit honored by Issuing
Lender and not reimbursed to Issuing Lender by Borrower or converted into Loans.
"LEVERAGE RATIO" means, as of any date of determination, for Borrower and
its Subsidiaries on a consolidated basis, the ratio of (a) Total Debt as of such
date TO (b) Consolidated EBITDA for the period of the four fiscal quarters
ending on that date.
"LIEN" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement (in the nature of compensating balances, cash collateral accounts
or security interests), encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement
of any kind or nature whatsoever (including any conditional sale or other
title retention agreement, any financing lease having substantially the same
economic effect as any of
-13-
the foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable Laws of any jurisdiction), including the
interest of a purchaser of accounts receivable.
"LOAN" means any advance made by any Lender to Borrower as provided in
SECTION 2 (collectively, the "LOANS").
"LOAN DOCUMENTS" means this Agreement, the Master Subsidiary Guaranty,
the Intercreditor Agreement, any Letter of Credit Application, any Request
for Extension of Credit and any Note, certificate, any fee letter, and other
instrument, document or agreement from time to time delivered in connection
with this Agreement.
"MASTER SUBSIDIARY GUARANTY" means the continuing guaranty of the
Obligations to be executed and delivered by the Subsidiary Guarantors,
substantially in the form of EXHIBIT E, and any amendments or supplements
thereto.
"MATERIAL ADVERSE EFFECT" means (a) a material adverse effect upon the
business, operations, properties, assets, business prospects or condition
(financial or otherwise) of Borrower and its Subsidiaries, taken as a whole, or
(b) a material impairment of the ability of any Borrower Party to perform the
Obligations in any material respect or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability of any Loan Document.
"MATURITY DATE" means September 30, 2004, as it may be earlier terminated
or extended in accordance with the terms hereof.
"MINIMUM AMOUNT" means, with respect to each of the following actions,
the minimum amount and any multiples in excess thereof set forth opposite such
action:
MULTIPLES IN EXCESS
TYPE OF ACTION MINIMUM AMOUNT THEREOF
--------------------- -------------- --------------------
Borrowing or prepayment of or
Conversion into, Base Rate Loans $500,000 none
Borrowing, prepayment, Continuation
of, or Conversion into, Offshore Rate
Loans $1,500,000 $500,000
Borrowing or prepayment of Swing Line
Loans $500,000 $500,000
Letter of Credit Action $100,000 None
Reduction in Commitments $10,000,000 $5,000,000
Assignments $5,000,000
-14-
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is maintained for employees of Borrower or any ERISA
Affiliate of Borrower.
"NEGATIVE PLEDGE" means a Contractual Obligation that restricts Liens on
property.
"NET ISSUANCE PROCEEDS" means, in respect of any issuance of equity, the
cash proceeds and non-cash proceeds received or receivable in connection
therewith, net of reasonable costs and expenses and underwriting discounts and
commissions paid or incurred in connection therewith in favor of any Person not
an Affiliate of Borrower.
"NOTE" means a promissory note made by Borrower in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of EXHIBIT C
(collectively, the "NOTES").
"NOTICE OF ASSIGNMENT AND ACCEPTANCE" means a Notice of Assignment and
Acceptance substantially in the form of EXHIBIT D.
"NOTICE OF LIEN" means any "notice of lien" or similar document
intended to be filed or recorded with any court, registry, recorder's office,
central filing office or Governmental Authority for the purpose of
evidencing, creating, perfecting or preserving the priority of a Lien
securing obligations owing to a Governmental Authority.
"OBLIGATIONS" means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Borrower Party arising under any Loan Document,
whether direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest that accrues after the commencement of any proceeding under
any Debtor Relief Laws by or against any Borrower Party or any Subsidiary or
Affiliate of any Borrower Party.
"OFFSHORE BASE RATE" has the meaning set forth in the definition of
Offshore Rate.
"OFFSHORE RATE" means for any Interest Period with respect to any
Offshore Rate Loan, a rate per annum determined by Administrative Agent pursuant
to the following formula:
OFFSHORE BASE RATE
Offshore Rate = ------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"OFFSHORE BASE RATE" means, for such Interest Period:
(a) the rate per annum (carried out to the fifth decimal place) equal
to the rate determined by Administrative Agent to be the offered rate that
appears on the page of the Telerate Screen that displays an average British
Bankers Association Interest Settlement Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, or
-15-
(b) in the event the rate referenced in the preceding subsection
(a) does not appear on such page or service or such page or service shall
cease to be available, the rate per annum (carried out to the fifth decimal
place) equal to the rate determined by Administrative Agent to be the offered
rate on such other page or other service that displays an average British
Bankers Association Interest Settlement Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, or
(c) in the event the rates referenced in the preceding subsections (a)
and (b) are not available, the rate per annum determined by Administrative Agent
as the rate of interest at which deposits in Dollars (for delivery on the first
day of such Interest Period) in same day funds in the approximate amount of the
applicable Offshore Rate Loan and with a term equivalent to such Interest Period
would be offered by its London Branch to major banks in the offshore market at
their request at approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period.
"EURODOLLAR RESERVE PERCENTAGE" means, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, rounded upward to the
next 1/100th of 1%) in effect on such day, whether or not applicable to any
Lender, under regulations issued from time to time by the Board of Governors of
the Federal Reserve System for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"). The Offshore Rate for each outstanding Offshore Rate Loan shall
be adjusted automatically as of the effective date of any change in the
Eurodollar Reserve Percentage.
"OFFSHORE RATE LOAN" means a Loan bearing interest based on the Offshore
Rate.
"OPERATING LEASE" means, as applied to any Person, any lease of property
(whether real, personal or mixed) which is not a lease that would, in conformity
with GAAP, be required to be accounted for as a capital lease on the balance
sheet of that Person and excluding, in the case of Borrower or any of its
Subsidiaries, any such lease under which Borrower or that Subsidiary is the
lessor.
"ORDINARY COURSE DISPOSITIONS" means:
(a) Dispositions of obsolete or worn out property, whether now owned
or hereafter acquired, in the ordinary course of business;
(b) Dispositions of cash, cash equivalents, inventory and other
property in the ordinary course of business;
(c) Dispositions of property to the extent that such property is
exchanged for credit against the purchase price of similar replacement property,
or the proceeds of such sale are reasonably promptly applied to the purchase
price of such replacement property or where Borrower or its Subsidiary determine
in good faith that the failure to replace such equipment will not be detrimental
to the business of Borrower or such Subsidiary; and
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(d) Dispositions of assets or property by any Subsidiary of Borrower
to Borrower or another wholly-owned Subsidiary of Borrower;
PROVIDED, HOWEVER, that no such Disposition shall be for less than the fair
market value of the property being disposed of.
"ORDINARY COURSE INDEBTEDNESS" means:
(a) intercompany Guaranty Obligations of Borrower or any of its
Subsidiaries guarantying Indebtedness otherwise permitted hereunder of Borrower
or any wholly-owned Subsidiary of Borrower;
(b) Indebtedness arising from the honoring of a check, draft or
similar instrument against insufficient funds;
(c) Indebtedness of a Subsidiary to Borrower or to a wholly-owned
Subsidiary;
(d) Indebtedness of Borrower to a Subsidiary Guarantor; and
(e) in connection with Letters of credit issued in the ordinary
course of business.
"ORDINARY COURSE INVESTMENTS" means Investments of Borrower and its
Subsidiaries, consisting of:
(a) Investments in and to Subsidiaries and Borrower and in any Person
that is a Subsidiary after giving effect to such Investment;
(b) Investments in commercial paper maturing in 270 days or less from
the date of issuance which, at the time of acquisition by Borrower or its
Subsidiaries, is accorded the highest rating by Standard & Poor's Ratings
Services, a division of The McGraw-Hill Companies, Inc. ("S&P"), Moody's
Investors Service, Inc. ("MOODY'S") or other nationally recognized credit rating
agency of similar standing;
(c) Investments in direct obligations of the United States of America
or any agency or instrumentality of the United States of America, the payment or
guarantee of which constitutes a full faith and credit obligation of the United
States of America, in either case, maturing in 12 months or less from the date
of acquisition thereof;
(d) Investments in certificates of deposit maturing within one year
from the date of issuance thereof, issued by a bank or trust company organized
under the laws of the United States or any state thereof, having capital,
surplus and undivided profits aggregating at least $100,000,000 and whose
long-term certificates of deposit are, at the time of acquisition thereof by
Borrower or its Subsidiaries, rated A or better by S&P or A or better by
Moody's;
(e) receivables, including negotiable instruments and letters of
credit in respect of which Borrower or its Subsidiaries is the beneficiary,
arising from the sale of goods and services in the ordinary course of business
of Borrower and its Subsidiaries;
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(f) Investments in repurchase agreements or bankers acceptances,
having terms of less than 30 days, with a United States bank or trust company
meeting the requirements of paragraph (d) hereof, which Investments mature
within one year and which are fully secured by obligations of the type described
in paragraphs (c) and (d) hereof; and
(g) Investments in offshore certificates of deposit maturing within
one year from the date of issuance thereof, issued by a bank or trust company
having capital, surplus and undivided profits aggregating at least
$1,000,000,000 and whose long term offshore certificates of deposit are at the
time of acquisition thereof by Borrower or its Subsidiaries, accorded a rating
of A or better by S&P or Moody's.
"ORDINARY COURSE LIENS" means:
(a) Liens for property taxes and assessments or governmental charges
or levies and Liens securing claims or demands of carriers, warehousemen,
landlords, mechanics and materialmen, provided payment thereof is not at the
time required by SECTION 6.05;
(b) Liens of or resulting from any judgment or award the time for
the appeal or petition for rehearing of which shall not have expired, or in
respect of which Borrower or its Subsidiaries shall at any time in good faith
be prosecuting an appeal or proceeding for a review and in respect of which a
stay of execution pending such appeal or proceeding for review shall have
been secured;
(c) Liens and Negative Pledges incidental to the conduct of business
or the ownership of assets (including Liens and Negative Pledges in connection
with worker's compensation, unemployment insurance and other like laws,
warehouseman's and attorneys' liens and statutory landlords' liens) and Liens
and Negative Pledges to secure the performance of bids, tenders or trade
contracts or to secure statutory obligations, surety or appeal bonds or other
Liens and Negative Pledges of like general nature incurred in the ordinary
course of business and not in connection with the borrowing of money; provided
in each case, the obligation secured is not overdue or, if overdue, is being
contested in good faith by appropriate actions or proceedings;
(d) survey exceptions or encumbrances, easements or reservations, or
rights of others for rights-of-way, utilities and other similar purposes, or
zoning or other restrictions as to the use of real properties, which are
necessary for the conduct of the activities of Borrower and its Subsidiaries or
which customarily exist on properties of corporations engaged in similar
activities and similarly situated and which do not in any event materially
impair their use in the operation of the business of Borrower and its
Subsidiaries; and
(e) Liens securing Indebtedness of a Subsidiary to Borrower or to
another Subsidiary.
"ORGANIZATION DOCUMENTS" means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws; (b) with respect to any
limited liability company, the articles of formation and operating agreement;
and (c) with respect to any partnership, joint venture or other form of business
entity, the partnership agreement and any agreement, filing or notice with
respect thereto filed with the secretary of state of the state of its formation,
in each case as amended from time to time.
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"OUTSTANDING OBLIGATIONS" means, as of any date, and giving effect to
making any Extensions of Credit requested on such date and all payments,
repayments and prepayments made on such date, (a) when reference is made to all
Lenders, the sum of (i) the aggregate outstanding principal amount of all Loans,
and (ii) all Letter of Credit Usage, and (b) when reference is made to one
Lender the sum of (i) the aggregate outstanding principal amount of all Loans
(excluding, in the case of Swing Line Lender, Swing Line Loans) made by such
Lender, (ii) such Lender's ratable participation in all Letter of Credit Usage,
and (iii) such Lender's ratable participation in all outstanding Swing Line
Loans.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PENSION PLAN" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that
is subject to Title IV of ERISA and is sponsored or maintained by Borrower or
any ERISA Affiliates or to which Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer
plan (as described in Section 4064(a) of ERISA) has made contributions at any
time during the immediately preceding five plan years.
"PERFORMANCE LETTER OF CREDIT" means a standby Letter of Credit used
directly or indirectly to cover bid, performance, advance and retention
obligations, including, without limitation, Letters of Credit issued in favor of
sureties who in connection therewith cover bid, performance and retention
obligations.
"PERMITTED ACCOUNTS RECEIVABLE FINANCING FACILITIES" means (a) a single
facility not exceeding $75,000,000 in the aggregate involving the sale or
discount of undivided ownership interests not exceeding $75,000,000 in domestic
accounts receivable, and (b) a single facility not exceeding $20,000,000 in the
aggregate involving the sale or discount of undivided ownership interests not
exceeding $20,000,000 in foreign accounts receivable of Borrower and its
Subsidiaries; PROVIDED, HOWEVER, that, in each case (x) such facility does not
involve the creation of a Lien or Negative Pledge on any accounts receivable
except to the extent of the undivided ownership interests in such accounts
receivable so purportedly sold or discounted.
"PERSON" means any individual, partnership, corporation (including a
business trust), limited liability company, limited liability partnership, joint
stock company, joint venture, trust, Lender, trust company, unincorporated
association or other entity or a government or any agency or political
subdivision thereof.
"PLAN" means any employee benefit plan maintained or contributed to by a
Borrower Party or by any trade or business (whether or not incorporated) under
common control with a Borrower Party as defined in Section 4001(b) of ERISA and
insured by the Pension Benefit Guaranty Corporation under Title IV of ERISA.
"PRO RATA SHARE" means, with respect to each Lender, the percentage of
the combined Commitments set forth opposite the name of that Lender on
SCHEDULE 2.01, as such share may be adjusted pursuant to SECTION 2.12.
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"REPORTABLE EVENT" means any of the events set forth in Section 4043(b)
of ERISA or the regulations thereunder, a withdrawal from a Plan described in
Section 4063 of ERISA, or a cessation of operations described in Section 4062(e)
of ERISA.
"REQUEST FOR EXTENSION OF CREDIT" means, unless otherwise specified
herein, (a) with respect to a Borrowing, Conversion or Continuance of Loans, a
written request substantially in the form of EXHIBIT A, (b) with respect to a
Letter of Credit Action, a Letter of Credit Application, and (c) with respect to
a Swing Line Loan, any written or verbal notice acceptable to Swing Line Lender,
in each case delivered by Requisite Notice.
"REQUISITE LENDERS" means (a) as of any date of determination if the
Commitments are then in effect, Lenders(excluding any Lenders not funding when
required to so hereunder) having in the aggregate more than 50% of the combined
Commitments then in effect and (b) as of any date of determination if the
Commitments have then been terminated and there are Loans and/or Letter of
Credit Usage outstanding, Lenders holding Loans and Letter of Credit Usage
aggregating more than 50% of the aggregate outstanding principal amount of the
Loans and Letter of Credit Usage.
"REQUISITE NOTICE" means, unless otherwise provided herein, (a)
irrevocable written notice to the intended recipient or (b) except with respect
to Letter of Credit Actions (which must be in writing), irrevocable telephonic
notice to the intended recipient, promptly followed by a written notice to such
recipient. Such notices shall be (i) delivered to such recipient at the address
or telephone number specified on SCHEDULE 10.02 or as otherwise designated by
such recipient by Requisite Notice to each other party hereto, and (ii) if made
by any Borrower Party, duly given or made by a Responsible Officer of such
Borrower Party. Any written notice delivered in connection with any Loan
Document shall be in the form, if any, prescribed in the applicable section
hereof or thereof and may be delivered as provided in SECTION 10.02. Any notice
sent by other than hardcopy shall be promptly confirmed by a telephone call to
the recipient and, if requested by Administrative Agent, by a manually-signed
hardcopy thereof.
"REQUISITE TIME" means, with respect to any of the actions listed below,
the time and date set forth below opposite such action (all times are local time
(standard or daylight) as observed in the state where Administrative Agent's
Office is located):
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TYPE OF ACTION TIME DATE OF ACTION
--------------------------------- ------- ---------------------
Delivery of Request for Extension
of Credit for, or notice for
- - Borrowing or prepayment of 8:30 a.m. Same date as such Borrowing,
or Conversion into, Base prepayment or Conversion
Rate Loans
- - Borrowing, prepayment or 10:00 a.m. 3 Business Days prior to
Continuation of, or such Borrowing, prepayment
Conversion into, Offshore or Conversion
Rate Loans
- - Borrowing or prepayment of 1:00 p.m. Same date as such Borrowing
Swing Line Loans or prepayment
- - Letter of Credit Action 10:00 a.m. 2 Business Days prior to
such action (OR SUCH LESSER
TIME WHICH IS ACCEPTABLE TO
ISSUING LENDER)
- - Voluntary reduction in or 10:00 a.m. 3 Business Days prior to
termination of Commitments such reduction or
termination
Payments by Lenders or Borrower to 11:00 a.m. On date payment is due
Administrative Agent
"RESPONSIBLE OFFICER" means the President, any Senior Vice President, the
Chief Financial Officer or the Treasurer of Borrower who in the normal
performance of his or her duties would have knowledge of this Agreement and the
provisions thereof.
"RESTRICTED PAYMENTS" means:
(a) the declaration or payment of any dividend by Borrower, either in
cash or property, on any shares of the capital stock of any class of Borrower
(except dividends or other distributions payable solely in shares of capital
stock of Borrower);
(b) the purchase, redemption or retirement by Borrower of any shares
of the capital stock of any class of Borrower or any warrants, rights or options
to purchase or acquire any shares of its capital stock, whether directly or
indirectly, or through any Subsidiary; and
(c) any other payment or distribution by Borrower in respect of its
capital stock, either directly or indirectly or through any Subsidiary.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, and any successor statute.
"SENIOR NOTE AGREEMENTS" means (a) that certain Note Agreement dated as
of October 15, 1992 among Borrower and the purchasers named in schedule 1
thereto, and (b) that certain Note Purchase Agreement dated as of December 1,
1999 among Borrower and the purchasers named in schedule A thereto, in each case
as amended, supplemented or otherwise modified from time to time.
-21-
"SIMPLEX PRODUCTS DISPOSITION" means any sale or transfer of assets of
the Simplex Products Division of Borrower or refinancing or recapitalization of
the assets or operations of the Simplex Products Division, whether in the form
of a sale of stock, borrowing, issuance of debt or equity securities or
otherwise, as result of which (a) Borrower ceases to own directly substantially
all of the assets of the Simplex Products Division, (b) Borrower ceases to be
liable directly or indirectly for any Indebtedness or trade payables of the
Simplex Products Division (other than pursuant to any indemnification provision
for the benefit of the transferee of the assets of the Simplex Products Division
or any affiliate of such transferee contained in the agreements memorializing
such transaction), and (c) Borrower receives in such transaction, by way of sale
proceeds, refinancing proceeds, dividend proceeds, proceeds of the issuance of
securities or otherwise, at least $20,000,000 in cash.
"SUBSIDIARY" means any corporation, association or other business entity
of which more than 50% of the total voting power of shares of stock entitled to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by any Person or one or more of the
other Subsidiaries of that Person or a combination thereof.
"SUBSIDIARY GUARANTORS" means each Person from time to time executing and
delivering the Master Subsidiary Guaranty.
"SWAP CONTRACT" means (a) any and all rate swap transactions, basis
swaps, forward rate transactions, commodity swaps, commodity options, forward
commodity contracts, equity or equity index swaps or options, bond or bond price
or bond index swaps or options or forward bond or forward bond price or forward
bond index transactions, interest rate options, forward foreign exchange
transactions, cap transactions, floor transactions, collar transactions,
currency swap transactions, cross-currency rate swap transactions, currency
options, or any other similar transactions or any combination of any of the
foregoing (including any options to enter into any of the foregoing), whether or
not any such transaction is governed by or subject to any master agreement, or
(b) any and all transactions of any kind, and the related confirmations, which
are subject to the terms and conditions of, or governed by, any form of master
agreement published by the International Swaps and Derivatives Association,
Inc., or any other master agreement (any such master agreement, together with
any related schedules, as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, a "MASTER AGREEMENT"), including any such
obligations or liabilities under any Master Agreement.
"SWAP TERMINATION VALUE" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a) the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include any Lender).
"SWING LINE" means the revolving line of credit established by Swing Line
Lender in favor of Borrower pursuant to SECTION 2.04.
-22-
"SWING LINE LENDER" means Bank of America, or any successor Swing Line
Lender hereunder.
"SWING LINE LOAN" means a loan which bears interest at a rate per
annum equal to interest payable on a Base Rate Loan (plus the Applicable
Margin, if any) and made by Swing Line Lender to Borrower under the Swing
Line.
"SWING LINE SUBLIMIT" means an amount equal to the lesser of (a)
$7,500,000 and (b) the combined Commitments.
"SYNTHETIC LEASE OBLIGATIONS" means all monetary obligations of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations
which do not appear on the balance sheet of such Person but which, upon the
insolvency or bankruptcy of such Person, would be characterized as the
Indebtedness of such Person (without regard to accounting treatment).
"TOTAL DEBT" of any Person means all (a) Indebtedness of such Person for
borrowed money, (b) drawn, but unreimbursed letters of credit; (c) all
Capitalized Lease Obligations of such Person, (d) Indebtedness in respect of
Permitted Accounts Receivable Financing Facilities, and, without duplication,
(e) all Guaranty Obligations of such Person with respect to the foregoing.
"TYPE" of Loan means (a) a Base Rate Loan, (b) an Offshore Rate Loan and
(c) a Swing Line Loan.
"UNFUNDED PENSION LIABILITY" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.
"VOTING STOCK" means securities of any class or classes, the holders of
which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions).
1.02 USE OF CERTAIN TERMS.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto or thereto, unless otherwise defined therein.
(b) As used herein, unless the context requires otherwise, the
masculine, feminine and neuter genders and the singular and plural include one
another.
(c) The words "HEREIN" and "HEREUNDER" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement. The term "INCLUDING" is by way of
example and not limitation. References herein to a Section, subsection or
clause shall refer to the appropriate Section, subsection or clause in this
Agreement.
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(d) The term "or" is disjunctive; the term "and" is conjunctive. The
term "shall" is mandatory; the term "may" is permissive. Masculine terms also
apply to females; feminine terms also apply to males.
1.03 ACCOUNTING TERMS. All accounting terms not specifically or
completely defined in this Agreement shall be construed in conformity with, and
all financial data required to be submitted by this Agreement shall be prepared
in conformity with, GAAP applied on a consistent basis, as in effect from time
to time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, EXCEPT as otherwise specifically prescribed herein.
1.04 ROUNDING. Any financial ratios required to be maintained by
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed in this
Agreement and rounding the result up or down to the nearest number (with a
round-up if there is no nearest number) to the number of places by which such
ratio is expressed in this Agreement.
1.05 EXHIBITS AND SCHEDULES. All exhibits and schedules to this
Agreement, either as originally existing or as the same may from time to time be
supplemented, modified or amended, are incorporated herein by this reference. A
matter disclosed on any Schedule shall be deemed disclosed on all Schedules.
1.06 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly
provided herein, (a) references to agreements (including the Loan Documents) and
other contractual instruments shall include all amendments and other
modifications thereto (unless prohibited by any Loan Document), and (b)
references to any statute or regulation shall include all statutory and
regulatory provisions consolidating, amending, replacing, supplementing or
interpreting the statute or regulation.
SECTION 2.
THE COMMITMENTS.
2.01 AMOUNTS AND TERMS OF COMMITMENTS.
(a) Subject to the terms and conditions set forth in this Agreement,
each Lender severally agrees to make, Convert and Continue Loans in Dollars
until the Maturity Date as Borrower may from time to time request; PROVIDED,
HOWEVER, that the Outstanding Obligations of each Lender shall not exceed such
Lender's Commitment, and the aggregate principal amount of all outstanding Loans
shall not at any time exceed the combined Commitments. Within the foregoing
limits, and subject to the other terms and conditions hereof, Borrower may
borrow, Convert, Continue, prepay and reborrow Loans as set forth herein without
premium or penalty.
(b) Loans made by each Lender shall be evidenced by one or more loan
accounts or records maintained by such Lender in the ordinary course of
business. Upon the request of any Lender made through Administrative Agent,
such Lender's Loans may be evidenced by one or more Notes, instead of or in
addition to loan accounts. Each such Lender may attach schedules
-24-
to its Note(s) and endorse thereon the date, amount and maturity of its Loans
and payments with respect thereto. Such loan accounts, records or Notes
shall be conclusive absent manifest error of the amount of such Loans and
payments thereon. Any failure so to record or any error in doing so shall
not, however, limit or otherwise affect the obligation of Borrower to pay any
amount owing with respect to the Loans.
2.02 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF LOANS.
(a) Borrower may irrevocably request a Borrowing, Conversion or
Continuation of Loans in a Minimum Amount therefor by delivering a Request for
Extension of Credit therefor by Requisite Notice to Administrative Agent not
later than the Requisite Time therefor. All Borrowings, Conversions and
Continuations shall constitute Base Rate Loans unless properly and timely
otherwise designated as set forth in the prior sentence.
(b) Following receipt of a Request for Extension of Credit,
Administrative Agent shall promptly notify each Lender of its Pro Rata Share
thereof by Requisite Notice. In the case of a Borrowing of Loans, each Lender
shall make available the funds for its Loan to Administrative Agent at
Administrative Agent's Office not later than the Requisite Time therefor on the
Business Day specified in such Request for Extension of Credit. Upon
satisfaction of the applicable conditions set forth in SECTION 4.02, all funds
so received shall be made available to Borrower in like funds received.
(c) Administrative Agent shall promptly notify Borrower and Lenders of
the interest rate applicable to any Loan other than a Base Rate Loan upon
determination of same.
(d) Except as otherwise provided herein, an Offshore Rate Loan may be
Continued or Converted only on the last day of the Interest Period for such
Offshore Rate Loan. No Loans may be requested as, Converted into or Continued
as Offshore Rate Loans during the existence of a Default or Event of Default.
During the existence of a Default or Event of Default, the Requisite Lender may
demand that any or all of the then outstanding Offshore Rate Loans be Converted
immediately into Base Rate Loans. Such Conversion shall be effective upon
notice to Borrower and shall continue so long as such Default or Event of
Default continues to exist.
(e) If a Loan is to be made on the same date that another Loan is due
and payable, Borrower or Lenders, as the case may be, shall, unless
Administrative Agent otherwise requests, make available to Administrative Agent
the net amount of funds giving effect to both such Loans and the effect for
purposes of this Agreement shall be the same as if separate transfers of funds
had been made with respect to each such Loan.
(f) The failure of any Lender to make any Loan on any date shall not
relieve any other Lender of any obligation to make a Loan on such date, but no
Lender shall be responsible for the failure of any other Lender to so make its
Loan.
2.03 LETTERS OF CREDIT.
(a) THE LETTER OF CREDIT SUBLIMIT. Subject to the terms and
conditions hereof, at any time and from time to time from the Closing Date
through the Letter of Credit Expiration
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Date, Issuing Lender shall take such Letter of Credit Actions under the
Commitments as Borrower may request; PROVIDED, HOWEVER, that (i) the
Outstanding Obligations of each Lender shall not exceed such Lender's
Commitment and the Outstanding Obligations of all Lenders shall not exceed
the combined Commitments at any time, and (ii) the aggregate outstanding
Letter of Credit Usage with respect to Financial Letters of Credit shall not
exceed the Financial Letter of Credit Sublimit at any time. Subject to
subsection (f) below, no Letter of Credit may expire more than 12 months
after the date of its issuance or last renewal; PROVIDED, HOWEVER, that no
Letter of Credit shall expire after the Letter of Credit Expiration Date. If
any Letter of Credit Usage remains outstanding after the Letter of Credit
Expiration Date, Borrower shall, not later than the Letter of Credit
Expiration Date, deposit cash in an amount equal to such Letter of Credit
Usage in a Letter of Credit Cash Collateral Account.
(b) REQUESTING LETTER OF CREDIT ACTIONS. Borrower may irrevocably
request a Letter of Credit Action in a Minimum Amount therefor by delivering a
Letter of Credit Application therefor to Issuing Lender, with a copy to
Administrative Agent (who shall notify Lenders), by Requisite Notice not later
than the Requisite Time therefor. Each Letter of Credit Action shall be in a
form acceptable to Issuing Lender in its sole discretion. Unless Administrative
Agent notifies Issuing Lender that such Letter of Credit Action is not permitted
hereunder, or Issuing Lender notifies Administrative Agent that it has
determined that such Letter of Credit Action is contrary to any Laws or policies
of Issuing Lender, Issuing Lender shall, upon satisfaction of the applicable
conditions set forth in SECTION 4.02 with respect to any Letter of Credit Action
constituting an Extension of Credit, effect such Letter of Credit Action. This
Agreement shall control in the event of any conflict with any Letter of Credit
Application. Upon the issuance of a Letter of Credit, each Lender shall be
deemed to have purchased from Issuing Lender a risk participation therein in an
amount equal to that Lender's Pro Rata Share TIMES the amount of such Letter of
Credit Usage.
(c) REIMBURSEMENT OF PAYMENTS UNDER LETTERS OF CREDIT. Borrower shall
reimburse Issuing Lender through Administrative Agent for any payment that
Issuing Lender makes under a Letter of Credit on or before the date of such
payment; PROVIDED, HOWEVER, that if the conditions precedent set forth in
SECTION 4 can be satisfied, Borrower may request a Borrowing of Loans to
reimburse Issuing Lender for such payment on or before the date thereof by
complying with SECTION 2.02, or Borrower may allow a deemed Borrowing of Loans
which are Base Rate Loans to take place on such payment date pursuant to
subsection (e) below.
(d) FUNDING BY LENDERS WHEN ISSUING LENDER NOT REIMBURSED. Upon any
drawing under a Letter of Credit, Issuing Lender shall notify Administrative
Agent and Borrower. If Borrower fails to timely make the payment required
pursuant to subsection (c) above, Issuing Lender shall notify Administrative
Agent of such fact and the amount of such unreimbursed payment. Administrative
Agent shall promptly notify each Lender of its Pro Rata Share of such amount by
Requisite Notice. Each Lender shall make funds in an amount equal its Pro Rata
Share of such unreimbursed payment available to Administrative Agent at
Administrative Agent's Office not later than the Requisite Time on the Business
Day specified by Administrative Agent, and Administrative Agent shall remit the
funds so received to reimburse Issuing Lender. The obligation of each Lender to
so reimburse Issuing Lender shall be absolute and unconditional and shall not be
affected by the occurrence of an Event of Default or
-26-
any other occurrence or event. Any such reimbursement shall not relieve or
otherwise impair the obligation of Borrower to reimburse Issuing Lender for
the amount of any payment made by Issuing Lender under any Letter of Credit,
together with interest as provided herein.
(e) NATURE OF LENDERS' FUNDING. If the conditions precedent set
forth in SECTION 4.02 can be satisfied (except for the giving of a Request
for Extension of Credit) on any date Borrower is obligated to, but fails to,
reimburse Issuing Lender for a drawing under a Letter of Credit, the funding
by Lenders pursuant to the previous subsection shall be deemed to be a
Borrowing of Base Rate Loans (without regard to the Minimum Amount therefor)
deemed requested by Borrower. If the conditions precedent set forth in
SECTION 4.02 cannot be satisfied on the date Borrower is obligated to, but
fails to, reimburse Issuing Lender for a drawing under a Letter of Credit,
the funding by Lenders pursuant to the previous subsection shall be deemed to
be a funding by each Lender of its risk participation in such Letter of
Credit, and each Lender making such funding shall thereupon acquire a pro
rata participation, to the extent of its reimbursement, in the claim of
Issuing Lender against Borrower in respect of such payment and shall share,
in accordance with that pro rata participation, in any payment made by
Borrower with respect to such claim. Any amounts made available by a Lender
under its risk participation shall be payable by Borrower upon demand of
Administrative Agent, and shall bear interest at a rate per annum equal to
the Default Rate.
(f) SPECIAL PROVISIONS RELATING TO EVERGREEN LETTERS OF CREDIT.
Borrower may request Letters of Credit that have automatic extension or renewal
provisions ("evergreen" Letters of Credit) so long as Issuing Lender consents in
its sole and absolute discretion thereto and has the right to not permit any
such extension or renewal at least annually within a notice period to be agreed
upon at the time each such Letter of Credit is issued. Once an evergreen Letter
of Credit is issued, unless Administrative Agent has notified Issuing Lender
that Requisite Lenders have elected not to permit such extension or renewal, the
Borrower Parties, Administrative Agent and Lenders shall be deemed to have
authorized (but may not require) Issuing Lender to, in its sole and absolute
discretion, permit the renewal of such evergreen Letter of Credit at any time to
a date not later than the Letter of Credit Expiration Date, and, unless directed
by Issuing Lender, Borrower shall not be required to request such extension or
renewal. Issuing Lender may, in its sole and absolute discretion elect not to
permit an evergreen Letter of Credit to be extended or renewed at any time.
(G) OBLIGATIONS ABSOLUTE. The obligation of Borrower to pay to
Issuing Lender the amount of any payment made by Issuing Lender under any Letter
of Credit shall be absolute, unconditional, and irrevocable. Without limiting
the foregoing or limiting Borrower's rights to pursue such rights and remedies
as it may have against Issuing Lender, Administrative Agent or any Lender or
beneficiaries of a Letter of Credit, Borrower's obligation shall not be affected
by any of the following circumstances:
(i) any lack of validity or enforceability of the Letter of
Credit, this Agreement, or any other agreement or instrument relating
thereto;
(ii) any amendment or waiver of or any consent to departure from
the Letter of Credit, this Agreement, or any other agreement or
instrument relating thereto;
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(iii) the existence of any claim, setoff, defense, or other
rights which Borrower may have at any time against Issuing Lender,
Administrative Agent or any Lender, any beneficiary of the Letter of
Credit (or any persons or entities for whom any such beneficiary may be
acting) or any other Person, whether in connection with the Letter of
Credit, this Agreement, or any other agreement or instrument relating
thereto, or any unrelated transactions;
(iv) any demand, statement, or any other document presented
under the 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 whatsoever so long as any such document
appeared to comply with the terms of the Letter of Credit;
(v) payment by Issuing Lender in good faith under the Letter of
Credit against presentation of a draft or any accompanying document which
does not strictly comply with the terms of the Letter of Credit; or any
payment made by Issuing Lender under any Letter of Credit to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession, assignee
for the benefit of creditors, liquidator, receiver or other
representative of or successor to any beneficiary or any transferee of
any Letter of Credit, including any arising in connection with any
proceeding under any Debtor Relief Laws;
(vi) the existence, character, quality, quantity, condition,
packing, value or delivery of any property purported to be represented by
documents presented in connection with any Letter of Credit or for any
difference between any such property and the character, quality,
quantity, condition, or value of such property as described in such
documents;
(vii) the time, place, manner, order or contents of shipments or
deliveries of property as described in documents presented in connection
with any Letter of Credit or the existence, nature and extent of any
insurance relative thereto;
(viii) the solvency or financial responsibility of any party
issuing any documents in connection with a Letter of Credit;
(ix) any failure or delay in notice of shipments or arrival of
any property;
(x) any error in the transmission of any message relating to a
Letter of Credit not caused by Issuing Lender, or any delay or
interruption in any such message;
(xi) any error, neglect or default of any correspondent of
Issuing Lender in connection with a Letter of Credit;
(xii) any consequence arising from acts of God, wars,
insurrections, civil unrest, disturbances, labor disputes, emergency
conditions or other causes beyond the control of Issuing Lender;
(xiii) so long as Issuing Lender in good faith determines that the
document appears to comply with the terms of the Letter of Credit, the
form, accuracy, genuineness
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or legal effect of any contract or document referred to in any document
submitted to Issuing Lender in connection with a Letter of Credit; and
(xiv) where Issuing Lender has acted in good faith under any
other circumstances whatsoever.
In addition, Borrower will promptly examine a copy of each Letter of
Credit and amendments thereto delivered to it and, in the event of any claim of
noncompliance with Borrower's instructions or other irregularity, Borrower will
immediately notify Issuing Lender in writing. Borrower shall be conclusively
deemed to have waived any such claim against Issuing Lender and its
correspondents unless such notice is given as aforesaid.
(h) ROLE OF ISSUING LENDER. Each Lender and Borrower Parties agree
that, in paying any drawing under a Letter of Credit, Issuing Lender shall not
have any responsibility to obtain any document (other than any sight draft,
certificates and documents expressly required by the Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document. No
Administrative Agent-Related Person nor any of the respective correspondents,
participants or assignees of Issuing Lender shall be liable to any Lender for
any action taken or omitted in connection herewith at the request or with the
approval of Lenders or the Requisite Lenders, as applicable; any action taken or
omitted in the absence of gross negligence or willful misconduct; or the due
execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit. Borrower hereby assumes all risks
of the acts or omissions of any beneficiary or transferee with respect to its
use of any Letter of Credit; PROVIDED, HOWEVER, that this assumption is not
intended to, and shall not, preclude Borrower's pursuing such rights and
remedies as it may have against the beneficiary or transferee at law or under
any other agreement. No Administrative Agent-Related Person, nor any of the
respective correspondents, participants or assignees of Issuing Lender, shall be
liable or responsible for any of the matters described in subsection (g) above.
In furtherance and not in limitation of the foregoing, Issuing Lender may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary,
and Issuing Lender shall not be responsible for the validity or sufficiency of
any instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.
(i) APPLICABILITY OF ISP98 AND UCP. Unless otherwise expressly agreed
by the Issuing Lender and Borrower when a Letter of Credit is issued,
performance under Letters of Credit by the Issuing Lender, its correspondents,
and beneficiaries will be governed by (i) with respect to standby Letters of
Credit, the rules of the "International Standby Practices 1998" (ISP98) or such
later revision as may be published by the International Chamber of Commerce (the
"ICC"), and (ii) with respect to commercial Letters of Credit, the rules of the
Uniform Customs and Practice for Documentary Credits, as published in its most
recent version by the ICC on the date any commercial Letter of Credit is issued.
(j) LETTER OF CREDIT FEES. On each Applicable Payment Date,
Borrower shall pay to Administrative Agent in arrears, for the account of
each Lender in accordance with its Pro Rata Share, a Letter of Credit fee
equal to the indicated Applicable Margin for the type of Letters of
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Credit in each case such fee to be MULTIPLIED BY the actual daily maximum
amount available to be drawn under each such Letter of Credit since the later
of the Closing Date and the previous Applicable Payment Date. If there is
any change in the Applicable Margin during any quarter, the actual daily
amount shall be computed and multiplied by the Applicable Margin separately
for each period during such quarter that such Applicable Margin was in
effect. In addition, Borrower shall pay directly to Issuing Lender for its
account a fronting fee in an amount (i) with respect to Performance Letters
of Credit and Financial Letters of Credit, equal to 1/8 of 1% per annum on
the daily average face amount thereof, payable quarterly in arrears on each
Applicable Payment Date, and (ii) with respect to Commercial Letters of
Credit, equal to the greater of (A) $400 and (B) 1/8 of 1% of the face amount
thereof, payable upon the issuance thereof.
(k) DOCUMENTARY AND PROCESSING CHARGES PAYABLE TO ISSUING LENDER.
Borrower shall pay directly to Issuing Lender for its sole account its customary
documentary and processing charges in accordance with its standard schedule, as
from time to time in effect, for any Letter of Credit Action or other occurrence
relating to a Letter of Credit for which such charges are customarily made.
Such fees and charges are nonrefundable.
2.04 THE SWING LINE.
(a) Subject to the terms and conditions set forth in this Agreement,
Swing Line Lender agrees to make Swing Line Loans to Borrower until the Maturity
Date in such amounts as Borrower may from time to time request; PROVIDED,
HOWEVER, that (i) the aggregate principal amount of all Swing Line Loans shall
not exceed the Swing Line Sublimit, and (ii) the Outstanding Obligations of each
Lender shall not exceed such Lender's Commitment and the Outstanding Obligations
of all Lenders shall not exceed the combined Commitments at any time. This is a
revolving credit and, subject to the foregoing and the other terms and
conditions hereof, Borrower may borrow, prepay and reborrow Swing Line Loans as
set forth herein without premium or penalty; PROVIDED, HOWEVER, that Swing Line
Lender may terminate or suspend the Swing Line at any time in its sole
discretion upon at least 24 hours Requisite Notice to Borrower. Each Swing Line
Loan shall be a Base Rate Loan.
(b) Unless notified to the contrary by Swing Line Lender, Borrower may
irrevocably request a Swing Line Loan in the Minimum Amount therefor upon
Requisite Notice to Swing Line Lender not later than the Requisite Time
therefor. Each such request for a Swing Line Loan shall constitute a
representation and warranty by Borrower that the conditions set forth in
SECTIONS 4.02(A) and (B) are satisfied. Promptly after receipt of such request,
Swing Line Lender shall obtain telephonic verification from Administrative Agent
that such Swing Line Loan is permitted hereunder. Upon receiving such
verification, Swing Line Lender shall make such Swing Line Loan available to
Borrower. Without the consent of Requisite Lenders and Swing Line Lender, no
Swing Line Loan shall be made during the continuation of a Default or Event of
Default. Upon the making of each Swing Line Loan, each Lender shall be deemed
to have purchased from Swing Line Lender a risk participation therein in an
amount equal to that Lender's Pro Rata Share TIMES the amount of the Swing Line
Loan.
(c) Each Swing Line Loan shall bear interest at a fluctuating rate per
annum equal to the rate of interest payable on Base Rate Loans (plus the
Applicable Margin, if any) upon demand of Swing Line Lender and on the Maturity
Date. Swing Line Lender shall be
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responsible for invoicing Borrower (or notifying Administrative Agent to so
invoice Borrower) for such interest. The interest payable on Swing Line
Loans is solely for the account of Swing Line Lender.
(d) Borrower shall repay each Swing Line Loan not later than the
Requisite Time for payments hereunder on the earliest of (i) the fifth Business
Day after it is made, (ii) upon demand made by Swing Line Lender and (iii) the
Maturity Date. If the conditions precedent set forth in SECTION 4.02 can be
satisfied, Borrower may request a Borrowing of Loans to repay Swing Line Lender
pursuant to SECTION 2.02 or, failing to make such request, Borrower shall be
deemed to have requested a Borrowing of Base Rate Loans (without regard to the
Minimum Amount therefor) on such payment date in a principal amount equal to
such payment. Swing Line Lender shall promptly notify Administrative Agent of
each Swing Line Loan and each payment thereof.
(e) If Swing Line Lender does not timely receive (by payment, a
Borrowing or a deemed Borrowing) any payment of principal of or interest on any
Swing Line Loan, Swing Line Lender shall notify Administrative Agent of such
fact and the unpaid amount. Administrative Agent shall promptly notify each
Lender of its Pro Rata Share of such amount by Requisite Notice. Each Lender
shall make funds in an amount equal its Pro Rata Share of such amount available
to Administrative Agent at Administrative Agent's Office not later than the
Requisite Time for payments hereunder on the following Business Day. The
obligation of each Lender to make such payment shall be absolute and
unconditional and shall not be affected by the occurrence of an Event of Default
or any other occurrence or event. Each Lender's payment shall be deemed to be a
funding of such Lender's participation in such Swing Line Loan, and each Lender
making such funding shall thereupon acquire a pro rata participation, to the
extent of its payment, in the claim of Swing Line Lender against Borrower in
respect of such payment and shall share, in accordance with that pro rata
participation, in any payment made by Borrower with respect to such claim. Any
amounts made available by a Lender under its risk participation shall not
relieve or otherwise impair the obligation of Borrower to repay Swing Line
Lender for any amount of Swing Line Loans, together with interest as provided
herein, and such amounts made available shall be payable by Borrower upon demand
of Administrative Agent, and shall bear interest at a rate per annum equal to
the Default Rate.
2.05 PREPAYMENTS.
(a) Upon Requisite Notice to Administrative Agent not later than the
Requisite Time therefor, Borrower may at any time and from time to time
voluntarily prepay Loans in part in the Minimum Amount therefor or in full
without premium or penalty. Administrative Agent will promptly notify each
Lender thereof and of such Lender's Pro Rata Share of such prepayment. Any
prepayment of an Offshore Rate Loan shall be accompanied by all accrued interest
thereon, together with the costs set forth in SECTION 3.05.
(b) If for any reason the Outstanding Obligations exceed the combined
Commitments as in effect or as reduced or because of any limitation set forth in
this Agreement or otherwise, Borrower shall immediately prepay Loans and/or
deposit cash in a Letter of Credit Cash Collateral Account in an aggregate
amount equal to such excess.
2.06 REDUCTION OR TERMINATION OF COMMITMENTS.
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(a) Upon Requisite Notice to Administrative Agent not later than the
Requisite Time therefor, Borrower may at any time and from time to time, without
premium or penalty, permanently and irrevocably reduce the Commitments in a
Minimum Amount therefor to an amount not less than the Outstanding Obligations
at such time or terminate the Commitments. Any such reduction or termination
shall be accompanied by payment of all accrued and unpaid commitment fees with
respect to the portion of the Commitments being reduced or terminated.
Administrative Agent shall promptly notify Lenders of any such request for
reduction or termination of the Commitments. Each Lender's Commitment shall be
reduced by an amount equal to such Lender's Pro Rata Share TIMES the amount of
such reduction.
2.07 PRINCIPAL AND INTEREST.
(a) If not sooner paid, Borrower agrees to pay the outstanding
principal amount of each Loan on the Maturity Date.
(b) Subject to subsection (c) below, Borrower shall pay interest on
the unpaid principal amount of each Loan (before and after default, before and
after maturity, before and after judgment, and before and after the commencement
of any proceeding under any Debtor Relief Laws) from the date borrowed until
paid in full (whether by acceleration or otherwise) on each Applicable Payment
Date at a rate per annum equal to the interest rate determined in accordance
with the definition of such type of Loan, PLUS, to the extent applicable in each
case, the Applicable Margin.
(c) If any amount payable by any Borrower Party under any Loan
Document is not paid when due (without regard to any applicable grace periods),
it shall thereafter bear interest (after as well as before entry of judgment
thereon to the extent permitted by law) at a fluctuating interest rate per annum
at all times equal to the Default Rate to the fullest extent permitted by
applicable Law. Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be payable upon demand.
2.08 FEES.
(a) COMMITMENT FEE. Borrower shall pay to Administrative Agent, for
the ratable accounts of Lenders pro rata according to their Pro Rata Share, a
commitment fee equal to the Applicable Margin TIMES the actual daily amount by
which the combined Commitments exceed the sum of all Outstanding Obligations
(excluding Swing Line Loans). The commitment fee shall accrue at all times from
the Closing Date until the Maturity Date and shall be payable quarterly in
arrears on each Applicable Payment Date and on the Maturity Date. The
commitment fee shall be calculated quarterly in arrears; if there is any change
in the Applicable Margin during any quarter, the actual daily amount shall be
computed and multiplied by the Applicable Margin separately for each period that
such Applicable Margin was in effect during such quarter. The commitment fee
shall accrue at all times, including at any time during which one or more
conditions in SECTION 4 are not met.
(b) AGENCY FEES. Borrower shall pay to Administrative Agent an agency
fee in such amounts and at such times as set forth in separate letter agreement
between Borrower and Administrative Agent. The agency fee is for the services
to be performed by Administrative
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Agent in acting as Administrative Agent and is fully earned on the date paid.
The agency fee paid to Administrative Agent is solely for its own account
and is nonrefundable.
(c) ARRANGEMENT FEE. On the Closing Date, Borrower shall pay to the
Arranger an arrangement fee in the amount set forth in separate a separate
letter agreement between Borrower and the Arranger. Such arrangement fee is for
the services of the Arranger in arranging the credit facilities under this
Agreement and is fully earned on the date paid. The arrangement fee paid to the
Arranger is solely for its own account and is nonrefundable.
(d) PARTICIPATION FEE. On the Closing Date, Borrower shall pay to
each Lender an upfront participation fee in the amount set forth in separate
letter agreement between Borrower and Administrative Agent. Such upfront fee is
fully earned on the date paid. The participation fee paid to each Lender is
solely for its own account and is nonrefundable.
2.09 COMPUTATION OF FEES AND INTEREST. All computations of interest
payable in respect of Base Rate Loans shall be made on the basis of a year of
365 or 366 days, as the case may be, and actual days elapsed. All computations
of interest payable in respect of Offshore Rate Loans and all fees shall be made
on the basis of a 360 day year and actual days elapsed, which results in more
interest being paid than if computed on the basis of a 365-day year. Interest
and fees shall accrue during each period during which interest or such fees are
computed from, and including, the first day thereof to, but excluding, the last
day thereof.
2.10 MAKING PAYMENTS.
(a) Except as otherwise provided herein, all payments by Borrower or
any Lender hereunder shall be made to Administrative Agent at Administrative
Agent's Office not later than the Requisite Time for such type of payment. All
payments received after such Requisite Time shall be deemed received on the next
succeeding Business Day. Except as otherwise provided herein, all payments
shall be made in immediately available funds in lawful money of the United
States of America. All payments by Borrower shall be made without condition or
deduction for any counterclaim, defense, recoupment or setoff.
(b) Upon satisfaction of any applicable terms and conditions set forth
herein, Administrative Agent shall promptly make any amounts received in
accordance with the prior subsection available in like funds received as
follows: (i) if payable to Borrower, by crediting the Designated Deposit
Account, and (ii) if payable to any Lender, by wire transfer to such Lender at
its Lending Office. If such conditions are not so satisfied, Administrative
Agent shall return any funds it is holding to the Lenders making such funds
available, without interest.
(c) Subject to the definition of "Interest Period," if any payment to
be made by any Borrower Party shall come due on a day other than a Business Day,
payment shall instead be considered due on the next succeeding Business Day, and
such extension of time shall be reflected in computing interest and fees.
(d) Unless Borrower or any Lender has notified Administrative Agent
prior to the date any payment to be made by it is due, that it does not intend
to remit such payment, Administrative Agent may, in its sole and absolute
discretion, assume that Borrower or Lender,
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as the case may be, has timely remitted such payment and may, in its sole and
absolute discretion and in reliance thereon, make available such payment to
the Person entitled thereto. If such payment was not in fact remitted to
Administrative Agent in immediately available funds, then:
(i) if Borrower failed to make such payment, each Lender shall
forthwith on demand repay to Administrative Agent the amount of such
assumed payment made available to such Lender, together with interest
thereon in respect of each day from and including the date such amount
was made available by Administrative Agent to such Lender to the date
such amount is repaid to Administrative Agent at the Federal Funds Rate;
and
(ii) if any Lender failed to make such payment, Administrative
Agent shall be entitled to recover such corresponding amount on demand
from such Lender. If such Lender does not pay such corresponding amount
forthwith upon Administrative Agent's demand therefor, Administrative
Agent promptly shall notify Borrower, and Borrower shall pay such
corresponding amount to Administrative Agent. Administrative Agent also
shall be entitled to recover from such Lender interest on such
corresponding amount in respect of each day from the date such
corresponding amount was made available by Administrative Agent to
Borrower to the date such corresponding amount is recovered by
Administrative Agent, (A) from such Lender at a rate per annum equal to
the daily Federal Funds Rate. and (B) from Borrower, at a rate per annum
equal to the interest rate applicable to such Borrowing. Nothing herein
shall be deemed to relieve any Lender from its obligation to fulfill its
Commitment or to prejudice any rights which Administrative Agent or
Borrower may have against any Lender as a result of any default by such
Lender hereunder.
(e) If Administrative Agent or any Lender is required at any time to
return to Borrower, or to a trustee, receiver, liquidator, custodian, or any
official under any proceeding under Debtor Relief Laws, any portion of a
payments made by Borrower, each Lender shall, on demand of Administrative Agent,
return its share of the amount to be returned, plus interest thereon from the
date of such demand to the date such payment is made at a rate per annum equal
to the daily Federal Funds Rate.
2.11 FUNDING SOURCES. Nothing in this Agreement shall be deemed to
obligate any Lender to obtain the funds for any Loan in any particular place or
manner or to constitute a representation by any Lender that it has obtained or
will obtain the funds for any Loan in any particular place or manner.
2.12 INCREASE IN COMMITMENTS.
(a) Borrower may from time to time (but no more often than once in
every 12 months) request an increase in the combined Commitments up to an
aggregate of $100,000,000 upon Requisite Notice to Administrative Agent. Such
request shall include a certificate signed by a Responsible Officer stating that
(i) the representations and warranties contained in SECTION 5 are true and
correct on and as of the date of such certificate, and (ii) no Default or Event
of Default exists. Administrative Agent shall promptly notify each Lender of
such request. Each Lender shall, within 15 Business days of such notice, notify
Administrative
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Agent by Requisite Notice whether (x) it agrees to increase its Commitment by
an amount less than or equal to its Pro Rata Share of such requested
increase, or (y) it does not agree to any increase in its Commitment. Any
Lender not responding within the above time period shall be deemed to have
elected not to increase its Commitment. Administrative Agent shall, after
receiving the notifications from all of Lenders or the expiration of such
period, whichever is earlier, notify Borrower and Lenders of the results
thereof.
(b) If any Lender declines, or is deemed to have declined, to
participate in any such increase to the full extent of its Pro Rata Share
thereof (a "DECLINING LENDER"), Borrower may request, through Administrative
Agent, that one or more other Lenders, in their sole discretion, provide
Commitment(s) equal to such shortfall, If any shortfall remains after all
existing Lenders have declined or been deemed to have declined, Borrower may
then request, through Administrative Agent, that one or more Eligible Assignees,
in their sole discretion, provide Commitment(s) equal to the remaining
shortfall; PROVIDED, HOWEVER, that the Commitment of any Eligible Assignee shall
not be less than any existing Lender's Commitment before giving effect to any
increase in the Commitments contemplated hereby. No existing Lender's
Commitment may be reduced without its consent to facilitate the prior proviso.
Administrative Agent and Borrower shall thereafter determine the final, revised
Commitment allocations and determine an effective date therefor (the "INCREASE
EFFECTIVE DATE"). Administrative Agent shall promptly notify Lenders of such
revised Commitment allocations and the Increase Effective Date. This section
shall supercede any provisions in SECTION 10.02 to the contrary.
(c) On or prior to the Increase Effective Date, Borrower shall deliver
to Administrative Agent, in form and substance satisfactory to Administrative
Agent (with sufficient copies for each Lender): (i) corporate resolutions and
incumbency certificates of Borrower and any Guarantor dated as of the Increase
Effective Date approving such increase; (ii) new or amended Notes, if requested
by any new or affected Lender, evidencing such new or revised Commitments; (iii)
with respect to any Eligible Assignees becoming Lenders, one or more Assignments
and Acceptances. Administrative Agent shall distribute an amended SCHEDULE 2.01
(which shall thereafter be incorporated into this Agreement), to reflect any new
or increased Commitments and each Lender's Pro Rata Share thereof. In order to
make all Lender's interests in any outstanding Loans ratable in accordance with
any revised Pro Rata Shares after giving effect to any increase in the
Commitments, Borrower shall pay or prepay, if necessary, on the Increase
Effective Date, all outstanding Loans and pay, to the extent applicable, any
amounts due under SECTION 3.05. Borrower may then borrow Loans from Lenders in
accordance with their revised Pro Rata Shares.
2.13 MASTER SUBSIDIARY GUARANTY. The Obligations shall be guarantied
under the Master Subsidiary Guaranty.
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SECTION 3.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Any and all payments by Borrower to or for the account of
Administrative Agent or any Lender under any Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholding or similar
charges, and all liabilities with respect thereto, EXCLUDING, in the case of
Administrative Agent and any Lender, taxes imposed on or measured by its net
income, and franchise taxes imposed on it (in lieu of net income taxes), by the
jurisdiction (or any political subdivision thereof) under the Laws of which
Administrative Agent or such Lender, as the case may be, is organized or
maintains a lending office (all such non-excluded taxes, duties, levies,
imposts, deductions, charges, and liabilities being hereinafter referred to as
"TAXES"). If Borrower shall be required by any Laws to deduct any Taxes from or
in respect of any sum payable under any Loan Document to Administrative Agent or
any Lender, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section), Administrative Agent and such Lender receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) Borrower shall make such deductions, (iii) Borrower shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable Laws, and (iv) within 30 days after the date of such
payment, Borrower shall furnish to Administrative Agent (who shall forward the
same to such Lender) the original or a certified copy of a receipt evidencing
payment thereof.
(b) In addition, Borrower agrees to pay any and all present or future
stamp, court or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "OTHER TAXES").
(c) If Borrower shall be required by the Laws of any jurisdiction
outside the United States to deduct any Taxes from or in respect of any sum
payable under any Loan Document to Administrative Agent or any Lender, Borrower
shall also pay to such Lender or Administrative Agent (for the account of such
Lender), at the time interest is paid, such additional amount that that
respective Lender specifies as necessary to preserve the after-tax yield (after
factoring in United States (federal and state) taxes imposed on or measured by
net income) the Lender would have received if such deductions (including
deductions applicable to additional sums payable under this Section) had not
been made.
(d) Borrower agrees to indemnify Administrative Agent and each Lender
for the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable under this Section)
paid by Administrative Agent and such Lender and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
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3.02 ILLEGALITY. If any Lender determines that any Laws adopted on or
after the date hereof have made it unlawful, or that any Governmental Authority
has asserted that it is unlawful, for any Lender or its applicable Lending
Office to make, maintain or fund Offshore Rate Loans, or materially restricts
the authority of such Lender to purchase or sell, or to take deposits of,
Dollars in the applicable offshore interbank market, or to determine or charge
interest rates based upon the Offshore Rate, then, on notice thereof by Lender
to Borrower through Administrative Agent, any obligation of that Lender to make
Offshore Rate Loans shall be suspended until Lender notifies Administrative
Agent and Borrower that the circumstances giving rise to such determination no
longer exist. Upon receipt of such notice, Borrower shall, upon demand from
such Lender (with a copy to Administrative Agent), prepay or Convert all
Offshore Rate Loans of that Lender, either on the last day of the Interest
Period thereof, if Lender may lawfully continue to maintain such Offshore Rate
Loans to such day, or immediately, if Lender may not lawfully continue to
maintain such Offshore Rate Loans. Each Lender agrees to designate a different
Lending Office if such designation will avoid the need for such notice and will
not, in the good faith judgment of such Lender, otherwise be materially
disadvantageous to such Lender.
3.03 INABILITY TO DETERMINE RATES. If, in connection with any
Extension of Credit involving any Offshore Rate Loan, Administrative Agent
determines that (a) deposits in Dollars are not being offered to banks in the
applicable offshore dollar market for the Applicable Margin and Interest Period
of the requested Offshore Rate Loan, (b) adequate and reasonable means do not
exist for determining the underlying interest rate for such Offshore Rate Loan,
or (c) such underlying interest rate does not adequately and fairly reflect the
cost to Lender of funding such Offshore Rate Loan, Administrative Agent will
promptly notify Borrower and all Lenders. Thereafter, the obligation of all
Lenders to make or maintain such Offshore Rate Loan shall be suspended until
Administrative Agent revokes such notice. Upon receipt of such notice, Borrower
may revoke any pending request for a Borrowing of Offshore Rate Loans or,
failing that, be deemed to have converted such request into a request for a
Borrowing of Base Rate Loans in the amount specified therein.
3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY.
(a) If any Lender determines that any Laws adopted on or after the
date hereof:
(i) subject such Lender to any Tax, duty, or other charge with
respect to any Offshore Rate Loans or its obligation to make Offshore
Rate Loans, or change the basis on which taxes are imposed on any amounts
payable to such Lender under this Agreement in respect of any Offshore
Rate Loans;
(ii) shall impose or modify any reserve, special deposit, or
similar requirement (other than the reserve requirement utilized in the
determination of the Offshore Rate) relating to any extensions of credit
or other assets of, or any deposits with or other liabilities or
commitments of, such Lender (including its Commitment); or
(iii) shall impose on such Lender or on the offshore Dollar
interbank market any other condition affecting this Agreement or any of
such extensions of credit or liabilities or commitments;
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and the result of any of the foregoing is to increase the cost to such Lender
of making, Converting into, Continuing, or maintaining any Offshore Rate
Loans or to reduce any sum received or receivable by such Lender under this
Agreement with respect to any Offshore Rate Loans, then from time to time
upon demand of Lender (with a copy of such demand to Administrative Agent),
Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such increased cost or reduction. Each Lender requesting
compensation shall deliver a certificate setting forth the amount and
calculation thereof in reasonable detail, which amount shall be presumptive
evidence of the amount owing.
(b) If any Lender determines that any change in or the
interpretation of any Laws adopted on or after the date hereof have the
effect of reducing the rate of return on the capital of such Lender or
compliance by such Lender (or its Lending Office) or any corporation
controlling such Lender as a consequence of such Lender's obligations
hereunder (taking into consideration its policies with respect to capital
adequacy and such Lender's desired return on capital), then from time to time
upon demand of such Lender (with a copy to Administrative Agent), Borrower
shall pay to such Lender such additional amounts as will compensate such
Lender for such reduction. Each Lender requesting compensation shall deliver
a certificate setting forth the amount and calculation thereof in reasonable
detail, which amount shall be presumptive evidence of the amount owing.
3.05 BREAKFUNDING COSTS. Upon demand of any Lender (with a copy to
Administrative Agent) from time to time, Borrower shall promptly compensate such
Lender for and hold such Lender harmless from any loss, cost or expense incurred
by it as a result of:
(a) any Continuation, Conversion, payment or prepayment of any
Offshore Rate Loan on a day other than the last day of the Interest Period for
such Loan (whether voluntary, mandatory, automatic, by reason of acceleration,
or otherwise); or
(b) any failure by Borrower (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, Continue or Convert any
Offshore Rate Loan on the date or in the amount notified by Borrower;
including any loss of anticipated profits and any loss or expense arising
from the liquidation or reemployment of funds obtained by it to maintain such
Loan or from fees payable to terminate the deposits from which such funds
were obtained. Borrower shall also pay any customary administrative fees
charged by such Lender in connection with the foregoing.
3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION.
A certificate of Administrative Agent claiming compensation under this
SECTION 3 and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of clearly demonstrable error.
In determining such amount, Administrative Agent may use any reasonable
averaging and attribution methods. For purposes of this SECTION 3, a Lender
shall be deemed to have funded each Offshore Rate Loan at the Offshore Base
Rate used in determining the Offshore Rate for such Loan by a matching
deposit or other borrowing in the offshore Dollar interbank market, whether
or not such Offshore Rate Loan was in fact so funded.
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3.07 SURVIVAL. All of Borrower's obligations under this SECTION 3
shall survive termination of the Commitments and payment in full of all
Obligations.
SECTION 4.
CONDITIONS TO EFFECTIVENESS OF AGREEMENT
AND EXTENSIONS OF CREDIT.
4.01 CONDITIONS OF INITIAL LOANS. The obligation of each Lender to
make its initial Extension of Credit hereunder is subject to the condition that
Administrative Agent shall have received on or before the Closing Date all of
the following, in form and substance satisfactory to Administrative Agent and
its counsel and in sufficient copies for each Lender and the Issuing Lender:
(a) CREDIT AGREEMENT. This Agreement executed by Borrower,
Administrative Agent and each of Lenders.
(b) MASTER SUBSIDIARY GUARANTY. The Master Subsidiary Guaranty
executed by each Person required to be a Subsidiary Guarantor;
(c) RESOLUTIONS; INCUMBENCY.
(i) Copies of the resolutions of the board of directors or the
executive committee of the board of directors of each Borrower Party
approving and authorizing the execution, delivery and performance by such
Borrower Party of the Loan Documents to which it is a party, certified as
of the Closing Date by the Secretary or an Assistant Secretary of such
Borrower Party; and
(ii) A certificate of the Secretary or Assistant Secretary of
each Borrower Party, certifying the names and true signatures of the
officers of each Borrower Party authorized to execute and deliver the
Loan Documents to which it is a party.
(d) ARTICLES OF INCORPORATION; BY-LAWS AND GOOD STANDING. Each of the
following documents:
(i) the articles or certificate of incorporation of each
Borrower Party as in effect on the Closing Date, certified by the
Secretary of State of the State of incorporation of each Borrower Party
as of a recent date and by the Secretary or Assistant Secretary of each
Borrower Party as of the Closing Date and the bylaws of each Borrower
Party as in effect on the Closing Date, certified by the Secretary or
Assistant Secretary of each Borrower Party as of the Closing Date; and
(ii) a good standing certificate for Borrower from the Secretary
of State of its state of incorporation and the State of California as of
a recent date, together with bring-down certificate by telex or telecopy,
dated as of a recent date.
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(e) SENIOR NOTES. Evidence that Borrower has issued, or concurrently
herewith is issuing, not less than $50,000,000 in aggregate principal amount of
senior unsecured notes pursuant to that certain Note Purchase Agreement dated as
of December 1, 1999.
(f) INTERCREDITOR AGREEMENT. The Intercreditor Agreement executed by
each of the parties thereto.
(g) LEGAL OPINIONS. An opinion of Gibson, Dunn & Crutcher, counsel to
the Borrower Parties, and addressed to Administrative Agent and Lenders in form
and substance satisfactory to Administrative Agent and Lenders.
(h) PAYMENT OF FEES. Borrower shall have paid all accrued and unpaid
fees, costs and expenses to the extent then due and payable on the Closing Date,
together with reasonable attorney fees, costs and expenses (including the
allocated cost of Administrative Agent's inhouse counsel and staff) to the
extent invoiced prior to or on the Closing Date, together with such additional
amounts of such fees, costs and expenses as shall constitute Administrative
Agent's reasonable estimate of such reasonable fees, costs and expenses incurred
or to be incurred through the closing proceedings, provided that such estimate
shall not thereafter preclude final settling of accounts between Borrower and
Administrative Agent; including any such costs, fees and expenses arising under
or referenced in SECTION 2.08;
(i) CERTIFICATE. A certificate signed by a Responsible Officer, dated
as of the Closing Date, stating that: (i) the representations and warranties
contained in SECTION 5 are true and correct on and as of such date, as though
made on and as of such date; (ii) no Default or Event of Default exists on the
Closing Date; and (iii) since December 31, 1998, there has been no change that
has caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect.
(j) TERMINATION OF EXISTING SYNDICATED AGREEMENT. The Existing
Syndicated Agreement shall have been, or concurrently herewith is being,
terminated, and all amounts due and owing thereunder shall have been, or
concurrently herewith are being, paid in full.
(k) YEAR 2000 COMPLIANCE. Receipt and review, with results
satisfactory to Administrative Agent and Lenders, of information confirming that
(a) Borrower and its Subsidiaries are taking all necessary and appropriate steps
to ascertain the extent of, and to quantify and successfully address, business
and financial risks facing Borrower and its subsidiaries as a result of what is
commonly referred to as the "Year 2000 problem" (as defined in SECTION 5.22),
including risks resulting from the failure of key vendors and customers of
Borrower and its Subsidiaries to successfully address the Year 2000 problem, and
(b) Borrower's and its Subsidiaries' material computer applications and those of
its key vendors and customers will, on a timely basis, adequately address the
Year 2000 problem in all material respects.
(l) OTHER DOCUMENTS. Such other approvals, opinions or documents as
Administrative Agent or any Lender may reasonably request.
4.02 CONDITIONS TO ALL EXTENSIONS OF CREDIT. In addition to any
applicable conditions precedent set forth elsewhere in this Section, the
obligation of each Lender to honor any Request for Extension of Credit is
subject to the following conditions precedent:
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(a) the representations and warranties of Borrower contained in
SECTION 5, or which are contained in any certificate, document or financial or
other statement furnished at any time under or in connection herewith or
therewith, shall be correct on and as of the date of such Extension of Credit,
except to the extent that such representations and warranties specifically refer
to any earlier date.
(b) No Default or Event of Default exists, or would result from such
proposed Extension of Credit.
(c) Administrative Agent shall have timely received a Request for
Extension of Credit by Requisite Notice by the Requisite Time therefor.
(d) Administrative Agent shall have received, in form and substance
satisfactory to it, such other assurances, certificates, documents or consents
related to the foregoing as Administrative Agent or Requisite Lenders reasonably
may require.
Each request for an Extension of Credit by Borrower shall be deemed to be
a representation and warranty that the conditions specified in SECTIONS 4.02(A)
and 4.02(B) have been satisfied and on and as of the date of such Extension of
Credit.
4.03 CONDITIONS FOR A SUBSIDIARY BECOMING A SUBSIDIARY GUARANTOR.
As a condition precedent to a Domestic Subsidiary becoming a Subsidiary
Guarantor under the Master Subsidiary Guaranty, Administrative Agent shall have
received the following with respect to such Subsidiary, in form and substance
satisfactory to Administrative Agent:
(a) The items referred to in SECTION 4.01(C) and, to the extent not
previously delivered, the items referred in SECTION 4.01(D).
(b) The opinion of the general counsel or assistant general counsel of
Borrower (or such other counsel designated by Borrower and acceptable to
Administrative Agent) as to (i) such Subsidiary's obligations under the
Subsidiary Guaranty being the legal, valid, binding and enforceable obligation
of such Subsidiary and (ii) the execution, delivery and performance of
Subsidiary Guaranty by such Subsidiary (A) being authorized by all necessary
corporate, company or partnership action, as applicable, (B) not violating any
law, decree, judgment or contractual obligation to which such Subsidiary is a
party or by which it or its assets are bound, and (C) not requiring any
government approvals, consents, registrations or filings.
(c) Exhibit A to the Master Subsidiary Guaranty duly executed by such
Domestic Subsidiary, whereby such Domestic Subsidiary agrees to be bound by the
terms and conditions of the Master Subsidiary Guaranty and an Addendum to the
Intercreditor Agreement in accordance with the terms thereof.
(d) Such other approvals, opinions or documents as Administrative
Agent or any Lender may reasonably request.
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SECTION 5.
REPRESENTATIONS AND WARRANTIES
In order to induce Lenders, the Issuing Lender and Administrative
Agent to enter into this Agreement and to make any extension of credit
hereunder, Borrower represents and warrants to each Lender, the Issuing
Lender and Administrative Agent that the following statements are true,
correct and complete:
5.01 CORPORATE EXISTENCE AND POWER. Each Borrower Party and their
Subsidiaries: (a) are corporation duly organized, validly existing and in good
standing under the Laws of the jurisdiction of their incorporation; (b) have the
corporate power and authority to own their assets, carry on their business and
to execute, deliver and perform their obligations under the Loan Documents; and
(c) are duly qualified as foreign corporations or licensed and in good standing
under the Laws of each jurisdiction where their ownership, lease or operation of
property or the conduct of their business requires such qualification, except
where the failure to be so qualified, licensed or in good standing could not
reasonably be expected to cause a Material Adverse Effect.
5.02 CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution,
delivery and performance by each Borrower Party of the Loan Documents to
which such Person is party, have been duly authorized by all necessary
corporate action and do not and will not: (a) contravene the terms of that
Person's certificate of incorporation, bylaws or other organization document;
(b) conflict with or result in any breach or contravention of, or the
creation of any material Lien under, any Contractual Obligation, injunction,
order or decree to which such Person is a party; or (c) violate any material
Law. The Loan Document has been duly executed and delivered by each Borrower
Party which is a party hereto or thereto.
5.03 BINDING EFFECT. The Loan Document to which each Borrower Party is
a party constitute the legal, valid and binding obligations of each respective
Person, enforceable against such Person in accordance with their respective
terms, except as enforceability may be limited by applicable Debtor Relief Laws
affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability.
5.04 SUBSIDIARIES; SUBSIDIARY GUARANTORS.
(a) SCHEDULE 5.04 correctly sets forth, as of the Closing Date, for
each direct or indirect Subsidiary of Borrower, its name, jurisdiction of
formation, type of legal entity, the amount, type and ownership of all issued
and outstanding equity interests and whether it is a Domestic Subsidiary,
Subsidiary Guarantor or Foreign Subsidiary. All active Domestic Subsidiaries of
Borrower (EXCLUDING special purpose bankruptcy remote financing entities) are
Subsidiary Guarantors.
(b) Except as described in SCHEDULE 5.04, Borrower does not as of
the Closing Date own directly or indirectly any capital stock, partnership or
other equity interest or debt security which is convertible, or exchangeable,
for capital stock or partnership or other equity interests in any Person
which, if fully or partially exercised by any party, would be a Subsidiary.
Unless otherwise indicated on in SCHEDULE 5.04, all outstanding equity
interests in each Subsidiary are
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owned of record and beneficially by the Person specified thereon, there are
no outstanding options, warrants or other rights to purchase capital stock of
any such Subsidiary, and all such equity interests so owned are duly
authorized, validly issued, fully paid and non-assessable, and were issued in
compliance with all applicable state and federal securities and other Laws,
and are free and clear of all Liens.
5.05 FINANCIAL STATEMENTS.
(a) The consolidated balance sheet of Borrower and its Subsidiaries
as of December 31, 1998, and the consolidated statement of income and
shareholders' equity and cash flows for the fiscal year ended on said date,
accompanied by a report thereon containing an opinion unqualified as to scope
limitations imposed by Borrower and otherwise without qualification, by Ernst
& Young, have been prepared in accordance with GAAP, consistently applied,
and present fairly the financial position of Borrower and its Subsidiaries as
of such date and the results of their operations and cash flows for such
period in accordance with GAAP. The unaudited consolidated and consolidating
balance sheets of Borrower and its Restricted Subsidiaries as of December
31, 1998 and June 30, 1999, and the unaudited consolidated and consolidating
statements of income and shareholders' equity and cash flows for the year and
quarter, respectively, ended on said dates prepared by Borrower have been
prepared in accordance with GAAP, consistently applied.
(b) Since December 31, 1998, there has been no change in the
condition, financial or otherwise, of Borrower and its Subsidiaries as shown on
the consolidated balance sheet as of such date except changes which individually
or in the aggregate have not had a Material Adverse Effect.
5.06 INDEBTEDNESS. SCHEDULE 5.06 correctly describes all Indebtedness,
including Total Debt and letters of credit of Borrower and its Subsidiaries
outstanding on the date indicated thereon.
5.07 DISCLOSURE. Neither the financial statements referred to in
SECTION 5.05 nor any other written statement furnished by Borrower to any
Lender or Administrative Agent in connection herewith contains any untrue
statement of a material fact or omits a material fact necessary to make the
statements contained therein or herein not misleading as of their respective
dates; PROVIDED, HOWEVER, that with respect to any financial projections
contained therein, Borrower represents only that such projections were
prepared in good faith based on assumptions determined by Borrower as
reasonable and appropriate. There is no fact peculiar to Borrower or its
Subsidiaries which Borrower has not disclosed to any Lender or Administrative
Agent in writing which could reasonably be expected to have a Material
Adverse Effect.
5.08 PENDING LITIGATION. Except as set forth in SCHEDULE 5.08, there
are no proceedings pending or, to the knowledge of Borrower, threatened against
or affecting any Borrower Party or any of their Subsidiaries in any court or
before any governmental authority or arbitration board or tribunal which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect.
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5.09 TITLE TO PROPERTIES. Each Borrower Party and their
Subsidiaries have good and marketable title in fee simple (or its equivalent
under applicable law) to all material parcels of real property and has good
title to all the other material items of property they purports to own,
including that reflected as owned in the most recent balance sheet referred
to in SECTION 5.05, except for Dispositions not in violation of SECTION 7.05
and except for Liens permitted under SECTION 7.01.
5.10 PATENTS AND TRADEMARKS. Each Borrower Party and their
Subsidiaries own or have the right to use all the material patents,
trademarks, trade names, service marks, copyrights, licenses and rights with
respect to the foregoing necessary for the present and planned future conduct
of their business, without any known conflict with the rights of others.
5.11 GOVERNMENTAL CONSENT. No approval, consent or withholding of
objection on the part of any regulatory body, state, Federal or local, which
has not been obtained is necessary in connection with the execution and
delivery by each Borrower Party of the Loan Documents or compliance by each
Borrower Party with any of the provisions of the Loan Documents.
5.12 TAXES. All tax returns required to be filed by any Borrower
Party and their Subsidiaries in any jurisdiction have, in fact, been filed,
except tax returns as to which the failure to file would not reasonably be
expected to have a Material Adverse Effect, and all taxes, assessments, fees
and other governmental charges upon any Borrower Party and their Subsidiaries
or upon any of their respective properties, income or franchises, which are
shown to be due and payable in such returns have been paid. For all taxable
years ending on or before December 31, 1996 either the period of limitations
on assessment of additional Federal income tax has expired or any Borrower
Party and their Subsidiaries has entered into an agreement with the Internal
Revenue Service closing conclusively the total tax liability for the taxable
year. Except as disclosed on SCHEDULE 5.12, as updated from time to time by
written notice from Borrower to Administrative Agent, Borrower does not know
of any proposed additional tax assessment against it for which adequate
provision has not been made on its accounts, and no material controversy in
respect of additional Federal or state income taxes due since said date is
pending or to the knowledge of Borrower threatened. The provisions for taxes
on the books of Borrower and each of its Subsidiaries are adequate in
accordance with GAAP for all open years, and for its current fiscal period.
5.13 USE OF PROCEEDS. Borrower shall use the proceeds of the Loans
solely for working capital, Acquisitions and Restricted Payments otherwise
permitted hereunder and other general corporate purposes not in contravention
in any material respect of any material Laws. None of the transactions
contemplated in the Loan Documents (including, without limitation thereof,
the use of proceeds of the Loans) will violate or result in a violation of
Regulations U and X of the Board of Governors of the Federal Reserve System,
12 C.F.R., Chapter II. Neither any Borrower Party nor any of their
Subsidiaries owns or intends to carry or purchase any "margin stock" within
the meaning of said Regulation U other than the capital stock of Borrower.
5.14 ERISA. Except as set forth in SCHEDULE 5.14, to Borrower's
knowledge, the consummation of the transactions provided for herein and
compliance by Borrower with the provisions hereof will not involve any
prohibited transaction within the meaning of ERISA or Section 4975 of the Code
other than a transaction for which a statutory exemption is available or
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an administrative exemption has been obtained. Each Qualified Plan complies
in all material respects with all applicable statutes and governmental
regulations, and (a) no Reportable Event has occurred and is continuing with
respect to any Qualified Plan, (b) neither Borrower nor any ERISA Affiliate
has withdrawn from any Multiemployer Plan, and (c) no steps have been
instituted to terminate any Qualified Plan in a distress termination under
Section 4041(c) of ERISA or a termination issued by the PBGC under Section
4042 of ERISA. No condition exists or event or transaction has occurred in
connection with any Qualified Plan which would result in the incurrence by
Borrower or any ERISA Affiliate or any liability, fine or penalty which would
reasonably be expected to have a Material Adverse Effect. No Qualified Plan
maintained by Borrower or any ERISA Affiliate, nor any trust created
thereunder, has incurred any "accumulated funding deficiency" as defined in
Section 302 of ERISA nor does the present value of all benefits vested under
all Qualified Plans exceed, as of the last annual valuation date, the value
of the assets of the Qualified Plans allocable to such vested benefits based
on the assumptions contained in the most recent actuarial valuation report
for the Qualified Plan by an amount greater than $5,000,000 in the aggregate.
Neither Borrower nor any ERISA Affiliate has any contingent liability in
excess of $1,500,000 with respect to any post-retirement "welfare benefit
plan" (as such term is defined in ERISA) that is required to be reflected on
Borrower's financial statements under FASB 106, except as so reflected in
such financial statements or as has been disclosed to Administrative Agent in
writing. Except as set forth on SCHEDULE 5.14, neither any Borrower Party
nor any of their Subsidiaries are part of any Multiemployer Plan.
5.15 COMPLIANCE WITH LAWS. Neither any Borrower Party nor any of their
Subsidiaries (a) is in violation of any Laws to which it is subject; or (b) has
failed to obtain any license, permit, franchise or other governmental
authorization necessary to the ownership of its property or to the conduct of
its business, which violation or failure to obtain would have a Material Adverse
Effect. Neither any Borrower Party nor any of their Subsidiaries is in default
with respect to any order of any court or governmental authority or arbitration
board or tribunal where such default could reasonably be expected to have a
Material Adverse Effect.
5.16 COMPLIANCE WITH ENVIRONMENTAL LAWS. Neither any Borrower Party
nor any of their Subsidiaries is in violation of any Environmental Laws relating
to public health, safety or the environment, including, without limitation,
relating to releases, discharges, emissions or disposals to air, water, land or
ground water, to the withdrawal or use of ground water, to the use, handling or
disposal of polychlorinated biphenyls (PCBs), asbestos or urea formaldehyde, to
the treatment, storage, disposal or management of hazardous substances
(including, without limitation, petroleum, crude oil or any fraction thereof, or
other hydrocarbons), pollutants or contaminants, to exposure to toxic, hazardous
or other controlled, prohibited or regulated substances which violation could
reasonably be expected to have a Material Adverse Effect. Except as set forth
on SCHEDULE 5.16, as updated from time to time by written notice from Borrower
to Administrative Agent with the consent of the Requisite Lenders, Borrower does
not know of any liability or class of liability of any Borrower Party or any of
their Subsidiaries under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et seq.), or the
Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C.
Section 6901 et seq.) which liability could reasonably be expected to have a
Material Adverse Effect.
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5.17 REGULATED ENTITIES. None of any Borrower Party, any Person
controlling any Borrower Party, or any Subsidiary of Borrower, is (a) an
"Investment Company" within the meaning of the Investment Company Act of 1940;
or (b) subject to regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act, the Interstate Commerce Act, any state public
utilities code or any other Federal or state statute or regulation limiting its
ability to incur Indebtedness.
5.18 NO BURDENSOME RESTRICTIONS. Neither any Borrower Party nor any of
their Subsidiaries is a party to or bound by any Contractual Obligation or
subject to any charter or corporate restriction or any Laws which could
reasonably be expected to have a Material Adverse Effect.
5.19 LABOR RELATIONS. There are no strikes, lockouts or other labor
disputes against any Borrower Party or any of their Subsidiaries, or , to the
best of Borrower's knowledge, threatened against or affecting any Borrower Party
or any of their Subsidiaries, and no unfair labor practice complaint is pending
against any Borrower Party or any of their Subsidiaries or, to the best
knowledge of Borrower, threatened against any of them before any Governmental
Authority, which, in each case, could reasonably be expected to cause a Material
Adverse Effect.
5.20 INSURANCE. The properties of each Borrower Party and their
Subsidiaries are insured with financially sound and reputable insurance
companies, in such amounts, with such deductibles and covering such risks as is
customarily carried on by companies engaged in similar businesses and owning
similar properties in localities where such Borrower Party or such Subsidiary
operates.
5.21 NO RESTRICTIONS ON SUBSIDIARIES. Neither any Borrower Party nor
any of their Subsidiaries has entered into, or committed to enter into, any
agreement or understanding that could limit or restrict any Subsidiary making or
declaring any dividends, either in cash or property, to Borrower, repaying or
prepaying any Indebtedness (other than for amounts loaned by Borrower to
Subsidiaries on a subordinated basis in connection with Permitted Accounts
Receivable Financing Facilities) owing to Borrower, or making any Investment in
Borrower.
5.22 YEAR 2000. Borrower has (a) initiated a review and assessment of
all areas within its and each of its Subsidiaries' business and operations
(including those affected by customers and vendors) that could be adversely
affected by the "Year 2000 Problem" (that is, the risk that computer
applications and devices containing imbedded computer chips used by any Borrower
Party or any of its Subsidiaries (or their respective customers and vendors) may
be unable to recognize and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31, 1999), (b) developed a
plan and timeline for addressing the Year 2000 Problem on a timely basis, and
(c) to date, implemented that plan in accordance with that timetable. Based on
the foregoing, Borrower believes that all computer applications and devices
containing imbedded computer chips (including those of its and its Subsidiaries'
customers and vendors) that are material to its or any of its Subsidiaries'
business and operations are reasonably expected on a timely basis to be able to
perform properly date-sensitive functions for all dates before and after
January 1, 2000 (that is, be "Year 2000 Compliant"), except to the extent that a
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
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SECTION 6.
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, so long as any Lender or the
Issuing Lender shall have any Commitment hereunder, or any Obligation shall
remain unpaid, unless the Requisite Lenders waive compliance in writing:
6.01 FINANCIAL STATEMENTS. Borrower shall deliver to Administrative
Agent in form and detail satisfactory to the Requisite Lenders, with copies for
each Lender:
(a) QUARTERLY STATEMENTS. As soon as available and in any event
within 50 days after the end of each quarterly fiscal period (except the last)
of each fiscal year, copies of:
(1) consolidated and consolidating balance sheets of Borrower and
its Subsidiaries as of the close of such quarterly fiscal period, setting
forth in comparative form the consolidated figures for the fiscal year then
most recently ended,
(2) consolidated and consolidating statements of income of Borrower
and its Subsidiaries for such quarterly fiscal period and for the portion of
the fiscal year ending with such quarterly fiscal period, in each case
setting forth in comparative form the consolidated figures for the
corresponding periods of the preceding fiscal year, and
(3) consolidated and consolidating statements of cash flows of
Borrower and its Subsidiaries for each quarterly fiscal period and for the
portion of the fiscal year ending with such quarterly fiscal period, setting
forth in comparative form the consolidated figures for the corresponding period
of the preceding fiscal year,
all certified by an appropriate Responsible Officer as being to the best of
such officer's knowledge complete and correct and fairly presenting, in
accordance with GAAP (except for the use of abbreviated footnotes of the type
required by the Securities and Exchange Commission to be included in
quarterly reports on Form 10-Q), the financial position and the results of
operations of Borrower and its Subsidiaries.
(b) ANNUAL STATEMENTS. As soon as available and in any event within
105 days after the close of each fiscal year of Borrower, copies of:
(1) consolidated and consolidating balance sheets of Borrower and its
Subsidiaries as of the close of such fiscal year, and
(2) consolidated and consolidating statements of income and retained
earnings and cash flows of Borrower and its Subsidiaries for such fiscal year,
in each case setting forth in comparative form the consolidated figures for the
preceding fiscal year, all in reasonable detail and accompanied, with respect to
Borrower and its Subsidiaries, by a report thereon of a firm of independent
public accountants of recognized national standing selected by Borrower to the
effect that the consolidated financial statements present fairly, in all
material respects, the consolidated financial position of Borrower and its
Subsidiaries as of the end of the fiscal year being reported on and the
consolidated results of operations and cash flows
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for said year in conformity with GAAP and that the audit of such accountants
in connection with such financial statements has been conducted in accordance
with generally accepted auditing standards. Such report and opinion shall
not be subject to any qualifications or exceptions as to the scope of the
audit nor to any qualifications and exceptions (including possible errors
generated by financial reporting and related systems due to the Year 2000
Problem) not reasonably acceptable to the Requisite Lenders;
(c) AUDIT REPORTS. Promptly upon receipt thereof, one copy of each
interim or special audit made by independent accountants of the books of
Borrower or any Subsidiary and any management letter received from such
accountants;
(d) SEC AND OTHER REPORTS. Promptly upon their becoming sent or
filed, one copy of each financial statement, report, notice or proxy statement
sent by Borrower to stockholders generally and of each regular or periodic
report, and any registration statement or prospectus filed by Borrower or any of
its Subsidiaries with any securities exchange or the Securities and Exchange
Commission or any successor agency, and copies of any orders in any material
proceedings to which Borrower or any of its Subsidiaries is a party, issued by
any governmental agency, Federal or state, having jurisdiction over Borrower or
any of its Subsidiaries;
(e) ERISA REPORTS. Notice of the occurrence of any of the following
events affecting Borrower or any ERISA Affiliate (but in no event more than 10
days after such event), and deliver to Administrative Agent and each Lender a
copy of any notice with respect to such event that is filed with a Governmental
Authority and any notice delivered by a Governmental Authority to Borrower or
any ERISA Affiliate with respect to such event: (i) an ERISA Event; (ii) a
material increase in the Unfunded Pension Liability of any Pension Plan; (iii)
the adoption of, or the commencement of contributions to, any Plan subject to
Section 412 of the Code by Borrower or any ERISA Affiliate; or (iv) the adoption
of any amendment to a Plan subject to Section 412 of the Code, if such amendment
results in a material increase in contributions or Unfunded Pension Liability;
(f) COMPLIANCE CERTIFICATES. Within the periods provided in
paragraphs (a) and (b) above, a Compliance Certificate signed by a Responsible
Officer;
(g) ACCOUNTANT'S CERTIFICATES. Within the period provided in
paragraph (b) above, a certificate of the accountants who render an opinion with
respect to such financial statements, stating that they have reviewed this
Agreement and stating further whether, in making their audit, (i) Borrower is in
compliance with SECTIONS 7.02(E), 7.13, 7.14 AND 7.15 as of the end of such year
and (ii) anything came to their attention that caused them to believe that
Borrower failed to comply with the terms, covenants, provisions or conditions of
SECTION 7.02 (excluding SECTION 7.02(E)) insofar as they relate to accounting
matters, and if any such condition or event then exists, specifying the nature
and period of existence thereof;
(h) YEAR 2000 COMPLIANCE. Promptly upon the discovery or
determination that any computer application (including those of its suppliers
and vendors) that is material to any Borrower Parties' or any of their
Subsidiaries' business and operations will not be Year 2000 Compliant on a
timely basis, except to the extent that such failure could not reasonably be
expected to have a Material Adverse Effect; and
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(i) REQUESTED INFORMATION. With reasonable promptness, such other
data and information as Administrative Agent or any Lender may reasonably
request and which may be furnished without unreasonable expense to Borrower.
6.02 NOTICES. Borrower shall promptly notify Administrative Agent and
each Lender:
(a) upon becoming aware of the occurrence of any Default or Event of
Default and of the occurrence or existence of any event or circumstance that
foreseeably will become a Default or Event of Default and the action which
Borrower is taking or proposes to take with respect thereto;
(b) upon becoming aware of any (i) breach or non-performance of, or
any default under any Contractual Obligation of Borrower or any of its
Subsidiaries which could reasonably be expected to result in a Material Adverse
Effect;
(c) upon becoming aware of the commencement of, or any material
development in, any litigation, dispute, litigation, investigation,
proceeding or suspension affecting Borrower or any of its Subsidiaries (i) in
which the amount of damages claimed is $15,000,000 (or its equivalent in
another currency or currencies) or more, (ii) in which injunctive or similar
relief is sought and which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect, or (iii) in which the relief
sought is an injunction or other stay of the performance of this Agreement or
any Loan Document or any material portion of the operations of Borrower or
any of its Subsidiaries;
(d) upon, but in no event later than ten business days after, receipt
of notice of (i) any and all enforcement, cleanup, removal or other governmental
or regulatory actions instituted, completed or threatened against Borrower or
any of its Subsidiaries or any of their properties pursuant to any applicable
Environmental Laws and (ii) all other Environmental Claims which, in the case of
each of clauses (i) and (ii) could reasonably be expected to have a Material
Adverse Effect;
(e) upon becoming aware of any other litigation or proceeding
affecting Borrower or any of its Subsidiaries which Borrower would be required
to report to the Securities and Exchange Commission pursuant to the Exchange
Act, within four days after reporting the same to the Securities and Exchange
Commission; and
(f) upon becoming aware of any Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a written
statement by a Responsible Officer of Borrower setting forth details of the
occurrence referred to therein and stating what action, if any, Borrower
proposes to take with respect thereto.
6.03 CORPORATE EXISTENCE, ETC. Borrower will preserve and keep in full
force and effect, and will cause each of its Subsidiaries to preserve and keep
in full force and effect, its corporate existence and all licenses and permits
necessary to the proper conduct of its business; PROVIDED, HOWEVER, that the
foregoing shall not prevent any transactions permitted by
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SECTION 7.04 or 7.05 or prevent the dissolution, liquidation, merger or other
Disposition of Subsidiaries not holding any assets.
6.04 INSURANCE. Borrower shall maintain, and shall cause each of
its Subsidiaries to maintain, with financially sound and reputable
independent insurers, insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or similar business, of such types and in such amounts as
are customarily carried under similar circumstances by such other Persons;
including workers' compensation insurance, public liability and property and
casualty insurance. Upon request of Administrative Agent or any Lender,
Borrower shall furnish Administrative Agent, with sufficient copies for each
Lender, at reasonable intervals (but not more than once per calendar year) a
copy of all insurance policies maintained by Borrower and its Subsidiaries
and a certificate of a Responsible Officer of Borrower (and, if requested by
Administrative Agent or any Lender, any insurance broker of Borrower) setting
forth the nature and extent of all insurance maintained by Borrower and its
Subsidiaries in accordance with this SECTION 6.04 (and which, in the case of
a certificate of a broker, were placed through such broker).
6.05 TAXES, CLAIMS FOR LABOR AND MATERIALS, COMPLIANCE WITH LAWS.
Borrower will promptly pay and discharge, and will cause each of its
Subsidiaries promptly to pay and discharge, all lawful taxes, assessments and
governmental charges or levies imposed upon Borrower or such Subsidiary,
respectively, or upon or in respect of all or any part of the property or
business of Borrower or such Subsidiary, all trade accounts payable in
accordance with usual and customary business terms, and all claims for work,
labor or materials, which if unpaid might become a Lien upon any property of
Borrower or such Subsidiary; PROVIDED, HOWEVER, that Borrower or such Subsidiary
shall not be required to pay any such tax, assessment, charge, levy, account
payable or claim if (i) the validity, applicability or amount thereof is being
contested in good faith by appropriate actions or proceedings which will prevent
the forfeiture or sale of any property of Borrower or such Subsidiary or any
material interference with the use thereof by Borrower or such Subsidiary, and
Borrower or such Subsidiary shall set aside on its books, reserves deemed by it
to be adequate with respect thereto in accordance with GAAP or (ii) the failure
to pay any such tax, assessment, charge, levy, account payable or claim could
not reasonably be expected to have a Material Adverse Effect. Neither Borrower
nor any of its Subsidiaries shall violate any law, ordinance or governmental
rule and regulation to which it is subject including, without limitation, the
Occupational Safety and Health Act of 1970, as amended, ERISA and all laws,
ordinances, governmental rules and regulations relating to environmental
protection in all applicable jurisdictions, if such violation could reasonably
be expected to have a Material Adverse Effect or would result in any Lien not
permitted under SECTION 7.01.
6.06 MAINTENANCE, ETC. Borrower will maintain, preserve and keep, and
will cause each of its Subsidiaries to maintain, preserve and keep, its material
properties which are used or useful in the conduct of its business (whether
owned in fee or a leasehold interest) in good repair and working order (ordinary
wear and tear excepted) and from time to time will make all necessary repairs,
replacements, renewals and additions so that at all times the efficiency thereof
shall be maintained.
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6.07 PAYMENT OF OBLIGATIONS. Subject to SECTION 6.05, Borrower
shall, and shall cause each of its Subsidiaries to, pay and discharge as the
same shall become due and payable, all their respective material obligations
and liabilities, including all material Indebtedness as and when due and
payable but subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness.
6.08 ENVIRONMENTAL LAWS. Upon the written request of Administrative
Agent or any Lender, Borrower shall submit and cause each of its Subsidiaries
to submit, to Administrative Agent with sufficient copies for each Lender, at
Borrower's sole cost and expense, at reasonable intervals, but in any event
no more frequently than quarterly, a report providing an update of the status
of any environmental compliance, hazard or liability issue identified in any
notice or report required pursuant to SECTION 6.02(D), that could,
individually or in the aggregate, reasonably be expected to result in
liability in excess of $5,000,000.
6.09 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. Borrower shall
maintain, and shall cause each of its Subsidiaries to maintain, proper books of
record and account, in which full, true and correct entries which will allow for
preparation of financial statements in conformity with GAAP consistently applied
shall be made of all financial transactions and matters involving the assets and
business of Borrower and such Subsidiaries. Borrower will permit, and will
cause each of its Subsidiaries to permit, representatives of Administrative
Agent or any Lender to visit and inspect any of their respective properties, to
examine their respective corporate, financial and operating records and make
copies thereof or abstracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent public
accountants, all at the expense of Borrower and at such reasonable times during
normal business hours and as often as may be reasonably requested, upon
reasonable advance notice to Borrower.
6.10 GUARANTIES BY NEW DOMESTIC SUBSIDIARIES. Borrower shall cause
each Person that becomes an active Domestic Subsidiary (EXCLUDING special
purpose bankruptcy remote financing entities), within 30 days after becoming
such a Domestic Subsidiary, to become a Subsidiary Guarantor under the Master
Subsidiary Guaranty and, in connection therewith, deliver to Administrative
Agent the applicable documents pursuant to SECTION 4.03, and such other
documents as Administrative Agent and any Lender may reasonably request.
SECTION 7.
NEGATIVE COVENANTS
Borrower covenants and agrees that, so long as any Lender or the Issuing
Lender shall have any Commitment hereunder, or any Obligations shall remain
unpaid, unless the Requisite Lenders waive compliance in writing:
7.01 LIMITATION ON LIENS. Borrower will not, nor will it permit any of
its Subsidiaries to, incur, assume or suffer to exist, any Lien or Negative
Pledge upon any of its property, assets or revenues, whether now owned or
hereafter acquired, EXCEPT:
(a) Ordinary Course Liens;
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(b) Liens and Negative Pledges existing on the Closing Date and listed
on SCHEDULE 7.01;
(c) Liens securing Indebtedness permitted to be secured under SECTIONS
7.02; PROVIDED HOWEVER that Liens permitted under SECTION 7.02(D) shall attach
solely to the assets financed by such purchase money Indebtedness;
(d) Liens in connection with Permitted Accounts Receivable Financing
Facilities;
(e) Liens resulting from or consisting of Operating Leases and
Capitalized Leases permitted hereunder;
(f) Negative Pledges on assets otherwise permitted to be subject to a
Lien hereunder; and
(g) extensions and renewals of Liens described above, PROVIDED that
(i) such Liens shall not be extended to other property of Borrower or any of its
Subsidiaries, and (ii) the principal amount of Indebtedness secured thereby
shall not be increased over the principal amount thereof outstanding immediately
prior to such extension or renewal.
7.02 LIMITATIONS ON INDEBTEDNESS. Borrower will not, nor will it
permit of its Subsidiaries to, create, assume, suffer to exist or incur or in
any manner become liable in respect of any Indebtedness for borrowed money or
other Indebtedness described in clauses (a) through (f) of the definition
thereof, EXCEPT:
(a) Ordinary Course Indebtedness;
(b) unsecured Indebtedness outstanding under the Senior Note
Agreements not exceeding $100,000,000 in the aggregate;
(c) Indebtedness under Permitted Accounts Receivable Financing
Facilities; PROVIDED, HOWEVER, that the Net Issuance Proceeds from increases in
outstandings under Permitted Accounts Receivable Financing Facilities after the
Closing Date shall be applied to repay or prepay Indebtedness owing by the
Borrower and its Subsidiaries.
(d) secured purchase money Indebtedness, including Capitalized Lease
Obligations, originally incurred to acquire fixed assets PROVIDED that at the
time of such acquisition, the aggregate amount remaining unpaid on all such
Indebtedness secured by Liens on such fixed assets, whether or not assumed by
Borrower or its Subsidiaries Subsidiary, does not exceed an amount equal to the
lesser of (i) 100%, in the case of fixed assets which are personal property
(including Capitalized Leases of fixed assets which are personal property) or
(ii) 80%, in the case of fixed assets which are real property, of the lesser of
the total purchase price or fair market value at the time of such acquisition as
determined in good faith by the Board of Directors of Borrower;
(e) other Indebtedness for borrowed money (including Indebtedness
hereunder); PROVIDED, HOWEVER, that, after giving effect thereto, ALL of the
following conditions are satisfied:
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(i) no Default or Event of Default shall exist;
(ii) the aggregate outstanding principal of the Basket Total
Debt of Borrower's Subsidiaries shall not exceed 20% of Consolidated Net
Worth; and
(iii) the aggregate outstanding principal of the secured Basket
Total Debt of Borrower and its Subsidiaries shall not exceed 10% of
Consolidated Net Worth;
(f) Indebtedness refinancing or extending Indebtedness permitted above
on terms and conditions no less favorable than the Indebtedness being
refinanced; PROVIDED, HOWEVER, that the principal amount of such new
Indebtedness shall not exceed the outstanding principal amount of Indebtedness
being refinanced immediately prior to such refinancing.
7.03 NO RESTRICTIONS ON SUBSIDIARIES. Borrower will not, nor will it
permit any of its Subsidiaries to, enter into, or commit to enter into, any
agreement or understanding that could limit or restrict any of its Subsidiaries
making or declaring any dividends, either in cash or property, to Borrower,
repaying or prepaying any Indebtedness (other than for amounts loaned by
Borrower to its Subsidiaries on a subordinated basis in connection with
Permitted Accounts Receivable Financing Facilities) owing to Borrower, or making
any Investment in Borrower.
7.04 FUNDAMENTAL CHANGES. Borrower will not, nor will it permit any of
its Subsidiaries to, merge or consolidate with or into any Person or liquidate,
wind-up or dissolve itself, or permit or suffer any liquidation or dissolution
or sell all or substantially all of its assets, EXCEPT, that so long as no
Default or Event of Default exists or would result therefrom:
(a) any of its Subsidiaries may merge or consolidate (i) with or into
Borrower or any wholly-owned Subsidiary so long as in any merger or
consolidation involving Borrower, Borrower shall be the surviving or continuing
corporation or (ii) with any other Person PROVIDED that such merger or
consolidation (EXCLUDING any Covered Dispositions) does not constitute a
Disposition of more than 15% of Consolidated Total Assets, determined as of the
end of the end of the immediately preceding fiscal year;
(b) Borrower may consolidate or merge with any other corporation if
(i) Borrower shall be the surviving or continuing corporation and (ii) at the
time of such consolidation or merger and after giving effect thereto no Default
or Event of Default shall have occurred and be continuing; and
(c) any of its Subsidiaries may sell, lease or otherwise dispose of
all or any substantial part of its assets to Borrower or any wholly-owned
Subsidiary.
7.05 DISPOSITIONS. Borrower will not, nor will it permit any of its
Subsidiaries to, make any Dispositions, EXCEPT:
(a) Ordinary Course Dispositions;
(b) Dispositions permitted by SECTION 7.04;
(c) in connection with Permitted Accounts Receivable Financing
Facilities;
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(d) the Simplex Products Disposition;
(e) Dispositions (EXCLUDING Covered Dispositions) of other assets
having a book value not exceeding during the 12-month period ending with the
date of such Disposition, 15% of Consolidated Total Assets, determined as of the
end of the end of the immediately preceding fiscal year; and
(f) any Covered Dispositions.
7.06 ACQUISITIONS. Borrower will not, nor will it suffer or permit any
of its Subsidiaries to, make any Acquisition unless, after giving effect to such
Acquisition (the "SUBJECT ACQUISITION"), ALL of the following requirements are
satisfied:
(a) during the 12-month period ending on the last day of the month
prior to the closing of the subject Acquisition, the aggregate consideration
paid (including, without limitation, Indebtedness for borrowed money incurred or
assumed) for all Acquisitions during such period (including, on a pro forma
basis, the subject Acquisition) does not exceed 50% of Consolidated Tangible Net
Worth as of the last day of such period (including all Acquisitions during such
period including, on a pro forma basis, the subject Acquisition);
(b) the total consideration paid (including, without limitation,
Indebtedness for borrowed money incurred or assumed, but excluding secured
purchase money Indebtedness, including Capitalized Lease Obligations permitted
under SECTION 7.02(D)) for any one Acquisition or series of related Acquisitions
does not exceed $75,000,000; PROVIDED, HOWEVER, that the cash consideration and
all Indebtedness incurred or assumed in any one Acquisition (excluding secured
purchase money Indebtedness, including Capitalized Lease Obligations permitted
under SECTION 7.02(D)) shall not exceed an amount equal to the SUM OF (i)
$25,000,000, (ii) the net cash proceeds received from Dispositions (OTHER THAN
Permitted Accounts Receivable Financing Facilities) within the prior 12 months
(EXCLUDING any such proceeds counted towards prior Acquisitions), and (iii) the
net cash proceeds received from any equity offering;
(c) at the time of any Acquisition and after giving effect thereto no
Default or Event of Default shall have occurred and be continuing; and
(d) such Acquisitions are not opposed by the board of directors or
management of any Person or business to be acquired.
7.07 OPERATING LEASES. Borrower will not, nor will it permit any of
its Subsidiaries to, create or suffer to exist any obligations for the payment
of rent for any property under any Operating Leases, EXCEPT
(a) Operating Leases of Borrower and its Subsidiaries in existence on
the Closing Date and any renewal, extension or refinancing thereof that does not
increase the rental payments therefor; and
(b) other Operating Leases PROVIDED that aggregate annual rental
payments for all such Operating Leases shall not exceed in any fiscal year
$15,000,000.
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7.08 LOANS AND INVESTMENTS. Borrower will not, nor will it suffer or
permit any of its Subsidiaries to, make any Investment in any Person including
any Affiliate of Borrower, EXCEPT:
(a) Ordinary Course Investments;
(b) Investments existing as of the date hereof and set forth on
SCHEDULE 7.08, including reinvestments of the same amounts in the same
instruments;
(c) Investments in, or Guaranty Obligations with respect to
Indebtedness of, joint ventures which respect to which Borrower or its
Subsidiaries is a partner not exceeding $2,000,000 in the aggregate at any time;
(d) loans or advances in the usual and ordinary course of business to
officers, directors and employees for expenses (including moving and relocation
expenses related to a transfer) incidental to carrying on the business of
Borrower or any of its Subsidiaries not exceeding $2,000,000 in the aggregate at
any time outstanding;
(e) loan and advances to officers, directors and employees to exercise
stock options of such employees to purchase stock of Borrower, if, after giving
effect thereto and to the application of the proceeds thereof, such loan does
not increase Consolidated Net Worth or Consolidated Net Income (other than an
increase due to interest on such loan or advance);
(f) advances on commissions in the ordinary course of business to
employees or subcontractors of Borrower or its Subsidiaries in an aggregate
amount not exceeding $5,000,000 at any time outstanding;
(g) loans, guarantees, or other extensions of credit not exceeding
$10,000,000 in the aggregate to Borrower's employee stock ownership plan
("ESOP") at any time outstanding;
(h) loans to the ESOP to purchase newly issued convertible shares of
stock of Borrower, if, after giving effect thereto and to the application of the
proceeds thereof, such loan does not increase Consolidated Tangible Net Worth;
(i) notes taken in connection with any Disposition permitted
hereunder;
(j) additional Investments in any fiscal year in an amount equal to
Restricted Payments that can be made under SECTION 7.09(A) in respect of such
fiscal year, but which are not made, PROVIDED that after giving effect to such
Investments, no Event of Default shall have occurred and be continuing; and
(k) additional Investments not exceeding $3,000,000 in the aggregate
in any fiscal year, PROVIDED that after giving effect to such Investments, no
Event of Default shall have occurred and be continuing.
7.09 RESTRICTED PAYMENTS. Borrower will not, nor will it permit any of
its Subsidiaries to, make any Restricted Payments EXCEPT:
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(a) Restricted Payments not exceeding $9,000,000 in the aggregate in
respect of any fiscal year; and
(b) Restricted Payments in any fiscal year in an amount equal to
Investments that can be made under SECTION 7.08(K) in such fiscal year, but
which are not made;
PROVIDED that, in each instance, after giving effect to any Restricted Payments,
no Event of Default shall have occurred and be continuing.
For the purposes of this SECTION 7.09, (a) the amount of any Restricted
Payment declared, paid or distributed in property shall be deemed to be the
greater of the book value or fair market value (as determined in good faith by
the Board of Directors of Borrower) of such property at the time of the making
of the Restricted Payment in question and (b) on the date which is twelve months
after the date on which a corporation becomes a Subsidiary, all Investments of
such corporation at such time shall be deemed to have been made by such
corporation, as a Subsidiary, at such time and such Investments will not be
taken into account for purposes of this SECTION 7.09 prior to such time.
7.10 TERMINATION OF PENSION PLANS. Borrower will not, nor will it
permit any ERISA Affiliate to, withdraw from any Multiemployer Plan if such
withdrawal would result in withdrawal liability (as described in Part I of
Subtitle E of Title IV of ERISA) which is currently owing which could reasonably
be expected to have a Material Adverse Effect. Borrower and any ERISA Affiliate
will not permit any employee benefit plan maintained by it to be terminated if
such termination could result in the imposition of a Lien on any property of
Borrower or any ERISA Affiliate pursuant to Section 4068 of ERISA.
7.11 COMPLIANCE WITH ERISA. Borrower will not directly or indirectly,
nor will it permit any ERISA Affiliate directly or indirectly, (i) to terminate
in a distress termination under Section 4041 of ERISA, any Plan subject to Title
IV of ERISA so as to result in any material liability to Borrower or any ERISA
Affiliate, (ii) to permit to exist any ERISA Event or any other event or
condition, which presents the risk of a material liability of Borrower or any
ERISA Affiliate, or (iii) to make a complete or partial withdrawal (within the
meaning of ERISA Section 4201) from any Multiemployer Plan so as to result in
any material liability to Borrower or any ERISA Affiliate. For purposes of this
SECTION 7.11, "material liability" means any liability which could reasonably be
expected to have a Material Adverse Effect.
7.12 CAPITAL EXPENDITURES. Borrower will not, nor will it suffer or
permit any Of its Subsidiaries to, make, or become legally obligated to make,
any Capital Expenditures, EXCEPT Capital Expenditures in any fiscal year of
Borrower not exceeding $30,000,000 in the aggregate.
7.13 CONSOLIDATED NET WORTH. Borrower will not permit its Consolidated
Net Worth at any time during any fiscal quarter to be less than $170,000,000
PLUS 50% of each fiscal quarter's Consolidated Net Income (with no deduction for
losses) commencing January 1, 1999 PLUS 75% of any Net Issuance Proceeds after
January 1, 1999.
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7.14 LEVERAGE RATIO. Borrower shall not permit the Leverage Ratio at
any time during any fiscal quarter set forth below to be greater than the ratio
set forth below opposite such fiscal quarter or the period during which such
fiscal quarter ends:
MAXIMUM LEVERAGE
FISCAL QUARTERS ENDING RATIO
------------------------------ -----------------
Closing through March 31, 2000 4.50 to 1
June 30, 2000 through September 30, 2000 3.75 to 1
December 31, 2000 3.50 to 1
March 31, 2001 through June 30, 2001 3.25 to 1
September 30, 2001 and thereafter 3.00 to 1
7.15 INTEREST COVERAGE RATIO. Borrower will not permit its Interest
Coverage Ratio to be less than 3.50 to 1.00 at any time.
7.16 TRANSACTIONS WITH AFFILIATES. Borrower will not, nor will it
permit any Of its Subsidiaries to, enter into or be a party to any transaction
or arrangement with any Affiliate (including, without limitation, the purchase
from, sale to or exchange of property with, or the rendering of any service by
or for, any Affiliate, but excluding intercompany transactions with any
wholly-owned Subsidiary), EXCEPT
(a) employment, consulting and other compensation arrangements with
the officers and directors of Borrower,
(b) in the ordinary course of and pursuant to the reasonable
requirements of Borrower's or such Subsidiary's business and upon terms no less
favorable to Borrower or such Subsidiary than would obtain in a comparable
arm's-length transaction with a Person other than an Affiliate; and
(c) in connection with Permitted Accounts Receivable Financing
Facilities.
7.17 NATURE OF BUSINESS. Borrower will not, nor will it permit any Of
its Subsidiaries to, engage in any business if, as a result, the general nature
of the business, taken on a consolidated basis, which would then be engaged in
by Borrower and its Subsidiaries would be substantially changed from the general
nature of the business engaged in by Borrower and its Subsidiaries on the date
of this Agreement. No transaction or series of transactions permitted under
SECTION 7.04 or constituting Investments permitted under SECTION 7.08 shall be
deemed to violate this SECTION 7.17.
7.18 ACCOUNTING CHANGES. Borrower will not, nor will it permit any Of
its Subsidiaries to make any material changes in accounting, except as may be
allowed or required by GAAP and only if the impact of such changes are disclosed
and quantified in a note to Borrower's financial statements.
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SECTION 8.
EVENTS OF DEFAULT
8.01 EVENTS OF DEFAULT. Any of the following events shall constitute
an "Event of Default":
(a) Any Borrower Party fails to pay any principal or interest on any
Outstanding Obligation (other than fees) as and on the date when due; or fails
to pay any fees due hereunder within three days after the date when due; or
(b) Any representation or warranty by Borrower or any of its
Subsidiaries herein, in any Loan Document or which is contained in any
certificate, document or financial or other statement furnished at any time
under this Agreement, or in or under any Loan Document, shall prove to have been
incorrect in any material respect on or as of the date made or deemed made; or
(c) A default shall occur in the observance or performance of any
other provision of this Agreement which is not remedied within 10 business days
after the earlier of (i) the day on which a Responsible Officer of any Borrower
Party first obtains actual knowledge of such default, or (ii) the day on which
notice thereof is given to Borrower by Administrative Agent; or
(d) (i) Any Borrower Party (x) defaults in any payment when due of
principal of or interest on any Indebtedness (other than Indebtedness hereunder)
or (y) defaults in the observance or performance of any other agreement or
condition relating to any Indebtedness (other than Indebtedness hereunder) or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur, the effect of which default or other
event is to cause, or to permit the holder or holders of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, Indebtedness
having an aggregate principal amount in excess of $5,000,000 to be demanded or
become due (automatically or otherwise) prior to its stated maturity, or any
Guaranty Obligation in such amount to become payable or cash collateral in
respect thereof to be demanded, or any Borrower Party is unable or admits in
writing its inability to pay its debts as they mature; or (ii) the occurrence
under any Swap Contract of an Early Termination Date (as defined in such Swap
Contract) resulting from (x) any event of default under such Swap Contract as to
which Borrower or any Subsidiary is the Defaulting Party (as defined in such
Swap Contract) or (y) any Termination Event occurs under any Swap Contract (as
defined therein) as to which Borrower or any Subsidiary is an Affected Party (as
so defined), which, in either event, the Swap Termination Value owed by Borrower
or such Subsidiary as a result thereof is greater than $5,000,000; or
(e) Final judgment or judgments for the payment of money aggregating
in excess of $1,000,000 is or are outstanding against Borrower and/or any Of its
Subsidiaries or against any property or assets of either and such judgments have
remained unpaid, unvacated, unbonded or unstayed by appeal or otherwise for a
period of 10 business days from the date of entry; or
(f) Borrower or any of its Subsidiaries (i) becomes insolvent or
generally fails to pay, or admits in writing its inability to pay, its debts as
they become due, subject to applicable grace
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periods, if any, whether at stated maturity or otherwise; (ii) voluntarily
ceases to conduct its business in the ordinary course substantially as it is
conducted on the Closing Date except as permitted by SECTION 7.04; (iii)
commences any proceeding under Debtor Relief Laws or files any petition or
answer consenting to any proceeding under Debtor Relief Laws; (iv) acquiesces
in the appointment of a receiver, trustee, custodian or liquidator for itself
or a substantial portion of its property, assets or business or effects a
plan or other arrangement with its creditors; or (v) takes any action to
effectuate any of the foregoing; or
(g) Any involuntary proceeding under Debtor Relief Laws is commenced
or filed against Borrower or any Of its Subsidiaries holding a substantial part
of the assets of Borrower and its Subsidiaries on a consolidated basis, or any
writ, judgment, warrant of attachment, execution or similar process, is issued
or levied against a substantial part of the assets of Borrower and its
Subsidiaries on a consolidated basis and any such proceedings or petition shall
not be dismissed, or such writ, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded within 60 days
after commencement, filing or levy; or
(h) An ERISA Event shall occur with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of 5% of
Consolidated Tangible Net Worth; the aggregate amount of Unfunded Pension
Liability among all Pension Plans at any time exceeds 5% of Consolidated
Tangible Net Worth; or (iii) Borrower or any ERISA Affiliate shall fail to pay
when due, after the expiration of any applicable grace period, any installment
payment with respect to its withdrawal liability under Section 4201 of ERISA
under a Multiemployer Plan in an aggregate amount in excess of 5% of
Consolidated Tangible Net Worth; or
(i) Any Event of Default shall occur under (and as defined in) any
Senior Note Agreement; or
(j) Any Person or group of Persons (within the meaning of Section 13
or 14 of the Exchange Act), other than an employee benefit or stock ownership
plan of Borrower, shall have acquired beneficial ownership (within the meaning
of Rule 13d-3 promulgated by the Securities and Exchange Commission under said
Act) of 50% or more of the outstanding shares of common stock of Borrower; or
(k) There occurs any termination (other than a scheduled termination),
liquidation, unwind or similar event or circumstance under any Permitted
Accounts Receivable Financing Facilities, which permits any purchaser of
receivables thereunder to cease purchasing such receivables and/or to apply all
collections on previously purchased receivables thereunder to the repayment of
such purchaser's interest in such previously purchased receivables; or
(l) Any Loan Document, at any time after its execution and delivery
and for any reason other than the agreement or action (or omission to act) of
Lenders or satisfaction in full of all the Obligations ceases to be in full
force and effect or is declared by a court of competent jurisdiction to be null
and void, invalid or unenforceable in any respect; or any Borrower Party
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thereto denies in writing that it has any or further liability or obligation
under any Loan Document, or purports to revoke, terminate or rescind same; or
(m) The occurrence of a Change in Control.
8.02 REMEDIES UPON EVENT OF DEFAULT. Without limiting any other rights
or remedies of Administrative Agent or Lenders provided for elsewhere in this
Agreement, or the other Loan Documents, or by applicable Law, or in equity, or
otherwise:
(a) Upon the occurrence, and during the continuance, of any Event of
Default OTHER THAN an Event of Default described in SECTION 8.01(f) or (g):
(i) the Requisite Lenders may request Administrative Agent to,
and Administrative Agent thereupon shall, terminate the Commitments
and/or declare all or any part of the unpaid principal of all Loans, all
interest accrued and unpaid thereon and all other amounts payable under
the Loan Documents to be immediately due and payable, whereupon the same
shall become and be immediately due and payable, without protest,
presentment, notice of dishonor, demand or further notice of any kind,
all of which are expressly waived by Borrower; and
(ii) Issuing Lender may, with the approval of Administrative
Agent on behalf of the Requisite Lenders, demand immediate payment by
Borrower of an amount equal to the aggregate amount of all outstanding
Letters of Credit Usage to be held in a Letter of Credit Cash Collateral
Account.
(b) Upon the occurrence of any Event of Default described in SECTION
8.01(f) or (g):
(i) the Commitments and all other obligations of Administrative
Agent or Lenders shall automatically terminate without notice to or
demand upon Borrower, which are expressly waived by Borrower;
(ii) the unpaid principal of all Loans, all interest accrued and
unpaid thereon and all other amounts payable under the Loan Documents
shall be immediately due and payable, without protest, presentment,
notice of dishonor, demand or further notice of any kind, all of which
are expressly waived by Borrower; and
(iii) an amount equal to the aggregate amount of all outstanding
Letters of Credit Usage shall be immediately due and payable to Issuing
Lender without notice to or demand upon Borrower, which are expressly
waived by Borrower, to be held in a Letter of Credit Cash Collateral
Account.
(c) Upon the occurrence of any Event of Default, Lenders and
Administrative Agent, or any of them, without notice to (except as expressly
provided for in any Loan Document) or demand upon Borrower, which are expressly
waived by Borrower (except as to notices expressly provided for in any Loan
Document), may proceed to (but only with the consent of the Requisite Lenders)
protect, exercise and enforce their rights and remedies under the Loan Documents
against any Borrower Party and such other rights and remedies as are provided by
Law or equity.
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(d) Except as permitted by SECTION 10.05, no Lender may exercise any
rights or remedies with respect to the Obligations without the consent of the
Requisite Lenders in their sole and absolute discretion. The order and manner
in which Administrative Agent's and Lenders' rights and remedies are to be
exercised shall be determined by the Requisite Lenders in their sole and
absolute discretion. Regardless of how a Lender may treat payments for the
purpose of its own accounting, for the purpose of computing the Obligations
hereunder, payments shall be applied FIRST, to costs and expenses (including
Attorney Costs) incurred by Administrative Agent and each Lender, SECOND, to the
payment of accrued and unpaid interest on the Loans to and including the date of
such application, THIRD, to the payment of the unpaid principal of the Loans,
and FOURTH, to the payment of all other amounts (including fees) then owing to
Administrative Agent and Lenders under the Loan Documents, in each case paid pro
rata to each Lender in the same proportions that the aggregate Obligations owed
to each Lender under the Loan Documents bear to the aggregate Obligations owed
under the Loan Documents to all Lenders, without priority or preference among
Lenders. No application of payments will cure any Event of Default, or prevent
acceleration, or continued acceleration, of amounts payable under the Loan
Documents, or prevent the exercise, or continued exercise, of rights or remedies
of Administrative Agent and Lenders hereunder or thereunder or at Law or in
equity.
SECTION 9.
ADMINISTRATIVE AGENT
9.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.
(a) Each Lender hereby irrevocably (subject to SECTION 9.09) appoints,
designates and authorizes Administrative Agent to take such action on its behalf
under the provisions of this Agreement and each other Loan Document and to
exercise such powers and perform such duties as are expressly delegated to it by
the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary contained elsewhere in this Agreement or in any other Loan
Document, Administrative Agent shall not have any duties or responsibilities,
except those expressly set forth herein, nor shall Administrative Agent have or
be deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against Administrative Agent. Without limiting the generality of the foregoing
sentence, the use of the term "agent" in this Agreement with reference to
Administrative Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
(b) Issuing Lender shall act on behalf of Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith until such
time and except for so long as Administrative Agent may agree at the request of
the Requisite Lenders to act for such Issuing Lender with respect thereto;
PROVIDED, HOWEVER, that Issuing Lender shall have all of the benefits and
immunities (i) provided to Administrative Agent in this SECTION 9 with respect
to any acts taken or omissions suffered by Issuing Lender in connection with
Letters of Credit issued by it or
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proposed to be issued by it and the application and agreements for letters of
credit pertaining to the Letters of Credit as fully as if the term
"Administrative Agent" as used in this SECTION 9 included Issuing Lender with
respect to such acts or omissions, and (ii) as additionally provided in this
Agreement with respect to Issuing Lender.
9.02 DELEGATION OF DUTIES. Administrative Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. Administrative Agent shall
not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
9.03 LIABILITY OF ADMINISTRATIVE AGENT. None of Administrative
Agent-Related Persons shall (i) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any other
Loan Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct), or (ii) be responsible in any manner to any
of Lenders for any recital, statement, representation or warranty made by any
Borrower Party or any Subsidiary or Affiliate of any Borrower Party, or any
officer thereof, contained in this Agreement or in any other Loan Document, or
in any certificate, report, statement or other document referred to or provided
for in, or received by Administrative Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of any Borrower Party or any other party to any
Loan Document to perform its obligations hereunder or thereunder. No
Administrative Agent-Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Borrower Party
or any of any Borrower Party's Subsidiaries or Affiliates.
9.04 RELIANCE BY ADMINISTRATIVE AGENT.
(a) Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to Borrower),
independent accountants and other experts selected by Administrative Agent.
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Requisite Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by Lenders against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action.
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Requisite Lenders or all Lenders, if
required hereunder, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of Lenders. Where this Agreement
expressly permits or prohibits an action unless the Requisite Lenders otherwise
determine, and in all other instances, Administrative
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Agent may, but shall not be required to, initiate any solicitation for the
consent or a vote of Lenders.
(b) For purposes of determining compliance with the conditions
specified in SECTION 4.01, each Lender that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by Administrative Agent to such Lender for
consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to such Lender.
9.05 NOTICE OF DEFAULT. Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to Administrative Agent for the account of Lenders, unless
Administrative Agent shall have received written notice from a Lender or
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". Administrative
Agent will notify Lenders of its receipt of any such notice. Administrative
Agent shall take such action with respect to such Default or Event of Default as
may be requested by the Requisite Lenders in accordance with SECTION 8;
PROVIDED, HOWEVER, that unless and until Administrative Agent has received any
such request, Administrative Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable or in the best interest of Lenders.
9.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE
AGENT. Each Lender acknowledges that none of Administrative Agent-Related
Persons has made any representation or warranty to it, and that no act by
Administrative Agent hereinafter taken, including any consent to and acceptance
of any assignment or review of the affairs of any Borrower Party and its
Subsidiaries, shall be deemed to constitute any representation or warranty by
any Administrative Agent-Related Person to any Lender as to any matter,
including whether Administrative Agent-Related Persons have disclosed material
information in their possession. Each Lender, including any Lender by
assignment, represents to Administrative Agent that it has, independently and
without reliance upon any Administrative Agent-Related Person and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, prospects, operations, property,
financial and other condition and creditworthiness of any Borrower Party and its
Subsidiaries, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to any Borrower Party hereunder. Each Lender
also represents that it will, independently and without reliance upon any
Administrative Agent-Related Person and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigations as it
deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of any Borrower
Party. Except for notices, reports and other documents expressly required to be
furnished to Lenders by Administrative Agent herein, Administrative Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations, property,
financial and
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other condition or creditworthiness of any Borrower Party or any of its
Subsidiaries which may come into the possession of any of Administrative
Agent-Related Persons.
9.07 INDEMNIFICATION OF ADMINISTRATIVE AGENT. Whether or not the
transactions contemplated hereby are consummated, Lenders shall indemnify upon
demand each Administrative Agent-Related Person (to the extent not reimbursed by
or on behalf of Borrower Parties and without limiting the obligation of Borrower
Parties to do so), pro rata, and hold harmless each Administrative Agent-Related
Person from and against any and all Indemnified Liabilities incurred by it;
PROVIDED, HOWEVER, that no Lender shall be liable for the payment to any
Administrative Agent-Related Person of any portion of such Indemnified
Liabilities resulting from such Person's gross negligence or willful misconduct;
PROVIDED, HOWEVER, that no action taken in accordance with the directions of the
Requisite Lenders shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section. Without limitation of the foregoing,
each Lender shall reimburse Administrative Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs) incurred
by Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that
Administrative Agent is not reimbursed for such expenses by or on behalf of
Borrower Parties. The undertaking in this Section shall survive the payment of
all Obligations hereunder and the resignation or replacement of Administrative
Agent.
9.08 ADMINISTRATIVE AGENT IN INDIVIDUAL CAPACITY. Bank of America and
its Affiliates may make loans to, issue letters of credit for the account of,
accept deposits from, acquire equity interests in and generally engage in any
kind of banking, trust, financial advisory, underwriting or other business with
Borrower and its Subsidiaries and Affiliates as though Bank of America were not
Administrative Agent or Issuing Lender hereunder and without notice to or
consent of Lenders. Lenders acknowledge that, pursuant to such activities, Bank
of America or its Affiliates may receive information regarding Borrower or its
Affiliates (including information that may be subject to confidentiality
obligations in favor of Borrower or such Affiliate) and acknowledge that
Administrative Agent shall be under no obligation to provide such information to
them. With respect to its Loans, Bank of America shall have the same rights and
powers under this Agreement as any other Lender and may exercise the same as
though it were not Administrative Agent or Issuing Lender.
9.09 SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may, and
at the request of the Requisite Lenders shall, resign as Administrative Agent
upon 30 days' notice to Lenders. If Administrative Agent resigns under this
Agreement, the Requisite Lenders shall appoint from among Lenders a successor
administrative agent for Lenders which successor administrative agent shall
be approved by Borrower. If no successor administrative agent is appointed
prior to the effective date of the resignation of Administrative Agent,
Administrative Agent may appoint, after consulting with Lenders and Borrower,
a successor administrative agent from among Lenders. Upon the acceptance of
its appointment as successor administrative agent hereunder, such successor
administrative agent shall succeed to all the rights, powers and duties of
the retiring Administrative Agent and the term "Administrative Agent" shall
mean such successor
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administrative agent and the retiring Administrative Agent's appointment,
powers and duties as Administrative Agent shall be terminated. After any
retiring Administrative Agent's resignation hereunder as Administrative
Agent, the provisions of this SECTION 9 and SECTIONS 10.03 and 10.13 shall
inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement. If no successor
administrative agent has accepted appointment as Administrative Agent by the
date which is 30 days following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and Lenders shall perform all of the
duties of Administrative Agent hereunder until such time, if any, as the
Requisite Lenders appoint a successor agent as provided for above.
Notwithstanding the foregoing, however, Bank of America may not be removed as
Administrative Agent at the request of the Requisite Lenders unless Bank of
America shall also simultaneously be replaced as "Issuing Lender" and "Swing
Line Lender" hereunder pursuant to documentation in form and substance
reasonably satisfactory to Bank of America.
SECTION 10.
MISCELLANEOUS.
10.01 AMENDMENTS; CONSENTS. No amendment, modification, supplement,
extension, termination or waiver of any provision of this Agreement or any other
Loan Document, no approval or consent thereunder, and no consent to any
departure by any Borrower Party therefrom shall be effective unless in writing
signed by the Requisite Lenders and acknowledged by Administrative Agent, and
each such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given. Except as otherwise expressly
provided herein, without the approval in writing of Administrative Agent and all
Lenders, no amendment, modification, supplement, termination, waiver or consent
may be effective:
(a) To reduce the amount of principal, principal prepayments or the
rate of interest payable on, any Loan, or the amount of any fee or other amount
payable to any Lender under the Loan Documents (unless such modification is
consented to by each Lender entitled to receive such fee ) or to waive an Event
of Default consisting of the failure of any Borrower Party to pay when due
principal, interest or any commitment fee;
(b) To postpone any date fixed for any payment of principal of,
prepayment of principal of, or any installment of interest on, any Loan or any
installment of any commitment fee, to extend the term of, or, except as provided
in SECTION 2.12, increase the amount of, any Lender's Commitment (it being
understood that a waiver of an Event of Default shall not constitute an
extension or increase in the Commitment of any Lender) or, except as provided in
SECTION 2.12, modify the Pro Rata Share of any Lender;
(c) To amend the provisions of the definition of "REQUISITE LENDERS,"
this SECTION 10.01 or SECTION 10.06;
(d) Release all or substantially all of the Subsidiary Guarantors; or
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(e) To amend any provision of this Agreement that expressly requires
the consent or approval of all Lenders.
PROVIDED, HOWEVER, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Issuing Lender in addition to the Requisite Lenders or
all Lenders, as the case may be, affect the rights or duties of the Issuing
Lender under any Loan Document relating to Letters of Credit, (ii) no amendment,
waiver or consent shall, unless in writing and signed by Administrative Agent in
addition to the Requisite Lenders or all Lenders, as the case may be, affect the
rights or duties of Administrative Agent under any Loan Document, (iii) no
amendment, waiver or consent shall, unless in writing and signed by Swing Line
Lender in addition to the Requisite Lenders or all Lenders, as the case may be,
affect the rights or duties of Swing Line Lender under any Loan Document, and
(iv) any fee letter may be amended, or rights or privileges thereunder waived,
in a writing executed by the parties thereto. Any amendment, modification,
supplement, termination, waiver or consent pursuant to this Section shall apply
equally to, and shall be binding upon, all Lenders and Administrative Agent.
10.02 TRANSMISSION AND EFFECTIVENESS OF NOTICES AND SIGNATURES.
(a) MODES OF DELIVERY. Except as otherwise provided in any Loan
Document, notices, requests, demands, directions, agreements and documents
delivered in connection with the Loan Documents (collectively, "COMMUNICATIONS")
shall be transmitted by Requisite Notice to the number and address set forth on
SCHEDULE 10.02, may be delivered by the following modes of delivery, and shall
be effective as follows:
MODE OF DELIVERY EFFECTIVE ON EARLIER OF ACTUAL RECEIPT AND:
- ------------------------------------------------------------------------
Courier Scheduled delivery date
Facsimile When transmission in legible form complete
Mail Fourth Business Day after deposit in U.S. mail
first class postage pre-paid
Personal delivery When received
Telephone When conversation completed
PROVIDED, HOWEVER, that communications delivered to Administrative Agent
pursuant to SECTION 2 shall not be effective until actually received by
Administrative Agent.
(b) RELIANCE BY ADMINISTRATIVE AGENT AND LENDERS. Administrative
Agent and Lenders shall be entitled to rely and act on any communications
purportedly given by or on behalf of any Borrower Party even if such
communications (i) were not made in a manner specified herein, (ii) were
incomplete, (iii) were not preceded or followed by any other notice specified
herein, or (d) the terms thereof, as understood by the recipient, varied from
any subsequent related communications provided for herein. Each Borrower Party
shall indemnify Administrative Agent and Lenders from any loss, cost, expense or
liability as a result of relying on any communications permitted herein.
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(c) EFFECTIVENESS OF FACSIMILE SIGNATURES. Signatures on
communications may be transmitted by facsimile only with the consent of
Administrative Agent in its sole and absolute discretion in each instance. The
effectiveness of any such signatures accepted by Administrative Agent shall,
subject to applicable Law, have the same force and effect as manual signatures
and shall be binding on all Borrower Parties and Administrative Agent and
Lenders. Administrative Agent may also require that any such signature be
confirmed by a manually-signed hardcopy thereof; PROVIDED, HOWEVER, that the
failure to request any such manually-signed hardcopy confirmation shall not
effect the effectiveness of any facsimile signatures.
10.03 ATTORNEY COSTS, EXPENSES AND TAXES. Borrower agrees (a) to pay
or reimburse Administrative Agent for all costs and expenses incurred in
connection with the development, preparation, negotiation and execution of
the Loan Documents, and the development, preparation, negotiation and
execution of any amendment, waiver, consent, supplement or modification to,
any Loan Documents, and any other documents prepared in connection herewith
or therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including all Attorney Costs, and (b) to pay
or reimburse Administrative Agent and each Lender for all costs and expenses
incurred in connection with any refinancing, restructuring, reorganization
(including a bankruptcy reorganization) and enforcement or attempted
enforcement, or preservation of any rights under any Loan Documents, and any
other documents prepared in connection herewith or therewith, or in
connection with any refinancing, or restructuring of any such documents in
the nature of a "workout" or of any insolvency or bankruptcy proceeding,
including Attorney Costs. The foregoing costs and expenses shall include all
search, filing, recording, title insurance and appraisal charges and fees and
taxes related thereto, and other out-of-pocket expenses incurred by
Administrative Agent and the cost of independent public accountants and other
outside experts retained by Administrative Agent or any Lender. Such costs
and expenses shall also include administrative costs of Administrative Agent
reasonably attributable to the administration of the Loan Documents. Any
amount payable by Borrower under this Section shall bear interest from the
second Business Day following the date of demand for payment at the Default
Rate, unless waived by Administrative Agent. The agreements in this Section
shall survive repayment of all Obligations.
10.04 BINDING EFFECT; ASSIGNMENT.
(a) This Agreement and the other Loan Documents to which each Borrower
Party is a party will be binding upon and inure to the benefit of each Borrower
Party, Administrative Agent, Lenders and their respective successors and
assigns, except that, no Borrower Party may assign its rights hereunder or
thereunder or any interest herein or therein without the prior written consent
of all Lenders and any such attempted assignment shall be void. Any Lender may
at any time pledge its Note or any other instrument evidencing its rights as a
Lender under this Agreement to a Federal Reserve Lender, but no such pledge
shall release that Lender from its obligations hereunder or grant to such
Federal Reserve Lender the rights of a Lender hereunder absent foreclosure of
such pledge.
(b) From time to time following the Closing Date, each Lender may
assign to one or more Eligible Assignees all or any portion of its Pro Rata
Share of its Commitment and/or Extensions of Credit; PROVIDED that (i) such
assignment, if not to a Lender or an Affiliate of the assigning Lender, shall be
consented to by Borrower at all times other than during the existence
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of a Default or Event of Default and Administrative Agent and Issuing Lender
(which consents shall not be unreasonably withheld or delayed), (ii) a copy
of a duly signed and completed Notice of Assignment and Acceptance shall be
delivered to Administrative Agent, (iii) except in the case of an assignment
to an Affiliate of the assigning Lender, to another Lender or of the entire
remaining Commitment of the assigning Lender, the assignment shall not assign
a Pro Rata Share equivalent to less than the Minimum Amount therefor, and
(iv) the effective date of any such assignment shall be as specified in the
Notice of Assignment and Acceptance, but not earlier than the date which is
five Business Days after the date Administrative Agent has received the
Notice of Assignment and Acceptance. Upon acceptance by Administrative Agent
of such Notice Assignment and Acceptance and consent thereto by
Administrative Agent and Issuing Lender and payment of the requisite fee
described below, the Eligible Assignee named therein shall be a Lender for
all purposes of this Agreement, with the Pro Rata Share therein set forth
and, to the extent of such Pro Rata Share, the assigning Lender shall be
released from its further obligations under this Agreement. Borrower agrees
that it shall execute and deliver upon request (against delivery by the
assigning Lender to Borrower of any Note) to such assignee Lender, one or
more Notes evidencing that assignee Lender's Pro Rata Share, and to the
assigning Lender if requested, one or more Notes evidencing the remaining
balance Pro Rata Share retained by the assigning Lender. Administrative
Agent's consent to and acceptance of any assignment shall not be deemed to
constitute any representation or warranty by any Administrative Agent-Related
Person as to any matter. Each assignee shall concurrently execute and
deliver an Addendum to the Intercreditor Agreement in accordance with the
terms thereof.
(c) After receipt of a completed Notice of Assignment and Acceptance,
and receipt of an assignment fee of $3,500 from such Eligible Assignee
(including Affiliates of assigning Lenders), Administrative Agent shall,
promptly following the effective date thereof, provide to Borrower and Lenders a
revised SCHEDULE 10.02 giving effect thereto.
(d) Each Lender may from time to time grant participations to one or
more other Person (including another Lender) all or any portion of its Pro Rata
Share of its Commitment and/or Extensions of Credit; PROVIDED, HOWEVER, that (i)
such Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the participating banks or other
financial institutions shall not be a Lender hereunder for any purpose except,
if the participation agreement so provides, for the purposes of SECTION 3 (but
only to the extent that the cost of such benefits to a Borrower Party does not
exceed the cost which a Borrower Party would have incurred in respect of such
Lender absent the participation) and subject to SECTIONS 10.05 AND 10.06, (iv)
Borrower, Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, (v) the participation shall not restrict an
increase in the Commitment or in granting Lender's Pro Rata Share, so long as
the amount of the participation interest is not affected thereby, and (vi) the
consent of the holder of such participation interest shall not be required for
amendments or waivers of provisions of the Loan Documents; PROVIDED, HOWEVER,
that the assigning Lender may, in any agreement with a participant, give such
participant the right to consent to any matter which (A) extends the Maturity
Date as to such participant or any other date upon which any payment of money is
due to such participant, (B) reduces the rate of interest
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owing to such participant, any fee or any other monetary amount owing to such
participant, or (C) reduces the amount of any installment of principal owing
to such participant.
10.05 SET-OFF. In addition to any rights and remedies of Administrative
Agent and Lenders or any assignee or participant of Lenders or any Affiliates
thereof (each, a "PROCEEDING PARTY") provided by law, upon the occurrence and
during the continuance of any Event of Default, each Proceeding Party is
authorized at any time and from time to time, without prior notice to Borrower,
any such notice being waived by Borrower to the fullest extent permitted by law,
to proceed directly, by right of set-off, banker's lien, or otherwise, against
any assets of Borrower Parties which may be in the hands of such Proceeding
Party (including all general or special, time or demand, provisional or other
deposits and other indebtedness owing by such Proceeding Party to or for the
credit or the account of Borrower) and apply such assets against the
Obligations, irrespective of whether such Proceeding Party shall have made any
demand therefor and although such Obligations may be unmatured. Each Lender
agrees promptly to notify Borrower and Administrative Agent after any such
set-off and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application.
10.06 SHARING OF PAYMENTS. Each Lender severally agrees that if it,
through the exercise of any right of setoff, banker's lien or counterclaim
against any Borrower Party, or otherwise, receives payment of the Obligations
held by it that is ratably more than any other Lender, through any means,
receives in payment of the Obligations held by that Lender, then, subject to
applicable Laws: (a) Lender exercising the right of setoff, banker's lien or
counterclaim or otherwise receiving such payment shall purchase, and shall be
deemed to have simultaneously purchased, from the other Lender a participation
in the Obligations held by the other Lender and shall pay to the other Lender a
purchase price in an amount so that the share of the Obligations held by each
Lender after the exercise of the right of setoff, banker's lien or counterclaim
or receipt of payment shall be in the same proportion that existed prior to the
exercise of the right of setoff, banker's lien or counterclaim or receipt of
payment; and (b) such other adjustments and purchases of participations shall be
made from time to time as shall be equitable to ensure that all of Lenders share
any payment obtained in respect of the Obligations ratably in accordance with
each Lender's share of the Obligations immediately prior to, and without taking
into account, the payment; PROVIDED that, if all or any portion of a
disproportionate payment obtained as a result of the exercise of the right of
setoff, banker's lien, counterclaim or otherwise is thereafter recovered from
the purchasing Lender by a Borrower Party or any Person claiming through or
succeeding to the rights of a Borrower Party, the purchase of a participation
shall be rescinded and the purchase price thereof shall be restored to the
extent of the recovery, but without interest. Each Lender that purchases a
participation in the Obligations pursuant to this Section shall from and after
the purchase have the right to give all notices, requests, demands, directions
and other communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased. Each Borrower Party expressly
consents to the foregoing arrangements and agrees that any Lender holding a
participation in an Obligation so purchased may exercise any and all rights of
setoff, banker's lien or counterclaim with respect to the participation as fully
as if Lender were the original owner of the Obligation purchased.
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10.07 NO WAIVER; CUMULATIVE REMEDIES.
(a) No failure by any Lender or Administrative Agent to exercise, and
no delay by any Lender or Administrative Agent in exercising, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege under any
Loan Document preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege.
(b) The rights, remedies, powers and privileges herein or therein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by Law. Any decision by Administrative Agent or any Lender
not to require payment of any interest (including Default Interest), fee, cost
or other amount payable under any Loan Document or to calculate any amount
payable by a particular method on any occasion shall in no way limit or be
deemed a waiver of Administrative Agent's or such Lender's right to require full
payment thereof, or to calculate an amount payable by another method that is not
inconsistent with this Agreement, on any other or subsequent occasion.
(c) The terms and conditions of SECTION 9 are inserted for the sole
benefit of Administrative Agent and Lenders; the same may be waived in whole or
in part, with or without terms or conditions, in respect of any Extension of
Credit without prejudicing Administrative Agent's or Lenders' rights to assert
them in whole or in part in respect of any other Loan.
10.08 USURY. Notwithstanding anything to the contrary contained in any
Loan Document, the interest and fees paid or agreed to be paid under the Loan
Documents shall not exceed the maximum rate of non-usurious interest permitted
by applicable Law (the "MAXIMUM RATE"). If Administrative Agent or any Lender
shall receive interest or a fee in an amount that exceeds the Maximum Rate, the
excessive interest or fee shall be applied to the principal of the Outstanding
Obligations or, if it exceeds the unpaid principal, refunded to Borrower. In
determining whether the interest or a fee contracted for, charged, or received
by Administrative Agent or a Lender exceeds the Maximum Rate, such Person may,
to the extent permitted by applicable Law, (a) characterize any payment that is
not principal as an expense, fee, or premium rather than interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate,
allocate, and spread in equal or unequal parts the total amount of interest
throughout the contemplated term of the Obligations.
10.09 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.10 INTEGRATION. This Agreement, together with the other Loan
Documents and any letter agreements referred to herein, comprises the complete
and integrated agreement of the parties on the subject matter hereof and
supersedes all prior agreements, written or oral, on the subject matter hereof.
In the event of any conflict between the provisions of this Agreement and those
of any other Loan Document, the provisions of this Agreement shall control and
govern; PROVIDED that the inclusion of supplemental rights or remedies in favor
of Administrative Agent or Lenders in any other Loan Document shall not be
deemed a conflict with this Agreement. Each Loan Document was drafted with the
joint participation of the respective parties thereto and
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shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.
10.11 NATURE OF LENDERS' OBLIGATIONS. The obligations of Lenders
hereunder are several and not joint or joint and several. Nothing contained
in this Agreement or any other Loan Document and no action taken by
Administrative Agent or Lenders or any of them pursuant hereto or thereto
may, or may be deemed to, make Lenders a partnership, an association, a joint
venture or other entity, either among themselves or with Borrower or any
Affiliates of Borrower. Each Lender's obligation to make any Loan pursuant
hereto is several and not joint or joint and several, and in the case of the
initial Loan only is conditioned upon the performance by all other Lenders of
their obligations to make initial Loans A default by any Lender will not
increase the Pro Rata Share attributable to any other Lender.
10.12 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder and in any Loan Document, certificate or statement
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery thereof but shall terminate the later
of (a) when the Commitments are terminated and (b) when no Obligations remain
outstanding under any Loan Document. Such representations and warranties have
been or will be relied upon by Administrative Agent and each Lender,
notwithstanding any investigation made by Administrative Agent or any Lender or
on their behalf.
10.13 INDEMNITY BY BORROWER. Borrower agrees to indemnify, save and
hold harmless each Administrative Agent-Related Person and each Lender and their
respective Affiliates, directors, officers, agents, attorneys and employees
(collectively the "INDEMNITEES") from and against: (a) any and all claims,
demands, actions or causes of action that are asserted against any Indemnitee by
any Person (other than Administrative Agent or any Lender) relating directly or
indirectly to a claim, demand, action or cause of action that such Person
asserts or may assert against any Borrower Party, any of their Affiliates or any
of their officers or directors; (b) any and all claims, demands, actions or
causes of action arising out of or relating to, the Loan Documents, any
predecessor loan documents, the Commitments, the use or contemplated use of the
proceeds of any Loan, or the relationship of any Borrower Party, Administrative
Agent and Lenders under this Agreement; (c) any administrative or investigative
proceeding by any Governmental Authority arising out of or related to a claim,
demand, action or cause of action described in subsection (a) or (b) above; and
(d) any and all liabilities, losses, costs or expenses (including Attorney
Costs) that any Indemnitee suffers or incurs as a result of the assertion of any
foregoing claim, demand, action, cause of action or proceeding, or as a result
of the preparation of any defense in connection with any foregoing claim,
demand, action, cause of action or proceeding, in all cases, whether or not an
Indemnitee is a party to such claim, demand, action, cause of action or
proceeding, including those liabilities caused by an Indemnitee's own negligence
(all the foregoing, collectively, the "INDEMNIFIED LIABILITIES"); PROVIDED that
no Indemnitee shall be entitled to indemnification for any loss caused by its
own gross negligence or willful misconduct or for any loss asserted against it
by another Indemnitee.
10.14 NONLIABILITY OF LENDERS.
Borrower acknowledges and agrees that:
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(a) Any inspections of any property of Borrower made by or through
Administrative Agent or Lenders are for purposes of administration of the Loan
Documents only, and Borrower is entitled to rely upon the same (whether or not
such inspections are at the expense of Borrower);
(b) By accepting or approving anything required to be observed,
performed, fulfilled or given to Administrative Agent or Lenders pursuant to the
Loan Documents, neither Administrative Agent nor Lenders shall be deemed to have
warranted or represented the sufficiency, legality, effectiveness or legal
effect of the same, or of any term, provision or condition thereof, and such
acceptance or approval thereof shall not constitute a warranty or representation
to anyone with respect thereto by Administrative Agent or Lenders;
(c) The relationship between Borrower and Administrative Agent and
Lenders is, and shall at all times remain, solely that of borrower and lenders;
neither Administrative Agent nor Lenders shall under any circumstance be
construed to be partners or joint venturers of Borrower or its Affiliates;
neither Administrative Agent nor Lenders shall under any circumstance be deemed
to be in a relationship of confidence or trust or a fiduciary relationship with
Borrower or its Affiliates, or to owe any fiduciary duty to Borrower or its
Affiliates; neither Administrative Agent nor Lenders undertake or assume any
responsibility or duty to Borrower or its Affiliates to select, review, inspect,
supervise, pass judgment upon or inform Borrower or its Affiliates of any matter
in connection with their property or the operations of Borrower or its
Affiliates; Borrower and it Affiliates shall rely entirely upon their own
judgment with respect to such matters; and any review, inspection, supervision,
exercise of judgment or supply of information undertaken or assumed by
Administrative Agent or Lenders in connection with such matters is solely for
the protection of Administrative Agent and Lenders and neither Borrower nor any
other Person is entitled to rely thereon; and
(d) Administrative Agent and Lenders shall not be responsible or
liable to any Person for any loss, damage, liability or claim of any kind
relating to injury or death to Persons or damage to property caused by the
actions, inaction or negligence of any Borrower and/or its Affiliates and
Borrower hereby indemnifies and holds Administrative Agent and Lenders harmless
from any such loss, damage, liability or claim.
10.15 NO THIRD PARTIES BENEFITED. This Agreement is made for the
purpose of defining and setting forth certain obligations, rights and duties of
Borrower, Administrative Agent and Lenders in connection with the Loans, and is
made for the sole benefit of Borrower, Administrative Agent and Lenders, and
Administrative Agent's and Lenders' successors and assigns. Except as provided
in SECTIONS 10.04 and 10.13, no other Person shall have any rights of any nature
hereunder or by reason hereof.
10.16 SEVERABILITY. Any provision of the Loan Documents that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
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10.17 CONFIDENTIALITY. Administrative Agent and each Lender shall use
any confidential non-public information concerning the Borrower Parties and
their Subsidiaries that is furnished to Administrative Agent or such Lender by
or on behalf of the Borrower Parties and their Subsidiaries in connection with
the Loan Documents (collectively, "CONFIDENTIAL INFORMATION") solely for the
purpose of evaluating and providing products and services to them and
administering and enforcing the Loan Documents, and it will hold the
Confidential Information in confidence. Notwithstanding the foregoing,
Administrative Agent and each Lender may disclose Confidential Information (a)
to their affiliates or any of their or their affiliates' directors, officers,
employees, advisors, or representatives (collectively, the "REPRESENTATIVES")
whom it determines need to know such information for the purposes set forth in
this Section; (b) to any bank or financial institution or other entity to which
such Lender has assigned or desires to assign an interest or participation in
the Loan Documents or the Obligations, PROVIDED that any such foregoing
recipient of such Confidential Information agrees to keep such Confidential
Information confidential as specified herein; (c) to any governmental agency or
regulatory body having or claiming to have authority to regulate or oversee any
aspect of Administrative Agent's or such Lender's business or that of their
Representatives in connection with the exercise of such authority or claimed
authority; (d) to the extent necessary or appropriate to effect or preserve
Administrative Agent's or such Lender's or any of their Affiliates' security (if
any) for any Obligation or to enforce any right or remedy or in connection with
any claims asserted by or against Administrative Agent or such Lender or any of
their Representatives; and (e) pursuant to any subpoena or any similar legal
process. For purposes hereof, the term "Confidential Information" shall not
include information that (x) is in Administrative Agent's or a Lender's
possession prior to its being provided by or on behalf of the Borrower Parties,
PROVIDED that such information is not known by Administrative Agent or such
Lender to be subject to another confidentiality agreement with, or other legal
or contractual obligation of confidentiality to, a Borrower Party, (y) is or
becomes publicly available (other than through a breach hereof by Administrative
Agent or such Lender), or (z) becomes available to Administrative Agent or such
Lender on a nonconfidential basis, PROVIDED that the source of such information
was not known by Administrative Agent or such Lender to be bound by a
confidentiality agreement or other legal or contractual obligation of
confidentiality with respect to such information.
10.18 FURTHER ASSURANCES. Borrower and its Subsidiaries shall, at their
expense and without expense to Lenders or Administrative Agent, do, execute and
deliver such further acts and documents as any Lender or Administrative Agent
from time to time reasonably requires for the assuring and confirming unto
Lenders or Administrative Agent of the rights hereby created or intended now or
hereafter so to be, or for carrying out the intention or facilitating the
performance of the terms of any Loan Document.
10.19 HEADINGS. Section headings in this Agreement and the other Loan
Documents are included for convenience of reference only and are not part of
this Agreement or the other Loan Documents for any other purpose.
10.20 TIME OF THE ESSENCE. Time is of the essence of the Loan
Documents.
10.21 FOREIGN LENDERS AND PARTICIPANTS. Each Lender, and each holder of
a participation interest herein, that is a "foreign corporation, partnership or
trust" within the
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meaning of the Code shall deliver to Administrative Agent, prior to receipt
of any payment subject to withholding (or after accepting an assignment or
receiving a participation interest herein), two duly signed completed copies
of either Form W-8BEN or any successor thereto (relating to such Person and
entitling it to a complete exemption from withholding on all payments to be
made to such Person by Borrower pursuant to this Agreement) or Form W-8ECI or
any successor thereto (relating to all payments to be made to such Person by
Borrower pursuant to this Agreement) of the United States Internal Revenue
Service or such other evidence satisfactory to Borrower and Administrative
Agent that no withholding under the federal income tax laws is required with
respect to such Person. Thereafter and from time to time, each such Person
shall (a) promptly submit to Administrative Agent such additional duly
completed and signed copies of one of such forms (or such successor forms as
shall be adopted from time to time by the relevant United States taxing
authorities) as may then be available under then current United States laws
and regulations to avoid, or such evidence as is satisfactory to Borrower and
Administrative Agent of any available exemption from, United States
withholding taxes in respect of all payments to be made to such Person by
Borrower pursuant to this Agreement and (b) take such steps as shall not be
materially disadvantageous to it, in the reasonable judgment of such Lender,
and as may be reasonably necessary (including the re-designation of its
Lending Office, if any) to avoid any requirement of applicable Laws that
Borrower make any deduction or withholding for taxes from amounts payable to
such Person. If such Persons fails to deliver the above forms or other
documentation, then Administrative Agent may withhold from any interest
payment to such Person an amount equivalent to the applicable withholding tax
imposed by Sections 1441 and 1442 of the Code, without reduction. If any
Governmental Authority asserts that Administrative Agent did not properly
withhold any tax or other amount from payments made in respect of such
Person, such Person shall indemnify Administrative Agent therefor, including
all penalties and interest and costs and expenses (including Attorney Costs)
of Administrative Agent. The obligation of Lenders under this subsection
shall survive the payment of all Obligations and the resignation or
replacement of Administrative Agent.
10.22 GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF CALIFORNIA APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT ADMINISTRATIVE AGENT AND
EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
CALIFORNIA OR OF THE UNITED STATES FOR THE CENTRAL DISTRICT OF CALIFORNIA,
AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH BORROWER PARTY,
ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH
BORROWER PARTY, ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
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HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED HERETO.
EACH BORROWER PARTY, ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONAL
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY
OTHER MEANS PERMITTED BY THE LAW OF CALIFORNIA.
10.23 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
10.24 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
10.25 TERMINATION OF EXISTING SYNDICATED AGREEMENT. The parties to the
Existing Syndicated Agreement which are parties hereto hereby agree that the
Existing Syndicated Agreement shall terminate on as of the Closing Date, except
with respect to provisions thereof which by their terms survive the termination
of the Existing Syndicated Agreement PROVIDED that all amounts due and owing
thereunder are paid in full.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
K2 INC.
By
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John J. Rangel
Senior Vice President, Finance
BANK OF AMERICA, N.A., AS ADMINISTRATIVE
AGENT
By
-------------------------------------
Gina Meador
Vice President
BANK OF AMERICA, N.A., AS ISSUING LENDER, A
LENDER AND SWING LINE LENDER
By
-------------------------------------
Therese Fontaine
Principal
-S-1-
BANK ONE, N.A.
By
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Name
--------------------------
Title
-------------------------
-S-2-
UNION BANK OF CALIFORNIA, N.A.
By
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Name
----------------------------
Title
---------------------------
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COMERICA WEST INCORPORATED
By
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Name
-------------------------
Title
------------------------
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