Exhibit 10.5
================================================================================
AMENDED AND RESTATED
CREDIT AGREEMENT
among
RENAISSANCE WORLDWIDE, INC.,
as Borrower,
BANK OF AMERICA, N.A.
as Administrative Agent,
BNY FACTORING LLC,
as Syndication Agent,
and
the Lenders named herein
July 15, 1999
================================================================================
Banc of America Securities LLC
as
Sole Lead Arranger and Sole Book Manager
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE 1 - Definitions......................................................................... 1
Section 1.1 Definitions......................................................... 1
Section 1.2 Other Definitional Provisions....................................... 19
Section 1.3 Accounting Terms and Determinations................................. 20
Section 1.4 Time of Day......................................................... 20
ARTICLE 2 - Revolving Credit Facility........................................................... 20
Section 2.1 Revolving Commitments............................................... 20
Section 2.2 Revolving Notes..................................................... 21
Section 2.3 Repayment of Revolving Loans........................................ 21
Section 2.4 Use of Proceeds..................................................... 22
Section 2.5 Revolving Commitment Fee............................................ 22
Section 2.6 Termination or Reduction of Revolving Commitments................... 23
Section 2.7 Letters of Credit................................................... 23
Section 2.8 Borrowing Base...................................................... 26
ARTICLE 3 - Term Loan Facility.................................................................. 27
Section 3.1 Term Loans.......................................................... 27
Section 3.2 Term Notes.......................................................... 27
Section 3.3 Repayment of Term Loans............................................. 27
Section 3.4 Use of Proceeds..................................................... 27
ARTICLE 4 - Interest and Fees................................................................... 28
Section 4.1 Interest Rate....................................................... 28
Section 4.2 Determinations of Margins and Commitment Fee Rate................... 28
Section 4.3 Payment Dates....................................................... 29
Section 4.4 Default Interest.................................................... 29
Section 4.5 Conversions and Continuations of Accounts........................... 29
Section 4.6 Computations........................................................ 29
ARTICLE 5 - Administrative Matters.............................................................. 30
Section 5.1 Borrowing Procedure................................................. 30
Section 5.2 Minimum Amounts..................................................... 30
Section 5.3 Certain Notices..................................................... 30
Section 5.4 Prepayments......................................................... 31
Section 5.5 Method of Payment................................................... 32
Section 5.6 Pro Rata Treatment.................................................. 33
Section 5.7 Sharing of Payments................................................. 33
Section 5.8 Non-Receipt of Funds by Administrative Agent........................ 34
Section 5.9 Participation Obligations Absolute; Failure to Fund Participation... 34
ARTICLE 6 - Change in Circumstances............................................................. 35
Section 6.1 Increased Cost and Reduced Return................................... 35
i
Section 6.2 Limitation on Libor Accounts........................................ 36
Section 6.3 Illegality.......................................................... 36
Section 6.4 Treatment of Affected Accounts...................................... 37
Section 6.5 Compensation........................................................ 37
Section 6.6 Taxes............................................................... 38
Section 6.7 Withholding Tax Exemption........................................... 38
Section 6.8 Mitigation.......................................................... 39
ARTICLE 7 - Security............................................................................ 40
Section 7.1 Collateral.......................................................... 40
Section 7.2 Guaranties.......................................................... 40
Section 7.3 New Subsidiaries, New Issuances of Capital Stock.................... 41
Section 7.4 New Mortgaged Properties............................................ 41
Section 7.5 Release of Collateral............................................... 42
ARTICLE 8 - Conditions Precedent................................................................ 42
Section 8.1 Initial Loan and Letter of Credit................................... 42
Section 8.2 All Loans and Letters of Credit..................................... 47
ARTICLE 9 - Representations and Warranties...................................................... 47
Section 9.1 Corporate Existence................................................. 47
Section 9.2 Financial Condition................................................. 48
Section 9.3 Corporate Action; No Breach......................................... 48
Section 9.4 Operation of Business............................................... 48
Section 9.5 Litigation and Judgments............................................ 49
Section 9.6 Rights in Properties; Liens......................................... 49
Section 9.7 Enforceability...................................................... 49
Section 9.8 Approvals........................................................... 49
Section 9.9 Debt................................................................ 49
Section 9.10 Taxes............................................................... 49
Section 9.11 Margin Securities................................................... 50
Section 9.12 ERISA............................................................... 50
Section 9.13 Disclosure.......................................................... 50
Section 9.14 Subsidiaries; Capitalization........................................ 49
Section 9.15 Agreements.......................................................... 51
Section 9.16 Compliance with Laws................................................ 51
Section 9.17 Investment Company Act.............................................. 51
Section 9.18 Public Utility Holding Company Act.................................. 51
Section 9.19 Environmental Matters............................................... 51
Section 9.20 Broker's Fees....................................................... 52
Section 9.21 Employee Matters.................................................... 52
Section 9.22 Solvency............................................................ 52
Section 9.23 Year 2000 Compliance................................................ 53
ARTICLE 10 - Positive Covenants................................................................. 53
Section 10.1 Reporting Requirements.............................................. 53
Section 10.2 Maintenance of Existence; Conduct of Business....................... 55
ii
Section 10.3 Maintenance of Properties........................................... 55
Section 10.4 Taxes and Claims.................................................... 55
Section 10.5 Insurance........................................................... 56
Section 10.6 Inspection Rights................................................... 57
Section 10.7 Keeping Books and Records........................................... 57
Section 10.8 Compliance with Laws................................................ 57
Section 10.9 Compliance with Agreements.......................................... 57
Section 10.10 Further Assurances.................................................. 58
Section 10.11 ERISA............................................................... 58
Section 10.12 Unified Cash Management System; Dominion of Funds................... 58
Section 10.13 Year 2000 Compliance................................................ 58
ARTICLE 11 - Negative Covenants................................................................. 59
Section 11.1 Debt................................................................ 59
Section 11.2 Limitation on Liens and Restrictions on Subsidiaries................ 60
Section 11.3 Mergers, Etc........................................................ 61
Section 11.4 Restricted Junior Payments.......................................... 62
Section 11.5 Investments......................................................... 62
Section 11.6 Limitation on Issuance of Capital Stock............................. 63
Section 11.7 Transactions With Affiliates........................................ 63
Section 11.8 Disposition of Assets............................................... 64
Section 11.9 Lines of Business................................................... 64
Section 11.10 Limitations on Restrictions Affecting Subsidiaries.................. 64
Section 11.11 Environmental Protection............................................ 64
Section 11.12 ERISA............................................................... 64
ARTICLE 12 - Financial Covenants................................................................ 65
Section 12.1 Minimum Tangible Net Worth.......................................... 65
Section 12.2 Maximum Total Leverage Ratio........................................ 65
Section 12.3 Minimum Fixed Charge Coverage Ratio................................. 65
Section 12.4 Maximum Capital Expenditures........................................ 65
ARTICLE 13 - Default............................................................................ 65
Section 13.1 Events of Default................................................... 65
Section 13.2 Remedies............................................................ 68
Section 13.3 Cash Collateral..................................................... 68
Section 13.4 Performance by Administrative Agent................................. 68
Section 13.5 Set-off............................................................. 69
Section 13.6 Continuance of Default.............................................. 69
ARTICLE 14 - Administrative Agent............................................................... 69
Section 14.1 Appointment, Powers, and Immunities................................. 69
Section 14.2 Reliance by Administrative Agent.................................... 70
Section 14.3 Defaults............................................................ 70
Section 14.4 Rights as Lender.................................................... 70
Section 14.5 Indemnification..................................................... 71
Section 14.6 Non-Reliance on Agents and Other Lenders............................ 71
iii
Section 14.7 Resignation of Administrative Agent................................. 72
Section 14.8 Administrative Agent Fee............................................ 72
Section 14.9 Several Commitments................................................. 72
ARTICLE 15 - Miscellaneous...................................................................... 72
Section 15.1 Expenses............................................................ 72
Section 15.2 Indemnification..................................................... 73
Section 15.3 Limitation of Liability............................................. 74
Section 15.4 No Duty............................................................. 75
Section 15.5 No Fiduciary Relationship........................................... 75
Section 15.6 Equitable Relief.................................................... 75
Section 15.7 No Waiver; Cumulative Remedies...................................... 75
Section 15.8 Successors and Assigns.............................................. 75
Section 15.9 Survival............................................................ 77
Section 15.10 Entire Agreement.................................................... 77
Section 15.11 Amendments and Waivers.............................................. 77
Section 15.12 Maximum Interest Rate............................................... 79
Section 15.13 Notices............................................................. 79
Section 15.14 Governing Law; Venue; Service of Process............................ 80
Section 15.15 Counterparts........................................................ 80
Section 15.16 Severability........................................................ 80
Section 15.17 Headings............................................................ 80
Section 15.18 Construction........................................................ 80
Section 15.19 Independence of Covenants........................................... 80
Section 15.20 Waiver of Jury Trial................................................ 81
Section 15.21 Confidentiality..................................................... 81
Section 15.22 Currency Conversion................................................. 81
Section 15.23 Amendment and Restatement........................................... 81
iv
INDEX TO EXHIBITS
-----------------
Exhibit Description of Exhibit
------- ----------------------
"A-1" Revolving Note
"A-2" Swingline Note
"B" Term Note
"C" Borrowing Base Certificate
"D" Assignment and Acceptance Agreement
"E" Compliance Certificate
"F" Subsidiary Guaranty
"G" Joinder Agreement
"H" Notice of Borrowing
INDEX TO SCHEDULES
------------------
Schedule Description of Schedule
-------- -----------------------
1.1 Commitments
7.1 Transfer Restrictions, Etc.
9.1 Corporate Existence/Good Standing
9.3 Corporate Action/No Breach
9.4 Operation of Business
9.5 Litigation and Judgments
9.6 Collateral Matters
9.9 Debt
9.10 Taxes
9.12 ERISA
9.13 Disclosure Documents
9.14 Subsidiaries; Capitalization
9.15 Restrictions on Subsidiaries
9.19 Environmental Matters
9.21 Employee Matters
9.22 Solvency
9.23 Year 2000 Compliance
11.2 Liens
11.3 Subsidiary Mergers, Resolutions, Etc.
11.5 Investments
11.8 Asset Dispositions
v
AMENDED AND RESTATED
CREDIT AGREEMENT
----------------
THIS AMENDED AND RESTATED CREDIT AGREEMENT ("Agreement"), dated as of July
---------
15, 1999, is among RENAISSANCE WORLDWIDE, INC., a corporation duly organized and
validly existing under the laws of the Commonwealth of Massachusetts
("Borrower"), each of the banks or other lending institutions which is or which
--------
may from time to time become a signatory hereto or any successor or assignee
thereof pursuant to Section 15.8(b) hereof (individually, a "Lender" and,
--------------- ------
collectively, the "Lenders"), BANK OF AMERICA, N.A., a national banking
-------
association (formerly known as NationsBank, N.A.), as Fronting Bank (as defined
below) and administrative agent for the Lenders (in its capacity as
administrative agent, together with its successors in such capacity,
"Administrative Agent"), and BNY FACTORING LLC, a New York limited liability
- ---------------------
company, as syndication agent for the Lenders (in its capacity as syndication
agent, together with its successors in such capacity, "Syndication Agent").
-----------------
R E C I T A L S:
---------------
Borrower has requested that the Lenders extend credit to Borrower in the
form of a revolving credit facility, a letter of credit subfacility and a term
loan facility to be used in part to amend, extend and restate the Original
Revolving Credit Agreement currently in effect between Borrower and NationsBank
and to increase the credit facility available to Borrower. Lenders are willing
to extend such credit to Borrower upon the terms and conditions hereinafter set
forth.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE 1
Definitions
-----------
Section 1.1 Definitions. As used in this Agreement, the following terms
-----------
have the following meanings:
"Account" means either a Base Rate Account or a Libor Account.
-------
"Account Debtor" means a Person who is obligated on a Receivable.
--------------
"Adjusted EBITDA" means, for any period and any Person, the total of the
---------------
following calculated without duplication on a consolidated basis for such
period: (a) EBITDA of such Person; plus (b) on a pro forma basis, the EBITDA
----
attributable to all Subsidiaries of such Person or assets acquired by such
Person during such period, in each case for any portion of such period occurring
prior to the date of the acquisition of such Subsidiary or assets; minus (c)
-----
EBITDA of such Person and its Subsidiaries attributable to any Subsidiary or
assets disposed of during such period, in each case for any portion of such
period occurring prior to the date of the disposal of any such Subsidiary or
assets.
"Adjusted Libor Rate" means, for any Libor Account for any Interest Period
-------------------
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) determined by Administrative Agent to be equal to the quotient
obtained by dividing (a) the Libor Rate for such Libor Account for such Interest
Period by (b) 1 minus the Reserve Requirement for such Libor Account for such
Interest Period.
"Adjusted Net Income" means, for any period and any Person, such Person's
-------------------
consolidated net income (or loss) determined in accordance with GAAP, but
excluding: (a) the income of any other Person (other than its Subsidiaries) in
which such Person or any of its Subsidiaries has an ownership interest, unless
received by such Person or its Subsidiary in a cash distribution; and (b) any
after-tax gains or losses attributable to an asset disposition.
"Administrative Agent" has the meaning set forth in the introductory
--------------------
paragraph of this Agreement.
"Affiliate" means, with respect to any Person, any other Person (a) that
---------
directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, such Person; (b) that directly
or indirectly beneficially owns or holds ten percent (10%) or more of any class
of Voting Stock of such Person; or (c) ten percent (10%) or more of the Voting
Stock of which is directly or indirectly beneficially owned or held by the
Person in question. As used in this definition, the term "control" means the
possession, directly or indirectly, of the power to direct or cause direction of
the management and policies of a Person, whether through the ownership of Voting
Stock, by contract, or otherwise; provided, however, in no event shall the
-------- -------
Agents or any Lender be deemed an Affiliate of Borrower or any Subsidiary of
Borrower.
"Agents" means the Administrative Agent and the Syndication Agent,
------
collectively.
"Agreement" has the meaning set forth in the introductory paragraph of this
---------
Agreement, as the same may be amended or otherwise modified.
"Applicable Lending Office" means, for each Lender and for each Type of
-------------------------
Account, the "Lending Office" of such Lender (or of an Affiliate of such Lender)
designated for such Type of Account on the signature pages hereof or such other
office of such Lender (or an Affiliate of such Lender) as such Lender may from
time to time specify to Administrative Agent and Borrower by written notice in
accordance with the terms hereof as the office by which its Accounts of such
Type are to be made and maintained.
"Applicable Rate" has the meaning set forth in Section 4.1.
--------------- -----------
"Applicable Rate Calculation" has the meaning set forth in Section 10.1(d).
--------------------------- ---------------
"Asset Disposition" means, with respect to any Person, the disposition of
-----------------
any asset of such Person (including, without limitation, the sale of any Capital
Stock of any Subsidiary of such Person) other than (i) sales of Inventory in the
ordinary course of business, (ii) dispositions of equipment no longer used or
useful in such Person's business and (iii) dispositions of other equipment to be
2
replaced (and such equipment is so replaced) with other functionally equivalent
equipment within one hundred twenty (120) days of the disposition thereof.
"Assignment and Acceptance" means an assignment and acceptance, in
-------------------------
substantially the form of Exhibit "D", entered into by a Lender and an Eligible
-----------
Assignee and accepted by Administrative Agent pursuant to Section 15.8(b).
---------------
"Authorized Representative" has the meaning set forth in Section 10.1(f).
------------------------- ---------------
"Bank of America" means Bank of America, N.A. (formerly known as
---------------
NationsBank, N.A.) and its successors and assigns.
"Bankruptcy Code" has the meaning set forth in Section 13.1(e).
--------------- ---------------
"Base Rate" means, for any day, the rate per annum equal to the higher of
---------
(a) the Federal Funds Rate plus one-half of one percent (0.5%), or (b) the Prime
Rate. Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Rate shall be effective on the effective date of such change in
the Prime Rate or Federal Funds Rate.
"Base Rate Account" means a portion of a Loan that bears interest at a rate
-----------------
based upon the Base Rate.
"Base Rate Margin" has the meaning specified in Section 4.2.
---------------- -----------
"Borrower" has the meaning set forth in the introductory paragraph of this
--------
Agreement.
"Borrowing Base" means, at any time, an amount equal to eighty-five percent
--------------
(85%) of the face value of Eligible Receivables due and owing at such time plus
----
fifty percent (50%) of earned but unbilled Receivables that would constitute
Eligible Receivables upon the issuance of an invoice therefor.
"Borrowing Base Certificate" means a certificate, signed by an Authorized
--------------------------
Representative of Borrower, in substantially the form attached hereto as Exhibit
-------
"C".
- ---
"Business Day" means (a) any day excluding Saturday, Sunday, and any day
------------
which either is a legal holiday under the laws of the Commonwealth of
Massachusetts or the State of Texas or is a day on which banking institutions
located in any such states are closed, and (b), with respect to all borrowings,
payments, Conversions, Continuations, Interest Periods, and notices in
connection with Loans subject to Libor Accounts, any day which is a Business Day
described in clause (a) above and which is also a day on which dealings in
----------
Dollar deposits are carried out in the London interbank market.
"Capital Expenditures" means, with respect to any Person, all expenditures
--------------------
made and liabilities incurred for the acquisition of assets which are not, in
accordance with GAAP, treated as expense items for such Person in the year made
or incurred or as a prepaid expense applicable to a future year or years.
3
"Capital Lease Obligations" means, as to any Person, the obligations of
-------------------------
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal property, which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person according to GAAP. For purposes of this Agreement, the
amount of such Capital Lease Obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"Capital Stock" means corporate stock and any and all shares, partnership
-------------
interests, membership interests, equity interests, rights, securities, or other
equivalent evidences of ownership, or any options, warrants, voting trust
certificates, or other instruments evidencing an ownership interest or a right
to acquire an ownership interest in a Person (however designated) issued by any
entity (whether a corporation, partnership, limited liability company, limited
partnership, or other type of entity).
"Change of Control" means the occurrence of any of the following: (i) the
-----------------
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of Borrower and its Subsidiaries taken as a
whole to any "person" (as such term is used in Section 13(d) (3) of the
Securities Exchange Act), (ii) the adoption of a plan relating to the
liquidation or dissolution of Borrower, (iii) the consummation of any
transaction (including, without limitation, any merger or consolidation) first
occurring after the Closing Date the result of which is that any "person" (as
defined above), becomes the "beneficial owner" (as such term is defined in Rule
13d-3 and Rule 13d-5 under the Securities Exchange Act, except that a person
shall be deemed to have "beneficial ownership" of all securities that such
person has the right to acquire, whether such right is currently exercisable or
is exercisable only upon the occurrence of a subsequent condition), directly or
indirectly, of more than 50% of the Voting Stock of Borrower (measured by voting
power rather than number of shares), or (iv) the first day on which a majority
of the members of the Board of Directors of Borrower are not Continuing
Directors.
"Closing Date" means July 15, 1999.
------------
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Collateral" means all Property of any nature whatsoever upon which a Lien
----------
is created or purported to be created by any Loan Document as security for the
Obligations or any portion thereof.
"Commitment Fee Rate" has the meaning specified in Section 4.2.
------------------- -----------
"Commitment Percentage" means, with respect to each Lender, the percentage
---------------------
equivalent of the amount of the Commitments of such Lender (or the Commitment in
question) divided by the aggregate amount of all the Commitments of all of the
Lenders (or the Commitment in question of all the Lenders).
"Commitments" means, with respect to each Lender, its Revolving Commitment
-----------
and its Term Commitment, and, with respect to all Lenders, all such commitments.
4
"Compliance Certificate" means a certificate in substantially the form of
----------------------
Exhibit "E", properly completed and executed by the chief financial officer of
- -----------
Borrower.
"Continue", "Continuation", and "Continued" shall refer to the continuation
-------- ------------ ---------
pursuant to Section 4.5 of a Libor Account from one Interest Period to the next
-----------
Interest Period.
"Continuing Directors" means, as of any date of determination, any member
--------------------
of the Board of Directors of Borrower who (i) was a member of such Board of
Directors on the Closing Date or (ii) was nominated for election or elected to
such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board at the time of such nomination or
election.
"Contract Rate" has the meaning specified in subsection 15.12(a).
------------- -------------------
"Convert", "Conversion", and "Converted" shall refer to a conversion
------- ---------- ---------
pursuant to Section 4.5 or Article 6 of one Type of Account into another Type of
----------- ---------
Account.
"Debt" means, as to any Person at any time (without duplication): (a) all
----
obligations of such Person for borrowed money; (b) all obligations of such
Person evidenced by bonds, notes, debentures, or other similar instruments; (c)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable of such Person arising in the ordinary
course of business; (d) all Capital Lease Obligations of such Person; (e) all
Debt or other obligations of others Guaranteed by such Person; (f) all
obligations secured by a Lien existing on property owned by such Person, whether
or not the obligations secured thereby have been assumed by such Person or are
non-recourse to the credit of such Person; provided, however, that the amount of
-------- -------
such Debt of any Person described in this clause (f) shall, for purposes of this
----------
Agreement, be deemed to be equal to the lesser of (i) the aggregate unpaid
amount of such Debt or (ii) in the case of non-recourse obligations, the fair
market value of the property or asset encumbered, as determined by
Administrative Agent in its reasonable discretion; (g) all reimbursement
obligations of such Person (whether contingent or otherwise) in respect of
letters of credit, bankers' acceptances, surety or other bonds, and similar
instruments (including, without limitation, those outstanding with respect to
Letters of Credit); (h) all liabilities of such Person in respect of unfunded
vested benefits under any Plan (excluding obligations to deliver stock in
respect of stock options or stock ownership plans); and (i) all vested
obligations of such Person for the payment of money under any noncompete,
consulting, or similar arrangements providing for the deferred payment of the
purchase price for an acquisition consummated prior to the date hereof;
provided, however, that the term "Debt" shall not include any earnout or similar
- -------- -------
contingent payments incurred in connection with an acquisition until such amount
is actually earned.
"Default" means an Event of Default or the occurrence of an event or
-------
condition which with notice or lapse of time or both would become an Event of
Default.
"Default Rate" means, in respect of any principal of any Loan, any
------------
Reimbursement Obligation, or any other amount payable by Borrower under any Loan
Document, a rate per annum during the period specified in Section 4.4, equal to
-----------
the sum of two percent (2%), plus the Applicable Rate for Base Rate Accounts as
----
in effect from time to time (provided, that if such amount is subject
--------
5
to a Libor Account, the "Default Rate" for such amount shall be, for the period
to but excluding the last day of the Interest Period therefor, two percent (2%),
plus the interest rate for such Account for such Interest Period as provided in
Section 4.1, and, thereafter, the rate provided for above in this definition).
- -----------
"Dollars" and "$" mean lawful money of the U.S.
------- -
"Domestic Subsidiary" means each direct or indirect Subsidiary of Borrower
-------------------
formed under the laws of the U.S. or any state thereof (other than CANAM L.L.C.,
a Delaware limited liability company).
"EBITDA" means, for any period and any Person, the total of the following
------
calculated without duplication for such Person on a consolidated basis for such
period: (a) Adjusted Net Income; plus (b) any provision for (or less any benefit
----
from) income or franchise taxes deducted in determining Adjusted Net Income;
plus (c) Interest Expense deducted in determining Adjusted Net Income; plus (d)
- ---- ----
amortization and depreciation expense deducted in determining Adjusted Net
Income; plus (e) charges taken during the second, third and fourth Fiscal
----
Quarters of Fiscal 1998 associated with acquisitions and restructuring fees,
divested businesses and write-offs of accounts receivable in the amount of Six
Million Nine Hundred Thousand Dollars ($6,900,000) in such second Fiscal
Quarter, Nine Million Dollars ($9,000,000) in such third Fiscal Quarter and
Forty-Two Million Two Hundred Thousand Dollars ($42,200,000) in such fourth
Fiscal Quarter, deducted in determining Adjusted Net Income to the extent not
already deducted in accordance with clause (d) above; plus (f) transaction costs
---------- ----
during any subsequent Fiscal Quarter associated with acquisitions completed
during such Fiscal Quarter deducted in determining Adjusted Net Income.
"EBITDAR" means, for any period and any Person, the sum of the following
-------
calculated without duplication for such Person on a consolidated basis for such
period: (a) Adjusted EBITDA; plus (b) Rental Expense deducted in determining
Adjusted EBITDA.
"Eligible Assignee" has the meaning specified in subsection 15.8(b)(i).
----------------- ---------------------
"Eligible Receivable" means a Receivable that consists of the unpaid
-------------------
portion of the obligation stated on the invoice issued to an Account Debtor with
respect to Inventory sold and shipped to or services performed for such Account
Debtor in the ordinary course of Borrower's or its Subsidiaries' business, net
of any credits or rebates owed by Borrower or its Subsidiaries to the Account
Debtor and net of any commissions payable by Borrower or its Subsidiaries to
third parties and that Administrative Agent determines to meet all of the
following requirements:
(a) such Receivable is owned by Borrower or its Subsidiaries,
represents a bona fide transaction and the Account Debtor is not the
Borrower or any of its Subsidiaries;
(b) not more than ninety (90) days have elapsed from the date of the
original invoice;
(c) the goods the sale of which gave rise to such Receivable were
shipped or delivered to the Account Debtor on an absolute sale basis and
not on a bill and hold sale
6
basis, a consignment sale basis, a guaranteed sale basis, a sale or return
basis or on the basis of any other similar understanding, and no material
part of such goods has been returned or rejected;
(d) such Receivable is not evidenced by chattel paper or an instrument
of any kind unless such chattel paper or instrument (i) has been
collaterally assigned to Administrative Agent, for the benefit of the
Lenders, pursuant to an assignment in form and substance satisfactory to
Administrative Agent and (ii) is in the possession of Administrative Agent;
(e) the Account Debtor with respect to such Receivable is not
insolvent or the subject of any bankruptcy or insolvency proceedings of any
kind or of any other proceeding or action, threatened or pending, which
might, in Administrative Agent's sole judgment, have a Material Adverse
Effect on such Account Debtor, and is not, in the reasonable discretion of
Administrative Agent, deemed ineligible for credit or other reasons;
(f) such Receivable is not owing by an Account Debtor having fifty
percent (50.0%) or more in face value of its then existing aggregate total
accounts owing to Borrower or its Subsidiaries, in the aggregate, which do
not meet the requirements of clause (b) or clause (c) above;
---------- ----------
(g) such Receivable is not owing by an Account Debtor whose then
existing accounts owing to Borrower or its Subsidiaries, in the aggregate,
exceed in face amount ten percent (10%) of Borrower's total Eligible
Receivables; provided that only the amount of the excess of such Receivable
--------
over such ten percent (10%) figure shall be excluded and provided, further,
-------- -------
that such exclusion shall not apply to Account Debtors with a Debt rating
of A or better by Standard & Poor's Corporation or Moody's Investors
Service, Inc.;
(h) such Receivable is not owing by an Account Debtor that is located
outside of the United States of America;
(i) such Receivable is a valid, legally enforceable obligation of the
Account Debtor with respect thereto and is not subject to any present or
contingent (and no facts exist which are the basis for any future) offset,
deduction or counterclaim, dispute or other defense on the part of such
Account Debtor;
(j) such Receivable is subject to a perfected first priority Lien in
favor of Administrative Agent, on behalf of the Lenders, and such
Receivable is subject to no other Lien whatsoever other than a Permitted
Lien;
(k) such Receivable is not subject to the Assignment of Claims Act of
1940, as amended from time to time, or any applicable law now or hereafter
existing similar in effect thereto, or to any other prohibition (under
applicable law, by contract or otherwise) against its assignment or
requiring notice of or consent to such assignment, unless all such required
notices have been given, all such required consents have been received and
all other
7
procedures have been complied with such that such Receivable shall have
been duly and validly assigned to Administrative Agent, for the benefit of
Lenders; and
(l) neither the Account Debtor with respect to such Receivable, nor
such Receivable, is determined by Administrative Agent in its reasonable
discretion to be ineligible for any other reason.
"Environmental Laws" means any and all federal, state, and local laws,
------------------
regulations, and requirements regulating health, safety, or the environment, as
such laws, regulations, and requirements may be amended or supplemented from
time to time.
"Environmental Liabilities" means, as to any Person, all liabilities,
-------------------------
obligations, responsibilities, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs, and expenses, (including,
without limitation, all reasonable fees, disbursements, and expenses of counsel,
expert and consulting fees, and costs of investigation and feasibility studies),
fines, penalties, sanctions, and interest incurred as a result of any claim or
demand, by any Person, whether based in contract, tort, implied or express
warranty, strict liability, or criminal or civil statute, including, without
limitation, any Environmental Law, permit, order, or agreement with any
Governmental Authority or other Person, arising from environmental, health, or
safety conditions or the Release or threatened Release of a Hazardous Material
into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time, and the regulations issued thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
---------------
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as any Loan Party or is under common control (within
the meaning of Section 414(c) of the Code) with any Loan Party.
"Event of Default" has the meaning specified in Section 13.1.
---------------- ------------
"Federal Funds Rate" means, for any day, the rate per annum (rounded
------------------
upwards, if necessary, 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 of New York 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 Administrative
Agent (in its individual capacity) on such day on such transactions as
determined by Administrative Agent.
"Fiscal Quarters" means the three (3) month periods falling in each Fiscal
---------------
Year ending on the last Saturday of each March, June, September, and December.
8
"Fiscal Year" means a twelve (12) month period ending the last Saturday in
-----------
December.
"Foreign Subsidiary" means each direct or indirect Subsidiary of Borrower
------------------
that is not a Domestic Subsidiary.
"Fronting Bank" means Bank of America or such other Lender which is a
-------------
commercial bank as Borrower and Bank of America may mutually designate from time
to time which agrees to be the issuer of a Letter of Credit.
"Funded Debt" means, with respect to any Person for such Person and its
-----------
Subsidiaries, determined on a consolidated basis in accordance with GAAP, at the
time of determination, the sum of all Debt other than: (a) Debt or other
obligations of others guaranteed by such Person and its Subsidiaries; (b) all
Reimbursement Obligations (whether contingent or otherwise) in respect of
letters of credit, bankers' acceptances, surety or other bonds, and similar
instruments (including, without limitation, those outstanding with respect to
Letters of Credit); and (c) all liabilities in respect of unfunded vested
benefits under any Plan.
"GAAP" means generally accepted accounting principles, applied on a
----
"consistent basis" (as such phrase is interpreted in accordance with Section 1.3
-----------
hereof), as set forth in Opinions of the Accounting Principles Board of the
American Institute of Certified Public Accountants and/or in statements of the
Financial Accounting Standards Board and/or their respective successors and
which are applicable in the circumstances as of the date in question.
"Governmental Authority" means any nation or government, any state or
----------------------
political subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory, or administrative functions of or pertaining to
government.
"Guarantee" means any obligation, contingent or otherwise, of any Person
---------
directly or indirectly guaranteeing any Debt or other obligation of any other
Person or indemnifying such other Person for an obligation and, without limiting
the generality of the foregoing, any obligation, direct or indirect, contingent
or otherwise, of such Person (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or other obligation (whether arising
by virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (b) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other obligation of the
payment thereof or to protect the obligee against loss in respect thereof (in
whole or in part), provided that the term Guarantee shall not include
--------
endorsements for collection or deposit in the ordinary course of business. The
amount of any Guarantee of any guaranteeing Person shall be deemed to be the
lesser of (i) an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guarantee is made or (ii) the
maximum amount for which such guaranteeing Person may be liable pursuant to the
terms of the instrument embodying such Guarantee, unless such primary obligation
and the maximum amount for which such guaranteeing Person may be liable are not
stated or determinable, in which case the amount of such Guarantee shall be such
guaranteeing Person's maximum reasonably anticipated liability in respect
thereof as mutually determined by Borrower and Administrative Agent in good
faith. The term "Guarantee" used as a verb has a corresponding meaning.
9
"Guarantor" means any Person which has executed a Guaranty, and
---------
"Guarantors" means all of such Persons, collectively.
----------
"Guaranty" means each of the Subsidiary Guaranties, and any and all
--------
amendments, modifications, supplements, renewals, extensions, or restatements
thereof, and "Guaranties" means the Subsidiary Guaranties, collectively.
----------
"Hazardous Material" means any substance, product, waste, pollutant,
------------------
material, chemical, contaminant, constituent, or other material which is or
becomes listed, regulated, or addressed under any Environmental Law as a result
of its hazardous or toxic nature.
"Hedge Agreements" means any and all agreements, devices, or arrangements
----------------
designed to protect Borrower from the fluctuations of interest rates, exchange
rates, or forward rates applicable to its assets, liabilities, or exchange
transactions, including, but not limited to, dollar-denominated or cross-
currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap, swap or collar protection agreements, and forward
rate currency or interest rate options, as the same may be amended or modified
and in effect from time to time, and any and all cancellations, buy backs,
reversals, terminations, or assignments of any of the foregoing.
"Installment Note" means the $2,000,000 Convertible Subordinated Promissory
----------------
Note from Zefer Corp., as maker, payable to Borrower.
"Intellectual Property" means any U.S. or foreign patents, patent
---------------------
applications, trademarks, trade names, service marks, brand names, logos and
other trade designations (including, without limitation, unregistered names and
marks), trademark and service mark registrations and applications, copyrights
and copyright registrations and applications, inventions, invention disclosures,
protected formulae, formulations, processes, methods, trade secrets, computer
software, computer programs and source codes, manufacturing research and similar
technical information, engineering know-how, customer and supplier information,
assembly and test data drawings or royalty rights.
"Interest Expense" means, for any period and for any Person, the sum of (a)
----------------
interest expense of such Person calculated without duplication on a consolidated
basis for such period in accordance with GAAP, plus (b) payments made under
----
Hedge Agreements during such period, minus (c) payments received under Hedge
-----
Agreements during such period.
"Interest Period" means with respect to any Libor Account, each period
---------------
commencing on the date such Account is established or Continued, or Converted
from a Base Rate Account to a Libor Account, or the last day of the next
preceding Interest Period with respect to such Libor Account, and ending on the
numerically corresponding day in the first, second, third or sixth calendar
month thereafter, as Borrower may select as provided in Section 4.5 or Section
----------- -------
5.1, except that each such Interest Period which commences on the last Business
- ---
Day of a calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall end on the
last Business Day of the appropriate subsequent calendar month. Notwithstanding
the foregoing: (a) each Interest Period which would otherwise end on a day which
is not a Business Day shall end on the next succeeding Business Day (or if such
succeeding Business Day falls in the next
10
succeeding calendar month, on the next preceding Business Day); (b) any Interest
Period which would otherwise extend beyond the Termination Date shall end on the
Termination Date; (c) no more than five (5) Interest Periods shall be in effect
at the same time; (d) no Interest Period for any Libor Account shall have a
duration of less than one (1) month and, if the Interest Period would otherwise
be a shorter period, the related Libor Account shall not be available hereunder;
and (e) no Interest Period in respect of any Term Loan may extend beyond a
principal repayment date thereof unless, after giving effect thereto, the
aggregate principal amount of such Term Loan subject to Libor Accounts having
Interest Periods that end after such principal payment date shall be equal to or
less than the aggregate principal amount of such Term Loan to be outstanding
hereunder after such principal payment date.
"Inventory" means all inventory now owned or hereafter acquired by Borrower
---------
or any Subsidiary of Borrower wherever located and whether or not in transit,
which is or may at any time be held for sale or lease, or furnished under any
contract (exclusive of leases of real Property) for service or held as raw
materials, work in process, or supplies or materials used or consumed in the
business of Borrower or any Subsidiary of Borrower.
"Investments" has the meaning specified in Section 11.5.
----------- ------------
"Joinder Agreement" means an agreement which has been or will be executed
-----------------
by a Subsidiary adding it as a party to the Guaranty and certain Security
Documents, in substantially the form of Exhibit "G", as the same may be amended
-----------
or otherwise modified.
"Lender" has the meaning set forth in the introductory paragraph of this
------
Agreement.
"Letter of Credit Liabilities" means, at any time, the sum of (a) the
----------------------------
aggregate undrawn face amount of all outstanding Letters of Credit, plus (b) all
----
unreimbursed drawings under Letters of Credit.
"Letters of Credit" has the meaning specified in Section 2.7(a).
----------------- --------------
"Letter of Credit Agreement" means, with respect to each Letter of Credit
--------------------------
to be issued by the Fronting Bank therefor, the letter of credit application and
reimbursement agreement which such Fronting Bank requires to be executed by
Borrower in connection with the issuance of such Letter of Credit.
"Leverage Ratio" means, for any period, the ratio of Borrower's Funded Debt
--------------
as of the end of such period to Adjusted EBITDA for the twelve (12) month period
then ending.
"Libor Account" means any portion of a Loan that bears interest at a rate
-------------
based upon the Adjusted Libor Rate.
"Libor Rate" means, for any Libor Account for any Interest Period therefor,
----------
the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two (2) Business Days prior to the first day of such Interest Period for a
11
term comparable to such Interest Period. If for any reason such rate is not
available, the term "Libor Rate" shall mean, for any Libor Account for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two (2) Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided, however, if more
-------- -------
than one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if necessary,
to the nearest 1/100 of 1%).
"Libor Rate Margin" has the meaning specified in Section 4.2.
----------------- -----------
"Lien" means any lien, mortgage, security interest, tax lien, pledge,
----
charge, hypothecation, assignment, preference, priority, or other encumbrance of
any kind or nature whatsoever (including, without limitation, any conditional
sale or title retention agreement), whether arising by contract, operation of
law, or otherwise.
"Loan Documents" means this Agreement, the Notes, the Security Documents,
--------------
the Letters of Credit, the Letter of Credit Agreements, the Joinder Agreements,
any Hedge Agreement between Borrower or any Subsidiary of Borrower and any
Lender and all other agreements, documents, and instruments now or hereafter
executed and/or delivered pursuant to or in connection with any of the
foregoing, and any and all amendments, modifications, supplements, renewals,
extensions, or restatements thereof (including, without limitation, any
amendment that increases the amount of any Obligations due thereunder).
"Loan Party" means (a) Borrower, (b) the Guarantors, and (c) any other
----------
Person who is or becomes a party to any agreement, document, or instrument that
Guarantees or secures payment or performance of the Obligations or any part
thereof.
"Loans" means Revolving Loans, Term Loans and Swingline Advances.
-----
"Material Adverse Effect" means, with respect to any Person, any material
-----------------------
adverse effect, or the occurrence of any event or the existence of any condition
that could reasonably be expected to have a material adverse effect, on (a) with
respect to Borrower or any of its Subsidiaries, the prospects, business or
financial condition, or performance of Borrower and its Subsidiaries, taken as a
whole and, with respect to any other Person, the prospects, business or
financial condition, or performance of such Person and its Subsidiaries, taken
as a whole, (b) the ability of such Person to pay and perform the obligations
for which such Person is responsible when due, or (c) with respect to any Loan
Party, the validity or enforceability of (i) any of the Loan Documents, (ii) any
Lien created or purported to be created by any of the Loan Documents or the
required priority of any such Lien, or (iii) the rights and remedies of
Administrative Agent or the Lenders under any of the Loan Documents.
"Maximum Rate" means, at any time and with respect to any Lender, the
------------
maximum rate of nonusurious interest under applicable law that such Lender may
charge Borrower. The Maximum Rate shall be calculated in a manner that takes
into account any and all fees, payments, and other charges contracted for,
charged, or received in connection with the Loan Documents that constitute
12
interest under applicable law. Each change in any interest rate provided for
herein based upon the Maximum Rate resulting from a change in the Maximum Rate
shall take effect without notice to Borrower at the time of such change in the
Maximum Rate.
"Mortgaged Property" means, any Property consisting of real property or
------------------
interests therein which becomes or is required to become subject to a Mortgage
pursuant to Section 7.4, and "Mortgaged Properties" means all of such real
----------- --------------------
property or interests, collectively.
"Mortgage" means any (if any) deed of trust, leasehold deed of trust,
--------
mortgage, leasehold mortgage, collateral assignment of leases, or other real
estate security document executed and delivered pursuant to this Agreement by
any Loan Party in favor of Administrative Agent for the benefit of the Agents
and the Lenders with respect to any Mortgaged Property, and any and all
amendments, modifications, supplements, renewals or restatements thereof, and
"Mortgages" means all of such Mortgages, collectively.
- ----------
"Multiemployer Plan" means a multiemployer plan defined as such in Section
------------------
3(37) of ERISA to which contributions have been made by any Loan Party or any
ERISA Affiliate at any time within the six (6) year period preceding the date
hereof or hereafter and which is covered by Title IV of ERISA.
"Net Proceeds" means (i) in connection with any disposition of assets of
------------
any Loan Party, the cash proceeds received by such Loan Party from such
disposition (including, without limitation, payments under notes or other debt
Securities received in connection with any such disposition, but only as and
when received) net of (a) the costs of such disposition (including reasonable,
out-of-pocket professional fees and expenses, taxes, notarial fees, survey
costs, title insurance premiums, required escrow deposits, and purchase price
adjustments and other customary fees and expenses, in each case attributable to
and actually paid in connection with such disposition), and (b) amounts applied
to repayment of Debt (other than the Obligations) secured by a lien, security
interest, claim or encumbrance on the asset or property disposed and (ii) in
connection with issuance of any equity Securities, the cash proceeds received
from such issuance, net of all costs of such issuance (including reasonable,
out-of-pocket professional fees and expenses, notarial fees, underwriting
discounts and commissions, and other customary fees and expenses) actually paid.
"Net Worth" means with respect to any Person, such Person's total
---------
shareholders' equity (including, without limitation, capital stock, additional
paid-in capital and retained earnings, after deducting treasury stock, or other
form of equity (i.e., partner's capital, membership interests, etc.)) which
would appear as such on a balance sheet of such Person prepared in accordance
with GAAP.
"Notes" means the Revolving Notes, the Swingline Note, and the Term Notes.
-----
"Notice of Borrowing" means a Notice of Borrowing substantially in the form
-------------------
of Exhibit "H" hereto executed on behalf of Borrower.
-----------
"Obligations" means any and all (a) obligations, indebtedness, and
-----------
liabilities of Borrower and its Subsidiaries to the Agents and the Lenders, or
any of them, arising pursuant to any of the Loan Documents, whether now existing
or hereafter arising, whether direct, indirect, fixed, contingent,
13
liquidated, unliquidated, joint, several, or joint and several, including,
without limitation, the obligation of Borrower to repay the Loans, the
Reimbursement Obligations, interest on the Loans and Reimbursement Obligations,
and all fees, costs, and expenses (including, without limitation, attorneys'
fees) provided for in the Loan Documents, and (b) indebtedness, liabilities, and
obligations of any Loan Party under any Hedge Agreement that it may enter into
with the Agent or any Affiliate of any Lender if and to the extent that such
Hedge Agreement is permitted in accordance with Section 11.1(i).
---------------
"Original Revolving Credit Agreement" means that certain Credit Agreement
-----------------------------------
dated as of February 24, 1999, among Borrower, Administrative Agent and
NationsBank, N.A., as the same has been amended or modified prior to the
effectiveness of this Agreement.
"Original Revolving Credit Facility" or "ORCF" means the credit facility
---------------------------------- ----
provided by the Original Revolving Credit Agreement.
"Other Taxes" has the meaning specified in Section 6.6(b).
----------- --------------
"Outstanding Revolving Credit" means, at any time of determination, the sum
----------------------------
of (a) the aggregate amount of Revolving Loans then outstanding; plus (b) the
aggregate amount of Letter of Credit Liabilities (or when calculated with
respect to any Lender, such Lender's pro rata share of the Revolving Loans then
outstanding and participation or other interest in such Letter of Credit
Liabilities).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
----
succeeding to all or any of its functions under ERISA.
"Permitted Liens" means the Liens permitted by Section 11.2.
--------------- ------------
"Person" means any individual, corporation, limited liability company,
------
business trust, association, company, partnership, joint venture, Governmental
Authority, or other entity.
"Plan" means any employee benefit plan established or maintained by any
----
Loan Party or any ERISA Affiliate and which is subject to Title IV of ERISA.
"Prime Rate" means the per annum rate of interest established from time to
----------
time by Bank of America as its prime rate, which rate may not be the lowest rate
of interest charged by Bank of America to its customers.
"Principal Office" means the office of Administrative Agent, located at 901
----------------
Main Street, 67th Floor, Dallas, Texas 75202.
"Prohibited Transaction" means any transaction described in Section 406 or
----------------------
407 of ERISA or Section 4975(c)(1) of the Code for which no statutory or
administrative exemption applies.
"Projections" means Borrower's forecasted consolidated: (a) balance sheets;
-----------
(b) profit and loss statements; (c) cash flow statements; and (d) capitalization
statements, all materially consistent
14
with Borrower's historical financial statements, together with appropriate
supporting details and a statement of underlying assumptions.
"Property" means, for any Person, property or assets of all kinds, real,
--------
personal or mixed, tangible or intangible (including, without limitation, all
rights relating thereto), whether owned or acquired on or after the Closing
Date.
"Purchase Price" means, as of any date of determination and with respect to
--------------
any acquisition, the purchase price to be paid for the equity interests issued
by the Person to be acquired or the assets of the Person to be acquired,
including all cash consideration paid (whether classified as purchase price,
debt assumption, noncompete payments, consulting payments or otherwise and
without regard to whether such amount is paid at closing or paid over time but
excluding the amount of any finance charges attributable to deferred payments
and excluding amounts payable as salary and benefits under any employment
agreement entered into with any seller for the purpose of retaining such seller
as an active officer or employee of Borrower or a Subsidiary) and the Dollar
value of all other assets to be transferred by the purchaser in connection with
such acquisition to the seller or sellers (including the value of all capital
stock of Borrower issued or to be issued to the seller) all valued in accordance
with the applicable purchase agreements.
"Quarterly Payment Date" means the last day of March, June, September, and
----------------------
December of each year, the first of which shall be September 30, 1999.
"Receivable" or "Receivables" means, as at any date of determination
---------- -----------
thereof, each and every "account" as such term is defined in article or chapter
9 of the UCC (or any successor statute) and includes, without limitation, the
unpaid portion of the obligation, as stated on the respective invoice, or, if
there is no invoice, other writing, of a customer of Borrower or any Subsidiary
of Borrower in respect of Inventory sold and shipped or services rendered by
Borrower or any Subsidiary of Borrower.
"Register" has the meaning specified in subsection 15.8(c).
-------- ------------------
"Regulation D" means Regulation D of the Board of Governors of the Federal
------------
Reserve System as the same may be amended, modified, or supplemented from time
to time or any successor regulation therefor.
"Regulatory Change" means, with respect to any Lender, any change after the
-----------------
date of this Agreement (other than with respect to taxes excluded by the first
sentence of Section 6.6(a)) in U.S. federal, state, or foreign laws or
--------------
regulations (including Regulation D) or the adoption or making after such date
of any interpretations, directives, or requests (other than with respect to
taxes excluded by the first sentence of Section 6.6(a)) applying to a class of
--------------
lenders including such Lender of or under any U.S. federal or state, or any
foreign, laws or regulations (whether or not having the force of law) by any
Governmental Authority or monetary authority charged with the interpretation or
administration thereof.
15
"Reimbursement Obligations" means all indebtedness, liabilities, and
-------------------------
obligations of Borrower or any other Loan Party to reimburse Administrative
Agent or the Fronting Bank in accordance with subsection 2.7(e) for any demand
-----------------
for payment or drawing under a Letter of Credit.
"Release" means, as to any Person, any release, spill, emission, leaking,
-------
pumping, injection, deposit, disposal, disbursement, leaching, or migration of
Hazardous Materials into the indoor or outdoor environment or into or from
property owned by such Person, including, without limitation, the migration of
Hazardous Materials through or in the air, soil, surface water, ground water, or
property in violation of Environmental Laws.
"Remedial Action" means all actions required under applicable Environmental
---------------
Laws to (a) cleanup, remove, treat, or otherwise address Hazardous Materials in
the indoor or outdoor environment, (b) prevent the Release or threat of Release
or minimize the further Release of Hazardous Materials, or (c) perform pre-
remedial studies and investigations and post-remedial monitoring and care;
provided that "Remedial Action" shall not include such actions taken in the
- --------
normal course of business and in material compliance with Environmental Laws.
"Rental Expense" means, for any period and for any Person, the rental or
--------------
lease expense of such Person under operating leases calculated without
duplication on a consolidated basis for such period as determined in accordance
with GAAP.
"Required Lenders" means any combination of Lenders having (a) more than
----------------
fifty percent (50%) of the sum of the Revolving Commitments and the outstanding
principal amount of the Term Loans or (b) if the Revolving Commitments have
terminated or have otherwise been fulfilled, more than fifty percent (50%) of
the outstanding principal amount of the Loans and participations in the Letters
of Credit.
"Reportable Event" means any of the events set forth in Section 4043 of
----------------
ERISA for which the 30-day notice requirement has not been waived by the PBGC.
"Reserve Requirement" means, at any time, the maximum rate at which
-------------------
reserves (including, without limitation, any marginal, special, supplemental, or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against, in the case of
Libor Accounts, "Eurocurrency liabilities" (as such term is used in Regulation
D). Without limiting the effect of the foregoing, the Reserve Requirement shall
reflect any other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes deposits by reference
to which the Adjusted Libor Rate is to be determined, or (ii) any category of
extensions of credit or other assets which include Libor Accounts. The Adjusted
Libor Rate shall be adjusted automatically on and as of the effective date of
any change in the Reserve Requirement.
"Revolving Commitment" means, as to each Lender, the obligation of such
--------------------
Lender to make advances of funds and purchase participation interests in (or
with respect to the Fronting Bank as a Lender, hold other interests in) Letters
of Credit in an aggregate principal amount at any one time outstanding up to but
not exceeding the amount set forth opposite the name of such Lender on Schedule
--------
1.1 (or if applicable, the most recent Assignment and Acceptance executed by it)
- ---
under the
16
heading "Revolving Commitment", as the same may be reduced or terminated
pursuant to Section 2.6, Section 5.4, or Section 13.2. The aggregate amount of
----------- ----------- ------------
all the Revolving Commitments as of the Closing Date equals One Hundred Million
Dollars ($100,000,000).
"Revolving Loans" means, as to any Lender, the advances made by such Lender
---------------
pursuant to Section 2.1, and, as to all Lenders making such Loans, all such
-----------
Loans made or held by such Lenders pursuant to Section 2.1.
-----------
"Revolving Notes" means the promissory notes provided for by Section 2.2
--------------- -----------
and all amendments or other modifications thereof.
"Revolving Termination Date" means July __, 2002.
--------------------------
"Securities" means any stock, shares, options, warrants, voting trust
----------
certificates, or other instruments evidencing an ownership interest or a right
to acquire an ownership interest in a Person or any bonds, debentures, notes, or
other evidences of indebtedness for borrowed money, secured or unsecured.
"Security Agreements" means security agreements, pledge agreements,
-------------------
securities pledge agreements, debenture pledge agreements, and other agreements,
documents or instruments evidencing or creating a Lien as security for the
Obligations or any portion thereof in form and substance satisfactory to
Administrative Agent executed by any of Borrower, each Domestic Subsidiary of
Borrower, and any other Loan Party, dated the date of the ORCF, the Closing Date
or a subsequent date (in the case of Domestic Subsidiaries acquired after the
Closing Date), in favor of Administrative Agent, for the benefit of the Agents
and the Lenders, and any such agreement, document, or instrument executed
pursuant to Article 7, and any and all amendments, modifications, supplements,
---------
renewals, extensions, or restatements thereof, including, without limitation,
the Security Agreements delivered in connection with the ORCF, as amended or
confirmed as of the Closing Date.
"Security Documents" means the Guaranties, the Security Agreements, and the
------------------
Mortgages, as such agreements may be amended, modified, supplemented, renewed,
extended, or restated from time to time, and any and all other agreements, deeds
of trust, mortgages, chattel mortgages, security agreements, pledges,
guaranties, assignments of proceeds, assignments of income, assignments of
contract rights, assignments of partnership interests, assignments of royalty
interests, or other collateral assignments, completion or surety bonds, standby
agreements, subordination agreements, undertakings, and other agreements,
documents, instruments, and financing statements now or hereafter executed
and/or delivered by any Loan Party in connection with or as security or
assurance for the payment or performance of the Obligations or any part thereof.
"Solvent" means, with respect to any Person as of the date of any
-------
determination, that on such date (a) the fair value of the Property of such
Person (both at fair valuation and at present fair saleable value) is greater
than the total liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its assets and pay its debts
and other
17
liabilities, contingent obligations, and other commitments as they mature in the
normal course of business, (d) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature, and (e) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's Property would constitute unreasonably
small capital after giving due consideration to current and anticipated future
capital requirements and current and anticipated future business conduct and the
prevailing practice in the industry in which such Person is engaged. In
computing the amount of contingent liabilities at any time, such liabilities
shall be computed at the amount which, in light of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Spot Rate" means, as of any date of determination (whether current or as
---------
of a prior date of determination if such conversion is to be determined as of a
prior date) with respect to the conversion of an amount denominated in one
currency (the "Original Currency") to another currency (the "Other Currency"),
----------------- --------------
the rate of exchange which, in accordance with customary banking procedures and
at such time and in such foreign exchange market as Administrative Agent shall
determine consistent with such procedures and for such purpose, Administrative
Agent on such date could purchase or could have purchased (if such conversion is
to calculated as of a prior date) such amount of the Original Currency with such
Other Currency.
"Subordinated Debt" means Debt of Borrower or its Subsidiaries subordinated
-----------------
to the Obligations on terms and conditions satisfactory to Administrative Agent
in its absolute discretion.
"Subsidiary" means, (a) when used to determine the relationship of a Person
----------
to another Person, a Person of which an aggregate of more than fifty percent
(50%) or more of the Capital Stock is owned of record or beneficially by such
other Person, or by one or more Subsidiaries of such other Person, or by such
other Person and one or more Subsidiaries of such Person, (i) if the holders of
such Capital Stock (A) are ordinarily, in the absence of contingencies, entitled
to vote for the election of a majority of the directors (or other individuals
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency, or (B) are entitled,
as such holders, to vote for the election of a majority of the directors (or
individuals performing similar functions) of such Person, whether or not the
right so to vote exists by reason of the happening of a contingency, or (ii) in
the case of Capital Stock which is not issued by a corporation, if such
ownership interests constitute a majority voting interest, and (b) when used
with respect to a Plan, ERISA, or a provision of the Code pertaining to employee
benefit plans, means, with respect to a Person, any corporation, trade, or
business (whether or not incorporated) which is under common control with such
Person and is treated as a single employer with such Person under Section 414(b)
or (c) of the Code and the regulations thereunder.
"Subsidiary Guaranty" means (a) the guaranty of the Domestic Subsidiaries
-------------------
of Borrower in favor of Administrative Agent, for the benefit of the Agents and
the Lenders, in substantially the form of Exhibit "F", as the same may be
-----------
modified pursuant to one or more Joinder Agreements and as the same may be
otherwise modified from time to time and (b) each of the "Subsidiary Guaranties"
delivered in connection with the ORCF, as amended or confirmed as of the Closing
Date.
18
"Swingline Advances" has the meaning specified in Section 2.1.
------------------ -----------
"Swingline Note" means the swingline promissory note provided for by
--------------
Section 2.2 and all amendments and other modifications thereof.
- -----------
"Syndication Agent" has the meaning set forth in the introductory paragraph
-----------------
of this Agreement.
"Tangible Net Worth" means, at the time of determination, the remainder of
------------------
(a) Net Worth minus (b) the aggregate book value of all intangible assets of
-----
Borrower and its Subsidiaries which are included in the determination of Net
Worth.
"Taxes" has the meaning specified in Section 6.6.
----- -----------
"Term Commitment" means, with respect to any Lender, the obligation of such
---------------
Lender to make an advance of funds on the Closing Date (or with respect to any
Person becoming a Lender after the Closing Date, on such date) in the principal
amount set forth opposite the name of such Lender on Schedule 1.1 under the
------------
heading "Term Commitment." The aggregate amount of all of the Term Commitments
as of the Closing Date equals Fifty Million Dollars ($50,000,000).
"Term Loans" means, as to any Lender, the Term Loans made or held by such
----------
Lender pursuant to Section 3.1 and, as to all Lenders making such Loans, all
-----------
such Loans made or held by such Lenders pursuant to Section 3.1.
-----------
"Term Notes" means the promissory notes provided for by Section 3.2 and all
---------- -----------
amendments or other modifications thereof.
"Term Termination Date" means July __, 2002.
---------------------
"Termination Date" means the Revolving Termination Date or the Term
----------------
Termination Date.
"Termination Event" means (a) a Reportable Event, or (b) the filing of a
-----------------
notice of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, or (c) the institution of proceedings
to terminate a Plan by the PBGC under Section 4042 of ERISA, or the appointment
of a trustee to administer any Plan.
"Type" shall mean either type of Account (i.e., a Base Rate Account or
----
Libor Account).
"UCC" means the Uniform Commercial Code as in effect in the Commonwealth of
---
Massachusetts and/or any other jurisdiction, the laws of which may be applicable
to or in connection with the creation, perfection or priority of any Lien on any
Property created pursuant to any Security Document.
19
"Unfunded Vested Accrued Benefits" means with respect to any Plan at any
--------------------------------
time, the amount (if any) by which (a) the present value of all vested
nonforfeitable benefits under such Plan exceeds, (b) the fair market value of
all Plan assets allocable to such benefits; all determined as of the then most
recent valuation date for such Plan.
"U.S." means the United States of America.
----
"Voting Stock" means Capital Stock of a Person having by the terms thereof
------------
ordinary voting power to elect a majority of the board of directors (or similar
governing body) of such Person (irrespective of whether or not at the time
Capital Stock of any other class or classes of such Person shall have or might
have voting power by reason of the happening of any contingency).
"Wholly-Owned Subsidiary" means any Subsidiary that (i) is owned 100% by
-----------------------
Borrower and/or a Subsidiary of Borrower, and (ii) is organized under the laws
of a state within the U.S.
"Year 2000 Compliant" has the meaning set forth in Section 9.24 hereof.
------------------- ------------
"Year 2000 Problem" has the meaning set forth in Section 9.24 hereof.
----------------- ------------
Section 1.2 Other Definitional Provisions. All definitions contained in
-----------------------------
this Agreement are equally applicable to the singular and plural forms of the
terms defined. The words "hereof", "herein", and "hereunder" and words of
similar import referring to this Agreement refer to this Agreement as a whole
and not to any particular provision of this Agreement. Unless otherwise
specified, all Article, Section, and Schedule references pertain to Articles,
Sections, and Schedules of this Agreement. Terms used herein that are defined
in the UCC, unless otherwise defined herein, shall have the meanings specified
in the UCC.
Section 1.3 Accounting Terms and Determinations. Except as otherwise
-----------------------------------
expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to Administrative Agent and the
Lenders hereunder shall be prepared, in accordance with GAAP, on a "consistent
basis" with those used in the preparation of the financial statements referred
to in Section 9.2. All calculations made for the purposes of determining
-----------
compliance with the provisions of this Agreement shall be made by application of
GAAP, on a "consistent basis" with those used in the preparation of the
financial statements referred to in Section 9.2. Accounting principles are
-----------
applied on a "consistent basis" when the accounting principles applied in a
current period are comparable in all material respects to those accounting
principles applied in a preceding period. Changes in the application of
accounting principles which do not have a material impact on calculating the
financial covenants herein shall be deemed comparable in all material respects
to accounting principles applied in a preceding period. To enable the ready and
consistent determination of compliance by Borrower with its obligations under
this Agreement, Borrower will not, nor will it permit any other Loan Party to,
change the manner in which either the last day of its Fiscal Year or the last
days of the first three Fiscal Quarters of its Fiscal Years is calculated
without the prior written consent of the Required Lenders. In the event any
changes in accounting principles required by GAAP, recommended by Borrower's or
any other Loan Party's certified public accountants or requested by Borrower (or
that
20
Borrower otherwise requests and Administrative Agent and the Required Lenders
agree to accept, such agreement not unreasonably to be denied) and implemented
by Borrower or any other Loan Party occur and such changes result in a change in
the method of the calculation of financial covenants under this Agreement, then
Borrower, Administrative Agent, and the Required Lenders agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such changes with the desired result that the criteria for
evaluating such covenants shall be the same after such changes as if such
changes had not been made. Until such time as such an amendment shall have been
executed and delivered by Borrower, Administrative Agent, and the Required
Lenders, all financial covenants, standards and terms in this Agreement shall
continue to be calculated or construed as if such changes had not occurred.
Section 1.4 Time of Day. Unless otherwise indicated, all references in
-----------
this Agreement to times of day shall be references to Dallas, Texas time.
ARTICLE 2
Revolving Credit Facility
-------------------------
Section 2.1 Revolving Commitments. Subject to the terms and conditions
---------------------
of this Agreement, each Lender who has agreed to provide a Revolving Commitment
severally agrees to make advances to Borrower from time to time from and
including the Closing Date to but excluding the Revolving Termination Date in an
aggregate principal amount at any time outstanding up to but not exceeding the
amount of such Lender's Revolving Commitment as then in effect; provided,
--------
however, (a) the Outstanding Revolving Credit applicable to a Lender shall not
- -------
at any time exceed such Lender's Revolving Commitment, and (b) the Outstanding
Revolving Credit of all of the Lenders shall not at any time exceed the lesser
of (i) the Borrowing Base minus the outstanding principal amount of the Term
Loans, or (ii) the aggregate Revolving Commitments. Subject to the foregoing
limitations, and the other terms and provisions of this Agreement, Borrower may
borrow, prepay, and reborrow hereunder the amount of the Revolving Commitments
and may establish Base Rate Accounts and Libor Accounts thereunder and, until
the Revolving Termination Date, Borrower may Continue Libor Accounts established
under the Revolving Loans or Convert Accounts established under the Revolving
Loans of one Type into Accounts of the other Type. Accounts of each Type under
the Revolving Loans made by each Lender shall be established and maintained at
such Lender's Applicable Lending Office for Revolving Loans of such Type.
Notwithstanding anything to the contrary contained in this Agreement, Borrower
may from time to time request, and Bank of America may at its discretion from
time to time advance (but shall in no event be obligated to advance), Revolving
Loans which are to be funded solely by Bank of America (the "Swingline
---------
Advances"); provided, however, that (i) the aggregate principal amount of the
-------- -------
Swingline Advances outstanding at any time shall not exceed Five Million Dollars
($5,000,000) and the aggregate principal amount of the Revolving Loans
outstanding at any time (inclusive of the Swingline Advances) shall not exceed
the aggregate principal amount of the Revolving Commitments, (ii) all Swingline
Advances shall bear interest at the rate provided by Section 4.1(c), (iii) each
--------------
Swingline Advance shall be a minimum principal amount of One Hundred Thousand
Dollars ($100,000) or any larger amount in increments of Fifty Thousand Dollars
($50,000), and (iv) Bank of America shall give the Administrative Agent and each
Lender written notice of the aggregate outstanding principal amount of the
Swingline Advances upon the written request of the Administrative Agent or any
21
Lender (but no more often than once every calendar quarter). Furthermore, upon
one Business Day's prior written notice given by Bank of America to the
Administrative Agent and the other Lenders at any time and from time to time
(including, without limitation, at any time following the occurrence of a
Default or an Event of Default) and, in any event, without notice on the
Business Day immediately preceding the Termination Date, each Lender (including,
without limitation, Bank of America) severally agrees, as provided in the first
sentence of this Section 2.1, and notwithstanding anything to the contrary
-----------
contained in this Agreement, any Default or Event of Default or the inability or
failure of Borrower or any of its Subsidiaries or any other Loan Party to
satisfy any condition precedent to funding any of the Revolving Loans contained
in Article 8 (which conditions precedent shall not apply to this sentence), to
---------
make a Revolving Loan, in the form of a Base Rate Account, in an amount equal to
its Commitment Percentage of the aggregate principal amount of the Swingline
Advances then outstanding, and the proceeds of such Revolving Loans shall be
promptly paid by the Administrative Agent to Bank of America and applied as a
repayment of the aggregate principal amount of the Swingline Advances then
outstanding.
Section 2.2 Revolving Notes. The Revolving Loans made by a Lender shall
---------------
be evidenced by a single promissory note of Borrower in substantially the form
of Exhibit "A", payable to the order of such Lender, in the maximum principal
-----------
amount equal to its Revolving Commitment as originally in effect (or, if
greater, its Revolving Commitment thereafter increased) and otherwise duly
completed; provided, however, that the Swingline Advances made by Bank of
America shall be evidenced by a single promissory note of Borrower in the
maximum original principal amount of Five Million Dollars ($5,000,000) payable
to the order of Bank of America in substantially the form of Exhibit "A-2"
-------------
hereto, dated the Closing Date.
Section 2.3 Repayment of Revolving Loans. Borrower shall pay to
----------------------------
Administrative Agent, for the account of the Lenders, the outstanding principal
amount of all of the Revolving Loans on the Revolving Termination Date and shall
repay each of the Swingline Advances upon demand, but in any event no later than
the 30th day after the making of such Swingline Advance and if at any time the
aggregate Outstanding Revolving Credit shall exceed the Borrowing Base, Borrower
shall pay the Administrative Agent for the account of the Lenders such excess
amount.
Section 2.4 Use of Proceeds. Subject to the terms of this Agreement,
---------------
the proceeds of the Revolving Loans shall be used by Borrower (i) to refinance
the existing Debt outstanding under the Original Revolving Credit Facility and
(ii) otherwise for general corporate purposes arising in the ordinary course of
business of Borrower and its Subsidiaries, to finance working capital
requirements and Capital Expenditures of Borrower and its Subsidiaries, and for
payment of the Reimbursement Obligations.
Section 2.5 Revolving Commitment Fee. Borrower agrees to pay to Agent
------------------------
for the account of each Lender a commitment fee on the daily average unused
amount of such Lender's Revolving Commitment for the period from and including
the date of this Agreement to and including the Revolving Termination Date, at a
per annum rate equal to the Commitment Fee Rate, computed on the basis of a year
of 360 days and the actual number of days elapsed (including the first day but
excluding the last day) provided that for purposes of calculating such fee (i)
the amount of outstanding Letters of Credit shall constitute use of the
Revolving Commitment but (ii) Swingline Advances shall not constitute use of the
Revolving Commitment. Accrued commitment fees under
22
this Section 2.5 shall be payable in arrears on the last Business Day of each
-----------
calendar quarter and on the Revolving Termination Date.
Section 2.6 Termination or Reduction of Revolving Commitments. Borrower
-------------------------------------------------
shall have the right to terminate fully or to reduce in part the unused portion
of the Revolving Commitments at any time and from time to time, provided that:
--------
(a) Borrower shall not have the right to terminate or reduce in part any unused
portion of the Revolving Commitments that could or may be required to be
advanced by the Lenders to refinance Swingline Advances then outstanding; (b)
Borrower shall give Administrative Agent at least five (5) Business Days notice
of each such termination or reduction as provided in Section 5.3 hereof; (c)
-----------
each partial reduction shall be in an aggregate amount at least equal to One
Million Dollars ($1,000,000) or any multiple One Hundred Thousand Dollars
($100,000) in excess thereof; and (d) the Revolving Commitments may not be
reduced below an amount equal to the Letter of Credit Liabilities. The
Revolving Commitments may not be reinstated after they have been terminated or
reduced.
Section 2.7 Letters of Credit.
-----------------
(a) Commitment to Issue. Borrower may utilize Revolving Commitments
-------------------
by requesting that the Fronting Bank issue, and the Fronting Bank, subject
to the terms and conditions of this Agreement, shall issue, standby and
commercial letters of credit for Borrower's account (such letters of credit
being hereinafter referred to as the "Letters of Credit", which may be for
-----------------
the benefit of a Subsidiary of Borrower); provided, however, (i) the
-------- -------
aggregate amount of outstanding Letter of Credit Liabilities shall not at
any time exceed Fifteen Million Dollars ($15,000,000), (ii) the Outstanding
Revolving Credit shall not at any time exceed the maximum amount prescribed
by Section 2.1, and (iii) the Outstanding Revolving Credit applicable to
-----------
any Lender shall not at any time exceed the maximum amount for a Lender
prescribed by Section 2.1. Upon the date of issue of a Letter of Credit,
-----------
Administrative Agent shall be deemed, without further action by any party
hereto, to have sold to each Lender who holds a Revolving Commitment, and
each such Lender shall be deemed, without further action by any party
hereto, to have purchased from Administrative Agent, a participation to the
extent of such Lender's Commitment Percentage (calculated with respect to
the Revolving Commitments) in such Letter of Credit and the related Letter
of Credit Liabilities.
(b) Letter of Credit Request Procedure. Except for Letters of Credit
----------------------------------
issued on the Closing Date, Borrower shall give Administrative Agent not
less than three (3) Business Days prior notice (effective upon receipt)
specifying the date of each Letter of Credit and the nature of the
transactions to be supported thereby. Upon receipt of such notice
Administrative Agent shall promptly notify the Fronting Bank and each
Lender who holds a Revolving Commitment of the contents thereof and of such
Lender's Commitment Percentage of the amount of the proposed Letter of
Credit. Each Letter of Credit shall have an expiration date that does not
extend beyond a date which is thirty (30) days prior to the Revolving
Termination Date, shall be payable in Dollars, must support a transaction
entered into in the ordinary course of business of Borrower or its
Subsidiaries, must be reasonably satisfactory in form and substance to
Administrative Agent and the Fronting Bank, and shall be issued pursuant to
such documentation as Administrative Agent and the Fronting Bank
23
may reasonably require, including, without limitation, the Fronting Bank's
standard form Letter of Credit Agreement; provided, that, in the event of
-------- ----
any conflict between the terms of such agreement and the other Loan
Documents, the terms of the other Loan Documents shall control.
(c) Letter of Credit Fees. Borrower will pay to Administrative Agent
---------------------
for the account of each Lender holding a Revolving Commitment a fee on such
Lender's Commitment Percentage (calculated with respect to the Revolving
Commitments only) of the daily average amount available for drawings under
the Letters of Credit, such fee (i) to be paid in arrears on the last
Business Day of each calendar quarter occurring after the date of the
issuance of the first Letter of Credit and on each last Business Day of
each calendar quarter thereafter until the date of expiration or
termination of all Letters of Credit and (ii) to be calculated at a rate
per annum equal to the Libor Rate Margin applicable to the Revolving Loans
on the basis of a year of 360 days and the actual number of days elapsed
(including the first day but excluding the last day). After receiving any
payment of any fees under this clause (c), Administrative Agent will
----------
promptly pay to each Lender that holds a Revolving Commitment the fees then
due such Lender. Borrower will also pay to the Fronting Bank for its
account only a fronting fee on the amount available to be drawn under each
Letter of Credit, such fronting fee (i) to be paid in advance on the date
of the issuance of each Letter of Credit and (ii) to be calculated at a
rate per annum equal to one-eighth of one percent (0.125%) on the basis of
a year of 360 days and the actual number of days such Letter of Credit is
to be outstanding (including the first day but excluding the last day).
Borrower will also pay to the Fronting Bank, for its account only, all
customary fees for amendments to and processing of the Letters of Credit.
(d) Funding of Drawings. Upon receipt from the beneficiary of any
-------------------
Letter of Credit of any demand for payment or other drawing under such
Letter of Credit, the Fronting Bank shall promptly so notify Administrative
Agent and Administrative Agent shall promptly so notify Borrower and each
Lender that holds a Revolving Commitment as to the amount to be paid as a
result of such demand or drawing and the respective payment date. Not later
than 2:00 p.m. on the applicable payment date if Borrower has not
reimbursed the Fronting Bank for the amount paid as a result of such demand
or drawing, each Lender will make available to Administrative Agent, at the
Principal Office, in immediately available funds, an amount equal to such
Lender's Commitment Percentage (calculated based only on the Revolving
Commitments) of the amount to be paid as a result of such demand or drawing
which has not been reimbursed even if the conditions to a Loan under
Article 8 hereof have not been satisfied and Administrative Agent shall
---------
promptly pay such amounts to the Fronting Bank.
(e) Reimbursements. Borrower shall be irrevocably and
--------------
unconditionally obligated to immediately reimburse the Fronting Bank
(through Administrative Agent) for any amounts paid by the Fronting Bank
upon any demand for payment or drawing under any Letter of Credit, without
presentment, demand, protest, or other formalities of any kind. All
payments on the Reimbursement Obligations shall be made to Administrative
Agent not later than 2:00 p.m. on the date of the corresponding payment
under the Letter of Credit by the Fronting Bank; provided, that
--------
Administrative Agent has provided notice to Borrower prior
24
to 11:00 a.m. on such day that such payment is due. In the event such
notice is received after 11:00 a.m. on a Business Day, such payment shall
be due not later than 1:00 p.m. on the next succeeding Business Day.
Subject to the other terms and conditions of this Agreement, such
reimbursement may be made by Borrower requesting a Revolving Loan in
accordance with Section 5.1 hereof, the proceeds of which shall be credited
-----------
against Borrower's Reimbursement Obligations. Administrative Agent will pay
to each Lender participating in a Letter of Credit such Lender's Commitment
Percentage (calculated based only on the Revolving Commitments) of all
amounts received from Borrower for application in payment, in whole or in
part, to the Reimbursement Obligation in respect of any Letter of Credit,
but only to the extent such Lender has made payment to Administrative Agent
in respect of such Letter of Credit pursuant to clause (d) of this Section
---------- -------
2.7.
---
(f) Reimbursement Obligations Absolute. The Reimbursement
----------------------------------
Obligations of Borrower under this Agreement shall be absolute,
unconditional, and irrevocable, and shall be performed strictly in
accordance with the terms of the Loan Documents under all circumstances
whatsoever and Borrower hereby waives any defense to the payment of the
Reimbursement Obligations based on any circumstance whatsoever, including,
without limitation, in either case, the following circumstances: (i) any
lack of validity or enforceability of any Letter of Credit or any other
Loan Document; (ii) the existence of any claim, set-off, counterclaim,
defense, or other rights which any Loan Party or any other Person may have
at any time against any beneficiary of any Letter of Credit, the Fronting
Bank, Administrative Agent, any Lender, or any other Person, whether in
connection with any Loan Document or any unrelated transaction; (iii) any
statement, draft, or other documentation presented under any Letter of
Credit proving to be forged, fraudulent, invalid, or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect
whatsoever; (iv) payment by the Fronting Bank under any Letter of Credit
against presentation of a draft or other document that does not comply with
the terms of such Letter of Credit; or (v) any other circumstance
whatsoever, whether or not similar to any of the foregoing, except in each
instance as otherwise provided in the penultimate sentence of clause (g) of
----------
this Section 2.7.
-----------
(g) Assumption of Risk by Borrower. As among Borrower and the
------------------------------
Lenders, Borrower assumes all risks of the acts and omissions of, or misuse
of any of the Letters of Credit by, the respective beneficiaries of such
Letters of Credit. In furtherance and not in limitation of the foregoing,
subject to the provisions of the applications for the issuance of Letters
of Credit, the Lenders, the Fronting Bank, and Administrative Agent shall
not be responsible for:
(i) the form, validity, sufficiency, accuracy, genuineness, or
legal effect of any document submitted by any Person in connection
with the application for and issuance of and presentation of drafts
with respect to any of the Letters of Credit, even if it should prove
to be in any or all respects invalid, insufficient, inaccurate,
fraudulent, or forged;
(ii) the validity or sufficiency of any instrument transferring
or assigning, or purporting to transfer or assign, any Letter of
Credit or the rights or benefits
25
thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason;
(iii) the failure of the beneficiary of any Letter of Credit to
comply duly with conditions required in order to draw upon such Letter
of Credit;
(iv) errors, omissions, interruptions, or delays in
transmission or delivery of any messages, by mail, cable, telegraph,
telex, or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms;
(vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of
Credit or of the proceeds thereof;
(vii) the misapplication by the beneficiary of any Letter of
Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control of
any Lender or the Fronting Bank, including, without limitation, any
acts of any Governmental Authorities.
None of the foregoing shall affect, impair, or prevent the vesting of any of the
Lenders, the Fronting Bank or Administrative Agent's rights or powers under this
Section 2.7. Borrower shall have a claim against the Fronting Bank, and the
- -----------
Fronting Bank shall be liable to Borrower, to the extent of any direct (but not
indirect, consequential, remote, exemplary or punitive) damages suffered by
Borrower or its Subsidiaries which Borrower proves in a final nonappealable
judgment were caused by (A) the Fronting Bank's willful misconduct or gross
negligence in determining whether documents presented under any Letter of Credit
complied with the terms thereof or (B) the Fronting Bank's willful failure to
pay under any Letter of Credit after presentation to it of documentation
strictly complying with the terms and conditions of such Letter of Credit.
Subject to the preceding sentence, the Fronting Bank 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.
Section 2.8 Borrowing Base. Percentages used from time to time in
--------------
calculating the Borrowing Base are for the sole purpose of determining the
maximum amount of the Outstanding Revolving Credit that may be outstanding from
time to time under this Agreement, and shall not be evidentiary of or binding
upon Administrative Agent or Lenders with respect to the market value or
liquidation value of any Collateral. Funding of Revolving Loans and issuance of
Letters of Credit hereunder shall at all times remain subject to confirmation by
Administrative Agent of Eligible Receivables and the Borrowing Base. Any
request for a Revolving Loan which, if funded, would result in the unpaid
balance of the Revolving Loans being in excess of the amount allowed by this
Agreement shall be declined by Administrative Agent without prior notice.
26
ARTICLE 3
Term Loan Facility
------------------
Section 3.1 Term Loans. Subject to the terms and conditions of this
----------
Agreement, each Lender who holds a Term Commitment severally agrees to make an
advance of funds to Borrower on the Closing Date in the amount of such Lender's
Term Commitment. Borrower may not repay and reborrow the Term Loans. Borrower
may establish Base Rate Accounts or Libor Accounts in respect of the Term Loans
and, until the Term Termination Date, Borrower may Continue Libor Accounts
established under the Term Loans or Convert Accounts established under the Term
Loans of one Type into Accounts of another Type. Accounts of each Type
established under the Term Loans made by each Lender shall be made and
maintained at such Lender's Applicable Lending Office for Accounts of such Type.
Section 3.2 Term Notes. Each Term Loan made by a Lender shall be
----------
evidenced by a single promissory note of Borrower in substantially the form of
Exhibit "B" payable to the order of such Lender, in the amount of its Term
- -----------
Commitment and otherwise duly completed.
Section 3.3 Repayment of Term Loans. Borrower shall pay to
-----------------------
Administrative Agent for the account of the Lenders who hold Term Loans the
aggregate principal amount of the Term Loans advanced in installments as
follows:
(a) Consecutive quarterly principal installments due and payable on
each Quarterly Payment Date commencing September 30, 2000, in accordance
with the following schedule:
- ----------------------------------------
Quarterly Payment Dates Term Loan
Installment
- ----------------------------------------
September 2000 $250,000
- ----------------------------------------
December 2000 $250,000
- ----------------------------------------
March 2001 $250,000
- ----------------------------------------
June 2001 $250,000
- ----------------------------------------
September 2001 $250,000
- ----------------------------------------
December 2001 $250,000
- ----------------------------------------
March 2002 $250,000
- ----------------------------------------
June 2002 $250,000
- ----------------------------------------
(b) In any event, all unpaid Obligations in respect of the Term Loans
will be due and payable on the Term Termination Date.
Section 3.4 Use of Proceeds. Subject to the terms of this Agreement,
---------------
the proceeds of the Term Loans shall be used by Borrower (i) to refinance the
existing Debt outstanding under the Original Revolving Credit Facility and (ii)
otherwise for general corporate purposes arising in the ordinary course of
business of Borrower and its Subsidiaries, to finance working capital
requirements
27
and Capital Expenditures of Borrower and its Subsidiaries, and for payment of
the Reimbursement Obligations.
ARTICLE 4
Interest and Fees
-----------------
Section 4.1 Interest Rate. Borrower shall pay to Administrative Agent,
-------------
for the account of each Lender, interest on the unpaid principal amount of each
Loan made by such Lender for the period commencing on the date of such Loan to
but excluding the date such Loan is due, at a fluctuating rate per annum equal
to the Applicable Rate. The term "Applicable Rate" means:
---------------
(a) during the period that such Loans or portions thereof are subject
to a Base Rate Account, the Base Rate, plus the Base Rate Margin;
----
(b) during the period that such Loans or portions thereof are subject
to a Libor Account, the Adjusted Libor Rate, plus the Libor Rate Margin;
----
and
(c) with respect to Loans constituting Swingline Advances, the lesser
of the Maximum Rate or the rate determined pursuant to clause (a) above, as
----------
the case may be.
Section 4.2 Determinations of Margins and Commitment Fee Rate. Prior to
-------------------------------------------------
receipt of the Applicable Rate Certificate to be delivered with Borrower's
financial statements for the Fiscal Quarter ending December 25, 1999, the
margins identified in Section 4.1 and the Commitment Fee Rate shall be as
-----------
follows: (i) the Base Rate Margin shall be one and three-quarters percent
(1.75%), (ii) the Libor Rate Margin shall be three percent (3.00%), and (iii)
the Commitment Fee Rate shall be one-half of one percent (0.50%); thereafter,
the Base Rate Margin, the Libor Rate Margin, and the Commitment Fee Rate shall
be determined in accordance with the following table:
============================================================================
LIBOR RATE BASE RATE COMMITMENT
LEVERAGE RATIO MARGIN MARGIN FEE RATE
============================================================================
Less than 0.75 to 1.00 1.50% 0.25% 0.375%
- ----------------------------------------------------------------------------
Greater than or equal to 0.75 to 2.00% 0.75% 0.50%
1.00 but less than 1.75 to 1.00
- ----------------------------------------------------------------------------
Greater than or equal to 1.75 to 2.50% 1.25% 0.50%
1.00 but less than 2.75 to 1.00
- ----------------------------------------------------------------------------
Greater than or equal to 2.75 to 3.00% 1.75% 0.50%
1.00
============================================================================
Upon delivery of the Applicable Rate Calculations pursuant to subsection
----------
10.1(c) in connection with the financial statements of Borrower and its
- -------
Subsidiaries required to be delivered pursuant to subsection 10.1(b) after the
------------------
end of each Fiscal Quarter commencing with such Applicable Rate Certificate
delivered for the Fiscal Quarter ending December 25, 1999, the Commitment Fee
Rate, the Base Rate Margin, and the Libor Rate Margin shall automatically be
adjusted to the fee or rate, as applicable, corresponding to the Leverage Ratio
of Borrower set forth
28
in the table above, such automatic adjustment to take effect prospectively the
third Business Day after receipt by Administrative Agent of the Applicable Rate
Calculation (the "Adjustment Date"). If Borrower fails to deliver such
---------------
Applicable Rate Calculation with respect to any Fiscal Quarter which sets forth
the Leverage Ratio within the period of time required by subsection 10.1(c): (i)
------------------
the Commitment Fee Rate shall automatically be adjusted to one-half percent
(0.50%) per annum; (ii) the Base Rate Margin shall automatically be adjusted to
one and three-quarters percent (1.75%) per annum, and (iii) the Libor Rate
Margin (for Interest Periods commencing after the applicable Adjustment Date)
shall automatically be adjusted to three percent (3.00%) per annum. The
automatic adjustments provided for in the preceding sentence shall take effect
on the last day that the Applicable Rate Calculation was required to be
delivered and shall remain in effect until subsequently adjusted in accordance
herewith upon the delivery of such Applicable Rate Certificate.
Section 4.3 Payment Dates. Accrued interest on the Loans shall be due
-------------
and payable as follows: (i) in the case of Loans subject to Base Rate Accounts,
on each Quarterly Payment Date and on the Termination Date of such Loan; (ii) in
the case of Loans subject to Libor Accounts and with respect to each such
Account, on (A) the last day of the Interest Period with respect thereto, (B) in
the case of an Interest Period greater than three months, at three-month
intervals after the first day of such Interest Period, and (C) on the
Termination Date of such Loan.
Section 4.4 Default Interest. Notwithstanding anything to the contrary
----------------
contained in this Agreement, upon the occurrence and during the continuance of
an Event of Default, at the option of Required Lenders and following notice to
Borrower, Borrower will pay to Administrative Agent for the account of each
Lender, in lieu of the interest payments required under Section 4.1, interest at
-----------
the applicable Default Rate on any principal of any Loan made by such Lender,
any Reimbursement Obligation, and (to the fullest extent permitted by law) any
other amount payable by Borrower under any Loan Document to or for the account
of Administrative Agent or such Lender.
Section 4.5 Conversions and Continuations of Accounts. Subject to
-----------------------------------------
Section 5.2 hereof, Borrower shall have the right from time to time to Convert
- -----------
all or part of any Base Rate Account in existence under a Loan into a Libor
Account under the same Loan or to continue Libor Accounts in existence under a
Loan as Libor Accounts under the same Loan, provided that: (a) Borrower shall
--------
give Administrative Agent notice of each such Conversion or Continuation as
provided in Section 5.3 hereof; (b) subject to Section 6.3 hereof, a Libor
----------- -----------
Account may only be Converted on the last day of the Interest Period therefor;
and (c) except for Conversions into Base Rate Accounts, no Conversions or
Continuations shall be made without the consent of Administrative Agent and the
Required Lenders while a Default has occurred and is continuing.
Section 4.6 Computations. Interest and fees payable by Borrower
------------
hereunder and under the other Loan Documents in respect of the interest and
fees, other than interest based on the Base Rate, shall be computed on the basis
of a year of 360 days and the actual number of days elapsed (including the first
day but excluding the last day) in the period for which interest is payable
unless such calculation would result in a rate that exceeds the Maximum Rate, in
which case interest shall be calculated on the basis of a year of 365 or 366
days, as the case may be; interest based on the Base Rate shall be computed on
the basis of a 365 or 366 day year, as the case may be.
29
ARTICLE 5
Administrative Matters
----------------------
Section 5.1 Borrowing Procedure. Borrower shall give Administrative
-------------------
Agent, and Administrative Agent will give the Lenders, notice of each borrowing
under the Commitments in accordance with Section 5.3 hereof. Not later than
-----------
12:00 noon on the date specified for each borrowing under the applicable
Commitment, each Lender obligated with respect to such Commitment will make
available the amount of the Loan to be made by it on such date to Administrative
Agent, at the Principal Office, in immediately available funds, for the account
of Borrower. The amounts received by Administrative Agent shall, subject to the
terms and conditions of this Agreement, be made available to Borrower by 3:00
p.m. at Borrower's direction by transferring the same, in immediately available
funds by wire transfer, automated clearinghouse debit, or interbank transfer to
(a) a bank account of Borrower designated by Borrower in writing or (b) a Person
or Persons designated by Borrower in writing.
Section 5.2 Minimum Amounts. Except for prepayments and Conversions
---------------
pursuant to Section 5.4(a) and Article 6 hereof, each Base Rate Account
-------------- ---------
applicable to a Loan and each prepayment of principal of a Loan shall be in a
minimum principal amount of One Hundred Thousand Dollars ($100,000) or
increments Fifty Thousand Dollars ($50,000) in excess thereof. Each LIBOR
Account applicable to a Loan shall be in a minimum principal amount of One
Million Dollars ($1,000,000) or increments One Hundred Thousand Dollars
($100,000) in excess thereof.
Section 5.3 Certain Notices. Notices by Borrower to Administrative
---------------
Agent of terminations or reductions of Commitments, of borrowings and
prepayments of Loans and of Conversion and Continuations of Accounts shall be
irrevocable and shall be effective only if received by Administrative Agent not
later than 11:00 a.m. on the Business Day prior to (or, with respect to Base
Rate Accounts, on) the date of the relevant termination, reduction, borrowing,
Conversion, Continuation, or other repayment specified below:
Notice Number of Business
Days Prior
==============================================================================================
Termination or reduction of Commitments 5
- ----------------------------------------------------------------------------------------------
Borrowing of Loans subject to Base Rate Accounts, prepayment or
repayment of Loans subject to Base Rate Accounts, or Conversions 0
into Base Rate Accounts or Swingline Advances
- ----------------------------------------------------------------------------------------------
Borrowing, prepayment, or repayment of Loans subject to Libor 3
Accounts, Conversions into or Continuations as Libor Accounts
==============================================================================================
Notwithstanding the foregoing, Borrower may give an effective notice of
borrowing of Revolving Loans subject to Base Rate Accounts in accordance with
Section 2.7(e) not later than 12:00 noon on the Business Day of the proposed
- --------------
borrowing if the proceeds of such borrowing will be used to satisfy
Reimbursement Obligations. Any notices of the type described in this Section
-------
5.3 which are received by Administrative Agent after the applicable time set
- ---
forth above on a Business Day shall be deemed to be received and shall be
effective on the next Business Day. Each such notice of
30
termination or reduction shall specify the applicable Commitments to be affected
and the amount of the Commitments to be terminated or reduced. Each such notice
of borrowing, Conversion, Continuation, or prepayment shall specify (a) the
Loans to be borrowed or prepaid or the Accounts to be Converted or Continued;
(b) the amount (subject to Section 5.2 hereof) to be borrowed, Converted,
-----------
Continued, or prepaid; (c) in the case of a Conversion, the Type of Account to
result from such Conversion; (d) in the case of a borrowing, the Type of Account
or Accounts to be applicable to such borrowing and the amounts thereof; (e) in
the event a Libor Account is selected, the duration of the Interest Period
therefor; and (f) the date of borrowing, Conversion, Continuation, or prepayment
(which shall be a Business Day). Any notices by Borrower of the type described
in this Section 5.3 may be made orally or in writing and, if made orally, must
-----------
be confirmed in writing not more than two (2) Business Days after the notice is
given. Administrative Agent shall notify the Lenders of the contents of each
such notice on the date of its receipt of the same or, if received on or after
the applicable time set forth above on a Business Day, on the next Business Day.
In the event Borrower fails to select the Type of Account applicable to a Loan,
or the duration of any Interest Period for any Libor Account, within the time
period and otherwise as provided in this Section 5.3, such Account (if
-----------
outstanding as a Libor Account) will be automatically Converted into a Base Rate
Account on the last day of the preceding Interest Period for such Account or (if
outstanding as a Base Rate Account) will remain as, or (if not then outstanding)
will be made as, a Base Rate Account. Borrower may not borrow any Loans subject
to a Libor Account, Convert any Base Rate Accounts into Libor Accounts, or
Continue any Libor Account as a Libor Account if the Applicable Rate for such
Libor Accounts would exceed the Maximum Rate.
Section 5.4 Prepayments.
-----------
(a) Mandatory.
---------
(i) Revolving Loans. If at any time the Outstanding Revolving
---------------
Credit exceeds the aggregate Revolving Commitments or the Borrowing Base,
Borrower shall, within one (1) Business Day after the occurrence thereof,
prepay outstanding Swingline Advances (first) and the outstanding Revolving
Loans by the amount of such excess.
(ii) Prepayments from Asset Dispositions. Immediately upon
-----------------------------------
receipt by Borrower or any of its Subsidiaries of the Net Proceeds of any
Asset Disposition, Borrower shall make a prepayment in respect of the
Obligations equal to the amount of such Net Proceeds in prepayment of the
Loans as provided in Section 5.4(a)(iv); provided, however, that if no
------------------ -------- -------
Default or Event of Default has occurred and is continuing, Borrower shall
not be required to make such prepayment to the extent that the Net Proceeds
from such Asset Dispositions during any fiscal year of Borrower do not
exceed Ten Million Dollars ($10,000,000) in the aggregate and if they
should exceed such amount, then the excess amount only shall be required to
be prepaid. Concurrently with the making of any such payment, Borrower
shall deliver to Administrative Agent a certificate of Borrower's chief
financial officer demonstrating the calculations of the amount required to
be prepaid.
31
(iii) Prepayments from Debt Offerings. In the event that
-------------------------------
Borrower, or any Subsidiary of Borrower issues any Debt Securities
(including, without limitation, any Subordinated Debt Securities),
other than Debt described in clauses (a) through (k) of Section 11.1
----------- ------------
hereof, no later than the third Business Day following the date of
receipt of the proceeds from such issuance, Borrower shall make a
prepayment in respect of the Obligations equal to the amount of such
proceeds, net of underwriting discounts and commissions and other
reasonable costs associated therewith, in prepayment of the Loans as
provided in Section 5.4(a)(iv).
------------------
(iv) Application of Proceeds of Prepayments. All prepayments
--------------------------------------
of Loans pursuant to this Section 5.4(a) shall be accompanied by an
--------------
appropriate notice of prepayment in accordance with Section 5.3 and,
-----------
except to the extent otherwise provided in clause (i), shall be
----------
applied to the Term Loans, pro rata with respect to each remaining
installment of principal, until the Term Loans are paid in full. Upon
payment of the Term Loans in full, the prepayments made pursuant to
this Section 5.4(a) shall be applied to permanently reduce the
--------------
Revolving Commitments.
(b) Optional. Subject to Section 5.2 and the provisions of this
-------- -----------
clause (b), Borrower may, at any time and from time to time without premium
----------
or penalty upon prior notice to Administrative Agent as specified in
Section 5.3, prepay or repay any Loan in full or in part; provided that the
-----------
optional prepayments of the Loans shall be applied first to any outstanding
Swingline Advances (until such advances are paid in full) and then to the
Outstanding Loans other than the Swingline Advances. Any optional
prepayment of the Term Loans shall be accompanied with accrued interest on
the amount prepaid to the date of prepayment. Any partial prepayments of
the Term Loans shall be applied to installments due under the Term Loans,
pro rata with respect to each remaining installment of principal. Loans
subject to a Libor Account may be prepaid or repaid only on the last day of
the Interest Period applicable thereto unless Borrower pays to
Administrative Agent, for the account of the applicable Lenders, any
amounts due under Section 6.5 as a result of such prepayment or repayment.
-----------
Section 5.5 Method of Payment. Except as otherwise expressly provided
-----------------
herein, all payments of principal, interest, and other amounts to be made by
Borrower or any other Loan Party under the Loan Documents shall be made to
Administrative Agent at the Principal Office for the account of each Lender's
Applicable Lending Office in Dollars and in immediately available funds, without
set-off, deduction, or counterclaim, not later than 12:00 noon on the date on
which such payment shall become due (each such payment made after such time on
such due date to be deemed to have been made on the next succeeding Business
Day). Borrower shall, at the time of making each such payment, specify to
Administrative Agent the sums payable under the Loan Documents to which such
payment is to be applied (and in the event that Borrower fails to so specify, or
if an Event of Default has occurred and is continuing, Administrative Agent may
apply such payment to the Obligations in such order and manner as it may elect
in its sole discretion, subject to Section 5.6 and provided that when applying
-----------
any such amounts to any Loans, Loans subject to Base Rate Accounts shall be
prepaid in full prior to any application to Loans subject to Libor Accounts);
provided, however that, unless Bank of America expressly agrees to the contrary,
such payment shall be applied first to any outstanding Swingline Advances until
such advances are paid in full. Each
32
payment received by Administrative Agent under any Loan Document for the account
of a Lender shall be paid to such Lender by 3:00 p.m. on the date the payment is
deemed made to Administrative Agent in immediately available funds, for the
account of such Lender's Applicable Lending Office. Whenever any payment under
any Loan Document shall be stated to be due on a day that is not a Business Day,
such payment may be made on the next succeeding Business Day, and such extension
of time shall in such case be included in the computation of the payment of
interest and commitment fee, as the case may be.
Section 5.6 Pro Rata Treatment. Except to the extent otherwise provided
------------------
herein: (a) each Loan shall be made by the Lenders holding Commitments for such
Loan, each payment of commitment fees under Sections 2.5 and letter of credit
------------
fees under subsection 2.7(c) shall be made for the account of the Lenders
-----------------
holding Revolving Commitments and each termination or reduction of the
Commitments shall be applied to the Commitments of the Lenders holding the
applicable Commitments, pro rata according to their respective Commitment
Percentages (calculated with respect to the Commitments for the Loans in
question only); (b) the making, Conversion, and Continuation of Accounts of a
particular Type (other than Conversions provided for by Section 6.4) shall be
-----------
made pro rata among the Lenders holding Accounts of such Type according to their
respective Commitment Percentages (calculated with respect to the Commitments
for the Loans in question only); (c) each payment and prepayment of principal of
or interest on Loans or Reimbursement Obligations by Borrower shall be made to
Administrative Agent for the account of the Lenders holding such Loans or
Reimbursement Obligations (or participation interests therein) pro rata in
accordance with the respective unpaid principal amounts of such Loans or
participation interests held by such Lenders; provided that as long as no
--------
default in the payment of interest exists, payments of interest made when
Lenders are holding different types of Accounts applicable to the same Loan as a
result of the application of Section 6.4, shall be made to the Lenders in
-----------
accordance with the amount of interest owed to each; and (d) the Lenders holding
Revolving Commitments shall purchase from the Fronting Bank participations in
the Letters of Credit to the extent of their respective Commitment Percentages
(calculated only with respect to the Revolving Commitments). All payments of the
Term Loans shall be applied pro rata with respect to each remaining installment
of principal. If at any time payment, in whole or in part, of any amount
distributed by Administrative Agent hereunder is rescinded or must otherwise be
restored or returned by Administrative Agent as a preference, fraudulent
conveyance, or otherwise under any bankruptcy, insolvency, or similar law, then
each Person receiving any portion of such amount agrees, upon demand, to return
the portion of such amount it has received to Administrative Agent.
Section 5.7 Sharing of Payments. If a Lender shall obtain payment of
-------------------
any principal of or interest on any of the Obligations due to such Lender
hereunder directly (and not through Administrative Agent) through the exercise
of any right of set-off, banker's lien, counterclaim, or similar right, or
otherwise, it shall promptly purchase from the other Lenders participations in
the Obligations held by the other Lenders in such amounts, and make such other
adjustments from time to time as shall be equitable to the end that all the
Lenders shall share the benefit of such payment pro rata in accordance with the
unpaid principal of and interest on the Obligations then due to each of them.
To such end, all of the Lenders shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise) if all or any
portion of such excess payment is thereafter rescinded or must otherwise be
restored. Borrower agrees, to the fullest extent it may effectively do so under
applicable law, that any Lender so purchasing a participation in the
33
Obligations held by the other Lenders may exercise all rights of set-off,
banker's lien, counterclaim, or similar rights with respect to such
participation as fully as if such Lender were a direct holder of Obligations in
the amount of such participation. Nothing contained herein shall require any
Lender to exercise any such right or shall affect the right of any Lender to
exercise, and retain the benefits of exercising, any such right with respect to
any other indebtedness or obligation of Borrower.
Section 5.8 Non-Receipt of Funds by Administrative Agent. Unless
--------------------------------------------
Administrative Agent shall have been notified by a Lender or Borrower (the
"Payor") prior to the date on which such Lender is to make payment to
- ------
Administrative Agent hereunder or Borrower is to make a payment to
Administrative Agent, for the account of one or more of the Agents or the
Lenders, as the case may be (such payment being herein called the "Required
--------
Payment"), which notice shall be effective upon receipt, that the Payor does not
- -------
intend to make the Required Payment to Administrative Agent, Administrative
Agent may assume that the Required Payment has been made and may, in reliance
upon such assumption (but shall not be required to), make the amount thereof
available to the intended recipient on such date and, if the Payor has not in
fact made the Required Payment to Administrative Agent, (a) the recipient of
such payment shall, on demand, pay to Administrative Agent the amount made
available to it together with interest thereon in respect of the period
commencing on the date such amount was so made available by Administrative Agent
until the date Administrative Agent recovers such amount at a rate per annum
equal to the Federal Funds Rate for such period, and (b) Administrative Agent
shall be entitled to offset against any and all sums to be paid to such
recipient, the amount calculated in accordance with the foregoing clause (a).
----------
Section 5.9 Participation Obligations Absolute; Failure to Fund
---------------------------------------------------
Participation. The obligations of a Lender holding a Revolving Commitment to
- -------------
fund its participation in the Letters of Credit in accordance with the terms
hereof shall be absolute, unconditional and irrevocable and shall be performed
strictly in accordance with the terms of the Loan Documents under all
circumstances whatsoever, including, without limitation, the following
circumstances: (a) any lack of validity of any Loan Document; (b) the occurrence
of any Default; (c) the existence of any claim, set-off, counterclaim, defense,
or other right which such Lender, any Loan Party, or any other Person may have;
(d) the occurrence of any event that has or could reasonably be expected to have
a Material Adverse Effect on Borrower or any other Loan Party; (e) the failure
of any condition to a Loan under Article 8 hereof to be satisfied; (f) the fact
---------
that after giving effect to the funding of the participation the Outstanding
Revolving Credit may exceed the aggregate Revolving Commitments or the Borrowing
Base; or (g) any other circumstance whatsoever, whether or not similar to any of
the foregoing. If a Lender fails to fund its participation in a Letter of
Credit as required hereby, such Lender shall, subject to the foregoing proviso,
remain obligated to pay to Administrative Agent the amount it failed to fund on
demand together with interest thereon in respect of the period commencing on the
date such amount should have been funded until the date the amount was actually
funded to Administrative Agent at a rate per amount equal to the Federal Funds
Rate for such period and Administrative Agent shall be entitled to offset
against any and all sums to be paid to such Lender hereunder the amount due
Administrative Agent or the Fronting Bank under this sentence.
34
ARTICLE 6
Change in Circumstances
-----------------------
Section 6.1 Increased Cost and Reduced Return.
---------------------------------
(a) Increased Cost. If, after the Closing Date, any Regulatory Change
--------------
or compliance by any Lender (or its Applicable Lending Office) with any request
or directive (whether or not having the force of law) of any Governmental
Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending Office)
to any tax, duty, or other charge with respect to any Libor Accounts,
its Notes, or its obligation to make Libor Accounts, or change the
basis of taxation of any amounts payable to such Lender (or its
Applicable Lending Office) under this Agreement or its Notes in
respect of any Libor Accounts (other than franchise taxes or taxes
imposed on or measured by the net income of such Lender by the
jurisdiction in which such Lender is organized, has its principal
office or such Applicable Lending Office or is doing business);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Reserve Requirement utilized in the determination of the Adjusted
Libor Rate) relating to any extensions of credit or other assets of,
or any deposits with or other liabilities or commitments of, such
Lender (or its Applicable Lending Office), including the Commitments
of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or the London interbank market any other condition affecting
this Agreement or its Notes or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such
Lender (or its Applicable Lending Office) of making, Converting into,
Continuing, or maintaining any Libor Accounts or to reduce any sum received
or receivable by such Lender (or its Applicable Lending Office) under this
Agreement or its Notes with respect to any Libor Accounts, then Borrower
shall pay to such Lender on demand such amount or amounts as will
compensate such Lender for such increased cost or reduction, as then or
previously incurred. If any Lender requests compensation by Borrower under
this Section 6.1(a), Borrower may, by notice to such Lender (with a copy to
--------------
Administrative Agent), suspend the obligation of such Lender to make or
maintain Libor Accounts, or to Convert Base Rate Accounts into Libor
Accounts, until the event or condition giving rise to such request ceases
to be in effect (in which case the provisions of Section 6.4 shall be
-----------
applicable); provided that such suspension shall not affect the right of
--------
such Lender to receive the compensation so requested.
(b) Capital Adequacy. If, after the date hereof, any Lender shall
----------------
have determined that any Regulatory Change has or would have the effect of
reducing the rate of return on the
35
capital of such Lender or any corporation controlling such Lender as a
consequence of such Lender's obligations hereunder to a level below that
which such Lender or such corporation could have achieved but for such
adoption, change, request, or directive (taking into consideration its
policies with respect to capital adequacy) by an amount reasonably deemed
by such Lender to be material, then from time to time upon demand, Borrower
shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such reduction.
(c) Claims Under this Section 6.1. Each Lender shall promptly notify
-----------------------------
Borrower and Administrative Agent of any event of which it has knowledge,
occurring after the date hereof, which will entitle such Lender to such
compensation pursuant to this Section 6.1 and will designate a different
-----------
Applicable Lending Office if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the judgment of
such Lender, be otherwise disadvantageous to it. Any Lender claiming
compensation under this Section 6.1 shall furnish to Borrower and
-----------
Administrative Agent a statement setting forth the additional amount or
amounts to be paid to it hereunder which shall be conclusive in the absence
of manifest error. In determining such amount, such Lender may use any
reasonable averaging and attribution methods.
Section 6.2 Limitation on Libor Accounts. If on or prior to the first
----------------------------
day of any Interest Period for any Libor Account:
(a) Administrative Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Libor Rate
for such Interest Period; or
(b) the Required Lenders determine (which determination shall be
conclusive) and notify Administrative Agent that the Adjusted Libor Rate
will not adequately and fairly reflect the cost to the Lenders of funding
Libor Accounts for such Interest Period;
then Administrative Agent shall give Borrower prompt notice thereof specifying
the amounts or periods, and so long as such condition remains in effect, the
Lenders shall be under no obligation to make additional Libor Accounts, Continue
Libor Accounts, or to Convert Base Rate Accounts into Libor Accounts and
Borrower shall, on the last day(s) of the then current Interest Period(s) for
the outstanding Libor Accounts, either prepay such Libor Accounts or Convert
such Libor Accounts into Base Rate Accounts in accordance with the terms of this
Agreement.
Section 6.3 Illegality. Notwithstanding any other provision of this
----------
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Libor Accounts hereunder,
then such Lender shall promptly notify Borrower and Administrative Agent thereof
and such Lender's obligation to make or Continue Libor Accounts and to Convert
Base Rate Accounts into Libor Accounts shall be suspended until such time as
such Lender may again make, maintain, and fund Libor Accounts (in which case the
provisions of Section 6.4 shall be applicable).
-----------
36
Section 6.4 Treatment of Affected Accounts. If the obligation of any
------------------------------
Lender to make a particular Libor Account or to Continue, or to Convert Base
Rate Accounts into, Libor Accounts shall be suspended pursuant to Section 6.1 or
-----------
Section 6.3 (Accounts of such Type being herein called "Affected Accounts"),
- ----------- -----------------
such Lender's Affected Accounts shall be automatically Converted into Base Rate
Accounts on the last day(s) of the then current Interest Period(s) for the
Affected Accounts (or, in the case of a Conversion required by Section 6.3
-----------
hereof, on such earlier date as such Lender may specify to Borrower with a copy
to Administrative Agent) and, unless and until such Lender gives notice as
provided below that the circumstances specified in Section 6.1 or Section 6.3
----------- -----------
hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Affected Accounts have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Affected Accounts shall be applied instead to
its Base Rate Accounts; and
(b) all Accounts that would otherwise be made or Continued by such
Lender as Libor Accounts shall be made or Continued instead as Base Rate
Accounts, and all Accounts of such Lender that would otherwise be Converted
into Libor Accounts shall be Converted instead into (or shall remain as)
Base Rate Accounts.
If such Lender gives notice to Borrower (with a copy to Administrative Agent)
that the circumstances specified in Section 6.1 or Section 6.3 hereof that gave
----------- -----------
rise to the Conversion of such Lender's Affected Accounts no longer exist (which
such Lender agrees to do promptly upon such circumstances ceasing to exist) at a
time when Libor Accounts made by other Lenders are outstanding, such Lender's
Base Rate Accounts shall be automatically Converted, on the first day(s) of the
next succeeding Interest Period(s) for such outstanding Libor Accounts, to the
extent necessary so that, after giving effect thereto, all Accounts held by the
Lenders holding Libor Accounts and by such Lender are held pro rata (as to
principal amounts, Types, and Interest Periods) in accordance with their
respective Commitment Percentages.
Section 6.5 Compensation. Upon the request of any Lender, Borrower
------------
shall pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost, or
expense (including, without limitation, any such amounts incurred in connection
with syndication of the Loans) incurred by it as a result of:
(a) any payment, prepayment, or Conversion by Borrower of a Libor
Account for any reason (including, without limitation, the acceleration of
the Loans pursuant to Section 13.2) on a date other than the last day of
------------
the Interest Period for such Libor Account; or
(b) any failure by Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Article 8
---------
to be satisfied) to borrow, Convert, Continue, or prepay a Libor Account on
the date for such borrowing, Conversion, Continuation, or prepayment
specified in the relevant notice of borrowing, prepayment, Continuation, or
Conversion under this Agreement.
37
Section 6.6 Taxes.
-----
(a) Withholding Taxes. Except as otherwise provided in this
-----------------
Agreement, any and all payments by any Loan Party to or for the account of
any Lender, any of the Agents or the Fronting Bank hereunder or under any
other Loan Document shall be made free and clear of and without deduction
for any and all present or future taxes, duties, levies, imposts,
deductions, charges, or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender, each of the Agents, or the
---------
Fronting Bank (as applicable), taxes imposed on or measured by its income,
and franchise taxes imposed on it, by the jurisdiction under the laws of
which such Lender (or its Applicable Lending Office), such of the Agents,
or the Fronting Bank (as the case may be) is organized, located or doing
business or any political subdivision thereof (all such non-excluded taxes,
duties, levies, imposts, deductions, charges, withholdings, and liabilities
being hereinafter referred to as "Taxes"). If a Loan Party shall be
-----
required by law to deduct any Taxes from or in respect of any sum payable
under any Loan Document to any Lender, any of the Agents, or the Fronting
Bank (as applicable), (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 6.6) such Lender,
-----------
such of the Agents, or the Fronting Bank (as applicable) receives an amount
equal to the sum it would have received had no such deductions been made,
(ii) the applicable Loan Party shall make such deductions, (iii) the
applicable Loan Party shall pay the full amount deducted to the relevant
taxing authority or other authority in accordance with applicable law, and
(iv) the applicable Loan Party shall furnish to Administrative Agent the
original or a certified copy of a receipt evidencing payment thereof.
(b) Stamp Taxes, Etc. In addition, Borrower agrees to pay any and all
----------------
present or future stamp or documentary taxes and any other excise or
property taxes or charges or similar levies which arise from any payment
made under this Agreement or any other Loan Document or from the execution
or delivery of, or otherwise with respect to, this Agreement or any other
Loan Document (hereinafter referred to as "Other Taxes").
-----------
(c) Tax Indemnification. BORROWER AGREES TO INDEMNIFY EACH LENDER,
-------------------
EACH OF THE AGENTS, AND THE FRONTING BANK FOR THE FULL AMOUNT OF TAXES AND
OTHER TAXES (INCLUDING, WITHOUT LIMITATION, ANY TAXES OR OTHER TAXES
IMPOSED OR ASSERTED BY ANY JURISDICTION ON AMOUNTS PAYABLE UNDER THIS
SECTION 6.6) PAID BY SUCH LENDER, SUCH OF THE AGENTS, OR THE FRONTING BANK
-----------
(AS THE CASE MAY BE) AND ANY LIABILITY (INCLUDING PENALTIES, INTEREST AND
EXPENSES) ARISING THEREFROM OR WITH RESPECT THERETO.
Section 6.7 Withholding Tax Exemption. Each Lender organized under the
-------------------------
laws of a jurisdiction outside the U.S., on or prior to the date of its
execution and delivery of this Agreement in the case of each Lender listed on
the signature pages hereof and on or prior to the date on which it becomes a
Lender in the case of each other Lender, and from time to time thereafter if
requested in writing by Borrower or Administrative Agent (but only so long as
such Lender remains lawfully able to do so), shall provide Borrower and
Administrative Agent with (a) if such Lender is a "bank"
38
within the meaning of Section 881(c)(3)(A) of the Code, (i) Internal Revenue
Service Form 1001 or 4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Lender is entitled to
benefits under an income tax treaty to which the U.S. is a party which reduces
to zero the rate of withholding tax on payments of interest or certifying that
the income receivable pursuant to this Agreement is effectively connected with
the conduct of a trade or business in the U.S., (ii) Internal Revenue Service
Form W-8 or W-9, as appropriate, or any successor form prescribed by the
Internal Revenue Service, and (iii) any other form or certificate required by
any taxing authority (including any certificate required by Sections 871(h) and
881(c) of the Code), certifying that such Lender is entitled to a complete
exemption from tax on payments pursuant to any of the Loan Documents or (b) if
such Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code, a Form W-8, or any subsequent versions thereof or successors thereto (and,
if such non-U.S. Lender delivers a Form W-8, a certificate (including any
certificate required by Sections 871(h) and 881(c) of the Code) representing
that such non-U.S. Lender is not a bank for purposes of Section 881(c) of the
Code, is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Code) of Borrower and is not a controlled foreign
corporation related to Borrower (within the meaning of Section 864(d)(4) of the
Code)), properly completed and duly executed by such non-U.S. Lender claiming
complete exemption from United States Federal withholding tax on payments of
interest by Borrower under this Agreement and the other Loan Documents. For any
period with respect to which a Lender has failed to provide Borrower and
Administrative Agent with the appropriate form pursuant to this Section 6.7 and
-----------
thereby to establish complete exemption from U.S. withholding tax (unless such
failure to establish complete exemption from U.S. withholding tax is due to a
change in treaty, law, or regulation occurring subsequent to the date on which a
form originally was required to be provided), (A) the applicable Loan Party
shall deduct all required Taxes from any amounts payable to such Lender under
any Loan Document, (B) the applicable Loan Party shall pay the full amount
allocated to the relevant taxing authority or other authority in accordance with
applicable law, (C) the applicable Loan Party shall furnish to Administrative
Agent the original or a certified copy of a receipt evidencing payment thereof,
and (D) such Lender shall not be entitled to an indemnification or increases in
the sum payable under Section 6.6 or Section 14.5 with respect to Taxes imposed
----------- ------------
by the U.S.; provided, however, that should a Lender, which is otherwise exempt
-------- -------
from or subject to a reduced rate of withholding tax, become subject to Taxes
because of its failure to deliver a form required hereunder, Borrower shall take
such steps as such Lender shall reasonably request to assist such Lender to
recover such Taxes.
Section 6.8 Mitigation. If Borrower is required to pay additional
----------
amounts to or for the account of any Lender pursuant to this Article 6, then
---------
such Lender will agree to use reasonable efforts to change the jurisdiction of
its Applicable Lending Office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the reasonable judgment
of such Lender, is not otherwise disadvantageous to such Lender.
39
ARTICLE 7
Security
--------
Section 7.1 Collateral. To secure the full and complete payment and
----------
performance of the Obligations, Borrower shall, and, to secure the Subsidiary
Guaranty, Borrower shall cause each Subsidiary of Borrower, other than the
Foreign Subsidiaries, to grant to Administrative Agent, for the benefit of the
Agents and the Lenders, a perfected (except, in the case of immaterial items of
Collateral perfection against which requires extraordinary filings or other
actions, where not required by Administrative Agent in the exercise of its
absolute discretion), first priority Lien on all of its right, title, and
interest in and to the following Property, whether now owned or hereafter
acquired, pursuant to the Security Documents:
(a) all Capital Stock of each Subsidiary of Borrower other than
Foreign Subsidiaries (whether present or future), owned as of the Closing
Date or thereafter acquired by Borrower or any Domestic Subsidiary of
Borrower;
(b) 65% of the shares of each class of Capital Stock of each Foreign
Subsidiary (whether present or future) that is a direct, wholly-owned
Subsidiary of Borrower or of a Domestic Subsidiary of Borrower, owned as of
the Closing Date or thereafter acquired by Borrower or such Domestic
Subsidiary; and
(c) all other Property of Borrower and, for purposes of securing the
Subsidiary Guaranty, each Subsidiary of Borrower, other than the Foreign
Subsidiaries, owned as of the Closing Date or thereafter acquired,
including, without limitation, all accounts (including, without limitation,
Receivables), inventory (including, without limitation, Inventory),
equipment, furniture, fixtures, contract rights, general intangibles,
documents, instruments, investment property, chattel paper, permits,
Intellectual Property, intercompany Debt, licenses, and material real
Property, excluding only the Installment Note.
Except as set forth in Schedule 7.1, Borrower covenants that none of the Capital
-------------
Stock to be pledged, in accordance with this Section 7.1 shall be subject to any
-----------
transfer restrictions, shareholders' agreement, or other restriction except for
such restrictions under applicable securities laws and such restrictions, if
any, as may be reasonably acceptable to Administrative Agent. In connection
with and in addition to the foregoing, Borrower and its Subsidiaries shall
execute and/or deliver such Security Documents and further agreements,
documents, and instruments (including, without limitation, stock certificates,
stock powers, and financing statements) as Administrative Agent may reasonably
request in order for it to obtain and maintain the perfected, first priority
Liens to be granted in accordance with this Section 7.1.
-----------
Section 7.2 Guaranties. Each Domestic Subsidiary shall guarantee
----------
payment and performance of the Obligations pursuant to the Subsidiary Guaranty.
40
Section 7.3 New Subsidiaries, New Issuances of Capital Stock.
------------------------------------------------
Contemporaneously with the creation or acquisition of any Subsidiary of Borrower
(other than a Foreign Subsidiary) Borrower shall, and shall cause each of its
Subsidiaries to:
(a) grant or cause to be granted to Administrative Agent, for the
benefit of the Agents and the Lenders, a perfected, first priority security
interest in all Capital Stock in such Subsidiary owned by Borrower or its
Domestic Subsidiaries (to the extent such Capital Stock is not already so
pledged to Administrative Agent);
(b) cause each such Subsidiary to Guarantee the payment and
performance of the Obligations by executing and delivering to
Administrative Agent an appropriate Guaranty; and
(c) cause each such Subsidiary to execute and deliver to
Administrative Agent an appropriate Security Agreement and such other
Security Documents as Administrative Agent may reasonably request to grant
Administrative Agent, for the benefit of the Agents and the Lenders, a
perfected, first priority Lien (except for Permitted Liens, if any) on all
Property of such Subsidiary in order to secure such Subsidiary's Guaranty.
Contemporaneously with the issuance of any additional Capital Stock of any
Subsidiary of Borrower, Borrower shall, and shall cause each of its Subsidiaries
to, grant or cause to be granted to Administrative Agent, for the benefit of the
Agents and the Lenders, a perfected, first priority security interest in all
Capital Stock in such Subsidiary owned by Borrower, or any Subsidiary of
Borrower (to the extent such Capital Stock are already not so pledged to
Administrative Agent). Borrower covenants that none of the Capital Stock to be
pledged in accordance with this Section 7.3 shall be subject to any transfer
-----------
restriction, shareholders' agreement, or other restriction except for such
restrictions under applicable securities laws and such restrictions, if any, as
may be reasonably acceptable to Administrative Agent. Notwithstanding anything
to the contrary contained in this Section 7.3, (i) neither Borrower nor any
-----------
Subsidiary of Borrower shall be obligated to pledge more than 65% of each class
of the issued and outstanding capital stock of any Foreign Subsidiary that is a
direct, wholly-owned Subsidiary of Borrower or its Domestic Subsidiaries or to
pledge any Capital Stock of any Subsidiary of any such Foreign Subsidiaries,
(ii) no Foreign Subsidiary shall be obligated to execute a Guaranty guaranteeing
payment or performance of the Obligations, and (iii) no Foreign Subsidiary shall
be obligated to execute a Security Agreement securing payment or performance of
the Obligations. In connection with and in addition to the foregoing, Borrower
and its Subsidiaries shall execute and/or deliver such further agreements,
documents and instruments (including, without limitation, stock certificates,
stock powers, and financing statements) as Administrative Agent may reasonably
request in order for it to obtain and maintain the perfected, first priority
Liens to be granted in accordance with this Section 7.3.
-----------
Section 7.4 New Mortgaged Properties. If requested by Administrative
------------------------
Agent, Borrower shall, and shall cause each of its Subsidiaries other than its
Foreign Subsidiaries to, contemporaneously with the acquisition of any fee real
Property, execute, acknowledge and deliver to Administrative Agent a Mortgage or
an amendment or modification to a then existing Mortgage covering all fee real
Property acquired by Borrower or any of such Subsidiaries subsequent to the
41
Closing Date, together with evidence reasonably satisfactory to Administrative
Agent and its counsel, including, without limitation, if requested by
Administrative Agent, a commitment for a mortgagee policy of title insurance or
a title opinion in favor of Administrative Agent, in form and substance
reasonably satisfactory to Administrative Agent, that the Mortgage creates a
valid, first priority Lien on the fee estate in favor of Administrative Agent,
for the benefit of the Agents and the Lenders (except for Permitted Liens, if
any), together with appraisals and surveys if requested by Administrative Agent.
Following the date of each such acquisition of Property, if requested by
Administrative Agent, Borrower shall, and shall cause each of its Subsidiaries
(other than its Foreign Subsidiaries) with an interest in such Properties to,
(a) deliver or cause to be delivered to Administrative Agent, a mortgagee policy
of title insurance insuring the Liens of the Mortgage covering such fee real
Property in an amount reasonably satisfactory to Administrative Agent on
standard form policies (except for Permitted Liens, if any) and (b) provide
Administrative Agent with a current environmental assessment of such Property in
form and substance reasonably satisfactory to Administrative Agent.
Section 7.5 Release of Collateral. Upon any sale, transfer or other
---------------------
disposition of Collateral that is expressly permitted under Section 11.8 and
-------------
upon five Business Days prior written request by Borrower, Administrative Agent
shall execute at Borrower's expense such documents as may be necessary to
evidence the release by Administrative Agent of its Liens on such Collateral
being sold, transferred, or otherwise disposed of; provided, however, that (a)
-------- -------
Administrative Agent shall not be required to release any Lien on any Collateral
if a Default shall have occurred and be continuing, (b) Administrative Agent
shall not be required to execute any such document on terms which, in
Administrative Agent's opinion, would expose Administrative Agent to liability
or create any obligation not reimbursed by Borrower or entail any consequences
other than the release of such Lien without recourse or warranty, and (c) such
release shall not in any manner discharge, affect or impair any of the
Obligations or any of Administrative Agent's Liens on any Collateral retained by
Borrower or any of its Subsidiaries, including, without limitation, its Liens on
the proceeds of any such sale, transfer or other disposition.
ARTICLE 8
Conditions Precedent
--------------------
Section 8.1 Initial Loan and Letter of Credit. The obligation of each
---------------------------------
Lender to make its initial Loan are subject to the fulfillment of the following
conditions precedent to the satisfaction of Administrative Agent on or before
July 15, 1999:
(a) Deliveries. Administrative Agent shall have received on or before
----------
the Closing Date and on or before the day of any such Loan or Letter of
Credit all of the following, each dated (unless otherwise indicated) the
Closing Date, in form and substance reasonably satisfactory to
Administrative Agent:
(i) Resolutions; Authority. Resolutions of the board of
----------------------
directors (or similar governing body) of each Loan Party certified by
its Secretary, its Assistant Secretary, its Clerk or its Assistant
Clerk which authorize its execution, delivery, and performance of the
Loan Documents to which it is or is to be a party;
42
(ii) Incumbency Certificate. A certificate of incumbency
----------------------
certified by the Secretary, the Assistant Secretary, the Clerk or the
Assistant Clerk of each Loan Party (or confirmations of the Incumbency
Certificates in the case of Loan Parties subject to the ORCF)
certifying the names of its officers (A) who are authorized to sign
the Loan Documents to which it is or is to be a party (including the
certificates contemplated herein) together with specimen signatures of
each such officer and (B) who will, until replaced by other officers
duly authorized for that purpose, act as its representative for the
purposes of signing documentation and giving notices and other
communications in connection with this Agreement and the transactions
contemplated hereby;
(iii) Organizational Documents. The certificate of incorporation
------------------------
of each Loan Party certified by the Secretary of State of the state of
its incorporation and dated a current date or a certificate of no
change from the copy delivered at the closing of the ORCF;
(iv) Bylaws. The bylaws of each Loan Party certified by its
------
Secretary or an Assistant Secretary or a certificate of no change from
the copy delivered at the closing of the ORCF;
(v) Governmental Certificates. Certificates of the appropriate
-------------------------
government officials of the state of incorporation of each Loan Party
as to its existence and, to the extent applicable good standing, and
certificates of the appropriate government officials of each state in
which each Loan Party's principal business office is located, as to
each Loan Party's qualification to do business and good standing in
such state, all dated a current date;
(vi) Notes. The Notes executed by Borrower dated the date
-----
hereof;
(vii) Guaranties. The Guaranties (or amendments and/or
----------
confirmations of Guaranties delivered in connection with the ORCF)
executed by the Domestic Subsidiaries of Borrower;
(viii) Lien Search Reports. UCC, tax, and judgment Lien search
-------------------
reports listing all documentation on file against Borrower and its
Domestic Subsidiaries in the central filing locations of each
jurisdiction in which any such party's business offices are located
and in the local filing offices of each jurisdiction in which such
party's principal business office is located in each case for those
jurisdictions and Domestic Subsidiaries not previously searched in
connection with the ORCF;
(ix) Termination or Assignment of Liens. Duly executed UCC-3
----------------------------------
termination statements, mortgage releases, and such other
documentation as shall be necessary to terminate, release, or assign
to Administrative Agent all Liens other than those permitted by
Section 11.2 hereof;
------------
43
(x) Security Agreements. Security Agreements executed by each of
-------------------
the Loan Parties not party to the Security Agreements executed in
connection with the ORCF and amendments and/or confirmations of the
Security Agreements executed in connection with the ORCF;
(xi) Stock Certificates. The stock certificates representing all
------------------
of the issued and outstanding Capital Stock the Domestic Subsidiaries
and 65% of the outstanding Capital Stock of its first tier Foreign
Subsidiaries (excluding Foreign Subsidiaries with total assets of less
than Two Million Five Hundred Thousand Dollars ($2,500,000), provided
that the total assets of all such excluded Foreign Subsidiaries shall
not exceed Five Million Dollars ($5,000,000) in the aggregate), in
each case accompanied by appropriate instruments of transfer or stock
powers executed in blank (as appropriate), or registration of
Administrative Agent's Lien, in form and substance satisfactory to
Administrative Agent (in the case of book entry securities); provided
--------
that Borrower may have up to 30 days after the Closing Date to deliver
all of the Capital Stock of its first tier Foreign Subsidiaries
required to be pledged as aforesaid;
(xii) Financing Statements. UCC Financing statements and all
--------------------
other requisite filing documents executed by the Loan Parties
necessary to perfect the Liens created pursuant to the Security
Documents;
(xiii) Consents. Copies of all material consents or waivers
--------
(other than consents or waivers previously delivered to Administrative
Agent and certified by a Loan Party as being true and correct copies)
necessary for the execution, delivery, and performance by each of the
Loan Parties of the Loan Documents to which it is a party, as
Administrative Agent may require, which consents shall be certified by
an Authorized Representative of the applicable Loan Party as true and
correct copies of such consents as of the Closing Date;
(xiv) Permits. Copies of all material permits (other than
-------
permits previously delivered to Administrative Agent and certified by
a Loan Party as being true and correct copies) affecting Borrower or
any of its Subsidiaries in connection with its businesses or any of
the Properties owned or leased by it, and evidence satisfactory to
Administrative Agent that Borrower and its Subsidiaries are able to
conduct their businesses with the use of such permits in full force
and effect;
(xv) Insurance Policies. Certificates of insurance summarizing
------------------
the insurance policies of Borrower and its Subsidiaries required by
this Agreement and reflecting Administrative Agent as additional
insured under such policies;
(xvi) Opinions of Counsel. Opinions of legal counsel to Borrower
-------------------
and the Subsidiaries of Borrower, and as to such matters, as
Administrative Agent may reasonably request;
44
(xvii) Fees. The underwriting and structuring fees set forth in
----
that certain letter dated January 13, 1999, from Administrative Agent
to Borrower, as the same may be amended from time to time (such fees
are expected to be paid on the Closing Date);
(xviii) Employment Agreements. Copies of all employment
---------------------
contracts or other compensation arrangements not previously delivered
to Administrative Agent between Borrower and any of its Subsidiaries
and their respective executive officers as Administrative Agent shall
reasonably request;
(xix) Letter of Direction. A letter of direction from Borrower
-------------------
addressed to Administrative Agent with respect to the disbursement of
the proceeds of the initial Loans;
(xx) Borrowing Base Certificate. A Borrowing Base Certificate
--------------------------
calculating the Borrowing Base as of May 29, 1999; and
(xxi) Schedules. The Schedules to be attached hereto in form and
---------
substance satisfactory to Lenders in their sole discretion.
(b) Financial Statements. Receipt and satisfactory review by
--------------------
Administrative Agent of the consolidated financial statements of Borrower
and its Subsidiaries for the periods ended December 26, 1998, and March
27, 1999, including balance sheets, income and cash flow statements audited
(in the case of the December 26, 1998 financial statements) by independent
public accountants of recognized national standing and prepared, in each
case, in conformity with GAAP and such other financial information as
Administrative Agent may request.
(c) Attorneys' Fees and Expenses. The reasonable costs and
----------------------------
expenses (including attorneys' fees) referred to in Section 15.1
------------
hereof for which statements have been presented shall have been paid
in full;
(d) Compliance with Laws. As of the Closing Date, each Loan Party
--------------------
shall have complied with all requirements of all Governmental Authorities
necessary to consummate the transactions contemplated by this Agreement and
the other Loan Documents;
(e) No Prohibitions. No requirement of any Governmental Authority
---------------
shall prohibit the consummation of the transactions contemplated by this
Agreement or any other Loan Document, and no order, judgment, or decree of
any Governmental Authority or arbitrator shall, and no litigation or other
proceeding shall be pending or threatened which would, enjoin, prohibit,
restrain, or otherwise adversely affect in any material manner the
consummation of the transactions contemplated by this Agreement and the
other Loan Documents or otherwise have a Material Adverse Effect on
Borrower or any other Loan Party;
45
(f) No Material Adverse Change. As of the Closing Date, no material
--------------------------
adverse change shall have occurred with respect to the condition (financial
or otherwise), results of operations, business, operations, capitalization,
assets, liabilities, or prospects of Borrower and its Subsidiary taken as a
whole since December 26, 1998, and Administrative Agent shall be satisfied
that the economic performance of Borrower and each of its Subsidiaries to
the Closing Date is not materially different from the economic projections
for Borrower and each of its Subsidiaries through the Closing Date that
were previously submitted to Administrative Agent;
(g) No Material Litigation. Except as set forth in Schedule 9.5
---------------------- ------------
hereto, as of the Closing Date, no action, suit, investigation, or
proceeding shall be pending or threatened before any Governmental Authority
that purports to affect Borrower or any Subsidiary of Borrower that could
result in a Material Adverse Effect on Borrower or that could have an
adverse effect on the ability of Borrower or any Subsidiary of Borrower to
perform their Obligations under the Loan Documents;
(h) Compliance With Financial Obligations. As of the Closing Date,
-------------------------------------
each of Borrower and the Subsidiaries of Borrower shall be in compliance
with all of their respective existing financial obligations except where
failure to be in compliance could not have a Material Adverse Effect;
(i) Due Diligence Review. Receipt and review, with results reasonably
--------------------
satisfactory to Administrative Agent and its counsel, of information (or
confirmation of no material changes to the information provided in
connection with the ORCF) regarding litigation, tax, accounting, labor,
insurance, pension liabilities (actual or contingent), real estate leases,
material contracts, debt agreements, property ownership, environmental
matters, contingent liabilities and management of Borrower and its
subsidiaries which information may include, if requested by Administrative
Agent, a written audit of the accounts receivable, controls and systems of
Borrower and its Subsidiaries.
(j) Year 2000 Matters. Receipt and review, with results reasonably
-----------------
satisfactory to Administrative Agent, of information (or confirmation of no
changes to the information provided in connection with the ORCF) 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 the Year 2000 Problem, 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.
(k) No Material Market Changes. The absence of any material
--------------------------
disruption of or material adverse change in conditions in the financial,
banking or capital markets which Administrative Agent and Syndication
Agent, in their reasonable discretion, deem material in connection with the
syndication of the Loans.
46
(l) Additional Documentation. Administrative Agent shall have
------------------------
received such additional approvals, opinions, or other documentation as
Administrative Agent may reasonably request.
Failure to fulfill each of the foregoing conditions to the satisfaction of
Administrative Agent on or before July 15, 1999 shall result in the termination
of all Commitments.
Section 8.2 All Loans and Letters of Credit. The obligation of each
-------------------------------
Lender to make any Loan (including the initial Loans) and the obligation of the
Fronting Bank to issue any Letter of Credit (including any initial Letter of
Credit) are subject to the following additional conditions precedent:
(a) No Default. No Default shall have occurred and be continuing, or
----------
would result from such Loan or Letter of Credit;
(b) Representations and Warranties. All of the representations and
------------------------------
warranties contained in Article 9 hereof and in the other Loan Documents
----------
shall be true and correct in all material respects on and as of the date of
such Loan or Letter of Credit with the same force and effect as if such
representations and warranties had been made on and as of such date except
to the extent that such representations and warranties relate specifically
to another date, and except as to transactions permitted hereunder; and
(c) Notice of Borrowing. Administrative Agent shall have received a
-------------------
Notice of Borrowing requesting such Loan or Letter of Credit.
Each notice of borrowing by Borrower hereunder, and each request for the
issuance of a Letter of Credit, shall constitute a representation and warranty
by Borrower that the conditions precedent set forth in subsection 8.1(a) and
-----------------
subsection 8.1(b) hereof have been satisfied (both as of the date of such notice
- -----------------
and, unless Borrower otherwise notifies Administrative Agent prior to the date
of such borrowing or Letter of Credit, as of the date of such borrowing or
Letter of Credit).
ARTICLE 9
Representations and Warranties
------------------------------
To induce the Agents and the Lenders to enter into this Agreement, Borrower
represents and warrants to the Agents and the Lenders that the following
statements are, and, after giving effect to the transactions contemplated
hereby, will be true, correct, and complete:
Section 9.1 Corporate Existence.
-------------------
(a) Except as set forth in Schedule 9.1 (any such exception to be
------------
cured within thirty (30) days of the Closing Date), Borrower and each Subsidiary
of Borrower is (i) a corporation duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its incorporation; (ii) has all
requisite power and authority to own its assets and carry on its business as now
being or as proposed to be conducted; and (iii) is qualified
47
to do business in all jurisdictions in which the nature of its business
makes such qualification necessary and where failure to so qualify would
have a Material Adverse Effect;
(b) Each Loan Party has the power and authority to execute, deliver,
and perform its respective obligations under the Loan Documents to which it
is or may become a party.
Section 9.2 Financial Condition.
-------------------
(a) Financial Statements. All financial statements concerning
--------------------
Borrower and its Subsidiaries delivered at any time to Administrative Agent
or any Lender have been, and at all times subsequent to the Closing Date
shall be, prepared in accordance with GAAP, and present fairly, in all
material respects the financial condition of Borrower and its Subsidiaries
as of the respective dates indicated therein and the results of operations
for the respective periods indicated therein. Neither Borrower nor any
Subsidiary of Borrower has any material contingent liabilities, liabilities
for taxes, unusual forward or long-term commitments, or unrealized or
anticipated losses from any unfavorable commitments except as referred to
or reflected in such financial statements.
(b) Projections. The Projections delivered and to be delivered have
-----------
been and will be prepared by Borrower in light of the past operation of the
business of Borrower and its Subsidiaries. The Projections represent, as
of the date thereof, a good faith estimate by Borrower and its senior
management of the financial conditions and performance of Borrower and its
Subsidiaries based on assumptions believed to be reasonable at the time
made.
Section 9.3 Corporate Action; No Breach. Except as set forth in
---------------------------
Schedule 9.3, the execution, delivery, and performance by each Loan Party of the
- ------------
Loan Documents to which each is or may become a party and compliance with the
terms and provisions thereof have been duly authorized by all requisite action
on the part of each Loan Party and do not and will not (a) violate or conflict
with, or result in a breach of, or require any consent under (i) the articles of
incorporation, certificate of formation, bylaws, or operating agreement of any
Loan Party, (ii) any applicable law, rule, or regulation or any order, writ,
injunction, or decree of any Governmental Authority or arbitrator, or (iii) any
agreement or instrument to which any Loan Party is a party or by which any of
them or any of their property is bound or subject, or (b) constitute a default
under any such agreement or instrument, or result in the creation or imposition
of any Lien upon any of the revenues or assets of any Loan Party.
Section 9.4 Operation of Business. Each Loan Party possesses all
---------------------
material licenses, permits, franchises, patents, copyrights, trademarks, and
tradenames, or rights thereto, necessary to conduct its respective businesses
substantially as now conducted and as presently proposed to be conducted, and no
Loan Party is in violation of any valid rights of others with respect to any of
the foregoing where such violation could reasonably be expected to have a
Material Adverse Effect. Except as set forth in Schedule 9.4, since the last
------------
Saturday of 1998, the Loan Parties have conducted their respective businesses
only in the ordinary and usual course, except for transactions permitted hereby.
48
Section 9.5 Litigation and Judgments. Except as set forth in Schedule
------------------------ --------
9.5, to Borrower's knowledge there is no action, suit, investigation, or
- ---
proceeding before or by any Governmental Authority or arbitrator pending or
threatened against or affecting any Loan Party which could reasonably be
expected to have a Material Adverse Effect. As of the Closing Date, except as
set forth in Schedule 9.5, there are no outstanding judgments against any Loan
------------
Party.
Section 9.6 Rights in Properties; Liens. Except as set forth in
---------------------------
Schedule 9.6, each Loan Party has good title to or valid leasehold interests in
- ------------
its respective properties and assets, real and personal, including, as of the
Closing Date, the properties, assets, and leasehold interests reflected in the
most recent financial statements described in Section 9.2 (except for any
-----------
thereof disposed of in compliance with Section 11.8), and none of such
------------
properties, assets, or leasehold interests of any Loan Party is subject to any
Lien, except as permitted by Section 11.2. Except as disclosed on Schedule
------------ --------
9.6(a), as of the Closing Date, no Loan Party owns any material right, title, or
- ------
interest in any real Properties. Except as disclosed on Schedule 9.6(b), as of
---------------
the Closing Date, no Loan Party owns any right, title, or interest of a material
nature in Intellectual Property that is registered with any Governmental
Authority. As of the Closing Date, Schedule 9.6(c) sets forth the locations of
---------------
all of the offices and other places of business of the Loan Parties and the
locations of all of the material Properties of the Loan Parties, as well as the
identities of the Loan Parties who conduct business or own Properties at such
locations and the identities of the predecessor entities who previously
conducted business or owned Properties at such locations and whose Capital Stock
or assets were acquired by any Loan Party. The Lenders' Lien on the Collateral
required by Article 7 constitutes a perfected first priority Lien subject only
---------
to Permitted Liens.
Section 9.7 Enforceability. The Loan Documents to which any Loan Party
--------------
is a party, when delivered, shall constitute the legal, valid, and binding
obligations of the applicable Loan Party, enforceable against such Loan Party in
accordance with their respective terms, except as limited by bankruptcy,
insolvency, or other laws of general application relating to the enforcement of
creditors' rights and general principles of equity.
Section 9.8 Approvals. No authorization, approval, or consent of, and
---------
no filing or registration with, any Governmental Authority or other third party
is or will be necessary for the execution, delivery, or performance by any Loan
Party of the Loan Documents to which each is or may become a party or for the
validity or enforceability thereof except for such authorizations, approvals,
consents, filings, and registrations which have been obtained or made.
Section 9.9 Debt. Except as set forth in Schedule 9.9, no Loan Party
---- ------------
has any Debt, except as permitted by Section 11.1.
------------
Section 9.10 Taxes. Except as set forth in Schedule 9.10, the Loan
----- -------------
Parties have filed all material tax returns (federal, state, and local) required
to be filed, including all material income, franchise, employment, property, and
sales tax returns, and have paid all of their respective material liabilities
for taxes, assessments, governmental charges, and other levies that are due and
payable other than those being contested in good faith by appropriate
proceedings diligently pursued for which adequate reserves have been established
in accordance with GAAP. Except as set forth in Schedule 9.10, Borrower knows
-------------
of no pending investigation of any Loan Party by any taxing
49
authority with respect to any material liability for tax or of any pending but
unassessed material tax liability of any Loan Party.
Section 9.11 Margin Securities. No Loan Party is engaged principally, or
-----------------
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of
Regulations T, U, or X of the Board of Governors of the Federal Reserve System),
and no part of the proceeds of any Loan will be used to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or
carrying margin stock.
Section 9.12 ERISA. With respect to each Plan, each Loan Party is in
-----
substantial compliance with all applicable provisions of ERISA. Neither a
Reportable Event nor a Prohibited Transaction has occurred and is continuing
with respect to any Plan. Except for termination of Borrower's Plans on the
Closing Date, no notice of intent to terminate a Plan has been filed, nor has
any Plan been terminated. No circumstances exist which constitute grounds
entitling the PBGC to institute proceedings to terminate, or appoint a trustee
to administer, a Plan, nor has the PBGC instituted any such proceedings. No
Loan Party nor any ERISA Affiliate has completely or partially withdrawn from a
Multiemployer Plan. The Loan Parties and each ERISA Affiliate have met their
minimum funding requirements under ERISA with respect to each Plan. Except as
set forth in Schedule 9.12 hereto, the present value of all vested benefits
-------------
under each Plan do not exceed the fair market value of all Plan assets allocable
to such benefits, as determined on the most recent valuation date of the Plan
and in accordance with ERISA. No Loan Party nor any ERISA Affiliate has any
outstanding liability to the PBGC under ERISA (other than liability for the
payment of PBGC premiums in the ordinary course of business).
Section 9.13 Disclosure. All factual information furnished by or on
----------
behalf of any Loan Party in writing to the Agents or any Lender in this
Agreement, the Schedules hereto, the other Loan Documents, or the documents
listed on Schedule 9.13 hereto, and all other such factual information hereafter
-------------
furnished by or on behalf of any Loan Party to the Agents or any Lender, are and
will be true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
fact necessary to make such information not misleading in any material respect
at such time in light of the circumstances under which such information was
provided.
Section 9.14 Subsidiaries; Capitalization. Schedule 9.14 sets forth as
---------------------------- -------------
of the Closing Date the jurisdiction of incorporation or organization of
Borrower and each Subsidiary of Borrower, the percentage of Borrower's or
another Subsidiary's (as applicable) ownership of the outstanding Voting Stock
of each Subsidiary of Borrower, and the authorized, issued, and outstanding
Capital Stock of Borrower and each Subsidiary of Borrower. All of the
outstanding Capital Stock of Borrower and each Subsidiary of Borrower has been
validly issued, is fully paid, is nonassessable, and has not been issued in
violation of any preemptive or similar rights. Except as disclosed in Schedule
--------
9.14, there are (a) no outstanding subscriptions, options, warrants, calls, or
- ----
rights (including preemptive rights) to acquire, and no outstanding securities
or instruments convertible into, Capital Stock of any Subsidiary of Borrower to
which Borrower or any Subsidiary of Borrower is a party, and (b) no shareholder
agreements, voting trusts, or similar agreements in effect and binding on any
shareholder of Borrower or any Subsidiary of Borrower or the Capital Stock of
any Subsidiary of Borrower to which Borrower or any Subsidiary of Borrower is a
party. All shares of Capital Stock of Borrower
50
and each Subsidiary of Borrower were issued in compliance with all applicable
state and federal securities laws.
Section 9.15 Agreements. Except as set forth in Schedule 9.15, no Loan
---------- -------------
Party is a party to any indenture, loan, or credit agreement, or to any lease or
other agreement or instrument, or subject to any charter or corporate
restriction that is so unusually burdensome as could have a Material Adverse
Effect with respect to such Loan Party. No Loan Party is in default in any
respect in the performance, observance, or fulfillment of any of the
obligations, covenants, or conditions contained in any agreement or instrument
to which it is a party where such default could reasonably be expected to cause
a Material Adverse Effect with respect to such Loan Party.
Section 9.16 Compliance with Laws. No Loan Party is in violation of any
--------------------
law, rule, regulation, order, or decree of any Governmental Authority or
arbitrator except for unintentional violations which could not reasonably be
expected to have a Material Adverse Effect with respect to such Loan Party.
Section 9.17 Investment Company Act. No Loan Party is an "investment
----------------------
company" within the meaning of the Investment Company Act of 1940, as amended.
Section 9.18 Public Utility Holding Company Act. No Loan Party is a
----------------------------------
"holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of a "holding company" or a "public utility" within the meaning of
the Public Utility Borrower Company Act of 1935, as amended.
Section 9.19 Environmental Matters.
---------------------
Except as disclosed on Schedule 9.19:
-------------
(a) Each Loan Party, and all of their respective properties, assets,
and operations are in compliance in all material respects with all
Environmental Laws. Borrower is not aware of, nor has any Loan Party
received notice of, any past, present, or future conditions, events,
activities, practices, or incidents which may interfere with or prevent
the compliance or continued compliance of the Loan Parties with all
Environmental Laws except for such noncompliance as could not reasonably
be expected to have a Material Adverse Effect on Borrower;
(b) The Loan Parties have obtained and maintained, and are in material
compliance with, all material permits, licenses, and authorizations that
are required under applicable Environmental Laws;
(c) No Hazardous Materials exist on, about, or within or have been
used, generated, stored, transported, disposed of on, or Released from any
of the properties or assets of any Loan Party (other than lubricants,
cleaning solutions, and similar materials used for maintenance in the
ordinary course of business). The use which the Loan Parties make and
intend to make of their respective properties and assets will not result
in the use, generation, storage, transportation, accumulation, disposal,
or Release of any Hazardous
51
Material on, in, or from any of their properties or assets (other than
lubricants, cleaning solutions, and similar materials used for maintenance
in the ordinary course of business);
(d) No Loan Party nor any of their respective currently or previously
owned or leased properties or operations is subject to any outstanding or
threatened order from or agreement with any Governmental Authority or other
Person or subject to any judicial or administrative proceeding with respect
to (i) failure to comply with Environmental Laws, (ii) Remedial Action, or
(iii) any Environmental Liabilities arising from a Release or threatened
Release;
(e) There are no conditions or circumstances associated with the
currently or previously owned or leased properties or operations of any
Loan Party that could reasonably be expected to result in any Environmental
Liabilities, except as could not reasonably be expected to result in a
Material Adverse Effect on Borrower;
(f) No Loan Party is a treatment, storage, or disposal facility
requiring a permit under the Resource Conservation and Recovery Act, 42
U.S.C. (S) 6901 et seq., regulations thereunder or any comparable provision
of state law. Except as would not reasonably be expected to have a
Material Adverse Effect with respect to any Loan Party, as the case may be,
the Loan Parties are in compliance with all applicable financial
responsibility requirements of all applicable Environmental Laws;
(g) Except as would not reasonably be expected to have a Material
Adverse Effect with respect any Loan Party, as the case may be, no Loan
Party has filed or failed to file any notice required under applicable
Environmental Law reporting an unauthorized Release; and
(h) No Lien arising under any Environmental Law has attached to any
property or revenues of any Loan Party.
Section 9.20 Broker's Fees. No broker's or finder's fee, commission or
-------------
similar compensation will be payable by any Loan Party with respect to the
transactions contemplated by this Agreement. No other similar fees or
commissions will be payable by any Loan Party to any Person (other than the
Agents and the Lenders) for any other services rendered to any Loan Party
ancillary to this Agreement.
Section 9.21 Employee Matters. Except as set forth on Schedule 9.21
---------------- -------------
hereto, as of the Closing Date, (a) no Loan Party, nor any of their respective
employees, is subject to any collective bargaining agreement, (b) no petition
for certification or union election is pending with respect to the employees of
any Loan Party and no union or collective bargaining unit has sought such
certification or recognition with respect to the employees of any Loan Party,
and (c) there are no strikes, slowdowns, work stoppages, or controversies
pending or, to the best knowledge of Borrower after due inquiry, threatened
between any Loan Party and its respective employees.
Section 9.22 Solvency. Except as set forth in Schedule 9.22, as of and
-------- -------------
from and after the date of this Agreement and after giving effect to the
consummation of the transactions contemplated hereby, each of the Loan Parties
individually and on a consolidated basis is Solvent.
52
Section 9.23 Year 2000 Compliance. Except as set forth in Schedule 9.23,
-------------------- -------------
Borrower has (i) undertaken a detailed review and assessment of all areas within
the business and operations of it and its Subsidiaries that could be adversely
affected by the "Year 2000 Problem" (that is, the risk that computer
-----------------
applications used by Borrower or its Subsidiaries may be unable to recognize and
perform properly date-sensitive functions involving certain dates prior to and
any date after December 31, 1999), (ii) developed a detailed plan and timeline
for addressing the Year 2000 Problem on a timely basis, and (iii) to date,
implemented that plan in accordance with that timetable. Borrower reasonably
anticipates that all computer applications that are material to the business and
operations of it and its Subsidiaries will on a timely basis be able to perform
properly date-sensitive functions for all dates before and after January 1, 2000
(that is, be "Year 2000 Compliant").
-------------------
ARTICLE 10
Positive Covenants
------------------
Borrower covenants and agrees that, as long as the Obligations or any part
thereof are outstanding or any Lender has any Commitment hereunder or any Letter
of Credit remains outstanding, it will perform and observe the following
positive covenants:
Section 10. Reporting Requirements. Borrower will furnish to
----------------------
Administrative Agent and each Lender:
(a) Annual Financial Statements. As soon as available, and in any
---------------------------
event within ninety (90) days after the end of each Fiscal Year of
Borrower, beginning with Fiscal Year 1999, (i) a copy of the annual audit
report of Borrower and its Subsidiaries for such Fiscal Year containing, on
a consolidated basis, balance sheets and statements of income, retained
earnings, and cash flow as at the end of such Fiscal Year and for the
Fiscal Year then ended, in each case setting forth in comparative form the
figures for the preceding Fiscal Year, all in reasonable detail and audited
and certified on an unqualified basis by independent certified public
accountants of recognized standing selected by Borrower and reasonably
acceptable to Administrative Agent, to the effect that such report has been
prepared in accordance with GAAP; (ii) a copy of the annual unaudited
report of Borrower and its Subsidiaries for such Fiscal Year containing, on
a consolidating basis balance sheets and statements of income, retained
earnings, and cash flow as at the end of such Fiscal Year and for the
Fiscal Year then ended, in each case setting forth in comparative form the
figures for the preceding Fiscal Year, and in reasonable detail certified
by the chief executive officer or chief financial officer of Borrower to
have been prepared in accordance with GAAP and to fairly present the
financial condition and results of operation of Borrower and such
significant business divisions, on a consolidating basis at the date and
for the Fiscal Year then ended; and (iii) a copy of Projections for each of
Borrower's Fiscal Year through the Fiscal Year first ending after the
Termination Date;
(b) Quarterly Financial Statements. As soon as available, and in any
------------------------------
event within forty-five (45) days after the end of each of the first three
Fiscal Quarters beginning with the Fiscal Quarter ending on the last
Saturday of March, 1999, a copy of an unaudited financial report of
Borrower and its Subsidiaries as of the end of such period and for the
53
portion of the Fiscal Year then ended containing, on a consolidated basis,
balance sheets and statements of income, retained earnings, and cash flow,
in each case setting forth in comparative form the figures for the
corresponding period of the preceding Fiscal Year, all in reasonable detail
certified by the chief executive officer or chief financial officer of
Borrower to have been prepared in accordance with GAAP and to fairly
present, in all material respects, the financial condition and results of
operations of Borrower and its Subsidiaries on a consolidated basis, at the
date and for the periods indicated therein, subject to year-end audit
adjustments;
(c) Compliance Certificate. As soon as available, and in any event
----------------------
within forty-five (45) days after the end of each of the first three Fiscal
Quarters and accompanying the annual financial statements delivered in
accordance with subsection 10.1(a), a Compliance Certificate, together with
------------------
schedules setting forth the calculations supporting the computations
therein and, within forty-five (45) days after the end of each Fiscal
Quarter, a calculation enabling Administrative Agent to determine the
Applicable Rate (the "Applicable Rate Calculation");
---------------------------
(d) Borrowing Base Certificate. After the Closing Date, Borrower
--------------------------
shall deliver to Administrative Agent as soon as available, but in any
event no later than the twentieth day of each month (fifteenth day for the
February, 2000 report and each report thereafter), unless such day falls
upon a weekend or a bank holiday in either Texas or Massachusetts, in which
case such delivery shall be due upon the next succeeding day not a weekend
or bank holiday in Texas or Massachusetts, a Borrowing Base Certificate and
a backlog report in Borrower's customary form prepared as of the close of
business on the last Business Day of the previous month (but giving pro
forma effect to any sales of Subsidiaries or business units occurring on or
after the close of business on such last Business Day and prior to the date
of such Borrower Base Certificate) in form acceptable to Administrative
Agent;
(e) Notice of Litigation. Promptly after receipt by any Loan Party of
--------------------
notice of the commencement thereof, notice of all actions, suits, and
proceedings before any Governmental Authority or arbitrator affecting any
Loan Party which, if determined adversely to such Loan Party, could
reasonably be expected to have a Material Adverse Effect with respect to
such Loan Party;
(f) Notice of Default. As soon as possible and in any event within
-----------------
two (2) Business Days after the chief executive officer, president, chief
financial officer, the general counsel, any president of a major operating
unit, secretary, assistant secretary, treasurer, or any assistant treasurer
of Borrower (each an "Authorized Representative") has knowledge of the
-------------------------
occurrence of a Default, a written notice setting forth the details of such
Default and the action that Borrower has taken and proposes to take with
respect thereto;
(g) ERISA. As soon as possible and in any event within thirty (30)
-----
days after Borrower knows, or has reason to know, that
(i) any Termination Event with respect to a Plan has occurred
or will occur, or
54
(ii) the aggregate present value of the Unfunded Vested Accrued
Benefits under all Plans is equal to an amount in excess of $0, or
(iii) any Loan Party is in "default" (as defined in Section
4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan
required by reason of any Loan Party's complete or partial withdrawal
(as described in Section 4203 or 4205 of ERISA) from such
Multiemployer Plan,
Borrower will provide Administrative Agent and the Lenders a certificate of
its president or its chief financial officer setting forth the details of
such event and the action which is proposed to be taken with respect
thereto, together with any notice or filing which may be required by the
PBGC or any other Governmental Authority with respect to such event.
(h) Notice of Material Adverse Effect. As soon as possible and in
---------------------------------
any event within two (2) Business Days of the discovery of any event or
condition that could reasonably be expected to have a Material Adverse
Effect with respect to any Loan Party, written notice thereof;
(i) Proxy Statements, Etc. As soon as available, one copy of each
----------------------
financial statement, report, notice, or proxy statement sent by any Loan
Party to its stockholders generally and one copy of each regular, periodic,
or special report, registration statement, or prospectus filed by any Loan
Party with any securities exchange or the Securities and Exchange
Commission or any successor agency; and
(j) General Information. Promptly, such other information concerning
-------------------
any Loan Party as Administrative Agent or any Lender may from time to time
reasonably request.
Section 10.2 Maintenance of Existence; Conduct of Business. Except as
---------------------------------------------
permitted by Section 11.3, Borrower will, and will cause each of its
------------
Subsidiaries to, preserve and maintain its corporate existence and all of its
leases, privileges, licenses, permits, franchises, qualifications, and rights
that are necessary in the ordinary conduct of its business, except where the
failure of a Subsidiary so to preserve and maintain could not reasonably be
expected to have a Material Adverse Effect on Borrower. Borrower will, and will
cause each of its Subsidiaries to, conduct its business in an orderly and
efficient manner in accordance with good business practices.
Section 10.3 Maintenance of Properties. Borrower will, and will cause
-------------------------
each other Loan Party to, maintain, keep, and preserve all of its material
properties necessary in the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
Section 10.4 Taxes and Claims. Borrower will, and will cause each other
----------------
Loan Party to, pay or discharge at or before maturity or before becoming
delinquent (a) all taxes, levies, assessments, and governmental charges imposed
on it or its income or profits or any of its property, and (b) all lawful claims
for labor, material, and supplies, which, if unpaid, might become a Lien upon
any of its property; provided, however, that neither no Loan Party shall be
-------- -------
required to pay or discharge any tax, levy, assessment, or governmental charge
(i) which is being contested in good faith by appropriate proceedings diligently
pursued, and for which adequate reserves in accordance
55
with GAAP have been established or (ii) if the failure to pay the same would not
result in a Lien on the property of any Loan Party.
Section 10.5 Insurance. (a) Each of the Loan Parties will, and will
---------
cause each of its Subsidiaries to, keep insured by financially sound and
reputable insurers all Property of a character usually insured by responsible
corporations engaged in the same or a similar business similarly situated
against loss or damage of the kinds and in the amounts customarily insured
against by such corporations or entities and carry such other insurance as is
usually carried by such corporations or entities, provided that in any event
--------
each Loan Party (as appropriate) will maintain:
(i) Property Insurance -- Insurance against loss or damage covering
------------------
substantially all of the tangible real and personal Property and
improvements of such Loan Party by reason of any Peril (as defined
below) in such amounts (subject to any deductibles as shall be
reasonably satisfactory to Administrative Agent) as shall be
reasonable and customary and sufficient to avoid the insured named
therein from becoming a co-insurer of any loss under such policy, but
in any event in such amounts as are reasonably available as
determined by Borrower's independent insurance broker reasonably
acceptable to Administrative Agent.
(ii) Automobile Liability Insurance for Bodily Injury and Property
-------------------------------------------------------------
Damage -- Insurance in respect of all vehicles (whether owned, hired,
------
or rented by any Loan Party) at any time located at, or used in
connection with, its Properties or operations against liabilities for
bodily injury and Property damage in such amounts as are then
customary for vehicles used in connection with similar Properties and
businesses, but in any event to the extent required by applicable
law.
(iii) Comprehensive General Liability Insurance -- Insurance against claims
-----------------------------------------
for bodily injury, death, or Property damage occurring on, in or
about the Property (and adjoining streets, sidewalks, and waterways)
of any Loan Party, in such amounts as are then customary for Property
similar in use in the jurisdictions where such Properties are
located.
(iv) Worker's Compensation Insurance -- Worker's compensation insurance
-------------------------------
(including, without limitation, employers' liability insurance) to
the extent required by applicable law, which may be self-insurance to
the extent permitted by applicable law.
Such insurance shall be written by financially responsible companies selected by
the applicable Loan Party and having an A.M. Best Rating of "A-" or better and
being in a financial size category of "VI" or larger, or by other companies
reasonably acceptable to Administrative Agent. Each policy referred to in this
Section 10.5 shall provide that it will not be canceled, amended, or reduced
- ------------
except after not less than thirty (30) days' prior written notice to
Administrative Agent and shall also provide that the interests of Administrative
Agent and the Lenders shall not be invalidated or reduced by any act, omission
or negligence of any Loan Party. Borrower will advise Administrative Agent
promptly of any policy cancellation, reduction, or amendment. For purposes
hereof, the term "Peril" shall mean, collectively, fire, lightning, flood,
-----
windstorm, hail, explosion, riot and civil commotion, vandalism and malicious
mischief, damage from aircraft, vehicles and smoke, and other perils
56
covered by the "all-risk" endorsement then in use in the jurisdictions where the
Properties of the Loan Parties are located.
(b) Borrower will cause each insurance recovery (other than any portion of
an insurance recovery payable to a landlord to repair or replace Property leased
by Borrower or any of its Subsidiaries) paid to it or any other Loan Party by
any insurance company to be deposited promptly with Administrative Agent as
security for the Obligations if a Default has then occurred and is continuing.
(c) If a Default shall have occurred and be continuing, Borrower will cause
all proceeds of insurance paid to it or any other Loan Party on account of the
loss of or damage to any Property of any Loan Party and all awards of
compensation for any Property of any Loan Party taken by condemnation or eminent
domain to be paid directly to Administrative Agent to be applied against or held
as security for the Obligations, at the election of Administrative Agent and the
Required Lenders.
Section 10.6 Inspection Rights. Each of the Loan Parties will, and will
-----------------
cause each of its Subsidiaries to, permit representatives and agents of
Administrative Agent and each Lender, during normal business hours and upon
reasonable notice to Borrower, to examine, copy, and make extracts from its
books and records, to visit and inspect its Properties and to discuss its
business, operations, and financial condition with its officers and independent
certified public accountants. Borrower will authorize its accountants in
writing (with a copy to Administrative Agent) to comply with this Section 10.6.
------------
Administrative Agent or its representatives may, at any time and from time to
time at Borrower's expense, conduct field examinations and audits of the
Collateral and Borrowing Base and of other matters pertaining to Borrower and
its Subsidiaries for such purposes as Administrative Agent may reasonably
request.
Section 10.7 Keeping Books and Records. Borrower will, and will cause
-------------------------
each other Loan Party to, maintain proper books of record and account in which
full, true, and correct entries in conformity with GAAP shall be made of all
dealings and transactions in relation to its business and activities.
Section 10.8 Compliance with Laws. Borrower will, and will cause each
--------------------
other Loan Party to, comply in all material respects with all applicable laws
(including, without limitation, all Environmental Laws), rules, regulations,
orders, and decrees of a material nature of any Governmental Authority or
arbitrator other than any such laws, rules, regulations, orders, and decrees
contested by appropriate actions or proceedings diligently pursued, if adequate
reserves in conformity with GAAP and satisfactory to Administrative Agent are
established with respect thereto and except for unintentional violations which
could not reasonably be expected to have a Material Adverse Effect with respect
to any such Loan Party.
Section 10.9 Compliance with Agreements. Borrower will, and will cause
---------------------------
each other Loan Party to, comply with all agreements, contracts, and instruments
binding on it or affecting its properties or business other than such
noncompliance which could not reasonably be expected to have a Material Adverse
Effect with respect to such Loan Party.
57
Section 10.10 Further Assurances.
------------------
(a) Further Assurance. Borrower will, and will cause each other Loan
-----------------
Party to, execute and deliver pursuant to this clause (a) such further
documentation and take such further action as may be reasonably requested
by Administrative Agent to carry out the provisions and purposes of the
Loan Documents.
(b) Subsidiary Joinder. Within ten (10) days after the end of each
------------------
Fiscal Quarter, Borrower shall cause each Domestic Subsidiary created or
acquired during the Fiscal Quarter then ending to execute and deliver to
Administrative Agent a Joinder Agreement and such other documentation as
Administrative Agent may require to cause such Domestic Subsidiary to
evidence, perfect, and otherwise implement the guaranty and/or security for
repayment of the Obligations contemplated by this Agreement, the Subsidiary
Guaranty, and any applicable Security Document.
Section 10.11 ERISA. With respect to each Plan, Borrower will, and will
-----
cause each other Loan Party to, comply with all minimum funding requirements and
all other material requirements of ERISA, if applicable, so as not to give rise
to any liability which could reasonably be expected to have a Material Adverse
Effect with respect to such Loan Party.
Section 10.12 Unified Cash Management System; Dominion of Funds. Borrower
-------------------------------------------------
will, and will cause each of its Subsidiaries (other than Foreign Subsidiaries)
to maintain a unified cash management system and Borrower will ensure, and will
cause each of its Subsidiaries (other than Foreign Subsidiaries) to ensure, that
all monies, checks, notes, drafts and other payments relating to or constituting
proceeds of any trade accounts receivable or other Receivables are (a) deposited
directly, as received, into a lockbox or collection account of Borrower or such
Subsidiary (as applicable) and (b) on a daily basis after such deposit,
transferred into a concentration account of Borrower or such Subsidiary (as
applicable) maintained with Administrative Agent or another depository bank
acceptable to Administrative Agent. Borrower will, and will cause each of its
Subsidiaries (other than Foreign Subsidiaries) to, maintain in effect an
agreement governing each of its lockbox accounts, collection accounts and/or
concentration accounts and collaterally assigning such accounts to
Administrative Agent, all of which shall be in a form approved by Administrative
Agent.
Section 10.13 Year 2000 Compliance. Borrower will promptly notify
--------------------
Administrative Agent in the event Borrower discovers or determines that any
computer application (including those of its suppliers and vendors) that is
material to its or any of its 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 on Borrower.
58
ARTICLE 11
Negative Covenants
------------------
Borrower covenants and agrees that, as long as the Obligations or any part
thereof are outstanding or any Lender has any Commitment hereunder or any Letter
of Credit remains outstanding, Borrower will perform and observe the following
negative covenants:
Section 11.1 Debt. Borrower will not, and will not permit any other Loan
----
Party to, incur, create, assume, or permit to exist any Debt, except:
(a) Debt to the Lenders pursuant to the Loan Documents;
(b) Debt described on Schedule 9.9 hereto, and any extensions,
------------
renewals, or refinancings of such existing Debt so long as (i) the
principal amount of such Debt after such renewal, extension, or refinancing
shall not exceed the principal amount of such Debt which was outstanding
immediately prior to such renewal, extension, or refinancing and (ii) such
Debt shall not be secured by any assets other than assets securing such
Debt, if any, prior to such renewal, extension, or refinancing;
(c) Debt of a Subsidiary of Borrower owed to Borrower or another
Subsidiary of Borrower;
(d) Guaranties incurred in the ordinary course of business with
respect to surety and appeal bonds, performance and return-of-money bonds,
and other similar obligations including those of the type otherwise
described in Section 11.2(f);
---------------
(e) Debt of Borrower or any Subsidiary of Borrower constituting
purchase money Debt (including, without limitation, Capital Lease
Obligations) incurred after the Closing Date not to exceed Two Million
Dollars ($2,000,000) in the aggregate at any time outstanding secured by
purchase money Liens permitted by Section 11.2(g);
---------------
(f) Debt constituting obligations to reimburse worker's compensation
insurance companies for claims paid by such companies on Borrower's or any
of its Subsidiaries' behalf in accordance with the policies issued to
Borrower or such Subsidiary of Borrower;
(g) Debt secured by the Liens permitted by clauses (d) and (e) of
----------- ---
Section 11.2;
------------
(h) unsecured Debt arising under, created by and consisting of Hedge
Agreements, provided, (i) such Hedge Agreements shall have been entered
--------
into for the purpose of hedging actual risk and not for speculative
purposes and (ii) that each counterparty to such Hedge Agreement shall be a
Lender (or an Affiliate thereof) or shall be rated in one of the two
highest rating categories of Standard and Poor's Corporation or Moody's
Investors Service, Inc.; and
59
(i) Subordinated Debt to the relevant seller (including pursuant to a
transaction permitted by Section 11.3) incurred in connection with the
------------
acquisition of any Person not to exceed Twenty Million Dollars
($20,000,000) in the aggregate from the Closing Date through the
Termination Date;
(j) Debt of Borrower or any Subsidiary of Borrower for borrowed money
in currencies other than Dollars in an amount not to exceed the equivalent
of Ten Million Dollars ($10,000,000) in the aggregate at any time
outstanding; and
(k) Debt in addition to the Debt described in the foregoing clauses
-------
(a) through (j) in an aggregate amount not exceeding Ten Million Dollars
--- ---
($10,000,000) in the aggregate principal amount at any one time
outstanding.
Section 11.2 Limitation on Liens and Restrictions on Subsidiaries.
----------------------------------------------------
Borrower will not, and will not permit any Subsidiary to, incur, create, assume,
or permit to exist any Lien upon any of its property, assets, or revenues,
whether now owned or hereafter acquired, except the following:
(a) Liens described on Schedule 11.2 hereto, and any extensions,
-------------
renewals, or refinancings of the Debt secured by such Liens as permitted
under Section 11.1(b), provided that (i) no such Lien is expanded to cover
--------------- --------
any additional Property (other than after acquired title in or on such
Property and proceeds of the existing collateral) after the Closing Date
and (ii) no such Lien is spread to secure any additional Debt after the
Closing Date other than Debt permitted by Section 11.1(b);
---------------
(b) Liens in favor of Administrative Agent, for the benefit of the
Agents and each Lender pursuant to the Loan Documents;
(c) Encumbrances consisting of easements, zoning restrictions, or
other restrictions on the use of real Property that do not (individually or
in the aggregate) materially detract from the value of the real Property
encumbered thereby or materially impair the ability of Borrower or any
other Loan Party to use such real Property in their respective businesses;
(d) Liens for taxes, assessments, or other governmental charges (but
excluding Environmental Liens or Liens under ERISA) that are not delinquent
or which are being contested in good faith and for which adequate reserves
have been established in accordance with GAAP;
(e) Liens of mechanics, materialmen, warehousemen, carriers,
landlords, or other similar statutory Liens securing obligations that are
not overdue or are being contested in good faith by appropriate proceedings
diligently pursued and for which adequate reserves have been established in
accordance with GAAP and are incurred in the ordinary course of business;
(f) Liens resulting from deposits to secure payments of worker's
compensation, unemployment insurance or other social security programs or
to secure the performance of
60
tenders, statutory obligations, leases, insurance contracts, surety,
performance and appeal bonds, bids, and other contracts incurred in the
ordinary course of business (other than for payment of Debt);
(g) Liens for purchase money obligations and Liens securing Capital
Lease Obligations; provided that: (i) the Debt secured by any such Lien is
--------
permitted under Section 11.1(e) hereof; and (ii) any such Lien encumbers
---------------
only the Property so purchased or leased;
(h) Any attachment or judgment Lien not constituting an Event of
Default;
(i) Any interest or title of a licensor, lessor, or sublessor under
any license or lease entered into in the ordinary course of business;
(j) Liens against equipment arising from precautionary UCC financing
statement filings regarding operating leases entered into by Borrower or
another Loan Party in the ordinary course of business; and
(k) Nonconsensual Liens in favor of banking institutions arising as a
matter of law and encumbering the deposits (including the right of set-off)
held by such banking institutions in the ordinary course of business.
Section 11.3 Mergers, Etc. Borrower will not, and will not permit any
------------
other Loan Party to, become a party to a merger or consolidation, or purchase or
otherwise acquire all or a substantial part of the business or Property of any
Person or all or a substantial part of the business or Property of a division or
branch of a Person or more than a majority interest in the Capital Stock of any
Person, or wind-up, dissolve, or liquidate itself; provided that as long as no
--------
Default exists or would result therefrom and provided Borrower gives
Administrative Agent and the Lenders prior written notice:
(i) A Subsidiary may wind-up, dissolve, or liquidate if (a) its
Property is transferred to Borrower or a Wholly-Owned Subsidiary of
Borrower and (b) the Loan Party acquiring such Property complies with its
obligations under Section 10.9 simultaneously with such acquisitions;
------------
(ii) Any Subsidiary of Borrower may merge or consolidate with
Borrower (provided Borrower is the surviving entity) or with any Wholly-
Owned Subsidiary of Borrower (provided the Wholly-Owned Subsidiary is the
surviving entity);
(iii) Borrower or any Domestic Subsidiary of Borrower may acquire any
Person or all or a substantial part of the business or Property of a Person
(or a division or branch thereof) provided that the aggregate Purchase
Price of all such acquisitions shall not exceed Fifty Million Dollars
($50,000,000) in the aggregate from the Closing Date through the
Termination Date and provided further that the cash consideration paid (as
described in the definition of Purchase Price) shall not exceed Twenty Five
Million Dollars ($25,000,000) in the aggregate during such period; and
61
(iv) The Subsidiaries of Borrower described on Schedule 11.3 may be
-------------
merged, wound up, dissolved or liquidated on the terms described in such
schedule.
Section 11.4 Restricted Junior Payments. Borrower will not, and will not
--------------------------
permit any other Loan Party to, directly or indirectly declare, order, pay,
make, or set apart any sum for (a) any dividend or other distribution, direct or
indirect, on account of any shares of any class of Capital Stock of any Loan
Party now or hereafter outstanding; (b) any redemption, conversion, exchange,
retirement, sinking fund, or similar payment, purchase, or other acquisition for
value, direct or indirect, of any shares of any class of Capital Stock of any
Loan Party now or hereafter outstanding; or (c) any payment made to retire, or
to obtain the surrender of, any outstanding warrants, options, or other rights
to acquire shares of any class of Capital Stock of any Loan Party now or
hereafter outstanding except:
(i) Subsidiaries of Borrower may make, declare, and pay dividends
and make other distributions with respect to their Capital Stock to
Borrower or Wholly-Owned Subsidiaries of Borrower;
(ii) Borrower may declare and pay dividends on any class of its
Capital Stock payable solely in shares of Capital Stock of Borrower; and
(iii) Borrower may purchase or redeem stock, stock rights, options or
similar rights not to exceed Fifteen Million Dollars ($15,000,000) in the
aggregate from the Closing Date through the Termination Date provided, in
each instance, that after giving effect to any such purchase or redemption
Borrower will have at least Fifteen Million Dollars ($15,000,000) of
borrowing availability under both the Borrowing Base and the aggregate
Revolving Commitments.
Section 11.5 Investments. Borrower will not, and will not permit any
-----------
other Loan Party to, make or permit to remain outstanding any advance, loan,
extension of credit, or capital contribution to or investment in any Person, or
purchase or own any stocks, bonds, notes, debentures, or other Securities of any
Person, or be or become a joint venturer with or partner of any Person (all the
foregoing, herein "Investments"), except:
-----------
(a) Borrower and its Subsidiaries may make equity investments in and
may make loans to Subsidiaries of Borrower (in the case of loans, as
permitted by Section 11.1) and may make the acquisitions permitted by
------------
Section 11.3(iii); provided that total investments in Foreign Subsidiaries
----------------- --------
shall never exceed Thirty Million Dollars ($30,000,000) in the aggregate at
any time outstanding (determined on the basis of the Dollar cost equivalent
value of each Investment as of the date such Investment is made);
(b) readily marketable direct obligations of the U.S. or any agency
thereof with maturities of one year or less from the date of acquisition;
(c) fully insured certificates of deposit with maturities of one year
or less from the date of acquisition issued by any commercial bank
operating in the U.S. having capital and surplus in excess of One Hundred
Million Dollars ($100,000,000);
62
(d) commercial paper of a domestic issuer and equity or debt
Securities of a domestic issuer if at the time of purchase such paper or
debt Securities of such issuer is rated in one of the two highest rating
categories of Standard and Poor's Corporation or Moody's Investors Service,
Inc. or any successor thereto and shares of any mutual fund company
substantially all the assets of which consist of cash and the Investments
of the type described in clause (c), clause (d), and this clause (e);
---------- ---------- ----------
(e) advances to officers, directors, and employees for business
expenses incurred in the ordinary course of business;
(f) if no Event of Default exists, Borrower and its Subsidiaries may
make capital contributions to or investments in, or purchase any Capital
Stock of, Borrower or a Wholly-Owned Domestic Subsidiary of Borrower;
(g) Borrower and its Subsidiaries may acquire and own any Investments
of any Person received in connection with the bankruptcy or reorganization
of suppliers and customers and in connection with the settlement of
delinquent obligations of, and disputes with, customers and suppliers
arising in the ordinary course of business;
(h) deposits with and advances to trade creditors and extensions of
trade credit to trade debtors in the ordinary course of business;
(i) Investments described on Schedule 11.5; and
-------------
(j) Investments other than those described in clauses (a)-(i) of this
---------------
Section 11.5 if the aggregate amount thereof never exceeds Five Million
------------
Dollars ($5,000,000) at any time (determined based on the cost or
outstanding principal amount thereof, as applicable, without regard to any
write up or write down thereof).
Section 11.6 Limitation on Issuance of Capital Stock. Borrower will not
---------------------------------------
permit any Subsidiary to, at any time issue, sell, assign, or otherwise dispose
of the following to any Person (other than Borrower or any of its Subsidiaries):
(a) any of its Capital Stock, (b) any securities exchangeable for or convertible
into or carrying any rights to acquire any of its Capital Stock, or (c) any
option, warrant, or other right to acquire any of its Capital Stock; provided,
--------
however, that any Subsidiary may issue qualifying shares to its directors if
- -------
required by applicable law.
Section 11.7 Transactions With Affiliates. Borrower will not, and will
----------------------------
not permit any other Loan Party to, enter into any transaction, including,
without limitation, the purchase, sale, or exchange of property or the rendering
of any service, with any Affiliate of Borrower or such other Loan Party (other
than Borrower and its wholly-owned Subsidiaries), except in the ordinary course
of and pursuant to the reasonable requirements of Borrower's or such other Loan
Party's business and upon fair and reasonable terms no less favorable to
Borrower or such other Loan Party than would be obtained in a comparable arms-
length transaction with a Person not an Affiliate of Borrower or such other Loan
Party.
63
Section 11.8 Disposition of Assets. Except for transactions described on
---------------------
Schedule 11.8 and for transactions permitted by Section 11.3(iv), Borrower will
- ------------- ----------------
not, and will not permit any other Loan Party to, sell, lease, assign, transfer,
or otherwise voluntarily dispose of: (a) any of its Receivables; (b) any
substantial portion of the consolidated assets of the Loan Parties; or (c) any
other Property, other than (i) dispositions of Inventory in the ordinary course
of business, (ii) dispositions of Equipment no longer used or useful in such
Person's business and (iii) dispositions of other Equipment to be replaced (and
such Equipment is so replaced) with other functionally equivalent Equipment
within one hundred twenty (120) days of the disposition thereof.
Section 11.9 Lines of Business. Borrower and its Subsidiaries will not
-----------------
engage in any line or lines of business activity other than the businesses in
which they are engaged on the date hereof or a business reasonably related
thereto.
Section 11.10 Limitations on Restrictions Affecting Subsidiaries. Neither
--------------------------------------------------
Borrower nor any other Loan Party shall enter into or assume any material
agreement (other than the Loan Documents) prohibiting the creation or assumption
of any Lien upon its material properties or assets, whether now owned or
hereafter acquired (except for prohibitions against Liens on assets financed by
Debt secured by Liens permitted by subsections 11.2(a) or (g)). Except as
---------------------------
provided herein, Borrower will not, and will not permit any other Loan Party to,
directly or indirectly to create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Loan Party to: (a) pay dividends or make any other distribution on any
of such Loan Party's Capital Stock owned by any Loan Party; (b) pay any Debt
owed to any Loan Party; (c) make loans or advances to any Loan Party; or (d)
transfer any of its property or assets to any Loan Party.
Section 11.11 Environmental Protection. Borrower will not, and will not
------------------------
permit any other Loan Party to, (a) use (or permit any tenant to use) any of its
Properties for the handling, processing, storage, transportation, or disposal of
any Hazardous Material except in compliance with applicable Environmental Laws,
(b) generate any Hazardous Material except in compliance with applicable
Environmental Laws, (c) conduct any activity that is likely to cause a Release
or threatened Release of any Hazardous Material in violation of any
Environmental Law, or (d) otherwise conduct any activity or use any of its
Properties in any manner, that in any material respect violates or is likely to
violate any Environmental Law or create any Environmental Liabilities for which
Borrower or any other Loan Party would be responsible that could reasonably be
expected to have a Material Adverse Effect with respect to any Loan Party.
Section 11.12 ERISA. Borrower will not, and will not permit any other
-----
Loan Party to:
(a) allow, or take (or permit any ERISA Affiliate to take) any action
which would cause, any unfunded or unreserved liability for benefits under
any Plan (exclusive of any Multiemployer Plan) to exist or to be created;
or
(b) with respect to any Multiemployer Plan, allow, or take (or permit
any ERISA Affiliate to take) any action which would cause, any unfunded or
unreserved liability for benefits under any Multiemployer Plan to exist or
to be created, either individually as to any such Plan or in the aggregate
as to all such Plans.
64
ARTICLE 12
Financial Covenants
-------------------
Borrower covenants and agrees that, as long as the Obligations or any part
thereof are outstanding or any Lender has any Commitment hereunder or any Letter
of Credit remains outstanding, it will perform and observe the following
financial covenants:
Section 12.1 Minimum Tangible Net Worth. At all times, Borrower shall
--------------------------
not permit its Tangible Net Worth to be less than Seventy-Six Million Five
Hundred Thousand Dollars ($76,500,000), plus (i) 75% of Borrower's positive
-----
Adjusted Net Income for each fiscal quarter of Borrower ending after the Closing
Date (no reductions to be made for any losses), plus (ii) 100% of the Net
----
Proceeds of the issuance by Borrower or any of its Subsidiaries of Capital Stock
(or receipt of any additional capital in respect of existing Capital Stock or
other Securities).
Section 12.2 Maximum Total Leverage Ratio. Borrower shall not permit its
----------------------------
Leverage Ratio at the end of any Fiscal Quarter to exceed 3.50 to 1.00 for any
Fiscal Quarter ending prior to December 25, 1999, 2.75 to 1.00 for its Fiscal
Quarters ending December 25, 1999, and March 25, 2000, or 2.50 to 1.00 for its
Fiscal Quarter ending June 24, 2000, or any Fiscal Quarter thereafter.
Section 12.3 Minimum Fixed Charge Coverage Ratio. As of the end of each
-----------------------------------
Fiscal Quarter, Borrower shall not permit the ratio of (a) its EBITDAR for the
four (4) Fiscal Quarter period then ending to (b) the sum of (i) Interest
Expense during such period and (ii) Rental Expense paid during such period to be
less than 2.50 to 1.00.
Section 12.4 Maximum Capital Expenditures. Borrower shall not permit the
----------------------------
aggregate amount of all Capital Expenditures of the Borrower and its
Subsidiaries made during any Fiscal Year to exceed Twenty Million Dollars
($20,000,000).
ARTICLE 13
Default
-------
Section 13.1 Events of Default. Each of the following shall be deemed an
-----------------
"Event of Default":
----------------
(a) Borrower shall fail to pay (i) when due any principal of, interest
on or fees payable in respect of any Loan or any Reimbursement Obligation
payable under any Loan Document or any part thereof or (ii) within two (2)
days after the date Borrower receives written notice of the failure to pay
when due, any other Obligation or any part thereof, or any indebtedness,
liability, or obligation due to any Lender under any Hedge Agreement.
(b) Any representation, warranty, or certification made or deemed made
by any Loan Party (or any of their respective officers) in any Loan
Document or in any certificate, report, notice, or financial statement
furnished at any time in connection with any Loan
65
Document shall be false, misleading, or erroneous in any material respect
when made or deemed to have been made.
(c) Any Loan Party shall fail to perform, observe, or comply with any
covenant, agreement, or term contained in Section 10.1, Article 11 or
------------ ----------
Article 12 of this Agreement.
----------
(d) Any Loan Party shall fail to perform, observe, or comply with any
other agreement, or term contained in any Loan Document (other than
covenants described in subsections 13.1(a)-(c)) and such failure shall
------------------------
continue for a period of fifteen (15) days after the earlier of (i) the
date Administrative Agent provides Borrower with notice thereof or (ii) the
date Borrower should have notified Administrative Agent thereof in
accordance with subsection 10.1(g) hereof.
------------------
(e) Any Loan Party shall (i) apply for or consent to the appointment
of, or the taking of possession by, a receiver, custodian, trustee,
examiner, liquidator, or the like of itself or of all or a substantial part
of its Property, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the United States
Bankruptcy Code (as now or hereafter in effect, the "Bankruptcy Code"),
---------------
(iv) institute any proceeding or file a petition seeking to take advantage
of any other law relating to bankruptcy, insolvency, reorganization,
liquidation, dissolution, winding-up, or composition or readjustment of
debts, (v) fail to controvert in a timely and appropriate manner, or
acquiesce in writing to, any petition filed against it in an involuntary
case under the Bankruptcy Code, (vi) admit in writing its inability to, or
be generally unable to pay its debts as such debts become due, or (vii)
take any corporate action for the purpose of effecting any of the
foregoing.
(f) A proceeding or case shall be commenced, without the application,
approval or consent of the applicable Loan Party in any court of competent
jurisdiction, seeking (i) its reorganization, liquidation, dissolution,
arrangement, or winding-up, or the composition or readjustment of its
debts, (ii) the appointment of a receiver, custodian, trustee, examiner,
liquidator, or the like of such Loan Party or of all or any substantial
part of its Property, or (iii) similar relief in respect of such Loan Party
under any law relating to bankruptcy, insolvency, reorganization, winding-
up, or composition or adjustment of debts, and such proceeding or case
shall continue undismissed, or an order, judgment, or decree approving or
ordering any of the foregoing shall be entered and continue unstayed and in
effect, for a period of sixty (60) or more days; or an order for relief
against any Loan Party shall be entered in an involuntary case under the
Bankruptcy Code.
(g) Any Loan Party shall fail within a period of thirty (30) days
after the commencement thereof to discharge or obtain a stay of any
attachment, sequestration, forfeiture, or similar proceeding or proceedings
involving an aggregate amount in excess of Five Hundred Thousand Dollars
($500,000) against any of its assets or properties.
(h) A final judgment or judgments for the payment of money in excess
of Five Hundred Thousand Dollars ($500,000) in the aggregate (to the extent
not paid or fully covered by insurance acknowledged by a carrier reasonably
acceptable to Administrative Agent) shall be rendered by a court or courts
against any Loan Party and the same shall not
66
be discharged (or provision shall not be made for such discharge), or a
stay of execution thereof shall not be procured, within thirty (30) days
from the date of entry thereof and the relevant Loan Party shall not,
within said period of thirty (30) days, or such longer period during which
execution of the same shall have been stayed, appeal therefrom and cause
the execution thereof to be stayed during such appeal.
(i) Any Loan Party shall fail to pay when due any principal of or
interest on any Debt (beyond the period of grace, if any) if the aggregate
principal amount of the affected Debt equals or exceeds Five Hundred
Thousand ($500,000) (other than the Obligations), or the maturity of any
such Debt shall have been accelerated, or any such Debt shall have been
required to be prepaid prior to the stated maturity thereof or any event
shall have occurred with respect to any Debt in the aggregate principal
amount equal to or in excess of Five Hundred Thousand ($500,000) that
permits any holder or holders of such Debt or any Person acting on behalf
of such holder or holders to accelerate the maturity thereof or require any
prepayment thereof.
(j) This Agreement or any Security Document shall cease to be in full
force and effect or shall be declared null and void or the validity or
enforceability thereof shall be contested or challenged by any Loan Party
or any Loan Party shall deny that it has any further liability or
obligation under any of the Loan Documents or any Lien created or purported
to be created by the Loan Documents shall for any reason cease to be or
fail to be a valid, first priority perfected Lien (except for Permitted
Liens, if any, which are expressly permitted by the Loan Documents to have
priority over the Liens in favor of Administrative Agent) upon any of the
Collateral purported to be covered thereby.
(k) Any of the following events shall occur or exist with respect to
any Loan Party or any ERISA Affiliate: (i) any Prohibited Transaction
involving any Plan; (ii) any Reportable Event with respect to any Plan;
(iii) the filing under Section 4041 of ERISA of a notice of intent to
terminate any Plan or the termination of any Plan; (iv) any event or
circumstance that could reasonably be expected to constitute grounds
entitling the PBGC to institute proceedings under Section 4042 of ERISA for
the termination of, or for the appointment of a trustee to administer, any
Plan, or the institution by the PBGC of any such proceedings; or (v)
complete or partial withdrawal under Section 4201 or 4204 of ERISA from a
Multiemployer Plan or the reorganization, insolvency, or termination of any
Multiemployer Plan; and in each case above, such event or condition,
together with all other events or conditions, if any, have subjected or
could in the reasonable opinion of Administrative Agent subject Borrower or
any of its Subsidiaries to any tax, penalty, or other liability to a Plan,
a Multiemployer Plan, the PBGC, or otherwise (or any combination thereof)
which in the aggregate could reasonably be expected to exceed Five Hundred
Thousand Dollars ($500,000).
(l) The occurrence of any event or condition which constitutes a
Material Adverse Effect with respect to Borrower or any other Loan Party
and thirty (30) days have passed since written notification thereof to
Borrower by Administrative Agent (therein reasonably identifying such event
or condition) without such event or condition having been remedied, cured
or waived.
67
(m) a Change of Control shall occur.
Section 13.2 Remedies. If any Event of Default shall occur and be
--------
continuing, Administrative Agent may (and if directed by Required Lenders,
shall) do any one or more of the following:
(a) Acceleration. By notice to Borrower, declare all outstanding
------------
principal of and accrued and unpaid interest on the Notes and all other
amounts payable by Borrower under the Loan Documents immediately due and
payable, and the same shall thereupon become immediately due and payable,
without further notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, protest, or other formalities
of any kind, all of which are hereby expressly waived by Borrower except as
where required by the specific terms of this Agreement or the other Loan
Documents;
(b) Termination of Commitments. Terminate the Commitments,
--------------------------
including, without limitation, the obligation of the Fronting Bank to issue
Letters of Credit, without notice to Borrower or any other Loan Party;
(c) Judgment. Reduce any claim to judgment;
--------
(d) Foreclosure. Foreclose or otherwise enforce any Lien granted to
-----------
Administrative Agent, for the benefit of the Agents and each Lender to
secure payment and performance of the Obligations in accordance with the
terms of the Loan Documents; and
(e) Rights. Exercise any and all rights and remedies afforded by the
------
laws of the Commonwealth of Massachusetts, or any other jurisdiction
governing any of the Loan Documents, by equity, or otherwise;
provided, however, that, upon the occurrence of an Event of Default under
- -------- -------
subsections 13.1(e) or subsection 13.1(f), the Commitments of all of the
- ------------------- -------------------
Lenders, and the obligation of the Fronting Bank to issue Letters of Credit,
shall automatically terminate and the outstanding principal of and accrued and
unpaid interest on the Notes and all other amounts payable by Borrower under the
Loan Documents shall thereupon become immediately due and payable without
notice, demand, presentment, notice of dishonor, notice of acceleration, notice
of intent to accelerate, protest, or other formalities of any kind, all of which
are hereby expressly waived by Borrower.
Section 13.3 Cash Collateral. If an Event of Default shall have occurred
---------------
and be continuing, Borrower shall, if requested by Administrative Agent or the
Required Lenders, pledge to Administrative Agent as security for the
Obligations, pursuant to agreements in form and substance satisfactory to
Administrative Agent, an amount in immediately available funds equal to the then
outstanding Letter of Credit Liabilities, such funds to be held in a cash
collateral account by Administrative Agent without any right of withdrawal by
Borrower.
Section 13.4 Performance by Administrative Agent. Upon the occurrence of
-----------------------------------
a Default, if any Loan Party shall fail to perform any agreement in accordance
with the terms of the Loan Documents, Administrative Agent may, at the direction
of the Required Lenders, perform or attempt
68
to perform such agreement on behalf of such Loan Party. In such event, Borrower
shall, at the request of Administrative Agent, promptly pay any amount expended
by Administrative Agent or the Lenders in connection with such performance or
attempted performance, to Administrative Agent at the Principal Office together
with interest thereon at the Default Rate applicable to Base Rate Accounts from
and including the date of such expenditure to but excluding the date such
expenditure is paid in full. Notwithstanding the foregoing, it is expressly
agreed that neither the Agents nor any Lender shall have any liability or
responsibility for the performance of any obligation of any Loan Party under any
Loan Document.
Section 13.5 Set-off. If an Event of Default shall have occurred and be
-------
continuing, each Lender is hereby authorized at any time and from time to time,
without notice to Borrower (any such notice being hereby expressly waived by
Borrower), to set-off and apply any and all deposits (general, time, demand,
provisional, or final) at any time held and other indebtedness at any time owing
by such Lender to or for the credit or the account of any Loan Party against any
and all of the obligations of such Loan Party now or hereafter existing under
any Loan Document, irrespective of whether or not Administrative Agent or such
Lender shall have made any demand under such Loan Documents and although such
obligations may be unmatured. Each Lender agrees promptly to notify Borrower
(with a copy to Administrative Agent) after any such set-off and application,
provided that the failure to give such notice shall not affect the validity of
- --------
such set-off and application. The rights and remedies of each Lender hereunder
are in addition to other rights and remedies (including, without limitation,
other rights of set-off) which such Lender may have.
Section 13.6 Continuance of Default. For purposes of all Loan
----------------------
Documents, a Default shall be deemed to have continued and exist until
Administrative Agent shall have actually received evidence satisfactory to
Administrative Agent that such Default shall have been remedied.
ARTICLE 14
Administrative Agent
--------------------
Section 14.1 Appointment, Powers, and Immunities. Each Lender hereby
-----------------------------------
irrevocably appoints and authorizes Bank of America to act as its agent under
this Agreement and the other Loan Documents with such powers and discretion as
are specifically delegated to Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Administrative Agent (which term as used in this
sentence and in Section 14.5 and the first sentence of Section 14.6 shall
------------ ------------
include its Affiliates (including NationsBanc Montgomery Securities LLC) and its
own and its Affiliates' officers, directors, employees, and agents): (a) shall
not have any duties or responsibilities except those expressly set forth in the
Loan Documents and shall not be a trustee or fiduciary for any Lender; (b) shall
not be responsible to the Lenders for any recital, statement, representation, or
warranty (whether written or oral) made in or in connection with any Loan
Document or any certificate or other document referred to or provided for in, or
received by any of them under, any Loan Document, or for the value, validity,
effectiveness, genuineness, enforceability, or sufficiency of any Loan Document,
or any other document referred to or provided for therein or for any failure by
any Loan Party or any other Person to perform any of its obligations thereunder;
(c) shall not be responsible for or have any duty to ascertain, inquire into, or
verify the performance or observance of any covenants or agreements by
69
any Loan Party or the satisfaction of any condition or to inspect the property
(including the books and records) of any Loan Party or any of its Affiliates;
(d) shall not be required to initiate or conduct any litigation or collection
proceedings under any Loan Document; and (e) shall not be responsible for any
action taken or omitted to be taken by it under or in connection with any Loan
Document, except for its own gross negligence or willful misconduct.
Administrative Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or attorneys-in-
fact selected by it with reasonable care.
Section 14.2 Reliance by Administrative Agent. Administrative Agent
--------------------------------
shall be entitled to rely upon any certification, notice, instrument, writing,
or other communication (including, without limitation, any thereof by telephone
or telecopy) believed by it to be genuine and correct and to have been signed,
sent or made by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel for any Loan Party),
independent accountants, and other experts selected by Administrative Agent.
Administrative Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until Administrative Agent receives
and accepts an Assignment and Acceptance executed in accordance with Section
-------
15.8. As to any matters not expressly provided for by this Agreement,
- ----
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions
of the Required Lenders, and such instructions shall be binding on all of the
Lenders; provided, however, that Administrative Agent shall not be required to
-------- -------
take any action that exposes Administrative Agent to personal liability or that
is contrary to any Loan Document or applicable law.
Section 14.3 Defaults. Administrative Agent shall not be deemed to have
--------
knowledge or notice of the occurrence of a Default unless Administrative Agent
has received written notice from a Lender or Borrower specifying such Default
and stating that such notice is a "Notice of Default". In the event that
Administrative Agent receives such a notice of the occurrence of a Default,
Administrative Agent shall give prompt notice thereof to the Lenders.
Administrative Agent shall take such action with respect to such Default as it
shall deem appropriate or as shall reasonably be directed by the Required
Lenders.
Section 14.4 Rights as Lender. With respect to its Commitment and the
----------------
Loans made by it, Bank of America (and any successor acting as Administrative
Agent) in its capacity as a Lender hereunder shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not acting as Administrative Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include Administrative Agent in its
individual capacity. Bank of America (and any successor acting as Administrative
Agent) and its Affiliates may (without having to account therefor to any Lender)
accept deposits from, lend money to, make investments in, provide services to,
and generally engage in any kind of lending, trust, or other business with any
Loan Party or any of their respective Affiliates as if it were not acting as
Administrative Agent, and Bank of America (and any successor acting as
Administrative Agent) and its Affiliates may accept fees and other consideration
from any Loan Party or any of their respective Affiliates for services in
connection with this Agreement or otherwise without having to account for the
same to the Lenders.
70
Section 14.5 Indemnification. THE LENDERS AGREE TO INDEMNIFY THE AGENTS
---------------
(TO THE EXTENT NOT REIMBURSED UNDER SECTION 15.1 OR SECTION 15.2, BUT WITHOUT
------------ ------------
LIMITING THE OBLIGATIONS OF BORROWER UNDER SUCH SECTIONS) RATABLY IN ACCORDANCE
WITH THEIR RESPECTIVE COMMITMENT PERCENTAGES, FOR ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES), OR
DISBURSEMENTS OF ANY KIND AND NATURE WHATSOEVER THAT MAY BE IMPOSED ON, INCURRED
BY OR ASSERTED AGAINST ADMINISTRATIVE AGENT (INCLUDING BY ANY LENDER) IN ANY WAY
RELATING TO OR ARISING OUT OF ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY OR ANY ACTION TAKEN OR OMITTED BY ADMINISTRATIVE AGENT UNDER ANY LOAN
DOCUMENT; PROVIDED THAT NO LENDER SHALL BE LIABLE FOR ANY OF THE FOREGOING TO
--------
THE EXTENT THEY ARE FOUND IN A FINAL, NON-APPEALABLE JUDGMENT RENDERED BY A
COURT OF COMPETENT JURISDICTION TO HAVE ARISEN FROM THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF, THE PERSON TO BE INDEMNIFIED. WITHOUT LIMITING ANY
PROVISION OF ANY LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES
HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS SECTION SHALL BE
INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES,
CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES
(INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES) ARISING OUT OF OR RESULTING
FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON. WITHOUT LIMITATION OF
THE FOREGOING, EACH LENDER AGREES TO REIMBURSE ADMINISTRATIVE AGENT PROMPTLY
UPON DEMAND FOR ITS RATABLE SHARE (CALCULATED BASED ON THE COMMITMENT
PERCENTAGES) OF ANY COSTS OR EXPENSES PAYABLE BY BORROWER UNDER SECTION 15.1 TO
------------
THE EXTENT THAT ADMINISTRATIVE AGENT IS NOT PROMPTLY REIMBURSED FOR SUCH COSTS
AND EXPENSES BY BORROWER. IN THE CASE OF AN INVESTIGATION, LITIGATION, OR OTHER
PROCEEDING TO WHICH THE INDEMNITY IN THIS SECTION 14.5 APPLIES, SUCH INDEMNITY
------------
SHALL BE EFFECTIVE WHETHER OR NOT SUCH INVESTIGATION, LITIGATION OR PROCEEDING
IS BROUGHT BY BORROWER, ITS DIRECTORS, SHAREHOLDERS, OR CREDITORS OR ANY PARTY
ENTITLED TO INDEMNIFICATION HEREUNDER OR ANY OTHER PERSON AND WHETHER OR NOT THE
TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED.
Section 14.6 Non-Reliance on Agents and Other Lenders. Each Lender
----------------------------------------
agrees that it has, independently and without reliance on the Agents or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Loan Parties and decision to
enter into this Agreement and that it will, independently and without reliance
upon the Agents or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under the Loan Documents. Except for
notices, reports, and other documents and information expressly required to be
furnished to the Lenders by the Agents hereunder, the Agents shall not have
71
any duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition, or business of any Loan
Party or any of their Affiliates that may come into the possession of any Agent
or any of its Affiliates.
Section 14.7 Resignation of Administrative Agent. Administrative Agent
-----------------------------------
may resign at any time by giving notice thereof to the Lenders and Borrower.
Upon any such resignation, the Required Lenders shall have the right to appoint
a successor Administrative Agent, which successor agent shall be subject to the
approval of Borrower if and so long as no Event of Default has occurred and is
continuing, which approval shall not be unreasonably withheld, conditioned, or
delayed. If no successor Administrative Agent shall have been so appointed by
the Required Lenders and shall have accepted such appointment within thirty (30)
days after the retiring Administrative Agent's giving of notice of resignation,
then the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent which shall be a commercial bank organized under
the laws of the U.S. having combined capital and surplus of at least One Hundred
Million Dollars ($100,000,000), which successor agent shall be subject to the
approval of Borrower if no Event of Default has occurred and is continuing,
which approval shall not be unreasonably withheld, conditioned, or delayed.
Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor, such successor shall thereupon succeed to and become vested with all
the rights, powers, discretion, privileges, and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of this
Article 14 shall continue in effect for its benefit in respect of any actions
- ----------
taken or omitted to be taken by it while it was acting as Administrative Agent.
Section 14.8 Administrative Agent Fee. Borrower agrees to pay to
------------------------
Administrative Agent on the date hereof and on each anniversary of the date
hereof the administrative fee described in that certain letter dated January 13,
1999 from Bank of America and NationsBanc Montgomery Securities LLC to Borrower,
as the same may be amended from time to time.
Section 14.9 Several Commitments. The Commitments and other obligations
-------------------
of the Lenders under any Loan Document are several. The default by any Lender
in making a Loan in accordance with its Commitment shall not relieve the other
Lenders of their obligations under any Loan Document. In the event of any
default by any Lender in making any Loan, each nondefaulting Lender shall be
obligated to make its Loan but shall not be obligated to advance the amount
which the defaulting Lender was required to advance hereunder. No Lender shall
be responsible for any act or omission of any other Lender.
ARTICLE 15
Miscellaneous
-------------
Section 15.1 Expenses. Borrower hereby agrees to pay promptly after
--------
presentation of supporting documentation without duplication: (a) all reasonable
costs and expenses of Administrative Agent arising in connection with the
preparation, negotiation, execution, and delivery of the Loan Documents and all
amendments or other modifications to the Loan Documents, including, without
limitation, the reasonable fees and expenses of legal counsel for Administrative
72
Agent; (b) all reasonable fees, costs, and expenses of Administrative Agent or
the Fronting Bank arising in connection with any Letter of Credit, including the
Fronting Bank's customary fees for amendments, transfers, and drawings on
Letters of Credit; (c) all reasonable costs and expenses of Administrative Agent
in connection with any Default and the enforcement of any Loan Document or
collection of the Obligations, including, without limitation, the fees and
expenses of legal counsel for Administrative Agent; (d) all reasonable fees,
costs, and expenses of any Lender arising in connection with an Event of Default
and the enforcement of any Loan Document or collection of the Obligations during
the continuance of an Event of Default; provided, however, that all Lenders
-------- -------
(other than Administrative Agent) shall be limited to the legal fees and
expenses of one counsel for all Lenders unless such representation shall result
in a conflict of interest, in which case Borrower shall pay the fees, costs, and
expenses of as many counsel as necessary to avoid conflicts among the Lenders;
(e) all transfer, stamp, documentary, or other similar taxes, assessments, or
charges (including, without limitation, the Taxes and any penalties or interest)
levied by any Governmental Authority in respect of any Loan Document or the
transactions contemplated thereby; (f) all reasonable costs, expenses,
assessments, and other charges incurred in connection with any filing,
registration, recording, or perfection of any security interest or other Lien
contemplated by any Loan Document; and (g) all other reasonable costs and
expenses incurred by Administrative Agent in connection with any Loan Document.
The fees and expenses of legal counsel for Administrative Agent that Borrower
has agreed to pay hereunder include the fees and expenses of legal counsel for
Administrative Agent arising in connection with advice given to Administrative
Agent as to its rights and responsibilities hereunder. Notwithstanding the
foregoing, Borrower shall not be required to pay or reimburse Administrative
Agent or any Lender for (i) any fees, costs or expenses incurred by any of them
in connection with any litigation commenced by Borrower or any other Loan Party
against the Lenders or Administrative Agent which seeks enforcement of any of
the rights of Borrower or any other Loan Party hereunder or under any other Loan
Document and is determined adversely to the Lenders or Administrative Agent in a
final nonappealable judgment, or (ii) any fees, costs, or expenses found in a
final, non-appealable judgment rendered by a court of competent jurisdiction to
have arisen out of or resulted from any Lender's gross negligence or its willful
misconduct.
Section 15.2 Indemnification. BORROWER SHALL INDEMNIFY THE AGENTS, THE
---------------
FRONTING BANK, AND EACH LENDER AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, AND AGENTS FROM, AND HOLD EACH OF
THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES,
PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING, WITHOUT
LIMITATION, REASONABLE ATTORNEYS' FEES) TO WHICH ANY OF THEM MAY BECOME SUBJECT
WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (A) ANY BREACH BY ANY LOAN
PARTY OF ANY REPRESENTATION, WARRANTY, COVENANT, OR OTHER AGREEMENT CONTAINED IN
ANY OF THE LOAN DOCUMENTS, (B) THE PRESENCE, RELEASE, THREATENED RELEASE,
DISPOSAL, REMOVAL, OR CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON, ABOUT,
WITHIN, OR AFFECTING ANY OF THE ASSETS OF BORROWER OR ANY OTHER LOAN PARTY, (C)
THE USE OR PROPOSED USE OF ANY LETTER OF CREDIT OR ANY PAYMENT OR FAILURE TO PAY
WITH RESPECT TO ANY LETTER OF CREDIT, (D) ANY AND ALL STAMP, FILING, OR SIMILAR
TAXES (INCLUDING, WITHOUT LIMITATION, THE "TAXES" AND ANY INTEREST OR PENALTY)
LEVIES,
73
DEDUCTIONS, AND CHARGES IMPOSED ON ADMINISTRATIVE AGENT OR ANY LENDER IN RESPECT
OF ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY, OR (E) ANY
INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION,
ANY THREATENED INVESTIGATION, LITIGATION, OR OTHER PROCEEDING RELATING TO ANY OF
THE FOREGOING, THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY;
PROVIDED THAT (1) THE FOREGOING INDEMNITY SHALL NOT APPLY TO LITIGATION
- --------
COMMENCED BY BORROWER OR ANY OTHER LOAN PARTY AGAINST THE LENDERS OR THE
ADMINISTRATIVE AGENT OR THE SYNDICATION AGENT WHICH SEEKS ENFORCEMENT OF ANY OF
THE RIGHTS OF BORROWER OR ANY OTHER LOAN PARTY HEREUNDER OR UNDER ANY OTHER LOAN
DOCUMENT AND IS DETERMINED ADVERSELY TO THE LENDERS OR THE AGENT OR THE
SYNDICATION AGENT IN A FINAL NONAPPEALABLE JUDGMENT AND (2) THAT THE PERSON
ENTITLED TO BE INDEMNIFIED UNDER THIS SECTION SHALL NOT BE INDEMNIFIED FROM OR
HELD HARMLESS AGAINST ANY LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES,
JUDGMENTS, DISBURSEMENTS, COSTS, OR EXPENSES (INCLUDING, WITHOUT LIMITATION,
ATTORNEYS' FEES) FOUND IN A FINAL, NON-APPEALABLE JUDGMENT RENDERED BY A COURT
OF COMPETENT JURISDICTION TO HAVE ARISEN OUT OF OR RESULTED FROM ITS GROSS
NEGLIGENCE OR ITS WILLFUL MISCONDUCT. WITHOUT LIMITING ANY PROVISION OF ANY LOAN
DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO
BE INDEMNIFIED UNDER THIS SECTION SHALL BE INDEMNIFIED FROM AND HELD HARMLESS
AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS,
DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEYS'
FEES) ARISING OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF
SUCH PERSON. SUBJECT TO THE LIMITATIONS SET FORTH ABOVE, IN THE CASE OF AN
INVESTIGATION, LITIGATION, OR OTHER PROCEEDING TO WHICH THE INDEMNITY IN THIS
SECTION 15.2 APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE WHETHER OR NOT SUCH
- ------------
INVESTIGATION, LITIGATION, OR PROCEEDING IS BROUGHT BY BORROWER, ITS DIRECTORS,
SHAREHOLDERS, OR CREDITORS OR ANY PARTY ENTITLED TO INDEMNIFICATION HEREUNDER OR
ANY OTHER PERSON AND WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE
CONSUMMATED.
Section 15.3 Limitation of Liability. None of the Agents, any Lender, or
-----------------------
any Affiliate, officer, director, employee, attorney, or agent thereof shall
have any liability with respect to Borrower, and, by the execution of the Loan
Documents to which it is a party, each other Loan Party, hereby waives,
releases, and agrees not to sue any of them upon, any claim for any special,
indirect, incidental, consequential, remote, exemplary or punitive damages
suffered or incurred by any Loan Party in connection with, arising out of, or in
any way related to any of the Loan Documents, or any of the transactions
contemplated by any of the Loan Documents.
74
Section 15.4 No Duty. All attorneys, accountants, appraisers, and other
-------
professional Persons and consultants retained by any of the Agents or any Lender
shall have the right to act exclusively in the interest of the Agents and the
Lenders and shall have no duty of disclosure, duty of loyalty, duty of care, or
other duty or obligation of any type or nature whatsoever to any Loan Party, any
shareholders of any Loan Party, or any other Person.
Section 15.5 No Fiduciary Relationship. The relationship between the
-------------------------
Loan Parties on the one hand and the Agents and each Lender on the other is
solely that of debtor and creditor, and neither any of the Agents nor any Lender
has any fiduciary or other special relationship with any Loan Parties, and no
term or condition of any of the Loan Documents shall be construed so as to deem
the relationship between the Loan Parties on the one hand and any of the Agents
and each Lender on the other to be other than that of debtor and creditor.
Section 15.6 Equitable Relief. Borrower recognizes that in the event any
----------------
Loan Party fails to pay, perform, observe, or discharge any or all of the
obligations under the Loan Documents, any remedy at law may prove to be
inadequate relief to the Agents and the Lenders. Borrower therefore agrees that
the Agents and the Lenders, if Administrative Agent or the Required Lenders so
request, shall be entitled to temporary and permanent injunctive relief in any
such case without the necessity of proving actual damages.
Section 15.7 No Waiver; Cumulative Remedies. No failure on the part of
------------------------------
Administrative Agent or any Lender to exercise and no delay in exercising, and
no course of dealing with respect to, any right, power, or privilege under any
Loan Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power, or privilege under any Loan Document preclude any
other or further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies provided for in the Loan Documents are
cumulative and not exclusive of any rights and remedies provided by law.
Section 15.8 Successors and Assigns.
----------------------
(a) Binding Effect. This Agreement shall be binding upon and inure
--------------
to the benefit of the parties hereto and their respective successors and
assigns. Borrower may not assign or transfer any of its rights or
obligations hereunder or under any other Loan Document without the prior
written consent of Administrative Agent and all of the Lenders.
(b) Assignment. Each Lender may assign to one or more Persons all or
----------
a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Loans, its Notes, and its
Commitment); provided, however, that
-------- -------
(i) each such assignment shall be to an Eligible Assignee. As
used herein, "Eligible Assignee" means (A) a Lender; (B) an Affiliate
-----------------
of a Lender or, with respect to any Lender that is a fund that invests
in bank loans, any other fund that invests in bank loans and is
managed by the same investment advisor as such Lender (herein a
"Related Fund"); and (C) any other Person approved by Administrative
-------------
Agent and, provided no Default then exists, Borrower (such consent of
Borrower not to be required if a Default then exists and, in any
event, not unreasonable to be
75
denied or delayed by Administrative Agent or Borrower); provided,
--------
however, that neither Borrower nor an Affiliate of Borrower shall
-------
qualify as an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or an
assignment of all of a Lender's rights and obligations under this
Agreement or an assignment by a Lender to one of its Related Funds,
any such partial assignment shall be in an amount at least equal to
Five Million Dollars ($5,000,000) and the assignee must have (after
giving effect to such assignment) Commitments of at least Ten Million
Dollars ($10,000,000);
(iii) the parties to such assignment shall execute and deliver to
Administrative Agent for its acceptance an Assignment and Acceptance,
together with any Note subject to such assignment and a processing fee
of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance,
the assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender
hereunder and the assigning Lender shall, to the extent of such assignment,
relinquish its rights and be released from its obligations under this
Agreement. Upon the consummation of any assignment pursuant to this
Section, the assignor, Administrative Agent, and Borrower shall upon return
of the assignor's notes, if any, make appropriate arrangements so that, if
required, new Notes are issued to the assignor and the assignee. If the
assignee is not incorporated under the laws of the U.S. or a state thereof,
it shall deliver to Borrower and Administrative Agent certification as to
exemption from deduction or withholding of Taxes in accordance with Section
--------
6.7.
---
(c) Register. Administrative Agent shall maintain at the Principal
--------
Office a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries in the
--------
Register shall be conclusive and binding for all purposes, absent manifest
error, and Borrower, Administrative Agent, and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection
by Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice. Upon its receipt of an Assignment and Acceptance
executed by the parties thereto, together with any Note or Notes subject to
such assignment and payment of the processing fee, Administrative Agent
shall, if such Assignment and Acceptance has been completed, (i) accept
such Assignment and Acceptance, (ii) record the information contained
therein in the Register, and (iii) give prompt notice thereof to the
parties thereto.
(d) Participations. Each Lender may sell participations to one or
--------------
more Persons in all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and its Loans);
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
participant shall be entitled to the benefit of the yield protection
provisions contained in
76
Article 6 (to the extent that the Lender selling such participation would
---------
have been entitled thereto) and the right of set-off contained in Section
-------
13.5, and (iv) Borrower shall continue to deal solely and directly with
----
such Lender in connection with such Lender's rights and obligations under
this Agreement, and such Lender shall retain the sole right to enforce the
obligations of Borrower relating to its Loans and to approve any amendment,
modification, waiver, or consent of any provision of any Loan Document
(other than amendments, modifications, waivers, or consents of the types
referred to in Section 15.11(a)).
----------------
(e) Pledge to Federal Reserve. Notwithstanding any other provision
-------------------------
set forth in this Agreement, any Lender may at any time assign and pledge
all or any portion of its Loans to any Federal Reserve Bank as collateral
security pursuant to Regulation A and any Operating Circular issued by such
Federal Reserve Bank. No such assignment shall release the assigning
Lender from its obligations hereunder.
(f) Delivery of Information. Any Lender may furnish any information
-----------------------
concerning any Loan Party in the possession of such Lender from time to
time to assignees and participants (including prospective assignees and
participants) subject to such Persons agreeing to being bound by the
provisions of Section 15.22.
-------------
Section 15.9 Survival. All representations and warranties made in any
--------
Loan Document or in any document, statement, or certificate furnished in
connection with any Loan Document shall survive the execution and delivery of
the Loan Documents and no investigation by Administrative Agent or any Lender or
any closing shall affect the representations and warranties or the right of
Administrative Agent or any Lender to rely upon them. Without prejudice to the
survival of any other obligation of Borrower hereunder, the obligations under
Article 6, Section 14.5, Section 15.1, and Section 15.2 shall survive repayment
- --------- ------------ ------------ ------------
of the Notes and termination of the Commitments and the Letters of Credit.
Section 15.10 Entire Agreement. THIS AGREEMENT, THE NOTES, AND THE OTHER
----------------
LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE
PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES
THERETO.
Section 15.11 Amendments and Waivers. Any provision of any Loan Document
----------------------
may be amended or waived and any consent to any departure by any Loan Party
therefrom may be granted if, but only if, such amendment, waiver, or consent is
in writing and is signed by Borrower and the Required Lenders (and, if Article
-------
14 or the rights or duties of Administrative Agent are affected thereby, by
- --
Administrative Agent); provided that no such amendment, waiver, or consent
--------
applicable to:
77
(a) a Loan, Letter of Credit, or Commitment which has the effect of:
(i) increasing such Commitment,
(ii) reducing the principal of or rate of interest on such
Loan or any Reimbursement Obligation relating to such Letter of
Credit or any fees or other amounts payable hereunder to Lenders
generally with respect to such Loan, Letter of Credit, or
Commitment,
(iii) postponing any date fixed for the payment of any
scheduled installment of principal of or interest on such Loan or
any Reimbursement Obligation relating to such Letter of Credit or
any fees or other amounts payable hereunder with respect to such
Loan, Letter of Credit, or Commitment or changing any optional or
mandatory prepayment provision applicable to such Loan or Letter
of Credit, or
(iv) postponing any date fixed for termination of such
Commitment
shall be effective unless also signed by each Lender holding (with respect
to Letters of Credit either directly or through a participation under
Section 2.7(a)) the Loan, Letter of Credit, or Commitment of the type being
--------------
modified; and
(b) any change (including a waiver) in:
(i) the definition of Required Lenders or the provisions of
this Section 15.11; or
-------------
(ii) the conditions specified in Article 8 hereof, or
---------
(iii) which has the effect of releasing any Loan Party in a
transaction which is not otherwise permitted hereby, or
(iv) releases of all or substantially all of the
Collateral, or
(v) releases of all or substantially all of the
Guaranties, or
(vi) changes the definition of "Borrowing Base" or changes
the advance rate under the Borrowing Base
shall not be effective unless signed by all Lenders.
78
Section 15.12 Maximum Interest Rate.
---------------------
(a) No interest rate specified in any Loan Document shall at any time
exceed the Maximum Rate. If at any time the interest rate (the "Contract
--------
Rate") for any Obligation shall exceed the Maximum Rate, thereby causing
----
the interest accruing on such Obligation to be limited to the Maximum Rate,
then any subsequent reduction in the Contract Rate for such Obligation
shall not reduce the rate of interest on such Obligation below the Maximum
Rate until the aggregate amount of interest accrued on such Obligation
equals the aggregate amount of interest which would have accrued on such
Obligation if the Contract Rate for such Obligation had at all times been
in effect.
(b) No provision of any Loan Document shall require the payment or the
collection of interest in excess of the maximum amount permitted by
applicable law. If any excess of interest in such respect is hereby
provided for, or shall be adjudicated to be so provided, in any Loan
Document or otherwise in connection with this loan transaction, the
provisions of this Section shall govern and prevail and neither Borrower
nor the sureties, guarantors, successors, or assigns of Borrower shall be
obligated to pay the excess amount of such interest or any other excess sum
paid for the use, forbearance, or detention of sums loaned pursuant hereto.
In the event any Lender ever receives, collects, or applies as interest any
such sum, such amount which would be in excess of the maximum amount
permitted by applicable law shall be applied as a payment and reduction of
the principal of the Obligations; and, if the principal of the Obligations
has been paid in full, any remaining excess shall forthwith be paid to
Borrower. In determining whether or not the interest paid or payable
exceeds the Maximum Rate, Borrower and each Lender shall, to the extent
permitted by applicable law, (a) characterize any non-principal payment as
an expense, fee, or premium rather than as 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 entire contemplated term of the Obligations so that interest
for the entire term does not exceed the Maximum Rate.
Section 15.13 Notices. All notices and other communications provided for
-------
in any Loan Document to which any Loan Party is a party shall be given or made
in writing (except as otherwise permitted by Section 5.3) and shall be
-----------
telecopied, electronically transferred, mailed by certified mail return receipt
requested, sent by overnight courier, or personally delivered to the intended
recipient in each case at the "Address for Notices" specified below its name on
the signature pages hereof or with respect to any Loan Party, at the "Address
for Notices" specified below Borrower's name on the signature pages hereof, or
with respect to a Lender not a party to this Agreement on the Closing Date, in
its Assignment and Acceptance, or, as to any party at such other address as
shall be designated by such party in a notice to each other party given in
accordance with this Section. Except as otherwise provided in any Loan
Document, all such communications shall be deemed to have been duly given in the
case of transmittal by telecopy or electronic transmission, when transmitted
(subject to telephone confirmation of receipt in either case), in the case of
personal delivery, when delivered, in the case of overnight courier, on the next
Business Day after delivery to the courier, and in the case of a mailed notice,
three (3) Business Days after being duly deposited in the mails, in each case
given or addressed as aforesaid; provided, however, notices to Administrative
-------- -------
Agent pursuant to Section 2.7 or Section 5.3 shall not be effective until
----------- -----------
received by Administrative Agent.
79
Section 15.14 Governing Law; Venue; Service of Process. THIS AGREEMENT
----------------------------------------
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK AND THE APPLICABLE LAWS OF THE U.S. ANY ACTION OR PROCEEDING AGAINST
BORROWER UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
MAY BE BROUGHT IN ANY NEW YORK STATE COURT OR FEDERAL COURT IN THE DISTRICT OF
NEW YORK. BORROWER IRREVOCABLY (a) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF
SUCH COURTS, AND (b) WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE
VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM. BORROWER AGREES THAT SERVICE OF PROCESS UPON IT MAY BE
MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ITS ADDRESS
SPECIFIED OR DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 15.13 OF
-------------
THIS AGREEMENT. NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL
AFFECT THE RIGHT OF ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF ADMINISTRATIVE AGENT
OR ANY LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST BORROWER OR WITH RESPECT
TO ANY OF ITS PROPERTY IN COURTS IN OTHER JURISDICTIONS. ANY ACTION OR
PROCEEDING BY ANY LOAN PARTY AGAINST ANY AGENT OR ANY LENDER SHALL BE BROUGHT
ONLY IN A COURT LOCATED IN DALLAS, TEXAS.
Section 15.15 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 agreement.
Section 15.16 Severability. Any provision of any Loan Document held by a
------------
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of such Loan Document and the effect thereof shall
be confined to the provision held to be invalid or illegal.
Section 15.17 Headings. The headings, captions, and arrangements used in
--------
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
Section 15.18 Construction. Borrower, each Loan Party (by its execution
------------
of the Loan Documents to which it is a party), the Agents, and each Lender
acknowledges that each of them has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review the Loan Documents with
its legal counsel and that the Loan Documents shall be construed as if jointly
drafted by the parties thereto.
Section 15.19 Independence of Covenants. All covenants under the Loan
-------------------------
Documents shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitations of, another
covenant shall not avoid the occurrence of a Default if such action is taken or
such condition exists.
80
Section 15.20 Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY
--------------------
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
ACTIONS OF ANY OF THE AGENTS OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION,
OR ENFORCEMENT THEREOF.
Section 15.21 Confidentiality. Each Lender agrees to keep confidential
---------------
any information obtained by it from any Loan Party or its agents or
representatives pursuant hereto and the other Loan Documents identified as
confidential in writing at the time of delivery in accordance with such Lender's
customary practices and agrees that it will only use such information in
connection with the transactions contemplated by this Agreement and not disclose
any of such information other than (a) to such Lender's officers, directors,
employees, representatives, attorneys, agents, or affiliates who are advised of
the confidential nature of such information, (b) to the extent such information
presently is or hereafter becomes available to such Lender on a non-confidential
basis from any source or as such information that is in the public domain at the
time of disclosure, (c) to the extent disclosure is required by law, regulation,
subpoena, or judicial order or process (provided that notice of such requirement
or order shall be promptly furnished to Borrower unless such notice is legally
prohibited) or requested or required by bank regulators or auditors or any
administrative body, commission, or other Governmental Authority to whose
jurisdiction such Lender may be subject, (d) to assignees or participants or
potential assignees or participants or to professional advisors or direct or
indirect contractual counter parties in swap agreements provided in each case
such Person agrees to be bound by the provisions of this Section 15.21, (e) to
-------------
the extent required in connection with any litigation between any Loan Party and
any Lender with respect to the Loans or this Agreement and the other Loan
Documents, (f) to rating agencies, their employees, representatives, attorneys,
agents, or affiliates who are advised of the confidential nature of such
information and who agree to be subject to the provisions of this Section 15.21,
-------------
and (g) with Borrower's prior written consent.
Section 15.22 Currency Conversion. If for any purpose of this Agreement
-------------------
it is necessary to convert a sum in any currency to another currency, then the
rate of exchange which shall be applied shall be the Spot Rate.
Section 15.23 Amendment and Restatement. This Agreement shall constitute
-------------------------
an amendment and restatement in its entirety of the Original Revolving Credit
Agreement. From and after the Closing Date, all indebtedness, liabilities,
obligations, security interests and liens arising under the Original Revolving
Credit Agreement or any Loan Documents referred to therein are hereby deemed to
be renewed and continued, and not extinguished, discharged or satisfied, and are
hereafter evidenced by and governed in accordance with this Agreement and the
other Loan Documents. All references in the Loan Documents referred to in the
Original Revolving Credit Agreement to the Original Revolving Credit Agreement
shall be deemed to mean this Agreement, as an amendment and restatement of the
Original Revolving Credit Agreement.
81
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
RENAISSANCE WORLDWIDE, INC.
By:_____________________________
Name:___________________________
Title:__________________________
Address for Notices to Borrower
or any Loan Party:
-----------------
Renaissance Worldwide, Inc.
189 Wells Avenue
Newton, Massachusetts 02159
Attention: Joseph P. Fargnoli
Telephone: (617) 527-6886
Telecopier: (617) 332-4647
AMENDED AND RESTATED CREDIT AGREEMENT
BANK OF AMERICA, N.A.,
as Administrative Agent and as a Lender
By:_____________________________
Name:___________________________
Title:__________________________
Address for Notices:
-------------------
Bank of America, N.A.
901 Main Street, 67th Floor
Dallas, Texas 75202
Attention: Tim O'Connor
Telephone: (214) 508-9419
Telecopier: (214) 508-0980
Lending Office for Base Rate Accounts
and Libor Accounts:
------------------
Bank of America, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202
Attention: Otis Howard
Telephone: (214) 508-9253
Telecopier: (214) 508-2515
AMENDED AND RESTATED CREDIT AGREEMENT
BNY FACTORING, LLC
as Syndication Agent and as a Lender
By:_____________________________
Name:___________________________
Title:__________________________
Address for Notices:
-------------------
BNY Factoring LLC
Bank of New York
1290 Avenue of the Americas, 3rd Floor
New York, New York 10104
Attention: _____________
Telephone: (212) 408-____
Telecopier: (212) 408-____
Lending Office for Base Rate Accounts
and Libor Accounts:
------------------
BNY Factoring LLC
Bank of New York
1290 Avenue of the Americas, 3rd Floor
New York, New York 10104
Attention: _____________
Telephone: (212) 408-____
Telecopier: (212) 408-____
AMENDED AND RESTATED CREDIT AGREEMENT
CITIZENS BANK OF MASSACHUSETTS
By:_____________________________
Name:___________________________
Title:__________________________
Address for Notices:
-------------------
Citizens Bank of Massachusetts
28 State Street, 15th Floor
Boston, Massachusetts 02109
Attention: ____________
Telephone: (617) 725-____
Telecopier: (617) 725-____
Lending Office for Base Rate Accounts
and Libor Accounts:
------------------
Citizens Bank of Massachusetts
28 State Street, 15th Floor
Boston, Massachusetts 02109
Attention: ____________
Telephone: (617) 725-____
Telecopier: (617) 725-____
AMENDED AND RESTATED CREDIT AGREEMENT
DEBIS FINANCIAL SERVICES, INC.
By:_____________________________
Name:___________________________
Title:__________________________
Address for Notices:
-------------------
debis Financial Services, Inc.
201 Merritt 7, Suite 700
Norwalk, Connecticut 06856
Attention: Legal Department
Telephone: (203) 845-7563
Telecopier: (203) 847-2925
Lending Office for Base Rate Accounts
and Libor Accounts:
------------------
debis Financial Services, Inc.
201 Merritt 7, Suite 700
Norwalk, Connecticut 06856
Attention: Legal Department
Telephone: (203) 845-7563
Telecopier: (203) 847-2925
AMENDED AND RESTATED CREDIT AGREEMENT
NATIONAL BANK OF CANADA
By:_____________________________
Name:___________________________
Title:__________________________
By:_____________________________
Name:___________________________
Title:__________________________
Address for Notices:
-------------------
National Bank of Canada
One Federal Street, 27th Floor
Boston, Massachusetts 02110
Attention: ____________
Telephone: (617) 350-____
Telecopier: (617) 350-____
Lending Office for Base Rate Accounts
and Libor Accounts:
------------------
National Bank of Canada
One Federal Street, 27th Floor
Boston, Massachusetts 02110
Attention: _____________
Telephone: (617) 350-____
Telecopier: (617) 350-____
AMENDED AND RESTATED CREDIT AGREEMENT
FINOVA CAPITAL CORPORATION
By:_____________________________
Name:___________________________
Title:__________________________
Address for Notices:
-------------------
Finova Capital Corporation
311 South Wacker Drive, Suite 4400
Chicago, Illinois 60606
Attention: ____________
Telephone: (312) 322-____
Telecopier: (312) 322-____
Lending Office for Base Rate Accounts
and Libor Accounts:
------------------
Finova Capital Corporation
311 South Wacker Drive, Suite 4400
Chicago, Illinois 60606
Attention: ____________
Telephone: (312) 322-____
Telecopier: (312) 322-____
AMENDED AND RESTATED CREDIT AGREEMENT