EXHIBIT 10.36
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CREDIT AGREEMENT
among
SYLVAN LEARNING SYSTEMS, INC.,
VARIOUS BANKS,
NATIONSBANK, N.A.,
as SYNDICATION AGENT
and
BANKERS TRUST COMPANY,
as LEAD ARRANGER and
ADMINISTRATIVE AGENT
_______________________________
Dated as of December 23, 1998
_______________________________
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TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit.................................................................. 1
1.01 The Commitments.............................................................................. 1
1.02 Minimum Amount of Each Borrowing............................................................. 3
1.03 Notice of Borrowing.......................................................................... 3
1.04 Disbursement of Funds........................................................................ 4
1.05 Notes........................................................................................ 5
1.06 Conversions.................................................................................. 6
1.07 Pro Rata Borrowings.......................................................................... 6
1.08 Interest..................................................................................... 6
1.09 Interest Periods............................................................................. 7
1.10 Increased Costs, Illegality, etc............................................................. 8
1.11 Compensation................................................................................. 10
1.12 Change of Lending Office..................................................................... 10
1.13 Replacement of Banks......................................................................... 10
1.14 Limitation on Additional Amounts, etc........................................................ 11
SECTION 2. Letters of Credit........................................................................... 12
2.01 Letters of Credit............................................................................ 12
2.02 Maximum Letter of Credit Outstandings; Final Maturities...................................... 12
2.03 Letter of Credit Requests; Minimum Stated Amount............................................. 13
2.04 Letter of Credit Participations.............................................................. 13
2.05 Agreement to Repay Letter of Credit Drawings................................................. 15
2.06 Increased Costs.............................................................................. 16
SECTION 3. Commitment Commission; Fees; Reductions of Commitment....................................... 17
3.01 Fees......................................................................................... 17
3.02 Voluntary Termination of Unutilized Commitments.............................................. 18
3.03 Mandatory Reduction of Commitments........................................................... 18
SECTION 4. Prepayments; Payments; Taxes................................................................ 20
4.01 Voluntary Prepayments........................................................................ 20
4.02 Mandatory Repayments......................................................................... 21
4.03 Method and Place of Payment.................................................................. 21
4.04 Net Payments................................................................................. 22
SECTION 5. Conditions Precedent to the Effective Date.................................................. 23
5.01 Execution of Agreement; Notes................................................................ 23
5.02 Officer's Certificate........................................................................ 24
(i)
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5.03 Opinions of Counsel.......................................................................... 24
5.04 Corporate Documents; Proceedings; etc........................................................ 24
5.05 Fees, etc.................................................................................... 24
5.06 Adverse Change, etc.......................................................................... 24
5.07 Litigation................................................................................... 25
5.08 Pledge Agreement............................................................................. 25
5.09 Subsidiaries Guaranty........................................................................ 26
5.10 Financial Statements; Projections............................................................ 26
5.11 Solvency Certificate......................................................................... 26
SECTION 6. Conditions Precedent to All Credit Events................................................... 26
6.01 Effective Date............................................................................... 26
6.02 No Default; Representations and Warranties................................................... 26
6.03 Notice of Borrowing; Letter of Credit Request................................................ 26
SECTION 7. Representations, Warranties and Agreements.................................................. 27
7.01 Status....................................................................................... 27
7.02 Power and Authority.......................................................................... 27
7.03 No Violation................................................................................. 28
7.04 Approvals.................................................................................... 28
7.05 Financial Statements; Financial Condition; Undisclosed Liabilities; Projections; etc......... 28
7.06 Litigation................................................................................... 29
7.07 True and Complete Disclosure................................................................. 30
7.08 Use of Proceeds; Margin Regulations.......................................................... 30
7.09 Tax Returns and Payments..................................................................... 30
7.10 Compliance with ERISA........................................................................ 31
7.11 The Pledge Agreement......................................................................... 32
7.12 Properties................................................................................... 32
7.13 Year 2000.................................................................................... 32
7.14 Subsidiaries................................................................................. 32
7.15 Compliance with Statutes, etc................................................................ 32
7.16 Investment Company Act....................................................................... 33
7.17 Public Utility Holding Company Act........................................................... 33
7.18 Environmental Matters........................................................................ 33
7.19 Labor Relations.............................................................................. 34
7.20 Patents, Licenses, Franchises and Formulas................................................... 34
7.21 Indebtedness.................................................................................. 34
7.22 Subordination Provisions..................................................................... 34
SECTION 8. Affirmative Covenants....................................................................... 34
8.01 Information Covenants........................................................................ 35
8.02 Books, Records and Inspections; Annual Meetings.............................................. 37
8.03 Maintenance of Property; Insurance........................................................... 37
8.04 Corporate Franchises......................................................................... 38
(ii)
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8.05 Compliance with Statutes, etc................................................................ 38
8.06 Compliance with Environmental Laws........................................................... 38
8.07 ERISA........................................................................................ 38
8.08 End of Fiscal Years; Fiscal Quarters......................................................... 39
8.09 Payment of Taxes............................................................................. 40
8.10 Foreign Subsidiaries......................................................................... 40
8.11 Margin Stock................................................................................. 40
8.12 Year 2000.................................................................................... 40
8.13 Additional Guarantors and Additional Pledge Agreements....................................... 40
SECTION 9. Negative Covenants.......................................................................... 41
9.01 Liens........................................................................................ 41
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc....................................... 43
9.03 Dividends.................................................................................... 46
9.04 Indebtedness................................................................................. 47
9.05 Advances, Investments and Loans.............................................................. 49
9.06 Transactions with Affiliates................................................................. 51
9.07 Capital Expenditures......................................................................... 51
9.08 Consolidated Interest Coverage Ratio......................................................... 52
9.09 Maximum Leverage Ratio....................................................................... 52
9.10 Consolidated Fixed Charge Coverage Ratio..................................................... 52
9.11 Minimum Consolidated Net Worth............................................................... 53
9.12 Limitation on Modifications of Certificate of Incorporation, By-Laws, etc and
Limitations on Payments and Modifications of Permitted
Designated Indebtedness................................................................... 53
9.13 Limitation on Certain Restrictions on Subsidiaries........................................... 53
9.14 Limitation on Issuance of Capital Stock...................................................... 54
9.15 Business..................................................................................... 54
9.16 Limitation on Creation of Subsidiaries....................................................... 54
SECTION 10. Events of Default.......................................................................... 54
10.01 Payments.................................................................................... 54
10.02 Representations, etc........................................................................ 55
10.03 Covenants................................................................................... 55
10.04 Default Under Other Agreements.............................................................. 55
10.05 Bankruptcy, etc............................................................................. 55
10.06 ERISA....................................................................................... 56
10.07 Pledge Agreement............................................................................ 56
10.08 Subsidiaries Guaranty....................................................................... 56
10.09 Judgments................................................................................... 57
10.10 Change of Control........................................................................... 57
SECTION 11. Definitions and Accounting Terms........................................................... 57
11.01 Defined Terms............................................................................... 57
(iii)
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SECTION 12. The Administrative Agent................................................................... 76
12.01 Appointment................................................................................. 76
12.02 Nature of Duties............................................................................ 76
12.03 Lack of Reliance on the Administrative Agent................................................ 76
12.04 Certain Rights of the Administrative Agent.................................................. 77
12.05 Reliance.................................................................................... 77
12.06 Indemnification............................................................................. 77
12.07 The Administrative Agent in its Individual Capacity......................................... 77
12.08 Holders..................................................................................... 78
12.09 Resignation by the Administrative Agent..................................................... 78
SCHEDULE I Revolving Loan Commitments
SCHEDULE II Bank Addresses
SCHEDULE III Subsidiaries
SCHEDULE IV Existing Indebtedness
SCHEDULE V Existing Liens
SCHEDULE VI Existing Investments
SCHEDULE VII Litigation
EXHIBIT A Notice of Borrowing
EXHIBIT B-1 Revolving Note
EXHIBIT B-2 Swingline Note
EXHIBIT C Letter of Credit Request
EXHIBIT D Section 4.04(b)(ii) Certificate
EXHIBIT E Opinion of Piper & Marbury L.L.P., Special Counsel to the
Credit Parties
EXHIBIT F Officers' Certificate
EXHIBIT G Pledge Agreement
EXHIBIT H Subsidiaries Guaranty
EXHIBIT I Solvency Certificate
EXHIBIT J Subordination Provisions
EXHIBIT K Assignment and Assumption Agreement
(iv)
CREDIT AGREEMENT, dated as of December 23, 1998, among SYLVAN LEARNING
SYSTEMS, INC., a Maryland corporation (the "Borrower"), the Banks party hereto
from time to time, NATIONSBANK, N.A., as Syndication Agent, and BANKERS TRUST
COMPANY, as Lead Arranger and Administrative Agent (all capitalized terms used
herein and defined in Section 11 are used herein as therein defined).
W I T N E S S E T H:
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WHEREAS, subject to and upon the terms and conditions set forth
herein, the Banks are willing to make available to the Borrower the respective
credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
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1.01 The Commitments. (a) Subject to and upon the terms and
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conditions set forth herein, each Bank severally agrees to make, at any time and
from time to time on and after the Effective Date and prior to the Final
Maturity Date, a revolving loan or revolving loans (each a "Revolving Loan" and,
collectively, the "Revolving Loans") to the Borrower, which Revolving Loans (i)
shall, at the option of the Borrower, be incurred and maintained as, and/or
converted into, Base Rate Loans or Eurodollar Loans, provided that, except as
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otherwise specifically provided in Section 1.10(b), all Revolving Loans
comprising the same Borrowing shall at all times be of the same Type, (ii) may
be repaid and reborrowed in accordance with the provisions hereof, (iii) shall
not exceed for any Bank at any time outstanding that aggregate principal amount
which, when added to the product of (x) such Bank's RL Percentage and (y) the
sum of (I) the aggregate amount of all Letter of Credit Outstandings (exclusive
of Unpaid Drawings which are repaid with the proceeds of, and simultaneously
with the incurrence of, the respective incurrence of Revolving Loans) at such
time and (II) the aggregate principal amount of all Swingline Loans (exclusive
of Swingline Loans which are repaid with the proceeds of, and simultaneously
with the incurrence of, the respective incurrence of Revolving Loans) then
outstanding, equals the Revolving Loan Commitment of such Bank at such time and
(iv) shall not exceed for all Banks at any time outstanding that aggregate
principal amount which, when added to the sum of (I) the aggregate amount of all
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time and (II) the aggregate principal
amount of all Swingline Loans (exclusive of Swingline Loans which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) then outstanding, equals the Total Revolving Loan
Commitment at such time.
(b) Subject to and upon the terms and conditions set forth herein,
the Swingline Bank agrees to make, at any time and from time to time on and
after the Effective Date and prior to the Swingline Expiry Date, a revolving
loan or revolving loans (each a "Swingline Loan" and, collectively, the
"Swingline Loans") to the Borrower, which Swingline Loans (i) shall be made and
maintained as Base Rate Loans, (ii) may be repaid and reborrowed in accordance
with the provisions hereof, (iii) shall not exceed in aggregate principal amount
at any time outstanding, when combined with the sum of (I) the aggregate
principal amount of all Revolving Loans then outstanding and (II) the aggregate
amount of all Letter of Credit Outstandings at such time, an amount equal to the
Total Revolving Loan Commitment at such time, and (iv) shall not exceed in
aggregate principal amount at any time outstanding the Maximum Swingline Amount.
Notwithstanding anything to the contrary contained in this Section 1.01(b), (x)
the Swingline Bank shall not be obligated to make any Swingline Loans at a time
when a Bank Default exists unless the Swingline Bank has entered into
arrangements satisfactory to it and the Borrower to eliminate the Swingline
Bank's risk with respect to the Defaulting Bank's or Banks' participation in
such Swingline Loans, including by cash collateralizing such Defaulting Bank's
or Banks' RL Percentage of the outstanding Swingline Loans and (y) the Swingline
Bank shall not make any Swingline Loan after it has received written notice from
the Borrower, any other Credit Party or the Required Banks stating that a
Default or an Event of Default exists and is continuing until such time as the
Swingline Bank shall have received written notice (I) of rescission of all such
notices from the party or parties originally delivering such notice or (II) of
the waiver of such Default or Event of Default by the Required Banks.
(c) On any Business Day, the Swingline Bank may, in its sole
discretion, give notice to the Banks that the Swingline Bank's outstanding
Swingline Loans shall be funded with one or more Borrowings of Revolving Loans
(provided that such notice shall be deemed to have been automatically given upon
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the occurrence of a Default or an Event of Default under Section 10.05 or upon
the exercise of any of the remedies provided in the last paragraph of Section
10), in which case one or more Borrowings of Revolving Loans constituting Base
Rate Loans (each such Borrowing, a "Mandatory Borrowing") shall be made on the
immediately succeeding Business Day by all Banks pro rata based on each Bank's
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RL Percentage (determined before giving effect to any termination of the
Revolving Loan Commitments pursuant to the last paragraph of Section 10) and the
proceeds thereof shall be applied directly by the Swingline Bank to repay the
Swingline Bank for such outstanding Swingline Loans. Each Bank hereby
irrevocably agrees to make Revolving Loans upon one Business Day's notice
pursuant to each Mandatory Borrowing in the amount and in the manner specified
in the preceding sentence and on the date specified in writing by the Swingline
Bank notwithstanding (i) the amount of the Mandatory Borrowing may not comply
with the Minimum Borrowing Amount otherwise required hereunder, (ii) whether any
conditions specified in Section 6 are then satisfied, (iii) whether a Default or
an Event of Default then exists, (iv) the date of such Mandatory Borrowing and
(v) the amount of the Total Revolving Loan Commitment at such time. In the
event that any Mandatory Borrowing cannot for any reason be made on the date
otherwise required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect to the
Borrower), then each Bank hereby agrees that it shall forthwith purchase (as of
the date the Mandatory Borrowing would otherwise have occurred, but adjusted for
any payments received from the Borrower on or after such date and prior to such
purchase) from the Swingline Bank such participations in the outstanding
Swingline Loans as shall be necessary to cause the Banks to share in such
Swingline Loans ratably based upon their respective RL Percentages (determined
before giving effect to any termination of the Revolving Loan Commitments
pursuant to the last paragraph of Section 10), provided that (x) all interest
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payable on the Swingline Loans shall be for the account of the Swingline Bank
until the date as of which the respective participation is required to
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be purchased and, to the extent attributable to the purchased participation,
shall be payable to the participant from and after such date and (y) at the time
any purchase of participations pursuant to this sentence is actually made, the
purchasing Bank shall be required to pay the Swingline Bank interest on the
principal amount of participation purchased for each day from and including the
day upon which the Mandatory Borrowing would otherwise have occurred to but
excluding the date of payment for such participation, at the overnight Federal
Funds Rate for the first three days and at the rate otherwise applicable to
Revolving Loans maintained as Base Rate Loans hereunder for each day thereafter.
1.02 Minimum Amount of Each Borrowing. The aggregate principal
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amount of each Borrowing of Revolving Loans or Swingline Loans shall not be less
than the Minimum Borrowing Amount applicable thereto. More than one Borrowing
may occur on the same date, but at no time shall there be outstanding more than
ten Borrowings of Eurodollar Loans; provided, however that the Borrower may
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incur one additional Borrowing of Eurodollar Loans for every $10,000,000
increase in the Total Revolving Loan Commitment pursuant to Section 13.17.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to
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incur (x) Eurodollar Loans hereunder, the Borrower shall give the Administrative
Agent at the Notice Office at least three Business Days' prior notice of each
Eurodollar Loan to be incurred hereunder and (y) Base Rate Loans hereunder
(excluding Swingline Loans), the Borrower shall give the Administrative Agent at
the Notice Office at least one Business Day's prior notice of each Base Rate
Loan to be incurred hereunder, provided that (in each case) any such notice
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shall be deemed to have been given on a certain day only if given before 11:00
A.M. (New York time) on such day. Each such notice (each a "Notice of
Borrowing"), except as otherwise expressly provided in Section 1.10, shall be
irrevocable and shall be given by the Borrower in writing, or by telephone
promptly confirmed in writing, in the form of Exhibit A, appropriately completed
to specify the aggregate principal amount of the Revolving Loans to be incurred
pursuant to such Borrowing, the date of such Borrowing (which shall be a
Business Day), and whether the Revolving Loans being incurred pursuant to such
Borrowing are to be initially maintained as Base Rate Loans or, to the extent
permitted hereunder, Eurodollar Loans and, if Eurodollar Loans, the initial
Interest Period to be applicable thereto. The Administrative Agent shall
promptly give each Bank notice of such proposed Borrowing, of such Bank's
proportionate share thereof and of the other matters required by the immediately
preceding sentence to be specified in the Notice of Borrowing.
(b)(i) Whenever the Borrower desires to incur Swingline Loans
hereunder, the Borrower shall give the Swingline Bank and the Administrative
Agent no later than 1:00 P.M. (New York time) on the date that a Swingline Loan
is to be incurred hereunder, written notice or telephonic notice promptly
confirmed in writing of each Swingline Loan to be incurred hereunder. Each such
notice shall be irrevocable and specify in each case (A) the date of Borrowing
(which shall be a Business Day) and (B) the aggregate principal amount of the
Swingline Loans to be incurred pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(c), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of the Mandatory Borrowings as set forth in
Section 1.01(c).
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(c) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice of any Borrowing or prepayment of
Loans, the Administrative Agent or the Swingline Bank, as the case may be, may
act without liability upon the basis of telephonic notice of such Borrowing or
prepayment, as the case may be, believed by the Administrative Agent or the
Swingline Bank, as the case may be, in good faith to be from the Chairman of the
Board, the Chief Executive Officer, the President, a Senior Vice-President, the
Chief Financial Officer, a Vice-President, the Treasurer or any Assistant
Treasurer of the Borrower, or from any other authorized officer of the Borrower
designated in writing by any of the foregoing officers of the Borrower to the
Administrative Agent as being authorized to give such notices, prior to receipt
of written confirmation. In each such case, the Borrower hereby waives the
right to dispute the Administrative Agent's or Swingline Bank's record of the
terms of such telephonic notice of such Borrowing or prepayment of Loans, as the
case may be, absent manifest error.
(d) Notwithstanding the foregoing provisions of this Section 1.03,
the Borrower and the Swingline Bank may from time to time, upon prompt written
notice to the Administrative Agent, agree to make a Swingline Loan pursuant to
an "auto-borrow" and "zero balance" or other similar arrangement, subject
however to the conditions and limitations relating to the Swingline Loans set
forth herein.
1.04 Disbursement of Funds. No later than 12:00 Noon (New York time)
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on the date specified in each Notice of Borrowing (or (x) in the case of
Swingline Loans, no later than 3:00 P.M. (New York time) on the date specified
pursuant to Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, no
later than 1:00 P.M. (New York time) on the date specified in Section 1.01(c)),
each Bank will make available its pro rata portion (determined in accordance
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with Section 1.07) of each such Borrowing requested to be made on such date (or
in the case of Swingline Loans, the Swingline Bank will make available the full
amount thereof). All such amounts will be made available in Dollars and in
immediately available funds at the Payment Office, and, except for Revolving
Loans made pursuant to a Mandatory Borrowing, the Administrative Agent (or the
Swingline Lender, as the case may be) will make available to the Borrower at the
Payment Office the aggregate of the amounts so made available by the Banks.
Unless the Administrative Agent shall have been notified by any Bank prior to
the date of Borrowing that such Bank does not intend to make available to the
Administrative Agent such Bank's portion of any Borrowing to be made on such
date, the Administrative Agent may assume that such Bank has made such amount
available to the Administrative Agent on such date of Borrowing and the
Administrative Agent may (but shall not be obligated to), in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Administrative Agent
by such Bank, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Bank. If such Bank does not pay such
corresponding amount forthwith upon the Administrative Agent's demand therefor,
the Administrative Agent shall promptly notify the Borrower and the Borrower
shall immediately pay such corresponding amount to the Administrative Agent.
The Administrative Agent also shall be entitled to recover on demand from such
Bank or the Borrower, as the case may be, interest on such corresponding amount
in respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the Borrower until the date such
corresponding amount is recovered by the Administrative Agent, at a rate per
annum equal to (i) if recovered from such Bank, at the overnight Federal Funds
Rate
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for the first three days and at the rate of interest otherwise applicable to the
respective Borrowing for each day thereafter and (ii) if recovered from the
Borrower, the rate of interest applicable to the respective Borrowing, as
determined pursuant to Section 1.08. Nothing in this Section 1.04 shall be
deemed to relieve any Bank from its obligation to make Loans hereunder or to
prejudice any rights which the Borrower may have against any Bank as a result of
any failure by such Bank to make Loans hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of,
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and interest on, the Loans made by each Bank shall be evidenced in the Register
maintained by the Administrative Agent pursuant to Section 13.15 and shall, if
requested by such Bank, also be evidenced (i) if Revolving Loans, by a
promissory note duly executed and delivered by the Borrower to each Bank
substantially in the form of Exhibit B-1, with blanks appropriately completed in
conformity herewith (each a "Revolving Note" and, collectively, the "Revolving
Notes") and (ii) if Swingline Loans, by a promissory note duly executed and
delivered by the Borrower to the Swingline Bank substantially in the form of
Exhibit B-2, with blanks appropriately completed in conformity herewith (the
"Swingline Note").
(b) The Revolving Note issued to each Bank shall (i) be executed by
the Borrower, (ii) be payable to such Bank or its registered assigns and be
dated the Effective Date (or, if issued after the Effective Date, be dated the
date of the issuance thereof), (iii) be in a stated principal amount equal to
the Revolving Loan Commitment of such Bank (or, if issued after the termination
thereof, be in a stated principal amount equal to the outstanding Revolving
Loans of such Bank at such time) and be payable in the outstanding principal
amount of the Revolving Loans evidenced thereby, (iv) mature on the Final
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided
in Section 4.01, and mandatory repayment as provided in Section 4.02, and (vii)
be entitled to the benefits of this Agreement and the other Credit Documents.
(c) The Swingline Note issued to the Swingline Bank shall (i) be
executed by the Borrower, (ii) be payable to the Swingline Bank or its
registered assigns and be dated the Effective Date, (iii) be in a stated
principal amount equal to the Maximum Swingline Amount and be payable in the
outstanding principal amount of the Swingline Loans evidenced thereby from time
to time, (iv) mature on the Swingline Expiry Date, (v) bear interest as provided
in the appropriate clause of Section 1.08 in respect of the Base Rate Loans
evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01, and mandatory repayment as provided in Section 4.02, and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(d) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in such notation shall not affect the Borrower's obligations in
respect of such Loans.
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1.06 Conversions. The Borrower shall have the option to convert, on
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any Business Day, all or a portion equal to at least the Minimum Borrowing
Amount of the outstanding principal amount of Revolving Loans made pursuant to
one or more Borrowings of one or more Types of Revolving Loans into a Borrowing
of another Type of Revolving Loan, provided that, (i) except as otherwise
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provided in Section 1.10(b), Eurodollar Loans may be converted into Base Rate
Loans only on the last day of an Interest Period applicable to the Revolving
Loans being converted and no such partial conversion of Eurodollar Loans shall
reduce the outstanding principal amount of such Eurodollar Loans made pursuant
to a single Borrowing to less than the Minimum Borrowing Amount applicable
thereto, (ii) unless the Required Banks otherwise agree, Base Rate Loans may
only be converted into Eurodollar Loans if no Default or Event of Default is in
existence on the date of such conversion, and (iii) no conversion pursuant to
this Section 1.06 shall result in a greater number of Borrowings of Eurodollar
Loans than is permitted under Section 1.02. Each such conversion shall be
effected by the Borrower by giving the Administrative Agent at the Notice Office
prior to 11:00 A.M. (New York time) at least three Business Days' prior notice
(each a "Notice of Conversion") specifying the Revolving Loans to be so
converted, the Borrowing or Borrowings pursuant to which such Revolving Loans
were made and, if to be converted into Eurodollar Loans, the Interest Period to
be initially applicable thereto. The Administrative Agent shall give each Bank
prompt notice of any such proposed conversion affecting any of its Revolving
Loans. Swingline Loans may not be converted pursuant to this Section 1.06.
1.07 Pro Rata Borrowings. All Borrowings of Revolving Loans under
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this Agreement shall be incurred from the Banks pro rata on the basis of their
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Revolving Loan Commitments. It is understood that no Bank shall be responsible
for any default by any other Bank of its obligation to make Revolving Loans
hereunder and that each Bank shall be obligated to make the Revolving Loans
provided to be made by it hereunder, regardless of the failure of any other Bank
to make its Revolving Loans hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in respect
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of the unpaid principal amount of each Base Rate Loan from the date of Borrowing
thereof until the earlier of (i) the maturity thereof (whether by acceleration
or otherwise) and (ii) the conversion of such Base Rate Loan to a Eurodollar
Loan at a rate per annum which shall be equal to the sum of the Applicable Base
Rate Margin plus the Base Rate each as in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan from the date of Borrowing thereof
until the earlier of (i) the maturity thereof (whether by acceleration or
otherwise) and (ii) the conversion of such Eurodollar Loan to a Base Rate Loan
at a rate per annum which shall, during each Interest Period applicable thereto,
be equal to the sum of the Applicable Eurodollar Rate Margin plus the Eurodollar
Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum equal to the greater of
(x) the rate which is 2% in excess of the rate then borne by such Loans and (y)
the rate which is 2% in excess of the rate otherwise applicable
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to Base Rate Loans from time to time. Interest which accrues under this Section
1.08(c) shall be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i)
in respect of each Base Rate Loan (other than Swingline Loans), quarterly in
arrears on each Quarterly Payment Date, (ii) in respect of Swingline Loans,
monthly in arrears on the first day of each month, (iii) in respect of each
Eurodollar Loan, on the last day of each Interest Period applicable thereto and,
in the case of an Interest Period in excess of three months, on each date
occurring at three month intervals after the first day of such Interest Period,
and (iv) in respect of each Loan, on any repayment or prepayment (on the amount
repaid or prepaid), at maturity (whether by acceleration or otherwise) and,
after such maturity, on demand, provided that, in the case of Base Rate Loans,
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interest shall not be payable pursuant to preceding clause (iv) at the time of
any repayment or prepayment thereof (but shall otherwise be payable as provided
in preceding clause (i) or (ii), as the case may be) unless the respective
repayment or prepayment is made in conjunction with a permanent reduction of the
Total Revolving Loan Commitment.
(e) Upon each Interest Determination Date, the Administrative Agent
shall determine the Eurodollar Rate for each Interest Period applicable to the
respective Eurodollar Loans and shall promptly notify the Borrower and the Banks
thereof. Each such determination shall, absent manifest error, be final and
conclusive and binding on all parties hereto.
1.09 Interest Periods. At the time the Borrower gives any Notice of
----------------
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, any Eurodollar Loan (in the case of the initial Interest Period applicable
thereto) or on the third Business Day prior to the expiration of an Interest
Period applicable to such Eurodollar Loan (in the case of any subsequent
Interest Period), the Borrower shall have the right to elect, by giving the
Administrative Agent notice thereof, the interest period (each an "Interest
Period") applicable to such Eurodollar Loan, which Interest Period shall, at the
option of the Borrower, be a one, two, three or six-month period, provided that:
--------
(i) all Eurodollar Loans comprising a Borrowing shall at all times
have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including the
date of any conversion thereto from a Base Rate Loan) and each Interest
Period occurring thereafter in respect of such Eurodollar Loan shall
commence on the day on which the next preceding Interest Period applicable
thereto expires;
(iii) if any Interest Period for a Eurodollar Loan begins on a day
for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period, such Interest Period shall end on the
last Business Day of such calendar month;
(iv) if any Interest Period for a Eurodollar Loan would otherwise
expire on a day which is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day; provided, however, that if any
-------- -------
Interest Period for a Eurodollar Loan would
-7-
otherwise expire on a day which is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(v) unless the Required Banks otherwise agree, no Interest Period
may be selected at any time when a Default or an Event of Default is then
in existence; and
(vi) no Interest Period in respect of any Borrowing of Eurodollar
Loans shall be selected which extends beyond the Final Maturity Date.
If upon the expiration of any Interest Period applicable to a
Borrowing of Eurodollar Loans, the Borrower has failed to elect, or is not
permitted to elect, a new Interest Period to be applicable to such Eurodollar
Loans as provided above, the Borrower shall be deemed to have elected to convert
such Eurodollar Loans into Base Rate Loans effective as of the expiration date
of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that any
---------------------------------
Bank shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but, with respect to
clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the interbank
Eurodollar market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition of
Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loan because of (x) any change since the Effective Date in
any applicable law or governmental rule, regulation, order, guideline or
request (whether or not having the force of law) or in the interpretation
or administration thereof and including the introduction of any new law or
governmental rule, regulation, order, guideline or request, such as, for
example, but not limited to: (A) a change in the basis of taxation of
payment to any Bank of the principal of or interest on the Notes or any
other amounts payable hereunder (except for changes in the rate of tax on,
or determined by reference to, the net income or profits of such Bank
pursuant to the laws of the jurisdiction in which it is organized or in
which its principal office or applicable lending office is located or any
subdivision thereof or therein) or (B) a change in official reserve
requirements, but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of the Eurodollar
Rate and/or (y) other circumstances since the Effective Date affecting the
interbank Eurodollar market or the position of such Bank in such market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has been made (x) unlawful by any law or governmental rule, regulation
or order, (y) impossible by compliance by any Bank in good faith with any
governmental request (whether or not having force of law) or (z)
impracticable as a result of a contingency
-8-
occurring after the Effective Date which materially and adversely affects
the interbank Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent,
in the case of clause (i) above) shall promptly give notice (by telephone
promptly confirmed in writing) to the Borrower and, except in the case of
clause (i) above, to the Administrative Agent of such determination (which
notice the Administrative Agent shall promptly transmit to each of the
other Banks). Thereafter (x) in the case of clause (i) above, Eurodollar
Loans shall no longer be available until such time as the Administrative
Agent notifies the Borrower and the Banks that the circumstances giving
rise to such notice by the Administrative Agent no longer exist, and any
Notice of Borrowing or Notice of Conversion given by the Borrower with
respect to Eurodollar Loans which have not yet been incurred (including by
way of conversion) shall be deemed rescinded by the Borrower, (y) in the
case of clause (ii) above, the Borrower shall, subject to Section 1.14, pay
to such Bank, upon such Bank's written request therefor, such additional
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Bank in its sole discretion
shall determine) as shall be required to compensate such Bank for such
increased costs or reductions in amounts received or receivable hereunder
(a written notice as to the additional amounts owed to such Bank, showing
in reasonable detail the basis for the calculation thereof, submitted to
the Borrower by such Bank shall, absent manifest error, be final and
conclusive and binding on all the parties hereto) and (z) in the case of
clause (iii) above, the Borrower shall take one of the actions specified in
Section 1.10(b) as promptly as possible and, in any event, within the time
period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) the Borrower shall) either (x) if the affected Eurodollar
Loan is then being made initially or pursuant to a conversion, cancel such
Borrowing by giving the Administrative Agent telephonic notice (confirmed in
writing) on the same date that the Borrower was notified by the affected Bank or
the Administrative Agent pursuant to Section 1.10(a)(ii) or (iii) or (y) if the
affected Eurodollar Loan is then outstanding, upon at least three Business Days'
written notice to the Administrative Agent, require the affected Bank to convert
such Eurodollar Loan into a Base Rate Loan, provided that, if more than one Bank
--------
is so affected at any time, then all affected Banks must be treated the same
pursuant to this Section 1.10(b).
(c) If any Bank determines that after the Effective Date the
introduction of or any change in any applicable law or governmental rule,
regulation, order, guideline, directive or request (whether or not having the
force of law) concerning capital adequacy, or any change in interpretation or
administration thereof by the NAIC or any governmental authority, central bank
or comparable agency, in each case to the extent that any such introduction or
change occurs, is adopted or is effective after the Effective Date and will have
the effect of increasing the amount of capital required or expected to be
maintained by such Bank or any corporation controlling such Bank based on the
existence of such Bank's Revolving Loan Commitment hereunder or its obligations
hereunder, then the Borrower shall, subject to Section 1.14, pay to such Bank,
upon its written demand therefor, such additional amounts as shall be required
to compensate such
-9-
Bank or such other corporation for the increased cost to such Bank or such other
corporation or the reduction in the rate of return to such Bank or such other
corporation as a result of such increase of capital. In determining such
additional amounts, each Bank will act reasonably and in good faith and will use
averaging and attribution methods which are reasonable, provided that such
--------
Bank's determination of compensation owing under this Section 1.10(c) shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto. Each Bank, upon determining that any additional amounts will be payable
pursuant to this Section 1.10(c), will give prompt written notice thereof to the
Borrower, which notice shall show in reasonable detail the basis for calculation
of such additional amounts.
1.11 Compensation. The Borrower shall, subject to Section 1.14,
------------
compensate each Bank, upon its written request (which request shall set forth in
reasonable detail the basis for requesting such compensation), for all losses,
expenses and liabilities (including, without limitation, any loss, expense or
liability incurred by reason of the liquidation or reemployment of deposits or
other funds required by such Bank to fund its Eurodollar Loans but excluding
loss of anticipated profits) which such Bank may sustain: (i) if for any reason
(other than a default by such Bank or the Administrative Agent) a Borrowing of,
or conversion from or into, Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.10(a)); (ii)
if any repayment (including any repayment made pursuant to Section 4.01, Section
4.02 or as a result of an acceleration of the Loans pursuant to Section 10) or
conversion of any of its Eurodollar Loans occurs on a date which is not the last
day of an Interest Period with respect thereto; (iii) if any prepayment of any
of its Eurodollar Loans is not made on any date specified in a notice of
prepayment given by the Borrower; or (iv) as a consequence of (x) any other
default by the Borrower to repay its Eurodollar Loans when required by the terms
of this Agreement or any Note held by such Bank or (y) any election made
pursuant to Section 1.10(b).
1.12 Change of Lending Office. Each Bank agrees that upon the
------------------------
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), Section 1.10(c), Section 2.06 or Section 4.04 with respect to such Bank,
it will, if requested by the Borrower, use reasonable efforts (subject to
overall policy considerations of such Bank) to designate another lending office
for any Loans or Letters of Credit affected by such event, provided that such
--------
designation is made on such terms that such Bank and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of such Section. Nothing
in this Section 1.12 shall affect or postpone any of the obligations of the
Borrower or the right of any Bank provided in Sections 1.10, 2.06 and 4.04.
1.13 Replacement of Banks. (x) If any Bank becomes a Defaulting
--------------------
Bank or otherwise defaults in its obligations to make Loans, (y) upon the
occurrence of an event giving rise to the operation of Section 1.10(a)(ii) or
(iii), Section 1.10(c), Section 2.06 or Section 4.04 with respect to any Bank
which results in such Bank charging to the Borrower increased costs or (z) in
the case of a refusal by a Bank to consent to certain proposed changes, waivers,
discharges or terminations with respect to this Agreement which have been
approved by the Required Banks as (and to the extent) provided in Section
13.12(b), the Borrower shall have the right, if no Default or Event of Default
then exists (or, in the case of preceding clause (z), no Default or Event of
Default will exist immediately after giving effect to such replacement), to
replace such
-10-
Bank (the "Replaced Bank") with one or more other Eligible Transferees, none of
whom shall constitute a Defaulting Bank at the time of such replacement
(collectively, the "Replacement Bank") and each of whom shall be required to be
reasonably acceptable to the Administrative Agent, provided that (i) at the time
--------
of any replacement pursuant to this Section 1.13, the Replacement Bank shall
enter into one or more Assignment and Assumption Agreements pursuant to Section
13.04(b) (and with all fees payable pursuant to said Section 13.04(b) to be paid
by the Replacement Bank) pursuant to which the Replacement Bank shall acquire
the entire Revolving Loan Commitment and outstanding Revolving Loans of, and
participations in Letters of Credit by, the Replaced Bank and, in connection
therewith, shall pay to (x) the Replaced Bank in respect thereof an amount equal
to the sum of (I) an amount equal to the principal of, and all accrued interest
on, all outstanding Revolving Loans of the Replaced Bank, (II) an amount equal
to all Unpaid Drawings that have been funded by (and not reimbursed to) such
Replaced Bank, together with all then unpaid interest with respect thereto at
such time and (III) an amount equal to all accrued, but theretofore unpaid, Fees
owing to the Replaced Bank pursuant to Section 3.01, (y) the Issuing Bank an
amount equal to such Replaced Bank's RL Percentage of any Unpaid Drawing (which
at such time remains an Unpaid Drawing) to the extent such amount was not
theretofore funded by such Replaced Bank to the Issuing Bank and (z) the
Swingline Bank an amount equal to such Replaced Bank's RL Percentage of any
Mandatory Borrowings to the extent such amount was not theretofore funded by
such Replaced Bank to the Swingline Bank and (ii) all obligations of the
Borrower due and owing to the Replaced Bank at such time (other than those
specifically described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being, paid) shall be paid in full
to such Replaced Bank concurrently with such replacement. Upon the execution of
the respective Assignment and Assumption Agreement, the payment of amounts
referred to in clauses (i) and (ii) above and, if so requested by the
Replacement Bank, delivery to the Replacement Bank of the appropriate Revolving
Note executed by the Borrower, the Replacement Bank shall become a Bank
hereunder and the Replaced Bank shall cease to constitute a Bank hereunder,
except with respect to indemnification provisions under this Agreement as to the
events occurring prior to the date of replacement (including, without
limitation, Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01), which shall
survive as to such Replaced Bank.
1.14 Limitation on Additional Amounts, etc. Notwithstanding anything
--------------------------------------
to the contrary contained in Sections 1.10, 1.11, 2.06 or 4.04, unless a Bank
gives notice to the Borrower that the Borrower is obligated to pay an amount
under any such Section within 180 days after the later of (x) the date such Bank
incurs the respective increased costs, Taxes, loss, expense or liability,
reduction in amounts received or receivable or reduction in return on capital or
(y) the date such Bank has actual knowledge of its incurrence of the respective
increased costs, Taxes, loss, expense or liability, reductions in amounts
received or receivable or reduction in return on capital, then such Bank shall
only be entitled to be compensated for such amount by the Borrower pursuant to
said Section 1.10, 1.11, 2.06 or 4.04, as the case may be, to the extent the
costs, Taxes, loss, expense or liability, reduction in amounts received or
receivable or reduction in return on capital are incurred or suffered on or
after the date which occurs 180 days prior to such Bank giving notice to the
Borrower that the Borrower is obligated to pay the respective amounts pursuant
to said Section 1.10, 1.11, 2.06 or 4.04, as the case may be. This Section 1.14
shall
-11-
have no applicability to any Section of this Agreement or any other Credit
Document other than said Sections 1.10, 1.11, 2.06 and 4.04.
SECTION 2. Letters of Credit.
-----------------
2.01 Letters of Credit. (a) Subject to and upon the terms and
-----------------
conditions set forth herein, the Borrower may request that the Issuing Bank
issue, at any time and from time to time on and after the Effective Date and
prior to the 30th day prior to the Final Maturity Date, for the account of the
Borrower and for the benefit of any holder (or any trustee, agent or other
similar representative for any such holders) of L/C Supportable Obligations of
the Borrower or any of its Subsidiaries, an irrevocable standby letter of
credit, in a form customarily used by the Issuing Bank or in such other form as
has been approved by the Issuing Bank (each such letter of credit issued
pursuant to this Section 2.01, a "Letter of Credit"). All Letters of Credit
shall be denominated in Dollars or an Alternate Currency and shall be issued on
a sight basis only.
(b) Subject to and upon the terms and conditions set forth herein,
the Issuing Bank agrees that it will, at any time and from time to time on and
after the Effective Date and prior to the 30th day prior to the Final Maturity
Date, following its receipt of the respective Letter of Credit Request, issue
for the account of the Borrower, one or more Letters of Credit as are permitted
to remain outstanding hereunder without giving rise to a Default or an Event of
Default, provided that the Issuing Bank shall not be under any obligation to
--------
issue any Letter of Credit of the types described above if at the time of such
issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain the Issuing
Bank from issuing such Letter of Credit or any requirement of law
applicable to the Issuing Bank or any request or directive (whether or not
having the force of law) from any governmental authority with jurisdiction
over the Issuing Bank shall prohibit, or request that the Issuing Bank
refrain from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon the Issuing Bank with respect to
such Letter of Credit any restriction or reserve or capital requirement
(for which the Issuing Bank is not otherwise compensated) not in effect on
the Effective Date, or any unreimbursed loss, cost or expense which was not
applicable or in effect with respect to the Issuing Bank as of the date
hereof; or
(ii) the Issuing Bank shall have received notice from the Borrower,
any other Credit Party or the Required Banks prior to the issuance of such
Letter of Credit of the type described in the second sentence of Section
2.03(b).
2.02 Maximum Letter of Credit Outstandings; Final Maturities.
-------------------------------------------------------
Notwithstanding anything to the contrary contained in this Agreement, (i) no
Letter of Credit shall be issued the Stated Amount of which, when added to the
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid on
the date of, and prior to the issuance of, the respective Letter of Credit) at
such time would exceed either (x) $5,000,000 or (y) when added to the sum of (I)
the aggregate principal amount of all Revolving Loans then outstanding and (II)
the aggregate principal amount of all Swingline Loans then outstanding, an
amount equal to the Total Revolving Loan Commitment at such time and (ii) each
Letter of Credit shall by its terms terminate on or
-12-
before the earlier of (x) the date which occurs 12 months after the date of the
issuance thereof (although any such Letter of Credit may be extendible for
successive periods of up to 12 months, but not beyond the third Business Day
prior to the Final Maturity Date, on terms reasonably acceptable to the Issuing
Bank) and (y) three Business Days prior to the Final Maturity Date.
2.03 Letter of Credit Requests; Minimum Stated Amount. (a) Whenever
------------------------------------------------
the Borrower desires that a Letter of Credit be issued for its account, the
Borrower shall give the Administrative Agent and the Issuing Bank at least five
Business Days' (or such shorter period as is acceptable to the Issuing Bank)
written notice thereof (including by way of facsimile transmission, to
telecopier number (212) 250-5817 (or such alternative telecopier number as may
be provided by the Administrative Agent to the Borrower from time to time),
immediately confirmed in writing by submission of the original of such request
by mail to the Issuing Bank). Each notice shall be in the form of Exhibit C
appropriately completed (each a "Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be deemed to
be a representation and warranty by the Borrower that such Letter of Credit may
be issued in accordance with, and will not violate the requirements of, Section
2.02. Unless the Issuing Bank has received notice from the Borrower, any other
Credit Party or the Required Banks before it issues a Letter of Credit that one
or more of the conditions specified in Section 5 or 6 are not then satisfied, or
that the issuance of such Letter of Credit would violate Section 2.02, then the
Issuing Bank shall, subject to the terms and conditions of this Agreement, issue
the requested Letter of Credit for the account of the Borrower in accordance
with the Issuing Bank's usual and customary practices. Upon its issuance of or
amendment to any Letter of Credit, the Issuing Bank shall promptly notify the
Borrower, each Participant and the Administrative Agent of such issuance or
amendment and such notification shall be accompanied, if so requested by a
Participant, by a copy of the issued Letter of Credit or amendment.
Notwithstanding anything to the contrary contained in this Agreement, in the
event that a Bank Default exists, the Issuing Bank shall not be required to
issue any Letter of Credit unless the Issuing Bank has entered into an
arrangement satisfactory to it and the Borrower to eliminate the Issuing Bank's
risk with respect to the participation in Letters of Credit by the Defaulting
Bank or Banks, including by cash collateralizing such Defaulting Bank's or
Banks' RL Percentage of the Letter of Credit Outstandings.
(c) The initial Stated Amount of each Letter of Credit shall not be
less than $100,000 or such lesser amount as is acceptable to the Issuing Bank.
2.04 Letter of Credit Participations. (a) Immediately upon the
-------------------------------
issuance by the Issuing Bank of any Letter of Credit, the Issuing Bank shall be
deemed to have sold and transferred to each Bank, other than the Issuing Bank
(each such Bank, in its capacity under this Section 2.04, a "Participant"), and
each such Participant shall be deemed irrevocably and unconditionally to have
purchased and received from the Issuing Bank, without recourse or warranty, an
undivided interest and participation, to the extent of such Participant's RL
Percentage, in such Letter of Credit, each drawing or payment made thereunder
and the obligations of the Borrower under this Agreement with respect thereto,
and any security therefor or guaranty pertaining thereto. Upon any change in
the Revolving Loan Commitments or RL Percentages of the Banks
-13-
pursuant to Section 1.13 or 13.04, it is hereby agreed that, with respect to all
outstanding Letters of Credit and Unpaid Drawings, there shall be an automatic
adjustment to the participations pursuant to this Section 2.04 to reflect the
new RL Percentages of the assignor and assignee Bank, as the case may be.
(b) In determining whether to pay under any Letter of Credit issued
by it, the Issuing Bank shall not have an obligation relative to the other Banks
other than to confirm that any documents required to be delivered under such
Letter of Credit appear to have been delivered and that they appear to
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by the Issuing Bank under or in
connection with any Letter of Credit issued by it shall not create for the
Issuing Bank any resulting liability to the Borrower, any other Credit Party,
any Bank or any other Person unless such action was taken or omitted by reason
of the gross negligence or willful misconduct of the Issuing Bank (as finally
determined by a court of competent jurisdiction).
(c) In the event that the Issuing Bank makes any payment under any
Letter of Credit issued by it and the Borrower shall not have reimbursed such
amount in full to the Issuing Bank pursuant to Section 2.05(a), the Issuing Bank
shall promptly notify the Administrative Agent, which shall promptly notify each
Participant of such failure, and, except as provided in the proviso of the
immediately succeeding sentence, each Participant shall promptly and
unconditionally pay to the Issuing Bank the amount of such Participant's RL
Percentage of such unreimbursed payment in Dollars (or, in the case of any
unreimbursed payments made in respect of a Letter of Credit issued in an
Alternate Currency, the Dollar Equivalent of such unreimbursed payments) and in
same day funds. If the Administrative Agent so notifies, prior to 11:00 A.M.
(New York time) on any Business Day, any Participant required to fund a payment
under a Letter of Credit, such Participant shall make available to the Issuing
Bank in Dollars (or in the case of any unreimbursed payments made in respect of
a Letter of Credit issued in an Alternate Currency, the Dollar Equivalent of
such unreimbursed payments) such Participant's RL Percentage of the amount of
such payment on such Business Day in same day funds; provided, however, that no
-------- -------
Participant shall be obligated to pay to the Issuing Bank its RL Percentage of
such unreimbursed amount for any wrongful payment made by the Issuing Bank under
a Letter of Credit issued by it as a result of acts or omissions constituting
willful misconduct or gross negligence on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction). If and to the extent
such Participant shall not have so made its RL Percentage of the amount of such
payment available to the Issuing Bank, such Participant agrees to pay to the
Issuing Bank, forthwith on demand such amount, together with interest thereon,
for each day from such date until the date such amount is paid to the Issuing
Bank at the overnight Federal Funds Rate for the first three days and at the
interest rate applicable to Base Rate Loans for each day thereafter. The failure
of any Participant to make available to the Issuing Bank its RL Percentage of
any payment under any Letter of Credit shall not relieve any other Participant
of its obligation hereunder to make available to the Issuing Bank its RL
Percentage of any Letter of Credit on the date required, as specified above, but
no Participant shall be responsible for the failure of any other Participant to
make available to the Issuing Bank such other Participant's RL Percentage of any
such payment.
(d) Whenever the Issuing Bank receives a payment of a reimbursement
obligation as to which it has received any payments from the Participants
pursuant to clause (c) above, the
-14-
Issuing Bank shall pay to each Participant which has paid its RL Percentage
thereof, in Dollars (or, in the case of any payment received in respect of a
Letter of Credit issued in an Alternate Currency, of the Dollar Equivalent
thereof) and in same day funds, an amount equal to such Participant's share
(based upon the proportionate aggregate amount originally funded by such
Participant to the aggregate amount funded by all Participants) of the principal
amount of such reimbursement obligation and interest thereon accruing after the
purchase of the respective participations.
(e) Upon the request of any Participant, the Issuing Bank shall
furnish to such Participant copies of any Letter of Credit issued by it and such
other documentation as may reasonably be requested by such Participant.
(f) The obligations of the Participants to make payments to the
Issuing Bank with respect to Letters of Credit issued by it shall be irrevocable
and not subject to any qualification or exception whatsoever (except as
otherwise provided in the proviso to the second sentence of Section 2.04(c)) and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower or any of its Subsidiaries may have at any time against
a beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, the Issuing Bank, any Participant, or any other
Person, whether in connection with this Agreement, any Letter of Credit,
the transactions contemplated herein or any unrelated transactions
(including any underlying transaction between the Borrower or any
Subsidiary of the Borrower and the beneficiary named in any such Letter of
Credit);
(iii) any draft, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
--------------------------------------------
agrees to reimburse the Issuing Bank, by making payment to the Administrative
Agent in Dollars (or, in the case of payments or disbursements made by the
Issuing Bank in respect of a Letter of Credit issued in an Alternate Currency,
the Dollar Equivalent thereof) and in immediately available funds at the Payment
Office, for any payment or disbursement made by the Issuing Bank under any
Letter of Credit issued by it (each such amount (or the Dollar Equivalent
thereof, as the case may be), so paid until reimbursed, an "Unpaid Drawing"),
not later than one Business Day following
-15-
receipt by the Borrower of notice of such payment or disbursement (provided that
--------
no such notice shall be required to be given if a Default or an Event of Default
under Section 10.05 shall have occurred and be continuing, in which case the
Unpaid Drawing shall be due and payable immediately without presentment, demand,
protest or notice of any kind (all of which are hereby waived by the Borrower)),
with interest on the amount so paid or disbursed by the Issuing Bank, to the
extent not reimbursed prior to 12:00 Noon (New York time) on the date of such
payment or disbursement, from and including the date paid or disbursed to but
excluding the date the Issuing Bank was reimbursed by the Borrower therefor at a
rate per annum which shall be the sum of the Applicable Base Rate Margin plus
the Base Rate in effect from time to time; provided, however, to the extent such
-------- -------
amounts are not reimbursed prior to 12:00 Noon (New York time) on the third
Business Day following the receipt by the Borrower of notice of such payment or
disbursement or following the occurrence of a Default or an Event of Default
under Section 10.05, interest shall thereafter accrue on the amounts so paid or
disbursed by such Issuing Bank (and until reimbursed by the Borrower) at a rate
per annum which shall be the sum of the Applicable Base Rate Margin plus the
Base Rate each as in effect from time to time plus 2%, in each such case, with
interest to be payable on demand. The Issuing Bank shall give the Borrower
prompt written notice of each Drawing under any Letter of Credit issued by it,
provided that the failure to give any such notice shall in no way affect, impair
- --------
or diminish the Borrower's obligations hereunder.
(b) The obligations of the Borrower under this Section 2.05 to
reimburse the Issuing Bank with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower may have or have had against any Bank (including in its
capacity as issuer of the Letter of Credit or as Participant), including,
without limitation, any defense based upon the failure of any drawing or payment
under a Letter of Credit (each a "Drawing") to conform to the terms of the
Letter of Credit or any nonapplication or misapplication by the beneficiary of
the proceeds of such Drawing; provided, however, that the Borrower shall not be
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obligated to reimburse the Issuing Bank for any wrongful payment made by the
Issuing Bank under a Letter of Credit issued by it as a result of acts or
omissions constituting willful misconduct or gross negligence on the part of the
Issuing Bank (as finally determined by a court of competent jurisdiction).
2.06 Increased Costs. If at any time after the Effective Date, the
---------------
introduction of or any change in any applicable law, rule, regulation, order,
guideline or request or in the interpretation or administration thereof by the
NAIC or any governmental authority charged with the interpretation or
administration thereof, or compliance by any Issuing Bank or any Participant
with any request or directive by the NAIC or by any such authority (whether or
not having the force of law), shall either (i) impose, modify or make applicable
any reserve, deposit, capital adequacy or similar requirement against letters of
credit issued by the Issuing Bank or participated in by any Participant, or (ii)
impose on the Issuing Bank or any Participant any other conditions relating,
directly or indirectly, to this Agreement; and the result of any of the
foregoing is to increase the cost to the Issuing Bank or any Participant of
issuing, maintaining or participating in any Letter of Credit, or reduce the
amount of any sum received or receivable by the Issuing Bank or any Participant
hereunder or reduce the rate of return on its capital with respect to Letters of
Credit (except for changes in the rate of tax on, or determined by reference to,
the net income or
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profits of the Issuing Bank or such Participant pursuant to the laws of the
jurisdiction in which it is organized or in which its principal office or
applicable lending office is located or any subdivision thereof or therein),
then, upon the delivery of the certificate referred to below to the Borrower by
the Issuing Bank or such Participant (a copy of which certificate shall be sent
by the Issuing Bank or such Participant to the Administrative Agent), the
Borrower shall, subject to Section 1.14, pay to the Issuing Bank or such
Participant such additional amount or amounts as will compensate the Issuing
Bank or such Participant for such increased cost or reduction in the amount
receivable or reduction on the rate of return on its capital. The Issuing Bank
or Participant, upon determining that any additional amounts will be payable to
it pursuant to this Section 2.06, will give prompt written notice thereof to the
Borrower, which notice shall include a certificate submitted to the Borrower by
the Issuing Bank or such Participant (a copy of which certificate shall be sent
by such Issuing Bank or such Participant to the Administrative Agent), setting
forth in reasonable detail the basis for the calculation of such additional
amount or amounts necessary to compensate such Issuing Bank or such Participant.
The certificate required to be delivered pursuant to this Section 2.06 shall,
absent manifest error, be final and conclusive and binding on the Borrower.
SECTION 3. Commitment Commission; Fees; Reductions of Commitment.
-----------------------------------------------------
3.01 Fees. (a) The Borrower agrees to pay to the Administrative
----
Agent for distribution to each Non-Defaulting Bank, a commitment commission (the
"Commitment Commission") for the period from and including the Effective Date to
and including the Final Maturity Date (or such earlier date on which the Total
Revolving Loan Commitment shall have been terminated), computed at a rate per
annum for each day equal to the Applicable Commitment Commission Percentage on
the daily average Unutilized Revolving Loan Commitment of such Non-Defaulting
Bank. Accrued Commitment Commission shall be due and payable quarterly in
arrears on each Quarterly Payment Date and on the Final Maturity Date (or such
earlier date on which the Total Revolving Loan Commitment shall have been
terminated).
(b) The Borrower agrees to pay to the Administrative Agent for
distribution to each Bank (based on each such Bank's respective RL Percentage) a
fee in respect of each Letter of Credit issued hereunder (the "Letter of Credit
Fee") for the period from and including the date of issuance of such Letter of
Credit to and including the date of termination or expiration of such Letter of
Credit, computed at a rate per annum equal to the Applicable Eurodollar Rate
Margin then in effect on the daily Stated Amount of such Letter of Credit.
Accrued Letter of Credit Fees shall be due and payable quarterly in arrears on
each Quarterly Payment Date and on the first day on or after the termination of
the Total Revolving Loan Commitment upon which no Letters of Credit remain
outstanding.
(c) The Borrower agrees to pay to the Issuing Bank, for its own
account, a facing fee in respect of each Letter of Credit issued by the Issuing
Bank hereunder (the "Facing Fee") for the period from and including the date of
issuance of such Letter of Credit to and including the date of the termination
of such Letter of Credit, computed at a rate per annum equal to 1/8 of 1% on the
daily Stated Amount of such Letter of Credit, provided that in any event the
minimum amount of the Facing Fee payable in any 12 month period for each Letter
of Credit shall be $500; it being agreed that, on the date of issuance of any
Letter of Credit and on each anniversary
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thereof prior to the termination of such Letter of Credit, if $500 will exceed
the amount of Facing Fees that will accrue with respect to such Letter of Credit
for the immediately succeeding 12 month period, the full $500 shall be payable
on the date of issuance of such Letter of Credit and on each such anniversary
thereof so long as such Letter of Credit is outstanding. Except as otherwise
provided in the proviso to the immediately preceding sentence, accrued Facing
Fees shall be due and payable quarterly in arrears on each Quarterly Payment
Date and upon the first day on or after the termination of the Total Revolving
Loan Commitment upon which no Letters of Credit remain outstanding.
(d) The Borrower agrees to pay to the Issuing Bank, for its own
account, upon each payment under, issuance of, or amendment to, any Letter of
Credit, such amount as shall at the time of such event be the administrative
charge and the reasonable expenses which the Issuing Bank is generally imposing
in connection with such occurrence with respect to letters of credit.
(e) The Borrower agrees to pay to the Administrative Agent, for its
own account, such other fees as have been agreed to in writing by the Borrower
and the Administrative Agent.
3.02 Voluntary Termination of Unutilized Commitments. (a) Upon at
-----------------------------------------------
least one Business Day's prior written notice to the Administrative Agent at the
Notice Office (which notice the Administrative Agent shall promptly transmit to
each of the Banks), the Borrower shall have the right, at any time or from time
to time, without premium or penalty, to terminate the Total Unutilized Revolving
Loan Commitment, in whole or in part, pursuant to this Section 3.02(a), in an
integral multiple of $1,000,000, in the case of partial reductions to the Total
Unutilized Revolving Loan Commitment, provided that each such reduction shall
--------
apply proportionately to permanently reduce the Revolving Loan Commitment of
each Bank.
(b) In the event of a refusal by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as (and to the extent)
provided in Section 13.12(b), the Borrower may, subject to its compliance with
the requirements of Section 13.12(b), upon five Business Days' prior written
notice to the Administrative Agent at the Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Banks) terminate the
Revolving Loan Commitment of such Bank, so long as all Revolving Loans, together
with accrued and unpaid interest, Fees and all other amounts, owing to such Bank
are repaid concurrently with the effectiveness of such termination pursuant to
Section 4.01(b) (at which time Schedule I shall be deemed modified to reflect
such changed amounts), and at such time, such Bank shall no longer constitute a
"Bank" for purposes of this Agreement, except with respect to indemnifications
under this Agreement as to the events occurring prior to the date of termination
(including, without limitation, Sections 1.10, 1.11, 2.06, 4.04, 12.06 and
13.01), which shall survive as to such repaid Bank.
3.03 Mandatory Reduction of Commitments. (a) The Total Revolving
----------------------------------
Loan Commitment (and the Revolving Loan Commitment of each Bank) shall terminate
in their entirety on January 31, 1999 unless the Effective Date has occurred on
or before such date.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on each date on or after the Effective Date on
which the Borrower or any of its
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Subsidiaries receives any cash proceeds from any Asset Sale, the Total Revolving
Loan Commitment shall be permanently reduced on such date by an amount equal to
100% of the Net Sale Proceeds from such Asset Sale, provided that such Net Sale
--------
Proceeds shall not give rise to a reduction to the Total Revolving Loan
Commitment pursuant to this Section 3.03(b) on such date to the extent that no
Default or Event of Default then exists on such date and such Net Sale Proceeds
shall be used to purchase assets used or to be used in the businesses permitted
pursuant to Section 9.15 (including, without limitation (but only to the extent
permitted by Section 9.02), the purchase of the assets or 100% of the capital
stock of a Person engaged in such businesses) within 180 days following the date
of receipt of such Net Sale Proceeds from such Asset Sale, and provided further,
-------- -------
that if all or any portion of such Net Sale Proceeds are not so used within such
180 day period (or such earlier date, if any, as the Borrower or such
Subsidiary, as the case may be, determines not to reinvest such Net Sale
Proceeds), the Total Revolving Loan Commitment shall be permanently reduced on
the last day of such period (or such earlier date, as the case may be) by an
amount equal to such remaining portion.
(c) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, (i) on each date on or after the Effective Date
on which the Borrower or any of its Subsidiaries receives any cash proceeds from
any incurrence of Indebtedness for borrowed money (other than Indebtedness
permitted to be incurred pursuant to Section 9.04 as such Section is in effect
on the Effective Date) by the Borrower or any of its Subsidiaries, the Total
Revolving Loan Commitment shall be permanently reduced on such date by an amount
equal to 100% of the Net Debt Proceeds of the respective incurrence of
Indebtedness and (ii) on each date on or after the Effective Date on which the
Borrower receives any cash proceeds from any incurrence of Permitted Designated
Indebtedness, the Total Revolving Loan Commitment shall be permanently reduced
on such date by an amount equal to 50% of the Net Debt Proceeds of the
respective incurrence of Permitted Designated Indebtedness, provided that the
provisions of this clause (ii) shall not apply to the first $200,000,000 of
Permitted Designated Indebtedness issued on or after the Effective Date.
(d) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, within 10 days following each date on or after
the Effective Date on which the Borrower or any of its Subsidiaries receives any
cash proceeds from any Recovery Event (other than cash proceeds from Recovery
Events in an amount less than $500,000 per Recovery Event), the Total Revolving
Loan Commitment shall be permanently reduced on such date by an amount equal to
100% of the Net Insurance Proceeds of such Recovery Event, provided that so long
--------
as no Default or Event of Default then exists, such proceeds shall not give rise
to a reduction to the Total Revolving Loan Commitment pursuant to this Section
3.03(d) on such date to the extent that the Borrower has delivered a certificate
to the Administrative Agent on or prior to such date stating that such proceeds
shall be used to replace or restore any properties or assets in respect of which
such proceeds were paid within 180 days following the date of receipt of such
proceeds (which certificate shall set forth the estimates of the proceeds to be
so expended), and provided further, that if all or any portion of such proceeds
-------- -------
are not so used within such 180 day period (or such earlier date, if any, as the
Borrower or such Subsidiary, as the case may be, determines not to reinvest such
Net Insurance Proceeds), the Total Revolving Loan Commitment shall be
permanently reduced on the last day of such period (or such earlier date, as the
case may be) by an amount equal to such remaining portion.
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(e) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Revolving Loan Commitment (and the
Revolving Loan Commitment of each Bank) shall terminate in its entirety on the
earlier of (i) the date on which a Change of Control occurs and (ii) the Final
Maturity Date.
(f) Each reduction to the Total Revolving Loan Commitment pursuant
to this Section 3.03 shall apply proportionately to permanently reduce the
Revolving Loan Commitment of each Bank.
SECTION 4. Prepayments; Payments; Taxes.
----------------------------
4.01 Voluntary Prepayments. (a) The Borrower shall have the right
---------------------
to prepay the Loans, without premium or penalty, in whole or in part at any time
and from time to time on the following terms and conditions: (i) the Borrower
shall give the Administrative Agent prior to 12:00 Noon (New York time) at the
Notice Office and, in the case of Swingline Loans, the Swingline Bank, at least
three Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) of its intent to prepay Eurodollar Loans or same day
notice in the case of a prepayment of Base Rate Loans, the amount of such
prepayment, whether Revolving Loans or Swingline Loans are to be prepaid, and
the Types of Loans to be prepaid and, in the case of Eurodollar Loans, the
specific Borrowing or Borrowings pursuant to which made, which notice the
Administrative Agent shall, except in the case of Swingline Loans, promptly
transmit to each of the Banks; (ii) each partial prepayment of Revolving Loans
pursuant to this Section 4.01(a) shall be in an aggregate principal amount of at
least $500,000 and each partial prepayment of Swingline Loans pursuant to this
Section 4.01(a) shall be in an aggregate principal amount of at least $50,000,
provided that if any partial prepayment of Eurodollar Loans made pursuant to any
- --------
Borrowing shall reduce the outstanding principal amount of Eurodollar Loans made
pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount
applicable thereto, then such Borrowing may not be continued as a Borrowing of
Eurodollar Loans and any election of an Interest Period with respect thereto
given by the Borrower shall have no force or effect; and (iii) each prepayment
pursuant to this Section 4.01(a) in respect of any Revolving Loans made pursuant
to a Borrowing shall be applied pro rata among such Revolving Loans, provided
--- ---- --------
that at the Borrower's election in connection with any prepayment of Revolving
Loans pursuant to this Section 4.01(a), such prepayment shall not, so long as no
Default or Event of Default then exists, be applied to any Revolving Loan of a
Defaulting Bank.
(b) In the event of a refusal by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as (and to the extent)
provided in Section 13.12(b), the Borrower may, upon five Business Days' prior
written notice to the Administrative Agent at the Notice Office (which notice
the Administrative Agent shall promptly transmit to each of the Banks), repay
all Revolving Loans of such Bank, together with accrued and unpaid interest,
Fees and other amounts owing to such Bank in accordance with, and subject to the
requirements of, said Section 13.12(b) so long as (A) the Revolving Loan
Commitment of such Bank is terminated concurrently with such repayment pursuant
to Section 3.02(b) (at which time Schedule I shall be deemed modified to reflect
the changed Revolving Loan Commitments) and (B) the consents, if any, required
under Section 13.12(b) in connection with the repayment pursuant to this clause
(b) have been obtained.
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4.02 Mandatory Repayments. (a) On any day on which the sum of (I)
--------------------
the aggregate outstanding principal amount of all Revolving Loans (after giving
effect to all other repayments thereof on such date), (II) the aggregate
outstanding principal amount of all Swingline Loans (after giving effect to all
other repayments thereof on such date) and (III) the aggregate amount of all
Letter of Credit Outstandings exceeds the Total Revolving Loan Commitment as
then in effect, the Borrower shall prepay on such day the principal of Swingline
Loans and, after all Swingline Loans have been repaid in full or if no Swingline
Loans are outstanding, Revolving Loans in an amount equal to such excess. If,
after giving effect to the prepayment of all outstanding Swingline Loans and
Revolving Loans, the aggregate amount of the Letter of Credit Outstandings
exceeds the Total Revolving Loan Commitment as then in effect, the Borrower
shall pay to the Administrative Agent at the Payment Office on such day an
amount of cash and/or Cash Equivalents equal to the amount of such excess (up to
a maximum amount equal to the Letter of Credit Outstandings at such time), such
cash and/or Cash Equivalents to be held as security for all obligations of the
Borrower to the Issuing Bank and the Banks hereunder in a cash collateral
account to be established by the Administrative Agent.
(b) With respect to each repayment of Revolving Loans required by
this Section 4.02, the Borrower may designate the Types of Revolving Loans which
are to be repaid and, in the case of Eurodollar Loans, the specific Borrowing or
Borrowings pursuant to which made, provided that: (i) repayments of Eurodollar
--------
Loans pursuant to this Section 4.02 may only be made on the last day of an
Interest Period applicable thereto unless all Eurodollar Loans with Interest
Periods ending on such date of required repayment and all Base Rate Loans have
been paid in full; (ii) if any repayment of Eurodollar Loans made pursuant to a
single Borrowing shall reduce the outstanding Eurodollar Loans made pursuant to
such Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto, such Borrowing shall be converted at the end of the then current
Interest Period into a Borrowing of Base Rate Loans; and (iii) each repayment of
any Revolving Loans made pursuant to a Borrowing shall be applied pro rata among
--- ----
such Revolving Loans. In the absence of a designation by the Borrower as
described in the preceding sentence, the Administrative Agent shall, subject to
the above, make such designation in its sole discretion.
(c) Notwithstanding anything to the contrary contained in this
Agreement or in any other Credit Document, (i) all then outstanding Revolving
Loans shall be repaid in full on the Final Maturity Date, (ii) all then
outstanding Swingline Loans shall be repaid in full on the Swingline Expiry Date
and (iii) all then outstanding Loans shall be repaid in full on the date on
which a Change of Control occurs.
4.03 Method and Place of Payment. Except as otherwise specifically
---------------------------
provided herein, all payments under this Agreement or under any Note shall be
made to the Administrative Agent for the account of the Bank or Banks entitled
thereto not later than 12:00 Noon (New York time) on the date when due and shall
be made in Dollars in immediately available funds at the Payment Office.
Whenever any payment to be made hereunder or under any Note shall be stated to
be due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day and, with respect to payments of
principal, interest shall be payable at the applicable rate during such
extension.
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4.04 Net Payments. (a) All payments made by the Borrower hereunder
------------
or under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income or net profits of a Bank pursuant to the laws
of the jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Bank is located or any
subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect to such non-excluded taxes, levies, imposts, duties,
fees, assessments or other charges (all such non-excluded taxes, levies,
imposts, duties, fees, assessments or other charges being referred to
collectively, as "Taxes"). If any Taxes are so levied or imposed, the Borrower
agrees to pay the full amount of such Taxes, and such additional amounts as may
be necessary so that every payment of all amounts due under this Agreement or
under any Note, after withholding or deduction for or on account of any Taxes,
will not be less than the amount provided for herein or in such Note. If any
amounts are payable in respect of Taxes pursuant to the preceding sentence, the
Borrower agrees to reimburse each Bank, upon the written request of such Bank,
for taxes imposed on or measured by the net income or net profits of such Bank
pursuant to the laws of the jurisdiction in which such Bank is organized or in
which the principal office or applicable lending office of such Bank is located
or under the laws of any political subdivision or taxing authority of any such
jurisdiction in which such Bank is organized or in which the principal office or
applicable lending office of such Bank is located and for any withholding of
taxes as such Bank shall determine are payable by, or withheld from, such Bank,
in respect of such amounts so paid to or on behalf of such Bank pursuant to the
preceding sentence and in respect of any amounts paid to or on behalf of such
Bank pursuant to this sentence. The Borrower will furnish to the Administrative
Agent within 45 days after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts evidencing such payment by the
Borrower. The Borrower agrees to indemnify and hold harmless each Bank, and
reimburse such Bank upon its written request, for the amount of any Taxes so
levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes
agrees to deliver to the Borrower and the Administrative Agent on or prior to
the Effective Date, or in the case of a Bank that is an assignee or transferee
of an interest under this Agreement pursuant to Section 1.13 or 13.04 (unless
the respective Bank was already a Bank hereunder immediately prior to such
assignment or transfer), on the date of such assignment or transfer to such
Bank, (i) two accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001 (or successor forms) certifying to such Bank's
entitlement as of such date to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note, or (ii) if the Bank is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form 1001 or 4224 pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit D (any such certificate, a "Section
4.04(b)(ii) Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8 (or successor form) certifying to
such Bank's entitlement as
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of such date to a complete exemption from United States withholding tax with
respect to payments of interest to be made under this Agreement and under any
Note. In addition, each Bank agrees that from time to time after the Effective
Date, when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, such Bank will
deliver to the Borrower and the Administrative Agent two new accurate and
complete original signed copies of Internal Revenue Service Form 4224 or 1001
(or successor forms), or Form W-8 (or successor form) and a Section 4.04(b)(ii)
Certificate, as the case may be, and such other forms as may be required in
order to confirm or establish the entitlement of such Bank to a continued
exemption from or reduction in United States withholding tax with respect to
payments under this Agreement and any Note, or such Bank shall immediately
notify the Borrower and the Administrative Agent of its inability to deliver any
such Form or Certificate, in which case such Bank shall not be required to
deliver any such Form or Certificate pursuant to this Section 4.04(b).
Notwithstanding anything to the contrary contained in Section 4.04(a), but
subject to Section 13.04(b) and the immediately succeeding sentence, (x) the
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
Fees or other amounts payable hereunder for the account of any Bank which is not
a United States person (as such term is defined in Section 7701(a)(30) of the
Code) for U.S. Federal income tax purposes to the extent that such Bank has not
provided to the Borrower U.S. Internal Revenue Service Forms that establish a
complete exemption from such deduction or withholding and (y) the Borrower shall
not be obligated pursuant to Section 4.04(a) hereof to gross-up payments to be
made to a Bank in respect of income or similar taxes imposed by the United
States if (I) such Bank has not provided to the Borrower the Internal Revenue
Service Forms required to be provided to the Borrower pursuant to this Section
4.04(b) or (II) in the case of a payment, other than interest, to a Bank
described in clause (ii) above, to the extent that such Forms do not establish a
complete exemption from withholding of such taxes. Notwithstanding anything to
the contrary contained in the preceding sentence or elsewhere in this Section
4.04 and except as set forth in Section 13.04(b), the Borrower agrees to pay any
additional amounts and to indemnify each Bank in the manner set forth in Section
4.04(a) (without regard to the identity of the jurisdiction requiring the
deduction or withholding) in respect of any Taxes deducted or withheld by it as
described in the immediately preceding sentence as a result of any changes that
are effective after the Effective Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of such Taxes.
SECTION 5. Conditions Precedent to the Effective Date. The
------------------------------------------
occurrence of the Effective Date pursuant to Section 13.10 is subject to the
satisfaction of the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the Effective
-----------------------------
Date, (i) this Agreement shall have been executed and delivered as provided in
Section 13.10 and (ii) there shall have been delivered to the Administrative
Agent for the account of each of the Banks that has requested same, the
appropriate Revolving Note executed by the Borrower and to the Swingline Bank to
the extent requested by it, the Swingline Note executed by the Borrower, in each
case, in the amount, maturity and as otherwise provided herein.
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5.02 Officer's Certificate. On the Effective Date, the
---------------------
Administrative Agent shall have received a certificate, dated the Effective Date
and signed on behalf of the Borrower by the Chairman of the Board, the Chief
Executive Officer, the President or any Vice President of the Borrower,
certifying on behalf of the Borrower that all of the conditions in Sections
5.06, 5.07, 5.12 and 6.02 have been satisfied on such date.
5.03 Opinions of Counsel. On the Effective Date, the Administrative
-------------------
Agent shall have received from (i) Piper & Marbury L.L.P., special counsel to
the Credit Parties, an opinion addressed to the Administrative Agent, the
Collateral Agent and each of the Banks and dated the Effective Date covering the
matters set forth in Exhibit E and such other matters incident to the
transactions contemplated herein as the Administrative Agent may reasonably
request and (ii) the General Counsel of the Borrower, an opinion addressed to
the Administrative Agent, the Collateral Agent and each of the Banks and dated
the Effective Date in form and substance reasonably acceptable to the
Administrative Agent with respect to the transactions contemplated by this
Agreement.
5.04 Corporate Documents; Proceedings; etc. (a) On the Effective
-------------------------------------
Date, the Administrative Agent shall have received a certificate from each
Credit Party, dated the Effective Date, signed on behalf of such Credit Party by
the Chairman of the Board, the Chief Executive Officer, the President or any
Vice President of such Credit Party, and attested to by the Secretary or any
Assistant Secretary of such Credit Party, in the form of Exhibit F with
appropriate insertions, together with copies of the certificate or articles of
incorporation (or equivalent organizational document) and by-laws of such Credit
Party and the resolutions of such Credit Party referred to in such certificate,
and the foregoing shall be in form and substance reasonably acceptable to the
Administrative Agent.
(b) All corporate, partnership, limited liability company and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Credit Documents shall
be reasonably satisfactory in form and substance to the Administrative Agent and
the Required Banks, and the Administrative Agent shall have received all
information and copies of all documents and papers, including records of
corporate proceedings, governmental approvals, good standing certificates and
bring-down telegrams or facsimiles, if any, which the Administrative Agent
reasonably may have requested in connection therewith, such documents and papers
where appropriate to be certified by proper corporate or governmental
authorities.
5.05 Fees, etc. On the Effective Date, the Borrower shall have paid
----------
to the Administrative Agent and each Bank all costs, fees and expenses
(including, without limitation, reasonable legal fees and expenses) payable to
the Administrative Agent and such Bank to the extent then due.
5.06 Adverse Change, etc. (a) Since December 31, 1997, nothing
--------------------
shall have occurred (and neither the Administrative Agent nor the Banks shall
have become aware of any facts or conditions not previously known) which the
Administrative Agent or the Required Banks shall reasonably determine (x) has
had, or could reasonably be expected to have, a material adverse effect on the
rights or remedies of the Banks or the Administrative Agent, or on the
-24-
ability of any Credit Party to perform its obligations to the Banks or the
Administrative Agent hereunder or under any other Credit Document or (y) has
had, or could reasonably be expected to have, a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
(b) On or prior to the Effective Date, all necessary governmental
(domestic and foreign) and third party approvals and/or consents in connection
with the transactions contemplated by this Agreement and the other Credit
Documents and otherwise referred to herein or therein shall have been obtained
and remain in effect. Additionally, there shall not exist any judgment, order,
injunction or other restraint issued or filed or a hearing seeking injunctive
relief or other restraint pending or notified prohibiting or imposing materially
adverse conditions upon the transactions contemplated by this Agreement and the
other Credit Documents or otherwise referred to herein or therein.
5.07 Litigation. Except as disclosed on Schedule VII (but only so
----------
long as no adverse determination is made with respect thereto which could
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as whole), on the
Effective Date, there shall be no actions, suits or proceedings pending or
threatened (i) with respect to this Agreement or any other Credit Document or
(ii) which the Administrative Agent or the Required Banks shall reasonably
determine could reasonably be expected to have a material adverse effect on (a)
the business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole,
(b) the rights or remedies of the Banks or the Administrative Agent hereunder or
under any other Credit Document or (c) the ability of any Credit Party to
perform its respective obligations to the Banks or the Administrative Agent
hereunder or under any other Credit Document.
5.08 Pledge Agreement. On the Effective Date, each Credit Party
----------------
shall have duly authorized, executed and delivered a Pledge Agreement in the
form of Exhibit G, with such changes thereto, or additional pledge agreements
(or amendments thereto) entered into in connection therewith, as foreign counsel
may suggest in connection with the Pledge Agreement Collateral issued by any
Foreign Subsidiary (such Pledge Agreement, together with such additional pledge
agreements, as modified, amended or supplemented from time to time in accordance
with the terms thereof an hereof, collectively, the "Pledge Agreement") and
shall have delivered to the Collateral Agent, as Pledgee thereunder, all of the
Certificated Securities, if any, referred to therein and then owned by such
Credit Party, (x) together (i) executed and undated stock powers, (ii) proper
Financing Statements (Form UCC-1 or the equivalent) fully executed for filing
under the UCC or other appropriate filing offices of each jurisdiction as may be
necessary or, in the reasonable opinion of the Collateral Agent, desirable to
perfect the security interests purported to be created by the Pledge Agreement,
and (iii) certified copies of Requests for Information or Copies (Form UCC-11),
or equivalent reports, listing all effective financing statements that name any
Credit Party as debtor (none of which shall cover the assets or property of the
Borrower or any of its Subsidiaries except to the extent evidencing Permitted
Liens or in respect of which the Collateral Agent shall have received
termination statements (Form UCC-3 or the equivalent) as shall be required by
local law fully executed for filing).
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5.09 Subsidiaries Guaranty. On the Effective Date, each Subsidiary
---------------------
Guarantor shall have duly authorized, executed and delivered a Guaranty in the
form of Exhibit H (as amended, modified or supplemented from time to time, the
"Subsidiaries Guaranty").
5.10 Financial Statements; Projections. On or prior to the Effective
---------------------------------
Date, the Administrative Agent shall have received true and correct copies of
the historical financial statements and the Projections referred to in Sections
7.05(a) and (d), which historical financial statements and Projections shall be
in form and substance reasonably satisfactory to the Administrative Agent and
the Required Banks.
5.11 Solvency Certificate. On the Effective Date, the Borrower shall
--------------------
have delivered to the Administrative Agent a solvency certificate from the Chief
Financial Officer of the Borrower in the form of Exhibit I.
5.12 Existing Lines of Credit. On or prior to the Effective Date,
------------------------
(i) the Borrower and its Subsidiaries shall have terminated their existing line
of credit with NationsBank, N.A., and shall have repaid all amounts owing
thereunder and caused the termination and release of all security interests and
guaranties supporting such lines of credit and (ii) the Administrative Agent
shall have received evidence (including pay-off letters and lien releases and
termination statements), in form and substance reasonably satisfactory to it, as
to the matters set forth in preceding clause (i).
SECTION 6. Conditions Precedent to All Credit Events. The obligation
-----------------------------------------
of each Bank to make Loans (including any Loans made on the Effective Date), and
the obligation of the Issuing Bank to issue Letters of Credit, is subject, at
the time of each such Credit Event (except as hereinafter indicated), to the
satisfaction of the following conditions:
6.01 Effective Date. The Effective Date shall have occurred.
--------------
6.02 No Default; Representations and Warranties. At the time of each
------------------------------------------
such Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of such Credit Event (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).
6.03 Notice of Borrowing; Letter of Credit Request. (a) Prior to
---------------------------------------------
the making of each Revolving Loan (other than a Revolving Loan made pursuant to
a Mandatory Borrowing), the Administrative Agent shall have received a Notice of
Borrowing meeting the requirements of Section 1.03(a). Prior to the making of
each Swingline Loan, the Administrative Agent and the Swingline Bank shall have
received the notice referred to in Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the Issuing Bank shall have received a Letter of Credit
Request meeting the requirements of Section 2.03.
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The occurrence of the Effective Date and the acceptance of the
benefits of each Credit Event shall constitute a representation and warranty by
the Borrower to the Administrative Agent and each of the Banks that all the
conditions specified in Section 5 (with respect to the Effective Date and Credit
Events to occur on the Effective Date) and in this Section 6 (with respect to
the Effective Date and Credit Events to occur on or after the Effective Date)
and applicable to such Credit Event exist as of that time. All of the Notes,
certificates, legal opinions and other documents and papers referred to in
Section 5 and in this Section 6, unless otherwise specified, shall be delivered
to the Administrative Agent at the Notice Office for the account of each of the
Banks and, except for the Notes, in sufficient counterparts or copies for each
of the Banks and shall be in form and substance satisfactory to the
Administrative Agent and the Required Banks.
SECTION 7. Representations, Warranties and Agreements. In order to
------------------------------------------
induce the Banks to enter into this Agreement and to make the Loans, and issue
(or participate in) the Letters of Credit as provided herein, the Borrower makes
the following representations, warranties and agreements, in each case after
giving effect to the Effective Date, all of which shall survive the execution
and delivery of this Agreement and the Notes and the making of the Loans and
issuance of the Letters of Credit, with the occurrence of the Effective Date and
the occurrence of each Credit Event on or after the Effective Date being deemed
to constitute a representation and warranty that the matters specified in this
Section 7 are true and correct on and as of the Effective Date and on the date
of each such Credit Event (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct only as of such specified date).
7.01 Status. Each of the Borrower and each of its Subsidiaries (i)
------
is a duly organized and validly existing corporation, partnership or limited
liability company in good standing under the laws of the jurisdiction of its
organization, (ii) has the corporate, partnership or limited liability company
power and authority, as the case may be, to own its property and assets and to
transact the business in which it is engaged and presently proposes to engage
and (iii) is duly qualified and is authorized to do business and is in good
standing in each jurisdiction where the ownership, leasing or operation of its
property or the conduct of its business requires such qualifications except for
failures to be so qualified which, either individually or in the aggregate,
could not reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
7.02 Power and Authority. Each Credit Party has the corporate,
-------------------
partnership or limited liability company power and authority, as the case may
be, to execute, deliver and perform the terms and provisions of each of the
Credit Documents to which it is party and has taken all necessary corporate,
partnership or limited liability company action, as the case may be, to
authorize the execution, delivery and performance by it of each of such Credit
Documents. Each Credit Party has duly executed and delivered each of the Credit
Documents to which it is party, and each of such Credit Documents constitutes
its legal, valid and binding obligation enforceable in accordance with its
terms, except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally
-27-
affecting creditors' rights and by equitable principles (regardless of whether
enforcement is sought in equity or at law).
7.03 No Violation. Neither the execution, delivery or performance by
------------
any Credit Party of the Credit Documents to which it is a party, nor compliance
by it with the terms and provisions thereof, (i) will contravene any provision
of any law, statute, rule or regulation or any order, writ, injunction or decree
of any court or governmental instrumentality, (ii) will conflict with or result
in any breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the Pledge
Agreement) upon any of the property or assets of the Borrower or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust,
credit agreement or loan agreement, or any other material agreement, contract or
instrument, to which the Borrower or any of its Subsidiaries is a party or by
which it or any of its property or assets is bound or to which it may be subject
or (iii) will violate any provision of the certificate or articles of
incorporation or by-laws (or equivalent organizational documents) of the
Borrower or any of its Subsidiaries.
7.04 Approvals. No order, consent, approval, license, authorization
---------
or validation of, or filing, recording or registration with (except for (i) the
filing of UCC-1 financing statements to perfect the security interests created
under the Pledge Agreement in any partnership or limited liability company
interests covered thereby and (ii) those that have otherwise been obtained or
made on or prior to the Effective Date and which remain in full force and effect
on the Effective Date), or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required by any Credit Party to
authorize, or is required in connection with, (i) the execution, delivery and
performance of any Credit Document by any Credit Party or (ii) the legality,
validity, binding effect or enforceability of any such Credit Document against
any Credit Party.
7.05 Financial Statements; Financial Condition; Undisclosed
------------------------------------------------------
Liabilities; Projections; etc. (a) The consolidated balance sheets of the
- ------------------------------
Borrower and its Subsidiaries for its fiscal year ended on December 31, 1997 and
its fiscal quarter ended on September 30, 1998, and the related consolidated
statements of income, cash flows and shareholders' equity of the Borrower and
its Subsidiaries for the fiscal year and fiscal quarter ended on such dates, as
the case may be, copies of which have been furnished to the Banks on or prior to
the Effective Date, present fairly in all material respects the consolidated
financial position of the Borrower and its Subsidiaries at the dates of such
balance sheets and the consolidated results of the operations of the Borrower
and its Subsidiaries for the periods covered thereby. All of the foregoing
financial statements have been prepared in accordance with generally accepted
accounting principles consistently applied. Since December 31, 1997, there has
been no material adverse change in the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.
(b) On and as of the Effective Date and after giving effect thereto,
(a) the sum of the assets, at a fair valuation, of each of the Borrower on a
stand-alone basis and of the Borrower and its Subsidiaries taken as a whole will
exceed its debts; (b) each of the Borrower on a stand-alone basis and the
Borrower and its Subsidiaries taken as a whole has not incurred and does not
intend to incur, and does not believe that it will incur, debts beyond its
ability to pay such debts as
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such debts mature; and (c) each of the Borrower on a stand alone basis and the
Borrower and its Subsidiaries taken as a whole will have sufficient capital with
which to conduct its business. For purposes of this Section 7.05(b), "debt"
means any liability on a claim, and "claim" means (i) right to payment, whether
or not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured,
or unsecured or (ii) right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured. The amount of contingent liabilities at any
time shall be computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
(c) Except as fully disclosed in the financial statements (including
the notes thereto) delivered pursuant to Section 7.05(a), there were as of the
Effective Date no liabilities or obligations with respect to the Borrower or any
of its Subsidiaries which are required under generally accepted accounting
principles to be disclosed on a consolidated balance sheet of the Borrower or in
the notes to such balance sheet (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in aggregate,
could reasonably be expected to be material to the Borrower and its Subsidiaries
taken as a whole. Except as disclosed on Schedule VII (but only so long as no
adverse determination is made with respect thereto which could reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole), as of the Effective
Date, the Borrower does not know of any basis for the assertion against it or
any of its Subsidiaries of any liability or obligation of any nature whatsoever
that is not fully disclosed in the financial statements delivered pursuant to
Section 7.05(a) which, either individually or in the aggregate, could reasonably
be expected to be material to the Borrower and its Subsidiaries taken as a
whole.
(d) On and as of the Effective Date, the Projections delivered to
the Administrative Agent and the Banks prior to the Effective Date have been
prepared in good faith and are based on reasonable assumptions, and there are no
statements or conclusions in the Projections which are based upon or include
information known to the Borrower to be misleading in any material respect or
which fail to take into account material information known to the Borrower
regarding the matters reported therein. On the Effective Date, the Borrower
believes that the Projections are reasonable and attainable, it being recognized
by the Banks, however, that projections as to future events are not to be viewed
as facts and that the actual results during the period or periods covered by the
Projections may differ from the projected results and that the differences may
be material.
7.06 Litigation. Except as disclosed on Schedule VII (but only so
----------
long as no adverse determination is made with respect thereto which could
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole), there are no
actions, suits or proceedings pending or, to the best knowledge of the Borrower,
threatened (i) with respect to this Agreement or any other Credit Document, (ii)
with respect to any material Indebtedness of the Borrower or any of its
Subsidiaries or (iii) that are reasonably likely to
-29-
materially and adversely affect the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.
7.07 True and Complete Disclosure. All factual information (taken as
----------------------------
a whole) furnished by or on behalf of any Credit Party in writing to the
Administrative Agent or any Bank for purposes of or in connection with this
Agreement, the other Credit Documents or any transaction contemplated herein or
therein is, and all other such factual information (taken as a whole) hereafter
furnished by or on behalf of any Credit Party in writing to the Administrative
Agent or any Bank 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 (taken as a whole)
not misleading in any material respect at such time in light of the
circumstances under which such information was provided.
7.08 Use of Proceeds; Margin Regulations. (a) All proceeds of the
-----------------------------------
Revolving Loans and the Swingline Loans shall be used for the working capital
and general corporate purposes of the Borrower and its Subsidiaries (including,
without limitation, (i) for Permitted Acquisitions and repurchases of the stock
of the Borrower in accordance with the terms of this Agreement and (ii) for the
repayment of existing Indebtedness as contemplated by Section 5.12).
(b) No part of any Credit Event (or the proceeds thereof) will be
used to purchase or carry any Margin Stock or to extend credit for the purpose
of purchasing or carrying any Margin Stock except (i) in connection with the
repurchase of shares of stock of the Borrower as permitted by Section 9.03 and
(ii) for purchases of Margin Stock not exceeding 1% of the outstanding capital
stock of any Person, in each case to the extent such purchases are otherwise
permitted under this Agreement and would not violate Regulations T, U and X.
The value of all Margin Stock at any time owned by the Borrower and its
Subsidiaries does not, and will not, exceed 25% of the value of the assets of
the Borrower and its Subsidiaries taken as a whole. Neither the making of any
Loan nor the use of the proceeds thereof nor the occurrence of any other Credit
Event will violate or be inconsistent with the provisions of Regulation T, U or
X.
7.09 Tax Returns and Payments. Each of the Borrower and each of its
------------------------
Subsidiaries has filed all federal and state income tax returns and all other
material tax returns, domestic and foreign, required to be filed by it and has
paid all taxes and assessments payable by it which have become due, except for
those contested in good faith and adequately disclosed and fully provided for on
the financial statements of the Borrower and its Subsidiaries in accordance with
generally accepted accounting principles. The Borrower and each of its
Subsidiaries have paid, or have provided adequate reserves (in the good faith
judgment of the management of the Borrower) for the payment of, all federal,
state, local and foreign income taxes applicable for all prior fiscal years and
for the current fiscal year to date. There is no material action, suit,
proceeding, investigation, audit, or claim now pending or, to the knowledge of
the Borrower threatened, by any authority regarding any taxes relating to the
Borrower or any of its Subsidiaries. As of the Effective Date, neither the
Borrower nor any of its Subsidiaries has entered into an agreement or waiver or
been requested to enter into an agreement or waiver extending any statute of
limitations relating to the payment or collection of taxes of the Borrower or
any of its Subsidiaries, or is aware of any circumstances that would cause the
taxable years or other taxable periods of the
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Borrower or any of its Subsidiaries not to be subject to the normally applicable
statute of limitations.
7.10 Compliance with ERISA. Except to the extent that any of the
---------------------
matters set forth in clause (i) or (ii) below, either individually or in the
aggregate, could not reasonably be expected to have a material adverse effect on
the business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole:
(i) Each Plan (and each related trust, insurance contract or fund) is in
compliance with its terms and with all applicable laws, including without
limitation ERISA and the Code; each Plan (and each related trust, if any) which
is intended to be qualified under Section 401(a) of the Code has received a
determination letter from the Internal Revenue Service to the effect that it
meets the requirements of Sections 401(a) and 501(a) of the Code; no Reportable
Event has occurred and is continuing; no Plan which is a multiemployer plan (as
defined in Section 4001(a)(3) of ERISA) is insolvent or in reorganization; no
Plan has an Unfunded Current Liability; no Plan which is subject to Section 412
of the Code or Section 302 of ERISA has an accumulated funding deficiency,
within the meaning of such sections of the Code or ERISA, or has applied for or
received a waiver of an accumulated funding deficiency or an extension of any
amortization period, within the meaning of Section 412 of the Code or Section
303 or 304 of ERISA; all contributions required to be made with respect to a
Plan have been made and no liability has occurred as a result of any failure to
make any such contribution in a timely manner; neither the Borrower nor any
Subsidiary of the Borrower nor any ERISA Affiliate has incurred any liability
(including any indirect, contingent or secondary liability) to or on account of
a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code
reasonably expects to incur any such liability under any of the foregoing
sections with respect to any Plan; no condition exists which presents a risk to
the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate of
incurring a liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code; no proceedings have been instituted to
terminate or appoint a trustee to administer any Plan which is subject to Title
IV of ERISA; no action, suit, proceeding, hearing, audit or investigation with
respect to the administration, operation or the investment of assets of any Plan
(other than routine claims for benefits) is pending or the Borrower reasonably
believes is expected or threatened; using actuarial assumptions and computation
methods consistent with Part 1 of subtitle E of Title IV of ERISA, the aggregate
liabilities of the Borrower and its Subsidiaries and its ERISA Affiliates to all
Plans which are multiemployer plans (as defined in Section 4001(a)(3) of ERISA)
in the event of a complete withdrawal therefrom, as of the close of the most
recent fiscal year of each such Plan ended prior to the date of the most recent
Credit Event, would not be material; each group health plan (as defined in
Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) which covers or has
covered employees or former employees of the Borrower, any Subsidiary of the
Borrower, or any ERISA Affiliate has at all times been operated in compliance
with the provisions of Part 6 of subtitle B of Title I of ERISA and Section
4980B of the Code and any failure to so comply would not result in a liability;
no lien imposed under the Code or ERISA on the assets of the Borrower or any
Subsidiary of the Borrower or any ERISA Affiliate exists or is likely to arise
on account of any Plan; and the Borrower and its Subsidiaries may cease
contributions to or terminate any employee benefit plan maintained by any of
them without incurring any liability.
-31-
(ii) Each Foreign Pension Plan has been maintained in compliance with
its terms and with the requirements of any and all applicable laws, statutes,
rules, regulations and orders and has been maintained, where required, in good
standing with applicable regulatory authorities. All contributions required to
be made with respect to a Foreign Pension Plan have been made and no liability
has occurred as a result of any failure to make any such contribution in a
timely manner. Neither the Borrower nor any of its Subsidiaries has incurred any
obligation in connection with the termination of or withdrawal from any Foreign
Pension Plan. The present value of the accrued benefit liabilities (whether or
not vested) under each Foreign Pension Plan, determined as of the end of the
Borrower's most recently ended fiscal year on the basis of actuarial
assumptions, each of which is reasonable, did not exceed the current value of
the assets of such Foreign Pension Plan allocable to such benefit liabilities.
7.11 The Pledge Agreement. The security interests created in favor
--------------------
of the Collateral Agent, as Pledgee, for the benefit of the Secured Creditors,
under the Pledge Agreement constitute first priority perfected security
interests in the Pledge Agreement Collateral, subject to no security interests
of any other Person. Except as otherwise provided in Section 7.04, filings or
recordings are required in order to perfect (or maintain the perfection or
priority of) the security interests created in the Pledge Agreement Collateral.
7.12 Properties. The Borrower and each of its Subsidiaries have good
----------
and marketable title to all material properties owned by them, including all
property reflected in the balance sheets referred to in Section 7.05(a) (except
as sold or otherwise disposed of since the date of such balance sheet in the
ordinary course of business or as permitted by the terms of this Agreement),
free and clear of all Liens, other than Permitted Liens.
7.13 Year 2000. All material Information Systems and Equipment are
---------
either Year 2000 Compliant, or any reprogramming, remediation, or any other
corrective action, including the internal testing of all such Information
Systems and Equipment, will be completed by June 30, 1999. Further, to the
extent that such reprogramming/remediation and testing action is required, the
cost thereof, as well as the cost of the reasonably foreseeable consequences of
failure to become Year 2000 Compliant, to the Borrower and its Subsidiaries
(including, without limitation, reprogramming errors and the failure of other
systems or equipment) will not result in a Default, an Event of Default or a
material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.
7.14 Subsidiaries. As of the Effective Date, the Borrower has no
------------
Subsidiaries other than those Subsidiaries listed on Schedule III. Schedule III
correctly sets forth, as of the Effective Date, the percentage ownership (direct
or indirect) of the Borrower in each class of capital stock or other equity of
each of its Subsidiaries and also identifies the direct owner thereof.
7.15 Compliance with Statutes, etc. Each of the Borrower and each of
------------------------------
its Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls), except such non-
-32-
compliances as could not, either individually or in the aggregate, reasonably
be expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole.
7.16 Investment Company Act. Neither the Borrower nor any of its
----------------------
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.17 Public Utility Holding Company Act. Neither the Borrower nor
----------------------------------
any of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
7.18 Environmental Matters. (a) The Borrower and each of its
---------------------
Subsidiaries have complied with, and on the date of each Credit Event are in
compliance with, all applicable Environmental Laws and the requirements of any
permits issued under such Environmental Laws. There are no pending or, to the
best knowledge of the Borrower, threatened Environmental Claims against the
Borrower or any of its Subsidiaries (including any such claim arising out of the
ownership, lease or operation by the Borrower or any of its Subsidiaries of any
Real Property no longer owned, leased or operated by the Borrower or any of its
Subsidiaries) or any Real Property owned, leased or operated by the Borrower or
any of its Subsidiaries. There are no facts, circumstances, conditions or
occurrences with respect to the business or operations of the Borrower or any of
its Subsidiaries, or any Real Property owned, leased or operated by the Borrower
or any of its Subsidiaries (including any Real Property formerly owned, leased
or operated by the Borrower or any of its Subsidiaries but no longer owned,
leased or operated by the Borrower or any of its Subsidiaries) or any property
adjoining or adjacent to any such Real Property that could be expected (i) to
form the basis of an Environmental Claim against the Borrower or any of its
Subsidiaries or any Real Property owned, leased or operated by the Borrower or
any of its Subsidiaries or (ii) to cause any Real Property owned, leased or
operated by the Borrower or any of its Subsidiaries to be subject to any
restrictions on the ownership, lease, occupancy or transferability of such Real
Property by the Borrower or any of its Subsidiaries under any applicable
Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any Real Property owned, leased
or operated by the Borrower or any of its Subsidiaries where such generation,
use, treatment or storage has violated or could be expected to violate any
Environmental Law. Hazardous Materials have not at any time been Released on or
from any Real Property owned, leased or operated by the Borrower or any of its
Subsidiaries where such Release has violated or could be expected to violate any
applicable Environmental Law.
(c) Notwithstanding anything to the contrary in this Section 7.18
the representations made in this Section 7.18 shall not be untrue unless the
effect of any or all violations, claims, restrictions, failures and
noncompliances of the types described above, either individually or in the
aggregate, could reasonably be expected to have a material adverse effect on the
business, opera-
-33-
tions, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.
7.19 Labor Relations. Neither the Borrower nor any of its
---------------
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a material adverse effect on the Borrower and its Subsidiaries
taken as a whole. There is (i) no unfair labor practice complaint pending
against the Borrower or any of its Subsidiaries or, to the best knowledge of the
Borrower, threatened against any of them, before the National Labor Relations
Board, and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against the Borrower or any of its
Subsidiaries or, to the best knowledge of the Borrower, threatened against any
of them, (ii) no strike, labor dispute, slowdown or stoppage pending against the
Borrower or any of its Subsidiaries or, to the best knowledge of the Borrower,
threatened against the Borrower or any of its Subsidiaries and (iii) no union
representation question exists with respect to the employees of the Borrower or
any of its Subsidiaries, except (with respect to any matter specified in clause
(i), (ii) or (iii) above, either individually or in the aggregate) such as could
not reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.
7.20 Patents, Licenses, Franchises and Formulas. Each of the
------------------------------------------
Borrower and each of its Subsidiaries owns or has the right to use all the
patents, trademarks, permits, service marks, trade names, copyrights, licenses,
franchises, proprietary information (including but not limited to rights in
computer programs and databases) and formulas, or rights with respect to the
foregoing, and has obtained assignments of all leases and other rights of
whatever nature, necessary for the present conduct of its business, without any
known conflict with the rights of others which, or the failure to obtain which,
as the case may be, could reasonably be expected to result in a material adverse
effect on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole.
7.21 Indebtedness. Schedule IV sets forth a true and complete list
------------
of all Indebtedness (including Contingent Obligations) of the Borrower and its
Subsidiaries as of the Effective Date (excluding the Loans and the Letters of
Credit, the "Existing Indebtedness"), in each case showing the aggregate
principal amount thereof and the name of the respective borrower and any Credit
Party or any of its Subsidiaries which directly or indirectly guarantees such
debt.
7.22 Subordination Provisions. From and after the issuance thereof,
------------------------
the subordination provisions contained in any Permitted Designated Indebtedness
that is subordinated indebtedness will be enforceable against the respective
Credit Parties party thereto and the holders of such Permitted Designated
Indebtedness, and all Obligations and Guaranteed Obligations (as defined in the
Subsidiaries Guaranty) will be within the definition of "Senior Indebtedness" or
"Guarantor Senior Indebtedness", as the case may be, included in such
subordination provisions.
SECTION 8. Affirmative Covenants. The Borrower hereby covenants and
---------------------
agrees that on and after the Effective Date and until the Total Revolving Loan
Commitment and all
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Letters of Credit have terminated and the Loans, Notes and Unpaid Drawings,
together with interest, Fees and all other Obligations incurred hereunder and
thereunder, are paid in full:
8.01 Information Covenants. The Borrower will furnish to each Bank:
---------------------
(a) Quarterly Financial Statements. Within 45 days after the close
------------------------------
of the first three quarterly accounting periods in each fiscal year of the
Borrower, (i) the consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such quarterly accounting period and the related
consolidated statements of income and retained earnings and statement of cash
flows for such quarterly accounting period and for the elapsed portion of the
fiscal year ended with the last day of such quarterly accounting period, in each
case setting forth comparative figures for the related periods in the prior
fiscal year and the respective budgeted figures for such quarterly accounting
period, all of which shall be certified by the Chief Financial Officer of the
Borrower, subject to normal year-end audit adjustments and the absence of
footnotes and, (ii) management's discussion and analysis of the important
operational and financial developments during such quarterly accounting period
(it being understood that any management's discussion and analysis set forth in
the Borrower's Form 10-Q and filed with the SEC for such quarterly accounting
period shall satisfy this provision).
(b) Annual Financial Statements. Within 90 days after the close of
---------------------------
each fiscal year of the Borrower, (i) the consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and statement of cash
flows for such fiscal year setting forth comparative figures for the preceding
fiscal year and certified by Ernst & Young LLP or such other independent
certified public accountants of recognized national standing reasonably
acceptable to the Administrative Agent, together with a report of such
accounting firm stating that in the course of its regular audit of the financial
statements of the Borrower and its Subsidiaries, which audit was conducted in
accordance with generally accepted auditing standards, such accounting firm
obtained no knowledge of any Default or an Event of Default which has occurred
and is continuing or, if in the opinion of such accounting firm such a Default
or Event of Default has occurred and is continuing, a statement as to the nature
thereof and (ii) management's discussion and analysis of the important
operational and financial developments during such fiscal year (it being
understood that any management's discussion and analysis set forth in the
Borrower's Form 10-K for such fiscal year shall satisfy this provision).
(c) Management Letters. Promptly after the Borrower's or any of its
------------------
Subsidiaries' receipt thereof, a copy of any "management letter" received from
its certified public accountants and management's response thereto.
(d) Budgets. No later than 30 days following the first day of each
-------
fiscal year of the Borrower, a budget, in form reasonably satisfactory to the
Administrative Agent, consisting of budgeted statements of income and sources
and uses of cash and balance sheets prepared by the Borrower for each of the
four fiscal quarters of such fiscal year.
(e) Officers Certificates. At the time of the delivery of the
---------------------
financial statements provided for in Sections 8.01(a) and (b), a certificate of
the Chief Financial Officer of the Bor-
-35-
rower to the effect that, to the best of such officer's knowledge, no Default or
Event of Default has occurred and is continuing or, if any Default or Event of
Default has occurred and is continuing, specifying the nature and extent
thereof, which certificate shall set forth in reasonable detail the calculations
required to establish (A) whether the Borrower and its Subsidiaries were in
compliance with the provisions of Sections 3.03(b), 3.03(d), 9.03, 9.04, 9.05
and 9.07 through 9.11, inclusive, at the end of such fiscal quarter or year, as
the case may be, and (B) the Applicable Base Rate Margin, the Applicable
Eurodollar Rate Margin and the Applicable Commitment Commission Percentage for
the Applicable Margin Period commencing with the delivery of the respective
financial statements.
(f) Notice of Default or Litigation. Promptly upon, and in any
-------------------------------
event within five Business Days after, any officer of the Borrower obtains
knowledge thereof, notice of (i) the occurrence of any event which constitutes a
Default or an Event of Default and/or (ii) any litigation or governmental
investigation or proceeding pending (x) against the Borrower or any of its
Subsidiaries which could reasonably be expected to materially and adversely
affect the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole, (y) with respect to any material Indebtedness of the Borrower or any
of its Subsidiaries or (z) with respect to any Credit Document.
(g) Other Reports and Filings. Promptly after the filing or
-------------------------
delivery thereof, copies of all reports on Forms 10-K, 10-Q and 8-K and all
proxy materials, if any, which the Borrower or any of its Subsidiaries shall
publicly file with the Securities and Exchange Commission or any successor
thereto (the "SEC").
(h) Environmental Matters. Promptly after any officer of the
---------------------
Borrower obtains knowledge thereof, notice of one or more of the following
environmental matters, unless such environmental matters could not, individually
or when aggregated with all other such environmental matters, be reasonably
expected to materially and adversely affect the business, operations, property,
assets, liabilities, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole:
(i) any pending or threatened Environmental Claim against the
Borrower or any of its Subsidiaries or any Real Property owned, leased or
operated by the Borrower or any of its Subsidiaries;
(ii) condition or occurrence on or arising from any Real Property
owned, leased or operated by the Borrower or any of its Subsidiaries that
(a) results in noncompliance by the Borrower or any of its Subsidiaries
with any applicable Environmental Law or (b) could be expected to form the
basis of an Environmental Claim against the Borrower or any of its
Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property owned, leased
or operated by the Borrower or any of its Subsidiaries that could be
expected to cause such Real Property to be subject to any restrictions on
the ownership, lease, occupancy, use or transferability by the Borrower or
any of its Subsidiaries of such Real Property under any Environmental Law;
and
-36-
(iv) the taking of any removal or remedial action in response to the
actual or alleged presence of any Hazardous Material on any Real Property
owned, leased or operated by the Borrower or any of its Subsidiaries as
required by any Environmental Law or any governmental or other
administrative agency; provided, that in any event the Borrower shall
--------
deliver to each Bank all notices received by the Borrower or any of its
Subsidiaries from any government or governmental agency under, or pursuant
to, CERCLA which identify the Borrower or any of its Subsidiaries as
potentially responsible parties for remediation costs or which otherwise
notify the Borrower or any of its Subsidiaries of potential liability under
CERCLA.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action and
the Borrower's or such Subsidiary's response thereto.
(i) Other Information. From time to time, such other information
-----------------
or documents (financial or otherwise) with respect to the Borrower or any of its
Subsidiaries as the Administrative Agent or any Bank may reasonably request.
8.02 Books, Records and Inspections; Annual Meetings. (a) The
-----------------------------------------------
Borrower will, and will cause each of its Subsidiaries to, keep proper books of
record and accounts in which entries sufficient to prepare the financial
statements required to be delivered pursuant to this Agreement in conformity
with generally accepted accounting principles and all requirements of law shall
be made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its Subsidiaries to,
permit officers and designated representatives of the Administrative Agent or
any Bank to visit and inspect, under guidance of officers of the Borrower or
such Subsidiary, any of the properties of the Borrower or such Subsidiary, and
to examine the books of account of the Borrower or such Subsidiary and discuss
the affairs, finances and accounts of the Borrower or such Subsidiary with, and
be advised as to the same by, its and their officers and independent
accountants, provided, unless a Default or an Event of Default has occurred and
--------
is continuing, neither the Administrative Agent nor any Bank may exercise its
rights under this sentence more than once in any fiscal year of the Borrower.
(b) At a date to be mutually agreed upon between the Administrative
Agent and the Borrower occurring on or prior to the 120th day after the close of
each fiscal year of the Borrower, the Borrower will, at the request of the
Administrative Agent, hold a meeting with all of the Banks at which meeting
shall be reviewed the financial results of the Borrower and its Subsidiaries for
the previous fiscal year and the budgets presented for the current fiscal year
of the Borrower.
8.03 Maintenance of Property; Insurance. The Borrower will, and
----------------------------------
will cause each of its Subsidiaries to, (i) keep all material property necessary
to the business of the Borrower and its Subsidiaries in reasonably good working
order and condition, ordinary wear and tear excepted, (ii) maintain insurance in
at least such amounts and against at least such risks as is consistent and in
accordance with industry practice for companies similarly situated owning
similar properties in the same general areas in which the Borrower or any of its
Subsidiaries operates, and (iii) furnish to the Administrative Agent or any
Bank, upon written request, full information as to the
-37-
insurance carried. If the Borrower or any of its Subsidiaries shall fail to
maintain insurance in accordance with this Section 8.03, the Administrative
Agent shall have the right (but shall be under no obligation) to procure such
insurance and the Borrower agrees to reimburse the Administrative Agent for all
costs and expenses of procuring such insurance.
8.04 Corporate Franchises. The Borrower will, and will cause each of
--------------------
its Subsidiaries to, do or cause to be done, all things necessary to preserve
and keep in full force and effect its existence and its material rights,
franchises, licenses and patents; provided, however, that nothing in this
-------- -------
Section 8.04 shall prevent (i) sales of assets and other transactions by the
Borrower or any of its Subsidiaries in accordance with Section 9.02 or (ii) the
withdrawal by the Borrower or any of its Subsidiaries of its qualification as a
foreign corporation in any jurisdiction where such withdrawal could not
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.
8.05 Compliance with Statutes, etc. The Borrower will, and will
------------------------------
cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliances as could not, either individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
8.06 Compliance with Environmental Laws. The Borrower will, and will
----------------------------------
cause each of its Subsidiaries to, comply in all respects with all Environmental
Laws applicable to the ownership or use of its Real Property now or hereafter
owned, leased or operated by the Borrower or any of its Subsidiaries, will
promptly pay or cause to be paid all costs and expenses incurred in connection
with such compliance, and will keep or cause to be kept all such Real Property
free and clear of any Liens imposed pursuant to such Environmental Laws, except
such noncompliances as could not, either individually or in the aggregate,
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole. Neither the
Borrower nor any of its Subsidiaries will generate, use, treat, store, Release
or dispose of, or permit the generation, use, treatment, storage, Release or
disposal of Hazardous Materials on any Real Property now or hereafter owned,
leased or operated by the Borrower or any of its Subsidiaries, or transport or
permit the transportation of Hazardous Materials to or from any such Real
Property, except for Hazardous Materials generated, used, treated, stored,
Released or disposed of at any such Real Properties in compliance in all
material respects with all applicable Environmental Laws and reasonably required
in connection with the operation, use and maintenance of the business or
operations of the Borrower or any of its Subsidiaries.
8.07 ERISA. As soon as possible and, in any event, within ten (10)
-----
days after the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate
knows of the occurrence of any of the following, the Borrower will deliver to
each of the Banks a certificate of the Chief Financial Officer of the Borrower
setting forth the full details as to such occurrence and the
-38-
action, if any, that the Borrower, such Subsidiary or such ERISA Affiliate is
required or proposes to take, together with any notices required or proposed to
be given to or filed with or by the Borrower, the Subsidiary, the ERISA
Affiliate, the PBGC, a Plan participant or the Plan administrator with respect
thereto: that a Reportable Event has occurred (except to the extent that the
Borrower has previously delivered to the Banks a certificate and notices (if
any) concerning such event pursuant to the next clause hereof); that a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA is subject to the advance reporting requirement of
PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof),
and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC
Regulation Section 4043 is reasonably expected to occur with respect to such
Plan within the following 30 days; that an accumulated funding deficiency,
within the meaning of Section 412 of the Code or Section 302 of ERISA, has been
incurred or an application may be or has been made for a waiver or modification
of the minimum funding standard (including any required installment payments) or
an extension of any amortization period under Section 412 of the Code or Section
303 or 304 of ERISA with respect to a Plan; that any contribution required to be
made with respect to a Plan or Foreign Pension Plan has not been timely made;
that a Plan has been or may be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA; that a Plan has an Unfunded Current
Liability; that proceedings may be or have been instituted to terminate or
appoint a trustee to administer a Plan which is subject to Title IV of ERISA;
that a proceeding has been instituted pursuant to Section 515 of ERISA to
collect a delinquent contribution to a Plan; that the Borrower, any Subsidiary
of the Borrower or any ERISA Affiliate will or may incur any material liability
(including any indirect, contingent, or secondary liability) to or on account of
the termination of or withdrawal from a Plan under Section 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section
401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(l) of
ERISA or with respect to a group health plan (as defined in Section 607(1) of
ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or
that the Borrower or any Subsidiary of the Borrower may incur any material
liability pursuant to any employee welfare benefit plan (as defined in Section
3(1) of ERISA) that provides benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA) or any Plan or any
Foreign Pension Plan. Upon the request of the Administrative Agent, the Borrower
will deliver to each of the Banks a complete copy of the annual report (on
Internal Revenue Service Form 5500-series) of each Plan (including, to the
extent required, the related financial and actuarial statements and opinions and
other supporting statements, certifications, schedules and information) required
to be filed with the Internal Revenue Service. In addition to any certificates
or notices delivered to the Banks pursuant to the first sentence hereof, copies
of any records, documents or other information that must be furnished to the
PBGC with respect to any Plan pursuant to Section 4010 of ERISA, and any
material notices received by the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate with respect to any Plan or Foreign Pension Plan shall be
delivered to the Banks no later than ten (10) days after the date such records,
documents and/or information has been furnished to the PBGC or such notice has
been received by the Borrower, the Subsidiary or the ERISA Affiliate, as
applicable.
8.08 End of Fiscal Years; Fiscal Quarters. The Borrower will cause
------------------------------------
(i) its fiscal year to end on December 31, and (ii) its fiscal quarters to end
on March 31, June 30, September 30 and December 31.
-39-
8.09 Payment of Taxes. The Borrower will pay and discharge, and will
----------------
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which penalties attach
thereto, and all lawful claims for sums that have become due and payable which,
if unpaid, might become a Lien not otherwise permitted under Section 9.01(i);
provided, that neither the Borrower nor any of its Subsidiaries shall be
- --------
required to pay any such tax, assessment, charge, levy or claim which is being
contested in good faith and by proper proceedings if it has maintained adequate
reserves with respect thereto in accordance with generally accepted accounting
principles.
8.10 Foreign Subsidiaries. If following a change in the relevant
--------------------
sections of the Code or the regulations, rules, rulings, notices or other
official pronouncements issued or promulgated thereunder, counsel for the
Borrower reasonably acceptable to the Administrative Agent does not within 30
days after a request from the Administrative Agent or the Required Banks deliver
its opinion, in form and substance mutually satisfactory to the Administrative
Agent and the Borrower, with respect to any Foreign Subsidiary of the Borrower
which has not already had all of its stock pledged pursuant to the Pledge
Agreement that a pledge of 66-2/3% or more of the total combined voting power of
all classes of capital stock of such Foreign Subsidiary entitled to vote could
reasonably be expected to cause (I) the undistributed earnings of such Foreign
Subsidiary as determined for federal income tax purposes to be treated as a
deemed dividend to such Foreign Subsidiary's United States parent for federal
income tax purposes or (II) other material adverse federal income tax
consequences to the Credit Parties, then in the case of a failure to deliver the
evidence described above, (i) that portion of such Foreign Subsidiary's
outstanding capital stock owned by a Credit Party and not theretofore pledged
pursuant to the Pledge Agreement shall be pledged to the Collateral Agent for
the benefit of the Secured Creditors pursuant to the Pledge Agreement and (ii)
each such Foreign Subsidiary shall execute and deliver to the Administrative
Agent counterparts of the Subsidiaries Guaranty and the Pledge Agreement.
8.11 Margin Stock. The Borrower will, and will cause each of the
------------
Subsidiary Guarantors to, take any and all actions as may be required to ensure
that no capital stock pledged, or required to be pledged, pursuant to the Pledge
Agreement shall constitute Margin Stock.
8.12 Year 2000. The Borrower will ensure that its and its
---------
Subsidiaries' Information Systems and Equipment are at all times after June 30,
1999 Year 2000 Compliant, except insofar as the failure to do so, could not
reasonably be expected to result in a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole, and shall
notify the Administrative Agent and each Bank promptly upon detecting any
failure of the Information Systems and Equipment to be Year 2000 Compliant. In
addition, the Borrower shall provide the Administrative Agent and any Bank with
such information about its year 2000 computer readiness (including, without
limitation, information as to contingency plans, budgets and testing results) as
the Administrative Agent or such Bank shall reasonably request.
8.13 Additional Guarantors and Additional Pledge Agreements. (a) On
------------------------------------------------------
February 1, 1999, each of Sylvan Properties (California), Inc.,
-40-
Educational Consultants International Inc. and Travel Selections, Inc. shall
execute and deliver to the Administrative Agent counterparts of the Subsidiaries
Guaranty and the Pledge Agreement, although no such Wholly-Owned Domestic
Subsidiary of the Borrower shall be required to execute and deliver such Credit
Documents to the extent that same has been merged with and into the Borrower or
a Subsidiary Guarantor as permitted pursuant to Section 9.02(x) or (xi). In
addition, until such time as such Wholly-Owned Domestic Subsidiaries have
executed and delivered counterparts of the Subsidiaries Guaranty and Pledge
Agreement or have been so merged with and into the Borrower or a Subsidiary
Guarantor as provided above, the Borrower shall cause each such Wholly-Owned
Domestic Subsidiary to continue to be an inactive company and, as such, shall
not have any significant assets or liabilities.
(b) No later than February 1, 1999 (and notwithstanding anything to
the contrary contained in Section 5.08), the Borrower shall have delivered, or
cause to be delivered, one or more additional Pledge Agreements, in form and
substance reasonably satisfactory to the Administrative Agent, pursuant to which
the capital stock of SLS I B.V. and Aspect International Language Schools B.V.,
each a Netherlands corporation, shall be duly pledged to the Collateral Agent
under the laws of The Netherlands.
(c) Together with the delivery of each Credit Document pursuant to
clause (a) or (b) of this Section 8.13, the Borrower shall deliver, or cause to
be delivered, one or more opinions of counsel, in form and substance reasonably
satisfactory to the Administrative Agent, with respect to the transactions
contemplated by such Credit Documents and such other matters incident thereto as
the Administrative Agent may reasonably request.
SECTION 9. Negative Covenants. The Borrower hereby covenants and
------------------
agrees that on and after the Effective Date and until the Total Revolving Loan
Commitment and all Letters of Credit have terminated and the Loans, Notes and
Unpaid Drawings, together with interest, Fees and all other Obligations incurred
hereunder and thereunder, are paid in full:
9.01 Liens. The Borrower will not, and will not permit any of its
-----
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
the Borrower or any of its Subsidiaries, whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable with recourse to the Borrower or any of
its Subsidiaries), or assign any right to receive income or permit the filing of
any financing statement under the UCC or any other similar notice of Lien under
any similar recording or notice statute; provided that the provisions of this
--------
Section 9.01 shall not prevent the creation, incurrence, assumption or existence
of the following or the filing of any financing statements in connection
therewith (Liens described below are herein referred to as "Permitted Liens"):
(i) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due or Liens for taxes, assessments or governmental charges
or levies being contested in good faith and by appropriate proceedings for
which adequate reserves have been established in accordance with generally
accepted accounting principles;
-41-
(ii) Liens in respect of property or assets of the Borrower or any of
its Subsidiaries imposed by law, which were incurred in the ordinary course
of business and do not secure Indebtedness for borrowed money, such as
carriers', warehousemen's, materialmen's and mechanics' liens and other
similar Liens arising in the ordinary course of business, and (x) which do
not in the aggregate materially detract from the value of the Borrower's or
such Subsidiary's property or assets or materially impair the use thereof
in the operation of the business of the Borrower or such Subsidiary or (y)
which are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the
property or assets subject to any such Lien;
(iii) Liens in existence on the Effective Date which are listed, and
the property subject thereto described, in Schedule V, but only to the
respective date, if any, set forth in such Schedule V for the removal,
replacement and termination of any such Liens, plus renewals, replacements
and extensions of such Liens to the extent set forth on such Schedule V,
provided that (x) the aggregate principal amount of the Indebtedness, if
--------
any, secured by such Liens does not increase from that amount outstanding
at the time of any such renewal, replacement or extension and (y) any such
renewal, replacement or extension does not encumber any additional assets
or properties of the Borrower or any of its Subsidiaries;
(iv) Liens created pursuant to the Pledge Agreement;
(v) leases or subleases granted to other Persons not materially
interfering with the conduct of the business of the Borrower or any of its
Subsidiaries;
(vi) Liens upon assets of the Borrower or any of its Subsidiaries
subject to Capitalized Lease Obligations to the extent such Capitalized
Lease Obligations are permitted by Section 9.04(iv), provided that (x) such
--------
Liens only serve to secure the payment of Indebtedness arising under such
Capitalized Lease Obligation and (y) the Lien encumbering the asset giving
rise to the Capitalized Lease Obligation does not encumber any other asset
of the Borrower or any Subsidiary of the Borrower;
(vii) Liens placed upon (x) equipment or machinery used in the
ordinary course of business of the Borrower or any of its Subsidiaries at
the time of the acquisition thereof by the Borrower or any such Subsidiary
or (y) Real Property used in the ordinary course of business of the
Borrower or any of its Subsidiaries at the time of construction thereof by
the Borrower or any of its Subsidiaries or (in either case) within 90 days
thereafter to secure Indebtedness incurred to pay all or a portion of the
purchase price or construction cost thereof, as the case may be, or to
secure Indebtedness incurred solely for the purpose of financing the
acquisition of any such equipment or machinery or the construction of any
such Real Property or extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount, provided that (x) such
--------
Indebtedness is permitted by Section 9.04(iv) and (y) in all events, the
Lien encumbering the asset so acquired or constructed does not encumber any
other asset of the Borrower or such Subsidiary other than the proceeds of
such asset, substitutions for and replacements of such asset and accessions
to such asset;
-42-
(viii) easements, rights-of-way, restrictions, encroachments and
other similar charges or encumbrances, and minor title deficiencies, in
each case not securing Indebtedness and not materially interfering with the
conduct of the business of the Borrower or any of its Subsidiaries;
(ix) Liens arising from precautionary UCC financing statement
filings regarding operating leases;
(x) Liens arising out of the existence of judgments or awards not
constituting an Event of Default under Section 10.09, provided that the
aggregate amount of all cash and the fair market value of all property
pledged or deposited to secure all such judgments or awards shall not
exceed $2,000,000 at any time outstanding;
(xi) statutory and common law landlords' liens under leases to which
the Borrower or any of its Subsidiaries is a party;
(xii) Liens (other than Liens imposed under ERISA) incurred in the
ordinary course of business in connection with workers compensation claims,
unemployment insurance and social security benefits;
(xiii) Liens securing (x) the performance of bids, tenders, leases
and contracts in the ordinary course of business and consistent with past
practices and (y) statutory obligations, surety bonds, performance bonds
and other obligations of a like nature incurred in the ordinary course of
business and consistent with past practices (exclusive of obligations in
respect of the payment for borrowed money);
(xiv) Liens on property or assets acquired pursuant to a Permitted
Acquisition, or on property or assets of a Subsidiary of the Borrower in
existence at the time such Subsidiary is acquired pursuant to a Permitted
Acquisition, provided that (x) any Indebtedness that is secured by such
--------
Liens is permitted to exist under Section 9.04(ix), and (y) such Liens are
not incurred in connection with, or in contemplation or anticipation of,
such Permitted Acquisition and do not attach to any other asset of the
Borrower or any of its Subsidiaries; and
(xv) Liens which constitute rights of set-off of a customary nature
or bankers' Liens with respect to amounts on deposit, whether arising by
operation of law or by contract, in connection with arrangements entered
into with banks in the ordinary course of business.
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc. The
------------------------------------------------------
Borrower will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or merge or consolidate, or convey, sell,
lease or otherwise dispose of all or any part of its property or assets, or
enter into any sale-leaseback transactions, or purchase or otherwise acquire (in
one or a series of related transactions) any part of the property or assets
(other than purchases or other acquisitions of inventory, materials and
equipment in the ordinary course of business) of any Person, except that:
-43-
(i) Capital Expenditures by the Borrower and its Subsidiaries shall
be permitted to the extent not in violation of Section 9.07;
(ii) each of the Borrower and its Subsidiaries may (x) make sales of
inventory and license intellectual property in the ordinary course of
business and (y) enter into franchise agreements, as franchisors, in the
ordinary course of business;
(iii) each of the Borrower and its Subsidiaries may sell obsolete or
worn-out equipment or materials in the ordinary course of business;
(iv) each of the Borrower and its Subsidiaries may sell or discount,
in each case without recourse and in the ordinary course of business,
accounts receivable arising in the ordinary course of business, but only in
connection with the compromise or collection thereof and not as part of any
financing transaction;
(v) each of the Borrower and its Subsidiaries may sell other assets
(other than the capital stock of any Subsidiary Guarantor) so long as (i)
no Default or no Event of Default then exists or would result therefrom,
(ii) each such sale is in an arm's-length transaction and the Borrower or
the respective Subsidiary receives at least fair market value (as
determined in good faith by the Borrower or such Subsidiary, as the case
may be), (iii) the total consideration received by the Borrower or such
Subsidiary is at least 90% cash and is paid at the time of the closing of
such sale, (iv) the Net Sale Proceeds therefrom are applied and/or
reinvested as (and to the extent) required by Section 3.03(b) and (v) the
aggregate amount of the proceeds received from all assets sold pursuant to
this clause (v) shall not exceed $10,000,000 in any fiscal year of the
Borrower; provided, however, to the extent that the amount of asset sales
-------- -------
made pursuant to this clause (v) in any fiscal year of the Borrower is less
than the amount of asset sales permitted to be made in such fiscal year,
such excess may be carried forward and utilized to make asset sales in the
immediately succeeding fiscal year of the Borrower (but not in any fiscal
year thereafter);
(vi) Investments may be made to the extent permitted by Section
9.05;
(vii) each of the Borrower and its Subsidiaries may lease (as
lessee) real or personal property (so long as any such lease does not
create a Capitalized Lease Obligation except to the extent permitted by
Section 9.04(iv));
(viii) the Borrower and its Wholly-Owned Subsidiaries may acquire
all or substantially all of the assets of any Person (or all or
substantially all of the assets of a product line or division of any
Person) or at least 50.1% of the voting and economic interest in the
capital stock or other equity interest of any Person (including by
purchasing all or any portion of the capital stock or other equity interest
of any Person in which the Borrower or a Wholly-Owned Subsidiary already
has an ownership interest and as a result of which such Person already is,
or shall become, a Subsidiary of the Borrower) (any such acquisition
permitted by this clause (viii), a "Permitted Acquisition"), so long as (i)
no Default or Event of Default then exists or would result therefrom, (ii)
each of the representations and warranties contained in Section 7 shall be
true and correct in all
-44-
material respects both before and after giving effect to such Permitted
Acquisition, (iii) any Liens or Indebtedness assumed or issued in
connection with any Permitted Acquisition are otherwise permitted under
Section 9.01 or 9.04, as the case may be, (iv) the Acquired Entity or
Business acquired pursuant to such Permitted Acquisition is in a line of
business permitted under Section 9.15, (v) the only consideration paid by
the Borrower or any of its Wholly-Owned Subsidiaries in connection with any
Permitted Acquisition consists solely of cash, common stock or Qualified
Preferred Stock of the Borrower and/or Indebtedness permitted under Section
9.04, (vi) at least 10 Business Days prior to the consummation of any
Permitted Acquisition, the Borrower shall deliver to the Administrative
Agent and each of the Banks (A) a certificate of the Borrower's Chief
Financial Officer certifying (and showing the calculations therefor in
reasonable detail) (x) that the Borrower would have been in compliance with
the financial covenants set forth in Sections 9.08, 9.09, 9.10 and 9.11 for
the Test Period then most recently ended prior to the date of the
consummation of such Permitted Acquisition and for which financial
statements are available, in each case with such financial covenants to be
determined on a pro forma basis as if such Permitted Acquisition had been
--- -----
consummated on the first day of such Test Period (and assuming that any
Indebtedness incurred, issued or assumed in connection therewith had been
incurred, issued or assumed on the first day of, and had remained
outstanding throughout, such Test Period) and (y) necessary to establish
the Acquired EBITDA of the Acquired Entity or Business acquired pursuant to
each Permitted Acquisition for the most recently ended 12 month period for
which financial statements are available for such Acquired Entity or
Business, and (B) projections (in reasonable detail) prepared by the
Borrower for the period from the date of the consummation of such Permitted
Acquisition to the date which is one year thereafter calculated after
giving effect to the respective Permitted Acquisition, demonstrating that
the level of financial performance measured by the financial covenants set
forth in Sections 9.08, 9.09, 9.10 and 9.11 shall be better than or equal
to such level as would be required to provide that no Default or Event of
Default will exist under such financial covenants, as compliance with such
financial covenants will be required through the date which is one year
from the date of the consummation of the respective Permitted Acquisition,
(vii) the sum of (I) the aggregate cash consideration paid in connection
with any Permitted Acquisition, including, without limitation, any earn-
out, non-compete or deferred compensation arrangements (based on reasonable
estimates of the amount thereof), (II) the aggregate principal amount of
any Indebtedness assumed and/or issued in connection therewith and (III)
the fair market value of any common stock and/or Qualified Preferred Stock
of the Borrower issued in connection therewith (as determined in good faith
by the Borrower) does not exceed $50,000,000 (or, in the case of a
potential Permitted Acquisition previously disclosed to the Banks in
writing, $60,000,000), and (viii) the sum of (I) the aggregate cash
consideration paid in connection with all Permitted Acquisitions
consummated in any fiscal year of the Borrower including, without
limitation, any earn-out, non-compete or deferred compensation arrangements
(based on reasonable estimates of the amount thereof) and (II) the
aggregate principal amount of any Indebtedness assumed and/or issued in
connection therewith does not exceed $150,000,000 in any such fiscal year
of the Borrower;
-45-
(ix) each of the Borrower and its Subsidiaries may grant leases or
subleases to other Persons not materially interfering with the conduct of
the business of the Borrower or any of its Subsidiaries;
(x) any Subsidiary of the Borrower may (i) be merged or
consolidated with or into the Borrower or liquidated so long as the
Borrower is the surviving corporation of such merger or consolidation or
receives the assets of such Subsidiary upon such liquidation and (ii) may
transfer its assets to the Borrower;
(xi) any Subsidiary of the Borrower may be merged or consolidated
with or into any other Subsidiary of the Borrower or liquidated so long as
(i) in the case of any (x) such merger or consolidation involving a
Subsidiary Guarantor, a Subsidiary Guarantor is the surviving corporation
of such merger or consolidation or (y) such liquidation, a Subsidiary
Guarantor receives the assets of such Subsidiary upon such liquidation and
(ii) in the case of any (x) such merger or consolidation involving a
Wholly-Owned Subsidiary of the Borrower, in addition to the requirements of
preceding clause (i), a Wholly-Owned Subsidiary is the surviving
corporation of such merger or consolidation or (y) such liquidation, a
Wholly-Owned Subsidiary receives the assets of such Subsidiary upon such
liquidation;
(xii) any Subsidiary Guarantor may transfer assets to another
Subsidiary Guarantor; and
(xiii) each of the Borrower and its Subsidiaries may sell Cash
Equivalents so long as (i) each such sale is in an arm's-length transaction
and the Borrower or the respective Subsidiary receives at least fair market
value (as determined in good faith by the Borrower or such Subsidiary, as
the case may be), and (ii) the total consideration received by the Borrower
or such Subsidiary is 100% cash and is paid at the time of the closing of
such sale.
To the extent the Required Banks waive the provisions of this Section
9.02 with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 9.02 (other than to the Borrower or a Subsidiary
thereof), such Collateral shall be sold free and clear of the Liens created by
the Pledge Agreement and the Administrative Agent and the Collateral Agent shall
be authorized to take any actions deemed appropriate in order to effect the
foregoing.
9.03 Dividends. The Borrower will not, and will not permit any of
---------
its Subsidiaries to, authorize, declare or pay any Dividends with respect to the
Borrower or any of its Subsidiaries, except that:
(i) any Subsidiary of the Borrower may pay Dividends to the
Borrower or to any Wholly-Owned Subsidiary of the Borrower;
(ii) any non-Wholly-Owned Subsidiary of the Borrower may pay cash
Dividends to its shareholders generally so long as the Borrower or its
respective Subsidiary which owns the equity interest in the Subsidiary
paying such Dividends receives at least its
-46-
proportionate share thereof (based upon its relative holding of the equity
interest in the Subsidiary paying such Dividends and taking into account
the relative preferences, if any, of the various classes of equity
interests of such Subsidiary);
(iii) so long as there shall exist no Default or Event of Default
(both before and after giving effect to the payment thereof), the Borrower
may repurchase or redeem shares of its common stock, provided that the
aggregate amount of all Dividends paid by the Borrower pursuant to this
clause (iii) shall not exceed $200,000,000; and
(iv) the Borrower may pay Dividends on its shares of its Qualified
Preferred Stock solely through the issuance of additional shares of its
Qualified Preferred Stock rather than in cash.
9.04 Indebtedness. The Borrower will not, and will not permit any
------------
of its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(ii) Existing Indebtedness outstanding on the Effective Date and
listed on Schedule IV, and giving effect to any subsequent extension,
renewal or refinancing thereof to the extent permitted on such Schedule IV,
provided that the aggregate principal amount of the Indebtedness to be
extended, renewed or refinanced does not increase from that amount
outstanding at the time of any such extension, renewal or refinancing;
(iii) Indebtedness under Interest Rate Protection Agreements entered
into with respect to Indebtedness under this Agreement and other
Indebtedness permitted under this Section 9.04;
(iv) Indebtedness of the Borrower and its Subsidiaries evidenced by
Capitalized Lease Obligations and purchase money Indebtedness of the type
described in Section 9.01(vii), provided that in no event shall the sum of
--------
(I) the aggregate principal amount of all Capitalized Lease Obligations and
(II) the aggregate principal amount of all such purchase money Indebtedness
exceed $30,000,000 at any time outstanding;
(v) intercompany Indebtedness among the Borrower and its
Subsidiaries to the extent permitted by Sections 9.05(ix), (xiii), (xiv)
and (xv), provided that any intercompany indebtedness owed to any
Subsidiary of the Borrower which is not a Subsidiary Guarantor shall
contain (and shall be subject to) the subordination provisions set forth on
Exhibit J;
(vi) Indebtedness consisting of guaranties by the Borrower and its
Subsidiaries of other Indebtedness of the Borrower and its Subsidiaries
otherwise permitted to be incurred under this Section 9.04;
(vii) Indebtedness under Other Hedging Agreements providing
protection against fluctuations in currency values in connection with the
Borrower's or any of its
-47-
Subsidiaries' foreign operations so long as management of the Borrower or
such Subsidiary, as the case may be, has determined in good faith that the
entering into of such Other Hedging Agreements are bona fide hedging
---- ----
activities and are not for speculative purposes;
(viii) Indebtedness of the Borrower and the Subsidiary Guarantors
under Permitted Designated Indebtedness, so long as (i) at the time of the
issuance of the Permitted Designated Indebtedness, no Default or Event of
Default then exists or would result therefrom, (ii) at least 10 Business
Days prior to the issuance of any Permitted Designated Indebtedness, the
Borrower shall have delivered to the Administrative Agent and each of the
Banks a certificate of the Borrower's Chief Financial Officer certifying
(and showing the calculations therefor in reasonable detail) that the
Borrower and its Subsidiaries would have been in compliance with the
financial covenants set forth in Sections 9.08, 9.09, 9.10 and 9.11 for
which financial statements are available for the Test Period then most
recently ended prior to the date of the issuance of such Permitted
Designated Indebtedness, in each case with such financial covenants to be
determined on a pro forma basis as if such Permitted Designated
--- -----
Indebtedness had been incurred on the first day of, and had remained
outstanding throughout, such Test Period (and using a conservative range of
interest rates), (iii) such Permitted Designated Indebtedness is unsecured
and does not have any required maturity, redemption, amortization or
sinking fund obligations prior to the six year anniversary of the Effective
Date. (iv) such Permitted Designated Indebtedness is issued pursuant to an
effective registration statement under the Securities Act or pursuant to
Rule 144A promulgated thereunder, (v) all of the terms and conditions of
(and the documentation for) such Permitted Designated Indebtedness
(including covenants, events of default, remedies and subordination
provisions (if applicable)) are in form and substance reasonably
satisfactory to the Administrative Agent, and (vi) 50% of the Net Debt
Proceeds from the issuance of such Permitted Designated Indebtedness are
applied as, and to the extent, required by Section 3.03(c)(ii);
(ix) Indebtedness of a Subsidiary acquired pursuant to a Permitted
Acquisition (or Indebtedness assumed at the time of a Permitted Acquisition
of an asset securing such Indebtedness), provided that (x) such
Indebtedness was not incurred in connection with, or in anticipation or
contemplation of, such Permitted Acquisition and (y) such Indebtedness does
not constitute debt for borrowed money (other than debt for borrowed money
incurred in connection with industrial revenue or industrial development
bond financings), it being understood and agreed that Capitalized Lease
Obligations and purchase money Indebtedness of the type described in
Section 9.01(vii) shall not constitute debt for borrowed money for purposes
of this clause (y);
(x) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business, so long as such Indebtedness not
otherwise constituting Indebtedness permitted under this Section 9.04 is
extinguished within two Business Days of the incurrence thereof;
-48-
(xi) Indebtedness in respect of bid, performance, advance payment or
surety bonds entered into in the ordinary course of business and consistent
with past practices;
(xii) unsecured Indebtedness of the Borrower or any of its
Subsidiaries in the form of earn-out, non-compete or deferred compensation
arrangements incurred pursuant to a Permitted Acquisition and to extent
permitted by clauses (vii) and (viii) of Section 9.02(viii); and
(xiii) additional unsecured Indebtedness incurred by the Borrower and
its Subsidiaries in an aggregate principal amount not to exceed $20,000,000
at any one time outstanding.
9.05 Advances, Investments and Loans. The Borrower will not, and
-------------------------------
will not permit any of its Subsidiaries to, directly or indirectly, lend money
or credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents (each of the foregoing an "Investment" and,
collectively, "Investments"), except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold accounts
receivables owing to any of them, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with
customary trade terms of the Borrower or such Subsidiary;
(ii) the Borrower and its Subsidiaries may acquire and hold cash and
Cash Equivalents;
(iii) the Borrower and its Subsidiaries may hold the Investments
held by them on the Effective Date and described on Schedule VI, provided
that any additional Investments made with respect thereto shall be
permitted only if independently permitted under the other provisions of
this Section 9.05;
(iv) the Borrower and its Subsidiaries may acquire and own
investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in good faith
settlement of delinquent obligations of, and other disputes with, customers
and suppliers arising in the ordinary course of business;
(v) the Borrower and its Subsidiaries may make loans and advances
in the ordinary course of business to their respective employees so long as
the aggregate principal amount thereof at any time outstanding (determined
without regard to any write-downs or write-offs of such loans and advances)
shall not exceed $5,000,000;
(vi) the Borrower may acquire and hold obligations of one or more
officers or other employees of the Borrower or any of its Subsidiaries in
connection with such officer's or employee's acquisition of shares of
common stock of the Borrower so long as
-49-
no cash is paid by the Borrower or any of its Subsidiaries to such officers
or employees in connection with the acquisition of any such obligations;
(vii) the Borrower may enter into Interest Rate Protection
Agreements to the extent permitted by Section 9.04(iii);
(viii) the Borrower and its Subsidiaries may enter into Other
Hedging Agreements to the extent permitted by Section 9.04(vii);
(ix) the Borrower and the Subsidiary Guarantors may make
intercompany loans and advances between or among one another;
(x) the Borrower may make cash common equity contributions to the
capital of the Subsidiary Guarantors and the Subsidiary Guarantors may make
cash common equity contributions to the capital of their respective
Subsidiaries which are Subsidiary Guarantors;
(xi) Permitted Acquisitions shall be permitted pursuant to Section
9.02(viii);
(xii) the Borrower and its Subsidiaries may acquire and hold
promissory notes issued by the purchaser of assets in connection with a
sale of such assets to the extent permitted by Sections 9.02(v);
(xiii) the Borrower and the Subsidiary Guarantors may make
additional intercompany loans and/or cash equity contributions to Wholly-
Owned Foreign Subsidiaries of the Borrower for the purpose of enabling such
Wholly-Owned Foreign Subsidiaries to consummate a Permitted Acquisition
pursuant to Section 9.02(viii);
(xiv) the Borrower and its Subsidiaries may make additional
intercompany loans and/or cash equity contributions to their respective
Subsidiaries for the purpose of enabling such Subsidiaries to make an
Investment permitted by clause (xvi) of this Section 9.05;
(xv) the Borrower and its Subsidiaries may make intercompany loans
to, and/or cash equity contributions in, Subsidiaries of the Borrower which
are not Subsidiary Guarantors in an aggregate amount not to exceed
$10,000,000 at any time outstanding (determined without regard to any
write-downs or write-offs thereof);
(xvi) the Borrower and its Subsidiaries may make loans and advances
to their franchisees in an aggregate amount not to exceed $4,000,000 at any
time outstanding (determined without regard to any write-downs or write-
offs thereof); and
(xvii) so long as no Default or Event of Default then exists or
would result therefrom, the Borrower and its Subsidiaries may make
additional Investments so long as the aggregate amount of all such
Investments made subsequent to the Effective Date and outstanding at any
time (determined without regard to any write-downs or write-offs thereof)
-50-
pursuant to this clause (xvii) does not exceed $10,000,000 in any fiscal
year of the Borrower.
9.06 Transactions with Affiliates. (a) The Borrower will not, and
----------------------------
will not permit any of its Subsidiaries to, directly or indirectly, enter into
or permit to exist any transaction or series of related transactions (including,
without limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service), with, or for the benefit of, any Affiliate of the
Borrower or any of its Subsidiaries (each an "Affiliate Transaction"), other
than (x) Affiliate Transactions permitted under clause (b) of this Section 9.06
and (y) Affiliate Transactions on terms that are no less favorable than those
that might reasonably have been obtained in a comparable transaction at such
time on an arm's length basis from a Person that is not an Affiliate of the
Borrower or such Subsidiary. All Affiliate Transactions (and each series of
related Affiliate Transactions which are similar or part of a common plan)
involving aggregate payments or other property with a fair market value (as
determined in good faith by the Board of Directors of the Borrower or such
Subsidiary, as the case may be) in excess of $1,000,000 shall be approved by the
Board of Directors of the Borrower or such Subsidiary, as the case may be, and
with such approval to be evidenced by a Board resolution stating that such Board
of Directors has determined that such transaction complies with the foregoing
provisions. If the Borrower or any Subsidiary of the Borrower enters into an
Affiliate Transaction (or a series of related Affiliate Transactions related to
a common plan) that involves an aggregate fair market value (as determined in
good faith by the Board of Directors of the Borrower or such Subsidiary, as the
case may be) of more than $10,000,000, the Borrower or such Subsidiary, as the
case may be, shall, prior to the consummation thereof, obtain a favorable
opinion as to the fairness of such transaction or series of related transactions
to the Borrower or the relevant Subsidiary, as the case may be, from a financial
point of view, from an Independent Financial Advisor and file the same with the
Administrative Agent.
(b) The restrictions set forth in clause (a) of this Section 9.06
shall not apply to (i) reasonable fees and compensation paid to and indemnity
provided on behalf of, officers, directors, employees or consultants of the
Borrower or any Subsidiary of the Borrower as determined in good faith by the
Borrower's Board of Directors or senior management, (ii) transactions
exclusively between or among the Borrower and any of its Wholly-Owned
Subsidiaries or exclusively between or among such Wholly-Owned Subsidiaries,
provided such transactions are not otherwise prohibited by the Credit
Documents, (iii) any agreement as in effect as of the Effective Date or any
amendment thereto or any transaction contemplated thereby (including pursuant
to any amendment thereto) in any replacement agreement thereto so long as any
such amendment or replacement agreement is not more disadvantageous to the
Banks in any material respect than the original agreement as in effect on the
Effective Date, (iv) advances and loans to employees, officers and directors of
the Borrower and its Subsidiaries permitted by Sections 9.05(v) and (xv), and
(v) Dividends permitted by Section 9.03.
9.07 Capital Expenditures. (a) The Borrower will not, and will not
--------------------
permit any of its Subsidiaries to, make any Capital Expenditures, except that
during any fiscal year of the Borrower, the Borrower and its Subsidiaries may
make Capital Expenditures so long as the aggregate amount does not exceed
$50,000,000. From and after the consummation of any Permitted Acquisition, the
Capital Expenditure amount set forth in the immediately preceding
-51-
sentence shall be increased in each fiscal year of the Borrower by an amount
equal to 35% of the Acquired EBITDA of the respective Acquired Entity or
Business acquired in each such Permitted Acquisition for the most recently ended
12 month period prior to the consummation of such Permitted Acquisition and for
which financial statements are available for such Acquired Entity or Business
(as certified in the respective officer's certificate delivered pursuant to
clause (vi) of Section 9.02(viii)).
(b) In addition to the foregoing, in the event that the amount of
Capital Expenditures permitted to be made by the Borrower and its Subsidiaries
pursuant to clause (a) above in any fiscal year of the Borrower (before giving
effect to any increase in the permitted Capital Expenditure amount pursuant to
this clause (b)) is greater than the amount of such Capital Expenditures
actually made by the Borrower and its Subsidiaries during such fiscal year, the
lesser of (x) such excess and (y) 50% of the applicable scheduled Capital
Expenditure amount as set forth in such clause (a) above may be carried forward
and utilized to make additional Capital Expenditures in the immediately
succeeding fiscal year, provided that no amounts once carried forward pursuant
to this Section 9.07(b) may be carried forward to any fiscal year thereafter and
such amounts may only be utilized after the Borrower and its Subsidiaries have
utilized in full the permitted Capital Expenditure amount for such fiscal year
as set forth in the table in clause (a) above (without giving effect to any
increase in such amount by operation of this clause (b)).
(c) In addition to the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures with the amount of Net Sale Proceeds received by
the Borrower or any of its Subsidiaries from any Asset Sale so long as such Net
Sale Proceeds are reinvested in replacement assets within 180 days following the
date of such Asset Sale to the extent such Net Sale Proceeds are not otherwise
required to be applied to reduce the Total Revolving Loan Commitment pursuant to
Section 3.03(b).
(d) In addition to the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures with the amount of Net Insurance Proceeds received
by the Borrower or any of its Subsidiaries from any Recovery Event so long as
such Net Insurance Proceeds are used to replace or restore any properties or
assets in respect of which such Net Insurance Proceeds were paid within 180 days
following the date of receipt of such Net Insurance Proceeds from such Recovery
Event to the extent such Net Insurance Proceeds are not otherwise required to be
applied to reduce the Total Revolving Loan Commitment pursuant to Section
3.03(d).
(e) In addition to the foregoing, the Borrower and its Wholly-Owned
Subsidiaries may consummate Permitted Acquisitions to the extent permitted by
Section 9.02(viii).
9.08 Consolidated Interest Coverage Ratio. The Borrower will not
------------------------------------
permit the Consolidated Interest Coverage Ratio for any Test Period to be less
than 3.00:1.00.
9.09 Maximum Leverage Ratio. The Borrower will not permit the
----------------------
Leverage Ratio at any time to be greater than 3.00:1.00.
9.10 Consolidated Fixed Charge Coverage Ratio. The Borrower will not
----------------------------------------
permit the Consolidated Fixed Charge Coverage Ratio for any Test Period to be
less than 1.50:1.00.
-52-
9.11 Minimum Consolidated Net Worth. The Borrower will not permit
------------------------------
the Consolidated Net Worth at any time to be less than the sum of (I)
$300,000,000 plus (II) 50% of Cumulative Consolidated Net Income (if positive)
plus, (III) 100% of the cash proceeds received by the Borrower from sales or
issuances of its equity after the Effective Date (net of underwriting or
placement discounts and commission and other costs associated therewith).
9.12 Limitation on Modifications of Certificate of Incorporation, By-
---------------------------------------------------------------
Laws, etc and Limitations on Payments and Modifications of Permitted Designated
- -------------------------------------------------------------------------------
Indebtedness. (a) The Borrower will not, and will not permit any of its
- -------------
Subsidiaries to, (i) amend, modify or change its certificate or articles of
incorporation (including, without limitation, by the filing or modification of
any certificate of designation) or by-laws (or the equivalent organizational
documents) unless any such amendment, modification or change could not be
adverse to the interests of the Banks in any material respect, (ii) after the
issuance thereof, make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption or acquisition for value of, or
any prepayment or redemption as a result of any asset sale, change of control or
similar event of (including in each case, without limitation, by way of
depositing with the trustee with respect thereto or any other Person money or
securities before due for the purpose of paying when due), any Permitted
Designated Indebtedness or (iii) after the execution and delivery thereof, amend
or modify, or permit the amendment or modification of, any documentation entered
into in connection with any Permitted Designated Indebtedness.
(b.) Neither the Borrower nor any of its Subsidiaries shall designate
any Indebtedness, other than the Obligations, as "Designated Senior
Indebtedness" for purposes of any Permitted Designated Indebtedness that is
issued as senior subordinated or subordinated notes or debt securities.
9.13 Limitation on Certain Restrictions on Subsidiaries. The
--------------------------------------------------
Borrower will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Borrower or any Subsidiary
of the Borrower, or pay any Indebtedness owed to the Borrower or any Subsidiary
of the Borrower, (b) make loans or advances to the Borrower or any Subsidiary of
the Borrower or (c) transfer any of its properties or assets to the Borrower or
any Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (i) applicable law, (ii) this Agreement and the
other Credit Documents, (iii) customary non-assignment, subletting or
restriction on transfer or net worth provisions of any contract, license or
lease governing a leasehold interest of any Subsidiary of the Borrower, (iv) any
instrument governing Indebtedness described in Section 9.04(ix), which
restriction is not applicable to any Person, or the property or assets of any
Person, other than the Person or the properties or assets acquired pursuant to
any such Permitted Acquisition, (v) agreements existing on the Effective Date to
the extent and in the manner such agreements are in effect on the Effective
Date, (vi) any agreement for the sale or disposition of capital stock or assets
of any Subsidiary of the Borrower, provided that such encumbrances and
--------
restrictions are only applicable to such Subsidiary or assets, as applicable,
and any such sale or disposition is made in compliance with Section 9.02, (vii)
restrictions on the transfer of any asset subject to a
-53-
Lien permitted by Section 9.01 and (viii) after the issuance thereof, the
Permitted Designated Indebtedness.
9.14 Limitation on Issuance of Capital Stock. (a) The Borrower will
---------------------------------------
not, and will not permit any of its Subsidiaries to, issue (i) any preferred
stock (other than Qualified Preferred Stock of the Borrower) or (ii) any
redeemable common stock (other than common stock that is redeemable at the sole
option of the Borrower or such Subsidiary).
(b) The Borrower will not permit any of its Subsidiaries to issue
any capital stock (including by way of sales of treasury stock) or any options
or warrants to purchase, or securities convertible into, capital stock, except
(i) for transfers and replacements of then outstanding shares of capital stock,
(ii) for stock splits, stock dividends and issuances which do not decrease the
percentage ownership of the Borrower or any of its Subsidiaries in any class of
the capital stock of such Subsidiary, (iii) to qualify directors to the extent
required by applicable law, (iv) for issuances to the Borrower or a Wholly-Owned
Subsidiary thereof and (v) for issuances by newly created or acquired
Subsidiaries in accordance with the terms of this Agreement.
9.15 Business. The Borrower and its Subsidiaries will not engage in
--------
any businesses other than the businesses engaged in by the Borrower and its
Subsidiaries as of the Effective Date and reasonable extensions thereof and
other businesses that are complimentary or reasonably related thereto
(including, without limitation, "for profit universities").
9.16 Limitation on Creation of Subsidiaries. Notwithstanding
--------------------------------------
anything to the contrary contained in this Agreement, the Borrower will not, and
will not permit any of its Subsidiaries to, establish, create or acquire after
the Effective Date any Subsidiary, provided that the Borrower and its Wholly-
--------
Owned Subsidiaries shall be permitted to establish, create or, to the extent
permitted by the Agreement, acquire (x) Wholly-Owned Subsidiaries so long as (i)
the capital stock or other equity interests of each such new Wholly-Owned
Subsidiary (to the extent owned by a Credit Party) is pledged pursuant to, and
to the extent required by, the Pledge Agreement, (ii) each such new Wholly-Owned
Subsidiary (other than a Foreign Subsidiary, except to the extent required by
Section 8.10) executes a counterpart of the Subsidiaries Guaranty and the Pledge
Agreement, and (iii) each such new Wholly-Owned Subsidiary (other than a Foreign
Subsidiary, except to the extent required by Section 8.10) executes and
delivers, or causes to be executed and delivered, all other relevant
documentation of the type described in Section 5 as such new Wholly-Owned
Subsidiary would have had to deliver if such new Wholly-Owned Subsidiary were a
Credit Party on the Effective Date and (y) non-Wholly-Owned Subsidiaries so long
as the capital stock or other equity interest of each such new non-Wholly-Owned
Subsidiary (to the extent owned by a Credit Party) is pledged pursuant to, and
to the extent required by, the Pledge Agreement.
SECTION 10. Events of Default. Upon the occurrence of any of the
-----------------
following specified events (each an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the payment when
--------
due of any principal of any Loan or any Note or (ii) default, and such default
shall continue unremedied for three or more Business Days, in the payment when
due of any interest on any Loan or Note, any
-54-
Unpaid Drawing (or any interest thereon) or any Fees or any other amounts owing
hereunder or thereunder; or
10.02 Representations, etc. Any representation, warranty or
---------------------
statement made or deemed made by any Credit Party herein or in any other Credit
Document or in any certificate delivered to the Administrative Agent or any Bank
pursuant hereto or thereto shall prove to be untrue in any material respect on
the date as of which made or deemed made; or
10.03 Covenants. Any Credit Party shall (i) default in the due
---------
performance or observance by it of any term, covenant or agreement contained in
Section 8.01(f)(i) or 8.08 or Section 9 or (ii) default in the due performance
or observance by it of any other term, covenant or agreement contained in this
Agreement or any other Credit Document (other than those set forth in Sections
10.01 and 10.02) and such default shall continue unremedied for a period of 30
days after written notice thereof to the defaulting party by the Administrative
Agent or the Required Banks; or
10.04 Default Under Other Agreements. (i) The Borrower or any of
------------------------------
its Subsidiaries shall (x) default in any payment of any Indebtedness (other
than the Notes) beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created or (y) default in the
observance or performance of any agreement or condition relating to any
Indebtedness (other than the Obligations) or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause (determined
without regard to whether any notice is required), any such Indebtedness to
become due prior to its stated maturity, or (ii) any Indebtedness (other than
the Obligations) of the Borrower or any of its Subsidiaries shall be declared to
be (or shall become) due and payable, or required to be prepaid other than by a
regularly scheduled required prepayment, prior to the stated maturity thereof,
provided that it shall not be a Default or an Event of Default under this
- --------
Section 10.04 unless the aggregate principal amount of all Indebtedness as
described in preceding clauses (i) and (ii) is at least $2,000,000; or
10.05 Bankruptcy, etc. The Borrower or any of its Subsidiaries shall
----------------
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against the
Borrower or any of its Subsidiaries, and the petition is not controverted within
10 days, or is not dismissed within 60 days, after commencement of the case; or
a custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of the Borrower or any of
its Subsidiaries, or the Borrower or any of its Subsidiaries commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Borrower or any
of its Subsidiaries, or there is commenced against the Borrower or any of its
Subsidiaries any such proceeding which remains undismissed for a period of 60
days, or the Borrower or any of its Subsidiaries is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Borrower or any of its Subsidiaries suffers any
appointment of any custodian or
-55-
the like for it or any substantial part of its property to continue undischarged
or unstayed for a period of 60 days; or the Borrower or any of its Subsidiaries
makes a general assignment for the benefit of creditors; or any corporate action
is taken by the Borrower or any of its Subsidiaries for the purpose of effecting
any of the foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
-----
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made with respect to a Plan or a
Foreign Pension Plan has not been timely made, the Borrower or any Subsidiary of
the Borrower or any ERISA Affiliate has incurred or is likely to incur any
liability to or on account of a Plan under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971
or 4975 of the Code or on account of a group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the
Code, or the Borrower or any Subsidiary of the Borrower has incurred or is
likely to incur liabilities pursuant to one or more employee welfare benefit
plans (as defined in Section 3(1) of ERISA) that provide benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) or Plans or Foreign Pension Plans a "default," within the meaning of
Section 4219(c)(5) of ERISA, shall occur with respect to any Plan; any
applicable law, rule or regulation is adopted, changed or interpreted, or the
interpretation or administration thereof is changed, in each case after the date
hereof, by any governmental authority or agency or by any court (a "Change in
Law"), or, as a result of a Change in Law, an event occurs following a Change in
Law, with respect to or otherwise affecting any Plan; (b) there shall result
from any such event or events the imposition of a lien, the granting of a
security interest, or a liability or a material risk of incurring a liability;
and (c) such lien, security interest or liability, either individually and/or in
the aggregate, has had, or could reasonably be expected to have, a material
adverse effect on the business, operations, properties, assets, liabilities,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole; or
10.07 Pledge Agreement. The Pledge Agreement shall cease to be in
----------------
full force and effect, or shall cease to give the Collateral Agent for the
benefit of the Secured Creditors the Liens, rights, powers and privileges
purported to be created thereby (including, without limitation, a perfected
first priority security interest in all of the Collateral, in favor of the
Collateral Agent, superior to and prior to the rights of all third Persons); or
10.08 Subsidiaries Guaranty. The Subsidiaries Guaranty or any
---------------------
provision thereof shall cease to be in full force or effect as to any Subsidiary
Guarantor, or any Subsidiary
-56-
Guarantor or any Person acting by or on behalf of such Subsidiary Guarantor
shall deny or disaffirm such Subsidiary Guarantor's obligations under the
Subsidiaries Guaranty or any Subsidiary Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to the Subsidiaries Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be entered
---------
against the Borrower or any Subsidiary of the Borrower involving in the
aggregate for the Borrower and its Subsidiaries a liability (not paid or fully
covered by a reputable and solvent insurance company) and such judgments and
decrees either shall be final and non-appealable or shall not be vacated,
discharged or stayed or bonded pending appeal for any period of 30 consecutive
days, and the aggregate amount of all such judgments equals or exceeds
$2,000,000; or
10.10 Change of Control. A Change of Control shall occur;
-----------------
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Banks, shall by written notice to the Borrower, take any or all of
the following actions, without prejudice to the rights of any Administrative
Agent, any Bank or the holder of any Note to enforce its claims against any
Credit Party (provided, that, if an Event of Default specified in Section 10.05
--------
shall occur with respect to the Borrower, the result which would occur upon the
giving of written notice by the Administrative Agent as specified in clauses (i)
and (ii) below shall occur automatically without the giving of any such notice):
(i) declare the Total Revolving Loan Commitment terminated, whereupon the
Revolving Loan Commitment of each Bank shall forthwith terminate immediately and
any Commitment Commission shall forthwith become due and payable without any
other notice of any kind; (ii) declare the principal of and any accrued interest
in respect of all Loans and the Notes and all Obligations owing hereunder and
thereunder to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower; (iii) terminate any Letter of Credit which
may be terminated in accordance with its terms; (iv) direct the Borrower to pay
(and the Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default specified in Section 10.05 with respect to the
Borrower, it will pay) to the Collateral Agent at the Payment Office such
additional amount of cash and/or Cash Equivalents, to be held as security by the
Collateral Agent, as is equal to the aggregate Stated Amount of all Letters of
Credit issued for the account of the Borrower and then outstanding; (v) enforce,
as Collateral Agent, all Liens, rights and remedies created pursuant to the
Pledge Agreement; and (vi) apply any cash collateral held by the Administrative
Agent pursuant to Section 4.02 to the repayment of the Obligations.
SECTION 11. Definitions and Accounting Terms.
--------------------------------
11.01 Defined Terms. As used in this Agreement, the following terms
-------------
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Acquired EBITDA" of any Acquired Entity or Business acquired pursuant
to a Permitted Acquisition shall mean the consolidated "EBITDA" of such Acquired
Entity or
-57-
Business calculated on a basis consistent with the calculation of Consolidated
EBITDA under this Agreement and reasonably approved by the Administrative Agent.
"Acquired Entity or Business" shall have the meaning provided in the
definition of "Consolidated Net Income."
"Administrative Agent" shall mean BTCo, in its capacity as
Administrative Agent for the Banks hereunder, and shall include any successor to
the Administrative Agent appointed pursuant to Section 12.09.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited to, all directors
and officers of such Person), controlled by, or under direct or indirect common
control with, such Person. A Person shall be deemed to control another Person
if such Person possesses, directly or indirectly, the power (i) to vote 10% or
more of the securities having ordinary voting power for the election of
directors of such corporation or to direct or cause the direction of the
management and policies of such other Person, whether through the ownership of
voting securities, by contract or otherwise. Notwithstanding the foregoing, it
is understood and agreed that for purposes of Section 9.06, no Bank (nor any
Affiliate of such Bank) shall be deemed to be an Affiliate of the Borrower.
"Affiliate Transaction" shall have the meaning provided in Section
9.06.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated (including any amendment and restatement
hereof), extended, renewed, refinanced or replaced from time to time.
"Alternate Currency" shall mean each of Spanish Pasetas, British
Pounds, Euros and one or more other foreign currencies that are acceptable to
the Issuing Bank.
"Applicable Base Rate Margin" shall mean (i) for the period from the
Effective Date through but not including the first Start Date after the
Effective Date, 0% and (ii) from and after any Start Date to and including the
corresponding End Date, the respective percentage per annum set forth in clause
(A), (B), (C) or (D) below if, but only if, as of the Test Date for such Start
Date the applicable condition set forth in clause (A), (B), (C) or (D) below, as
the case may be, is met:
(A) 1.00% if, but only if, as of the Test Date for such Start Date
the Leverage Ratio for the Test Period ended on such Test Date shall be
greater than or equal to 2.00:1.00;
(B) .50% if, but only if, as of the Test Date for such Start Date the
Leverage Ratio for the Test Period ended on such Test Date shall be less
than 2.00:1.00 and greater than or equal to 1.50:1.00;
(C) .25% if, but only if, as of the Test Date for such Start Date the
Leverage Ratio for the Test Period ended on such Test Date shall be less
than 1.50:1.00 and greater than or equal to 1.00:1.00; and
-58-
(D) 0% if, but only if, as of the Test Date for such Start Date the
Leverage Ratio for the Test Period ended on such Test Date shall be less
than 1.00:1.00.
Notwithstanding anything to the contrary contained above in this definition, the
Applicable Base Rate Margin shall be 1.00% at all times when a Default or an
Event of Default shall exist.
"Applicable Commitment Commission Percentage" shall mean (i) for the
period from the Effective Date through but not including the first Start Date
after the Effective Date, .250% and (ii) from and after any Start Date to and
including the corresponding End Date, the respective percentage per annum set
forth in clause (A), (B) or (C) below if, but only if, as of the Test Date for
such Start Date the applicable condition set forth in clause (A), (B) or (C)
below, as the case may be, is met:
(A) .50% if, but only if, as of the Test Date for such Start Date the
Leverage Ratio for the Test Period ended on such Test Date shall be greater
than or equal to 2.00:1.00;
(B) .375% if, but only if, as of the Test Date for such Start Date
the Leverage Ratio for the Test Period ended on such Test Date shall be
less than 2.00:1.00 and greater than or equal to 1.00:1.00; and
(C) .250% if, but only if, as of the Test Date for such Start Date
the Leverage Ratio for the Test Period ended on such Test Date shall be
less than to 1.00:1.00.
Notwithstanding anything to the contrary contained above in this definition, the
Applicable Commitment Commission Percentage shall be .50% at all times when a
Default or an Event of Default shall exist.
"Applicable Eurodollar Rate Margin" shall mean (i) for the period from
the Effective Date through but not including the first Start Date after the
Effective Date, 1.00% and (ii) from and after any Start Date to and including
the corresponding End Date, the respective percentage per annum set forth in
clause (A), (B), (C) or (D) below if, but only if, as of the Test Date for such
Start Date the applicable condition set forth in clause (A), (B), (C) or (D)
below, as the case may be, is met:
(A) 2.00% if, but only if, as of the Test Date for such Start Date
the Leverage Ratio for the Test Period ended on such Test Date shall be
greater than or equal to 2.00:1.00;
(B) 1.50% if, but only if, as of the Test Date for such Start Date
the Leverage Ratio for the Test Period ended on such Test Date shall be
less than 2.00:1.00 and greater than or equal to 1.50:1.00;
(C) 1.25% if, but only if, as of the Test Date for such Start Date
the Leverage Ratio for the Test Period ended on such Test Date shall be
less than 1.50:1.00 and greater than or equal to 1.00:1.00; and
-59-
(D) 1.00% if, but only if, as of the Test Date for such Start Date
the Leverage Ratio for the Test Period ended on such Test Date shall be
less than 1.00:1.00.
Notwithstanding anything to the contrary contained above in this definition, the
Applicable Eurodollar Rate Margin shall be 2.00% at all times when a Default or
an Event of Default shall exist.
"Applicable Margin Period" shall mean each period which shall commence
on the date on which the financial statements are delivered pursuant to Section
8.01(a) or (b), as the case may be, and which shall end on the earlier of (i)
the date of actual delivery of the next financial statements pursuant to Section
8.01(a) or (b) as the case may be, and (ii) the latest date on which the next
financial statements are required to be delivered pursuant to Section 8.01(a) or
(b), as the case may be, with the first Applicable Margin Period commencing with
the delivery of the Borrower's financial statements for its fiscal year ending
December 31, 1998.
"Aspect Acquisition" shall mean the acquisition by the Borrower of
100% of the capital stock of Aspect International Language Schools, B.V. in May
6, 1998.
"Asset Sale" shall mean any sale, transfer or other disposition by the
Borrower or any of its Subsidiaries to any Person (including by-way-of
redemption by such Person) other than to the Borrower or a Wholly-Owned
Subsidiary of the Borrower of any asset (including, without limitation, any
capital stock or other securities of, or equity interests in, another Person)
other than sales of assets pursuant to Sections 9.02(ii), (iii), (iv), (ix),
(xii) and (xiii).
"Assignment and Assumption Agreement" shall mean an Assignment and
Assumption Agreement substantially in the form of Exhibit K (appropriately
completed).
"Bank" shall mean each financial institution listed on Schedule I, as
well as any Person which becomes a "Bank" hereunder pursuant to Section 1.13 or
13.04(b).
"Bank Default" shall mean (i) the refusal (which has not been
retracted) or the failure of a Bank to make available its portion of any
Borrowing required to be made available by it hereunder (including any Mandatory
Borrowing) or to fund its portion of any unreimbursed payment under Section
2.04(c) or (ii) a Bank having notified in writing the Borrower and/or the
Administrative Agent that such Bank does not intend to comply with its
obligations under Section 1.01(a), 1.01(c) or 2, in the case of either clause
(i) or (ii) as a result of any takeover or control (including, without
limitation, as a result of the occurrence of any event of the type described in
Section 10.05 with respect to such Bank) of such Bank by any regulatory
authority or agency.
"Bankruptcy Code" shall have the meaning provided in Section 10.05.
"Base Rate" shall mean, at any time, the higher of (i) the Prime
Lending Rate and (ii) 1/2 of 1% in excess of the Federal Funds Rate.
"Base Rate Loan" shall mean (i) each Swingline Loan and (ii) each
Revolving Loan designated or deemed designated as such by the Borrower at the
time of the incurrence thereof or conversion thereto.
-60-
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean (i) the borrowing of Swingline Loans from the
Swingline Bank on a given date and (ii) the borrowing of one Type of Revolving
Loan from all the Banks on a given date (or resulting from a conversion or
conversions on such date) having in the case of Eurodollar Loans the same
Interest Period, provided that Base Rate Loans incurred pursuant to Section
--------
1.10(b) shall be considered part of the related Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company, in its individual capacity,
and any successor corporation thereto by merger, consolidation or otherwise.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day except Saturday, Sunday and any day which shall be
in New York City, New York and, in the case of Swingline Loans, Charlotte, North
Carolina, a legal holiday or a day on which banking institutions are authorized
or required by law or other government action to close and (ii) with respect to
all notices and determinations in connection with, and payments of principal and
interest on, Eurodollar Loans, any day which is a Business Day described in
clause (i) above and which is also a day for trading by and between banks in the
New York interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles, and, without duplication, the amount
of all Capitalized Lease Obligations incurred by such Person.
"Capitalized Lease Obligations" shall mean, with respect to any
Person, all rental obligations of such Person which, under generally accepted
accounting principles, are or will be required to be capitalized on the books of
such Person, in each case taken at the amount thereof accounted for as
indebtedness in accordance with such principles.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued
or directly and fully guaranteed or insured by the United States or any agency
or instrumentality thereof (provided that the full faith and credit of the
--------
United States is pledged in support thereof) having maturities of not more than
one year from the date of acquisition, (ii) time deposits, Euro-dollar deposits,
certificates of deposit or bankers' acceptances of any commercial bank organized
under the laws of the United States or any state thereof or the District of
Columbia or any U.S. branch of a foreign bank having at the date of acquisition
thereof combined capital and surplus of not less than $250,000,000, in each case
with maturities of not more than one year from the date of acquisition by such
Person, (iii) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in clause (ii) above, (iv)
commercial paper issued by any Person incorporated in the United States rated at
least A-1 or the equivalent thereof by Standard & Poor's Ratings Services or at
least P-1 or the equivalent thereof by Moody's Investors Service, Inc. and in
each case maturing not more than one year after the date of acquisition by such
Person, (v) marketable direct obligations issued by the District of Columbia or
any State of the
-61-
United States or any political subdivision of any such State or any public
instrumentality thereof maturing within one year from the date of acquisition
and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Ratings Services or Moody's Investors
Service, Inc., (vi) investments in money market funds substantially all of whose
assets are comprised of securities of the types described in clauses (i) through
(v) above, and (vii) in the case of any Foreign Subsidiary, (A) direct
obligations of the sovereign nation (or any agency thereof) in which such
Foreign Subsidiary is organized or is conducting business or in obligations
fully and unconditionally guaranteed by such sovereign nation (or any agency
thereof) having maturities of not more than one year from the date of
acquisition or (B) of the type and maturity described in clauses (ii), (iii) or
(iv) above of foreign obligors, which obligations or obligors (or the parents of
such obligors) have ratings described in such clauses or equivalent ratings from
comparable foreign rating agencies.
"Certificated Securities" shall have the meaning provided in the
Pledge Agreement.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. (S) 9601 et seq.
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"Change of Control" shall mean (i) any Person or "group" (within the
meaning of Section 13(d) and 14(d) under the Securities Exchange Act, as in
effect on the Effective Date) shall have (A) acquired beneficial ownership of
35% or more on a fully diluted basis of the voting and/or economic interest in
the Borrower's capital stock or (B) obtained the power (whether or not
exercised) to elect a majority of the Borrower's directors or (ii) the Board of
Directors of the Borrower shall cease to consist of a majority of Continuing
Directors or (iii) after the issuance of any issue Permitted Designated
Indebtedness, a "change of control" shall occur under any such issue of
Permitted Designated Indebtedness.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect on the Effective
Date and any subsequent provisions of the Code, amendatory thereof, supplemental
thereto or substituted therefor.
"Collateral" shall mean all "Collateral" as defined in the Pledge
Agreement.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors pursuant to the Pledge Agreement.
"Commitment Commission" shall have the meaning set forth in Section
3.01(a).
"Consolidated EBIT" shall mean, for any period, Consolidated Net
Income for such period before Consolidated Interest Expense of the Borrower for
such period and provision for taxes for such period and without giving effect
(x) to any extraordinary gains or losses and (y) to any gains or losses from
sales of assets other than (i) from sales of inventory sold in the ordinary
course of business and (ii) licensing of intellectual property in the ordinary
course of business.
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"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT
for such period, adjusted by adding thereto (i) the amount of all amortization
of intangibles and depreciation that were deducted in arriving at Consolidated
EBIT for such period and (ii) the amount of all non-recurring charges (x)
previously incurred in connection with the Aspect Acquisition and (y) incurred
in connection with a Permitted Acquisition, in each case to the extent that such
non-recurring charges were deducted in arriving at Consolidated EBIT for such
period.
"Consolidated Fixed Charge Coverage Ratio" shall mean, for any period,
the ratio of (x) the sum of (I) Consolidated EBITDA for such period plus (II)
the amount of all rental expense of the Borrower and its Subsidiaries for such
period to (y) Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges" shall mean, for any period, the sum,
without duplication, of (i) Consolidated Interest Expense for such period, (ii)
the amount of all Capital Expenditures made by the Borrower and its Subsidiaries
for such period (other than Capital Expenditures to the extent financed with
equity proceeds, Asset Sale proceeds, insurance proceeds or Indebtedness), (iii)
the amount of all rental expense of the Borrower and its Subsidiaries for such
period and (iv) the scheduled principal amount of all amortization payments on
all Indebtedness (including, without limitation, the principal component of all
Capitalized Lease Obligations but excluding the repayment contemplated by
Section 5.12) of the Borrower and its Subsidiaries for such period (as
determined on the first day of such period and (v) the amount of all cash
payments made by the Borrower and its Subsidiaries in respect of taxes or tax
liabilities for such period.
"Consolidated Indebtedness" shall mean, at any time, without
duplication, the sum of (I) the principal amount of all Indebtedness of the
Borrower and its Subsidiaries at such time as determined on a consolidated basis
and (II) the Borrower's good faith estimate of the aggregate amount of all
accrued "earn-out" and similar payments at such time which were incurred by the
Borrower or a Subsidiary thereof in connection with the acquisition of any asset
(including pursuant to a Permitted Acquisition) less the amount of any such
"earn-out" or similar payments which have been designated by the Borrower to the
Administrative Agent as scheduled to be paid in common stock of the Borrower.
"Consolidated Interest Coverage Ratio" shall mean, for any period, the
ratio of Consolidated EBITDA to Consolidated Interest Expense for such period.
"Consolidated Interest Expense" shall mean, for any period, the total
consolidated cash interest expense of the Borrower and its Subsidiaries for such
period (calculated without regard to any limitations on the payment thereof)
plus, without duplication, that portion of Capitalized Lease Obligations of the
Borrower and its Subsidiaries representing the interest factor for such period;
provided that the amortization of deferred financing costs with respect to this
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Agreement shall be excluded from Consolidated Interest Expense to the extent
same would otherwise have been included therein.
"Consolidated Net Income" shall mean, for any period, the net income
(or loss) of the Borrower and its Subsidiaries for such period, determined on a
consolidated basis (and after
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deductions for minority interests), provided that (i) the net income of any
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other Person which is not a Subsidiary of the Borrower or is accounted for by
the Borrower by the equity method of accounting shall be included only to the
extent of the payment of cash dividends or distributions by such other Person to
the Borrower or a Subsidiary thereof during such period, (ii) the net income of
any Subsidiary of the Borrower shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Subsidiary
of that income is not at the time permitted by operation of the terms of its
charter or any agreement, instrument or law applicable to such Subsidiary and
(iii) the net income (or loss) of any other Person acquired by such specified
Person or a Subsidiary of such Person in a pooling of interests transaction for
any period prior to the date of such acquisition shall be excluded; and provided
--------
further, that for purposes of calculating the Leverage Ratio, there shall be
- -------
included (to the extent not already included) in determining Consolidated Net
Income for any period the net income (or loss) of any Person, business, property
or asset acquired during such period pursuant to a Permitted Acquisition and not
subsequently sold or otherwise disposed of by the Borrower or one of its
Subsidiaries during such period (each such Person, business, property or asset
acquired and not subsequently disposed of during such period, an "Acquired
Entity or Business"), in each case based on the actual net income (or loss) of
such Acquired Entity or Business for the entire period (including the portion
thereof occurring prior to such acquisition) (but after any deductions for
minority interests).
"Consolidated Net Worth" shall mean, at any date, the consolidated net
worth of the Borrower and its Subsidiaries as same would be shown on a
consolidated balance sheet of the Borrower prepared as of such date in
accordance with generally accepted accounting principles.
"Contingent Obligation" shall mean, as to any Person, any obligation
of such Person as a result of such Person being a general partner of the other
Person, unless the underlying obligation is expressly made non-recourse as to
such general partner, and any obligation of such Person guaranteeing or intended
to guarantee any Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (x) for the purchase or payment of any such primary
obligation or (y) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the holder of such primary obligation against loss in
respect thereof; provided, however, that the term Contingent Obligation shall
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not include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as determined
by such Person in good faith.
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"Continuing Directors" shall mean the directors of the Borrower on the
Effective Date and each other director if such director's nomination for
election to the Board of Directors of the Borrower is recommended by a majority
of the then Continuing Directors.
"Credit Documents" shall mean this Agreement and, after the execution
and delivery thereof pursuant to the terms of this Agreement, each Note, the
Subsidiaries Guaranty and the Pledge Agreement.
"Credit Event" shall mean the making of any Loan or the issuance of
any Letter of Credit.
"Credit Party" shall mean the Borrower and each Subsidiary Guarantor.
"Cumulative Consolidated Net Income" shall mean, at any time for the
determination thereof, Consolidated Net Income for the period (taken as one
accounting period) commencing on January 1, 1999 and ending on the last day of
the Borrower's fiscal quarter then last ended.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
"Dividend" shall mean, with respect to any Person, that such Person
has declared or paid a dividend or returned any equity capital to its
stockholders, partners or members or authorized or made any other distribution,
payment or delivery of property (other than common stock of such Person) or cash
to its stockholders, partners or members as such, or redeemed, retired,
purchased or otherwise acquired, directly or indirectly, for a consideration any
shares of any class of its capital stock or any partnership or membership
interests outstanding on or after the Effective Date (or any options or warrants
issued by such Person with respect to its capital stock or other equity
interests), or set aside any funds for any of the foregoing purposes, or shall
have permitted any of its Subsidiaries to purchase or otherwise acquire for a
consideration any shares of any class of the capital stock or any partnership or
membership interests of such Person outstanding on or after the Effective Date
(or any options or warrants issued by such Person with respect to its capital
stock or other equity interests). Without limiting the foregoing, "Dividends"
with respect to any Person that is a stockholder or other equityholder of such
Person shall also include all payments made or required to be made by such
Person with respect to any stock appreciation rights plans, equity incentive or
achievement plans or any similar plans or setting aside of any funds for the
foregoing purposes.
"Dollar Equivalent" of an amount denominated in a currency other than
Dollars ("the Other Currency") shall mean, at any time for the determination
thereof, the amount of Dollars which could be purchased with the amount of Other
Currency involved in such computation at the spot exchange rate therefor as
determined pursuant to Section 13.07(c).
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"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of the Borrower that
is incorporated under the laws of the United States or any State or territory
thereof.
"Drawing" shall have the meaning provided in Section 2.05(b).
"Effective Date" shall have the meaning provided in Section 13.10.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution, any fund that invests in loans or any other "accredited
investor" (as defined in Regulation D of the Securities Act).
"End Date" shall mean, for any Applicable Margin Period, the last day
of such Applicable Margin Period.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environmental Law (hereafter, "Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief in connection
with alleged injury or threat of injury to health, safety or the environment due
to the presence of Hazardous Materials.
"Environmental Law" shall mean any Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, guideline, written policy and
rule of common law now or hereafter in effect and in each case as amended, and
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
employee health and safety or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C. (S)
1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. (S) 2601 et seq.; the
-- ---- -- ----
Clean Air Act, 42 U.S.C. (S) 7401 et seq.; the Safe Drinking Water Act, 42
-- ----
U.S.C. (S) 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. (S) 2701 et
-- ---- --
seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42
- ----
U.S.C. (S) 11001 et seq.; the Hazardous Material Transportation Act, 49 U.S.C.
-- ----
(S) 1801 et seq; the Occupational Safety and Health Act, 29 U.S.C. (S) 651 et
-- ---- --
seq.; and any state and local or foreign counterparts or equivalents, in each
- ----
case as amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect on
the Effective Date and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
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"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Borrower or a Subsidiary of the Borrower would
be deemed to be a "single employer" (i) within the meaning of Section 414(b),
(c), (m) or (o) of the Code or (ii) as a result of the Borrower or a Subsidiary
of the Borrower being or having been a general partner of such person.
"Eurodollar Loan" shall mean each Revolving Loan designated as such by
the Borrower at the time of the incurrence thereof or conversion thereto.
"Eurodollar Rate" shall mean (a) the offered quotation to first-class
banks in the New York interbank Eurodollar market by BTCo for Dollar deposits of
amounts in immediately available funds comparable to the outstanding principal
amount of the Eurodollar Loan of BTCo with maturities comparable to the Interest
Period applicable to such Eurodollar Loan commencing two Business Days
thereafter as of 11:00 A.M. (New York time) on the date which is two Business
Days prior to the commencement of such Interest Period, divided (and rounded
upward to the nearest 1/16 of 1%) by (b) a percentage equal to 100% minus the
then stated maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves
required by applicable law) applicable to any member bank of the Federal Reserve
System in respect of Eurocurrency funding or liabilities as defined in
Regulation D (or any successor category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section 10.
"Existing Indebtedness" shall have the meaning provided in Section
7.21.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 3.01.
"Final Maturity Date" shall mean December 23, 2003.
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by the Borrower or any one or
more of its Subsidiaries primarily for the benefit of employees of the Borrower
or such Subsidiaries residing outside the United States of America, which plan,
fund or other similar program provides, or results in, retirement income, a
deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
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"Foreign Subsidiary" shall mean each Subsidiary of the Borrower which
is not a Domestic Subsidiary.
"Hazardous Materials" shall mean (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is friable, urea
formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous substances," "restricted hazardous waste," "toxic
substances," "toxic pollutants," "contaminants," or "pollutants," or words of
similar import, under any applicable Environmental Law; and (c) any other
chemical, material or substance the Release of which is prohibited, limited or
regulated by any governmental authority.
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services, (ii) the maximum amount available to be drawn under all letters of
credit issued for the account of such Person and all unpaid drawings in respect
of such letters of credit, (iii) all Indebtedness of the types described in
clause (i), (ii), (iv), (v), (vi) or (vii) of this definition secured by any
Lien on any property owned by such Person, whether or not such Indebtedness has
been assumed by such Person (provided that, if the Person has not assumed or
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otherwise become liable in respect of such Indebtedness, such Indebtedness shall
be deemed to be in an amount equal to the fair market value of the property to
which such Lien relates as determined in good faith by such Person), (iv) the
aggregate amount required to be capitalized under leases under which such Person
is the lessee, (v) all obligations of such Person to pay a specified purchase
price for goods or services, whether or not delivered or accepted, i.e., take-
----
or-pay and similar obligations, (vi) all Contingent Obligations of such Person
and (vii) all obligations under any Interest Rate Protection Agreement, any
Other Hedging Agreement or under any similar type of agreement. Notwithstanding
the foregoing, Indebtedness shall not include trade payables and accrued
expenses incurred by any Person in accordance with customary practices and in
the ordinary course of business of such Person.
"Independent Financial Advisor" shall mean a firm (i) which does not,
and whose directors, officers and employees or Affiliates do not, have a direct
or indirect financial interest in the Borrower and (ii) which, in the judgment
of the Board of Directors of the Borrower, is otherwise independent and
qualified to perform the task for which it is to be engaged.
"Information Systems and Equipment" shall mean all computer hardware,
firmware and software, as well as other information processing systems, or any
equipment containing embedded microchips, whether directly owned, licensed,
leased, operated or otherwise controlled by the Borrower or any of its
Subsidiaries, including through third-party service providers, and which, in
whole or in part, are used, operated, relied upon, or integral to, the
Borrower's or any of its Subsidiaries' conduct of their business.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
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"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement or other similar agreement or arrangement.
"Investments" shall have the meaning provided in Section 9.05.
"Issuing Bank" shall mean BTCo.
"L/C Supportable Obligations" shall mean (i) obligations of the
Borrower or any of its Subsidiaries with respect to workers compensation, surety
bonds and other similar statutory obligations and (ii) such other obligations of
the Borrower or any of its Subsidiaries as are reasonably acceptable to the
Issuing Bank and otherwise permitted to exist pursuant to the terms of this
Agreement.
"Leaseholds" of any Person shall mean all the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the sum of
(i) the aggregate Stated Amount of all outstanding Letters of Credit at such
time and (ii) the amount of all Unpaid Drawings at such time.
"Letter of Credit Request" shall have the meaning provided in Section
2.03(a).
"Leverage Ratio" shall mean, at any time, the ratio of Consolidated
Indebtedness at such time to Consolidated EBITDA for the Test Period then most
recently ended.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loan" shall mean each Revolving Loan and each Swingline Loan.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(c).
"Margin Stock" shall have the meaning provided in Regulation U.
"Maximum Swingline Amount" shall mean $10,000,000.
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"Minimum Borrowing Amount" shall mean (i) for Revolving Loans,
$1,000,000 and (ii) for Swingline Loans, $250,000 (or such lesser amount as may
be acceptable to the Swingline Bank).
"NAIC" shall mean the National Association of Insurance Commissioners.
"Net Debt Proceeds" shall mean, with respect to any incurrence of
Indebtedness for borrowed money, the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith)
received by the respective Person from the respective incurrence of such
Indebtedness for borrowed money.
"Net Insurance Proceeds" shall mean, with respect to any Recovery
Event, the cash proceeds (net of reasonable costs and taxes incurred in
connection with such Recovery Event) received by the respective Person in
connection with the respective Recovery Event.
"Net Sale Proceeds" shall mean, for any Asset Sale, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from such Asset Sale, net of the reasonable costs of such sale
(including fees and commissions, payments of unassummed liabilities relating to
the assets sold and required payments of any Indebtedness which is secured by
the respective assets which were sold), and the incremental taxes paid or
payable as a result of such Asset Sale.
"Non-Defaulting Bank" shall mean and include each Bank other than a
Defaulting Bank.
"Note" shall mean each Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean (i) except as provided in clause (ii)
below, the office of the Administrative Agent located at One Bankers Trust
Plaza, 130 Liberty Street, New York, New York 10006, Attention: Gaelle Vaval or
such other office as the Administrative Agent may hereafter designate in writing
as such to the other parties hereto, and (ii) in the case of the incurrence of
any Swingline Loans, the office of the Swingline Bank located at 10 Light
Street: MD4-302-16-01, Baltimore, Maryland 21202 or such other office as the
Swingline Bank may hereafter designate in writing to the Administrative Agent
and the Borrower.
"Obligations" shall mean all amounts owing to the Administrative
Agent, the Collateral Agent, the Issuing Bank or any Bank pursuant to the terms
of this Agreement or any other Credit Document.
"Other Hedging Agreement" shall mean any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against the fluctuations in currency values.
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"Participant" shall have the meaning provided in Section 2.04(a).
"Payment Office" shall mean the office of the Administrative Agent
located at One Bankers Trust Plaza, 130 Liberty Street, New York, New York
10006, or such other office as the Administrative Agent may hereafter designate
in writing as such to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisition" shall have the meaning provided in Section
9.02 (viii).
"Permitted Designated Indebtedness" shall mean any issue of unsecured
senior notes, unsecured senior subordinated notes and/or unsecured subordinated
notes (all of which may be convertible into common stock of the Borrower) issued
pursuant to, and satisfying the requirements of, Section 9.04(viii).
"Permitted Liens" shall have the meaning provided in Section 9.01.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) the Borrower or a Subsidiary of the Borrower or an
ERISA Affiliate, and each such plan for the five-year period immediately
following the latest date on which the Borrower, or a Subsidiary of the Borrower
or an ERISA Affiliate, maintained, contributed to or had an obligation to
contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section 5.08.
"Pledge Agreement Collateral" shall mean all "Collateral" as defined
in the Pledge Agreement.
"Pledgee" shall have the meaning provided in the Pledge Agreement.
"Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. BTCo may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"Projections" shall mean the five year projections of the Borrower and
its Subsidiaries through its fiscal year ending December 31, 2003, which are
dated November, 1998 and were delivered to the Bank prior to the Effective Date.
"Qualified Preferred Stock" shall mean any preferred stock of the
Borrower so long as the terms of any such preferred stock (i) do not contain any
mandatory put, redemption,
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repayment, sinking fund or other similar provision, except upon the occurrence
of a change of control so long as the terms thereof do not require any such
redemption or other action unless all Obligations have been paid in full and the
Total Revolving Loan Commitment has been terminated or the requisite consents
under this Agreement have been obtained to permit such redemption or other
action, (ii) do not require the cash payment of dividends to the extent that the
payment thereof would not be permitted at such time pursuant to this Agreement,
(iii) do not contain any operating or financial maintenance covenants, (iv) do
not grant the holders thereof any voting rights except for (x) voting rights
required to be granted to such holders under applicable law and (y) limited
customary voting rights on fundamental matters such as mergers, consolidations,
sales of all or substantially all of the assets of the Borrower, or liquidations
involving the Borrower, and (v) are otherwise reasonably satisfactory to the
Administrative Agent.
"Quarterly Payment Date" shall mean the last Business Day of each
March, June, September and December occurring after the Effective Date.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. (S) 6901 et seq.
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"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by the Borrower or any of its
Subsidiaries of any cash insurance proceeds or condemnation awards payable (i)
by reason of theft, loss, physical destruction, damage, taking or any other
similar event with respect to any property or assets of the Borrower or any of
its Subsidiaries and (ii) under any policy of insurance required to be
maintained under Section 8.03 (in each case other than payments received in
respect of business interruption insurance).
"Register" shall have the meaning provided in Section 13.15.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Release" shall mean the disposing, discharging, injecting, spilling,
pumping, leaking, leaching, dumping, emitting, escaping, emptying, pouring or
migrating, into or upon any land or water or air, or otherwise entering into the
environment.
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"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
.22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required Banks" shall mean Non-Defaulting Banks the sum of whose
Revolving Loan Commitments (or after the termination thereof, outstanding
Revolving Loans and RL Percentages of outstanding Swingline Loans and Letter of
Credit Outstandings) represent an amount greater than 50% of the sum of the
Total Revolving Loan Commitment less the Revolving Loan Commitments of all
Defaulting Banks (or after the termination thereof, the sum of the then total
outstanding Revolving Loans of Non-Defaulting Banks and the aggregate RL
Percentages of Non-Defaulting Banks of the total outstanding Swingline Loans and
Letter of Credit Outstandings at such time).
"Revolving Loan" shall have the meaning provided in Section 1.01(a).
"Revolving Loan Commitment" shall mean, for each Bank, the amount set
forth opposite such Bank's name in Schedule I directly below the column entitled
"Revolving Loan Commitment," as same may be (x) reduced from time to time
pursuant to Sections 3.02, 3.03 and/or 10 or (y) adjusted from time to time as a
result of assignments to or from such Bank pursuant to Section 1.13 or 13.04(b).
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"RL Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Bank at such time and the denominator of which is the Total
Revolving Loan Commitment at such time, provided that if the RL Percentage of
--------
any Bank is to be determined after the Total Revolving Loan Commitment has been
terminated, then the RL Percentages of the Banks shall be determined immediately
prior (and without giving effect) to such termination.
"SEC" shall have the meaning provided in Section 8.01(g).
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning assigned that term in the
Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
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"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
"Start Date" shall mean, with respect to any Applicable Margin Period,
the first day of such Applicable Margin Period.
"Stated Amount" of each Letter of Credit shall mean, at any time, the
maximum amount available to be drawn thereunder (regardless of whether any
conditions for drawing could then be met), provided the "Stated Amount" of each
---------
Letter of Credit denominated in an Alternate Currency shall be, on any date of
calculation, the Dollar Equivalent of the maximum amount available to be drawn
in such Alternate Currency thereunder (determined without regard to whether any
conditions to drawing could then be met).
"Subsidiaries Guaranty" shall have the meaning provided in Section
5.09.
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, limited liability
company, association, joint venture or other entity in which such Person and/or
one or more Subsidiaries of such Person has more than a 50% equity interest at
the time.
"Subsidiary Guarantor" shall mean each Wholly-Owned Domestic
Subsidiary of the Borrower and, to the extent required by Section 8.10, each
Wholly-Owned Foreign Subsidiary of the Borrower.
"Swingline Bank" shall mean NationsBank, N.A. and its successors and
assigns.
"Swingline Expiry Date" shall mean that date which is five Business
Days prior to the Final Maturity Date.
"Swingline Loan" shall have the meaning provided in Section 1.01(b).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Taxes" shall have the meaning provided in Section 4.04(a).
"Test Date" shall mean, with respect to any Start Date, the last day
of the most recent fiscal quarter of the Borrower ended immediately prior to
such Start Date.
"Test Period" shall mean the four consecutive fiscal quarters of the
Borrower then last ended (in each case taken as one accounting period).
"Total Revolving Loan Commitment" shall mean, at any time, the sum of
the Revolving Loan Commitments of each of the Banks.
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"Total Unutilized Revolving Loan Commitment" shall mean, at any time,
an amount equal to the remainder of (x) the Total Revolving Loan Commitment then
in effect less (y) the sum of the aggregate principal amount of all Revolving
Loans and Swingline Loans then outstanding plus the then aggregate amount of all
Letter of Credit Outstandings at such time.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan or a
----
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year, determined in accordance
with actuarial assumptions at such time consistent with Statement of Financial
Accounting Standards No. 87, exceeds the market value of the assets allocable
thereto.
"United States" and "U.S." shall each mean the United States of
America.
"Unpaid Drawing" shall have the meaning provided for in Section
2.05(a).
"Unutilized Revolving Loan Commitment" shall mean, with respect to any
Bank at any time, such Bank's Revolving Loan Commitment at such time less the
sum of (i) the aggregate outstanding principal amount of all Revolving Loans
made by such Bank at such time and (ii) such Bank's RL Percentage of the Letter
of Credit Outstandings at such time.
"Wholly-Owned Domestic Subsidiary" shall mean each Domestic Subsidiary
of the Borrower that is also a Wholly-Owned Subsidiary of the Borrower.
"Wholly-Owned Foreign Subsidiary" shall mean each Foreign Subsidiary
of the Borrower that is also a Wholly-Owned Subsidiary of the Borrower.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, limited liability company,
association, joint venture or other entity in which such Person and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.
"Year 2000 Compliant" shall mean that all Information Systems and
Equipment accurately process date data (including, but not limited to,
calculating, comparing and sequencing), before, during and after the year 2000,
as well as same and multi-century dates, or between the years 1999 and 2000,
taking into account all leap years, including the fact that the year 2000 is a
leap year, and further, that when used in combination with, or interfacing with,
other Information Systems and Equipment, shall accurately accept, release and
exchange date data, and shall in all material respects continue to function in
the same manner as it performs on the Effective Date and shall not otherwise
impair the accuracy or functionality of Information Systems and Equipment.
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SECTION 12. The Administrative Agent.
------------------------
12.01 Appointment. The Banks hereby irrevocably designate BTCo as
-----------
Administrative Agent (for purposes of this Section 12, the term "Administrative
Agent" also shall include BTCo in its capacity as Collateral Agent pursuant to
the Pledge Agreement) to act as specified herein and in the other Credit
Documents. Each Bank hereby irrevocably authorizes, and each holder of any Note
by the acceptance of such Note shall be deemed irrevocably to authorize, the
Administrative Agent to take such action on their behalf under the provisions of
this Agreement, the other Credit Documents and any other instruments and
agreements referred to herein or therein and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated to or
required of the Administrative Agent by the terms hereof and thereof and such
other powers as are reasonably incidental thereto. The Administrative Agent may
perform any of its duties hereunder by or through its officers, directors,
agents, employees or affiliates.
12.02 Nature of Duties. The Administrative Agent shall not have any
----------------
duties or responsibilities except those expressly set forth in this Agreement
and in the other Credit Documents. Neither the Administrative Agent nor any of
its officers, directors, agents, employees or affiliates shall be liable for any
action taken or omitted by them hereunder or under any other Credit Document or
in connection herewith or therewith, unless caused by its or their gross
negligence or willful misconduct (as finally determined by a court of competent
jurisdiction). The duties of the Administrative Agent shall be mechanical and
administrative in nature; the Administrative Agent shall not have by reason of
this Agreement or any other Credit Document a fiduciary relationship in respect
of any Bank or the holder of any Note; and nothing in this Agreement or any
other Credit Document, expressed or implied, is intended to or shall be so
construed as to impose upon the Administrative Agent any obligations in respect
of this Agreement or any other Credit Document except as expressly set forth
herein or therein.
12.03 Lack of Reliance on the Administrative Agent. Independently
--------------------------------------------
and without reliance upon the Administrative Agent, each Bank and the holder of
each Note, to the extent it deemed or deems appropriate, has made and shall
continue to make (i) its own independent investigation of the financial
condition and affairs of the Borrower and its Subsidiaries in connection with
the making and the continuance of the Loans and the taking or not taking of any
action in connection herewith and (ii) its own appraisal of the creditworthiness
of the Borrower and its Subsidiaries and, except as expressly provided in this
Agreement, the Administrative Agent shall not have any duty or responsibility,
either initially or on a continuing basis, to provide any Bank or the holder of
any Note with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter. The Administrative Agent shall not be responsible to any Bank
or the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectability, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of the Borrower or any of its Subsidiaries or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Credit Document, or
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the financial condition of the Borrower or any of its Subsidiaries or the
existence or possible existence of any Default or Event of Default.
12.04 Certain Rights of the Administrative Agent. If the
------------------------------------------
Administrative Agent shall request instructions from the Required Banks or all
of the Banks, as applicable, with respect to any act or action (including
failure to act) in connection with this Agreement or any other Credit Document,
the Administrative Agent shall be entitled to refrain from such act or taking
such action unless and until the Administrative Agent shall have received
instructions from the Required Banks or all of the Banks, as applicable; and the
Administrative Agent shall not incur liability to any Bank by reason of so
refraining. Without limiting the foregoing, no Bank or the holder of any Note
shall have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent acting or refraining from acting hereunder or
under any other Credit Document in accordance with the instructions of the
Required Banks or all of the Banks, as applicable.
12.05 Reliance. The Administrative Agent shall be entitled to rely,
--------
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other document or telephone message signed, sent
or made by any Person that the Administrative Agent believed to be the proper
Person, and, with respect to all legal matters pertaining to this Agreement and
any other Credit Document and its duties hereunder and thereunder, upon advice
of counsel selected by the Administrative Agent.
12.06 Indemnification. To the extent the Administrative Agent is not
---------------
reimbursed and indemnified by the Borrower or any of its Subsidiaries, the Banks
will reimburse and indemnify the Administrative Agent in proportion to their
respective "percentage" as used in determining the Required Banks for and
against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, costs, expenses or disbursements of whatsoever kind
or nature which may be imposed on, asserted against or incurred by the
Administrative Agent in performing its duties hereunder or under any other
Credit Document or in any way relating to or arising out of this Agreement or
any other Credit Document; provided that no Bank shall be liable for any portion
--------
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's gross negligence or willful misconduct (as finally
determined by a court of competent jurisdiction).
12.07 The Administrative Agent in its Individual Capacity. With
---------------------------------------------------
respect to its obligation to make Loans, or issue or participate in Letters of
Credit, under this Agreement, the Administrative Agent shall have the rights and
powers specified herein for a "Bank" and may exercise the same rights and powers
as though it were not performing the duties specified herein; and the term
"Banks," "Required Banks," "holders of Notes" or any similar terms shall, unless
the context clearly otherwise indicates, include the Administrative Agent in its
individual capacity. The Administrative Agent and its affiliates may accept
deposits from, lend money to, and generally engage in any kind of banking,
investment banking, trust or other business with, or provide debt financing,
equity capital or other services (including financial advisory services) to, any
Credit Party or any Affiliate of any Credit Party (or any Person engaged in a
similar business
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with any Credit Party or any Affiliate thereof) as if they were not performing
the duties specified herein, and may accept fees and other consideration from
any Credit Party or any Affiliate of any Credit Party for services in connection
with this Agreement and otherwise without having to account for the same to the
Banks.
12.08 Holders. The Administrative Agent may deem and treat the payee
-------
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
12.09 Resignation by the Administrative Agent. (a) The
---------------------------------------
Administrative Agent may resign from the performance of all its respective
functions and duties hereunder and/or under the other Credit Documents at any
time by giving 15 Business Days' prior written notice to the Banks. Such
resignation shall take effect upon the appointment of a successor Administrative
Agent pursuant to clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation by the Administrative
Agent, the Required Banks shall appoint a successor Administrative Agent
hereunder or thereunder who shall be a commercial bank or trust company
reasonably acceptable to the Borrower, which acceptance shall not be
unreasonably withheld or delayed (provided that the Borrower's approval shall
not be required if an Event of Default then exists).
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent with the
consent of the Borrower (which consent shall not be unreasonably withheld or
delayed), shall then appoint a successor Administrative Agent who shall serve as
Administrative Agent hereunder or thereunder until such time, if any, as the
Required Banks appoint a successor Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed
pursuant to clause (b) or (c) above by the 20th Business Day after the date such
notice of resignation was given by the Administrative Agent, the Administrative
Agent's resignation shall become effective and the Required Banks shall
thereafter perform all the duties of the Administrative Agent hereunder and/or
under any other Credit Document until such time, if any, as the Required Banks
appoint a successor Administrative Agent as provided above.
SECTION 13. Miscellaneous.
-------------
13.01 Payment of Expenses, etc. The Borrower shall: (i) whether or
-------------------------
not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Administrative Agent (including, without
limitation, the reasonable fees and disbursements of White & Case LLP) in
connection with the preparation, execution and delivery of this Agreement and
the other Credit Documents and the documents and instruments referred to herein
and therein and any amendment, waiver or consent relating hereto or thereto, of
the
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Administrative Agent in connection with its syndication efforts with respect to
this Agreement and of the Administrative Agent and, after the occurrence of an
Event of Default, each of the Banks in connection with the enforcement of this
Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or pursuant to any insolvency or bankruptcy proceedings
(including, without limitation, in each case the reasonable fees and
disbursements of counsel for the Administrative Agent and, after the occurrence
of an Event of Default, for each of the Banks); (ii) pay and hold each of the
Banks harmless from and against any and all present and future stamp, excise and
other similar documentary taxes with respect to the foregoing matters and save
each of the Banks harmless from and against any and all liabilities with respect
to or resulting from any delay or omission (other than to the extent
attributable to such Bank) to pay such taxes; and (iii) indemnify the
Administrative Agent and each Bank, and each of their respective officers,
directors, employees, representatives and agents from and hold each of them
harmless against any and all liabilities, obligations (including removal or
remedial actions), losses, damages, penalties, claims, actions, judgments,
suits, costs, expenses and disbursements (including reasonable attorneys' and
consultants' fees and disbursements) incurred by, imposed on or assessed against
any of them as a result of, or arising out of, or in any way related to, or by
reason of, (a) any investigation, litigation or other proceeding (whether or not
the Administrative Agent or any Bank is a party thereto and whether or not such
investigation, litigation or other proceeding is brought by or on behalf of any
Credit Party) related to the entering into and/or performance of this Agreement
or any other Credit Document or the use of any Letter of Credit or the proceeds
of any Loans hereunder or the consummation of any of the transactions
contemplated herein or in any other Credit Document or the exercise of any of
their rights or remedies provided herein or in the other Credit Documents, or
(b) the actual or alleged presence of Hazardous Materials in the air, surface
water or groundwater or on the surface or subsurface of any Real Property owned,
leased or at any time operated by the Borrower or any of its Subsidiaries, the
generation, storage, transportation, handling or disposal of Hazardous Materials
by the Borrower or any of its Subsidiaries at any location, whether or not
owned, leased or operated by the Borrower or any of its Subsidiaries, the non-
compliance of any Real Property owned, leased or at any time operated by the
Borrower or any of its Subsidiaries with foreign, federal, state and local laws,
regulations, and ordinances (including applicable permits thereunder) applicable
to any Real Property, or any Environmental Claim asserted against the Borrower,
any of its Subsidiaries or any Real Property owned, leased or at any time
operated by the Borrower or any of its Subsidiaries, including, in each case,
without limitation, the reasonable fees and disbursements of counsel and other
consultants incurred in connection with any such investigation, litigation or
other proceeding (but excluding any losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence, bad faith or
willful misconduct of the Person to be indemnified (as finally determined by a
court of competent jurisdiction)). To the extent that the undertaking to
indemnify, pay or hold harmless the Administrative Agent or any Bank set forth
in the preceding sentence may be unenforceable because it is violative of any
law or public policy, the Borrower shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
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13.02 Right of Setoff. In addition to any rights now or hereafter
---------------
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Bank is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind to any Credit
Party or to any other Person, any such notice being hereby expressly waived, to
set off and to appropriate and apply any and all deposits (general or special)
and any other Indebtedness at any time held or owing by such Bank (including,
without limitation, by branches and agencies of such Bank wherever located) to
or for the credit or the account of any Credit Party against and on account of
the Obligations and liabilities of the Credit Parties to such Bank under this
Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations purchased by such Bank pursuant to
Section 13.06(b), and all other claims of any nature or description arising out
of or connected with this Agreement or any other Credit Document, irrespective
of whether or not such Bank shall have made any demand hereunder and although
said Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
13.03 Notices. Except as otherwise expressly provided herein, all
-------
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to any Credit Party,
at the address specified opposite its signature below or in the other relevant
Credit Documents; if to the Bank, at its address specified on Schedule II; and
if to the Administrative Agent, at the Notice Office; or, as to any Credit Party
or the Administrative Agent, at such other address as shall be designated by
such party in a written notice to the other parties hereto and, as to each Bank,
at such other address as shall be designated by such Bank in a written notice to
the Borrower and the Administrative Agent. All such notices and communications
shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by
overnight courier, be effective when deposited in the mails, delivered to the
telegraph company, cable company or overnight courier, as the case may be, or
sent by telex or telecopier, except that notices and communications to the
Administrative Agent and the Borrower shall not be effective until received by
the Administrative Agent or the Borrower, as the case may be.
13.04 Benefit of Agreement; Assignments; Participations. (a) This
-------------------------------------------------
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto; provided,
--------
however, the Borrower may not assign or transfer any of its rights, obligations
- -------
or interest hereunder without the prior written consent of each of the Banks
and, provided further, that, although any Bank may transfer, assign or grant
----------------
participations in its rights hereunder, such Bank shall remain a "Bank" for all
purposes hereunder (and may not transfer or assign all or any portion of its
Commitments hereunder except as provided in Sections 1.13 and 13.04(b)) and the
transferee, assignee or participant, as the case may be, shall not constitute a
"Bank" hereunder and, provided further, that no Bank shall transfer or grant any
----------------
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Revolving Loan, Note or Letter of Credit (unless such Letter of
Credit is not extended beyond the Final Maturity Date) in which such participant
is participating, or reduce the rate or extend the time of payment of interest
or Fees thereon (except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount thereof
(it being understood that any amendment or
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modification to the financial definitions in this Agreement or to Section
13.07(a) shall not constitute a reduction in the rate of interest or Fees
payable hereunder), or increase the amount of the participant's participation
over the amount thereof then in effect (it being understood that a waiver of any
Default or Event of Default or of a mandatory reduction in the Total Revolving
Loan Commitment, shall not constitute a change in the terms of such
participation, and that an increase in any Revolving Loan Commitment or
Revolving Loan shall be permitted without the consent of any participant if the
participant's participation is not increased as a result thereof), (ii) consent
to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement or (iii) release all or substantially all of
the Collateral (except as expressly provided in the Credit Documents) supporting
the Revolving Loans hereunder in which such participant is participating. In the
case of any such participation, the participant shall not have any rights under
this Agreement or any of the other Credit Documents (the participant's rights
against such Bank in respect of such participation to be those set forth in the
agreement executed by such Bank in favor of the participant relating thereto)
and all amounts payable by the Borrower hereunder shall be determined as if such
Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together
with one or more other Banks) may (x) assign all or a portion of its Revolving
Loan Commitment and related outstanding Obligations hereunder to (i) its parent
company and/or any affiliate of such Bank which is at least 50% owned by such
Bank or its parent company or to one or more Banks or (ii) in the case of any
Bank that is a fund that invests in loans, any other fund that invests in loans
and is managed or advised by the same investment advisor of such Bank or by an
Affiliate of such investment advisor or (y) assign all, or if less than all, a
portion equal to at least $5,000,000 in the aggregate for the assigning Bank or
assigning Banks, of such Revolving Loan Commitment and related outstanding
Obligations hereunder to one or more Eligible Transferees (treating any fund
that invests in loans and any other fund that invests in bank loans and is
managed or advised by the same investment advisor of such fund or by an
Affiliate of such investment advisor as a single Eligible Transferee), each of
which assignees shall become a party to this Agreement as a Bank by execution of
an Assignment and Assumption Agreement, provided that, (i) at such time Schedule
--------
I shall be deemed modified to reflect the Revolving Loan Commitments of such new
Bank and of the existing Banks, (ii) upon the surrender of the relevant
Revolving Note by the assigning Bank (or, upon such assigning Bank's
indemnifying the Borrower for any lost Revolving Note pursuant to a customary
indemnification agreement) a new Revolving Note will be issued, at the
Borrower's expense, to such new Bank and to the assigning Bank upon the request
of such new Bank or assigning Bank, such new Revolving Note to be in conformity
with the requirements of Section 1.05 (with appropriate modifications) to the
extent needed to reflect the revised Revolving Loan Commitments and/or
outstanding Revolving Loans, as the case may be, (iii) the consent of the
Administrative Agent and, so long as no Default or an Event of Default then
exists, the consent of the Borrower, shall be required in connection with any
assignment to an Eligible Transferee pursuant to clause (y) above (each of which
consents shall not be unreasonably withheld or delayed), (iv) the Administrative
Agent shall receive at the time of each such assignment, from the assigning or
assignee Bank, the payment of a non-refundable assignment fee of $3,500 and (v)
no such transfer or assignment will be effective until recorded by the
Administrative Agent on the Register pursuant to Section 13.15. To the extent
of any assignment pursuant to this Section 13.04(b), the assigning Bank shall be
relieved of its obligations hereunder
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with respect to its assigned Revolving Loan Commitment and outstanding Revolving
Loans. At the time of each assignment pursuant to this Section 13.04(b) to a
Person which is not already a Bank hereunder and which is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) for Federal
income tax purposes, the respective assignee Bank shall, to the extent legally
entitled to do so, provide to the Borrower the appropriate Internal Revenue
Service Forms (and, if applicable, a Section 4.04(b)(ii) Certificate) described
in Section 4.04(b). To the extent that an assignment of all or any portion of a
Bank's Revolving Loan Commitment and related outstanding Obligations pursuant to
Section 1.13 or this Section 13.04(b) would, at the time of such assignment,
result in increased costs under Section 1.10, 2.06 or 4.04 from those being
charged by the respective assigning Bank prior to such assignment, then the
Borrower shall not be obligated to pay such increased costs (although the
Borrower, in accordance with and pursuant to the other provisions of this
Agreement, shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Bank
from pledging its Revolving Loans and Revolving Note hereunder to a Federal
Reserve Bank in support of borrowings made by such Bank from such Federal
Reserve Bank and, with the consent of the Administrative Agent, any Bank which
is a fund may pledge all or any portion of its Revolving Loans and Revolving
Note to its trustee in support of its obligations to its trustee. No pledge
pursuant to this clause (c) shall release the transferor Bank from any of its
obligations hereunder.
13.05 No Waiver; Remedies Cumulative. No failure or delay on the
------------------------------
part of the Administrative Agent, the Collateral Agent, the Issuing Bank or any
Bank in exercising any right, power or privilege hereunder or under any other
Credit Document and no course of dealing between the Borrower or any other
Credit Party and the Administrative Agent, the Collateral Agent, Issuing Bank or
any Bank shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Credit Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Bank would
otherwise have. No notice to or demand on any Credit Party in any case shall
entitle any Credit Party to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Administrative
Agent, the Collateral Agent, the Issuing Bank or any Bank to any other or
further action in any circumstances without notice or demand.
13.06 Payments Pro Rata. (a) Except as otherwise provided in this
-----------------
Agreement, the Administrative Agent agrees that promptly after its receipt of
each payment from or on behalf of the Borrower in respect of any Obligations
hereunder, it shall distribute such payment to the Banks (other than any Bank
that has consented in writing to waive its pro rata share of any such payment)
--- ----
pro rata based upon their respective shares, if any, of the Obligations with
- --- ----
respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff
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or banker's lien, by counterclaim or cross action, by the enforcement of any
right under the Credit Documents, or otherwise), which is applicable to the
payment of the principal of, or interest on, the Revolving Loans, Unpaid
Drawings, Commitment Commission or Letter of Credit Fees, of a sum which with
respect to the related sum or sums received by other Banks is in a greater
proportion than the total of such Obligation then owed and due to such Bank
bears to the total of such Obligation then owed and due to all of the Banks
immediately prior to such receipt, then such Bank receiving such excess payment
shall purchase for cash without recourse or warranty from the other Banks an
interest in the Obligations of the respective Credit Party to such Banks in such
amount as shall result in a proportional participation by all the Banks in such
amount; provided that if all or any portion of such excess amount is thereafter
--------
recovered from such Bank, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 13.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Banks as opposed to Defaulting Banks.
13.07 Calculations; Computations; Accounting Terms. (a) The
--------------------------------------------
financial statements to be furnished to the Banks pursuant hereto shall be made
and prepared in accordance with generally accepted accounting principles in the
United States consistently applied throughout the periods involved (except as
set forth in the notes thereto or as otherwise disclosed in writing by the
Borrower to the Banks); provided that, except as otherwise specifically provided
herein, all computations and all definitions used in determining compliance with
Sections 9.07 through 9.11, inclusive, shall utilize accounting principles and
policies in conformity with those used to prepare the historical financial
statements of the Borrower referred to in Section 7.05(a).
(b) All computations of interest, Commitment Commission and other
Fees hereunder shall be made on the basis of a year of 360 days for the actual
number of days (including (in each case) the first day but excluding the last
day; except that in the case of Letter of Credit Fees, the last day shall be
included) occurring in the period for which such interest, Commitment Commission
or Fees are payable.
(c) For purposes of this Agreement, the Dollar Equivalent of each
Letter of Credit denominated in an Alternate Currency shall be calculated (A) on
the date when such Letter of Credit is issued or any disbursements thereunder
made (calculated using the spot selling rate quoted by the Administrative
Agent's foreign exchange traders on such date), (B) on the second Business Day
of each month (calculated using the spot selling rate quoted in the Wall Street
Journal on the first business day of such month) and (C) at such other times as
designated by the Administrative Agent. Such Dollar Equivalent shall remain in
effect until the same is recalculated by the Administrative Agent as provided
above and notice of such recalculation is received by the Borrower, it being
understood that until such notice is received, the Dollar Equivalent shall be
that Dollar Equivalent as last reported to the Borrower by the Administrative
Agent.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
-----------------------------------------------------------
JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCU-
- ----------
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MENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF
NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR
OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION
AND DELIVERY OF THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, THE BORROWER HEREBY
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE BORROWER HEREBY
FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL
JURISDICTION OVER IT, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENTS BROUGHT
IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL JURISDICTION
OVER IT. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT
OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
IT AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY
OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES
NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER
ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR
INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT, ANY BANK OR THE
HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY
OTHER JURISDICTION.
(b) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS
OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER IRREVOCABLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW, WAIVES AND
AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
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13.09 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
13.10 Effectiveness. This Agreement shall become effective on the
-------------
date (the "Effective Date") on which (i) the Borrower, the Administrative Agent
and the Banks shall have signed a counterpart hereof (whether the same or
different counterparts) and shall have delivered the same to the Administrative
Agent at the Notice Office or, in the case of the Banks, shall have given to the
Administrative Agent telephonic (confirmed in writing), written or telex notice
(actually received) at such office that the same has been signed and mailed to
it and (ii) the conditions set forth in Section 5 are met to the satisfaction of
the Administrative Agent and the Required Banks. Unless the Administrative
Agent has received actual notice from any Bank that the conditions contained in
Section 5 have not been met to its satisfaction, upon the satisfaction of the
condition described in clause (i) of the immediately preceding sentence and upon
the Administrative Agent's good faith determination that the conditions
described in clause (ii) of the immediately preceding sentence have been met,
then the Effective Date shall have been deemed to have occurred, regardless of
any subsequent determination that one or more of the conditions thereto had not
been met (although the occurrence of the Effective Date shall not release the
Borrower from any liability for failure to satisfy one or more of the applicable
conditions contained in Section 5). The Administrative Agent will give the
Borrower and each Bank prompt written notice of the occurrence of the Effective
Date.
13.11 Headings Descriptive. The headings of the several sections and
--------------------
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
13.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any
-------------------------
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks, provided that no such change, waiver, discharge or termination
--------
shall, without the consent of each Bank (other than a Defaulting Bank), (i)
extend the final scheduled maturity of any Loan or Note or extend the stated
expiration date of any Letter of Credit beyond the Final Maturity Date, or
reduce the rate or extend the time of payment of interest or Fees thereon, or
reduce the principal amount thereof (except in connection with a waiver of
applicability of any post-default increase in interest rates) (it being
understood that any amendment or modification to the financial definitions in
this Agreement or to Section 13.07(a) shall not constitute a reduction in the
rate of interest or Fees for the purposes of this clause (i)), (ii) release all
or substantially all of the Collateral (except as expressly provided in the
Credit Documents), (iii) amend, modify or waive any provision of this Section
13.12, (except for technical amendments with respect to such additional
extensions of credit pursuant to this Agreement which afford the protections to
such additional extensions of credit of the type provided to the Revolving Loan
Commitments on the Effective Date) (iv) reduce the percentage specified in the
definition of Required Banks (it being understood that, with the consent of the
Required Banks, additional extensions of credit pursuant to this Agreement may
be included in the
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determination of the Required Banks on substantially the same basis as the
Revolving Loan Commitments are included on the Effective Date) or (v) consent to
the assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement; provided further, that no such change, waiver, discharge
----------------
or termination shall (A) increase the Revolving Loan Commitment of any Bank over
the amount thereof then in effect without the consent of such Bank (it being
understood that waivers or modifications of conditions precedent, covenants,
Defaults or Events of Default or of a mandatory reduction in the Total Revolving
Loan Commitment shall not constitute an increase of the Revolving Loan
Commitment of any Bank, and that an increase in the available portion of any
Revolving Loan Commitment of any Bank shall not constitute an increase of the
Revolving Loan Commitment of such Bank), (B) without the consent of the Issuing
Bank, amend, modify or waive any provision of Section 2 or alter its rights or
obligations with respect to Letters of Credit, (C) without the consent of the
Swingline Bank, alter the Swingline Bank's rights or obligations with respect to
Swingline Loans, (D) without the consent of the Administrative Agent, amend,
modify or waive any provision of Section 12 or any other provision as same
relates to the rights or obligations of the Administrative Agent, or (E) without
the consent of the Collateral Agent, amend, modify or waive any provision
relating to the rights or obligations of the Collateral Agent.
(b) If, in connection with any proposed change, waiver, discharge
or termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 13.12(a),
the consent of the Required Banks is obtained but the consent of one or more of
such other Banks whose consent is required is not obtained, then the Borrower
shall have the right, so long as all non-consenting Banks whose individual
consent is required are treated as described in either clauses (A) or (B) below,
to either (A) replace each such non-consenting Bank or Banks with one or more
Replacement Banks pursuant to Section 1.13 so long as at the time of such
replacement, each such Replacement Bank consents to the proposed change, waiver,
discharge or termination or (B) terminate such non-consenting Bank's Revolving
Loan Commitment and/or repay the outstanding Revolving Loans of such Bank and
cash collateralize its applicable RL Percentage of the Letter of Credit
Outstandings in accordance with Sections 3.02(b) and 4.01(b), provided that,
--------
unless the Revolving Loan Commitment that is terminated, and Revolving Loans
repaid, pursuant to preceding clause (B) are immediately replaced in full at
such time through the addition of new Banks or the increase of the Revolving
Loan Commitments and/or outstanding Revolving Loans of existing Banks (who in
each case must specifically consent thereto), then in the case of any action
pursuant to preceding clause (B) the Required Banks (determined after giving
effect to the proposed action) shall specifically consent thereto, provided
--------
further, that in any event the Borrower shall not have the right to replace a
- -------
Bank, terminate its Revolving Loan Commitment or repay its Revolving Loans
solely as a result of the exercise of such Bank's rights (and the withholding of
any required consent by such Bank) pursuant to the second proviso to Section
13.12(a).
13.13 Survival. All indemnities set forth herein including, without
--------
limitation, in Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01 shall survive
the execution, delivery and termination of this Agreement and the Notes and the
making and repayment of the Obligations.
13.14 Domicile of Loans. Each Bank may transfer and carry its Loans
-----------------
at, to or for the account of any office, Subsidiary or Affiliate of such Bank.
Notwithstanding anything to
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the contrary contained herein, to the extent that a transfer of Loans pursuant
to this Section 13.14 would, at the time of such transfer, result in increased
costs under Section 1.10, 1.11, 2.06 or 4.04 from those being charged by the
respective Bank prior to such transfer, then the Borrower shall not be obligated
to pay such increased costs (although the Borrower shall be obligated to pay any
other increased costs of the type described above resulting from changes after
the date of the respective transfer).
13.15 Register. The Borrower hereby designates the Administrative
--------
Agent to serve as the Borrower's agent, solely for purposes of this Section
13.15, to maintain a register (the "Register") on which it will record the
Revolving Loan Commitments from time to time of each of the Banks, the Revolving
Loans and Swingline Loans made by each of the Banks and each repayment in
respect of the principal amount of the Revolving Loans and Swingline Loans of
each Bank. Failure to make any such recordation, or any error in such
recordation shall not affect the Borrower's obligations in respect of such
Revolving Loans and Swingline Loans. With respect to any Bank, the transfer of
the Revolving Loan Commitment of such Bank and the rights to the principal of,
and interest on, any Revolving Loan made pursuant to such Revolving Loan
Commitment shall not be effective until such transfer is recorded on the
Register maintained by the Administrative Agent with respect to ownership of
such Revolving Loan Commitment and Revolving Loans and prior to such
recordation all amounts owing to the transferor with respect to such Revolving
Loan Commitment and Revolving Loans shall remain owing to the transferor. The
registration of assignment or transfer of all or part of any Revolving Loan
Commitments and Revolving Loans shall be recorded by the Administrative Agent on
the Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered Assignment and Assumption Agreement pursuant to Section
13.04(b). Coincident with the delivery of such an Assignment and Assumption
Agreement to the Administrative Agent for acceptance and registration of
assignment or transfer of all or part of a Revolving Loan, or as soon thereafter
as practicable, the assigning or transferor Bank shall surrender the Revolving
Note evidencing such Revolving Loan, and thereupon one or more new Revolving
Notes in the same aggregate principal amount shall be issued to the assigning or
transferor Bank and/or the new Bank. The Borrower agrees to indemnify the
Administrative Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted against or
incurred by the Administrative Agent in performing its duties under this Section
13.15.
13.16 Confidentiality. (a) Subject to the provisions of clause (b)
---------------
of this Section 13.16, each Bank agrees that it will use its reasonable efforts
not to disclose without the prior consent of the Borrower (other than to its
employees, auditors, advisors or counsel or to another Bank if the Bank or such
Bank's holding or parent company in its sole discretion determines that any such
party should have access to such information, provided such Persons shall be
subject to the provisions of this Section 13.16 to the same extent as such Bank)
any information with respect to the Borrower or any of its Subsidiaries which is
now or in the future furnished pursuant to this Agreement or any other Credit
Document and which is designated by the Borrower to the Banks in writing as
confidential, provided that any Bank may disclose any such information (i) as
--------
has become generally available to the public other than by virtue of a breach of
this Section 13.16(a) by the respective Bank, (ii) as may be required or
appropriate in any report, statement or testimony submitted to any municipal,
state or Federal regulatory body having or claiming to have jurisdiction over
such Bank or to the Federal Reserve Board or the Federal Deposit Insurance
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Corporation or similar organizations (whether in the United States or elsewhere)
or their successors, (iii) as may be required or appropriate in respect to any
summons or subpoena or in connection with any litigation, (iv) in order to
comply with any law, order, regulation or ruling applicable to such Bank, (v) to
the Administrative Agent or the Collateral Agent and (vi) to any prospective or
actual transferee or participant in connection with any contemplated transfer or
participation of any of the Revolving Notes or Revolving Loan Commitments or any
interest therein by such Bank, provided that such prospective transferee or
--------
participant agrees to be bound by the confidentiality provisions contained in
this Section 13.16.
(b) The Borrower hereby acknowledges and agrees that each Bank may
share with any of its affiliates any information related to the Borrower or any
of its Subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of the Borrower and its
Subsidiaries), provided such Persons shall be subject to the provisions of this
Section 13.16 to the same extent as such Bank.
13.17 Increases of Revolving Loan Commitments. So long as no Default
---------------------------------------
or Event of Default then exists or would result therefrom, the Borrower shall
have the right at any time and from time to time through and including December
1, 2000, and upon at least 30 days prior notice to the Administrative Agent to
request one or more Banks to increase their respective Revolving Loan
Commitments, it being understood and agreed, however, that (i) no Bank shall be
obligated to increase its Revolving Loan Commitment as a result of any request
by the Borrower, (ii) any Bank may so increase its Revolving Loan Commitment
without the consent of any other Bank, but with the prior consent or the
Administrative Agent, (iii) any increase in the Total Revolving Loan Commitment
pursuant to this Section 13.17 shall be in a minimum amount of at least
$10,000,000, (iv) the Total Revolving Loan Commitment may not be increased by
more than $50,000,000 in the aggregate pursuant to this Section 13.17, (v) any
increase in the Revolving Loan Commitment of any Bank pursuant to this Section
13.17 shall be done in coordination with the Administrative Agent, (vi) any such
increase must be effective prior to December 31, 2000 and (vii) the fees payable
to any Bank for increasing its Revolving Loan Commitment pursuant to this
section 13.17 shall not exceed the average up-front fees paid to the Banks on
the Effective Date in respect of their Revolving Loan Commitments. At the time
of any increase in the Total Revolving Loan Commitment pursuant to this Section
13.17, (i) the Borrower shall, in coordination with the Administrative Agent,
repay outstanding Revolving Loans of certain Banks and, if necessary, incur
additional Revolving Loans from other Banks in each case so that the Banks
continue to participate in each Borrowing of Revolving Loans pro rata on the
--- ----
basis of their respective Revolving Loan Commitments (after giving effect to any
such increase in the Total Revolving Loan Commitment pursuant to this Section
13.17) and with the Borrower being obligated to pay to the respective Banks the
costs of the type referred to in Section 1.11 in connection with any such
repayment and/or Borrowing, (ii) Schedule I shall be deemed modified to reflect
the revised Revolving Loan Commitments of the affected Banks, and (iii) upon
surrender of any old Revolving Notes by those Lenders that have increased their
Revolving Loan Commitments pursuant to this Section 13.17, to the extent
requested by such Banks, new Revolving Notes will be issued, at the Borrower's
expense, to such Banks to be in conformity with the requirements of Section 1.05
(with appropriate modifications) to the extent needed to reflect the revised
Revolving Loan Commitments.
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13.18 Judgment Currency. (a) The Borrower's obligation hereunder
-----------------
and under the other Credit Documents to make payments in Dollars or, in the case
of Letters of Credit denominated in an Alternate Currency, the Dollar Equivalent
thereof (in either case, the "Obligation Currency") shall not be discharged or
satisfied by any tender or recovery pursuant to any judgment expressed in or
converted into any currency other than the Obligation Currency, except to the
extent that such tender or recovery results in the effective receipt by the
Administrative Agent, the Issuing Bank or the respective Bank of the full amount
of the Obligation Currency expressed to be payable to the Administrative Agent,
the Issuing Bank or such Bank under this Agreement or the other Credit
Documents. If for the purpose of obtaining or enforcing judgment against the
Borrower in any court of in any jurisdiction, it becomes necessary to convert
into or from any currency other than the Obligation Currency (such other
currency being hereinafter referred to as the "Judgment Currency") an amount due
in the Obligation Currency, the conversion shall be made, at the Dollar
Equivalent thereof, in the case of conversions into Dollars or, in the case of
conversions into a currency other than Dollars, at the rate of exchange quoted
by the Administrative Agent, determined, in each case, as of the date
immediately preceding the day on which the judgment is given (such Business Day
being hereinafter referred to as the "Judgment Currency Conversion Date".)
(b) If there is a change in the rate of exchange prevailing between
the Judgment Currency Conversion Date and the date of actual payment of the
amount due, the Borrower convenants and agrees to pay, or cause to be paid, such
additional amounts, if any (but in any event not a lesser amount) as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate of exchange prevailing on the Judgment Currency Conversion
Date.
(c) For purposes of determining the Dollar Equivalent or any other
rate of exchange under this Section 13.18, such amounts shall include any
premium and costs payable in connection with the purchase of the Obligation
Currency.
13.19 Euro. If, while at any time any Letter of Credit denominated
----
in an Alternate Currency (an "Alternate Currency Letter of Credit") is
outstanding, the relevant Alternate Currency is fully replaced as the lawful
currency of the country that issued such Alternate Currency (the "Issuing
Country") by the Euro so that all payments are to be made in the Issuing Country
in Euros and not in the Alternate Currency previously the lawful currency of
such Issuing Country, then such Alternate Currency Letter of Credit shall be
automatically converted into a Letter of Credit denominated in Euros in a Stated
Amount equal to the amount of Euros into which the Stated Amount of such
Alternate Currency Letter of Credit would be converted pursuant to the EMU
Legislation (and thereafter no further Letters of Credit will be available in
such Alternate Currency).
* * *
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
- -------
SYLVAN LEARNING SYSTEMS, INC.
1000 Lancaster Street
Baltimore, MD 21202
Telephone: (410) 843-8000
Telecopier: (410) 843-8060 By: /s/ B. Lee McGee
-----------------------------------
Attention: B. Lee McGee Name: B. Lee McGee
Title: C.F.O.
BANKERS TRUST COMPANY,
Individually, as Administrative
Agent and as Lead Arranger
By: /s/ Mary Kay Coyle
-----------------------------------
Name: MARY KAY COYLE
Title: Managing Director
NATIONSBANK, N.A., Individually and as
Syndication Agent
By: /s/ James H. Peterson
-----------------------------------
Name: JAMES H. PETERSON
Title: SENIOR VICE PRESIDENT
ABN AMRO BANK N.V., NEW YORK BRANCH
By: /s/ Stephen Van Besien
-----------------------------------
Name: STEPHEN VAN BESIEN
Title: GROUP VICE PRESIDENT
By: /s/ Michael A. Kowalczuk
-----------------------------------
Name: MICHAEL A. KOWALCZUK
Title: ASSISTANT VICE PRESIDENT
CRESTAR BANK
By: /s/ Andrew D. waller
-----------------------------------
Name: Andrew D. Waller
Title: Vice President
THE FIRST NATIONAL BANK OF MARYLAND
By: /s/ Brooks W. Thropp
-----------------------------------
Name: Brooks W. Thropp
Title: Vice President
FIRST UNION NATIONAL BANK
By: /s/ Sean M. Sands
-----------------------------------
Name: Sean M. Sands
Title: Vice President