$200,000,000
CREDIT AGREEMENT
AMONG
CLUBCORP, INC.
CERTAIN LENDERS NAMED HEREIN
NATIONSBANK, N.A., AS ADMINISTRATIVE AGENT
March 29, 1999
NATIONSBANC MONTGOMERY SECURITIES LLC,
AS LEAD ARRANGER AND BOOK MANAGER
TABLE OF CONTENTS
ARTICLE 1 Definitions
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Section 1.1 Defined Terms
Section 1.2 Amendments and Renewals
Section 1.3 Construction
ARTICLE 2 Advances
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Section 2.1 The Advances
Section 2.2 Manner of Borrowing and Disbursement
Section 2.3 Interest
Section 2.4 Fees
Section 2.5 Prepayments
Section 2.6 Non-Receipt of Funds by the Administrative Agent
Section 2.7 Payment of Principal of Advances
Section 2.8 Reimbursement
Section 2.9 Manner of Payment
Section 2.10 LIBOR Lending Offices
Section 2.11 Sharing of Payments
Section 2.12 Calculation of LIBOR Rate and Eurodollar Rate
Section 2.13 Taxes
ARTICLE 3 Conditions Precedent
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Section 3.1 Conditions Precedent to the Initial Advance
Section 3.2 Conditions Precedent to Conversions and Continuations
ARTICLE 4 Representations and Warranties
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Section 4.1 Representations and Warranties
Section 4.2 Survival of Representations and Warranties, etc.
ARTICLE 5 General Covenants
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Section 5.1 Preservation of Existence and Similar Matters
Section 5.2 Business; Compliance with Applicable Law
Section 5.3 Maintenance of Properties
Section 5.4 Accounting Methods and Financial Records
Section 5.5 Insurance
Section 5.6 Payment of Taxes and Claims
Section 5.7 Visits and Inspections
Section 5.8 Use of Proceeds
Section 5.9 INDEMNITY
Section 5.10 Environmental Law Compliance
Section 5.11 Further Assurances.
Section 5.12 Year 2000 Compliance
Section 5.13 Non-Guarantors as Guarantors
ARTICLE 6 Information Covenants
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Section 6.1 Quarterly Financial Statements and Information
Section 6.2 Annual Financial Statements and Information; Certificate of No Default
Section 6.3 Compliance Certificate
Section 6.4 Copies of Other Reports and Notices
Section 6.5 Notice of Litigation, Default and Other Matters
Section 6.6 ERISA Reporting Requirements
Section 6.7 Year 2000 Compliance
ARTICLE 7 Negative Covenants
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Section 7.1 Unsecured Indebtedness
Section 7.2 Secured Indebtedness
Section 7.3 Liens
Section 7.4 Investments
Section 7.5 Liquidation, Merger
Section 7.6 Guaranties
Section 7.7 Sales of Assets
Section 7.8 Acquisitions
Section 7.9 Restricted Payments
Section 7.10 Affiliate Transactions
Section 7.11 Compliance with ERISA
Section 7.12 Maximum Leverage Ratio
Section 7.13 Minimum Fixed Charge Coverage Ratio
Section 7.14 Minimum Tangible Net Worth
Section 7.15 Sale or Discount of Receivables
Section 7.16 Business
Section 7.17 Fiscal Year
Section 7.18 Amendment of Organizational Documents
Section 7.19 Non-Guarantors
Section 7.20 Restrictions on Subsidiaries
ARTICLE 8 Default
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Section 8.1 Events of Default
Section 8.2 Remedies
ARTICLE 9 Changes in Circumstances
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Section 9.1 LIBOR Basis or Eurodollar Basis Determination Inadequate
Section 9.2 Illegality
Section 9.3 Increased Costs
Section 9.4 Effect On Base Rate Advances
Section 9.5 Capital Adequacy
ARTICLE 10 Agreement Among Lenders
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Section 10.1 Agreement Among Lenders
Section 10.2 Lender Credit Decision
Section 10.3 Benefits of Article
ARTICLE 11 Miscellaneous
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Section 11.1 Notices
Section 11.2 Expenses
Section 11.3 Waivers
Section 11.4 Determination by the Lenders Conclusive and Binding
Section 11.5 Set-Off
Section 11.6 Assignment
Section 11.7 Counterparts
Section 11.8 Severability
Section 11.9 Interest and Charges
Section 11.10 Headings
Section 11.11 Amendment and Waiver
Section 11.12 Exception to Covenants
Section 11.13 Confidentiality
Section 11.14 GOVERNING LAW
Schedules and Exhibits
Schedule 1: Commitments and Specified Percentages
Schedule 2: LIBOR Lending Offices
Schedule 3: Existing Liens
Schedule 4: Subsidiaries
Schedule 5: Existing Investments
Schedule 6: Existing Indebtedness
Schedule 7: Acquired Properties
Schedule 8: Investment Policy
Schedule 9: Labor Matters
Schedule 10: Non-Guarantors
Exhibit A: Promissory Note
Exhibit B: Compliance Certificate
Exhibit C: Assignment Agreement
Exhibit D: Subsidiary Guaranty
Exhibit E: Notice of Borrowing
Exhibit F: Notice of Continuation/Conversion
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of March 29, 1999, among CLUBCORP, INC.,
a Delaware corporation (the "Borrower"), the Lenders from time to time party
hereto, and NATIONSBANK, N.A., a national banking association, as administrative
agent for the Lenders.
BACKGROUND
The Lenders have been requested to provide the Borrower funds to (a)
consummate the Transaction (as hereinafter defined) and (b) pay certain fees and
expenses related to the Transaction. The Lenders have agreed to provide a
portion of such financing, subject to the terms and conditions set forth below.
In consideration of the mutual covenants and agreements contained herein,
and other good and valuable consideration hereby acknowledged, the parties
hereto agree as follows:
ARTICLE 1
Definitions
Section 1.1 Defined Terms. For purposes of this Agreement:
"Acquisition" means any transaction pursuant to which the Borrower or any
of its Subsidiaries, (a) whether by means of a capital contribution or purchase
or other acquisition of stock or other securities or other equity participation
or interest, (i) acquires (or after giving effect to such transaction owns) more
than 50% of the equity interest in any Person pursuant to a solicitation by the
Borrower or such Subsidiary of tenders of equity securities of such Person, or
through one or more negotiated block, market, private or other transactions, or
a combination of any of the foregoing, or (ii) except as permitted by Section
7.5(b) hereof with respect to an existing Subsidiary of the Borrower, makes any
existing corporation a Subsidiary of the Borrower or such Subsidiary, or causes
any corporation, other than a Subsidiary of the Borrower or such Subsidiary, to
be merged into the Borrower or such Subsidiary (or agrees to be merged into any
other corporation other than a wholly-owned Subsidiary (excluding directors'
qualifying shares) of the Borrower or such Subsidiary), or (b) purchases in one
transaction or a series of related transactions all or more than 50% of the
business or assets of any Person or of any operating division, facility or group
of facilities of any Person.
"Acquisition Consideration" means the consideration given by the Borrower
or any of its Subsidiaries for an Acquisition, including but not limited to the
sum of (without duplication) (a) the fair market value of any cash, property
(including capital stock or other equity securities or interests) or services
given, plus (b) consideration paid with proceeds of Indebtedness permitted
pursuant to this Agreement, plus (c) the amount of any Indebtedness, accounts
payable and accrued expenses assumed, incurred or guaranteed in connection with
such Acquisition by the Borrower or any of its Subsidiaries.
"Additional Costs" has the meaning specified in Section 9.5 hereof.
"Adjusted Eurodollar Rate" means, for any Eurodollar Rate Advance for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100th of 1%) determined by the Administrative Agent to be equal to
the quotient obtained by dividing (a) the Eurodollar Rate for such Eurodollar
Rate Advance for any Interest Period by (b) 1 minus the Reserve Requirement for
such Eurodollar Rate Advance for any Interest Period.
"Adjusted LIBOR Rate" means, for any LIBOR Advance for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100th of 1%) determined by the Administrative Agent to be equal to the
quotient obtained by dividing (a) the LIBOR Rate for such LIBOR Advance for any
Interest Period by (b) 1 minus the Reserve Requirement for such LIBOR Advance
for any Interest Period.
"Administrative Agent" means NationsBank, N.A., a national banking
association, as administrative agent for Lenders, or such successor
administrative agent appointed pursuant to Section 10.1(b) hereof.
"Administrative Agent Fee Letter" has the meaning specified in Section
2.4(a) hereof.
"Advance" means any amount advanced by a Lender to the Borrower pursuant to
Section 2.1(a) hereof.
"Affiliate" means, as applied to any Person, any other Person that,
directly or indirectly, through one or more Persons, Controls or is Controlled
By or Under Common Control with, such Person, or a Person who Controls or is
Controlled By, such Person.
"Agreement" means this Credit Agreement, as amended, modified, supplemented
or restated from time to time to the extent permitted pursuant hereto and
pursuant to the Intercreditor Agreement.
"Agreement Date" means the date of this Agreement.
"Applicable Environmental Laws" means Applicable Laws pertaining to health
or the environment, including without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986 (as amended from time
to time, "CERCLA"), the Resource Conservation and Recovery Act of 1976, as
amended by the Used Oil Recycling Act of 1980, the Solid Waste Disposal Act
amendments of 1980, and the Hazardous and Solid Waste Amendments of 1984 (as
amended from time to time, "RCRA"), the Texas Water Code, and the Texas Solid
Waste Disposal Act.
"Applicable Law" means (a) in respect of any Person, all provisions of
constitutions, statutes, rules, regulations and orders of governmental bodies or
regulatory agencies applicable to such Person and its properties, including,
without limiting the foregoing, all orders and decrees of all courts and
arbitrators in proceedings or actions to which the Person in question is a
party, and (b) in respect of contracts relating to interest or finance charges
that are made or performed in the State of Texas, "Applicable Law" means the
laws of the United States of America, including without limitation 12 USC 85
and 86, as amended from time to time, and any other statute of the United States
of America now or at any time hereafter prescribing the maximum rates of
interest on loans and extensions of credit, and the laws of the State of Texas,
including, without limitation, Art. 1H, if applicable, and if Art. 1H is not
applicable, Art. 1D, and any other statute of the State of Texas now or at any
time hereafter prescribing maximum rates of interest on loans and extensions of
credit; provided that the parties hereto agree pursuant to Texas Finance Code
Section 346.004 that the provisions of Chapter 346 of the Texas Finance Code
shall not apply to Advances, this Agreement, the Notes or any other Loan
Documents.
"Applicable Base Rate Margin" means the following per annum percentages,
applicable in the following situations:
Applicability Percentage
(a) Initial Pricing Period 0.000
(b) Subsequent Pricing Period 0.500
"Applicable Eurodollar Rate Margin" means the following per annum
percentages, applicable in the following situations:
Applicability Percentage
(a) Initial Pricing Period 1.250
(b) Subsequent Pricing Period 1.750
"Applicable LIBOR Rate Margin" means the following per annum percentages,
applicable in the following situations:
Applicability Percentage
(a) Initial Pricing Period 1.250
(b) Subsequent Pricing Period 1.750
"Arrangement Fee Letter" means that certain fee letter, dated March 3,
1999, from NationsBank, N.A. and NationsBanc Montgomery Securities LLC,
providing for an arrangement fee with respect to the Commitment.
"Art. 1D" means Article 5069-1D, Title 79, Revised Civil Statutes of Texas,
1925, as amended.
"Art. 1H" means Article 5069-1H, Title 79, Revised Civil Statutes of Texas,
1925, as amended.
"Assignment Agreement" has the meaning specified in Section 11.6(d) hereof.
"Authorized Signatory" means such senior personnel of the Borrower as may
be duly authorized and designated in writing by the Borrower to execute
documents, agreements and instruments on behalf of the Borrower, and to request
Advances hereunder.
"Base Rate Advance" means any Advance bearing interest at the Base Rate
Basis, which Advances shall be available at all times during this Agreement.
"Base Rate Basis" means, for any day, a per annum interest rate equal to
the higher of (a) the sum of (i) 0.50% plus (ii) the Federal Funds Rate on such
day plus (iii) the Applicable Base Rate Margin or (b) the sum of (i) the Prime
Rate on such day plus (ii) the Applicable Base Rate Margin. The Base Rate Basis
shall be adjusted automatically without notice as of the opening of business on
the effective date of each change in the Prime Rate or Federal Funds Rate, as
applicable, to account for such change.
"Business Day" means a day on which commercial banks are open (a) for the
transaction of commercial banking business in Dallas, Texas, and (b) with
respect to any LIBOR Advance, for the transaction of international commercial
banking business (including dealings in Dollar deposits) in London, England.
"Capitalized Lease Obligations" means that portion of any obligation of the
Borrower or any of its Subsidiaries as lessee under a lease which at the time
would be required to be capitalized on a balance sheet of the Borrower or such
Subsidiary prepared in accordance with GAAP.
"Capital Stock" means, as to any Person, the equity interests in such
Person, including, without limitation, the shares of each class of capital stock
in any Person that is a corporation, and each class of partnership interest
(including, without limitation, general, limited and preference units) in any
Person that is a partnership, and each class of member interest in any Person
that is a limited liability company.
"CERCLA" means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986 as amended from time to time.
"Change of Control" means the occurrence of any of the following events
after the Agreement Date: (a) the sale, lease or transfer of all or
substantially all of the Borrower's assets to any Person or Group, (b) the
adoption of a plan relating to the liquidation or dissolution of the Borrower,
(c) any Person or Group (other than Robert H. Dedman, Sr.) shall beneficially
own (as defined in Rule 13d-3 of the Securities and Exchange Commission under
the Exchange Act or any successor provision thereto) more than 50% of the
aggregate Voting Power of the Borrower, or (d) during any period of twenty-four
consecutive months (excluding, however, any such period during which a public
offering of the Capital Stock of the Borrower occurs), individuals who at the
beginning of such period constituted the Board of Directors of the Borrower
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the shareholders of the Borrower was approved
by a vote of a majority of the directors of the Borrower then still in office
who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved), cease for any reason to
constitute a majority of the Board of Directors of the Borrower then in office.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitment" means the commitment of the Lenders, subject to the terms and
conditions hereof, to make Advances up to an aggregate principal amount of
$200,000,000, as terminated pursuant to Section 2.1(a) hereof.
"Commitment Letter" means that certain commitment letter, dated March 3,
1999, from NationsBank, N.A. and NationsBanc Montgomery Securities LLC, with
respect to the Commitment.
"Compliance Certificate" means a certificate, signed by an Authorized
Signatory, in substantially the form of Exhibit B, appropriately completed.
"Control" or "Controlled By" or "Under Common Control" means possession,
directly or indirectly, of power to direct or cause the direction of management
or policies (whether through ownership of voting securities, by contract or
otherwise, but not solely by being an officer or director of that Person);
provided, however, that in any event any Person which beneficially owns,
directly or indirectly, 10% or more (in number of votes) of the securities
having ordinary Voting Power with respect to a corporation shall be conclusively
presumed to control such corporation.
"Controlled Group" means as of the applicable date, as to any Person not an
individual, all members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) which are under common control with
such Person and which, together with such Person, are treated as a single
employer under Section 414(b) or (c) of the Code; provided, however, that the
Subsidiaries of the Borrower shall be deemed to be members of the Borrower's
Controlled Group.
"Debtor Relief Laws" means any applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, insolvency, reorganization or similar
debtor relief Laws affecting the rights of creditors generally from time to time
in effect.
"Default" means an Event of Default and/or any of the events specified in
Section 8.1, hereto regardless of whether there shall have occurred any passage
of time or giving of notice that would be necessary in order to constitute such
event an Event of Default.
"Default Rate" means a simple per annum interest rate equal to (a) with
respect to Base Rate Advances the lesser of (i) the Highest Lawful Rate or (ii)
the Base Rate Basis then in effect plus 2.00%, (b) with respect to LIBOR
Advances, the lesser of (i) the Highest Lawful Rate or (ii) the LIBOR Basis then
in effect plus 2.00%, or (c) with respect to Eurodollar Rate Advances, the
lesser of (i) the Highest Lawful Rate or (ii) the Eurodollar Rate then in effect
plus 2.00%.
"Determining Lenders" means, on any date of determination, any combination
of Lenders whose Specified Percentages aggregate more than 50%; provided,
however, in the event that the Commitment has been terminated, "Determining
Lenders" means, on any date of determination, any combination of Lenders having
more than 50% of Advances then outstanding.
"Dividend" means, as to any Person, (a) any declaration or payment of any
dividend (other than a dividend in stock or in the right to acquire stock) on,
or the making of any distribution on account of, any Capital Stock of such
Person and (b) any purchase, redemption, or other acquisition or retirement for
value of any Capital Stock of such Person.
"Dollar" or "$" means the lawful currency of the United States of America.
"EBITDA" means, for any period, determined in accordance with GAAP on a
consolidated basis for the Borrower and its Subsidiaries, the sum of (a) Pretax
Net Income (excluding therefrom, to the extent included in determining Pretax
Net Income, any items of extraordinary gain, including net gains on the sale of
assets other than asset sales in the ordinary course of business, and adding
thereto, to the extent included in determining Pretax Net Income, any items of
extraordinary loss, including net losses on the sale of assets other than asset
sales in the ordinary course of business), plus (b) depreciation and
amortization, plus (c) interest expense (including but not limited to interest
expense pursuant to Capitalized Lease Obligations), plus (d) to the extent
included in determining Pretax Net Income, non-recurring, non-cash charges,
minus (e) to the extent included in determining Pretax Net Income, non-recurring
credits, plus (f) to the extent included in determining Pretax Net Income, Net
Change in Deferred Membership Revenue.
"EBITDAR" means, for any period, determined in accordance with GAAP on a
consolidated basis for the Borrower and its Subsidiaries, the sum of (a) EBITDA,
plus (b) lease expense pursuant to Operating Leases.
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender; and
(c) any other Person approved by the Administrative Agent and, unless an Event
of Default has occurred and is continuing at the time any assignment is effected
in accordance with Section 11.6 hereof, the Borrower, such approval not to be
unreasonably withheld or delayed by the Borrower or the Agent and such approval
to be deemed given by the Borrower if no objection is received by the assigning
Lender and the Administrative Agent from the Borrower within two Business Days
after notice of such proposed assignment has been provided by the assigning
Lender to the Borrower; provided, however, that neither the Borrower nor any of
its Affiliates shall qualify as an Eligible Assignee.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any regulation promulgated thereunder.
"ERISA Event" means, with respect to the Borrower and its Subsidiaries, (a)
a Reportable Event (other than a Reportable Event not subject to the provision
for 30-day notice to the PBGC pursuant to regulations issued under Section 4043
of ERISA), (b) the withdrawal of any such Person or any member of its Controlled
Group from a Plan subject to Title IV of ERISA during a plan year in which it
was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c) the
filing of a notice of intent to terminate under Section 4041(c) of ERISA, (d)
the institution of proceedings to terminate a Plan by the PBGC, (e) the failure
to make required contributions which could result in the imposition of a lien
under Section 412 of the Code or Section 302 of ERISA, or (f) any other event or
condition which could reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination by the PBGC of, or the appointment by the
appropriate United States District Court of a trustee to administer, any Plan or
the imposition of any liability under Title IV of ERISA other than PBGC premiums
due but not delinquent under Section 4007 of ERISA.
"Eurodollar Basis" means, with respect to any Eurodollar Rate Advance, a
per annum interest rate equal to the lesser of (a) the Highest Lawful Rate, or
(b) the sum of the Adjusted Eurodollar Rate applicable to such Eurodollar Rate
Advance plus the Applicable Eurodollar Rate Margin.
"Eurodollar Rate" means, for any Eurodollar Rate Advance for any Interest
Period therefor, the eurodollar rate published by Telerate News Service at
approximately 11:00 a.m. (Dallas, Texas time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period.
"Eurodollar Rate Advance" means any Advance bearing interest at the
Eurodollar Basis.
"Event of Default" means any of the events specified in Section 8.1 hereof,
provided that any requirement for notice or lapse of time has been satisfied.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Matters" has the meaning specified in Section 5.9(a) hereof.
"Federal Funds Rate" means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of Dallas on the Business Day next
succeeding such day, provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average of the quotations for
the day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Financial Statements" has the meaning specified in Section 4.1(j) hereof.
"Fiscal Month" means a consecutive 28-day period. The first Fiscal Month
of the Fiscal Year shall commence on the first day of the Fiscal Year.
"Fiscal Quarter" means four periods in each Fiscal Year. The first three
shall consist of three consecutive Fiscal Months and the last shall consist of
four consecutive Fiscal Months. The First Quarter of the Fiscal Year shall
commence on the first day of the Fiscal Year.
"Fiscal Year" means a period commencing on the Wednesday following the last
Tuesday in December and ending on the last Tuesday of the following December.
"Fixed Charges" means, for any date of calculation, calculated for the
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP,
the sum of, without duplication, (a) interest expense (including but not limited
to interest expense pursuant to Capitalized Lease Obligations, but not including
amortization of discount on Membership Deposits and amortization of discounts on
Indebtedness), plus (b) lease expense under Operating Leases, in each case for
the applicable period immediately preceding the date of calculation.
"Fixed Charge Coverage Ratio" means, for any date of determination (which
shall be as of the last day of each Fiscal Quarter), the ratio of (a) the sum of
(i) EBITDAR minus (ii) Maintenance Capital Expenditures to (b) Fixed Charges, in
each case for the immediately preceding four Fiscal Quarters.
"Form 1001" has the meaning specified in Section 2.13(e)(i)(B) hereof.
"Form 4224" has the meaning specified in Section 2.13(e)(i)(A) hereof.
"GAAP" means generally accepted accounting principles applied on a
consistent basis, set forth in the Opinions of the Accounting Principles Board
of the American Institute of Certified Public Accountants, or their successors
which are applicable in the circumstances as of the date in question. The
requirement that such principles be applied on a consistent basis shall mean
that the accounting principles applied in a current period are comparable in all
material respects to those applied in a preceding period.
"Group" means any Persons acting together which would constitute a "group"
for purposes of Section 13(d) of the Exchange Act or any successor provision
thereto.
"Guarantor" means each direct and indirect Subsidiary of the Borrower which
executes a Subsidiary Guaranty.
"Guaranty" or "Guaranteed", means (a) as applied to an obligation of
another Person, (i) a guaranty, direct or indirect, in any manner, of any part
or all of such obligation, and (ii) an agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of nonperformance) of any
part or all of such obligation, including, without limiting the foregoing, any
reimbursement obligations with respect to amounts which may be drawn by
beneficiaries of outstanding letters of credit and (b) an agreement, direct or
indirect, contingent or otherwise, to maintain the net worth, working capital,
earnings or other financial performance of another Person; provided, however,
Guaranty does not mean the endorsement of instruments for collection or deposit
in the ordinary course of business.
"Hazardous Substance" means any hazardous, dangerous or toxic substance or
material in the meaning of any Law.
"Hedge Agreements" means any and all non-speculative agreements, devices or
arrangements designed to protect at least one of the parties thereto from the
fluctuations of interest rates, currency exchange rates, forward rates
applicable to such party's assets, commodity prices (including commodity hedging
agreements), liabilities or exchange transactions, including, but not limited
to, dollar-denominated or cross-currency interest rate exchange agreements,
forward currency exchange agreements, interest rate cap, swap or collar
protection agreements, and forward rate currency or interest rate options, as
the same may be amended or modified and in effect from time to time, and any and
all cancellations, buy backs, reversals, terminations or assignments of any of
the foregoing.
"Highest Lawful Rate" means at the particular time in question the maximum
rate of interest which, under Applicable Law, the Lenders are then permitted to
charge on the Obligations. If the maximum rate of interest which, under
Applicable Law, the Lenders are permitted to charge on the Obligations shall
change after the date hereof, the Highest Lawful Rate shall be automatically
increased or decreased, as the case may be, from time to time as of the
effective time of each change in the Highest Lawful Rate without notice to the
Borrower. For purposes of determining the Highest Lawful Rate under the
Applicable Law of the State of Texas, the applicable rate ceiling shall be (a)
the weekly rate ceiling described in and computed in accordance with the
provisions of Art. 1D.003, or (b) if the parties subsequently contract as
allowed by Applicable Law, the quarterly ceiling or the annualized ceiling
computed pursuant to Art. 1D.008; provided, however, that at any time the weekly
rate ceiling, the quarterly ceiling or the annualized ceiling shall be less than
18% per annum or more than 24% per annum, the provisions of Art. 1D.009(a) and
(b) shall control for purposes of such determination, as applicable.
"Increased Advance Costs" has the meaning specified in Section 9.3 hereof.
"Indebtedness" means, with respect to any Person, without duplication, (a)
all obligations for borrowed money, (b) all obligations evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations under conditional
sale or other title retention agreements relating to property or assets
purchased by such Person, (d) all obligations issued or assumed as the deferred
purchase price of property or services (excluding trade accounts payable in the
ordinary course of business), (e) all obligations secured by any Lien on any
property or asset owned by such Person, whether or not the obligation secured
thereby shall have been assumed, (f) to the extent not otherwise included, all
Capitalized Lease Obligations of such Person, all obligations in respect of
letters of credit, bankers' acceptances and similar instruments, and all
obligations under Hedge Agreements, (g) any "withdrawal liability" of such
Person as such term is defined under Part I of Subtitle E of Title IV or ERISA,
(h) all preferred stock issued by such Person and required by the terms thereof
to be redeemed, or for which mandatory sinking fund payments are due, by a fixed
date, (i) the principal portion of all obligations of such Person under any
Synthetic Lease, and (j) any Guaranty of such Person of any obligation of
another Person constituting obligations of a type set forth above.
"Indemnified Matters" has the meaning specified in Section 5.9(a) hereof.
"Indemnitees" has the meaning specified in Section 5.9(a) hereof.
"Initial Advance Date" means the date of the initial Advance under this
Agreement.
"Initial Pricing Period" means the period from and including the Agreement
Date to and including the Rate Adjustment Date.
"Institutional Debt" means unsecured indebtedness for borrowed money which
may be raised by the Borrower in the private placement or public debt markets
pursuant to terms satisfactory to the Determining Lenders.
"Interest Period" means the period beginning on the day any (a) LIBOR
Advance is made and ending one, two or three months thereafter (as the Borrower
shall select) or (b) Eurodollar Rate Advance is made and ending up to
twenty-nine days thereafter (as the Borrower shall select); provided, however,
that:
(1) with respect to any LIBOR Advance, if any Interest Period would
otherwise end on a day which is not a Business Day, such Interest Period shall
be extended to the next succeeding Business Day, unless the result of such
extension would be to extend such Interest Period into another calendar month,
in which event such Interest Period shall end on the immediately preceding
Business Day;
(2) with respect to any LIBOR Advance, any Interest Period that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(3) there shall be outstanding at any one time no more than ten Interest
Periods in the aggregate.
"Investment" means any direct or indirect purchase or other acquisition of,
capital stock or other securities of, or beneficial interest in, any other
Person which is not an Acquisition, or any direct or indirect loan, advance
(other than loans or advances to employees for moving and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business) or
capital contribution to, or investment in any other Person, including without
limitation the purchase of accounts receivable of any other Person that are not
current assets or do not arise in the ordinary course of business.
"Investment Policy" means those investments permitted to be made by the
Borrower and its Subsidiaries set forth in the Investment Policy of the Borrower
attached hereto as Schedule 8, as such Investment Policy may be amended with the
consent of the Board of Directors of the Borrower after the Agreement Date, but
only to the extent that such amendments are approved in writing by the
Determining Lenders.
"Law" means any statute, law, ordinance, regulation, rule, order, writ,
injunction, or decree of any Tribunal.
"Lender" means each financial institution shown on the signature pages
hereof so long as such financial institution maintains a portion of the
Commitment or is owed any part of the Obligations (including the Administrative
Agent in its individual capacity), and each Eligible Assignee that hereafter
becomes a party hereto pursuant to Section 11.6 hereof, subject to the
limitations set forth therein.
"Leverage Ratio" means, for any date of calculation (which shall be as of
the last day of each Fiscal Quarter), the ratio of Total Debt as of the date of
determination to EBITDA calculated for the four consecutive Fiscal Quarters
ending on the date of calculation. For purpose of calculation of the Leverage
Ratio only, with respect to assets not owned at all times during the four Fiscal
Quarters immediately preceding the date of calculation of EBITDA, there shall be
(i) included in EBITDA the proforma EBITDA (but calculated to exclude any
increase in EBITDA which would be the result of any expenses that the Borrower
projects to be eliminated by such proposed acquisition) of any assets acquired
during any such four Fiscal Quarters and (ii) excluded from EBITDA the EBITDA of
any assets disposed of during any of such Fiscal Quarters.
"LIBOR Advance" means any Advance bearing interest at the LIBOR Basis.
"LIBOR Basis" means, with respect to any LIBOR Advance, a per annum
interest rate equal to the lesser of (a) the Highest Lawful Rate, or (b) the sum
of the Adjusted LIBOR Rate applicable to such LIBOR Advance plus the Applicable
LIBOR Rate Margin.
"LIBOR Lending Office" means, with respect to a Lender, the office
designated as its LIBOR Lending Office on Schedule 2 attached hereto, and such
other office of the Lender or any of its Affiliates hereafter designated by
written notice to the Borrower and the Administrative Agent.
"LIBOR Rate" means, for any LIBOR Advance for any Interest Period therefor,
the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "LIBOR Rate" shall mean, for any LIBOR Advance for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; provided, however, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates.
"Lien" means, with respect to any property, any mortgage, lien, pledge,
collateral assignment, hypothecation, charge, security interest, title retention
agreement, levy, execution, seizure, attachment, garnishment or other similar
encumbrance of any kind in respect of such property, whether or not choate,
vested or perfected, excluding (a) Liens securing Indebtedness among the
Obligors, provided that such Indebtedness is subordinated to the Obligations in
a manner satisfactory to the Determining Lenders and (b) Liens to secure
Indebtedness of any Non-Guarantor owed to any Obligor.
"Litigation" means any proceeding, claim, lawsuit, arbitration, and/or
investigation by or before any Tribunal, including, without limitation,
proceedings, claims, lawsuits, and/or investigations under or pursuant to any
environmental, occupational, safety and health, antitrust, unfair competition,
securities, Tax or other Law, or under or pursuant to any contract, agreement or
other instrument.
"Loan Documents" means this Agreement, the Notes, any Subsidiary Guaranty,
the Arrangement Fee Letter, the Administrative Agent Fee Letter, the Commitment
Letter, any Hedge Agreement with any Lender or an Affiliate of any Lender, and
any other document or agreement executed or delivered from time to time by the
Borrower and any of its Subsidiaries or any other Person in connection herewith
or as security for the Obligations.
"Maintenance Capital Expenditures" means, for any date of determination, an
amount equal to the product of (a) 5% multiplied by (b) gross revenue of the
Borrower and its Subsidiaries, on a consolidated basis, determined in accordance
with GAAP, calculated for the four consecutive Fiscal Quarters ending on the
date of calculation.
"Material Adverse Effect" means any act or circumstance or event that (a)
could reasonably be expected to be material and adverse to the business, assets,
liabilities, financial condition, results of operations or prospects of the
Borrower and its Subsidiaries taken as a whole, or (b) in any manner whatsoever
does or could reasonably be expected to materially and adversely affect (i) the
validity or enforceability of any Loan Document, (ii) the ability of the
Borrower and its Subsidiaries taken as a whole to perform their respective
Obligations under the Loan Documents, or (iii) the Rights of the Lenders or the
Administrative Agent under any of the Loan Documents.
"Maturity Date" means March 29, 2004, or the earlier date of termination in
whole of the Commitment pursuant to Section 8.2 hereof.
"Membership Deposits" means the advance initiation deposits paid to
Subsidiaries of the Borrower by members of Subsidiaries of the Borrower upon
their acceptance as a member of Subsidiaries of the Borrower, and as reported in
accordance with GAAP.
"Multiemployer Plan" means, as to any Person, at any time, a "multiemployer
plan" within the meaning of Section 4001(a)(3) of ERISA and to which such Person
or any member of its Controlled Group is making, or is obligated to make
contributions or has made, or been obligated to make, contributions.
"NationsBank" means NationsBank, N.A., a national banking association, in
its capacity as a Lender.
"Necessary Authorization" means any right, franchise, license, permit,
consent, approval or authorization from, or any filing or registration with, any
Tribunal or any Person necessary to enable the Borrower or any of its
Subsidiaries to maintain and operate its business and properties.
"Negative Pledge" means any agreement, contract or other arrangement
whereby the Borrower or any of its Subsidiaries is prohibited from, or would
otherwise be in default as a result of, creating, assuming, incurring or
suffering to exist, directly or indirectly, any Lien on any of its assets in
favor of the Administrative Agent for the benefit of the Lenders under this
Agreement.
"Net Cash Proceeds" means, with respect to any sale, transfer or issuance
of Indebtedness or Capital Stock to any Person, the amount of cash received by
such Person in connection with such transaction (including cash proceeds of any
property received in consideration of any such sale, transfer or other
disposition) after deducting therefrom the aggregate, without duplication, of
the following amounts to the extent properly attributable to such transaction or
to any asset that may be the subject thereof: (i) reasonable brokerage
commissions, legal fees, finder's fees, financial advisory fees, fees for
solvency opinions, accounting fees, underwriting fees, investment banking fees
and other similar commissions and fees, and expenses, in each case, to the
extent paid or payable by such Person; (ii) filing, recording or registration
fees or charges or similar fees or charges paid by such Person; and (iii) taxes
paid or payable by such Person or any shareholder, partner or member of such
Person to governmental taxing authorities as a result of such sale or other
disposition (after taking into account any available tax credits or deductions
or any tax sharing arrangements).
"Net Change in Deferred Membership Revenue" means, for any period, the net
change during such period in current and non-current deferred membership revenue
and related expenses in respect of Membership Deposits.
"Net Income" means net earnings (or deficit) after taxes of the Borrower
and its Subsidiaries, on a consolidated basis, determined in accordance with
GAAP.
"Net Tangible Assets" means, for the Borrower and its Subsidiaries, on a
consolidated basis, determined in accordance with GAAP, an amount equal to the
total assets of the Borrower and its Subsidiaries minus goodwill and any other
items that are classified as intangibles in accordance with GAAP.
"Net Worth" means, for the Borrower and its Subsidiaries, on a consolidated
basis, determined in accordance with GAAP, total stockholders' equity.
"Non-Guarantors" means the Subsidiaries of the Borrower which are not
Guarantors. The Borrower may designate a Guarantor as a Non-Guarantor (in which
case such Subsidiary shall be released from its obligations in respect of the
Subsidiary Guaranty by the Administrative Agent) and a Non-Guarantor as a
Guarantor (in which case such Subsidiary shall execute a Subsidiary Guaranty and
deliver such certificates and documents related thereto as shall be required by
the Administrative Agent) by written notice to the Administrative Agent;
provided, however, at the time of such designation and after giving effect
thereto, no Default or Event of Default shall have occurred and be continuing;
provided, however, notwithstanding the above, the following Subsidiaries shall
at no time be Non-Guarantors: Club Corporation of America, a Delaware
corporation, Club Resorts Holding, Inc., a Nevada corporation, and The
International Group of Club Corp., a Nevada corporation.
"Notes" means the promissory notes of Borrower evidencing Advances
hereunder, substantially in the form of Exhibit A hereto, together with any
extension, renewal, or amendment thereof, or substitution therefor.
"Notice of Borrowing" has the meaning specified in Section 2.2(a) hereof.
"Notice of Continuation/Conversion" has the meaning specified in Section
2.2(b) hereof.
"Obligations" means (a) all obligations of any nature (whether matured or
unmatured, fixed or contingent) of the Borrower or any other Obligor to any
Lender, the Administrative Agent or any Affiliate of any Lender under any of the
Loan Documents as they may be amended from time to time, and (b) all obligations
of the Borrower or any other Obligor for losses, damages, expenses or any other
liabilities of any kind that any Lender, the Administrative Agent or any
Affiliate of any Lender may suffer by reason of a breach by the Borrower or any
other Obligor of any obligation, covenant or undertaking with respect to any
Loan Document payable by the Borrower or any other Obligor under any Loan
Document.
"Obligor" means the Borrower and each Guarantor.
"Operating Lease" means any operating lease, as defined in the Financial
Accounting Standard Board Statement of Financial Accounting Standards No. 13,
dated November, 1976 or otherwise in accordance with GAAP.
"Other Taxes" has the meaning specified in Section 2.13(b) hereof.
"Ownership Information" has the meaning specified in Section 11.6(j)
hereof.
"Participants" has the meaning specified in Section 11.6(c) hereof.
"Participations" has the meaning specified in Section 11.6(c) hereof.
"Payment Date" means the last day of the Interest Period for any LIBOR
Advance or Eurodollar Rate Advance.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Liens" means, as applied to any Person:
(2) Any Lien in favor of the Administrative Agent to secure the Obligations
hereunder;
(3) Liens for taxes, assessments, governmental charges, levies or claims
that are not yet delinquent or that are being diligently contested in good faith
by appropriate proceedings in accordance with Section 5.6 hereof and for
which adequate reserves shall have been set aside on such Person's books, but
only so long as no foreclosure, restraint, sale or similar proceedings have been
commenced with respect thereto;
(4) Liens of carriers, warehousemen, mechanics, laborers, landlords and
materialmen and other similar Liens incurred in the ordinary course of business
or by operation of Law for sums not yet due or being contested in good faith, if
such reserve or appropriate provision, if any, as shall be required by GAAP
shall have been made therefor;
(5) Liens incurred or deposits made in the ordinary course of business in
connection with worker's compensation, unemployment insurance, pensions or other
social security programs or similar legislation;
(6) Easements, right-of-way, restrictions and other similar encumbrances on
the use of real property which do not interfere in any material respect with the
ordinary conduct of the business of such Person;
(7) Liens arising from filing Uniform Commercial Code financing statements
for precautionary purposes relating solely to operating leases of personal
property permitted by this Agreement under which the Borrower or any of its
Subsidiaries is a lessee;
(8) Any zoning or similar law or right reserved to or vested in any Tribunal
to control or regulate the use of any real property;
(9) Liens incurred or deposits made to secure the performance of bids,
tenders, leases, trade contracts (other than for Indebtedness), statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business;
(10) Any leases or subleases currently in effect, entered into in the
ordinary course of business or entered into in compliance with the Loan
Documents;
(11) Any Liens which are described on Schedule 3 hereto (and any
replacement, extension or renewal thereof), and Liens resulting from the
refinancing of the related Indebtedness, provided that the Indebtedness secured
thereby shall not be increased and the Liens shall not cover additional assets
of the Borrower; and
(12) Liens created to secure the purchase price of assets acquired (or
existing on property at the time such property is acquired) by such Person,
which is incurred solely for the purpose of financing the acquisition of such
assets and incurred at the time of acquisition or which exists against such
assets at the time of acquisition thereof or within 180 days thereafter,
provided that (i) each such Lien shall at all times be confined solely to the
asset or assets so acquired (and proceeds thereof), and refinancings thereof so
long as any such Lien remains solely on the asset or assets acquired (and the
proceeds thereof), (ii) the aggregate principal amount of Indebtedness
outstanding at any time secured by any Liens (including, without limitation,
clause (j) above) shall not exceed 15% of Net Tangible Assets, and (iii) the
aggregate consideration paid for such assets does not exceed 100% of the fair
market value of such assets.
"Permitted Secured Indebtedness" means Indebtedness of the Borrower and its
Subsidiaries secured by Liens described in clauses (j) and (k) of the definition
of Permitted Liens.
"Person" means an individual, corporation, partnership, limited liability
company, trust or unincorporated organization, or a government or any agency or
political subdivision thereof.
"Plan" means an employee benefit plan as defined in Section 3(3) of ERISA
(including a Multiemployer Plan) pursuant to which any employees of the
Borrower, its Subsidiaries or any member of their Controlled Group participate.
"Pretax Net Income" means net profit (or loss) before taxes of the Borrower
and its Subsidiaries, on a consolidated basis, determined in accordance with
GAAP.
"Prime Rate" means, at any time, the prime interest rate announced or
published by the Reference Lender from time to time as its reference rate for
the determination of interest rates for loans of varying maturities in United
States dollars to United States residents of varying degrees of creditworthiness
and being quoted at such time by the Reference Lender as its "prime rate;" it
being understood that such rate may not be the lowest rate of interest charged
by the Reference Lender.
"Quarterly Date" means the last day of each March, June, September and
December, beginning June 30, 1999.
"Rate Adjustment Date" means the date which is the earlier of (a) ninety
days from the Agreement Date or (b) the Syndication Commencement Date.
"Reference Lender" means NationsBank; provided that if NationsBank shall
cease to be the Administrative Agent hereunder, NationsBank shall cease to be
the Reference Lender, and the new Administrative Agent (after consultation with
the Borrower) shall, with notice to the Borrower and the Lenders, designate
itself as the Reference Lender.
"Refinancing Advance" means an Advance that is used to pay the principal
amount of an existing Advance at the end of its Interest Period and which, after
giving effect to such application, does not result in an increase in the
aggregate amount of Advances, and which such Advances do not result in an
increase in the aggregate amount of outstanding Advances. Each Advance, except
the initial Advance, shall be a Refinancing Advance.
"Register" has the meaning specified in Section 11.6(j) hereof.
"Regulatory Modification" has the meaning specified in Section 9.5 hereof.
"Release Date" means the date on which the Notes have been paid in full,
all other Obligations due and owing have been paid and performed in full, and
the Commitment has been terminated.
"Reportable Event" has the meaning set forth in Section 4043(c) of ERISA.
"Reserve Requirement " means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting the
effect of the foregoing, the Reserve Requirement shall reflect any other
reserves required to be maintained by such member banks with respect to (a) any
category of liabilities which includes deposits by reference to which the
Adjusted LIBOR Rate or Adjusted Eurodollar Rate is to be determined, or (b) any
category of extensions of credit or other assets which include LIBOR Advances or
Eurodollar Rate Advances. The Adjusted LIBOR Rate and Adjusted Eurodollar Rate
shall be adjusted automatically on and as of the effective date of any change in
the Reserve Requirement.
"Responsible Officer" means, of any Person, the President, chief operating
officer, chief executive officer, chief financial officer, chief accounting
officer or treasurer of such Person.
"Restricted Payments" means, collectively, (a) Dividends, and (b) any
payment or prepayment of principal, premium or penalty on any Indebtedness of
the Borrower or any of its Subsidiaries or any defeasance, redemption, purchase,
repurchase or other acquisition or retirement for value, in whole or in part, of
any Indebtedness (including, without limitation, the setting aside of assets or
the deposit of funds therefor) other than payment of principal of Indebtedness
at regularly scheduled maturities.
"Revolving Credit Agreement" means that certain Credit Agreement, dated as
of May 27, 1998, among the Borrower, the lenders named therein, Credit Lyonnais
New York Branch and First Union National Bank, as Co-Agents, and NationsBank,
N.A., as Administrative Lender, as amended, restated, and supplemented from time
to time.
"Rights" means rights, remedies, powers and privileges.
"Secured Indebtedness" means Indebtedness of the Borrower and its
Subsidiaries secured by Liens.
"Solvent" means, with respect to any Person, that as of the date of
determination, (a) the fair saleable value of the assets of such Person is
greater than the total amount of liabilities (including contingent and
unliquidated liabilities) of such Person, (b) such Person is able to pay the
probable liabilities on such Person's then existing debts as they become
absolute and matured considering all financing alternatives and potential asset
sales reasonably available to such Person, and (c) such Person does not have
unreasonably small capital with which to carry on its business. In computing
the amount of contingent or unliquidated liabilities at any time, such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability discounted to present value
at rates believed to be reasonable by such Person.
"Special Counsel" means the law firm of Donohoe, Jameson & Carroll, P.C.,
or such other legal counsel as the Administrative Agent may select.
"Specified Percentage" means, as to any Lender, the percentage indicated
beside its name on Schedule 1 hereto as its Specified Percentage, or as adjusted
or specified in any amendment to this Agreement or in any Assignment Agreement.
"Stock Purchase Agreement" means that certain Stock Purchase Agreement,
dated as of February 10, 1999, among Meditrust Corporation, Meditrust Operating
Company and Golf Acquisitions, L.L.C., as amended, modified or supplemented.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate or other Person of which (or
in which) more than 50% of:
(a) the outstanding capital stock having Voting Power to elect a
majority of the Board of Directors of such corporation (irrespective of whether
at the time capital stock of any other class or classes of such corporation
shall or might have Voting Power upon the occurrence of any contingency),
(b) the interest in the capital or profits of such partnership or joint
venture,
(c) the beneficial interest of such trust or estate, or
(d) the equity interest of such other Person,
is at the time directly or indirectly owned by such Person, by such Person and
one or more of its Subsidiaries or by one or more of such Person's Subsidiaries;
provided, however, notwithstanding anything above to the contrary, Subsidiary
shall also mean and include any other Person the financial results of which are
consolidated with the financial results of the Borrower pursuant to GAAP.
"Subsidiary Guaranty" means a guaranty, substantially in the form of
Exhibit D hereto, executed by each direct and indirect Subsidiary of the
Borrower, as amended, supplemented, modified, renewed or otherwise restated from
time to time.
"Syndication Commencement Date" means the date that the Administrative
Agent, or an Affiliate thereof, notifies the Borrower that it has commenced
syndication of this Agreement to other Lenders, which date shall be no sooner
than sixty days after the Agreement Date and no later than ninety days after the
Agreement Date.
"Synthetic Lease" means any synthetic lease, tax retention generating
lease, or off-balance sheet financing product where such transaction is
considered borrowed money indebtedness for tax purposes but which is classified
as an Operating Lease pursuant to GAAP.
"Tangible Net Worth" means the sum of the following for the Borrower and
its Subsidiaries, on a consolidated basis, determined in accordance with GAAP,
(a) Net Worth, minus (b) the sum of the following (without duplication in
respect of items already deducted in arriving at Net Worth): the book value of
all assets which would be treated as intangible assets under GAAP, including
without limitation, goodwill, trademarks, copyrights, patents, organizational
expense and experimental expense, deferred assets, unamortized debt discount and
expense, any write-up in the book value of assets resulting from the revaluation
thereof subsequent to December 31, 1997.
"Taxes" has the meaning specified in Section 2.13(a) hereof.
"Total Debt" means, as of any date of determination, determined for the
Borrower and its Subsidiaries on a consolidated basis, to the extent that the
following would appear as a liability upon the consolidated balance sheet of the
Borrower and its Subsidiaries in accordance with GAAP: (i) indebtedness for
borrowed money, (ii) obligations evidenced by bonds, debentures, notes or other
similar instruments, (iii) obligations to pay the deferred purchase price of
property or services other than trade payables incurred in the ordinary course
of business, (iv) Capitalized Lease Obligations, and (v) Membership Deposits.
"Transaction" means the acquisition by one or more Subsidiaries of the
Borrower of certain properties being sold by Meditrust Corporation and Meditrust
Operating Company, such properties being owned by Meditrust Golf Group, Inc.,
Meditrust Golf Group II, Inc., and The Cobblestone Golf Companies, Inc. (such
companies, collectively, the "Acquired Companies", and such properties,
collectively, the "Acquired Properties"), such properties being more
particularly described on Schedule 7 hereto.
"Transaction Documents" means the Stock Purchase Agreement and all other
contracts, agreements or documents executed or delivered in connection with the
Transaction.
"Tribunal" means any (a) state, commonwealth, federal, foreign,
territorial, or other court or government body, subdivision, agency, department,
commission, board, bureau, or instrumentality of a governmental or other
regulatory or public body or authority or (b) private arbitration board or
panel.
"UCC" means the Uniform Commercial Code of Texas, as amended from time to
time, and the Uniform Commercial Code applicable in such other states as any
Collateral may be located.
"Unsecured Indebtedness" means Indebtedness of the Borrower and its
Subsidiaries other than Secured Indebtedness.
"Voting Power" means, with respect to any Person, the power ordinarily
(without the occurrence of a contingency) to elect the members of the board of
directors (or persons performing similar functions).
"Year 2000 Compliant" has the meaning specified in Section 4.1(x) hereof.
Section 1.2 Amendments and Renewalsand Renewals. Each definition of an
agreement in this Article 1 shall include such agreement as amended to date, and
as amended or renewed from time to time in accordance with its terms, but
only with the prior written consent of the Determining Lenders or all the
Lenders as required pursuant to Section 11.11 hereof.
Section 1.3 Construction2Construction. The terms defined in this Article 1
(except as otherwise expressly provided in this Agreement) for all purposes
shall have the meanings set forth in Section 1.1 hereof, and the singular shall
include the plural, and vice versa, unless otherwise specifically required by
the context. All accounting terms used in this Agreement which are not
otherwise defined herein shall be construed in accordance with GAAP on a
consolidated basis for the Borrower and its Subsidiaries, unless otherwise
expressly stated herein.
ARTICLE 2
Advances
Section 2.1 The Advances.
(a) Advances. Each Lender severally agrees, upon the terms and subject to
the conditions of this Agreement, to make Advances to the Borrower on the
Initial Advance Date, in an aggregate amount not to exceed its Specified
Percentage of the Commitment, for the purposes set forth in Section 5.8 hereof.
Immediately upon the making of the Advances on the Initial Advance Date,
the Commitment shall be automatically terminated. Advances may not be repaid or
reborrowed other than as Refinancing Advances as a result of a conversion or
continuance
(b) Any Advance shall, at the option of the Borrower as provided in Section
2.2 hereof (and, in the case of LIBOR Advances, subject to the provisions of
Article 9 hereof), be made as a Base Rate Advance, a Eurodollar Rate Advance or
a LIBOR Advance; provided that there shall not be outstanding, at any one time,
more than ten LIBOR Advances and Eurodollar Rate Advances.
Section 2.2 Manner of Borrowing and Disbursement
(a) In the case of the initial Advance, the Borrower, through an Authorized
Signatory, shall give the Administrative Agent prior to (i) 11:00 a.m., Dallas,
Texas time, on the date of the proposed initial Advance if it is to be a Base
Rate Advance, (ii) 11:00 a.m., Dallas, Texas time, three Business Days prior to
the date of the proposed initial Advance if any portion of it is to be a LIBOR
Advance, or (iii) 11:00 a.m., Dallas, Texas time, two Business Days prior to the
date of the proposed initial Advance if any portion of it is to be a
Eurodollar Rate Advance, irrevocable written notice or irrevocable telephonic
notice followed immediately by written notice, in substantially the form of
Exhibit E hereto (a "Notice of Borrowing") (provided, however, that the
Borrower's failure to confirm any telephonic notice in writing shall not
invalidate any notice so given) of its intention to borrow the initial Advance
hereunder. Such Notice of Borrowing shall specify the requested funding date,
which shall be a Business Day.
(b) Continuation/Conversion. Subject to Sections 2.1 and 2.9 hereof, the
Borrower shall have the option (i) to convert at any time all or any part of the
outstanding Base Rate Advances to Eurodollar Rate Advances or LIBOR
Advances and all or any part of the outstanding LIBOR Advances or Eurodollar
Rate Advances to Base Rate Advances or (ii) upon expiration of any Interest
Period applicable to a LIBOR Advance or a Eurodollar Rate Advance, to continue
all or any portion of such LIBOR Advance or such Eurodollar Rate Advance equal
to $5,000,000 and integral multiples of $1,000,000 in excess of that amount as a
LIBOR Advance or a Eurodollar Rate Advance and the succeeding Interest Period(s)
of such continued LIBOR Advance or such Eurodollar Rate Advance shall commence
on the last day of the Interest Period of the LIBOR Advance or Eurodollar Rate
Advance to be continued; provided, however, (A) LIBOR Advances and Eurodollar
Rate Advances may only be converted into Base Rate Advances on the expiration
date of the Interest Period applicable thereto and (B) notwithstanding anything
in this Agreement to the contrary, no outstanding Advance may be continued as,
or converted into, a LIBOR Advance or a Eurodollar Rate Advance when any Default
or Event of Default has occurred and is continuing. Not later than 11:00 a.m.,
Dallas, Texas time on the date of any proposed continuation of or a conversion
to a Base Rate Advance or a Eurodollar Rate Advance, not later than 11:00 a.m.,
Dallas, Texas time at least two Business Days prior to any proposed continuation
of or conversion to a LIBOR Advance, and not later than 11:00 a.m., Dallas,
Texas time at least three Business Days prior to any proposed continuation of or
conversion to a LIBOR Advance, the Borrower, through an Authorized Signatory,
shall give the Administrative Agent irrevocable written notice, or irrevocable
telephonic notice followed immediately by written notice, in substantially the
form of Exhibit F hereto (a "Notice of Continuation/Conversion") (provided,
however, that the Borrower's failure to confirm any telephonic notice in writing
shall not invalidate any notice so given), stating (i) the proposed
conversion/continuation date (which shall be a Business Day), (ii) the amount of
the Advance to be converted/continued, (iii) in the case of a conversion to, or
a continuation of, a LIBOR Advance or a Eurodollar Rate Advance, the requested
Interest Period, and (iv) in the case of a conversion of a Base Rate Advance to
a LIBOR Advance or a Eurodollar Rate Advance or continuation of a LIBOR Advance
or a Eurodollar Rate Advance, stating that no Default or Event of Default has
occurred and is continuing. If the Borrower shall fail to give any notice in
accordance with this Section 2.2(d) prior to the expiration of any then-relevant
Interest Period with respect to any LIBOR Advance or any Eurodollar Rate
Advance, the Borrower shall be deemed irrevocably to have requested that such
LIBOR Advance or such Eurodollar Rate Advance be converted to a Base Rate
Advance in the same principal amount.
(c) Minimum Amount. The aggregate amount of Base Rate Advances to be made
by the Lenders on any day shall be in a principal amount which is at least
$1,000,000 and which is an integral multiple of $500,000. The aggregate amount
of LIBOR Advances or Eurodollar Rate Advances having the same Interest Period
and to be made by the Lenders on any day shall be in a principal amount which is
at least $5,000,000 and which is an integral multiple of $1,000,000.
(d) Notice and Disbursement. The Administrative Agent shall promptly notify
the Lenders of each notice received from the Borrower pursuant to this
Section. Each Lender shall, not later than 2:00 p.m., Dallas, Texas time, on
the Initial Advance Date of any Advance, deliver to the Administrative Agent, at
its address set forth herein, such Lender's Specified Percentage of such Advance
in immediately available funds in accordance with the Administrative Agent's
instructions. Prior to 2:30 p.m., Dallas, Texas time, on the Initial Advance
Date, the Administrative Agent shall, subject to satisfaction of the conditions
set forth in Article 3, disburse the amounts made available to the
Administrative Agent by the Lenders by (i) transferring such amounts by wire
transfer pursuant to the Borrower's instructions, or (ii) in the absence of such
instructions, crediting such amounts to the account of the Borrower maintained
with the Administrative Agent. All Advances shall be made by each Lender
according to its Specified Percentage.
Section 2.3 Interest.
(a) On Base Rate Advances.
(i) The Borrower shall pay interest on the outstanding unpaid principal
amount of each Base Rate Advance from the date such Base Rate Advance is made
until such Base Rate Advance is due (whether at maturity, by reason of
acceleration, by scheduled reduction, or otherwise) and repaid at a simple
interest rate per annum equal to the Base Rate Basis for the Base Rate Advances
as in effect from time to time. If at any time the Base Rate Basis would exceed
the Highest Lawful Rate, interest payable on the Base Rate Advances shall
be limited to the Highest Lawful Rate, but the Base Rate Basis shall not
thereafter be reduced below the Highest Lawful Rate until the total amount of
interest accrued on the Base Rate Advances equals the amount of interest that
would have accrued if the Base Rate Basis had been in effect at all times.
(ii) Subject to Section 11.9 hereof, interest on the Base Rate Advances shall
be computed on the basis of a year of 365 or 366 days, as appropriate, for
the actual number of days elapsed, and shall be payable in arrears on each
Quarterly Date and on the Maturity Date.
(b) On LIBOR Advances.
(i) The Borrower shall pay interest on the outstanding unpaid principal
amount of each LIBOR Advance, from the date such Advance is made until it is due
(whether at maturity, by reason of acceleration, by scheduled reduction, or
otherwise) and repaid, at a rate per annum equal to the LIBOR Basis for such
LIBOR Advance. The Administrative Agent, whose determination shall be
controlling in the absence of demonstrable error, shall determine the LIBOR
Basis on the second Business Day prior to the applicable funding, conversion or
continuation date and shall notify the Borrower and the Lenders of such LIBOR
Basis. The Administrative Agent shall, at the request of the Borrower, furnish
such information concerning the calculation of the LIBOR Basis as the Borrower
may reasonably request.
(ii) Subject to Section 11.9 hereof, interest on each LIBOR Advance shall be
computed on the basis of a 360-day year for the actual number of days elapsed,
and shall be payable in arrears on the applicable Payment Date and on the
Maturity Date.
(c) On Eurodollar Rate Advances.
(i) The Borrower shall pay interest on the outstanding principal amount of
each Eurodollar Rate Advance, from the date of such Eurodollar Rate Advance is
made until it is due (whether at maturity, by reason of acceleration or
otherwise) and repaid, at an interest rate per annum equal to the Eurodollar
Basis for such Eurodollar Rate Advance, but in no event higher than the Highest
Lawful Rate.
(ii) Subject to Section 11.9 hereof, interest on each Eurodollar Rate Advance
shall be computed on the basis of a 360-day year for the actual number of
days elapsed, and shall be payable in arrears on the maturity date of each
Eurodollar Rate Advance and on the Maturity Date.
(d) Interest After an Event of Default. (i) Subject to Section 11.9 hereof,
after an Event of Default (other than an Event of Default specified in
Section 8.1(e) or (f) hereof) and during any continuance thereof, at the option
of the Determining Lenders and after written notice to the Borrower by the
Administrative Agent, and (ii) after an Event of Default specified in Section
8.1(e) or (f) hereof and during any continuance thereof, automatically and
without any action by the Administrative Agent or any Lender, the Obligations
shall bear interest at a rate per annum equal to the Default Rate. Such
interest shall be payable on the earlier of demand or the Maturity Date, and
shall accrue until the earlier of (i) waiver or cure of the applicable Event of
Default, (ii) agreement by the Determining Lenders to rescind the charging of
interest at the Default Rate, or (iii) payment in full of the Obligations. The
Lenders shall not be required to accelerate the maturity of the Advances or to
exercise any other rights or remedies under the Loan Documents to charge
interest at the Default Rate. The Lenders shall not be required to give notice
to the Borrower of the decision to charge interest at the Default Rate.
Section 2.4 Fees. Subject to Section 11.9 hereof, the Borrower agrees to
pay to the Administrative Agent, for the account of (a) the Administrative
Agent, the fees on the dates and in the amounts specified in the letter
agreement (the "Administrative Agent Fee Letter"), dated as of the Agreement
Date, between the Borrower and the Administrative Agent, and (b) NationsBank,
N.A. and NationsBanc Montgomery Securities LLC the fees specified in the
Arrangement Fee Letter on the dates and in the amounts specified therein.
Section 2.5 Prepayments
(a) Voluntary Prepayments. Upon one Business Day's prior telephonic notice
(to be promptly followed by written notice) by an Authorized Signatory to the
Administrative Agent, Base Rate Advances may be voluntarily prepaid without
premium or penalty. Upon two Business Days' prior telephonic notice (to be
promptly followed by written notice) by an Authorized Signatory to the
Administrative Agent, LIBOR Advances and Eurodollar Rate Advances may be
voluntarily prepaid, without premium or penalty, but only so long as the
Borrower concurrently reimburses the Lenders in accordance with Section 2.8
hereof. Any notice of prepayment shall be irrevocable.
(b) Prepayment from Sales of Capital Stock. Provided that the Determining
Lenders (as defined in the Revolving Credit Agreement) under the Revolving
Credit Agreement have waived any Event of Default (as defined in the Revolving
Credit Agreement) that may occur under Section 7.1(i) of the Revolving Credit
Agreement as a result of the existence of this Section 2.5(b), concurrently with
the receipt of Net Cash Proceeds from the sale or disposition by the
Borrower or any of its Subsidiaries of any Capital Stock, the Borrower shall
prepay the Advances in an aggregate principal amount equal to 50% of such Net
Cash Proceeds. The Borrower shall be required to reimburse each Lender for any
loss, cost or expense incurred by each Lender in connection with any such
prepayment in accordance with Section 2.8 hereof.
(c) Prepayment for the Issuance of Institutional Debt. Concurrently with
the receipt of Net Cash Proceeds from the issuance of Institutional Debt by the
Borrower or any of its Subsidiaries, the Borrower shall prepay the Advances in
an aggregate principal amount equal to 100% of such Net Cash Proceeds. The
Borrower shall be required to reimburse each Lender for any loss, cost or
expense incurred by each Lender in connection with any such prepayment in
accordance with Section 2.8 hereof.
(d) Payments, Generally. Any prepayment of any Advance shall be accompanied
by interest accrued on the principal amount being prepaid. Any voluntary
partial payment of a Base Rate Advance shall be in a principal amount which is
at least $1,000,000 and which is an integral multiple of $500,000. Any
voluntary partial payment of a LIBOR Advance or a Eurodollar Rate Advance shall
be in a principal amount which is at least $5,000,000 and which is an integral
multiple of $1,000,000, and to the extent that any prepayment of a LIBOR Advance
is made on a date other than the last day of its Interest Period, the Borrower
shall reimburse each Lender in accordance with Section 2.8 hereof.
Section 2.6 Non-Receipt of Funds by the Administrative Agent. Unless the
Administrative Agent shall have been notified by a Lender prior to the Initial
Advance Date (which notice shall be effective upon receipt) that such Lender
does not intend to make the proceeds of such Advance available to the
Administrative Agent, the Administrative Agent may assume that such Lender has
made such proceeds available to the Administrative Agent on such date, and the
Administrative Agent may in reliance upon such assumption (but shall not be
required to) make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Administrative Agent
by such Lender, the Administrative Agent shall be entitled to recover such
amount on demand from such Lender (or, if such Lender fails to pay such amount
forthwith upon such demand, from the Borrower) together with interest thereon in
respect of each day during the period commencing on the date such amount
was available to the Borrower and ending on (but excluding) the date the
Administrative Agent receives such amount from (a) the Lender, at a per annum
rate equal to the lesser of (i) the Highest Lawful Rate or (ii) the Federal
Funds Rate, or (b) the Borrower, at the per annum rate applicable at the time to
such Advance. No Lender shall be liable for any other Lender's failure to fund
an Advance hereunder. The failure or refusal by any Lender to make available to
the Administrative Agent the proceeds of any Advance shall not relieve any
Lender from its several obligation hereunder to make its Specified Percentage of
any requested Advance available to the Administrative Agent.
Section 2.7 Payment of Principal of Advances.
(a) Advances. To the extent not otherwise required to be paid earlier as
provided herein, the principal amount of the Revolving Credit Advances shall be
due and payable on the Maturity Date.
(b) Eurodollar Rate Advances. To the extent not otherwise required to be
paid earlier as provided herein, the outstanding principal amount of each
Eurodollar Rate Advance shall be due and payable on its maturity date pursuant
to Section 2.2(c)(ii) hereof.
Section 2.8 Reimbursement. Whenever any Lender shall sustain or incur any
losses or reasonable out-of-pocket expenses in connection with (a) failure by
the Borrower to borrow any LIBOR Advance or Eurodollar Rate Advance after having
given notice of its intention to borrow in accordance with Section 2.2
hereof (whether by reason of the Borrower's election not to proceed or the
non-fulfillment of any of the conditions set forth in Article 3 hereof), (b) any
prepayment for any reason of any LIBOR Advance or Eurodollar Rate Advance in
whole or in part (including, but not limited to, a prepayment pursuant to
Section 9.3(b) hereof) on other than the last day of an Interest Period
applicable to such LIBOR Advance or such Eurodollar Rate Advance or (c) any
prepayment of any of its LIBOR Advances or Eurodollar Rate Advances that is not
made on any date specified in a notice of prepayment given by the Borrower, the
Borrower agrees to pay to any such Lender, within 30 days after demand by such
Lender, an amount sufficient to compensate such Lender for all such losses
(including loss of anticipated profits) and reasonable out-of-pocket expenses,
subject to Section 11.9 hereof. A certificate as to any amounts payable to any
Lender under this Section 2.8 submitted to the Borrower by such Lender shall
certify that such amounts were actually incurred by such Lender and shall show
in reasonable detail an accounting of the amount payable and the calculations
used to determine in good faith such amount and shall be conclusive absent
demonstrable error.
Section 2.9 Manner of Payment.
(a) Each payment (including prepayments) by the Borrower of the principal of
or interest on the Advances, fees, and any other amount owed under this
Agreement or any other Loan Document shall be made not later than 12:00 noon
(Dallas, Texas time) on the date specified for payment under this Agreement to
the Administrative Agent at the Administrative Agent's office, in lawful money
of the United States of America constituting immediately available funds.
(b) If any payment under this Agreement or any other Loan Document shall be
specified to be made upon a day which is not a Business Day, it shall be made on
the next succeeding day which is a Business Day, unless, with respect to a
payment due in respect of a LIBOR Advance, such Business Day falls in another
calendar month, in which case payment shall be made on the preceding Business
Day. Any extension of time shall in such case be included in computing interest
and fees, if any, in connection with such payment.
(c) The Borrower agrees to pay principal, interest, fees and all other
amounts due under the Loan Documents without deduction for set-off or
counterclaim or any deduction whatsoever.
(d) If some but less than all amounts due from the Borrower are received by
the Administrative Agent, the Administrative Agent shall apply such amounts in
the following order of priority; (i) to the payment of the Administrative
Agent's expenses incurred on behalf of the Lenders then due and payable, if any;
(ii) to the payment of all other fees then due and payable; (iii) to the
payment of interest then due and payable; (iv) the payment of all other amounts
not otherwise referred to in this clause (d) then due and payable under the Loan
Documents; and (v) to the payment of principal then due and payable.
Section 2.10 LIBOR Lending Offices. Each Lender's initial
LIBOR Lending Office is set forth opposite its name in Schedule 2 attached
hereto. Each Lender shall have the right at any time and from time to time to
designate a different office of itself or of any Affiliate of such Lender as
such Lender's LIBOR Lending Office, and to transfer any outstanding LIBOR
Advance to such LIBOR Lending Office.
Section 2.11 Sharing of Payments of Payments. If any Lender shall obtain a
payment (whether voluntary or involuntary, due to the exercise of any right of
set-off, or otherwise) on account of its Advances (other than pursuant to
Sections 2.4(a), 2.4(b), 2.13, 9.3 or 9.5 hereof) in excess of its Specified
Percentage, then such Lender shall purchase from each other Lender such
participation in the Advances made by such other Lender as shall be necessary to
cause such purchasing Lender to share the excess payment pro rata according
to its Specified Percentage; provided, however, that if all or any portion of
such excess payment is thereafter recovered from such purchasing Lender, the
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section, to the
fullest extent permitted by law, may exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.
Section 2.12 Calculation of LIBOR Rate and Eurodollar Rate. The provisions
of this Agreement relating to calculation of the LIBOR Rate and the Eurodollar
Rate are included only for the purpose of determining the rate of interest or
other amounts to be paid hereunder that are based upon such rate, it being
understood that each Lender shall be entitled to fund and maintain its funding
of all or any part of a LIBOR Advance or Eurodollar Advance as it sees fit.
Section 2.13 Taxes.
(a) Any and all payments by the Borrower hereunder shall be made, in
accordance with Section 2.9 hereof, free and clear of and without deduction for
any and all present or future taxes, levies, imposts, deductions, charges and
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and the Administrative Agent, (i) taxes imposed on, based upon or
measured by its overall net income, net worth or capital, and franchise
taxes, doing business taxes or minimum taxes imposed on it, by the jurisdiction
under the laws of which such Lender or the Administrative Agent (as the case may
be) is organized or in which it has its applicable lending office or any
political subdivision thereof; (ii) taxes imposed by reason of failure by the
Lender or the Administrative Agent to comply with the requirements of paragraph
(e) of this Section 2.13; (iii) in the case of any Lender, any taxes in the
nature of transfer, stamp, recording or documentary taxes resulting from a
transfer (other than as a result of foreclosure) by such Lender of all or any
portion of its interest in this Agreement, the Notes or any other Loan
Documents; and (iv) taxes, levies, imposts, deductions, charges, withholdings
and liabilities which are finally judicially determined by a court of competent
jurisdiction to have arisen as a result of gross negligence or wilful misconduct
of the Administrative Agent or any Lender (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes"). If the Borrower shall be required by Law to deduct or
withhold any Taxes from or in respect of any sum payable hereunder to any Lender
or the Administrative Agent, to the extent not prohibited by Applicable Law, (x)
the sum payable shall be increased as may be necessary so that after making all
required deductions for Taxes (including deductions applicable to additional
sums payable under this Section 2.13) such Lender or the Administrative Agent
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (y) the Borrower shall make such deductions
and (z) the Borrower shall pay the full amount of Taxes deducted to the relevant
taxation authority or other authority in accordance with Applicable Law.
(b) In addition, the Borrower agrees to pay any and all stamp and
documentary taxes and any and all other excise and property taxes, charges and
similar levies (other than those described in clauses (iii) and (iv) of the
first sentence of Section 2.13(a)) that arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect
to, this Agreement or any other Loan Document (hereinafter referred to as "Other
Taxes").
(c) The Borrower will indemnify each Lender and the Administrative Agent for
the full amount of Taxes and Other Taxes (including, without limitation,
any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under
this Section 2.13) paid by such Lender or the Administrative Agent (as the case
may be) and all liabilities (including penalties, additions to tax, interest and
reasonable expenses) arising therefrom or with respect thereto whether or not
such Taxes or Other Taxes were correctly or legally asserted, other than
penalties, additions to tax, interest and expenses which are finally judicially
determined by a court of competent jurisdiction to have arisen as a result of
gross negligence or wilful misconduct on the part of such Lender or the
Administrative Agent. This indemnification shall be made within 30 days from
the date such Lender or the Administrative Agent (as the case may be) makes
written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the Borrower will
furnish to the Administrative Agent the original or a certified copy of a
receipt evidencing payment thereof. For purposes of this Section 2.13 the terms
"United States" and "United States Person" shall have the meanings set forth in
Section 7701 of the Code.
(e) Each Lender which is not a United States Person hereby agrees that:
(i) it shall, no later than the Agreement Date (or, in the case of a Lender
which becomes a party hereto pursuant to Section 11.6 after the Agreement Date,
the date upon which such Lender becomes a party hereto) and at such times as
necessary in the reasonable determination of the Borrower, deliver to the
Borrower through the Administrative Agent, with a copy to the Administrative
Agent:
(A) if any lending office is located in the United States, two (2) accurate
and complete signed originals of Internal Revenue Service Form 4224 or any
successor form thereto ("Form 4224"),
(B) if any lending office is located outside the United States, two (2)
accurate and complete signed originals of Internal Revenue Service Form 1001 or
any successor form thereto ("Form 1001"),
in each case establishing that such Lender is on the date of delivery thereof
entitled to receive payments of principal, interest, fees, or other amounts
payable at such lending office or lending offices under this Agreement or any
other Loan Document free from deduction or withholding of United States federal
income tax;
(ii) if at any time such Lender changes its lending office or lending offices
or selects an additional lending office it shall, at the same time or
reasonably promptly thereafter, but only to the extent the forms previously
delivered by it hereunder are not effective with respect to such changed or
additional lending office or lending offices, deliver to the Borrower through
the Administrative Agent, with a copy to the Administrative Agent, in
replacement for the forms previously delivered by it hereunder:
(A) if such changed or additional lending office is located in the United
States, two (2) accurate and complete signed originals of Form 4224; or
(B) otherwise, two (2) accurate and complete signed originals of Form 1001,
in each case establishing that such Lender is on the date of delivery thereof
entitled to receive payments of principal, interest, fees, or other amounts
payable at such changed or additional lending office under this Agreement or any
other Loan Document free from deduction of withholding of United States federal
income tax;
(iii) it shall, before or promptly after the occurrence of any event
(including the passing of time but excluding any event mentioned in clause (ii)
above) requiring a change in the most recent Form 4224 or Form 1001 previously
delivered by such Lender and if the delivery of the same be lawful, deliver to
the Borrower through the Administrative Agent, with a copy to the Administrative
Agent, two (2) accurate and complete original signed copies of Form 4224 or
Form 1001, in each case establishing that such Lender is on the date of delivery
thereof entitled to receive payments of principal, interest, fees, or other
amounts payable under this Agreement or any other Loan Document free from
deduction or withholding of United States federal income tax, in replacement for
the forms previously delivered by such Lender;
(iv) it shall, promptly upon the request of the Borrower to that effect,
deliver to the Borrower such other forms or similar documentation as may be
required from time to time by any applicable law, treaty, rule or regulation in
order to establish such Lender's tax status for withholding purposes;
(v) it shall notify the Borrower promptly after any event (including an
amendment to or a change in any applicable law or regulation or in the written
interpretation thereof by any regulatory authority or any judicial authority or
by ruling applicable to such Lender of any governmental authority charged with
the interpretation or administration of any law) shall occur that results in
such Lender no longer being capable of receiving payments under this Agreement
without any deduction or withholding of United States federal income tax; and
(vi) if such Lender is not a "bank" or other person described in Section
881(c)(3) of the Code and cannot deliver either Form 4224 or Form 1001, a
statement that such Lender is not a "bank" under Section 881(c)(3)(A) of the
Code and two original copies of Internal Revenue Service Form W-8 (or any
successor form), properly completed and duly executed by such Lender.
(f) Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in this
Section 2.13 shall survive the payment in full of the Obligations.
(g) Each Lender (and the Administrative Agent with respect to payments to
the Administrative Agent for its own account) agrees that (i) it will take all
reasonable actions by all usual means to maintain all exemptions, if any,
available to it from United States withholding taxes (whether available by
treaty, existing administrative waiver or by virtue of the location of any
Lender's lending office), and (ii) it will use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its lending office, if the making of such a change would avoid
the need for, or reduce the amount of, any such additional amounts which may
thereafter accrue and would not, in the sole judgment of such Lender, be
disadvantageous to such Lender; provided, however, no Lender nor the
Administrative Agent shall be obligated by reason of this Section 2.13(g) to (a)
disclose any information regarding its tax affairs or tax computations or
reorder its tax or other affairs or tax or other planning or (b) contest the
payment of any Taxes or Other Taxes. Subject to the foregoing, to the extent
the Borrower pays sums pursuant to this Section 2.13 and the Lender or the
Administrative Agent receives a refund of any or all of such sums, the party
receiving such refund shall promptly pay over all such refunded sums to the
Borrower, provided that no Default or Event of Default is in existence at such
time. At such time, if any, that such Default or Event of Default is cured or
waived, the party receiving such refund shall promptly pay over all such
refunded sums to the Borrower.
ARTICLE 3
Conditions Precedent
Section 3.1 Conditions Precedent to the Initial Advance. The obligation of
each Lender to make the initial Advance is subject to (i) receipt by the
Administrative Agent of the following items which are to be delivered, in form
and substance reasonably satisfactory to each Lender, with a copy (except for
the Notes and this Agreement) for each Lender, and (ii) satisfaction of the
following conditions which are to be satisfied:
(a) A loan certificate of each Obligor required by the Administrative Agent
to be delivered certifying as to the accuracy of its representations and
warranties in the Loan Documents, certifying, in the case of any such Obligor,
that no Default or Event of Default has occurred, and including a certificate of
incumbency with respect to each Authorized Signatory, and including (i) a
copy of the articles or certificate of incorporation or other organizational
documents of such Obligor, certified to be true, complete and correct by the
secretary of state of its state of organization, (ii) a copy of a certificate of
good standing and a certificate of existence for its state of organization and,
in the case of any such Obligor, each state in which the nature of its business
requires it to be qualified to do business, (iii) a copy of such Obligor's
bylaws, partnership agreement or similar document, certified to be true,
complete and correct by its secretary or general partner, as the case may be,
and (iv) a copy of corporate or similar resolutions authorizing the execution,
delivery and performance of the Loan Documents to be executed by such Obligor;
(b) a certificate of incumbency with respect to each Authorized Signatory of
each Obligor not required to be delivered pursuant to clause (a)
immediately above, together with a copy of corporate or similar resolutions
authorizing the execution, delivery and performance of the Loan Documents to be
executed by such Obligor;
(c) a duly executed Note, payable to the order of each Lender and in an
amount for each Lender equal to its Specified Percentage of the Commitment;
(d) opinions of counsel to each Obligor addressed to the Lenders and in form
and substance reasonably satisfactory to the Administrative Agent and
Special Counsel, dated the Agreement Date, and covering certain of the matters
set forth in Sections 4.1(a), (b), (c), (h), (m), (n) and (p) and such other
matters incident to the transactions contemplated hereby as the Administrative
Agent or Special Counsel may reasonably request;
(e) reimbursement for the Administrative Agent for Special Counsel's
reasonable and customary fees (on an hourly basis) and expenses rendered through
the Agreement Date;
(f) evidence that all proceedings of each Obligor taken in connection with
the transactions contemplated by this Agreement and the other Loan Documents
shall be reasonably satisfactory in form and substance to the Administrative
Agent and Special Counsel; and the Administrative Agent shall have received
copies of all documents or other evidence which the Administrative Agent or
Special Counsel may reasonably request in connection with such transactions;
(g) any fees or any expenses required to be paid pursuant to Section 2.4(c)
hereof, the Administrative Agent Fee Letter and the Arrangement Fee Letter;
(h) simultaneously with the making of the initial Advance, executed UCC-3
Termination Statements to be filed in appropriate jurisdictions to terminate all
Liens against assets of the Borrower and its Subsidiaries other than
Permitted Liens (or written agreements from each holder of such Liens to
promptly execute such Termination Statements);
(i) all Indebtedness of the Borrower and its Subsidiaries not otherwise
permitted pursuant to Sections 7.1 and 7.2 hereof shall have been (or shall be
consummated simultaneously with the initial Advance hereunder) refinanced or
repaid in full and all obligations of the Borrower and its Subsidiaries under
such Indebtedness shall terminate;
(j) the Compliance Certificate, duly executed as of the Fiscal Year ended
December 29, 1998, evidencing that no Default or Event of Default would have
occurred at the end of such Fiscal Year had this Agreement been in effect at
such time and had the Transaction occurred at such time;
(k) the duly executed Subsidiary Guaranty executed by all Guarantors (which
shall be all Subsidiaries of the Borrower which are not Non-Guarantors);
(l) the Schedule of Non-Guarantors in the form of Schedule 10 hereto;
(m) all Transaction Documents, which shall be on terms and conditions
acceptable to the Determining Lenders;
(n) the Transaction shall have occurred contemporaneously pursuant to the
terms and conditions of the Transaction Documents;
(o) (i) financial statements of the Borrower and its Subsidiaries for the
Fiscal Year ended December 29, 1998, audited by independent public accountants
of recognized standing, (ii) unaudited financial statements of each of the
Acquired Companies for the fiscal year ended December 31, 1998, (iii) a pro
forma balance sheet of the Borrower and its Subsidiaries, taking into account
the Transaction as if the Transaction had occurred on December 29, 1998, and
reflecting estimated purchase price accounting adjustments, and (iv) such other
information relating to the Transaction, in each case in form and substance
satisfactory to the Administrative Agent;
(p) all requisite approvals or consents of all Tribunals or third parties
with respect to the Transaction and other transactions hereby to the extent
required shall be obtained;
(q) after giving effect to the Transaction, there shall have occurred no
material adverse change in the business, assets, operations, prospects or
condition (financial or otherwise) of the Borrower and its Subsidiaries, taken
as a whole since December 29, 1998;
(r) there shall exist no Default or Event of Default hereunder;
(s) no order, judgment, injunction or decree of any Tribunal shall purport
to enjoin or retain any Lender from making an Advance;
(t) all representations and warranties of the Borrower under this Agreement
shall be true and correct, both before and after giving effect to the
application of the proceeds of the Advance;
(u) There shall be no Litigation pending against, or, to the Borrower's
knowledge, threatened against the Borrower or any of its Subsidiaries, or in any
other manner relating directly and adversely to the Borrower or any of its
Subsidiaries, or any of their respective properties, in any court or before any
arbitrator of any kind or before or by any governmental body which could
reasonably be expected to have a Material Adverse Effect; and
(v) in form and substance reasonably satisfactory to the Administrative
Agent and Special Counsel, such other documents, instruments and certificates as
the Administrative Agent or any Lender may reasonably require in connection
with the transactions contemplated hereby.
Section 3.2 Conditions Precedent to Conversions and Continuations. The
obligation of each Lender to convert any existing Advance into an Advance of
another type or continue any LIBOR Advance or Base Rate Advance is subject to
fulfillment of the following conditions immediately prior to or
contemporaneously with each such conversion or continuation:
(a) all of the representations and warranties of the Borrower under this
Agreement shall be true and correct, both before and after giving effect to
continuation or conversion;
(b) there shall not exist a Default or Event of Default hereunder and no
Default or Event of Default would result from the making of such conversion or
continuation;
(c) no order, judgment, injunction or decree of any Tribunal shall purport
to enjoin or restrain any Lender from converting or continuing any Advance;
(d) there shall be no Litigation pending against, or, to the Borrower's
knowledge, threatened against the Borrower or any of its Subsidiaries, or in any
other manner relating directly and adversely to the Borrower or any of its
Subsidiaries, or any of their respective properties, in any court or before any
arbitrator of any kind or before or by any governmental body which could
reasonably be expected to have a Material Adverse Effect; and
(e) after giving effect to the Transaction, there shall have occurred no
material adverse change in the business, assets, operations, prospects or
conditions (financial or otherwise) of the Borrower and its Subsidiaries, taken
as a whole, since December 29, 1998.
ARTICLE 4
Representations and Warranties
Section 4.1 Representations and Warranties. The Borrower hereby represents
and warrants to each Lender as follows:
(a) Organization; Power; Qualification. As of the Agreement Date (but
treating the Transaction as having occurred), the respective jurisdiction of
organization or incorporation of the Borrower and its Subsidiaries and the
percentage ownership by the Borrower and its Subsidiaries of any Subsidiary
listed on Schedule 4 are true and correct. All of the outstanding Capital Stock
of the Borrower and its Subsidiaries is validly issued, fully paid and
non-assessable. Each of the Borrower and its Subsidiaries is a corporation or
other legal Person duly organized, validly existing and in good standing under
the laws of its state of incorporation or organization. Each of the Borrower
and its Subsidiaries has the legal power and authority to own its properties and
to carry on its business as now being and hereafter proposed to be conducted,
except where the failure to have such power and authority could not reasonably
be expected to have a Material Adverse Effect. Each of the Borrower and its
Subsidiaries is authorized to do business and is duly qualified and in good
standing in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification or authorization, except
where the failure to be so qualified or authorized could not reasonably be
expected to have a Material Adverse Effect.
(b) Authorization. The Borrower has legal power and has taken all necessary
legal action to authorize it to borrow hereunder and enter into the
Transaction. Each of the Borrower and its Subsidiaries has legal power and has
taken all necessary legal action to execute, deliver and perform the Loan
Documents to which it is party in accordance with the terms thereof, and to
consummate the transactions contemplated thereby. Each Loan Document has been
duly executed and delivered by the Borrower or its Subsidiary executing it.
Each of the Loan Documents to which the Borrower or any of its Subsidiaries is a
party is a legal, valid and binding obligation of the Borrower or such
Subsidiary, as applicable, enforceable in accordance with its terms, subject, to
enforcement of remedies, to the following qualifications: (i) equitable
principles generally, and (ii) Debtor Relief Laws (insofar as any such law
relates to the bankruptcy, insolvency or similar event of the Borrower or any
such Subsidiary).
(c) Compliance with Other Loan Documents and Contemplated Transactions. The
execution, delivery and performance by the Borrower and its Subsidiaries of
the Loan Documents to which they are respectively a party, and the consummation
of the transactions contemplated thereby, do not and will not (i) require any
consent or approval necessary on or prior to the Agreement Date not already
obtained, (ii) violate any Applicable Law, (iii) conflict with, result in a
breach of, or constitute a default under the certificate of incorporation or
by-laws or other applicable organizational documents of the Borrower or any of
its Subsidiaries, (iv) conflict with, result in a breach of, or constitute a
default under any Necessary Authorization, indenture, agreement or other
instrument, to which the Borrower or any of its Subsidiaries is a party or by
which they or their respective properties may be bound, or (v) result in or
require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by the Borrower or any of its
Subsidiaries.
(d) Business. The Borrower is a holding company, and its Subsidiaries are
engaged primarily in the operation of private clubs (including city,
city/athletic, athletic and country clubs), resorts, golf clubs and public golf
facilities through sole ownership, partial ownership (including joint venture
interests) and management agreements and other activities related thereto,
including, but not limited to, the hospitality business.
(e) Licenses, etc. All Necessary Authorizations have been duly obtained,
and are in full force and effect without any known conflict with the rights of
others and free from any unduly burdensome restrictions. The Borrower and its
Subsidiaries are and will continue to be in compliance with all provisions
thereof, except to the extent that any such failure to comply could not
reasonably be expected to have a Material Adverse Effect. No circumstance
exists which could reasonably be expected to impair the utility of the Necessary
Authorization or the right to renew such Necessary Authorization the effect
of which could reasonably be expected to have a Material Adverse Effect. No
Necessary Authorization is the subject of any pending or, to the best of the
Borrower's knowledge, threatened challenge, suspension, cancellation or
revocation, the effect of which could reasonably be expected to have a Material
Adverse Effect.
(f) Compliance with Law. The Borrower and its Subsidiaries are in
compliance in all respects with all Applicable Laws (including, without
limitation, all Applicable Environmental Laws), except where the failure to so
comply could not reasonably be expected to have a Material Adverse Effect.
(g) Title to Properties. The Borrower and its Subsidiaries have good title
to, or a valid leasehold or subleasehold interest in, all of their material
assets. None of their assets are subject to any Liens, except Permitted Liens.
No financing statement or other Lien filing (except relating to Permitted
Liens and other Liens for which releases and UCC-3 Termination Statements have
been obtained pursuant to Section 3.1(h) hereof) is on file in any state or
jurisdiction that names the Borrower or any of its Subsidiaries as debtor or
covers (or purports to cover) any assets of the Borrower or any of its
Subsidiaries, except for Indebtedness with respect to which the requirements of
Section 3.1(h) hereof have been satisfied. The Borrower and its Subsidiaries
have not signed any such financing statement or filing, nor any security
agreement authorizing any Person to file any such financing statement or filing
(except relating to Permitted Liens).
(h) Litigation. Except as disclosed in writing to the Lenders prior to the
Agreement Date, as of the Agreement Date there is no Litigation pending against,
or, to the Borrower's current actual knowledge, threatened against the
Borrower or any of its Subsidiaries, or in any other manner relating directly
and adversely to the Borrower or any of its Subsidiaries, or any of their
respective properties, in any court or before any arbitrator of any kind or
before or by any governmental body in which the amount claimed in an aggregate
amount (excluding liabilities for which credit worthy insurance companies have
acknowledged coverage) exceeds $1,000,000.
(i) Taxes. All federal, state and other tax returns of the Borrower and its
Subsidiaries required by law to be filed have been duly filed, or
extensions have been timely filed, and all Taxes shown to be due and payable on
such returns, have been paid, unless the same are being diligently contested in
accordance with Section 5.6 hereof. The charges, accruals and reserves on the
books of the Borrower and its Subsidiaries in respect of their Taxes are, in the
reasonable judgment of the Borrower, adequate.
(j) Financial Statements; Material Liabilities.
(i) The Borrower has heretofore delivered to Lenders the audited
consolidated balance sheets of the Borrower and its Subsidiaries as at December
29, 1998, and the related statements of earnings and changes in shareholders'
equity and statement of cash flows for the Fiscal Year then ended (the
"Financial Statements"). The Financial Statements were prepared in conformity
with GAAP and fairly present, in all material respects, the financial position
of the Borrower and its Subsidiaries as at the date thereof and the combined
results of operations and cash flows for the period covered thereby.
(ii) The projected financial statements of the Borrower and its Subsidiaries,
delivered to the Lenders prior to or on the Agreement Date are based on
good faith estimates and assumptions made by the management of the Borrower and
believed to be reasonable at the time made, it being recognized by the Lenders
that such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from the projected results.
(iii) The financial statements of the Borrower and its Subsidiaries delivered
to the Lenders pursuant to Section 6.1 and 6.2 hereof fairly present in all
material respects their respective financial condition and their respective
results of operations as of the dates and for the periods shown, all in
accordance with GAAP, subject to normal year-end adjustments. The latest of
such financial statements reflects all material liabilities, direct and
contingent, of the Borrower and each Subsidiary of the Borrower that are
required to be disclosed in accordance with GAAP.
(k) No Adverse Change. Since December 29, 1998, no event or circumstance
has occurred or arisen which is reasonably likely to have a Material Adverse
Effect.
(l) ERISA. Each Plan of the Borrower and its Controlled Group (other than
any Multiemployer Plan) is in compliance in all material respects with the
applicable provisions of ERISA, the Code, and any other applicable Law, except
to the extent that failure to so comply would not reasonably be expected to have
a Material Adverse Effect. With respect to each Plan (other than any
Multiemployer Plan) of the Borrower and each member of its Controlled Group, all
reports required under ERISA or any other Applicable Law to be filed with any
Tribunal, the failure of which to file could reasonably be expected to result in
liability of the Borrower or any member of its Controlled Group in excess of
$500,000, have been duly filed. All such reports are true and correct in all
material respects as of the date given. No Plan of the Borrower or any member
of its Controlled Group has been terminated under Section 4041(c) of ERISA nor
has any accumulated funding deficiency (as defined in Section 412(a) of the
Code) been incurred (without regard to any waiver granted under Section 412 of
the Code), nor has any funding waiver from the Internal Revenue Service been
received or requested the result of which could reasonably be expected to have a
Material Adverse Effect. None of the Borrower or any member of its Controlled
Group has failed to make any contribution or pay any amount due or owing as
required under the terms of any such Plan, or by Section 412 of the Code or
Section 302 of ERISA by the due date under Section 412 of the Code and Section
302 of ERISA, the result of which could reasonably be expected to have a
Material Adverse Effect. There has been no ERISA Event or any event requiring
disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any
Plan or its related trust of the Borrower or any member of its Controlled Group
since the effective date of ERISA, the result of which could reasonably be
expected to have a Material Adverse Effect. The present value of the benefit
liabilities, as defined in Title IV of ERISA, of each Plan subject to Title IV
of ERISA (other than a Multiemployer Plan) of the Borrower and each member of
its Controlled Group does not exceed the present value of the assets of each
such Plan as of the most recent valuation date using each such Plan's actuarial
assumptions at such date by an amount which could reasonably be expected to have
a Material Adverse Effect. There are no pending, or to the Borrower's knowledge
threatened, claims, lawsuits or actions (other than routine claims for benefits
in the ordinary course) asserted or instituted against, and neither the Borrower
nor any member of its Controlled Group has knowledge of any threatened
litigation or claims against, the assets of any Plan or its related trust or
against any fiduciary of a Plan with respect to the operation of such Plan, the
result of which could reasonably be expected to have a Material Adverse Effect.
None of the Borrower or, to the Borrower's knowledge, any member of its
Controlled Group has engaged in any prohibited transactions, within the meaning
of Section 406 of ERISA or Section 4975 of the Code, in connection with any Plan
the result of which could reasonably be expected to have a Material Adverse
Effect. None of the Borrower or any member of its Controlled Group has
withdrawn from any Multiemployer Plan, nor has incurred or reasonably expects to
incur (A) any liability under Title IV of ERISA (other than premiums due under
Section 4007 of ERISA to the PBGC), (B) any withdrawal liability (and no event
has occurred which with the giving of notice under Section 4219 of ERISA would
result in such liability) under Section 4201 of ERISA as a result of a complete
or partial withdrawal (within the meaning of Section 4203 or 4205 of ERISA) from
a Multiemployer Plan, or (C) any liability under Section 4062 of ERISA to the
PBGC or to a trustee appointed under Section 4042 of ERISA, the result of which
could reasonably be expected to have a Material Adverse Effect. None of the
Borrower, any member of its Controlled Group, or any organization to which the
Borrower or any member of its Controlled Group is a successor or parent
corporation within the meaning of ERISA Section 4069(b), has engaged in a
transaction within the meaning of ERISA Section 4069, the result of which could
reasonably be expected to have a Material Adverse Effect. Any Plan that is a
welfare benefit plan within the meaning of 3(1) of ERISA maintained or
contributed by the Borrower or any member of its Controlled Group and which
provides for continuing benefits or coverage for any participant or any
beneficiary of any participant after such participant's termination of
employment may be terminated by the Borrower or any member of its Controlled
Group at any time without liability other than liability that could not
reasonably be expected to have a Material Adverse Effect. Each of Borrower and
its Controlled Group which maintains a Plan which is a welfare benefit plan
within the meaning of Section 3(1) of ERISA has complied in all material
respects with the provisions of Parts 6 and 7 of subtitle B of Title I of ERISA,
as amended, and the regulations thereunder, except to the extent that the
failure to so comply could not reasonably be expected to have a Material Adverse
Effect. None of the Borrower or any member of its Controlled Group maintains or
has established a multiemployer welfare benefit arrangement within the meaning
of Section 3(40)(A) of ERISA.
(m) Compliance with Regulations T, U and X. The Borrower is not engaged
principally or as one of its important activities in the business of extending
credit for the purpose of purchasing or carrying any margin stock within the
meaning of Regulations T, U and X of the Board of Governors of the Federal
Reserve System. No more than 25% of the assets of the Borrower and its
Subsidiaries are margin stock. None of the Borrower and its Subsidiaries nor
any agent acting on their behalf, have taken or will take any action which might
cause the Borrower, the Lenders, this Agreement or any other Loan Document
to violate any regulation of the Board of Governors of the Federal Reserve
System or to violate the Exchange Act, in each case as in effect now or as the
same may hereafter be in effect. Neither the making of any Advances nor the
application of any proceeds thereof will violate, or be inconsistent with, the
provisions Regulations T, U and X of the Board of Governors of the Federal
Reserve System.
(n) Required Consents. The Borrower and its Subsidiaries are not required
to obtain any material Necessary Authorization on or prior to the Agreement Date
that has not already been obtained from, or effect any material filing or
registration that has not already been effected with, any Tribunal in connection
with the execution and delivery of this Agreement or any other Loan Document, or
the performance thereof, in accordance with their respective terms, including
any borrowings hereunder.
(o) Absence of Default. The Borrower and its Subsidiaries are in
compliance in all material respects with all of the provisions of their
certificate of incorporation, by-laws and other organizational documents, and no
event has occurred or failed to occur, which has not been remedied or
waived, the occurrence or non-occurrence of which constitutes, or which with the
passage of time or giving of notice or both would constitute, (i) an Event of
Default or (ii) a default by the Borrower or any of its Subsidiaries under any
indenture, agreement or other instrument, or any judgment, decree or order to
which the Borrower or any of its Subsidiaries or by which they or any of their
respective properties is bound, the result of which with respect to any default
set forth in clause (ii) could reasonably be expected to have a Material Adverse
Effect.
(p) Governmental Regulation. Neither the Borrower nor any of its
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or 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. Neither the entering
into or performance by the Borrower of this Agreement nor the issuance of the
Notes violates any provision of such act or requires any consent, approval, or
authorization of, or registration with, the Securities and Exchange Commission
or any other Tribunal pursuant to any provisions of such act.
(q) Environmental Matters. The Borrower does not have any knowledge or
reason to believe that any Hazardous Substance has been placed (i) on any real
property fee title to which is now owned by the Borrower or any of its
Subsidiaries or (ii) by Borrower or any of its Subsidiaries on any real property
leased by the Borrower or any of its Subsidiaries, in either case in a
manner which does not comply with Applicable Environmental Laws, except to the
extent that the failure to so comply could not reasonably be expected to have a
Material Adverse Effect. The Borrower and its Subsidiaries are not in violation
of or subject to any existing, pending or, to the best of the Borrower's
knowledge, threatened investigation or inquiry by any Tribunal or to any
remedial obligations under any Applicable Environmental Laws, the effect of
which could reasonably be expected to have a Material Adverse Effect. The
Borrower and its Subsidiaries have not failed to obtain and comply with any
permits, licenses or similar authorizations required to be obtained by reason of
any Applicable Environmental laws with respect to any real property owned or
leased by the Borrower or any of its Subsidiaries, except to the extent that the
failure to so obtain could not reasonably be expected to have a Material Adverse
Effect. The Borrower has no current actual knowledge that any Hazardous
Substances have been disposed of or otherwise released (i) on or to the real
property fee title to which is owned by the Borrower or any of its Subsidiaries
or (ii) by Borrower or any of its Subsidiaries on or to any real property leased
by Borrower or any of its Subsidiaries, all within the meaning of the Applicable
Environmental Laws, the effect of which could reasonably be expected to have a
Material Adverse Effect.
(r) Certain Fees. No broker's, finder's or other fee or commission will be
payable by the Borrower (other than under the Arrangement Fee Letter and as
set forth in Section 2.4 hereof) with respect to the making of the Commitment or
the Advances hereunder. The Borrower agrees to indemnify and hold harmless the
Administrative Agent and each Lender from and against any claims, demand,
liability, proceedings, costs or expenses asserted with respect to or arising in
connection with any such fees or commissions.
(s) Intellectual Property. The Borrower and its Subsidiaries have
collectively obtained or applied for or licensed or otherwise obtained the right
to use all patents, trademarks, service marks, trade names, copyrights, and
other rights, free from Liens (except Permitted Liens), that are necessary for
the operation of their business as presently conducted and as proposed to be
conducted. Nothing has come to the current actual knowledge of the Borrower or
any of its Subsidiaries to the effect that (i) any process, method, part or
other material presently contemplated to be employed by the Borrower or any of
its Subsidiaries infringes any valid and enforceable patent, trademark, service
mark, trade name, copyright, license or other right owned by any other Person,
or (ii) there is pending or overtly threatened any claim or litigation against
or affecting the Borrower or any of its Subsidiaries contesting its right to
sell or use any such process, method, part or other material, which could
reasonably be expected to have a Material Adverse Effect.
(t) Disclosure. All information, reports, financial statements, exhibits
and schedules furnished in writing by the Borrower or any of its Subsidiaries to
the Administrative Agent or any Lender in connection with this Agreement or
the other Loan Documents is, and all other such written information hereafter
furnished by or on behalf of the Borrower or any of its Subsidiaries to the
Administrative Agent or any Lender will be, true and accurate in all material
respects (or, in the case of projections based on reasonable estimates and
assumptions) on the date as of which such information is dated or certified and
not incomplete by omitting to state any material fact necessary to make such
information not misleading at such time in light of the circumstances under
which such information was provided. There is no fact known to the Borrower and
not known to the public generally that could reasonably be expected to have a
Material Adverse Effect, which has not been set forth in this Agreement or in
the documents, certificates and statements furnished to the Lenders by or on
behalf of the Borrower hereof in connection with the transactions contemplated
hereby or thereby.
(u) Solvency. The Borrower is, and Borrower and its Subsidiaries on a
consolidated basis are, Solvent.
(v) Labor Relations. Except as set forth on Schedule 9 hereto, neither the
Borrower nor any of its Subsidiaries is a party to a collective bargaining
agreement or similar agreement, and the Borrower and each Subsidiary is in
compliance in all material respects with all Laws respecting employment and
employment practices, terms and conditions of employment, wages and hours and
other laws related to the employment of its employees. There are no arrears in
the payment of wages, withholding or social securities taxes, unemployment
insurance premiums or other similar obligations of the Borrower or any of its
Subsidiaries or for which the Borrower or any such Subsidiary may be responsible
other than in the ordinary course of business. There is no strike, work
stoppage or labor dispute with any union or group of employees pending or
overtly threatened involving Borrower or any of its Subsidiaries.
(w) Common Enterprise. The Borrower and its Subsidiaries are engaged in
the businesses set forth in Section 4.1(d) hereof. These operations require
financing on a basis such that the credit supplied can be made available from
time to time to the Borrower and various of its Subsidiaries, as required for
the continued successful operation of the Borrower and its Subsidiaries as a
whole. The Borrower and its Subsidiaries expect to derive benefit (and the
boards of directors of the Borrower and its Subsidiaries have determined that
the Borrower and its Subsidiaries may reasonably be expected to derive benefit),
directly or indirectly, from the credit extended by the Lenders hereunder,
both in their separate capacities and as members of the group of companies,
since the successful operation and condition of the Borrower and its
Subsidiaries is dependent on the continued successful performance of the
functions of the group as a whole.
(x) Year 2000 Compliance. The Borrower has (i) undertaken a review and
assessment of all areas within its and each of its Subsidiaries' business and
operations (including those affected by suppliers and vendors) that could be
adversely affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by the Borrower or any of its Subsidiaries (or its suppliers
and vendors) may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December 31,
1999), and (ii) developed a plan and timeline for addressing the Year 2000
Problem on a timely basis. The Borrower reasonably believes that all computer
applications (including those of its suppliers and vendors) that are material to
its or any of its Subsidiaries' business and operations will on a timely
basis be able to perform properly date-sensitive functions for all dates before
and after January 1, 2000 (that is, be "Year 2000 Compliant"), except to the
extent that a failure to do so could not reasonably be expected to have a
Material Adverse Effect.
Section 4.2 Survival of Representations and Warranties, etc. All
representations and warranties made under this Agreement and the other Loan
Documents shall be deemed to be made at and as of the Agreement Date and at and
as of the date of any continuation or conversion of an Advance, and each shall
be true and correct when made, except to the extent (a) previously fulfilled in
accordance with the terms hereof, (b) previously waived in writing by the
Determining Lenders with respect to any particular factual circumstance or
permitted by the terms of this Agreement or (c) such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true and correct on and as of
such date. All such representations and warranties shall survive, and not be
waived by, the execution hereof by any Lender, any investigation or inquiry by
any Lender, or by the making of any Advance under this Agreement.
ARTICLE 5
General Covenants
Prior to the Release Date:
Section 5.1 Preservation of Existence and Similar Matters. The Borrower
shall, and shall cause each of its Subsidiaries to:
(a) except as otherwise permitted pursuant to Section 7.4 hereof, preserve
and maintain, or timely obtain and thereafter preserve and maintain, its
existence, rights, franchises, licenses, authorizations, consents, privileges
and all other Necessary Authorizations from any Tribunal, the loss of which
could reasonably be expected to have a Material Adverse Effect; and
(b) except as otherwise permitted pursuant to Section 7.4 hereof, qualify
and remain qualified and authorized to do business in each jurisdiction in which
the character of its properties or the nature of its business requires such
qualification or authorization, unless the failure to do so could not reasonably
be expected to have a Material Adverse Effect.
Section 5.2 Business; Compliance with Applicable Law. The Borrower and its
Subsidiaries shall (a) engage primarily in the businesses set forth in
Section 4.1(d) hereof, and (b) comply in all material respects with the
requirements of all Applicable Law, including, without limitation, all
Applicable Environmental Laws.
Section 5.3 Maintenance of Properties. The Borrower shall, and shall cause
each of its Subsidiaries to, maintain or cause to be maintained all its
properties (whether owned or held under lease) in adequate operating condition
and repair for purposes of their current use with due regard to the age thereof,
taken as a whole, subject to ordinary wear and tear, and from time to time make
or cause to be made all appropriate repairs, renewals, replacements, additions,
betterments and improvements thereto.
Section 5.4 Accounting Methods and Financial Records. The Borrower shall,
and shall cause each of its Subsidiaries to, maintain a system of accounting
established and administered in accordance with GAAP, keep adequate records and
books of account in which complete entries will be made and all transactions
reflected in accordance with GAAP, and keep accurate and complete records of its
respective assets.
Section 5.5 Insurance. The Borrower shall, and shall cause each of its
Subsidiaries to, maintain insurance from responsible companies in such amounts
and against such risks as shall be customary and usual in the industry for
companies of similar size and capability. Each insurance policy shall provide
for at least 30 days' prior notice to the Administrative Agent of any proposed
termination or cancellation of such policy, whether on account of default or
otherwise.
Section 5.6 Payment of Taxes and Claims. The Borrower shall, and shall
cause each of its Subsidiaries to, pay and discharge all material taxes to which
they are subject prior to the date on which penalties attach thereto, and
all lawful claims for labor, materials and supplies which, if unpaid, might by
Law become a Lien upon any of its properties; except that no such tax or claim
need be paid which is being diligently contested in good faith by appropriate
proceedings and for which adequate reserves shall have been set aside on the
appropriate books, but only so long as any Lien related thereto is a Permitted
Lien and no foreclosure, distraint, sale or similar proceedings shall have been
commenced. The Borrower shall, and shall cause each of its Subsidiaries to,
timely file all information returns (or extensions of such filing deadlines)
required by federal, state or local tax authorities.
Section 5.7 Visits and Inspections. The Borrower shall, and shall cause
each of its Subsidiaries to, promptly permit representatives of the
Administrative Agent or any Lender from time to time after reasonable notice by
the Administrative Agent or any Lender to (a) visit and inspect the properties
of the Borrower and its Subsidiaries as often as the Administrative Agent or any
Lender shall reasonably deem advisable, (b) review, inspect and make
extracts from and copies of the Borrower's and each such Subsidiary's books and
records, and (c) discuss with the Borrower's and each such Subsidiary's
directors, officers, employees and auditors its business, assets, liabilities,
financial positions, results of operations and business prospects, provided that
such representatives of the Administrative Agent or any Lender shall keep
confidential all information obtained pursuant to this Section 5.7 to the extent
required by Section 11.14. The Borrower shall pay the reasonable out-of-pocket
expenses related to inspections and reviews performed (a) at any time by the
Administrative Agent, and (b) after the occurrence and during the continuance of
an Event of Default, by each Lender. Except after the occurrence and during the
continuance of an Event of Default, all such visits and inspections shall be
conducted during normal business hours. Following the occurrence and during the
continuance of an Event of Default, such visits and inspections shall be
conducted at any time requested by the Administrative Agent or any Lender
without any requirement for reasonable notice.
Section 5.8 Use of Proceeds. The proceeds of the Advances shall be used by
the Borrower to (a) consummate the Transaction and (b) pay certain fees and
expenses related to the Transaction.
SECTION 5.9 INDEMNITY.
(a) THE BORROWER AGREES TO DEFEND, PROTECT, INDEMNIFY AND HOLD HARMLESS THE
ADMINISTRATIVE AGENT, EACH LENDER, EACH OF THEIR RESPECTIVE AFFILIATES, AND EACH
OF THEIR RESPECTIVE (INCLUDING SUCH AFFILIATES') OFFICERS, DIRECTORS,
EMPLOYEES, TRUSTEES, AGENTS, ATTORNEYS AND CONSULTANTS (INCLUDING, WITHOUT
LIMITATION, THOSE RETAINED IN CONNECTION WITH THE SATISFACTION OR ATTEMPTED
SATISFACTION OF ANY OF THE CONDITIONS SET FORTH HEREIN) OF EACH OF THE FOREGOING
(COLLECTIVELY, "INDEMNITEES") FROM AND AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, CLAIMS,
REASONABLE COSTS, REASONABLE OUT-OF-POCKET EXPENSES AND REASONABLE DISBURSEMENTS
OF ANY KIND OR NATURE WHATSOEVER (INCLUDING, WITHOUT LIMITATION, THE REASONABLE
FEES AND DISBURSEMENTS OF COUNSEL FOR SUCH INDEMNITEES IN CONNECTION WITH ANY
INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL PROCEEDING, WHETHER OR NOT SUCH
INDEMNITEES SHALL BE DESIGNATED A PARTY THERETO), IMPOSED ON, INCURRED BY, OR
ASSERTED AGAINST SUCH INDEMNITEES (WHETHER DIRECT, INDIRECT OR CONSEQUENTIAL,
WHETHER BASED ON ANY FEDERAL, STATE, OR LOCAL LAWS AND REGULATIONS, UNDER COMMON
LAW OR AT EQUITY, OR ON CONTRACT, TORT OR OTHERWISE, AND WHETHER ARISING FROM OR
CONNECTED WITH THE PAST, PRESENT OR FUTURE OPERATIONS OF THE BORROWER OR ANY
SUBSIDIARY OF THE BORROWER OR THEIR RESPECTIVE PREDECESSORS IN INTEREST, OR THE
PAST, PRESENT OR FUTURE ENVIRONMENTAL CONDITION OF PROPERTY OF THE BORROWER OR
ANY SUBSIDIARY OF THE BORROWER), RELATING TO OR ARISING OUT OF THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS, OR ANY ACT, EVENT OR TRANSACTION OR ALLEGED ACT, EVENT
OR TRANSACTION RELATING THERETO, INCLUDING IN CONNECTION WITH, OR AS A RESULT,
IN WHOLE OR IN PART, OF ANY ORDINARY OR MERE NEGLIGENCE OF ADMINISTRATIVE AGENT
OR ANY LENDER (OTHER THAN THOSE MATTERS RAISED EXCLUSIVELY BY A PARTICIPANT
AGAINST THE ADMINISTRATIVE AGENT OR ANY LENDER AND NOT THE BORROWER), OR THE USE
OR INTENDED USE OF THE PROCEEDS OF THE ADVANCES HEREUNDER, OR IN CONNECTION WITH
ANY INVESTIGATION OF ANY POTENTIAL MATTER COVERED HEREBY, BUT EXCLUDING (I) ANY
CLAIM OR LIABILITY THAT IS THE RESULT OF THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF ANY INDEMNITEE, AS ADMITTED IN WRITING BY SUCH INDEMNITEE OR
FINALLY JUDICIALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION, AND (II)
MATTERS RAISED BY ONE LENDER AGAINST ANOTHER LENDER OR INDEMNITEE OR BY ANY
SHAREHOLDERS OF A LENDER AGAINST A LENDER OR INDEMNITEE OR ITS MANAGEMENT
(COLLECTIVELY, EXCEPT FOR THE MATTERS REFERRED TO CLAUSES (I) OR (II) ABOVE,
"INDEMNIFIED MATTERS", AND THE MATTERS REFERRED TO IN CLAUSES (I) OR (II) ABOVE,
COLLECTIVELY, "EXCLUDED MATTERS").
(b) WITHOUT DUPLICATION, THE BORROWER SHALL PERIODICALLY, UPON REQUEST,
REIMBURSE EACH INDEMNITEE FOR ITS REASONABLE OUT-OF-POCKET LEGAL AND OTHER
ACTUAL REASONABLE EXPENSES (INCLUDING THE REASONABLE COST OF ANY INVESTIGATION
AND PREPARATION) INCURRED IN CONNECTION WITH ANY INDEMNIFIED MATTER; PROVIDED
THAT SUCH INDEMNITEE SHALL PROVIDE ADEQUATE DOCUMENTATION OF SUCH EXPENSES;
PROVIDED, FURTHER, THAT IF AN INDEMNITEE IS REIMBURSED HEREUNDER FOR SUCH
AMOUNT, THE AMOUNT SO PAID SHALL BE REFUNDED TO THE BORROWER IF AND TO THE
EXTENT IT IS FINALLY JUDICIALLY DETERMINED THAT THE INDEMNIFIED MATTER IN
QUESTION WAS AN EXCLUDED MATTER. THE REIMBURSEMENT AND INDEMNITY OBLIGATIONS
UNDER THIS SECTION 5.9 SHALL BE IN ADDITION TO ANY LIABILITY WHICH THE BORROWER
MAY OTHERWISE HAVE, SHALL EXTEND UPON THE SAME TERMS AND CONDITIONS TO EACH
INDEMNITEE, AND SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF ANY
SUCCESSORS, ASSIGNS, HEIRS AND PERSONAL REPRESENTATIVES OF THE BORROWER, THE
ADMINISTRATIVE AGENT, THE LENDERS AND ALL OTHER INDEMNITEES. THIS SECTION SHALL
SURVIVE ANY TERMINATION OF THIS AGREEMENT AND PAYMENT OF THE OBLIGATIONS
AND SHALL CONTINUE WITH RESPECT TO ANY LENDER THAT MAY ASSIGN ALL OF ITS RIGHTS
AND OBLIGATIONS UNDER THE LOAN DOCUMENTS.
Section 5.10 Environmental Law Compliance. In addition to and without
limiting the generality of Section 5.2 hereof, the use which the Borrower or any
of its Subsidiaries make of any real property which is owned or leased by
it will not result in the disposal or other release of any Hazardous Substance
or solid waste on or to such real property, the effect of which could reasonably
be expected to have a Material Adverse Effect. As used herein, the term
"release" as used in this Section shall have the meaning specified in CERCLA (as
defined in the definition of Applicable Environmental Laws), and the terms
"solid waste" and "disposal" shall have the meanings specified in RCRA (as
defined in the definition of Applicable Environmental Laws); provided, however,
that if CERCLA or RCRA is amended so as to broaden or lessen the meaning of any
term defined thereby, such broader or lesser meaning shall apply subsequent to
the effective date of such amendment; and provided further, to the extent that
any other law applicable to the Borrower, any Subsidiary or any of their
properties establishes a meaning for "release," "solid waste," or "disposal"
which is broader or lesser than that specified in either CERCLA or RCRA, such
broader or lesser meaning shall apply.
Section 5.11 Further Assurances. At any time or from time to time upon
reasonable request by the Administrative Agent, the Borrower or any of its
Subsidiaries shall execute and deliver such further documents and do such other
acts and things as the Administrative Agent may reasonably request in order to
effect fully the purposes of this Agreement and the other Loan Documents and to
provide for payment of the Obligations in accordance with the terms of this
Agreement and the other Loan Documents. Without limiting the generality of the
foregoing, the Borrower agrees to update and deliver to the Administrative Agent
Schedule 4 hereto at the time of delivery of the financial statements set
forth in Sections 6.1 (with respect to the identities, jurisdiction of
organization and ownership of the Guarantors) and 6.2 (with respect to the
identities, jurisdictions of organization and ownership of the Borrower's
Subsidiaries) hereof if the information provided therein is not complete and
correct.
Section 5.12 Year 2000 Compliance. The Borrower shall, and shall cause each
of its Subsidiaries to, maintain its computer applications to be Year 2000
Compliant, except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect.
Section 5.13 Non-Guarantors as Guarantors. At any time that an Event of
Default occurs as a result of a breach of Section 7.19 hereof, the Borrower
agrees to immediately cause such of its Subsidiaries to execute a Subsidiary
Guaranty (and to deliver such certificates and documents related thereto as
shall be required by the Administrative Agent) and thereby become Guarantors as
are necessary to cure such breach of Section 7.19 hereof; provided, however,
nothing provided in this Section 5.13 shall be deemed to provide any grace
period for any Event of Default that occurs as a result of a breach of Section
7.19 hereof.
ARTICLE 6
Information Covenants
Prior to the Release Date, the Borrower shall furnish or cause to be
furnished to each Lender:
Section 6.1 Quarterly Financial Statements and Information. Within 60 days
after the end of each Fiscal Quarter of each Fiscal Year (other than the
end of a Fiscal Quarter which coincides with the end of a Fiscal Year), the
consolidated balance sheets of the Borrower and its Subsidiaries as at the end
of such Fiscal Quarter and the related consolidated statements of earnings for
such Fiscal Quarter and for the elapsed portion of the year ended with the last
day of such Fiscal Quarter, and consolidated statements of cash flow for the
elapsed portion of the year ended with the last day of such Fiscal Quarter, all
of which shall be certified by a Responsible Officer, to, in his or her opinion
acting solely in his or her capacity as an officer of the Borrower, present
fairly in all material respects, in accordance with GAAP (except for the absence
of footnotes), the financial position and results of operations of the Borrower
and its Subsidiaries as at the end of and for such Fiscal Quarter, and for the
elapsed portion of the year ended with the last day of such Fiscal Quarter,
subject only to normal year-end adjustments.
Section 6.2 Annual Financial Statements and Information; Certificate of No
Default.
(a) Within 120 days after the end of each Fiscal Year, a copy of (i) the
consolidated balance sheets of the Borrower and its Subsidiaries, as of the end
of the current and prior Fiscal Years and (ii) the consolidated statements of
earnings and consolidated statements of changes in shareholders' equity and
consolidated statements of cash flow as of and through the end of such Fiscal
Year (together with certain consolidating statements in form reasonably
satisfactory to the Administrative Agent), all of which are prepared in
accordance with GAAP, and said consolidated statements certified by independent
certified public accountants reasonably acceptable to the Administrative Agent,
whose opinion shall be in scope and substance in accordance with generally
accepted auditing standards and shall be unqualified in all respects.
(b) Simultaneously with the delivery of the statements required by this
Section 6.2, a letter from the Borrower's public accountants stating to the
effect that during their audit of such financial statements nothing has come to
their attention that would result in a Default or Event of Default under this
Agreement, recognizing, however, that the scope and purpose of their audit was
not to determine compliance with the terms of this Agreement or whether a
Default or Event of Default has otherwise occurred.
Section 6.3 Compliance Certificate. At the time financial statements are
furnished pursuant to Sections 6.1 and 6.2 hereof, the Compliance Certificate,
completed as provided therein.
Section 6.4 Copies of Other Reports and Notices.
(a) Promptly upon their becoming available, copies of (i) all material
reports or letters submitted to the Borrower or any of its Subsidiaries by
accountants in connection with any annual, interim or special audit, including
without limitation any report prepared in connection with the annual audit
referred to in Section 6.2 hereof, and any other comment letter submitted to
management in connection with any such audit, (ii) each regular, periodic or
other report and any registration statement (other than statements on Form S-8)
or prospectus (or material written communication in respect of any thereof)
filed by the Borrower or any of its Subsidiaries with any securities exchange,
with the Securities and Exchange Commission or any successor agency, and (iii)
all press releases concerning material financial aspects of the Borrower or any
of its Subsidiaries;
(b) Promptly upon the Borrower becoming aware that (i) the holder(s) of any
note(s) or other evidence of Indebtedness or other security of the Borrower or
any of its Subsidiaries in excess of $250,000 in the aggregate has given notice
or taken any action with respect to a breach, failure to perform, claimed
default or event of default thereunder or (ii) any event, circumstance or
condition which could reasonably be expected to be classified as a Material
Adverse Effect, a written notice specifying the details thereof (or the nature
of any claimed default or event of default) and what action is being taken or is
proposed to be taken with respect thereto;
(c) Promptly upon the Borrower becoming aware that any party to any
Capitalized Lease Obligations in excess of $250,000 or Operating Lease in which
the annual rentals thereunder exceed $100,000 has given notice or taken any
action with respect to a breach, failure to perform, claimed default or event of
default thereunder, a written notice specifying the details thereof (or the
nature of any claimed default or event of default) and what action is being
taken or is proposed to be taken with respect thereto;
(d) Promptly upon receipt by the Borrower thereof, information with respect
to and copies of any notices received from any Tribunal relating to any order,
ruling, law, information or policy that relates to a breach of or noncompliance
with any Law, and could reasonably be expected to result in the payment of money
by the Borrower or any of its Subsidiaries of the Borrower in an amount of
$250,000 or more in the aggregate or otherwise have a Material Adverse Effect,
or result in the loss or suspension of any Necessary Authorization where such
loss could reasonably be expected to have a Material Adverse Effect; and
(e) From time to time and promptly upon each request, such material data,
certificates, reports, statements, documents or further information regarding
the assets, business, liabilities, financial position, projections, results of
operations or business prospects of the Borrower and its Subsidiaries, as the
Administrative Agent or any Lender may reasonably request.
Section 6.5 Notice of Litigation, Default and Other Matters. Prompt notice
of the following events after the Borrower has knowledge or notice thereof:
(a) The commencement of all Litigation and investigations by or before any
Tribunal, and all actions and proceedings in any court or before any arbitrator
involving claims for damages (including punitive damages) in excess of
$1,000,000 (after deducting the amount with respect to which creditworthy
insurance companies have acknowledged coverage), against or in any other way
relating directly to the Borrower, any of its Subsidiaries or any of their
respective properties or businesses; and
(b) Promptly upon the happening of any condition or event of which the
Borrower has current actual knowledge which constitutes a Default, a written
notice specifying the nature and period of existence thereof and what action is
being taken or is proposed to be taken with respect thereto.
Section 6.6 ERISA Reporting Requirements.
(a) Promptly and in any event (i) within 30 days after the Borrower has
current actual knowledge that any ERISA Event described in clause (a) of the
definition of ERISA Event or any event described in Section 4063(a) of ERISA
with respect to any Plan of the Borrower or any member of its Controlled Group
has occurred, and (ii) within 10 Business Days after the Borrower or any member
of its Controlled Group has current actual knowledge that any other ERISA Event
with respect to any Plan of the Borrower or any member of its Controlled Group
has occurred or a request for a minimum funding waiver under Section 412 of the
Code has been made with respect to any Plan of the Borrower or any member of its
Controlled Group, a written notice describing such event and describing
what action is being taken or is proposed to be taken with respect thereto,
together with a copy of any notice of such event that is given to the PBGC;
(b) Promptly and in any event within ten Business Days after receipt thereof
by the Borrower, copies of each notice received by the Borrower or any
member of its Controlled Group from the PBGC of the PBGC's intention to
terminate any Plan or to have a trustee appointed to administer any Plan;
(c) Promptly upon the request of the Administrative Agent, copies of each
annual report (including Schedule B thereto, if applicable) with respect to each
Plan subject to Title IV of ERISA of which Borrower or any member of its
Controlled Group is the "plan sponsor";
(d) Promptly, and in any event within 10 Business Days after receipt thereof
by the Borrower, a copy of any correspondence the Borrower or any member of
its Controlled Group receives from the Plan Sponsor (as defined by Section
4001(a)(10) of ERISA) of any Plan concerning potential withdrawal liability
pursuant to Section 4219 or 4202 of ERISA, and a statement from the chief
financial officer of the Borrower or such member of its Controlled Group setting
forth details as to the events giving rise to such potential withdrawal
liability and the action which the Borrower or such member of its Controlled
Group is taking or proposes to take with respect thereto;
(e) Notification within 30 days of any material increases in the benefits
provided under any existing Plan which is not a Multiemployer Plan, or the
establishment of any new Plans, or the commencement of contributions to any Plan
to which the Borrower or any member of its Controlled Group was not
previously contributing, which could reasonably be expected in any such case to
result in an additional material liability to the Borrower;
(f) Notification within five Business Days after the Borrower knows that the
Borrower or any such member of its Controlled Group has filed or intends to
file a notice of intent to terminate any Plan under a distress termination
within the meaning of Section 4041(c) of ERISA and a copy of such notice; and
(g) Within five Business Days after receipt by the Borrower of written
notice of commencement thereof, notice of all actions, suits and proceedings
before any court or governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, affecting the Borrower or any member of
its Controlled Group with respect to any Plan, except those which, in the
aggregate, if adversely determined could not reasonably be expected to have a
Material Adverse Effect.
Section 6.7 Year 2000 Compliance. The Borrower will promptly notify the
Administrative Agent in the event the Borrower discovers or determines that any
computer application (including those of its suppliers and vendors) that is
material to its or any of its Subsidiaries' business and operations will not be
Year 2000 Compliant on a timely basis, except to the extent that such failure
could not reasonably be expected to have a Material Adverse Effect.
ARTICLE 7
Negative Covenants
Prior to the Release Date:
Section 7.1 Unsecured Indebtedness. The Borrower shall not, and shall not
permit any Subsidiary of the Borrower to, create, assume, incur or otherwise
become or remain obligated in respect of, or permit to be outstanding, or suffer
to exist any Unsecured Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Hedging obligations under Hedge Agreements entered into with any Person
that is a Lender or an Affiliate of a Lender at the time of entering into such
Hedge Agreement;
(c) Unsecured Indebtedness existing on the Agreement Date which is described
on Schedule 6 hereto, including renewals, replacements and refinancings
(but no increases) thereof;
(d) Unsecured Indebtedness in respect of endorsement of negotiable
instruments in the ordinary course of business;
(e) Unsecured Indebtedness owing to any Obligor by the Borrower or any of
its Subsidiaries, which Indebtedness (i) is evidenced by an entry on the
financial records of the Borrower and any such Subsidiary and (ii) if owed by an
Obligor, is subordinated to the Obligations in a manner satisfactory to the
Determining Lenders, and which will permit payments to be made on such
Indebtedness provided that no Default or Event of Default shall exist before
such payment or after giving effect thereto;
(f) Guaranties by Subsidiaries of the Borrower of Unsecured Indebtedness of
the Borrower or other Subsidiaries of the Borrower and Guaranties by the
Borrower of Unsecured Indebtedness of Subsidiaries of the Borrower, in each case
to the extent such underlying Unsecured Indebtedness is permitted
hereunder;
(g) Unsecured Indebtedness consisting of performance bonds or surety or
appeal bonds provided by the Borrower or any of its Subsidiaries in the ordinary
course of business and which do not secure other Indebtedness;
(h) Guaranties permitted pursuant to Section 7.6 hereof; and
(i) Other Unsecured Indebtedness (including Institutional Debt) of the
Borrower and its Subsidiaries, provided that (i) prior to and after giving
effect to such other Unsecured Indebtedness, no Default or Event of Default
shall have occurred and be continuing, (ii) the terms, covenants and provisions
of such other Indebtedness shall not be more restrictive than any terms,
covenants or provisions of this Agreement, and (iii) no scheduled principal
payment of such other Unsecured Indebtedness shall occur prior to 180 days after
the scheduled Maturity Date.
Section 7.2 Secured Indebtedness. The Borrower shall not, and shall not
permit any of its Subsidiaries to, create, assume, incur or otherwise become or
remain obligated in respect of, or permit to be outstanding, or suffer to exist
any Secured Indebtedness, except for Permitted Secured Indebtedness.
Section 7.3 Liens. The Borrower shall not, and shall not permit any
Subsidiary of Borrower to, create, assume, incur, permit or suffer to exist,
directly or indirectly, any Lien on any of its assets, whether now owned or
hereafter acquired, except Permitted Liens. The Borrower shall not, and shall
not permit any Subsidiary to, become subject to a Negative Pledge other than in
respect of Permitted Secured Indebtedness, provided that such agreement relates
only to the assets purchased or acquired.
Section 7.4 Investments. The Borrower shall not, and shall not permit any
Subsidiary of Borrower to, make any Investment, except that the Borrower and any
Subsidiary of the Borrower may purchase or otherwise acquire and own:
(a) Accounts receivable that arise in the ordinary course of business and
are payable in a manner consistent with past practices;
(b) Investments in existence on the Agreement Date which are described on
Schedule 5 hereto;
(c) Investments in the form of Hedge Agreements permitted by Section 7.1(b)
hereof;
(d) Investments pursuant to the Investment Policy;
(e) Investments in Obligors;
(f) Investments in Non-Guarantors (calculated on the initial investment
amount but adjusted to take into account any proceeds received by the Borrower
or any other Obligor on a liquidation or repayment of any such Investments) not
to exceed, together with other Investments pursuant to Section 7.4(g) hereof
(calculated as provided in Section 7.4(g) hereof) and Acquisitions of
Non-Guarantors pursuant to Section 7.8 hereof (calculated using the aggregate
Acquisition Consideration therefor), an amount equal to the sum of (i)
$7,000,000 plus (ii) 10% of Net Worth at any time; and
(g) Investments not otherwise permitted pursuant to clauses (a) through (e)
above (calculated on the initial investment amount but adjusted to take into
account any proceeds received by the Borrower or any other Obligor on a
liquidation or repayment of any such Investments) not to exceed, together with
Investments in (calculated as provided in Section 7.4(f) hereof) and
Acquisitions of Non-Guarantors pursuant to Section 7.8 hereof (calculated using
the aggregate Acquisition Consideration therefor), an amount equal to the sum of
(i) $7,000000 plus (ii) 10% of Net Worth at any time;
provided, however, that no Investment otherwise permitted by clauses (f) and (g)
above shall be permitted to be made if, immediately before or after giving
effect thereto, any Event of Default shall have occurred and be continuing.
Section 7.5 Liquidation, Merger. The Borrower shall not, and shall not
permit any Subsidiary of Borrower to, at any time:
(a) liquidate or dissolve itself (or suffer any liquidation or dissolution)
or otherwise wind up, except that (i) a Subsidiary of the Borrower may liquidate
or dissolve into the Borrower or a Subsidiary of the Borrower which is an
Obligor, and (ii) a Subsidiary of the Borrower which is not an Obligor may
liquidate or dissolve into the Borrower or a Subsidiary of the Borrower; or
(b) enter into any merger or consolidation unless (i) with respect to a
merger or consolidation, the Borrower shall be the surviving corporation, unless
the merger or consolidation involves a Guarantor and the Borrower is not
merging with another Person, and either (A) such Guarantor shall be the
surviving corporation, (B) the survivor of the merger becomes a Guarantor, (C)
the entity formed in the consolidation becomes a Guarantor, or (D) the survivor
is, or is properly designated as, a Non-Guarantor, (ii) such transaction shall
not be utilized to circumvent compliance with any term or provision herein, and
(iii) no Default or Event of Default shall then be in existence or occur as a
result of such transaction.
Section 7.6 Guaranties. The Borrower shall not, and shall not permit any
Subsidiary to, at any time make or issue any Guaranty, or assume, be obligated
with respect to, or permit to be outstanding any Guaranty, of any obligation of
any other Person except (a) the Subsidiary Guaranty, (b) the endorsement in the
ordinary course of business of negotiable instruments for deposit or collection,
(c) the Guaranty of Indebtedness permitted by Sections 7.1 and 7.2 hereof,
and (d) the Guaranty of Indebtedness of Persons other than the Borrower and its
Subsidiaries, provided that the aggregate principal amount of such Indebtedness
which is guaranteed by the Borrower and its Subsidiaries shall not at any time
exceed 7-1/2% of Net Tangible Assets.
Section 7.7 Sales of Assets. The Borrower shall not, and shall not permit
any of its Subsidiaries to, sell, transfer or otherwise dispose of, any of its
assets except (a) inventory in the ordinary course of business, (b) obsolete or
worn-out assets, (c) sales and dispositions from the Borrower or any of its
Subsidiaries to any Obligor, and (d) other asset sales not otherwise permitted,
provided that (i) such sales are for full and fair consideration and (ii) the
aggregate amount of assets sales during any Fiscal Year do not exceed 7-1/2% of
Net Tangible Assets as of the end of the immediately preceding Fiscal Year.
Section 7.8 Acquisitions. The Borrower shall not, and shall not permit any
of its Subsidiaries to, make any Acquisitions; provided, however, if
immediately prior to and after giving effect to the proposed Acquisition there
shall not exist a Default or Event of Default, the Borrower or any of its
Subsidiaries may make Acquisitions so long as (a) such Acquisition shall not be
opposed by the board of the directors of the Person being acquired, (b) if the
Acquisition Consideration for such Acquisition is greater than or equal to
$25,000,000, the Lenders shall have received written notice thereof at least 5
Business Days prior to the date of such Acquisition, together with a Compliance
Certificate setting forth the covenant calculations both immediately prior to
and after giving effect to the proposed Acquisition, but calculated to exclude
any increases in EBITDA which would be the result of any expenses that the
Borrower projects to be eliminated by such proposed Acquisition, (c) the assets,
property or business acquired shall be primarily in the business described in
Section 4.1(d) hereof, (d) if such Acquisition results in a Subsidiary which is
to be a Guarantor, (i) such Subsidiary shall execute a Subsidiary Guaranty and
(ii) the Administrative Agent on behalf of the Lenders shall receive such board
resolutions, officer's certificates and opinions of counsel as the
Administrative Agent shall reasonably request in connection with such
Acquisition; and (e) the aggregate Acquisition Consideration for all
Non-Guarantors, together with Investments in Non-Guarantors (calculated as
provided in Section 7.4(f) hereof) and other Investments (calculated as provided
in Section 7.4(g) hereof) pursuant to Section 7.4(g) hereof, shall not exceed an
amount equal to the sum of (i) $7,000,000 plus (ii) 10% of Net Worth at any
time.
Section 7.9 Restricted Payments. The Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly declare, pay or make
any Restricted Payments except (a) Dividends payable by a Subsidiary to the
Borrower or another Subsidiary that is an Obligor, (b) Dividends payable by the
Borrower in an aggregate amount not to exceed 50% of cumulative Net Income for
the period from, but not including, December 31, 1997 through the date of the
proposed Dividend (provided that with respect to any Fiscal Quarter (or portion
of a Fiscal Quarter not then ended) of the Borrower for which Net Income was a
negative number the amount of Dividends permitted to be paid shall be reduced by
100% of such negative number), and (c) payments and prepayments of
principal of Indebtedness other than Indebtedness permitted to be incurred
pursuant to Section 7.1(i) hereof; provided, however, the Borrower shall not pay
or make any Restricted Payments permitted by this Section 7.9 unless there shall
exist no Default or Event of Default prior to or after giving effect to any such
proposed Restricted Payment.
Section 7.10 Affiliate Transactions. The Borrower shall not, and shall not
permit any of its Subsidiaries to, at any time engage in any transaction with an
Affiliate (other than the Borrower or any Obligor) on terms materially less
advantageous to the Borrower or such Subsidiary than would be the case if such
transaction had been effected with a non-Affiliate. The Borrower shall not, and
shall not permit any of its Subsidiaries to, in any event incur or suffer to
exist any Indebtedness or Guaranty in favor of any Affiliate, unless such
Affiliate shall subordinate the payment and performance thereof to the
Obligations on terms, conditions and documentation reasonably satisfactory to
the Determining Lenders, and which will permit payments to be made on any
Indebtedness or Guaranty in favor of any Affiliate provided that no Default or
Event of Default shall exist before such payment or after giving effect thereto.
Section 7.11 Compliance with ERISA. The Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, or permit any member
of its Controlled Group to directly or indirectly, (a) terminate any Plan so as
likely to result in liability to the Borrower or any member of its Controlled
Group taken as a whole which could reasonably be expected to have a Material
Adverse Effect, (b) permit to exist any ERISA Event, or any other event or
condition with respect to a Plan which could reasonably be expected to have a
Material Adverse Effect, (c) make a complete or partial withdrawal (within the
meaning of Section 4201 of ERISA) from any Multiemployer Plan which could
reasonably be expected to have a Material Adverse Effect on the Borrower or any
member of its Controlled Group taken as a whole, or (d) enter into any new Plan
or modify any existing Plan so as to increase its obligations thereunder which
could reasonably be expected to have a Material Adverse Effect.
Section 7.12 Maximum Leverage Ratio. The Borrower shall not permit the
Leverage Ratio to be greater than 3.75 to 1 at the end of any Fiscal Quarter.
Section 7.13 Minimum Fixed Charge Coverage Ratio. The Borrower shall not
permit the Fixed Charge Coverage Ratio to be less than 1.50 to 1 at the end of
any Fiscal Quarter.
Section 7.14 Minimum Tangible Net WorthTangible Net Worth. The Borrower
shall not permit the Tangible Net Worth at any time to be less than the sum of
(a) $305,060,000, plus (b) 50% of cumulative Net Income for the period from, but
not including, December 31, 1997 through the date of calculation (but
excluding from the calculation of such cumulative Net Income the effect, if any,
of any Fiscal Quarter (or portion of a Fiscal Quarter not then ended) of the
Borrower for which Net Income was a negative number), plus (c) an amount equal
to 100% of the tangible net worth of any Person that becomes a Subsidiary of the
Borrower or is merged into or consolidated with the Borrower or any Subsidiary
of the Borrower or substantially all of the assets of which are acquired by the
Borrower or any Subsidiary of the Borrower to the extent the purchase price paid
therefor is paid in equity securities of the Borrower or any Subsidiary of the
Borrower, plus (d) 75% of the Net Cash Proceeds (but without duplication) of any
offerings of capital stock or other equity interests of the Borrower or any of
its Subsidiaries.
Section 7.15 Sale or Discount of Receivables. The Borrower shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, sell, with
or without recourse, for discount or otherwise, any notes or accounts
receivable.
Section 7.16 Business. Neither the Borrower nor any of its Subsidiaries
shall conduct any business other than the business described in Section 4.1(d)
hereof.
Section 7.17 Fiscal Year. Neither the Borrower nor any of its Subsidiaries
shall change its Fiscal Year.
Section 7.18 Amendment of Organizational Documents. The Borrower shall not,
and shall not permit any Subsidiary of the Borrower to, amend its articles
of incorporation, bylaws or other applicable organizational documents in any
manner that could reasonably be expected to result in a Material Adverse Effect.
Section 7.19 Non-Guarantors. The Borrower shall not permit either the
aggregate amount of (a) EBITDA calculated with respect to all Non-Guarantors
only during any period of four consecutive Fiscal Quarters to exceed 20% of
EBITDA of the Borrower and all of its Subsidiaries during any such period of
four consecutive Fiscal Quarters or (b) assets of all Non-Guarantors as of the
end of any Fiscal Quarter to exceed 20% of the assets of the Borrower and all of
its Subsidiaries as of the end of any such Fiscal Quarter.
Section 7.20 Restrictions on Subsidiaries. The Borrower shall not, and
shall 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 Subsidiary to pay dividends or make any other
distributions to the Borrower or any of its Subsidiaries, except to the extent
that such encumbrances and restrictions would not, in the aggregate, affect the
ability of the Subsidiaries to make such dividends and distributions in amounts
sufficient such that the Borrower can timely pay and perform all Obligations in
full.
ARTICLE 8
Default
Section 8.1 Events of Default. Each of the following shall constitute an
Event of Default, whatever the reason for such event, and whether voluntary,
involuntary, or effected by operation of law or pursuant to any judgment or
order of any court or any order, rule or regulation of any governmental or
non-governmental body:
(a) Any representation or warranty made under any Loan Document shall prove
to have been incorrect or misleading in any material respect when made;
(b) The Borrower shall fail to pay any (i) principal under any Note when
due; or (ii) interest under any Note or any fees payable hereunder or any other
costs, fees, expenses or other amounts payable hereunder or under any other Loan
Document within the earlier of (A) three days after the date due or (B) one
Business Day after written notice thereof from the Administrative Agent;
(c) The Borrower or any of its Subsidiaries shall default in the performance
or observance of any agreement or covenant contained in Article 7 hereof;
(d) The Borrower or any of its Subsidiaries shall default in the performance
or observance of any other agreement or covenant contained in this
Agreement or any other Loan Document not specifically referred to elsewhere in
this Section 8.1, and such default shall not be cured within a period of thirty
days after the earlier of notice from the Administrative Agent thereof or actual
notice thereof by the Borrower or such Subsidiary;
(e) There shall be commenced an involuntary proceeding or an involuntary
petition shall be filed in a court having competent jurisdiction seeking (i)
relief in respect of the Borrower or any other Obligor, or a substantial part of
the property or the assets of the Borrower or such Obligor, under Title 11
of the United States Code, as now constituted or hereafter amended, or any other
applicable Federal, state or foreign bankruptcy law or other similar law, (ii)
the appointment of a receiver, liquidator, assignee, trustee, custodian,
sequestrator or similar official of the Borrower or any other Obligor, or of any
substantial part of their respective properties, or (iii) the winding-up or
liquidation of the affairs of the Borrower or any other Obligor and any such
proceeding or petition shall continue unstayed and in effect for a period of 60
consecutive days; or any order for relief shall be entered in any such
proceeding;
(f) The Borrower or any other Obligor shall (i) file a petition, answer or
consent seeking relief under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other applicable Federal, state or
foreign bankruptcy law or other similar law, (ii) consent to the institution of
proceedings thereunder or to the filing of any such petition or to the
appointment or taking of possession of a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Borrower or
any other Obligor or of substantially all of its properties, (iii) file an
answer admitting the material allegations filed against it in any such
proceeding, (iv) make a general assignment for the benefit of creditors, (v)
become unable, admit in writing its inability, or fail generally, to pay its
debts as they become due, or (vi) the Borrower or any other Obligor shall take
any corporate or other action in furtherance of any such action;
(g) A final judgment or judgments shall be entered by any court against the
Borrower or any other Obligor for the payment of money which exceeds $250,000 in
the aggregate, or a warrant of attachment or execution or similar process
shall be issued or levied against property of the Borrower or any other Obligor
which, together with all other such property of the Borrower and the Obligors
subject to other such process, exceeds in value $250,000 in the aggregate, and
if such judgment or award is not insured or, within 45 days after the entry,
issue or levy thereof, such judgment, warrant or process shall not have been
paid or discharged or stayed pending appeal, or if, after the expiration of any
such stay, such judgment, warrant or process shall not have been paid or
discharged;
(h) With respect to any Plan of the Borrower or any member of its Controlled
Group: (i) the Borrower, any such member, or any other party-in-interest
or disqualified person shall engage in transactions which in the aggregate would
reasonably be expected to result in a direct or indirect liability to the
Borrower or any member of its Controlled Group under Section 409 or 502 of ERISA
or Section 4975 of the Code; (ii) the Borrower or any member of its Controlled
Group shall incur any accumulated funding deficiency, as defined in Section 412
of the Code, or request a funding waiver from the Internal Revenue Service for
contributions; (iii) the Borrower or any member of its Controlled Group shall
incur any withdrawal liability as a result of a complete or partial withdrawal
within the meaning of Section 4203 or 4205 of ERISA, or any other liability with
respect to a Plan, unless the amount of such liability has been funded within
the Plan or pursuant to one or more insurance contracts; (iv) the Borrower or
any member of its Controlled Group shall fail to make a required contribution by
the due date under Section 412 of the Code or Section 302 of ERISA which would
result in the imposition of a lien under Section 412 of the Code or Section 302
of ERISA; (v) the Borrower, any member of its Controlled Group or any Plan
sponsor shall notify the PBGC of an intent to terminate, or the PBGC shall
institute proceedings to terminate, or the PBGC shall institute proceedings to
terminate, any Plan subject to Title IV of ERISA; (vi) a Reportable Event shall
occur with respect to a Plan subject to Title IV of ERISA, and within 15 days
after the reporting of such Reportable Event to the Administrative Agent, the
Administrative Agent shall have notified the Borrower in writing that the
Determining Lenders have made a determination that, on the basis of such
Reportable Event, there are reasonable grounds for the termination of such Plan
by the PBGC or for the appointment by the appropriate United States District
Court of a trustee to administer such Plan and as a result thereof an Event of
Default shall have occurred hereunder; (vii) a trustee shall be appointed by a
court of competent jurisdiction to administer any Plan or the assets thereof; or
(viii) any ERISA Event with respect to a Plan subject to Title IV of ERISA shall
have occurred, and 30 days thereafter (A) such ERISA Event, other than such
event described in clause (f) of the definition of ERISA Event herein, (if
correctable) shall not have been corrected and (B) the then present value of
such Plan's benefit liabilities, as defined in Title IV of ERISA, shall exceed
the then current value of assets accumulated in such Plan; provided, however,
that the events listed in subsections (i) - (viii) above shall constitute Events
of Default only if the maximum aggregate liability which the Borrower or any
member of its Controlled Group has a reasonable likelihood of incurring under
the applicable provisions of ERISA resulting from such event or events could
reasonably be expected to exceed $500,000.
(i) The Borrower or any other Obligor shall fail to make any payment when
due (whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise) with respect to any Indebtedness in excess of $1,000,000 beyond
any grace period provided with respect thereto, or any other event or condition
shall exist under any agreement or instrument under which such Indebtedness is
created or evidenced beyond any applicable grace period, if the effect of such
event or condition is to permit or cause the holder of such Indebtedness (or a
trustee on behalf of any such holder) to (i) cause such Indebtedness to become
due or prepaid prior to its date of maturity or (ii) require the Borrower or any
other Obligor to purchase, prepay or redeem such Indebtedness;
(j) Any real property lease where the Borrower or any Subsidiary of the
Borrower is the lessee shall terminate or cease to be effective, and termination
or cessation thereof, together with all other real property leases, if any,
which have been terminated or cease to be effective, could reasonably be
expected to have a Material Adverse Effect; provided, however, that termination
or cessation of a real property lease shall not constitute an Event of Default
if another real property lease reasonably satisfactory to the Administrative
Agent is contemporaneously substituted therefor;
(k) Any provision of any Loan Document shall for any reason cease to be
valid and binding on or enforceable against any party to it (other than the
Administrative Agent or any Lender) in any material respect, or any such party
(other than the Administrative Agent or any Lender) shall so assert in writing;
(l) A Change of Control shall occur; or
(m) An Event of Default (as defined in the Revolving Credit Agreement)
shall occur under the Revolving Credit Agreement.
Section 8.2 Remedies. If an Event of Default shall have occurred and shall
be continuing:
(a) With the exception of an Event of Default specified in Section 8.1(e) or
(f) hereof, the Administrative Agent may at its election (provided that the
Administrative Agent has not previously received notice to the contrary from the
Determining Lenders), and shall upon the direction of the Determining Lenders,
terminate the Commitment and/or by written notice to the Borrower declare the
principal of and interest on the Advances and all Obligations and other amounts
owed under the Loan Documents to be forthwith due and payable without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived, except for notices expressly set forth in the Loan Documents.
(b) Upon the occurrence of an Event of Default specified in Section 8.1(e)
or (f) hereof, such principal, interest and other amounts shall thereupon and
concurrently therewith become due and payable and the Commitment shall forthwith
terminate, all without any action by the Administrative Agent, any Lender
or any holders of the Notes and without presentment, demand, protest or other
notice of any kind, all of which are expressly waived, anything in the Loan
Documents to the contrary notwithstanding.
(c) The Administrative Agent and the Lenders may exercise all of the Rights
granted to them under the Loan Documents or under Applicable Law.
(d) The Rights of the Administrative Agent and the Lenders hereunder shall
be cumulative, and not exclusive.
ARTICLE 9
Changes in Circumstances
Section 9.1 LIBOR Basis or Eurodollar Basis Determination Inadequate. If
with respect to any proposed LIBOR Advance or Eurodollar Rate Advance for any
Interest Period, (i) any Lender determines that deposits in dollars (in the
applicable amount) are not being offered to that Lender in the relevant market
for such Interest Period or (ii) the Determining Lenders determine that the
LIBOR Rate or Eurodollar Rate for such proposed LIBOR Advance or Eurodollar Rate
Advance does not adequately and fairly reflect the cost to such Lender of
making and maintaining such proposed LIBOR Advance or Eurodollar Rate Advance
for such Interest Period, such Lender or Determining Lenders, as the case may
be, shall forthwith give prompt notice thereof to the Borrower, whereupon until
such Lender or Determining Lenders, as the case may be, notify the Borrower that
the circumstances giving rise to such situation no longer exist, the obligation
of such Lender to make LIBOR Advances or Eurodollar Rate Advances shall be
suspended; provided, however, such Lender or the Determining Lenders, as the
case may be, shall promptly notify the Borrower if the circumstances giving rise
to such situation no longer exist.
Section 9.2 Illegality. If any change or phase-in of applicable law, rule
or regulation, or adoption thereof, or any change in any interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or
compliance by any Lender (or its LIBOR Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency, shall make it unlawful or impossible for such
Lender (or its LIBOR Lending Office) to make, maintain or fund its LIBOR
Advances or Eurodollar Rate Advances, such Lender shall promptly so notify the
Borrower and the Administrative Agent. Before giving any notice to the Borrower
pursuant to this Section, the notifying Lender shall designate a different LIBOR
Lending Office or other lending office if such designation will avoid the need
for giving such notice and will not, in the sole judgment of the Lender, be
disadvantageous to the Lender. Upon receipt of such notice, notwithstanding
anything contained in Article 2 hereof, the Borrower shall repay in full the
then outstanding principal amount of each LIBOR Advance or each Eurodollar Rate
Advance owing to the notifying Lender, together with accrued interest thereon
and any reimbursement required under Section 2.8 hereof, on either (a) the last
day of the Interest Period applicable to such Advance, if the Lender may
lawfully continue to maintain and fund such Advance to such day, or (b)
immediately, if the Lender may not lawfully continue to fund and maintain such
Advance to such day or if the Borrower so elects. Concurrently with repaying
each affected LIBOR Advance or Eurodollar Rate Advance owing to such Lender if
the Borrower does not terminate this Agreement, notwithstanding anything
contained in Article 2 hereof, the Borrower may, without any requirement to
satisfy the conditions precedent set forth in Section 3.1 or 3.2, borrow a Base
Rate Advance from such Lender, and such Lender shall make such Base Rate
Advance, in an amount such that the outstanding principal amount of the Advances
owing to such Lender shall equal the outstanding principal amount of the
Advances owing immediately prior to such repayment.
Section 9.3 Increased Costs.
(a) If any change, phase-in or adoption of any law, rule or regulation, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof or compliance by any Lender (or its LIBOR Lending Office)
with any request or directive (whether or not having the force of law) of
any such authority, central bank or compatible agency:
(i) shall subject a Lender (or its LIBOR Lending Office) to any Tax (net of
any tax benefit engendered thereby) with respect to its LIBOR Advances or its
obligation to make such Advances, or shall change the basis of taxation of
payments to a Lender (or to its LIBOR Lending Office) of the principal of or
interest on its LIBOR Advances or Eurodollar Rate Advances or in respect of any
other amounts due under this Agreement, as the case may be, or its obligation to
make such Advances (except for changes in (A) the rate of tax on the
overall net income, net worth or capital of the Lender and franchise taxes,
doing business taxes or minimum taxes imposed upon such Lender and (B)
withholding taxes of any Tribunal other than the United States of America or any
state thereof; or
(ii) shall impose, modify or deem applicable any reserve (including, without
limitation, any imposed by the Board of Governors of the Federal Reserve
System), special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, a Lender's LIBOR Lending
Office or shall impose on the Lender (or its LIBOR Lending Office) or on the
London interbank market any other condition affecting its LIBOR Advances or its
obligation to make such Advances (but excluding any reserves or deposits that
are included in the calculation of LIBOR Basis or Eurodollar Basis);
and the result of any of the foregoing is to increase the cost to a Lender (or
its LIBOR Lending Office) of making or maintaining any LIBOR Advances or
Eurodollar Rate Advances, or to reduce the amount of any sum received or
receivable by a Lender (or its LIBOR Lending Office) with respect thereto, by an
amount deemed by a Lender to be material ("Increased Advance Costs"), then,
within 30 days after demand by a Lender, the Borrower agrees to pay to such
Lender such additional amount as will compensate such Lender for such Increased
Advance Costs, subject to Section 11.9 hereof. The affected Lender will as soon
as practicable notify the Borrower of any event of which it has knowledge,
occurring after the date hereof, which will entitle such Lender to compensation
pursuant to this Section and will designate a different LIBOR Lending Office or
other lending office if such designation will avoid the need for, or reduce the
amount of, such compensation and will not, in the sole judgment of the affected
Lender made in good faith, be disadvantageous to such Lender.
(b) A certificate of any Lender claiming compensation under this Section and
setting forth the additional amounts to be paid to it hereunder shall
certify that such amounts or costs were actually incurred by such Lender and
shall show in reasonable detail an accounting of the amount payable and the
calculations used to determine in good faith such amount and shall be
controlling absent demonstrable error. In determining such amount, a Lender may
use any reasonable averaging and attribution methods. Nothing in this Section
9.3 shall provide the Borrower or any of its Subsidiaries the right to inspect
the records, files or books of any Lender. If a Lender demands compensation
under this Section, the Borrower may at any time, upon at least five Business
Days' prior notice to the Lender, after reimbursement to the Lender by the
Borrower in accordance with this Section of all costs incurred, prepay in full
the then outstanding LIBOR Advances or Eurodollar Rate Advances of the Lender,
together with accrued interest thereon to the date of prepayment, along with any
reimbursement required under Section 2.8 hereof. Concurrently with prepaying
such LIBOR Advances or Eurodollar Rate Advances, the Borrower may, without any
requirement to satisfy the conditions precedent set forth in Section 3.1, 3.2 or
3.3, borrow a Base Rate Advance from the Lender, and the Lender shall make such
Base Rate Advance, in an amount such that the outstanding principal amount of
the Advances owing to such Lender shall equal the outstanding principal amount
of the Advances owing immediately prior to such prepayment.
Section 9.4 Effect On Base Rate Advances. If notice has been given
pursuant to Section 9.1, 9.2 or 9.3 hereof suspending the obligation of a Lender
to make LIBOR Advances or Eurodollar Rate Advances, or requiring LIBOR
Advances of a Lender to be repaid or prepaid, then, unless and until the Lender
notifies the Borrower that the circumstances giving rise to such repayment no
longer apply, all Advances which would otherwise be made by such Lender as LIBOR
Advances or Eurodollar Rate Advances shall be made instead as Base Rate
Advances.
Section 9.5 Capital Adequacy. If (a) the phase-in or the introduction of
or any change in or in the interpretation of any law, rule or regulation or (b)
compliance by a Lender with any Law or any guideline or request from any central
bank or other governmental authority (whether or not having the force of
law) (any of such events in clauses (a) and (b) herein being referred to as a
"Regulatory Modification") affects or would affect the amount of capital
required or expected to be maintained by a Lender or any corporation controlling
such Lender, and such Lender determines that the amount of such capital is
increased by or based upon the existence of such Lender's commitment or Advances
hereunder and other commitments or advances of such Lender of this type, then,
within 20 days after demand by such Lender, subject to Section 11.9, the
Borrower shall immediately pay to such Lender, from time to time as specified by
such Lender, additional amounts sufficient to compensate such Lender with
respect to such circumstances (collectively, "Additional Costs"), to the extent
that such Lender reasonably determines in good faith such increase in capital to
be allocable to the existence of such Lender's commitments hereunder to the
extent not compensated for in the Base Rate Basis, the Eurodollar Basis or in
the LIBOR Basis or in amounts paid by the Borrower pursuant to Section 9.3
hereof. A certificate as to such amounts submitted to the Borrower by a Lender
hereunder shall, in the absence of demonstrable error, be controlling and
binding for all purposes. In determining such amount, such Lender or a
corporation controlling such Lender may use any reasonable averaging and
attribution methods. Notwithstanding the foregoing, nothing in this Section 9.5
shall provide the Borrower or any Subsidiary of the Borrower the right to
inspect the records, files or books of any Lender or any corporation controlling
such Lender.
ARTICLE 10
Agreement Among Lenders
Section 10.1 Agreement Among Lenders. The Lenders agree among themselves
that:
(a) Administrative Agent. Each Lender hereby appoints the Administrative
Agent as its nominee in its name and on its behalf, to receive all documents and
items to be furnished hereunder; to act as nominee for and on behalf of all
Lenders under the Loan Documents; to, except as otherwise expressly set forth
herein, take such action as may be requested by the Determining Lenders,
provided that, (i) unless and until the Administrative Agent shall have received
such requests, the Administrative Agent may take such administrative action, or
refrain from taking such administrative action, as it may deem advisable and in
the best interests of the Lenders, and (ii) the Administrative Agent shall not
be required to take any action that exposes the Administrative Agent to personal
liability or that is contrary to any Loan Document or Applicable Law; to arrange
the means whereby the proceeds of the Advances of the Lenders are to be made
available to the Borrower; to distribute promptly to each Lender information,
requests and documents received from the Borrower, and each payment (in like
funds received) with respect to any of such Lender's Advances, or the ratable
amount of fees or other amounts; and to deliver to the Borrower requests,
demands, approvals and consents received from the Lenders. The Administrative
Agent agrees to promptly distribute to each Lender, at such Lender's address set
forth below information, requests, documents and payments received from the
Borrower. The Administrative Agent shall have no trustee or other fiduciary
relationship in respect of any Lender by reason of this Agreement or any other
Loan Document. The Administrative Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement. The duties
of the Administrative Agent are mechanical and administrative in nature.
(b) Replacement of Administrative Agent. Should the Administrative Agent or
any successor Administrative Agent ever cease to be a Lender hereunder, or
should the Administrative Agent or any successor Administrative Agent ever
resign as Administrative Agent, or should the Administrative Agent or any
successor Administrative Agent ever be removed with cause or without cause by
the action of the Determining Lenders (other than the Administrative Agent),
then the Lender appointed by the Determining Lenders (other than the
Administrative Agent) with the approval of the Borrower (provided that if an
Event of Default shall have occurred and be continuing, the approval of the
Borrower shall not be required) shall forthwith become the Administrative Agent,
and the Borrower and the Lenders shall execute such documents as any Lender may
reasonably request to reflect such change at no cost to the Borrower. Any
resignation or removal of the Administrative Agent or any successor
Administrative Agent shall become effective upon the appointment by the Lenders
of a successor Administrative Agent from among the other Lenders and written
notice thereto to the Borrower; provided, however, if no successor
Administrative Agent shall have been so appointed and shall have accepted such
appointment within 30 days after the retiring Administrative Agent's giving of
notice of resignation or the Lenders' removal of the retiring Administrative
Agent, then the retiring Administrative Agent may, on behalf of the Lenders and,
provided that no Event of Default shall have occurred and be continuing, with
the consent of the Borrower, which consent shall not be unreasonably withheld,
appoint a successor Administrative Agent, which shall be a commercial bank
organized under the Laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as the Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations under the Loan Documents, provided
that if the retiring or removed Administrative Agent is unable to appoint a
successor Administrative Agent, the Administrative Agent shall, after the
expiration of a 60 day period from the date of notice, be relieved of all
obligations as Administrative Agent hereunder. Notwithstanding any
Administrative Agent's resignation or removal hereunder, the provisions of this
Article shall continue to inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Administrative Agent under this
Agreement.
(c) Expenses. Each Lender shall pay its pro rata share, based on its
Specified Percentage, of any reasonable expenses paid by the Administrative
Agent directly and solely in connection with any of the Loan Documents (other
than expenses for which the Administrative Agent has received compensation in
the form of the fees set forth in the Administrative Agent Fee Letter) if the
Administrative Agent does not receive reimbursement therefor from other sources
within 60 days after the date incurred. Any amount so paid by the Lenders to
the Administrative Agent shall be returned by the Administrative Agent pro rata
to each paying Lender to the extent later paid by the Borrower or any other
Person on the Borrower's behalf to the Administrative Agent.
(d) Delegation of Duties. The Administrative Agent may execute any of its
duties hereunder by or through officers, directors, employees, attorneys or
agents, and shall be entitled to (and shall be protected in relying upon) advice
of counsel concerning all matters pertaining to its duties hereunder.
(e) Reliance by Administrative Agent. The Administrative Agent and its
officers, directors, employees, attorneys and agents shall be entitled to rely
and shall be fully protected in relying on any writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telex or teletype
message, statement, order, or other document or conversation reasonably believed
by it or them in good faith to be genuine and correct and to have been
signed or made by the proper Person and, with respect to legal matters, upon
opinions of counsel selected by the Administrative Agent. The Administrative
Agent may, in its reasonable judgment, deem and treat the payee of any Note as
the owner thereof for all purposes hereof.
(f) Limitation of Administrative Agent's Liability. Neither the
Administrative Agent nor any of its officers, directors, employees, attorneys or
agents shall be liable for any action taken or omitted to be taken by it or
them hereunder in good faith and believed by it or them to be within the
discretion or power conferred to it or them by the Loan Documents or be
responsible for the consequences of any error of judgment, except for its or
their own gross negligence or willful misconduct. Except as aforesaid, the
Administrative Agent shall be under no duty to enforce any rights with respect
to any of the Advances, or any security therefor. The Administrative Agent
shall not be compelled to do any act hereunder or to take any action towards the
execution or enforcement of the powers hereby created or to prosecute or defend
any suit in respect hereof, unless indemnified to its reasonable satisfaction
against loss, cost, liability and expense. The Administrative Agent shall not
be responsible in any manner to any Lender for the effectiveness,
enforceability, genuineness, validity or due execution of any of the Loan
Documents, or for any representation, warranty, document, certificate, report or
statement made herein or furnished in connection with any Loan Documents, or be
under any obligation to any Lender to ascertain or to inquire as to the
performance or observation of any of the terms, covenants or conditions of any
Loan Documents on the part of the Borrower or any other Obligor. TO THE EXTENT
NOT REIMBURSED BY THE BORROWER, EACH LENDER HEREBY SEVERALLY INDEMNIFIES AND
HOLDS HARMLESS THE ADMINISTRATIVE AGENT, PRO RATA ACCORDING TO ITS SPECIFIED
PERCENTAGE, FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, REASONABLE EXPENSES AND/OR
DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, ASSERTED
AGAINST, OR INCURRED BY THE ADMINISTRATIVE AGENT (IN SUCH CAPACITY) IN ANY WAY
WITH RESPECT TO ANY LOAN DOCUMENTS OR ANY ACTION TAKEN OR OMITTED BY THE
ADMINISTRATIVE AGENT UNDER THE LOAN DOCUMENTS (INCLUDING ANY NEGLIGENT ACTION OF
THE ADMINISTRATIVE AGENT), EXCEPT TO THE EXTENT THE SAME ARE FINALLY DETERMINED
BY A COURT OF COMPETENT JURISDICTION TO RESULT FROM GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT BY THE ADMINISTRATIVE AGENT. THE INDEMNITY PROVIDED IN THIS SECTION
10.1(f) SHALL SURVIVE TERMINATION OF THIS AGREEMENT.
(g) Liability Among Lenders. No Lender shall incur any liability (other
than the sharing of expenses and other matters specifically set forth herein and
in the other Loan Documents) to any other Lender, except for acts or
omissions in bad faith.
(h) Rights as Lender. With respect to its commitment hereunder, the
Advances made by it and the Notes issued to it, the Administrative Agent shall
have the same rights as a Lender and may exercise the same as though it were not
the Administrative Agent, and the term "Lender" or "Lenders" shall, unless
the context otherwise indicates, include the Administrative Agent in its
individual capacity. The Administrative Agent or any Lender may accept deposits
from, act as trustee under indentures of, and generally engage in any kind of
business with, the Borrower and any of its Affiliates, and any Person who may do
business with or own securities of the Borrower or any of its Affiliates, all as
if the Administrative Agent were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.
Section 10.2 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based upon the financial statements referred to in Sections 4.1(j),
6.1, and 6.2 hereof, and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Administrative Agent or any other Lender and based
upon such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Documents. Each Lender also acknowledges that
its decision to fund the initial Advances shall constitute evidence to the
Administrative Agent that such Lender has deemed all of the conditions set forth
in Section 3.1 to have been satisfied.
Section 10.3 Benefits of Article. None of the provisions of this Article
shall inure to the benefit of any Person other than Lenders; consequently, no
such other Person shall be entitled to rely upon, or to raise as a defense, in
any manner whatsoever, the failure of the Administrative Agent or any Lender to
comply with such provisions.
ARTICLE 11
Miscellaneous
Section 11.1 Notices.
(a) All notices and other communications under this Agreement shall be in
writing (except in those cases where giving notice by telephone is expressly
permitted) and shall be deemed to have been given on the date personally
delivered or sent by telecopy (answerback received), or three days after deposit
in the mail, designated as certified mail, return receipt requested,
postage-prepaid, or one day after being entrusted to a reputable commercial
overnight delivery service, addressed to the party to which such notice is
directed at its address determined as provided in this Section. All notices and
other communications under this Agreement shall be given to the parties hereto
at the following addresses:
(i) If to the Borrower, at:
ClubCorp, Inc.
3030 LBJ Freeway, Suite 700
Dallas, Texas 75234
Attention: Treasurer
Telephone: (972) 888-7332
Telecopier: (972) 888-6239
(ii) If to the Administrative Agent, at:
NationsBank, N.A.
901 Main Street, 14th Floor
Dallas, Texas 75202-3714
Attn: Molly Oxford
Telephone: (214) 508-3255
Telecopier: (214) 508-2515
(iii) If to a Lender, at its address shown below its name on the signature
pages hereof, or if applicable, set forth in its Assignment Agreement.
(b) Any party hereto may change the address to which notices shall be
directed by giving 10 days' written notice of such change to the other parties.
Section 11.2 Expenses. The Borrower shall promptly pay:
(a) all reasonable out-of-pocket expenses of the Administrative Agent in
connection with the preparation, negotiation, execution and delivery of this
Agreement and the other Loan Documents, the transactions contemplated hereunder
and thereunder, and the making of Advances hereunder, including without
limitation the reasonable fees and disbursements of Special Counsel;
(b) all reasonable out-of-pocket expenses, including reasonable attorneys'
fees, of the Administrative Agent in connection with the transactions
contemplated in this Agreement and the other Loan Documents and the preparation,
negotiation, execution and delivery of any waiver, amendment or consent by
the Administrative Agent relating to this Agreement or the other Loan Documents;
and
(c) all reasonable out-of-pocket costs, expenses and attorneys' fees of the
Administrative Agent and each Lender incurred for enforcement, collection,
restructuring, refinancing and "work-out", or otherwise incurred in obtaining
performance under the Loan Documents, which in each case shall include without
limitation reasonable fees and expenses of consultants, legal counsel for the
Administrative Agent and any Lender and administrative fees for the
Administrative Agent.
Section 11.3 Waivers. The rights and remedies of the Lenders under this
Agreement and the other Loan Documents shall be cumulative and not exclusive of
any rights or remedies which they would otherwise have. No failure or delay by
the Administrative Agent or any Lender in exercising any right shall operate as
a waiver of such right. The Lenders expressly reserve the right to require
strict compliance with the terms of this Agreement in connection with any
funding of a request for an Advance. In the event that any Lender decides to
fund or continue or convert an Advance at a time when the Borrower is not in
strict compliance with the terms of this Agreement, such decision by such Lender
shall not be deemed to constitute an undertaking by the Lender to fund any
further requests for Advances or continuations or conversions or preclude the
Lenders from exercising any rights available under the Loan Documents or at law
or equity. Any waiver or indulgence granted by the Lenders shall not constitute
a modification of this Agreement, except to the extent expressly provided in
such waiver or indulgence, or constitute a course of dealing by the Lenders at
variance with the terms of the Agreement such as to require further notice by
the Lenders of the Lenders' intent to require strict adherence to the terms of
the Agreement in the future. Any such actions shall not in any way affect the
ability of the Administrative Agent or the Lenders, in their discretion, to
exercise any rights available to them under this Agreement or under any other
agreement, whether or not the Administrative Agent or any of the Lenders are a
party thereto, relating to the Borrower or any of its Subsidiaries.
Section 11.4 Determination by the Lenders Conclusive and Binding. Any
determination or mathematical calculation required or expressly permitted to be
made by the Administrative Agent or any Lender under this Agreement shall be
controlling, absent demonstrable error.
Section 11.5 Set-Off. In addition to any rights now or hereafter granted
under Applicable Law and not by way of limitation of any such rights, upon the
occurrence and during the continuation of an Event of Default, each Lender and
any subsequent holder of any Note, and any assignee of any Note, is hereby
authorized by the Borrower at any time or from time to time, without notice to
the Borrower or any other Person, any such notice being hereby expressly waived,
to set-off, appropriate and apply any deposits (general or special (except
trust and escrow accounts), time or demand, including without limitation
Indebtedness evidenced by certificates of deposit, in each case whether matured
or unmatured) and any other Indebtedness at any time held or owing by such
Lender or holder to or for the credit or the account of the Borrower, against
and on account of the Obligations and other liabilities of the Borrower to such
Lender or holder, irrespective of whether or not (a) the Lender or holder shall
have made any demand hereunder, or (b) the Lender or holder shall have declared
the principal of and interest on the Advances and other amounts due hereunder to
be due and payable as permitted by Section 8.2 hereof (but after each set-off
such Lender shall promptly notify the Administrative Agent and the Borrower).
Any sums obtained by any Lender or by any assignee or subsequent holder of any
Note shall be subject to pro rata treatment of all Obligations and other
liabilities hereunder in accordance with each Specified Percentage.
Section 11.6 Assignment.
(a) The Borrower may not assign or transfer any of its rights or obligations
hereunder or under the other Loan Documents without the prior written
consent of the Lenders.
(b) No Lender shall be entitled to assign or grant a participation in its
interest in this Agreement, its Notes or its Advances, except as hereinafter set
forth.
(c) Each Lender may sell participations to one or more banks or other
entities (the "Participants") in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of the Advances or Reimbursement Obligations owing to it and the Note or
Notes held by it) (the "Participations"); provided, however, that (i) such
Lender's obligations under this Agreement (including, without limitation, its
Specified Percentage of the Commitment) shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) such Lender shall remain the holder of any such Note
for all purposes of this Agreement, (iv) the Borrower, the Administrative Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement, (v) no Participant under any such Participation shall have any right
to approve any amendment or waiver of any provision of any Loan Document, or any
consent to any departure by the Borrower therefrom, except to the extent that
such amendment, waiver or consent would (A) reduce or postpone any date fixed
for payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder (B) increase the commitment of any Participant or (C)
release any Collateral or security for the Obligations, except pursuant to the
Loan Documents, in each case to the extent subject to such Participation, and
(vi) no Participation shall be in an amount less than $5,000,000. The Lenders
may, subject to Section 11.14 hereof, provide copies of all financial
information received from the Borrower to such Participants.
(d) Each Lender may assign to one or more Eligible Assignees its rights and
obligations under this Agreement and the other Loan Documents; provided,
however, that (i) each such assignment shall be subject to the prior written
consent of the Administrative Agent and Borrower, which consents shall not be
unreasonably withheld (provided, however, notwithstanding anything herein to the
contrary, no consent of the (A) Borrower is required for any assignment (x)
during any time that an Event of Default has occurred and is continuing, (y) to
an Affiliate of a Lender and (z) to another Lender hereunder and (B)
Administrative Agent is required for any assignment (y) to an Affiliate of a
Lender and (z) to another Lender hereunder), (ii) no such assignment shall be in
an amount less than $5,000,000, unless the commitment of a Lender is less than
$5,000,000, in which case such assignment may be in the aggregate amount of such
Lender's Specified Percentage of the Commitment, (iii) the applicable Lender,
Administrative Agent, the Borrower and Eligible Assignee shall execute and
deliver to the Administrative Agent an Assignment and Acceptance Agreement (an
"Assignment Agreement") in substantially the form of Exhibit C hereto, together
with the Notes subject to such assignment and (iv) the Eligible Assignee
executing the Assignment, shall deliver to the Administrative Agent a processing
fee of $3,500. Upon such execution, delivery and acceptance from and after the
effective date specified in each Assignment, which effective date shall be at
least three Business Days after the execution thereof and the recordation of the
information therein in the Register pursuant to Section 11.6(j) hereof, (A) the
Eligible Assignee thereunder shall be party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment, have the rights and obligations of a Lender hereunder and (B) the
applicable Lender shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such assignment, relinquish such rights and
be released from such obligations under this Agreement; provided, however, the
indemnities and rights provided such Lender in Section 5.9, Article 9 and
Section 11.2 hereof shall survive such assignment.
(e) Notwithstanding anything in clause (d) above to the contrary, (i) any
Lender may assign and pledge all or any portion of its Advances and Notes to any
Federal Reserve Bank as collateral security pursuant to Regulation A of
F.R.S. Board and any Operating Circular issued by such Federal Reserve Bank and
(ii) any Lender that is a fund may at any time assign or pledge all or any
portion of its rights under this Agreement to secure such Lender's indebtedness;
provided, however, that no such assignment under this clause (e) shall release
the assignor Lender from its obligations hereunder.
(f) Upon its receipt of an Assignment Agreement executed by a Lender and an
Eligible Assignee, and any Note or Notes subject to such assignment, the
Borrower shall, subject to the Borrower's rights under Section 11.6(d), within
five Business Days after its receipt of such Assignment Agreement execute and
deliver to the Administrative Agent in exchange for the surrendered Notes new
Notes to the order of such Eligible Assignee in an amount equal to the portion
of the Advances and the Specified Percentage of the Commitment assigned to it
pursuant to such Assignment Agreement and new Notes to the order of the assignor
Lender in an amount equal to the portion of the Advances and the Specified
Percentage of the Commitment retained by it hereunder. Such new Notes shall be
in an aggregate principal amount equal to the aggregate principal amount of such
surrendered Notes, shall be dated the effective date of such Assignment
Agreement and shall otherwise be in substantially the form of Exhibit A hereto.
(g) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 11.6, disclose to
the Eligible Assignee or Participant or proposed Eligible Assignee or
participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower, provided such Person agrees in writing to
handle such information in accordance with the standards set forth in Section
11.14 hereof.
(h) Except as specifically set forth in this Section 11.6, nothing in this
Agreement or any other Loan Documents, expressed or implied, is intended to or
shall confer on any Person other than the respective parties hereto and thereto
and their successors and assignees permitted hereunder and thereunder any
benefit or any legal or equitable right, remedy or other claim under this
Agreement or any other Loan Documents.
(i) Notwithstanding anything in this Section 11.6 to the contrary, no
Eligible Assignee or Participant (nor the assigning or participating Lender)
shall be entitled to receive (whether individually or collectively) any greater
payment under Section 2.13 or Section 9.3 or Section 9.5 than such assigning or
participating Lender or any other Lender would have been entitled to receive
with respect to the interest assigned or participated to such Eligible Assignee
or Participant.
(j) The Administrative Agent shall maintain at its address referred to in
Section 11.1 a copy of each Assignment Agreement delivered to and accepted by it
and a register (the "Register") for the recordation of the names and
addresses of the Lenders, any U.S. taxpayer identification number, the Specified
Percentages of the Lenders (the "Ownership Information"), whether such Lender is
an original Lender or the assignee of another Lender pursuant to an Assignment
Agreement and the effective date and the amount of each Assignment Agreement
delivered to and accepted by it and the parties thereto. Any transfer of an
ownership interest in any Advance, including any right to principal or interest
payable with respect to such Advance, shall be subject to and conditioned upon
the due recordation of such transfer and the Ownership Information with respect
to the transferee in the Register and such transfer shall be effective only upon
such recordation (and not prior thereto), which recordation the Administrative
Agent agrees to make. The entries in the Register shall be controlling and
binding for all purposes, absent demonstrable error, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes hereof. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
Section 11.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
Section 11.8 Severability. Any provision of this Agreement or any other
Loan Document which is for any reason prohibited or found or held invalid or
unenforceable by any court or governmental agency shall be ineffective to the
extent of such prohibition or invalidity or unenforceability without
invalidating the remaining provisions hereof or thereof in such jurisdiction or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 11.9 Interest and Charges. It is not the intention of any parties
to this Agreement to make an agreement in violation of the laws of any
applicable jurisdiction relating to usury. Regardless of any provision in any
Loan Documents, no Lender shall ever be entitled to charge, receive, collect or
apply, as interest on the Obligations, any amount in excess of the Highest
Lawful Rate. If any Lender or participant ever receives, collects or applies,
as interest, any such excess, such amount which would be excessive interest
shall be deemed a partial repayment of principal and treated hereunder as such;
and if principal is paid in full, any remaining excess shall be paid to the
Borrower. In determining whether or not the interest paid or payable, under any
specific contingency, exceeds the Highest Lawful Rate, the Borrower and the
Lenders shall, to the maximum extent permitted under Applicable Law, (a)
characterize any nonprincipal payment as an expense, fee or premium rather than
as interest, (b) exclude voluntary prepayments and the effect thereof, and (c)
amortize, prorate, allocate and spread in equal parts, the total amount of
interest throughout the entire contemplated term of the Obligations so that the
interest rate is uniform throughout the entire term of the Obligations;
provided, however, that if the Obligations are paid and performed in full prior
to the end of the full contemplated term thereof, and if the interest received
for the actual period of existence thereof exceeds the Highest Lawful Rate, the
Lenders shall refund to the Borrower the amount of such excess or credit the
amount of such excess against the total principal amount of the Obligations
owing, and, in such event, the Lenders shall not be subject to any penalties
provided by any laws for contracting for, charging or receiving interest in
excess of the Highest Lawful Rate. This Section shall control every other
provision of all agreements pertaining to the transactions contemplated by or
contained in the Loan Documents.
Section 11.10 Headings. Headings used in this Agreement are for convenience
only and shall not be used in connection with the interpretation of any
provision hereof.
Section 11.11 Amendment and Waiver. The provisions of this Agreement may not
be amended, modified or waived except by the written agreement of the
Borrower and the Determining Lenders; provided, however, that no such amendment,
modification or waiver shall be made (a) without the consent of all Lenders, if
it would (i) increase the amount of the Commitment, (ii) change the Specified
Percentage or commitment of any Lender, or (iii) extend or postpone the date of
maturity of, extend the due date for any payment of principal or interest on,
reduce the amount of any installment of principal or interest on, or reduce the
rate of interest on, any Advance, or other amount owing under any Loan Documents
to which such Lender is entitled or (iv) release any guaranty of the Obligations
(except, in any case, pursuant to this Agreement or the other Loan Documents),
or (v) reduce the fees payable hereunder to which such Lender is entitled, or
(vi) revise, amend, modify or waive this Section 11.11, or (vii) waive or extend
the date for payment or prepayment of any principal, interest or fees hereunder
or (vii) amend the definition of "Determining Lenders" or "Specified
Percentage", or (b) without the consent of the Administrative Agent, if it,
would alter the rights, duties or obligations of the Administrative Agent.
Neither this Agreement nor any term hereof may be amended orally, nor may any
provision hereof be waived orally but only by an instrument in writing signed by
the Administrative Agent and, in the case of an amendment, by the Borrower.
Section 11.12 Exception to Covenants. Neither the Borrower nor any of its
Subsidiaries shall be deemed to be permitted to take any action or fail to take
any action which is permitted as an exception to any of the covenants contained
herein or which is within the permissible limits of any of the covenants
contained herein if such action or omission would result in the breach of any
other covenant contained herein.
Section 11.13 Confidentiality. Each Lender and the Administrative Agent
agrees (on behalf of itself and each of its Affiliates, directors, officers,
employees and representatives) to use reasonable efforts to keep confidential,
in accordance with customary procedures for handling confidential information of
this nature and in accordance with safe and sound banking or investment
practices, any non-public information supplied to it by the Borrower or any of
its Affiliates pursuant to this Agreement, provided that nothing herein shall
limit the disclosure of any such information (a) to the extent required by
statute, rule, regulation or judicial process, (b) to counsel for any Lender or
the Administrative Agent, (c) to bank or other examiners, regulatory bodies,
auditors or accountants of any Lender, (d) to the Administrative Agent or any
other Lender or any Affiliate thereof, (e) in connection with any Litigation
relating to the transactions contemplated by the Loan Documents to which any one
or more of Lenders is a party, (f) to the extent necessary in connection with
the exercise of any Right under this Agreement or any other Loan Document, or
(g) to any Eligible Assignee or Participant (or prospective Eligible Assignee or
Participant) or to any direct or indirect contractual counterparties in swap
agreements or to the professional advisors of such swap counterparties so long
as such Eligible Assignee or Participant (or prospective Eligible Assignee or
Participant) or direct or indirect contractual counterparties in swap agreements
or such swap counterparties' professional advisors agrees to handle such
information in accordance with the provisions of this Section 11.13.
SECTION 11.14 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
TEXAS (WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS) AND THE UNITED
STATES OF AMERICA. THE LOAN DOCUMENTS ARE PERFORMABLE IN DALLAS COUNTY, TEXAS,
AND THE BORROWER AND EACH SURETY, GUARANTOR, ENDORSER AND ANY OTHER PARTY EVER
LIABLE FOR PAYMENT OF ANY MONEY PAYABLE WITH RESPECT TO THE LOAN DOCUMENTS,
JOINTLY AND SEVERALLY WAIVE THE RIGHT TO BE SUED ELSEWHERE. WITHOUT EXCLUDING
ANY OTHER JURISDICTION, THE BORROWER AGREES THAT THE STATE AND FEDERAL COURTS OF
TEXAS LOCATED IN DALLAS, T EXAS, SHALL HAVE JURISDICTION OVER PROCEEDINGS IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND HEREBY SUBMITS
WITH RESPECT TO ITSELF AND ITS PROPERTY TO THE JURISDICTION OF ANY SUCH COURT
FOR THE PURPOSE OF ANY SUIT, ACTION, PROCEEDING OR JUDGMENT RELATING TO OR
ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
SECTION 11.15 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY KNOWINGLY VOLUNTARILY, IRREVOCABLY AND
INTENTIONALLY WAIVE, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR CLAIM ARISING OUT OF OR RELATED TO ANY OF
THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY. THIS PROVISION IS
A MATERIAL INDUCEMENT TO EACH LENDER ENTERING INTO THIS AGREEMENT AND MAKING ANY
ADVANCES HEREUNDER.
SECTION 11.16 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT, TOGETHER WITH THE
OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES
REGARDING THE SUBJECT MATTER HEREIN AND THEREIN AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES
HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, this Credit Agreement is executed as of the date first
set forth above.
BORROWER: CLUBCORP, INC.
By: /s/John M. Massey III
John M. Massey III
Treasurer
ADMINISTRATIVE AGENT: NATIONSBANK, N.A., as Administrative Agent
By: /s/Dan Killian
Name: Dan Killian
Title: Vice President
LENDER: NATIONSBANK, N.A.
By: /s/Dan Killian
Name: Dan Killian
Title: Vice President