EXHIBIT 2.2
URS CORPORATION
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of June 9, 1999 and entered into by
and among URS CORPORATION, a Delaware corporation ("Company"), THE FINANCIAL
INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to
herein as a "Lender" and collectively as "Lenders"), and WELLS FARGO BANK,
NATIONAL ASSOCIATION ("Wells Fargo"), as agent for Lenders (in such capacity,
"Administrative Agent") and as a Co-Lead Arranger and MORGAN STANLEY SENIOR
FUNDING, INC. ("Morgan Stanley") as Co-Lead Arranger (collectively, in such
capacity, "Co-Arrangers") and syndication agent (in such capacity, "Syndication
Agent").
R E C I T A L S
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WHEREAS, Company has formed its direct wholly owned Subsidiary, Merger
Sub (this and other capitalized terms used in these recitals without definition
being used as defined in subsection 1.1), for the purpose of acquiring all of
the outstanding shares of the common stock, par value $.01 per share, of DMG
("DMG Common Stock");
WHEREAS, on or before the Closing Date, RCBA will purchase shares of
Company Series A Preferred Stock and Company Series C Preferred Stock for cash
consideration of $100,000,000;
WHEREAS, on or before the Closing Date, Company will issue and sell
not less than $200,000,000 in aggregate principal amount of Senior Subordinated
Notes or, in lieu thereof, not less than $200,000,000 in aggregate principal
amount of Bridge Notes;
WHEREAS, Merger Sub has offered to purchase all of the issued and
outstanding shares of DMG Common Stock for $16.00 per share pursuant to the
Tender Offer;
WHEREAS, Merger Sub, Company and DMG have entered into the Merger
Agreement pursuant to which, upon completion of the Tender Offer and, with
respect to clauses (i) and (ii), upon receipt of the approval of holders of at
least a majority of the outstanding shares of DMG Common Stock (if required by
law):
(i) Merger Sub will be merged with and into DMG pursuant to the
Merger Agreement, with DMG being the surviving corporation in the
Merger (such surviving corporation is sometimes referred to herein as
the "Surviving Corporation");
(ii) Each of the shares of DMG Common Stock outstanding
immediately before the consummation of the Merger (other than shares
to be cancelled as described in clause (iii) below and shares held by
those who perfect appraisal rights under Delaware state law if such
rights are available) will be converted into the right to receive a
cash payment;
(iii) Each of the shares of DMG Common Stock outstanding
immediately before the consummation of the Merger held by Company,
Merger Sub, DMG or any of their respective direct or indirect
Subsidiaries (the "Other DMG Shares") shall be cancelled and retired
without payment of any consideration therefor;
(iv) As a result of the Merger, each of the shares of the
Capital Stock of Merger Sub outstanding immediately before the
consummation of the Merger will be converted into shares of common
stock, par value $.01 per share, of Surviving Corporation (the
"Surviving Corporation Common Stock"); and
(v) Following the Merger, all of the outstanding shares of
Surviving Corporation Common Stock will be owned by Company.
WHEREAS, Company desires that Lenders extend certain credit facilities
to Company to provide financing for (i) the purchase of the Tendered Shares, the
payment of a portion of the Transaction Costs and the payment of reasonable
costs and expenses associated with the Tender Offer; (ii) the purchase pursuant
to the Merger of all shares of DMG Common Stock (other than Other DMG Shares)
not tendered in the Tender Offer, the payment of the balance of the Transaction
Costs, and the payment of reasonable costs and expenses associated with the
Merger; (iii) the refinancing of certain existing debt of Company and DMG and
(iv) the working capital and other general corporate purposes of Company;
WHEREAS, Lenders have agreed to extend certain credit facilities to
Company the proceeds of which will be used, together with the proceeds of the
issuance and sale of the Senior Subordinated Notes or the Bridge Notes and the
proceeds of the issuance of shares of Company Series A Preferred Stock and
Company Series C Preferred Stock described above, (i) to fund the Acquisition
Financing Requirements and (ii) to provide financing for working capital and
other general corporate purposes of Company and its Subsidiaries;
WHEREAS, Company desires to secure all of the Obligations hereunder
and under the other Loan Documents by granting to Administrative Agent, on
behalf of Lenders, a First Priority Lien on substantially all of its personal
property, including a pledge of 100% of the Capital Stock held by Company of
certain of its Domestic Subsidiaries and the lesser of (i) 100% of the Capital
Stock held by Company of certain of its Foreign Subsidiaries or (ii) 65% of the
Capital Stock of any such Foreign Subsidiary; and
WHEREAS, certain of the Domestic Subsidiaries of Company have agreed
to guarantee the Obligations hereunder and under the other Loan Documents and to
secure their guaranties by granting to Administrative Agent, on behalf of
Lenders, a First Priority Lien on substantially all of their respective personal
property, including a pledge of 100% of the Capital Stock held by such Domestic
Subsidiaries of certain of their respective Domestic Subsidiaries and the lesser
of (i) 100% of the Capital Stock held by such Domestic Subsidiaries of certain
of their respective Foreign Subsidiaries or (ii) 65% of the Capital Stock of any
such Foreign Subsidiary:
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NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Lenders, Co-Arrangers,
Syndication Agent and Administrative Agent agree as follows:
Section 1. DEFINITIONS
1.1 Certain Defined Terms.
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The following terms used in this Agreement shall have the following meanings:
"Acquisition Financing Requirements" means the aggregate of all
amounts necessary (i) to finance the purchase of Tendered Shares pursuant to the
Tender Offer, (ii) to finance the purchase of shares of DMG Common Stock that
have been converted into the right to receive payment pursuant to the Merger
(including those for which appraisal rights have been perfected), (iii) to
repay amounts outstanding under the Existing Credit Agreements, and (iv) to pay
Transaction Costs.
"Acquisition Revolving Loans" has the meaning assigned to that term in
subsection 2.5A.
"Adjusted Domestic Sterling Rate" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Domestic Sterling
Rate Loan, the rate per annum displayed by Reuters at which Sterling is offered
to the Administrative Agent in the London interbank market at 11:00 A.M. (London
time) as determined by the British Bankers' Association based upon rates
supplied by the Reference Banks, as ranked and arithmetically averaged between
the middle two quartiles only and rounded upward, if necessary, to the nearest
1/16 of 1%.
"Adjusted Eurodollar Rate" means, for any Interest Rate Determination
Date with respect to an Interest Period for a Eurodollar Rate Loan, the rate per
annum obtained by dividing (i) the offered quotation (rounded upward to the
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nearest 1/16 of 1%) by first class banks in the London interbank market to Wells
Fargo for U.S. dollar deposits of amounts in same day funds comparable to the
principal amount of the Eurodollar Rate Loan of Wells Fargo for which the
Adjusted Eurodollar Rate is then being determined (which principal amount shall
be deemed to be $1,000,000 in the event Wells Fargo is not making, converting to
or continuing such a Eurodollar Rate Loan) with maturities comparable to such
Interest Period as of approximately 11:00 A.M. (London time) on such Interest
Rate Determination Date by (ii) a percentage equal to 100% minus the stated
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maximum rate of all reserve requirements (including any marginal, emergency,
supplemental, special or other reserves) applicable on such Interest Rate
Determination Date to any member bank of the Federal Reserve System in respect
of "Eurocurrency liabilities" as defined in Regulation D (or any successor
category of liabilities under Regulation D).
"Administrative Agent" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5.
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"Affected Class" has the meaning assigned to that term in subsection
10.6.
"Affected Lender" has the meaning assigned to that term in subsection
2.6C.
"Affected Loans" has the meaning assigned to that term in subsection
2.6C.
"Affiliate", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person or is a director or officer of such Person. For the purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling", "controlled by" and "under common control with"), as applied to
any Person, means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of that Person, whether
through the ownership of voting securities or by contract or otherwise. Any
Person, other than a Lender, who owns beneficially or of record Securities
representing more than 5% of the total outstanding Securities of Company shall
be an Affiliate of Company.
"Aggregate Amounts Due" has the meaning assigned to that term in
subsection 10.5.
"Agreement" means this Credit Agreement dated as of June 9, 1999, as
it may be amended, supplemented or otherwise modified from time to time.
"Applicable Commitment Fee Percentage" means, as at any date of
determination, the percentage per annum set forth below opposite the applicable
Leverage Ratio, as determined in accordance with subsection 2.3:
Leverage Ratio Commitment
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Fee
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Greater than or equal to 4.00 to 1.00 2.75
Greater than or equal to 3.50 to 1.00 2.50
Greater than or equal to 3.00 to 1.00 2.25
Greater than or equal to 2.50 to 1.00 2.00
Greater than or equal to 2.00 to 1.00 1.75
Less than 2.00 to 1.00 1.50
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"Applicable Margin" means, as at any date of determination and for any
type of Loan, the percentage per annum set forth below opposite the applicable
Leverage Ratio with respect to such type of Loan, as determined in accordance
with subsection 2.2A:
Revolving
Tranche A Tranche B Tranche C Revolving Dollar Sterling
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Leverage Euro- Euro- Euro- Euro-
Ratio Base dollar Base dollar Base dollar Base dollar
---- ---- ------ ---- ---- ---- ------ ---- ------
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Greater than or equal to 4.00 to 1.00 1.75 2.75 2.25 3.25 2.50 3.50 1.75 2.75 2.75
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Greater than or equal to 3.50 to 1.00 1.50 2.50 2.25 3.25 2.50 3.50 1.50 2.50 2.50
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Greater than or equal to 3.00 to 1.00 1.25 2.25 2.25 3.25 2.50 3.50 1.25 2.25 2.25
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Greater than or equal to 2.50 to 1.00 1.00 2.00 2.00 3.00 2.25 3.25 1.00 2.00 2.00
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Greater than or equal to 2.00 to 1.00 0.75 1.75 2.00 3.00 2.25 3.25 0.75 1.75 1.75
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Less than 2.00 to 1.00 0.50 1.50 2.00 3.00 2.25 3.25 0.50 1.50 1.50
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"Applicable Currency" means, as to any particular payment or Loan,
Dollars or Sterling in which it is denominated or is payable.
"Applied Amount" has the meaning assigned to that term in subsection
2.4B(iv)(b).
"Asset Sale", as applied to any Person, means the sale by such Person
or any of its Subsidiaries to any other Person of (i) any of the stock of any
Subsidiary of such Person (other than any stock sold to licensed professionals
employed by such Person or its Subsidiaries in order to comply with licensing
laws or any stock sold to qualify directors if required by applicable law), (ii)
substantially all of the assets of any division or line of business of such
Person or any of its Subsidiaries (other than the assets of any division or line
of business to the extent that the aggregate value of such assets is less than
$1,000,000), or (iii) any other assets (whether tangible or intangible) of such
Person or any of its Subsidiaries (other than any assets to the extent that the
aggregate value of such assets sold in any single transaction or related series
of transactions during any Fiscal Year is less than $1,000,000).
"Assignment Agreement" means an Assignment Agreement substantially in
the form of Exhibit XIII annexed hereto.
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"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Base Rate Loans" means Term Loans and Revolving Dollar Loans bearing
interest at rates determined by reference to the Dollar Base Rate.
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"Bridge Loan Agreement" means the Note Purchase Agreement dated as of
the Closing Date between Company and the purchasers listed therein and the
indenture with respect to the Rollover Notes provided for therein, as such
agreement or indenture, as the case may be, may be amended from time to time to
the extent permitted under subsection 7.13B.
"Bridge Notes" means the Senior Subordinated Increasing Rate Notes due
June 9, 2000.
"Business Day" means (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of California or is a day on which
banking institutions located in such state are authorized or required by law or
other governmental action to close, and (ii) with respect to all notices,
determinations, fundings, issuances and payments in connection with the Adjusted
Eurodollar Rate, the Adjusted Domestic Sterling Rate or any Eurodollar Rate
Loans or any Domestic Sterling Rate Loans, any day that is a Business Day
described in clause (i) above and that is also (a) a day for trading by and
between banks in Dollar or Sterling, as the case may be, deposits in the London
interbank market and (b) a day on which banking institutions are open for
business in London.
"Capital Lease", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company, membership interests, and (v) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distribution of assets of, the issuing Person.
"Cash" means money, currency or a credit balance in a Deposit Account.
"Cash Equivalents" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States of America the obligations of which are backed by
the full faith and credit of the United States of America, in each case maturing
within one year after such date; (ii) marketable direct obligations issued by
any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof, in each case maturing within
one year after such date and having, at the time of the acquisition thereof, the
highest rating obtainable from either Standard & Poor's Ratings Group ("S&P") or
Moody's Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no
more than one year from the date of creation thereof and having, at the time of
the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America, any
state thereof, the District of Columbia or any foreign country recognized by the
United States of America and which bank (a) is at least "adequately
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capitalized" (as defined in the regulations of its primary Federal banking
regulator), (b) has Tier 1 capital (as defined in such regulations) of not less
than $100,000,000 (or the foreign currency equivalent thereof), and (c) has
outstanding debt which is rated "A" (or such similar equivalent rating) or
higher by at least one nationally recognized statistical rating organization (as
defined in Rule 436 under the Securities Act); and (v) shares of any money
market mutual fund that (a) has at least 95% of its assets invested continuously
in the types of investments referred to in clauses (i) and (ii) above, (b) has
net assets of not less than $500,000,000, and (c) has the highest rating
obtainable from either S&P or Moody's.
"Certificate re Non-Bank Status" means a certificate substantially in
the form of Exhibit XIV annexed hereto delivered by a Lender to Administrative
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Agent pursuant to subsection 2.7B(iii).
"Class" means, as applied to Lenders, each of the following three
classes of Lenders: (i) Lenders having Revolving Loan Exposure and Term Loan A
Exposure; (ii) Lenders having Term Loan B Exposure; and (iii) Lenders having
Term Loan C Exposure.
"Closing Date" means the date, on or before September 30, 1999, on
which the initial Loans are made.
"Closing Date Company Disclosure Letter" means the letter dated the
Closing Date delivered to Administrative Agent by Company containing information
with respect to Company and its Subsidiaries and DMG and its Subsidiaries.
"Closing Date Compliance Certificate" means a certificate
substantially in the form of Exhibit X annexed hereto delivered to
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Administrative Agent and Lenders by Company pursuant to subsection 4.1I.
"Closing Date Loan Documents" means this Agreement, the Subsidiary
Guaranty, the Notes, the Pledge and Security Agreement and the Tender Pledge
Agreement.
"Closing Date Loan Parties" means Company, each of the Domestic
Subsidiaries of Company required to execute the Subsidiary Guaranty pursuant to
subsection 4.1, and DMG.
"Co-Arrangers" has the meaning assigned to that term in the
introduction to this Agreement.
"Collateral" means, collectively, all of the real, personal and mixed
property (including Capital Stock) in which Liens are purported to be granted
pursuant to the Collateral Documents as security for the Obligations.
"Collateral Documents" means the Pledge and Security Agreement, the
Tender Pledge Agreement, the Mortgages, and all other instruments or documents
delivered by any Loan Party pursuant to this Agreement or any of the other Loan
Documents in order to grant to Administrative Agent, on behalf of Lenders, a
Lien on any real, personal or mixed property (including Capital Stock) of that
Loan Party as security for the Obligations.
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"Commencement of the Third Stage of EMU" means January 1, 1999.
"Commitments" means the commitments of Lenders to make Loans as set
forth in subsection 2.1A.
"Company" has the meaning assigned to that term in the introduction to
this Agreement.
"Company Certificates of Designation" means the Certificates of
Designation for the Company Series A Preferred Stock, Company Series B Preferred
Stock and Company Series C Preferred Stock, in the form delivered to
Administrative Agent on May 3, 1999, as such Certificates of Designation may be
further amended from time to time to the extent permitted under subsection
7.13B.
"Company Series A Preferred Stock" means the Series A Preferred Stock,
$1.00 par value per share, of Company.
"Company Series B Preferred Stock" means the Series B Convertible
Exchangeable Preferred Stock, $1.00 par value per share, of Company.
"Company Series C Preferred Stock" means the Series C Preferred Stock,
$1.00 par value per share, of Company.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit IX annexed hereto delivered to Administrative Agent and Lenders by
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Company pursuant to subsection 6.1(iii).
"Consolidated Capital Expenditures" means, for any period, the sum,
without duplication, of (i) the aggregate of all expenditures (whether paid in
cash or other consideration or accrued as a liability and including that portion
of Capital Leases which is capitalized on the consolidated balance sheet of
Company and its Subsidiaries) by Company and its Subsidiaries during that period
for fixed assets and leasehold improvements of Company and its Subsidiaries plus
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(ii) to the extent not covered by clause (i) of this definition, the aggregate
of all expenditures by Company and its Subsidiaries during that period to
purchase or develop computer software or systems (but only to the extent such
expenditures are capitalized on the consolidated balance sheet of Company and
its Subsidiaries in conformity with GAAP) minus (iii) to the extent included in
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clause (i) of this definition, the total cash consideration expended by Company
and its Subsidiaries during such period to acquire (by purchase or otherwise)
the business, property or fixed assets of any Person, or the stock or other
evidence of beneficial ownership of any Person that, as a result of such
acquisition, becomes a Subsidiary of Company.
"Consolidated Cash Interest Expense" means, for any period,
Consolidated Interest Expense for such period, excluding, however, any interest
expense not payable in Cash (including amortization of discount and amortization
of debt issuance costs).
"Consolidated Current Assets" means, as at any date of determination,
the total assets of Company and its Subsidiaries on a consolidated basis which
may properly be classified as current assets in conformity with GAAP.
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"Consolidated Current Liabilities" means, as at any date of
determination, the total liabilities of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities in
conformity with GAAP, (i) excluding (a) the aggregate principal amount of all
outstanding Revolving Loans and (b) the maximum aggregate amount which is or at
any time thereafter may become available for drawing under all Letters of Credit
then outstanding and (ii) including the current portion of the aggregate
principal amount of all outstanding Term Loans.
"Consolidated EBITDA" means, for any period, the sum of the amounts
for such period of (i) Consolidated Net Income, (ii) Consolidated Interest
Expense, (iii) provisions for taxes based on income, (iv) total depreciation
expense, (v) total amortization expense, and (vi) other non-cash items reducing
Consolidated Net Income less other non-cash items increasing Consolidated Net
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Income, all of the foregoing as determined on a consolidated basis for Company
and its Subsidiaries in conformity with GAAP; provided, however, that
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Consolidated EBITDA for any four-Fiscal Quarter period which includes one or
more Fiscal Quarters prior to completion of the Tender Offer shall be equal to
the sum of (i) Consolidated EBITDA for such period plus (ii) the product of (a)
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$6,350,000, and (b) twelve minus the number of months that have elapsed since
the completion of the Tender Offer; provided, further, that in the event a
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Subsequent Acquisition is consummated during any four-Fiscal Quarter period,
Consolidated EBITDA shall be calculated after giving pro forma effect thereto as
if such Subsequent Acquisition occurred on the first day of such four-Fiscal
Quarter period.
"Consolidated Excess Cash Flow" means, for any period, an amount (if
positive) equal to (i) Consolidated EBITDA for such period minus (ii) the sum,
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without duplication, of (a) Consolidated Principal Payments for such period, (b)
Consolidated Capital Expenditures (net of any proceeds of any related financings
with respect to such expenditures) for such period, (c) Consolidated Cash
Interest Expense for such period, (d) the provision for current taxes based on
income of Company and its Subsidiaries on a consolidated basis and payable in
Cash during such period, and (e) the aggregate amount of all expenditures by
Company and its Subsidiaries during that period to acquire (by purchase or
otherwise) the business, property or fixed assets of any other Person, or the
stock or other evidence of beneficial ownership of any other Person that, as a
result of such acquisition, becomes a Subsidiary of Company (net of any proceeds
of any related financings with respect to such expenditures).
"Consolidated Fixed Charges" means, for any period, the sum (without
duplication) of the amounts for such period of (i) Consolidated Interest
Expense, (ii) provisions for taxes based on income and payable in Cash, and
(iii) Consolidated Scheduled Principal Payments, all of the foregoing as
determined on a consolidated basis for Company and its Subsidiaries in
conformity with GAAP.
"Consolidated Interest Expense" means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) of Company and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Company and
its Subsidiaries during such period, including all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs under Interest Rate Agreements to which
Company or any of its Subsidiaries is a party, but excluding, however, any
amounts referred to in subsection 2.3
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payable to Administrative Agent and Lenders on or before the Closing Date and
amounts paid pursuant to subsection 2.3 of the Existing URS Credit Agreement.
"Consolidated Net Income" means, for any period, the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP; provided
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that there shall be excluded (i) the income (or loss) of any Person (other than
a Subsidiary of Company) in which any other Person (other than Company or any of
its Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Company or any of its
Subsidiaries by such Person during such period, (ii) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of Company or is merged
into or consolidated with Company or any of its Subsidiaries or that Person's
assets are acquired by Company or any of its Subsidiaries, (iii) the income of
any Subsidiary of Company to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, (iv) any after-tax gains or losses attributable
to Asset Sales by Company or any of its Subsidiaries or returned surplus assets
of any Pension Plan of Company or any of its Subsidiaries, and (v) (to the
extent not included in clauses (i) through (iv) above) any net extraordinary
gains or net non-cash extraordinary losses.
"Consolidated Principal Payments" means, for any period, the aggregate
amount of all net voluntary and scheduled repayments of principal by Company and
its Subsidiaries on a consolidated basis during such period under all
Indebtedness of Company or any of its Subsidiaries (including the principal
component of Capital Leases).
"Consolidated Scheduled Principal Payments" means, for any period, the
aggregate amount of all scheduled repayments of principal by Company and its
Subsidiaries on a consolidated basis during such period under all Indebtedness
of Company or any of its Subsidiaries (including the principal component of
Capital Leases).
"Consolidated Total Funded Debt" means, as at any date of
determination, the sum, on a consolidated basis, of (i) the aggregate principal
amount of all outstanding Term Loans, (ii) the aggregate amount of that portion
of obligations with respect to Capital Leases of Company or any of its
Subsidiaries that is properly classified as a liability on a balance sheet in
conformity with GAAP, (iii) the aggregate principal amount of all outstanding
Indebtedness of Company or any of its Subsidiaries for borrowed money evidenced
by a note or similar written instrument, (iv) the aggregate principal amount of
all outstanding Subordinated Indebtedness, and (v) the aggregate principal
amount of all outstanding Revolving Loans.
"Contingent Obligation", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (i) with respect to
any Indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof, (ii)
with respect to any letter of credit issued for the
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account of that Person or as to which that Person is otherwise liable for
reimbursement of drawings, or (iii) under Hedge Agreements. Contingent
Obligations shall include (a) the direct or indirect guaranty, endorsement
(otherwise than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by such Person of the
obligation of another, (b) the obligation to make take-or-pay or similar
payments if required regardless of non-performance by any other party or parties
to an agreement, and (c) any liability of such Person for the obligation of
another through any agreement (contingent or otherwise) (1) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of loans, advances, stock purchases, capital contributions or otherwise) or
(2) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described under
subclauses (1) or (2) of this sentence, the primary purpose or intent thereof is
as described in the preceding sentence. The amount of any Contingent Obligation
in the form of a letter of credit or a guaranty of a specified amount shall be
equal to the face amount of the letter of credit or the amount of the obligation
so guaranteed or otherwise supported, as the case may be, or, if less, the
amount to which such Contingent Obligation is specifically limited. The amount
of any Contingent Obligation which is not in the form of a guaranty of a
specified amount shall be equal to the reasonably anticipated maximum amount of
such Contingent Obligation as determined by Company in good faith.
"Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement.
"Deposit Account" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DMG" means Dames & Moore Group, a Delaware corporation.
"DMG Common Stock" has the meaning assigned to that term in the
Recitals to this Agreement.
"DMG Fiscal Year" means, prior to consummation of the Merger, the
fiscal year of DMG and its Subsidiaries ending on the last Friday of March in
each calendar year.
"DMG Loan Proceeds Notes" means those certain promissory notes issued
by DMG in favor of Company to evidence (i) all amounts advanced to DMG by
Company on the Closing Date and (ii) the proceeds of all Revolving Loans
advanced to DMG from Company from time to time during the period from and
including the Closing Date to and including the Merger Date.
11
"Dollar Base Rate" means, at any time, the higher of (i) the Prime
Rate or (ii) the rate which is 1/2 of 1% in excess of the Federal Funds
Effective Rate.
"Dollar Equivalent" means, at any time, (i) as to any amount
denominated in Dollars, the amount thereof at such time, and (ii) as to any
amount denominated in Sterling, the equivalent amount in Dollars as determined
by Administrative Agent at such time on the basis of the Spot Rate for the
purchase of Dollars with Sterling on the most recent computation date provided
for in subsection 2.4D(i).
"Dollars" and the sign "$" mean the lawful money of the United States
of America.
"Domestic Sterling Rate Loans" means Revolving Sterling Loans bearing
interest at rates determined by reference to the Adjusted Domestic Sterling
Rate.
"Domestic Subsidiary" means any Subsidiary organized or incorporated
under the laws of a state of the United States of America.
"Eligible Assignee" means (i) (a) a commercial bank organized under
the laws of the United States of America or any state thereof and having a
combined capital and surplus of at least $100,000,000; (b) a savings and loan
association or savings bank organized under the laws of the United States of
America or any state thereof and having a combined capital and surplus of at
least $100,000,000; (c) a commercial bank organized under the laws of any other
country or a political subdivision thereof and having a combined capital and
surplus of at least $100,000,000; provided that (1) such bank is acting through
--------
a branch or agency located in the United States of America or (2) such bank is
organized under the laws of a country that is a member of the Organization for
Economic Cooperation and Development or a political subdivision of such country;
and (d) any other entity which is an "accredited investor" (as defined in
Regulation D under the Securities Act) which extends credit or buys loans as one
of its businesses, including insurance companies, investment funds, mutual funds
and lease financing companies, and which have a combined capital and surplus, a
net worth or total assets of at least $100,000,000; and (ii) any Lender and any
Affiliate of any Lender or, with respect to any Lender that is a fund that
invests in loans, any other fund that invests in loans and is advised or managed
by the same investment advisor as such Lender or by an Affiliate of such Lender;
provided that no Affiliate of Company shall be an Eligible Assignee.
- --------
"EMU" means Economic and Monetary Union as contemplated in the Treaty
on European Union.
"EMU Legislation" means legislative measures of the European Council
for the introduction of, changeover to or operation of a single or unified
European currency (whether known as the euro or otherwise), being in part the
implementation of the third stage of EMU.
"Employee Benefit Plan", as applied to any Person, means any "employee
benefit plan" as defined in Section 3(3) of ERISA which is or was maintained or
contributed to by such Person, any of its Subsidiaries or any of their
respective ERISA Affiliates.
12
"Environmental Claim" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any governmental authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection with any
Hazardous Materials or any actual or alleged Hazardous Materials Activity, or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"Environmental Laws" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of governmental
authorities relating to (i) environmental matters, including those relating to
any Hazardous Materials Activity, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or (iii) occupational safety
and health, industrial hygiene, land use or the protection of human, plant or
animal health or welfare, in any manner applicable to Company or any of its
Subsidiaries or any Facility, including the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. (S) 9601 et seq.), the
-- ---
Hazardous Materials Transportation Act (49 U.S.C. (S) 1801 et seq.), the
-- ---
Resource Conservation and Recovery Act (42 U.S.C. (S) 6901 et seq.), the Federal
-- ---
Water Pollution Control Act (33 U.S.C. (S) 1251 et seq.), the Clean Air Act (42
-- ---
U.S.C. (S) 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. (S) 2601
-- ---
et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. (S)
- -- ---
136 et seq.), the Occupational Safety and Health Act (29 U.S.C. (S) 651 et
-- --- --
seq.), the Oil Pollution Act (33 U.S.C. (S) 2701 et seq.) and the Emergency
- --- ------
Planning and Community Right-to-Know Act (42 U.S.C. (S) 11001 et seq.), each as
-- ---
amended or supplemented, any analogous present or future state or local statutes
or laws, and any regulations promulgated pursuant to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.
"ERISA Affiliate," as applied to any Person, means (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member. Any former ERISA Affiliate of Company or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of Company or
such Subsidiary within the meaning of this definition with respect to the period
such entity was an ERISA Affiliate of Company or such Subsidiary and with
respect to liabilities arising after such period for which Company or such
Subsidiary could be liable under the Internal Revenue Code or ERISA.
"ERISA Event" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan of Company or any of its Subsidiaries (excluding those for which
the provision for 30-day notice to the PBGC has been waived by regulation); (ii)
the failure to meet the minimum funding standard
13
of Section 412 of the Internal Revenue Code with respect to any Pension Plan of
Company or any of its Subsidiaries (whether or not waived in accordance with
Section 412(d) of the Internal Revenue Code) or the failure by Company or any of
its Subsidiaries to make by its due date a required installment under Section
412(m) of the Internal Revenue Code with respect to any Pension Plan or the
failure by Company or any of its Subsidiaries to make any required contribution
to a Multiemployer Plan; (iii) the provision by the administrator of any Pension
Plan of Company or any of its Subsidiaries pursuant to Section 4041(a)(2) of
ERISA of a notice of intent to terminate such plan in a distress termination
described in Section 4041(c) of ERISA; (iv) the withdrawal by Company, any of
its Subsidiaries or any of their respective ERISA Affiliates from any Pension
Plan with two or more contributing sponsors or the termination of any such
Pension Plan resulting in liability pursuant to Section 4063 or 4064 of ERISA;
(v) the institution by the PBGC of proceedings to terminate any Pension Plan of
Company or any of its Subsidiaries, or the occurrence of any event or condition
which might constitute grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan of Company or any of
its Subsidiaries; (vi) the imposition of liability on Company, any of its
Subsidiaries or any of their respective ERISA Affiliates pursuant to Section
4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of
ERISA; (vii) the withdrawal of Company, any of its Subsidiaries or any of their
respective ERISA Affiliates in a complete or partial withdrawal (within the
meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there
is any potential liability therefor, or the receipt by Company, any of its
Subsidiaries or any of their respective ERISA Affiliates of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated
under Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or
omission which could give rise to the imposition on Company, any of its
Subsidiaries or any of their respective ERISA Affiliates of fines, penalties,
taxes or related charges under Chapter 43 of the Internal Revenue Code or under
Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of
any Employee Benefit Plan; (ix) the assertion of a material claim (other than
routine claims for benefits) against any Employee Benefit Plan of Company or any
of its Subsidiaries other than a Multiemployer Plan or the assets thereof, or
against Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in connection with any Employee Benefit Plan; (x) receipt from the
Internal Revenue Service of notice of the failure of any Pension Plan of Company
or any of its Subsidiaries (or any other Employee Benefit Plan of Company or any
of its Subsidiaries intended to be qualified under Section 401(a) of the
Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue
Code, or the failure of any trust forming part of any Pension Plan of Company or
any of its Subsidiaries to qualify for exemption from taxation under Section
501(a) of the Internal Revenue Code; or (xi) the imposition of a Lien pursuant
to Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to
ERISA with respect to any Pension Plan of Company or any of its Subsidiaries.
"euro" means the single currency of participating member states of the
European Union.
"euro Unit" means the currency unit of the euro.
"Eurodollar Rate Loans" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
14
"Event of Default" means each of the events set forth in Section 8.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"Exchange Assets" has the meaning assigned to that term in subsection
2.4B(iii)(a)(2).
"Exchange Rate" means, on any date when an amount expressed in a
currency other than Dollars is to be determined with respect to any Letter of
Credit, the nominal rate of exchange of the Issuing Lender in the New York
foreign exchange market for the purchase by the Issuing Lender (by cable
transfer) of such currency in exchange for Dollars at 12:00 noon (New York time)
one Business Day prior to such date, expressed as a number of units of such
currency per one Dollar.
"Existing Company Letters of Credit" means those letters of credit
issued for the account of Company and identified on Schedule 1.1 of the Closing
------------
Date Company Disclosure Letter.
"Existing Credit Agreements" means, collectively, (i) the Existing URS
Credit Agreement and (ii) the Existing DMG Credit Agreement, in each case as
amended prior to the Closing Date.
"Existing DMG Credit Agreement" means that certain Amended and
Restated Credit Agreement dated as of October 22, 1998 among DMG, the several
lenders from time to time parties thereto, and Canadian Imperial Bank of
Commerce, as administrative agent.
"Existing DMG Letters of Credit" means those letters of credit issued
for the account of DMG and identified on Schedule 1.1 of the Closing Date
------------
Company Disclosure Letter.
"Existing Senior Subordinated Note Indenture" means the Indenture,
dated as of March 16, 1989, between Thortec International, Inc. and MTrust Corp,
National Association, as amended by Amendment Number 1 and Amendment Number 2,
as such indenture may be further amended from time to time to the extent
permitted under subsection 7.13B.
"Existing Senior Subordinated Notes" means Company's 8% Senior
Subordinated Notes due 2004 in the original aggregate principal amount of
$36,814,500 and the remaining aggregate principal amount of $6,455,000 as of the
Closing Date.
"Existing Subordinated Agreements" means, collectively, the Existing
Senior Subordinated Note Indenture and the Existing Subordinated Note Indenture.
"Existing Subordinated Indebtedness" means, collectively, the Existing
Senior Subordinated Notes and the Existing Subordinated Notes.
"Existing Subordinated Note Indenture" means the Indenture, dated as
of February 15, 1987, between Company and The Bank of New York as assignee of
First Interstate
15
Bank of California, as amended by Amendment Number 1, as such indenture may be
further amended from time to time to the extent permitted under subsection
7.13B.
"Existing Subordinated Notes" means Company's 6 1/2% Convertible
Subordinated Notes due 2012 in the original aggregate principal amount of
$57,500,000 and the remaining aggregate principal amount of $1,833,000 as of the
Closing Date.
"Existing URS Credit Agreement" means that certain Credit Agreement
dated as of November 14, 1997 among Company, the lenders party thereto, and
Wells Fargo, as administrative agent.
"Facilities" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now, hereafter or
heretofore owned, leased, operated or used by Company or any of its Subsidiaries
or any of their respective predecessors or Affiliates.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from three Federal funds brokers
of recognized standing selected by Administrative Agent.
"Financial Plan" has the meaning assigned to that term in subsection
6.1(xii).
"First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i) such
Lien has priority over any other Lien on such Collateral (other than Permitted
Encumbrances) and (ii) such Lien is the only Lien (other than Permitted
Encumbrances and Liens permitted pursuant to subsection 7.2A) to which such
Collateral is subject.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of Company and its Subsidiaries
ending on October 31 of each calendar year. For purposes of this Agreement, any
particular Fiscal Year shall be designated by reference to the calendar year in
which such Fiscal Year ends.
"Flood Hazard Property" means a Mortgaged Property located in an area
designated by the Federal Emergency Management Agency as having special flood or
mud slide hazards.
"Foreign Subsidiary" means any Subsidiary formed or organized under
the laws of a jurisdiction other than a state of the United States of America.
"Funding and Payment Office" means in respect of fundings, issuances
and payments (i) with respect to Term Loans, Revolving Dollar Loans and Swing
Line Loans, the office of Administrative Agent located at 201 3rd Street, 8th
Floor, San Francisco, California
16
94103; (ii) with respect to Revolving Sterling Loans, the office of Lloyds Bank
P.L.C. in London (International SC 309634; Swift ID No.: LOYDGB2L) for the
account of Wells Fargo (Acct. No. 01084802 with the following reference note:
"For Account of Wells Fargo Bank, San Francisco, Reference: Sterling Loan"); or
(iii) with respect to any Loans, such office of Administrative Agent or Swing
Line Lender as may from time to time hereafter be designated as such in a
written notice delivered by Administrative Agent and Swing Line Lender to
Company and each Lender.
"Funding Date" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set forth
in opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"Governmental Acts" has the meaning assigned to that term in
subsection 3.5A.
"Governmental Authorization" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal, state
or local governmental authority, agency or court.
"Hazardous Materials" means (i) any chemical, material or substance at
any time defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste", acutely
hazardous waste", "radioactive waste", "biohazardous waste", "pollutant", "toxic
pollutant", "contaminant", "restricted hazardous waste", "infectious waste",
"toxic substances", or any other term or expression intended to define, list or
classify substances by reason of properties harmful to health, safety or the
indoor or outdoor environment (including harmful properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive
toxicity, "TCLP toxicity" or "EP toxicity" or words of similar import under any
applicable Environmental Laws); (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids, produced waters and
other wastes associated with the exploration, development or production of crude
oil, natural gas or geothermal resources; (iv) any flammable substances or
explosives; (v) any radioactive materials; (vi) any asbestos-containing
materials; (vii) urea formaldehyde foam insulation; (viii) electrical equipment
which contains any oil or dielectric fluid containing polychlorinated biphenyls;
(ix) pesticides; and (x) any other chemical, material or substance, exposure to
which is prohibited, limited or regulated by any governmental authority or which
may or could pose a hazard to the health and safety of the owners, occupants or
any Persons in the vicinity of any Facility or to the indoor or outdoor
environment.
"Hazardous Materials Activity" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment,
17
abatement, removal, remediation, disposal, disposition or handling of any
Hazardous Materials, and any corrective action or response action with respect
to any of the foregoing.
"Hedge Agreement" means an Interest Rate Agreement or a Currency
Agreement designed to hedge against fluctuations in interest rates or currency
values, respectively.
"Inactive Subsidiary" has the meaning assigned to that term in
subsection 5.1E.
"Indebtedness", as applied to any Person, means (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to Capital
Leases that is properly classified as a liability on a balance sheet in
conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
written instrument, excluding, in the case of both clauses (a) and (b), accounts
receivable from Company and its Subsidiaries arising in the ordinary course of
business, and (v) all indebtedness secured by any Lien on any property or asset
owned or held by that Person regardless of whether the indebtedness secured
thereby shall have been assumed by that Person or is nonrecourse to the credit
of that Person. Obligations under Interest Rate Agreements and Currency
Agreements constitute (1) in the case of Hedge Agreements, Contingent
Obligations, and (2) in all other cases, Investments, and in neither case
constitute Indebtedness.
"Indemnified Liabilities" has the meaning assigned to that term in
subsection 10.3.
"Indemnitee" has the meaning assigned to that term in subsection 10.3.
"Intellectual Property" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes used in or necessary for the
conduct of the business of Company and its Subsidiaries as currently conducted
that are material to the condition (financial or otherwise), business or
operations of Company and its Subsidiaries, taken as a whole.
"Interest Payment Date" means (i) with respect to any Base Rate Loan,
the last Business Day of each January, April, July and October of each year,
commencing on the first such date to occur after the Closing Date; provided,
--------
however, that the first Interest Payment Date with respect to any Base Rate Loan
- -------
shall be October 31, 1999 and (ii) with respect to any Eurodollar Rate Loan or
Domestic Sterling Rate Loan, the last day of each Interest Period applicable to
such Loan; provided that in the case of each Interest Period of six or twelve
--------
months "Interest Payment Date" shall also include each date that is three
months, or an integral multiple thereof, after the commencement of such Interest
Period.
"Interest Period" has the meaning assigned to that term in subsection
2.2B.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement.
18
"Interest Rate Determination Date" means each date for calculating the
Adjusted Eurodollar Rate or the Adjusted Domestic Sterling Rate, for purposes of
determining the interest rate in respect of an Interest Period. The Interest
Rate Determination Date in respect of calculating the Adjusted Eurodollar Rate
and the Adjusted Domestic Sterling Rate shall be the second Business Day prior
to the first day of the related Interest Period.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary of
Company), (ii) any direct or indirect redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of Company from any Person other than
Company or any of its Subsidiaries, of any equity Securities of such Subsidiary,
(iii) any direct or indirect loan, advance (other than advances to employees for
moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by
Company or any of its Subsidiaries to any other Person, including all
indebtedness and accounts receivable from that other Person that, in the case of
accounts receivable from Persons other than Company and its Subsidiaries, are
not current assets or did not arise from sales to that other Person in the
ordinary course of business and, in the case of accounts receivable from Company
and its Subsidiaries, did not arise in the ordinary course of business, or (iv)
Interest Rate Agreements or Currency Agreements not constituting Hedge
Agreements. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment and minus the amount of any return of capital
contributed in respect of any Investment (not to exceed the original cost of
such Investment plus the cost of all additions thereto).
"Issuing Lender" means, with respect to any Letter of Credit, Wells
Fargo.
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided
--------
that in no event shall any Subsidiary of any Person be considered to be a Joint
Venture to which such Person is a party.
"Lender" and "Lenders" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their successors
and permitted assigns pursuant to subsection 10.1, and the term "Lenders" shall
include Swing Line Lender unless the context otherwise requires; provided that
the term "Lenders", when used in the context of a particular Commitment, shall
mean Lenders having that Commitment.
"Letter of Credit" or "Letters of Credit" means (i) any letter of
credit or similar instrument issued or to be issued by the Issuing Lender for
the account of Company pursuant to subsection 3.1 for the purpose of supporting
(a) Indebtedness of Company or any of its Subsidiaries in respect of industrial
revenue or development bonds or financings, (b) workers' compensation
liabilities of Company or any of its Subsidiaries, (c) the obligations of third
party insurers of Company or any of its Subsidiaries arising by virtue of the
laws of any jurisdiction requiring third party insurers, (d) obligations with
respect to Capital Leases or Operating Leases
19
of Company or any of its Subsidiaries, and (e) performance, payment, deposit or
surety obligations of Company or any of its Subsidiaries, in any case if
required by law or governmental rule or regulation or in accordance with custom
and practice in the industry; provided that Letters of Credit may not be issued
--------
for the purpose of supporting any Indebtedness constituting "antecedent debt"
(as that term is used in Section 547 of the Bankruptcy Code), and (ii) the
Existing Company Letters of Credit.
"Letter of Credit Usage" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter may
become available for drawing under all Letters of Credit then outstanding plus
----
(ii) the aggregate amount of all drawings under Letters of Credit honored by the
Issuing Lender and not theretofore reimbursed by Company (including any such
reimbursement out of the proceeds of Revolving Dollar Loans pursuant to
subsection 3.3B). For purposes of this definition, any amount described in
clause (i) or (ii) of the preceding sentence which is denominated in a currency
other than Dollars shall be valued based on the applicable Exchange Rate for
such currency as of the applicable date of determination.
"Leverage Ratio" means, as at any date of determination, the ratio of
(i) Consolidated Total Funded Debt as of such date to (ii) Consolidated EBITDA
for the four-Fiscal Quarter period ending on such date.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"Loan" or "Loans" means one or more of the Term Loans, Revolving Loans
or Swing Line Loans or any combination thereof.
"Loan Documents" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or other documents
or certificates executed by Company in favor of the Issuing Lender relating to,
the Letters of Credit), the Subsidiary Guaranty and the Collateral Documents.
"Loan Party" means each of Company and any Subsidiary Guarantor, and
"Loan Parties" means all such Persons, collectively.
"Margin Stock" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from time
to time.
"Material Adverse Effect", as applied to any Person, means (i) a
material adverse effect upon the business, operations, properties, assets,
liabilities, financial condition or prospects of such Person and its
Subsidiaries, taken as a whole, or (ii) the material impairment of the ability
of any Loan Party to perform, or of Administrative Agent or Lenders to enforce,
the Obligations.
20
"Material Real Property" means, as at any date of determination, any
fee interest in real property of Company or any of its Subsidiaries having a
fair market value of $10,000,000 or more.
"Maximum Consolidated Capital Expenditures Amount" has the meaning
assigned to that term in subsection 7.8.
"Merger" means the merger of DMG with Merger Sub in accordance with
the terms of the Merger Agreement, with DMG being the surviving corporation in
such Merger.
"Merger Agreement" means that certain Agreement and Plan of Merger by
and among DMG, Company and Merger Sub dated as of May 5, 1999 in the form
delivered to Administrative Agent and Lenders prior to their execution of this
Agreement and as such agreement may be amended from time to time thereafter to
the extent permitted under subsection 7.13A.
"Merger Date" means the date that the Merger becomes effective in
accordance with the terms of the Merger Agreement.
"Merger Date Loan Documents" means the Subsidiary Guaranty and the
Pledge and Security Agreement.
"Merger Date Loan Parties" means each of the Domestic Subsidiaries of
DMG required to execute the Subsidiary Guaranty pursuant to subsection 4.2.
"Merger Sub" means Demeter Acquisition Corporation, a Delaware
corporation and a wholly-owned Subsidiary of Company.
"Minimum Shares" means more than 50% of the shares of DMG Common
Stock, on a fully diluted basis.
"Morgan Stanley" has the meaning assigned to that term in the
introduction to this Agreement.
"Mortgage" means a security instrument (whether designated as a deed
of trust or a mortgage or by any similar title) executed and delivered by any
Loan Party, in such form as may be approved by Administrative Agent in its sole
discretion, with such changes thereto as may be recommended by Administrative
Agent's local counsel based on local laws or customary local mortgage or deed of
trust practices. "Mortgages" means all such instruments, collectively.
"Mortgaged Property" has the meaning assigned to that term in
subsection 6.8.
"Multiemployer Plan" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"National Currency Unit" means the unit of currency (other than a euro
Unit) of a Participating Member State.
21
"Net Asset Sale Proceeds" means, with respect to any Asset Sale by
Company or any of its Subsidiaries, Cash payments (including any Cash received
by way of deferred payment pursuant to, or by monetization of, a note receivable
or otherwise, but only as and when so received) received from such Asset Sale,
net of any bona fide direct costs incurred in connection with such Asset Sale,
including (i) income taxes reasonably estimated to be actually payable within
two years of the date of such Asset Sale as a result of any gain recognized in
connection with such Asset Sale and (ii) payment of the outstanding principal
amount of, premium or penalty, if any, and interest on any Indebtedness (other
than the Loans) that is secured by a Lien on the stock or assets in question and
that is required to be repaid under the terms thereof as a result of such Asset
Sale.
"Net Debt Securities Proceeds" has the meaning assigned to that term
in subsection 2.4B(iii)(d).
"Net Equity Securities Proceeds" has the meaning assigned to that term
in subsection 2.4B(iii)(e).
"Net Insurance/Condemnation Proceeds" means any Cash payments or
proceeds attributable to a loss by Company or any of its Subsidiaries (i) under
any business interruption or casualty insurance policy in respect of a covered
loss thereunder or (ii) as a result of the taking of any assets of Company or
any of its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of any
actual and reasonable documented costs incurred by Company or any of its
Subsidiaries in respect thereof.
"Net Pension Proceeds" has the meaning assigned to that term in
subsection 2.4B(iii)(c).
"Net Proceeds Amount" has the meaning assigned to that term in
subsection 2.4B(iii)(g).
"Non-US Lender" has the meaning assigned to that term in subsection
2.7B(iii)(a).
"Notes" means one or more of the Revolving Notes, Tranche A Term
Notes, Tranche B Term Notes, Tranche C Term Notes or Swing Line Note or any
combination thereof.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit I annexed hereto delivered by Company to Administrative Agent pursuant
- ---------
to subsection 2.1B with respect to a proposed borrowing.
"Notice of Conversion/Continuation" means a notice substantially in
the form of Exhibit II annexed hereto delivered by Company to Administrative
----------
Agent pursuant to subsection 2.2D with respect to a proposed conversion or
continuation of the applicable basis for determining the interest rate with
respect to the Loans specified therein.
22
"Notice of Issuance of Letter of Credit" means a notice substantially
in the form of Exhibit III annexed hereto delivered by Company to Administrative
-----------
Agent pursuant to subsection 3.1B(i) with respect to the proposed issuance of a
Letter of Credit.
"Obligations" means all obligations of every nature of each Loan Party
from time to time owed to Administrative Agent, Lenders or any of them under the
Loan Documents, whether for principal, interest, reimbursement of amounts drawn
under Letters of Credit, fees, expenses, indemnification or otherwise.
"Officer's Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its president or by its
chief financial officer; provided that every Officer's Certificate with respect
--------
to the compliance with a condition precedent to the making of any Loans
hereunder shall include (i) a statement that the officer making or giving such
Officer's Certificate has read such condition and any definitions or other
provisions contained in this Agreement relating thereto, (ii) a statement that,
in the opinion of the signer, he or she has made or has caused to be made such
examination or investigation as is necessary to enable such signer to express an
informed opinion as to whether or not such condition has been complied with, and
(iii) a statement as to whether, in the opinion of the signer, such condition
has been complied with.
"Operating Lease" as applied to any Person, means any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) that is not a Capital Lease other than any
such lease under which that Person is the lessor.
"Organizational Documents" means (i) with respect to any corporation,
its certificate or articles of incorporation and its bylaws, (ii) with respect
to any limited partnership, its certificate of limited partnership and its
partnership agreement, (iii) with respect to any general partnership, its
partnership agreement, (iv) with respect to any limited liability company, its
articles or certificate of organization and its operating agreement, and (v)
with respect to any other entity, its equivalent organizational, governing
documents.
"Original Currency" has the meaning assigned to that term in
subsection 10.20A.
"Other Currency" has the meaning assigned to that term in subsection
10.20A.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Participating Member State" means each state so described in any EMU
Legislation.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"Permitted Encumbrances" means the following types of Liens (excluding
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by ERISA, any such Lien relating to or imposed in connection
with any Environmental Claim):
23
(i) Liens for taxes, assessments or governmental charges or claims
the payment of which is not, at the time, required by subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of banks and
rights of set-off, statutory Liens of carriers, warehousemen, mechanics,
repairmen, workmen and materialmen, and other Liens imposed by law, in each
case incurred in the ordinary course of business (a) for amounts not yet
overdue or (b) for amounts that are overdue and that (in the case of any
such amounts overdue for a period in excess of five days) are being
contested in good faith by appropriate proceedings, so long as (1) such
reserves or other appropriate provisions, if any, as shall be required by
GAAP shall have been made for any such contested amounts, and (2) in the
case of a Lien with respect to any portion of the Collateral, such contest
proceedings operate to stay the sale of any portion of the Collateral on
account of such Lien;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, surety, bid and appeal bonds, bids, leases,
government contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money), so long as no foreclosure, sale or similar
proceedings have been commenced with respect to any portion of the
Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting an Event of
Default under subsection 8.8;
(v) leases or subleases granted to third parties in accordance with
any applicable terms of the Collateral Documents and not interfering in any
material respect with the ordinary conduct of the business of Company or
any of its Subsidiaries;
(vi) easements, rights-of-way, restrictions, encroachments, and
other minor defects or irregularities in title, in each case which do not
and will not interfere in any material respect with the ordinary conduct of
the business of Company or any of its Subsidiaries;
(vii) any (a) interest or title of a lessor or sublessor under any
lease not prohibited by this Agreement, (b) restriction or encumbrance that
the interest or title of such lessor or sublessor may be subject to, or (c)
subordination of the interest of the lessee or sublessee under such lease
to any restriction or encumbrance referred to in the preceding clause (b),
so long as the holder of such restriction or encumbrance agrees to
recognize the rights of such lessee or sublessee under any such material
lease;
(viii) Liens arising from filing UCC financing statements relating
solely to leases and Liens permitted by this Agreement;
(ix) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
24
(x) any zoning or similar law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property; and
(xi) licenses of patents, trademarks and other intellectual property
rights granted by Company or any of its Subsidiaries in the ordinary course
of business and not interfering in any material respect with the ordinary
conduct of the business of Company or such Subsidiary.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"Pledge and Security Agreement" means the Pledge and Security
Agreement executed and delivered by the Closing Date Loan Parties on the Closing
Date and the Merger Date Loan Parties on the Merger Date and to be executed and
delivered by additional Subsidiaries of Company from time to time thereafter in
accordance with subsection 6.7, substantially in the form of Exhibit XV annexed
----------
hereto, as such Pledge and Security Agreement may thereafter be amended,
supplemented or otherwise modified from time to time.
"Pledged Collateral" means, collectively, the "Pledged Collateral" as
defined in the Pledge and Security Agreement and the Tender Pledge Agreement.
"Potential Event of Default" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"Prime Rate" means the rate most recently announced by Wells Fargo at
its principal office in San Francisco from time to time as its "Prime Rate." The
Prime Rate is one of Wells Fargo's base rates and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto, and is evidenced by the recording thereof after its announcement in
such internal publication or publications as Wells Fargo may designate. Wells
Fargo or any other Lender may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate. Any change in the interest rate
resulting from a change in such Prime Rate shall become effective as of 12:01
A.M. (San Francisco time) of the Business Day on which each change in Prime Rate
is announced by Wells Fargo.
"Pro Rata Share" means (i) with respect to all payments, computations
and other matters relating to the Tranche A Term Loan Commitment or the Tranche
A Term Loan of any Lender, the percentage obtained by dividing (a) the Tranche A
--------
Term Loan Exposure of that Lender by (b) the aggregate Tranche A Term Loan
--
Exposure of all Lenders, (ii) with respect to all payments, computations and
other matters relating to the Tranche B Term Loan Commitment or the Tranche B
Term Loan of any Lender, the percentage obtained by dividing (a) the Tranche B
--------
Term Loan Exposure of that Lender by (b) the aggregate Tranche B Term Loan
--
Exposure of all Lenders, (iii) with respect to all payments, computations and
other matters relating to the Tranche C Term Loan Commitment or the Tranche C
Term Loan of any Lender, the percentage
25
obtained by dividing (a) the Tranche C Term Loan Exposure of that Lender by (b)
--------
the aggregate Tranche C Term Loan Exposure of all Lenders, (iv) with respect to
all payments, computations and other matters relating to the Revolving Loan
Commitment or the Revolving Loans of any Lender or any Letters of Credit issued
or participations therein purchased by any Lender or any participations in any
Swing Line Loans purchased by any Lender, the percentage obtained by dividing
--------
(a) the Revolving Loan Exposure of that Lender by (b) the aggregate Revolving
--
Loan Exposure of all Lenders, and (v) for all other purposes with respect to
each Lender, the percentage obtained by dividing (a) the sum of the Tranche A
--------
Term Loan Exposure of that Lender plus the Tranche B Term Loan Exposure of that
----
Lender plus the Tranche C Term Loan Exposure of that Lender plus the Revolving
---- ----
Loan Exposure of that Lender by (b) the sum of the aggregate Tranche A Term Loan
--
Exposure of all Lenders plus the aggregate Tranche B Term Loan Exposure of all
----
Lenders plus the aggregate Tranche C Term Loan Exposure of all Lenders plus the
----
aggregate Revolving Loan Exposure of all Lenders, in any such case as the
applicable percentage may be adjusted by assignments permitted pursuant to
subsection 10.1. The initial Pro Rata Share of each Lender for purposes of each
of clauses (i), (ii), (iii), (iv) and (v) of the preceding sentence is set forth
opposite the name of that Lender in Schedule 2.1 annexed hereto.
------------
"Proceedings" has the meaning assigned to that term in subsection
6.1(ix).
"Projections" means the consolidated projected balance sheets and
consolidated projected statements of income and cash flows of Company and its
Subsidiaries, prepared by Company assuming the Merger has been consummated, for
each of Fiscal Years 1999 through 2007 delivered to Administrative Agent by
Company under cover of a letter dated May 3, 1999.
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in the opinion
of Administrative Agent, desirable in order to create or perfect Liens on any
Collateral.
"RCBA" means RCBA Strategic Partners, L.P., a Delaware limited
partnership.
"RCBA Registration Rights Agreement" means the Registration Rights
Agreement dated as of the Closing Date between Company and RCBA, as such
agreement may be amended from time to time to the extent permitted under
subsection 7.13B.
"Real Property Asset" means, at any date of determination, any
interest then owned by any Loan Party in any real property.
"Reference Banks" means the banks designated by the British Bankers'
Association as the reference panel of banks that reflect the balance of the
London interbank market.
"Refunded Swing Line Loans" has the meaning assigned to that term in
subsection 2.1A(vi).
"Register" has the meaning assigned to that term in subsection 2.1D.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
26
"Reimbursement Date" has the meaning assigned to that term in
subsection 3.3B.
"Related Agreements" means, collectively, the Merger Agreement, the
Bridge Loan Agreement or the Senior Subordinated Note Indenture, as the case may
be, the Securities Purchase Agreement, the Company Certificates of Designation,
the RCBA Registration Rights Agreement, the Warrant Agreements to be entered
into between Company and the parties to the Bridge Loan Agreement, the Warrants
to be issued thereunder, and the Subsidiary Guaranty to be executed by the
Subsidiary Guarantors for the benefit of the parties to the Bridge Loan
Agreement.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including, without limitation, the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Materials), including the movement of any Hazardous Materials through the air,
soil, surface water or groundwater.
"Requisite Class Lenders" means, at any date of determination (i) for
the Class of Lenders having Tranche A Term Loan Exposure and/or Revolving Loan
Exposure, Lenders having or holding at least 51% of the sum of the aggregate
Tranche A Term Loan Exposure of all Lenders plus the aggregate Revolving Loan
----
Exposure of all Lenders, (ii) for the Class of Lenders having Tranche B Term
Loan Exposure, Lenders having or holding at least 51% of the aggregate Tranche B
Term Loan Exposure of all Lenders and (iii) for the Class of Lenders having
Tranche C Term Loan Exposure, Lenders having or holding more than at least 51%
of the aggregate Tranche C Term Loan Exposure of all Lenders.
"Requisite Lenders" means, at any date of determination, two or more
Lenders having or holding at least 51% of the sum of (i) the aggregate Tranche A
Term Loan Exposure of all Lenders plus (ii) the aggregate Tranche B Term Loan
----
Exposure of all Lenders plus (iii) the aggregate Tranche C Term Loan Exposure of
----
all Lenders plus (iv) the aggregate Revolving Loan Exposure of all Lenders;
----
provided, however, that if as of any date of determination there is only one
- -------- -------
Lender, then such Lender shall constitute Requisite Lenders.
"Responsible Officer" means, with respect to any Person, the chief
executive officer, the chief financial officer, the president, the general
counsel or any other employee who is a member of the Board of Directors of such
Person.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company or any of its Subsidiaries now or hereafter outstanding, except a
dividend payable solely in shares of that class of stock to the holders of that
class, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of stock of Company or any of its Subsidiaries now or hereafter
outstanding, (iii) any payment made to retire, or to obtain the surrender of,
any outstanding warrants, options or other rights to acquire shares of any class
of stock of Company or any of its Subsidiaries now or hereafter outstanding, and
(iv) any payment or prepayment of principal of, premium, if any, or interest on,
or
27
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any Subordinated
Indebtedness.
"Reuters" means the display designated as Page LIBOR 01 (as to
Sterling) on the Reuters Service or such other screen by the Reuters Service as
shall display the London interbank offered rates for deposits in Sterling quoted
by selected banks.
"Revolving Dollar Loans" means the Revolving Loans denominated and
payable in Dollars made by Lenders to Company pursuant to subsection 2.1A(iv).
"Revolving Loan Commitment" means the commitment of a Lender to make
Revolving Dollar Loans and Revolving Sterling Loans to Company pursuant to
subsections 2.1A(iv) and 2.1A(v), and "Revolving Loan Commitments" means such
commitments of all Lenders in the aggregate.
"Revolving Loan Commitment Termination Date" means June 9, 2005.
"Revolving Loan Exposure" means, with respect to any Lender as of any
date of determination (i) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Lender plus (b) in
----
the event that Lender is the Issuing Lender, the aggregate Letter of Credit
Usage in respect of all Letters of Credit issued by that Lender (in each case
net of any participations purchased by other Lenders in such Letters of Credit
or any unreimbursed drawings thereunder) plus (c) the aggregate amount of all
----
participations purchased by that Lender in any outstanding Letters of Credit or
any unreimbursed drawings under any Letters of Credit plus (d) in the case of
----
Swing Line Lender, the aggregate outstanding principal amount of all Swing Line
Loans (net of any participations therein purchased by other Lenders) plus (e)
----
the aggregate amount of all participations purchased by that Lender in any
outstanding Swing Line Loans.
"Revolving Loans" means one or more of the Revolving Dollar Loans and
the Revolving Sterling Loans, or any combination thereof.
"Revolving Notes" means (i) the promissory notes of Company issued
pursuant to subsection 2.1E on the Closing Date and (ii) any promissory notes
issued by Company pursuant to the last sentence of subsection 10.1B(i) in
connection with assignments of the Revolving Loan Commitments and Revolving
Loans of any Lenders, in each case substantially in the form of Exhibit IV
----------
annexed hereto, as they may be amended, supplemented or otherwise modified from
time to time.
"Revolving Sterling Loans" means the Revolving Loans denominated and
payable in Sterling made by Lenders to Company pursuant to subsection 2.1A(v).
"Revolving Sterling Loan Commitment" means the commitment of a Lender
to make Revolving Sterling Loans to Company pursuant to subsection 2.1A(v), and
"Revolving Sterling Loan Commitments" means such commitments of all Lenders in
the aggregate.
28
"Rollover Notes" means the subordinated promissory notes issued by
Company pursuant to the Bridge Loan Agreement in the event the Bridge Notes are
not paid in full on or prior to June 9, 2000.
"Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any profit-
sharing agreement or arrangement, options, warrants, bonds, debentures, notes,
or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"Securities Purchase Agreement" means the Securities Purchase
Agreement dated as of May 5, 1999 by and between RCBA and Company, in the form
delivered to Administrative Agent and Lenders prior to their execution of this
Agreement and as such agreement may be amended from time to time thereafter to
the extent permitted under subsection 7.13A.
"Senior Subordinated Note Indenture" means the Senior Subordinated
Indenture among Company and the trustee named therein pursuant to which the
Senior Subordinated Notes are issued, as such indenture may be amended from time
to time to the extent permitted under subsection 7.13B.
"Senior Subordinated Notes" means the Senior Subordinated Notes due
2009 of Company issued pursuant to the Senior Subordinated Note Indenture.
"Significant Subsidiary" means, as of any date of determination, any
Subsidiary of Company that, together with its Subsidiaries, (i) for the most
recent Fiscal Year accounted for more than 5% of the consolidated revenues of
Company and its Subsidiaries or (ii) as of the end of such Fiscal Year was the
owner of more than 5% of the consolidated assets of Company and its
Subsidiaries, all as set forth on the most recently available consolidated
financial statements of Company and its Subsidiaries for such Fiscal Year.
"Solvent" means, with respect to any Person, that as of the date of
determination both (i) (a) the then fair saleable value of the property of such
Person is (1) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (2) not less than the amount that will be
required 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; (b) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (c) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (ii) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any
29
time shall be computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
"Spot Rate" for Dollars or Sterling means the rate quoted by Wells
Fargo as the spot rate for the purchase by Wells Fargo of such currency with the
other currency through its foreign exchange desk at approximately 11:00 A.M.
(San Francisco time) on the date two Business Days prior to the date as of which
the foreign exchange computation is made.
"Sterling" and the sign "(Pounds)" mean the lawful money of the United
Kingdom.
"Subordinated Indebtedness" means (i) the Existing Subordinated
Indebtedness, (ii) the Senior Subordinated Notes, (iii) the Bridge Notes, (iv)
the Rollover Notes and (v) any other Indebtedness of Company or any of its
Subsidiaries subordinated in right of payment to the Obligations pursuant to
documentation containing maturities, amortization schedules, covenants,
defaults, remedies, subordination provisions and other material terms in form
and substance satisfactory to Administrative Agent and Requisite Lenders.
"Subsequent Acquisition" has the meaning assigned to that term in
subsection 7.7(vi).
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, association, or other business entity of
which more than 50% of the total voting power of shares of stock or other
ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof; provided that in no event shall any Joint Venture be considered to be a
--------
Subsidiary of any Person.
"Subsidiary Guarantor" means DMG and any Domestic Subsidiary of
Company and any Domestic Subsidiary of DMG that executes and delivers the
Subsidiary Guaranty on the Closing Date or the Merger Date or from time to time
thereafter pursuant to subsection 6.7.
"Subsidiary Guaranty" means the Subsidiary Guaranty executed and
delivered by DMG and certain existing Subsidiaries of Company on the Closing
Date and certain existing Subsidiaries of DMG on the Merger Date and to be
executed and delivered by additional Subsidiaries of Company from time to time
thereafter in accordance with subsection 6.7 substantially in the form of
Exhibit XVI annexed hereto, as such Subsidiary Guaranty may hereafter be
- -----------
amended, supplemented or otherwise modified from time to time.
"Supplemental Collateral Agent" has the meaning assigned to that term
in subsection 9.1B.
"Surviving Corporation" has the meaning assigned to that term in the
Recitals to this Agreement.
30
"Surviving Corporation Common Stock" has the meaning assigned to that
term in the Recitals to this Agreement.
"Swing Line Lender" means Wells Fargo, or any Person serving as a
successor Administrative Agent hereunder, in its capacity as Swing Line Lender
hereunder.
"Swing Line Loan Commitment" means the commitment of Swing Line Lender
to make Swing Line Loans to Company pursuant to subsection 2.1A(vi).
"Swing Line Loans" means the Loans made by Swing Line Lender to
Company pursuant to subsection 2.1A(vi).
"Swing Line Note" means any promissory note of Company issued pursuant
to subsection 2.1E to evidence the Swing Line Loans of Swing Line Lender,
substantially in the form of Exhibit VIII annexed hereto, as it may be amended,
------------
supplemented or otherwise modified from time to time.
"Syndication Agent" has the meaning assigned to that term in the
introduction to this Agreement.
"Target" has the meaning assigned to that term in subsection 7.7(vi).
"Tax" or "Taxes" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed; provided that "Tax on the overall net income" of a Person shall be
--------
construed as a reference to a tax imposed by the jurisdiction in which that
Person is organized or in which that Person's principal office (and/or, in the
case of a Lender, its lending office) is located or in which that Person
(and/or, in the case of a Lender, its lending office) is deemed to be doing
business on all or part of the net income, profits or gains (whether worldwide,
or only insofar as such income, profits or gains are considered to arise in or
to relate to a particular jurisdiction, or otherwise) of that Person (and/or, in
the case of a Lender, its lending office).
"Tender Offer" means the offer to purchase for cash all of the
outstanding shares of DMG Common Stock by Company pursuant to the Tender Offer
Materials.
"Tender Offer Materials" means the Tender Offer Statement on Schedule
14D-1 filed by Merger Sub on May 11, 1999 with the Securities and Exchange
Commission pursuant to Section 14(d)(1) of the Exchange Act, together with all
exhibits thereto, including the form of "Offer to Purchase For Cash", set forth
in Exhibit (a)(1) thereto, and any amendments prior to the date hereof that
relate only to any extension of time during which the offer to purchase remains
outstanding or to the results of the Tender Offer and other amendments that are
approved by Requisite Lenders.
"Tender Pledge Agreement" means the Pledge Agreement executed and
delivered by DMG on the Closing Date, substantially in the form of Exhibit XVII
------------
annexed hereto, as such Pledge Agreement may thereafter be amended, supplemented
or otherwise modified from time to time.
31
"Tendered Shares" means all shares of DMG Common Stock tendered to and
purchased by Merger Sub pursuant to the Tender Offer.
"Term Loans" means, collectively, the Tranche A Term Loans, the
Tranche B Term Loans and the Tranche C Term Loans.
"Total Purchase Price" means, with respect to any Subsequent
Acquisition, (i) the sum, without duplication, of (a) the aggregate amount of
all consideration payable by or on behalf of Company or any of its Subsidiaries
in connection with such Subsequent Acquisition in Cash, property (including
Securities of Company), services, notes, bonds, debentures or other debt
instruments, (b) the aggregate principal amount of all Indebtedness assumed by
Company or any or its Subsidiaries in connection with such Subsequent
Acquisition, (c) the reasonable estimate of the amount of any Contingent
Obligation of Company or any of its Subsidiaries incurred in connection with
such Subsequent Acquisition, and (d) the aggregate amount of any Indebtedness
incurred by Company or any Subsidiary in connection with such Subsequent
Acquisition minus (ii) all Cash and Cash Equivalents acquired by Company or any
-----
of its Subsidiaries as a result of such Subsequent Acquisition. For purposes of
this definition, any amount which is payable in a currency other than Dollars
shall be valued based on the applicable Exchange Rate for such currency as of
the date of such Subsequent Acquisition.
"Total Utilization of Revolving Loan Commitments" means, as at any
date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the purpose of
repaying any Refunded Swing Line Loans or reimbursing the Issuing Lender for any
amount drawn under any Letter of Credit but not yet so applied) plus (ii) the
----
aggregate principal amount of all outstanding Swing Line Loans plus (iii) the
----
Letter of Credit Usage.
"Tranche A Term Loan Commitment" means the commitment of a Lender to
make a Tranche A Term Loan to Company pursuant to subsection 2.1A(i), and
"Tranche A Term Loan Commitments" means such commitments of all Lenders in the
aggregate.
"Tranche A Term Loan Commitment Termination Date" means the date that
is 180 days after the Closing Date.
"Tranche A Term Loan Exposure" means, with respect to any Lender as of
any date of determination (i) prior to the funding of the Tranche A Term Loans,
that Lender's Tranche A Term Loan Commitment and (ii) after the funding of the
Tranche A Term Loans, the outstanding principal amount of the Tranche A Term
Loan of that Lender.
"Tranche A Term Loan Maturity Date" means June 9, 2005.
"Tranche A Term Loans" means the Loans made by Lenders to Company
pursuant to subsection 2.1A(i).
"Tranche A Term Notes" means (i) the promissory notes of Company
issued pursuant to subsection 21E on the Closing Date and (ii) any promissory
notes issued by Company pursuant to the last sentence of subsection 10.1B(i) in
connection with assignments of the Tranche A Term Loan Commitments or Tranche A
Term Loans of any Lenders, in each case
32
substantially in the form of Exhibit V annexed hereto, as they may be amended,
---------
supplemented or otherwise modified from time to time.
"Tranche B Term Loan Commitment" means the commitment of a Lender to
make a Tranche B Term Loan to Company pursuant to subsection 2.1A(ii), and
"Tranche B Term Loan Commitments" means such commitments of all Lenders in the
aggregate.
"Tranche B Term Loan Exposure" means, with respect to any Lender as of
any date of determination (i) prior to the funding of the Tranche B Term Loans,
that Lender's Tranche B Term Loan Commitment and (ii) after the funding of the
Tranche B Term Loans, the outstanding principal amount of the Tranche B Term
Loan of that Lender.
"Tranche B Term Loan Maturity Date" means June 9, 2006.
"Tranche B Term Loans" means the Loans made by Lenders to Company
pursuant to subsection 2.1A(ii).
"Tranche B Term Notes" means (i) the promissory notes of Company
issued pursuant to subsection 2.1E on the Closing Date and (ii) any promissory
notes issued by Company pursuant to the last sentence of subsection 10.1B(i) in
connection with assignments of the Tranche B Term Loan Commitments or Tranche B
Term Loans of any Lenders, in each case substantially in the form of Exhibit VI
----------
annexed hereto, as they may be amended, supplemented or otherwise modified from
time to time.
"Tranche C Term Loan Commitment" means the commitment of a Lender to
make a Tranche C Term Loan to Company pursuant to subsection 2.1A(iii), and
"Tranche C Term Loan Commitments" means such commitments of all Lenders in the
aggregate.
"Tranche C Term Loan Exposure" means, with respect to any Lender as of
any date of determination (i) prior to the funding of the Tranche C Term Loans,
that Lender's Tranche C Term Loan Commitment and (ii) after the funding of the
Tranche C Term Loans, the outstanding principal amount of the Tranche C Term
Loan of that Lender.
"Tranche C Term Loan Maturity Date" means June 9, 2007.
"Tranche C Term Loans" means the Loans made by Lenders to Company
pursuant to subsection 2.1A(iii).
"Tranche C Term Notes" means (i) the promissory notes of Company
issued pursuant to subsection 2.1E on the Closing Date and (ii) any promissory
notes issued by Company pursuant to the last sentence of subsection 10.1B(i) in
connection with assignments of the Tranche C Term Loan Commitments or Tranche C
Term Loans of any Lenders, in each case substantially in the form of Exhibit VII
-----------
annexed hereto, as they may be amended, supplemented or otherwise modified from
time to time.
"Transaction Costs" means the sum of (i) the fees, costs and expenses
payable by Company on or before the Closing Date in connection with the
transactions contemplated by the Loan Documents and the Related Agreements, (ii)
the fees payable by Company on or before
33
the Merger Date in connection with the transactions contemplated by the Loan
Documents and the Related Agreements and (iii) all expenses (including
attorney's fees and costs), damages and settlement payments payable in
connection with any litigation relating to the Tender Offer or the Merger.
"Treaty on European Union" means the Treaty of Rome of March 25, 1957,
as amended by the Single European Act 1986 and the Maastricht Treaty (which was
signed at Maastricht on February 7, 1992 and came into force on November 1,
1993), as amended from time to time.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"URS" means URS Corporation, a Delaware corporation, prior to
consummation of the Tender Offer.
"Wells Fargo" has the meaning assigned to that term in the
introduction to this Agreement.
"Year 2000 Compliant" has the meaning assigned to that term in
subsection 6.10.
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
------------------------------------------------------------------------
Agreement. Except as otherwise expressly provided in this Agreement, all
- ---------
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii),
and (xii) of subsection 6.1 shall be prepared in accordance with GAAP as in
effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 6.1(iv)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements referred to in subsection 5.3.
1.3 Other Definitional Provisions and Rules of Construction.
-------------------------------------------------------
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
C. The use herein of the word "include" or "including", when following
any general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not nonlimiting
language (such as "without limitation" or "but not limited to" or words of
similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that fall within the broadest possible scope
of such general statement, term or matter.
34
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Making of Loans; Notes.
-----------------------------------
A. Commitments. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of Company herein set forth,
each Lender hereby severally agrees to make the Loans described in subsections
2.1A(i), 2.1A(ii), 2.1A(iii), 2.1A(iv) and 2.1A(v), and Swing Line Lender hereby
agrees to make the Loans described in subsection 2.1A(vi).
(i) Tranche A Term Loans. Each Lender severally agrees to lend to
--------------------
Company on the Closing Date and on the Merger Date an amount not exceeding
its Pro Rata Share of the aggregate amount of the Tranche A Term Loan
Commitments to be used for the purposes identified in subsections 2.5A and
2.5B. The amount of each Lender's Tranche A Term Loan Commitment is set
forth opposite its name on Schedule 2.1 annexed hereto and the aggregate
------------
amount of the Tranche A Term Loan Commitments is $250,000,000; provided
--------
that the Tranche A Term Loan Commitments of Lenders shall be adjusted to
give effect to any assignments of the Tranche A Term Loan Commitments
pursuant to subsection 10.1B. Each Lender's Tranche A Term Loan Commitment
shall expire immediately and without further action on September 30, 1999,
if the Closing Date has not occurred on or before that date and shall
expire immediately and without further action on the Tranche A Term Loan
Commitment Termination Date if the Merger Date has not occurred on or
before that date. Company may make only two borrowings under the Tranche A
Term Loan Commitments. Amounts borrowed under this subsection 2.1A(i) and
subsequently repaid or prepaid may not be reborrowed.
(ii) Tranche B Term Loans. Each Lender severally agrees to lend to
--------------------
Company on the Closing Date an amount not exceeding its Pro Rata Share of
the aggregate amount of the Tranche B Term Loan Commitments to be used for
the purposes identified in subsection 2.5A. The amount of each Lender's
Tranche B Term Loan Commitment is set forth opposite its name on Schedule
--------
2.1 annexed hereto and the aggregate amount of the Tranche B Term Loan
---
Commitments is $100,000,000; provided that the Tranche B Term Loan
--------
Commitments of Lenders shall be adjusted to give effect to any assignments
of the Tranche B Term Loan Commitments pursuant to subsection 10.1B. Each
Lender's Tranche B Term Loan Commitment shall expire immediately and
without further action on September 30, 1999 if the Tranche B Term Loans
are not made on or before that date. Company may make only one borrowing
under the Tranche B Term Loan Commitments. Amounts borrowed under this
subsection 2.1A(ii) and subsequently repaid or prepaid may not be
reborrowed.
(iii) Tranche C Term Loans. Each Lender severally agrees to lend to
--------------------
Company on the Closing Date an amount not exceeding its Pro Rata Share of
the aggregate amount of the Tranche C Term Loan Commitments to be used for
the purposes identified in subsection 2.5A. The amount of each Lender's
Tranche C Term Loan Commitment is set forth opposite its name on Schedule
--------
2.1 annexed hereto and the aggregate amount of the Tranche C Term Loan
---
Commitments is $100,000,000; provided that the Tranche C Term
--------
35
Loan Commitments of Lenders shall be adjusted to give effect to any
assignments of the Tranche C Term Loan Commitments pursuant to subsection
101.B. Each Lender's Tranche C Term Loan Commitment shall expire
immediately and without further action on September 30, 1999 if the Tranche
C Term Loans are not made on or before that date. Company may make only one
borrowing under the Trance C Term Loan Commitments. Amounts borrowed under
this subsection 2.1A(iii) and subsequently repaid or prepaid may not be
reborrowed.
(iv) Revolving Dollar Loans. Each Lender severally agrees, subject to
----------------------
the limitations set forth below with respect to the maximum amount of
Revolving Dollar Loans permitted to be outstanding from time to time, to
lend to Company from time to time during the period from the Closing Date
to but excluding the Revolving Loan Commitment Termination Date an
aggregate amount, the Dollar Equivalent of which shall not exceed its Pro
Rata Share of the aggregate amount of the Revolving Dollar Loan Commitments
to be used for the purposes identified in subsection 2.5C. The original
amount of each Lender's Revolving Dollar Loan Commitment is set forth
opposite its name on Schedule 2.1 annexed hereto and the aggregate original
------------
amount of the Revolving Dollar Loan Commitments is $100,000,000; provided
--------
that the Revolving Dollar Loan Commitments of Lenders shall be adjusted to
give effect to any assignments of the Revolving Dollar Loan Commitments
pursuant to subsection 10.1B. Each Lender's Revolving Dollar Loan
Commitment shall expire on the Revolving Loan Commitment Termination Date
and all Revolving Dollar Loans and all other amounts owed hereunder with
respect to the Revolving Dollar Loans and the Revolving Dollar Loan
Commitments shall be paid in full no later than that date; provided that
--------
each Lender's Revolving Dollar Loan Commitment shall expire immediately and
without further action on September 30, 1999 if the Tranche C Term Loans
are not made on or before that date. Amounts borrowed under this subsection
2.1A(iv) may be repaid and reborrowed to but excluding the Revolving Loan
Commitment Termination Date.
(v) Revolving Sterling Loans. Each Lender severally agrees, subject
------------------------
to the limitations set forth below with respect to the maximum amount of
Revolving Sterling Loans permitted to be outstanding from time to time, to
lend to Company a portion of the Revolving Loan Commitments from time to
time during the period from the Closing Date to but excluding the Revolving
Loan Commitment Termination Date an aggregate amount, the Dollar Equivalent
of which shall not exceed its Pro Rata Share of the aggregate amount of the
Revolving Sterling Loan Commitments to be used for the purposes identified
in subsection 2.5C. The original amount of each Lender's Revolving Sterling
Loan Commitment is set forth opposite its name on Schedule 2.1 annexed
------------
hereto and the aggregate original amount of the Revolving Sterling Loan
Commitments is $15,000,000; provided that the Revolving Sterling Loan
--------
Commitments of Lenders shall be adjusted to give effect to any assignments
of the Revolving Loan Commitments pursuant to subsection 10.1B. Each
Lender's Revolving Sterling Loan Commitment shall expire on the Revolving
Loan Commitment Termination Date and all Revolving Sterling Loans and all
other amounts owed hereunder with respect to the Revolving Sterling Loans
and the Revolving Sterling Loan Commitments shall be paid in full no later
than that date; provided that each Lender's Revolving Sterling Loan
--------
Commitment shall expire immediately and without further action on September
30, 1999 if the Tranche C Term
36
Loans are not made on or before that date. Amounts borrowed under this
subsection 2.1A(v) may be repaid and reborrowed to but excluding the
Revolving Loan Commitment Termination Date.
Revolving Loans constituting Revolving Dollar Loans may not be
converted into Revolving Sterling Loans and Revolving Loans constituting
Revolving Sterling Loans may not be converted into Revolving Dollar Loans;
provided that, subject to applicable law, borrowings in one currency may be
--------
used to purchase the other currency and the other currency so purchased may
be used to repay borrowings made in such other currency.
(vi) Swing Line Loans. Swing Line Lender hereby agrees, subject to
----------------
the limitations set forth below with respect to the maximum amount of Swing
Line Loans permitted to be outstanding from time to time, to make a portion
of the Revolving Loan Commitments available to Company from time to time
during the period from the Closing Date to but excluding the Revolving Loan
Commitment Termination Date by making Swing Line Loans to Company in an
aggregate amount not exceeding the amount of the Swing Line Loan Commitment
to be used for the purposes identified in subsection 2.5C, notwithstanding
the fact that such Swing Line Loans, when aggregated with Swing Line
Lender's outstanding Revolving Loans and Swing Line Lender's Pro Rata Share
of the Letter of Credit Usage then in effect, may exceed Swing Line
Lender's Revolving Loan Commitment. The original amount of the Swing Line
Loan Commitment is $5,000,000; provided that any reduction of the Revolving
--------
Loan Commitments made pursuant to subsection 2.4B(ii) or 2.4B(iii) which
reduces the aggregate Revolving Loan Commitments to an amount less than the
then current amount of the Swing Line Loan Commitment shall result in an
automatic corresponding reduction of the Swing Line Loan Commitment to the
amount of the Revolving Loan Commitments, as so reduced, without any
further action on the part of Company, Administrative Agent or Swing Line
Lender. The Swing Line Loan Commitment shall expire on the Revolving Loan
Commitment Termination Date and all Swing Line Loans and all other amounts
owed hereunder with respect to the Swing Line Loans shall be paid in full
no later than that date; provided that the Swing Line Loan Commitment shall
--------
expire immediately and without further action on September 30, 1999 if the
Tranche C Term Loans are not made on or before that date. Amounts borrowed
under this subsection 2.1A(vi) may be repaid and reborrowed to but
excluding the Revolving Loan Commitment Termination Date.
With respect to any Swing Line Loans which have not been voluntarily
prepaid by Company pursuant to subsection 2.4B(i), Swing Line Lender may,
at any time in its sole and absolute discretion, deliver to Administrative
Agent (with a copy to Company), no later than 9:00 A.M. (San Francisco
time) on the first Business Day in advance of the proposed Funding Date, a
notice (which shall be deemed to be a Notice of Borrowing given by Company)
requesting Lenders to make Revolving Dollar Loans that are Base Rate Loans
on such Funding Date in an amount equal to the amount of such Swing Line
Loans (the "Refunded Swing Line Loans") outstanding on the date such notice
is given which Swing Line Lender requests Lenders to prepay. Anything
contained in this Agreement to the contrary notwithstanding, (a) the
proceeds of such Revolving Dollar Loans made by Lenders other than Swing
Line Lender shall be immediately delivered by
37
Administrative Agent to Swing Line Lender (and not to Company) and applied
to repay a corresponding portion of the Refunded Swing Line Loans and (b)
on the day such Revolving Dollar Loans are made, Swing Line Lender's Pro
Rata Share of the Refunded Swing Line Loans shall be deemed to be paid with
the proceeds of a Revolving Dollar Loan made by Swing Line Lender, and such
portion of the Swing Line Loans deemed to be so paid shall no longer be
outstanding as Swing Line Loans and shall no longer be due under the Swing
Line Note, if any, of Swing Line Lender but shall instead constitute part
of Swing Line Lender's outstanding Revolving Dollar Loans and shall be due
under the Revolving Note, if any, of Swing Line Lender. Company hereby
authorizes Administrative Agent and Swing Line Lender to charge Company's
accounts with Administrative Agent and Swing Line Lender (up to the amount
available in each such account) in order to immediately pay Swing Line
Lender the amount of the Refunded Swing Line Loans to the extent the
proceeds of such Revolving Dollar Loans made by Lenders, including the
Revolving Dollar Loan deemed to be made by Swing Line Lender, are not
sufficient to repay in full the Refunded Swing Line Loans. If any portion
of any such amount paid (or deemed to be paid) to Swing Line Lender should
be recovered by or on behalf of Company from Swing Line Lender in
bankruptcy, by assignment for the benefit of creditors or otherwise, the
loss of the amount so recovered shall be ratably shared among all Lenders
in the manner contemplated by subsection 10.5.
If for any reason (a) Revolving Dollar Loans are not made upon the
request of Swing Line Lender as provided in the immediately preceding
paragraph in an amount sufficient to repay any amounts owed to Swing Line
Lender in respect of any outstanding Swing Line Loans or (b) the Revolving
Loan Commitments are terminated at a time when any Swing Line Loans are
outstanding, each Lender shall be deemed to, and hereby agrees to, have
purchased a participation in such outstanding Swing Line Loans in an amount
equal to its Pro Rata Share (calculated, in the case of the foregoing
clause (b), immediately prior to such termination of the Revolving Loan
Commitments) of the unpaid amount of such Swing Line Loans together with
accrued interest thereon. Upon one Business Day's notice from Swing Line
Lender, each Lender shall deliver to Swing Line Lender an amount equal to
its respective participation in same day funds at the Funding and Payment
Office. In order to further evidence such participation (and without
prejudice to the effectiveness of the participation provisions set forth
above), each Lender agrees to enter into a separate participation agreement
at the request of Swing Line Lender in form and substance reasonably
satisfactory to Swing Line Lender. In the event any Lender fails to make
available to Swing Line Lender the amount of such Lender's participation as
provided in this paragraph, Swing Line Lender shall be entitled to recover
such amount on demand from such Lender together with interest thereon at
the rate customarily used by Swing Line Lender for the correction of errors
among banks for three Business Days and thereafter at the Dollar Base Rate.
In the event Swing Line Lender receives a payment of any amount in which
other Lenders have purchased participations as provided in this paragraph,
Swing Line Lender shall promptly distribute to each such other Lender its
Pro Rata Share of such payment.
Anything contained herein to the contrary notwithstanding, each
Lender's obligation to make Revolving Dollar Loans for the purpose of
repaying any Refunded Swing Line Loans pursuant to the second preceding
paragraph and each Lender's
38
obligation to purchase a participation in any unpaid Swing Line Loans
pursuant to the immediately preceding paragraph shall be absolute and
unconditional and shall not be affected by any circumstance, including (a)
any set-off, counterclaim, recoupment, defense or other right which such
Lender may have against Swing Line Lender, Company or any other Person for
any reason whatsoever; (b) the occurrence or continuation of an Event of
Default or a Potential Event of Default; (c) the occurrence of any Material
Adverse Effect; (d) any breach of this Agreement or any other Loan Document
by any party thereto; or (e) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing; provided that
--------
such obligations of each Lender are subject to the condition that (1) Swing
Line Lender believed in good faith that all conditions under Section 4 to
the making of the applicable Refunded Swing Line Loans or other unpaid
Swing Line Loans, as the case may be, were satisfied at the time such
Refunded Swing Line Loans or unpaid Swing Line Loans were made or (2) the
satisfaction of any such condition not satisfied had been waived in
accordance with subsection 10.6 prior to or at the time such Refunded Swing
Line Loans or other unpaid Swing Line Loans were made.
(vii) Certain Limitations. Anything contained in this Agreement to
-------------------
the contrary notwithstanding, the Revolving Loans and the Revolving Loan
Commitments shall be subject to the following limitations: (a) in no event
shall the Total Utilization of Revolving Loan Commitments at any time
exceed the Revolving Loan Commitments then in effect; (b) in no event shall
the aggregate principal amount of all outstanding Revolving Sterling Loans
exceed the Revolving Sterling Loan Commitment then in effect; and (c)
during the period from and including the Closing Date to and excluding the
Merger Date, in no event shall the aggregate principal amount of Revolving
Loans exceed the sum of the aggregate principal amount of Acquisition
Revolving Loans plus $25,000,000.
----
B. Borrowing Mechanics. Term Loans or Revolving Loans made on any Funding
Date (other than Revolving Dollar Loans made pursuant to a request by Swing Line
Lender pursuant to subsection 2.1A(vi) for the purpose of repaying any Refunded
Swing Line Loans or Revolving Dollar Loans made pursuant to subsection 3.3B for
the purpose of reimbursing the Issuing Lender for the amount of a drawing under
a Letter of Credit) shall be in an aggregate minimum amount of $500,000 and
integral multiples of $10,000 in excess of that amount; provided that Term Loans
--------
made on any Funding Date as Eurodollar Rate Loans with a particular Interest
Period shall be in an aggregate minimum amount equal to or in excess of
$5,000,000 and that Revolving Dollar Loans made on any Funding Date as
Eurodollar Rate Loans with a particular Interest Period shall be in an aggregate
minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess of
that amount. Revolving Sterling Loans made on any Funding Date shall be in an
aggregate minimum amount of (Pounds)2,500,000 and integral multiples of
(Pounds)1,000,000 in excess of that amount. Swing Line Loans made on any Funding
Date shall be in an aggregate minimum amount of $100,000 and integral multiples
of $100,000 in excess of that amount. Whenever Company desires that Lenders make
Term Loans or Revolving Loans it shall deliver to Administrative Agent a Notice
of Borrowing substantially in the form of Exhibit I annexed hereto no later than
---------
9:00 A.M. (San Francisco time) at least (i) three Business Days in advance of
the proposed Funding Date (in the case of a Eurodollar Rate Loan); (ii) one
Business Day in advance of the proposed Funding Date (in the case of a Base Rate
Loan); or (iii) four Business
39
Days in advance of the proposed Funding Date (in the case of a Domestic Sterling
Rate Loan). Whenever Company desires that Swing Line Lender make a Swing Line
Loan, it shall deliver to Administrative Agent a Notice of Borrowing no later
than 1:00 P.M. (San Francisco time) on the proposed Funding Date. The Notice of
Borrowing shall specify (i) the proposed Funding Date (which shall be a Business
Day), (ii) the amount and type of Loans requested, (iii) in the case of Swing
Line Loans and any Revolving Dollar Loans made on the Closing Date, that such
Loans shall be Base Rate Loans, (iv) in the case of Revolving Loans not made on
the Closing Date, whether such Loans shall be Revolving Dollar Loans or
Revolving Sterling Loans and, in the case of Revolving Dollar Loans, whether
such Loans shall be Base Rate Loans or Eurodollar Rate Loans, and (v) in the
case of any Loans requested to be made as Eurodollar Rate Loans or Domestic
Sterling Rate Loans, the initial Interest Period requested therefor. Term Loans
and Revolving Dollar Loans may be continued as or converted into Base Rate Loans
and Eurodollar Rate Loans in the manner provided in subsection 2.2D. Revolving
Sterling Loans may be continued as Domestic Sterling Rate Loans in the manner
provided in subsection 2.2D. In lieu of delivering the above-described Notice of
Borrowing, Company may give Administrative Agent telephonic notice by the
required time of any proposed borrowing under this subsection 2.1B; provided
--------
that such notice shall be promptly confirmed in writing by delivery of a Notice
of Borrowing to Administrative Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding of any
Loans in the event that any of the matters to which Company is required to
certify in the applicable Notice of Borrowing is no longer true and correct in
all material respects as of the applicable Funding Date, and the acceptance by
Company of the proceeds of any Loans shall constitute a re-certification by
Company, as of the applicable Funding Date, as to the matters to which Company
is required to certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Borrowing for a Eurodollar Rate Loan or a Domestic Sterling Rate Loan
(or telephonic notice in lieu thereof) shall be irrevocable, and Company shall
be bound to make a borrowing in accordance therewith.
C. Disbursement of Funds. All Term Loans and Revolving Loans under this
Agreement shall be made by Lenders simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder nor shall the Commitment of any
Lender to make the particular type of Loan requested be increased or decreased
as a result of a default by any other Lender in that other Lender's obligation
to make a Loan requested hereunder. Promptly after receipt by Administrative
Agent of a Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice
in lieu thereof), Administrative Agent shall notify each Lender or Swing Line
Lender, as the case may be, of the proposed
40
borrowing. Each Lender shall make the amount of its Loan available to
Administrative Agent not later than 11:00 A.M. (San Francisco time) or 12:00
Noon (London time), as applicable, on the applicable Funding Date, and Swing
Line Lender shall make the amount of its Swing Line Loan available to
Administrative Agent not later than 11:00 A.M. (San Francisco time) on the
applicable Funding Date in same day funds in Dollars, at the Funding and Payment
Office. In the case of Revolving Sterling Loans, such notice will also provide
the approximate Dollar Equivalent of the amount of such Lender's Pro Rata Share
of such Revolving Sterling Loans, and Administrative Agent will, upon the
determination of the exact Dollar Equivalent of such amount on the applicable
Funding Date, promptly notify such Lender of such amount; provided that, unless
--------
Administrative Agent shall otherwise agree with any Lender in writing, nothing
in this sentence shall relieve any Lender of its obligation to fund its Pro Rata
Share of all Loans in the Applicable Currency. Except as provided in subsection
2.1A(vi) and subsection 3.3B with respect to Revolving Loans used to repay
Refunded Swing Line Loans or to reimburse the Issuing Lender for the amount of a
drawing under a Letter of Credit issued by it, upon satisfaction or waiver of
the conditions precedent specified in subsection 4.1 (in the case of Loans made
on the Closing Date) 4.2 (in the case of Loans made on the Merger Date) and 4.3
(in the case of all Loans), Administrative Agent shall make the proceeds of such
Loans available to Company on the applicable Funding Date by causing an amount
of same day funds in Dollars or Sterling, as the case may be, equal to the
proceeds of all such Loans received by Administrative Agent from Lenders or
Swing Line Lender, as the case may be, to be credited to the account of Company
at the Funding and Payment Office.
Unless Administrative Agent shall have been notified by any Lender
prior to the Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Funding Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Dollar Base Rate. If such Lender does not pay such corresponding amount
forthwith upon Administrative Agent's demand therefor, Administrative Agent
shall promptly notify Company and Company shall immediately pay such
corresponding amount to Administrative Agent together with interest thereon, for
each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the rate payable under this Agreement for Base Rate
Loans. Nothing in this subsection 2.1C shall be deemed to relieve any Lender
from its obligation to fulfill its Commitments hereunder or to prejudice any
rights that Company may have against any Lender as a result of any default by
such Lender hereunder.
D. The Register.
(i) Administrative Agent shall maintain, at its address referred to
in subsection 10.8, a register for the recordation of the names and addresses of
Lenders and the Commitments and Loans of each Lender from time to time (the
"Register"). The
41
Register shall be available for inspection by Company or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(ii) Administrative Agent shall record in the Register the Tranche A
Term Loan Commitment, Tranche B Term Loan Commitment, Tranche C Term Loan
Commitment, Revolving Sterling Loan Commitment and Revolving Loan
Commitment and the Term Loans and Revolving Loans from time to time of each
Lender, the Swing Line Loan Commitment and the Swing Line Loans from time
to time of Swing Line Lender, and each repayment or prepayment in respect
of the principal amount of the Term Loans or Revolving Loans of each Lender
or the Swing Line Loans of Swing Line Lender. Any such recordation shall be
conclusive and binding on Company and each Lender, absent manifest error;
provided that failure to make any such recordation, or any error in such
--------
recordation, shall not affect any Lender's commitments or Company's
Obligations in respect of any applicable Loans.
(iii) Each Lender shall record on its internal records (including the
Notes, if any, held by such Lender) the amount of the Term Loans and each
Revolving Loan made by it and each payment in respect thereof. Any such
recordation shall be conclusive and binding on Company, absent manifest
error; provided that failure to make any such recordation, or any error in
--------
such recordation, shall not affect any Lender's Commitments or Company's
Obligations in respect of any applicable Loans; and provided, further that
-------- -------
in the event of any inconsistency between the Register and any Lender's
records, the recordations in the Register shall govern.
(iv) Company, Administrative Agent and Lenders shall deem and treat
the Persons listed as Lenders in the Register as the holders and owners of
the corresponding Commitments and Loans listed therein for all purposes
hereof, and no assignment or transfer of any such Commitment or Loan shall
be effective, in each case unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by
Administrative Agent and recorded in the Register as provided in subsection
10.1B(ii). Prior to such recordation, all amounts owed with respect to the
applicable Commitment or Loan shall be owed to the Lender listed in the
Register as the owner thereof, and any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and
binding on any subsequent holder, assignee or transferee of the
corresponding Commitments or Loans.
(v) Company hereby designates Administrative Agent to serve as
Company's agent solely for purposes of maintaining the Register as provided
in this subsection 2.1D, and Company hereby agrees that, to the extent
Administrative Agent serves in such capacity, Administrative Agent and its
officers, directors, employees, agents and affiliates shall constitute
Indemnitees for all purposes under subsection 10.3.
E. Optional Notes. On the Closing Date, and if so requested by any Lender
by written notice to Company (with a copy to Administrative Agent) or at any
time thereafter, Company shall execute and deliver to such Lender (and/or, if
applicable and if so specified in such notice, to any Person who is an assignee
of such Lender pursuant to subsection 10.1) on the
42
Closing Date (or, if such notice is delivered after the Closing Date, promptly
after Company's receipt of such notice) a promissory note or promissory notes to
evidence such Lender's Tranche A Term Loan, Tranche B Term Loan, Tranche C Term
Loan, Revolving Loans or Swing Line Loans, as the case may be, substantially in
the form of Exhibit V, Exhibit VI, Exhibit VII, Exhibit V or Exhibit VIII
--------- ---------- ----------- --------- ------------
annexed hereto, respectively, with appropriate insertions.
Administrative Agent may deem and treat the payee of any Note as the
owner thereof for all purposes hereof unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by
Administrative Agent as provided in subsection 10.1B(ii). Any request,
authority or consent of any person or entity who, at the time of making such
request or giving such authority or consent, is the holder of any Note shall be
conclusive and binding on any subsequent holder, assignee or transferee of that
Note or of any Note or Notes issued in exchange therefor.
2.2 Interest on the Loans.
---------------------
A. Rate of Interest. Subject to the provisions of subsections 2.6 and
2.7, each Term Loan and each Revolving Loan shall bear interest on the unpaid
principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to (a) in the case
of Revolving Dollar Loans, the Dollar Base Rate or the Adjusted Eurodollar Rate,
as the case may be, and (b) in the case of Revolving Sterling Loans, the
Adjusted Domestic Sterling Rate. Subject to the provisions of subsection 2.7,
each Swing Line Loan shall bear interest on the unpaid principal amount thereof
from the date made through maturity (whether by acceleration or otherwise) at a
rate determined by reference to the Dollar Base Rate. The applicable basis for
determining the rate of interest with respect to any Term Loan or any Revolving
Loan shall be selected by Company initially at the time a Notice of Borrowing is
given with respect to such Loan pursuant to subsection 2.1B, and the basis for
determining the interest rate with respect to any Term Loan or any Revolving
Dollar Loan may be changed from time to time pursuant to subsection 2.2D. If on
any day a Term Loan or Revolving Dollar Loan is outstanding with respect to
which notice has not been delivered to Administrative Agent in accordance with
the terms of this Agreement specifying the applicable basis for determining the
rate of interest, then for that day that Loan shall bear interest determined by
reference to the Dollar Base Rate.
(i) Subject to the provisions of subsections 2.2E and 2.7, the
Tranche A Term Loans and the Revolving Loans shall bear interest through
maturity as follows:
(a) if a Base Rate Loan, then (1) for the period from and
including the Closing Date to and excluding the date on which
Administrative Agent receives a Compliance Certificate pursuant to
subsection 6.1(iii) for the Fiscal Quarter ended July 31, 2000, at the
sum of the Dollar Base Rate plus 1.75% and (2) thereafter, at the sum
----
of the Dollar Base Rate plus the appropriate Applicable Margin; or
----
(b) if a Eurodollar Rate Loan, then (1) for the period from and
including the Closing Date to and excluding the date on which
Administrative Agent receives a Compliance Certificate pursuant to
subsection 6.1(iii) for the Fiscal Quarter ended July 31, 2000, at the
sum of the Adjusted Eurodollar Rate
43
plus 2.75% and (2) thereafter, at the sum of the Adjusted Eurodollar
----
Rate plus the appropriate Applicable Margin; or
(c) if a Domestic Sterling Rate Loan, then, (1) for the period
from and including the Closing Date to and excluding the date on which
Administrative Agent receives a Compliance Certificate pursuant to
subsection 6.1(iii) for the Fiscal Quarter ended July 31, 2000, at the
sum of the Adjusted Domestic Sterling Rate, plus 2.75% and (2)
----
thereafter at the sum of the Adjusted Domestic Sterling Rate, plus the
----
appropriate Applicable Margin.
(ii) Subject to the provisions of subsections 2.2E and 2.7, the
Tranche B Term Loans shall bear interest through maturity as follows:
(a) if a Base Rate Loan, then (1) for the period from and
including the Closing Date to and excluding the date on which
Administrative Agent receives a Compliance Certificate pursuant to
subsection 6.1(iii) for the Fiscal Quarter ended July 31, 2000, at the
sum of the Dollar Base Rate plus 2.25% and (2) thereafter, at the sum
of the Dollar Base Rate plus the appropriate Applicable Margin; or
----
(b) If a Eurodollar Rate Loan, then (1) for the period from and
including the Closing Date to and excluding the date on which
Administrative Agent receives a Compliance Certificate pursuant to
subsection 6.1(iii) for the Fiscal Quarter ended July 31, 2000, at the
sum of the Adjusted Eurodollar Rate plus 3.25% and (2) thereafter, at
----
the sum of the Adjusted Eurodollar Rate plus the appropriate
----
Applicable Margin.
(iii) Subject to the provisions of subsections 2.2E and 2.7, the
Tranche C Term Loans shall bear interest through maturity as follows:
(a) if a Base Rate Loan, then (1) for the period from and
including the Closing Date to and excluding the date on which
Administrative Agent receives a Compliance Certificate pursuant to
subsection 6.1(iii) for the Fiscal Quarter ended July 31, 2000, at the
sum of the Dollar Base Rate plus 2.50% and (2) thereafter, at the sum
----
of the Dollar Base Rate plus the appropriate Applicable Margin; or
----
(b) if a Eurodollar Rate Loan, then (1) for the period from and
including the Closing Date to and excluding the date on which
Administrative Agent receives a Compliance Certificate pursuant to
subsection 6.1(iii) for the Fiscal Quarter ended July 31, 2000, at the
sum of the Adjusted Eurodollar Rate plus 3.50% and (2) thereafter, at
----
the sum of the Adjusted Eurodollar Rate plus the appropriate
----
Applicable Margin.
(iv) Subject to the provisions of subsections 2.2E and 2.7, the Swing
Line Loans shall bear interest through maturity (a) for the period from and
including the Closing Date to and excluding the date on which
Administrative Agent receives a Compliance Certificate pursuant to
subsection 6.1(iii) for the Fiscal Quarter ended July 31, 2000, at the sum
of the Dollar Base Rate plus 1.75% and (b) thereafter, at the sum of the
----
Dollar Base Rate plus the Applicable Margin with respect to Revolving
----
Dollar
44
Loans that are Base Rate Loans.
The Applicable Margin shall be determined on the first day of the
calendar month following the delivery of each Compliance Certificate pursuant to
subsection 6.1(iii), commencing with the Compliance Certificate for the Fiscal
Quarter ended July 31, 2000, by reference to such Compliance Certificate
(without regard to any subsequent corrections to reflect year-end audit
adjustments). The appropriate Applicable Margin so determined shall apply to
all Loans for the period from and including the date of determination to and
excluding the first day of the calendar month following the delivery of the next
Compliance Certificate; provided, however, that (1) if the Company fails to
-------- -------
deliver any Compliance Certificate in a timely manner pursuant to subsection
6.1(iii) or (2) upon the occurrence and during the continuation of any Event of
Default, the highest percentage per annum set forth in the definition of the
appropriate Applicable Margin shall apply to all Loans for the period from and
including the first day of the calendar month following the date on which such
Compliance Certificate was required to be delivered to and excluding the date on
which Administrative Agent receives such Compliance Certificate or during the
continuation of such Event of Default, as the case may be.
B. Interest Periods. In connection with each Eurodollar Rate Loan or
Domestic Sterling Rate Loan, as the case may be, Company may, pursuant to the
applicable Notice of Borrowing or Notice of Conversion/Continuation, as the case
may be, select an interest period (each an "Interest Period") to be applicable
to such Loan, which Interest Period shall be, at Company's sole option, either a
one, two, three, or six month or, if available to all Lenders, twelve month
period; provided that:
--------
(i) the initial Interest Period for any Eurodollar Rate Loan or
Domestic Sterling Rate Loan, as the case may be, shall commence on the
Funding Date in respect of such Loan, in the case of a Loan initially made
as a Eurodollar Rate Loan or Domestic Sterling Rate Loan, as the case may
be, or on the date specified in the applicable Notice of
Conversion/Continuation, in the case of a Loan converted to a Eurodollar
Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan or Domestic Sterling Rate Loan, as the
case may be, continued as such pursuant to a Notice of
Conversion/Continuation, each successive Interest Period shall commence on
the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would
--------
otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) 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,
subject to clause (v) of this subsection 2.2B, end on the last Business Day
of a calendar month;
45
(v) no Interest Period with respect to any portion of the Tranche A
Term Loans shall extend beyond the Tranche A Term Loan Maturity Date, no
Interest Period with respect to any portion of the Tranche B Term Loans
shall extend beyond the Tranche B Term Loan Maturity Date, no Interest
Period with respect to any portion of the Tranche C Term Loans shall extend
beyond the Tranche C Term Loan Maturity Date and no Interest Period with
respect to any portion of the Revolving Loans shall extend beyond the
Revolving Loan Commitment Termination Date;
(vi) no Interest Period with respect to any portion of the Tranche A
Term Loans, Tranche B Term Loans or Tranche C Term Loans shall extend
beyond a date on which Company is required to make a scheduled payment of
principal of the Tranche A Term Loans, Tranche B Term Loans or Tranche C
Term Loans, as the case may be, unless the sum of (a) the aggregate
principal amount of Tranche A Term Loans, Tranche B Term Loans or Tranche C
Term Loans, as the case may be, that are Base Rate Loans plus (b) the
----
aggregate principal amount of Tranche A Term Loans, Tranche B Term Loans or
Tranche C Term Loans, as the case may be, that are Eurodollar Rate Loans
with Interest Periods expiring on or before such date equals or exceeds the
principal amount required to be paid on the Tranche A Term Loans, Tranche B
Term Loans or Tranche C Term Loans, as the case may be, on such date;
(vii) there shall be no more than ten Interest Periods outstanding at
any time; and
(viii) in the event Company fails to specify an Interest Period for
any Eurodollar Rate Loan or Domestic Sterling Rate Loan in the applicable Notice
of Borrowing or Notice of Conversion/Continuation, Company shall be deemed to
have selected an Interest Period of one month.
C. Interest Payments. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid), upon any conversion of a Loan from
a Loan bearing interest at a rate determined by reference to one basis to a Loan
bearing interest at a rate determined by reference to an alternative basis and
at maturity (including final maturity); provided that in the event any Revolving
Dollar Loans that are Base Rate Loans are prepaid pursuant to subsection
2.4B(i), interest accrued on such Swing Line Loans or Revolving Dollar Loans
through the date of prepayment shall be payable on the next succeeding Interest
Payment Date applicable to Base Rate Loans (or, if earlier, at final maturity).
D. Conversion or Continuation. Subject to the provisions of subsection
2.6, Company shall have the option (i) to convert at any time all or any part of
its outstanding Term Loans equal to or in excess of $5,000,000 or all or any
part of its outstanding Revolving Dollar Loans equal to $5,000,000 and integral
multiples of $1,000,000 in excess of that amount from Loans bearing interest at
a rate determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis or (ii) upon the expiration of
any Interest Period applicable to a Eurodollar Rate Loan or Domestic Sterling
Rate Loan, to continue all or any portion of such Loan equal to (x) in the case
of Eurodollar Rate Loans, any amount equal to or in excess of $5,000,000 as a
Eurodollar Rate Loan or (y) in the case of Domestic Sterling Rate
46
Loans, (Pounds)2,500,000 and integral multiples of (Pounds)1,000,000 in excess
of that amount as a Domestic Sterling Rate Loan; provided, however, that a
-------- -------
Eurodollar Rate Loan may only be converted into a Base Rate Loan on the
expiration date of an Interest Period applicable thereto. Revolving Dollar Loans
may not be converted into Revolving Sterling Loans and Revolving Sterling Loans
may not be converted into Revolving Dollar Loans.
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 9:00 A.M. (San Francisco time) at least (i)
one Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan), (ii) three Business Days in advance of the
proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan) or (iii) four Business Days in advance
of the proposed continuation date (in the case of a continuation of a Domestic
Sterling Rate Loan). A Notice of Conversion/Continuation shall specify (i) the
proposed conversion/continuation date (which shall be a Business Day), (ii) the
amount and type of the Loan to be converted/continued, (iii) the nature of the
proposed conversion/continuation, (iv) in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan, or in the case of a continuation of a
Domestic Sterling Rate Loan, the requested Interest Period, and (v) in the case
of a conversion to, or a continuation of, a Eurodollar Rate Loan, or in the case
of a continuation of a Domestic Sterling Rate Loan, that no Potential Event of
Default or Event of Default has occurred and is continuing. In lieu of
delivering the above-described Notice of Conversion/Continuation, Company may
give Administrative Agent telephonic notice by the required time of any proposed
conversion/continuation under this subsection 2.2D; provided that such notice
--------
shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to Administrative Agent on or before the proposed
conversion/continuation date. Upon receipt of written or telephonic notice of
any proposed conversion/continuation under this subsection 2.2D, Administrative
Agent shall promptly transmit such notice by telefacsimile or telephone to each
Lender.
Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of, a
Eurodollar Rate Loan or Domestic Sterling Rate Loan, as the case may be (or
telephonic notice in lieu thereof) shall be irrevocable on and after the related
Interest Rate Determination Date, and Company shall be bound to effect a
conversion or continuation in accordance therewith.
E. Default Rate. Upon the occurrence and during the continuation of any
Event of Default, the outstanding principal amount of all Loans and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
47
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans); provided that, in the case of Eurodollar Rate Loans, upon the expiration
--------
of the Interest Period in effect at the time any such increase in interest rate
is effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans
and shall thereafter bear interest payable upon demand at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2E is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Administrative Agent or any Lender.
F. Computation of Interest. Interest on the Loans shall be computed (i)
in the case of Base Rate Loans, on the basis of a 365-day or 366-day year, as
the case may be, (ii) in the case of Eurodollar Rate Loans, on the basis of a
360-day year, and (iii) in the case of Domestic Sterling Rate Loans, on the
basis of a 365-day or 366-day year, as the case may be, in each case for the
actual number of days elapsed in the period during which it accrues. In
computing interest on any Loan, the date of the making of such Loan or the first
day of an Interest Period applicable to such Loan or, with respect to a Base
Rate Loan being converted from a Eurodollar Rate Loan, the date of conversion of
such Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be
included, and the date of payment of such Loan or the expiration date of an
Interest Period applicable to such Loan or, with respect to a Base Rate Loan
being converted to a Eurodollar Rate Loan, the date of conversion of such Base
Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be excluded;
provided that if a Loan is repaid on the same day on which it is made, one day's
- --------
interest shall be paid on that Loan.
2.3 Fees.
----
A. Commitment Fees. Company agrees to pay to Administrative Agent in
Dollars, for distribution to each Lender in proportion to that Lender's Pro Rata
Share, (i) commitment fees for the period from and including the Closing Date to
and excluding the Revolving Loan Commitment Termination Date equal to the
average of the daily excess of the Revolving Loan Commitments over the sum of
the Dollar Equivalent of (a) the aggregate principal amount of outstanding
Revolving Loans and Swing Line Loans plus (b) the Letter of Credit Usage and
----
(ii) commitment fees for the period from and including the Closing Date to and
excluding the Merger Date equal to the excess of the Tranche A Term Loan
Commitment over the aggregate principal amount of outstanding Tranche A Term
Loans, in each case, multiplied by (a) for the period from and including the
-------------
Closing Date to and excluding the date on which Administrative Agent receives a
Compliance Certificate pursuant to subsection 6.1(iii) for the Fiscal Quarter
ended July 31, 2000, 0.50% and (b) thereafter, the appropriate Applicable
Commitment Fee Percentage. Such commitment fees shall be calculated on the basis
of a 365-day or 366-day year, as the case may be, and the actual number of days
elapsed and shall be payable quarterly in arrears on the last Business Day of
January, April, July and October of each year, commencing on the first such date
to occur after the Closing Date, on the Merger Date and on the Revolving Loan
Commitment Termination Date. For purposes of calculating the commitment fees,
the aggregate principal amount of the Revolving Sterling Loans (but not any
outstanding Swing Line
48
Loans) shall be recalculated in accordance with subsection 2.4D(i) on the last
Business Day of each calendar month and on the Funding Date for any Revolving
Sterling Loan.
Except as provided in the immediately preceding paragraph, the
Applicable Commitment Fee Percentage shall be determined on the first day of the
calendar month following the delivery of each Compliance Certificate pursuant to
subsection 6.1(iii), commencing with the Compliance Certificate for the Fiscal
Quarter ended July 31, 2000, by reference to such Compliance Certificate
(without regard to any subsequent corrections to reflect year-end audit
adjustments). The Applicable Commitment Fee Percentage so determined shall
apply for the period from and including the date of determination to and
excluding the first day of the calendar month following the delivery of the next
Compliance Certificate; provided, however, that (1) if the Company fails to
-------- -------
deliver any Compliance Certificate in a timely manner pursuant to subsection
6.1(iii), or (2) upon the occurrence and during the continuation of any Event of
Default, the highest percentage per annum set forth in the definition of the
Applicable Commitment Fee Percentage shall apply for the period from and
including the first day of the calendar month following the date on which such
Compliance Certificate was required to be delivered to and excluding the date on
which Administrative Agent receives such Compliance Certificate or during the
continuation of such Event of Default, as the case may be.
B. Other Fees. Company agrees to pay to Administrative Agent the fees
described in the letter dated May 3, 1999 from Administrative Agent to Company
in the amounts and at the times set forth in such letter or separately agreed
upon in writing between Company and Administrative Agent.
2.4 Repayments, Prepayments and Reductions in Revolving Loan Commitments;
--------------------------------------------------------------------
General Provisions Regarding Payments.
- -------------------------------------
A. Scheduled Payments of Term Loans.
(i) Scheduled Payments of Tranche A Term Loans. Company shall make
------------------------------------------
principal payments on the Tranche A Term Loans in quarterly installments on
the dates and in the amounts set forth below:
Scheduled Repayment
Date of Tranche A Term Loans
---- -----------------------
October 31, 1999 $ 3,125,000
January 31, 2000 3,125,000
April 30, 2000 3,125,000
July 31, 2000 3,125,000
October 31, 2000 6,250,000
January 31, 2001 6,250,000
April 30, 2001 6,250,000
July 31, 2001 6,250,000
October 31, 2001 9,375,000
January 31, 2002 9,375,000
April 30, 2002 9,375,000
49
July 31, 2002 9,375,000
October 31, 2002 12,500,000
January 31, 2003 12,500,000
April 30, 2003 12,500,000
July 31, 2003 12,500,000
October 31, 2003 15,625,000
January 31, 2004 15,625,000
April 30, 2004 15,625,000
July 31, 2004 15,625,000
October 31, 2004 15,625,000
January 31, 2005 15,625,000
April 30, 2005 15,625,000
June 9, 2005 15,625,000
; provided, however, that the scheduled installments of principal of the
-------- -------
Tranche A Term Loans set forth above shall be reduced in connection with
any voluntary or mandatory prepayments of the Tranche A Term Loans in
accordance with subsection 2.4B(iv); and provided, further, that the
-------- -------
Tranche A Term Loans and all other amounts owed hereunder with respect to
the Tranche A Term Loans shall be paid in full no later than the Tranche A
Term Loan Maturity Date, and the final installment payable by Company in
respect of the Tranche A Term Loans on such date shall be in an amount, if
such amount is different from that specified above, sufficient to repay all
amounts owing by Company under this Agreement with respect to the Tranche A
Term Loans.
(ii) Scheduled Payments of Tranche B Term Loans. Company shall make
------------------------------------------
principal payments on the Tranche B Term Loans in quarterly installments on
the dates and in the amounts set forth below:
Scheduled Repayment
Date of Tranche B Term Loans
---- -----------------------
October 31, 1999 $250,000
January 31, 2000 $250,000
April 30, 2000 $250,000
July 31, 2000 $250,000
October 31, 2000 $250,000
January 31, 2001 $250,000
April 30, 2001 $250,000
July 31, 2001 $250,000
October 31, 2001 $250,000
January 31, 2002 $250,000
April 30, 2002 $250,000
July 31, 2002 $250,000
October 31, 2002 $250,000
January 31, 2003 $250,000
April 30, 2003 $250,000
50
July 31, 2003 $ 250,000
October 31, 2003 $ 250,000
January 31, 2004 $ 250,000
April 30, 2004 $ 250,000
July 31, 2004 $ 250,000
October 31, 2004 $ 250,000
January 31, 2005 $ 250,000
April 30, 2005 $ 250,000
July 31, 2005 $ 250,000
October 31, 2005 $23,500,000
January 31, 2006 $23,500,000
April 30, 2006 $23,500,000
June 9, 2006 $23,500,000
; provided that the scheduled installments of principal of the Tranche B
--------
Term Loans set forth above shall be reduced in connection with any
voluntary or mandatory prepayments of the Tranche B Term Loans in
accordance with subsection 2.4B(iv); and provided, further that the Tranche
-------- -------
B Term Loans and all other amounts owed hereunder with respect to the
Tranche B Term Loans shall be paid in full no later than the Tranche B Term
Loan Maturity Date, and the final installment payable by Company in respect
of the Tranche B Term Loans on such date shall be in an amount, if such
amount is different from that specified above, sufficient to repay all
amounts owing by Company under this Agreement with respect to the Tranche B
Term Loans.
(iii) Scheduled Payments of Tranche C Term Loans. Company shall make
------------------------------------------
principal payments on the Tranche C Term Loans in quarterly installments on
the dates and in the amounts set forth below:
Scheduled Repayment
Date of Tranche C Term Loans
---- -----------------------
October 31, 1999 $250,000
January 31, 2000 $250,000
April 30, 2000 $250,000
July 31, 2000 $250,000
October 31, 2000 $250,000
January 31, 2001 $250,000
April 30, 2001 $250,000
July 31, 2001 $250,000
October 31, 2001 $250,000
January 31, 2002 $250,000
April 30, 2002 $250,000
July 31, 2002 $250,000
October 31, 2002 $250,000
January 31, 2003 $250,000
April 30, 2003 $250,000
July 31, 2003 $250,000
51
October 31, 2003 $ 250,000
January 31, 2004 $ 250,000
April 30, 2004 $ 250,000
July 31, 2004 $ 250,000
October 31, 2004 $ 250,000
January 31, 2005 $ 250,000
April 30, 2005 $ 250,000
July 31, 2005 $ 250,000
October 31, 2005 $ 250,000
January 31, 2006 $ 250,000
April 30, 2006 $ 250,000
July 31, 2006 $ 250,000
October 31, 2006 $23,250,000
January 31, 2007 $23,250,000
April 30, 2007 $23,500,000
June 9, 2007 $23,500,000
; provided that the scheduled installments of principal of the Tranche C
--------
Term Loans set forth above shall be reduced in connection with any
voluntary or mandatory prepayments of the Tranche C Term Loans in
accordance with subsection 2.4B(iv); and provided, further that the Tranche
-------- -------
C Term Loans and all other amounts owed hereunder with respect to the
Tranche C Term Loans shall be paid in full no later than the Tranche C Term
Loan Maturity Date, and the final installment payable by Company in respect
of the Tranche C Term Loans on such date shall be in an amount, if such
amount is different from that specified above, sufficient to repay all
amounts owing by Company under this Agreement with respect to the Tranche C
Term Loans.
B. Prepayments and Unscheduled Reductions in Revolving Loan Commitments.
(i) Voluntary Prepayments. Company may, upon not less than one
---------------------
Business Day's prior written or telephonic notice, in the case of Base Rate
Loans, and three Business Days' prior written or telephonic notice, in the
case of Eurodollar Rate Loans and four Business Days' prior written or
telephonic notice, in the case of Domestic Sterling Rate Loans, in each
case given to Administrative Agent by 9:00 A.M. (San Francisco time) on the
date required and, if given by telephone, promptly confirmed in writing to
Administrative Agent (which original written or telephonic notice
Administrative Agent will promptly transmit by telefacsimile or telephone
to each Lender), at any time and from time to time prepay, without premium
or penalty (except as provided in subsection 2.6D), any Term Loans,
Revolving Loans or any Swing Line Loan on any Business Day in whole or in
part in an aggregate minimum amount of $5,000,000 and integral multiples of
$1,000,000 in excess of that amount (in the case of Term Loans and
Revolving Dollar Loans) or in an aggregate minimum amount of (Pounds)
2,500,000 and integral multiples of (Pounds) 1,000,000 in excess of that
amount (in the case of Revolving Sterling Loans). Notice of prepayment
having been given as aforesaid, the principal amount of the Loans specified
in such notice shall become due and payable on
52
the prepayment date specified therein. Any such voluntary prepayment shall
be applied as specified in subsection 2.4B(iv).
(ii) Voluntary Reductions of Revolving Loan Commitments. Company
may, upon not less than five Business Days' prior written or telephonic
notice confirmed in writing to Administrative Agent (which original written
or telephonic notice Administrative Agent will promptly transmit by
telefacsimile or telephone to each Lender), at any time and from time to
time terminate in whole or permanently reduce in part, without premium or
penalty, the Revolving Loan Commitments in an amount up to the amount by
which the Revolving Loan Commitments exceed the Total Utilization of
Revolving Loan Commitments at the time of such proposed termination or
reduction; provided that any such partial reduction of the Revolving Loan
--------
Commitments shall be in an aggregate minimum amount of $2,000,000 and
integral multiples of $500,000 in excess of that amount (in the case of
Revolving Dollar Loan Commitments) or in an aggregate minimum amount of
(Pounds)2,500,000 and integral multiples of (Pounds)1,000,000 in excess of
that amount (in the case of Revolving Sterling Loan Commitments). Company's
notice to Administrative Agent shall designate the date (which shall be a
Business Day) of such termination or reduction and the amount of any
partial reduction, and such termination or reduction of the Revolving Loan
Commitments shall be effective on the date specified in Company's notice
and shall reduce the Revolving Loan Commitment of each Lender
proportionately to its Pro Rata Share.
(iii) Mandatory Prepayments and Mandatory Reductions of Revolving
-----------------------------------------------------------
Loan Commitment. The Loans shall be prepaid and/or the Revolving Loan
---------------
Commitments shall be permanently reduced in the amounts and under the
circumstances set forth below, all such prepayments and/or reductions to be
applied as set forth below or as more specifically provided in subsection
2.4B(iv):
(a) Prepayments from Net Asset Sale Proceeds.
----------------------------------------
(1) No later than the date of receipt by Company of any
Net Asset Sale Proceeds in respect of any sale by Company or
Merger Sub of Tendered Shares, Company shall prepay the Term
Loans in an aggregate amount equal to such Net Asset Sale
Proceeds; provided, however, that nothing contained in this
-------- -------
clause (1) shall be construed to permit any sale of assets
prohibited by subsection 7.7.
(2) No later than the date of receipt by Company or any
of its Subsidiaries of any Net Asset Sale Proceeds in respect
of any Asset Sale (other than any sale of assets subject to
subclause (1) above), Company shall prepay the Loans and/or the
Revolving Loan Commitments shall be permanently reduced in an
aggregate amount equal to such Net Asset Sale Proceeds;
provided; however, that in the event Company notifies
-------- -------
Administrative Agent in writing on the date of receipt of such
Net Asset Sale Proceeds that Company or such Subsidiary intends
to replace any assets to be sold ("Exchange Assets") with
assets that are of a nature or type that are used or useful in
a business engaged in by Company and its
53
Subsidiaries at the time of any such replacement or any
business or activity substantially similar or related thereto,
Company shall prepay the Loans and/or the Revolving Loan
Commitments shall be permanently reduced in an aggregate amount
equal to the excess of (1) the aggregate amount of such Net
Asset Sale Proceeds over (2) an amount equal to the amount of
cash expected to be expended by Company and its Subsidiaries to
acquire such assets during the 360-day period following the
date of receipt by Company or any of its Subsidiaries of such
Net Asset Sale Proceeds. Any amounts not expended by Company
and its Subsidiaries within such 360-day period (or within 18
months following such date of receipt in the event that a
binding commitment to acquire assets with such Net Asset Sale
Proceeds has been entered into by Company or any of its
Subsidiaries during such 360-day period) shall be prepaid
pursuant to clause (g) below. Nothing contained in this clause
(2) shall be construed to permit any sale of assets prohibited
by subsection 7.7.
(b) Prepayments and Reductions from Net Insurance/Condemnation
----------------------------------------------------------
Proceeds. No later than the first Business Day following the date of
--------
receipt by Administrative Agent or by Company or any of its
Subsidiaries of any Net Insurance/Condemnation Proceeds that are
required to be applied to prepay the Loans and/or reduce the Revolving
Loan Commitments pursuant to the provisions of subsection 6.4C, the
Loans shall be prepaid and/or the Revolving Loan Commitments shall be
permanently reduced in an aggregate amount equal to the amount of such
Net Insurance/Condemnation Proceeds.
(c) Prepayments Due to Reversion of Surplus Assets of Pension
---------------------------------------------------------
Plans. On the date of return to Company or any of its Subsidiaries of
-----
any surplus assets of any pension plan of Company or any of its
Subsidiaries, Company shall prepay the Loans and/or reduce the
Revolving Loan Commitments in an aggregate amount (such amount being
the "Net Pension Proceeds") equal to 100% of such returned surplus
assets, net of transaction costs and expenses incurred in obtaining
such return, including incremental taxes payable as a result thereof.
(d) Prepayments Due to Issuance of Debt Securities. On the
----------------------------------------------
date of receipt by Company of the Cash proceeds (any such Cash
proceeds, net of underwriting discounts and commissions and other
reasonable costs and expenses associated therewith, including without
limitation reasonable legal fees and expenses, being "Net Debt
Securities Proceeds") from the issuance of any debt Securities of
Company or any of its Subsidiaries after the Closing Date (other than
issuances of Indebtedness permitted under subsection 7.1), Company
shall prepay the Loans in an aggregate amount equal to 100% of such
Net Debt Securities Proceeds.
(e) Prepayments Due to Issuance of Equity Securities. On the
------------------------------------------------
date of receipt by Company of the Cash proceeds (any such Cash
proceeds, net of underwriting discounts and commissions and other
reasonable costs and expenses associated therewith, including without
limitation reasonable legal fees and
54
expenses, being "Net Equity Securities Proceeds") from the issuance of
any equity Securities of Company or any of its Subsidiaries, or any
equity contribution to Company or any of its Subsidiaries, after the
Closing Date (other than (1) issuances of equity Securities of Company
to directors and employees of Company and its Subsidiaries pursuant to
a written employee benefit plan maintained by Company or any of its
Subsidiaries, approved by Company's Board of Directors and issuances
of equity Securities of Company pursuant to the exercise of options or
warrants issued under any such plan, (2) the issuance of Company
Series B Preferred Stock to RCBA in the manner contemplated by the
Securities Purchase Agreement and (3) issuances of equity Securities
of Company, the Net Equity Securities Proceeds of which are applied by
Company or its Subsidiaries to the consideration paid by Company or
such Subsidiary for Subsequent Acquisitions, provided, that Company
shall apply such Net Equity Securities Proceeds to the consideration
for such Subsequent Acquisitions during the three-month period
following the date of receipt of such Net Equity Securities Proceeds
by Company), Company shall prepay the Loans in an aggregate amount
equal to 50% of such Net Equity Securities Proceeds.
(f) Prepayments from Consolidated Excess Cash Flow. Company
----------------------------------------------
shall, no later than 105 days after the end of (1) any Fiscal Year
(commencing with the Fiscal Year ending October 31, 2000) for which
the Leverage Ratio as of the last day of such Fiscal Year is less than
4.00 to 1.00, prepay the Term Loans in an aggregate amount equal to
50% of Consolidated Excess Cash Flow, if any, for such Fiscal Year or
(2) any other Fiscal Year, prepay the Term Loans in an aggregate
amount equal to 75% of Consolidated Excess Cash Flow.
(g) Calculations of Net Proceeds Amounts; Additional Prepayments
------------------------------------------------------------
Based on Subsequent Calculations. Concurrently with any prepayment of
--------------------------------
the Loans pursuant to subsections 2.4B(iii)(a)-(f), Company shall
deliver to Administrative Agent an Officer's Certificate demonstrating
the calculation of the amount (the "Net Proceeds Amount") of the
applicable Net Asset Sale Proceeds, Net Insurance/Condemnation
Proceeds, Net Pension Proceeds, Net Debt Securities Proceeds, Net
Equity Securities Proceeds or Consolidated Excess Cash Flow, as the
case may be, that gave rise to such prepayment. In the event that
Company shall subsequently determine that the actual Net Proceeds
Amount was greater than the amount set forth in such Officer's
Certificate, Company shall promptly make an additional prepayment of
the Loans in an amount equal to the amount of such excess, and Company
shall concurrently therewith deliver to Administrative Agent an
Officer's Certificate demonstrating the derivation of the additional
Net Proceeds Amount resulting in such excess.
(h) Prepayments Due to Reductions or Restrictions of Revolving
----------------------------------------------------------
Dollar Loan Commitments. Company shall from time to time prepay the
-----------------------
Revolving Loans to the extent necessary to give effect to the
limitations set forth in subsection 2.1(A) (vii).
55
(i) Prepayments due to Fluctuations in Currency Exchange
----------------------------------------------------
Rates. Company shall, on the last Business Day of each calendar month
-----
that the Dollar Equivalent of the aggregate principal amount of all
outstanding Revolving Sterling Loans exceeds the Revolving Sterling
Loan Commitments, either (1) prepay the Revolving Sterling Loans or
(2) deposit funds into an account satisfactory to Administrative Agent
and in which Administrative Agent (on behalf of Lenders) has a First
Priority Lien for prepayment on the last day of the Interest Period
for such Revolving Sterling Loans, in each case to the extent
necessary so that the Total Utilization of Revolving Loan Commitments
does not exceed the Revolving Loan Commitments then in effect
(iv) Application of Prepayments.
--------------------------
(a) Application of Voluntary Prepayments by Type of Loans and
---------------------------------------------------------
Order of Maturity. Any voluntary prepayments pursuant to subsection
-----------------
2.4B(i) shall be applied as specified by Company in the applicable
notice of prepayment; provided that in the event Company fails to
--------
specify the Loans to which any such prepayment shall be applied, such
prepayment shall be applied first, to repay outstanding Swing Line
-----
Loans to the full extent thereof, second, to repay outstanding
------
Revolving Loans to the full extent thereof and third, to repay
-----
outstanding Term Loans to the full extent thereof. Any voluntary
prepayments of the Term Loans pursuant to subsection 2.4B(i) shall be
applied to prepay the Tranche A Term Loans, Tranche B Term Loans and
Tranche C Term Loans on a pro-rata basis (in accordance with the
respective outstanding principal amounts thereof) and to reduce the
scheduled installments of principal of the Tranche A Term Loans,
Tranche B Term Loans and Tranche C Term Loans set forth in subsection
2.4A in order of maturity.
(b) Application of Mandatory Prepayments by Type of Loans. Any
-----------------------------------------------------
amount (the "Applied Amount") required to be applied as a mandatory
prepayment of the Loans pursuant to subsections 2.4B(iii)(a)-(f) shall
be applied first, to prepay the Term Loans to the full extent thereof,
-----
second, to the extent of any remaining portion of the Applied Amount,
------
to prepay the Swing Line Loans to the full extent thereof and third,
-----
to the extent of any remaining portion of the Applied Amount, to
prepay the Revolving Loans to the full extent thereof and to
permanently reduce the Revolving Loan Commitment by the amount of such
prepayment.
(c) Application of Mandatory Prepayments of Term Loans to
------------------------------------------------------
Tranche A Term Loans, Tranche B Term Loans and Tranche C Term Loans
-------------------------------------------------------------------
and the Scheduled Installments of Principal Thereof. Any mandatory
---------------------------------------------------
prepayments of the Term Loans pursuant to subsection 2.4B(iii) shall
be applied to prepay the Tranche A Term Loans, the Tranche B Term
Loans and the Tranche C Term Loans on a pro rata basis (in accordance
with the respective outstanding principal amounts thereof) and to
reduce on a pro rata basis the scheduled installments of principal of
the Tranche A Term Loans, Tranche B Term Loans and Tranche C Term
Loans set forth in subsection 2.4A that are unpaid at the time of such
56
prepayment; provided that, in the case of any such mandatory
--------
prepayment of the Tranche B Term Loans or Tranche C Term Loans,
Administrative Agent shall, upon receipt of such mandatory prepayment,
notify each Tranche B Term Loan Lender and Tranche C Term Loan Lender
of such receipt and of the amount of such mandatory prepayment to be
applied to such Lender's Tranche B Term Loan or Tranche C Term Loan,
as the case may be. In the event any Tranche B Term Loan Lender or
Tranche C Term Loan Lender desires to waive such Lender's right to
receive such mandatory prepayment, (1) such Lender shall so advise
Administrative Agent in writing no later than the close of business on
the date it receives such notice from Administrative Agent and (2)
upon receipt of such written advice from such Lender, Administrative
Agent shall apply the amount so waived by such Lender first, to prepay
-----
the Tranche A Term Loans to the full extent thereof and to reduce on a
pro rata basis the scheduled installments of principal of the Tranche
A Term Loans set forth in subsection 2.4A(i) that are unpaid at the
time of such prepayment, second, to prepay the Swing Line Loans to the
------
full extent thereof and third, to prepay the Revolving Loans to the
-----
full extent thereof and to permanently reduce the Revolving Loan
Commitments by the amount of such prepayment.
(d) Application of Prepayments to Base Rate Loans and
-------------------------------------------------
Eurodollar Rate Loans. Considering Term Loans and Revolving Dollar
---------------------
Loans being prepaid separately, any prepayment thereof shall be
applied first to Base Rate Loans to the full extent thereof before
application to Eurodollar Rate Loans, in each case in a manner which
minimizes the amount of any payments required to be made by Company
pursuant to subsection 2.6D.
(e) Application of Prepayments to Revolving Dollar Loans and
--------------------------------------------------------
Revolving Sterling Loans. Considering Revolving Loans being prepaid at
------------------------
any time, any prepayment thereof shall be allocated between Revolving
Dollar Loans and Revolving Sterling Loans as specified by Company or,
if no specification is given, in such a manner as to effect ratable
percentage reductions in the outstanding principal balances of
Revolving Dollar Loans and Revolving Sterling Loans constituting
Revolving Loans then outstanding.
C. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by Company of
--------------------------
principal, interest, fees and other Obligations hereunder and under the
Notes shall be made in the Applicable Currency in same day funds, without
defense, setoff or counterclaim, free of any restriction or condition, and
delivered to Administrative Agent not later than 11:00 A.M. (San Francisco
time) on the date due at the Funding and Payment Office for the account of
Lenders; funds received by Administrative Agent after that time on such due
date shall be deemed to have been paid by Company on the next succeeding
Business Day. Company hereby authorizes Administrative Agent to charge its
accounts with Administrative Agent in order to cause timely payment to be
made to Administrative Agent of all principal, interest, fees and expenses
due hereunder (subject to sufficient funds being available in its accounts
for that purpose).
57
(ii) Application of Payments to Principal and Interest. Except as
-------------------------------------------------
provided in subsection 2.2C, payments in respect of the principal amount of
any Loan shall include payment of accrued interest on the principal amount
being repaid or prepaid, and all such payments (and, in any event, any
payments in respect of any Loan on a date when interest is due and payable
with respect to such Loan) shall be applied to the payment of interest
before application to principal.
(iii) Apportionment of Payments. Aggregate principal and interest
-------------------------
payments in respect of Term Loans and Revolving Loans shall be apportioned
among all outstanding Loans to which such payments relate, in each case
proportionately to Lenders' respective Pro Rata Shares. Administrative
Agent shall promptly distribute to each Lender, at its primary address set
forth below its name on the appropriate signature page hereof or at such
other address as such Lender may request, its Pro Rata Share of all such
payments received by Administrative Agent and the commitment fees of such
Lender when received by Administrative Agent pursuant to subsection 2.3.
Notwithstanding the foregoing provisions of this subsection 2.4C(iii), if,
pursuant to the provisions of subsection 2.6C, any Notice of
Conversion/Continuation is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to be made
-------------------------
hereunder shall be stated to be due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder or of the commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before disposing
-------------------
of any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all
Loans evidenced by that Note and all principal payments previously made
thereon and of the date to which interest thereon has been paid; provided
that the failure to make (or any error in the making of) a notation of any
Loan made under such Note shall not limit or otherwise affect the
obligations of Company hereunder or under such Note with respect to any
Loan or any payments of principal or interest on such Note.
D. Application of Proceeds of Collateral and Payments Under Subsidiary
Guaranty.
(i) Application of Proceeds of Collateral. Except as provided in
-------------------------------------
subsection 2.4B(iii)(a) with respect to prepayments from Net Asset Sale
Proceeds, all proceeds received by Administrative Agent in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral under any Collateral Document may, in the discretion of
Administrative Agent, be held by Administrative Agent as Collateral for,
and/or (then or at any time thereafter) applied in full or in part by
Administrative Agent against, the applicable Secured Obligations (as
defined in such Collateral Document) in the following order of priority:
58
(a) To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Administrative Agent and its agents and counsel, and all other
expenses, liabilities and advances made or incurred by Administrative
Agent in connection therewith, and all amounts for which
Administrative Agent is entitled to indemnification under such
Collateral Document and all advances made by Administrative Agent
thereunder for the account of the applicable Loan Party, and to the
payment of all costs and expenses paid or incurred by Administrative
Agent in connection with the exercise of any right or remedy under
such Collateral Document, all in accordance with the terms of this
Agreement and such Collateral Document;
(b) thereafter, to the extent of any excess such proceeds, to
the payment of all other such Secured Obligations for the ratable
benefit of the holders thereof; and
(c) thereafter, to the extent of any excess such proceeds, to
the payment to or upon the order of such Loan Party or to whosoever
may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
(ii) Application of Payments Under Subsidiary Guaranty. All
-------------------------------------------------
payments received by Administrative Agent under the Subsidiary Guaranty
shall be applied promptly from time to time by Administrative Agent in the
following order of priority:
(a) To the payment of the costs and expenses of any collection
or other realization under the Subsidiary Guaranty, including
reasonable compensation to Administrative Agent and its agents and
counsel, and all expenses, liabilities and advances made or incurred
by Administrative Agent in connection therewith, all in accordance
with the terms of this Agreement and the Subsidiary Guaranty;
(b) thereafter, to the extent of any excess such payments, to
the payment of all other Guarantied Obligations (as defined in the
Subsidiary Guaranty) for the ratable benefit of the holders thereof;
and
(c) thereafter, to the extent of any excess such payments, to
the payment to the applicable Subsidiary Guarantor or to whosoever may
be lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
E. Matters Relating to Changes in Currency Exchange Rates and Conversion
of Amounts to Applicable Currencies.
(i) Fluctuations in Currency Exchange Rates. The Dollar Equivalent
---------------------------------------
of any Revolving Sterling Loans shall be calculated (a) on the Funding Date
for such Revolving Sterling Loans and (b) on the last Business Day of each
calendar month and such calculation shall remain in effect for purposes of
this Agreement until the next date on which an event described in the
foregoing clauses (a) and (b) occurs and a recalculation is made.
59
(ii) Conversion of Amounts to Applicable Currencies. To the extent
----------------------------------------------
funds received by Administrative Agent from any Loan Party (or debited from
any Loan Party's account with Administrative Agent) in Dollars or in
Sterling must be converted into the Applicable Currency required for any
payment hereunder, Administrative Agent shall effect such conversion on the
applicable payment date on the basis of the rate at which Administrative
Agent is able to purchase such Applicable Currency with such other currency
on such payment date.
2.5 Use of Proceeds.
---------------
A. Term Loans. The proceeds of the Term Loans, together with up to
$25,000,000 in proceeds of the initial Revolving Loans (the "Acquisition
Revolving Loans"), Letters of Credit in a face amount equal to the aggregate
face amount of the Existing Company Letters of Credit and the Existing DMG
Letters of Credit and the proceeds of the debt and equity capitalization of
Company described in subsection 4.1 shall be applied to (i) purchase the
Tendered Shares; (ii) pay Transaction Costs in an aggregate amount not to exceed
$42,000,000; and (iii) repay amounts outstanding under the Existing Credit
Agreements; provided that Company shall first apply the proceeds from the
--------
Tranche C Terms Loans to the full extent thereof then the Tranche B Term Loans
to the full extent thereof then the Tranche A Terms Loans to the full extent
----
thereof before application of the Acquisition Revolving Loans.
B. Tranche A Term Loans. The proceeds of the Tranche A Term Loans not
used pursuant to subsection 2.5A shall be applied to (i) pay that portion of the
Acquisition Financing Requirements that becomes due and payable on the Merger
Date and (ii) pay Transaction Costs on the Merger Date in an aggregate amount,
together with Transaction Costs paid pursuant to subsection 2.5A, not to exceed
$42,000,000.
C. Revolving Loans; Swing Line Loans. The proceeds of the Acquisition
Revolving Loans shall be applied by Company as provided in subsection 2.5A. The
proceeds of any other Revolving Loans and any Swing Line Loans shall be applied
by Company for working capital purposes, which may include the making of
intercompany loans to its Subsidiaries in accordance with subsection 7.3 for
their own working capital purposes, for general corporate purposes not
prohibited hereby, for payments permitted under subsection 7.5 and for the
payment of amounts payable in respect of appraisal rights perfected by any
shareholder of DMG.
D. Margin Regulations. Based upon the calculation of good faith loan
value on the Form U-1 completed by Company and Lenders with respect to the Loans
to be made on the Closing Date, no portion of the proceeds of any borrowing
under this Agreement shall be used by Company or any of its Subsidiaries in any
manner that might cause the borrowing or the application of such proceeds to
violate Regulation T, Regulation U or Regulation X of the Board of Governors of
the Federal Reserve System or any other regulation of such Board or to violate
the Exchange Act, in each case as in effect on the date or dates of such
borrowing and such use of proceeds.
2.6 Special Provisions Governing Eurodollar Rate Loans and Domestic Sterling
------------------------------------------------------------------------
Rate Loans.
- ----------
60
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to Eurodollar Rate Loans and
Domestic Sterling Rate Loans as to the matters covered:
A. Determination of Applicable Interest Rate. As soon as practicable
after 9:00 A.M. (San Francisco time) or 11:00 A.M. (London time), as applicable,
on each Interest Rate Determination Date, Administrative Agent shall determine
(which determination shall, absent manifest error, be final, conclusive and
binding upon all parties) the interest rate that shall apply to the Eurodollar
Rate Loans or Domestic Sterling Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
B. Inability to Determine Applicable Interest Rate. In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans or Domestic
Sterling Rate Loans, that by reason of circumstances affecting the London
interbank market adequate and fair means do not exist for ascertaining the
interest rate applicable to such Loans on the basis provided for in the
definition of Adjusted Eurodollar Rate or Adjusted Domestic Sterling Rate, as
the case may be, Administrative Agent shall on such date give notice (by
telefacsimile or by telephone confirmed in writing) to Company and each Lender
of such determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans or Domestic Sterling Rate Loans until such time as
Administrative Agent notifies Company and Lenders that the circumstances giving
rise to such notice no longer exist and (ii) any Notice of Borrowing or Notice
of Conversion/Continuation given by Company with respect to the Loans in respect
of which such determination was made shall be deemed to be rescinded by Company.
C. Illegality or Impracticability of Eurodollar Rate Loans or Domestic
Sterling Rate Loans. In the event that on any date any Lender shall have
determined (which determination shall be final and conclusive and binding upon
all parties hereto but shall be made only after consultation with Company and
Administrative Agent) that the making, maintaining or continuation of its
Eurodollar Rate Loans or Domestic Sterling Rate Loans (i) has become unlawful as
a result of compliance by such Lender in good faith with any law, treaty,
governmental rule, regulation, guideline or order (or would conflict with any
such treaty, governmental rule, regulation, guideline or order not having the
force of law even though the failure to comply therewith would not be unlawful)
or (ii) has become impracticable, or would cause such Lender material hardship,
as a result of contingencies occurring after the date of this Agreement which
materially and adversely affect the London interbank market or the position of
such Lender in that market, then, and in any such event, such Lender shall be an
"Affected Lender" and it shall on that day give notice (by telefacsimile or by
telephone confirmed in writing) to Company and Administrative Agent of such
determination (which notice Administrative Agent shall promptly transmit to each
other Lender). Thereafter (a) the obligation of the Affected Lender to make
Loans as, or to convert Loans to, Eurodollar Rate Loans or Domestic Sterling
Rate Loans shall be suspended until such notice shall be withdrawn by the
Affected Lender, (b) to the extent such determination by the Affected Lender
relates to a Eurodollar Rate Loan or Domestic Sterling Rate Loan then being
requested by Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender
61
shall make such Loan as (or convert such Loan to, as the case may be) a Base
Rate Loan, (c) the Affected Lender's obligation to maintain its outstanding
Eurodollar Rate Loans or Domestic Sterling Rate Loans (the "Affected Loans")
shall be terminated at the earlier to occur of the expiration of the Interest
Period then in effect with respect to the Affected Loans or when required by
law, and (d) the Affected Loans shall automatically convert into Base Rate Loans
on the date of such termination. Notwithstanding the foregoing, to the extent a
determination by an Affected Lender as described above relates to a Eurodollar
Rate Loan or Domestic Sterling Rate Loan then being requested by Company
pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation,
Company shall have the option, subject to the provisions of subsection 2.6D, to
rescind such Notice of Borrowing or Notice of Conversion/Continuation as to all
Lenders by giving notice (by telefacsimile or by telephone confirmed in writing)
to Administrative Agent of such rescission on the date on which the Affected
Lender gives notice of its determination as described above (which notice of
rescission Administrative Agent shall promptly transmit to each other Lender).
Except as provided in the immediately preceding sentence, nothing in this
subsection 2.6C shall affect the obligation of any Lender other than an Affected
Lender to make or maintain Loans as, or to convert Loans to, Eurodollar Rate
Loans or Domestic Sterling Rate Loans in accordance with the terms of this
Agreement.
D. Compensation For Breakage or Non-Commencement of Interest Periods.
Company shall compensate each Lender, upon written request by that Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any interest paid by that
Lender to lenders of funds borrowed by it to make or carry its Eurodollar Rate
Loans and Domestic Sterling Rate Loans and any reasonable loss, expense or
liability sustained by that Lender in connection with the liquidation or re-
employment of such funds) which that Lender may sustain: (i) if for any reason
(other than a default by that Lender) a borrowing of any Eurodollar Rate Loan or
Domestic Sterling Rate Loan does not occur on a date specified therefor in a
Notice of Borrowing or a telephonic request for borrowing, or a conversion to or
continuation of any Eurodollar Rate Loan or Domestic Sterling Rate Loan, does
not occur on a date specified therefor in a Notice of Conversion/Continuation or
a telephonic request for conversion or continuation, (ii) if any prepayment
(including any prepayment pursuant to subsection 2.4B(i) and including any
prepayment of any Lender's Eurodollar Rate Loans as a result of the syndication
of the Loans on or prior to the date that is 90 days after the Closing Date) or
other principal payment or any conversion of any of its Eurodollar Rate Loans
occurs on a date prior to the last day of an Interest Period applicable to that
Loan, (iii) if any prepayment of any of its Eurodollar Rate Loans or Domestic
Sterling Rate Loans is not made on any date specified in a notice of prepayment
given by Company, or (iv) as a consequence of any other default by Company in
the repayment of its Eurodollar Rate Loans and Domestic Sterling Rate Loans when
required by the terms of this Agreement. In the case of Domestic Sterling Rate
Loans, such reasonable losses, expenses and liabilities shall also include (i)
any loss or reasonable expense sustained or incurred in liquidating or employing
deposits from third Persons acquired to effect or maintain such Domestic
Sterling Rate Loans, (ii) an amount equal to the excess, if any of (a) the cost
sustained by any Lender of obtaining the funds for the Domestic Sterling Rate
Loans being prepaid or converted prior to the expiration of the applicable
Interest Period for such Domestic Sterling Rate Loans for the period from the
date of such prepayment or conversion to the last day of the applicable Interest
Period, over (b) the amount of interest (as reasonably determined by that
Lender) that would be realized by such Lender in re-employing the funds so
prepaid or converted for such Interest Period, (iii) any loss
62
incurred in liquidating or closing out any foreign currency contract undertaken
by that Lender in funding or maintaining such Domestic Sterling Rate Loans in
funding or maintaining such Domestic Sterling Rate Loans, and (iv) any loss
arising from any change in the value of Dollars in relation to any such Domestic
Sterling Rate Loans which was not paid on the date due between the date such
payment was due and the date of payment, or which was not paid in Sterling, all
as determined by such Lender in its good faith discretion, but otherwise without
penalty.
E. Booking of Eurodollar Rate Loans and Domestic Sterling Rate Loans. Any
Lender may make, carry or transfer Eurodollar Rate Loans and Domestic Sterling
Rate Loans at, to, or for the account of any of its branch offices or the office
of an Affiliate of that Lender.
F. Assumptions Concerning Funding of Eurodollar Rate Loans and Domestic
Sterling Rate Loans. Calculation of all amounts payable to a Lender under this
subsection 2.6 and under subsection 2.7A shall be made as though that Lender had
actually funded each of its relevant Eurodollar Rate Loans and Domestic Sterling
Rate Loans through the purchase of a Eurodollar deposit or a Sterling deposit,
as the case may be, bearing interest at the rate obtained pursuant to clause (i)
of the definition of Adjusted Eurodollar Rate or Adjusted Domestic Sterling
Rate, as the case may be, in an amount equal to the amount of such Eurodollar
Rate Loan or Domestic Sterling Rate Loan and having a maturity comparable to the
relevant Interest Period and (y) in the case of a Term Loan or Revolving Dollar
Loan, through the transfer of such Eurodollar deposit from an offshore office of
that Lender to a domestic office of that Lender in the United States of America,
and (z) in the case of a Revolving Sterling Loan, through the making of the
relevant Loan at a branch in the United Kingdom; provided, however, that each
-------- -------
Lender may fund each of its Eurodollar Rate Loans and Domestic Sterling Rate
Loans in any manner it sees fit and the foregoing assumptions shall be utilized
only for the purposes of calculating amounts payable under this subsection 2.6
and under subsection 2.7A.
G. Eurodollar Rate Loans After Default. After the occurrence of and
during the continuation of a Potential Event of Default or an Event of Default,
(i) Company may not elect to have a Loan be made or maintained as, or converted
to, a Eurodollar Rate Loan after the expiration of any Interest Period then in
effect for that Loan and (ii) subject to the provisions of subsection 2.6D, any
Notice of Borrowing or Notice of Conversion/Continuation given by Company with
respect to a requested borrowing or conversion/continuation that has not yet
occurred shall be deemed to be rescinded by Company.
2.7 Increased Costs; Taxes; Capital Adequacy.
----------------------------------------
A. Compensation for Increased Costs and Taxes. Subject to the provisions
of subsection 2.7B (which shall be controlling with respect to the matters
covered thereby), in the event that any Lender shall reasonably determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any
63
central bank or other governmental or quasi-governmental authority (whether or
not having the force of law):
(i) subjects such Lender (or its applicable lending office) to any
additional Tax (other than any Tax on the overall net income of such
Lender) with respect to this Agreement or any of its obligations hereunder
or any payments to such Lender (or its applicable lending office) of
principal, interest, fees or any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the account of,
or advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Lender (other than any such
reserve or other requirements with respect to Eurodollar Rate Loans and
Domestic Sterling Rate Loans that are reflected in the definition of
Adjusted Eurodollar Rate or Adjusted Domestic Sterling Rate, as the case
may be); or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office) or
its obligations hereunder or the London interbank market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender reasonably
shall determine) as may be necessary to compensate such Lender for any such
increased cost or reduction in amounts received or receivable hereunder;
provided, however, that Company shall not be obligated to pay such Lender any
- -------- -------
compensation attributable to any period prior to the date that is 90 days prior
to the date on which such Lender gave notice to Company of the circumstances
entitling such Lender to compensation. Such Lender shall promptly deliver to
Company (with a copy to Administrative Agent) a written statement, setting forth
in reasonable detail the basis for calculating the additional amounts owed to
such Lender under this subsection 2.7A, which statement shall be conclusive and
binding upon all parties hereto absent manifest error.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums payable by Company
-----------------------------
under this Agreement and the other Loan Documents shall (except to the
extent required by law) be paid free and clear of, and without any
deduction or withholding on account of, any Tax (other than a Tax on the
overall net income of any Lender) imposed, levied, collected, withheld or
assessed by or within the United States of America or any political
subdivision in or of the United States of America or any other jurisdiction
from or to which a payment is made by or on behalf of Company or by any
federation or
64
organization of which the United States of America or any such jurisdiction
is a member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other Person is
-----------------------
required by law to make any deduction or withholding on account of any such
Tax from any sum paid or payable by Company to Administrative Agent or any
Lender under any of the Loan Documents:
(a) Company shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as Company
becomes aware of it;
(b) Company shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability to
pay is imposed on Company) for its own account or (if that liability
is imposed on Administrative Agent or such Lender, as the case may be)
on behalf of and in the name of Administrative Agent or such Lender;
(c) the sum payable by Company in respect of which the relevant
deduction, withholding or payment is required shall be increased to
the extent necessary to ensure that, after the making of that
deduction, withholding or payment, Administrative Agent or such
Lender, as the case may be, receives on the due date a net sum equal
to what it would have received had no such deduction, withholding or
payment been required or made; and
(d) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within 30
days after the due date of payment of any Tax which it is required by
clause (b) above to pay, Company shall deliver to Administrative Agent
evidence satisfactory to Administrative Agent of such deduction,
withholding or payment and of the remittance thereof to the relevant
taxing or other authority;
provided that no such additional amount shall be required to be paid to any
--------
Lender under clause (c) above except to the extent that any change after
the date hereof (in the case of each Lender listed on the signature pages
hereof) or after the date of the Assignment Agreement pursuant to which
such Lender became a Lender (in the case of each other Lender) in any such
requirement for a deduction, withholding or payment as is mentioned therein
shall result in an increase in the rate of such deduction, withholding or
payment from that in effect at the date of this Agreement or at the date of
such Assignment Agreement, as the case may be, in respect of payments to
such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
-----------------------------------------------
(a) Each Lender that is organized under the laws of any
jurisdiction other than the United States of America or any state or
other political subdivision thereof (for purposes of this subsection
2.7B(iii), a "Non-US Lender") shall deliver to Administrative Agent
for transmission to Company, on or prior to the Closing Date (in the
case of each Lender listed on the signature pages hereof) or
65
on or prior to the date of the Assignment Agreement pursuant to which
it becomes a Lender (in the case of each other Lender), and at such
other times as may be necessary in the determination of Company or
Administrative Agent (each in the reasonable exercise of its
discretion), (1) two original copies of Internal Revenue Service Form
1001 or 4224 (or any successor forms), properly completed and duly
executed by such Lender, together with any other certificate or
statement of exemption required under the Internal Revenue Code or the
regulations issued thereunder to establish that such Lender is not
subject to deduction or withholding of United States federal income
tax with respect to any payments to such Lender of principal,
interest, fees or other amounts payable under any of the Loan
Documents or (2) if such Lender is not a "bank" or other Person
described in Section 881(c)(3) of the Internal Revenue Code and cannot
deliver either Internal Revenue Service Form 1001 or 4224 pursuant to
clause (1) above, a Certificate re Non-Bank Status substantially in
the form of Exhibit XIV annexed hereto together with two original
-----------
copies of Internal Revenue Service Form W-8 (or any successor form),
properly completed and duly executed by such Lender, together with any
other certificate or statement of exemption required under the
Internal Revenue Code or the regulations issued thereunder to
establish that such Lender is not subject to deduction or withholding
of United States federal income tax with respect to any payments to
such Lender of interest payable under any of the Loan Documents.
(b) Each Lender required to deliver any forms, certificates or
other evidence with respect to United States federal income tax
withholding matters pursuant to subsection 2.7B(iii)(a) hereby agrees,
from time to time after the initial delivery by such Lender of such
forms, certificates or other evidence, whenever a lapse in time or
change in circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that such
Lender shall promptly (1) deliver to Administrative Agent for
transmission to Company two new original copies of Internal Revenue
Service Form 1001 or 4224, or a Certificate re Non-Bank Status and two
original copies of Internal Revenue Service Form W-8, as the case may
be, properly completed and duly executed by such Lender, together with
any other certificate or statement of exemption required in order to
confirm or establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to
payments to such Lender under the Loan Documents or (2) notify
Administrative Agent and Company of its inability to deliver any such
forms, certificates or other evidence.
(c) Company shall not be required to pay any additional amount
to any Non-US Lender under clause (c) of subsection 2.7B(ii) if such
Lender shall have failed to satisfy the requirements of clause (a) or
(b)(1) of this subsection 2.7B(iii); provided that if such Lender
--------
shall have satisfied the requirements of subsection 2.7B(iii)(a) on
the Closing Date (in the case of each Lender listed on the signature
pages hereof) or on the date of the Assignment Agreement pursuant to
which it became a Lender (in the case of each other Lender), nothing
in this subsection 2.7B(iii)(c) shall relieve Company of its
66
obligation to pay any additional amounts pursuant to clause
(c) of subsection 2.7B(ii) in the event that, as a result of any
change in any applicable law, treaty or governmental rule, regulation
or order, or any change in the interpretation, administration or
application thereof, such Lender is no longer properly entitled to
deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to withholding
as described in subsection 2.7B(iii)(a).
C. Capital Adequacy Adjustment. If any Lender shall have determined that
the adoption, effectiveness, phase-in or applicability after the date hereof of
any law, rule or regulation (or any provision thereof) regarding capital
adequacy, or any change therein or 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 applicable lending office) with any guideline, request or directive
regarding capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender's Loans or Commitments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within five Business Days after receipt by Company from
such Lender of the statement referred to in the next sentence, Company shall pay
to such Lender such additional amount or amounts as will compensate such Lender
or such controlling corporation on an after-tax basis for such reduction;
provided, however, that Company shall not be obligated to pay such Lender any
- -------- -------
compensation attributable to any period prior to the date that is 90 days prior
to the date on which such Lender gave notice to Company of the circumstances
entitling such Lender to compensation. Such Lender shall deliver to Company
(with a copy to Administrative Agent) a written statement, setting forth in
reasonable detail the basis of the calculation of such additional amounts, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.
2.8 Obligation of Lenders and Issuing Lenders to Mitigate.
-----------------------------------------------------
Each Lender and the Issuing Lender agrees that, as promptly as
practicable after the officer of such Lender or Issuing Lender responsible for
administering the Loans or Letters of Credit of such Lender or Issuing Lender,
as the case may be, becomes aware of the occurrence of an event or the existence
of a condition that would cause such Lender to become an Affected Lender or that
would entitle such Lender or Issuing Lender to receive payments under subsection
2.7 or subsection 3.6, it will, to the extent not inconsistent with the internal
policies of such Lender or Issuing Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or maintain the
Commitments of such Lender or the affected Loans or Letters of Credit of such
Lender or Issuing Lender through another lending or letter of credit office of
such Lender or Issuing Lender, or (ii) take such other measures as such Lender
or Issuing Lender may deem reasonable, if as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which
67
would otherwise be required to be paid to such Lender or Issuing Lender pursuant
to subsection 2.7 or subsection 3.6 would be materially reduced and if, as
determined by such Lender or Issuing Lender in its sole discretion, the making,
issuing, funding or maintaining of such Commitments or Loans or Letters of
Credit through such other lending or letter of credit office or in accordance
with such other measures, as the case may be, would not otherwise materially
adversely affect such Commitments or Loans or Letters of Credit or the interests
of such Lender or Issuing Lender; provided that such Lender or Issuing Lender
--------
will not be obligated to utilize such other lending or letter of credit office
pursuant to this subsection 2.8 unless Company agrees to pay all incremental
expenses incurred by such Lender or Issuing Lender as a result of utilizing such
other lending or letter of credit office as described in clause (i) above. A
certificate as to the amount of any such expenses payable by Company pursuant to
this subsection 2.8 (setting forth in reasonable detail the basis for requesting
such amount) submitted by such Lender or Issuing Lender to Company (with a copy
to Administrative Agent) shall be conclusive absent manifest error.
2.9 Substitution of Lenders.
-----------------------
If Company receives a notice from any Lender requesting payment
pursuant to subsection 2.7 or 3.6, or the obligation of any Lender to make or
maintain Eurodollar Rate Loans or Domestic Sterling Rate Loans has been
suspended or terminated pursuant to subsection 2.6C, so long as (i) no Potential
Event of Default or Event of Default shall have occurred and be continuing and
(ii), in the case of a notice pursuant to subsection 2.7 or 3.6, such Lender is
unwilling to withdraw the notice delivered to Company, upon 30 days prior
written notice to such Lender and Administrative Agent, Company may require such
Lender to assign all of its Loans, Commitments and other Obligations to another
Lender or Eligible Assignee from whom Company obtains a commitment to purchase
at par the Loans, Commitments and other Obligations of the Lender to be replaced
and to assume all obligations of such Lender pursuant to the provisions of
subsection 10.1B; provided that prior to or concurrently with such replacement
--------
(a) Company has paid to such Lender all amounts, if any, under subsections 2.7
and 3.6 through such date of replacement, (b) Company or the applicable assignee
has paid to Administrative Agent the recordation fee required to be paid by
subsection 10.1B, and (c) all of the requirements for such assignment contained
in subsection 10.1B have been fulfilled.
2.10 European Monetary Union.
-----------------------
A. Effectiveness of Provisions. The provisions of subsections 2.10C to
2.10J (inclusive) are hereby effective, provided that, if and to the extent
-------------
that any such provision relates to any state (or the currency of such state)
which shall not be a Participating Member State on the Commencement of the Third
Stage of EMU, such provision shall come into effect in relation to such state
(and the currency of such state) on and with effect from the date on which such
state becomes a Participating Member State.
B. Redenomination and Alternative Currencies. Each obligation under this
Agreement of a party to this Agreement which has been denominated in the
National Currency Unit of a Participating Member State shall be redenominated
into the euro Unit in accordance with EMU Legislation, provided that, if and to
-------------
the extent that any EMU Legislation provides that following the Commencement of
the Third Stage of EMU an amount denominated either in the
68
euro or in the National Currency Unit of a Participating Member State and
payable within that Participating Member State by crediting an account of the
creditor can be paid by the debtor either in the euro Unit or in that National
Currency Unit, each party to this Agreement shall be entitled to pay or repay
any such amount either in the euro Unit or in such National Currency Unit.
C. Business Days. In relation to any amount denominated or to be
denominated in the euro or a National Currency Unit, any reference to a business
day shall be construed as a reference to a day (other than a Saturday or Sunday)
on which banks are generally open for business in:
(a) London and New York City, and
(b) Frankfurt am Main, Germany (or such principal financial
center or centers in such Participating Member State or states as the
Administrative Agent may from time to time designate for this purpose).
D. Advances. Any Revolving Sterling Loan in the currency of a
Participating Member State shall be made in the euro Unit.
E. Payments to the Administrative Agent. In relation to the payment of any
amount of euro Units or National Currency Units to Administrative Agent, such
amount shall be made available to the Administrative Agent in immediately
available, freely transferable, cleared funds to such account with such bank in
Frankfurt am Main, Germany (or such other principal financial center in such
Participating Member State as the Administrative Agent may from time to time
designate for this purpose) as the Administrative Agent shall from time to time
designate for this purpose.
F. Payments by the Administrative Agent to the Lenders. Any amount payable
by the Administrative Agent to the Lenders under this Agreement in the currency
of a Participating Member State shall be paid in the euro Unit.
G. Payments by the Administrative Agent. In relation to the payment of any
amount denominated in the euro or in a National Currency Unit, the
Administrative Agent shall not be liable to Company or any of the Lenders in any
way whatsoever for any delay, or the consequences of any delay, in the crediting
to any account of any amount required by this Agreement to be paid by the
Administrative Agent if the Administrative Agent shall have taken commercially
reasonable steps to achieve, on the date required by this Agreement, the payment
of such amount in immediately available, freely transferable, cleared funds (in
the euro Unit or, as the case may be, in a National Currency Unit) to the
account with the bank in the principal financial center in the Participating
Member State which Company or, as the case may be, any Bank shall have specified
for such purpose. In this subsection 2.10G, "commercially reasonable steps"
means such reasonable steps as may be prescribed from time to time by the
regulations or operating procedures of such clearing or settlement system as the
Administrative Agent may from time to time determine for the purpose of clearing
or settling payments of the euro.
H. Basis of Accrual. If, in relation to the currency of any state which
becomes a Participating Member State, the basis of accrual of interest expressed
in this Agreement (i.e., a
69
365-day or 366-day year, as the case may be, or a 360-day year) in respect of
such currency shall be inconsistent with any convention or practice in the
London Interbank Market for the basis of accrual of interest in respect of the
euro, such expressed basis shall be replaced by such convention or practice,
effective on the date on which such state becomes a Participating Member State;
provided that, if any Revolving Sterling Loan in the currency of such state is
- -------------
outstanding immediately prior to such date, such replacement shall take effect,
with respect to such Revolving Sterling Loan, at the end of the then current
Interest Period.
I. Rounding and Other Consequential Changes. In addition to any method of
conversion or rounding prescribed by any EMU Legislation and without affecting
the respective obligations of Company to the Lenders and the Lenders to Company
under or pursuant to this Agreement:
(a) each reference in this Agreement to a minimum amount (or an
integral multiple thereof) in a National Currency Unit to be paid to or
by the Administrative Agent shall be replaced by a reference to such
reasonably comparable and convenient amount (or an integral multiple
thereof) in the euro Unit as the Administrative Agent may from time to
time specify; and
(b) except as expressly provided in this subsection 2.10I, each
provision of this Agreement shall be subject to such reasonable changes
of construction as the Administrative Agent may from time to time
determine to be necessary or appropriate to reflect the introduction of
or changeover to the euro in the Participating Member States.
J. Increased Costs. Company shall, from time to time, at the request of
any of the Lenders, pay to the Administrative Agent for the account of such
Lender the amount of any cost or increased cost incurred by, or of any reduction
in any amount payable to or in the effective return on its capital to, or of
interest or other return foregone by, a Lender or any holding company of such
Lender that such Lender shall reasonably determine is incurred or sustained by
such Lender as a result of the introduction of, changeover to or operation of
the euro in any Participating Member State. A certificate of the calculation of
such amount or amounts shall be delivered to Company and shall be conclusive
absent manifest error.
SECTION 3. LETTERS OF CREDIT
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
---------------------------------------------------------------------
Therein.
- -------
A. Letters of Credit. In addition to Company requesting that Lenders make
Revolving Loans pursuant to subsections 2.1A(iv) and 2.1A(v) and that Swing Line
Lender make Swing Line Loans pursuant to subsection 2.1A(vi), Company may
request, in accordance with the provisions of this subsection 3.1, from time to
time during the period from the Closing Date to but excluding the Revolving Loan
Commitment Termination Date, that the Issuing Lender issue Letters of Credit for
the account of Company for the purposes specified in the definition of Letters
of Credit. Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Company herein set forth,
the Issuing Lender shall issue such Letters of Credit in accordance with the
provisions of this subsection 3.1;
70
provided that Company shall not request that the Issuing Lender issue (and the
- --------
Issuing Lender shall not issue):
(i) any Letter of Credit if, after giving effect to such issuance,
the sum of the aggregate principal amount of all outstanding Revolving
Dollar Loans (other than Revolving Dollar Loans made for the purpose of
reimbursing the Issuing Lender for any amount drawn under any Letter of
Credit but not yet so applied) plus the Letter of Credit Usage would exceed
----
the Revolving Dollar Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such issuance,
the Letter of Credit Usage would exceed $50,000,000;
(iii) any Letter of Credit having an expiration date later than the
earlier of (a) the Revolving Loan Commitment Termination Date and (b) the
date which is one year from the date of issuance of such Letter of Credit;
provided that the immediately preceding clause (b) shall not prevent the
--------
Issuing Lender from agreeing that a Letter of Credit will automatically be
extended for one or more successive periods not to exceed one year each
unless the Issuing Lender elects not to extend for any such additional
period; and provided, further that the Issuing Lender shall elect not to
-------- -------
extend such Letter of Credit if it has knowledge that an Event of Default
has occurred and is continuing (and has not been waived in accordance with
subsection 10.6) at the time the Issuing Lender must elect whether or not
to allow such extension; or
(iv) any Letter of Credit denominated in a foreign currency which in
the judgment of Administrative Agent is not readily and freely available.
On and after the Closing Date, the Existing Company Letters of Credit
shall be deemed for all purposes, including for purposes of the fees to be
collected pursuant to subsection 3.2, and reimbursement of costs and expenses to
the extent provided herein, to be Letters of Credit outstanding under this
Agreement and entitled to the benefits of this Agreement and the other Loan
Documents, and shall be governed by the applications and agreements pertaining
thereto and by this Agreement; provided, however, that, notwithstanding any
-------- -------
other provision of this Agreement, no fees with respect to the issuance of the
Existing Company Letters of Credit shall be due hereunder.
B. Mechanics of Issuance.
(i) Notice of Issuance. Whenever Company desires the issuance of
------------------
a Letter of Credit, it shall deliver to Administrative Agent a Notice of
Issuance of Letter of Credit substantially in the form of Exhibit III
-----------
annexed hereto no later than 10:00 A.M. (San Francisco time) at least three
Business Days, or such shorter period as may be agreed to by the Issuing
Lender in any particular instance, in advance of the proposed date of
issuance. The Notice of Issuance of Letter of Credit shall specify (a) the
proposed date of issuance (which shall be a Business Day), (b) the face
amount of the Letter of Credit, (c) in the case of a Letter of Credit which
Company requests to be denominated in a currency other than Dollars, the
currency in which Company requests such Letter of Credit to be issued, (d)
the expiration date of the Letter of Credit, (e) the name and
71
address of the beneficiary, and (f) the verbatim text of the proposed
Letter of Credit or the proposed terms and conditions thereof; provided
--------
that the Issuing Lender, in its reasonable discretion, may require changes
in the text of the proposed Letter of Credit; and provided, further that no
-------- -------
Letter of Credit shall require payment against a conforming draft to be
made thereunder on the same business day (under the laws of the
jurisdiction in which the office of the Issuing Lender to which such draft
is required to be presented is located) that such draft is presented if
such presentation is made after 10:00 A.M. (in the time zone of such office
of the Issuing Lender) on such business day.
Company shall notify the Administrative Agent prior to the
issuance of any Letter of Credit in the event that any of the matters to
which Company is required to certify in the applicable Notice of Issuance
of Letter of Credit is no longer true and correct in all material respects
as of the proposed date of issuance of such Letter of Credit, and upon the
issuance of any Letter of Credit Company shall be deemed to have re-
certified, as of the date of such issuance, as to the matters to which
Company is required to certify in the applicable Notice of Issuance of
Letter of Credit.
(ii) Issuance of Letter of Credit. Upon satisfaction or waiver
----------------------------
(in accordance with subsection 10.6) of the conditions set forth in
subsection 4.3, the Issuing Lender shall issue the requested Letter of
Credit in accordance with the Issuing Lender's standard operating
procedures.
(iii) Notification to Lenders. Upon the issuance of any Letter of
-----------------------
Credit the Administrative Agent shall promptly notify each other Lender of
such issuance, which notice shall be accompanied by a copy of such Letter
of Credit and shall notify each Lender of the amount of such Lender's
respective participation in such Letter of Credit, determined in accordance
with subsection 3.1C.
C. Lenders' Purchase of Participations in Letters of Credit. Immediately
upon the issuance of each Letter of Credit, each Lender shall be deemed to, and
hereby agrees to, have irrevocably purchased from the Issuing Lender a
participation in such Letter of Credit and any drawings honored thereunder in an
amount equal to such Lender's Pro Rata Share of the maximum amount which is or
at any time may become available to be drawn thereunder.
3.2 Letter of Credit Fees.
---------------------
Company agrees to pay the following amounts with respect to Letters of
Credit issued hereunder:
(i) with respect to each Letter of Credit, (a) a fronting fee,
payable directly to the Issuing Lender for its own account, equal to 0.125%
per annum of the amount available to be drawn under such Letter of Credit
and (b) a nonrefundable letter of credit fee, payable to Administrative
Agent for the account of Lenders, equal to the amount available to be drawn
under such Letter of Credit multiplied by (1) for the period from and
----------
including the Closing Date to and excluding the date on which
Administrative Agent receives a Compliance Certificate pursuant to
subsection 6.1(iii) for the Fiscal Quarter ended July 31, 2000, 2.75% and
(2) thereafter, the Applicable Margin with respect to
72
Revolving Dollar Loans that are Eurodollar Rate Loans, each such fronting
fee or letter of credit fee to be payable quarterly in advance at issuance
and on the last Business Day of each January, April, July and October of
each year and computed on the basis of a 360-day year; and
(ii) with respect to the issuance, amendment, negotiation or transfer
of each Letter of Credit and each payment of a drawing made thereunder
(without duplication of the fees payable under clause (i) above),
documentary and processing charges payable directly to the Issuing Lender
for its own account in accordance with the Issuing Lender's standard
schedule for such charges in effect at the time of such issuance,
amendment, transfer or payment, as the case may be.
For purposes of calculating any fees payable under this subsection 3.2, any
amount described in such clauses which is denominated in a currency other than
Dollars shall be valued based on the applicable Exchange Rate for such currency
as of the applicable date of determination. The Applicable Margin shall be
determined on the first day of the calendar month following the delivery of each
Compliance Certificate pursuant to subsection 6.1(iii), commencing with the
Compliance Certificate for the Fiscal Quarter ended July 31, 2000, by reference
to such Compliance Certificate (without regard to any subsequent corrections to
reflect year-end audit adjustments). The appropriate Applicable Margin so
determined shall apply to all Letters of Credit for the period from and
including the date of determination to and excluding the first day of the
calendar month following the delivery of the next Compliance Certificate;
provided, however, that (1) if the Company fails to deliver any Compliance
- -------- -------
Certificate in a timely manner pursuant to subsection 6.1(iii), or (2) upon the
occurrence and during the continuation of any Event of Default, the highest
percentage per annum set forth in the definition of the appropriate Applicable
Margin shall apply for the period from and including the first day of the
calendar month following the date on which such Compliance Certificate was
required to be delivered to and excluding the date on which Administrative Agent
receives such Compliance Certificate or during the continuation of such Event of
Default, as the case may be. Promptly upon receipt by Administrative Agent of
any amount described in clause (i)(b) of this subsection 3.2, Administrative
Agent shall distribute to each Lender its Pro Rata Share of such amount.
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit.
------------------------------------------------------------------
A. Responsibility of Issuing Lender With Respect to Drawings. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
B. Reimbursement by Company of Amounts Paid Under Letters of Credit. In
the event the Issuing Lender has determined to honor a drawing under a Letter of
Credit issued by it, the Issuing Lender shall immediately notify Company, and
Company shall reimburse the Issuing Lender on or before the Business Day
immediately following the date on which such drawing is honored (the
"Reimbursement Date") in an amount in Dollars (which amount, in the case of a
drawing under a Letter of Credit which is denominated in a currency other than
Dollars, shall be calculated by reference to the applicable Exchange Rate) and
in same day funds equal to
73
the amount of such honored drawing; provided that,
anything contained in this Agreement to the contrary notwithstanding, (i) unless
Company shall have notified the Issuing Lender prior to 10:00 A.M. (San
Francisco time) on the date such drawing is honored that Company intends to
reimburse the Issuing Lender for the amount of such honored drawing with funds
other than the proceeds of Revolving Dollar Loans, Company shall be deemed to
have given a timely Notice of Borrowing to Administrative Agent requesting
Lenders to make Revolving Dollar Loans that are Base Rate Loans on the
Reimbursement Date in an amount in Dollars (which amount, in the case of a
drawing under a Letter of Credit which is denominated in a currency other than
Dollars, shall be calculated by reference to the applicable Exchange Rate) equal
to the amount of such honored drawing and (ii) subject to satisfaction or waiver
of the conditions specified in subsection 4.2B, Lenders shall, on the
Reimbursement Date, make Revolving Dollar Loans that are Base Rate Loans in the
amount of such honored drawing, the proceeds of which shall be applied directly
by Administrative Agent to reimburse the Issuing Lender for the amount of such
honored drawing; and provided, further that if for any reason proceeds of
Revolving Dollar Loans are not received by the Issuing Lender on the
Reimbursement Date in an amount equal to the amount of such honored drawing,
Company shall reimburse the Issuing Lender, on demand, in an amount in same day
funds equal to the excess of the amount of such honored drawing over the
aggregate amount of such Revolving Dollar Loans, if any, which are so received.
Nothing in this subsection 3.3B shall be deemed to relieve any Lender from its
obligation to make Revolving Dollar Loans on the terms and conditions set forth
in this Agreement, and Company shall retain any and all rights it may have
against any Lender resulting from the failure of such Lender to make such
Revolving Dollar Loans under this subsection 3.3B.
C. Payment by Lenders of Unreimbursed Amounts Paid Under Letters of
Credit.
(i) Payment by Lenders. In the event that Company shall fail for any
------------------
reason to reimburse the Issuing Lender as provided in subsection 3.3B in
an amount (calculated, in the case of a drawing under a Letter of Credit
denominated in a currency other than Dollars, by reference to the
applicable Exchange Rate) equal to the amount of any drawing honored by
the Issuing Lender under a Letter of Credit issued by it, the Issuing
Lender shall promptly notify each other Lender of the unreimbursed amount
of such honored drawing and of such other Lender's respective participation
therein based on such Lender's Pro Rata Share. Each Lender shall make
available to the Issuing Lender an amount equal to its respective
participation, in Dollars and in same day funds, at the office of the
Issuing Lender specified in such notice, not later than 11:00 A.M. (San
Francisco time) on the first business day (under the laws of the
jurisdiction in which such office of the Issuing Lender is located) after
the date notified by the Issuing Lender. In the event that any Lender fails
to make available to the Issuing Lender on such business day the amount of
such Lender's participation in such Letter of Credit as provided in this
subsection 3.3C, the Issuing Lender shall be entitled to recover such
amount on demand from the Lender together with interest thereon at the rate
customarily used by the Issuing Lender for the correction of errors among
banks for three Business Days and thereafter at the Dollar Base Rate.
Nothing in this subsection 3.3C shall be deemed to prejudice the right of
any Lender to recover from the Issuing Lender any amounts made available by
such Lender to the Issuing Lender pursuant to this subsection 3.3C in the
event that it is determined by the final judgment of a court of competent
74
jurisdiction that the payment with respect to a Letter of Credit by the
Issuing Lender in respect of which payment was made by such Lender
constituted gross negligence or willful misconduct on the part of the
Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From Company.
---------------------------------------------------------------
In the event the Issuing Lender shall have been reimbursed by other Lenders
pursuant to subsection 3.3C(i) for all or any portion of any drawing
honored by the Issuing Lender under a Letter of Credit issued by it, the
Issuing Lender shall distribute to each other Lender which has paid all
amounts payable by it under subsection 3.3C(i) with respect to such honored
drawing such other Lender's Pro Rata Share of all payments subsequently
received by the Issuing Lender from Company in reimbursement of such
honored drawing when such payments are received. Any such distribution
shall be made to a Lender at its primary address set forth below its name
on the appropriate signature page hereof or at such other address as such
Lender may request.
D. Interest on Amounts Paid Under Letters of Credit.
------------------------------------------------
(i) Payment of Interest by Company. Company agrees to pay to the
------------------------------
Issuing Lender, with respect to drawings honored under any Letters of
Credit issued by it, interest on the amount paid by the Issuing Lender in
respect of each such honored drawing from the date such drawing is honored
to but excluding the date such amount is reimbursed by Company (including
any such reimbursement out of the proceeds of Revolving Dollar Loans
pursuant to subsection 3.3B) at a rate equal to (a) for the period from the
date such drawing is honored to but excluding the Reimbursement Date, the
rate then in effect under this Agreement with respect to Revolving Dollar
Loans that are Base Rate Loans and (b) thereafter, if and to the extent not
fully reimbursed, a rate which is 2% per annum in excess of the rate of
interest otherwise payable under this Agreement with respect to Revolving
Dollar Loans that are Base Rate Loans. Interest payable pursuant to this
subsection 3.3D(i) shall be computed on the basis of a 365-day or 366-day
year, as the case may be, for the actual number of days elapsed in the
period during which it accrues and shall be payable on demand or, if no
demand is made, on the date on which the related drawing under a Letter of
Credit is reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender. Promptly
---------------------------------------------------
upon receipt by the Issuing Lender of any payment of interest pursuant to
subsection 3.3D(i) with respect to a drawing honored under a Letter of
Credit issued by it, (a) the Issuing Lender shall distribute to each other
Lender, out of the interest received by the Issuing Lender in respect of
the period from the date such drawing is honored to but excluding the date
on which the Issuing Lender is reimbursed for the amount of such drawing
(including any such reimbursement out of the proceeds of Revolving Dollar
Loans pursuant to subsection 3.3B), the amount that such other Lender would
have been entitled to receive in respect of the letter of credit fee that
would have been payable in respect of such Letter of Credit for such period
pursuant to subsection 3.2 if no drawing had been honored under such Letter
of Credit, and (b) in the event the Issuing Lender shall have been
reimbursed by other Lenders pursuant to subsection 3.3C(i) for all or any
portion of such honored drawing, the Issuing Lender shall distribute to
each other Lender which has paid all amounts payable by it under subsection
3.3C(i) with respect to such honored
75
drawing such other Lender's Pro Rata Share of any interest received by the
Issuing Lender in respect of that portion of such honored drawing so
reimbursed by other Lenders for the period from the date on which the
Issuing Lender was so reimbursed by other Lenders to but excluding the date
on which such portion of such honored drawing is reimbursed by Company. Any
such distribution shall be made to a Lender at its primary address set
forth below its name on the appropriate signature page hereof or at such
other address as such Lender may request.
3.4 Obligations Absolute.
--------------------
The obligation of Company to reimburse the Issuing Lender for drawings
honored under the Letters of Credit issued by it and to repay any Revolving
Dollar Loans made by Lenders pursuant to subsection 3.3B and the obligations of
Lenders under subsection 3.3C(i) shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, set-off, defense or other right
which Company or any Lender may have at any time against a beneficiary or
any transferee of any Letter of Credit (or any Persons for whom any such
transferee may be acting), the Issuing Lender or other Lender or any other
Person or, in the case of a Lender, against Company, whether in connection
with this Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between Company or one of
its Subsidiaries and the beneficiary for which any Letter of Credit was
procured);
(iii) any draft or other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(iv) payment by the Issuing Lender under any Letter of Credit
against presentation of a draft or other document which does not
substantially comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Company or any
of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document by any
party thereto;
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
provided, in each case, that payment by the Issuing Lender under the applicable
- --------
Letter of Credit shall not have constituted gross negligence or willful
misconduct of the Issuing Lender under the
76
circumstances in question (as determined by a final judgment of a court of
competent jurisdiction).
3.5 Indemnification; Nature of Issuing Lenders' Duties.
--------------------------------------------------
A. Indemnification. In addition to amounts payable as provided in
subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless the Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which the Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by the Issuing
Lender, other than as a result of (a) the gross negligence or willful misconduct
of the Issuing Lender as determined by a final judgment of a court of competent
jurisdiction or (b) subject to the following clause (ii), the wrongful dishonor
by the Issuing Lender of a proper demand for payment made under any Letter of
Credit issued by it or (ii) the failure of the Issuing Lender to honor a drawing
under any such Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions herein called "Governmental
Acts").
B. Nature of Issuing Lenders' Duties. As between Company and the Issuing
Lender, Company assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit issued by the Issuing Lender by, the respective beneficiaries
of such Letters of Credit. In furtherance and not in limitation of the
foregoing, the Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond the
control of the Issuing Lender, including any Governmental Acts, and none of the
above shall affect or impair, or prevent the vesting of, any of the Issuing
Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by the Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put the Issuing Lender under any
resulting liability to Company.
77
Notwithstanding anything to the contrary contained in this subsection
3.5, Company shall retain any and all rights it may have against any Issuing
Lender for any liability arising solely out of the gross negligence or willful
misconduct of the Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.
3.6 Increased Costs and Taxes Relating to Letters of Credit.
-------------------------------------------------------
Subject to the provisions of subsection 2.7B (which shall be
controlling with respect to the matters covered thereby), in the event that the
Issuing Lender or any Lender shall reasonably determine (which determination
shall, absent manifest error, be final and conclusive and binding upon all
parties hereto) that any law, treaty or governmental rule, regulation or order,
or any change therein or in the interpretation, administration or application
thereof (including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by the
Issuing Lender or any Lender with any guideline, request or directive issued or
made after the date hereof by any central bank or other governmental or quasi-
governmental authority (whether or not having the force of law):
(i) subjects the Issuing Lender or any Lender (or its applicable
lending or letter of credit office) to any additional Tax (other than any
Tax on the overall net income of the Issuing Lender or such Lender) with
respect to the issuing or maintaining of any Letters of Credit or the
purchasing or maintaining of any participations therein or any other
obligations under this Section 3, whether directly or by such being imposed
on or suffered by the Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement in respect
of any Letters of Credit issued by the Issuing Lender or participations
therein purchased by any Lender; or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting the Issuing Lender or any Lender (or its applicable
lending or letter of credit office) regarding this Section 3 or any Letter
of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to the Issuing
Lender or any Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by the Issuing Lender or
any Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Company shall promptly pay to the Issuing Lender or
any Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts as may be necessary to compensate the Issuing
Lender or any Lender for any such increased cost or reduction in amounts
received or receivable hereunder; provided, however, that Company shall not be
-------- -------
obligated to pay the Issuing Lender or such Lender any compensation attributable
to any period prior to the date that is 90 days prior to the date on which the
Issuing Lender or such Lender gave notice to Company of the circumstance
entitling the Issuing Lender or such Lender to compensation. The Issuing Lender
or any Lender shall deliver to Company a written statement, setting forth in
reasonable detail the basis for calculating
78
the additional amounts owed to the Issuing Lender or any Lender under this
subsection 3.6, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT
4.1 Conditions to Initial Term Loans and the Acquisition Revolving Loans.
---------------------------------------------------------------------
The obligations of Lenders to make the initial Term Loans and the
Acquisition Revolving Loans to be made on the Closing Date are, in addition to
the conditions precedent specified in subsection 4.3, subject to prior or
concurrent satisfaction of the following conditions:
A. Closing Date Loan Party Documents. On or before the Closing Date,
Company shall, and shall cause each Closing Date Loan Party to, deliver to
Administrative Agent with sufficient originally executed copies, where
appropriate, for each Lender and its counsel the following with respect to
Company or each such Closing Date Loan Party, as the case may be, each, unless
otherwise noted, dated the Closing Date:
(i) Certified copies of the Organizational Documents of such
Person, together with a good standing certificate from the Secretary of
State of its jurisdiction of organization and, to the extent generally
available, a certificate or other evidence of good standing as to payment
of any applicable franchise or similar taxes from the appropriate taxing
authority of such jurisdiction, each dated a recent date prior to the
Closing Date;
(ii) Copies of the Bylaws of such Person, certified as of the
Closing Date by such Person's corporate secretary or an assistant
secretary;
(iii) Resolutions of the Board of Directors of such Person approving
and authorizing the execution, delivery and performance of the Closing Date
Loan Documents and Related Agreements to which it is a party, and approving
and authorizing the consummation of the Tender Offer and the Merger in the
manner contemplated by the Tender Offer Materials, certified as of the
Closing Date by the corporate secretary or an assistant secretary of such
Person as being in full force and effect without modification or amendment;
(iv) Signature and incumbency certificates of the officers of such
Person executing the Closing Date Loan Documents and the Related Agreements
to which it is a party;
(v) Executed originals of the Closing Date Loan Documents to which
such Person is a party; and
(vi) Such other documents as Administrative Agent may reasonably
request.
B. Foreign Subsidiary Documents. On or before the Closing Date, Company
shall cause each of the Foreign Subsidiaries of URS the Capital Stock of which
constitutes Pledged Collateral to deliver to Administrative Agent (with
sufficient originally executed copies, where appropriate, for each Lender and
its counsel) copies of the charter documents of such Subsidiary, certified as of
the Closing Date by such Subsidiary's corporate secretary or an assistant
secretary.
79
C. Corporate and Capital Structure.
(i) Corporate Structure. The corporate organizational structure of
-------------------
Company and its Subsidiaries, immediately after giving effect to the Tender
Offer, shall be as set forth on Schedule 4.1C of the Closing Date Company
-------------
Disclosure Letter.
(ii) Capital Structure and Ownership. The capital structure and
-------------------------------
ownership of Company and its Subsidiaries, immediately after giving effect
to the Tender Offer, shall be as set forth on Schedule 4.1C of the Closing
-------------
Date Company Disclosure Letter.
D. Proceeds of Debt and Equity Capitalization of Company.
(i) Debt and Equity Capitalization of Company. On or before the
-----------------------------------------
Closing Date, (a) RCBA shall have purchased all of the outstanding Company
Series A Preferred Stock and Company Series C Preferred Stock for cash
consideration of $100,000,000 and (b) Company shall have issued and sold
not less than $200,000,000 in aggregate principal amount of Senior
Subordinated Notes or Bridge Notes.
(ii) Use of Proceeds by Company. Company shall have provided evidence
--------------------------
satisfactory to Administrative Agent that the proceeds of the debt and
equity capitalization of Company described in the immediately preceding
clause (i) have been applied, prior to or simultaneously with the
application of the proceeds of the Term Loans and the Acquisition Revolving
Loans, to the purchase of the Tendered Shares.
E. Tendered Shares. The Tendered Shares purchased on the Closing Date
shall represent the Minimum Shares, and Company and DMG shall have delivered to
Administrative Agent an Officers' Certificate to such effect.
F. Maximum Consideration for Tendered Shares. The aggregate consideration
for the Tendered Shares to be acquired on the Closing Date shall not exceed
$305,000,000.
G. Maximum Transaction Costs. Administrative Agent shall have received
evidence satisfactory to it that the Transaction Costs will not exceed
$42,000,000.
H. Related Agreements and Tender Offer Materials.
(i) Form of Bridge Loan Agreement or Senior Subordinated Note
---------------------------------------------------------
Indenture. The Bridge Loan Agreement shall incorporate the terms contained
---------
in that certain commitment letter dated May 3, 1999 by and between Company
and Morgan Stanley & Co. Incorporated with such changes thereto, if any,
that have been approved by Administrative Agent and Requisite Lenders or
that would otherwise have been permitted to be made pursuant to subsection
7.13B if the Bridge Notes were issued and outstanding at the time of any
such change or the Senior Subordinated Note Indenture shall be in form and
substance satisfactory to Requisite Lenders.
(ii) Tender Offer Materials. Administrative Agent shall have received
----------------------
a copy of all Tender Offer Materials and other documents filed by Company
and DMG with the Securities and Exchange Commission.
80
(iii) Related Agreements in Full Force and Effect. Each Related
-------------------------------------------
Agreement shall be in full force and effect and no provision thereof shall
have been modified or waived in any respect determined by Administrative
Agent to be material, in each case without the consent of Administrative
Agent and Requisite Lenders. Administrative Agent shall have received an
executed copy of all Related Agreements, certified as of the Closing Date
by the corporate secretary or an assistant secretary.
(iv) Officer's Certificates. Administrative Agent shall have
----------------------
received an Officers' Certificate from DMG to the effect that the
representations and warranties pertaining to DMG in the Merger Agreement
are true, correct and complete in all material respects on and as of the
Closing Date to the same extent as though made on and as of that date (or,
to the extent such representations and warranties specifically relate to an
earlier date, that such representations and warranties were true, correct
and complete in all material respects on and as of such earlier date).
Administrative Agent shall have received Officers' Certificates from each
of the parties to the Merger Agreement to the effect that (a) the Merger
Agreement is in full force and effect and no provision thereof shall have
been modified or waived in any respect determined by Administrative Agent
to be material without the consent of Administrative Agent and Requisite
Lenders and (b) each such party has complied with all agreements and
conditions contained in the Merger Agreement and any agreements or
documents referred to therein required to be performed or complied with by
each of them on or before the Closing Date and none of such corporations
shall be in default in the performance or compliance with any of the terms
or provisions thereof.
I. Annualized Combined EBITDA. The sum of (a) Consolidated EBITDA for
URS and its Subsidiaries (determined in accordance with the definition of
Consolidated EBITDA substituting "URS and its Subsidiaries" for "Company and its
Subsidiaries" in the component definitions used therein) for the twelve-month
period ended April 30, 1999 plus (b) Consolidated EBITDA for DMG and its
----
Subsidiaries (determined in accordance with the definition of Consolidated
EBITDA substituting "DMG and its Subsidiaries" for "Company and its
Subsidiaries" in the component definitions used therein) for the six-month
period ended March 26, 1999 multiplied by 2 shall not be less than $143,000,000
----------
and Company shall deliver to Administrative Agent the Closing Date Compliance
Certificate demonstrating in reasonable detail compliance with such restriction.
J. Security Interests in Tendered Shares. Administrative Agent shall have
received evidence reasonably satisfactory to it that Company and Merger Sub
shall have taken or caused to be taken all such actions, executed and delivered
or caused to be executed and delivered all such agreements, documents and
instruments, and made or caused to be made all such filings and recordings that
may be necessary or, in the opinion of Administrative Agent, desirable in order
to create in favor of Administrative Agent, for the benefit of Lenders, a valid
and perfected First Priority Lien on the Tendered Shares. Such actions shall
include the following:
(i) Schedules to Collateral Documents. Delivery to Administrative
---------------------------------
Agent of accurate and complete schedules to the Pledge and Security
Agreement executed by Merger Sub;
81
(ii) Stock Certificates. Delivery to Administrative Agent of
------------------
evidence of the purchase of the Tendered Shares and an acknowledgment
executed by the depositary with respect to the Lien of Administrative Agent
on the Tendered Shares; and
(iii) Form U-1. Delivery to Administrative Agent of a properly
--------
completed Form U-1 executed by Merger Sub.
K. Security Interests in Personal Property. On or prior to the Closing
Date, Administrative Agent shall have received evidence satisfactory to it that
Company and Subsidiary Guarantors constituting Closing Date Loan Parties shall
have taken or caused to be taken all such actions, executed and delivered or
caused to be executed and delivered all such agreements, documents and
instruments, and made or caused to be made all such filings and recordings
(other than the filing or recording of items described in clause (iii), (iv) and
(v) below) that may be necessary or, in the opinion of Administrative Agent,
desirable in order to create in favor of Administrative Agent, for the benefit
of Lenders, a valid and (upon such filing and recording) perfected First
Priority security interest in all Collateral. Such actions shall include the
following:
(i) Schedules to Collateral Documents. Delivery to Administrative
---------------------------------
Agent of accurate and complete schedules to all of the applicable
Collateral Documents;
(ii) Stock Certificates and Instruments. Delivery to Administrative
----------------------------------
Agent of (a) certificates (which certificates shall be accompanied by
irrevocable undated stock powers, duly endorsed in blank and otherwise
satisfactory in form and substance to Administrative Agent) representing
all Capital Stock required to be pledged pursuant to the Pledge and
Security Agreement and the Tender Pledge Agreement on the Closing Date and
(b) all promissory notes (duly endorsed, where appropriate, in a manner
satisfactory to Administrative Agent) evidencing any intercompany debt
required to be pledged pursuant to subsections 7.1(iii) and (iv) on the
Closing Date (including the DMG Loan Proceeds Notes);
(iii) Lien Searches and UCC Termination Statements. Delivery to
--------------------------------------------
Administrative Agent of (a) the results of a recent search, by a Person
satisfactory to Administrative Agent, of all effective UCC financing
statements and fixture filings and all judgment and tax lien filings which
may have been made with respect to any personal or mixed property of any
Loan Party, together with copies of all such filings disclosed by such
search, and (b) UCC termination statements duly executed by all applicable
Persons for filing in all applicable jurisdictions as may be necessary to
terminate any effective UCC financing statements or fixture filings
disclosed in such search (other than any such financing statements or
fixture filings in respect of Liens permitted to remain outstanding
pursuant to the terms of this Agreement);
(iv) UCC Financing Statements. Delivery to Administrative Agent of
------------------------
UCC financing statements, duly executed by each applicable Closing Date
Loan Party with respect to all personal property Collateral of such Closing
Date Loan Party, for filing in all jurisdictions as may be necessary or, in
the opinion of Administrative Agent, desirable
82
to perfect the security interests created in such Collateral pursuant to
the Collateral Documents; and
(v) PTO Cover Sheets, Etc. Delivery to Administrative Agent of all
---------------------
cover sheets or other documents or instruments required to be filed with
the PTO in order to create or perfect Liens in respect of any Intellectual
Property Collateral.
L. Termination of Existing Credit Agreements and Related Liens; Existing
DMG Letters of Credit.
(i) As of the Closing Date, Company, DMG and their respective
Subsidiaries shall have (a) repaid in full all Indebtedness outstanding
under the Existing Credit Agreements, (b) terminated any commitments to
lend or make other extensions of credit thereunder, (c) delivered to
Administrative Agent all documents or instruments necessary to release all
Liens securing Indebtedness or other obligations of DMG and its
Subsidiaries thereunder and (d) made arrangements satisfactory to
Administrative Agent with respect to the Existing DMG Letters of Credit.
(ii) As of the Closing Date, DMG shall execute and deliver the DMG
Loan Proceeds Note.
M. Matters Relating to Existing Subordinated Indebtedness. On or prior to
the Closing Date, Company shall have delivered to Administrative Agent a fully
executed or conformed copy of the Existing Subordinated Agreements or an
Officer's Certificate stating that since November 14, 1997 there have been no
amendments to the Existing Subordinated Agreements.
N. Necessary Governmental Authorizations and Consents; Expiration of
Waiting Periods, Etc. Company shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the Tender Offer and the Merger, the
other transactions contemplated by the Loan Documents and the Related
Agreements, and the continued operation of the business conducted by DMG and its
Subsidiaries in substantially the same manner as conducted prior to the
consummation of the Tender Offer, and each of the foregoing shall be in full
force and effect, in each case other than those the failure to obtain or
maintain which, either individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect with respect to Company or DMG. All
applicable waiting periods shall have expired without any action being taken or
threatened by any competent authority which would restrain, prevent or otherwise
impose adverse conditions on the Tender Offer or the Merger or the financing
thereof. No action, request for stay, petition for review or rehearing,
reconsideration, or appeal with respect to any of the foregoing shall be
pending, and the time for any applicable agency to take action to set aside its
consent on its own motion shall have expired.
O. Financial Statements; Pro Forma Balance Sheet; Projections. On or
before the Closing Date, Lenders shall have received from Company (i) audited
financial statements of Company and its Subsidiaries for Fiscal Year 1998 and
DMG and its Subsidiaries for Fiscal Years 1998 and 1999, in each case consisting
of a consolidated balance sheet and the related
83
consolidated statements of income, stockholders' equity and cash flows for such
Fiscal Years, (ii) unaudited financial statements of Company and its
Subsidiaries for each of the Fiscal Quarters prior to the Closing Date and for
which financial statements are available, consisting of a consolidated balance
sheet and the related consolidated statements of income and cash flows for the
period ending on each such date, all in reasonable detail and certified by the
chief financial officer of Company that they fairly present, in all material
respects, the financial condition of Company and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal year-end
adjustments, (iii) unaudited financial statements of DMG and its Subsidiaries
for each of the Fiscal Quarters ended June 26, 1998, September 25, 1998,
December 25, 1998 and each of the Fiscal Quarters ended following March 26, 1999
and prior to the Closing Date and for which financial statements are available,
consisting of a consolidated balance sheet and the related consolidated
statements of income and cash flows for the period ending on each such date, all
in reasonable detail and certified by the chief financial officer of DMG that
they fairly present, in all material respects, the financial condition of DMG
and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to changes
resulting from audit and normal year-end adjustments, (iv) a pro forma
consolidated balance sheet of Company and its Subsidiaries as at the Closing
Date, prepared in accordance with GAAP and reflecting the consummation of the
Tender Offer and the Merger, the related financings and the other transactions
contemplated by the Loan Documents and the Related Agreements, which pro forma
financial statement shall be in form and substance satisfactory to Lenders, and
(v) a statement of sources and uses of funds with respect to the Tender Offer
and Merger. There shall have been no change in the Projections.
P. No Material Adverse Effect. Since October 31, 1998, no Material
Adverse Effect with respect to URS shall have occurred. Since December 25, 1998
no Material Adverse Effect with respect to DMG shall have occurred.
Q. Solvency Assurances. A Financial Condition Certificate dated the
Closing Date, substantially in the form of Exhibit XVIII annexed hereto and with
appropriate attachments, in each case demonstrating that, after giving effect to
the consummation of the Tender Offer and the Merger, the related financings and
the other transactions contemplated by the Loan Documents and the Related
Agreements, Company and DMG will be Solvent.
R. Opinions of Counsel to Loan Parties. Lenders shall have received
originally executed copies of one or more favorable written opinions of Cooley
Godward LLP, Skadden, Arps, Slate, Meagher & Flom LLP, Vorys, Sater, Seymore and
Pease LLP and Marshall Hill Cassis & deLipkau, counsel to Loan Parties,
addressed to Administrative Agent and Lenders and dated as of the Closing Date
substantially in the form of Exhibit XI annexed hereto and as to such other
----------
matters as Administrative Agent may reasonably request.
S. Opinions of Administrative Agent's Counsel. Lenders shall have
received originally executed copies of one or more favorable written opinions of
O'Melveny & Myers LLP, counsel to Administrative Agent, addressed to
Administrative Agent and Lenders and dated as of the Closing Date, substantially
in the form of Exhibit XII annexed hereto and as to such other matters as
-----------
Administrative Agent may reasonably request.
84
T. Fees. Company shall have paid to Administrative Agent, for
distribution (as appropriate) to Administrative Agent Lenders, the fees payable
on the Closing Date referred to in subsection 2.3.
U. Representations and Warranties; Performance of Agreements. Company
shall have delivered to Administrative Agent an Officers' Certificate, in form
and substance reasonably satisfactory to Administrative Agent, to the effect
that the representations and warranties in Section 5 are true, correct and
complete in all material respects on and as of the Closing Date to the same
extent as though made on and as of that date (or, to the extent such
representations and warranties specifically relate to an earlier date, that such
representations and warranties were true, correct and complete in all material
respects on and as of such earlier date) and that Company shall have performed
in all material respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before the
Closing Date except as otherwise disclosed to and agreed to in writing by
Administrative Agent and Requisite Lenders.
V. Closing Date Company Disclosure Letter. Company shall have delivered
to Administrative Agent the Closing Date Company Disclosure Letter.
W. Officer's Certificate Regarding Subsidiaries. The aggregate gross
revenues for the Fiscal Year ended October 31, 1998 of the Subsidiary Guarantors
that constitute the Closing Date Loan Parties shall be equal to at least 90% of
the aggregate gross revenues of URS and its Domestic Subsidiaries on a
consolidated basis for such Fiscal Year. All of the Domestic Subsidiaries of URS
whose gross revenues for the Fiscal Year ended October 31, 1998 are greater than
or equal to $5,000,000 are Closing Date Loan Parties and the Capital Stock of
all such Domestic Subsidiaries constitutes Pledged Collateral as of the Closing
Date. The Capital Stock of all of the first tier Domestic Subsidiaries of DMG
constitutes Pledged Collateral as of the Closing Date. On the Closing Date,
Company shall deliver to Administrative Agent an Officer's Certificate, in form
and substance satisfactory to Administrative Agent, demonstrating compliance
with this requirement.
X. Evidence of Insurance. Administrative Agent shall have received a
certificate from Company's insurance broker or other evidence satisfactory to it
that Administrative Agent has been named loss payee or additional insured, as
the case may be, as required by subsection 6.4.
Y. No Disruption of Financial and Capital Markets. Since May 3, 1999,
there shall not have occurred and be continuing a material disruption of or
change in the financial, banking or capital markets or in the regulatory
environment that in the good faith judgment of Administrative Agent could
materially and adversely affect the syndication of this Agreement.
Z. Completion of Proceedings. All corporate and other proceedings taken
or to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by Administrative
Agent, acting on behalf of Lenders, and its counsel shall be reasonably
satisfactory in form and substance to Administrative Agent and such counsel, and
Administrative Agent and such counsel shall have received all such
85
counterpart originals or certified copies of such documents as Administrative
Agent may reasonably request.
4.2 Conditions to Merger Date Loans.
-------------------------------
The obligations of Lenders to make additional Tranche A Term Loans on
the Merger Date and, if not already made, the initial Revolving Loans are, in
addition to the conditions precedent specified in subsection 4.2, subject to
prior or concurrent satisfaction of the following conditions:
A. Merger Date Loan Party Documents. On or before the Merger Date,
Company shall, and shall cause each Merger Date Loan Party to, deliver to
Administrative Agent (with sufficient originally executed copies, where
appropriate, for each Lender and its counsel) the following with respect to each
such Merger Date Loan Party, each, unless otherwise noted, dated the Merger
Date:
(i) Certified copies of the Organizational Documents of such
Person, together with a good standing certificate from the Secretary of
State of its jurisdiction of organization and, to the extent generally
available, a certificate or other evidence of good standing as to payment
of any applicable franchise or similar taxes from the appropriate taxing
authority of such jurisdiction;
(ii) Copies of the Bylaws of such Person, certified as of the Merger
Date by such Person's corporate secretary or an assistant secretary;
(iii) Resolutions of the Board of Directors of such Person approving
and authorizing the execution, delivery and performance of the Merger Date
Loan Documents, certified as of the Merger Date by the corporate secretary
or an assistant secretary of such Person as being in full force and effect
without modification or amendment;
(iv) Signature and incumbency certificates of the officers of such
Person executing the Merger Date Loan Documents to which it is a party;
(v) Executed originals of the Merger Date Loan Documents to which
such Person is a party; and
(vi) Such other documents as Administrative Agent may reasonably
request.
B. Foreign Subsidiary Documents. On or before the Merger Date, Company
shall cause each of the Foreign Subsidiaries of DMG, the Capital Stock of which
constitutes Pledged Collateral, to deliver to Administrative Agent (with
sufficient originally executed copies, where appropriate, for each Lender and
its counsel) copies of the charter documents of such Subsidiary, certified as of
the Merger Date by such Subsidiary's corporate secretary or an assistant
secretary.
C. Corporate and Capital Structure, Ownership, Etc.
86
(i) Corporate Structure. The corporate organizational structure of
-------------------
Company, DMG and their respective Subsidiaries, after giving effect to the
Merger, shall be as set forth on Schedule 4.2C of the Closing Date Company
-------------
Disclosure Letter.
(ii) Capital Structure and Ownership. The capital structure and
-------------------------------
ownership of Company, DMG and their respective Subsidiaries, after giving
effect to the Merger, shall be as set forth on Schedule 4.2C of the Closing
-------------
Date Company Disclosure Letter.
(iii) Merger Agreement. The Merger Agreement shall be in full force
----------------
and effect and no provision thereof shall have been modified or waived in
any respect determined by Administrative Agent to be material, in each case
without the consent of Administrative Agent and Requisite Lenders.
D. Consummation of Merger.
(i) All material conditions to the Merger shall have been satisfied
or the fulfillment of any such conditions shall have been waived, in the
case of a material condition to the performance of the obligations of URS,
with the consent of Administrative Agent and Requisite Lenders;
(ii) The Merger shall become effective concurrently with the making
of the Loans in accordance with the terms of the Merger Agreement, and the
laws of the State of Delaware;
(iii) Administrative Agent shall have received satisfactory evidence
of the filing of the documents with the Delaware Secretary of State
effecting the Merger on the Merger Date;
(iv) The aggregate consideration for the DMG Common Stock shall not
exceed $305,000,000; an d
(v) Administrative Agent shall have received evidence satisfactory
to it that the Transaction Costs will not exceed $42,000,000.
E. Security Interests in Personal Property. On or prior to the Merger
Date, Administrative Agent shall have received evidence satisfactory to it that
DMG and Subsidiary Guarantors constituting Merger Date Loan Parties shall have
taken or caused to be taken all such actions, executed and delivered or caused
to be executed and delivered all such agreements, documents and instruments, and
made or caused to be made all such filings and recordings (other than the filing
or recording of items described in clause (iii) and (iv) below) that may be
necessary or, in the opinion of Administrative Agent, desirable in order to
create in favor of Administrative Agent, for the benefit of Lenders, a valid and
(upon such filing and recording) perfected First Priority security interest in
the entire Collateral. Such actions shall include the following:
(i) Schedules to Collateral Documents. Delivery to Administrative
---------------------------------
Agent of accurate and complete schedules to all of the applicable
Collateral Documents;
87
(ii) Stock Certificates and Instruments. Delivery to Administrative
----------------------------------
Agent of (a) certificates and instruments (which certificates and
instruments shall be accompanied by irrevocable undated stock powers, duly
endorsed in blank and otherwise satisfactory in form and substance to
Administrative Agent) representing all Capital Stock required to be pledged
pursuant to the Pledge and Security Agreement on the Merger Date and (b)
all promissory notes (duly endorsed, where appropriate, in a manner
satisfactory to Administrative Agent) evidencing any intercompany debt
required to be pledged pursuant to subsections 7.1(iii) and (iv) on the
Merger Date;
(iii) UCC Financing Statements. Delivery to Administrative Agent of
------------------------
UCC financing statements and, where appropriate, fixture filings, duly
executed by each applicable Merger Date Loan Party with respect to all
personal property Collateral of such Merger Date Loan Party, for filing in
all jurisdictions as may be necessary or, in the opinion of Administrative
Agent, desirable to perfect the security interests created in such
Collateral pursuant to the Collateral Documents; and
(iv) PTO Cover Sheets, Etc. Delivery to Administrative Agent of all
---------------------
cover sheets or other documents or instruments required to be filed with
the PTO in order to create or perfect Liens in respect of any Intellectual
Property Collateral.
F. Evidence of Insurance. Administrative Agent shall have received a
certificate from Company's insurance broker or other evidence satisfactory to it
that Administrative Agent has been named loss payee or additional insured, as
the case may be, as required by subsection 6.4.
G. Opinions of Counsel to Loan Parties. Lenders shall have received
originally executed copies of one or more favorable written opinions of counsel
to the Loan Parties, addressed to Administrative Agent and Lenders, dated as of
the Merger Date in form and substance satisfactory to Administrative Agent.
H. Fees. Company shall have paid to Administrative Agent the fees
payable on the Merger Date referred to herein.
I. Officer's Certificate Regarding Subsidiaries. The sum of (i) the
aggregate gross revenues for the DMG Fiscal Year ended March 26, 1999 of the
Subsidiary Guarantors that constitute Merger Date Loan Parties plus (ii) the
aggregate gross revenues for the Fiscal Year ended October 31, 1998 of the
Subsidiary Guarantors that constitute Closing Date Loan Parties shall be equal
to at least 90% of the sum of (i) the aggregate gross revenues of URS and its
Domestic Subsidiaries for such Fiscal Year and (ii) the aggregate gross revenues
of DMG and its Domestic Subsidiaries for such DMG Fiscal Year. All of the
Domestic Subsidiaries of Company whose gross revenues for the Fiscal Year ended
October 31, 1998 or the DMG Fiscal Year ended March 26, 1999, as the case may
be, are greater than or equal to $5,000,000 are Subsidiary Guarantors. On the
Merger Date, Company shall deliver to Administrative Agent an Officer's
Certificate, in form and substance satisfactory to Administrative Agent,
demonstrating compliance with this requirement.
88
J. Representations and Warranties; Performance of Agreements. Company
shall have delivered to Administrative Agent an Officer's Certificate, in form
and substance satisfactory to Administrative Agent, to the effect that the
representations and warranties in Section 5 are true, correct and complete in
all material respects on and as of the Merger Date to the same extent as though
made on and as of the Merger Date (or, to the extent such representations and
warranties specifically relate to an earlier date, that such representations and
warranties were true, correct and complete in all material respects on and as of
such earlier date) and that Company shall have performed in all material
respects all agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by it on or before the Merger Date
except as otherwise disclosed to and agreed to in writing by Administrative
Agent and Requisite Lenders and to the effect set forth in clauses (i)-(v) of
subsection 4.2D, and stating that Company will proceed to consummate the Merger
concurrently with the making of the Loans.
K. Completion of Proceedings. All corporate and other proceedings taken
or to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by Administrative
Agent and its counsel shall be reasonably satisfactory in form and substance to
Administrative Agent and such counsel, and Administrative Agent and such counsel
shall have received all such counterpart originals or certified copies of such
documents as Administrative Agent may reasonably request.
4.3 Conditions to All Loans.
-----------------------
The obligations of Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
A. Administrative Agent shall have received before that Funding Date, in
accordance with the provisions of subsection 2.1B, an originally executed Notice
of Borrowing, in each case signed by the chief executive officer, the chief
financial officer or the treasurer of Company or by any executive officer of
Company designated by any of the above-described officers on behalf of Company
in a writing delivered to Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein and in the
other Loan Documents shall be true, correct and complete in all material
respects on and as of that Funding Date to the same extent as though made
on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct and complete
in all material respects on and as of such earlier date;
(ii) No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Notice of
Borrowing that would constitute an Event of Default or a Potential Event of
Default;
(iii) Each Loan Party shall have performed in all material respects
all agreements and satisfied all conditions which this Agreement provides shall
be performed or satisfied by it on or before that Funding Date;
89
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender from
making the Loans to be made by it on that Funding Date;
(v) The making of the Loans requested on such Funding Date shall
not violate any law including Regulation T, Regulation U or Regulation X of
the Board of Governors of the Federal Reserve System; and
(vi) (a) There shall not be pending or, to the actual knowledge of a
Responsible Officer of Company, threatened, any action, suit, proceeding,
governmental investigation or arbitration against or affecting Company or
any of its Subsidiaries or any property of Company or any of its
Subsidiaries that has not been disclosed by Company in writing pursuant to
subsection 5.6 or 6.1(ix) prior to the making of the last preceding Loans
(or, in the case of the initial Loans, prior to the execution of this
Agreement), and (b) there shall have occurred no development not so
disclosed in any such action, suit, proceeding, governmental investigation
or arbitration so disclosed, that, in either event, in the reasonable
opinion of Administrative Agent or of Requisite Lenders, would be likely to
result in a Material Adverse Effect with respect to Company; and no
injunction or other restraining order shall have been issued and no hearing
to cause an injunction or other restraining order to be issued shall be
pending or noticed with respect to any action, suit or proceeding seeking
to enjoin or otherwise prevent the consummation of, or to recover any
damages or obtain relief as a result of, the transactions contemplated by
this Agreement or the making of Loans hereunder.
4.4 Conditions to Letters of Credit.
-------------------------------
The issuance of any Letter of Credit hereunder (whether or not the
Issuing Lender is obligated to issue such Letter of Credit) is subject to the
following conditions precedent:
A. On or before the date of issuance of the initial Letter of Credit
pursuant to this Agreement, the initial Loans shall have been made.
B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1B(i), an originally executed Notice of Issuance of Letter of
Credit, in each case signed by the chief executive officer, the chief financial
officer or the treasurer of Company or by any executive officer of Company
designated by any of the above-described officers on behalf of Company in a
writing delivered to Administrative Agent, together with all other information
specified in subsection 3.1B(i) and such other documents or information as the
Issuing Lender may reasonably require in connection with the issuance of such
Letter of Credit.
C. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.3B shall be satisfied to the same extent as
if the issuance of such Letter of Credit were the making of a Loan and the date
of issuance of such Letter of Credit were a Funding Date.
SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES
90
In order to induce Lenders to enter into this Agreement and to make
the Loans, to induce the Issuing Lender to issue Letters of Credit and to induce
other Lenders to purchase participations therein, Company represents and
warrants to each Lender, on the Closing Date, on the Merger Date, on each
Funding Date and on the date of issuance of each Letter of Credit, that the
following statements are true, correct and complete:
5.1 Organization, Powers, Qualification, Good Standing, Business and
----------------------------------------------------------------
Subsidiaries.
- ------------
A. Organization and Powers. Each Loan Party is duly organized and formed,
validly existing and in good standing under the laws of its jurisdiction of
organization. Each Loan Party has all requisite partnership, company or
corporate power and authority to own and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, to enter into the
Loan Documents and the Related Agreements to which it is a party and to carry
out the transactions contemplated thereby.
B. Qualification and Good Standing. Each Loan Party is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had and would not be likely to result in a Material Adverse Effect with respect
to such Loan Party.
C. Conduct of Business. Company and its Subsidiaries are engaged only in
the businesses permitted to be engaged in pursuant to subsection 7.10.
D. Subsidiaries. As of the Closing Date and the Merger Date, all of the
Subsidiaries of Company, DMG and all of the Subsidiaries of DMG are identified
on Schedule 4.1C of the Closing Date Company Disclosure Letter. Each Subsidiary
-------------
of Company, DMG and each Subsidiary of DMG is duly organized and formed, validly
existing and in good standing under the laws of its respective jurisdiction of
organization, has all requisite corporate power and authority to own and operate
its properties and to carry on its business as now conducted and as proposed to
be conducted, and is qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its business and operations, in each case except where failure to be so
qualified or in good standing or a lack of such corporate power and authority
has not had and would not be likely to result in a Material Adverse Effect with
respect to Company. Except as set forth on Schedule 5.1D of the Closing Date
-------------
Company Disclosure Letter, Company, DMG or a Subsidiary of Company or DMG has
executed an agreement with respect to the Capital Stock of each non-wholly owned
Subsidiary of Company or DMG that gives Company, DMG or a Subsidiary of Company
or DMG the right to purchase any shares of Capital Stock of such non-wholly
owned Subsidiary held by any Person other than Company, DMG or a Subsidiary of
Company or DMG in the event of any proposed transfer thereof unless the failure
to execute such an agreement would not be likely to result in a Material Adverse
Effect with respect to Company.
E. Inactive Subsidiaries. None of the Subsidiaries of Company or DMG
identified on Schedule 5.1E of the Closing Date Company Disclosure Letter under
-------------
the heading "Inactive Subsidiaries" ("Inactive Subsidiaries"), as said Schedule
--------
5.1E may be supplemented from time
- ----
91
to time pursuant to the provisions of subsection 6.1(xv), is conducting any
material business, owns any material property or is generating any material
revenue.
F. Capitalization. As of the Closing Date, Schedule 4.1C of the Closing
-------------
Date Company Disclosure Letter correctly sets forth the ownership interest of
Company and each of its Subsidiaries in each of the Subsidiaries of Company
identified therein and of DMG and each of its Subsidiaries in each of the
Subsidiaries of DMG identified therein. Schedule 4.1C of the Closing Date
-------------
Company Disclosure Letter correctly sets forth, as of the Closing Date, the
total number of outstanding shares of such Subsidiaries' Capital Stock. As of
the Closing Date, no other class of Capital Stock of Company or DMG is
outstanding. The Capital Stock of Company and DMG and each of their respective
Subsidiaries is duly authorized, validly issued, fully paid and nonassessable.
G. Options and Other Rights. As of the Closing Date, except as set forth
on Schedule 5.1G of the Closing Date Company Disclosure Letter and except for
-------------
issuances of options to directors and employees of Company and its Subsidiaries
pursuant to a written employee benefit plan maintained by Company or any of its
Subsidiaries, there are no outstanding subscriptions, warrants, calls, options,
rights (including unsatisfied preemptive rights), commitments or agreements to
which Company or any of its Subsidiaries or DMG or any of its Subsidiaries is
bound that permit or entitle any Person to purchase or otherwise to receive from
or to be issued any shares of Capital Stock of Company or any of its
Subsidiaries or DMG or any of its Subsidiaries or any security or obligation of
any kind convertible into any class of Capital Stock of Company or any of its
Subsidiaries or DMG or any of its Subsidiaries.
5.2 Authorization of Borrowing, etc.
--------------------------------
A. Authorization of Borrowing. The execution, delivery and performance of
the Loan Documents and the Related Agreements have been duly authorized by all
necessary corporate action on the part of each Loan Party that is a party
thereto.
B. No Conflict. The execution, delivery and performance by each Loan
Party of the Loan Documents and the Related Agreements to which it is a party
and the consummation of the transactions contemplated by the Loan Documents and
such Related Agreements do not and will not (i) violate any provision of any law
or any governmental rule or regulation applicable to Company or any of its
Subsidiaries, the Organizational Documents of Company or any of its Subsidiaries
or any order, judgment or decree of any court or other agency of government
binding on Company or any of its Subsidiaries, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any Contractual Obligation of Company or any of its Subsidiaries in any
manner that would be likely to result in a Material Adverse Effect with respect
to such Loan Party; (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Company or any of its Subsidiaries
(other than any Liens created under any of the Loan Documents in favor of
Administrative Agent on behalf of Lenders or Permitted Encumbrances); or (iv)
require any approval of stockholders or any approval or consent of any Person
under any Contractual Obligation of Company or any of its Subsidiaries, except
for such approvals or consents which will be obtained on or before the Closing
Date and disclosed in writing to Lenders.
92
C. Governmental Consents. The execution, delivery and performance by each
Loan Party of the Loan Documents and the Related Agreements to which it is a
party and the consummation of the transactions contemplated by the Loan
Documents and such Related Agreements do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body.
D. Binding Obligation. Each of the Loan Documents and the Related
Agreements has been duly executed and delivered by each Loan Party that is a
party thereto and is the legally valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
E. Valid Issuance of Company Preferred Stock and Senior Subordinated
Notes.
(i) Company Preferred Stock. The Company Series A Preferred Stock and
-----------------------
Company Series C Preferred Stock to be sold on or before the Closing Date,
and the Company Series B Preferred Stock, in each case when issued and
delivered, will be duly and validly issued, fully paid and nonassessable.
The issuance and sale of such Company Series A Preferred Stock, Company
Series B Preferred Stock and Company Series C Preferred Stock, upon such
issuance and sale, will either (a) have been registered or qualified under
applicable federal and state securities laws or (b) be exempt therefrom.
(ii) Senior Subordinated Notes, Bridge Notes and Rollover Notes.
----------------------------------------------------------
Company has the corporate power and authority to issue the Senior
Subordinated Notes, the Bridge Notes and the Rollover Notes. The Senior
Subordinated Notes, the Bridge Notes, and the Rollover Notes when issued
and paid for, will be the legally valid and binding obligations of Company,
enforceable against Company in accordance with their respective terms,
except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights
generally or by equitable principles relating to enforceability. The
subordination provisions of the Senior Subordinated Notes, the Bridge Notes
and the Rollover Notes will be enforceable against the holders thereof and
the Loans and all other monetary Obligations hereunder are and will be
within the definition of "Senior Indebtedness" included in such provisions.
The Senior Subordinated Notes, the Bridge Notes and the Rollover Notes when
issued and sold, will either (a) have been registered or qualified under
applicable federal and state securities laws or (b) be exempt therefrom.
5.3 Financial Condition.
-------------------
Company has heretofore delivered to Lenders, at Lenders' request, (i)
the audited consolidated balance sheet of Company and its Subsidiaries as at
October 31, 1998 and the related consolidated statements of income,
stockholders' equity and cash flows of Company and its Subsidiaries for the
Fiscal Year then ended and (ii) the unaudited consolidated balance sheets of
Company and its Subsidiaries as at January 31, 1999 and April 30, 1999 and the
related unaudited consolidated statements of income, stockholders' equity and
cash flows of Company
93
and its Subsidiaries for the periods then ended. All such statements were
prepared in conformity with GAAP and fairly present, in all material respects,
the financial position (on a consolidated basis) of the entities described in
such financial statements as at the respective dates thereof and the results of
operations and cash flows (on a consolidated basis) of the entities described
therein for each of the periods then ended, subject, in the case of any such
unaudited financial statements, to changes resulting from audit and normal year-
end adjustments. Company does not (and will not following the funding of the
initial Loans) have any Contingent Obligation, contingent liability or liability
for taxes, long-term lease or unusual forward or long-term commitment that is
not reflected in the foregoing financial statements or the notes thereto and
which in any such case is material in relation to the business, operations,
properties, assets, financial condition or prospects of Company or any of its
Subsidiaries.
Company has heretofore delivered to Lenders, at Lenders' request, the
audited consolidated balance sheet of DMG and its Subsidiaries as at March 27,
1998 and March 26, 1999 and the related consolidated statements of income,
stockholders' equity and cash flows of DMG and its Subsidiaries for the DMG
Fiscal Year then ended. All such statements were prepared in conformity with
GAAP and fairly present, in all material respects, the financial position (on a
consolidated basis) of the entities described in such financial statements as at
the respective dates thereof and the results of operations and cash flows (on a
consolidated basis) of the entities described therein for each of the periods
then ended, subject, in the case of any such unaudited financial statements, to
changes resulting from audit and normal year-end adjustments. DMG does not (and
will not following the funding of the initial Loans) have any Contingent
Obligation, contingent liability or liability for taxes, long-term lease or
unusual forward or long-term commitment that is not reflected in the foregoing
financial statements or the notes thereto and which in any such case is material
in relation to the business, operations, properties, assets, financial condition
or prospects of DMG or any of its Subsidiaries.
5.4 No Material Adverse Change; No Restricted Junior Payments.
---------------------------------------------------------
Since October 31, 1998, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect with respect to Company. Neither Company nor any of its Subsidiaries has
directly or indirectly declared, ordered, paid or made, or set apart any sum or
property for, any Restricted Junior Payment or agreed to do so except as
permitted by subsection 7.5.
5.5 Title to Properties; Liens; Real Property; Licenses, Trademarks; etc.
---------------------------------------------------------------------
A. Title to Properties; Liens. Company and its Subsidiaries and DMG and
its Subsidiaries have (i) good, sufficient and legal title to (in the case of
fee interests in real property), (ii) valid leasehold interests in (in the case
of leasehold interests in real or personal property), or (iii) good title to (in
the case of all other personal property), all of their respective properties and
assets reflected in the financial statements referred to in subsection 5.3 or in
the most recent financial statements delivered pursuant to subsection 6.1, in
each case except for assets disposed of since the date of such financial
statements in the ordinary course of business or as otherwise permitted under
subsection 7.7. Except as permitted by this Agreement, all such properties and
assets are free and clear of Liens.
94
B. Real Property. As of the Closing Date, Schedule 5.5C of the Closing
-------------
Date Company Disclosure Letter contains a true, accurate and complete list of
all fee interests in any Real Property Asset of Company or any of its
Subsidiaries or of DMG or any of its Subsidiaries.
C. Licenses, Trademarks, etc. Company and each of its Subsidiaries and
DMG and each of its Subsidiaries have all patents, licenses, trademarks,
trademark rights, trade names, trade name rights, copyrights, permits and
franchises which are required in order for it to conduct its business and to
operate its properties as now or proposed to be conducted without known conflict
with the rights of others, except to the extent that the failure by Company or
such Subsidiary to have any such right would not be likely to result in a
Material Adverse Effect with respect to Company. As of the Closing Date and the
Merger Date, Schedule 5.5C of the Closing Date Company Disclosure Letter
-------------
contains a complete and correct list of all patents, copyrights, trade marks,
licenses, service marks, trade names and other similar rights owned or used by
Company, DMG or any of their respective Subsidiaries, showing for each item the
owner thereof and each public body with which such ownership is registered,
other than those the failure by Company, DMG or such Subsidiary to own or have
the right to use would not be likely to result in a Material Adverse Effect with
respect to Company.
5.6 Litigation; Adverse Facts.
-------------------------
There are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of Company, DMG or any of
their respective Subsidiaries) at law or in equity, or before or by any federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign (including any Environmental
Claims) that are pending or, to the knowledge of any Responsible Officer of
Company, threatened against or affecting Company, DMG or any of their respective
Subsidiaries or any property of Company, DMG or any of their respective
Subsidiaries and that, individually or in the aggregate, would be likely to
result in a Material Adverse Effect with respect to Company. None of Company,
DMG nor any of their respective Subsidiaries (i) is in violation of any
applicable laws (including Environmental Laws) that, individually or in the
aggregate, would be likely to result in a Material Adverse Effect with respect
to Company, or (ii) is subject to or in default with respect to any final
judgments, writs, injunctions, decrees, rules or regulations of any court or any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, that, individually or in
the aggregate, would be likely to result in a Material Adverse Effect with
respect to Company.
5.7 Payment of Taxes.
----------------
Except to the extent permitted by subsection 6.3 or to the extent that
failure to perform would not be likely to result in a Material Adverse Effect
with respect to Company, all tax returns and reports of Company and its
Subsidiaries required to be filed by any of them have been timely filed, and all
taxes shown on such tax returns to be due and payable and all assessments, fees
and other governmental charges upon Company and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. Company knows of no proposed
tax assessment against Company or any of its Subsidiaries which is not being
actively contested by Company or such
95
Subsidiary in good faith and by appropriate proceedings; provided that such
--------
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.
5.8 Performance of Agreements; Materially Adverse Agreements; Material
------------------------------------------------------------------
Contracts.
- ---------
A. Neither Company nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not be likely to result in a Material
Adverse Effect with respect to Company.
B. Neither Company nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, would be likely
to result in a Material Adverse Effect with respect to Company.
5.9 Governmental Regulation.
-----------------------
Neither Company nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
5.10 Securities Activities.
---------------------
A. Neither Company nor any of its Subsidiaries is 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.
B. Following application of the proceeds of each Loan, not more than 25%
of the value of the assets (either of Company only or of Company and its
Subsidiaries on a consolidated basis) subject to the provisions of subsection
7.2 or 7.7 or subject to any restriction contained in any agreement or
instrument, between Company and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
5.11 Employee Benefit Plans.
----------------------
A. Company, each of its Subsidiaries and each of their respective ERISA
Affiliates are in compliance with all applicable provisions and requirements of
ERISA and the regulations and published interpretations thereunder with respect
to each Employee Benefit Plan of Company and its Subsidiaries, and have
performed all their obligations under each such Employee Benefit Plan, except
where such failure to comply or failure to perform would not be likely to result
in a Material Adverse Effect with respect to Company. Each such Employee
Benefit Plan which is intended to qualify under Section 401(a) of the Internal
Revenue Code is so qualified.
96
B. No ERISA Event has occurred or is reasonably expected to occur.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code or except as set forth on Schedule 5.11 of the Closing Date Company
-------------
Disclosure Letter, no such Employee Benefit Plan provides health or welfare
benefits (through the purchase of insurance or otherwise) for any retired or
former employee of Company, any of its Subsidiaries or any of their respective
ERISA Affiliates.
D. As of the most recent valuation date for any Pension Plan of Company
and its Subsidiaries, the amount of unfunded benefit liabilities (as defined in
Section 4001(a)(18) of ERISA), individually or in the aggregate for all such
Pension Plans (excluding for purposes of such computation any such Pension Plans
with respect to which assets exceed benefit liabilities), does not exceed
$1,000,000.
E. As of the most recent valuation date for each Multiemployer Plan for
which the actuarial report is available, the potential liability of Company, its
Subsidiaries and their respective ERISA Affiliates for a complete withdrawal
from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all such
Multiemployer Plans, based on information available pursuant to Section 4221(e)
of ERISA, does not exceed $5,000,000.
5.12 Certain Fees.
------------
No broker's or finder's fee or commission will be payable with respect
to this Agreement or any of the transactions contemplated hereby, other than
those payable in connection with the Tender Offer and Merger, and Company hereby
indemnifies Lenders against, and agrees that it will hold Lenders harmless from,
any claim, demand or liability for any such broker's or finder's fees alleged to
have been incurred in connection herewith or therewith and any expenses
(including reasonable fees, expenses and disbursements of counsel) arising in
connection with any such claim, demand or liability.
5.13 Environmental Protection.
------------------------
Except as set forth on Schedule 5.13 of the Closing Date Company
-------------
Disclosure Letter:
(i) neither Company nor any of its Subsidiaries nor any of their
respective Facilities or operations are subject to any outstanding written
order, consent decree or settlement agreement with any Person relating to
(a) any Environmental Law, (b) any Environmental Claim, or (c) any
Hazardous Materials Activity that, individually or in the aggregate, would
be likely to result in a Material Adverse Effect with respect to Company;
(ii) neither Company nor any of its Subsidiaries has received on its
own behalf any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act (42
U.S.C. (S) 9604) or any comparable state law;
97
(iii) there are and, to the knowledge of each Responsible Officer of
Company, have been no conditions, occurrences, or Hazardous Materials
Activities which could reasonably be expected to form the basis of an
Environmental Claim against Company or any of its Subsidiaries that,
individually or in the aggregate, would be likely to result in a Material
Adverse Effect with respect to Company;
(iv) neither Company nor any of its Subsidiaries nor, to the
knowledge of each Responsible Officer of Company, any predecessor of
Company or any of its Subsidiaries has filed on its own behalf any notice
under any Environmental Law indicating past or present treatment of
Hazardous Materials at any Facility, and none of Company's or any of its
Subsidiaries' operations involves (other than in a solely advisory
capacity) the generation, transportation, treatment, storage or disposal of
hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any state
equivalent; and
(v) compliance by Company and its Subsidiaries with all current or
reasonably foreseeable future requirements pursuant to or under
Environmental Laws will not, individually or in the aggregate, be likely to
result in a Material Adverse Effect with respect to Company.
Notwithstanding anything in this subsection 5.13 to the contrary, no
event or condition is occurring with respect to Company or any of its
Subsidiaries or, to the knowledge of any Responsible Officer of Company, has
occurred with respect to Company or any of its Subsidiaries relating to any
Environmental Law, any Release of Hazardous Materials, or any Hazardous
Materials Activity, including any matter disclosed on Schedule 5.13 of the
-------------
Closing Date Company Disclosure Letter, which individually or in the aggregate
has had or would be likely to result in a Material Adverse Effect with respect
to Company.
5.14 Employee Matters.
----------------
There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that would be likely to result in a
Material Adverse Effect with respect to Company.
5.15 Solvency.
--------
Each of Company and each other Loan Party, upon the incurrence of any
Obligations by such Loan Party on any date on which this representation is made,
will be Solvent.
5.16 Matters Relating to Collateral.
------------------------------
A. Creation, Perfection and Priority of Liens. The execution and delivery
of the Collateral Documents by Loan Parties, together with (i) the actions taken
on or prior to the Closing Date pursuant to subsections 4.1K and 6.7, (ii) the
actions taken on or prior to the Merger Date pursuant to subsections 4.2E and
6.7 and (iii) the delivery to Administrative Agent of any Pledged Collateral not
delivered to Administrative Agent at the time of execution and delivery of the
applicable Collateral Document (all of which Pledged Collateral has been so
delivered) are effective to create in favor of Administrative Agent for the
benefit of Lenders, as
98
security for the respective Secured Obligations (as defined in the applicable
Collateral Document in respect of any Collateral), a valid and perfected First
Priority Lien on all of the Collateral, and all filings and other actions
necessary or desirable to perfect and maintain the perfection and First Priority
status of such Liens have been duly made or taken and remain in full force and
effect, other than the filing of any UCC financing statements delivered to
Administrative Agent for filing (but not yet filed) and the periodic filing of
UCC continuation statements in respect of UCC financing statements filed by or
on behalf of Administrative Agent.
B. Governmental Authorizations. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by any Loan Party
of the Liens purported to be created in favor of Administrative Agent pursuant
to any of the Collateral Documents or (ii) the exercise by Administrative Agent
of any rights or remedies in respect of any Collateral (whether specifically
granted or created pursuant to any of the Collateral Documents or created or
provided for by applicable law), except for filings or recordings contemplated
by subsection 5.16A and except as may be required, in connection with the
disposition of any Pledged Collateral, by laws generally affecting the offering
and sale of securities.
C. Absence of Third-Party Filings. Except such as may have been filed in
favor of Administrative Agent as contemplated by subsection 5.16A, (i) no
effective UCC financing statement, fixture filing or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office and (ii) no document granting any rights to any third party
with respect to any Intellectual Property that constitutes Collateral has been
recorded with the PTO.
D. Margin Regulations. Based upon the calculation of good faith loan
value on the Form U-1 completed by Company and Lenders with respect to the Loans
to be made on the Closing Date, on the Closing Date, the pledge of the Pledged
Collateral pursuant to the Collateral Documents does not violate Regulation T, U
or X of the Board of Governors of the Federal Reserve System.
E. Information Regarding Collateral. All information supplied to
Administrative Agent by or on behalf of any Loan Party with respect to any of
the Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.
5.17 Related Agreements.
------------------
A. Delivery of Related Agreements. Company has delivered to Lenders
complete and correct copies of each Related Agreement and of all exhibits and
schedules thereto.
B. DMG's Warranties. Except to the extent otherwise set forth herein or
in the schedules to the Closing Date Company Disclosure Letter, each of the
representations and warranties given by DMG to Company and Merger Sub in the
Merger Agreement is true and correct in all material
99
respects as of the date hereof (or as of any earlier date to which such
representation and warranty specifically relates) and will be true and correct
in all material respects as of the Closing Date and the Merger Date (or as of
such earlier date, as the case may be), in each case subject to the
qualifications set forth in the schedules to the Merger Agreement.
C. Warranties of Company. Subject to the qualifications set forth
therein, each of the representations and warranties given by Company to DMG in
the Merger Agreement is true and correct in all material respects as of the date
hereof and will be true and correct in all material respects as of the Closing
Date.
D. Survival. Notwithstanding anything in the Merger Agreement to the
contrary, the representations and warranties of Company set forth in subsections
5.17B and 5.17C shall, solely for purposes of this Agreement, survive the
Closing Date for the benefit of Lenders.
5.18 Disclosure.
----------
No representation or warranty of Company or any of its Subsidiaries
contained in any Loan Document or Related Agreement or in any other document,
certificate or written statement furnished to Lenders by or on behalf of Company
or any of its Subsidiaries for use in connection with the transactions
contemplated by this Agreement, including the Closing Date Company Disclosure
Letter, contains any untrue statement of a material fact or omits to state a
material fact (known to Company, in the case of any document not furnished by
it) necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made. Any
projections and pro forma financial information contained in such materials are
based upon good faith estimates and assumptions believed by Company to be
reasonable at the time made, it being recognized by 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. There are no facts known (or which should upon the
reasonable exercise of diligence be known) to Company (other than matters of a
general economic nature) that, individually or in the aggregate, would be likely
to result in a Material Adverse Effect with respect to Company and that have not
been disclosed herein or in such other documents, certificates and statements
furnished to Lenders for use in connection with the transactions contemplated
hereby.
SECTION 6. COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 6.
6.1 Financial Statements and Other Reports.
--------------------------------------
Company will maintain, and cause each of its Subsidiaries to maintain,
a system of accounting established and administered in accordance with sound
business practices to permit preparation of consolidated financial statements in
conformity with GAAP. Company will deliver to Administrative Agent and Lenders:
100
(i) Company Quarterly Financials: (a) as soon as available and in
----------------------------
any event within 55 days after the end of each of the first three Fiscal
Quarters of each Fiscal Year, the consolidated balance sheet of Company and
its Subsidiaries as at the end of such Fiscal Quarter and the related
consolidated statements of income and cash flows of Company and its
Subsidiaries for such Fiscal Quarter and for the period from the beginning
of the then current Fiscal Year to the end of such Fiscal Quarter, setting
forth in each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year, all in reasonable detail
and certified by the chief financial officer of Company that they fairly
present, in all material respects, the financial condition of Company and
its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments, and (b) as
soon as available and in any event within 90 days after the end of each
Fiscal Quarter, a summary of such consolidated statements setting forth in
comparative form the corresponding figures from the Financial Plan for the
current Fiscal Year and a narrative report describing the operations of
Company and its Subsidiaries in each case in the form prepared for
presentation to the Board of Directors for such Fiscal Quarter and for the
period from the beginning of the then current Fiscal Year to the end of
such Fiscal Quarter;
(ii) Company Year-End Financials: as soon as available and in any
---------------------------
event within 100 days after the end of each Fiscal Year, (a) the
consolidated balance sheet of Company and its Subsidiaries as at the end of
such Fiscal Year and the related consolidated statements of income,
stockholders' equity and cash flows of Company and its Subsidiaries for
such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year, all in reasonable
detail and certified by the chief financial officer of Company that they
fairly present, in all material respects, the financial condition of
Company and its Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods indicated, (b) a
summary of such consolidated statements setting forth in comparative form
the corresponding figures from the Financial Plan for the current Fiscal
Year and a narrative report describing the operations of Company and its
Subsidiaries in each case in the form prepared for presentation to the
Board of Directors for such Fiscal Year, (c) an office performance summary
for the Fiscal Year then ended and (d) in the case of such consolidated
financial statements, a report thereon of Pricewaterhouse Coopers or other
independent certified public accountants of recognized national standing
selected by Company, which report shall be unqualified, shall express no
doubts about the ability of Company and its Subsidiaries to continue as a
going concern, and shall state that such consolidated financial statements
fairly present, in all material respects, the consolidated financial
position of Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated
in conformity with GAAP applied on a basis consistent with prior years
(except as otherwise disclosed in such financial statements) and that the
examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards;
(iii) Officer's and Compliance Certificates: together with each
-------------------------------------
delivery of financial statements of Company and its Subsidiaries pursuant
to subdivisions (i) and (ii)
101
above, (a) an Officer's Certificate of Company stating that the signers
have reviewed the terms of this Agreement and have made, or caused to be
made under their supervision, a review in reasonable detail of the
transactions and condition of Company and its Subsidiaries during the
accounting period covered by such financial statements and that such review
has not disclosed the existence during or at the end of such accounting
period, and that the signers do not have knowledge of the existence as at
the date of such Officer's Certificate, of any condition or event that
constitutes an Event of Default or Potential Event of Default, or, if any
such condition or event existed or exists, specifying the nature and period
of existence thereof and what action Company has taken, is taking and
proposes to take with respect thereto; and (b) a Compliance Certificate
demonstrating in reasonable detail compliance during and at the end of the
applicable accounting periods with the restrictions contained in
subsections 7.1(x) and (xi), 7.2(viii), 7.3(viii) and (xiii), 7.4(ix), 7.6,
7.7(vi) and 7.8, in each case to the extent compliance with such
restrictions is required to be tested at the end of the applicable
accounting period;
(iv) Reconciliation Statements: if, as a result of any change in
-------------------------
accounting principles and policies from those used in the preparation of
the audited financial statements referred to in subsection 5.3, the
consolidated financial statements delivered pursuant to subdivisions (i),
(ii) or (xii) of this subsection 6.1 will differ in any material respect
from the consolidated financial statements that would have been delivered
pursuant to such subdivisions had no such change in accounting principles
and policies been made, then (a) together with the first delivery of
financial statements pursuant to subdivision (i), (ii) or (xii) of this
subsection 6.1 following such change, consolidated financial statements of
Company and its Subsidiaries for (y) the current Fiscal Year to the
effective date of such change and (z) the two full Fiscal Years immediately
preceding the Fiscal Year in which such change is made, in each case
prepared on a pro forma basis as if such change had been in effect during
such periods, and (b) together with each delivery of financial statements
pursuant to subdivision (i), (ii) or (xii) of this subsection 6.1 following
such change, a written statement of the chief accounting officer or chief
financial officer of Company setting forth the differences (including any
differences that would affect any calculations relating to the financial
covenants set forth in subsection 7.6) which would have resulted if such
financial statements had been prepared without giving effect to such
change;
(v) Accountants' Certification: together with each delivery of
--------------------------
consolidated financial statements of Company and its Subsidiaries pursuant
to subdivision (ii) above, a written statement by the independent certified
public accountants giving the report thereon stating that their audit
examination has included a review of the terms of this Agreement and the
other Loan Documents as they relate to accounting matters and that, based
on their audit examination, nothing has come to their attention that causes
them to believe that the information relating to subsection 7.6 contained
in the certificates delivered therewith pursuant to subdivision (iii) above
is not correct or that the matters set forth in the Compliance Certificates
delivered therewith pursuant to clause (b) of subdivision (iii) above for
the applicable Fiscal Year are not stated in accordance with the terms of
this Agreement;
102
(vi) Accountants' Reports: promptly upon receipt thereof (unless
--------------------
restricted by applicable professional standards), copies of all reports
submitted to Company by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Company and its Subsidiaries made by such accountants,
including any comment letter submitted by such accountants to management in
connection with their annual audit;
(vii) SEC Filings and Press Releases: promptly upon their becoming
------------------------------
available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by Company to its
security holders or by any Subsidiary of Company to its security holders
other than Company or another Subsidiary of Company, (b) all regular and
periodic reports and all registration statements (other than on Form S-8 or
a similar form) and prospectuses, if any, filed by Company or any of its
Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory authority,
and (c) all press releases and other statements made available generally by
Company or any of its Subsidiaries to the public concerning material
developments in the business of Company or any of its Subsidiaries;
(viii) Events of Default, etc.: promptly upon any Responsible Officer
----------------------
of Company obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or becoming
aware that any Lender has given any notice (other than to Administrative
Agent) or taken any other action with respect to a claimed Event of Default
or Potential Event of Default, (b) that any Person has given any notice to
Company or any of its Subsidiaries or taken any other action with respect
to a claimed default or event or condition of the type referred to in
subsection 8.2, (c) of any condition or event that would be required to be
disclosed in a current report filed by Company with the Securities and
Exchange Commission on Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in
effect on the date hereof) if Company were required to file such reports
under the Exchange Act, or (d) of the occurrence of any event or change
that has caused or evidences, either in any case or in the aggregate, a
Material Adverse Effect with respect to Company, an Officer's Certificate
specifying the nature and period of existence of such condition, event or
change, or specifying the notice given or action taken by any such Person
and the nature of such claimed Event of Default, Potential Event of
Default, default, event or condition, and what action Company has taken, is
taking and proposes to take with respect thereto;
(ix) Litigation or Other Proceedings: (a) promptly upon any
-------------------------------
Responsible Officer of Company obtaining knowledge of (x) the institution
of, or non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Company or any of its Subsidiaries or any
property of Company or any of its Subsidiaries (collectively,
"Proceedings") not previously disclosed in writing by Company to Lenders or
(y) any material development in any Proceeding that, in any case:
(1) is reasonably likely to result in a Material Adverse
Effect with respect to Company; or
103
(2) seeks to enjoin or otherwise prevent the consummation
of, or to recover any damages or obtain relief as a result of,
the transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters; and (b) promptly upon request by Administrative
Agent, a copy of the list of Proceedings delivered by Company to its
independent certified public accountants in connection with the report
prepared by them on the consolidated financial statements of Company and
its Subsidiaries for each Fiscal Year, and promptly after request by
Administrative Agent such other information as may be reasonably requested
by Administrative Agent to enable Administrative Agent and its counsel to
evaluate any of such Proceedings;
(x) ERISA Events: promptly upon becoming aware of the occurrence of
------------
or forthcoming occurrence of any ERISA Event, a written notice specifying
the nature thereof, what action Company, any of its Subsidiaries or any of
their respective ERISA Affiliates has taken, is taking or proposes to take
with respect thereto and, when known, any action taken or threatened by the
Internal Revenue Service, the Department of Labor or the PBGC with respect
thereto;
(xi) ERISA Notices: with reasonable promptness upon request by
-------------
Administrative Agent, copies of (a) each Schedule B (Actuarial Information)
to the annual report (Form 5500 Series) filed by Company, any of its
Subsidiaries or any of their respective ERISA Affiliates with the Internal
Revenue Service with respect to each Pension Plan of Company or any of its
Subsidiaries; (b) all notices received by Company, any of its Subsidiaries
or any of their respective ERISA Affiliates from a Multiemployer Plan
sponsor concerning an ERISA Event; and (c) copies of such other documents
or governmental reports or filings relating to any Employee Benefit Plan of
Company or any of its Subsidiaries as Administrative Agent shall reasonably
request;
(xii) Financial Plans: as soon as practicable and in any event no
---------------
later than 60 days following the end of each Fiscal Year, a consolidated
plan and financial forecast for the then current Fiscal Year (the
"Financial Plan" for such Fiscal Year), including, (a) forecasted
consolidated balance sheets and forecasted consolidated statements of
income and cash flows of Company and its Subsidiaries for such Fiscal Year,
together with a projected Compliance Certificate for such Fiscal Year and
an explanation of the assumptions on which such forecasts are based, (b)
forecasted consolidated statements of income and cash flows of Company and
its Subsidiaries for each Fiscal Quarter of such Fiscal Year, together with
an explanation of the assumptions on which such forecasts are based, and
(c) such other information and projections as any Lender may reasonably
request;
(xiii) Insurance: as soon as practicable and in any event by the last
---------
day of each Fiscal Year, a report in form and substance reasonably
satisfactory to Administrative Agent outlining any change since the
proceeding Fiscal Year in any material insurance coverage maintained by
Company and its Subsidiaries;
104
(xiv) Board of Directors: with reasonable promptness, written
------------------
notice of any change in the Board of Directors of Company;
(xv) New Subsidiaries or Change in Status of Subsidiaries:
----------------------------------------------------
annually within 100 days of the end of each Fiscal Year, all of the data
required to be set forth on Schedule 4.2C of the Closing Date Company
-------------
Disclosure Letter with respect to all Subsidiaries of Company and an
Officer's Certificate, together with supporting documentation in form and
substance satisfactory to Requisite Lenders, setting forth the aggregate
gross revenues for the immediately preceding Fiscal Year of the Subsidiary
Guarantors and the aggregate gross revenues for the immediately preceding
Fiscal Year of all Subsidiaries of Company, the Capital Stock of which
constitutes Pledged Collateral;
(xvi) Subordinated Debt Notices: promptly upon receipt by Company
-------------------------
or any of its Subsidiaries of any notice with respect to any Subordinated
Indebtedness, and promptly upon the giving of notice by Company or any of
its Subsidiaries with respect to any Subordinated Indebtedness, in each
case relating to any default or payment or prepayment of principal of,
premium, if any, redemption, purchase, retirement, defeasance (including
in-substance or legal defeasance), sinking fund or similar payment with
respect to such Subordinated Indebtedness, a copy of such notice;
(xvii) UCC Search Report: As promptly as practicable after the date
-----------------
of delivery to Administrative Agent of any UCC financing statement executed
by any Loan Party pursuant to subsection 4.1K(iv), 4.2E(iii) or 6.7, copies
of completed UCC searches evidencing the proper filing, recording and
indexing of all such UCC financing statement and listing all other
effective financing statements that name such Loan Party as debtor,
together with copies of all such other financing statements not previously
delivered to Administrative Agent by or on behalf of Company or such Loan
Party; and
(xviii) Other Information: with reasonable promptness, such other
-----------------
information and data with respect to Company or any of its Subsidiaries as
from time to time may be reasonably requested by any Lender.
6.2 Corporate Existence, etc.
-------------------------
Except as permitted under subsection 7.7, Company will, and will cause
each of its Subsidiaries to, at all times preserve and keep in full force and
effect its corporate existence and all rights and franchises material to its
business; provided, however that neither Company nor any of its Subsidiaries
-------- -------
shall be required to preserve any such right or franchise if the Board of
Directors of Company or such Subsidiary shall determine that the preservation
thereof is no longer desirable in the conduct of the business of Company or such
Subsidiary, as the case may be, and that the loss thereof is not disadvantageous
in any material respect to Company, such Subsidiary or Lenders.
6.3 Payment of Taxes and Claims; Tax Consolidation.
----------------------------------------------
A. Company will, and will cause each of its Subsidiaries to, pay all
taxes, assessments and other governmental charges imposed upon it or any of its
properties or assets or
105
in respect of any of its income, businesses or franchises before any penalty
accrues thereon, and all claims (including, claims for labor, services,
materials and supplies) for sums that have become due and payable and that by
law have or may become a Lien upon any of its properties or assets, prior to the
time when any penalty or fine shall be incurred with respect thereto, except
where the failure to pay such taxes, assessments and governmental charges would
not be likely to result in a Material Adverse Effect with respect to Company;
provided that no such charge or claim need be paid if it is being contested in
- --------
good faith by appropriate proceedings promptly instituted and diligently
conducted, so long as (i) such reserve or other appropriate provision, if any,
as shall be required in conformity with GAAP shall have been made therefor and
(ii) in the case of a charge or claim which has or may become a Lien against any
of the Collateral, such contest proceedings conclusively operate to stay the
sale of any portion of the Collateral to satisfy such charge or claim.
B. Company will not, nor will it permit any of its Subsidiaries to, file
or consent to the filing of any consolidated income tax return with any Person
(other than Company or any of its Subsidiaries).
6.4 Maintenance of Properties; Insurance; Application of Net Insurance/
-------------------------------------------------------------------
Condemnation Proceeds.
- ---------------------
A. Maintenance of Properties. Company will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all material properties
used or useful in the business of Company and its Subsidiaries (including all
Intellectual Property) and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof the failure of which
would be likely to result in a Material Adverse Effect with respect to Company.
B. Insurance. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by corporations
of established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Without limiting the generality
of the foregoing, Company will maintain or cause to be maintained (i) flood
insurance with respect to each Flood Hazard Property that is located in a
community that participates in the National Flood Insurance Program, in each
case in compliance with any applicable regulations of the Board of Governors of
the Federal Reserve System, and (ii) replacement value casualty insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are at all times
satisfactory to Administrative Agent in its commercially reasonable judgment.
Each such policy of insurance shall (a) name Administrative Agent for the
benefit of Lenders as an additional insured thereunder as its interests may
appear and (b) in the case of each business interruption and casualty insurance
policy, contain a loss payable clause or endorsement, satisfactory in form and
substance to Administrative Agent, that names Administrative Agent for the
benefit of Lenders as the loss payee thereunder and provides for at
106
least 30 days prior written notice to Administrative Agent of any modification
or cancellation of such policy.
C. Application of Net Insurance/Condemnation Proceeds.
(i) Business Interruption Insurance. Upon receipt by Company or any
-------------------------------
of its Subsidiaries of any Net Insurance/Condemnation Proceeds from
business interruption insurance, (a) so long as no Event of Default or
Potential Event of Default shall have occurred and be continuing, Company
or such Subsidiary may retain and apply such Net Insurance/Condemnation
Proceeds for working capital purposes, and (b) if an Event of Default or
Potential Event of Default shall have occurred and be continuing, Company
shall apply an amount equal to such Net Insurance/Condemnation Proceeds to
prepay the Loans (and/or the Revolving Loan Commitments shall be reduced)
as provided in subsection 2.4B(iii)(b);
(ii) Casualty Insurance/Condemnation Proceeds. Upon receipt by
----------------------------------------
Company or any of its Subsidiaries of any Net Insurance/Condemnation
Proceeds other than from business interruption insurance, (a) so long as no
Event of Default or Potential Event of Default shall have occurred and be
continuing, Company shall, or shall cause one or more of its Subsidiaries
to, promptly and diligently (and in any event within 360 days of the date
of receipt of such Net Insurance/Condemnation Proceeds) apply such Net
Insurance/Condemnation Proceeds to pay or reimburse the costs of repairing,
restoring or replacing the assets in respect of which such Net
Insurance/Condemnation Proceeds were received or, to the extent not so
applied within such 360-day period), to prepay the Loans (and/or the
Revolving Loan Commitments shall be reduced) as provided in subsection
2.4B(iii)(b), and (b) if an Event of Default or Potential Event of Default
shall have occurred and be continuing, Company shall apply an amount equal
to such Net Insurance/Condemnation Proceeds to prepay the Loans (and/or the
Revolving Loan Commitments shall be reduced) as provided in subsection
2.4B(iii)(b); and
(iii) Net Insurance/Condemnation Proceeds Received by Administrative
--------------------------------------------------------------
Agent. Upon receipt by Administrative Agent of any Net
-----
Insurance/Condemnation Proceeds as loss payee, (a) if and to the extent
Company would have been required to apply such Net Insurance/Condemnation
Proceeds (if it had received them directly) to prepay the Loans and/or
reduce the Revolving Loan Commitments, Administrative Agent shall, and
Company hereby authorizes Administrative Agent to, apply such Net
Insurance/Condemnation Proceeds to prepay the Loans (and/or the Revolving
Loan Commitments shall be reduced) as provided in subsection 2.4B(iii)(b),
and (b) to the extent the foregoing clause (a) does not apply,
Administrative Agent shall deliver such Net Insurance/Condemnation Proceeds
to Company, and Company shall, or shall cause one or more of its
Subsidiaries to, promptly apply such Net Insurance/Condemnation Proceeds to
the costs of repairing, restoring, or replacing the assets in respect of
which such Net Insurance/Condemnation Proceeds were received, or, to the
extent not so applied, to prepay the Loans (and/or the Revolving Loan
Commitments shall be reduced as provided in subsection 2.4B(iii)(b).
107
6.5 Inspection Rights.
-----------------
Company shall, and shall cause each of its Subsidiaries to, permit any
authorized representatives designated by any Lender to visit and inspect any of
the properties of Company or of any of its Subsidiaries, to inspect, copy and
take extracts from its and their financial and accounting records, and to
discuss its and their affairs, finances and accounts with its and their officers
and independent public accountants (provided that Company may, if it so chooses,
be present at or participate in any such discussion), all upon reasonable notice
and at such reasonable times during normal business hours and as often as may
reasonably be requested.
6.6 Compliance with Laws, etc.
--------------------------
Company shall comply, and shall cause each of its Subsidiaries to
comply, with the requirements of all applicable laws, rules, regulations and
orders of any governmental authority (including all Environmental Laws),
noncompliance with which would be likely to cause, individually or in the
aggregate, a Material Adverse Effect with respect to Company.
6.7 Execution of Subsidiary Guaranty and Personal Property Collateral Documents
---------------------------------------------------------------------------
by Certain Additional Subsidiaries.
- ----------------------------------
A. Execution of Subsidiary Guaranty and Personal Property Collateral
Documents. In the event that the aggregate gross revenues of the Subsidiary
Guarantors for any Fiscal Year, commencing with the Fiscal Year ending October
31, 1999, is less than 90% of the aggregate gross revenues of Company and its
Domestic Subsidiaries on a consolidated basis for such Fiscal Year, Company
will, within 100 days after the end of such Fiscal Year, (i) cause one or more
additional Domestic Subsidiaries after consultation with Requisite Lenders to
execute and deliver to Administrative Agent a counterpart of the Subsidiary
Guaranty and the Pledge and Security Agreement such that the aggregate gross
revenues of all Subsidiary Guarantors for such Fiscal Year shall be equal to at
least 90% of the aggregate gross revenues of Company and its Domestic
Subsidiaries on a consolidated basis for such Fiscal Year, and (ii) take, or
cause each such Domestic Subsidiary to take, all such further actions and
execute all such further documents and instruments (including actions, documents
and instruments comparable to those described in subsection 4.1K) as may be
necessary or, in the opinion of Administrative Agent, desirable to create in
favor of Administrative Agent, for the benefit of Lenders, a valid and perfected
First Priority Lien on all Material Real Property and all personal property of
each such Domestic Subsidiary described in the applicable forms of Collateral
Documents. In addition, in the event that any Domestic Subsidiary of Company
that has not previously executed the Subsidiary Guaranty has gross revenues for
any Fiscal Year, commencing with the Fiscal Year ending October 31, 1999,
greater than equal to $5,000,000 Company will, within 100 days after the end of
such Fiscal Year, (i) cause such Domestic Subsidiary to execute and deliver to
Administrative Agent a counterpart of the Subsidiary Guaranty and the Pledge and
Security Agreement and (ii) take, or cause such Domestic Subsidiary to take, all
such further actions and execute all such further documents and instruments
(including actions, documents and instruments comparable to those described in
subsection 4.1K) as may be necessary or, in the opinion of Administrative Agent,
desirable to create in favor of Administrative Agent, for the benefit of
Lenders, a valid and perfected First Priority Lien on all Material Real Property
and all personal property of each such Domestic Subsidiary described in the
applicable forms of Collateral Documents.
108
B. Subsidiary Organizational Documents, Legal Opinions, Etc. Company
shall deliver to Administrative Agent, together with such Loan Documents, (i)
certified copies of the Organizational Documents of each Subsidiary described in
subsections 6.7A and 6.7D, together with a good standing certificate from the
Secretary of State of the jurisdiction of its incorporation and, to the extent
generally available, a certificate or other evidence of good standing as to
payment of any applicable franchise or similar taxes from the appropriate taxing
authority of such jurisdiction, each to be dated a recent date prior to their
delivery to Administrative Agent, (ii) a copy of such Subsidiary's Bylaws,
certified by its corporate secretary or an assistant secretary as of a recent
date prior to their delivery to Administrative Agent, (iii) a certificate
executed by the secretary or an assistant secretary of such Subsidiary as to (a)
the fact that the attached resolutions of the Board of Directors of such
Subsidiary approving and authorizing the execution, delivery and performance of
such Loan Documents are in full force and effect and have not been modified or
amended and (b) the incumbency and signatures of the officers of such Subsidiary
executing such Loan Documents, and (iv) a favorable opinion of counsel to such
Subsidiary, in form and substance reasonably satisfactory to Administrative
Agent and its counsel, as to (a) the due organization and good standing of such
Subsidiary, (b) the due authorization, execution and delivery by such Subsidiary
of such Loan Documents, (c) the enforceability of such Loan Documents against
such Subsidiary and (d) such other matters (including matters relating to the
creation and perfection of Liens in any Collateral pursuant to such Loan
Documents) as Administrative Agent may reasonably request, all of the foregoing
to be in form and substance reasonably satisfactory to Administrative Agent and
its counsel.
C. Pledged Collateral. In the event that the aggregate gross revenues of
the Subsidiaries of Company, the Capital Stock of which constitutes Pledged
Collateral, for any Fiscal Year, commencing with the Fiscal Year ending October
31, 1999, is less than 90% of the aggregate gross revenues of Company and its
Subsidiaries on a consolidated basis for such Fiscal Year, Company will, or will
cause its Domestic Subsidiaries to, within 100 days after the end of such Fiscal
Year, execute all such Collateral Documents and/or all such other documents and
instruments (including actions, documents and instruments comparable to those
described in subsection 4.1K) as may be necessary or, in the opinion of
Administrative Agent, desirable to create, in favor of Administrative Agent, for
the benefit of Lenders, a valid and perfected First Priority Lien on all the
Capital Stock of one or more additional Subsidiaries after consultation with
Requisite Lenders to the extent set forth in the applicable forms of Collateral
Documents such that the aggregate gross revenues of all Subsidiaries, the
Capital Stock of which constitutes Pledged Collateral, shall be equal to at
least 90% of the aggregate gross revenues of Company and its Subsidiaries on a
consolidated basis for such Fiscal Year; provided, however, that notwithstanding
-------- -------
the foregoing, no action shall be required to be taken with respect to the
Capital Stock of any Foreign Subsidiary pursuant to this subsection in the event
that Company and Administrative Agent agree in good faith that the pledge of
such stock would result in a significant tax liability to Company or any of its
Subsidiaries or is restricted by the laws of the jurisdiction under which such
Foreign Subsidiary is organized so long as the Capital Stock of all Subsidiaries
whose aggregate gross revenues for such Fiscal Year are greater than or equal to
$5,000,000 constitute Pledged Collateral unless Company and Administrative Agent
agree in good faith that the pledge of such stock of any Foreign Subsidiary
would result in a significant tax liability to Company or any of its
Subsidiaries or is restricted by the laws of the jurisdiction under which such
Foreign Subsidiary is organized; provided further that notwithstanding the
-------- -------
109
foregoing, no action shall be required to be taken with respect to the Capital
Stock of any Subsidiary whose gross revenues for such Fiscal Year are $250,000
or less.
D. Optional Guaranty. In the event that any Subsidiary of Company
executes a guaranty of the Bridge Notes, Rollover Notes or Senior Subordinated
Notes, Company will (i) cause such Subsidiary to execute and deliver to
Administrative Agent a counterpart of the Subsidiary Guaranty and (ii) take, or
cause each such Subsidiary to take, all such further actions and execute all
such further documents and instruments (including actions, documents and
instruments comparable to those described in subsection 4.1K) as may be
necessary or, in the opinion of Administrative Agent, desirable to create in
favor of Administrative Agent, for the benefit of Lenders, a valid and perfected
First Priority Lien on all Material Real Property and all personal property of
each such Subsidiary described in the applicable forms of Collateral Documents.
6.8 Matters Relating to Real Property Collateral.
--------------------------------------------
From and after the Closing Date, in the event that (i) Company or any
Subsidiary Guarantor acquires any Material Real Property or (ii) at the time any
Person becomes a Subsidiary Guarantor, such Person owns or holds any Material
Real Property, in either case excluding any such Real Property Asset the
encumbrancing of which requires the consent of any then-existing senior
lienholder, where Company and its Subsidiaries are unable to obtain such
lessor's or senior lienholder's consent (any such non-excluded Real Property
Asset described in the foregoing clause (i) or (ii) being a "Mortgaged
Property"), Company or such Subsidiary Guarantor, if requested by Administrative
Agent shall deliver to Administrative Agent, as soon as practicable after such
Person acquires such Mortgaged Property or becomes a Subsidiary Guarantor, as
the case may be, (a) a fully executed and notarized Mortgage in proper form for
recording in all appropriate places in all applicable jurisdictions, encumbering
the interest of such Loan Party in such Mortgaged Property; (b) a favorable
opinion of counsel; (c) if required by Administrative Agent, an ALTA mortgagee
title insurance policy or an unconditional commitment therefor issued by title
company acceptable to Administrative Agent in form and substance and in an
amount satisfactory to Administrative Agent, insuring fee simple title to such
Mortgaged Property vested in such Loan Party and assuring Administrative Agent
that such Mortgage creates a valid and enforceable First Priority Lien on such
Mortgaged Property, and (d) such other documents, reports and information as
would be usual and customary in transactions of this type.
6.9 Interest Rate Protection.
------------------------
At all times during the period from and including the date which is 90
days after the Closing Date to and excluding the third anniversary of the
Closing Date, Company shall maintain in effect one or more Interest Rate
Agreements with respect to the Term Loans, in an aggregate notional principal
amount of not less than 50% of the aggregate principal amount of all outstanding
Term Loans, each such Interest Rate Agreement to be in form and substance
reasonably satisfactory to Administrative Agent.
110
6.10 Year 2000.
---------
Company shall perform all acts reasonably necessary to ensure that
Company and its Subsidiaries become Year 2000 Compliant in a timely manner.
Such acts shall include performing a comprehensive review and assessment of all
of Company's systems and adopting a detailed plan, with itemized budget, for the
remediation, monitoring and testing of such systems. As used in this
subsection, "Year 2000 Compliant" shall mean, in regard to any entity, that all
software, hardware, firmware, equipment, goods or systems utilized by or
material to the business operations or financial condition of such entity, will
properly perform date sensitive functions before, during and after the year
2000. Company shall, immediately upon request, provide to Administrative Agent
such certifications or other evidence of Company's compliance with the terms of
this paragraph as Administrative Agent may from time to time require.
6.11 Syndication.
-----------
Company and DMG shall cooperate with Administrative Agent in the
syndication of the Commitments (such cooperation to include participating in
meetings with the Lenders and assisting in the preparation of a Confidential
Information Memorandum and other materials to be used in connection with such
syndication) and shall provide and cause their respective advisors to provide
all information reasonably deemed necessary by Administrative Agent to such
syndication. Company and DMG shall also coordinate any other financings by
Company and DMG with Administrative Agent's primary syndication efforts relating
to the Commitments.
6.12 Consummation of Merger..
----------------------
Company shall proceed to consummate the Merger as soon as practical
following the consummation of the Tender Offer.
6.13 Post Closing Deliveries.
-----------------------
On or prior to September 9, 1999, Company will, or will cause its
Domestic Subsidiaries to, execute all such Collateral Documents and/or all such
documents and instruments (including actions, documents and instruments
comparable to those described in subsection 4.1K) as may be necessary or, in the
reasonable opinion of Administrative Agent, desirable to create, in favor of
Administrative Agent, for the benefit of Lenders, a valid and perfected First
Priority Lien on all Capital Stock required to be pledged pursuant to subsection
6.7C using, for the purposes of such calculation, the sum of (i) the aggregate
gross revenues of URS and its Subsidiaries for the Fiscal Year ended October 31,
1998 and (ii) the aggregate gross revenues of DMG and its Subsidiaries for the
DMG Fiscal Year ended March 26, 1999.
On or prior to September 9, 1999, Administrative Agent shall have
received, with respect to all Intellectual Property listed on Schedule 5.5C to
-------------
the Closing Date Company Disclosure Letter that Administrative Agent and Company
agree in good faith has significant value to Company or any of its Subsidiaries,
such documents as shall be necessary to create and perfect a security interest
in such Intellectual Property.
111
SECTION 7. COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 7.
7.1 Indebtedness.
------------
Company shall not, and shall not permit any of its Subsidiaries or any
Joint Venture in which Company or any of its Subsidiaries has any interest to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Company and its Subsidiaries may become and remain liable with
respect to the Obligations;
(ii) Company, its Subsidiaries and Joint Ventures may become and
remain liable with respect to Contingent Obligations permitted by
subsection 7.4 and, upon any matured obligations actually arising pursuant
thereto, the Indebtedness corresponding to the Contingent Obligations so
extinguished;
(iii) Company may become and remain liable with respect to
Indebtedness to any Subsidiary Guarantor, and any Subsidiary Guarantor may
become and remain liable with respect to Indebtedness to Company or any
other Subsidiary Guarantor, provided that (a) such loan is evidenced by a
--------
promissory note pledged to Administrative Agent on behalf of Lenders
pursuant to the Pledge and Security Agreement, (b) all intercompany
Indebtedness owed by Company to any Subsidiary Guarantor and by any
Subsidiary Guarantor to Company shall be subordinated in right of payment
to the payment in full of the Obligations, and (c) any payment by any
Subsidiary Guarantor under any guaranty of the Obligations shall result
in a pro tanto reduction of the amount of any intercompany Indebtedness
--- -----
owed by such Subsidiary Guarantor to Company or to any Subsidiary Guarantor
for whose benefit such payment is made;
(iv) any Subsidiary of Company (other than a Subsidiary Guarantor or
an Inactive Subsidiary) may become and remain liable with respect to
Indebtedness to Company or any Subsidiary Guarantor to the extent such
corresponding Investment by Company or any such Subsidiary Guarantor is
permitted under subsection 7.3(xiii), provided that (a) such loan is
--------
evidenced by a promissory note pledged to Administrative Agent on behalf of
Lenders pursuant to the Pledge and Security Agreement, (b) all intercompany
Indebtedness owed by any Subsidiary Guarantor to Company shall be
subordinated in right of payment to the payment in full of the Obligations,
and (c) any payment by any Subsidiary Guarantor under any guaranty of the
Obligations shall result in a pro tanto reduction of the amount of any
--- -----
intercompany Indebtedness owed by such Subsidiary Guarantor to Company or
to any Subsidiary Guarantor for whose benefit such payment is made;
112
(v) any Foreign Subsidiary of Company may become and remain liable
with respect to Indebtedness to any other Foreign Subsidiary of Company;
(vi) Company may become and remain liable with respect to
Indebtedness evidenced by (a) the Bridge Notes in an aggregate principal
amount not to exceed $200,000,000 plus the amount of all interest thereon
paid in the form of additional Bridge Notes, (b) the Rollover Notes in an
aggregate principal amount not to exceed $205,500,000 plus (1) an amount
equal to the aggregate amount of all interest on the Bridge Notes paid in
the form of additional Bridge Notes, and (2) the amount of all interest
thereon paid in the form of additional Rollover Notes, and (c) the Senior
Subordinated Notes in an aggregate principal amount not to exceed
$205,500,000 plus (1) an amount equal to the aggregate amount of all
interest on the Bridge Notes or Rollover Notes paid in the form of
additional Bridge Notes or Rollover Notes, as the case may be, and (2) the
amount of any premium payable in respect of the Rollover Notes upon the
refinancing thereof;
(vii) any Joint Venture may become and remain liable with respect to
Indebtedness to Persons other than Company or any of its Subsidiaries,
provided that such Indebtedness is nonrecourse to Company, its Subsidiaries
--------
and their respective assets;
(viii) any Joint Venture may become and remain liable with respect to
Indebtedness to Company or any Subsidiary of Company (other than an
Inactive Subsidiary) to the extent such corresponding Investment by Company
or any such Subsidiary is permitted under subsection 7.3(viii);
(ix) Indebtedness (including the amount of any committed lines of
credit) listed on Schedule 7.1 of the Closing Date Company Disclosure
------------
Letter;
(x) Company and its Domestic Subsidiaries (other than Inactive
Subsidiaries) may become and remain liable with respect to Indebtedness to
Persons other than Company or any of its Subsidiaries in an aggregate
principal amount (not including the amount of any such Indebtedness and
committed lines of credit listed on Schedule 7.1 of the Closing Date
------------
Company Disclosure Letter) not to exceed $50,000,000 (less the aggregate
amount of all Contingent Obligations permitted by subsection 7.4(ix)) at
any time outstanding;
(xi) Foreign Subsidiaries of Company may become and remain liable
with respect to Indebtedness to Persons other than Company or any of its
Subsidiaries in an aggregate principal amount (including the amount of any
such Indebtedness listed on Schedule 7.1 of the Closing Date Company
------------
Disclosure Letter) not to exceed $30,000,000 at any time outstanding; and
(xii) any Target who becomes a Subsidiary or who is merged or
consolidated into a Subsidiary after the date hereof pursuant to a
Subsequent Acquisition permitted by subsection 7.7(vi) may remain liable
with respect to Indebtedness existing immediately prior to the date of such
Subsequent Acquisition; provided that (a) such Indebtedness was
113
not incurred in connection with, or anticipation or contemplation of, such
Subsequent Acquisition, (b) no Event of Default or Potential Event of
Default shall have occurred and be continuing or would occur and be
continuing or would occur as a result of such Subsequent Acquisition, and
(c) neither Company nor any of its Subsidiaries (other than such Target or
the Subsidiary into which such Target is merged or consolidated) shall
become liable with respect to such Indebtedness.
7.2 Liens and Related Matters.
-------------------------
A. Prohibition on Liens. Company shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC or under any similar recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens described on Schedule 7.2 of the Closing Date Company
------------
Disclosure Letter;
(iv) Liens on property or assets acquired by Company or any of its
Subsidiaries (other than Inactive Subsidiaries) after the date of this
Agreement or on property or assets of any Person which becomes a Subsidiary
of Company after the date of this Agreement, provided that (a) such Liens
--------
exist at the time such property or assets or the stock of such Person is
acquired, (b) such Liens were not created in contemplation of such
acquisition and (c) any such Lien shall attach only to the property or
assets so acquired;
(v) Liens created to secure the purchase price of property or
assets, provided that (a) any such Lien shall attach only to the property
--------
or assets so purchased, (b) the Indebtedness secured by any such Lien shall
not exceed 100% of the purchase price of the property or assets purchased,
and (c) any such Lien shall be created within 180 days following the
acquisition of such property or assets;
(vi) Liens on property or assets of any Foreign Subsidiary of
Company created to secure Indebtedness permitted under subsection 7.1(xi);
(vii) Liens incurred in connection with the extension, renewal or
refinancing of the Indebtedness secured by the Liens described in clauses
(iv) and (v) above; and
(viii) other Liens in an aggregate amount not to exceed $500,000 at
any time.
114
B. Equitable Lien in Favor of Lenders. If Company or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
--------
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.
C. No Further Negative Pledges. Neither Company nor any of its
Subsidiaries shall enter into any agreement prohibiting the creation or
assumption of any Lien upon any of its properties or assets, whether now owned
or hereafter acquired, except (i) restrictions contained in the Related
Agreements as in effect on the Closing Date, (ii) restrictions on the
encumbrance of specific property encumbered to secure payment of particular
Indebtedness or to be sold pursuant to an executed agreement with respect to an
Asset Sale, and (iii) customary non-assignment provisions contained in leases,
subleases, licenses and sublicenses permitted by this Agreement.
D. No Restrictions on Subsidiary Distributions to Company or Other
Subsidiaries. Except as provided herein and except for restrictions contained in
the terms of any Indebtedness of Foreign Subsidiaries of Company permitted by
subsection 7.1(xi) if such restriction applies only in the event of a payment
default or a default with respect to a financial covenant in such Indebtedness
or Company determines that any such restriction will not materially affect
Company's ability to make principal or interest payments on the Loans and the
restriction is not materially more disadvantageous to Lenders than is customary
in comparable financings, Company will not, and will not permit any of its
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any such Subsidiary to (i) pay dividends or make any other distributions on
any of such Subsidiary's Capital Stock owned by Company or any other Subsidiary
of Company, (ii) repay or prepay any Indebtedness owed by such Subsidiary to
Company or any other Subsidiary of Company, (iii) make loans or advances to
Company or any other Subsidiary of Company, except as provided in the Bridge
Loan Agreement as in effect on the Closing Date and the Senior Note Indenture in
a form consistent with the "Description of Notes" contained in the Offering
Memorandum dated June 7, 1999 or such other form as may be approved by Requisite
Lenders, or (iv) transfer any of its property or assets to Company or any other
Subsidiary of Company, except for (a) restrictions contained in the Bridge Loan
Agreement as in effect on the Closing Date and the Senior Note Indenture in the
form approved by Requisite Lenders, (b) customary non-assignment provisions
contained in leases, subleases, licenses and sublicenses, (c) restrictions on
the transfer of Joint Venture interests contained in the organizational
documents of any Joint Venture, and (d) restrictions in an executed agreement
with respect to an Asset Sale.
7.3 Investments; Joint Ventures.
---------------------------
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:
115
(i) Company and its Subsidiaries (other than Inactive Subsidiaries)
may make and own Investments in Cash Equivalents;
(ii) Company and any Subsidiary Guarantor may make intercompany
loans to the extent permitted under subsections 7.1(iii) and (iv);
(iii) Company and its Subsidiaries (other than Inactive Subsidiaries)
may make Consolidated Capital Expenditures permitted by subsection 7.8;
(iv) Company and Merger Sub may consummate the Merger;
(v) Company and its Subsidiaries may continue to own the
Investments owned by them and described on Schedule 7.3 of the Closing Date
------------
Company Disclosure Letter;
(vi) Company and its Subsidiaries (other than Inactive Subsidiaries)
may make and own Investments in wholly-owned Subsidiary Guarantors;
(vii) Company and its Subsidiaries (other than Inactive Subsidiaries)
may own Investments received in connection with the restructuring or work-
out of the obligations of or the bankruptcy of suppliers and customers or
received pursuant to a plan of reorganization of any supplier or customer,
in each case in settlement of delinquent obligations or disputes with such
suppliers or customers;
(viii) Company and its Subsidiaries (other than Inactive Subsidiaries)
may make and own Investments in Joint Ventures in an aggregate amount not
to exceed $5,000,000 at any time;
(ix) Company or any of its Subsidiaries (other than Inactive
Subsidiaries) may make and own Investments consisting of non-cash
consideration received in the form of securities, notes or similar
obligations in connection with an Asset Sale permitted pursuant to
subsection 7.7; provided that (a) the aggregate amount of such non-cash
--------
consideration received in connection with such Asset Sale shall not exceed
10% of the total consideration received in connection with such Asset Sale
and (b) such non-cash consideration is pledged pursuant to the Pledge and
Security Agreement;
(x) any Foreign Subsidiary of Company may make and own Investments
in any other Foreign Subsidiary of Company;
(xi) Company and its Subsidiaries (other than Inactive Subsidiaries)
may make Subsequent Acquisitions permitted under subsection 7.7(vi);
(xii) any Target who becomes a Subsidiary or who is merged or
consolidated into a Subsidiary after the date hereof pursuant to a
Subsequent Acquisition permitted by subsection 7.7(vi) may continue to own
Investments owned by such Target on the date of such Subsequent
Acquisition; provided that (a) such Investment was not incurred in
connection with, or anticipation or contemplation of, such Subsequent
Acquisition, (b) no Event of Default or Potential Event of Default shall
have occurred and be continuing or
116
would occur as a result of such Subsequent Acquisition, and (c) neither
Company nor any of its Subsidiaries (other than such Target or the
Subsidiary into which such Target is merged or consolidated) shall become
liable with respect to such Investment; and
(xiii) Company and Subsidiary Guarantors may make and own Investments
in Subsidiaries (other than wholly-owned Subsidiary Guarantors and Inactive
Subsidiaries) in an aggregate amount (including the amount of any such
Investments listed on Schedule 7.3 of the Closing Date Company Disclosure
------------
Letter) not to exceed $25,000,000 at any time.
7.4 Contingent Obligations.
----------------------
Company shall not, and shall not permit any of its Subsidiaries or any
Joint Venture in which Company or any of its Subsidiaries has an interest to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Subsidiaries of Company may become and remain liable with
respect to Contingent Obligations in respect of the Subsidiary Guaranty;
(ii) Company may become and remain liable with respect to Contingent
Obligations in respect of the Letters of Credit;
(iii) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations described on Schedule 7.4 of the Closing
------------
Date Company Disclosure Letter;
(iv) Company may become and remain liable with respect to Contingent
Obligations under Currency Agreements and Interest Rate Agreements
constituting Hedge Agreements in the ordinary course of business;
(v) Company and its Subsidiaries (other than Inactive Subsidiaries)
may become and remain liable with respect to Contingent Obligations in
respect of any Indebtedness of any of its Domestic Subsidiaries (other than
Inactive Subsidiaries) permitted by subsection 7.1;
(vi) Joint Ventures may become and remain liable with respect to
Contingent Obligations; provided that such Contingent Obligations are
--------
nonrecourse to Company, its Subsidiaries and their respective assets;
(vii) Company, its Subsidiaries (other than Inactive Subsidiaries)
and Joint Ventures may become and remain liable with respect to Contingent
Obligations in respect of performance bonds, bid bonds, appeal bonds,
surety bonds and similar obligations provided in the ordinary course of
business to support the obligations of such Subsidiaries and Joint
Ventures;
(viii) Subsidiary Guarantors may become and remain liable with respect
to Contingent Obligations in respect of the Bridge Notes, the Rollover
Notes or the Senior
117
Subordinated Notes; provided that such Contingent Obligations are
--------
subordinated to the Subsidiary Guaranty on terms satisfactory to Requisite
Lenders; and
(ix) Company and its Subsidiaries (other than Inactive Subsidiaries)
may become and remain liable with respect to Contingent Obligations in an
amount not to exceed $10,000,000 at any time.
7.5 Restricted Junior Payments.
--------------------------
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment; provided that (i) Company may make regularly
--------
scheduled payments of interest in respect of the Existing Subordinated
Indebtedness in accordance with the terms of, and only to the extent required
by, and subject to the subordination provisions contained in, the Existing
Subordinated Agreements, (ii) Company may make regularly scheduled payments of
interest in respect of the Senior Subordinated Notes in accordance with the
terms of, and only to the extent required by, and subject to the subordination
provisions contained in, the Senior Subordinated Note Indenture, (iii) Company
may make regularly scheduled payments of interest in respect of the Bridge Notes
and the Rollover Notes, in an amount not to exceed 15% per annum in cash and an
additional 2% per annum in the form of additional Bridge Notes or Rollover
Notes, in accordance with the terms of, and only to the extent required by, and
subject to the subordination provisions contained in, the Bridge Loan Agreement,
(iv) Company may make regularly scheduled sinking fund payments in accordance
with the terms of, and only to the extent required by, the Existing Subordinated
Note Indenture and may repay the outstanding principal amount of the Existing
Senior Subordinated Notes on the scheduled maturity thereof, (v) Company may
exchange the Bridge Notes for the Rollover Notes and may repay the principal
amount and premium, if any, of the Bridge Notes or the Rollover Notes with the
proceeds of the Senior Subordinated Notes, (vi) Company may exchange Company
Series A Preferred Stock and Company Series C Preferred Stock for Company Series
B Preferred Stock and may exchange Company Series A Preferred Stock, Company
Series B Preferred Stock or Company Series C Preferred Stock for common stock of
Company, in each case as contemplated in the Securities Purchase Agreement,
(vii) Company may repurchase common stock of Company that constitutes odd lots
pursuant to a program established by Company for the repurchase of such odd lots
in an aggregate amount not to exceed $100,000, (viii) Company may purchase
shares of DMG Common Stock from holders who have perfected their statutory
appraisal rights, (ix) any Subsidiary may declare and pay dividends to Company
or any wholly-owned Subsidiary of Company, and (x) Company and its Subsidiaries
may purchase shares of Capital Stock of any Subsidiary owned by professional
engineers in connection with licensing requirements in an aggregate amount not
to exceed $500,000.
7.6 Financial Covenants.
-------------------
A. Minimum Current Ratio. Company shall not permit the ratio of (i)
Consolidated Current Assets to (ii) Consolidated Current Liabilities as of the
last day of any Fiscal Quarter to be less than 1.20 to 1.00
118
B. Minimum Fixed Charge Coverage Ratio. Company shall not permit the
ratio of (i) Consolidated EBITDA minus Consolidated Capital Expenditures (net of
any proceeds of any related financings with respect to such expenditures) to
(ii) Consolidated Fixed Charges for (a)(1) the one-Fiscal Quarter period ending
October 31, 1999, (2) the two-Fiscal Quarter period ending January 31, 2000, (3)
the three-Fiscal Quarter period ending April 30, 2000, (4) the four-Fiscal
Quarter period ending July 31, 2000, or (5) any four-Fiscal Quarter period
ending thereafter prior to January 31, 2006 to be less than 1.10 to 1.00, or (b)
any four-Fiscal Quarter period ending on or after January 31, 2006 to be less
than 1.0 to 1.0.
C. Maximum Leverage Ratio. As of the last day of any Fiscal Quarter
ending during any of the periods set forth below, Company shall not permit the
Leverage Ratio to exceed the correlative ratio indicated.
Period Maximum Leverage Ratio
------ ----------------------
Closing through 10/31/99 4.75:1.00
11/01/99 through 04/30/00 4.50:1.00
05/01/00 through 10/31/00 4.25:1.00
11/01/00 through 04/30/01 4.00:1.00
05/01/01 through 10/31/01 3.50:1.00
11/01/01 through 04/30/02 3.25:1.00
05/01/02 through 10/31/02 3.00:1.00
11/01/02 through 04/30/03 2.75:1.00
05/01/03 through 10/31/03 2.50:1.00
11/01/03 through 04/30/04 2.50:1.00
thereafter 2.25:1.00
D. Minimum Consolidated EBITDA. Company shall not permit Consolidated
EBITDA for any four-Fiscal Quarter period ending during any of the periods set
forth below to be less than the correlative amount indicated.
Period Minimum Consolidated EBITDA
------ ---------------------------
Closing through 10/30/00 $ 142,000,000
10/31/00 through 10/30/01 $ 160,000,000
10/31/01 through 10/30/02 $ 185,000,000
10/31/02 through 10/30/03 $ 200,000,000
10/31/03 through 10/30/04 $ 215,000,000
10/31/04 through 10/30/05 $ 230,000,000
10/31/05 through 10/30/06 $ 240,000,000
10/31/06 through 10/30/07 $ 250,000,000
thereafter $ 260,000,000
119
7.7 Restriction on Fundamental Changes; AsSales and Acquisitions.
------------------------------------------------------------
Company shall not, and shall not peany of its Subsidiaries to,
alter the corporate, capital or legal structuf Company or any of its
Subsidiaries, or merge or consolidate, or liq e, wind-up or dissolve itself
(or suffer any liquidation or dissolution), or convey, sell, lease or sub-lease
(as lessor or sublessor), transfer or otherwise dispose of, in one transaction
or a series of transactions, all or any part of its business, property or
assets, whether now owned or hereafter acquired, or acquire by purchase or
otherwise all or substantially all the business, property or fixed assets of, or
stock or other evidence of beneficial ownership of, any Person or any division
or line of business of any Person, except:
(i) Company and Merger Sub may consummate the Tender Offer and the
Merger;
(ii) any Subsidiary of Company may be merged with or into Company or
any wholly-owned Subsidiary Guarantor, or be liquidated, wound up or
dissolved, or all or any part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of, in one
transaction or a series of transactions, to Company or any wholly-owned
Subsidiary Guarantor; provided that, in the case of such a merger, Company
--------
or such wholly-owned Subsidiary Guarantor shall be the continuing or
surviving corporation;
(iii) Company and its Subsidiaries may dispose of obsolete, worn out
or surplus property in the ordinary course of business;
(iv) Company and its Subsidiaries may sell or otherwise dispose of
assets in transactions that do not constitute Asset Sales, provided that
--------
the consideration received for such assets shall be in an amount at least
equal to the fair market value thereof;
(v) Company and its Subsidiaries may make Asset Sales of assets
(other than the Tendered Shares) having a fair market value of not in
excess of $10,000,000 during any Fiscal Year, provided that (a) the
--------
consideration received for such assets shall be in an amount at least equal
to the fair market value thereof and shall be Cash or non-cash
consideration permitted by subsection 7.3(ix); and (b) the proceeds of such
Asset Sales shall be applied as required by subsection 2.4B(iii)(a); and
(vi) subject to subsection 6.7, after January 1, 2000, Company and
its Subsidiaries (other than Inactive Subsidiaries) may acquire by purchase
or otherwise (each, a "Subsequent Acquisition") all or substantially all
the business, property or fixed assets of, or stock or other evidence of
beneficial ownership of, any Person (other than DMG) or any division or
line of business of any Person (other than DMG) (any such business,
property, assets, stock, evidence of ownership, division or line of
business, being a "Target"), provided that (a) the sum of the aggregate
--------
Total Purchase Price of all Subsequent Acquisitions does not exceed
$60,000,000 in the aggregate during the term of this Agreement and (b)
Company shall have delivered a Compliance Certificate to Administrative
Agent demonstrating that, after giving effect to such proposed Subsequent
120
Acquisition, the Leverage Ratio is in compliance with the requirements of
subsection 7.6C;
(vii) licenses or sublicenses by the Company and its Subsidiaries of
software, trademarks, patents and other intellectual property in the
ordinary course of business and which do not materially interfere with the
business of the Company or any of its Subsidiaries;
(viii) transfers of condemned property to the respective governmental
authority or agency that have condemned the same (whether by deed in lieu
of condemnation or otherwise), and transfers of properties that have been
subject to a casualty to the respective insurer of such property or its
designee as part of an insurance settlement; and
(ix) Company and its Subsidiaries may sell or otherwise dispose of
Investments permitted to be made or owned by subsection 7.3(i).
7.8 Consolidated Capital Expenditures.
---------------------------------
Company shall not, and shall not permit its Subsidiaries to, make or
incur Consolidated Capital Expenditures, in any Fiscal Year indicated below, in
an aggregate amount in excess of the corresponding amount (the "Maximum
Consolidated Capital Expenditures Amount") set forth below opposite such Fiscal
Year; provided that the Maximum Consolidated Capital Expenditures Amount for any
--------
Fiscal Year shall be increased by an amount equal to the excess, if any, of the
Maximum Consolidated Capital Expenditures Amount for the previous Fiscal Year
(without giving effect to any adjustment in accordance with this proviso) over
the actual amount of Consolidated Capital Expenditures for such previous Fiscal
Year:
Fiscal Year Maximum Consolidated Capital Expenditures Amount
----------- ------------------------------------------------
2000 $34,000,000
2001 $36,000,000
2002 $38,000,000
2003 $40,000,000
2004 $42,000,000
2005 $44,000,000
2006 $46,000,000
thereafter $48,000,000
7.9 Sales and Lease-Backs.
---------------------
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which Company or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than Company or
any of its Subsidiaries) or (ii) which Company or any of its Subsidiaries
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by
121
Company or any of its Subsidiaries to any Person (other than Company or any of
its Subsidiaries) in connection with such lease.
7.10 Sale or Discount of Receivables.
-------------------------------
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, discount or otherwise sell for less
than the face value thereof, any of its accounts receivable.
7.11 Transactions with Shareholders and Affiliates.
---------------------------------------------
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Company or with any Affiliate of Company or of any such holder, on terms that
are less favorable to Company or that Subsidiary, as the case may be, than those
that might be obtained at the time from Persons who are not such a holder or
Affiliate; provided that the foregoing restriction shall not apply to (i) any
--------
transaction between Company and any of its wholly-owned Subsidiaries or between
any of its wholly-owned Subsidiaries, (ii) reasonable and customary fees paid to
members of the Boards of Directors of Company and its Subsidiaries, (iii)
existing related party transactions described in Company's Annual Report on Form
10-K for the 1998 Fiscal Year, or (iv) the transactions contemplated by the
Securities Purchase Agreement.
7.12 Conduct of Business.
-------------------
From and after the Closing Date, Company shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than (i) the
businesses engaged in by Company, DMG and their respective Subsidiaries on the
Closing Date and similar or related businesses and (ii) such other lines of
business as may be consented to by Requisite Lenders.
7.13 Amendments or Waivers of Related Agreements; Amendments of Documents
--------------------------------------------------------------------
Relating to Subordinated Indebtedness.
- -------------------------------------
A. Amendments or Waivers of Related Agreements. Except as set forth on
Schedule 7.13 of the Closing Date Company Disclosure Letter, neither Company nor
any of its Subsidiaries will agree to any material amendment to, or waive any of
its material rights under, any Related Agreement (other than the Bridge Loan
Agreement, the Senior Subordinated Note Indenture, the Existing Subordinated
Agreements, the Securities Purchase Agreement or the Company Certificates of
Designations) after the Closing Date without in each case obtaining the prior
written consent of Requisite Lenders to such amendment or waiver. Neither
Company nor any of its Subsidiaries will agree to any amendment to, or waive any
of its rights under, the Securities Purchase Agreement or the Company
Certificates of Designation in any respect that would be adverse to Company or
Lenders after the Closing Date without in each case obtaining the prior written
consent of Requisite Lenders to such amendment or waiver.
B. Amendments of Documents Relating to Subordinated Indebtedness. Company
shall not, and shall not permit any of its Subsidiaries to, amend or otherwise
change
122
the terms of any Existing Subordinated Indebtedness, the Existing
Subordinated Agreements, the Bridge Loan Agreement, the Bridge Notes, the
Rollover Notes, the Senior Subordinated Notes or the Senior Subordinated Note
Indenture, or make any payment consistent with an amendment thereof or change
thereto.
C. Designated Senior Indebtedness. Company shall not designate any
Indebtedness as "Designated Senior Indebtedness" other than the Obligations for
purposes of the Senior Subordinated Note Indenture without the prior written
consent of Requisite Lenders.
7.14 Fiscal Year.
-----------
Company shall not change its Fiscal Year-end from October 31.
SECTION 8. EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default")
shall occur:
8.1 Failure to Make Payments When Due.
---------------------------------
Failure by Company to pay any installment of principal of any Loan
when due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Company to pay when
due any amount payable to the Issuing Lender in reimbursement of any drawing
under a Letter of Credit; or failure by Company to pay any interest on any Loan
or any fee or any other amount due under this Agreement within five days after
the date due; or
8.2 Default in Other Agreements.
---------------------------
(i) Failure of Company or any of its Subsidiaries to pay when due any
principal of or interest on or any other amount payable in respect of any
Subordinated Indebtedness or one or more items of any other Indebtedness
(other than Indebtedness referred to in subsection 8.1) or Contingent
Obligations in an individual principal amount of $5,000,000 or more or
with an aggregate principal amount of $5,000,000 or more, in each case
beyond the end of any grace period provided therefor; or (ii) breach or
default by Company or any of its Subsidiaries with respect to any other
material term of (a) any Subordinated Indebtedness or one or more items of
any other Indebtedness or Contingent Obligations in the individual or
aggregate principal amounts referred to in clause (i) above or (b) any
loan agreement, mortgage, indenture or other agreement relating to such
item(s) of Indebtedness or Contingent Obligation(s), if the effect of such
breach or default is to cause, or to permit the holder or holders of that
Indebtedness or Contingent Obligation(s) (or a trustee on behalf of such
holder or holders) to cause, that Indebtedness or Contingent Obligation(s)
to become or be declared due and payable prior to its stated maturity or
the stated maturity of any underlying obligation, as the case may be (upon
the giving or receiving of notice, lapse of time, both, or otherwise); or
8.3 Breach of Certain Covenants.
---------------------------
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Failure of Company to perform or comply with any term or condition
contained in subsection 2.5, 6.1(vii) or 6.2 or Section 7 of this Agreement; or
8.4 Breach of Warranty.
------------------
Any representation, warranty, certification or other statement made
by Company or any of its Subsidiaries in any Loan Document or in any statement
or certificate at any time given by Company or any of its Subsidiaries in
writing pursuant hereto or thereto or in connection herewith or therewith shall
be false in any material respect on the date as of which made; or
8.5 Other Defaults Under Loan Documents.
-----------------------------------
Any Loan Party shall default in the performance of or compliance with
any term contained in this Agreement or any of the other Loan Documents, other
than any such term referred to in any other subsection of this Section 8, and
such default shall not have been remedied or waived within 30 days after the
earlier of (i) a Responsible Officer of Company becoming aware of such default
or (ii) receipt by Company and such Loan Party of notice from Administrative
Agent or any Lender of such default; or
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
-----------------------------------------------------
(i) A court having jurisdiction in the premises shall enter a decree
or order for relief in respect of Company or any of its Subsidiaries in an
involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which
decree or order is not stayed; or any other similar relief shall be granted
under any applicable federal or state law; or (ii) an involuntary case
shall be commenced against Company or any of its Subsidiaries under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect; or a decree or order of a court
having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having
similar powers over Company or any of its Subsidiaries, or over all or a
substantial part of its property, shall have been entered; or there shall
have occurred the involuntary appointment of an interim receiver, trustee
or other custodian of Company or any of its Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Company or any of its Subsidiaries, and any such event
described in this clause (ii) shall continue for 60 days unless dismissed,
bonded or discharged; or
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
---------------------------------------------------
(i) Company or any of its Subsidiaries shall have an order for relief
entered with respect to it or commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect, or shall consent to the entry of an
order for relief in an involuntary case, or to the conversion of an
involuntary case to a voluntary case, under any such law, or shall consent
to the appointment of or taking possession by a receiver, trustee or other
custodian for all or a substantial part of its property; or Company or any
of its Subsidiaries shall make any
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assignment for the benefit of creditors; or (ii) Company or any of its
Subsidiaries shall be unable, or shall fail generally, or shall admit in
writing its inability, to pay its debts as such debts become due; or the
Board of Directors of Company or any of its Subsidiaries (or any committee
thereof) shall adopt any resolution or otherwise authorize any action to
approve any of the actions referred to in clause (i) above or this clause
(ii); or
8.8 Judgments and Attachments.
-------------------------
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $5,000,000 or (ii)
in the aggregate at any time an amount in excess of $5,000,000 shall be entered
or filed against Company or any of its Subsidiaries or any of their respective
assets and shall remain undischarged, unvacated, unbonded or unstayed for a
period of 60 days (or in any event later than five days prior to the date of any
proposed sale thereunder); or
8.9 Dissolution.
-----------
Any order, judgment or decree shall be entered against Company or any
of its Material Subsidiaries decreeing the dissolution or split up of Company or
that Material Subsidiary and such order shall remain undischarged or unstayed
for a period in excess of 30 days; or
8.10 Employee Benefit Plans.
----------------------
There shall occur one or more ERISA Events which individually or in
the aggregate results in or might reasonably be expected to result in liability
of Company, any of its Subsidiaries or any of their respective ERISA Affiliates
in excess of $5,000,000 during the term of this Agreement; or there shall exist
an amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans of Company and
its Subsidiaries (excluding for purposes of such computation any such Pension
Plans with respect to which assets exceed benefit liabilities), which exceeds
$5,000,000; or
8.11 Material Adverse Effect.
-----------------------
Any event or change shall occur that has caused or evidences, either
in any case or in the aggregate, a Material Adverse Effect with respect to
Company; or
8.12 Change in Control.
-----------------
Any Person or any two or more Persons, other than RCBA and its
Affiliates, acting in concert shall have acquired after the date hereof
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Exchange Act), directly or indirectly, of
Securities of Company (or other Securities convertible into such Securities)
representing 35% or more of the combined voting power of all Securities of
Company entitled to vote in the election of directors, other than Securities
having such power only by reason of the happening of a contingency; or during
any period of 12 consecutive months after the Closing Date, individuals who at
the beginning of such 12-month period constituted the Board of Directors of
Company (together with any new directors whose election by such Board
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of Directors or whose nomination for election by the stockholders of Company was
approved by a vote of a majority of the directors 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, including new directors designated in
or provided for in an agreement regarding the merger, consolidation or sale,
transfer or other conveyance, of all or substantially all of the assets of
Company, if such agreement was approved by a vote of such majority directors)
cease for any reason to constitute a majority of the Board of Directors of
Company then in office, or
8.13 Invalidity of Subsidiary Guaranty; Failure of Security; Repudiation of
----------------------------------------------------------------------
Obligations.
- -----------
At any time after the execution and delivery thereof, (i) the
Subsidiary Guaranty for any reason, other than the satisfaction in full of all
Obligations, shall cease to be in full force and effect (other than in
accordance with its terms) or shall be declared to be null and void, (ii) any
Collateral Document shall cease to be in full force and effect (other than by
reason of a release of Collateral thereunder in accordance with the terms hereof
or thereof, the satisfaction in full of the Obligations or any other termination
of such Collateral Document in accordance with the terms hereof or thereof) or
shall be declared null and void, or Administrative Agent shall not have or shall
cease to have a valid and perfected First Priority Lien in any material part of
the Collateral purported to be covered thereby, in each case for any reason
other than the failure of Administrative Agent or any Lender to take any action
within its control, or (iii) any Loan Party shall contest the validity or
enforceability of any Loan Document in writing or deny in writing that it has
any further liability, including with respect to future advances by Lenders,
under any Loan Document to which it is a party; or
8.14 Failure to Consummate Merger.
----------------------------
The Merger shall not be consummated in accordance with the Merger
Agreement or the Merger shall be unwound, reversed or otherwise rescinded in
whole or in part for any reason;
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7 with respect to Company or any of its Significant Subsidiaries, each of
(a) the unpaid principal amount of and accrued interest on the Loans, (b) an
amount equal to the maximum amount that may at any time be drawn under all
Letters of Credit then outstanding (whether or not any beneficiary under any
such Letter of Credit shall have presented, or shall be entitled at such time to
present, the drafts or other documents or certificates required to draw under
such Letter of Credit), and (c) all other Obligations shall automatically become
immediately due and payable, without presentment, demand, protest or other
requirements of any kind, all of which are hereby expressly waived by Company,
and the obligation of each Lender to make any Loan and the obligation of the
Issuing Lender to issue any Letter of Credit hereunder shall thereupon
terminate, and (ii) upon the occurrence and during the continuation of any other
Event of Default, Administrative Agent shall, upon the written request or with
the written consent of Requisite Lenders, by written notice to Company, declare
all or any portion of the amounts described in clauses (a) through (c) above to
be, and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan and the obligation of the Issuing
Lender to issue any Letter of Credit hereunder shall thereupon terminate;
provided that the foregoing shall not affect in any way the obligations of
- --------
Lenders
126
under subsection 3.3C(i) or the obligations of Lenders to purchase
participations in any unpaid Swing Line Loans as provided in subsection
2.1A(vi).
Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent in an account
satisfactory to Administrative Agent and in which Administrative Agent (on
behalf of Lenders) has a First Priority Lien and shall be applied as provided in
an agreement entered into by the parties with respect thereto.
Notwithstanding anything contained in the second preceding paragraph,
if at any time within 60 days after an acceleration of the Loans pursuant to
clause (ii) of such paragraph Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as a
result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than non-
payment of the principal of and accrued interest on the Loans, in each case
which is due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to subsection 10.6, then Requisite Lenders, by written notice to
Company, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon. The
provisions of this paragraph are intended merely to bind Lenders to a decision
which may be made at the election of Requisite Lenders and are not intended,
directly or indirectly, to benefit Company, and such provisions shall not at any
time be construed so as to grant Company the right to require Lenders to rescind
or annul any acceleration hereunder or to preclude Administrative Agent or
Lenders from exercising any of the rights or remedies available to them under
any of the Loan Documents, even if the conditions set forth in this paragraph
are met.
SECTION 9. ADMINISTRATIVE AGENT
9.1 Appointment.
-----------
A. Appointment of Administrative Agent. Wells Fargo is hereby appointed
Administrative Agent hereunder and under the other Loan Documents and each
Lender hereby authorizes Administrative Agent to act as its agent in accordance
with the terms of this Agreement and the other Loan Documents. Administrative
Agent agrees to act upon the express conditions contained in this Agreement and
the other Loan Documents, as applicable. The provisions of this Section 9 are
solely for the benefit of Administrative Agent and Lenders and Company shall
have no rights as a third party beneficiary of any of the provisions thereof.
In performing its functions and duties under this Agreement, Administrative
Agent shall act solely as an agent of Lenders and does not assume and shall not
be deemed to have assumed any obligation towards or relationship of agency or
trust with or for Company or any of its Subsidiaries.
B. Appointment of Supplemental Collateral Administrative Agents. It is the
purpose of this Agreement and the other Loan Documents that there shall be no
violation of any law of any jurisdiction denying or restricting the right of
banking corporations or associations to transact business as agent or trustee in
such jurisdiction. It is recognized that in case of litigation under this
Agreement or any of the other Loan Documents, and in particular in case of the
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enforcement of any of the Loan Documents, or in case Administrative Agent deems
that by reason of any present or future law of any jurisdiction it may not
exercise any of the rights, powers or remedies granted herein or in any of the
other Loan Documents or take any other action which may be desirable or
necessary in connection therewith, it may be necessary that Administrative Agent
appoint an additional individual or institution reasonably acceptable to Company
as a separate trustee, co-trustee, collateral agent or collateral co-agent (any
such additional individual or institution being referred to herein individually
as a "Supplemental Collateral Agent" and collectively as "Supplemental
Collateral Agents"). Company shall not be obligated to pay any fees to such
Supplemental Collateral Agent.
In the event that Administrative Agent appoints a Supplemental
Collateral Administrative Agent with respect to any Collateral, (i) each and
every right, power, privilege or duty expressed or intended by this Agreement or
any of the other Loan Documents to be exercised by or vested in or conveyed to
Administrative Agent with respect to such Collateral shall be exercisable by and
vest in such Supplemental Collateral Administrative Agent to the extent, and
only to the extent, necessary to enable such Supplemental Collateral
Administrative Agent to exercise such rights, powers and privileges with respect
to such Collateral and to perform such duties with respect to such Collateral,
and every covenant and obligation contained in the Loan Documents and necessary
to the exercise or performance thereof by such Supplemental Collateral
Administrative Agent shall run to and be enforceable by either Administrative
Agent or such Supplemental Collateral Administrative Agent, and (ii) the
provisions of this Section 9 and of subsections 10.2 and 10.3 that refer to
Administrative Agent shall inure to the benefit of such Supplemental Collateral
Administrative Agent and all references therein to Administrative Agent shall be
deemed to be references to Administrative Agent and/or such Supplemental
Collateral Administrative Agent, as the context may require.
Should any instrument in writing from Company or any other Loan Party
be required by any Supplemental Collateral Administrative Agent so appointed by
Administrative Agent for more fully and certainly vesting in and confirming to
him or it such rights, powers, privileges and duties, Company shall, or shall
cause such Loan Party to, execute, acknowledge and deliver any and all such
instruments promptly upon request by Administrative Agent. In case any
Supplemental Collateral Administrative Agent, or a successor thereto, shall die,
become incapable of acting, resign or be removed, all the rights, powers,
privileges and duties of such Supplemental Collateral Administrative Agent, to
the extent permitted by law, shall vest in and be exercised by Administrative
Agent until the appointment of a new Supplemental Collateral Administrative
Agent.
9.2 Powers and Duties; General Immunity.
-----------------------------------
A. Powers; Duties Specified. Each Lender irrevocably authorizes
Administrative Agent to take such action on such Lender's behalf and to exercise
such powers, rights and remedies hereunder and under the other Loan Documents as
are specifically delegated or granted to Administrative Agent by the terms
hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto. Administrative Agent shall have only those duties
and responsibilities that are expressly specified in this Agreement and the
other Loan Documents. Administrative Agent may exercise such powers, rights and
remedies and perform such duties by or through its agents or employees.
Administrative Agent shall not have, by
128
reason of this Agreement or any of the other Loan Documents, a fiduciary
relationship in respect of any Lender; and nothing in this Agreement or any of
the other Loan Documents, expressed or implied, is intended to or shall be so
construed as to impose upon Administrative Agent any obligations in respect of
this Agreement or any of the other Loan Documents except as expressly set forth
herein or therein.
B. No Responsibility for Certain Matters. Administrative Agent shall not
be responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by Administrative Agent to Lenders or by
or on behalf of Company to Administrative Agent or any Lender in connection with
the Loan Documents and the transactions contemplated thereby or for the
financial condition or business affairs of Company or any other Person liable
for the payment of any Obligations, nor shall Administrative Agent be required
to ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the Loan
Documents or as to the use of the proceeds of the Loans or the use of the
Letters of Credit or as to the existence or possible existence of any Event of
Default or Potential Event of Default. Anything contained in this Agreement to
the contrary notwithstanding, Administrative Agent shall not have any liability
arising from confirmations of the amount of outstanding Loans or the Letter of
Credit Usage or the component amounts thereof.
C. Exculpatory Provisions. Neither Administrative Agent nor any of its
officers, directors, employees or agents shall be liable to Lenders for any
action taken or omitted by Administrative Agent under or in connection with any
of the Loan Documents except to the extent caused by Administrative Agent's
gross negligence or willful misconduct. Administrative Agent shall be entitled
to refrain from any act or the taking of any action (including the failure to
take an action) in connection with this Agreement or any of the other Loan
Documents or from the exercise of any power, discretion or authority vested in
it hereunder or thereunder unless and until Administrative Agent shall have
received instructions in respect thereof from Requisite Lenders (or such other
Lenders as may be required to give such instructions under subsection 10.6) and,
upon receipt of such instructions from Requisite Lenders (or such other Lenders,
as the case may be), Administrative Agent shall be entitled to act or (where so
instructed) refrain from acting, or to exercise such power, discretion or
authority, in accordance with such instructions. Without prejudice to the
generality of the foregoing, (i) Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any communication, instrument or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, and shall be entitled to rely and shall be
protected in relying on opinions and judgments of attorneys (who may be
attorneys for Company and its Subsidiaries), accountants, experts and other
professional advisors selected by it; and (ii) no Lender shall have any right of
action whatsoever against Administrative Agent as a result of Administrative
Agent acting or (where so instructed) refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the instructions
of Requisite Lenders (or such other Lenders as may be required to give such
instructions under subsection 10.6).
129
D. Administrative Agent Entitled to Act as Lender. The agency hereby
created shall in no way impair or affect any of the rights and powers of, or
impose any duties or obligations upon, Administrative Agent in its individual
capacity as a Lender hereunder. With respect to its participation in the Loans
and the Letters of Credit, Administrative Agent shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not performing the duties and functions delegated to it hereunder, and the term
"Lender" or "Lenders" or any similar term shall, unless the context clearly
otherwise indicates, include Administrative Agent in its individual capacity.
Administrative Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust, financial advisory or other
business with Company or any of its Affiliates as if it were not performing the
duties specified herein, and may accept fees and other consideration from
Company for services in connection with this Agreement and otherwise without
having to account for the same to Lenders.
9.3 Representations and Warranties; No Responsibility For Appraisal of
------------------------------------------------------------------
Creditworthiness.
- ----------------
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company and its Subsidiaries.
Administrative Agent shall not have any duty or responsibility, either initially
or on a continuing basis, to make any such investigation or any such appraisal
on behalf of Lenders or to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter, and Administrative Agent
shall not have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.
9.4 Right to Indemnity.
------------------
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify Administrative Agent, to the extent that Administrative Agent shall
not have been reimbursed by Company, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or asserted against
Administrative Agent in exercising its powers, rights and remedies or performing
its duties hereunder or under the other Loan Documents or otherwise in its
capacity as Administrative Agent in any way relating to or arising out of this
Agreement or the other Loan Documents; provided that no Lender shall be liable
--------
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
Administrative Agent's gross negligence or willful misconduct. If any indemnity
furnished to Administrative Agent for any purpose shall, in the opinion of
Administrative Agent, be insufficient or become impaired, Administrative Agent
may call for additional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is furnished.
9.5 Successor Administrative Agent and Swing Line Lender.
----------------------------------------------------
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A. Administrative Agent may resign at any time by giving 30 days' prior
written notice thereof to Lenders and Company, and Administrative Agent may be
removed at any time with or without cause by an instrument or concurrent
instruments in writing delivered to Company and Administrative Agent and signed
by Requisite Lenders. Upon any such notice of resignation or any such removal,
Requisite Lenders shall have the right, upon five Business Days' notice to
Company, to appoint a successor Administrative Agent, except during the
continuance of an Event of Default, with the consent of Company (which consent
shall not be unreasonably withheld or delayed). Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, that successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Administrative Agent and the retiring or removed Administrative Agent
shall be discharged from its duties and obligations under this Agreement. After
any retiring or removed Administrative Agent's resignation or removal hereunder
as Administrative Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
B. Successor Swing Line Lender. Any resignation or removal of
Administrative Agent pursuant to subsection 9.5A shall also constitute the
resignation or removal of Wells Fargo or its successor as Swing Line Lender, and
any successor Administrative Agent appointed pursuant to subsection 9.5A shall,
upon its acceptance of such appointment, become the successor Swing Line Lender
for all purposes hereunder. In such event (i) Company shall prepay any
outstanding Swing Line Loans made by the retiring or removed Administrative
Agent in its capacity as Swing Line Lender, (ii) upon such prepayment, the
retiring or removed Administrative Agent and Swing Line Lender shall surrender
any Swing Line Note held by it to Company for cancellation, and (iii) if so
requested by the successor Administrative Agent and Swing Line Lender in
accordance with subsection 2.1E, Company shall issue a new Swing Line Note to
the successor Administrative Agent and Swing Line Lender substantially in the
form of Exhibit IX annexed hereto, in the principal amount of the Swing Line
------- --
Loan Commitment then in effect and with other appropriate insertions.
9.6 Collateral Documents and Guaranties.
-----------------------------------
Each Lender hereby further authorizes Administrative Agent, on behalf
of and for the benefit of Lenders, to enter into each Collateral Document as
secured party and to be the agent for and representative of Lenders under the
Subsidiary Guaranty, and each Lender agrees to be bound by the terms of each
Collateral Document and the Subsidiary Guaranty; provided that Administrative
--------
Agent shall not (i) enter into or consent to any material amendment,
modification, termination or waiver of any provision contained in any Collateral
Document or the Subsidiary Guaranty or (ii) release any Collateral (except as
otherwise expressly permitted or required pursuant to the terms of this
Agreement or the applicable Collateral Document), in each case without the prior
consent of Requisite Lenders (or, if required pursuant to subsection 10.6, all
Lenders); provided further, however, that, without further written consent or
-------- ------- -------
authorization from Lenders, Administrative Agent may execute any documents or
instruments necessary to (a) release any Lien encumbering any item of Collateral
that is the subject of a sale or other disposition of assets permitted by this
Agreement or to which Requisite Lenders have otherwise consented or (b) release
any Subsidiary Guarantor from the Subsidiary Guaranty if all of the Capital
Stock of such Subsidiary Guarantor is sold to any Person (other than an
Affiliate of
131
Company) pursuant to a sale or other disposition permitted hereunder or to which
Requisite Lenders have otherwise consented. Anything contained in any of the
Loan Documents to the contrary notwithstanding, Company, Administrative Agent
and each Lender hereby agree that (1) no Lender shall have any right
individually to realize upon any of the Collateral under any Collateral Document
or to enforce the Subsidiary Guaranty, it being understood and agreed that all
powers, rights and remedies under the Collateral Documents and the Subsidiary
Guaranty may be exercised solely by Administrative Agent for the benefit of
Lenders in accordance with the terms thereof, and (2) in the event of a
foreclosure by Administrative Agent on any of the Collateral pursuant to a
public or private sale, Administrative Agent or any Lender may be the purchaser
of any or all of such Collateral at any such sale and Administrative Agent, as
agent for and representative of Lenders (but not any Lender or Lenders in its or
their respective individual capacities unless Requisite Lenders shall otherwise
agree in writing) shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Obligations
as a credit on account of the purchase price for any collateral payable by
Administrative Agent at such sale.
9.7 Syndication Agent.
-----------------
Syndication Agent shall have no right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such or to Syndication Agent as such.
SECTION 10. MISCELLANEOUS
10.1 Assignments and Participations in Loans and Letters of Credit.
-------------------------------------------------------------
A. General. Subject to subsection 10.1B, each Lender shall have the right
at any time to (i) sell, assign or transfer to any Eligible Assignee, or (ii)
sell participations to any Person in, all or any part of its Commitments or any
Loan or Loans made by it or its Letters of Credit or participations therein or
any other interest herein or in any other Obligations owed to it; provided that
no such sale, assignment, transfer or participation shall, without the consent
of Company, require Company to file a registration statement with the Securities
and Exchange Commission or apply to qualify such sale, assignment, transfer or
participation under the securities laws of any state; provided, further that no
-------- -------
such sale, assignment or transfer described in clause (i) above shall be
effective unless and until an Assignment Agreement effecting such sale,
assignment or transfer shall have been accepted by Administrative Agent and
consented to by Company and Administrative Agent as provided in subsection
10.1B(ii); provided, further that no such sale, assignment, transfer or
-------- -------
participation of any Letter of Credit or any participation therein may be made
separately from a sale, assignment, transfer or participation of a corresponding
interest in the Revolving Loan Commitment and the Revolving Loans of the Lender
effecting such sale, assignment, transfer or participation; and provided,
further that, anything contained herein to the contrary notwithstanding, the
Swing Line Loan Commitment and the Swing Line Loan of Swing Line Lender may not
be sold, assigned or transferred as described in clause (i) above to any Person
other than a successor Administrative Agent and Swing Line Lender to the extent
contemplated by subsection 9.5. Except as otherwise provided in this subsection
10.1, no Lender shall, as between Company and such Lender, be relieved of any of
its obligations hereunder as a result of any sale, assignment or transfer of, or
any granting of participations in, all or any part of
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its Commitments or the Loans, the Letters of Credit or participations therein,
or the other Obligations owed to such Lender.
B. Assignments.
(i) Amounts and Terms of Assignments. Each Commitment, Loan, Letter
--------------------------------
of Credit or participation therein, or other Obligation may (a) be assigned
in any amount to another Lender, or to an Affiliate of the assigning Lender
or another Lender, with the giving of notice to Company and Administrative
Agent or (b) be assigned in an aggregate amount of not less than $5,000,000
(or such lesser amount as shall constitute the aggregate amount of the
Commitments, Loans, Letters of Credit and participations therein, and other
Obligations of the assigning Lender) to any other Eligible Assignee with
the consent of Administrative Agent and, except during the continuance of
an Event of Default, with the consent of Company (which consent of Company
and Administrative Agent shall not be unreasonably withheld or delayed);
provided, however that any Lender that assigns its Revolving Sterling Loan
-------- -------
Commitment must also assign a pro rata portion of its Revolving Loan
Commitment. To the extent of any such assignment in accordance with either
clause (a) or (b) above, the assigning Lender shall be relieved of its
obligations with respect to its Commitments, Loans, Letters of Credit or
participations therein, or other Obligations or the portion thereof so
assigned. The parties to each such assignment shall execute and deliver to
Administrative Agent, for its acceptance, an Assignment Agreement, together
with a recordation fee of $3,500 and such forms, certificates or other
evidence, if any, with respect to United States federal income tax
withholding matters as the assignee under such Assignment Agreement may be
required to deliver to Administrative Agent pursuant to subsection
2.7B(iii)(a). Upon such execution, delivery and acceptance, from and after
the effective date specified in such Assignment Agreement, (1) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment
Agreement, shall have the rights and obligations of a Lender hereunder and
(2) the assigning Lender thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment
Agreement, relinquish its rights (other than any rights which survive the
termination of this Agreement under subsection 10.9B) and be released from
its obligations under this Agreement (and, in the case of an Assignment
Agreement covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be
a party hereto; provided that, anything contained in any of the Loan
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Documents to the contrary notwithstanding, if such Lender is the Issuing
Lender with respect to any outstanding Letters of Credit such Lender shall
continue to have all rights and obligations of the Issuing Lender with
respect to such Letters of Credit until the cancellation or expiration of
such Letters of Credit and the reimbursement of any amounts drawn
thereunder). The Commitments hereunder shall be modified to reflect the
Commitment of such assignee and any remaining Commitment of such assigning
Lender and, if any such assignment occurs after the issuance of any Notes
hereunder, the assigning Lender shall, upon the effectiveness of such
assignment or as promptly thereafter as practicable, surrender its
applicable Notes, if any, to Administrative Agent for cancellation, and
thereupon new Notes shall, if so requested by the assignee and/or the
assigning Lender in accordance with subsection 2.1E, be issued to the
assignee and to the assigning Lender,
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substantially in the form of Exhibit IV, Exhibit V, Exhibit VI or Exhibit
------- -- --------- ---------- -------
VII annexed hereto, as the case may be, with appropriate insertions, to
---
reflect the new Commitments and/or outstanding Tranche A Term Loans and/or
Tranche B Term Loans and/or Tranche C Term Loans, as the case may be, of
the assignee and the assigning Lender.
(ii) Acceptance by Administrative Agent. Upon its receipt of an
----------------------------------
Assignment Agreement executed by an assigning Lender and an assignee
representing that it is an Eligible Assignee, together with the recordation
fee referred to in subsection 10.1B(i) and any forms, certificates or other
evidence with respect to United States federal income tax withholding
matters that such assignee may be required to deliver to Administrative
Agent pursuant to subsection 2.7B(iii)(a), Administrative Agent shall, if
Administrative Agent and Company have consented to the assignment evidenced
thereby (in each case to the extent such consent is required pursuant to
subsection 10.1B(i)), (a) accept such Assignment Agreement by executing a
counterpart thereof as provided therein (which acceptance shall evidence
any required consent of Administrative Agent to such assignment), and (b)
give prompt notice thereof to Company. Administrative Agent shall maintain
a copy of each Assignment Agreement delivered to and accepted by it as
provided in this subsection 10.1B(ii).
C. Participations. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the regularly scheduled maturity of any
portion of the principal amount of or interest on any Loan allocated to such
participation or (ii) a reduction of the principal amount of or the rate of
interest payable on any Loan allocated to such participation, and all amounts
payable by Company hereunder (including amounts payable to such Lender pursuant
to subsections 2.6D, 2.7 and 3.6) shall be determined as if such Lender had not
sold such participation.
D. Assignments to Federal Reserve Banks. In addition to the assignments
and participations permitted under the foregoing provisions of this subsection
10.1, any Lender may assign and pledge all or any portion of its Loans, the
other Obligations owed to such Lender, and its Notes to any Federal Reserve Bank
as collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
Bank; provided that (i) no Lender shall, as between Company and such Lender, be
--------
relieved of any of its obligations hereunder as a result of any such assignment
and pledge and (ii) in no event shall such Federal Reserve Bank be considered to
be a "Lender" or be entitled to require the assigning Lender to take or omit to
take any action hereunder.
E. Information. Each Lender may furnish any information concerning
Company and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 10.18.
F. Representations of Lenders. Each Lender listed on the signature pages
hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (i) of the definition thereof; (ii) that it has experience
and expertise in the making of loans such as the Loans; and (iii) that it will
make its Loans for its own account in the ordinary course of its business and
without a view to distribution of such Loans within the meaning of the
Securities
134
Act or the Exchange Act or other federal securities laws (it being understood
that, subject to the provisions of this subsection 10.1, the disposition of such
Loans or any interests therein shall at all times remain within its exclusive
control). Each Lender that becomes a party hereto pursuant to an Assignment
Agreement shall be deemed to agree that the representations and warranties of
such Lender contained in Section 2(c) of such Assignment Agreement are
incorporated herein by this reference.
10.2 Expenses.
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Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents and any consents,
amendments, waivers or other modifications thereto and the transactions
contemplated thereby; (ii) all the costs of furnishing all opinions by counsel
for Company required hereunder and of Company's performance of and compliance
with all agreements and conditions on its part to be performed or complied with
under this Agreement and the other Loan Documents, including with respect to
confirming compliance with environmental, insurance and solvency requirements;
(iii) the reasonable fees, expenses and disbursements of counsel to
Administrative Agent (including allocated costs of internal counsel) in
connection with the negotiation, preparation, execution and administration of
the Loan Documents and any consents, amendments, waivers or other modifications
thereto and any other documents or matters requested by Company; (iv) all the
actual costs and reasonable expenses of creating and perfecting Liens in favor
of Administrative Agent on behalf of Lenders pursuant to any Collateral
Document, including filing and recording fees, expenses and taxes, stamp or
documentary taxes, search fees, title insurance premiums and reasonable fees,
expenses and disbursements of counsel to Administrative Agent and of counsel
providing any opinions required hereunder; (v) all the actual costs and
reasonable expenses (including the reasonable fees, expenses and disbursements
of any auditors, accountants or appraisers and any environmental or other
consultants, advisors and agents employed or retained by Administrative Agent or
its counsel) of obtaining and reviewing any reports provided for under
subsection 6.8; (vi) the custody or preservation of any of the Collateral; (vii)
all actual and reasonable costs and expenses incurred by Administrative Agent in
connection with the syndication of the Commitments; and (vi) after the
occurrence of an Event of Default, all costs and expenses, including reasonable
attorneys' fees (including allocated costs of internal counsel) and costs of
settlement, incurred by Administrative Agent and Lenders in enforcing any
Obligations of or in collecting any payments due from any Loan Party hereunder
or under the other Loan Documents by reason of such Event of Default (including
in connection with the sale of, collection from, or other realization upon any
of the Collateral or the enforcement of the Subsidiary Guaranty) or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy proceedings.
10.3 Indemnity.
---------
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend (subject to Indemnitees' selection of counsel)
indemnify, pay and hold harmless Administrative Agent and Lenders, and the
officers, directors, employees, agents and affiliates of Administrative
135
Agent and Lenders (collectively called the "Indemnitees"), from and against any
and all Indemnified Liabilities (as hereinafter defined); provided that Company
--------
shall not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise solely
from the gross negligence or willful misconduct of that Indemnitee as determined
by a final judgment of a court of competent jurisdiction.
As used herein, "Indemnified Liabilities" means, collectively, any and
all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including Environmental
Claims), costs (including the costs of any investigation, study, sampling,
testing, abatement, cleanup, removal, remediation or other response action
necessary to remove, remediate, clean up or abate any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement or the other Loan Documents or the Related
Agreements or the transactions contemplated hereby or thereby (including
Lenders' agreement to make the Loans hereunder or the use or intended use of the
proceeds thereof or the issuance of Letters of Credit hereunder or the use or
intended use of any thereof, or any enforcement of any of the Loan Documents
(including any sale of, collection from, or other realization upon any of the
Collateral or the enforcement of the Subsidiary Guaranty), (ii) the statements
contained in the commitment letter delivered by any Lender to Company with
respect thereto, or (iii) any Environmental Claim or any Hazardous Materials
Activity relating to or arising from, directly or indirectly, any past or
present activity, operation, land ownership, or practice of Company or any of
its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 10.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them. Promptly after receipt by an Indemnitee
of notice of the commencement of any action, such Indemnitee shall use
reasonable efforts to notify Company of the commencement of such action.
10.4 Set-Off.
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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 of any
Event of Default each Lender is hereby authorized by Company at any time or from
time to time, without notice to Company or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and to apply any
and all deposits (general or special, including Indebtedness evidenced by
certificates of deposit, whether matured or unmatured, but not including trust
accounts) and any
136
other Indebtedness at any time held or owing by that Lender to or for the credit
or the account of Company against and on account of the obligations and
liabilities of Company to that Lender under this Agreement, the Letters of
Credit and participations therein and the other Loan Documents, including all
claims of any nature or description arising out of or connected with this
Agreement, the Letters of Credit and participations therein or any other Loan
Document, irrespective of whether or not (i) that Lender shall have made any
demand hereunder or (ii) the principal of or the interest on the Loans or any
amounts in respect of the Letters of Credit or any other amounts due hereunder
shall have become due and payable pursuant to Section 8 and although said
obligations and liabilities, or any of them, may be contingent or unmatured.
Company hereby further grants to Administrative Agent and each Lender a security
interest in all deposits and accounts maintained with Administrative Agent or
such Lender as security for the Obligations.
10.5 Ratable Sharing.
---------------
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "Aggregate
Amounts Due" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided that if all or part of such proportionately
--------
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or reorganization of Company or otherwise, those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the extent
of such recovery, but without interest. Company expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Company to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder. Each Lender hereby agrees that, solely for purposes of
this subsection 10.5, a participant shall be considered to be a Lender.
10.6 Amendments and Waivers.
----------------------
No amendment, modification, termination or waiver of any provision of
this Agreement or of the Notes, and no consent to any departure by Company
therefrom, shall in any event be effective without the written concurrence of
Requisite Lenders; provided that any such
--------
137
amendment, modification, termination, waiver or consent which: increases the
amount of any of the Commitments or reduces the principal amount of any of the
Loans; changes in any manner the definition of "Class" or the definition of "Pro
Rata Share" or the definition of "Requisite Class Lenders" or the definition of
"Requisite Lenders"; changes in any manner any provision of this Agreement
which, by its terms, expressly requires the approval or concurrence of all
Lenders; postpones the date or reduces the amount of any scheduled payment (but
not prepayment) of principal of any of the Loans; postpones the date on which
any interest or any fees are payable; decreases the interest rate borne by any
of the Loans (other than any waiver of any increase in the interest rate
applicable to any of the Loans pursuant to subsection 2.2E) or the amount of any
fees payable hereunder; increases the maximum duration of Interest Periods
permitted hereunder; reduces the amount or postpones the due date of any amount
payable in respect of, or extends the required expiration date of, any Letter of
Credit; changes in any manner the obligations of Lenders relating to the
purchase of participations in Letters of Credit; releases any Lien granted in
favor of Administrative Agent with respect to all or substantially all of the
Collateral; releases all or substantially all of the Subsidiary Guarantors from
their obligations under the Subsidiary Guaranty, in each case other than in
accordance with the terms of the Loan Documents; or changes in any manner the
provisions contained in subsection 8.1 or this subsection 10.6 shall be
effective only if evidenced by a writing signed by or on behalf of all Lenders.
In addition, (i) any amendment, modification, termination or waiver of any of
the provisions contained in Section 4 shall be effective only if evidenced by a
writing signed by or on behalf of Administrative Agent and Requisite Lenders,
(ii) no amendment, modification, termination or waiver of any provision of any
Note shall be effective without the written concurrence of the Lender which is
the holder of that Note, (iii) no amendment, modification, termination or waiver
of any provision of subsection 2.1A(vi) or of any other provision of this
Agreement relating to the Swing Line Loan Commitment or the Swing Line Loans
shall be effective without the written concurrence of Swing Line Lenders, (iv)
no amendment, modification, termination or waiver of any provision of Section 9
or of any other provision of this Agreement which, by its terms, expressly
requires the approval or concurrence of Administrative Agent shall be effective
without the written concurrence of Administrative Agent and (iv) no amendment,
modification, termination or waiver of any provision of subsection 2.4 which has
the effect of changing any interim scheduled payments, voluntary or mandatory
prepayments, or Commitment reductions applicable to any Class (the "Affected
Class") in a manner that disproportionately disadvantages such Class relative to
any other Class shall be effective without the written concurrence of Requisite
Class Lenders of the Affected Class (it being understood and agreed that any
amendment, modification, termination or waiver of any such provision which only
postpones or reduces any interim scheduled payment, voluntary or mandatory
prepayment, or Commitment reduction from those set forth in subsection 2.4 with
respect to one Class but not the other Class shall be deemed to
disproportionately disadvantage such one Class but not to disproportionately
disadvantage such other Class for purposes of this clause (iv)). Administrative
Agent may, but shall have no obligation to, with the concurrence of any Lender,
execute amendments, modifications, waivers or consents on behalf of that Lender.
Any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given. No notice to or demand on Company
in any case shall entitle Company to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination, waiver
or consent effected in accordance with this subsection 10.6
138
shall be binding upon each Lender at the time outstanding, each future Lender
and, if signed by Company, on Company.
10.7 Independence of Covenants.
-------------------------
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 Notices.
-------
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile or three Business Days
after depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Administrative Agent shall not be effective
--------
until received. For the purposes hereof, the address of each party hereto shall
be as set forth under such party's name on the signature pages hereof or (i) as
to Company and Administrative Agent, such other address as shall be designated
by such Person in a written notice delivered to the other parties hereto and
(ii) as to each other party, such other address as shall be designated by such
party in a written notice delivered to Administrative Agent.
10.9 Survival of Representations, Warranties and Agreements.
------------------------------------------------------
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company set forth in subsections 2.6D, 2.7, 3.5A,
3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in subsections
9.2C, 9.4, 10.5 and 10.19 shall survive the payment of the Loans, the
cancellation or expiration of the Letters of Credit and the reimbursement of any
amounts drawn thereunder, and the termination of this Agreement.
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
-----------------------------------------------------
No failure or delay on the part of Administrative Agent or any Lender
in the exercise of any power, right or privilege hereunder or under any other
Loan Document shall impair such power, right or privilege or be construed to be
a waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
10.11 Marshalling; Payments Set Aside.
-------------------------------
139
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Company or any other party or
against or in payment of any or all of the Obligations. To the extent that
Company makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
10.12 Severability.
------------
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.13 Obligations Several; Independent Nature of Lenders' Rights.
----------------------------------------------------------
The obligations of Lenders hereunder are several and no Lender shall
be responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
10.14 Headings.
--------
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.15 Applicable Law.
--------------
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE
STATE OF NEW YORK).
140
10.16 Successors and Assigns.
----------------------
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither
Company's rights or obligations hereunder nor any interest therein may be
assigned or delegated by Company without the prior written consent of all
Lenders.
10.17 Consent to Jurisdiction and Service of Process .
----------------------------------------------
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND
DELIVERING THIS AGREEMENT, COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE
WITH SUBSECTION 10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY IN THE
COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-
1402 OR OTHERWISE.
141
10.18 Waiver of Jury Trial.
--------------------
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including contract claims, tort claims, breach of duty claims and all other
common law and statutory claims. Each party hereto acknowledges that this
waiver is a material inducement to enter into a business relationship, that each
has already relied on this waiver in entering into this Agreement, and that each
will continue to rely on this waiver in their related future dealings. Each
party hereto further warrants and represents that it has reviewed this waiver
with its legal counsel and that it knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION
10.18 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In the event of litigation,
this Agreement may be filed as a written consent to a trial by the court.
10.19 Confidentiality.
---------------
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement, including pursuant to any inspection under
subsection 6.5, in accordance with such Lender's customary procedures for
handling confidential information of this nature and in accordance with safe and
sound banking practices, it being understood and agreed by Company that in any
event a Lender may make disclosures to Affiliates of such Lender or disclosures
reasonably required by any bona fide assignee, transferee or participant in
connection with the contemplated assignment or transfer by such Lender of any
Loans or any participations therein (provided that such assignee, transferee or
participant shall have agreed by accepting and retaining such information to the
terms of this subsection 10.19) or disclosures required or requested by any
governmental agency or representative thereof or pursuant to legal process or
disclosures to the National Association of Insurance Commissioners or any
similar organization, or any nationally recognized rating agency that requires
access to information about any Lender's investment portfolio; provided that,
--------
unless specifically prohibited by applicable law or court order, each Lender
shall notify Company of any request by any governmental agency or representative
thereof (other than any such request in connection with any examination of the
financial condition of such Lender by such governmental agency) for disclosure
of any such non-public information prior to disclosure of such information; and
provided, further that in no event shall any Lender be obligated or required to
- -------- -------
return any materials furnished by Company or any of its Subsidiaries.
142
10.20 Judgment Currency.
-----------------
A. Currency Conversion Rate. If, for the purposes of obtaining judgment
in any court, it is necessary to convert a sum due hereunder in any currency
(the "Original Currency") into another currency (the "Other Currency"), the
parties hereto agree, to the fullest extent permitted by law, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures Administrative Agent could purchase the Original Currency with the
Other Currency on the Business Day preceding that on which final judgment is
given.
B. Discharge of Judgment. The obligations of Company in respect of any
sum due from it to Lenders hereunder shall, notwithstanding any judgment in such
Other Currency, be discharged only to the extent that, on the Business Day
following receipt by Administrative Agent of any sum adjudged to be so due in
the Other Currency, Administrative Agent may in accordance with normal banking
procedures purchase the Original Currency with the Other Currency; if the
Original Currency so purchased is less than the sum originally due to Lenders in
the Original Currency, Company agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify Lenders against such loss, and
if the amount of the Original Currency so purchased exceeds the sum originally
due to Lenders in the Original Currency, Lenders shall remit such excess to
Company.
10.21 Counterparts; Effectiveness.
---------------------------
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
[Remainder of page intentionally left blank]
143
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
URS CORPORATION
By: /s/ Kent P. Ainsworth
---------------------
Name: Kent P. Ainsworth
Title: Executive Vice President and
Chief Financial Officer
Notice Address:
100 California Street
San Francisco, CA 94111
Attention: Mr. Kent P. Ainsworth
Executive Vice President and
Chief Financial Officer
Fax: (415) 398-1905
LENDERS:
WELLS FARGO BANK, NATIONAL ASSOCIATION,
Individually and as Administrative Agent
By: /s/ Peter Gruebele
------------------
Name: Peter Gruebele
Title: Vice President
Notice Address:
420 Montgomery Street, 9th Floor
San Francisco, CA 94163
Attention: Mr. Peter Gruebele
Vice President
Fax: (415) 421-1352
S-2
Payment Instructions:
WELLS FARGO BANK,
NATIONAL ASSOCIATION
San Francisco, CA
ABA #1210-00248
For Acct.: 4518-105598
Ref: URS Corporation
MORGAN STANLEY SENIOR FUNDING,
INC., Individually and as Syndication Agent
By: /s/ Michael Hart
---------------------------------------
Name: Michael Hart
-------------------------------------
Title: Principal
------------------------------------
Notice Address:
S-2
CREDIT AGREEMENT
DATED AS OF JUNE 9, 1999
AMONG
URS CORPORATION,
as Borrower,
THE LENDERS LISTED HEREIN,
as Lenders,
and
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Co-Lead Arranger and Administrative Agent
and
MORGAN STANLEY SENIOR FUNDING, INC.
as Co-Lead Arranger and Syndication Agent
TABLE OF CONTENTS
Page
Section 1. DEFINITIONS..................................................................................................... 3
1.1 Certain Defined Terms........................................................................................... 3
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement.............................. 33
1.3 Other Definitional Provisions and Rules of Construction......................................................... 34
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS...................................................................... 34
2.1 Commitments; Making of Loans; Notes............................................................................. 34
2.2 Interest on the Loans........................................................................................... 42
2.3 Fees............................................................................................................ 48
2.4 Repayments, Prepayments and Reductions in Revolving Loan Commitments; General Provisions Regarding Payments..... 49
2.5 Use of Proceeds................................................................................................. 59
2.6 Special Provisions Governing Eurodollar Rate Loans and Domestic Sterling Rate Loans............................. 60
2.7 Increased Costs; Taxes; Capital Adequacy........................................................................ 63
2.8 Obligation of Lenders and Issuing Lenders to Mitigate........................................................... 67
2.9 Substitution of Lenders......................................................................................... 67
2.10 European Monetary Union......................................................................................... 68
Section 3. LETTERS OF CREDIT............................................................................................... 70
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations Therein................................... 70
3.2 Letter of Credit Fees........................................................................................... 72
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit.............................................. 73
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TABLE OF CONTENTS
(continued)
Page
3.4 Obligations Absolute............................................................................................ 75
3.5 Indemnification; Nature of Issuing Lenders' Duties.............................................................. 76
3.6 Increased Costs and Taxes Relating to Letters of Credit......................................................... 77
Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT....................................................................... 78
4.1 Conditions to Initial Term Loans and the Acquisition Revolving Loans............................................ 78
4.2 Conditions to Merger Date Loans................................................................................. 85
4.3 Conditions to All Loans......................................................................................... 88
4.4 Conditions to Letters of Credit................................................................................. 89
Section 5. COMPANY'S REPRESENTATIONS AND WARRANTIES........................................................................ 90
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries................................... 90
5.2 Authorization of Borrowing, etc................................................................................. 92
5.3 Financial Condition............................................................................................. 93
5.4 No Material Adverse Change; No Restricted Junior Payments....................................................... 94
5.5 Title to Properties; Liens; Real Property; Licenses, Trademarks; etc............................................ 94
5.6 Litigation; Adverse Facts....................................................................................... 95
5.7 Payment of Taxes................................................................................................ 95
5.8 Performance of Agreements; Materially Adverse Agreements; Material Contracts.................................... 96
5.9 Governmental Regulation......................................................................................... 96
5.10 Securities Activities........................................................................................... 96
5.11 Employee Benefit Plans.......................................................................................... 96
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TABLE OF CONTENTS
(continued)
Page
5.12 Certain Fees.................................................................................................... 97
5.13 Environmental Protection........................................................................................ 97
5.14 Employee Matters................................................................................................ 98
5.15 Solvency........................................................................................................ 98
5.16 Matters Relating to Collateral.................................................................................. 98
5.17 Related Agreements.............................................................................................. 99
5.18 Disclosure...................................................................................................... 100
Section 6. COMPANY'S AFFIRMATIVE COVENANTS................................................................................. 100
6.1 Financial Statements and Other Reports.......................................................................... 100
6.2 Corporate Existence, etc........................................................................................ 105
6.3 Payment of Taxes and Claims; Tax Consolidation.................................................................. 105
6.4 Maintenance of Properties; Insurance; Application of Net Insurance/ Condemnation Proceeds....................... 106
6.5 Inspection Rights............................................................................................... 107
6.6 Compliance with Laws, etc....................................................................................... 108
6.7 Execution of Subsidiary Guaranty and Personal Property Collateral Documents by Certain Additional Subsidiaries.. 108
6.8 Matters Relating to Real Property Collateral.................................................................... 109
6.9 Interest Rate Protection........................................................................................ 110
6.10 Year 2000....................................................................................................... 110
6.11 Syndication..................................................................................................... 110
6.12 Consummation of Merger.......................................................................................... 110
Section 7. COMPANY'S NEGATIVE COVENANTS.................................................................................... 111
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TABLE OF CONTENTS
(continued)
Page
7.1 Indebtedness.................................................................................................... 111
7.2 Liens and Related Matters....................................................................................... 113
7.3 Investments; Joint Ventures..................................................................................... 114
7.4 Contingent Obligations.......................................................................................... 115
7.5 Restricted Junior Payments...................................................................................... 116
7.6 Financial Covenants............................................................................................. 117
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions................................................ 118
7.8 Consolidated Capital Expenditures............................................................................... 119
7.9 Sales and Lease-Backs........................................................................................... 119
7.10 Sale or Discount of Receivables................................................................................. 120
7.11 Transactions with Shareholders and Affiliates................................................................... 120
7.12 Conduct of Business............................................................................................. 120
7.13 Amendments or Waivers of Related Agreements; Amendments of Documents Relating to Subordinated Indebtedness...... 120
7.14 Fiscal Year..................................................................................................... 121
Section 8. EVENTS OF DEFAULT............................................................................................... 121
8.1 Failure to Make Payments When Due............................................................................... 121
8.2 Default in Other Agreements..................................................................................... 121
8.3 Breach of Certain Covenants..................................................................................... 121
8.4 Breach of Warranty.............................................................................................. 122
8.5 Other Defaults Under Loan Documents............................................................................. 122
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc............................................................ 122
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.............................................................. 122
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TABLE OF CONTENTS
(continued)
Page
8.8 Judgments and Attachments....................................................................................... 123
8.9 Dissolution..................................................................................................... 123
8.10 Employee Benefit Plans.......................................................................................... 123
8.11 Material Adverse Effect......................................................................................... 123
8.12 Change in Control............................................................................................... 123
8.13 Invalidity of Subsidiary Guaranty; Failure of Security; Repudiation of Obligations.............................. 123
8.14 Failure to Consummate Merger.................................................................................... 124
Section 9. ADMINISTRATIVE AGENT............................................................................................ 125
9.1 Appointment..................................................................................................... 125
9.2 Powers and Duties; General Immunity............................................................................. 126
9.3 Representations and Warranties; No Responsibility For Appraisal of Creditworthiness............................. 128
9.4 Right to Indemnity.............................................................................................. 128
9.5 Successor Administrative Agent and Swing Line Lender............................................................ 128
9.6 Collateral Documents and Guaranties............................................................................. 129
9.7 Syndication Agent............................................................................................... 130
Section 10. MISCELLANEOUS................................................................................................... 130
10.1 Assignments and Participations in Loans and Letters of Credit................................................... 130
10.2 Expenses........................................................................................................ 132
10.3 Indemnity....................................................................................................... 133
10.4 Set-Off......................................................................................................... 134
10.5 Ratable Sharing................................................................................................. 135
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TABLE OF CONTENTS
(continued)
Page
10.6 Amendments and Waivers.......................................................................................... 135
10.7 Independence of Covenants....................................................................................... 136
10.8 Notices......................................................................................................... 136
10.9 Survival of Representations, Warranties and Agreements.......................................................... 137
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative........................................................... 137
10.11 Marshalling; Payments Set Aside................................................................................. 137
10.12 Severability.................................................................................................... 137
10.13 Obligations Several; Independent Nature of Lenders' Rights...................................................... 138
10.14 Headings........................................................................................................ 138
10.15 Applicable Law.................................................................................................. 138
10.16 Successors and Assigns.......................................................................................... 138
10.17 Consent to Jurisdiction and Service of Process.................................................................. 138
10.18 Waiver of Jury Trial............................................................................................ 139
10.19 Confidentiality................................................................................................. 140
10.20 Judgment Currency............................................................................................... 140
10.21 Counterparts; Effectiveness..................................................................................... 141
Signatures S-1
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EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV FORM OF REVOLVING NOTE
V FORM OF TRANCHE A TERM NOTE
VI FORM OF TRANCHE B TERM NOTE
VII FORM OF TRANCHE C TERM NOTE
VIII FORM OF SWING LINE NOTE
IX FORM OF COMPLIANCE CERTIFICATE
X FORM OF CLOSING DATE COMPLIANCE CERTIFICATE
XI FORM OF CLOSING DATE OPINION OF COMPANY'S COUNSEL
XII FORM OF OPINION OF ADMINISTRATIVE AGENT COUNSEL
XIII FORM OF ASSIGNMENT AGREEMENT
XIV FORM OF CERTIFICATE RE NON-BANK STATUS
XV FORM OF PLEDGE AND SECURITY AGREEMENT
XVI FORM OF SUBSIDIARY GUARANTY
XVII FORM OF TENDER PLEDGE AGREEMENT
XVIII FORM OF FINANCIAL CONDITION CERTIFICATE
(v)
SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
Revolving Revolving Tranche A Tranche B Tranche C
Loan Sterling Loan Term Loan Term Loan Term Loan
Commitment Commitment Commitment Commitment Commitment
Wells Fargo Bank, $54,545,454.55 $8,181,818.19 $136,363,636.37 $95,454,545.46 $95,454,545.46
National Association
Morgan Stanley $45,454,545.45 $6,818,181.81 $113,636,363.63 $ 4,545,454.54 $ 4,545,454.54
Senior Funding, Inc.
Total $ 100,000,000 $ 15,000,000* $ 250,000,000 $ 100,000,000 $ 100,000,000
*Part of Revolving Loan Commitment
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