1
CONFORMED COPY
$800,000,000
AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT
dated as of
March 12, 1993
among
ARA SERVICES, INC.,
as Borrower
THE ARA GROUP, INC.,
as Parent Guarantor
THE BANKS LISTED HEREIN
and
CHEMICAL BANK
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Agents
2
TABLE OF CONTENTS*
Page
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ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Accounting Terms and Determinations. . . . . . . 23
SECTION 1.03. Types of Borrowings. . . . . . . . . . . . . . . 23
SECTION 1.04. Investment Grade Status. . . . . . . . . . . . . 23
ARTICLE II
THE LOANS
SECTION 2.01. Commitments to Lend. . . . . . . . . . . . . . . 24
SECTION 2.02. Notice of Committed Borrowings . . . . . . . . . 24
SECTION 2.03. Money Market Borrowings. . . . . . . . . . . . . 26
SECTION 2.04. Swingline Advances . . . . . . . . . . . . . . . 28
SECTION 2.05. Notice to Banks; Funding of Loans. . . . . . . . 29
SECTION 2.06. Maturity of Loans. . . . . . . . . . . . . . . . 30
SECTION 2.07. Notes. . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.08. Interest . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.09. Facility Fees. . . . . . . . . . . . . . . . . . 36
SECTION 2.10. Reduction of Commitments . . . . . . . . . . . . 37
SECTION 2.11. Optional Prepayments . . . . . . . . . . . . . . 39
SECTION 2.12. Payments . . . . . . . . . . . . . . . . . . . . 40
SECTION 2.13. Funding Losses . . . . . . . . . . . . . . . . . 40
SECTION 2.14. Withholding Tax Exemption. . . . . . . . . . . . 41
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness. . . . . . . . . . . . . . . . . . 42
SECTION 3.02. Conditions to Borrowing. . . . . . . . . . . . . 43
SECTION 3.03. Representation by Borrower . . . . . . . . . . . 44
SECTION 3.04. Transitional Provisions. . . . . . . . . . . . . 44
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*The Table of Contents is not a part of this Agreement.
3
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Page
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SECTION 4.01. Corporate Existence and Power. . . . . . . . . . 45
SECTION 4.02. Corporate and Governmental Authori-
zation; No Contravention . . . . . . . . . . 45
SECTION 4.03. Binding Effect . . . . . . . . . . . . . . . . . 46
SECTION 4.04. Financial Information. . . . . . . . . . . . . . 46
SECTION 4.05. Litigation . . . . . . . . . . . . . . . . . . . 47
SECTION 4.06. Compliance with ERISA. . . . . . . . . . . . . . 47
SECTION 4.07. Environmental Matters. . . . . . . . . . . . . . 47
SECTION 4.08. Taxes. . . . . . . . . . . . . . . . . . . . . . 48
SECTION 4.09. Compliance with Laws . . . . . . . . . . . . . . 48
SECTION 4.10. Not an Investment Company. . . . . . . . . . . . 48
SECTION 4.11. No Defaults. . . . . . . . . . . . . . . . . . . 48
SECTION 4.12. Possession of Franchises, Licenses,
etc. . . . . . . . . . . . . . . . . . . . . 49
ARTICLE V
COVENANTS
SECTION 5.01. Information. . . . . . . . . . . . . . . . . . . 49
SECTION 5.02. Payment of Obligations . . . . . . . . . . . . . 52
SECTION 5.03. Maintenance of Property; Insurance . . . . . . . 53
SECTION 5.04. Conduct of Business and Maintenance
of Existence . . . . . . . . . . . . . . . . 53
SECTION 5.05. Inspection of Property, Books and
Records. . . . . . . . . . . . . . . . . . . 54
SECTION 5.06. Maintenance of Stock of Subsidiaries . . . . . . 54
SECTION 5.07. Limitation on Subsidiary Debt. . . . . . . . . . 54
SECTION 5.08. Negative Pledge. . . . . . . . . . . . . . . . . 55
SECTION 5.09. Consolidations, Mergers and Sales of
Assets . . . . . . . . . . . . . . . . . . . 56
SECTION 5.10. Restricted Payments. . . . . . . . . . . . . . . 57
SECTION 5.11. Fixed Charge Coverage. . . . . . . . . . . . . . 59
SECTION 5.12. Debt Coverage. . . . . . . . . . . . . . . . . . 59
SECTION 5.13. Minimum Consolidated Net Worth . . . . . . . . . 60
SECTION 5.14. Subordinated Debt. . . . . . . . . . . . . . . . 60
SECTION 5.15. Transactions with Affiliates . . . . . . . . . . 60
SECTION 5.16. Use of Proceeds. . . . . . . . . . . . . . . . . 61
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. . . . . . . . . . . . . . . . 61
SECTION 6.02. Notice of Default. . . . . . . . . . . . . . . . 64
4
ARTICLE VII
THE AGENTS
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SECTION 7.01. Appointment and Authorization. . . . . . . . . . 65
SECTION 7.02. Agents and Affiliates. . . . . . . . . . . . . . 65
SECTION 7.03. Action by Agents . . . . . . . . . . . . . . . . 65
SECTION 7.04. Consultation with Experts. . . . . . . . . . . . 65
SECTION 7.05. Liability of Agents. . . . . . . . . . . . . . . 65
SECTION 7.06. Indemnification. . . . . . . . . . . . . . . . . 66
SECTION 7.07. Credit Decision. . . . . . . . . . . . . . . . . 66
SECTION 7.08. Agency Fees. . . . . . . . . . . . . . . . . . . 66
SECTION 7.09. Successor Agents . . . . . . . . . . . . . . . . 66
ARTICLE VIII
CHANGES IN CIRCUMSTANCES
AFFECTING FIXED RATE LOANS
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair . . . . . . . . . . . . 67
SECTION 8.02. Illegality . . . . . . . . . . . . . . . . . . . 68
SECTION 8.03. Increased Cost . . . . . . . . . . . . . . . . . 68
SECTION 8.04. Base Rate Loans Substituted for
Affected Fixed Rate Loans. . . . . . . . . . 70
ARTICLE IX
GUARANTEE
SECTION 9.01. The Guarantee. . . . . . . . . . . . . . . . . . 71
SECTION 9.02. Guarantee Unconditional. . . . . . . . . . . . . 71
SECTION 9.03. Discharge Only Upon Payment in Full;
Reinstatement in Certain
Circumstances. . . . . . . . . . . . . . . . 73
SECTION 9.04. Waiver . . . . . . . . . . . . . . . . . . . . . 73
SECTION 9.05. Subrogation and Contribution . . . . . . . . . . 73
SECTION 9.06. Stay of Acceleration . . . . . . . . . . . . . . 73
ARTICLE X
JUDICIAL PROCEEDINGS
SECTION 10.01. Consent to Jurisdiction . . . . . . . . . . . . 73
SECTION 10.02. Enforcement of Judgments. . . . . . . . . . . . 74
SECTION 10.03. Service of Process. . . . . . . . . . . . . . . 74
SECTION 10.04. No Limitation on Service or Suit. . . . . . . . 74
5
ARTICLE XI
MISCELLANEOUS
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SECTION 11.01. Notices . . . . . . . . . . . . . . . . . . . . 75
SECTION 11.02. No Waiver . . . . . . . . . . . . . . . . . . . 75
SECTION 11.03. Expenses; Documentary Taxes;
Indemnification for Litigation . . . . . . . 75
SECTION 11.04. Amendments and Waivers. . . . . . . . . . . . . 76
SECTION 11.05. Sharing of Set-Offs . . . . . . . . . . . . . . 77
SECTION 11.06. New York Law. . . . . . . . . . . . . . . . . . 78
SECTION 11.07. Successors and Assigns. . . . . . . . . . . . . 78
SECTION 11.08. Collateral. . . . . . . . . . . . . . . . . . . 79
SECTION 11.09. Counterparts. . . . . . . . . . . . . . . . . . 79
SECTION 11.10. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . 80
6
Schedule I - Commitment Reduction Schedule
Schedule II - Debt
Exhibit A - Note
Exhibit B - Opinion of Counsel of the
Borrower and the Parent Guarantor
(See Tab 1)
Exhibit C - Opinion of Special Counsel for the Agents
(See Tab 2)
Exhibit D - Amended and Restated Stock Pledge Agreement
(See Tab 3)
Exhibit E - Amended and Restated Subsidiary Guaranty Agreement
(See Tab 4)
Exhibit F - Management Equity Note
Exhibit G - Invitation for Money Market Quotes
Exhibit H - Money Market Quote
7
AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT
AGREEMENT dated as of March 12, 1993 (the
"Agreement") among ARA SERVICES, INC., a Delaware corporation
(the "Borrower"), THE ARA GROUP, INC., a Delaware corporation
(the "Parent Guarantor"), the BANKS party hereto and CHEMICAL
BANK and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agents.
WHEREAS, the parties hereto have previously entered
into a Credit and Guaranty Agreement dated as of March 12,
1993 (the "Original Agreement");
WHEREAS, the parties hereto wish to amend the
Original Agreement to make mutually satisfactory changes in
the terms of the Original Agreement;
WHEREAS, in such connection, the Borrower desires to
be entitled to borrow up to $800,000,000 on a revolving credit
basis pursuant to this Agreement;
WHEREAS, when all of the conditions specified in
Section 3.01 have been satisfied, the Original Agreement will
be automatically amended and restated to read in full as set
forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as
used herein, have the following meanings:
"Adjusted CD Rate" has the meaning set forth in
Section 2.08(c).
"Administrative Agent" means Chemical Bank in its
capacity as administrative agent for the Banks hereunder.
"Administrative Questionnaire" means, with respect
to each Bank, an administrative questionnaire in the form
requested by the Administrative Agent that is submitted to the
Administrative Agent (with a copy to the other Agent and the
Borrower) duly completed by such Bank.
"Affiliate" means any Person (other than the Parent
Guarantor or a Subsidiary) which controls, is controlled by or
is under common control with the Parent Guarantor. As used
herein, the term "control" means possession, directly or
indirectly, of the power to direct or cause the direction of
the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
8
"Agents" means Chemical Bank and Morgan Guaranty
Trust Company of New York, in their respective capacities as
agents for the Banks hereunder, including, in the case of the
Administrative Agent, its administrative capacities hereunder.
"Agreement" means the Original Agreement, as amended
and restated by this Amended Agreement and as the same may be
further amended or restated from time to time in accordance
with the terms hereof.
"Amended Agreement" means this Amended and Restated
Credit Agreement dated as of March 12, 1993 among ARA
Services, Inc., the Parent Guarantor, the Banks and the
Agents.
"Applicable Discount" has the meaning set forth in
Section 2.08(g).
"Applicable Margin" has the meaning set forth in
Section 2.08(g).
"Applicable Pricing Adjustment Percentage" has the
meaning set forth in Section 2.08(h).
"Assessment Rate" has the meaning set forth in
Section 2.08(c).
"Asset Reduction Amount" means, at any date (the
"Date of Determination"), an amount equal to 75% of the
excess, if any, of (a) the aggregate Net Cash Proceeds
received by the Parent Guarantor or any Restricted Subsidiary
(x) during the period beginning on March 12, 1993 and ending
one year prior to the Date of Determination in respect of
Major Asset Sales consummated during such period, (y) after
March 12, 1993, in respect of Dispositions of accounts
receivable (except for any such Disposition which is excluded
from the scope of article 9 of the Uniform Commercial Code as
in effect on the Effective Date in the State of New York by
section 9-104(f) thereof) and (z) after March 12, 1993, in
respect of Major Sale and Leaseback Transactions over (b) the
sum of (i) $400,000,000 plus (ii) the aggregate amount
invested in Major Asset Acquisitions during the period
beginning on March 12, 1993 and ending on the Date of
Determination plus (iii) 133-1/3% of the amount of any
previous commitment reduction pursuant to Section 2.10(c)(i).
"Bank" means each bank listed on the signature pages
hereof as having a Commitment, and (subject to Section 11.07)
its successors and assigns, and "Banks" means all of the
foregoing.
"Base Level Priority Debt" means Priority Debt
permitted pursuant to subparagraphs (i) through (vii),
inclusive, of subsection 5.07(b) and subsections (a) through
(g), inclusive, of Section 5.08.
"Base Overdue Interest Rate" has the meaning set
forth in Section 2.08(b).
9
"Base Rate" means, for any day, a rate per annum
equal to the higher of (i) the Prime Rate for such day and
(ii) the sum of 1/2 of 1% plus the Federal Funds Rate for such
day.
"Base Rate Loan" means a Committed Loan made or to
be made by a Bank as a Base Rate Loan in accordance with the
applicable Notice of Committed Borrowing or pursuant to
Article VIII.
"Benefit Arrangement" means at any time an employee
benefit plan within the meaning of Section 3(3) of ERISA which
is not a Plan or a Multiemployer Plan and which is maintained
or otherwise contributed to by any member of the ERISA Group.
"Borrowing" has the meaning set forth in Section
1.03.
"Capital Lease" means a lease that would be
capitalized on a balance sheet of the lessee prepared in
accordance with generally accepted accounting principles.
"CD Base Rate" has the meaning set forth in Section
2.08(c).
"CD Loan" means a Committed Loan made or to be made
by a Bank as a CD Loan in accordance with the applicable
Notice of Committed Borrowing.
"CD Reference Banks" means Morgan Guaranty Trust
Company of New York, Chemical Bank and CoreStates Bank, N.A.
"Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Collateral" means the "Collateral" as defined in
the Stock Pledge Agreement.
"Collateral Agent" means Chemical Bank in its
capacity as collateral agent under the Stock Pledge Agreement.
"Collateral Documents" means the Stock Pledge
Agreement, and all supplementary assignments, security
agreements, pledge agreements and other documents delivered or
to be delivered pursuant hereto or thereto.
"Commitment" means, with respect to each Bank, the
amount set forth opposite the name of such Bank on the
signature pages of this Amended Agreement (or, in the case of
an Assignee, the portion of the transferor Bank's Commitment
assigned to such Assignee pursuant to Section 11.07), in each
case, as such amount may be reduced from time to time pursuant
to Section 2.10 or changed as a result of an assignment
pursuant to Section 11.07.
"Commitment Reduction Date" means each of the dates
set forth in Schedule I.
"Committed Loan" means a loan made by a Bank
pursuant to Section 2.01.
10
"Committed Outstandings" means the aggregate
outstanding principal amount of Committed Loans.
"Common Stock" means the Common Stock, par value
$.01 per share, of the Parent Guarantor.
"Consolidated Capital Funds" means at any date (the
"Date of Determination") the sum of Consolidated Net Worth as
of the Date of Determination and the lesser of (i) the aggre-
gate principal amount of Subordinated Debt outstanding as of
the Date of Determination and (ii) $375,000,000.
"Consolidated Cash Flow Available for Fixed Charges"
means for any period EBITDA for such period, plus the excess
(if any) of (x) the aggregate amounts deducted in determining
Consolidated Net Income for such period in respect of rental
expense over (y) the aggregate amounts included in determining
such Consolidated Net Income in respect of rental income
(excluding any portion of such rental expense or rental income
in respect of leases having a term of one year or less or in
respect of Capital Leases).
"Consolidated Fixed Charges" means for any period
(the "Applicable Period") the sum of, without duplication, (i)
the Consolidated Interest Charges accrued in the Applicable
Period, (ii) the excess (if any) of (x) the aggregate amounts
deducted in determining Consolidated Net Income for the Appli-
cable Period in respect of rental expense over (y) the aggre-
gate amounts included in determining such Consolidated Net
Income in respect of rental income (excluding any portion of
such rental expense or rental income in respect of leases
having a term of one year or less or in respect of Capital
Leases) and (iii) the aggregate amount of dividends accrued in
the Applicable Period in respect of Series Preferred Stock.
"Consolidated Interest Charges" means for any period
the aggregate interest expense (net of interest income) of the
Parent Guarantor and its Consolidated Subsidiaries for such
period including, without limitation, (i) the portion of any
obligation under Capital Leases allocable to interest expense
in accordance with generally accepted accounting principles,
and (ii) the portion of any debt discount or premium arising
at issuance of such debt that shall be amortized in such
period.
"Consolidated Net Income" means for any period the
consolidated net income of the Parent Guarantor and its Con-
solidated Subsidiaries for such period, adjusted by (i) sub-
tracting therefrom any portion thereof attributable to the
direct or indirect investment by the Parent Guarantor or any
of its Consolidated Subsidiaries in any Investment Subsidiary
and (ii) adding thereto the aggregate amount of dividends
(other than stock dividends) paid by any Investment Subsidiary
to the Parent Guarantor or any of its other Subsidiaries
during such period.
"Consolidated Net Worth" means at any date (the
"Date of Determination") without duplication (i) the consoli-
dated shareholders' equity (exclusive of (x) the cumulative
11
foreign currency translation adjustment as determined in
accordance with generally accepted accounting principles and
(y) any portion of such consolidated shareholders' equity
attributable to retained earnings of any Investment Subsidiary
or undistributed profits of the general partnership in which
any Investment Subsidiary holds a general partnership inter-
est) of the Parent Guarantor and its Consolidated Subsidiaries
as of the Date of Determination plus (ii) the principal amount
of all Management Equity Notes outstanding on the Date of
Determination. For purposes of this definition, consolidated
shareholders' equity includes Common Stock subject to
potential repurchase pursuant to the Stockholders' Agreement,
as reflected in the consolidated financial statements of the
Parent Guarantor and its Consolidated Subsidiaries.
"Consolidated Subsidiary" means, at any date with
respect to any Person, any Subsidiary or other entity the
accounts of which would be consolidated with those of such
Person in the consolidated financial statements of such Person
as of such date.
"Consolidated Total Assets" means at any date the
consolidated assets of the Parent Guarantor and its
Consolidated Subsidiaries determined as of such date.
"Contingent Liability" means any quantifiable
obligation or liability which is of a type required to be
disclosed as a contingent liability in the consolidated
financial statements of the Parent Guarantor and its
Consolidated Subsidiaries in accordance with generally
accepted accounting principles; provided that Guarantees
constitute Debt and not Contingent Liabilities. To the extent
that any "holdback" or similar deferred contingent payment
obligation of a purchaser of accounts receivable in connection
with a disposition thereof subject to Section 2.10(c)(i) is
reflected as an asset of the Parent Guarantor or one of its
Subsidiaries in such consolidated financial statements, a
corresponding Contingent Liability shall be deemed to exist
for purposes of this definition.
"Credit" means any Loan or Swingline Advance.
"Current Quarter" has the meaning set forth in
Section 2.08(h).
"Debt" of any Person means, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (iii) all obligations of
such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the
ordinary course of business, (iv) all obligations of such
Person as lessee under Capital Leases, (v) all obligations of
such Person to purchase securities which arise out of or in
connection with the sale of the same or substantially similar
securities, (vi) all noncontingent obligations (and, for
purposes of Section 5.08, all contingent obligations) of such
Person to reimburse any other Person for amounts which have
12
been drawn under a letter of credit or similar instrument,
(vii) all Debt of others secured by a Lien on any asset of
such Person, whether or not such Debt is assumed by such
Person (such Debt to have a principal amount, for purposes of
determinations under this Agreement, not exceeding the net
unencumbered carrying value of such asset under generally
accepted accounting principles), and (viii) all Debt of others
Guaranteed by such Person (such Debt to have a principal
amount, for purposes of determinations under this Agreement,
not exceeding the portion of such Debt Guaranteed by such
Person); provided that each obligation of a general
partnership that constitutes Debt of an Investment Subsidiary
solely by reason of such Investment Subsidiary's status as a
general partner thereof shall be considered Debt of such
Investment Subsidiary in an amount equal to (a) the amount of
such obligation times (b) the percentage of the ownership
interests in such general partnership owned by such Investment
Subsidiary.
"Default" means any condition or event that consti-
tutes an Event of Default or that with the giving of notice or
lapse of time or both would, unless cured or waived, become an
Event of Default.
"Deferred Stock Units" means Deferred Stock Units
representing the right to receive shares of Common Stock, and
issued under any Restricted Subsidiary's Stock Unit Retirement
Plan, as amended from time to time.
"Derivatives Obligations" of any Person means all
obligations of such Person in respect of any rate swap
transaction, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or
equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any
other similar transaction (including any option with respect
to any of the foregoing transactions) or any combination of
the foregoing transactions.
"Disposition" means the sale, assignment, transfer
or other disposition by any Person of any asset or assets in a
transaction or a series of related transactions.
"Domestic Business Day" means any day except a
Saturday, Sunday or other day on which commercial banks in New
York City (or, when used with reference to any Swingline
Advance, in the city in which the lending Bank is located) are
authorized or required by law to close.
"Domestic Lending Office" means, as to each Bank,
its office located at its address set forth in its Administra-
tive Questionnaire (or identified in its Administrative Ques-
tionnaire as its Domestic Lending Office) or such other office
as such Bank may hereafter designate as its Domestic Lending
Office by notice to the Borrower and the Administrative Agent;
provided that any Bank may so designate separate Domestic
13
Lending Offices for its Base Rate Loans, on the one hand, and
its CD Loans, on the other hand, in which case all references
herein to the Domestic Lending Office of such Bank shall be
deemed to refer to either or both of such offices, as the
context may require.
"Domestic Loan" means a CD Loan or a Base Rate Loan.
"Domestic Reserve Percentage" has the meaning set
forth in Section 2.08(c).
"EBITDA" means for any period Consolidated Net
Income for such period, excluding therefrom any extraordinary
items of gain or loss, plus the aggregate amounts deducted in
determining Consolidated Net Income for such period in respect
of (i) income taxes, (ii) Consolidated Interest Charges and
(iii) depreciation, amortization and other similar non-cash
charges. If the period for which EBITDA is calculated
includes a date on which the Parent Guarantor or any of its
Consolidated Subsidiaries made a Major Asset Acquisition or
Major Asset Sale, then, EBITDA for such period shall be
calculated (A) on a pro forma basis as if such acquisition or
sale had occurred on the first day thereof and (B) exclusive
of any gain or loss on account of any Major Asset Sale.
"Effective Date" means the date this Amended
Agreement becomes effective in accordance with Section 3.01.
"Environmental Laws" means any and all federal,
state, local and foreign statutes, laws, judicial decisions,
regulations, ordinances, rules, judgments, orders, decrees,
plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions
relating to the environment, the effect of the environment on
human health or to emissions, discharges or releases of
pollutants, contaminants, Hazardous Substances or wastes into
the environment including, without limitation, ambient air,
surface water, ground water, or land, or otherwise relating to
the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants,
contaminants, Hazardous Substances or wastes or the clean-up
or other remediation thereof.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, or any successor statute.
"ERISA Group" means the Borrower, the Parent
Guarantor and any other Subsidiary and all members of a
controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which,
together with the Borrower, the Parent Guarantor or any other
Subsidiary, are treated as a single employer under Section 414
of the Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic
Business Day on which commercial banks are open for
international business (including dealings in dollar deposits)
in London.
14
"Euro-Dollar Lending Office" means, as to each Bank,
its office, branch or affiliate located at its address set
forth in its Administrative Questionnaire (or identified in
its Administrative Questionnaire as its Euro-Dollar Lending
Office) or such other office, branch or affiliate of such Bank
as it may hereafter designate as its Euro-Dollar Lending
Office by notice to the Borrower and the Administrative Agent.
"Euro-Dollar Loan" means a Committed Loan made or to
be made as a Euro-Dollar Loan pursuant to the applicable
Notice of Committed Borrowing.
"Euro-Dollar Overdue Interest Rate" means a rate of
interest determined pursuant to Section 2.08(f).
"Euro-Dollar Reference Banks" means the principal
London offices of Morgan Guaranty Trust Company of New York,
Chemical Bank and CoreStates Bank, N.A.
"Euro-Dollar Reserve Percentage" means for any day
that percentage (expressed as a decimal) which is in effect on
such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor), for determining the
maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five
billion dollars in respect of "Eurocurrency liabilities" (or
in respect of any other category of liabilities which includes
deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United
States office of any Bank to United States residents).
"Events of Default" has the meaning set forth in
Section 6.01.
"Excess Contingent Liabilities" means at any time
all Contingent Liabilities of the Parent Guarantor and its
Subsidiaries other than:
(a) surety or fidelity bonds or letters of credit
issued on behalf of the Parent Guarantor or any of its
Subsidiaries issued in the normal course of business of
the Parent Guarantor or such Subsidiary, as the case may
be; and
(b) other Contingent Liabilities in an aggregate
amount not exceeding $60,000,000.
"Excess Priority Debt" means Priority Debt other
than Base Level Priority Debt.
"Excluded Dividend" means a dividend on shares of
the capital stock of any Restricted Subsidiary held by the
Parent Guarantor (and not by another Subsidiary), which
dividend is comprised of assets which are to be (and in fact
are) reinvested (including through intercompany accounts in
accordance with normal practice) by the Parent Guarantor
substantially simultaneously in (i) the Borrower, (ii) a Spin-
Off Subsidiary, (iii) a Wholly Owned Subsidiary of the
15
Borrower or of a Spin-Off Subsidiary or (iv) another Wholly
Owned Subsidiary of the Parent Guarantor which is a party to
the Subsidiary Guaranty Agreement and all of whose capital
stock is pledged to the Collateral Agent under the Stock
Pledge Agreement.
"Federal Funds Rate" means, for any day, the rate
per annum (rounded upward, if necessary, to the nearest
1/100th of 1%) equal to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New York
on the Domestic Business Day next succeeding such day,
provided that (i) if such day is not a Domestic Business Day,
the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so
published on the next succeeding Domestic Business Day, and
(ii) if no such rate is so published on such next succeeding
Domestic Business Day, the Federal Funds Rate for such day
shall be the average rate quoted to Chemical Bank on such day
on such transactions as determined by the Administrative
Agent.
"Financing Documents" means this Agreement, the
Notes, the Collateral Documents and the Subsidiary Guaranty
Agreement.
"Fixed Rate Loans" means CD Loans or Euro-Dollar
Loans or Money Market Loans or any combination of the
foregoing.
"Fixed Rate Outstandings" means the aggregate
outstanding principal amount of CD Loans and Euro-Dollar
Loans.
"Guarantee" by any Person means any obligation,
contingent or otherwise, of such Person directly or indirectly
guaranteeing any Debt of any other Person and, without
limiting the generality of the foregoing, any obligation,
direct or indirect, contingent or otherwise, of such Person
(i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-
pay, or to maintain financial statement conditions or
otherwise) or (ii) entered into for the purpose of assuring in
any other manner the obligee of such Debt of the payment
thereof or to protect such obligee against loss in respect
thereof (in whole or in part), provided that the term
Guarantee shall not include endorsements for collection or
deposit in the ordinary course of business. The term
"Guarantee" used as a verb has a corresponding meaning.
"Hazardous Substances" means any toxic, radioactive,
caustic or otherwise hazardous substance, including petroleum,
its derivatives, by-products and other hydrocarbons, or any
substance having any constituent elements displaying any of
the foregoing characteristics.
16
"Interest Period" means:
(1) with respect to each Euro-Dollar Borrowing, the
period commencing on the date of such Euro-Dollar
Borrowing and ending one, two, three or six months
thereafter, or (subject to paragraph (e) of Section 2.08)
12 months thereafter, as the Borrower may elect in the
applicable Notice of Borrowing; provided that:
(a) any Interest Period that would otherwise
end on a day that is not a Euro-Dollar Business Day
shall be extended to the next succeeding Euro-Dollar
Business Day unless such day falls in another
calendar month, in which case such Interest Period
shall end on the next preceding Euro-Dollar Business
Day;
(b) any Interest Period that begins on the
last Euro-Dollar 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 the
provisions of paragraph (a) of this proviso, end on
the last day of a calendar month; and
(c) if any Interest Period includes a
Commitment Reduction Date but does not end on such
date, then (i) the principal amount (if any) of each
Euro-Dollar Loan required to be repaid on such date
shall have an Interest Period ending on such date
and (ii) the remainder (if any) of each such
Euro-Dollar Loan shall have an Interest Period
determined as set forth above;
(2) with respect to each CD Borrowing, the period
commencing on the date of such Borrowing and ending 30,
60, 90 or 180 days thereafter, as the Borrower may elect
in the applicable Notice of Borrowing; provided that:
(a) any Interest Period (other than an
Interest Period determined pursuant to clause (b)(i)
below) which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to
the next succeeding Euro-Dollar Business Day; and
(b) if any Interest Period includes a
Commitment Reduction Date but does not end on such
date, then (i) the principal amount (if any) of each
CD Loan required to be repaid on such date shall
have an Interest Period ending on such date and (ii)
the remainder (if any) of each such CD Loan shall
have an Interest Period determined as set forth
above;
(3) with respect to each Base Rate Borrowing, the
period commencing on the date of such Borrowing and
ending on the next succeeding Commitment Reduction Date;
provided that any Interest Period which would otherwise
end on a day which is not a Euro-Dollar Business Day
shall be extended to the next succeeding Euro-Dollar
Business Day;
17
(4) with respect to each Money Market Borrowing,
the period commencing on the date of such Borrowing and
ending such number of days thereafter (but not less than
7 nor more than 270 days) as the Borrower may elect in
accordance with Section 2.03; provided that:
(a) any Interest Period (other than an
Interest Period determined pursuant to clause (b)
below) which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to
the next succeeding Euro-Dollar Business Day; and
(b) no Interest Period for any such Borrowing
shall end on a date after a Commitment Reduction
Date unless, after giving effect thereto, the
aggregate principal amount of Credits having
Interest Periods ending after such Commitment
Reduction Date would not exceed the aggregate
Commitments after giving effect to the scheduled
reduction of the Commitments on such Commitment
Reduction Date; and
(5) with respect to each Swingline Advance, the
period commencing on the date of such Swingline Advance
and ending on the applicable Swingline Maturity Date.
"Interest Rate Agreement" means an agreement under
the International Swap Dealers Association, Inc. Master
Agreement (or any predecessor or successor agreement), or any
other interest rate swap agreement or similar agreement
between the Borrower and one or more of the Banks.
"Investment" means with respect to any Person (the
"Investor"), any investment or series of related investments
in the same Person or an affiliate thereof, whether
individually or in the aggregate in excess of $1,000,000 and,
in the case of any series of investments, without regard to
any differences between or among the types of investments
comprising such series, by the Investor in any other Person,
whether by means of share purchase, capital contribution,
loan, purchase of Debt, time deposit or otherwise; provided,
that the performance by any Person of its obligations under
any guarantee shall not be considered an Investment; and
provided further that non-convertible, non-participating Debt
of any Person received as consideration by the Parent
Guarantor or any of its Subsidiaries in connection with a
Disposition shall not be considered an Investment.
"Investment Grade Status" has the meaning set forth
in Section 1.04.
"Investment Subsidiary" means any Subsidiary formed
for the purpose of holding a general partnership interest in
Spectacor Management Group, a general partnership ("SMG"), or
in any other general partnership which is principally engaged
in the management of arenas and other public assembly facili-
ties; provided that (i) such general partnership interest
represents one-half or less of the ownership interests in such
general partnership and constitutes substantially all of the
18
assets of such Subsidiary, (ii) such Subsidiary engages in no
substantial business other than owning such general partner-
ship interest and taking actions as a general partner of such
general partnership, (iii) no other Subsidiary owns a general
partnership interest in such general partnership and (iv) in
the case of any general partnership other than SMG, (A) at
least 15% of the ownership interests in such general partner-
ship are owned by one or more Persons (other than such Subsi-
diary or any Affiliate) that are also partners in SMG or
affiliates thereof and (B) the partners of SMG and their
affiliates own in the aggregate 50% or more of the ownership
interests in such general partnership.
"Lending Office" means, as to any Bank, its Domestic
Lending Office, its Euro-Dollar Lending Office or its Money
Market Lending Office, as the context may require.
"Leverage Ratio" means on any date ("the Date of
Determination") the ratio of (A) EBITDA for the four most
recent fiscal quarters of the Parent Guarantor ended on or
prior to the Date of Determination to (B) Total Borrowed Funds
as of the last day of the most recent fiscal quarter of the
Parent Guarantor ended on or prior to the Date of
Determination.
"Lien" means, with respect to any asset, any
mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset. For the
purpose of this Agreement, the Parent Guarantor or any of its
Subsidiaries shall be deemed to own subject to a Lien any
asset that it has acquired or holds subject to the interest of
a vendor or lessor under any conditional sale agreement or
other title retention agreement relating to such asset or any
Capital Lease.
"Loan" means a Domestic Loan or a Euro-Dollar or a
Money Market Loan, and "Loans" means Domestic Loans or Euro-
Dollar Loans or Money Market Loans or any combination of the
foregoing.
"London Interbank Offered Rate" has the meaning set
forth in Section 2.08(d).
"Major Asset Acquisition" means any acquisition for
cash or other consideration by the Parent Guarantor or any of
its Restricted Subsidiaries, or any series of such acquisi-
tions of (a) any asset, (b) any group of related assets or (c)
any shares of capital stock or any other ownership interest in
any Person; provided that in the case of any such acquisition,
or such series of acquisitions, the aggregate of all
consideration (including cash and the fair market value (as
certified by a Principal Officer of the Parent Guarantor) of
all other consideration paid by the Parent Guarantor or any of
its Restricted Subsidiaries) for or in respect of such
acquisition, or such series of acquisitions, exceeds
$25,000,000; and provided further that no such acquisition or
series of acquisitions from the Parent Guarantor or any
Subsidiary of the Parent Guarantor shall constitute a Major
Asset Acquisition.
19
"Major Asset Sale" means any Disposition by the
Parent Guarantor or any of its Restricted Subsidiaries of a
Single Asset; provided that in the case of any such
Disposition the aggregate of all cash and the fair market
value (as certified by a Principal Officer of the Parent
Guarantor) of all property received by the Parent Guarantor or
any of its Restricted Subsidiaries from or in respect of such
Disposition exceeds $25,000,000; and provided further that (i)
no such Disposition by any Wholly Owned Restricted Subsidiary
of the Parent Guarantor to any other Wholly Owned Restricted
Subsidiary of the Parent Guarantor shall constitute a Major
Asset Sale, (ii) no Sale and Leaseback Transaction shall
constitute a Major Asset Sale and (iii) for purposes of
Section 2.10(c)(i), no Disposition of any account receivable
(except for any such Disposition which is excluded from the
scope of article 9 of the Uniform Commercial Code as in effect
on the Effective Date in the State of New York by section
9-104(f) thereof) shall constitute a Major Asset Sale.
"Major Sale and Leaseback Transaction" means any
Sale and Leaseback Transaction, or any series of related Sale
and Leaseback Transactions, in respect of which the aggregate
of all cash and the fair market value (as certified by a
Principal Officer of the Parent Guarantor) of all property
received by the Parent Guarantor or any of its Restricted
Subsidiaries from or in respect of such transaction or series
of transactions exceeds $2,000,000; provided that a Sale and
Leaseback Transaction consummated not later than the last day
of the fiscal year of the Parent Guarantor following the
fiscal year during which the acquisition of the related
property was effected or construction of the related property
was completed shall not be deemed a Major Sale and Leaseback
Transaction.
"Management Equity Note" means a subordinated
promissory note of the Parent Guarantor carrying an interest
rate no higher than the market interest rate payable in
respect of debt with comparable terms issued by comparable
issuers, substantially in the form of Exhibit F hereto, issued
to management or former management (including directors) of
the Parent Guarantor in exchange for shares of Common Stock
pursuant to the Stockholders' Agreement or in exchange for
Series Preferred Stock.
"Material Financial Obligations" means a principal
or face amount of Debt and/or payment or collateralization
obligations in respect of Derivatives Obligations of the
Borrower and/or one or more of its Subsidiaries, arising in
one or more related or unrelated transactions, exceeding in
the aggregate $10,000,000.
"Maximum Money Market Aggregate Amount" means at any
time an amount equal to the aggregate Commitments at such
time; provided that at any time the Maximum Money Market
Aggregate Amount shall be reduced by the lesser of
$400,000,000 or the amount of the aggregate Commitments at
such time if the Reference Ratio is not more than 0.30 to 1.
"Money Market Auction" means a solicitation of Money
Market Quotes setting forth Money Market Rates pursuant to
Section 2.03.
20
"Money Market Lending Office" means, as to each
Bank, its Domestic Lending Office or such other office, branch
or affiliate of such Bank as it may hereafter designate as its
Money Market Lending Office by notice to the Borrower and the
Administrative Agent.
"Money Market Loan" means a loan made or to be made
by a Bank pursuant to a Money Market Auction.
"Money Market Quote" means an offer by a Bank to
make a Money Market Loan in accordance with Section 2.03.
"Money Market Rate" has the meaning set forth in
Section 2.03(c).
"Multiemployer Plan" means at any time an employee
pension benefit plan within the meaning of Section 4001(a)(3)
of ERISA to which any member of the ERISA Group is then making
or accruing an obligation to make contributions or has within
the preceding five plan years made contributions, including
for these purposes any Person which ceased to be a member of
the ERISA Group during such five-year period.
"Net Cash Proceeds" means, in the case of any Major
Asset Sale, Major Sale and Leaseback Transaction or
Disposition of accounts receivable, the cash proceeds received
by the Parent Guarantor or any of its Restricted Subsidiaries,
at any time or from time to time, from or in respect thereof
(including, without limitation, cash received on or in respect
of any instrument evidencing an obligation of the purchaser to
make payments to the Parent Guarantor or such Restricted
Subsidiary), less (x) any expenses reasonably incurred by the
Parent Guarantor or such Restricted Subsidiary in respect
thereof and (y) any taxes paid or payable by the Parent
Guarantor or such Restricted Subsidiary (as certified by a
Principal Officer of the Parent Guarantor) in respect of the
receipt of such cash.
"Notes" means promissory notes of the Borrower,
substantially in the form of Exhibit A hereto, evidencing the
obligation of the Borrower to repay the Loans and the
Swingline Advances, and "Note" means any one of such
promissory notes issued hereunder.
"Notice of Borrowing" means a Notice of Committed
Borrowing or a Notice of Money Market Borrowing.
"Notice of Committed Borrowing" has the meaning set
forth in Section 2.02(a).
"Notice of Money Market Borrowing" has the meaning
set forth in Section 2.03(d).
"Obligors" means the Borrower, the Parent Guarantor
and each Subsidiary from time to time party to the Subsidiary
Guaranty Agreement.
"Original Agreement" means the Credit and Guaranty
Agreement dated as of March 12, 1993 among the parties hereto,
as in effect immediately prior to the effectiveness of this
Amended Agreement.
21
"Original Stock Pledge Agreement" means the Stock
Pledge Agreement dated as of December 19, 1984 among the
Parent Guarantor, the Borrower and the Collateral Agent, as
executed and delivered by the parties thereto and as amended
and restated prior to the Effective Date.
"Original Subsidiary Guaranty Agreement" means the
Subsidiary Guaranty Agreement dated as of December 14, 1984
among the Borrower, the Parent Guarantor and certain
Subsidiaries of the Parent Guarantor, as executed and
delivered by the parties thereto and as amended and restated
prior to the Effective Date.
"Parent" means, with respect to any Bank, any Person
controlling such Bank.
"PBGC" means the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions under ERISA.
"Person" means an individual, a corporation, a
partnership, an association, a trust or any other entity or
organization, including a government or political subdivision
or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit
plan (other than a Multiemployer Plan) which is covered by
Title I or IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code and either (i) is
maintained, or contributed to, by any member of the ERISA
Group for employees of any member of the ERISA Group or (ii)
has at any time within the preceding five years been
maintained, or contributed to, by any Person which was at such
time a member of the ERISA Group for employees of any Person
which was at such time a member of the ERISA Group.
"Prime Rate" means the rate of interest publicly
announced from time to time by Chemical Bank at its main
offices in New York City as its prime rate.
"Principal Officer" means the chief executive
officer, chief operating officer, chief financial officer,
chief accounting officer, senior vice president, treasurer or
general counsel of the Parent Guarantor or the Borrower.
"Priority Debt" means any unsecured Debt of a
Subsidiary (other than the Borrower) and any secured Debt of
the Parent Guarantor or any of its Subsidiaries; except that,
if any long-term senior unsecured Debt of the Borrower ever
achieves Investment Grade Status, "Priority Debt" shall mean
only any secured Debt of the Parent Guarantor or any of its
Subsidiaries.
"Qualification" means, with respect to any report of
independent public accountants covering financial statements
of a Person, (a) an explanatory paragraph with respect to the
continued existence of such Person, as contemplated by
Statement on Auditing Standards No. 59, or (b) a qualification
to such report (such as an "except for" statement therein) (i)
resulting from a limitation on the scope of audit of such
22
financial statements or the underlying data, (ii) resulting
from a change in accounting principles to which such
independent public accountants take exception or (iii) which
could be eliminated by changes in financial statements or
notes thereto covered by such report (such as, by the creation
of or increase in a reserve or a decrease in the carrying
value of assets) and which if so eliminated by the making of
any such change and after giving effect thereto would occasion
a Default, provided that neither of the following shall
constitute a Qualification: (x) an explanatory paragraph
relating to a change in accounting principles to which such
independent public accountants take no exception or (y) an
explanatory paragraph relating to the outcome or disposition
of any uncertainty, including but not limited to threatened
litigation, pending litigation being contested in good faith,
pending or threatened claims or other contingencies, the
impact of which litigation, claims, contingencies or
uncertainties cannot be determined with sufficient certainty
to permit quantification in such financial statements.
"Redeemable Stock" means any capital stock that is
redeemable other than at the sole option of the issuer.
"Reference Banks" means the CD Reference Banks or
the Euro-Dollar Reference Banks, as the context may require,
and "Reference Bank" means any one of such Reference Banks.
"Reference Ratio" means, for purposes of determining
a Maximum Money Market Aggregate Amount, an Applicable Pricing
Adjustment Percentage or an applicable facility fee rate for
purposes of Section 2.09(b) for any day during any Current
Quarter, the Leverage Ratio as of the last day of the most
recent fiscal quarter of the Parent Guarantor ended 80 days or
more before the first day of the Current Quarter. The
foregoing determinations (but not determinations of compliance
with Section 5.12) for each day during the Current Quarter
shall be based upon the Reference Ratio as defined above.
"Refunding Borrowing" means a Borrowing which, after
application of the proceeds thereof, results in no net
increase in the outstanding principal amount of Committed
Loans made by any Bank.
"Regulation U" has the meaning set forth in Section
5.16.
"Required Banks" means at any time Banks having
at least 51% of the aggregate amount of the Commitments or, if
the Commitments shall have been terminated, holding Notes
evidencing at least 51% of the aggregate unpaid principal
amount of the Loans.
"Restricted Payment" means (i) any dividend or other
distribution on any shares of the capital stock of the Parent
Guarantor (except dividends payable solely in shares of
capital stock) or on any Deferred Stock Units, (ii) any
dividend or other distribution on any shares of the capital
stock of any Restricted Subsidiary held by the Parent
Guarantor (and not by another Subsidiary) (such shares of
23
capital stock held by the Parent Guarantor, together with the
capital stock of the Parent Guarantor and Deferred Stock
Units, being hereinafter referred to as "Restricted Stock")
other than Excluded Dividends, (iii) any payment on account of
the purchase, redemption, retirement or acquisition of (a) any
shares of Restricted Stock (except shares acquired upon the
conversion thereof into other shares of capital stock of the
issuer), excluding the issuance of Management Equity Notes in
exchange for such shares, but including repayments of
principal of such Management Equity Notes or (b) any option,
warrant or other right to acquire shares of Restricted Stock
or (iv) any loan or advance by any Subsidiary to the Parent
Guarantor.
"Restricted Subsidiary" means, with respect to any
Person, any Subsidiary of such Person other than Versa
Services, Ltd., a Canadian corporation, and its Subsidiaries.
"Revolving Credit Period" means the period from the
Effective Date to and including October 31, 2001 (or, if such
day is not a Euro-Dollar Business Day, the next preceding
Euro-Dollar Business Day).
"Sale and Leaseback Transaction" means any arrange-
ment with any Person providing for the leasing by the Parent
Guarantor or any Restricted Subsidiary of any property that,
or of any property similar to and used for substantially the
same purposes as any other property that, has been or is to be
sold, assigned, transferred or otherwise disposed of by the
Parent Guarantor or any of its Restricted Subsidiaries to such
Person with the intention of entering into such a lease.
"Secured Interest Rate Indebtedness" means the
obligations of the Borrower to the Banks or any of them in
respect of the Interest Rate Agreements.
"Senior Debt" means Total Borrowed Funds, exclusive
of Subordinated Debt.
"Series Preferred Stock" means any series of Series
Preferred Stock issued by the Parent Guarantor from time to
time.
"Share Transactions" means (i) any repurchase by the
Parent Guarantor of outstanding shares of its Class A Common
Stock, Series Preferred Stock or (pursuant to a substantially
pro rata offer to repurchase) Class B Common Stock or (ii) any
declaration and payment of special dividends (other than in
capital stock of the Parent Guarantor) to the holders of its
Class A Common Stock or Class B Common Stock (or both),
provided that any such repurchase (other than any repurchase
of Series Preferred Stock which was, prior to March 31, 1995,
issued as a dividend or in exchange for Class A Common Stock
or Class B Common Stock) or declaration and payment is made
prior to March 31, 1995.
"Single Asset" means, in the case of any Disposition
by the Parent Guarantor or any of its Restricted Subsidiaries,
(a) any asset, (b) any group of assets used in connection with
24
the same line of business of the Parent Guarantor or such
Restricted Subsidiary prior to such sale, assignment, transfer
or other disposition or (c) any shares of capital stock or any
other ownership interest in any Person.
"Spin-Off Subsidiary" means a Subsidiary of the
Borrower, the capital stock of which is distributed to the
Parent Guarantor in accordance with Section 5.10(d).
"Stock Pledge Agreement" means the Amended and
Restated Stock Pledge Agreement among the Parent Guarantor,
the Borrower and the Collateral Agent, in the form of Exhibit
D hereto.
"Stockholders' Agreement" means the Amended and
Restated Stockholders' Agreement dated as of April 7, 1988
among the Parent Guarantor and the investors listed therein,
as the same may be amended from time to time.
"Subordinated Debt" means any Debt of the Parent
Guarantor (i) which is subordinated to the Notes by substan-
tially the same subordination terms as those set forth in the
Subordinated Indenture dated as of June 1, 1993 between the
Parent Guarantor and The Bank of New York, as trustee, or such
other subordination provisions as shall have been approved in
writing by the Required Banks, and (ii) in the case of
Subordinated Debt issued after the Effective Date, as to which
no principal repayments are required on or prior to October
31, 2001.
"Subordinated Intercompany Notes" means: (i) the
subordinated notes delivered to the Parent Guarantor in
connection with the advance to the Borrower of an amount equal
to the initial principal amount of the Subordinated Debt
described in clause (i) of the definition of "Subordinated
Debt" and (ii) other subordinated notes of the Borrower,
subordinated to the Notes by substantially the same subordina-
tion terms as those applicable to the subordinated note
described in clause (i) above, or such other subordination
provisions as shall have been approved in writing by the
Required Banks, delivered to the Parent Guarantor in connec-
tion with the loan to the Borrower of the principal amount
thereof; provided that the financial terms of such notes are
substantially as favorable to the Borrower as the terms that
could have been obtained at the time of creation thereof from
an unaffiliated lender.
"Subsidiary" means, with respect to any Person, any
corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned
by such Person. As used herein, the term "Subsidiary" shall
be deemed to refer to a Subsidiary of the Parent Guarantor
unless otherwise specified.
"Subsidiary Guaranty Agreement" means the Amended
and Restated Subsidiary Guaranty Agreement among the Borrower,
the Parent Guarantor and certain Subsidiaries, in the form of
Exhibit E hereto.
25
"Swingline Advance" means an advance made by a Bank
to the Borrower pursuant to a solicitation of offers therefor
in accordance with Section 2.04.
"Swingline Maturity Date" has the meaning set forth
in Section 2.06.
"Total Borrowed Funds" means at any date the sum of
(i) all Debt of the Parent Guarantor and its Consolidated
Subsidiaries that would be required to be reflected on or
referred to in a consolidated balance sheet of the Parent
Guarantor and its Consolidated Subsidiaries at such date
(including without limitation all Capital Leases of and,
except as set forth below, all Debt Guaranteed by the Parent
Guarantor and its Consolidated Subsidiaries but excluding (x)
Debt Guaranteed by the Parent Guarantor and its Consolidated
Subsidiaries outstanding on March 12, 1993 in an aggregate
principal amount not exceeding $10,000,000 and (y) the
Management Equity Notes) and (ii) Excess Contingent
Liabilities.
"Unfunded Liabilities" means, with respect to any
Plan at any time, the amount (if any) by which (i) the value
of all benefit liabilities under such Plan, determined on a
plan termination basis using the assumptions prescribed by the
PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued but
unpaid contributions), all determined as of the then most
recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of a member
of the ERISA Group to the PBGC or any other Person under Title
IV of ERISA.
"Wholly Owned Restricted Subsidiary" means, with
respect to any Person, a Wholly Owned Subsidiary of such
Person which is also a Restricted Subsidiary of such Person.
"Wholly Owned Subsidiary" means, with respect to any
Person, any Subsidiary all of the shares of capital stock or
other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly
owned by such Person.
SECTION 1.02. Accounting Terms and Determinations.
Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements required
to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles applied on a basis
consistent with the audited consolidated financial statements
of the Parent Guarantor and its Consolidated Subsidiaries for
the fiscal year ended October 1, 1993 referred to in paragraph
(a) of Section 4.04 (except for changes to which independent
public accountants for the Parent Guarantor take no exception)
provided that, if the Borrower notifies the Agents that the
Borrower wishes to amend any covenant in Article V to
eliminate the effect of any change in generally accepted
accounting principles on the operation of such covenant (or if
26
the Agents notify the Borrower that the Required Banks wish to
amend Article V for such purpose), then the Borrower's
compliance with such covenant shall be determined on the basis
of generally accepted accounting principles in effect
immediately before the relevant change in generally accepted
accounting principles became effective, until either such
notice is withdrawn or such covenant is amended in a manner
satisfactory to the Parent Guarantor, the Borrower and the
Required Banks.
SECTION 1.03. Types of Borrowings. The term
"Borrowing" denotes the aggregation of Loans of one or more
Banks to be made to the Borrower pursuant to Article II on a
single date and for a single Interest Period. Borrowings are
classified for purposes of this Agreement either by reference
to the pricing of Loans comprising such Borrowing (e.g., a
"Euro-Dollar Borrowing" is a Borrowing comprised of EuroDollar
Loans) or by reference to the provisions of Article II under
which participation therein is determined (i.e., a "Committed
Borrowing" is a Borrowing under Section 2.01 in which all
Banks participate in proportion to their Commitments, while a
"Money Market Borrowing" is a Borrowing under Section 2.03 in
which the Bank participants are determined on the basis of
their bids in accordance therewith).
SECTION 1.04. Investment Grade Status. Long-term
senior unsecured Debt of the Borrower will have achieved
"Investment Grade Status", if such Debt (a) is not enhanced by
any security or instrument issued by another Person and (b) is
rated and is known to the Administrative Agent to be rated:
(i) Baa3 or better by Moody's Investors Service,
Inc. ("Moody's"); or
(ii) BBB- or better by Standard & Poor's
Corporation ("S&P").
For purposes of the preceding sentence, (x) the Administrative
Agent shall be deemed to know that such Debt is rated the
ratings specified in clause (i) or (ii) above if and only if a
letter to such effect addressed to the Borrower by Moody's or
S&P is delivered to the Administrative Agent and such letter
is dated no more than 6 months prior to the date of delivery
and (y) such Debt shall be deemed to be rated any rating
specified in a letter addressed and delivered to the Borrower
by Moody's or S&P and a copy of which is delivered to the
Administrative Agent if such letter states that such Debt
would be rated such rating immediately upon the termination of
the Collateral Documents and without the taking of any other
action by any Person or the occurrence of any other event or
condition.
27
ARTICLE II
THE LOANS
SECTION 2.01. Commitments to Lend. During the
Revolving Credit Period each Bank severally agrees, on the
terms and conditions set forth in this Agreement, to make
loans to the Borrower pursuant to this Section from time to
time in amounts such that the aggregate principal amount of
Committed Loans by such Bank at any one time outstanding shall
not exceed the amount of such Bank's Commitment. Each Borrow-
ing under this Section shall be in an aggregate principal
amount of $5,000,000 or any larger multiple of $5,000,000
(except that any such Borrowing may be in the aggregate amount
available in accordance with Section 3.02(b)) and shall be
made from the several Banks ratably in proportion to their
respective Commitments. Within the foregoing limits, the
Borrower may borrow under this Section, repay or, to the
extent permitted by Section 2.11, prepay Loans and reborrow at
any time during the Revolving Credit Period pursuant to this
Section.
SECTION 2.02. Notice of Committed Borrowings. (a)
The Borrower shall give the Administrative Agent at least two
Domestic Business Days' notice (or, in the case of a Base Rate
Borrowing on a date for which the Borrower has requested
quotes pursuant to a Money Market Auction but not accepted
quotes in the full amount for which requested, notice not
later than 11:00 A.M. (New York City time) on the date of such
Borrowing) (a "Notice of Committed Borrowing") of its
intention to make a Domestic Borrowing and at least three
Euro-Dollar Business Days' notice (five Euro-Dollar Business
Days' notice, in the case of a Euro-Dollar Borrowing with
respect to which a 12-month Interest Period is requested) of
its intention to make a Euro-Dollar Borrowing, in each case in
writing (or by telephone confirmed in writing not later than
the close of business on the next succeeding Domestic Business
Day or Euro-Dollar Business Day, as applicable) specifying:
(i) the proposed date of such Borrowing, which
shall be a Domestic Business Day in the case of a
Domestic Borrowing or a Euro-Dollar Business Day in the
case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing are
to be CD Loans, Base Rate Loans or Euro-Dollar Loans, and
(iv) in the case of a Fixed Rate Borrowing, the
duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest
Period.
(b) The provisions of subsection (a) above
notwithstanding, if the Borrower shall not have given a Notice
of Committed Borrowing not later than two Domestic Business
Days prior to the last day of the Interest Period applicable
28
to an outstanding Committed Borrowing consisting of Base Rate
Loans, then, unless the Borrower shall have notified the
Administrative Agent not later than two Domestic Business Days
prior to the last day of such Interest Period that it elects
not to borrow on such date, the Administrative Agent shall be
deemed to have received a Notice of Committed Borrowing
specifying (i) that the date of the proposed Borrowing shall
be the last day of the Interest Period applicable to such
outstanding Borrowing, (ii) that the aggregate amount of the
proposed Borrowing shall be the amount of such outstanding
Borrowing (reduced to the extent necessary to reflect any
reduction of the Commitments on or prior to the date of the
proposed Borrowing), and (iii) that the Loans comprising the
proposed Borrowing are to be Base Rate Loans.
(c) No more than eight Euro-Dollar Borrowings and
eight CD Borrowings shall be outstanding at any one time and
no more than two Euro-Dollar Borrowings and two CD Borrowings
at any one time outstanding shall have one-month or 30-day
Interest Periods.
SECTION 2.03. Money Market Borrowings.
(a) The Money Market Option. In addition to
Committed Borrowings pursuant to Section 2.01, the Borrower
may, as set forth in this Section, request the Banks during
the Revolving Credit Period to make offers to make Money
Market Loans to the Borrower. The Banks may, but shall have
no obligation to, make such offers and the Borrower may, but
shall have no obligation to, accept any such offers in the
manner set forth in this Section 2.03.
(b) Money Market Quote Request. When the Borrower
wishes to request offers to make Money Market Loans under this
Section 2.03, it shall transmit an Invitation for Money Market
Quotes substantially in the form of Exhibit G hereto to each
of the Banks by telex or facsimile transmission so as to be
received no later than 10:00 A.M. (New York City time) on the
Domestic Business Day next preceding the date of Borrowing
proposed therein specifying:
(i) the proposed date of Borrowing, which shall be
a Domestic Business Day,
(ii) the aggregate amount of such Borrowing, which
shall be $5,000,000 or a larger multiple of $1,000,000,
and
(iii) the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of
Interest Period.
The Borrower may request offers to make Money Market Loans for
up to six different Interest Periods in a single Invitation
for Money Market Quotes. No Invitation for Money Market
Quotes shall be given within three Domestic Business Days of
any other Invitation for Money Market Quotes.
29
(c) Submission and Contents of Money Market Quotes.
(i) Each Bank may submit a Money Market Quote containing an
offer or offers to make Money Market Loans in response to any
Invitation for Money Market Quotes. Each Money Market Quote
must comply with the requirements of this subsection (c) and
must be submitted to the Borrower by telex or facsimile
transmission at its offices specified in or pursuant to
Section 11.01 not later than 10:00 A.M. (New York City time)
on the proposed date of Borrowing. Subject to Articles III
and VI, any Money Market Quote so made shall be irrevocable
except with the written consent of the Borrower.
(ii) Each Money Market Quote shall be in
substantially the form of Exhibit H hereto and shall in any
case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan
for which each such offer is being made, which principal
amount (w) may be greater than or less than the
Commitment of the quoting Bank, (x) must be $5,000,000 or
a larger multiple of $1,000,000, (y) may not exceed the
principal amount of Money Market Loans for which offers
were requested and (z) may be subject to an aggregate
limitation as to the principal amount of Money Market
Loans for which offers being made by such quoting Bank
may be accepted,
(C) the rate of interest per annum (specified to
the nearest 1/10,000th of 1%) (the "Money Market Rate")
offered for each such Money Market Loan, and
(D) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers
by the quoting Bank with respect to each Interest Period
specified in the related Invitation for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if
it:
(A) is not substantially in conformity with Exhibit
H hereto or does not specify all of the information
required by subsection (c)(ii);
(B) except as provided in subsection (c)(ii)(B)(z),
contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to
those set forth in the applicable Invitation for Money
Market Quotes; or
(D) arrives after the time set forth in subsection
(c)(i).
(d) Acceptance and Notice by Borrower. Not later
than 11:00 A.M. (New York City time) on the proposed date of
Borrowing, the Borrower shall notify the Administrative Agent
30
of its acceptance or non-acceptance of the offers so notified
to it pursuant to subsection (c). In the case of acceptance,
such notice (a "Notice of Money Market Borrowing") shall
specify the aggregate principal amount of offers for each
Interest Period that are accepted. The Borrower may accept
any Money Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money
Market Borrowing may not exceed the applicable amount set
forth in the related Invitation for Money Market Quotes,
(ii) the principal amount of each Money Market
Borrowing must be $5,000,000 or a larger multiple of
$1,000,000,
(iii) acceptance of offers may only be made on the
basis of ascending Money Market Rates and without regard
to any Money Market Quote submitted by a Bank that
amends, modifies or is otherwise inconsistent with a
previous Money Market Quote submitted by such Bank in
response to the same Invitation for Money Market Quotes,
unless such subsequent Money Market Quote is submitted
solely to correct a manifest error in such former Money
Market Quote,
(iv) the Borrower may not accept any offer that is
described in subsection (c)(iii) or that otherwise fails
to comply with the requirements of this Agreement, and
(v) the absence of timely acceptance by the
Borrower in accordance with this subsection (d) shall
constitute rejection of all related Money Market Quotes.
(e) Allocation Among Banks. If offers are made by
two or more Banks with the same Money Market Rates, for a
greater aggregate principal amount than the amount in respect
of which such offers are accepted for the related Interest
Period, the principal amount of Money Market Loans in respect
of which such offers are accepted shall be allocated by the
Borrower among such Banks as nearly as possible (in multiples
of $1,000,000) in proportion to the aggregate principal
amounts of such offers. Such determinations of the amounts of
Money Market Loans shall be conclusive in the absence of
manifest error.
SECTION 2.04. Swingline Advances.
(a) The Borrower may at any time during the Revolv-
ing Credit Period request any or all of the Banks to offer to
make Swingline Advances under this Section. No such Bank
shall have any obligation to make such an offer, and the
Borrower shall have no obligation to request or accept any
such offer.
(b) The Borrower may not request or accept any
offer to make a Swingline Advance:
(i) the final maturity date of which is more than
180 days after the date of such Swingline Advance; or
31
(ii) the principal amount of which, when added to
then outstanding Swingline Advances, would exceed an
amount equal to the excess, if any, of (x) the Maximum
Money Market Aggregate Amount at such time over (y) the
aggregate outstanding principal amount of Money Market
Loans at such time; or
(iii) the principal amount of which, when added to
the aggregate principal amount of all Credits then
outstanding, exceeds (or would exceed at any time during
the term of such Swingline Advance) the aggregate
Commitments at such time.
(c) The Borrower shall promptly notify the
Administrative Agent, upon receipt of a request therefor from
the Administrative Agent during normal business hours, of the
aggregate principal amount of Swingline Advances then
outstanding.
SECTION 2.05. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the
Administrative Agent shall promptly notify (by telex, cable,
facsimile transmission, telephone or other means of
telecommunications) each Bank participating therein of the
contents thereof and of such Bank's share of such Borrowing,
and such Notice of Borrowing shall not thereafter be revocable
by the Borrower.
(b) Not later than 12:00 Noon (New York City time)
on the date of each Borrowing, each Bank participating therein
shall, except as provided in subsection (c) of this Section
2.05, make available its share of such Borrowing, in Federal
or other funds immediately available in New York City, to the
Administrative Agent at its address specified in or pursuant
to Section 11.01. Unless the Administrative Agent determines
that any applicable condition specified in Article III has not
been satisfied, the Administrative Agent will make the funds
so received from the Banks available to the Borrower on such
date at the Administrative Agent's aforesaid address.
(c) If pursuant to any provision of this Agreement
any Bank makes a new Committed Loan hereunder to the Borrower
on a day on which the Borrower is to repay all or any part of
an outstanding Committed Loan from such Bank, such Bank shall
apply the proceeds of such new Committed Loan to make such
repayment and only an amount equal to the difference (if any)
between the amount being borrowed and the amount being repaid
shall be made available by such Bank to the Administrative
Agent, or remitted by the Borrower to the Administrative
Agent, as the case may be.
(d) Unless the Administrative Agent shall have
received notice from a Bank prior to the date of any Borrowing
that such Bank will not make available to the Administrative
Agent such Bank's share of such Borrowing, the Administrative
Agent may assume that such Bank has made such share available
to the Administrative Agent on the date of such Borrowing in
accordance with subsections (b) and (c) of this Section 2.05
32
and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank
shall not have so made such share available to the
Administrative Agent, such Bank and the Borrower severally
agree to repay to the Administrative Agent forthwith on demand
such corresponding amount together with interest thereon, for
each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the
Administrative Agent, at (i) in the case of the Borrower, a
rate per annum equal to the higher of the Federal Funds Rate
and the interest rate applicable thereto pursuant to Section
2.08 and (ii) in the case of such Bank, the Federal Funds
Rate. If such Bank shall repay to the Administrative Agent
such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for
purposes of this Agreement.
SECTION 2.06. Maturity of Loans. Each Committed
Loan and each Money Market Loan shall mature, and the
principal amount thereof shall be due and payable, on the last
day of the Interest Period applicable thereto. Each Swingline
Advance made by a Bank shall mature, and the principal amount
thereof shall be due and payable, on the maturity date
specified in the applicable offer made pursuant to Section
2.04 (the "Swingline Maturity Date").
SECTION 2.07. Notes. (a) The Credits of each Bank
shall be evidenced by a single Note payable to the order of
such Bank for the account of its Lending Office in an amount
equal to the aggregate unpaid principal amount of such Bank's
Credits.
(b) Each Bank may, by notice to the Borrower and
the Administrative Agent, request that its Credits of a
particular type be evidenced by a separate Note in an amount
equal to the aggregate unpaid principal amount of such
Credits. Each such Note shall be in substantially the form of
Exhibit A hereto with appropriate modifications to reflect the
fact that it evidences solely Credits of the relevant type.
Each reference in this Agreement to the "Note" of such Bank
shall be deemed to refer to and include any or all of such
Notes, as the context may require.
(c) Upon receipt of each Bank's Note pursuant to
Section 3.01, the Administrative Agent shall deliver, by hand
or overnight courier, such Note to such Bank. Each Bank shall
record the date, amount, type and maturity of each Credit to
be evidenced by its Note and the date and amount of each
payment of principal made by the Borrower with respect thereto
and may, if a Bank so elects in connection with any transfer
or enforcement of its Note, and is hereby irrevocably
authorized by the Borrower to, endorse on the schedules
forming a part thereof appropriate notations to evidence such
information and attach to and make a part of any Note a
continuation of any such schedule as and when required.
Notwithstanding the foregoing provisions of this paragraph
(c), neither the obligations of the Borrower and the Parent
Guarantor hereunder nor the rights of any Bank shall be
affected by the failure of any Bank to appropriately record
such information on any Note.
33
SECTION 2.08. Interest. (a) Subject to paragraph
(b) of this Section 2.08, each Base Rate Loan shall bear
interest on the unpaid principal amount thereof from time to
time outstanding at a rate per annum equal to the Base Rate
plus the Applicable Margin, if any. Such interest rates shall
be adjusted automatically on and as of the effective date of
any change in the Base Rate or the Applicable Margin. Such
interest shall be payable with respect to each Base Rate Loan
on the last day of the related Interest Period.
(b) Any overdue principal of or interest on any
Base Rate Loan shall bear interest, payable on demand, for
each day from the date payment thereof was due to but
excluding the date of actual payment, at a rate per annum
equal to the sum of 1-1/2% plus the Base Rate for such day
plus the Applicable Margin, if any (the "Base Overdue Interest
Rate").
(c) Each CD Loan shall bear interest on the
outstanding principal amount thereof, for the Interest Period
applicable thereto, at a rate per annum equal to the
applicable Adjusted CD Rate plus the Applicable Margin less
the Applicable Discount, if any; provided that (i) such
interest rates shall be adjusted automatically on and as of
the effective date of any change in the Domestic Reserve
Percentage, the Assessment Rate, the Applicable Margin or the
Applicable Discount and (ii) if any CD Loan or any portion
thereof shall, as a result of clause (2)(b)(i) of the
definition of Interest Period, have an Interest Period of less
than 30 days, such portion shall bear interest during such
Interest Period at the rate applicable to Base Rate Loans
during such period. Such interest shall be payable for each
Interest Period on the last day thereof and, if such Interest
Period is longer than 90 days, 90 days after the first day
thereof. Any overdue principal of or interest on any CD Loan
shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the higher of (i) the sum of
1-1/2% plus the sum of the Adjusted CD Rate applicable to such
Loan plus the Applicable Margin and (ii) the Base Overdue
Interest Rate for such day.
The "Adjusted CD Rate" applicable to any Interest
Period means a rate per annum determined pursuant to the
following formula:
{ CDBR }*
ACDR = { ---------- } + AR
{ 1.00 - DRP }
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
__________
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
34
The "CD Base Rate" applicable to any Interest Period
is the rate of interest determined by the Administrative Agent
to be the average (rounded upward, if necessary, to the next
higher 1/100 of 1%) of the prevailing rates per annum bid at
10:00 A.M. (New York City time) (or as soon thereafter as
practicable) on the first day of such Interest Period by two
or more New York certificate of deposit dealers of recognized
standing for the purchase at face value from each CD Reference
Bank of its certificates of deposit in an amount comparable to
the principal amount of the CD Loan of such CD Reference Bank
to which such Interest Period applies and having a maturity
comparable to such Interest Period.
"Domestic Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such
day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum
reserve requirement (including without limitation any basic,
supplemental or emergency reserves) for a member bank of the
Federal Reserve System in New York City with deposits
exceeding five billion dollars in respect of new non-personal
time deposits in dollars in New York City having a maturity
comparable to the related Interest Period and in an amount of
$100,000 or more.
"Assessment Rate" means for any day the annual
assessment rate in effect on such day which is payable by a
member of the Bank Insurance Fund classified as adequately
capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within
the meaning of 12 C.F.R. Section 327.3(d) (or any successor
provision) to the Federal Deposit Insurance Corporation (or
any successor) for such Corporation's (or such successor's)
insuring time deposits at offices of such institution in the
United States.
(d) Subject to paragraph (f) of this Section 2.08,
each Euro-Dollar Loan shall bear interest on the unpaid
principal amount thereof for the applicable Interest Period at
an interest rate per annum equal to the sum of the Applicable
Margin plus the applicable Adjusted Euro-Dollar Rate, less the
Applicable Discount, if any. Such interest rate shall be
adjusted automatically on and as of the effective date of any
change in the Euro-Dollar Reserve Percentage, the Applicable
Margin or the Applicable Discount. Interest on each
Euro-Dollar Loan shall be payable on the last day of the
related Interest Period and, if such Interest Period is longer
than three months, at intervals of three months after the
first day thereof.
The "Adjusted Euro-Dollar Rate" applicable to any
Interest Period means a rate per annum equal to the quotient
obtained (rounded upward, if necessary, to the next higher
1/100 of 1%) by dividing (i) the applicable London Interbank
Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve
Percentage.
35
The "London Interbank Offered Rate" applicable to
any Interest Period means the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of the respective
rates per annum at which deposits in dollars are offered to
each of the Euro-Dollar Reference Banks in the London
interbank market at approximately 11:00 A.M. (London time) two
Euro-Dollar Business Days before the first day of such
Interest Period in an amount approximately equal to the
principal amount of the largest Euro-Dollar Loan to which such
Interest Period is to apply and for a period of time
comparable to such Interest Period.
(e) If requested to do so by the Borrower through
the Administrative Agent at least five Euro-Dollar Business
Days before the beginning of any Interest Period applicable to
a Euro-Dollar Borrowing, each Bank participating therein will
advise the Administrative Agent before noon (New York City
time) on the third Euro-Dollar Business Day preceding the
beginning of such Interest Period as to whether, if the
Borrower selects a duration of 12 months for such Interest
Period, such Bank expects that deposits in dollars with a term
corresponding to such Interest Period will be available to it
on the first day of such Interest Period in the amount
required to fund its Euro-Dollar Loan to which such Interest
Period would apply. Unless Banks having more than 34% of the
aggregate principal amount of the Commitments respond by such
time to the effect that they expect such deposits not to be
available to them, the Borrower shall be entitled to select a
duration of 12 months for such Interest Period.
(f) Any overdue principal of or interest on any
Euro-Dollar Loan shall bear interest, payable on demand, for
each day from and including the date payment thereof was due
to but excluding the date of actual payment, at a rate per
annum equal to the sum of 1-1/2% plus the Applicable Margin
plus the quotient obtained (rounded upward, if necessary to
the next higher 1/100 of 1%) by dividing (i) the average
(rounded upward, if necessary, to the next higher 1/16 of 1%)
of the respective rates per annum at which one-day (or, if
such amount due remains unpaid more than three Euro-Dollar
Business Days, then for such other period of time not longer
than six months as the Administrative Agent may elect)
deposits in dollars in an amount approximately equal to the
largest such overdue payment due to any Bank are offered to
each Euro-Dollar Reference Bank in the London interbank market
for the applicable period determined as provided above by (ii)
1.00 minus the Euro-Dollar Reserve Percentage (or, if the
circumstances described in clause (a) or (b) of Section 8.01
shall exist, at a rate per annum equal to the Base Overdue
Interest Rate for such day).
(g) The "Applicable Margin" at any date shall be
equal to the sum of the Applicable Pricing Adjustment
Percentage, if positive, plus (i) 5/8 of 1% in the case of CD
Loans and (ii) 1/2 of 1% in the case of Euro-Dollar Loans.
The "Applicable Discount" shall be equal to the absolute value
of the Applicable Pricing Adjustment Percentage, if negative.
36
(h) The "Applicable Pricing Adjustment Percentage"
shall be for each day during any fiscal quarter of the Parent
Guarantor (the "Current Quarter"), the percentage, if any,
indicated in the table set forth below opposite the ratio
category applicable to the Reference Ratio. The Parent
Guarantor shall, prior to the first day of each fiscal quarter
of the Parent Guarantor during which the Applicable Pricing
Adjustment Percentage for any type of Loan differs from that
in effect during the next preceding fiscal quarter of the
Parent Guarantor, deliver to the Administrative Agent a
certificate of the Parent Guarantor signed by its chief
financial officer, its Treasurer or its chief accounting
officer setting forth in reasonable detail the calculations
necessary to determine each of the ratios referred to above as
of the relevant time periods.
Base Rate CD Loans and
Reference Ratio Loans Euro-Dollar Loans
--------------- ------------- -----------------
0.30 to 1, or less + 3/8 of 1% + 3/8 of 1%
More than 0.30 to 1,
but not more than 0.35
to 1 + 1/4 of 1% + 1/4 of 1%
More than 0.35 to 1,
but not more than 0.40
to 1 0 0
More than 0.40 to 1,
but not more than 0.45
to 1 0 - 1/8 of 1%
More than 0.45 to 1,
but not more than 0.50
to 1 0 - 1/4 of 1%
More than 0.50 to 1 0 - 3/8 of 1%
(i) For each day on which Committed Outstandings
exceed $400,000,000, additional interest shall be payable at
the rate of 1/4 of 1% per annum on an amount equal to the
excess of the Committed Outstandings at such day over
$400,000,000. Such interest shall be payable on each
Commitment Reduction Date.
(j) Each Money Market Loan and each Swingline
Advance made by a Bank shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum equal to the Money Market Rate
quoted by the Bank making such Loan in accordance with Section
2.03 or the fixed interest rate quoted by the Bank making such
Swingline Advance in accordance with Section 2.04, as the case
may be. Such interest shall be payable for each Interest
Period on the last day thereof. Any overdue principal of or
interest on any Money Market Loan or Swingline Advance shall
bear interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of 2% plus the Prime Rate for
such day.
37
(k) The Administrative Agent shall determine each
rate of interest applicable to the Loans. The Administrative
Agent shall give prompt notice thereof to the Borrower and the
affected Banks by telephone, facsimile transmission, telex or
cable. The Administrative Agent's good faith determination of
each such rate of interest shall be conclusive in the absence
of manifest error.
(l) Each Reference Bank agrees to use its best
efforts to furnish quotations to the Administrative Agent as
contemplated hereby. If any Reference Bank does not furnish a
timely quotation, the Administrative Agent shall determine the
relevant interest rate on the basis of the quotation or
quotations furnished by the remaining Reference Bank or Banks
or, if none of such quotations is available on a timely basis,
the provisions of Section 8.01 shall apply.
(m) Interest based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a
leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All
other interest shall be computed on the basis of a year of 360
days and paid for the actual number of days elapsed,
calculated as to each Interest Period or period fixed pursuant
to paragraph (f) of this Section 2.08 from and including the
first day thereof to but excluding the last day thereof.
SECTION 2.09. Facility Fees. (a) The Borrower
shall pay to the Administrative Agent for the account of the
Banks a facility fee accrued from and including the Effective
Date to and including the last day of the Revolving Credit
Period on the daily average aggregate amount of the
Commitments (whether used or unused).
(b) The facility fees referred to in paragraph (a)
of this Section 2.09 shall accrue at the rate of 1/4 of 1% per
annum; provided that no such fee shall accrue with respect to
the portion, if any, of the aggregate Commitments utilized in
the form of Base Rate Loans during any Current Quarter of the
Parent Guarantor if the Reference Ratio is more than 0.45 to 1
for such fiscal quarter.
(c) Such facility fees shall be computed on the
basis of a year of 360 days and paid for the actual number of
days elapsed. Such facility fees shall be paid quarterly in
arrears on each March 31, June 30, September 30 and
December 31 and on the last day of the Revolving Credit
Period. From the effective date of any termination or
reduction of Commitments, such facility fees shall cease to
accrue or be correspondingly reduced. If the Commitments are
terminated in their entirety or reduced, facility fees accrued
on the total Commitments, or accrued on the aggregate amount
of the reduction of the Commitments (in the case of such a
reduction), shall be payable on the effective date of such
termination or reduction.
(d) Upon receipt of any amount representing fees
paid pursuant to this Section 2.09, the Administrative Agent
shall pay such amount to the Banks in proportion to their
respective Commitments.
38
SECTION 2.10. Reduction of Commitments. (a) The
Borrower at its option may at any time and from time to time
upon at least three Domestic Business Days' notice to the
Administrative Agent terminate in their entirety or reduce, in
an aggregate amount of $10,000,000 or any larger multiple of
$5,000,000, the unused Commitments (any such reduction to be
applied ratably to the respective Commitments of all Banks).
For this purpose, the Commitments shall be deemed unused at
any time to the extent (and only to the extent) that the
Borrower could at such time borrow Committed Loans without
causing the Credits to exceed the aggregate Commitments at
such time. Upon any termination or reduction of the Commit-
ments pursuant to this subsection (a) or subsection (c) below,
the Administrative Agent shall promptly notify each Bank of
such termination or reduction.
(b) On each Commitment Reduction Date, the Commit-
ments shall be reduced by the applicable amount (if any) set
forth in Schedule I (adjusted in accordance with subsection
(e) of this Section 2.10).
(c) In addition, the Commitments shall be reduced
in the following amounts:
(i) in the event that the Asset Reduction Amount is
greater than zero, an amount equal to such Asset
Reduction Amount; and
(ii) upon the incurrence by the Parent Guarantor or
any of its Subsidiaries of Excess Priority Debt (other
than Excess Priority Debt arising out of the refinancing,
extension, renewal or refunding of other Excess Priority
Debt, except to the extent, and only to the extent, that
the outstanding principal amount of such other Excess
Priority Debt is increased), an amount equal to the cash
proceeds of such Excess Priority Debt, net of the
reasonable expenses of the Parent Guarantor or such
Subsidiary in connection with such incurrence.
(d) The reductions required by subsection (c) of
this Section 2.10 shall be effective on each date on which the
Asset Reduction Amount first exceeds zero, in the case of
reductions required by subparagraph (i), or on the date of
receipt by the Parent Guarantor or any of its Subsidiaries or
Restricted Subsidiaries, as the case may be, of the amounts
described in subparagraph (ii); provided that, in the event
such amounts shall aggregate less than $10,000,000, such
reduction shall be effective forthwith upon receipt by the
Parent Guarantor or any of its Subsidiaries or Restricted
Subsidiaries, as the case may be, of proceeds which, together
with all other amounts described in subparagraphs (i) and (ii)
of subsection (c) above not previously applied pursuant to
subsection (c) of this Section 2.10, aggregate $10,000,000 or
more. The Borrower shall give the Administrative Agent at
least four Euro-Dollar Business Days' notice of each reduction
in the Commitments pursuant to subsection (c) of this Section
2.10 and a certificate of a Principal Officer of the Parent
Guarantor, setting forth the information, in form and
39
substance satisfactory to the Administrative Agent, necessary
to determine the amount of each such reduction and, in the
case of a reduction in the Commitments required pursuant to
Section 2.10(c)(i), the date thereof.
(e) Each reduction of the Commitments pursuant to
subsection (c) of this Section 2.10 shall be applied ratably
to the respective Commitments of the Banks. The amount of any
mandatory reduction of the Commitments pursuant to subsection
(c) of this Section 2.10 shall be applied to reduce the amount
of subsequent mandatory reductions pursuant to subsection (b)
of this Section 2.10 in inverse chronological order; provided
that, if the Borrower so elects in its notice thereof given
pursuant to subsection (d) of this Section 2.10, such
mandatory reduction shall be applied to reduce the amount of
subsequent mandatory reductions pursuant to such subsection
(b) pro rata by amount. Each optional reduction of the
Commitments pursuant to subsection (a) of this Section 2.10
shall be applied first to reduce the amount of the mandatory
reductions of the Commitments pursuant to subsection (b) of
this Section 2.10 on the four Commitment Reduction Dates next
succeeding the date of such optional reduction, in forward
chronological order, and any remaining amount of such optional
reduction shall be applied to reduce the amount of subsequent
mandatory reductions pursuant to such subsection (b) of the
Commitments pro rata by amount.
(f) On each Commitment Reduction Date or date on
which a reduction required by subsection (c) becomes
effective, the Borrower shall repay or prepay such principal
amount of the outstanding Loans, if any, as may be necessary
so that after such payment or prepayment, (i) the unpaid
principal amount of the Credits does not exceed the aggregate
Commitments after giving effect to such reduction of the
Commitments and (ii) the unpaid principal amount of the
Committed Loans of each Bank does not exceed the amount of the
Commitment of such Bank as then reduced. The particular
Borrowings to be repaid shall be as designated by the Borrower
in the related Notice or Notices of Borrowing; provided that
if there shall have been a mandatory reduction of the
Commitments pursuant to subsection (c) of this Section 2.10 at
a time such that, and with the result that, this subsection
(f) would otherwise require payment of principal of Fixed Rate
Loans or portions thereof prior to the last day of the related
Interest Period, such payment shall be deferred to such last
day unless the Required Banks otherwise elect by notice to the
Borrower through the Administrative Agent (and the facility
fee provided for in Section 2.09(a) shall continue to accrue
on the amount of such deferred payment until such payment is
made). Each repayment or prepayment pursuant to this
subsection (f) shall be made together with accrued interest to
the date of payment or prepayment, and shall be applied
ratably to payment of the Loans of the several Banks in the
related Borrowing.
SECTION 2.11. Optional Prepayments. (a) The
Borrower may, upon at least one Domestic Business Day's notice
to the Administrative Agent, prepay any Base Rate Borrowing
without premium or penalty in whole at any time or from time
to time in part in an aggregate amount equal to $5,000,000 or
40
any larger multiple of $5,000,000, by paying the principal
amount being prepaid together with interest accrued thereon to
the date of prepayment. Each such prepayment shall be applied
ratably to the Loans of the Banks included in the applicable
Borrowing.
(b) Except as provided in Section 8.02, the
Borrower may not prepay all or any portion of the principal
amount of any Fixed Rate Loan prior to the maturity thereof.
(c) Swingline Advances shall be prepayable as may
be mutually agreed by the Borrower and the Bank making any
such Swingline Advance.
(d) Upon receipt of a notice of prepayment pursuant
to this Section, the Administrative Agent shall promptly
notify each affected Bank of the contents thereof and of such
Bank's ratable share of such prepayment and such notice shall
not thereafter be revocable by the Borrower.
SECTION 2.12. Payments. (a) All payments of
principal of, and interest on, the Loans and of fees and other
amounts payable hereunder shall be made not later than 12:00
Noon (New York City time) on the date when due, in Federal or
other funds immediately available in New York City to the
Administrative Agent at its office at 52 Broadway, New York,
New York. The Administrative Agent will promptly distribute
to each Bank in like funds its ratable share of each such
payment received by the Administrative Agent for the account
of the Banks.
(b) Whenever any payment of principal of, or
interest on, any Domestic Loans or any Swingline Advances or
of facility fees hereunder shall be due on a day which is not
a Domestic Business Day, the date for payment thereof shall be
extended to the next succeeding Domestic Business Day.
Whenever any payment of principal of, or interest on, any
Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall
be extended to the next succeeding Euro-Dollar Business Day,
unless such day falls in another calendar month, in which case
such payment shall be due on the next preceding Euro-Dollar
Business Day. Whenever any payment of principal of, or
interest on, any Money Market Loans shall be due on a day
which is not a Euro-Dollar Business Day, the date for payment
thereof shall be extended to the next succeeding Euro-Dollar
Business Day. If the date for any payment of principal is
extended by operation of law or otherwise, interest thereon
shall be payable for such extended time.
(c) Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which
any payment is due to the Banks hereunder that the Borrower
will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to
the Administrative Agent on such date and the Administrative
Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date an amount equal to
the amount then due such Bank. If and to the extent that the
41
Borrower shall not have so made such payment, each Bank shall
repay to the Administrative Agent forthwith on demand such
amount distributed to such Bank together with interest
thereon, for each day from the date such amount is distributed
to such Bank until the date such Bank repays such amount to
the Agent, at the Federal Funds Rate.
SECTION 2.13. Funding Losses. If the Borrower
makes any payment of principal with respect to any Fixed Rate
Loan (pursuant to Article VI, VIII or otherwise) on any day
other than the last day of the Interest Period applicable
thereto, or the last day of an applicable period fixed
pursuant to Section 2.08(f), or if the Borrower fails to
borrow or prepay any Fixed Rate Loan after notice has been
given to any Bank in accordance with Section 2.05(a) or
2.11(d), the Borrower shall reimburse each Bank on demand for
any resulting loss or expense incurred by such Bank (or by any
existing or prospective participant in the related Loan),
including (without limitation) any loss incurred in obtaining,
liquidating or employing deposits from third parties, but
excluding loss of margin for the period after any such payment
or failure to borrow or prepay, provided that such Bank shall
have delivered to the Borrower a certificate as to the amount
of such loss or expense, which certificate shall be conclusive
in the absence of manifest error.
SECTION 2.14. Withholding Tax Exemption. At least
five Domestic Business Days prior to the first date on which
interest or facility fees are payable hereunder for the
account of any Bank, each Bank that is not incorporated under
the laws of the United States of America or a state thereof
agrees that it will deliver to each of the Borrower and the
Administrative Agent two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224, certifying
in either case that such Bank is entitled to receive payments
under the Financing Documents without deduction or withholding
of any United States federal income taxes. Each Bank which so
delivers a Form 1001 or 4224 further undertakes to deliver to
each of the Borrower and the Administrative Agent two
additional copies of such form (or a successor form) on or
before the date that such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the
most recent form so delivered by it, and such amendments
thereto or extensions or renewals thereof as may be reasonably
requested by the Borrower or the Administrative Agent, in each
case certifying that such Bank is entitled to receive payments
under the Financing Documents without deduction or withholding
of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or
regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such
forms inapplicable or which would prevent such Bank from duly
completing and delivering any such form with respect to it and
such Bank advises the Borrower and the Administrative Agent
that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax.
42
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness. This Amended
Agreement shall become effective on the date that each of the
following conditions shall have been satisfied (or waived in
accordance with Section 11.04):
(a) receipt by the Administrative Agent of
counterparts hereof signed by each of the parties hereto
(or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the
Administrative Agent in form satisfactory to it of
telegraphic, telex or other written confirmation from
such party of execution of a counterpart hereof by such
party);
(b) receipt by the Administrative Agent for the
account of each Bank of a duly executed Note dated on or
before the Effective Date complying with the provisions
of Section 2.07;
(c) receipt by the Administrative Agent of
counterparts of all other Financing Documents signed by
each of the parties thereto (or, in the case of any party
as to which an executed counterpart shall not have been
received, receipt by the Administrative Agent in form
satisfactory to it of telegraphic, telex or other written
confirmation from such party of execution of a
counterpart thereof by such party);
(d) receipt by the Agents of a certificate of a
Principal Officer of the Borrower to the effect that, as
of the Effective Date and simultaneously with the initial
Borrowings made pursuant to this Agreement immediately
upon its effectiveness, all amounts payable under the
Original Agreement (excluding amounts payable with
respect to the Money Market Borrowings specified in
Section 3.04(a)) have been paid in full;
(e) receipt by the Agents of a certificate of a
Principal Officer of each of the Parent Guarantor and the
Borrower that, upon the Effective Date, no Default shall
have occurred and be continuing and that each of the
representations and warranties made by the Obligors in or
pursuant to the Financing Documents are true and correct
in all material respects;
(f) receipt by the Agents of an opinion of the
General Counsel or Associate General Counsel of the
Borrower and the Parent Guarantor, substantially in the
form of Exhibit B hereto and covering such additional
matters relating to the transactions contemplated hereby
as the Required Banks may reasonably request;
(g) receipt by the Agents of an opinion of Davis
Polk & Wardwell, special counsel for the Agents,
43
substantially in the form of Exhibit C hereto and
covering such additional matters relating to the
transactions contemplated hereby as the Required Banks
may reasonably request;
(h) receipt by the Agents of all documents they may
reasonably request relating to the existence of the
Borrower and the Parent Guarantor, the corporate
authority for and the validity and enforceability of the
Financing Documents, and any other matters relevant
hereto, all in form and substance satisfactory to the
Agents; and
(i) receipt by the Administrative Agent for the
account of each Bank of a participation fee in an amount
determined by the Administrative Agent on the basis set
forth in the Borrower's letters dated May 27, 1994 to the
Banks;
provided that this Amended Agreement shall not become effec-
tive or be binding on any party hereto unless all of the
foregoing conditions are satisfied not later than July 29,
1994. On the Effective Date the Original Agreement shall be
automatically amended and restated in its entirety to read as
set forth herein. The Administrative Agent shall promptly
notify the Borrower and the Banks of the Effective Date, and
such notice shall be conclusive and binding on all parties
hereto. The Notes delivered to each Bank under the Original
Agreement shall become void on the Effective Date and, upon
receiving its new Note delivered pursuant to clause (b) of
this Section 3.01, each Bank will cancel its original Notes
and return them to the Borrower. No failure of a Bank so to
cancel and return its original Notes shall affect the validity
or enforceability of its new Note.
SECTION 3.02. Conditions to Borrowing. The
obligation of each Bank to make a Loan on the occasion of each
Borrowing is subject to the satisfaction of such of the
following conditions as shall not have been expressly waived
in writing by Banks having 51% or more in aggregate principal
amount of the Loans to be included in such Borrowing:
(a) receipt (or deemed receipt) by the Adminis-
trative Agent of a Notice of Borrowing as required by
Section 2.02 or 2.03, as the case may be;
(b) the fact that, immediately after such
Borrowing, (i) the aggregate outstanding principal amount
of Loans will not exceed an amount equal to (A) the
aggregate amount of the Commitments at such time less (B)
the aggregate outstanding principal amount of Swingline
Advances at such time and (ii) the aggregate outstanding
principal amount of Money Market Loans shall not exceed
an amount equal to (A) the Maximum Money Market Aggregate
Amount at such time less (B) the aggregate outstanding
principal amount of Swingline Advances at such time;
44
(c) the fact that, immediately after such Borrow-
ing: (i) in the case of a Refunding Borrowing, no Event
of Default and no Default under Section 6.01(a) or (b)
shall have occurred and be continuing and (ii) in the
case of any other Borrowing, no Default shall have
occurred and be continuing;
(d) the fact that each of the representations and
warranties made by the Obligors in or pursuant to the
Financing Documents (other than, in the case of a
Refunding Borrowing, the representations and warranties
set forth in Sections 4.04(c), 4.05, 4.06, 4.07 and 4.08
of this Agreement), shall be true and correct in all
material respects on and as of the date of such
Borrowing; and
(e) the fact that such Borrowing will not violate
any provision of law or regulation applicable to any Bank
(including, without limiting the generality of the
foregoing, Regulations U and X of the Board of Governors
of the Federal Reserve System) as then in effect.
SECTION 3.03. Representation by Borrower. Each
Borrowing under this Agreement shall be deemed to be a
representation and warranty by the Borrower on the date of
such Borrowing as to the facts specified in subsections (b),
(c) and (d) of Section 3.02.
SECTION 3.04. Transitional Provisions. (a) Each
Money Market Loan or Swingline Advance outstanding under the
Original Agreement and made on or prior to the Effective Date
shall mature on the last day of the then current Interest
Period applicable thereto under the Original Agreement.
(b) Each of the Banks consents to (i) the amendment
and restatement of the Original Stock Pledge Agreement
substantially in the form of the Stock Pledge Agreement
attached as Exhibit D hereto and (ii) the amendment and
restatement of the Original Subsidiary Guaranty substantially
in the form of the Subsidiary Guaranty Agreement attached as
Exhibit E hereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Parent Guarantor and the Borrower jointly and
severally represent and warrant to each Agent and each Bank
that:
SECTION 4.01. Corporate Existence and Power. Each
of the Parent Guarantor, the Borrower and each Subsidiary of
either is a corporation duly incorporated, validly existing
and in good standing under the laws of its jurisdiction of
incorporation and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted (except, in
45
the case of such Subsidiaries, to the extent that failure to
comply with the foregoing statements could not, in the
aggregate, have a material adverse effect on the business,
financial position, results of operations or prospects of the
Parent Guarantor and its Consolidated Subsidiaries, considered
as a whole), and each of the Parent Guarantor, the Borrower
and each Subsidiary of either is duly qualified as a foreign
corporation, licensed and in good standing in each
jurisdiction where qualification or licensing is required by
the nature of its business or the character and location of
its property, business or customers and in which the failure
so to qualify or be licensed, as the case may be, in the
aggregate, could have a material adverse effect on the
business, financial position, results of operations or
prospects of the Parent Guarantor and its Consolidated
Subsidiaries, considered as a whole.
SECTION 4.02. Corporate and Governmental Authori-
zation; No Contravention. The execution and delivery by each
Obligor of each of the Financing Documents to which it is a
party and the performance by such Obligor of its obligations
thereunder are within the corporate power of such Obligor,
have been duly authorized by all necessary corporate action,
require no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene,
or constitute a default under, any provision of applicable law
or regulation or of the charter or by-laws of such Obligor or
of any agreement or instrument relating to Debt of the Parent
Guarantor or any Subsidiary or any other agreement, judgment,
injunction, order, decree or other instrument binding upon
such Obligor material to the business of the Parent Guarantor
and its Consolidated Subsidiaries, considered as a whole, or
result in the creation or imposition of any Lien (other than
the Liens created by the Collateral Documents) on any asset of
the Parent Guarantor or any Subsidiary.
SECTION 4.03. Binding Effect. This Agreement
constitutes a valid and binding agreement of each of the
Parent Guarantor and the Borrower and the other Financing
Documents, when executed and delivered in accordance with this
Agreement, will constitute valid and binding obligations of
each Obligor that is a party thereto, in each case enforceable
in accordance with its terms.
SECTION 4.04. Financial Information. (a) The
consolidated balance sheet of the Parent Guarantor and its
Consolidated Subsidiaries as of October 1, 1993 and the
related consolidated statements of income and cash flows for
the fiscal year then ended, reported on by Arthur Andersen &
Co., a copy of which has been delivered to each of the Banks,
fairly present, in conformity with generally accepted
accounting principles, the consolidated financial position of
the Parent Guarantor and its Consolidated Subsidiaries as of
such date and their consolidated results of operations and
cash flows for such fiscal year.
(b) The unaudited consolidated balance sheet of the
Parent Guarantor and its Consolidated Subsidiaries as of
April 1, 1994 and the related unaudited consolidated
46
statements of income and cash flows for the six months then
ended, set forth in the Parent Guarantor's quarterly report
for the fiscal quarter ended April 1, 1994 as filed with the
Securities and Exchange Commission on Form 10-Q, a copy of
which has been delivered to each of the Banks, fairly present,
in conformity with generally accepted accounting principles
applied on a basis consistent with the financial statements
referred to in subsection (a) of this Section (except with
respect to any inconsistency resulting from the adoption by
the Parent Guarantor of Financial Accounting Standards Board
Statement No. 109 as of December 31, 1993), the consolidated
financial position of the Parent Guarantor and its
Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such
six-month period (subject to normal year-end adjustments).
(c) Since April 1, 1994, there has been no change
in the business, financial position or results of operations
of the Parent Guarantor and its Consolidated Subsidiaries
which materially and adversely affects the credit-worthiness
of the Borrower and the other Obligors, considered as a whole.
SECTION 4.05. Litigation. There is no action, suit
or proceeding pending against, or to the knowledge of a
Principal Officer threatened against, the Parent Guarantor,
the Borrower or any Subsidiary of either before any court or
arbitrator or any governmental body, agency or official in
which there is a reasonable likelihood of an adverse decision
which would affect the business, financial position or results
of operations of the Parent Guarantor and its Consolidated
Subsidiaries in a manner material and adverse to the credit-
worthiness of the Borrower and the other Obligors, considered
as a whole, or which in any manner questions the validity or
enforceability of any Financing Document.
SECTION 4.06. Compliance with ERISA. No member of
the ERISA Group has caused there to be an "accumulated funding
deficiency", as such term is defined in Section 412 of the
Code or Section 302 of ERISA, with respect to any Plan in an
aggregate amount exceeding $100,000, whether or not waived.
Each member of the ERISA Group has paid, when due, all
contributions it has been required to make to any Multi-
employer Plan. Each member of the ERISA Group is in compli-
ance in all material respects with the presently applicable
provisions of ERISA and the Code. No Plan has been termin-
ated, and within the past five years there has not been a
"complete withdrawal" or a "partial withdrawal" from a Multi-
employer Plan, as such terms are defined in Sections 4203 and
4205, respectively, of ERISA, which could have a material
adverse effect on the financial condition of the ERISA Group.
No member of the ERISA Group has incurred any undischarged
liability in excess of $100,000 to the PBGC or a Plan under
Title IV of ERISA. No member of the ERISA Group has (i)
sought a waiver of the minimum funding standard under Section
412 of the Code in respect of any Plan or (ii) failed to make
any contribution or payment to any Plan or made any amendment
to any Plan which has resulted or could result in the
imposition of a Lien or the posting of a bond or other
security under ERISA or the Code.
47
SECTION 4.07. Environmental Matters. The Parent
Guarantor has reasonably concluded that the liabilities and
costs associated with the effect of Environmental Laws on the
business, operations and properties of the Parent Guarantor
and its Subsidiaries, including the costs of compliance with
Environmental Laws, are unlikely to have a material adverse
effect on the business, financial condition, results of opera-
tions or prospects of the Parent Guarantor and its Consoli-
dated Subsidiaries, considered as a whole.
SECTION 4.08. Taxes. United States Federal income
tax returns of the Borrower and its Subsidiaries have been
examined and closed through the fiscal year ended on October
3, 1986. The Parent Guarantor, the Borrower and each
Subsidiary of either have filed all United States Federal
income tax returns and all other material tax returns that are
required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment
received by any of them, except for any such taxes being
diligently contested in good faith and by appropriate
proceedings. Adequate reserves have been provided on the
books of the Parent Guarantor and its Subsidiaries in respect
of all taxes or other governmental charges in accordance with
generally accepted accounting principles, and no tax
liabilities in excess of the amount so provided are
anticipated that could materially and adversely affect the
business, financial position, results of operations or
prospects of the Parent Guarantor and its Consolidated
Subsidiaries, considered as a whole.
SECTION 4.09. Compliance with Laws. The Parent
Guarantor, the Borrower and each Subsidiary of either are in
compliance with all applicable laws, rules and regulations
(including, without limitation, Environmental Laws and ERISA
and the rules and regulations thereunder), other than such
laws, rules or regulations (i) the validity or applicability
of which the Parent Guarantor, the Borrower or such Subsidiary
is contesting in good faith or (ii) the failure to comply with
which cannot reasonably be expected to have a material adverse
effect on the business, financial position, results of
operations or prospects of the Parent Guarantor and its
Consolidated Subsidiaries, considered as a whole.
SECTION 4.10. Not an Investment Company. None of
the Obligors is an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
SECTION 4.11. No Defaults. Neither the Parent
Guarantor nor the Borrower nor any Subsidiary of either is in
violation of, or in default under, any term or provision of
any charter, by-law, mortgage, indenture, agreement,
instrument, statute, rule, regulation, judgment, decree,
order, writ or injunction applicable to it, such that such
violations or defaults in the aggregate might have a material
adverse effect on the business, financial position, results of
operations or prospects of the Parent Guarantor and its
Consolidated Subsidiaries, considered as a whole, or the
ability of any Obligor to perform its obligations under the
Financing Documents to which it is a party.
48
SECTION 4.12. Possession of Franchises, Licenses,
etc. The Parent Guarantor, the Borrower and each Subsidiary
of either own or possess all franchises, patents, trademarks,
service marks, trade names, copyrights, licenses and other
rights that are necessary in any material respect for the
ownership, maintenance and operation of their respective
properties and assets, and neither the Parent Guarantor nor
the Borrower nor any Subsidiary of either is in violation of
any provision thereof in any material respect.
ARTICLE V
COVENANTS
The Parent Guarantor and the Borrower jointly and
severally agree that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid:
SECTION 5.01. Information. The Parent Guarantor
will deliver to each of the Banks:
(a) within 90 days after the end of each fiscal
year of the Parent Guarantor, consolidated balance sheets
of the Borrower and its Consolidated Subsidiaries and of
the Parent Guarantor and its Consolidated Subsidiaries as
of the end of such fiscal year, and the related
consolidated statements of income and cash flows for such
fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, all in
reasonable detail and, in the case of such balance sheet
and related consolidated statements of income and cash
flows of the Parent Guarantor and its Consolidated
Subsidiaries, accompanied by an opinion thereon by Arthur
Andersen & Co. or other independent public accountants of
nationally recognized standing, which opinion (x) shall
state that such financial statements present fairly the
consolidated financial position of the companies being
reported upon as of the date of such financial statements
and the consolidated results of their operations and cash
flows for the period covered by such financial statements
in conformity with generally accepted accounting
principles and that the audit of such accountants in
connection with such financial statements has been
conducted in accordance with generally accepted auditing
standards and (y) shall not contain any Qualification;
(b) within 60 days after the end of each of the
first three quarters of each fiscal year of the Parent
Guarantor, consolidated balance sheets of the Borrower
and its Consolidated Subsidiaries and of the Parent
Guarantor and its Consolidated Subsidiaries, and the
related consolidated statements of income for such
quarter and for the portion of the fiscal year ended at
the end of such quarter and cash flows for the portion of
the fiscal year ended at the end of such quarter, setting
forth in each case in comparative form the figures for
the corresponding quarter and the corresponding portion
49
of the previous fiscal year, if any, all prepared in
accordance with Rule 10-01 of Regulation S-X of the
General Rules and Regulations under the Securities Act of
1933, or any successor rule that sets forth the manner in
which interim financial statements shall be prepared, and
certified (subject to normal year-end audit adjustments)
as to fairness of presentation and consistency by the
chief financial officer or the chief accounting officer
of the Borrower and the Parent Guarantor, respectively;
(c) once during each fiscal year of the Parent
Guarantor, in accordance with its normal business
practice, projected consolidated balance sheets of the
Parent Guarantor and its Consolidated Subsidiaries as of
the end of such fiscal year, and the related consolidated
statements of projected cash flows and projected income
(in each case substantially in the form customarily
prepared by the Parent Guarantor) for such fiscal year,
based on the Parent Guarantor's best estimates,
information and assumptions at the time;
(d) simultaneously with the delivery of each set of
financial statements referred to in paragraphs (a) and
(b) of this Section 5.01, a certificate of the chief
financial officer, Treasurer or chief accounting officer
of the Parent Guarantor (i) setting forth in reasonable
detail such calculations as are required to establish
whether the Parent Guarantor was in compliance with the
requirements of Sections 5.06 through 5.14, inclusive, on
the date of such financial statements, and identifying
any Excluded Dividends declared or paid by any Subsidiary
of the Parent Guarantor (ii) stating whether there exists
on the date of such certificate any Default and, if any
Default then exists, setting forth the details thereof
and the action that the Parent Guarantor is taking or
proposes to take with respect thereto, (iii) stating
whether, since the date of the most recent previous
delivery of financial statements pursuant to paragraph
(a) or (b) of this Section 5.01, there has been any
material adverse change in the business, financial
position, results of operations or prospects of the
Parent Guarantor and its Consolidated Subsidiaries or of
the Borrower and its Consolidated Subsidiaries, in each
case considered as a whole, not reflected in the
financial statements delivered simultaneously therewith
and, if so, the nature of such material adverse change
and (iv) stating whether, since the date of the most
recent financial statements previously delivered pursuant
to paragraph (a) or (b) of this Section 5.01, there has
been a change in the generally accepted accounting
principles applied in preparing the financial statements
then being delivered from those applied in preparing the
most recent financial statements and, in the case of the
Parent Guarantor, audited financial statements so
delivered which is material to the financial statements
then being delivered;
(e) forthwith upon the occurrence of any Default, a
certificate of the chief financial officer, Treasurer or
50
chief accounting officer of the Parent Guarantor setting
forth the details thereof and the action that the Parent
Guarantor is taking or proposes to take with respect
thereto;
(f) promptly upon the mailing thereof to the
shareholders of the Parent Guarantor generally, copies of
all financial statements, reports and proxy statements so
mailed;
(g) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto
and any registration statements on Form S-8 or its
equivalent) and annual, quarterly or monthly reports that
the Parent Guarantor or any of its Consolidated
Subsidiaries shall have filed with the Securities and
Exchange Commission;
(h) if and when any member of the ERISA Group (i)
gives or is required to give notice to the PBGC of any
"reportable event" (as defined in Section 4043 of ERISA)
with respect to any Plan which could reasonably lead to a
termination of such Plan under Title IV of ERISA, or
knows that the plan administrator of any Plan has given
or is required to give notice of any such reportable
event, a copy of the notice of such reportable event
given or required to be given to the PBGC; (ii) receives
notice of complete or partial withdrawal liability under
Title IV of ERISA in an amount greater than $1,000,000 or
notice that any Multiemployer Plan is in reorganization,
is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title
IV of ERISA of an intent to terminate, impose liability
(other than for premiums under Section 4007 of ERISA) in
respect of, or appoint a trustee to administer, any Plan,
a copy of such notice; (iv) applies for a waiver of the
minimum funding standard under Section 412 of the Code, a
copy of such application; (v) gives notice of intent to
terminate any Plan under Section 4041(c) of ERISA, a copy
of such notice and other information filed with the PBGC;
(vi) gives notice of withdrawal from any Plan pursuant to
Section 4063 of ERISA, a copy of such notice; or (vii)
fails to make any required payment or contribution to any
Plan or Multiemployer Plan or in respect of any Benefit
Arrangement or makes any amendment to any Plan or Benefit
Arrangement which has resulted or could result in the
imposition of a Lien or the posting of a bond or other
security, a certificate of the chief financial officer or
the chief accounting officer of the Borrower setting
forth details as to such occurrence and action, if any,
which the Borrower or applicable member of the ERISA
Group is required or proposes to take;
(i) as soon as reasonably practicable after a
Principal Officer obtains knowledge of the commencement
of, or of a material threat of the commencement of, an
action, suit or proceeding against the Parent Guarantor
or any of its Subsidiaries before any court or arbitrator
or any governmental body, agency or official in which, in
51
the reasonable opinion of the Parent Guarantor or the
Borrower, there is a reasonable likelihood of an adverse
decision which would affect the business, financial
position or results of operations of the Parent Guarantor
and its Consolidated Subsidiaries in a manner material
and adverse to the credit-worthiness of the Borrower and
the other Obligors, considered as a whole, or which in
any manner questions the validity or enforceability of
any Financing Document, information as to the nature of
such pending or threatened action, suit or proceeding and
will provide such additional information as may be
reasonably requested by any Bank; and
(j) from time to time such additional information
regarding the financial position, results of operations,
business or prospects of the Parent Guarantor or any of
its Subsidiaries as the Administrative Agent, at the
request of any Bank, may reasonably request.
SECTION 5.02. Payment of Obligations. The Parent
Guarantor will, and will cause each of its Subsidiaries to,
pay and discharge, as the same shall become due and payable,
(i) all material claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other like Persons
which, in any such case, if unpaid, might by law give rise to
a Lien upon any of its property or assets, and (ii) all
material taxes, assessments and governmental charges or levies
upon it or its property or assets, except where any of the
items in clause (i) or (ii) above may be contested in good
faith by appropriate proceedings, and the Parent Guarantor or
such Subsidiary, as the case may be, shall have set aside on
its books, in accordance with generally accepted accounting
principles, appropriate reserves for the accrual of any such
items.
SECTION 5.03. Maintenance of Property; Insurance.
The Parent Guarantor will keep, and will cause each of its
Subsidiaries to keep, all material property useful and
necessary in its business in good working order and condition
in accordance with generally accepted industry standards
applicable to the line of business in which such property is
used; will maintain and will cause each of its Subsidiaries to
maintain (either in the name of the Parent Guarantor or in
such Subsidiary's own name) with financially sound and
responsible insurance companies, insurance on all their
respective properties in at least such amounts and against at
least such risks (and with such risk retentions) as are
usually insured against in the same general area by companies
of established repute engaged in the same or a similar
business; and will furnish to the Banks, upon written request
from the Administrative Agent, information presented in
reasonable detail as to the insurance so carried. Notwith-
standing the foregoing, the Parent Guarantor may, in lieu of
maintaining the insurance required by the preceding sentence,
self-insure, or cause any of its Subsidiaries to self-insure,
with respect to the properties and risks referred to in the
preceding sentence to the extent that such self-insurance is
customary among companies of established repute engaged in the
line of business in which such properties are used or to which
such risks pertain.
52
SECTION 5.04. Conduct of Business and Maintenance
of Existence. (a) Subject to Section 5.09, the Parent Guar-
antor will continue, and will cause each of its Subsidiaries
to continue, to engage in business of the same general type as
now conducted by the Parent Guarantor and its Subsidiaries,
and will preserve, renew and keep in full force and effect,
and will cause each of its Subsidiaries to preserve, renew and
keep in full force and effect, their respective corporate
existences and their respective rights, privileges and
franchises necessary or desirable in the normal conduct of
business; provided that, subject to Sections 5.09 and 5.10,
nothing in this Section 5.04(a) shall prohibit the termination
of the corporate existence of any Subsidiary (other than the
Borrower) if the Parent Guarantor in good faith determines
that such termination is in the best interest of the Parent
Guarantor and is not adverse to the interests of the Banks;
provided further that nothing in this Section 5.04(a) shall
prohibit the termination of the corporate existence of the
Borrower or the Parent Guarantor, if such termination is the
result of the merger of the Borrower with the Parent Guarantor
pursuant to Section 5.09 hereof.
(b) The Parent Guarantor's principal assets will at
all times be Investments in its Subsidiaries and corporate
assets used to service its Subsidiaries and Investments.
SECTION 5.05. Inspection of Property, Books and
Records. The Parent Guarantor will keep, and will cause each
of its Subsidiaries to keep, proper books of record and
account in which full, true and correct entries in conformity
with generally accepted accounting principles shall be made of
all dealings and transactions in relation to its business and
activities. The Parent Guarantor, upon reasonable request by
any Bank to the Treasurer of the Parent Guarantor, will
permit, and will cause each of its Subsidiaries to permit,
representatives of any Bank to visit and inspect any of their
respective properties, to examine and make abstracts from any
of their respective books and records and to discuss their
respective affairs, finances and accounts with their
respective officers, employees and independent public
accountants, all at such reasonable times and as often as may
reasonably be desired.
SECTION 5.06. Maintenance of Stock of Subsidiaries.
The Parent Guarantor will at all times maintain ownership of
100% of the outstanding shares of each class of capital stock
of the Borrower, unless the Borrower and the Parent Guarantor
shall have merged in accordance with Section 5.09 hereof.
SECTION 5.07. Limitation on Subsidiary Debt. (a)
The Parent Guarantor will not permit any of its Subsidiaries
to incur or at any time be liable with respect to any Debt
owing to the Parent Guarantor except Debt of the Borrower
under Subordinated Intercompany Notes.
(b) Until the long-term unsecured Debt of the
Borrower achieves Investment Grade Status, the Parent
Guarantor will not permit any of its Subsidiaries (other than
the Borrower) to incur or at any time be liable with respect
to any Debt except:
53
(i) Debt consisting of Guarantees under the
Financing Documents;
(ii) Debt listed on Schedule II;
(iii) Debt of any Person outstanding at the date such
Person becomes a Subsidiary of the Parent Guarantor and
not created in contemplation of such event;
(iv) Debt arising out of the refinancing, extension,
renewal or refunding of any Debt permitted by any of the
foregoing clauses of this Section 5.07(b), provided that
the outstanding principal amount of such Debt is not
increased;
(v) Guarantees by a Subsidiary of Debt of the
Borrower;
(vi) Debt owing to a Restricted Subsidiary;
(vii) Debt not otherwise permitted by the foregoing
clauses of this Section 5.07(b) in an aggregate principal
amount at any time outstanding not to exceed, together
with the outstanding principal amount of Debt secured by
Liens pursuant to subsection 5.08(g), an amount equal to
15% of Consolidated Total Assets; and
(viii) subject to Section 2.10(c)(ii), Excess Priority
Debt.
SECTION 5.08. Negative Pledge. The Parent Guar-
antor will not, and will not permit any of its Subsidiaries
to, create, assume or suffer to exist any Lien on any asset
now owned or hereafter acquired by the Parent Guarantor or any
such Subsidiary, except:
(a) Liens created pursuant to the Financing
Documents and Liens on Schedule II;
(b) any Lien existing on any asset prior to the
acquisition thereof by the Parent Guarantor or such
Subsidiary and not created in contemplation of such
acquisition;
(c) any Lien existing on any asset of any Person at
the time such Person becomes a Subsidiary and not created
in contemplation of such event;
(d) any Lien arising out of the refinancing,
extension, renewal or refunding of any Debt secured by
any Lien permitted by any of the foregoing subsections of
this Section 5.08, provided that the outstanding
principal amount of such Debt is not increased and is not
secured by any additional assets;
(e) any Liens arising in the ordinary course of
business of the Parent Guarantor or any of its
Subsidiaries which (i) do not secure Debt or Derivatives
Obligations and (ii) do not in the aggregate materially
54
detract from the value of the assets of the Parent
Guarantor and its Consolidated Subsidiaries, considered
as a whole, or impair the use thereof in the operation of
the business of the Parent Guarantor and its Consolidated
Subsidiaries, considered as a whole; provided that any
Lien on any asset of the Parent Guarantor or any of its
Subsidiaries arising in connection with a judgment in
excess of $10,000,000 (reduced, for purposes of this
proviso, by any amount in respect thereof that is
acknowledged by a reputable insurer as being payable
under any valid and enforceable insurance policy issued
by such insurer), whether or not such judgment is being
contested or execution thereof has been stayed, shall be
deemed not arising in the ordinary course of business of
the Parent Guarantor or such Subsidiary;
(f) Liens on cash and cash equivalents securing
Derivatives Obligations, provided that the aggregate
amount of cash and cash equivalents subject to such Liens
may at no time exceed $25,000,000;
(g) any Lien not otherwise permitted by the
foregoing provisions of this Section 5.08 securing Debt
(or Derivative Obligations, as measured by the amount of
the pledged collateral in excess of that permitted under
(f)) in an aggregate principal amount not to exceed the
lesser of (i) an amount equal to 5% of Consolidated Total
Assets and (ii) an amount equal to 15% of Consolidated
Total Assets less the outstanding principal amount of
unsecured Debt permitted pursuant to clause (vii) of
Section 5.07(b); and
(h) subject to Section 2.10(c)(ii), any Lien on any
asset or assets of the Parent Guarantor or any of its
Subsidiaries securing Excess Priority Debt.
SECTION 5.09. Consolidations, Mergers and Sales of
Assets. (a) The Parent Guarantor will not, and will not
permit any of its Restricted Subsidiaries to, consolidate or
merge with or into any Person, except that (i) the Borrower
may merge with any Person (other than the Parent Guarantor) if
the Borrower is the surviving corporation and if, immediately
after such merger (and giving effect thereto), no Default
shall have occurred and be continuing, (ii) any other
Restricted Subsidiary of the Parent Guarantor may consolidate
or merge with or into any other Person if the surviving
corporation is a Wholly Owned Subsidiary of the Parent
Guarantor and if, immediately after such consolidation or
merger (and giving effect thereto), no Default shall have
occurred and be continuing and (iii) if any long-term senior
unsecured Debt of the Borrower ever achieves Investment Grade
Status, then the Borrower may merge with the Parent Guarantor,
if (x) immediately after such merger (and giving effect
thereto), no Default shall have occurred and be continuing and
(y) when the Borrower is to be the surviving corporation, the
Borrower has signed an instrument of assumption in form and
substance satisfactory to the Required Banks immediately prior
to such merger.
55
(b) The Parent Guarantor will not, and will not
permit any of its Subsidiaries to, sell, lease or otherwise
transfer or dispose of to any Person all or any substantial
part of the assets of the Parent Guarantor and its Subsid-
iaries, taken as a whole.
SECTION 5.10. Restricted Payments. The Parent
Guarantor will not, and will not permit any of its Subsid-
iaries to, declare or make any Restricted Payment except that,
if, after giving effect thereto, no Default shall have
occurred and be continuing,
(a) the Parent Guarantor may declare or make
Restricted Payments, if, after giving effect thereto, the
aggregate of all Restricted Payments, not otherwise
permitted under this Section 5.10, declared or made
subsequent to October 3, 1992 (net of cash received upon
the sale of capital stock (excluding any Series Preferred
Stock issued pursuant to subsection 5.10(b) and any
Redeemable Stock) and Deferred Stock Units subsequent to
October 3, 1992) does not exceed the sum of (i)
$25,000,000 plus (ii) 25% of Consolidated Net Income for
the period from October 3, 1992 through October 1, 1993
plus (iii) 50% of Consolidated Net Income for the period
from October 2, 1993 through the end of the Parent
Guarantor's most recent fiscal quarter (treated for this
purpose as a single accounting period). For purposes of
calculating the net cash received upon the sale of
capital stock or Deferred Stock Units, the contribution
of shares of capital stock or Deferred Stock Units to an
employee benefit plan shall be deemed a sale of such
shares (or, in the case of a contribution of Deferred
Stock Units, shall be deemed a sale of the shares of
Common Stock for which such Deferred Stock Units may be
exchanged) for cash at the then appraised value of such
shares, provided that the amount contributed is in
accordance with the regular practice of the Parent
Guarantor and its Subsidiaries relating to contributions
to employee benefit plans. Nothing in this Section shall
prohibit the payment of any dividend or distribution
within 60 days after the declaration thereof if such
declaration was not prohibited by this Section;
(b) the Parent Guarantor may from time to time
declare or make Restricted Payments not otherwise
permitted under this Section 5.10 solely for the purpose
of the Share Transactions, provided that the aggregate
amount of such Restricted Payments made after March 12,
1993 does not exceed $100,000,000;
(c) any Subsidiary of the Parent Guarantor may make
Restricted Payments in cash to the Parent Guarantor to
enable the Parent Guarantor to make payments otherwise
permitted under this Agreement;
(d) the Borrower may distribute to the Parent
Guarantor all (but not less than all) capital stock of a
Subsidiary of the Borrower; provided that:
56
(A) in the case of a Spin-Off Subsidiary, such
Spin-Off Subsidiary is a party to the Subsidiary
Guaranty Agreement at the time of such distribution;
(B) in the case of a Spin-Off Subsidiary, all
capital stock of such Spin-Off Subsidiary shall have
been duly pledged to the Collateral Agent under the
Stock Pledge Agreement at or prior to the time of
such distribution; and
(C) at or prior to the time of such distri-
bution, the Administrative Agent shall have received
(i) a certificate of a Principal Officer to the
effect that, after giving effect to such
distribution, no Default shall have occurred and be
continuing and (ii) an opinion of counsel
substantially to the effect set forth in paragraphs
2, 4, 5, 6 and 8 of Exhibit B hereto with
appropriate changes to refer to the Spin-Off
Subsidiary; and
(e) any Subsidiary may distribute non-cash assets
in kind to the Parent Guarantor to the extent that such
assets are or will be used in the corporate headquarters
function of the Parent Guarantor, wherever such function
may be performed.
Notwithstanding subsections (a) and (b) of this Section 5.10,
the aggregate cash amount paid in respect of any repurchase
made from a stockholder pursuant to his or her election to
require the Parent Guarantor to repurchase shares in accor-
dance with the terms of Section 5 of the Stockholders'
Agreement (Put of Shares upon Death, Complete Disability or
Normal Retirement), together with the aggregate cash amount
paid in respect of all prior repurchases of shares pursuant to
Section 5 of the Stockholders' Agreement made after March 12,
1993, shall not exceed an amount equal to 4% of Consolidated
Capital Funds, as reflected in the most recent consolidated
balance sheet of the Parent Guarantor and its Consolidated
Subsidiaries referred to in Section 4.04(a) or delivered prior
to such repurchase pursuant to Section 5.01.
SECTION 5.11. Fixed Charge Coverage. As of the
last day of each fiscal quarter ending on or after the last
day of any of the fiscal years set forth below of the Parent
Guarantor, the ratio of Consolidated Cash Flow Available for
Fixed Charges to Consolidated Fixed Charges, in each case for
the four fiscal quarters ending on such day, shall not be less
than the ratio of (i) the number set forth below opposite such
fiscal year to (ii) 1.0:
Fiscal Year
Ending in September
or October Ratio
----------------- -----
1993 1.8
1994 1.9
1995 2.0
1996 2.1
1997 2.2
1998 2.3
1999 2.4
2000 2.5
2001 2.6
57
SECTION 5.12. Debt Coverage. As of the last day of
each fiscal quarter ending on or after the last day of any of
the fiscal years set forth below of the Parent Guarantor, the
Leverage Ratio at such day shall not be less than the ratio of
(i) the number set forth below in the column opposite such
fiscal year to (ii) 1.0:
Fiscal Year Ending
in September or
October Leverage Ratio
-------------- --------------
1993 .28
1994 .28
1995 .30
1996 .32
1997 .36
1998 .42
1999 .48
2000 .55
2001 .65
SECTION 5.13. Minimum Consolidated Net Worth.
Consolidated Net Worth shall at no time on or after the last
day of any fiscal year of the Parent Guarantor set forth below
be less than the amount set forth on the table below opposite
such fiscal year:
Fiscal Year
Ending in September Consolidated
or October Net Worth
---------------- ------------
1993 $ 75,000,000
1994 $115,000,000
1995 $165,000,000
1996 $205,000,000
1997 $270,000,000
1998 $340,000,000
1999 $430,000,000
2000 $525,000,000
2001 $625,000,000
SECTION 5.14. Subordinated Debt. The Parent
Guarantor will not, nor will it permit any of its Subsidiaries
to, directly or indirectly, redeem, retire, purchase, acquire
or otherwise make any payment in respect of the principal of
any Subordinated Debt, unless, after giving effect thereto,
Consolidated Capital Funds is equal to or greater than the sum
of (i) the amount of Consolidated Net Worth required under
Section 5.13 plus (ii) $200,000,000.
SECTION 5.15. Transactions with Affiliates. The
Parent Guarantor will not, and will not permit any of its
Subsidiaries to, directly or indirectly, engage in any
material transaction with an Affiliate unless the terms of
such transaction are determined on an arm's-length basis and
are substantially as favorable to the Parent Guarantor or such
58
Subsidiary as the terms which could have been obtained from a
Person which was not an Affiliate; provided that Restricted
Payments permitted by Section 5.10 shall not be limited by
this Section 5.15.
SECTION 5.16. Use of Proceeds. The proceeds of
Credits hereunder will be used for general corporate purposes.
None of such proceeds will be used in violation of any
applicable law or regulation and, without limiting the
generality of the foregoing, no use of such proceeds for
general corporate purposes will include any use thereof,
directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of purchasing or carrying any "margin
stock" within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System as in effect from time
to time ("Regulation U").
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of
the following events ("Events of Default") shall have occurred
and be continuing:
(a) the Borrower shall fail to pay when due any
principal of any Note; or
(b) the Borrower shall fail to pay any interest on
any Note or any fees or any other amount payable
hereunder for a period of three Domestic Business Days
after the same shall become due; or
(c) any Obligor shall fail to observe or perform
any covenant contained in Sections 5.06 to 5.16, inclu-
sive; or
(d) any Obligor shall fail to observe or perform
any of its covenants or agreements contained in the
Financing Documents (other than those covered by para-
graph (a), (b) or (c) above) for 30 days after the Parent
Guarantor or the Borrower shall have become aware of such
failure; or
(e) any representation, warranty, certification or
statement made or deemed made by any Obligor in any
Financing Document or in any certificate, financial
statement or other document delivered pursuant thereto
shall prove to have been incorrect in any material
respect when made or deemed made; or
(f) the Parent Guarantor or any of its Subsidiaries
shall fail to make any payment in respect of any Material
Financial Obligations when due or within any applicable
grace period; or
59
(g) any event or condition shall occur that results
in the acceleration of the maturity of Debt of the Parent
Guarantor or any of its Subsidiaries aggregating in
excess of $10,000,000, or enables (or, with the giving of
notice or lapse of time or both, would enable) the holder
or holders of such Debt or any Person acting on behalf of
such holder or holders to accelerate the maturity thereof
(it being understood that the prepayment by the Borrower
of (x) its Senior Note (the "Senior Note") payable to
Metropolitan Life Insurance Company (the "Holder") or (y)
any successor note (a "Successor Note") issued by the
Borrower to the Holder in connection with the refinancing
of the Debt evidenced by the Senior Note (provided that
the principal amount of any Successor Note is not more
than $125,000,000 and that such Successor Note is
substantially in the form of the Senior Note in all
material respects other than principal amount,
amortization, maturity and interest rate), by reason of
the refusal by the Holder to consent to a proposed
written waiver or amendment of this Agreement insofar as
the provisions hereof are incorporated by reference in
the Senior Note or the Successor Note, as the case may
be, shall not constitute an event or condition subject to
this paragraph (g)); or
(h) the Parent Guarantor or any Subsidiary (other
than any Investment Subsidiary) shall commence a
voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian
or other similar official of it or any substantial part
of its property, or shall consent to any such relief or
to the appointment of or taking possession by any such
official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment
for the benefit of creditors, or shall fail generally or
admit in writing its inability to pay its debts as they
become due, or shall take any corporate action to
authorize any of the foregoing; or
(i) an involuntary case or other proceeding shall
be commenced against the Parent Guarantor or any Sub-
sidiary (other than any Investment Subsidiary) seeking
liquidation, reorganization or other relief with respect
to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any
substantial part of its property, and such involuntary
case or other proceeding shall remain undismissed and
unstayed for a period of 60 days; or an order for relief
shall be entered against the Parent Guarantor or any
Subsidiary (other than any Investment Subsidiary) under
the Federal bankruptcy laws as now or hereafter in
effect; or
60
(j) any member of the ERISA Group shall fail to pay
when due an amount or amounts aggregating in excess of
$500,000 which it shall have become liable to pay under
Title IV of ERISA (other than any such liability which is
being contested in good faith by appropriate proceedings
and is not secured by any Lien); or notice of intent to
terminate a Plan or Plans having aggregate Unfunded
Liabilities in excess of $5,000,000 (a "Material Plan")
shall be filed under Title IV of ERISA by any member of
the ERISA Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate, to
impose liability (other than for premiums under Section
4007 of ERISA) in respect of, or to cause a trustee to be
appointed to administer, any Material Plan; or a condi-
tion shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any
Material Plan must be terminated; or there shall occur a
complete or partial withdrawal from, or a default, within
the meaning of Section 4219(c)(5) of ERISA, with respect
to, one or more Multiemployer Plans which could cause one
or more members of the ERISA Group to incur a current
annual payment obligation in excess of $20,000,000 or an
aggregate payment obligation in excess of $35,000,000; or
(k) a judgment or order for the payment of money in
excess of $1,000,000 (reduced, for purposes of this
paragraph (k), by any amount in respect thereof that is
acknowledged by a reputable insurer as being payable
under any valid and enforceable insurance policy issued
by such insurer) shall be rendered against the Parent
Guarantor or any of its Subsidiaries (other than any
Investment Subsidiary) and such judgment or order shall
continue unsatisfied and unstayed for a period of 30
days; or
(l) any Wholly Owned Subsidiary of the Parent
Guarantor organized under the laws of the United States,
any State thereof or any political subdivision thereof or
therein shall not have entered into the Subsidiary
Guaranty Agreement within 30 days after the later of the
date hereof or the date on which such Wholly Owned
Subsidiary shall have become a Wholly Owned Subsidiary of
the Parent Guarantor; or
(m) more than 30 percent (40 percent, in the case
of voting securities held by a Plan) in voting power of
the voting securities of the Parent Guarantor shall be
held (i) by any Person or (ii) by any two or more Persons
(other than parties to the Stockholders' Agreement) who
"act as a partnership, limited partnership, syndicate or
other group for the purpose of acquiring, holding, or
disposing of securities" of the Parent Guarantor, as the
case may be, within the meaning of Section 13(d)(3) of
the Securities Exchange Act of 1934;
61
then, and in every such event, the Administrative Agent shall
(i) if requested by Banks having more than 50 percent in
aggregate amount of the Commitments, by notice to the Borrower
terminate the Commitments, and the Commitments shall thereupon
terminate, and (ii) if requested by the Banks holding Notes
evidencing more than 50 percent in aggregate principal amount
of the Loans, by notice to the Borrower declare the Notes
(together with accrued interest thereon) and all other amounts
payable by the Borrower hereunder to be, and such Notes
(together with accrued interest thereon) and amounts shall
thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Borrower, provided that in
the case of any of the Events of Default specified in
paragraph (h) or (i) of this Section 6.01 with respect to the
Parent Guarantor or the Borrower, without any notice to any
Obligor or any other act by any Agent or any Bank, the
Commitments shall thereupon terminate and the Notes (together
with accrued interest thereon) and all other amounts payable
by the Borrower hereunder shall become immediately due and
payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The Administra-
tive Agent shall give notice to the Parent Guarantor and the
Borrower under Section 6.01(d) promptly upon being requested
to do so by any Bank and shall thereupon notify all the Banks
thereof.
ARTICLE VII
THE AGENTS
SECTION 7.01. Appointment and Authorization. Each
Bank irrevocably appoints and authorizes each Agent to take
such action as agent on such Bank's behalf and to exercise
such powers under the Financing Documents as are delegated to
such Agent by the terms thereof, together with all such powers
as are reasonably incidental thereto.
SECTION 7.02. Agents and Affiliates. Each of
Chemical Bank and Morgan Guaranty Trust Company of New York
shall have the same rights and powers under this Agreement as
any other Bank and may exercise or refrain from exercising the
same as though it were not an Agent, and each of Chemical Bank
and Morgan Guaranty Trust Company of New York and its
affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with the Parent
Guarantor or any Subsidiary or Affiliate of the Parent
Guarantor as if it were not an Agent.
SECTION 7.03. Action by Agents. The obligations of
each Agent under the Financing Documents are only those
expressly set forth therein with respect to it. Without
limiting the generality of the foregoing, neither Agent shall
be required to take any action with respect to any Default,
except as expressly provided in Article VI.
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SECTION 7.04. Consultation with Experts. Either
Agent may consult with legal counsel (who may be counsel for
the Parent Guarantor or the Borrower), independent public
accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel,
accountants or experts.
SECTION 7.05. Liability of Agents. Neither any
Agent nor any of its affiliates nor any of their respective
directors, officers, agents or employees shall be liable for
any action taken or not taken by such Agent or affiliate or
any such director, officer, agent or employee in connection
herewith (i) with the consent or at the request of the
Required Banks or (ii) in the absence of the gross negligence
or willful misconduct of such Agent, affiliate, director,
officer, agent or employee. Neither any Agent nor any of its
directors, officers, agents or employees shall be responsible
for or have any duty to ascertain, inquire into or verify (i)
any statement, warranty or representation made in connection
with any Financing Document or any borrowing hereunder; (ii)
the performance or observance of any of the covenants or
agreements of any Obligor under any Financing Document; (iii)
the satisfaction of any condition specified in Article III
except, in the case of the Administrative Agent, receipt of
items required to be delivered to the Administrative Agent; or
(iv) the validity, effectiveness or genuineness of any
Financing Document or any other instrument or writing
furnished in connection therewith. Neither Agent shall incur
any liability by acting in reliance upon any notice, consent,
certificate, statement, or other writing (which may be a bank
wire, telex, facsimile or similar writing) believed by it to
be genuine or to be signed by the proper party or parties.
SECTION 7.06. Indemnification. The Banks shall,
ratably in accordance with their respective Commitments,
indemnify each Agent (to the extent not reimbursed by any
Obligor) against any cost, expense (including counsel fees and
disbursements), claim, demand, action, loss or liability
(except such as result from such Agent's gross negligence or
willful misconduct) that such Agent may suffer or incur in
connection with the Financing Documents or any action taken or
omitted by such Agent thereunder.
SECTION 7.07. Credit Decision. Each Bank
acknowledges that it has, independently and without reliance
upon either Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this
Agreement and any other Financing Document to which it is a
party. Each Bank also acknowledges that it will, indepen-
dently and without reliance upon either Agent or any other
Bank, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
decisions in taking or not taking any action under the
Financing Documents.
SECTION 7.08. Agency Fees. The Borrower shall pay
fees to the Agents in the amounts and on the dates agreed to
prior to the date hereof by the Borrower and the Agents.
63
SECTION 7.09. Successor Agents. Either Agent may
resign at any time by giving notice thereof to the Banks and
the Obligors. Upon any such resignation, the Required Banks
shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Required
Banks, and shall have accepted such appointment, within 30
days after the retiring Agent gives notice of resignation,
then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which shall be a commercial bank organized or
licensed under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of
at least $50,000,000. Upon the acceptance of its appointment
as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the
rights and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder
as Agent, the provisions of this Article shall inure to its
benefit as to any actions taken or omitted to be taken by it
while it was Agent.
ARTICLE VIII
CHANGES IN CIRCUMSTANCES
AFFECTING FIXED RATE LOANS
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair. If on or prior to the first day of any
Interest Period for any Fixed Rate Borrowing:
(a) the Administrative Agent is advised by the
Reference Banks that deposits in dollars (in the appli-
cable amounts) are not being offered to the Reference
Banks in the relevant market for such Interest Period, or
(b) in the case of a Committed Borrowing, Banks
having at least a majority of the aggregate amount of the
related Commitments advise the Administrative Agent that
the Adjusted CD Rate or the Adjusted Euro-Dollar Rate, as
the case may be, as determined by the Administrative
Agent will not adequately and fairly reflect the cost to
such Banks of maintaining or funding their respective CD
Loans or Euro-Dollar Loans, as the case may be, for such
Interest Period,
the Administrative Agent shall forthwith give notice thereof
to the Borrower (specifying in reasonable detail, in the case
of an event referred to in clause (b) above, the information
relating thereto received by the Administrative Agent from the
Banks) and the Banks, whereupon until the Administrative Agent
notifies the Borrower that the circumstances giving rise to
such suspension no longer exist (which it shall promptly do
when it determines that such circumstances have ceased to
exist or, in the case of clause (b) of this Section 8.01, when
the Administrative Agent is so notified by Banks having at
least a majority of the related Commitments, as specified
above), the obligations of the Banks to make CD Loans or
64
Euro-Dollar Loans, as the case may be, shall be suspended.
Unless the Borrower notifies the Administrative Agent at least
two Domestic Business Days before the date of any Fixed Rate
Borrowing for which a Notice of Borrowing has previously been
given that it elects not to borrow on such date, if such Fixed
Rate Borrowing is a Committed Borrowing, such Borrowing shall
instead be made as a Base Rate Borrowing.
SECTION 8.02. Illegality. If, on or after the date
hereof, the adoption of any applicable law, rule or regula-
tion, or any change in any applicable law, rule or regulation,
or any change in the interpretation or administration thereof
by any governmental authority, central bank or comparable
agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Euro-Dollar Lending
Office) with any request or directive (whether or not having
the force of law) of any such authority, central bank or
comparable agency shall make it unlawful or impossible for any
Bank (or its Euro-Dollar Lending Office) to make, maintain or
fund any of its Euro-Dollar Loans and such Bank shall so
notify the Administrative Agent, the Administrative Agent
shall forthwith give notice thereof to the other Banks and the
Borrower, whereupon until such Bank notifies the Borrower and
the Administrative Agent that the circumstances giving rise to
such suspension no longer exist, the obligation of such Bank
to make Euro-Dollar Loans shall be suspended. Before giving
any notice to the Administrative Agent pursuant to this
Section 8.02, such Bank shall designate a different
Euro-Dollar Lending Office if such designation will avoid the
need for giving such notice and will not, in the judgment of
such Bank, be otherwise disadvantageous to such Bank. If such
Bank shall determine that it may not lawfully continue to
maintain and fund any of its outstanding Euro-Dollar Loans to
maturity and shall so specify in such notice, the Borrower
shall immediately prepay in full the then outstanding
principal amount of each such Euro-Dollar Loan, together with
accrued interest thereon. Concurrently with prepaying each
such Euro-Dollar Loan, the Borrower shall borrow a Base Rate
Loan in equal principal amount from such Bank (on which
interest and principal shall be payable contemporaneously with
the related Euro-Dollar Loans of the other Banks), and such
Bank shall make such a Base Rate Loan.
SECTION 8.03. Increased Cost. (a) If on or after
(x) the date hereof, in the case of any Committed Loan or any
obligation to make Committed Loans, or (y) the date of the
related Money Market Quote, in the case of any Money Market
Loan, the adoption of any applicable law, rule or regulation,
or any change in any applicable law, rule or regulation, or
any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or
compliance by any Bank (or its Lending Office) with any
request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency:
(A) shall subject any Bank (or its Lending Office)
to any tax, duty or other charge with respect to its
Fixed Rate Loans, its Notes or its obligation to make
65
Fixed Rate Loans, or shall change the basis of taxation
of payments to any Bank (or its Lending Office) of the
principal of or interest on its Fixed Rate Loans or any
other amounts due under this Agreement in respect of its
Fixed Rate Loans or its obligation to make Fixed Rate
Loans (except for changes in the rate of tax on the
overall net income of such Bank or its Lending Office
imposed by the jurisdiction in which such Bank's
principal executive office or Lending Office is located);
or
(B) shall impose, modify or deem applicable any
reserve, special deposit, insurance assessment or similar
requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the
Federal Reserve System, but excluding (A) with respect to
any CD Loan any such requirement included in an
applicable Domestic Reserve Percentage or Assessment Rate
and (B) with respect to any Euro-Dollar Loan any such
requirement included in an applicable Euro-Dollar Reserve
Percentage) against assets of, deposits with or for the
account of, or credit extended by, any Bank's Lending
Office or shall impose on any Bank (or its Lending
Office) or on the United States market for certificates
of deposit or the London interbank market any other
condition affecting its Fixed Rate Loans, its Note or its
obligation to make Fixed Rate Loans;
and the result of any of the foregoing is to increase the cost
to such Bank (or its Lending Office) of making or maintaining
any Fixed Rate Loan, or to reduce the amount of any sum
received or receivable by such Bank (or its Lending Office)
under this Agreement or under its Note with respect thereto,
by an amount deemed by such Bank to be material, then, within
15 days after demand by such Bank (with a copy to the
Administrative Agent), the Borrower shall pay to or for the
account of such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction with
respect to its Fixed Rate Loans.
(b) If any Bank shall have determined that, after
the date hereof, the adoption of any applicable law, rule or
regulation regarding capital adequacy of general applicabil-
ity, or any change in any such law, rule or regulation, or any
change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or
compliance by any Bank (or its Lending Office) with any
request or directive regarding capital adequacy of general
applicability (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on the
capital of such Bank (or its Parent) as a consequence of an
undrawn Commitment hereunder to a level below that which such
Bank (or its Parent) could have achieved but for such
adoption, change or compliance (taking into consideration its
policies with respect to capital adequacy) by an amount deemed
by such Bank to be material, then from time to time, within
15 days after demand by such Bank (with a copy to the
66
Administrative Agent), the Borrower shall pay to such Bank
such additional amount or amounts as will compensate such Bank
(or its Parent) for such reduction. The Borrower shall not be
obligated to compensate any Bank pursuant to this subsection
(b) for reduced return accruing prior to the date which is 30
days before such Bank requests compensation; provided that if
any law, rule or regulation, or interpretation or
administration thereof, or any request or directive giving
rise to reduced returns has retroactive effect, such Bank
shall be entitled to claim compensation hereunder for the
period commencing on such date of retroactive effect through
the date of adoption or change or promulgation thereof without
regard to the foregoing limitation. If any Bank has demanded
compensation under this subsection (b), the Borrower shall
have the right, with the assistance of the Administrative
Agent, to seek a mutually satisfactory substitute bank or
banks (which may be one or more of the Banks) to purchase the
Note and assume the Commitment of such Bank.
(c) Each Bank will promptly notify the Borrower and
the Administrative Agent of any event of which it has
knowledge, occurring after the date hereof, that will entitle
such Bank to compensation pursuant to this Section 8.03 and
will designate a different Lending Office if such designation
will avoid the need for, or reduce the amount of, such
compensation and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. A certificate of any
Bank claiming compensation under this Section 8.03 and setting
forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest
error. In determining such amount, such Bank may use any
reasonable averaging and attribution methods.
SECTION 8.04. Base Rate Loans Substituted for
Affected Fixed Rate Loans. If (i) the obligation of any Bank
to make Euro-Dollar Loans has been suspended pursuant to
Section 8.02 or (ii) any Bank has demanded compensation under
Section 8.03(a) and the Borrower shall by at least five
Euro-Dollar Business Days' prior notice to such Bank through
the Administrative Agent have elected that the provisions of
this Section shall apply to such Bank, then, unless and until
such Bank notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer
apply:
(a) all Loans which would otherwise be made by such
Bank as CD Loans or Euro-Dollar Loans, as the case may
be, shall be made instead as Base Rate Loans (on which
interest and principal shall be payable contemporaneously
with the related Fixed Rate Loans of the other Banks),
and
(b) after each of its CD Loans or Euro-Dollar
Loans, as the case may be, has been repaid, all payments
of principal that would otherwise be applied to repay
such Fixed Rate Loans shall be applied to repay its Base
Rate Loans instead.
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ARTICLE IX
GUARANTEE
SECTION 9.01. The Guarantee. The Parent Guarantor
hereby unconditionally and irrevocably guarantees to the
Banks, and to each of them, the due and punctual payment of
all present and future indebtedness evidenced by or arising
out of this Agreement, the Notes and any Interest Rate
Agreements, including, but not limited to, the due and
punctual payment of principal of and interest on the Notes,
the due and punctual payment of all other sums now or
hereafter owed by the Borrower under this Agreement and the
Notes as and when the same shall become due and payable,
whether at maturity, by declaration or otherwise, according to
the terms hereof and thereof and the due and punctual payment
of any Secured Interest Rate Indebtedness. In case of failure
by the Borrower punctually to pay the indebtedness guaranteed
hereby, the Parent Guarantor hereby unconditionally agrees to
cause such payment to be made punctually as and when the same
shall become due and payable, whether at maturity or by
declaration or otherwise, and as if such payment were made by
the Borrower.
SECTION 9.02. Guarantee Unconditional. The
obligations of the Parent Guarantor under this Article IX
shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged
or otherwise affected by:
(a) any extension, renewal, settlement, compromise,
waiver or release in respect of any obligation of any
other Obligor under any Financing Document or any
Interest Rate Agreement by operation of law or otherwise;
(b) any modification or amendment of or supplement
to any Financing Document or any Interest Rate Agreement;
(c) any modification, amendment, waiver, release,
non-perfection or invalidity of any direct or indirect
security, or of any guarantee or other liability of any
third party, for any obligation of any other Obligor
under any Financing Document or any Interest Rate
Agreement;
(d) any change in the corporate existence, struc-
ture or ownership of any other Obligor, or any
insolvency, bankruptcy, reorganization or other similar
proceeding affecting any other Obligor or its assets or
any resulting release or discharge of any obligation of
any other Obligor contained in any Financing Document or
any Interest Rate Agreement;
(e) the existence of any claim, set-off or other
rights which the Parent Guarantor may have at any time
against any other Obligor, any Agent, any Bank or any
other Person, whether or not arising in connection with
any Financing Document or any Interest Rate Agreement,
68
provided that nothing herein shall prevent the assertion
of any such claim by separate suit or compulsory
counterclaim;
(f) any invalidity or unenforceability relating to
or against any other Obligor for any reason of any
Financing Document or any Interest Rate Agreement, or any
provision of applicable law or regulation purporting to
prohibit the payment by any other Obligor of the
principal of or interest on any Note or any other amount
payable by it under any Financing Document or any
Interest Rate Agreement; or
(g) any other act or omission to act or delay of
any kind by any other Obligor, any Agent, any Bank or any
other Person or any other circumstance whatsoever that
might, but for the provisions of this paragraph, con-
stitute a legal or equitable discharge of the obligations
of the Parent Guarantor under this Article IX.
SECTION 9.03. Discharge Only Upon Payment in Full;
Reinstatement in Certain Circumstances. The Parent
Guarantor's obligations under this Article IX shall remain in
full force and effect until the Commitments are terminated and
the principal of and interest on the Notes and all other
amounts payable by the Borrower under this Agreement shall
have been paid in full. If at any time any payment of the
principal of or interest on any Note or any other amount
payable by the Borrower under this Agreement is rescinded or
must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of the Borrower or any Subsidiary
Guarantor or otherwise, the Parent Guarantor's obligations
under this Article IX with respect to such payment shall be
reinstated at such time as though such payment had become due
but had not been made at such time.
SECTION 9.04. Waiver. The Parent Guarantor
irrevocably waives acceptance hereof, presentment, demand,
protest and any notice not provided for herein, as well as any
requirement that at any time any action be taken by any Person
against any other Obligor or any other Person.
SECTION 9.05. Subrogation and Contribution. The
Parent Guarantor irrevocably waives any and all rights to
which it may be entitled, by operation of law or otherwise,
upon making any payment hereunder (i) to be subrogated to the
rights of the payee against the Borrower with respect to such
payment or otherwise to be reimbursed, indemnified or
exonerated by the Borrower in respect thereof or (ii) to
receive any payment, in the nature of contribution or for any
other reason, from any other Obligor with respect to such
payment.
SECTION 9.06. Stay of Acceleration. If accelera-
tion of the time for payment of any amount payable by the
Borrower under this Agreement or the Notes is stayed upon the
insolvency, bankruptcy or reorganization of the Borrower, all
such amounts otherwise subject to acceleration under the terms
of this Agreement shall nonetheless be payable by the Parent
Guarantor hereunder forthwith on demand by the Administrative
Agent made at the request of the requisite number of Banks
specified in Section 6.01.
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ARTICLE X
JUDICIAL PROCEEDINGS
SECTION 10.01. Consent to Jurisdiction. Each
Obligor hereby irrevocably submits to the non-exclusive
jurisdiction of the United States District Court for the
Southern District of New York and of any New York State court
sitting in the City of New York over any suit, action or
proceeding arising out of or relating to any Financing
Document. To the fullest extent it may effectively do so
under applicable law, each Obligor irrevocably waives and
agrees not to assert, by way of motion, as a defense or
otherwise, any claim that it is not subject to the
jurisdiction of any such court, any objection that it may now
or hereafter have to the laying of the venue of any such suit,
action or proceeding brought in any such court and any claim
that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum.
SECTION 10.02. Enforcement of Judgments. Each
Obligor agrees, to the fullest extent it may effectively do so
under applicable law, that a judgment in any suit, action or
proceeding of the nature referred to in Section 10.01 brought
in any such court shall be conclusive and binding upon such
Obligor and may be enforced in the courts of the United States
of America or the State of New York (or any other courts to
the jurisdiction of which such Obligor is or may be subject)
by a suit upon such judgment.
SECTION 10.03. Service of Process. Each Obligor
consents to process being served in any suit, action or
proceeding of the nature referred to in Section 10.01 by
mailing a copy thereof by registered or certified air mail,
postage prepaid, return receipt requested, to the address of
such Obligor specified in or designated pursuant to Section
11.01. Each Obligor agrees that such service (i) shall be
deemed in every respect effective service of process upon such
Obligor in any such suit, action or proceeding and (ii) shall,
to the fullest extent permitted by law, be taken and held to
be valid personal service upon and personal delivery to such
Obligor.
SECTION 10.04. No Limitation on Service or Suit.
Nothing in this Article X shall affect the right of the
Administrative Agent or any Bank to serve process in any
manner permitted by law, or limit any right that the Admin-
istrative Agent or any Bank may have to bring proceedings
against any Obligor in the courts of any jurisdiction or to
enforce in any lawful manner a judgment obtained in one
jurisdiction in any other jurisdiction.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices. Unless otherwise specified
herein, all notices, requests and other communications to any
party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be
given to such party (x) in the case of the Parent Guarantor,
the Borrower or either Agent, at its address or telex or
facsimile number set forth on the signature pages hereof, (y)
in the case of any Bank, at its address or telex or facsimile
number set forth in its Administrative Questionnaire, or (z)
in the case of any party hereto, at such other address or
telex or facsimile number as such party may hereafter specify
for the purpose by notice to the Agents and the Parent
Guarantor. Each such notice, request or other communication
shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in this Section
11.01 and the appropriate answerback is received, (ii) if
given by facsimile transmission, when transmitted to the
facsimile number specified in this Section and confirmation of
receipt is received, (iii) if given by mail, five days after
such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, or (iv) if given by
any other means, when delivered at the address specified in
this Section 11.01, provided that notices to the
Administrative Agent under Article II or VIII shall not be
effective until received.
SECTION 11.02. No Waiver. No failure or delay by
any Agent or any Bank in exercising any right, power or
privilege under any Financing Document shall operate as a
waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights
and remedies provided in the Financing Documents shall be
cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 11.03. Expenses; Documentary Taxes;
Indemnification for Litigation. (a) The Borrower shall pay
(i) all out-of-pocket expenses of each Agent, including fees
and disbursements of the law firm acting as special counsel
for the Banks and the Agents and such local counsel as may be
retained by the Administrative Agent on behalf of the Banks
and the Agents, in connection with the preparation and
administration of the Financing Documents, any waiver or
amendment of any provision thereof, or any Default or alleged
Default hereunder, and (ii) if any Event of Default occurs,
all out-of-pocket expenses incurred by any Agent or any Bank,
including fees and disbursements of counsel, in connection
with such Event of Default and collection, bankruptcy,
insolvency and other enforcement proceedings resulting
therefrom. The Borrower agrees to indemnify each Bank from
and hold it harmless against any transfer taxes, documentary
taxes, or other similar assessments or charges made by any
governmental authority by reason of the execution and delivery
of the Financing Documents.
71
(b) The Parent Guarantor and the Borrower agree
jointly and severally to indemnify each Bank and hold each
Bank harmless from and against any and all liabilities,
losses, damages, costs and expenses of any kind (including,
without limitation, the reasonable fees and disbursements of
counsel for any Bank in connection with any investigative,
administrative or judicial proceeding, whether or not such
Bank shall be designated a party thereto) which may be
incurred by any Bank (or by any Agent in connection with its
actions as Agent hereunder), relating to or arising out of the
Financing Documents or any actual or proposed use of the
proceeds of the Credits hereunder, provided that no Bank shall
have the right to be indemnified hereunder for its own gross
negligence or willful misconduct as determined by a court of
competent jurisdiction.
SECTION 11.04. Amendments and Waivers. Any provi-
sion of this Agreement or the Notes may be amended or waived
if, and only if, such amendment or waiver is in writing and is
signed by the Parent Guarantor, the Borrower and the Required
Banks (and, if the rights or duties of either Agent are
affected thereby, by such Agent), provided that no such
amendment or waiver shall, unless signed by all the Banks, (i)
increase or decrease the amount of any Commitment (except for
a ratable decrease in the Commitments of all Banks) or subject
any Bank to any additional obligation, (ii) reduce the
principal of or rate of interest on any Loan or any fees
payable hereunder, (iii) postpone the date fixed for any
payment of principal of or interest on any Loan or any fees
payable hereunder, (iv) postpone the date or reduce the amount
of any reduction of the Commitments pursuant to Section
2.10(b) or (v) change the percentage of the Commitments or of
the aggregate unpaid principal amount of the Notes, or the
number of Banks, which shall be required for the Banks or any
of them to take any action under this Section 11.04 or any
other provision of this Agreement or any other Financing
Document; and provided further that an amendment or waiver of
the payment obligations of the Borrower with respect to any
Swingline Advance shall be effective if, and only if, signed
by the Borrower and the Bank making such Swingline Advance.
The release of the Collateral is governed by Section 13 of the
Stock Pledge Agreement.
In the event that (i) a Bank shall have granted a
participation pursuant to Section 11.07(b); (ii) by virtue of
the participation arrangement, such Bank is required to obtain
the consent of its participant to a proposed amendment to this
Agreement or its Note; (iii) such participant's consent is not
forthcoming; (iv) such Bank and the other Banks are otherwise
prepared to agree to such proposed amendment; and (v) such
Bank shall have so certified to the Administrative Agent,
then, in order to effect and in conjunction with such
amendment, the Borrower may terminate the Commitment of such
Bank and, on a date otherwise permitted hereunder, prepay the
outstanding Credits of such Bank in their entirety, provided
that the Borrower shall have procured a substitute Bank (which
may be such Bank) contemporaneously to assume the Commitment
of such Bank and to fund, for the balance of the respective
Interest Periods applicable thereto, the Loans prepaid
pursuant to this paragraph.
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SECTION 11.05. Sharing of Set-Offs. Each Bank
agrees that if it shall, by exercising any right of set-off or
counterclaim or otherwise, receive payment of a proportion of
the aggregate amount of principal and interest due with
respect to its Credits which is greater than the proportion
received by any other Bank in respect of the aggregate amount
of principal and interest due with respect to the Credits of
such other Bank, the Bank receiving such proportionately
greater payment shall purchase such participations in the
Credits of the other Banks, and such other adjustments shall
be made, as may be required so that all such payments of
principal and interest with respect to the Credits of the
Banks shall be shared by the Banks pro rata. The Borrower and
the Parent Guarantor agree, to the fullest extent they may
effectively do so under applicable law, that any holder of a
participation in a Note, whether or not acquired pursuant to
the foregoing arrangements, may exercise rights of set-off or
counterclaim and other rights with respect to such par-
ticipation as fully as if such holder of a participation were
a direct creditor of the Borrower or the Parent Guarantor, as
the case may be, in the amount of such participation. Each
Bank further agrees that if it shall, by exercising any right
of set-off or counterclaim or otherwise, receive payment of a
proportion of the aggregate amount of facility fees due with
respect to its Commitments which is greater than the
proportion received by any other Bank in respect of the
aggregate amount of facility fees due with respect to the
Commitments of such other Bank, adjustments shall be made as
may be required so that all such payments of facility fees
with respect to the Commitments of the Banks shall be shared
by the Banks pro rata.
SECTION 11.06. New York Law. This Agreement and
each Note shall be construed in accordance with and governed
by the law of the State of New York.
SECTION 11.07. Successors and Assigns. (a) All of
the provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their
respective successors and assigns, except that neither the
Parent Guarantor nor the Borrower may assign or transfer any
of its rights or obligations under this Agreement or the Stock
Pledge Agreement without the consent of all Banks.
(b) No Bank may assign (other than (x) to Persons
affiliated with such Bank or (y) by granting participations)
such Bank's rights or obligations hereunder without the
Borrower's consent, which shall not be unreasonably withheld,
and no Bank may grant participations (other than to Persons
affiliated with such Bank) with respect to amounts exceeding
80% of such Bank's Commitment; provided that nothing herein
shall be deemed to prohibit (i) the granting of participations
by any Bank in its rights with respect to any particular
Credit or Credits or (ii) the assignment or pledge by any Bank
of its Notes and its rights hereunder with respect thereto to
any Federal Reserve Bank. Any agreement pursuant to which any
Bank may grant a participation shall provide that such Bank
shall retain the sole right and responsibility to enforce the
obligations of the Borrower relating to any Credit or Credits
including, without limitation, the right to approve any
73
amendment, modification or waiver of any provision of this
Agreement; provided that (i) any such participation agreement
with respect to any or all of a Bank's Credit or Credits may
provide that such Bank will not agree to any proposed
modification, amendment or waiver of this Agreement without
the consent of the participant which would reduce the
principal of or rate of interest on such Credit or Credits or
postpone the date fixed for any payment of principal of or
interest on such Credit or Credits and (ii) any such partici-
pation agreement with respect to a portion of a Bank's
Commitment may provide that such Bank will not agree to any
modification, amendment or waiver described in clause (i),
(ii), (iii) or (iv) of the first sentence of Section 11.04
without the consent of the participant; provided further that
any such participation agreement described in the preceding
clause (ii) shall further provide that such Bank may agree to
any proposed modification, amendment or waiver referred to in
such clause (ii) without the consent of such participant if
such participant fails to provide to the Bank voting
instructions with respect to such proposal within 30 days
after such participant's receipt of such proposal and the
Bank's request for such voting instructions. Any Bank that
has granted or grants a participation with respect to a
portion of its Commitment shall notify the Borrower as to the
amount of its Commitment subject to such participation and the
identity of the participant. Each of the Agents and the
Borrower may, for all purposes of this Agreement, treat any
Bank as the holder of any Note drawn to its order until
written notice of an assignment in accordance with this
Section 11.07(b) is received by it.
(c) No assignee of any Bank's rights or obligations
shall be entitled to receive any greater payment under Section
8.03 than such Bank would have been entitled to receive with
respect to the rights assigned, unless such assignment (or
change in Lending Office) is made with the Borrower's prior
written consent or by reason of the provisions of Section 8.02
or 8.03 requiring such Bank to designate a different Lending
Office under certain circumstances or at a time when the
circumstances giving rise to such greater payment did not
exist.
SECTION 11.08. Collateral. Each Bank (the "Rep-
resenting Bank") represents to each Agent and each other Bank
that the Representing Bank in good faith is not relying upon
any "margin stock" (as defined in Regulation U) as collateral
in the extension or maintenance of the credit provided for in
the Financing Documents.
SECTION 11.09. Counterparts. This Agreement may be
signed in any number of counterparts, each of which shall be
an original, and all of which taken together shall constitute
a single agreement, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
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SECTION 11.10. WAIVER OF JURY TRIAL. EACH OF THE
OBLIGORS, THE AGENTS AND THE BANKS HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THE FINANCING DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREBY.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective
authorized officers as of the date first above written.
ARA SERVICES, INC.
By /s/ Melvin M. Mahoney
---------------------
Title: Treasurer
The ARA Tower
1101 Market Street
Philadelphia, Pennsylvania 19107
Facsimile number: (215) 238-3284
(215) 238-3282
THE ARA GROUP, INC.
By /s/ Melvin M. Mahoney
---------------------
Title: Treasurer
The ARA Tower
1101 Market Street
Philadelphia, Pennsylvania 19107
Facsimile number: (215) 238-3284
(215) 238-3282