1
Exhibit 10.3
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AXEL CREDIT AGREEMENT
DATED AS OF DECEMBER 19, 1997
AMONG
AMSCAN HOLDINGS, INC.,
AS BORROWER,
THE LENDERS LISTED HEREIN,
AS LENDERS,
GOLDMAN SACHS CREDIT PARTNERS L.P.,
AS ARRANGER AND SYNDICATION AGENT,
AND
FLEET NATIONAL BANK,
AS ADMINISTRATIVE AGENT
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AXEL CREDIT AGREEMENT EXECUTION
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AMSCAN HOLDINGS, INC.
AXEL CREDIT AGREEMENT
TABLE OF CONTENTS
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SECTION 1.
DEFINITIONS.............................. 3
1.1 Certain Defined Terms.................................... 3
1.2 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement............................. 36
1.3 Other Definitional Provisions and Rules of Construction.. 36
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS............... 37
2.1 Commitments; Making of Loans; the Register; Notes........ 37
2.2 Interest on the Loans.................................... 40
2.3 Fees..................................................... 44
2.4 Repayments, Prepayments; General Provisions Regarding
Payments; Application of Proceeds of Collateral and
Payments Under Subsidiary Guaranty....................... 44
2.5 Use of Proceeds.......................................... 49
2.6 Special Provisions Governing Eurodollar Rate AXELs....... 50
2.7 Increased Costs; Taxes; Capital Adequacy................. 52
2.8 Obligation of Lenders to Mitigate........................ 56
2.9 Removal or Replacement of a Lender....................... 57
SECTION 3.
CONDITIONS TO AXELs.......................... 58
3.1 Certain Conditions to AXELs.............................. 58
3.2 Additional Conditions to AXELs........................... 66
SECTION 4.
COMPANY'S REPRESENTATIONS AND WARRANTIES................ 68
4.1 Organization, Powers, Qualification, Good Standing,
Business and Subsidiaries................................ 68
4.2 Authorization of Borrowing, etc.......................... 69
4.3 Financial Condition...................................... 70
4.4 No Material Adverse Change; No Restricted Payments....... 71
4.5 Title to Properties; Liens; Real Property................ 71
4.6 Litigation; Adverse Facts................................ 71
4.7 Payment of Taxes......................................... 72
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4.8 Performance of Agreements; Materially Adverse
Agreements; Material Contracts........................... 72
4.9 Governmental Regulation.................................. 73
4.10 Securities Activities.................................... 73
4.11 Employee Benefit Plans................................... 73
4.12 Certain Fees............................................. 74
4.13 Environmental Protection................................. 74
4.14 Employee Matters......................................... 75
4.15 Solvency................................................. 75
4.16 Matters Relating to Collateral........................... 75
4.17 Related Agreements....................................... 76
4.18 Disclosure............................................... 76
SECTION 5.
COMPANY'S AFFIRMATIVE COVENANTS.................... 77
5.1 Financial Statements and Other Reports................... 77
5.2 Corporate Existence, etc................................. 83
5.3 Payment of Taxes and Claims; Tax Consolidation........... 83
5.4 Maintenance of Properties; Insurance; Application of Net
Insurance/Condemnation Proceeds.......................... 84
5.5 Inspection Rights; Lender Meeting........................ 85
5.6 Compliance with Laws, etc................................ 86
5.7 Environmental Review and Investigation, Disclosure,
Etc.; Company's Actions Regarding Hazardous Materials
Activities, Environmental Claims and Violations of
Environmental Laws....................................... 86
5.8 Execution of Subsidiary Guaranty and Personal Property
Collateral Documents by Certain Subsidiaries and Future
Subsidiaries ............................................ 89
5.9 Conforming Leasehold Interests; Matters Relating to
Real Property Collateral................................. 90
5.10 Interest Rate Protection................................. 93
5.11 Cash Management System................................... 93
SECTION 6.
COMPANY'S NEGATIVE COVENANTS...................... 94
6.1 Indebtedness and Issuance of Disqualified Stock ......... 94
6.2 Liens and Related Matters ............................... 96
6.3 Restricted Payments ..................................... 97
6.4 Dividends and Other Payment Restrictions Affecting
Subsidiaries ............................................ 99
6.5 Restrictions on Fundamental Changes; Asset Sales.........100
6.6 Transactions with Affiliates.............................101
6.7 Asset Sales..............................................102
AXEL CREDIT AGREEMENT EXECUTION
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SECTION 7.
EVENTS OF DEFAULT...........................103
7.1 Failure to Make Payments When Due........................103
7.2 Default in Other Agreements..............................104
7.3 Breach of Certain Covenants..............................104
7.5 Other Defaults under AXEL Loan Documents.................104
7.6 Judgments................................................104
7.7 Bankruptcy; Appointment of Custodian.....................105
7.8 Invalidity of Subsidiary Guaranty........................105
7.9 Change in Control........................................106
8.1 Appointment..............................................107
8.2 Powers and Duties; General Immunity......................108
8.3 Representations and Warranties; No Responsibility For
Appraisal of Creditworthiness............................110
8.4 Right to Indemnity.......................................110
8.5 Successor Administrative Agent...........................110
8.6 Collateral Documents and Guaranties......................111
SECTION 9.
MISCELLANEOUS.............................112
9.1 Assignments and Participations in AXELs..................112
9.2 Expenses.................................................115
9.3 Indemnity................................................116
9.4 Set-Off; Security Interest in Deposit Accounts...........117
9.5 Ratable Sharing..........................................117
9.6 Amendments and Waivers...................................118
9.7 Independence of Covenants................................119
9.8 Notices..................................................119
9.9 Survival of Representations, Warranties and Agreements...119
9.10 Failure or Indulgence Not Waiver; Remedies Cumulative....120
9.11 Marshalling; Payments Set Aside..........................120
9.12 Severability.............................................120
9.13 Obligations Several; Independent Nature of Lenders'
Rights...................................................120
9.14 Headings.................................................121
9.15 Applicable Law...........................................121
9.16 Successors and Assigns...................................121
9.17 Consent to Jurisdiction and Service of Process...........121
9.18 Waiver of Jury Trial.....................................122
9.19 Confidentiality..........................................123
9.20 Counterparts; Effectiveness..............................123
Signature pages S-1
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EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF AXEL NOTE
IV FORM OF COMPLIANCE CERTIFICATE
V-A FORM OF OPINION OF WACHTELL, LIPTON ROSEN & KATZ
V-B FORM OF OPINION OF KURZMAN & EISENBERG
VI FORM OF OPINION OF O'MELVENY & MYERS LLP
VII FORM OF ASSIGNMENT AGREEMENT
VIII FORM OF CERTIFICATE RE NON-BANK STATUS
IX FORM OF FINANCIAL CONDITION CERTIFICATE
X FORM OF COMPANY PLEDGE AGREEMENT
XI FORM OF COMPANY SECURITY AGREEMENT
XII FORM OF SUBSIDIARY GUARANTY
XIII FORM OF SUBSIDIARY PLEDGE AGREEMENT
XIV FORM OF SUBSIDIARY SECURITY AGREEMENT
XV FORM OF MORTGAGE
XVI FORM OF COLLATERAL ACCESS AGREEMENT
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SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
3.1C CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP; MANAGEMENT
3.1F INDEBTEDNESS TO BE REPAID UNDER EXISTING CREDIT AGREEMENTS
4.1 SUBSIDIARIES OF COMPANY
4.5 REAL PROPERTY
4.6 LITIGATION
4.8 MATERIAL CONTRACTS
4.13 ENVIRONMENTAL MATTERS
5.11 CASH MANAGEMENT SYSTEM
6.1 CERTAIN EXISTING INDEBTEDNESS
AXEL CREDIT AGREEMENT EXECUTION
(v)
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AMSCAN HOLDINGS, INC.
AXEL CREDIT AGREEMENT
This AXEL CREDIT AGREEMENT is dated as of December 19, 1997 and entered
into by and among AMSCAN HOLDINGS, INC., a Delaware corporation ("Company"),
GOLDMAN SACHS CREDIT PARTNERS L.P., ("GSCP") as arranger (in such capacity,
"Arranger"), and as syndication agent (in such capacity, "Syndication Agent"),
THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each, including
GSCP and Fleet (as hereinafter defined), individually referred to herein as a
"Lender" and collectively as "Lenders"), and FLEET NATIONAL BANK ("Fleet"), as
administrative agent for Lenders (in such capacity, "Administrative Agent").
R E C I T A L S
WHEREAS, GSII (this and other capitalized terms used in these recitals
without definition being used as defined in subsection 1.1) has formed Confetti
Acquisition, Inc., a Delaware corporation ("Newco") for the purpose of entering
into a series of recapitalization transactions pursuant to the Recapitalization
Agreement;
WHEREAS, on or before the Closing Date, Newco and Company shall have
consummated the transactions contemplated under the Recapitalization Agreement,
and in connection with such transactions, Company will have, following the
Merger of Newco with and into Company, not less than $75,000,000 of equity
financing, consisting of (i) approximately $7,500,000 in shares of Company
retained by current shareholders, (ii) approximately $750,000 in cash common
equity contributions by certain Management Investors (which contributions will
be financed by Company and will be made following consummation of the Merger)
and (iii) approximately $67,500,000 in equity financing from Newco, which equity
financing shall have been contributed to Newco immediately prior to the Merger
as follows: (x) an amount not less than $61,875,000 in cash by GSII, (y)
approximately $4,500,000 of Old Management Shares (valued at the highest cash
price offered to public shareholders in the Acquisition) contributed by a
certain Management Investor in exchange for common stock of Newco which will be
converted in the Merger into shares of Company Common Stock and (z)
approximately $1,125,000 of restricted shares of common stock of Newco granted
to a certain Management Investor which will be converted in the Merger into
shares of Company Common Stock;
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WHEREAS, pursuant to the Recapitalization Agreement, on the Closing Date,
Newco will be merged with and into Company, with Company being the surviving
corporation in such merger;
WHEREAS, on or before the Closing Date, Company will issue and sell not
less than $110,000,000 in aggregate principal amount of Senior Subordinated
Notes;
WHEREAS, on the date hereof Company has entered into a separate Revolving
Credit Agreement (such credit agreement as amended, supplemented, refinanced,
renewed or extended or otherwise modified from time to time the "Revolving
Credit Agreement" with Fleet National Bank as administrative agent, (the
"Revolving Credit Facility Agent"), Goldman Sachs Credit Partners L.P. as
arranger and syndication agent and the financial institutions named therein as
lenders (the "Revolving Credit Lenders") pursuant to which Revolving Credit
Lenders have agreed to extend certain credit facilities to Company the proceeds
of which will be used (i) together with the proceeds of the AXELs made
hereunder, the issuance and sale of the Senior Subordinated Notes and the equity
financing described above to fund the Recapitalization Financing Requirements
and (ii) to provide financing for working capital, completion of Permitted
Business Acquisitions and other general corporate purposes of Company and its
Subsidiaries;
WHEREAS, Lenders have agreed to extend certain credit facilities to
Company pursuant to the terms and conditions of this Agreement, the proceeds of
which will be used together with the proceeds of the Revolving Loan facility
under the Revolving Credit Agreement and the issuance and sale of the Senior
Subordinated Notes and the equity financing described above, to fund the
Recapitalization Financing Requirements;
WHEREAS, on the date hereof, the Administrative Agent and the Revolving
Credit Facility Agent, have entered into an Intercreditor Agreement pursuant to
which the Administrative Agent and the Revolving Credit Facility Agent have
appointed Fleet to serve as collateral agent and representative (in such
capacity, the "Collateral Agent") for the Lenders, the Revolving Credit Lenders,
the Administrative Agent, the Revolving Credit Facility Agent and the other
agents under this Agreement and the Revolving Credit Agreement (collectively,
the "Secured Parties") and agreed to the terms on which Collateral, the benefits
of guarantees and the proceeds thereof will be shared between the credit
facilities;
WHEREAS, Company desires to secure all of the Obligations hereunder and
under the other Loan Documents by granting to Collateral Agent, on behalf of
Secured Parties, a first priority Lien on substantially all of its real,
personal and mixed property, including a pledge of all of the capital stock of
each of its Domestic Subsidiaries and 66% of the capital stock of each of its
Foreign Subsidiaries; and
WHEREAS, all of the Domestic Subsidiaries of Company have agreed to
guarantee the Obligations hereunder and under the other Loan Documents and to
secure their
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guaranties by granting to Collateral Agent, on behalf of Secured Parties, a
first priority Lien on substantially all of their respective personal and mixed
property, including a pledge of all of the capital stock of each of their
respective Domestic Subsidiaries and 66% of the capital stock of each of their
respective Foreign Subsidiaries:
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Lenders and Agents agree as
follows:
SECTION 1.
DEFINITIONS
1.1 Certain Defined Terms.
The following terms used in this Agreement shall have the following
meanings:
"Acquired Debt" means, with respect to any specified Person, (i)
indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified
Person, including, without limitation, Indebtedness incurred in connection
with, or in contemplation of, such other Person merging with or into or
becoming a Restricted Subsidiary of such specified Person, and (ii)
Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.
"Adjusted Eurodollar Rate" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar
Rate AXEL, the interest rate per annum (rounded upward, if necessary, to
the nearest 1/32 of one percent) as determined on the basis of the offered
rates for deposits in U.S. dollars, for a period of time comparable to
such Interest Period which appears on the Telerate Page 3750 as of 11:00
a.m. (New York time) two Business Days before the first day of such
Interest Period; provided, however, that if the rate described above does
not appear on the Telerate System on any applicable interest determination
date, the Adjusted Eurodollar Rate shall be the rate (rounded upward as
described above, if necessary for deposits in U.S. dollars for a period
substantially equal to the interest period on the Reuters Page "LIBO" or
such other page as may replace the LIBO page on that service for the
purpose of displaying such rates), as of 11:00 a.m. (London time) two
Business Days before the first day of such Interest Period.
If both the Telerate and Reuters system are unavailable, then the
rate for that date will be determined on the basis of the offered rates
for deposits in U.S. dollars for a period of time comparable to such
Interest Period which are offered by four major banks in the London
interbank market at approximately 11:00 a.m. (New York time) two Business
Days before the first day of such Interest Period as selected by the
Administrative Agent. The principal London office of each of the four
major
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London banks will be requested to provide a quotation of its U.S. dollar
deposit offered rate. If at least two such quotations are provided, the
rate for that date will be the arithmetic mean of the quotations. If fewer
than two quotations are provided as requested, the rate for the date will
be determined on the basis of the rates quoted for loans in U.S. dollars
to leading European banks for a period of time comparable to such Interest
Period offered by major banks in New York City at approximately 11:00 a.m.
(New York time) two Business Days before the first day of such Interest
Period. In the event that Administrative Agent is unable to obtain any
such quotation as provided above, it will be deemed that the Adjusted
Eurodollar Rate for such Interest Rate cannot be determined.
In the event that the Board of Governors of the Federal Reserve
System shall impose a Eurodollar Rate Reserve Percentage with respect to
Eurocurrency Liabilities, the Adjusted Eurodollar Rate for an Interest
Period shall be equal to the amount determined above for such Interest
Period divided by a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage for such Interest Period.
"Administrative Agent" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 8.5A.
"Affected Lender" has the meaning assigned to that term in
subsection 2.6C.
"Affiliate", of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling", "controlled by" and "under common control with"), as used
with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of
voting securities, by agreement or otherwise; provided that beneficial
ownership of 10% or more of the voting securities of a Person shall be
deemed to be control.
"Affiliate Transaction" has the meaning assigned to that term in
subsection 6.6.
"Agent" means, individually, each of Arranger, Syndication Agent,
Collateral Agent and Administrative Agent and "Agents" means Arranger,
Syndication Agent, Collateral Agent and Administrative Agent,
collectively.
"Agreement" means this AXEL Credit Agreement dated as of December
19, 1997, as it may be amended, supplemented or otherwise modified from
time to time.
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"Arranger" has the meaning assigned to that term in the introduction
to this Agreement.
"Asset Sale" means the sale by Company or any of its Subsidiaries to
any Person other than Company or any of its wholly-owned Subsidiaries of
(i) any of the stock of any of Company's Subsidiaries, (ii) substantially
all of the assets of any division or line of business of Company or any of
its Subsidiaries, or (iii) any other assets (whether tangible or
intangible) of Company or any of its Subsidiaries (other than (a)
inventory sold in the ordinary course of business (b) sales of Cash
Equivalents (as defined in the Revolving Credit Agreement) for the fair
market value thereof, and (c) any such other assets to the extent that the
aggregate value of such assets sold in any single transaction or related
series of transactions is equal to $500,000 or less).
"Assignment Agreement" means an Assignment Agreement in
substantially the form of Exhibit VII annexed hereto.
"Auxiliary Pledge Agreement" means each pledge agreement or similar
instrument governed by the laws of a country other than the United States,
executed on the Closing Date pursuant to subsection 3.1I(vii) or from time
to time thereafter in accordance with subsection 5.8 by Company or any
Domestic Subsidiary that owns capital stock of one or more Foreign
Subsidiaries organized in such country, in form and substance satisfactory
to Collateral Agent, as such Auxiliary Pledge Agreement may be amended,
supplemented or otherwise modified from time to time, and "Auxiliary
Pledge Agreements" means all such pledge agreements or instruments,
collectively.
"AXEL(TM)" or "AXELs(TM)" means a loan made by a Lender to Company
as an amortization extended loan pursuant to subsection 2.1A. The term
AXEL is a registered trademark of Goldman, Sachs & Co.
"AXEL Commitment" means a commitment of a Lender to make an AXEL as
set forth in subsection 2.1A, and "AXEL Commitments" means such
commitments of all Lenders in the aggregate.
"AXEL Exposure" means, with respect to any Lender as of any date of
determination (i) prior to the funding of the AXELs, that Lender's AXEL
Commitment and (ii) after the funding of the AXELs, the outstanding
principal amount of the AXEL of that Lender.
"AXEL Loan Documents" means this Agreement, the AXEL Notes, the
Subsidiary Guaranty, the Collateral Documents any Hedging Agreements with
Lenders, and the Intercreditor Agreement.
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"AXEL Notes" means (i) the promissory notes of Company issued
pursuant to subsection 2.1E on the Closing Date and (ii) any promissory
notes issued by Company pursuant to the last sentence of subsection
9.1B(i) in connection with assignments of the AXELs of any Lenders, in
each case substantially in the form of Exhibit III annexed hereto, as they
may be amended, supplemented or otherwise modified from time to time.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Bankruptcy Law" means title 11, U.S. Code or any similar Federal or
state law for the relief of debtors.
"Base Rate" means, at any time, the higher of (x) the Prime Rate or
(y) the rate which is 1/2 of 1% in excess of the Federal Funds Effective
Rate.
"Base Rate AXELs" means AXELs bearing interest at rates determined
by reference to the Base Rate as provided in subsection 2.2A.
"Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of New York or is a
day on which banking institutions located in such state are authorized or
required by law or other governmental action to close.
"Capital Lease", means, at any time any determination thereof is to
be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participation, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership,
partnership interests (whether of general or limited) and (iv) any other
interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the
issuing Person (but excluding customary employee incentive or bonus
arrangements, and customary earn-out provisions granted in connection with
acquisition transactions and providing for aggregate payouts not in excess
of $5,000,000 per year).
"Cash" means money, currency or a credit balance in a Deposit
Account.
"Cash Equivalents" means, (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof, (iii) certificates of
deposit and eurodollar time
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deposits with maturities of one year or less from the date of acquisition,
bankers' acceptances with maturities not exceeding one year and overnight
bank deposits, in each case with any domestic bank having capital and
surplus in excess of $500 million and a Keefe Bank Watch Rating of "B" (or
the equivalent rating under a substantially similar ratings system if
Keefe Bank Watch Ratings are no longer published) or better, (iv)
repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (ii) and (iii)
above entered into with any financial institution meeting the
qualifications specified in clause (iii) above and (v) commercial paper
having the highest rating obtainable from Moody's Investors Service, Inc.
or Standard & Poor's Corporation (or in their absence, an equivalent
rating from another nationally recognized securities rating agency) and in
each case maturing within one year after the date of acquisition.
"Certificate of Merger" means the Certificate of Merger dated as of
December 19, 1997 for the Merger of Newco with and into Company, as in
effect on the Closing Date.
"Certificate re Non-Bank Status" means a certificate substantially
in the form of Exhibit VIII annexed hereto delivered by a Lender to
Administrative Agent pursuant to subsection 2.7B(iii).
"Closing Date" means the date on or before December 19, 1997, on
which the AXELs are made.
"Collateral" means, collectively, all of the real, personal and
mixed property (including capital stock) in which Liens are purported to
be granted pursuant to the Collateral Documents as security for the
Obligations.
"Collateral Access Agreement" means any landlord waiver, mortgagee
waiver, bailee letter or any similar acknowledgement or agreement of any
landlord in respect of any Leased Property, or mortgagee in respect of any
real property, in which Company or any of its Subsidiaries owns or holds a
fee interest and which is subject to a mortgage, held by such mortgagee,
in either case where any Collateral is located, or any warehouseman or
processor in possession of any Inventory of any Loan Party, substantially
in the form of Exhibit XVI annexed hereto with such changes thereto as may
be agreed to by Collateral Agent in the reasonable exercise of its
discretion.
"Collateral Accounts" has the meaning assigned to that term in the
Intercreditor Agreement.
"Collateral Agent" has the meaning assigned to that term in the
introduction to this Agreement.
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"Collateral Documents" means the Company Pledge Agreement, the
Company Security Agreement, the Subsidiary Pledge Agreements, the
Subsidiary Security Agreements, the Mortgages, the Auxiliary Pledge
Agreements and all other instruments or documents delivered by any Loan
Party pursuant to this Agreement or any of the other Loan Documents in
order to grant to Collateral Agent, on behalf of Secured Parties, a Lien
on any real, personal or mixed property of that Loan Party as security for
the Obligations.
"Company" means Company as the surviving corporation in the Merger.
"Company Common Stock" means the shares of common stock of Company
par value $0.10 per share.
"Company Pledge Agreement" means the Company Pledge Agreement
executed and delivered by Company on the Closing Date, substantially in
the form of Exhibit X annexed hereto, as such Company Pledge Agreement may
thereafter be amended, supplemented or otherwise modified from time to
time.
"Company Security Agreement" means the Company Security Agreement
executed and delivered by Company on the Closing Date, substantially in
the form of
Exhibit XI annexed hereto, as such Company Security Agreement may
thereafter be amended, supplemented or otherwise modified from time to
time.
"Compliance Certificate" means a certificate substantially in the
form of Exhibit IV annexed hereto delivered to Administrative Agent and
Lenders by Company pursuant to subsection 5.1(iv).
"Confidential Information Memorandum" means that certain
Confidential Information Memorandum prepared by GSCP relating to the AXELs
and Revolving Loans dated November 1997.
"Conforming Leasehold Interest" means any Recorded Leasehold
Interest as to which the lessor has agreed in writing for the benefit of
Collateral Agent (which writing has been delivered to Collateral Agent),
whether under the terms of the applicable lease, under the terms of a
Landlord Consent and Estoppel, or otherwise, to the matters described in
the definition of "Landlord Consent and Estoppel," which interest, if a
sub-leasehold or sub-sub-leasehold interest, is not subject to any
contrary restrictions contained in a superior lease or sublease.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus
(i) an amount equal to any extraordinary loss plus any net loss realized
in connection with an Asset Sale (to the extent such losses were deducted
in computing such Consolidated Net Income), plus (ii) provision for taxes
based on income or profits of such Person and
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its Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net
Income, plus (iii) consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued and
whether or not capitalized (including, without limitation, amortization of
original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of
all payments associated with Capital Leases, commissions, discounts and
other fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments (if any) pursuant to Hedging
Obligations), to the extent that any such expense was deducted in
computing such Consolidated Net Income, plus (iv) depreciation,
amortization (including amortization of goodwill and other intangibles but
excluding amortization of prepaid cash operating expenses that were paid
in a prior period) and other non-cash charges of prepaid cash operating
expenses that were paid in a prior period) and other non-cash charges of
such Person and its Restricted Subsidiaries for such period to the extent
that such depreciation, amortization and other non-cash charges were
deducted in computing such Consolidated Net Income, minus (v) cash outlays
that were made by such Person or any of its Restricted Subsidiaries during
such period in respect of any item that was reflected as a non-cash charge
in a prior period, provided that such non-cash charge was added to
Consolidated Net Income in determining Consolidated Cash Flow for such
prior period.
"Consolidated Excess Cash Flow" has the meaning assigned to that
term under the Revolving Credit Agreement as in effect as of the date
hereof.
"Consolidated Fixed Charges" means with respect to any Person for
any period, the sum of (i) the consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or
accrued (including, without limitation, amortization of original issue
discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments
associated with Capital Leases, commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers' acceptance
financings, and net payments (if any) pursuant to Hedging Obligations) and
(ii) the consolidated interest expense of such Person and its Restricted
Subsidiaries that was capitalized during such period, and (iii) any
interest expense on Indebtedness of another Person that is Guaranteed by
such Person or one of its Restricted Subsidiaries or secured by a Lien on
assets of such Person or one of its Restricted Subsidiaries (whether or
not such Guarantee or Lien is called upon) and (iv) the product of (a) all
cash dividend payments (and non-cash dividend payments in the case of a
Person that is a Restricted Subsidiary) paid to any Person other than
Company or a Restricted Subsidiary on any series of Preferred Stock of
such Person, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined annual
federal, state and local statutory tax rate of such Person
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paying the dividend, expressed as a decimal, in each case, on a
consolidated basis and in accordance with GAAP.
"Consolidated Leverage Ratio" has the meaning assigned to that term
in the Revolving Credit Agreement as of the date hereof.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that (i) the Net Income (but not loss) for
such period of any Person that is not a Restricted Subsidiary or that is
accounted for by the equity method of accounting shall be included only to
the extent of the amount of dividends or distributions paid in cash to the
referent Person or a Wholly Owned Restricted Subsidiary thereof, (ii) the
Net Income of any Restricted Subsidiary shall be excluded to the extent
that the declaration or payment of dividends or similar distributions by
that Restricted Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that has
not been obtained) or, directly or indirectly, by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Restricted
Subsidiary or its stockholders, (iii) the Net Income of any Person
acquired in a pooling of interests transaction for any period prior to the
date of such acquisition shall be excluded, (iv) the cumulative effect of
a change in accounting principles shall be excluded and (v) the Net Income
of any Unrestricted Subsidiary shall be excluded, whether or not
distributed to Company or one of its Restricted Subsidiaries.
"Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or
other instrument to which that Person is a party or by which it or any of
its properties is bound or to which it or any of its properties is
subject.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement to which Company or any of its
Subsidiaries is a party.
"Deposit Account" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate
of deposit.
"Disqualified Stock" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible or for which it
is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant
AXEL CREDIT AGREEMENT EXECUTION
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to a sinking fund obligation or otherwise, or redeemable at the option of
the holder thereof, in whole or in part, on or prior to the date on which
the AXELs mature.
"Dollars" and the sign "$" mean the lawful money of the United
States of America.
"Domestic Subsidiary" means a Subsidiary of Company that is
organized under the laws of a state of the United States or the District
of Columbia.
"Eligible Assignee" means (A) (i) a commercial bank organized under
the laws of the United States or any state thereof; (ii) a savings and
loan association or savings bank organized under the laws of the United
States or any state thereof; (iii) a commercial bank organized under the
laws of any other country or a political subdivision thereof; provided
that (x) such bank is acting through a branch or agency located in the
United States or (y) such bank is organized under the laws of a country
that is a member of the Organization for Economic Cooperation and
Development or a political subdivision of such country; and (iv) any other
entity which is an "accredited investor" (as defined in Regulation D under
the Securities Act) which extends credit or buys loans as one of its
businesses including insurance companies, mutual funds and lease financing
companies; and (B) any Lender, and any Related Fund or any Affiliate of
any Lender; provided that no Loan Party or any Subsidiary of any Loan
Party shall be an Eligible Assignee.
"Employee Benefit Plan" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or was maintained or contributed to by
Company, any of its Subsidiaries or any of their respective ERISA
Affiliates.
"Employment Agreements" means, collectively, the employment
agreements and stock and option agreements between the Company and certain
employees of the Company as set forth on Schedule 3.1C annexed hereto, in
certain cases providing for the exclusive employment of such Persons by
Company, in the form provided to Arranger and Administrative Agent
pursuant to subsection 3.1C on or prior to the Closing Date.
"Environmental Claim" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or
other order or directive (conditional or otherwise), by any governmental
authority or any other Person, arising (i) pursuant to or in connection
with any actual or alleged violation of any Environmental Law, (ii) in
connection with any Hazardous Materials or any actual or alleged Hazardous
Materials Activity, or (iii) in connection with any actual or alleged
damage, injury, threat or harm to natural resources or the environment.
"Environmental Laws" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental
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Authorizations, or any other requirements of governmental authorities
relating to (i) environmental matters, including those relating to any
Hazardous Materials Activity, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or (iii) occupational
safety and health, industrial hygiene, land use or the protection of
human, plant or animal health or welfare, in any manner applicable to
Company or any of its Subsidiaries or any Facility, including the
Comprehensive Environmental Response, Compensation, and Liability Act (42
U.S.C. ss. 9601 et seq.), the Hazardous Materials Transportation Act (49
U.S.C. ss. 1801 et seq.), the Resource Conservation and Recovery Act (42
U.S.C. ss. 6901 et seq.), the Federal Water Pollution Control Act (33
U.S.C. ss. 1251 et seq.), the Clean Air Act (42 U.S.C. ss. 7401 et seq.),
the Toxic Substances Control Act (15 U.S.C. ss. 2601 et seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. ss.136 et seq.), the
Occupational Safety and Health Act (29 U.S.C. ss. 651 et seq.), the Oil
Pollution Act (33 U.S.C. ss. 2701 et seq) and the Emergency Planning and
Community Right-to-Know Act (42 U.S.C. ss. 11001 et seq.), each as amended
or supplemented, any analogous present or future state or local statutes
or laws, and any regulations promulgated pursuant to any of the foregoing.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security
that is convertible into, or exchangeable for, Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor thereto.
"ERISA Affiliate" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations within
the meaning of Section 414(b) of the Internal Revenue Code of which that
Person is a member; (ii) any trade or business (whether or not
incorporated) which is a member of a group of trades or businesses under
common control within the meaning of Section 414(c) of the Internal
Revenue Code of which that Person is a member; and (iii) any member of an
affiliated service group within the meaning of Section 414(m) or (o) of
the Internal Revenue Code of which that Person, any corporation described
in clause (i) above or any trade or business described in clause (ii)
above is a member. Any former ERISA Affiliate of Company or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of Company
or such Subsidiary within the meaning of this definition with respect to
the period such entity was an ERISA Affiliate of Company or such
Subsidiary and with respect to liabilities arising after such period for
which Company or such Subsidiary could be liable under the Internal
Revenue Code or ERISA.
"ERISA Event" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect
to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has
AXEL CREDIT AGREEMENT EXECUTION
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been waived by regulation); (ii) the failure to meet the minimum funding
standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of
the Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code
with respect to any Pension Plan or the failure to make any required
contribution to a Multiemployer Plan; (iii) the provision by the
administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA
of a notice of intent to terminate such plan in a distress termination
described in Section 4041(c) of ERISA; (iv) the withdrawal by Company, any
of its Subsidiaries or any of their respective ERISA Affiliates from any
Pension Plan with two or more contributing sponsors or the termination of
any such Pension Plan resulting in liability pursuant to Section 4063 or
4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate
any Pension Plan, or the occurrence of any event or condition which could
reasonably be expected to constitute grounds under ERISA for the
termination of, or the appointment of a trustee to administer, any Pension
Plan; (vi) the imposition of liability on Company, any of its Subsidiaries
or any of their respective ERISA Affiliates pursuant to Section 4062(e) or
4069 of ERISA or by reason of the application of Section 4212(c) of ERISA;
(vii) the withdrawal of Company, any of its Subsidiaries or any of their
respective ERISA Affiliates in a complete or partial withdrawal (within
the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer
Plan if there is any potential liability therefor, or the receipt by
Company, any of its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or
that it intends to terminate or has terminated under Section 4041A or 4042
of ERISA; (viii) the occurrence of an act or omission which could
reasonably be expected to give rise to the imposition on Company, any of
its Subsidiaries or any of their respective ERISA Affiliates of fines,
penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409, Section 502(c), (i) or (1), or Section
4071 of ERISA in respect of any Employee Benefit Plan; (ix) the assertion
of a material claim (other than routine claims for benefits) against any
Employee Benefit Plan other than a Multiemployer Plan or the assets
thereof, or against Company, any of its Subsidiaries or any of their
respective ERISA Affiliates in connection with any Employee Benefit Plan;
(x) receipt from the Internal Revenue Service of notice of the failure of
any Pension Plan (or any other Employee Benefit Plan intended to be
qualified under Section 401(a) of the Internal Revenue Code) to qualify
under Section 401(a) of the Internal Revenue Code, or the failure of any
trust forming part of any Pension Plan to qualify for exemption from
taxation under Section 501(a) of the Internal Revenue Code; or (xi) the
imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension
Plan.
"Eurocurrency Liabilities" has the meaning specified in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from
time to time.
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"Eurodollar Rate AXELs" means AXELs bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"Eurodollar Rate Reserve Percentage" means, for any Interest Period
for all Eurodollar Rate AXELs comprising part of the same Borrowing, the
reserve percentage applicable two Business Days before the first day of
such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New York
City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate
on Eurodollar Rate AXELs is determined) having a term equal to such
Interest Period.
"Event of Default" means each of the events set forth in Section 7.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"Excludable Current Liabilities" means, with respect to the
consideration received by the Company in connection with any Asset Sale,
(i) each trade payable incurred in the ordinary course of business of the
Company or any Restricted Subsidiary, (ii) each current liability that is
in an amount less than $50,000 on an individual basis, and (iii) each
liability due within 90 days of the date of consummation of such Asset
Sale, in the case of each of clauses (i) through (iii), that is assumed by
the transferee of the assets the subject to such Asset Sale pursuant to
customary assumption provisions.
"Existing Credit Agreements" means any and all credit agreements
entered into by Company, in each case as amended prior to the Closing
Date, as set forth on Schedule 3.1F.
"Existing Indebtedness" means Indebtedness of Company and its
Restricted Subsidiaries (other than Indebtedness under this Agreement and
the Revolving Credit Agreement) in existence on the date of the Senior
Subordinated Note Indenture, until such amounts are repaid.
"Facilities" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now, hereafter
or heretofore owned, leased, operated or used by Company or any of its
Subsidiaries or any of their respective predecessors or Affiliates.
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"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the
next preceding Business Day) by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by
Administrative Agent from three Federal funds brokers of recognized
standing selected by Administrative Agent.
"Fee Property" means any real property owned in fee simple by any
Loan Party, other than any such real property designated from time to time
by Collateral Agent in its sole discretion as not being required to be
included in the Collateral.
"Financial Plan" has the meaning assigned to that term in subsection
5.1(xiii).
"First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i)
such Lien has priority over any other Lien on such Collateral (other than
Liens permitted pursuant to subsection 6.2A) and (ii) such Lien is the
only Lien (other than Permitted Encumbrances and Liens permitted pursuant
to subsection 6.2) to which such Collateral is subject.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of Company and its Subsidiaries
ending on December 31 of each calendar year. For purposes of this
Agreement, any particular Fiscal Year shall be designated by reference to
the calendar year in which such Fiscal Year ends.
"Fixed Charge Coverage Ratio means with respect to any Person for
any period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Consolidated Fixed Charges
of such Person and its Restricted Subsidiaries for such period. In the
event that Company or any of its Restricted Subsidiaries incurs, assumes,
Guarantees or redeems any Indebtedness (other than revolving credit
borrowings) or issues Preferred Stock subsequent to the commencement of
the period for which the Fixed Charge Coverage Ratio is being calculated
but on or prior to the date on which the event for which the calculation
of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then
the Fixed Charge Coverage Ratio shall be calculated giving pro forma
effect to such incurrence, assumption, Guarantee or redemption or
Indebtedness, or such issuance or redemption of Preferred Stock, as if
the same had occurred at the beginning of the applicable four-quarter
reference period.
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In calculating the Fixed Charge Coverage Ratio, acquisitions will be
given pro forma effect as follows:
(i) (a) acquisitions that have been made or are being made by
Company or any of its Restricted Subsidiaries during the
four-quarter reference period or subsequent to such reference period
and on or prior to the Calculation Date (including through mergers
or consolidations and including any related financing transactions)
shall be deemed to have occurred on the first day of the
four-quarter reference period, and
(b) for purposes of determining the pro forma effects of
any such acquisition, Consolidated Cash Flow shall be increased to
reflect the annualized amount of any cost savings expected by
Company to be realized in connection with such acquisition (from
steps to be taken not later than the first anniversary of such
acquisition, and without reduction for any non-recurring charges
expected in connection with such acquisition), as set forth in an
Officers' Certificate signed by Company's chief executive and chief
financial officers (which shall be determinative of such matters)
which states (x) the amount of such increase, (y) that such increase
is based on the reasonable beliefs of the officers executing such
Officers' Certificate at the time of such execution (and that
estimates of cost savings from prior acquisitions have been
reevaluated and updated) and (z) that any related incurrence of
Indebtedness is permitted pursuant to the this Agreement.
(ii) Consolidated Cash Flow shall be further increased to reflect
the annualized amount of any cost savings expected by Company but
not yet realized in respect of any acquisition made by Company
during the four fiscal quarters immediately preceding the four
quarter reference period prior to the Calculation Date, to the
extent such cost savings are (x) expected to result from steps taken
not later than the first anniversary of the relevant acquisition and
(y) determined and certified as set forth in clause (i) above.
In addition, in calculating the Fixed Charge Coverage Ratio, discontinued
operations will be given pro forma effect as follows:
(i) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and
operations or businesses disposed of on or prior to the
Calculation Date, shall be excluded, and
(ii) the Consolidated Fixed Charges attributable to discontinued
operations, as determined in accordance with GAAP, and
operations or businesses disposed of on or prior to the
Calculation Date, shall be excluded, but only to the extent
that the obligations giving rise to such
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Consolidated Fixed Charges will not be obligations of Company
or any of its Restricted Subsidiaries following the
Calculation Date.
"Fleet" has the meaning assigned to that term in the introduction to
this Agreement.
"Flood Hazard Property" means a Mortgaged Property located in an
area designated by the Federal Emergency Management Agency as having
special flood or mud slide hazards.
"Foreign Subsidiary" means a Subsidiary of Company other than a
Domestic Subsidiary.
"Funding and Payment Office" means (i) the office of Administrative
Agent located at Fleet National Bank, 1 Federal Street, Boston,
Massachusetts 02110, or (ii) such other office of Administrative Agent as
may from time to time hereafter be designated as such in a written notice
delivered by Administrative Agent to Company and each Lender.
"Funding Default" has the meaning assigned to that term in
subsection 2.9.
"GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set
forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such
other statements by such other entity as may be approved by a significant
segment of the accounting profession, in each case as the same are
applicable to the circumstances as of the date of determination.
"Governmental Authorization" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from
any federal, state or local governmental authority, agency or court.
"GSCP" has the meaning assigned to that term in the introduction to
this Agreement.
"GSII" means, collectively, GS Capital Partners II, L.P., GS Capital
Partners II Offshore, L.P., Goldman, Sachs & Co. Verwaltungs GmbH, Stone
Street Fund 1997, L.P. and Bridge Street Fund 1997, L.P.
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters
of credit and reimbursement agreements in respect thereof), of all of any
part of any Indebtedness.
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"Hazardous Materials" means (i) any chemical, material or substance
at any time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely
hazardous waste", "acutely hazardous waste", "radioactive waste",
"biohazardous waste", "pollutant", "toxic pollutant", "contaminant",
"restricted hazardous waste", "infectious waste", "toxic substances", or
any other term or expression intended to define, list or classify
substances by reason of properties harmful to health, safety or the indoor
or outdoor environment (including harmful properties such as ignitability,
corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity,
"TCLP toxicity" or "EP toxicity" or words of similar import under any
applicable Environmental Laws); (ii) any oil, petroleum, petroleum
fraction or petroleum derived substance; (iii) any drilling fluids,
produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal
resources; (iv) any flammable substances or explosives; (v) any
radioactive materials; (vi) any asbestos-containing materials; (vii) urea
formaldehyde foam insulation; (viii) electrical equipment which contains
any oil or dielectric fluid containing polychlorinated biphenyls; (ix)
pesticides; and (x) any other chemical, material or substance, exposure to
which is prohibited, limited or regulated by any governmental authority or
which may or could pose a hazard to the health and safety of the owners,
occupants or any Persons in the vicinity of any Facility or to the indoor
or outdoor environment.
"Hazardous Materials Activity" means any past, current or future
activity, event or occurrence involving any Hazardous Materials, including
the use, manufacture, possession, storage, holding, presence, existence,
location, Release, threatened Release, discharge, placement, generation,
transportation, processing, construction, treatment, abatement, removal,
remediation, disposal, disposition or handling of any Hazardous Materials,
and any corrective action or response action with respect to any of the
foregoing.
"Hedge Agreement" means an Interest Rate Agreement or a Currency
Agreement designed to hedge against fluctuations in interest rates or
currency values, respectively.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) currency exchange or interest rate
swap agreements, currency exchange or interest rate cap agreements and
currency exchange or interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against
fluctuations in currency exchange or interest rates.
"Increased Cost Lender" has the meaning assigned to that term in
subsection 2.10.
"Indebtedness" means, with respect to any Person, any indebtedness
of such Person, whether or not contingent, in respect of borrowed money or
evidenced by
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bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or bankers' acceptances or
representing Capital Leases or the balance deferred and unpaid of the
purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade
payable, if and to the extent any of the foregoing indebtedness (other
than letters of credit and Hedging Obligations) would appear as liability
upon a balance sheet of such Person prepared in accordance with GAAP, as
well as all indebtedness of others secured by a Lien on any asset of such
Person (whether or not such indebtedness is assumed by such Person) and,
to the extent not otherwise included, the Guarantee by such Person of any
indebtedness of any other Person.
"Indemnitee" has the meaning assigned to that term in subsection
9.3.
"Insolvency Laws" means the Bankruptcy Code or any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect in the
United States of America or any state thereof.
"Intellectual Property" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes used in or necessary for
the conduct of the business of Company and its Subsidiaries as currently
conducted that are material to the condition (financial or otherwise),
business or operations of Company and its Subsidiaries, taken as a whole.
"Intercreditor Agreement" means the Intercreditor Agreement dated as
of December 19, 1997 among the Administrative Agent, the Revolving Credit
Facility Agent, the Collateral Agent, the Company and the Subsidiary
Guarantors as such agreement may be amended, supplemented or otherwise
modified from time to time.
"Interest Payment Date" means (i) with respect to any Base Rate
AXEL, each March 15, June 15, September 15 and December 15 of each year,
commencing on the first such date to occur after the Closing Date, and
(ii) with respect to any Eurodollar Rate AXEL, the last day of each
Interest Period applicable to such Eurodollar Rate AXEL; provided that in
the case of each Interest Period of longer than three months "Interest
Payment Date" shall also include each date that is three months, or an
integral multiple thereof, after the commencement of such Interest Period.
"Interest Period" has the meaning assigned to that term in
subsection 2.2B.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement to which Company or any of its
Subsidiaries is a party.
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"Interest Rate Determination Date" means, with respect to any
Interest Period, the second Business Day prior to the first day of such
Interest Period.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any
successor statute.
"Investment" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct
or indirect loans (including guarantees of indebtedness or other
obligations), advances (other than cash advances made to suppliers with
respect to current or anticipated purchases of inventory in the ordinary
course of business) or capital contributions (excluding commission, travel
and similar advances to officers and employees made in the ordinary course
of business), purchases or other acquisitions of Indebtedness, Equity
Interests or other securities (directly from the issuer thereof or from
third parties) together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP; provided
that an acquisition of Equity Interests or other securities by the Company
for consideration consisting of common equity securities of Company shall
not be deemed to be an Investment. If Company or any Subsidiary of Company
sells or otherwise disposes of any Equity Interests of any direct or
indirect Subsidiary of Company such that, after giving effect to any such
sale or disposition, Company no longer owns, directly or indirectly
greater than 50% of the outstanding Equity Interest of such Subsidiary,
Company shall be deemed to have made an Investment on the date of any such
sale or disposition equal to the fair market value of the Equity Interests
of such Subsidiary not sold or disposed of.
"Joint Venture" means all corporations, partnerships, associations
or other business entities (i) that are engaged in a Principal Business
and (ii) of which 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by the Company or one or more
Restricted Subsidiaries of the Company (or a combination thereof).
"Landlord Consent and Estoppel" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the
lessor under the related lease, satisfactory in form and substance to
Collateral Agent, pursuant to which such lessor agrees, for the benefit of
Collateral Agent, (i) to the matters contained in the form of Collateral
Access Agreement applicable to a Leasehold Property, and (ii) to such
other matters relating to such Leasehold Property as Collateral Agent may
reasonably request, including, without limitation, that without any
further consent of such lessor or any further action on the part of the
Loan Party holding such Leasehold Property, such Leasehold Property may be
encumbered pursuant to a Mortgage and may be assigned to the purchaser at
a foreclosure sale
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or in a transfer in lieu of such a sale (and to a subsequent third party
assignee if Collateral Agent, any Lender, or an Affiliate of either so
acquires such Leasehold Property).
"Leasehold Property" means any leasehold interest of any Loan Party
as lessee under any lease of real property, other than any such leasehold
interest designated from time to time by Collateral Agent in its sole
discretion as not being required to be included in the Collateral.
"Lender" and "Lenders" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their
successors and permitted assigns pursuant to subsection 9.1.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature thereof,
and any agreement to give any security interest) and any option, trust or
other preferential arrangement having the practical effect of any of the
foregoing.
"Loan Documents" means the Revolving Loan Documents and the AXEL
Loan Documents.
"Loan Party" means each of Company and any of Company's Subsidiaries
from time to time executing a Loan Document, and "Loan Parties" means all
such Persons, collectively.
"Management Investors" means the management officers and employees
of Company and its Subsidiaries identified as Management Investors on
Schedule 3.1C annexed hereto.
"Margin Stock" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from
time to time.
"Material Adverse Effect" means (i) a material adverse effect upon
the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Company or any of its Subsidiaries or (ii) the
impairment in any material respect of the ability of the Loan Parties,
taken as a whole, to perform, or of Administrative Agent or Lenders to
enforce, the Obligations.
"Material Contract" means any contract or other arrangement to which
Company or any of its Subsidiaries is a party (other than the Loan
Documents) for which breach, nonperformance, cancellation or failure to
renew could reasonably be expected to have a Material Adverse Effect.
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"Material Domestic Subsidiary" means (a) each Restricted Subsidiary
and (b) each other Domestic Subsidiary of Company now existing or
hereafter acquired or formed by Company which, on a consolidated basis for
such Subsidiary and its Subsidiaries, (i) for the most recent Fiscal Year
account for more than 5% of the consolidated revenues of Company and its
Subsidiaries or (ii) as at the end of such Fiscal Year, was the owner of
more than 5% of the consolidated assets of Company and its Subsidiaries.
"Material Leasehold Property" means a Leasehold Property reasonably
determined by Administrative Agent to be of material value as Collateral
or of material importance to the operations of Company or any of its
Subsidiaries; provided, however that, excepting any such Leasehold
Properties set forth on Schedule 4.1I annexed hereto, no Leasehold
Property with respect to which the aggregate amount of all rents payable
during any one Fiscal Year is not expected to exceed $500,000 shall be a
"Material Leasehold Property".
"Merger" means the merger of Newco with and into Company in
accordance with the terms of the Recapitalization Agreement, with Company
being the surviving corporation in such Merger.
"Mortgage" means a security instrument (whether designated as a deed
of trust or a mortgage or by any similar title) executed and delivered by
any Loan Party, substantially in the form of Exhibit XV annexed hereto or
in such other form as may be approved by Collateral Agent in its sole
discretion, in each case with such changes thereto as may be recommended
by Collateral Agent's local counsel based on local laws or customary local
mortgage or deed of trust practices. "Mortgages" means all such
instruments collectively.
"Mortgage Financing" means the incurrence by the Company or a
Restricted Subsidiary of the Company of any Indebtedness secured by a
mortgage or other Lien on real property acquired or improved by the
Company or any Restricted Subsidiary of the Company after the date hereof.
"Mortgage Refinancing" means the incurrence by the Company or a
Restricted Subsidiary of the Company of any Indebtedness secured by a
mortgage or other Lien on real property subject to a mortgage or other
Lien existing on the date hereof or created or incurred subsequent to the
date hereof and owned by the Company or any Restricted Subsidiary of the
Company.
"Mortgaged Property" has the meaning assigned to that term in
subsection 5.9.
"Mortgage Policy" has the meaning assigned to that term in
subsection 5.9.
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"Multiemployer Plan" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"Net Asset Sale Proceeds" means, with respect to any Asset Sale,
Cash payments (including any Cash received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but
only as and when so received) received from such Asset Sale, net of any
bona fide direct costs, including, without limitation, all transaction
costs, incurred in connection with such Asset Sale, including (i) income
taxes reasonably estimated to be actually payable within two years of the
date of such Asset Sale as a result of any gain recognized in connection
with such Asset Sale and (ii) payment of the outstanding principal amount
of, premium or penalty, if any, and interest on any Indebtedness that is
secured by a Lien on the stock or assets in question and that prior to the
Lien securing the AXELs on such stock or assets and is required to be
repaid under the terms thereof as a result of such Asset Sale.
"Net Income" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of Preferred Stock dividends, excluding, however, (i)
any gain (but not loss), together with any related provision for taxes on
such gain (but not loss) realized in connection with (a) any Asset Sale
(including, without limitation, dispositions pursuant to sale and
leaseback transactions) or (b) the disposition of any securities by such
Person or any of its Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Restricted Subsidiaries and (ii)
any extraordinary or nonrecurring gain (but not loss) together with any
related provision for taxes on such extraordinary or nonrecurring gain
(but not loss).
"Net Insurance/Condemnation Proceeds" means any Cash payments or
proceeds received by Company or any of its Subsidiaries (i) under any
business interruption or casualty insurance policy in respect of a covered
loss thereunder or (ii) as a result of the taking of any assets of Company
or any of its Subsidiaries by any Person pursuant to the power of eminent
domain, condemnation or otherwise, or pursuant to a sale of any such
assets to a purchaser with such power under threat of such a taking, in
each case net of (x) any actual and reasonable documented costs incurred
by Company or any of its Subsidiaries in connection with the adjustment or
settlement of any claims of Company or such Subsidiary in respect thereof
and (y) any amounts required to be applied to the repayment of any
Indebtedness secured by a Lien which is prior to any Liens of the Lenders
on the asset or assets that are subject to the taking, condemnation or
casualty but excluding, however, in each case any payments or proceeds
relating to assets having a value of $500,000 or less in any single
transaction or related series of transactions.
"Newco" has the meaning assigned to that term in the introduction to
this Agreement.
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"Newco Common Stock" means the shares of common stock of Newco par
value $0.10 per share to be converted into shares of Company Common Stock
upon consummation of the Merger.
"Non-Consenting Lender" has the meaning assigned to that term in
subsection 2.10.
"Non-Recourse Debt" means Indebtedness of any Unrestricted
Subsidiary (i) as to which neither Company nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness),
(b) is directly or indirectly liable (as a guarantor or otherwise), or (c)
constitutes the lender; and (ii) no default with respect to which
(including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of
Company or any of its Restricted Subsidiaries to declare a default on such
other Indebtedness of Company or any of its Restricted Subsidiaries or
cause the payment thereof to be accelerated or payable prior to its stated
maturity; and (iii) as to which the lenders, have been notified in writing
that they will not have any recourse to the stock or assets of Company or
any of its Restricted Subsidiaries.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit I annexed hereto delivered by Company to Administrative Agent
pursuant to subsection 2.1B with respect to a proposed borrowing.
"Notice of Conversion/Continuation" means a notice substantially in
the form of Exhibit II annexed hereto delivered by Company to
Administrative Agent pursuant to subsection 2.2D with respect to a
proposed conversion or continuation of the applicable basis for
determining the interest rate with respect to the AXELs specified therein.
"Obligations" means all obligations of every nature of each Loan
Party from time to time owed to Agents, Lenders or their respective
Affiliates or any of them under the AXEL Loan Documents, whether for
principal, interest, fees, expenses, indemnification or otherwise.
"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the
board (if an officer) or its president or one of its vice presidents and
by its chief financial officer or its treasurer; provided that every
Officers' Certificate with respect to the compliance with a condition
precedent to the making of any AXELs hereunder shall include (i) a
statement that the officer or officers making or giving such Officers'
Certificate have read such condition and any definitions or other
provisions contained in this Agreement relating thereto, (ii) a statement
that, in the opinion of the signers, they
AXEL CREDIT AGREEMENT EXECUTION
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have made or have caused to be made such examination or investigation as
is necessary to enable them to express an informed opinion as to whether
or not such condition has been complied with, and (iii) a statement as to
whether, in the opinion of the signers, such condition has been complied
with.
"Old Management Shares" means shares of Company Common Stock held by
Management Investors prior to the consummation of the Merger.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Pension Plan" means any Employee Benefit Plan, other than a Multi-
employer Plan, which is subject to Section 412 of the Internal Revenue
Code or Section 302 of ERISA.
"Permitted Encumbrances" means the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n)
of the Internal Revenue Code or by ERISA, any such Lien relating to or
imposed in connection with any Environmental Claim, and any such Lien
expressly prohibited by any applicable terms of any of the Collateral
Documents):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by
subsection 5.3;
(ii) statutory Liens of landlords, statutory Liens of banks
and rights of set-off, statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens
imposed by law, in each case incurred in the ordinary course of
business (a) for amounts not yet overdue or (b) for amounts that are
overdue and that (in the case of any such amounts overdue for a
period in excess of 15 days) are being contested in good faith by
appropriate proceedings, so long as (1) such reserves or other
appropriate provisions, if any, as shall be required by GAAP shall
have been made for any such contested amounts, and (2) in the case
of a Lien with respect to any portion of the Collateral, such
contest proceedings conclusively operate to stay the sale of any
portion of the Collateral on account of such Lien;
(iii) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money), so
long as no foreclosure, sale or similar proceedings have been
commenced with respect to any portion of the Collateral on account
thereof;
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(iv) any attachment or judgment Lien not constituting an Event
of Default under subsection 7.6;
(v) leases or subleases granted to third parties in accordance
with any applicable terms of the Collateral Documents and not
interfering in any material respect with the ordinary conduct of the
business of Company or any of its Subsidiaries or resulting in a
material diminution in the value of any Collateral as security for
the Obligations;
(vi) easements, rights-of-way, covenants, conditions,
restrictions, encroachments, and other defects or irregularities in
title, in each case which do not and will not interfere in any
material respect with the ordinary conduct of the business of
Company or any of its Subsidiaries or result in a material
diminution in the value of any Collateral as security for the
Obligations;
(vii) any (a) interest or title of a lessor or sublessor under
any lease permitted hereunder, (b) restriction or encumbrance that
the interest or title of such lessor or sublessor may be subject to,
or (c) subordination of the interest of the lessee or sublessee
under such lease to any restriction or encumbrance referred to in
the preceding clause (b), so long as the holder of such restriction
or encumbrance agrees to recognize the rights of such lessee or
sublessee under such lease;
(viii) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement;
(ix) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods;
(x) any zoning or similar law or right reserved to or vested
in any governmental office or agency to control or regulate the use
of any real property;
(xi) Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating,
reciprocal easement or similar agreements entered into in the
ordinary course of business of Company and its Subsidiaries; and
(xii) licenses of patents, trademarks and other intellectual
property rights granted by Company or any of its Subsidiaries in the
ordinary course of business and not interfering in any material
respect with the ordinary conduct of the business of Company or such
Subsidiary.
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"Permitted Holders" means Goldman, Sachs & Co.. and any of its
Affiliates.
"Permitted Investments" means (i) any Investment in Company or in a
Restricted Subsidiary of Company (including the acquisition of any Equity
Interest in a Restricted Subsidiary); (ii) any investment in cash and Cash
Equivalents; (iii) any Investment by the Company or any Restricted
Subsidiary of Company in a Person, if as a result of such Investment (a)
such Person becomes a Restricted Subsidiary of Company or (b) such Person,
in one transaction or a series of related transactions, is merged,
consolidated or amalgamated with or into, or transfer or conveys
substantially all of its assets to, or is liquidated into, Company or a
Restricted Subsidiary of Company; (iv) any Investment made as a result of
the receipt of consideration not constituting cash or Cash Equivalents
from an Asset Sale; (v) any Investment existing on the date of the
Indenture; (vi) any Investment by Restricted Subsidiaries in other
Restricted Subsidiaries and Investments by Subsidiaries that are not
Restricted Subsidiaries in other Subsidiaries that are not Restricted
Subsidiaries; (vii) advances to employees not in excess of $2,500,000
outstanding at any one time; (viii) any Investment acquired by Company or
any of its Restricted Subsidiaries (a) in exchange for any other
Investment or accounts receivable held by Company or any such Restricted
Subsidiary in connection with or as a result of a bankruptcy, workout,
reorganization or recapitalization of the issuer of such other Investment
or accounts receivable or (b) as a result of a foreclosure by Company or
any of its Restricted Subsidiaries with respect to any secured Investment
or other transfer of title with respect to any secured Investment in
default; (ix) Hedging Obligations; (x) loans and advances to officers,
directors and employees for business-related travel expenses, moving
expenses and other similar expenses, in each case incurred in the ordinary
course of business; (xi) Investments the payment for which consists
exclusively of Equity Interests (exclusive of Disqualified Stock) of
Company; and (xii) additional Investments having an aggregate fair market
value, taken together with all other Investments made pursuant to this
clause (xii) that are at that time outstanding, not to exceed $15,000,000
plus 5% of the increase in Total Asset since the Closing Date at the time
of such Investment (with the fair market value of each Investment being
measured at the time made and without giving effect to subsequent changes
in value).
"Permitted Refinancing Indebtedness" means any Indebtedness of
Company or any of its Restricted Subsidiaries issued in exchange for, or
the net proceeds of which are used to extend, refinance, renew, replace,
defease or refund other Indebtedness of Company or any of its Restricted
Subsidiaries in whole or in part; provided that: (i) the principal amount
(or accreted value, if applicable) of such Permitted Refinancing
Indebtedness does not exceed the principal amount (or accreted value, if
applicable) of the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of reasonable expenses
incurred in connection therewith); (ii) such Permitted Refinancing
Indebtedness has a final maturity date on or later than the final maturity
date of, and has a Weighted
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Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; (iii) if the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is subordinated in
right of payment to the Obligations, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date
of the AXELs, and is subordinated in right of payment to the AXELs, on
terms at least as favorable to the Lenders as those contained in the
documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; and (iv) such Indebtedness is
incurred either by Company or by the Restricted Subsidiary who is the
obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures,
associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and
governments (whether federal, state or local, domestic or foreign, and
including political subdivisions thereof) and agencies or other
administrative or regulatory bodies thereof.
"Pledged Collateral" means, collectively, the "Pledged Collateral"
as defined in the Company Pledge Agreement and the Subsidiary Pledge
Agreements.
"Potential Event of Default" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"Preferred Stock" means any Equity Interest with preferential right
of payment of dividends or upon liquidation, dissolution, or winding up.
"Prime Rate" means the rate that Fleet announces from time to time
as its prime lending rate, as in effect from time to time. The Prime Rate
is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. Fleet or any other Lender may make
commercial loans or other loans at rates of interest at, above or below
the Prime Rate.
"Pro Rata Share" means with respect to all payments, computations
and other matters relating to the AXEL Commitment or the AXEL of any
Lender, the percentage obtained by dividing (x) the AXEL Exposure of that
Lender by (y) the aggregate AXEL Exposure of all Lenders.
"Qualified Public Offering" means any sale of capital stock of
Company to the public pursuant to an offering registered under the
Securities Act of 1933 pursuant to which Company receives cash proceeds
(net of all fees and expenses (including underwriting discounts and legal,
investment banking and accounting and
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other professional fees) and disbursements actually incurred in connection
therewith) in an amount not less than $50,000,000.
"Real Property Asset" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"Recapitalization Agreement" means that certain Agreement and Plan
of Merger between Company and Newco dated as of August 10, 1997, in the
form delivered to Arranger, Administrative Agent and Lenders prior to
their execution of this Agreement and as such agreement may be amended
from time to time thereafter.
"Recapitalization Consideration" means payments required under
Article II of the Recapitalization Agreement.
"Recapitalization Documents" means the Recapitalization Agreement
and all other instruments or documents relating to the Recapitalization
Agreement.
"Recapitalization Financing Requirements" means the aggregate of all
amounts necessary (i) to pay the Recapitalization Consideration, (ii) to
refinance all Indebtedness outstanding under the Existing Credit
Agreements, and (iii) to pay Transaction Costs.
"Recorded Leasehold Interest" means a Leasehold Property with
respect to which a Record Document (as hereinafter defined) has been
recorded in all places necessary or desirable, in Collateral Agent's
reasonable judgment, to give constructive notice of such Leasehold
Property to third-party purchasers and encumbrancers of the affected real
property. For purposes of this definition, the term "Record Document"
means, with respect to any Leasehold Property, (a) the lease evidencing
such Leasehold Property or a memorandum thereof, executed and acknowledged
by the owner of the affected real property, as lessor, or (b) if such
Leasehold Property was acquired or subleased from the holder of a Recorded
Leasehold Interest, the applicable assignment or sublease document,
executed and acknowledged by such holder, in each case in form sufficient
to give such constructive notice upon recordation and otherwise in form
reasonably satisfactory to Administrative Agent.
"Refunding Capital Stock" has the meaning assigned to that term in
subsection 6.3A.
"Register" has the meaning assigned to that term in subsection 2.1D.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
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"Related Fund" means, with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial
loans and is managed by the same investment advisor as such Lender or by
any Affiliate of such investment advisor.
"Related Agreements" means, collectively, the Certificate of Merger,
the Stockholders Agreement, the Voting Agreement, the Employment
Agreements, the Tax Indemnification Agreement, the Recapitalization
Agreement and the Senior Subordinated Note Indenture.
"Related Parties" means any Person controlled by the Permitted
Holders, including any partnership of which any of the Permitted Holders
or their Affiliates is a general partner.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or
outdoor environment (including the abandonment or disposal of any barrels,
containers or other closed receptacles containing any Hazardous
Materials), including the movement of any Hazardous Materials through the
air, soil, surface water or groundwater.
"Requirement of Law" means, with respect to any Person, (i) the
certificate or articles of incorporation, by-laws and other organizational
or governing documents of such Person, (ii) any law, treaty, rule,
regulation or determination of an arbitrator, court or other governmental
authority binding on such Person or any of its property, or (iii) any
franchise, license, lease, permit, certificate, authorization,
qualification, easement, right of way, or right of approval binding on
such Person or any of its property.
"Required Prepayment Date" has the meaning assigned to that term in
subsection 2.4.
"Requisite Lenders" means Lenders having or holding more than 50% of
the sum of the aggregate AXEL Exposure of all Lenders.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Payments" has the meaning assigned to that team in
subsection 6.3.
"Restricted Subsidiary" of a Person means any Subsidiary of a Person
that is not (i) an Unrestricted Subsidiary or (ii) a direct or indirect
Subsidiary of an Unrestricted Subsidiary; provided, however, that upon the
occurrence of any
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Unrestricted Subsidiary ceasing to be an Unrestricted Subsidiary, such
Subsidiary shall be included in the definition of Restricted Subsidiary.
"Retired Capital Stock" has the meaning assigned to that term in
subsection 6.3A.
"Revolving Credit Agreement" means the Revolving Credit Agreement
dated as of December 19, 1997 among Company, the financial institutions
from time to time parties thereto, GSCP, as arranger and syndication
agent, and Revolving Credit Facility Agent as such Revolving Credit
Agreement may be amended, supplemented, refinanced, renewed, extended or
otherwise modified from time to time.
"Revolving Credit Facility Agent" has the meaning assigned to that
term in the introduction to this Agreement.
"Revolving Credit Lender" means a lender under the Revolving Credit
Agreement holding an outstanding Revolving Loan or having a Revolving Loan
Commitment (as defined in the Revolving Credit Agreement), and "Revolving
Lenders" means any such lenders or lenders under the Revolving Credit
Agreement, collectively.
"Revolving Loans" means the loans made by a Revolving Credit Lender
to Company pursuant to the Revolving Credit Agreement.
"Revolving Loan Documents" means the Revolving Credit Agreement, the
Revolving Loan Notes, the Subsidiary Guaranty, the Collateral Documents
and the Intercreditor Agreement.
"Secured Parties" has the meaning assigned to that term in the
introduction to this Agreement.
"Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds,
debentures, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim certificates
for the purchase or acquisition of, or any right to subscribe to, purchase
or acquire, any of the foregoing; provided that "Securities" shall not
include any earnout agreement or obligation or any employee bonus or other
incentive compensation plan or agreement.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
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"Senior Subordinated Note Indenture" means the indenture pursuant to
which the Senior Subordinated Notes are issued, as such indenture may be
amended from time to time.
"Senior Subordinated Guarantees" means the Guarantees by the
guarantors of the Obligations under the Senior Subordinated Notes
Indenture and the Senior Subordinated Notes;
"Senior Subordinated Notes" means the $110,000,000 in aggregate
principal amount of 9.875% Senior Subordinated Notes due 2007 of Company
issued pursuant to the Senior Subordinated Note Indenture.
"Solvent" means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the property of
such Person is (y) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (z) not less than the amount
that will be required to pay the probable liabilities on such Person's
then existing debts as they become absolute and matured considering all
financing alternatives and potential asset sales reasonably available to
such Person; (ii) such Person's capital is not unreasonably small in
relation to its business or any contemplated or undertaken transaction;
and (iii) such Person does not intend to incur, or believe (nor should it
reasonably believe) that it will incur, debts beyond its ability to pay
such debts as they become due; and (B) such Person is "solvent" within the
meaning given that term and similar terms under applicable laws relating
to fraudulent transfers and conveyances. For purposes of this definition,
the amount of any contingent liability at any time shall be computed as
the amount that, in light of all of the facts and circumstances existing
at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Stated Maturity" means, with respect to any installment of interest
or principal on, or any other payments with respect to, any series of
Indebtedness, the date on which such payment of interest or principal or
other payment (including any sinking fund payment) was scheduled or
required to be paid, but shall not include any acceleration of such
payment or any contingent obligations to repay, redeem or repurchase any
such interest or principal prior to the date originally scheduled for the
payment thereof.
"Stockholders Agreement" means the Stockholders Agreement dated as
of December 19, 1997 by and among Company, GSII, the Estate of John A.
Svenningsen and certain other individuals and as such agreement may be
amended from time to time thereafter.
"Subordinated Indebtedness" means any Indebtedness of the Company or
any of its Restricted Subsidiaries which is expressly by its terms
subordinated in right of payment to the Obligations.
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"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total
voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly
or indirectly, by such Person or one or more of the other Subsidiaries of
that Person (or a combination thereof) and (ii) any partnership (a) the
sole general partner or the managing general partner of which is such
Person or a Subsidiary of such Person or (b) the only general partners of
which are such Person or one or more Subsidiaries of such Person (or any
combination thereof).
"Subsidiary Guarantor" means any Subsidiary of Company that executes
and delivers a counterpart of the Subsidiary Guaranty on the Closing Date
or from time to time thereafter pursuant to subsection 5.8.
"Subsidiary Guaranty" means the Subsidiary Guaranty executed and
delivered by existing Domestic Subsidiaries of Company on the Closing Date
and to be executed and delivered by additional Domestic Subsidiaries of
Company from time to time thereafter in accordance with subsection 5.8,
substantially in the form of Exhibit XII annexed hereto, as such
Subsidiary Guaranty may hereafter be amended, supplemented or otherwise
modified from time to time.
"Subsidiary Pledge Agreement" means each Subsidiary Pledge Agreement
executed and delivered by an existing Subsidiary Guarantor on the Closing
Date or executed and delivered by any additional Subsidiary Guarantor from
time to time thereafter in accordance with subsection 5.8, in each case
substantially in the form of Exhibit XIII annexed hereto, as such
Subsidiary Pledge Agreement may be amended, supplemented or otherwise
modified from time to time, and "Subsidiary Pledge Agreements" means all
such Subsidiary Pledge Agreements, collectively.
"Subsidiary Security Agreement" means each Subsidiary Security
Agreement executed and delivered by an existing Subsidiary Guarantor on
the Closing Date or executed and delivered by any additional Subsidiary
Guarantor from time to time thereafter in accordance with subsection 5.8,
in each case substantially in the form of Exhibit XIV annexed hereto, as
such Subsidiary Security Agreement may be amended, supplemented or
otherwise modified from time to time, and "Subsidiary Security Agreements"
means all such Subsidiary Security Agreements, collectively.
"Supplemental Collateral Agent" has the meaning assigned to that
term in subsection 8.1B.
"Syndication Agent" has the meaning assigned to that term in the
introduction to this Agreement.
AXEL CREDIT AGREEMENT EXECUTION
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"Tax" or "Taxes" means any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied,
collected, withheld or assessed; provided that "Tax on the overall net
income" of a Person shall be construed as a reference to a tax imposed by
the jurisdiction in which that Person is organized or in which that
Person's principal office (and/or, in the case of a Lender, its lending
office) is located or in which that Person (and/or, in the case of a
Lender, its lending office) is deemed to be doing business on all or part
of the net income, profits or gains (whether worldwide, or only insofar as
such income, profits or gains are considered to arise in or to relate to a
particular jurisdiction, or otherwise) of that Person (and/or, in the case
of a Lender, its lending office).
"Tax Indemnification Agreement" means the Tax Indemnification
Agreement dated as of August 10, 1997 by and between Company, Christine
Svenningsen and the Estate of John A. Svenningsen and as such agreement
may be amended from time to time thereafter.
"Terminated Lender" has the meaning assigned to that term in
subsection 2.10.
"Title Company" means, collectively one or more title insurance
companies that are members of ALTA and are reasonably satisfactory to
Arranger and Administrative Agent.
"Total Assets" means, with respect to any Person, the total
consolidated assets of such Person and its Restricted Subsidiaries, as
shown on the most recent balance sheet of such Person.
"Transaction Costs" means the fees, costs and expenses payable by
Company in connection with the transactions contemplated by the Loan
Documents and the Related Agreements.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"Unrestricted Subsidiary" means any Subsidiary (other than the
Subsidiary Guarantors or any successor to any of them) that is designated
by the Board of Directors as an Unrestricted Subsidiary pursuant to a
Board Resolution, but only to the extent that such Subsidiary: (a) has no
Indebtedness other than Non-Recourse Debt; (b) is not party to any
agreement, contract, arrangement or understanding with Company or any
Restricted Subsidiary of Company unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to Company or
such Restricted Subsidiary than those that might be obtained at the time
from Persons who are not Affiliates of Company; (c) is a Person with
respect to which
AXEL CREDIT AGREEMENT EXECUTION
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neither Company nor any of its Restricted Subsidiaries has any direct or
indirect obligation (x) to subscribe for additional Equity Interests or
(y) to maintain or preserve such Person's financial condition or to cause
such Person to achieve any specified levels of operating results; (d) has
not guaranteed and does not otherwise directly or indirectly provide
credit support for any Indebtedness of Company or any of its Restricted
Subsidiaries; and (e) has at least one director on its board of directors
that is not a director or executive officer of Company or any of its
Restricted Subsidiaries and has at least one executive officer that is not
a director or executive officer of Company or any of its Restricted
Subsidiaries. If, at any time, any Unrestricted Subsidiary would fail to
meet the foregoing requirements as an Unrestricted Subsidiary, it shall
thereafter cease to be an Unrestricted Subsidiary for purposes hereof and,
so long as such Unrestricted Subsidiary remains a Subsidiary, any
Indebtedness of such Subsidiary shall be deemed to be incurred by a
Restricted Subsidiary of Company as of such date (and, if such
Indebtedness is not permitted to be incurred as of such date under the
covenant described under subsection 6.1, Company shall be in default of
such covenant). The Board of Directors of Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided that such designation shall be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall
only be permitted if (i) such Indebtedness is permitted under the covenant
described under subsection 6.1, and (ii) no Potential Event of Default or
Event of Default would be in existence following such designation.
"Unreinvested Asset Sale Proceeds" means that portion, if any, of
any Net Asset Sale Proceeds that shall not have been reinvested by Company
and its Subsidiaries in the business of Company and its Subsidiaries
within six months after the date of receipt by Company or any of its
Subsidiaries of such Net Asset Sale Proceeds or in the case of Net Asset
Sale Proceeds from the sale of the Chester, New York, Montreal, Quebec or
Melbourne, Australia properties, (i) that portion of Net Asset Sale
Proceeds that is not subject to a binding agreement with a third party to
reinvest such net Asset Sale Proceeds entered into within six months after
the date of receipt of such Net Asset Sale Proceeds or (ii) if subject to
such a binding agreement, that portion of such Net Asset Sale Proceeds
that shall not have been reinvested within nine months of such binding
agreement, such reinvestment to be evidenced by an Officers' Certificate,
satisfactory in form and substance to Administrative Agent, delivered by
Company to Administrative Agent prior to the expiration of such six-month
period and demonstrating in reasonable detail the reinvestment of such Net
Asset Sale Proceeds as aforesaid.
"Voting Agreement" means the Voting Agreement dated as of August 10,
1997 by and between Newco and the Estate of John A. Svenningsen and
Christine Svenningsen and as such agreement may be amended from time to
time thereafter.
AXEL CREDIT AGREEMENT EXECUTION
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"Voting Stock" means, with respect to any Person, any class or
series of capital stock of such Person that is ordinarily entitled to vote
in the election of directors thereof at a meeting of stockholders called
for such purpose, without the occurrence of any additional event or
contingency.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the
sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity, in respect
thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such
payment, by (ii) the then outstanding principal amount of such
Indebtedness.
"Wholly Owned Restricted Subsidiary" is any Wholly Owned Subsidiary
that is a Restricted Subsidiary.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests
of which (other than directors' qualifying shares) shall at the time be
owned by such person or by one or more Wholly Owned Subsidiaries of such
Person or by such Person and one or more Wholly Owned Subsidiaries of such
Person.
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement.
Except as otherwise expressly provided in this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to them in
conformity with GAAP. Financial statements and other information required to be
delivered by Company to Lenders pursuant to clauses (i), (ii), (iii) and (xiii)
of subsection 5.1 shall be prepared in accordance with GAAP as in effect at the
time of such preparation (and delivered together with the reconciliation
statements provided for in subsection 5.1(v)). Calculations in connection with
the definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare the
financial statements referred to in subsection 4.3.
1.3 Other Definitional Provisions and Rules of Construction.
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
AXEL CREDIT AGREEMENT EXECUTION
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C. The use herein of the word "include" or "including", when following any
general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not nonlimiting
language (such as "without limitation" or "but not limited to" or words of
similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that fall within the broadest possible scope
of such general statement, term or matter.
D. Any term incorporated herein from the Revolving Credit Agreement (as
amended, supplemented or otherwise modified from time to time) shall continue to
have the meaning assigned thereto whether or not the Revolving Agreement is
still in effect.
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Making of Loans; the Register; Notes.
A. Commitments. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of Company herein set forth,
each Lender hereby severally agrees to lend to Company on the Closing Date an
amount not exceeding its Pro Rata Share of the aggregate amount of the AXEL
Commitments to be used for the purposes identified in subsection 2.5A. The
amount of each Lender's AXEL Commitment is set forth opposite its name on
Schedule 2.1 annexed hereto and the aggregate amount of the AXEL Commitments is
$117,000,000; provided that the AXEL Commitments of Lenders shall be adjusted to
give effect to any assignments of the AXEL Commitments pursuant to subsection
9.1B. Each Lender's AXEL Commitment shall expire immediately and without further
action on January 31, 1998 if the AXELs are not funded on or before that date.
Company may make only one borrowing under the AXEL Commitments. Amounts borrowed
under this section 2.1A and subsequently repaid or prepaid may not be
reborrowed.
B. Borrowing Mechanics. AXELs or Eurodollar Rate AXELs with a particular
Interest Period shall be in an aggregate minimum amount of (x) $1,000,000 and
integral multiples of $100,000 in excess of that amount in the case of
Eurodollar Rate AXELs and (y) $100,000 and integral multiples of $100,000 in
excess of that amount in the case of Base Rate AXELs. Whenever Company desires
that Lenders make AXELs it shall deliver to Administrative Agent a Notice of
Borrowing no later than 10:00 A.M. (New York City time) at least three Business
Days in advance of the proposed Closing Date (in the case of a Eurodollar Rate
AXEL) or at least one Business Day in advance of the proposed Closing Date (in
the case of a Base Rate AXEL). The Notice of Borrowing shall specify (i) the
proposed Closing Date (which shall be a Business Day), (ii) the amount
requested, (iii) whether such AXELS shall be Base Rate AXELs or Eurodollar Rate
AXELs and (iv) in the case of any AXELS requested to be made as Eurodollar Rate
AXELs, the initial Interest Period requested therefor. AXELs may be continued as
or converted into Base
AXEL CREDIT AGREEMENT EXECUTION
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Rate AXELs and Eurodollar Rate AXELs in the manner provided in subsection 2.2D.
In lieu of delivering the above-described Notice of Borrowing, Company may give
Administrative Agent telephonic notice by the required time of any proposed
borrowing under this subsection 2.1B; provided that such notice shall be
promptly confirmed in writing by delivery of a Notice of Borrowing to
Administrative Agent on or before the Closing Date.
Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of AXELs by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected AXELs hereunder.
Company shall notify Administrative Agent prior to the Closing Date in the
event that any of the matters to which Company is required to certify in the
Notice of Borrowing is no longer true and correct as of the Closing Date, and
the acceptance by Company of the proceeds of any AXELs shall constitute a
re-certification by Company, as of the Closing Date, as to the matters to which
Company is required to certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Borrowing for a Eurodollar Rate AXEL (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and Company shall be bound to make a borrowing in accordance therewith.
C. Disbursement of Funds. All AXELs under this Agreement shall be made by
Lenders simultaneously and proportionately to their respective Pro Rata Shares,
it being understood that no Lender shall be responsible for any default by any
other Lender in that other Lender's obligation to make an AXEL requested
hereunder nor shall the AXEL Commitment of any Lender to make the AXEL requested
be increased or decreased as a result of a default by any other Lender in that
other Lender's obligation to make an AXEL requested hereunder. Promptly after
receipt by Administrative Agent of a Notice of Borrowing pursuant to subsection
2.1B (or telephonic notice in lieu thereof), Administrative Agent shall notify
each Lender of the proposed borrowing. Each Lender shall make the amount of its
AXEL available to Administrative Agent not later than 12:00 Noon (New York City
time) on the Closing Date, in same day funds in Dollars, at the Funding and
Payment Office. Upon satisfaction or waiver of the conditions precedent
specified in subsections 3.1 and 3.2, Administrative Agent shall make the
proceeds of such AXELs available to Company on the Closing Date by causing an
amount of same day funds in Dollars equal to the proceeds of all such AXELs
received by Administrative Agent from Lenders to be credited to the account of
Company at the Funding and Payment Office.
Unless Administrative Agent shall have been notified by any Lender prior
to the Closing Date for any AXELs that such Lender does not intend to make
available to
AXEL CREDIT AGREEMENT EXECUTION
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Administrative Agent the amount of such Lender's AXEL requested on such Closing
Date, Administrative Agent may assume that such Lender has made such amount
available to Administrative Agent on the Closing Date and Administrative Agent
may, in its sole discretion, but shall not be obligated to, make available to
Company a corresponding amount on the Closing Date. If such corresponding amount
is not in fact made available to Administrative Agent by such Lender,
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest thereon, for each day from the
Closing Date until the date such amount is paid to Administrative Agent, at the
customary rate set by Administrative Agent for the correction of errors among
banks for three Business Days and thereafter at the Base Rate. If such Lender
does not pay such corresponding amount forthwith upon Administrative Agent's
demand therefor, Administrative Agent shall promptly notify Company and Company
shall immediately pay such corresponding amount to Administrative Agent together
with interest thereon, for each day from the Closing Date until the date such
amount is paid to Administrative Agent, at the rate payable under this Agreement
for Base Rate AXELs. Nothing in this subsection 2.1C shall be deemed to relieve
any Lender from its obligation to fulfill its AXEL Commitments hereunder or to
prejudice any rights that Company may have against any Lender as a result of any
default by such Lender hereunder.
D. The Register.
(i) Administrative Agent shall maintain, at its address referred to
in subsection 9.8, a register for the recordation of the names and
addresses of Lenders and the AXEL Commitments and AXELs of each Lender
from time to time (the "Register"). The Register shall be available for
inspection by Company or any Lender at any reasonable time and from time
to time upon reasonable prior notice.
(ii) Administrative Agent shall record in the Register the AXEL
Commitment and the AXELs from time to time of each Lender and each
repayment or prepayment in respect of the principal amount of the AXEL of
each Lender. Any such recordation shall be conclusive and binding on
Company and each Lender, absent manifest error; provided that failure to
make any such recordation, or any error in such recordation, shall not
affect any Lender's Commitments or Company's Obligations in respect of any
AXELs.
(iii) Each Lender shall record on its internal records (including
the AXEL Notes held by such Lender) the amount of the AXEL made by it and
each payment in respect thereof. Any such recordation shall be conclusive
and binding on Company, absent manifest error; provided that failure to
make any such recordation, or any error in such recordation, shall not
affect any Lender's AXEL Commitments or Company's Obligations in respect
of any AXELs and provided, further that in the event of any inconsistency
between the Register and any Lender's records, the recordations in the
Register shall govern.
AXEL CREDIT AGREEMENT EXECUTION
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(iv) Company, Administrative Agent and Lenders shall deem and treat
the Persons listed as Lenders in the Register as the holders and owners of
the corresponding AXEL Commitments and AXELs listed therein for all
purposes hereof, and no assignment or transfer of any such AXEL Commitment
or AXEL shall be effective, in each case unless and until an Assignment
Agreement effecting the assignment or transfer thereof shall have been
accepted by Administrative Agent and recorded in the Register as provided
in subsection 9.1B(ii). Prior to such recordation, all amounts owed with
respect to the applicable AXEL Commitment or AXEL shall be owed to the
Lender listed in the Register as the owner thereof, and any request,
authority or consent of any Person who, at the time of making such request
or giving such authority or consent, is listed in the Register as a Lender
shall be conclusive and binding on any subsequent holder, assignee or
transferee of the corresponding AXEL Commitments or AXELs.
(v) Company hereby designates Fleet to serve as Company's agent
solely for purposes of maintaining the Register as provided in this
subsection 2.1D, and Company hereby agrees that, to the extent Fleet
serves in such capacity, Fleet and its officers, directors, employees,
agents and affiliates shall constitute Indemnitees for all purposes under
subsection 9.3.
E. AXEL Notes. Company shall execute and deliver on the Closing Date to
each Lender (or to Administrative Agent for that Lender) an AXEL Note
substantially in the form of Exhibit III annexed hereto to evidence that
Lender's AXEL, in the principal amount of that Lender's AXEL and with other
appropriate insertions.
2.2 Interest on the Loans.
A. Rate of Interest. Subject to the provisions of subsections 2.6 and 2.7,
each AXEL shall bear interest on the unpaid principal amount thereof from the
date made through maturity (whether by acceleration or otherwise) at a rate
determined by reference to the Base Rate or the Adjusted Eurodollar Rate. The
applicable basis for determining the rate of interest with respect to any AXEL
shall be selected by Company initially at the time a Notice of Borrowing is
given with respect to such AXEL pursuant to subsection 2.1B. The basis for
determining the interest rate with respect to any AXEL may be changed from time
to time pursuant to subsection 2.2D. If on any day an AXEL is outstanding with
respect to which notice has not been delivered to Administrative Agent in
accordance with the terms of this Agreement specifying the applicable basis for
determining the rate of interest, then for that day that AXEL shall bear
interest determined by reference to the Base Rate.
Subject to the provisions of subsections 2.2E and 2.7, the AXELs shall
bear interest through maturity as follows:
AXEL CREDIT AGREEMENT EXECUTION
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(i) if a Base Rate AXEL, then at the sum of the Base Rate plus
1-3/8% per annum; or
(ii) if a Eurodollar Rate AXEL, then at the sum of the Adjusted
Eurodollar Rate plus 2-3/8% per annum.
B. Interest Periods. In connection with each Eurodollar Rate AXEL, Company
may, pursuant to the applicable Notice of Borrowing or Notice of Conversion/
Continuation, as the case may be, select an interest period (each an "Interest
Period") to be applicable to such Eurodollar Rate AXEL, which Interest Period
shall be, at Company's option, either a one-, two-, three- or six-month period;
provided that:
(i) the initial Interest Period for any Eurodollar Rate AXEL shall
commence on the Closing Date in respect of such Eurodollar Rate AXEL, in
the case of an AXEL initially made as a Eurodollar Rate AXEL, or on the
date specified in the applicable Notice of Conversion/Continuation, in the
case of an AXEL converted to a Eurodollar Rate AXEL;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate AXEL continued as such pursuant to a
Notice of Conversion/Continuation, each successive Interest Period shall
commence on the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would
otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on the
last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the AXELs
shall extend beyond December 31, 2004;
(vi) no Interest Period with respect to any portion of the AXELs
shall extend beyond a date on which Company is required to make a
scheduled payment of principal of the AXELs unless the sum of (a) the
aggregate principal amount of AXELs that are Base Rate AXELs plus (b) the
aggregate principal amount of AXELs that are Eurodollar Rate AXELs with
Interest Periods expiring on or before such date equals or exceeds the
principal amount required to be paid on the AXELs on such date;
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(vii) there shall be no more than seven (7) Interest Periods
outstanding at any time under this Agreement and the Revolving Credit
Agreement; and
(viii) in the event Company fails to specify an Interest Period for
any Eurodollar Rate AXEL in the applicable Notice of Borrowing or Notice
of Conversion/Continuation, Company shall be deemed to have selected an
Interest Period of one month.
C. Interest Payments. Subject to the provisions of subsection 2.2E,
interest on each AXEL shall be payable in arrears on and to each Interest
Payment Date applicable to that AXEL, upon any prepayment of that AXEL (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity).
D. Conversion or Continuation. Subject to the provisions of subsection
2.6, Company shall have the option (i) to convert at any time all or any part of
its outstanding AXELs equal to $1,000,000 and integral multiples of $100,000 in
excess of that amount from Base Rate AXELs to Eurodollar Rate AXELs or (ii) to
convert at any time all or any part of its outstanding AXELs equal to $100,000
and integral multiples of $100,000 in excess of that amount from Eurodollar Rate
AXELs to Base Rate AXELs upon the expiration of any Interest Period applicable
to a Eurodollar Rate AXEL, to continue all or any portion of such Eurodollar
Rate AXEL equal to $1,000,000 and integral multiples of $100,000 in excess of
that amount as a Eurodollar Rate AXEL; provided, however, that a Eurodollar Rate
AXEL may only be converted into a Base Rate AXEL on the expiration date of an
Interest Period applicable thereto.
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 10:00 A.M. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate AXEL) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate AXEL). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount to be converted/continued, (iii) the nature of
the proposed conversion/continuation, (iv) in the case of a conversion to, or a
continuation of, a Eurodollar Rate AXEL, the requested Interest Period, and (v)
in the case of a conversion to, or a continuation of, a Eurodollar Rate AXEL,
that no Potential Event of Default or Event of Default has occurred and is
continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/Continuation to Administrative
Agent on or before the proposed conversion/continuation date. Upon receipt of
written or telephonic notice of any proposed conversion/continuation under this
subsection 2.2D, Administrative Agent shall promptly transmit such notice by
telefacsimile or telephone to each Lender.
AXEL CREDIT AGREEMENT EXECUTION
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Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any AXELs in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Conversion/Continuation for conversion to, or continuation of, a Eurodollar
Rate AXEL (or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and Company shall be bound
to effect a conversion or continuation in accordance therewith.
E. Default Rate. Upon the occurrence and during the continuation of any
Event of Default, the outstanding principal amount of all AXELs and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable AXELs (or, in the
case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
AXELs); provided that, in the case of Eurodollar Rate AXELs, upon the expiration
of the Interest Period in effect at the time any such increase in interest rate
is effective such Eurodollar Rate AXELs shall thereupon become Base Rate AXELs
and shall thereafter bear interest payable upon demand at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate AXELs. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2E is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Administrative Agent or any Lender.
F. Computation of Interest. Interest on the AXELs shall be computed on the
basis of a 360-day year, in each case for the actual number of days elapsed in
the period during which it accrues. In computing interest on any AXEL, the date
of the making of such AXEL or the first day of an Interest Period applicable to
such AXEL or, with respect to a Base Rate AXEL being converted from a Eurodollar
Rate AXEL, the date of conversion of such Eurodollar Rate AXEL to such Base Rate
AXEL, as the case may be, shall be included, and the date of payment of such
AXEL or the expiration date of an Interest Period applicable to such AXEL or,
with respect to a Base Rate AXEL being converted to a Eurodollar Rate AXEL, the
date of conversion of such Base Rate AXEL to such Eurodollar Rate AXEL, as the
case may be, shall be excluded; provided that if a
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AXEL is repaid on the same day on which it is made, one day's interest shall be
paid on that AXEL.
2.3 Fees.
Company agrees to pay to Arranger and Administrative Agent such fees in
the amounts and at the times separately agreed upon between Company, Arranger
and Administrative Agent.
2.4 Repayments, Prepayments; General Provisions Regarding Payments;
Application of Proceeds of Collateral and Payments Under Subsidiary
Guaranty.
A. Scheduled Payments of AXELs. Company shall make principal payments on
the AXELs in installments on the dates and in the amounts set forth below:
=================================================
Scheduled
Payment Repayment
Date of AXELs
=================================================
March 31, 1998 $292,500
-------------------------------------------------
June 30, 1998 $292,500
-------------------------------------------------
September 30, 1998 $292,500
-------------------------------------------------
December 31, 1998 $292,500
-------------------------------------------------
March 31, 1999 $292,500
-------------------------------------------------
June 30, 1999 $292,500
-------------------------------------------------
September 30, 1999 $292,500
-------------------------------------------------
December 31, 1999 $292,500
-------------------------------------------------
March 31, 2000 $292,500
-------------------------------------------------
June 30, 2000 $292,500
-------------------------------------------------
September 30, 2000 $292,500
-------------------------------------------------
December 31, 2000 $292,500
-------------------------------------------------
March 31, 2001 $292,500
-------------------------------------------------
June 30, 2001 $292,500
-------------------------------------------------
September 30, 2001 $292,500
-------------------------------------------------
December 31, 2001 $292,500
-------------------------------------------------
AXEL CREDIT AGREEMENT EXECUTION
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=================================================
Scheduled
Payment Repayment
Date of AXELs
=================================================
March 31, 2002 $292,500
-------------------------------------------------
June 30, 2002 $292,500
-------------------------------------------------
September 30, 2002 $292,500
-------------------------------------------------
December 31, 2002 $292,500
-------------------------------------------------
March 31, 2003 $5,000,000
-------------------------------------------------
June 30, 2003 $5,000,000
-------------------------------------------------
September 30, 2003 $13,893,750
-------------------------------------------------
December 31, 2003 $13,893,750
-------------------------------------------------
March 31, 2004 $13,893,750
-------------------------------------------------
June 30, 2004 $13,893,750
-------------------------------------------------
September 30, 2004 $22,787,500
-------------------------------------------------
December 31, 2004 $22,787,500
-------------------------------------------------
TOTAL $117,000,000
=================================================
; provided that the scheduled installments of principal of the AXELs set
forth above shall be reduced in connection with any voluntary or mandatory
prepayments of the AXELs in accordance with subsection 2.4B(iii); and
provided, further that the AXELs and all other amounts owed hereunder with
respect to the AXELs shall be paid in full no later than December 31,
2004, and the final installment payable by Company in respect of the AXELs
on such date shall be in an amount, if such amount is different from that
specified above, sufficient to repay all amounts owing by Company under
this Agreement with respect to the AXELs.
B. Prepayments.
(i) Voluntary Prepayments.
(a) Notice of Prepayment. Company may, upon not less than one
Business Day's prior written or telephonic notice, in the case of
Base Rate AXELs, and three Business Days' prior written or
telephonic notice, in the case of Eurodollar Rate AXELs, in each
case given to Administrative Agent by 12:00 Noon (New York City
time) on the date required and, if given by telephone, promptly
confirmed in writing to Administrative Agent (which
AXEL CREDIT AGREEMENT EXECUTION
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original written or telephonic notice Administrative Agent will
promptly transmit by telefacsimile or telephone to each Lender), at
any time and from time to time prepay any AXELs on any Business Day
in whole or in part in an aggregate minimum amount of $1,000,000 and
integral multiples of $500,000 in excess of that amount. Notice of
prepayment having been given as aforesaid, the principal amount of
the AXELs specified in such notice shall become due and payable on
the prepayment date specified therein. Any such voluntary prepayment
shall be applied as specified in subsection 2.4B(iii).
(b) Prepayment Fees. If any portion of the AXELs is prepaid
(1) pursuant to clause (a) of subsection 2.4B(i) or (2) pursuant to
clause (a), (b) or (c) of subsection 2.4B(ii), in each case on or
prior to the date that is 18 months after the Closing Date, Company
shall pay to Administrative Agent, for distribution to the holders
of the AXELs so prepaid in accordance with their Pro Rata Shares, a
fee equal to (x) 1.5% of the principal amount of AXELs so prepaid
during the period commencing on the Closing Date and ending on the
day prior to the first anniversary of the Closing Date and (y) 0.75%
of the principal amount of AXELs so prepaid during the period
commencing on the first anniversary of the Closing Date and ending
18 months after the Closing Date.
(ii) Mandatory Prepayments. The AXELs shall be prepaid in the
amounts and under the circumstances set forth below, all such prepayments
to be applied as set forth below or as more specifically provided in
subsection 2.4B(iii):
(a) Prepayments From Unreinvested Asset Sale Proceeds. No
later than the first Business Day following the date on which any
Net Asset Sale Proceeds become Unreinvested Asset Sale Proceeds,
Company shall prepay the AXELs in an aggregate amount equal to such
Unreinvested Asset Sale Proceeds; provided, further that, with
respect to an Asset Sale of any asset owned by a Foreign Subsidiary,
the Unreinvested Asset Sale Proceeds in respect thereof shall be
applied (i) first, to the extent such Unreinvested Net Asset Sale
Proceeds may be repatriated to the United States without in the
reasonable judgment of the Company resulting in a material tax
liability to Company in relation to the amount of proceeds to be
repatriated, to prepay the AXELs as set forth above in this
subsection 2.4B(ii)(a), (ii) second, to the extent of any remaining
portion of such Unreinvested Asset Sale Proceeds, to finance the
general corporate purposes of such Foreign Subsidiary so long as the
aggregate of all such amounts so applied by all Foreign Subsidiaries
with respect to Asset Sales consummated after the Closing Date does
not exceed $5,000,000, and (iii) third, to the extent of any
remaining portion of such Unreinvested Asset Sale Proceeds, to
prepay the AXELs as set forth above in this subsection 2.4B(ii)(a).
Concurrently with any determination by Company that any portion of
any Unreinvested Asset Sale Proceeds of any
AXEL CREDIT AGREEMENT EXECUTION
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53
Foreign Subsidiary will be applied as described in clause (ii) of
the immediately preceding proviso, Company shall deliver to Agent an
Officers' Certificate (w) certifying that such Unreinvested Asset
Sale Proceeds cannot be repatriated to the United States without
resulting in a material tax liability to Company and the reasons
therefor, (y) specifying the amount of Unreinvested Asset Sale
Proceeds to be retained by such Foreign Subsidiary as described in
said clause (ii) and the cumulative aggregate amount of all such
Unreinvested Asset Sale Proceeds so retained by all Foreign
Subsidiaries since the date of this Agreement and (z) demonstrating
the derivation of the Unreinvested Asset Sale Proceeds of the
correlative Asset Sale from the gross sales price thereof.
(b) Prepayments from Net Insurance/Condemnation Proceeds. No
later than the first Business Day following the date of receipt by
Administrative Agent or by Company or any of its Subsidiaries of any
Net Insurance/Condemnation Proceeds that are required to be applied
to prepay the AXELs pursuant to the provisions of subsection 5.4C,
Company shall prepay the AXELs in an aggregate amount equal to the
amount of such Net Insurance/Condemnation Proceeds.
(c) Prepayments Due to Issuance of Debt or Equity Securities.
On the date of receipt by Company or any of its Subsidiaries of the
Cash proceeds (any such proceeds, net of underwriting discounts and
commissions and other reasonable costs and expenses associated
therewith, including reasonable legal fees and expenses, being "Net
Securities Proceeds") from the issuance of any debt (other than debt
permitted by Section 6.1) or equity Securities of Company or any of
its Subsidiaries to any Person other than Company or any of its
Subsidiaries (and excluding any private issuances of Company Common
Stock after the Closing Date to the extent such funds would not be
required to prepay any other Indebtedness of the Company and its
Subsidiaries) after the Closing Date, Company shall prepay the AXELs
in an aggregate amount equal to such Net Securities Proceeds.
(d) Prepayments and Reductions from Consolidated Excess Cash
Flow.
In the event that there shall be Consolidated Excess Cash Flow for
any Fiscal Year (commencing with Fiscal Year 1998), Company shall,
no later than 90 days after the end of such Fiscal Year, prepay the
AXELs in an aggregate amount equal to 75% of such Consolidated
Excess Cash Flow; provided that for any Fiscal Year in which the
Consolidated Leverage Ratio as of the end of any such Fiscal Year is
less than 3.75:1, such percentage of Consolidated Excess Cash Flow
applied to prepay the AXELs shall be reduced to 50%.
AXEL CREDIT AGREEMENT EXECUTION
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(e) Calculations of Net Proceeds Amounts; Additional
Prepayments Based on Subsequent Calculations. Concurrently with any
prepayment of the AXELs pursuant to subsections 2.4B(ii)(a)-(e),
Company shall deliver to Administrative Agent an Officers'
Certificate demonstrating the calculation of the amount (the "Net
Proceeds Amount") of the applicable Unreinvested Asset Sale Proceeds
or Net Insurance/Condemnation Proceeds, the applicable Net
Securities Proceeds (as such term is defined in subsection
2.4B(ii)(c)) or the applicable Consolidated Excess Cash Flow, as the
case may be, that gave rise to such prepayment. In the event that
Company shall subsequently determine that the actual Net Proceeds
Amount was greater than the amount set forth in such Officers'
Certificate, Company shall promptly make an additional prepayment of
the AXEL in an amount equal to the amount of such excess, and
Company shall concurrently therewith deliver to Administrative Agent
an Officers' Certificate demonstrating the derivation of the
additional Net Proceeds Amount resulting in such excess.
(iii) Application of Prepayments.
(a) Application of Voluntary Prepayments. Any voluntary
prepayments pursuant to subsection 2.4B(i) shall be applied to
reduce the scheduled installments of principal of the AXELs set
forth in subsections 2.4A on a pro rata basis.
(b) Application of Mandatory Prepayments. Any mandatory
prepayments of the AXELs pursuant to subsection 2.4B(ii) shall be
applied to reduce the scheduled installments of principal of the
AXELs set forth in subsection 2.4A on a pro rata basis.
(c) Application of Prepayments to Base Rate AXELs and
Eurodollar Rate AXELs. Any prepayment of the AXELs shall be applied
first to Base Rate AXELs to the full extent thereof before
application to Eurodollar Rate AXELs, in a manner which minimizes
the amount of any payments required to be made by Company pursuant
to subsection 2.6D.
C. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by Company of
principal, interest, fees and other Obligations hereunder and under the
AXEL Notes shall be made in Dollars in same day funds, without defense,
setoff or counterclaim, free of any restriction or condition, and
delivered to Administrative Agent not later than 12:00 Noon (New York City
time) on the date due at the Funding and Payment Office for the account of
Lenders; funds received by Administrative Agent after that time on such
due date shall be deemed to have been paid by Company on the next
succeeding Business Day. Company hereby authorizes Administrative Agent to
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charge its accounts with Administrative Agent in order to cause timely
payment to be made to Administrative Agent of all principal, interest,
fees and expenses due hereunder (subject to sufficient funds being
available in its accounts for that purpose).
(ii) Application of Payments to Principal and Interest. All payments
in respect of the principal amount of any AXEL shall include payment of
accrued interest on the principal amount being repaid or prepaid, and all
such payments shall be applied to the payment of interest before
application to principal.
(iii) Apportionment of Payments. Aggregate principal and interest
payments shall be apportioned among all outstanding AXELs to which such
payments relate, in each case proportionately to Lenders' respective Pro
Rata Shares. Administrative Agent shall promptly distribute to each
Lender, at its primary address set forth below its name on the appropriate
signature page hereof or at such other address as such Lender may request,
its Pro Rata Share of all such payments received by Administrative Agent.
Notwithstanding the foregoing provisions of this subsection 2.4C(iii), if,
pursuant to the provisions of subsection 2.6C, any Notice of
Conversion/Continuation is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate AXELs in lieu of its Pro Rata Share of any
Eurodollar Rate AXELs, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder or of the commitment fees hereunder, as the case may
be.
(v) Notation of Payment. Each AXEL Lender agrees that before
disposing of any AXEL Note held by it, or any part thereof (other than by
granting participations therein), that Lender will make a notation thereon
of all AXELs evidenced by that AXEL Note and all principal payments
previously made thereon and of the date to which interest thereon has been
paid; provided that the failure to make (or any error in the making of) a
notation of any AXEL made under such AXEL Note shall not limit or
otherwise affect the obligations of Company hereunder or under such AXEL
Note with respect to any AXEL or any payments of principal or interest on
such AXEL Note.
2.5 Use of Proceeds.
A. AXELs. The proceeds of the AXELs and the proceeds of the debt and
equity capitalization of Company described in subsection 3.1D(ii), shall be
applied by Company to fund the Recapitalization Financing Requirements.
AXEL CREDIT AGREEMENT EXECUTION
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B. Margin Regulations. No portion of the proceeds of any borrowing under
this Agreement shall be used by Company or any of its Subsidiaries in any manner
that might cause the borrowing or the application of such proceeds to violate
Regulation G, Regulation U, Regulation T or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation of such Board or
to violate the Exchange Act, in each case as in effect on the date or dates of
such borrowing and such use of proceeds.
2.6 Special Provisions Governing Eurodollar Rate AXELs.
Notwithstanding any other provision of this Agreement to the contrary, the
following provisions shall govern with respect to Eurodollar Rate AXELs as to
the matters covered:
A. Determination of Applicable Interest Rate. As soon as practicable after
10:00 A.M. (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate AXELs for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
B. Inability to Determine Applicable Interest Rate. In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate AXELs, that by reason of
circumstances affecting the Eurodollar market adequate and fair means do not
exist for ascertaining the interest rate applicable to such Eurodollar Rate
AXELs on the basis provided for in the definition of Adjusted Eurodollar Rate,
Administrative Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to Company and each Lender of such
determination, whereupon (i) no AXELs may be converted to Eurodollar Rate AXELs
until such time as Administrative Agent notifies Company and Lenders that the
circumstances giving rise to such notice no longer exist and (ii) any Notice of
Conversion/Continuation given by Company with respect to the AXELs in respect of
which such determination was made shall be deemed to be rescinded by Company.
C. Illegality or Impracticability of Eurodollar Rate AXELs. In the event
that on any date any Lender shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto but shall be made only
after consultation with Company and Administrative Agent) that the making,
maintaining or continuation of its Eurodollar Rate AXELs (i) has become unlawful
as a result of compliance by such Lender in good faith with any law, treaty,
governmental rule, regulation, guideline or order (or would conflict with any
such treaty, governmental rule, regulation, guideline or order not having the
force of law even though the failure to comply therewith would not be unlawful)
or (ii) has become impracticable, or would cause such Lender material hardship,
as a result of contingencies occurring after the date of this Agreement which
materially and adversely
AXEL CREDIT AGREEMENT EXECUTION
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affect the Eurodollar market or the position of such Lender in that market,
then, and in any such event, such Lender shall be an "Affected Lender" and it
shall on that day give notice (by telefacsimile or by telephone confirmed in
writing) to Company and Administrative Agent of such determination (which notice
Administrative Agent shall promptly Transmit to each other Lender). Thereafter
(a) the obligation of the Affected Lender to convert AXELs to Eurodollar Rate
AXELs shall be suspended until such notice shall be withdrawn by the Affected
Lender, (b) to the extent such determination by the Affected Lender relates to a
Eurodollar Rate AXEL then being requested by Company pursuant to a Notice of
Conversion/Continuation, the Affected Lender shall convert such AXEL to a Base
Rate AXEL, (c) the Affected Lender's obligation to maintain its outstanding
Eurodollar Rate AXELs (the "Affected Loans") shall be terminated at the earlier
to occur of the expiration of the Interest Period then in effect with respect to
the Affected Loans or when required by law, and (d) the Affected Loans shall
automatically convert into Base Rate AXELs on the date of such termination.
Notwithstanding the foregoing, to the extent a determination by an Affected
Lender as described above relates to a Eurodollar Rate AXEL then being requested
by Company pursuant to a Notice of Conversion/Continuation, Company shall have
the option, subject to the provisions of subsection 2.6D, to rescind such Notice
of Conversion/Continuation as to all Lenders by giving notice (by telefacsimile
or by telephone confirmed in writing) to Administrative Agent of such rescission
on the date on which the Affected Lender gives notice of its determination as
described above (which notice of rescission Administrative Agent shall promptly
transmit to each other Lender). Except as provided in the immediately preceding
sentence, nothing in this subsection 2.6C shall affect the obligation of any
Lender other than an Affected Lender to maintain AXELs as, or to convert AXELs
to, Eurodollar Rate AXELs in accordance with the terms of this Agreement.
D. Compensation For Breakage or Non-Commencement of Interest Periods.
Company shall compensate each Lender, upon written request by that Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any interest paid by that
Lender to lenders of funds borrowed by it to make or carry its Eurodollar Rate
AXELs and any loss, expense or liability sustained by that Lender in connection
with the liquidation or re-employment of such funds) which that Lender may
sustain: (i) if for any reason (other than a default by that Lender) a borrowing
of any Eurodollar Rate AXEL does not occur on a date specified therefor in a
Notice of Borrowing or a telephonic request for borrowing, or a conversion to or
continuation of any Eurodollar Rate AXEL does not occur on a date specified
therefor in a Notice of Conversion/Continuation or a telephonic request for
conversion or continuation, (ii) if any prepayment (including any prepayment
pursuant to subsection 2.4B(i)) or other principal payment or any conversion of
any of its Eurodollar Rate AXELs occurs on a date prior to the last day of an
Interest Period applicable to that AXEL, (iii) if any prepayment of any of its
Eurodollar Rate AXELs is not made on any date specified in a notice of
prepayment given by Company, or (iv) as a consequence of any other default by
Company in the repayment of its Eurodollar Rate AXELs when required by the terms
of this Agreement.
AXEL CREDIT AGREEMENT EXECUTION
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E. Booking of Eurodollar Rate AXELs. Any Lender may make, carry or
transfer Eurodollar Rate AXELs at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.
F. Assumptions Concerning Funding of Eurodollar Rate AXELs. Calculation of
all amounts payable to a Lender under this subsection 2.6 and under subsection
2.7A shall be made as though that Lender had actually funded each of its
relevant Eurodollar Rate AXELs through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate AXEL and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of that
Lender to a domestic office of that Lender in the United States of America;
provided, however, that each Lender may fund each of its Eurodollar Rate AXELs
in any manner it sees fit and the foregoing assumptions shall be utilized only
for the purposes of calculating amounts payable under this subsection 2.6 and
under subsection 2.7A.
G. Eurodollar Rate AXELs After Default. After the occurrence of and during
the continuation of a Potential Event of Default or an Event of Default, (i)
Company may not elect to have an AXEL be maintained as, or converted to, a
Eurodollar Rate AXEL after the expiration of any Interest Period then in effect
for that AXEL and (ii) subject to the provisions of subsection 2.6D, any Notice
of Conversion/Continuation given by Company with respect to a requested
conversion/continuation that has not yet occurred shall be deemed to be
rescinded by Company.
2.7 Increased Costs; Taxes; Capital Adequacy.
A. Compensation for Increased Costs and Taxes. Subject to the provisions
of subsection 2.7B (which shall be controlling with respect to the matters
covered thereby and to the extent a Lender is not entitled to payment under the
terms of Section 2.7B, it shall not be entitled to such payment pursuant to this
subsection 2.7A), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending office) to any
additional Tax (other than any Tax on the overall net income of such
Lender) with respect to this Agreement or any of its obligations hereunder
or any payments to such Lender
AXEL CREDIT AGREEMENT EXECUTION
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(or its applicable lending office) of principal, interest, fees or any
other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the account of,
or advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Lender (other than any such
reserve or other requirements with respect to Eurodollar Rate AXELs that
are reflected in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office) or
its obligations hereunder or the Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining AXELs hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto by an amount considered by the Lender to be material; then, in
any such case, Company shall promptly pay to such Lender, upon receipt of the
statement referred to in the next sentence, such additional amount or amounts
(in the form of an increased rate of, or a different method of calculating,
interest or otherwise as such Lender in its sole discretion shall determine) as
may be necessary to compensate such Lender for any such increased cost or
reduction in amounts received or receivable hereunder. Such Lender shall deliver
to Company (with a copy to Administrative Agent) a written statement, setting
forth in reasonable detail the basis for calculating the additional amounts owed
to such Lender under this subsection 2.7A, which statement shall be conclusive
and binding upon all parties hereto absent manifest error.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums payable by Company under
this Agreement and the other AXEL Loan Documents shall (except to the
extent required by law) be paid free and clear of, and without any
deduction or withholding on account of, any Tax (other than a Tax on the
overall net income of any Lender) imposed, levied, collected, withheld or
assessed by or within the United States of America or any political
subdivision in or of the United States of America or any other
jurisdiction from or to which a payment is made by or on behalf of Company
or by any federation or organization of which the United States of America
or any such jurisdiction is a member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other Person is
required by law to make any deduction or withholding on account of any
such Tax from any
AXEL CREDIT AGREEMENT EXECUTION
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sum paid or payable by Company to Administrative Agent or any Lender under
any of the AXEL Loan Documents:
(a) Company shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as Company
becomes aware of it;
(b) Company shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability
to pay is imposed on Company) for its own account or (if that
liability is imposed on Administrative Agent or such Lender, as the
case may be) on behalf of and in the name of Administrative Agent or
such Lender;
(c) the sum payable by Company in respect of which the
relevant deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the making
of that deduction, withholding or payment, Administrative Agent or
such Lender, as the case may be, receives on the due date a net sum
equal to what it would have received had no such deduction,
withholding or payment been required or made; and
(d) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within 30
days after the due date of payment of any Tax which it is required
by clause (b) above to pay, Company shall deliver to Administrative
Agent evidence satisfactory to the other affected parties of such
deduction, withholding or payment and of the remittance thereof to
the relevant taxing or other authority;
provided that no such additional amount shall be required to be paid to
any Lender under clause (c) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the signature
pages hereof) or after the date of the Assignment Agreement pursuant to
which such Lender became a Lender (in the case of each other Lender) in
any such requirement for a deduction, withholding or payment as is
mentioned therein shall result in an increase in the rate of such
deduction, withholding or payment from that in effect at the date of this
Agreement or at the date of such Assignment Agreement, as the case may be,
in respect of payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other
political subdivision thereof (for purposes of this subsection
2.7B(iii), a "Non-US Lender") shall deliver to Administrative Agent
for transmission to Company, on or prior to the Closing Date (in the
case of each Lender listed on the signature pages hereof)
AXEL CREDIT AGREEMENT EXECUTION
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or on or prior to the date of the Assignment Agreement pursuant to
which it becomes a Lender (in the case of each other Lender), and at
such other times as may be necessary in the determination of Company
or Administrative Agent (each in the reasonable exercise of its
discretion), (1) two original copies of Internal Revenue Service
Form 1001 or 4224 (or any successor forms), properly completed and
duly executed by such Lender, together with any other certificate or
statement of exemption required under the Internal Revenue Code or
the regulations issued thereunder to establish that such Lender is
not subject to deduction or withholding of United States federal
income tax with respect to any payments to such Lender of principal,
interest, fees or other amounts payable under any of the AXEL Loan
Documents or (2) if such Lender is not a "bank" or other Person
described in Section 881(c)(3) of the Internal Revenue Code and
cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (1) above, a Certificate re Non-Bank Status
together with two original copies of Internal Revenue Service Form
W-8 (or any successor form), properly completed and duly executed by
such Lender, together with any other certificate or statement of
exemption required under the Internal Revenue Code or the
regulations issued thereunder to establish that such Lender is not
subject to deduction or withholding of United States federal income
tax with respect to any payments to such Lender of interest payable
under any of the AXEL Loan Documents.
(b) Each Lender required to deliver any forms, certificates or
other evidence with respect to United States federal income tax
withholding matters pursuant to subsection 2.7B(iii)(a) hereby
agrees, from time to time after the initial delivery by such Lender
of such forms, certificates or other evidence, whenever a lapse in
time or change in circumstances renders such forms, certificates or
other evidence obsolete or inaccurate in any material respect, that
such Lender shall promptly (1) deliver to Administrative Agent for
transmission to Company two new original copies of Internal Revenue
Service Form 1001 or 4224, or a Certificate re Non-Bank Status and
two original copies of Internal Revenue Service Form W-8, as the
case may be, properly completed and duly executed by such Lender,
together with any other certificate or statement of exemption
required in order to confirm or establish that such Lender is not
subject to deduction or withholding of United States federal income
tax with respect to payments to such Lender under the AXEL Loan
Documents or (2) notify Administrative Agent and Company of its
inability to deliver any such forms, certificates or other evidence.
(c) Company shall not be required to pay any additional amount
to any Non-US Lender under clause (c) of subsection 2.7B(ii) if such
Lender shall have failed to satisfy the requirements of clause (a)
or (b)(1) of this subsection 2.7B(iii); provided that if such Lender
shall have satisfied the requirements of subsection 2.7B(iii)(a) on
the Closing Date (in the case of
AXEL CREDIT AGREEMENT EXECUTION
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each Lender listed on the signature pages hereof) or on the date of
the Assignment Agreement pursuant to which it became a Lender (in
the case of each other Lender), nothing in this subsection
2.7B(iii)(c) shall relieve Company of its obligation to pay any
additional amounts pursuant to clause (c) of subsection 2.7B(ii) in
the event that, as a result of any change in any applicable law,
treaty or governmental rule, regulation or order, or any change in
the interpretation, administration or application thereof, such
Lender is no longer properly entitled to deliver forms, certificates
or other evidence at a subsequent date establishing the fact that
such Lender is not subject to withholding as described in subsection
2.7B(iii)(a).
C. Capital Adequacy Adjustment. If any Lender shall have determined that
the adoption, effectiveness, phase-in or applicability after the date hereof of
any law, rule or regulation (or any provision thereof) regarding capital
adequacy, or any change therein or in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
(or its applicable lending office) with any guideline, request or directive
regarding capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender's AXELS or AXEL Commitments or other obligations hereunder with
respect to the AXELs to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy) by
an amount considered by the Lender to be material, then from time to time,
within five Business Days after receipt by Company from such Lender of the
statement referred to in the next sentence, Company shall pay to such Lender
such additional amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction. Such Lender
shall deliver to Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis of the calculation of
such additional amounts, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
2.8 Obligation of Lenders to Mitigate.
Each Lender agrees that, as promptly as practicable after the officer of
such Lender responsible for administering the AXELs of such Lender becomes aware
of the occurrence of an event or the existence of a condition that would cause
such Lender to become an Affected Lender or that would entitle such Lender to
receive payments under subsection 2.7, it will, to the extent not inconsistent
with the internal policies of such Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, fund or maintain the AXEL
Commitments of such Lender or the affected AXELs of such Lender through another
lending of such Lender, or (ii) take such other measures as such Lender
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may deem reasonable, if as a result thereof the circumstances which would cause
such Lender to be an Affected Lender would cease to exist or the additional
amounts which would otherwise be required to be paid to such Lender pursuant to
subsection 2.7 would be materially reduced and if, as determined by such Lender
in its sole discretion, the making, funding or maintaining of such AXEL
Commitments or AXELs through such other lending or in accordance with such other
measures, as the case may be, would not otherwise materially adversely affect
such AXEL Commitments or AXELs or the interests of such Lender; provided that
such Lender will not be obligated to utilize such other lending pursuant to this
subsection 2.8 unless Company agrees to pay all incremental expenses incurred by
such Lender as a result of utilizing such other lending office as described in
clause (i) above. A certificate as to the amount of any such expenses payable by
Company pursuant to this subsection 2.8 (setting forth in reasonable detail the
basis for requesting such amount) submitted by such Lender to Company (with a
copy to Administrative Agent) shall be conclusive absent manifest error.
2.9 Removal or Replacement of a Lender.
A. Anything contained in this Agreement to the contrary notwithstanding,
in the event that:
(i) (a) any Lender (an "Increased-Cost Lender") shall give notice to
Company that such Lender is an Affected Lender or that such Lender is
entitled to receive payments under subsection 2.7, (b) the circumstances
which have caused such Lender to be an Affected Lender or which entitle
such Lender to receive such payments shall remain in effect, and (c) such
Lender shall fail to withdraw such notice within five Business Days after
Company's request for such withdrawal; or
(ii) (a) in connection with any proposed amendment, modification,
termination, waiver or consent with respect to any of the provisions of
this Agreement as contemplated by clauses (i) through (v) of the first
proviso to subsection 9.6A, the consent of Requisite Lenders shall have
been obtained but the consent of one or more of such other Lenders (each a
"Non-Consenting Lender") whose consent is required shall not have been
obtained, and (b) the failure to obtain Non-Consenting Lenders' consents
does not result solely from the exercise of Non-Consenting Lenders' rights
(and the withholding of any required consents by Non-Consenting Lenders)
pursuant to the second proviso to subsection 9.6A;
then, and in each such case, Company shall have the right, at its option, to
remove or replace the applicable Increased-Cost Lender or Non-Consenting Lender
(the "Terminated Lender") to the extent permitted by subsection 2.9B.
B. Company may, by giving written notice to Administrative Agent and any
Terminated Lender of its election to do so:
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(i) elect to prepay on the date of such termination any outstanding
AXELs made by such Terminated Lender, together with accrued and unpaid
interest thereon and any other amounts payable to such Terminated Lender
hereunder pursuant to subsection 2.6 or subsection 2.7 or otherwise;
provided that, in the event such Terminated Lender has any AXELs
outstanding at the time of such termination, the written consent of
Administrative Agent and Requisite Lenders (which consent shall not be
unreasonably withheld or delayed) shall be required in order for Company
to make the election set forth in this clause (i); or
(ii) elect to cause such Terminated Lender (and such Terminated
Lender hereby irrevocably agrees) to assign its outstanding AXELs in full
at par to one or more Eligible Assignees (each a "Replacement Lender") in
accordance with the provisions of subsection 9.1B; provided that (a) on
the date of such assignment, Company shall pay any amounts payable to such
Terminated Lender pursuant to subsection 2.6 or subsection 2.7 or
otherwise as if it were a prepayment and (b) in the event such Terminated
Lender is a Non-Consenting Lender, each Replacement Lender shall consent,
at the time of such assignment, to each matter in respect of which such
Terminated Lender was a Non-Consenting Lender;
provided that Company may not make either of the elections set forth in clauses
(i) or (ii) above with respect to any Non-Consenting Lender unless Company also
makes one of such elections with respect to each other Terminated Lender which
is a Non-Consenting Lender.
C. Upon the prepayment of all amounts owing to any Terminated Lender
pursuant to clause (i) of subsection 2.9B, such Terminated Lender shall no
longer constitute a "Lender" for purposes of this Agreement; provided that any
rights of such Terminated Lender to indemnification under this Agreement
(including under subsections 2.6D, 2.7, 9.2 and 9.3) shall survive as to such
Terminated Lender.
SECTION 3.
CONDITIONS TO AXELs
The obligations of Lenders to make AXELs hereunder are subject to the
satisfaction of the following conditions.
3.1 Certain Conditions to AXELs.
The obligations of Lenders to make the AXELs on the Closing Date are, in
addition to the conditions precedent specified in subsection 3.2, subject to
prior or concurrent satisfaction of the following conditions:
A. Loan Party Documents. On or before the Closing Date, Company shall, and
shall cause each other Loan Party to, deliver to Lenders (or to Administrative
Agent for
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Lenders with sufficient originally executed copies, where appropriate, for each
Lender and its counsel) the following with respect to Company or such Loan
Party, as the case may be, each, unless otherwise noted, dated the Closing Date:
(i) Certified copies of the Certificate or Articles of Incorporation
of such Person, together with a good standing certificate from the
Secretary of State of its jurisdiction of incorporation and each other
state in which such Person is qualified as a foreign corporation to do
business and, to the extent generally available, a certificate or other
evidence of good standing as to payment of any applicable franchise or
similar taxes from the appropriate taxing authority of each of such
jurisdictions, each dated a recent date prior to the Closing Date;
(ii) Copies of the Bylaws of such Person, certified as of the
Closing Date by such Person's corporate secretary or an assistant
secretary;
(iii) Resolutions of the Board of Directors of such Person approving
and authorizing the execution, delivery and performance of the AXEL Loan
Documents and Related Agreements to which it is a party, certified as of
the Closing Date by the corporate secretary or an assistant secretary of
such Person as being in full force and effect without modification or
amendment;
(iv) Signature and incumbency certificates of the officers of such
Person executing the AXEL Loan Documents to which it is a party;
(v) Executed originals of the AXEL Loan Documents to which such
Person is a party; and
(vi) Such other documents as Arranger or Administrative Agent may
reasonably request.
B. No Material Adverse Effect. Since December 31, 1996, no Material
Adverse Effect (in the opinions of Arranger and Administrative Agent) shall have
occurred.
C. Corporate and Capital Structure, Ownership, Management, Etc.
(i) Corporate Structure. The corporate organizational structure of
Company and its Subsidiaries, both before and after giving effect to the
Merger, shall be as set forth on Schedule 3.1C annexed hereto.
(ii) Capital Structure and Ownership. The capital structure and
ownership of Company, both before and after giving effect to the Merger,
shall be as set forth on Schedule 3.1C annexed hereto.
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(iii) Management; Employment Agreements. The management structure of
Company after giving effect to the Merger shall be as set forth on
Schedule 3.1C annexed hereto. Arranger and Administrative Agent shall have
received duly executed copies of, and shall be satisfied with the form and
substance of, the Employment Agreements as set forth on Schedule 3.1C
annexed hereto.
D. Proceeds of Debt and Equity Capitalization of Newco and Company.
(i) Debt and Equity Capitalization of Company. On or before the
Closing Date, Newco and Company shall have consummated the transactions
contemplated under the Recapitalization Agreement, and in connection with
such transactions, Company will have, following the Merger of Newco with
and into Company, not less than $75,000,000 of equity financing,
consisting of (i) approximately $7,500,000 in shares of Company retained
by current shareholders, (ii) approximately $750,000 in cash common equity
contributions by certain Management Investors (which contributions will be
financed by Company and will be made following consummation of the Merger)
and (iii) approximately $67,500,000 in equity financing from Newco, which
equity financing shall have been contributed to Newco immediately prior to
the Merger as follows: (x) an amount not less than $61,875,000 in cash by
GSII, (y) approximately $4,500,000 of Old Management Shares (valued at the
highest cash price offered to public shareholders in the Acquisition)
contributed by a certain Management Investor in exchange for common stock
of Newco which will be converted in the Merger into shares of Company
Common Stock and (z) approximately $1,125,000 of restricted shares of
common stock of Newco granted to a certain Management Investor which will
be converted in the Merger into shares of Company Common Stock. On or
before the Closing Date, Company shall have issued and sold not less than
$110,000,000 in aggregate principal amount of Senior Subordinated Notes.
(ii) Use of Proceeds by Company. Company shall have provided
evidence satisfactory to Arranger and Administrative Agent that the
proceeds of the debt and equity capitalization of Company described in the
immediately preceding clause (i) have been contributed or irrevocably
committed, prior to the application of the proceeds of the AXELs, to the
payment of a portion of the Recapitalization Financing Requirements.
E. Related Agreements.
(i) Form of Senior Subordinated Note Indenture. The Senior
Subordinated Note Indenture shall be in the form that has been approved by
Arranger and Administrative Agent if the Senior Subordinated Notes were
issued and outstanding at the time of any such change.
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(ii) Approval of Certain Related Agreements. The Recapitalization
Agreement, the Certificate of Merger, the Stockholders Agreement, the
Voting Agreement, the Employment Agreements and the Tax Indemnification
Agreement shall each be satisfactory in form and substance to Arranger and
Administrative Agent.
(iii) Related Agreements in Full Force and Effect. Arranger and
Administrative Agent shall each have received a fully executed or
conformed copy of each Related Agreement (including all schedules and
exhibits thereto) and any material documents executed in connection
therewith, and each Related Agreement shall be in full force and effect
and no provision thereof shall have been modified or waived in any respect
determined by Arranger or Administrative Agent to be material, in each
case without the consent of Arranger and Administrative Agent.
F. Matters Relating to Existing Indebtedness of Company and its
Subsidiaries.
(i) Termination of Existing Credit Agreements and Related Liens;
Existing Letters of Credit. On the Closing Date, Company and its
Subsidiaries shall have (a) repaid in full all Indebtedness outstanding
under the Existing Credit Agreements as set forth on Schedule 3.1F (the
aggregate principal amount of which Indebtedness shall not exceed
$48,000,000), (b) terminated any commitments to lend or make other
extensions of credit thereunder, (c) delivered to Arranger and
Administrative Agent all documents or instruments necessary to release all
Liens securing Indebtedness or other obligations of Company and its
Subsidiaries thereunder, and (d) made arrangements satisfactory to
Arranger and Administrative Agent with respect to the cancellation of any
letters of credit outstanding thereunder or the issuance of Letters of
Credit under the Revolving Credit Agreement to support the obligations of
Company and its Subsidiaries with respect thereto.
(ii) Existing Indebtedness to Remain Outstanding. Arranger and
Administrative Agent shall have received an Officers' Certificate of
Company stating that, after giving effect to the transactions described in
this subsection 3.1F, the Indebtedness of Loan Parties (other than
Indebtedness under the Loan Documents and the Senior Subordinated Notes)
shall consist of (a) approximately $6,379,156 in aggregate principal
amount of outstanding Indebtedness described in Part I of Schedule 6.1
annexed hereto and (b) Indebtedness in an aggregate amount not to exceed
$4,643,679 in respect of Capital Leases described in Part II of Schedule
6.1 annexed hereto. The terms and conditions of all such Indebtedness
shall be in form and in substance satisfactory to Arranger, Administrative
Agent and Requisite Lenders.
G. Necessary Governmental Authorizations and Consents; Expiration of
Waiting Periods, Etc. Company shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with
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the Merger, the other transactions contemplated by the Loan Documents and the
Related Agreements and the continued operation of the business conducted by
Company and its Subsidiaries in substantially the same manner as conducted prior
to the consummation of the Merger, and each of the foregoing shall be in full
force and effect, in each case other than those the failure to obtain or
maintain which, either individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. All applicable waiting periods shall
have expired without any action being taken or threatened by any competent
authority which would restrain, prevent or otherwise impose adverse conditions
on the Merger or the financing thereof. No action, request for stay, petition
for review or rehearing, reconsideration, or appeal with respect to any of the
foregoing shall be pending, and the time for any applicable agency to take
action to set aside its consent on its own motion shall have expired.
H. Consummation of Merger.
(i) All conditions to the Merger set forth in the Recapitalization
Agreement shall have been satisfied or the fulfillment of any such
conditions shall have been waived with the consent of Arranger,
Administrative Agent and Requisite Lenders;
(ii) the Merger shall have become effective in accordance with the
terms of the Recapitalization Agreement, the Certificate of Merger and the
laws of the State of Delaware;
(iii) Transaction Costs shall not exceed an amount previously agreed
to by Arranger, and Arranger shall have received evidence to its
satisfaction to such effect; and
(iv) Arranger and Administrative Agent shall have received an
Officers' Certificate of Company to the effect set forth in clauses
(i)-(iii) above.
I. Security Interests in Personal and Mixed Property. Collateral Agent
shall have received evidence satisfactory to it that Company and Subsidiary
Guarantors shall have taken or caused to be taken all such actions, executed and
delivered or caused to be executed and delivered all such agreements, documents
and instruments, and made or caused to be made all such filings and recordings
(other than the filing or recording of items described in clauses (iii), (iv)
and (v) below) that may be necessary or, in the opinion of Collateral Agent
desirable in order to create in favor of Collateral Agent, for the benefit of
Secured Parties, a valid and (upon such filing and recording) perfected First
Priority security interest in the entire personal and mixed property Collateral.
Such actions shall include the following:
(i) Schedules to Collateral Documents. Delivery to Collateral Agent
of accurate and complete schedules to all of the applicable Collateral
Documents.
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(ii) Stock Certificates and Instruments. Delivery to Collateral
Agent of (a) certificates (which certificates shall be accompanied by
irrevocable undated stock powers, duly endorsed in blank and otherwise
satisfactory in form and substance to Collateral Agent) representing all
capital stock pledged pursuant to the Company Pledge Agreement and the
Subsidiary Pledge Agreements and (b) all promissory notes or other
instruments (duly endorsed, where appropriate, in a manner satisfactory to
Collateral Agent) evidencing any Collateral;
(iii) Lien Searches and UCC Termination Statements. Delivery to
Arranger and Administrative Agent of (a) the results of a recent search,
by a Person satisfactory to Arranger and Administrative Agent, of all
effective UCC financing statements and fixture filings and all judgment
and tax lien filings which may have been made with respect to any personal
or mixed property of any Loan Party, together with copies of all such
filings disclosed by such search, and (b) UCC termination statements duly
executed by all applicable Persons for filing in all applicable
jurisdictions as may be necessary to terminate any effective UCC financing
statements or fixture filings disclosed in such search (other than any
such financing statements or fixture filings in respect of Liens permitted
to remain outstanding pursuant to the terms of this Agreement).
(iv) UCC Financing Statements and Fixture Filings. Delivery to
Collateral Agent of UCC financing statements and, where appropriate,
fixture filings, duly executed by each applicable Loan Party with respect
to all personal and mixed property Collateral of such Loan Party, for
filing in all jurisdictions as may be necessary or, in the reasonable
opinion of Collateral Agent, desirable to perfect the security interests
created in such Collateral pursuant to the Collateral Documents;
(v) Auxiliary Pledge Agreements. Execution and delivery to
Collateral Agent of Auxiliary Pledge Agreements with respect to the stock
of all Foreign Subsidiaries organized under the laws of all jurisdictions
with respect to which Collateral Agent deems an Auxiliary Pledge Agreement
necessary or advisable to perfect or otherwise protect the First Priority
Liens granted to Collateral Agent on behalf of Secured Parties in such
stock, and the taking of all such other actions under the laws of such
jurisdictions as Collateral Agent may deem necessary or advisable to
perfect or otherwise protect such Liens; and
(vi) Opinions of Local Counsel. Delivery to Arranger and
Administrative Agent of (a) an opinion of counsel (which counsel shall be
reasonably satisfactory to Arranger and Administrative Agent) under the
laws of each state in the United States in which any personal or mixed
property Collateral with an aggregate value in excess of $500,000 is
located with respect to the creation and perfection of the security
interests in favor of Collateral Agent in such Collateral and such other
matters governed by the laws of such jurisdiction regarding such security
interests as Arranger and Administrative Agent may reasonably request and
(b) an opinion of
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counsel (which counsel shall be reasonably satisfactory to Arranger and
Administrative Agent) under the laws of Quebec, Canada and England as to
the perfection of the pledge of stock of Foreign Subsidiaries organized in
those jurisdictions, in each case in form and substance reasonably
satisfactory to Arranger and Administrative Agent.
J. Environmental Reports. Arranger and Administrative Agent shall have
received such reports and other information, in form, scope and substance
satisfactory to Arranger and Administrative Agent, as Arranger and
Administrative Agent may reasonably require regarding environmental matters
relating to Company and its Subsidiaries and the Facilities, which reports shall
include (i) that certain Environmental Assessment dated October 7, 1997,
prepared by Pilko & Associates, Inc. for Confetti Acquisitions, Inc. covering
the Facilities located at Anaheim, California, Chester, New York, East
Providence, Rhode Island, Harriman, New York, Louisville, Kentucky, Montreal
(Kirkland), Quebec, Canada and Newburgh, New York, (the "Environmental
Assessment Report"), and (ii) a letter from Pilko & Associates, Inc. in form and
substance reasonably satisfactory to Administrative Agent allowing Arranger,
Administrative Agent, Collateral Agent and the Lenders to rely on the
Environmental Assessment Report to the same extent that Newco and Company may
rely thereon.
K. Financial Statements; Pro Forma Balance Sheet. On or before the Closing
Date, Lenders shall have received from Company (i) audited financial statements
of Company and its Subsidiaries for Fiscal Years ended December 31, 1994, 1995
and 1996, consisting of balance sheets and the related consolidated statements
of income, stockholders' equity and cash flows for such Fiscal Years, (ii)
unaudited financial statements of Company and its Subsidiaries as at September
30, 1997, consisting of a balance sheet and the related consolidated statements
of income, stockholders' equity and cash flows for the nine-month period ending
on such date, all in reasonable detail and certified by the chief financial
officer of Company that they fairly present the financial condition of Company
and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to changes
resulting from audit and normal year-end adjustments, (iii) pro forma
consolidated balance sheets of Company and its Subsidiaries as of November 30,
1997, prepared in accordance with GAAP and reflecting the consummation of the
Merger, the related financings and the other transactions contemplated by the
Loan Documents and the Related Agreements, which pro forma financial statements
shall be in form and substance satisfactory to Lenders and (iv) pro forma
financial statements (including consolidated balance sheets, statements of
operations, stockholders' equity and cash flows) of Company and its Subsidiaries
for the 10-year period commencing on the Closing Date, which pro forma financial
statements shall be in form and substance satisfactory to Lenders.
L. Solvency Assurances. On the Closing Date, Arranger, Administrative
Agent and Lenders shall have received (i) a letter from Houlihan, Lokey, Howard
& Zukin, dated the Closing Date and addressed to Arranger, Administrative Agent
and Lenders, in form
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and substance satisfactory to Arranger and Administrative Agent and with
appropriate attachments, and (ii) a Financial Condition Certificate dated the
Closing Date, substantially in the form of Exhibit IX annexed hereto and with
appropriate attachments, in each case demonstrating that, after giving effect to
the consummation of the Merger, the related financings and the other
transactions contemplated by the Loan Documents and the Related Agreements,
Company will be Solvent.
M. Evidence of Insurance. Collateral Agent shall have received a
certificate from Company's insurance broker or other evidence satisfactory to it
that all insurance required to be maintained pursuant to subsection 5.4 is in
full force and effect and that Collateral Agent on behalf of Secured Parties has
been named as additional insured and/or loss payee thereunder to the extent
required under subsection 5.4.
N. Opinions of Counsel to Loan Parties. Lenders and their respective
counsel shall have received (i) originally executed copies of one or more
favorable written opinions of (a) Wachtell, Lipton, Rosen & Katz, special
counsel for Loan Parties, in form and substance reasonably satisfactory to
Administrative Agent and Arranger and its counsel, dated as of the Closing Date
and setting forth substantially the matters in the opinions designated in
Exhibit V-A annexed hereto and as to such other matters as Administrative Agent
or Arranger and acting on behalf of Lenders may reasonably request and (b)
Kurzman & Eisenberg, counsel for Loan Parties, in form and substance reasonably
satisfactory to Administrative Agent and Arranger and its counsel, dated as of
the Closing Date and setting forth substantially the matters in the opinions
designated in Exhibit V-B annexed hereto and as to such other matters as
Administrative Agent or Arranger and acting on behalf of Lenders may reasonably
request, and (ii) evidence satisfactory to Arranger and Administrative Agent
that Company has requested such counsel to deliver such opinions to Lenders.
O. Opinions of Arranger and Administrative Agent's Counsel. Lenders shall
have received originally executed copies of one or more favorable written
opinions of O'Melveny & Myers LLP, counsel to Arranger and Administrative Agent,
dated as of the Closing Date, substantially in the form of Exhibit VI annexed
hereto and as to such other matters as Arranger and Administrative Agent may
reasonably request.
P. Fees. Company shall have paid to Arranger and Administrative Agent, for
distribution (as appropriate) to Arranger, Administrative Agent and Lenders, the
fees payable on the Closing Date referred to in subsection 2.3.
Q. Representations and Warranties; Performance of Agreements. Company
shall have delivered to Arranger and Administrative Agent an Officers'
Certificate, in form and substance satisfactory to Arranger and Administrative
Agent, to the effect that the representations and warranties in Section 4 hereof
are true, correct and complete in all material respects on and as of the Closing
Date to the same extent as though made on and as of that date (or, to the extent
such representations and warranties specifically relate to
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an earlier date, that such representations and warranties were true, correct and
complete in all material respects on and as of such earlier date) and that
Company shall have performed in all material respects all agreements and
satisfied all conditions which this Agreement provides shall be performed or
satisfied by it on or before the Closing Date except as otherwise disclosed to
and agreed to in writing by Arranger, Administrative Agent and Requisite
Lenders.
R. Completion of Proceedings. All corporate and other proceedings taken or
to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by Administrative
Agent, acting on behalf of Lenders, or Arranger and its counsel shall be
satisfactory in form and substance to Administrative Agent and Arranger and such
counsel, and Administrative Agent, Arranger and such counsel shall have received
all such counterpart originals or certified copies of such documents as
Administrative Agent or Arranger may reasonably request.
S. Collateral Access Agreements. Company and each applicable Subsidiary
Guarantor shall have used its reasonable good faith efforts to obtain, in the
case of any Leasehold Property or any real property in which Company or any of
its Subsidiaries owns or holds a fee interest and which is subject to a mortgage
held by a third-party mortgagee holding inventory or equipment with an aggregate
fair market value exceeding $500,000, a Collateral Access Agreement with respect
thereto, in each case in form and substance reasonably satisfactory to Arranger
and Administrative Agent.
T. Revolving Credit Agreement. Arranger and Administrative Agent shall
each have received a fully executed or conformed copy of the Revolving Credit
Agreement satisfactory in form and substance to Arranger and Administrative
Agent. The Revolving Credit Agreement shall be in full force and effect and the
conditions to advances of the Revolving Loans thereunder shall have been
satisfied or waived by the Revolving Credit Lenders.
3.2 Additional Conditions to AXELs.
The obligations of Lenders to make AXELs on the Closing Date are subject
to the following further conditions precedent:
A. Administrative Agent shall have received before the Closing Date, in
accordance with the provisions of subsection 2.1B, an originally executed Notice
of Borrowing, in each case signed by the chief executive officer, the chief
financial officer or the treasurer or corporate controller of Company or by any
executive officer of Company designated by any of the above-described officers
on behalf of Company in a writing delivered to Administrative Agent.
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B. As of the Closing Date:
(i) The representations and warranties contained herein and in the
other AXEL Loan Documents shall be true, correct and complete in all
material respects on and as of the Closing Date to the same extent as
though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in
which case such representations and warranties shall have been true,
correct and complete in all material respects on and as of such earlier
date;
(ii) No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Notice of
Borrowing that would constitute an Event of Default or a Potential Event
of Default;
(iii) Each Loan Party shall have performed in all material respects
all agreements and satisfied all conditions which this Agreement provides
shall be performed or satisfied by it on or before the Closing Date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender from
making the AXELs to be made by it on the Closing Date;
(v) The making of the AXELs requested on the Closing Date shall not
violate any law including Regulation G, Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System; and
(vi) There shall not be pending or, to the knowledge of Company,
threatened, any action, suit, proceeding, governmental investigation or
arbitration against or affecting Company or any of its Subsidiaries or any
property of Company or any of its Subsidiaries that has not been disclosed
by Company in writing prior to the execution of this Agreement), and there
shall have occurred no development not so disclosed in any such action,
suit, proceeding, governmental investigation or arbitration so disclosed,
that, in either event, in the opinion of Administrative Agent or of
Requisite Lenders, would be expected to have a Material Adverse Effect;
and no injunction or other restraining order shall have been issued and no
hearing to cause an injunction or other restraining order to be issued
shall be pending or noticed with respect to any action, suit or proceeding
seeking to enjoin or otherwise prevent the consummation of, or to recover
any damages or obtain relief as a result of, the transactions contemplated
by this Agreement or the making of AXELs hereunder.
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SECTION 4.
COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make the
AXELs, Company represents and warrants to each Lender, on the date of this
Agreement, that the following statements are true, correct and complete:
4.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.
A. Organization and Powers. Each Loan Party is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation as specified in Schedule 4.1 annexed hereto as it
may be supplemented pursuant to subsection 5.1(xvi). Each Loan Party has all
requisite corporate power and authority to own and operate its properties, to
carry on its business as now conducted and as proposed to be conducted, to enter
into the AXEL Loan Documents and Related Agreements to which it is a party and
to carry out the transactions contemplated thereby.
B. Qualification and Good Standing. Each Loan Party is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had and could not reasonably be expected to have a Material Adverse Effect.
C. Conduct of Business. Company and its Subsidiaries are engaged only in
(i) the businesses engaged in by Company and its Subsidiaries on the Closing
Date and similar or related businesses and (ii) such other lines of business as
may be consented to be Requisite Lenders.
D. Subsidiaries. All of the Subsidiaries of Company as of the Closing Date
are identified in Schedule 4.1 annexed hereto, as said Schedule 4.1 may be
supplemented from time to time pursuant to the provisions of subsection
5.1(xvi). The capital stock of each of the Subsidiaries of Company identified in
Schedule 4.1 annexed hereto (as so supplemented) is duly authorized, validly
issued, fully paid and nonassessable and none of such capital stock constitutes
Margin Stock. Each of the Subsidiaries of Company identified in Schedule 4.1
annexed hereto (as so supplemented) is a corporation duly organized, validly
existing and in good standing under the laws of its respective jurisdiction of
incorporation set forth therein, has all requisite corporate power and authority
to own and operate its properties and to carry on its business as now conducted
and as proposed to be conducted, and is qualified to do business and in good
standing in every jurisdiction where its assets are located and wherever
necessary to carry out its business and operations, in each case except where
failure to be so qualified or in good standing or a lack of such corporate power
and authority has not had and could not reasonably be expected to have a
Material Adverse Effect. Schedule 4.1 annexed hereto (as so supplemented)
correctly sets forth, as of the
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Closing Date, the ownership interest of Company and each of its Subsidiaries in
each of the Subsidiaries of Company identified therein.
4.2 Authorization of Borrowing, etc.
A. Authorization of Borrowing. The execution, delivery and performance of
the Loan Documents and the Related Agreements have been duly authorized by all
necessary corporate action on the part of each Loan Party that is a party
thereto.
B. No Conflict. The execution, delivery and performance by Loan Parties of
the AXEL Loan Documents and the Related Agreements to which they are parties and
the consummation of the transactions contemplated by the AXEL Loan Documents and
such Related Agreements do not and will not (i) violate any provision of any law
or any governmental rule or regulation applicable to Company or any of its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws of Company
or any of its Subsidiaries or any order, judgment or decree of any court or
other agency of government binding on Company or any of its Subsidiaries, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any Contractual Obligation of Company or any of
its Subsidiaries, except for any breach or default which could not reasonably be
expected to have a Material Adverse Effect, (iii) result in or require the
creation or imposition of any Lien upon any of the properties or assets of
Company or any of its Subsidiaries (other than any Liens created under any of
the AXEL Loan Documents in favor of Administrative Agent on behalf of Lenders),
or (iv) require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of Company or any of its Subsidiaries,
except for such approvals or consents which will be obtained on or before the
Closing Date and disclosed in writing to Lenders and such consents the failure
of which to receive could not reasonably be expected to have a Material Adverse
Effect.
C. Governmental Consents. The execution, delivery and performance by Loan
Parties of the AXEL Loan Documents and the Related Agreements to which they are
parties and the consummation of the transactions contemplated by the AXEL Loan
Documents and such Related Agreements do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body the failure of which to receive could not reasonably be expected to cause a
Material Adverse Effect.
D. Binding Obligation. Each of the AXEL Loan Documents and Related
Agreements has been duly executed and delivered by each Loan Party that is a
party thereto and is the legally valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
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E. Valid Issuance of Company Common Stock and Senior Subordinated Notes.
(i) Company Common Stock. The Company Common Stock to be issued in
the Merger on or before the Closing Date, when issued and delivered, will
be duly and validly issued, fully paid and nonassessable. No stockholder
of Company has or will have any preemptive rights to subscribe for any
additional equity Securities of Company. The issuance and sale of such
Company Common Stock, upon such issuance and sale, will either (a) have
been registered or qualified under applicable federal and state securities
laws or (b) be exempt therefrom.
(ii) Senior Subordinated Notes. Company has the corporate power and
authority to issue the Senior Subordinated Notes. The Senior Subordinated
Notes, when issued and paid for, will be the legally valid and binding
obligations of Company, enforceable against Company in accordance with
their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally or by equitable principles relating
to enforceability. The subordination provisions of the Senior Subordinated
Notes will be enforceable against the holders thereof and the AXELs and
all other monetary Obligations hereunder are and will be within the
definition of "Senior Debt" included in such provisions. The Senior
Subordinated Notes, when issued and sold, will either (a) have been
registered or qualified under applicable federal and state securities laws
or (b) be exempt therefrom.
4.3 Financial Condition.
Company has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated
balance sheets of Company and its Subsidiaries as at December 31, 1996 and the
related consolidated statements of income, stockholders' equity and cash flows
of Company and its Subsidiaries for the Fiscal Year then ended and (ii) the
unaudited consolidated balance sheets of Company and its Subsidiaries as at
September 30, 1997 and the related unaudited consolidated statements of income,
stockholders' equity and cash flows of Company and its Subsidiaries for the
nine-months then ended. All such statements were prepared in conformity with
GAAP and fairly present, in all material respects, the financial position (on a
consolidated basis) of the entities described in such financial statements as at
the respective dates thereof and the results of operations and cash flows (on a
consolidated basis) of the entities described therein for each of the periods
then ended, subject, in the case of any such unaudited financial statements, to
changes resulting from audit and normal year-end adjustments. Company does not
(and will not following the funding of the initial AXELs) have any Guarantee,
contingent liability or liability for taxes, long-term lease or unusual forward
or long-term commitment that is not reflected in the foregoing financial
statements or the notes thereto and which in any such case is material in
relation to the business, operations, properties, assets, condition (financial
or otherwise) or prospects of Company or any of its Subsidiaries.
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4.4 No Material Adverse Change; No Restricted Payments.
Since December 31, 1996, no event or change has occurred that has caused
or evidences, either in any case or in the aggregate, a Material Adverse Effect.
Other than with respect to the Recapitalization Consideration and the repayment
of debt outstanding prior to the effectiveness of the Merger, neither Company
nor any of its Subsidiaries has directly or indirectly declared, ordered, or set
apart any sum or property which has not yet been paid for, any Restricted
Payment or agreed to do so except as permitted by subsection 6.3.
4.5 Title to Properties; Liens; Real Property.
A. Title to Properties; Liens. Except for Permitted Encumbrances and Liens
permitted under subsection 6.2, Company and its Subsidiaries have (i) good,
sufficient and legal title to (in the case of fee interests in real property),
(ii) valid leasehold interests in (in the case of leasehold interests in real or
personal property), or (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in the
financial statements referred to in subsection 4.3 or in the most recent
financial statements delivered pursuant to subsection 5.1, in each case except
for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under subsection 6.5. All
such properties and assets are free and clear of Liens other than Permitted
Encumbrances and other Liens permitted under this Agreement.
B. Real Property. As of the Closing Date, Schedule 4.5 annexed hereto
contains a true, accurate and complete list of (i) all Fee Properties and (ii)
all leases, subleases or assignments of leases (together with all amendments,
modifications, supplements, renewals or extensions of any thereof) affecting
each Real Property Asset of any Loan Party, regardless of whether such Loan
Party is the landlord or tenant (whether directly or as an assignee or successor
in interest) under such lease, sublease or assignment. As of the Closing Date,
except as specified in Schedule 4.5 annexed hereto, each agreement listed in
clause (ii) of the immediately preceding sentence is in full force and effect
and Company does not have knowledge of any material default that has occurred
and is continuing thereunder, and each such agreement constitutes the legally
valid and binding obligation of each applicable Loan Party, enforceable against
such Loan Party in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles.
4.6 Litigation; Adverse Facts.
Except as set forth in Schedule 4.6 annexed hereto, there are no actions,
suits, proceedings, arbitrations or governmental investigations (whether or not
purportedly on behalf of Company or any of its Subsidiaries) at law or in
equity, or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign (including any Environmental Claims) that
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are pending or, to the knowledge of Company, threatened against or affecting
Company or any of its Subsidiaries or any property of Company or any of its
Subsidiaries and that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. Neither Company nor any of its
Subsidiaries (i) is in violation of any applicable laws (including Environmental
Laws) that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect, or (ii) is subject to or in default with
respect to any final judgments, writs, injunctions, decrees, rules or
regulations of any court or any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.
4.7 Payment of Taxes.
Except to the extent permitted by subsection 5.3, all material tax returns
and reports of Company and its Subsidiaries required to be filed by any of them
have been timely filed, and all taxes shown on such tax returns to be due and
payable and all assessments, fees and other governmental charges upon Company
and its Subsidiaries and upon their respective properties, assets, income,
businesses and franchises which are due and payable have been paid when due and
payable. Company knows of no proposed material tax assessment against Company or
any of its Subsidiaries which is not being actively contested by Company or such
Subsidiary in good faith and by appropriate proceedings; provided that such
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.
4.8 Performance of Agreements; Materially Adverse Agreements; Material
Contracts.
A. Neither Company nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.
B. Neither Company nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
C. Schedule 4.8 contains a true, correct and complete list of all the
Material Contracts in effect on the Closing Date. Except as described on
Schedule 4.8, all such Material Contracts are in full force and effect and no
defaults currently exist thereunder other than any such defaults or failure to
be in force and effect which could not reasonably be expected to result in a
Material Adverse Effect.
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4.9 Governmental Regulation.
Neither Company nor any of its Subsidiaries is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
4.10 Securities Activities.
A. Neither Company nor any of its Subsidiaries is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each AXEL and the Revolving
Loan under the Revolving Credit Agreement, not more than 25% of the value of the
assets (either of Company only or of Company and its Subsidiaries on a
consolidated basis) subject to the provisions of subsection 6.2 or 6.5 or
subject to any restriction contained in any agreement or instrument, between
Company and any Lender or any Affiliate of any Lender, relating to Indebtedness
and within the scope of subsection 7.2, will be Margin Stock.
4.11 Employee Benefit Plans.
A. Company, each of its Subsidiaries and each of their respective ERISA
Affiliates are in compliance with all applicable provisions and requirements of
ERISA and the regulations and published interpretations thereunder with respect
to each Employee Benefit Plan, and have performed all their obligations under
each Employee Benefit Plan. Each Employee Benefit Plan which is intended to
qualify under Section 401(a) of the Internal Revenue Code is so qualified.
B. No ERISA Events have occurred or are reasonably expected to occur which
could reasonably be expected to result in liabilities to the Company or any of
its Subsidiaries in excess of $1,000,000 in the aggregate.
C. As of the most recent valuation date for any Pension Plan, the excess
of (1) the actuarial present value (determined on the basis of reasonable
assumptions employed by the independent actuary for each Pension Plan for
purposes of Section 412 of the Internal Revenue Code or Section 302 of ERISA) of
benefit liabilities (as defined in Section 4001(a)(16) of ERISA), over (2) the
fair market value of the assets of such Pension Plan, individually or in the
aggregate for all Pension Plans (excluding for purposes of such computation any
Pension Plans with respect to which assets exceed benefit liabilities), does not
exceed $5,000,000.
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D. As of the most recent valuation date for each Multiemployer Plan for
which the actuarial report is available, the potential liability of Company, its
Subsidiaries and their respective ERISA Affiliates for a complete withdrawal
from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all
Multiemployer Plans, based on information available pursuant to Section 4221(e)
of ERISA, does not exceed $5,000,000.
4.12 Certain Fees.
Except as described in the Confidential Information Memorandum, no
broker's or finder's fee or commission will be payable with respect to this
Agreement or any of the transactions contemplated hereby, and Company hereby
indemnifies Lenders against, and agrees that it will hold Lenders harmless from,
any claim, demand or liability for any such broker's or finder's fees alleged to
have been incurred in connection herewith or therewith and any expenses
(including reasonable fees, expenses and disbursements of counsel) arising in
connection with any such claim, demand or liability.
4.13 Environmental Protection.
Except as set forth in Schedule 4.13 annexed hereto:
(i) neither Company nor any of its Subsidiaries nor any of their
respective Facilities or operations are subject to any outstanding written
order, consent decree or settlement agreement with any Person relating to
(a) any Environmental Law, (b) any Environmental Claim, or (c) any
Hazardous Materials Activity;
(ii) neither Company nor any of its Subsidiaries has received any
letter or request for information under Section 104 of the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. ss.
9604) or any comparable state law;
(iii) there are and, to Company's knowledge, have been no
conditions, occurrences, or Hazardous Materials Activities which could
reasonably be expected to form the basis of an Environmental Claim against
Company or any of its Subsidiaries;
(iv) neither Company nor any of its Subsidiaries nor, to Company's
knowledge, any predecessor of Company or any of its Subsidiaries has filed
any notice under any Environmental Law indicating past or present
treatment of Hazardous Materials at any Facility, and none of Company's or
any of its Subsidiaries' operations involves the generation,
transportation, treatment, storage or disposal of hazardous waste, as
defined under 40 C.F.R. Parts 260-270 or any state equivalent;
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(v) compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws will not,
individually or in the aggregate, have a reasonable possibility of giving
rise to a Material Adverse Effect.
Notwithstanding anything in this subsection 4.13 to the contrary, no event
or condition has occurred or is occurring with respect to Company or any of its
Subsidiaries relating to any Environmental Law, any Release of Hazardous
Materials, or any Hazardous Materials Activity, including any matter disclosed
on Schedule 4.13 annexed hereto, which individually or in the aggregate has had
or could reasonably be expected to have a Material Adverse Effect.
4.14 Employee Matters.
There is no strike or work stoppage in existence or threatened involving
Company or any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect.
4.15 Solvency.
Each Loan Party is and, upon the incurrence of any Obligations by such
Loan Party on any date on which this representation is made, will be, Solvent.
4.16 Matters Relating to Collateral.
A. Creation, Perfection and Priority of Liens. The execution and delivery
of the Collateral Documents by Loan Parties, together with (i) the actions taken
on or prior to the date hereof pursuant to subsections 3.1I, 5.8 and 5.9 and
(ii) the delivery to Collateral Agent of any Pledged Collateral not delivered to
Collateral Agent at the time of execution and delivery of the applicable
Collateral Document (all of which Pledged Collateral has been so delivered) are
effective to create in favor of Collateral Agent for the benefit of Secured
Parties, as security for the respective Secured Obligations (as defined in the
applicable Collateral Document in respect of any Collateral), a valid and
perfected First Priority Lien on all of the Collateral, and all filings and
other actions necessary or desirable to perfect and maintain the perfection and
First Priority status of such Liens have been duly made or taken and remain in
full force and effect, other than the filing of any UCC financing statements
delivered to Collateral Agent for filing (but not yet filed) and the periodic
filing of UCC continuation statements in respect of UCC financing statements
filed by or on behalf of Collateral Agent.
B. Governmental Authorizations. No authorization, approval or other action
by, and no notice to or filing with, any governmental authority or regulatory
body is required for either (i) the pledge or grant by any Loan Party of the
Liens purported to be created in favor of Collateral Agent pursuant to any of
the Collateral Documents or (ii) the exercise by Collateral Agent of any rights
or remedies in respect of any Collateral (whether
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specifically granted or created pursuant to any of the Collateral Documents or
created or provided for by applicable law), except for filings or recordings
contemplated by subsection 4.16A and except as may be required, in connection
with the disposition of any Pledged Collateral, by laws generally affecting the
offering and sale of securities.
C. Absence of Third-Party Filings. Except such as may have been filed in
favor of Collateral Agent as contemplated by subsection 4.16A, no effective UCC
financing statement, fixture filing or other instrument similar in effect
covering all or any part of the Collateral is on file in any filing or recording
office.
D. Margin Regulations. The pledge of the Pledged Collateral pursuant to
the Collateral Documents does not violate Regulation G, T, U or X of the Board
of Governors of the Federal Reserve System.
E. Information Regarding Collateral. All information supplied to
Collateral Agent by or on behalf of any Loan Party with respect to any of the
Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.
4.17 Related Agreements.
A. Delivery of Related Agreements. Company has delivered to Lenders
complete and correct copies of each Related Agreement and of all exhibits and
schedules thereto.
B. Warranties of Company. Except to the extent otherwise set forth herein
or in the schedules hereto, each of the representations and warranties given by
Company in the Recapitalization Agreement is true and correct in all material
respects as of the date hereof (or as of any earlier date to which such
representation and warranty specifically relates) and will be true and correct
in all material respects as of the Closing Date (or as of such earlier date, as
the case may be), in each case subject to the qualifications set forth in the
schedules to the Recapitalization Agreement.
C. Survival. Notwithstanding anything in the Recapitalization Agreement to
the contrary, the representations and warranties of Company set forth in
subsection 4.17B shall, solely for purposes of this Agreement, survive the
Closing Date for the benefit of Lenders.
4.18 Disclosure.
No representation or warranty of Company or any of its Subsidiaries
contained in the Confidential Information Memorandum or in any Loan Document or
in any other document, certificate or written statement furnished to Lenders by
or on behalf of Company or any of its Subsidiaries for use in connection with
the transactions contemplated by this Agreement contains any untrue statement of
a material fact or omits to state a material fact (known to Company, in the case
of any document not furnished by it) necessary in order to
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make the statements contained herein or therein not misleading in light of the
circumstances in which the same were made. Any projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by Company to be reasonable at the time made,
it being recognized by Lenders that such projections as to future events are not
to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ from the projected results. There are
no facts known (or which should upon the reasonable exercise of diligence be
known) to Company (other than matters of a general economic nature) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect and that have not been disclosed herein or in such other
documents, certificates and statements furnished to Lenders for use in
connection with the transactions contemplated hereby.
4.19 Revolving Credit Agreement.
A. Delivery of Revolving Credit Agreement. Company has delivered to
Lenders complete and correct copies of the Revolving Credit Agreement and of all
exhibits and schedules thereto.
B. Warranties of Company. Except to the extent otherwise set forth herein
or in the schedule hereto, each of the representations and warranties given by
Company in the Revolving Credit Agreement is true and correct in all material
respects as of the date hereof (or as of any earlier date to which such
representation and warranty specifically relates) and will be true and correct
in all material respects as of the Closing Date (or as of such earlier date, as
the case may be), in each case subject to the qualifications set forth in the
schedules to the Revolving Credit Agreement.
SECTION 5.
COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the AXEL Commitments
hereunder shall remain in effect and until payment in full of all of the AXELs
and other Obligations unless Requisite Lenders shall otherwise give prior
written consent, Company shall perform, and shall cause each of its Subsidiaries
to perform, all covenants in this Section 5.
5.1 Financial Statements and Other Reports.
Company will maintain, and cause each of its Subsidiaries to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to Administrative Agent and Lenders:
(i) Monthly Financials: as soon as available and in any event within
30 days after the end of each month ending after the Closing Date (or
within 45 days
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after the end of each month which ends a Fiscal Quarter), the consolidated
balance sheets of Company and its Subsidiaries as at the end of such month
and the related consolidated statements of income, stockholders' equity
and cash flows of Company and its Subsidiaries for such month and for the
period from the beginning of the then current Fiscal Year to the end of
such month, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal
Year and the corresponding figures from the Financial Plan for the current
Fiscal Year, to the extent prepared on a monthly basis, all in reasonable
detail and certified by the chief financial officer of Company that they
fairly present, in all material respects, the financial condition of
Company and its Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods indicated, subject
to changes resulting from audit and normal year-end adjustments, for such
month and for the period from the beginning of the then current Fiscal
Year to the end of such month;
(ii) Quarterly Financials: as soon as available and in any event
within 45 days after the end of each of first three Fiscal Quarters of
each year, (a) the consolidated balance sheets of Company and its
Subsidiaries as at the end of such Fiscal Quarter and the related
consolidated statements of income, stockholders' equity and cash flows of
Company and its Subsidiaries for such Fiscal Quarter and for the period
from the beginning of the then current Fiscal Year to the end of such
Fiscal Quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal
Year and the corresponding figures from the Financial Plan for the current
Fiscal Year, all in reasonable detail and certified by the chief financial
officer of Company that they fairly present, in all material respects, the
financial condition of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal
year-end adjustments, and (b) a narrative report describing the operations
of Company and its Subsidiaries in the form of the MD&A, which is prepared
by the Company for public filing for such Fiscal Quarter and for the
period from the beginning of the then current Fiscal Year to the end of
such Fiscal Quarter;
(iii) Year-End Financials: as soon as available and in any event
within 90 days after the end of each Fiscal Year, (a) the consolidated
balance sheets of Company and its Subsidiaries as at the end of such
Fiscal Year and the related consolidated statements of income,
stockholders' equity and cash flows of Company and its Subsidiaries for
such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year and the corresponding
figures from the Financial Plan for the Fiscal Year covered by such
financial statements, all in reasonable detail and certified by the chief
financial officer of Company that they fairly present, in all material
respects, the financial condition of Company and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated, (b) a narrative report
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describing the operations of Company and its Subsidiaries in the form
prepared for presentation to senior management for such Fiscal Year, and
(c) a report thereon of independent certified public accountants of
recognized national standing selected by Company and satisfactory to
Administrative Agent, which report shall be unqualified, shall express no
doubts about the ability of Company and its Subsidiaries to continue as a
going concern, and shall state that such consolidated financial statements
fairly present, in all material respects, the consolidated financial
position of Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated
in conformity with GAAP applied on a basis consistent with prior years
(except as otherwise disclosed in such financial statements) and that the
examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards;
(iv) Officers' and Compliance Certificates: together with each
delivery of financial statements of Company and its Subsidiaries pursuant
to subdivisions (ii) and (iii) above, (a) an Officers' Certificate of
Company stating that the signers have reviewed the terms of this Agreement
and have made, or caused to be made under their supervision, a review in
reasonable detail of the transactions and condition of Company and its
Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence during or
at the end of such accounting period, and that the signers do not have
knowledge of the existence as at the date of such Officers' Certificate,
of any condition or event that constitutes an Event of Default or
Potential Event of Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and what
action Company has taken, is taking and proposes to take with respect
thereto; and (b) a Compliance Certificate demonstrating in reasonable
detail (1) compliance during and at the end of the applicable accounting
periods with the restrictions contained in Section 6, in each case to the
extent compliance with such restrictions is required to be tested at the
end of the applicable accounting period and (2) with respect to any Net
Asset Sale Proceeds received by Company or any of its Subsidiaries during
the second Fiscal Quarter immediately preceding the Fiscal Quarter in
which the applicable accounting period ends, whether or not all or any
portion of such Net Asset Sale Proceeds shall have become Unreinvested
Asset Sale Proceeds;
(v) Reconciliation Statements: if, as a result of any change in
accounting principles and policies from those used in the preparation of
the audited financial statements referred to in subsection 4.3, the
consolidated financial statements of Company and its Subsidiaries
delivered pursuant to subdivisions (ii), (iii) or (xiii) of this
subsection 5.1 will differ in any material respect from the consolidated
financial statements that would have been delivered pursuant to such
subdivisions had no such change in accounting principles and policies been
made, then (a) together with the first delivery of financial statements
pursuant to subdivision (ii), (iii) or (xiii) of this
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subsection 5.1 following such change, consolidated financial statements
of Company and its Subsidiaries for (y) the current Fiscal Year to the
effective date of such change and (z) the two full Fiscal Years
immediately preceding the Fiscal Year in which such change is made, in
each case prepared on a pro forma basis as if such change had been in
effect during such periods, and (b) together with each delivery of
financial statements pursuant to subdivision (ii), (iii) or (xiii) of
this subsection 5.1 following such change, a written statement of the
chief accounting officer or chief financial officer of Company setting
forth the differences which would have resulted if such financial
statements had been prepared without giving effect to such change;
(vi) Accountants' Certification: together with each delivery of
consolidated financial statements of Company and its Subsidiaries pursuant
to subdivision (iii) above, a written statement by the independent
certified public accountants giving the report thereon (a) stating that
their audit examination has included a review of the terms of this
Agreement and the other AXEL Loan Documents as they relate to accounting
matters, (b) stating whether, in connection with their audit examination,
any condition or event that constitutes an Event of Default or Potential
Event of Default has come to their attention and, if such a condition or
event has come to their attention, specifying the nature and period of
existence thereof; provided that such accountants shall not be liable by
reason of any failure to obtain knowledge of any such Event of Default or
Potential Event of Default that would not be disclosed in the course of
their audit examination, and (c) stating that based on their audit
examination nothing has come to their attention that causes them to
believe either or both that the information contained in the certificates
delivered therewith pursuant to subdivision (iv) above is not correct or
that the matters set forth in the Compliance Certificates delivered
therewith pursuant to clause (b) of subdivision (iv) above for the
applicable Fiscal Year are not stated in accordance with the terms of this
Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all reports
submitted to Company by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Company and its Subsidiaries made by such accountants,
including any comment letter submitted by such accountants to management
in connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon their becoming
available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by Company to its
security holders or by any Subsidiary of Company to its security holders
other than Company or another Subsidiary of Company, (b) all regular and
periodic reports and all registration statements (other than on Form S-8
or a similar form) and prospectuses, if any, filed by Company or any of
its Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory authority,
and
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(c) all press releases and other statements made available generally by
Company or any of its Subsidiaries to the public concerning material
developments in the business of Company or any of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any officer of Company
obtaining knowledge (a) of any condition or event that constitutes an
Event of Default or Potential Event of Default, or becoming aware that any
Lender has given any notice (other than to Administrative Agent) or taken
any other action with respect to a claimed Event of Default or Potential
Event of Default, (b) that any Person has given any notice to Company or
any of its Subsidiaries or taken any other action with respect to a
claimed default or event or condition of the type referred to in
subsection 7.2, (c) of any condition or event that would be required to be
disclosed in a current report filed by Company with the Securities and
Exchange Commission on Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in
effect on the date hereof) if Company were required to file such reports
under the Exchange Act, or (d) of the occurrence of any event or change
that has caused or evidences, either in any case or in the aggregate, a
Material Adverse Effect, an Officers' Certificate specifying the nature
and period of existence of such condition, event or change, or specifying
the notice given or action taken by any such Person and the nature of such
claimed Event of Default, Potential Event of Default, default, event or
condition, and what action Company has taken, is taking and proposes to
take with respect thereto;
(x) Litigation or Other Proceedings: (a) promptly upon any officer
of Company obtaining knowledge of (X) the institution of, or non-frivolous
threat of, any action, suit, proceeding (whether administrative, judicial
or otherwise), governmental investigation or arbitration against or
affecting Company or any of its Subsidiaries or any property of Company or
any of its Subsidiaries (collectively, "Proceedings") not previously
disclosed in writing by Company to Lenders or (Y) any material development
in any Proceeding that, in any case:
(1) if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters; and (b) within twenty days after the end of each
Fiscal Quarter, a schedule of all Proceedings involving an alleged
liability of, or claims against or affecting, Company or any of its
Subsidiaries equal to or greater than $500,000, and promptly after request
by Administrative Agent such other information as may be reasonably
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requested by Administrative Agent to enable Administrative Agent and its
counsel to evaluate any of such Proceedings;
(xi) ERISA Events: promptly upon becoming aware of the occurrence of
or forthcoming occurrence of any ERISA Event, a written notice specifying
the nature thereof, what action Company, any of its Subsidiaries or any of
their respective ERISA Affiliates has taken, is taking or proposes to take
with respect thereto and, when known, any action taken or threatened by
the Internal Revenue Service, the Department of Labor or the PBGC with
respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of (a) each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
filed by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates with the Internal Revenue Service with respect to each Pension
Plan; (b) all notices received by Company or any of its Subsidiaries from
a Multiemployer Plan sponsor concerning an ERISA Event; and (c) copies of
such other documents or governmental reports or filings relating to any
Employee Benefit Plan as Administrative Agent shall reasonably request;
(xiii) Financial Plans: as soon as practicable and in any event no
later than 30 days prior to the beginning of each Fiscal Year, a
consolidated plan and financial forecast for such Fiscal Year and each
succeeding Fiscal Year through the date of the last scheduled payment
relating to the AXELs (the "Financial Plan" for such Fiscal Years),
including (a) forecasted consolidated balance sheets and forecasted
consolidated statements of income and cash flows of Company and its
Subsidiaries for each such Fiscal Year, together with pro forma Compliance
Certificates for each such Fiscal Year and an explanation of the
assumptions on which such forecasts are based, (b) forecasted consolidated
statements of income and cash flows of Company and its Subsidiaries for
each month of the first such Fiscal Year, together with an explanation of
the assumptions on which such forecasts are based, and (c) such other
information and projections as any Lender may reasonably request;
(xiv) Insurance: as soon as practicable and in any event by the last
day of each Fiscal Year, a report in form and substance satisfactory to
Administrative Agent outlining all material insurance coverage maintained
as of the date of such report by Company and its Subsidiaries and all
material insurance coverage planned to be maintained by Company and its
Subsidiaries in the immediately succeeding Fiscal Year;
(xv) Board of Directors: with reasonable promptness, written notice
of any change in the Board of Directors of Company;
(xvi) New Subsidiaries: promptly upon any Person becoming a
Subsidiary of Company, a written notice setting forth with respect to such
Person (a) the date
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on which such Person became a Subsidiary of Company and (b) all of the
data required to be set forth in Schedule 4.1 annexed hereto with respect
to all Subsidiaries of Company (it being understood that such written
notice shall be deemed to supplement Schedule 4.1 annexed hereto for all
purposes of this Agreement);
(xvii) Material Contracts: promptly, and in any event within ten
Business Days after any Material Contract of Company or any of its
Subsidiaries is terminated or amended in a manner that is materially
adverse to Company or such Subsidiary, as the case may be, or any new
Material Contract is entered into, a written statement describing such
event with copies of such material amendments or new contracts, and an
explanation of any actions being taken with respect thereto; and
(xviii) Other Information: with reasonable promptness, such other
information and data with respect to Company or any of its Subsidiaries
as from time to time may be reasonably requested by any Lender.
5.2 Corporate Existence, etc.
Except as permitted under subsection 6.5, Company will, and will cause
each of its Subsidiaries to, at all times preserve and keep in full force and
effect its corporate existence and all rights and franchises material to its
business; provided, however that neither Company nor any of its Subsidiaries
shall be required to preserve any such right or franchise if the Board of
Directors of Company or such Subsidiary shall determine that the preservation
thereof is no longer desirable in the conduct of the business of Company or such
Subsidiary, as the case may be, and that the loss thereof is not disadvantageous
in any material respect to Company, such Subsidiary or Lenders.
5.3 Payment of Taxes and Claims; Tax Consolidation.
A. Company will, and will cause each of its Subsidiaries to, pay all
material taxes, assessments and other governmental charges imposed upon it or
any of its properties or assets or in respect of any of its income, businesses
or franchises before any penalty accrues thereon, and all claims (including
claims for labor, services, materials and supplies) for sums that have become
due and payable and that by law have or may become a Lien upon any of its
properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided that no such charge or claim need be
paid if it is being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted, so long as (1) such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor and (2) in the case of a charge or claim which has
or may become a Lien against any of the Collateral, such contest proceedings
conclusively operate to stay the sale of any portion of the Collateral to
satisfy such charge or claim.
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B. Company will not, nor will it permit any of its Subsidiaries to, file
or consent to the filing of any consolidated income tax return with any Person
(other than Company or any of its Subsidiaries).
5.4 Maintenance of Properties; Insurance; Application of Net
Insurance/Condemnation Proceeds.
A. Maintenance of Properties. Company will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all material properties
used or useful in the business of Company and its Subsidiaries (including all
Intellectual Property) and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof except where the failure
to maintain such properties could not reasonably be expected in any individual
case or in the aggregate to have a Material Adverse Effect.
B. Insurance. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by corporations
of established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Without limiting the generality
of the foregoing, Company will maintain or cause to be maintained (i) flood
insurance with respect to each Flood Hazard Property that is located in a
community that participates in the National Flood Insurance Program, in each
case in compliance with any applicable regulations of the Board of Governors of
the Federal Reserve System, and (ii) replacement value casualty insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are at all times
satisfactory to Administrative Agent in its commercially reasonable judgment.
Each such policy of insurance shall (a) name Collateral Agent for the benefit of
Secured Parties as an additional insured thereunder as its interests may appear
and (b) in the case of each business interruption and casualty insurance policy,
contain a loss payable clause or endorsement, satisfactory in form and substance
to Collateral Agent, that names Collateral Agent for the benefit of Secured
Parties as the loss payee thereunder for any covered loss in excess of
$1,500,000 and provides for at least 30 days prior written notice to
Administrative Agent of any modification or cancellation of such policy.
C. Application of Net Insurance/Condemnation Proceeds.
(i) Business Interruption Insurance. Upon receipt by Company or any
of its Subsidiaries of any business interruption insurance proceeds
constituting Net Insurance/Condemnation Proceeds, (a) so long as no Event
of Default shall have
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occurred and be continuing, Company or such Subsidiary may retain and
apply such Net Insurance/Condemnation Proceeds for working capital
purposes, and (b) if an Event of Default shall have occurred and be
continuing, Company shall apply an amount equal to such Net
Insurance/Condemnation Proceeds to prepay the AXELs as provided in
subsection 2.4B(ii)(b);
(ii) Casualty Insurance/Condemnation Proceeds. Upon receipt by
Company or any of its Subsidiaries of any Net Insurance/Condemnation
Proceeds other than from business interruption insurance, (a) so long as
no Event of Default shall have occurred and be continuing, Company shall,
or shall cause one or more of its Subsidiaries to, (1) subject to clause
(iv) below, promptly and diligently and in any event within six months of
receipt apply such Net Insurance/Condemnation Proceeds to pay or reimburse
the costs of repairing, restoring or replacing the assets in respect of
which such Net Insurance/Condemnation Proceeds were received or, (2) to
the extent not so applied, or applied pursuant to clause (iv) below within
six months of receipt by Company or any of its Subsidiaries to prepay the
AXELs as provided in subsection 2.4B(ii)(b), and (b) if an Event of
Default shall have occurred and be continuing, Company shall apply an
amount equal to such Net Insurance/Condemnation Proceeds to prepay the
AXELs as provided in subsection 2.4B(ii)(b).
(iii) Net Insurance/Condemnation Proceeds Received by Collateral
Agent. Upon receipt by Collateral Agent of any Net Insurance/Condemnation
Proceeds as loss payee, such loss proceeds shall be held and applied in
accordance with the terms of the Intercreditor Agreement.
(iv) Reinvestment of Insurance Proceeds. So long as no Event of
Default or Potential Event of Default shall have occurred and be
continuing Company and its Subsidiaries may reinvest in the business of
Company and its Subsidiaries up to $1,000,000 per year of Net
Insurance/Condemnation Proceeds recovered by the Company or any of its
Subsidiaries provided that such funds are reinvested within six months of
receipt by Company or any of its Subsidiaries.
5.5 Inspection Rights; Lender Meeting.
A. Inspection Rights. Company shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of Company or of any of its
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided that Company may, if it so chooses, be present at or participate in
any such discussion), all upon reasonable notice and at such reasonable times
during normal business hours and as often as may reasonably be requested.
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B. Lender Meeting. Company will, upon the request of Arranger,
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year to be held at
Company's corporate offices (or at such other location as may be agreed to by
Company and Administrative Agent) at such time as may be agreed to by Company
and Administrative Agent.
5.6 Compliance with Laws, etc.
Company shall comply, and shall cause each of its Subsidiaries and all
other Persons on or occupying any Facilities to comply, with the requirements of
all applicable laws, rules, regulations and orders of any governmental authority
(including all Environmental Laws), noncompliance with which could reasonably be
expected to cause, individually or in the aggregate, a Material Adverse Effect.
5.7 Environmental Review and Investigation, Disclosure, Etc.; Company's
Actions Regarding Hazardous Materials Activities, Environmental Claims and
Violations of Environmental Laws.
A. Environmental Review and Investigation. Company agrees that
Administrative Agent may, from time to time and in its reasonable discretion,
(i) retain, at Company's expense, an independent professional consultant to
review any environmental audits, investigations, analyses and reports relating
to Hazardous Materials prepared by or for Company and (ii) conduct its own
investigation of any Facility; provided that, in the case of any Facility no
longer owned, leased, operated or used by Company or any of its Subsidiaries,
Company shall only be obligated to use its good faith and reasonable efforts to
obtain permission for Administrative Agent's professional consultant to conduct
an investigation of such Facility. For purposes of conducting such a review
and/or investigation, Company hereby grants to Administrative Agent and its
agents, employees, consultants and contractors the right to enter into or onto
any Facilities currently owned, leased, operated or used by Company or any of
its Subsidiaries and to perform such tests on such property (including taking
samples of soil, groundwater and suspected asbestoscontaining materials) as are
reasonably necessary in connection therewith. Any such investigation of any
Facility shall be conducted, unless otherwise agreed to by Company and
Administrative Agent, during normal business hours and, to the extent reasonably
practicable, shall be conducted so as not to interfere with the ongoing
operations at such Facility or to cause any damage or loss to any property at
such Facility. Company and Administrative Agent hereby acknowledge and agree
that any report of any investigation conducted at the request of Administrative
Agent pursuant to this subsection 5.7A will be obtained and shall be used by
Administrative Agent and Lenders for the purposes of Lenders' internal credit
decisions, to monitor and police the AXELs and to protect Lenders' security
interests, if any, created by the AXEL Loan Documents. Administrative Agent
agrees to deliver a copy of any such report to Company with the understanding
that Company acknowledges and agrees that (x) it will indemnify and hold
harmless Administrative Agent and each Lender from any costs, losses or
liabilities relating to
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Company's use of or reliance on such report, (y) neither Administrative Agent
nor any Lender makes any representation or warranty with respect to such report,
and (z) by delivering such report to Company, neither Administrative Agent nor
any Lender is requiring or recommending the implementation of any suggestions or
recommendations contained in such report.
B. Environmental Disclosure. Company will deliver to Administrative Agent
and Lenders:
(i) Environmental Audits and Reports. As soon as practicable
following receipt thereof, copies of all environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Company or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any Facility or with
respect to any Environmental Claims;
(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly
upon the occurrence thereof, written notice describing in reasonable
detail (a) any Release required to be reported by Company or any of its
Subsidiaries to any federal, state or local governmental or regulatory
agency under any applicable Environmental Laws, (b) any remedial action
taken by Company or any of its Subsidiaries or any other Person of which
Company has knowledge in response to (1) any Hazardous Materials
Activities the existence of which has a reasonable possibility of
resulting in one or more Environmental Claims having, individually or in
the aggregate, a Material Adverse Effect, or (2) any Environmental Claims
that, individually or in the aggregate, have a reasonable possibility of
resulting in a Material Adverse Effect, and (c) Company's discovery of any
occurrence or condition on any real property adjoining or in the vicinity
of any Facility that could reasonably be expected to cause such Facility
or any part thereof to be subject to any material restrictions on the
ownership, occupancy, transferability or use thereof under any
Environmental Laws.
(iii) Written Communications Regarding Environmental Claims,
Releases, Etc. As soon as practicable following the sending or receipt
thereof,by Company or any of its Subsidiaries, a copy of any and all
written communications with respect to (a) any Environmental Claims that,
individually or in the aggregate, are reasonably expected to have a
Material Adverse Effect, (b) any Release required to be reported by
Company or any of its Subsidiaries to any federal, state or local
governmental or regulatory agency, and (c) any request made to Company or
any of its Subsidiaries for information from any governmental agency that
suggests such agency is investigating whether Company or any of its
Subsidiaries may be potentially responsible for any Hazardous Materials
Activity.
(iv) Notice of Certain Proposed Actions Having Environmental Impact.
Prompt written notice describing in reasonable detail (a) any proposed
acquisition
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of stock, assets, or property by Company or any of its Subsidiaries that
could reasonably be expected to (1) expose Company or any of its
Subsidiaries to, or result in, Environmental Claims that would have,
individually or in the aggregate, a Material Adverse Effect or (2) result
in Company or any of its Subsidiaries failing to maintain in full force
and effect all material Governmental Authorizations required under any
Environmental Laws for their respective operations and (b) any proposed
action to be taken by Company or any of its Subsidiaries to modify current
operations in a manner that could reasonably be expected to subject
Company or any of its Subsidiaries to any additional obligations or
requirements under any Environmental Laws.
(v) Other Information. With reasonable promptness, such other
documents and information as from time to time may be reasonably requested
by Administrative Agent in relation to any matters disclosed pursuant to
this subsection 5.7.
C. Company's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws.
(i) Remedial Actions Relating to Hazardous Materials Activities.
Company shall promptly undertake, and shall cause each of its Subsidiaries
promptly to undertake, any and all investigations, studies, sampling,
testing, abatement, cleanup, removal, remediation or other response
actions necessary to remove, remediate, clean up or abate any Hazardous
Materials Activity on, under or about any Facility that is in violation of
any Environmental Laws or that presents a material risk of giving rise to
an Environmental Claim. In the event Company or any of its Subsidiaries
undertakes any such action with respect to any Hazardous Materials,
Company or such Subsidiary shall conduct and complete such action in
compliance with all applicable Environmental Laws and in accordance with
the policies, orders and directives of all federal, state and local
governmental authorities except when, and only to the extent that,
Company's or such Subsidiary's liability with respect to such Hazardous
Materials Activity is being contested in good faith by Company or such
Subsidiary.
(ii) Actions with Respect to Environmental Claims and Violations of
Environmental Laws. Company shall promptly take, and shall cause each of
its Subsidiaries promptly to take, any and all actions necessary to (i)
cure any violation of applicable Environmental Laws by Company or its
Subsidiaries and (ii) make an appropriate response to any Environmental
Claim against Company or any of its Subsidiaries and discharge any
obligations it may have to any Person thereunder.
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5.8 Execution of Subsidiary Guaranty and Personal Property Collateral
Documents by Certain Subsidiaries and Future Subsidiaries.
A. Execution of Subsidiary Guaranty and Personal Property Collateral
Documents. In the event that any Domestic Subsidiary existing on the Closing
Date that has not previously executed the Subsidiary Guaranty hereafter owns or
acquires assets with an aggregate fair market value (without netting such fair
market value against any liability of such Subsidiary) exceeding $500,000, or in
the event that any Person becomes a Material Domestic Subsidiary after the date
hereof, Company will promptly notify Collateral Agent of that fact and cause
such Subsidiary to execute and deliver to Collateral Agent a counterpart of the
Subsidiary Guaranty and a Subsidiary Pledge Agreement and a Subsidiary Security
Agreement and to take all such further actions and execute all such further
documents and instruments (including actions, documents and instruments
comparable to those described in subsection 3.1I) as may be necessary or, in the
opinion of Collateral Agent, desirable to create in favor of Collateral Agent,
for the benefit of Secured Parties, a valid and perfected First Priority Lien on
all of the personal and mixed property assets of such Subsidiary described in
the applicable forms of Collateral Documents.
B. Subsidiary Charter Documents, Legal Opinions, Etc. Company shall
deliver to Collateral Agent, together with such AXEL Loan Documents, (i)
certified copies of such Subsidiary's Certificate or Articles of Incorporation,
together with a good standing certificate from the Secretary of State of the
jurisdiction of its incorporation and each other state in which such Person is
qualified as a foreign corporation to do business and, to the extent generally
available, a certificate or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate taxing authority of
each of such jurisdictions, each to be dated a recent date prior to their
delivery to Collateral Agent, (ii) a copy of such Subsidiary's Bylaws, certified
by its corporate secretary or an assistant secretary as of a recent date prior
to their delivery to Collateral Agent, (iii) a certificate executed by the
secretary or an assistant secretary of such Subsidiary as to (a) the fact that
the attached resolutions of the Board of Directors of such Subsidiary approving
and authorizing the execution, delivery and performance of such AXEL Loan
Documents are in full force and effect and have not been modified or amended and
(b) the incumbency and signatures of the officers of such Subsidiary executing
such AXEL Loan Documents, and (iv) a favorable opinion of counsel to such
Subsidiary, in form and substance satisfactory to Collateral Agent and its
counsel, as to (a) the due organization and good standing of such Subsidiary,
(b) the due authorization, execution and delivery by such Subsidiary of such
AXEL Loan Documents, (c) the enforceability of such AXEL Loan Documents against
such Subsidiary, (d) such other matters (including matters relating to the
creation and perfection of Liens in any Collateral pursuant to such AXEL Loan
Documents) as Collateral Agent may reasonably request, all of the foregoing to
be satisfactory in form and substance to Administrative Agent and its counsel.
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C. Foreign Subsidiary Loan Documents. In the event that any Foreign
Subsidiary existing on the Closing Date whose shares have not been pledged
pursuant to an Auxiliary Pledge Agreement owns or acquires assets with an
aggregate fair market value (without netting such fair market value against any
liability of such Subsidiary) exceeding $1,500,000, or in the event that any
person becomes a Foreign Subsidiary which owns assets with an aggregate fair
market value (without netting such fair market value against any liability of
such Subsidiary) exceeding $1,500,000, Company will promptly notify Collateral
Agent of that fact and shall or cause the applicable subsidiary which owns
equity in such Foreign Subsidiary to execute and deliver to Collateral Agent an
Auxiliary Pledge Agreement in form and substance satisfactory to Collateral
Agent; to take all such further actions and execute such further documents and
instruments as may be necessary or, in the opinion of Collateral Agent
reasonably desirable, to perfect a Lien on the equity interests of such Foreign
Subsidiary for the benefit of Secured Parties and to deliver to Collateral Agent
an opinion of counsel (which counsel shall be reasonably acceptable to
Collateral Agent) as to the enforceability of the Auxiliary Pledge Agreement
under the laws of such Foreign Subsidiary's jurisdiction of organization and
such other matters as Collateral Agent may reasonably request (including as to
the perfection of liens on such equity interests)
D. If at any time JCS Realty acquires any personal property assets
with an aggregate fair market value (without netting such fair market value
against any liability of JCS Realty) in excess of $500,000, Company will
promptly notify Collateral Agent of that fact and cause JCS Realty to execute
and deliver all documents and to take all such further actions as may be
necessary or, in the opinion of Collateral Agent, desirable to create in favor
of Collateral Agent, for the benefit of Secured Parties, a valid and perfected
First Priority Lien on such property in all relevant jurisdictions.
5.9 Conforming Leasehold Interests; Matters Relating to Real Property
Collateral.
A. Conforming Leasehold Interests. If Company or any of its Subsidiaries
acquires any Leasehold Property, Company shall, or shall cause such Subsidiary
to, use its reasonable and good faith efforts (without requiring Company or such
Subsidiary to relinquish any material rights or incur any material obligations
or to expend more than a nominal amount of money over and above the
reimbursement, if required, of the Landlord's reasonable out-of-pocket costs,
including attorneys' fees) to cause such Leasehold Property to be a Conforming
Leasehold Interest.
B. Mortgages, Etc. From and after the Closing Date, in the event that (i)
Company or any Subsidiary Guarantor acquires any fee interest in real property
or any Material Leasehold Property, (ii) with respect to any Material Leasehold
Property or any real property in which Company has a fee interest in on or prior
to the Closing Date, any first priority mortgage existing on or prior to the
Closing Date on such property is removed or (iii) at the time any Person becomes
a Subsidiary Guarantor, such Person owns or holds any fee interest in real
property or any Material Leasehold Property, in all cases excluding any such
Real Property Asset the encumbrancing of which requires the consent of any
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applicable lessor or (in the case of clause (iii) above) then-existing senior
lienholder, where Company and its Subsidiaries are unable to obtain such
lessor's or senior lienholder's consent (any such non-excluded Real Property
Asset described in the foregoing clause (i), (ii) or (iii) being a "Mortgaged
Property"), Company or such Subsidiary Guarantor shall promptly notify
Collateral Agent, and shall deliver upon Collateral Agent's written request, as
soon as practicable after such Person acquires such Mortgaged Property or
becomes a Subsidiary Guarantor, as the case may be, the following:
(i) Mortgage. A fully executed and notarized Mortgage duly recorded
in all
appropriate places in all applicable jurisdictions, encumbering the
interest of such Loan Party in such Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of counsel to such
Loan Party, in form and substance satisfactory to Collateral Agent and its
counsel, as to the due authorization, execution and delivery by such Loan
Party of such Mortgage and such other matters as Collateral Agent may
reasonably request, and (b) if required by Collateral Agent, an opinion of
counsel (which counsel shall be reasonably satisfactory to Collateral
Agent) in the state in which such Mortgaged Property is located with
respect to the enforceability of such Mortgage and such other matters
(including any matters governed by the laws of such state regarding
personal property security interests in respect of any Collateral) as
Collateral Agent may reasonably request, in each case in form and
substance reasonably satisfactory to Collateral Agent;
(iii) Landlord Consent and Estoppel; Recorded Leasehold Interest. In
the case of a Mortgaged Property consisting of a Leasehold Property, (a)
if such Leasehold Property is holding or will hold inventory or equipment
with an aggregate fair market value exceeding $500,000, a Landlord Consent
and Estoppel provided that Company shall only be required to use
reasonable and good faith efforts to obtain such Landlord Consent and
Estoppel and in no event shall Company be obligated to pay any fee, charge
or other consideration to any landlord in order to obtain such Landlord
Consent and Estoppel, other than, if required, the landlord's reasonable
out-of-pocket costs, including attorneys' fees and (b) if such Leasehold
Property is a Recorded Leasehold Interest, evidence to that effect
(iv) Title Insurance. (a) If reasonably requested by Collateral
Agent, an ALTA mortgagee title insurance policy or an unconditional
commitment therefor (a "Mortgage Policy") issued by the Title Company with
respect to such Mortgaged Property, in an amount satisfactory to
Collateral Agent, insuring fee simple title to, or a valid leasehold
interest in, such Mortgaged Property vested in such Loan Party and
assuring Collateral Agent that such Mortgage creates a valid and
enforceable First Priority mortgage Lien on such Mortgaged Property,
subject only to, if available in the state in which such Mortgaged
Property is located, a standard survey exception and to Permitted
Encumbrances, which Mortgage Policy (1) shall include, if available
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in the state in which such Mortgaged Property is located, an endorsement
for mechanics' liens, for future advances under this Agreement and for any
other matters reasonably requested by Collateral Agent and (2) shall
provide for such affirmative insurance and such reinsurance as Collateral
Agent may reasonably request, all of the foregoing in form and substance
reasonably satisfactory to Collateral Agent; and (b) evidence satisfactory
to Collateral Agent that such Loan Party has (i) delivered to the Title
Company all certificates and affidavits customarily required by the Title
Company in connection with the issuance of the Mortgage Policy and (ii)
paid to the Title Company or to the appropriate governmental authorities
all expenses and premiums of the Title Company in connection with the
issuance of the Mortgage Policy and all recording and stamp taxes
(including mortgage recording and intangible taxes) payable in connection
with recording the Mortgage in the appropriate real estate records;
provided however, that Administrative Agent shall allow for such
reasonable revisions to the applicable mortgage and shall otherwise take
such steps as are reasonable and customary to minimize recording, mortgage
recording, stamp, documentary and intangible taxes, at Company's cost;
(v) Title Report. If no Mortgage Policy is required with respect to
such Mortgaged Property, a title report issued by the Title Company with
respect thereto, dated not more than 30 days prior to the date such
Mortgage is to be recorded and satisfactory in form and substance to
Collateral Agent;
(vi) Copies of Documents Relating to Title Exceptions. Copies of all
recorded documents listed as exceptions to title or otherwise referred to
in the Mortgage Policy or title report delivered pursuant to clause (iv)
or (v) above;
(vii) Matters Relating to Flood Hazard Properties. (a) Evidence,
which may be in the form of a letter from an insurance broker or a
municipal engineer, as to (1) whether such Mortgaged Property is a Flood
Hazard Property and (2) if so, whether the community in which such Flood
Hazard Property is located is participating in the National Flood
Insurance Program, (b) if such Mortgaged Property is a Flood Hazard
Property, such Loan Party's written acknowledgement of receipt of written
notification from Collateral Agent (1) that such Mortgaged Property is a
Flood Hazard Property and (2) as to whether the community in which such
Flood Hazard Property is located is participating in the National Flood
Insurance Program, and (c) in the event such Mortgaged Property is a Flood
Hazard Property that is located in a community that participates in the
National Flood Insurance Program, evidence that Company has obtained flood
insurance in respect of such Flood Hazard Property to the extent required
under the applicable regulations of the Board of Governors of the Federal
Reserve System; and
(viii) Environmental Audit. If required by Collateral Agent, reports
and other information, in form, scope and substance satisfactory to
Collateral Agent and prepared by environmental consultants satisfactory to
Collateral Agent, concerning
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any environmental hazards or liabilities to which Company or any of its
Subsidiaries may be subject with respect to such Mortgaged Property.
C. Real Estate Appraisals. Company shall, and shall cause each of its
Subsidiaries to, permit an independent real estate appraiser satisfactory to
Collateral Agent, upon reasonable notice, to visit and inspect any Additional
Mortgaged Property for the purpose of preparing an appraisal of such Mortgaged
Property satisfying the requirements of any applicable laws and regulations (in
each case to the extent required under such laws and regulations as determined
by Collateral Agent in its discretion).
5.10 Interest Rate Protection.
At all times after the date which is 45 days after the Closing Date,
Company shall maintain in effect one or more Interest Rate Agreements with
respect to the AXELs and the Revolving Loans, each such Interest Rate Agreement
to be for a term of not less than three years from the Closing Date and in form
and substance reasonably satisfactory to Administrative Agent, which Interest
Rate Agreements shall effectively limit the Unadjusted Eurodollar Rate Component
(as hereinafter defined) of the interest costs to Company (i) with respect to an
aggregate notional principal amount of not less than 25% of the aggregate
principal amount of the AXELs outstanding on the Closing Date (based on the
assumption that such notional principal amount was a Eurodollar Rate AXEL with
an Interest Period of three months) to a rate equal to not more than 9% per
annum and (ii) with respect to an aggregate notional principal amount of not
less than 25% of the aggregate principal amount of the AXELs outstanding on the
Closing Date (based on the assumption that such notional principal amount was a
Eurodollar Rate AXEL with an Interest Period of three months) to a rate equal to
not more than 10% per annum. For purposes of this subsection 5.10, the term
"Unadjusted Eurodollar Rate Component" means that component of the interest
costs to Company in respect of a Eurodollar Rate AXEL that is based upon the
rate obtained pursuant to the definition of Adjusted Eurodollar Rate (without
giving effect to the last paragraph thereof).
5.11 Cash Management System.
Company shall establish and thereafter maintain a cash management system
for the Loan Parties in form and substance reasonably satisfactory to the
Arranger and the Administrative Agent. The terms and conditions of such cash
management system shall be as set forth in Schedule 5.11 annexed hereto.
5.12 Trademarks and Patents.
If Company or any of its Subsidiaries acquires any material patents,
trademarks or copyrights, Company shall promptly notify the Collateral Agent of
that fact and, if requested by Administrative Agent, Company shall, or cause the
applicable Subsidiary to, execute and deliver to Collateral Agent supplemental
security agreements and take such other actions
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as the Collateral Agent may reasonably request to create in favor of Collateral
Agent, for the benefit of Secured Parties a valid and perfected First Priority
Lien on such patents, trademarks or copyrights.
SECTION 6.
COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the AXEL Commitments
hereunder shall remain in effect and until payment in full of all of the AXELs
and other Obligations unless Requisite Lenders shall otherwise give prior
written consent, Company shall perform, and shall cause each of its Subsidiaries
to perform, all covenants in this Section 6.
6.1 Indebtedness and Issuance of Disqualified Stock.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, (collectively, "incur"
and correlatively, an "incurrence" of) any Indebtedness (including Acquired
Debt) and that the Company will not issue any Disqualified Stock; provided,
however, that the Company may incur Indebtedness (including Acquired Debt) or
issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio for the
Company for the most recent four full fiscal quarters for which internal
financial statements are available at the time of such incurrence would have
been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred or the Disqualified Stock had been issued, as the case may be,
and the application of the proceeds therefrom had occurred at the beginning of
such four-quarter period.
The foregoing provision will not apply to:
(i) the incurrence by the Company (and the Guarantee thereof
by the Guarantors) of Obligations under this Agreement;
(ii) the incurrence by Company (and the Guarantee thereof by
the Guarantors) of Indebtedness under the Revolving Credit Agreement
and the issuance of letters of credit under the Revolving Credit
Agreement (with letters of credit being deemed to have a principal
amount equal to the aggregate maximum amount available to be drawn
thereunder, assuming compliance with all conditions for drawing) up
to an aggregate principal amount of $50,000,000 outstanding at any
one time, less permanent commitment reductions with respect to
Revolving Loans and letters of credit under the Revolving Credit
Agreement (in each case, other than in connection with an amendment,
refinancing, refunding, replacement, renewal or modification) made
after the date hereof;
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(iii) the incurrence by the Company or any of its Restricted
Subsidiaries of any Existing Indebtedness;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by the Senior Subordinated
Notes (but, with respect to this clause (iv), only up to the
aggregate principal amount thereof issued on the Closing Date);
(v) Indebtedness (including Acquired Debt) incurred by the
Company or any of its Restricted Subsidiaries to finance the
purchase, lease or improvement of property (real or personal),
assets or equipment (whether through the direct purchase of assets
or the Capital Stock of any Person owning such assets), in an
aggregate principal amount not to exceed $15,000,000 plus 5% of the
increase in Total Assets since the Closing Date;
(vi) Indebtedness incurred by the Company or any of its
Restricted Subsidiaries constituting reimbursement obligations with
respect to letters of credit issued in the ordinary course of
business, including, without limitation, letters of credit in
respect of workers' compensation claims or self-insurance, or other
Indebtedness with respect to reimbursement type obligations
regarding workers' compensation claims;
(vii) intercompany Indebtedness between or among the Company
and any of its Restricted Subsidiaries and Guarantees by the Company
of Indebtedness of any Restricted Subsidiary of the Company or by a
Restricted Subsidiary of the Company of Indebtedness of any other
Restricted Subsidiary of the Company or the Company; provided that
(a) all such intercompany Indebtedness shall be evidenced by
promissory notes subject to a first priority perfected pledge in
favor of Lenders, (b) all such intercompany Indebtedness owed by
Company to or in respect of any of its Subsidiaries and all such
Guarantees shall be subordinated in right of payment to the payment
in full of the Obligations pursuant to the terms of the applicable
promissory notes or an intercompany subordination agreement and (c)
any payment by any Subsidiary of Company under any guaranty of the
Obligations shall result in a pro tanto reduction of the amount of
any intercompany Indebtedness owed by such Subsidiary to Company or
to any of its Subsidiaries for whose benefit such payment is made;
(viii) Hedging Obligations that are incurred (1) for the
purpose of fixing or hedging interest rate or currency exchange rate
risk with respect to any Indebtedness that is permitted by the terms
of this Agreement to be outstanding or (2) for the purpose of fixing
or hedging currency exchange rate risk with respect to any purchases
or sales of goods or other transactions or expenditures made or to
be made in the ordinary course of business and
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consistent with past practices as to which the payment therefor or
proceeds therefrom, as the case may be, are denominated in a
currency other than U.S. dollars;
(ix) obligations in respect of performance and surety bonds
and completion guarantees provided by the Company or any Restricted
Subsidiary in the ordinary course of business;
(x) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for,
or the net proceeds of which are used to extend, refinance, renew,
replace, defease or refund, Indebtedness that was permitted by this
Agreement to be incurred;
(xi) the incurrence by the Company's Unrestricted Subsidiaries
of Non-Recourse Debt, provided, however, that if any such
Indebtedness ceases to be Non-Recourse Debt of an Unrestricted
Subsidiary, such event shall be deemed to constitute an incurrence
of Indebtedness by a Restricted Subsidiary of the Company; and
(xii) the incurrence by the Company of additional Indebtedness
(including any increase in the AXEL Commitment under this Agreement
or any increase in the Revolving Loan Commitment under the Revolving
Credit Agreement) not otherwise permitted hereunder in an amount
under this clause (xii) not to exceed $25,000,000 in aggregate
principal amount (or accreted value, as applicable) outstanding at
any one time.
6.2 Liens and Related Matters.
A. Company shall not and shall not permit any of its Subsidiaries to
directly or indirectly, create, incur, assume or suffer to exist any Lien that
secures obligations under any Indebtedness on any asset or property now owned or
hereafter acquired by the Company or any of its Subsidiaries, or on any income
or profits therefrom, or assign or convey any right to receive income therefrom
to secure any Indebtedness other than (i) Permitted Encumbrances, (ii) Liens
securing (a) purchase money Indebtedness incurred to finance the purchase price
of specific assets and Capital Leases, so long as, upon default, the holder of
such Indebtedness may seek recourse or payment against Company and its
Subsidiaries only through the return or sale of the assets financed thereby or
(b) Indebtedness assumed or acquired in connection with any acquisition to the
extent attaching only to assets acquired and so long as the Indebtedness secured
thereby is recourse only to the Person acquired or acquiring such assets
provided in each case that the aggregate amount of Indebtedness secured by such
Liens does not exceed $10,000,000 in the aggregate and (iii) any other Liens
permitted under subsection 7.2A of the Revolving Credit Agreement (as in effect
on the date hereof) other than clause (iv) thereof.
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B. If the Company or any of its Subsidiaries shall create or assume any
Lien upon any of its properties or assets, whether now owned or hereafter
acquired, other than as permitted under subsection 6.2A, it shall make or cause
to be made effective provision whereby the obligations of the Company and the
Subsidiaries under the AXEL Loan Documents will be secured by such Lien equally
and ratably with any and all other Indebtedness secured thereby as long as any
such Indebtedness shall be so secured; provided that, notwithstanding the
foregoing, this provision shall not be construed as a consent by the Lenders to
the creation or assumption of any Lien other than Liens permitted under
subsection 6.2A.
6.3 Restricted Payments.
A. Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other payment or distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Company or
dividends or distributions payable to the Company or any Restricted Subsidiary
of the Company); (ii) purchase, redeem, defease or otherwise acquire or retire
for value any Equity Interests of the Company; (iii) make any payment on or with
respect to, or purchase, redeem, defease or otherwise acquire or retire for
value any Subordinated Indebtedness, except for a payment of principal or
interest at Stated Maturity; or (iv) make any Restricted Investment (all such
payments and other actions set forth in clauses (i) through (iv) above being
collectively referred to as "Restricted Payments"), unless, at the time of and
after giving effect to such Restricted Payment:
(a) no Potential Event of Default or Event of Default shall have
occurred and be continuing or would occur as a consequence thereof;
(b) the Company would, at the time of such Restricted Payment and
immediately after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable four-quarter
period, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
subsection 6.1; and
(c) such Restricted Payment, together with the aggregate of all
other Restricted Payments made by the Company and its Restricted
Subsidiaries permitted by clause (i) of the next succeeding paragraph, but
excluding all other Restricted Payments permitted by the next succeeding
paragraph), is less than the sum of (i) 50% of the Consolidated Net Income
of the Company for the period (taken as one accounting period) from the
beginning of the first fiscal quarter commencing after the date hereof to
the end of the Company's most recently ended fiscal quarter for which
internal financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a deficit,
less 100% of such deficit), plus (ii) 100% of the aggregate net cash
proceeds and the fair
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market value, as determined in good faith by the Board of Directors, of
marketable securities received by the Company from the issue or sale since
the date hereof of Equity Interests (including Retired Capital Stock (as
defined below)) of the Company (except in connection with the Merger) or
of debt securities of the Company that have been converted into such
Equity Interests (other than Refunding Capital Stock (as defined below) or
Equity Interests or convertible debt securities of the Company sold to a
Restricted Subsidiary of the Company and other than Disqualified Stock or
debt securities that have been converted into Disqualified Stock), plus
(iii) 100% of the aggregate amounts contributed to the common equity
capital of the Company since the date hereof, (except amounts contributed
to finance the Merger), plus (iv) 100% of the aggregate amounts received
in cash and the fair market value of marketable securities (other than
Restricted Investments) received from (x) the sale or other disposition of
Restricted Investments made by the Company and its Restricted Subsidiaries
since the date hereof or (y) the sale of the stock of an Unrestricted
Subsidiary or the sale of all or substantially all of the assets of an
Unrestricted Subsidiary to the extent that a liquidating dividend is paid
to the Company or any Subsidiary from the proceeds of such sale, plus (v)
100% of any dividends received by the Company or a Wholly Owned Restricted
Subsidiary of the Company after the date hereof from an Unrestricted
Subsidiary of the Company, plus (vi) $10,000,000.
The foregoing provisions will not prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at the date of declaration such payment would have
complied with the provisions of this Agreement;
(ii) the redemption, repurchase, retirement or other acquisition of
any Equity Interests of the Company or any Restricted Subsidiary (the
"Retired Capital Stock") or any Subordinated Indebtedness, in each case,
in exchange for, or out of the proceeds of the substantially concurrent
sale (other than to a Restricted Subsidiary of the Company) of Equity
Interests of the Company (other than any Disqualified Stock) (the
"Refunding Capital Stock"); provided that the amount of any such net cash
proceeds that are utilized for any such redemption, repurchase, retirement
or other acquisition shall be excluded from clause (c)(ii) of the
immediately preceding paragraph;
(iii) the defeasance, redemption or repurchase of Subordinated
Indebtedness with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness;
(iv) the redemption, repurchase or other acquisition or retirement
for value of any Equity Interests of the Company or any Restricted
Subsidiary of the Company held by any member of the Company's (or any of
its Subsidiaries') management
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pursuant to any management equity subscription agreement or stock option
or similar agreement; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests shall not
exceed the sum of $5,000,000 in any twelve-month period plus the aggregate
cash proceeds received by the Company during such twelve-month period from
any issuance of Equity Interests by the Company to members of management
of the Company and its Subsidiaries; provided that the amount of any such
net cash proceeds that are utilized for any such redemption, repurchase,
retirement or other acquisition shall be excluded from clause (c)(ii) of
the immediately preceding paragraph;
(v) Investments in Unrestricted Subsidiaries or in Joint Ventures
having an aggregate fair market value, taken together with all other
Investments made pursuant to this clause (v) that are at that time
outstanding, not to exceed $15,000,000 plus 5% of the increase in Total
Assets since the Closing Date at the time of such Investment (with the
fair market value of each Investment being measured at the time made and
without giving effect to subsequent changes in value);
(vi) repurchase of Equity Interests deemed to occur upon exercise or
conversion of stock options, warrants, convertible securities or other
similar Equity Interests if such Equity Interests represent a portion of
the exercise or conversion price of such options, warrants, convertible
securities or other similar Equity Interests;
(vii) any dividend or distribution payable on or in respect of any
class of Equity Interests issued by a Restricted Subsidiary of the
Company; provided that such dividend or distribution is paid on a pro rata
basis to all of the holders of such Equity Interests in accordance with
their respective holdings of such Equity Interests;
provided, further, that at the time of, and after giving effect to, any
Restricted Payment permitted under clauses (iv) or (v) above, no Potential Event
of Default or Event of Default shall have occurred and be continuing or would
occur as a consequence thereof. The amount of all Restricted Payments (other
than cash) shall be the fair market value on the date of the Restricted Payment
of the asset(s) proposed to be transferred by the Company or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment.
6.4 Dividends and Other Payment Restrictions Affecting Subsidiaries.
Company shall not, and shall not permit any of its Restricted Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to (i) (a) pay dividends or make any other distributions to the
Company or any of its Restricted Subsidiaries (1) on its Capital Stock or (2)
with respect to any other interest or participation
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in, or measured by, its profits, or (b) pay any Indebtedness owed to the Company
or any of its Restricted Subsidiaries, (ii) make loans or advances to the
Company or any of its Restricted Subsidiaries or (iii) sell, lease or transfer
any of its properties or assets to the Company or any of its Restricted
Subsidiaries, except for such encumbrances or restrictions existing under or by
reason of (a) Existing Indebtedness as in effect on the date hereof, (b) this
Agreement or the Revolving Credit Agreement and any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings thereof, provided that this Agreement and the Revolving Credit
Agreement and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacement or refinancings thereof are no more
restrictive taken as a whole with respect to such dividend and other payment
restrictions than those terms included in this Agreement and the Revolving
Credit Agreement, as applicable, on the date hereof, (c) the Senior Subordinated
Note Indenture and the Senior Subordinated Notes, (d) applicable law, (e) any
instrument governing Indebtedness or Capital Stock of a Person acquired by the
Company or any of its Restricted Subsidiaries as in effect at the time of such
acquisition (except to the extent such Indebtedness was incurred in connection
with or in contemplation of such acquisition), which encumbrance or restriction
is not applicable to any Person, or the properties or assets of any Person,
other than the Person, or the property or assets of the Person, so acquired,
provided that, in the case of Indebtedness, such Indebtedness was permitted by
the terms of this Agreement to be incurred, (f) customary non-assignment or net
worth provisions in leases and other agreements entered into in the ordinary
course of business and consistent with past practices, (g) purchase money
obligations for property acquired in the ordinary course of business that impose
restrictions of the nature described in clause (iii) above on the property so
acquired, (h) Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing Indebtedness
are no more restrictive than those contained in the agreements governing the
Indebtedness being refinanced, (i) any Mortgage Financing or Mortgage
Refinancing that imposes restrictions on the real property securing such
Indebtedness, (j) any Permitted Investment, (k) contracts for the sale of
assets, including, without limitation customary restrictions with respect to a
Restricted Subsidiary of the Company pursuant to an agreement that has been
entered into for the sale or disposition of all or substantially all of the
Capital Stock or assets of such Restricted Subsidiary or (1) customary
provisions in joint venture agreements and other similar agreements.
6.5 Restrictions on Fundamental Changes; Asset Sales.
Company shall not consolidate or merge with or into (whether or not the
Company is the surviving corporation), or sell, assign, transfer,lease, convey
or otherwise dispose of all or substantially all of its properties or assets in
one or more related transactions, to another Person unless (i) the Company is
the surviving corporation or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia; (ii) the Person formed by or
surviving any such consolidation
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or merger (if other than the Company) or Person to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made assumes
all the obligations of the Company under this Agreement pursuant to
documentation in form and substance satisfactory to Administrative Agent; (iii)
immediately after such transaction no Potential Event of Default or Event of
Default exists; and (iv) except in the case of a merger of the Company with or
into a Wholly Owned Restricted Subsidiary of the Company, the Company or the
Person formed by or surviving any such consolidation or merger (if other than
the Company), or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made will, at the time of such transaction and
after giving pro forma effect thereto as if such transaction had occurred at the
beginning of the applicable four-quarter period, be permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in subsection 6.1. Notwithstanding the foregoing clauses (iii)
and (iv), (a) any Restricted Subsidiary may consolidate with, merge into or
transfer all or part of its properties and assets to the Company and (b) the
Company may merge with an Affiliate incorporated solely for the purpose of
reincorporating the Company in another jurisdiction.
6.6 Transactions with Affiliates.
Company shall not, and shall not permit any of its Restricted Subsidiaries
to, make any payment to, or sell, lease, transfer or otherwise dispose of any of
its properties or assets to, or purchase any property or assets from, or enter
into or make or amend any contract, agreement, understanding, loan, advance or
guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an
"Affiliate Transaction"), unless (i) such Affiliate Transaction is on terms that
are no less favorable to the Company or the relevant Restricted Subsidiary than
those that would have been obtained in a comparable transaction by the Company
or such Restricted Subsidiary with an unrelated Person and (ii) the Company
delivers to the Administrative Agent (a) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $5,000,000, a resolution of the Board of Directors
set forth in an Officers' Certificate certifying that such Affiliate Transaction
complies with clause (i) above and (if there are any disinterested members of
the Board of Directors) that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of Directors and (b) with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $10,000,000, or with respect to
any Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $5,000,000 as to which there are no
disinterested members of the Board of Directors, an opinion as to the fairness
of such Affiliate Transaction (as required by the Senior Subordinated Note
Indenture) from a financial point of view issued by an accounting, appraisal or
investment banking firm of national standing.
The foregoing provisions will not apply to the following: (i) transactions
between or among the Company and/or any of its Restricted Subsidiaries; (ii)
Restricted Payments or Permitted Investments permitted under subsection 6.3;
(iii) the payment of all fees, expenses
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and other amounts as disclosed in the Offering Circular relating to the Merger;
(iv) the payment of reasonable and customary regular fees to, and indemnity
provided on behalf of, officer, directors, employees or consultants of the
Company or any Restricted Subsidiary of the Company; (v) the transfer or
provision of inventory, goods or services by the Company or any Restricted
Subsidiary of the Company in the ordinary course of business to any Affiliate of
the Company on terms that are customary in the industry or consistent with past
practices, including with respect to price and volume discounts; (vi) the
execution of, or the performance by the Company or any of its Restricted
Subsidiaries of its obligations under the terms of, any financial advisory,
financing, underwriting or placement agreement or any other agreement relating
to investment banking or financing activities with Goldman, Sachs & Co. or any
of its Affiliates including, without limitation, in connection with acquisitions
or divestitures, in each case to the extent that such agreement was approved by
a majority of the disinterested members of the Board of Directors in good faith;
(vii) payments, advances or loans to employees that are approved by a majority
of the disinterested members of the Board of Directors of the Company in good
faith; (viii) the performance of any agreement as in effect as of the date
hereof or any transaction contemplated thereby (including pursuant to any
amendment thereto so long as any such amendment is not disadvantageous to the
Lenders in any material respect); (ix) the existence of, or the performance by
the Company or any of its Restricted Subsidiaries of its obligations under the
terms of, any stockholders agreement (including any registration rights
agreement or purchase agreement related thereto) to which it is a party as of
the date hereof and any similar agreements which it may enter into thereafter,
provided, however, that the existence of, or the performance by the Company or
any of its Restricted Subsidiaries of obligations under, any future amendment to
any such existing agreement or under any similar agreement entered into after
the date hereof shall only be permitted by this clause (ix) to the extent that
the terms of any such amendment or new agreement are not otherwise
disadvantageous to the Lenders in any material respect; (x) transactions
permitted by, and complying with, the provisions of the covenant described under
subsection 6.5; and (xi) transactions with suppliers or other purchases or sales
of goods or services, in each case in the ordinary course of business
(including, without limitation, pursuant to joint venture agreements) and
otherwise in compliance with the terms of this Agreement which are fair to the
Company or its Restricted Subsidiaries, in the reasonable determination of a
majority of the disinterested members of the Board of Directors of the Company
or an executive officer thereof, or are on terms at least as favorable as might
reasonably have been obtained at such time from an unaffiliated party.
6.7 Asset Sales. Company shall not, and shall not permit any of its Restricted
Subsidiaries to, cause, make or suffer to exist an Asset Sale unless (i) the
Company (or the Restricted Subsidiary, as the case may be) received
consideration at the time of such Asset Sale at least equal to the fair market
value (evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee (as defined in the Indenture as
in effect as of the date hereof)) of the assets or Equity Interests issued or
sold or otherwise disposed of and (ii) at least 80% of the consideration
therefor received by Company or such Restricted Subsidiary is in the form of
cash or Cash Equivalents; provided
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that the amount of (x) any liabilities (as shown on Company's or such Restricted
Subsidiary's most recent balance sheet) of Company or any Restricted Subsidiary
(other than contingent liabilities and liabilities that are by their terms
subordinated to the Senior Subordinated Notes or any guarantee thereof) that are
assumed by the transferee of any such assets pursuant to a customary novation
agreement that releases Company or such Restricted Subsidiary from further
liability, (y) any Excludable Current Liabilities and (z) any notes or other
obligations received by the Company or any such Restricted Subsidiary from such
transferee that are immediately converted by the Company or such Restricted
Subsidiary into cash (to the extent of the cash received), shall be deemed to be
cash for purposes of this provision.
6.8 Amendments of Documents Relating to Subordinated Indebtedness.
Company shall not, and shall not permit any of its Subsidiaries to, amend
or otherwise change the terms of any Subordinated Indebtedness, or make any
payment consistent with an amendment thereof or change thereto, if the effect of
such amendment or change is to increase the interest rate on such Subordinated
Indebtedness, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto), change the
redemption, prepayment or defeasance provisions thereof, change the
subordination provisions of such Subordinated Indebtedness (or of any guaranty
thereof), or change any collateral therefor (other than to release such
collateral), or if the effect of such amendment or change, together with all
other amendments or changes made, is to increase materially the obligations of
the obligor thereunder or to confer any additional rights on the holders of such
Subordinated Indebtedness (or a trustee or other representative on their behalf)
which would be adverse to Company or Lenders.
SECTION 7.
EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default") shall
occur:
7.1 Failure to Make Payments When Due.
Failure by Company to pay any installment of principal of any AXEL when
due, and payable whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; or failure by
Company to pay any interest on any fee or any other amount due under this
Agreement within three days after the date due; or
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7.2 Default in Other Agreements.
Failure of Company or any of its Subsidiaries to pay when due any
principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in subsection
7.1) or Guarantees with an aggregate principal amount of $5,000,000 or more, in
each case beyond the end of any grace period provided therefor; or (ii) breach
or default by Company or any of its Subsidiaries with respect to any other
material term of (a) one or more items of Indebtedness or Guarantees in the
individual or aggregate principal amounts referred to in clause (i) above or (b)
any loan agreement (including the Revolving Credit Agreement), mortgage,
indenture or other agreement relating to such item(s) of Indebtedness or
Guarantee(s), if the effect of such breach or default is to cause, or to permit
the holder or holders of that Indebtedness or Guarantee(s) (or a trustee on
behalf of such holder or holders) to cause, that Indebtedness or Guarantee(s) to
become or be declared due and payable prior to its stated maturity or the stated
maturity of any underlying obligation, as the case may be (upon the giving or
receiving of notice, lapse of time, both, or otherwise) and in either case such
breach or default shall continue for 20 days beyond any applicable grace period;
or
7.3 Breach of Certain Covenants.
The Company fails, and such failure continues for 30 days after notice
from the Administrative Agent or Lenders holding at least 25% in principal
amount of the then outstanding AXELs, to observe or perform any covenant,
condition or agreement on the part of the Company to be observed or performed
pursuant to Sections 6.1, 6.3 and 6.5 hereof; or
7.4 Breach of Warranty.
Any representation, warranty, certification or other statement made by
Company or any of its Subsidiaries in any AXEL Loan Document or in any statement
or certificate at any time given by Company or any of its Subsidiaries in
writing pursuant hereto or thereto or in connection herewith or therewith shall
be false in any material respect on the date as of which made; or
7.5 Other Defaults under AXEL Loan Documents.
The Company fails, and such failure continues for 60 days after notice
from the Administrative Agent or Lenders holding at least 25% in principal
amount of the then outstanding AXELs, to comply with any of its other agreements
or covenants in, or provisions of, this Agreement or any other AXEL Loan
Document; or
7.6 Judgments.
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The Company or any of its Restricted Subsidiaries fails to pay final
judgments aggregating in excess of $15,000,000, which judgments are not paid,
discharged or stayed for a period of 60 days; or
7.7 Bankruptcy; Appointment of Custodian.
A. The Company or any of its Restricted Subsidiaries pursuant to or within
the meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case,
(iii) consents to the appointment of a receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law (each, a
"Custodian"),
(iv) makes a general assignment for the benefit of its creditors, or
(v) admits in writing its inability to pay is debts as they become
due.
B. A court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Company or any Restricted Subsidiary
in an involuntary case,
(ii) appoints a Custodian of the Company or any Restricted
Subsidiary or for all or substantially all of the property of the Company
or any Restricted Subsidiary, or
(iii) orders the liquidation of the Company or any Restricted
Subsidiary,
and the order or decree remains unstayed and in effect for 60 consecutive days;
or
7.8 Invalidity of Subsidiary Guaranty.
Except as otherwise permitted under the provisions of this Agreement or
the Intercreditor Agreement, the Subsidiary Guaranty is held in any judicial
proceeding to be unenforceable or invalid or ceases for any reason to be in full
force and effect (except by its terms) or any Subsidiary Guarantor, or any
Person acting on behalf of any Subsidiary Guarantor, denies or disaffirms such
Subsidiary Guarantor's obligations under the Subsidiary Guaranty; or
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7.9 Change in Control.
If (i) prior to a Qualified Public Offering GSII together with any
Affiliates of GSII shall cease to beneficially own and control 51% or more of
the combined voting power of all Securities of the Company, (ii) following
consummation of a Qualified Public Offering any Person or any two or more
Persons acting in concert shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Exchange Act), directly or indirectly, of Securities of Company (or other
Securities convertible into such Securities) representing more of the combined
voting power of all Securities of Company than is owned by GSII and its
Affiliates at such time or (iii) a "Change of Control" as defined in the Senior
Subordinated Notes Indenture occurs;
THEN (i) upon the occurrence of any Event of Default described in subsection
7.7, each of (a) the unpaid principal amount of and accrued interest on the
AXELs, and (b) all other Obligations shall automatically become immediately due
and payable, without presentment, demand, protest or other requirements of any
kind, all of which are hereby expressly waived by Company, and (ii) upon the
occurrence and during the continuation of any other Event of Default,
Administrative Agent shall, upon the written request or with the written consent
of Requisite Lenders, by written notice to Company, declare all or any portion
of the amounts described in clauses (a) and (b) above to be, and the same shall
forthwith become, immediately due and payable.
Notwithstanding anything contained in the preceding paragraph, if at any
time within 60 days after an acceleration of the AXELs pursuant to clause (ii)
of such paragraph Company shall pay all arrears of interest and all payments on
account of principal which shall have become due otherwise than as a result of
such acceleration (with interest on principal and, to the extent permitted by
law, on overdue interest, at the rates specified in this Agreement) and all
Events of Default and Potential Events of Default (other than non-payment of the
principal of and accrued interest on the AXELS, in each case which is due and
payable solely by virtue of acceleration) shall be remedied or waived pursuant
to subsection 9.6, then Requisite Lenders, by written notice to Company, may at
their option rescind and annul such acceleration and its consequences; but such
action shall not affect any subsequent Event of Default or Potential Event of
Default or impair any right consequent thereon. The provisions of this paragraph
are intended merely to bind Lenders to a decision which may be made at the
election of Requisite Lenders and are not intended, directly or indirectly, to
benefit Company, and such provisions shall not at any time be construed so as to
grant Company the right to require Lenders to rescind or annul any acceleration
hereunder or to preclude Administrative Agent or Lenders from exercising any of
the rights or remedies available to them under any of the AXEL Loan Documents,
even if the conditions set forth in this paragraph are met.
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SECTION 8.
AGENTS
8.1 Appointment.
A. Appointment of Agents. GSCP is hereby appointed Arranger and
Syndication Agent hereunder, and each Lender hereby authorizes Arranger and
Syndication Agent to act as its agent in accordance with the terms of this
Agreement and the other AXEL Loan Documents. Fleet is hereby appointed
Administrative Agent hereunder and under the other AXEL Loan Documents and each
Lender hereby authorizes Administrative Agent to act as its agent in accordance
with the terms of this Agreement and the other Loan Documents. Fleet is also
being appointed Collateral Agent under the Intercreditor Agreement and each
Lender hereby authorizes Collateral Agent to act as its agent in accordance with
the terms of the Intercreditor Agreement and the other AXEL Loan Documents. Each
Agent hereby agrees to act upon the express conditions contained in this
Agreement and the other AXEL Loan Documents, as applicable. The provisions of
this Section 8 are solely for the benefit of Agents and Lenders and Company
shall have no rights as a third party beneficiary of any of the provisions
thereof. In performing its functions and duties under this Agreement, each Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation towards or relationship of agency or trust
with or for Company or any of its Subsidiaries. Each of Arranger and Syndication
Agent, without consent of or notice to any party hereto, may assign any and all
of its rights or obligations hereunder to any of its Affiliates. As of the
Closing Date, all obligations of Arranger and Syndication Agent hereunder shall
terminate.
B. Appointment of Supplemental Collateral Agents. It is the purpose of
this Agreement and the other AXEL Loan Documents that there shall be no
violation of any law of any jurisdiction denying or restricting the right of
banking corporations or associations to transact business as agent or trustee in
such jurisdiction. It is recognized that in case of litigation under this
Agreement or any of the other AXEL Loan Documents, and in particular in case of
the enforcement of any of the AXEL Loan Documents, or in case Administrative
Agent deems that by reason of any present or future law of any jurisdiction it
may not exercise any of the rights, powers or remedies granted herein or in any
of the other AXEL Loan Documents or take any other action which may be desirable
or necessary in connection therewith, it may be necessary that Administrative
Agent appoint an additional individual or institution as a separate trustee,
co-trustee, collateral agent or collateral co-agent (any such additional
individual or institution being referred to herein individually as a
"Supplemental Collateral Agent" and collectively as "Supplemental Collateral
Agents").
In the event that Administrative Agent appoints a Supplemental Collateral
Agent with respect to any Collateral, (i) each and every right, power, privilege
or duty expressed or intended by this Agreement or any of the other AXEL Loan
Documents to be exercised by or vested in or conveyed to Administrative Agent
with respect to such Collateral shall
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be exercisable by and vest in such Supplemental Collateral Agent to the extent,
and only to the extent, necessary to enable such Supplemental Collateral Agent
to exercise such rights, powers and privileges with respect to such Collateral
and to perform such duties with respect to such Collateral, and every covenant
and obligation contained in the AXEL Loan Documents and necessary to the
exercise or performance thereof by such Supplemental Collateral Agent shall run
to and be enforceable by either Agent or such Supplemental Collateral Agent, and
(ii) the provisions of this Section 8 and of subsections 9.2 and 9.3 that refer
to Administrative Agent shall inure to the benefit of such Supplemental
Collateral Agent and all references therein to Administrative Agent shall be
deemed to be references to Administrative Agent and/or such Supplemental
Collateral Agent, as the context may require.
Should any instrument in writing from Company or any other Loan Party be
required by any Supplemental Collateral Agent so appointed by Administrative
Agent for more fully and certainly vesting in and confirming to him or it such
rights, powers, privileges and duties, Company shall, or shall cause such Loan
Party to, execute, acknowledge and deliver any and all such instruments promptly
upon request by Administrative Agent. In case any Supplemental Collateral Agent,
or a successor thereto, shall die, become incapable of acting, resign or be
removed, all the rights, powers, privileges and duties of such Supplemental
Collateral Agent, to the extent permitted by law, shall vest in and be exercised
by Administrative Agent until the appointment of a new Supplemental Collateral
Agent.
8.2 Powers and Duties; General Immunity.
A. Powers; Duties Specified. Each Lender irrevocably authorizes each Agent
to take such action on such Lender's behalf and to exercise such powers, rights
and remedies hereunder and under the other AXEL Loan Documents as are
specifically delegated or granted to such Agent by the terms hereof and thereof,
together with such powers, rights and remedies as are reasonably incidental
thereto. Each Agent shall have only those duties and responsibilities that are
expressly specified in this Agreement and the other AXEL Loan Documents. Each
Agent may exercise such powers, rights and remedies and perform such duties by
or through its agents or employees. No Agent shall have, by reason of this
Agreement or any of the other AXEL Loan Documents, a fiduciary relationship in
respect of any Lender; and nothing in this Agreement or any of the other AXEL
Loan Documents, expressed or implied, is intended to or shall be so construed as
to impose upon any Agent any obligations in respect of this Agreement or any of
the other AXEL Loan Documents except as expressly set forth herein or therein.
B. No Responsibility for Certain Matters. No Agent shall be responsible to
any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
AXEL Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by any of Agent to Lenders or by or
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on behalf of Company to any Agent or any Lender in connection with the AXEL Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of Company or any other Person liable for the
payment of any Obligations, nor shall any Agent be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the AXEL Loan Documents
or as to the use of the proceeds of the AXELs or as to the existence or possible
existence of any Event of Default or Potential Event of Default. Anything
contained in this Agreement to the contrary notwithstanding, Administrative
Agent shall not have any liability arising from confirmations of the amount of
outstanding AXELs.
C. Exculpatory Provisions. None of Agents nor any of their respective
officers, partners, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by any Agent under or in connection with any of
the AXEL Loan Documents except to the extent caused by such Agent's gross
negligence or willful misconduct. Each Agent shall be entitled to refrain from
any act or the taking of any action (including the failure to take an action) in
connection with this Agreement or any of the other Loan Documents or from the
exercise of any power, discretion or authority vested in it hereunder or
thereunder unless and until such Agent shall have received instructions in
respect thereof from Requisite Lenders (or such other Lenders as may be required
to give such instructions under subsection 9.6) and, upon receipt of such
instructions from Requisite Lenders (or such other Lenders, as the case may be),
such Agent shall be entitled to act or (where so instructed) refrain from
acting, or to exercise such power, discretion or authority, in accordance with
such instructions. Without prejudice to the generality of the foregoing, (i)
each Agent shall be entitled to rely, and shall be fully protected in relying,
upon any communication, instrument or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and
shall be entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Company and its Subsidiaries),
accountants, experts and other professional advisors selected by it; and (ii) no
Lender shall have any right of action whatsoever against any Agent as a result
of such Agent acting or (where so instructed) refraining from acting under this
Agreement or any of the other AXEL Loan Documents in accordance with the
instructions of Requisite Lenders (or such other Lenders as may be required to
give such instructions under subsection 9.6).
D. Agent Entitled to Act as Lender. The agency hereby created shall in no
way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the AXELs, each Agent shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not performing the duties and functions delegated to it
hereunder, and the term "Lender" or "Lenders" or any similar term shall, unless
the context clearly otherwise indicates, include each Agent in its individual
capacity. Any Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust, financial advisory or other
business with Company or any of its Affiliates as if it were not performing the
duties specified herein, and
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may accept fees and other consideration from Company for services in connection
with this Agreement and otherwise without having to account for the same to
Lenders.
8.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness.
Each Lender represents and warrants that it has made its own independent
investigation of the financial condition and affairs of Company and its
Subsidiaries in connection with the making of the AXELs hereunder and that it
has made and shall continue to make its own appraisal of the creditworthiness of
Company and its Subsidiaries. No Agent shall have any duty or responsibility,
either initially or on a continuing basis, to make any such investigation or any
such appraisal on behalf of Lenders or to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before the making of the AXELs or at any time or times thereafter, and no Agent
shall have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.
8.4 Right to Indemnity.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by Company, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against such
Agent in exercising its powers, rights and remedies or performing its duties
hereunder or under the other AXEL Loan Documents or otherwise in its capacity as
such Agent in any way relating to or arising out of this Agreement or the other
AXEL Loan Documents; provided that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from such Agent's gross
negligence or willful misconduct and provided further that any such
indemnification of the Collateral Agent shall be on the terms described in
section 6(c) of the Intercreditor Agreement. If any indemnity furnished to any
Agent for any purpose shall, in the opinion of such Agent, be insufficient or
become impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished (excluding any indemnity for its gross negligence or will misconduct).
8.5 Successor Administrative Agent.
Successor Administrative Agent. Administrative Agent may resign at
any time by giving 30 days' prior written notice thereof to Lenders and Company,
and Administrative Agent may be removed at any time with or without cause by an
instrument or concurrent instruments in writing delivered to Company and
Administrative Agent and signed by Requisite Lenders. Upon any such notice of
resignation or any such removal,
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Requisite Lenders shall have the right, upon five Business Days' notice to
Company, to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by Requisite Lenders and shall
have accepted such appointment within 30 days after the notice of the intent of
the Administrative Agent to resign, then the retiring Administrative Agent may,
on behalf of the Lenders, appoint a successor Administrative Agent. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Administrative Agent and the retiring or removed
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring or removed Administrative Agent's resignation
or removal hereunder as Administrative Agent, the provisions of this Section 8
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.
8.6 Collateral Documents and Guaranties.
Each Lender hereby further authorizes Administrative Agent, on behalf of
and for the benefit of Lenders, to enter into the Intercreditor Agreement and to
appoint the Collateral Agent thereunder as agent for and representative of
Lenders. Under the terms of the Intercreditor Agreement, the Collateral Agent is
authorized to enter into each Collateral Document as secured party and to be the
agent for and representative of Secured Parties under the Subsidiary Guaranty,
and each Lender agrees to be bound by the terms of the Intercreditor Agreement,
each Collateral Document and the Subsidiary Guaranty. Administrative Agent shall
not enter into or consent to any material amendment, modification or termination
of the Intercreditor Agreement without the prior consent of Requisite Lenders.
Each Lender acknowledges that under the terms of the Intercreditor Agreement
without further written consent or authorization from Lenders, Collateral Agent
may execute any documents or instruments necessary to (a) release any Lien
encumbering any item of Collateral that is the subject of a sale or other
disposition of assets permitted by this Agreement or to which Requisite Lenders
have otherwise consented or (b) release any Subsidiary Guarantor from the
Subsidiary Guaranty if all of the capital stock of such Subsidiary Guarantor is
sold to any Person (other than an Affiliate of Company) pursuant to a sale or
other disposition permitted hereunder or to which Requisite Lenders or Lenders
(as applicable) have otherwise consented. Anything contained in any of the AXEL
Loan Documents to the contrary notwithstanding, Company, Administrative Agent
and each Lender hereby agree that (X) no Lender shall have any right
individually to realize upon any of the Collateral under any Collateral Document
or to enforce the Subsidiary Guaranty, it being understood and agreed that all
powers, rights and remedies under the Collateral Documents and the Subsidiary
Guaranty may be exercised solely by Collateral Agent for the benefit of Secured
Parties in accordance with the terms thereof, and (Y) in the event of a
foreclosure by Collateral Agent on any of the Collateral pursuant to a public or
private sale, Collateral Agent or any Secured Party may be the purchaser of any
or all of such Collateral at any such sale and Collateral Agent, as agent for
and representative of Secured Parties (but not any Secured Party or Secured
Parties in its or their respective individual capacities
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unless Requisite Lenders shall otherwise agree in writing) shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Collateral sold at any such public sale, to
use and apply any of the Obligations as a credit on account of the purchase
price for any collateral payable by Collateral Agent at such sale. The Lenders
each further acknowledge and agree that pursuant to the Intercreditor Agreement
and the Collateral Documents, Collateral Agent will act as the fonde de pouvoir
(holder of the power of attorney) of the holders from time to time of Notes
issued pursuant hereto to the extent necessary or desirable for the purposes of
creating, maintaining or enforcing any Liens or guarantees created or
established under any Collateral Documents contemplated hereby to be executed
under the laws of the Province of Quebec, Canada including, without limiting the
generality of the foregoing, entering into any such Collateral Documents and
exercising all or any of the rights, powers, trusts or duties conferred upon the
Collateral Agent therein and in the Intercreditor Agreement and each holder of
Notes by receiving and holding same accepts and confirms the appointment of the
Collateral Agent as fonde de pouvoir (holder of the power of attorney) of such
holder for such purposes.
SECTION 9.
MISCELLANEOUS
9.1 Assignments and Participations in AXELs.
A. General. Subject to subsection 9.1B, each Lender shall have the right
at any time to (i) sell, assign or transfer to any Eligible Assignee, or (ii)
sell participations to any Person in, all or any part of its AXEL Commitments or
the AXEL or AXELs made by it or any other interest herein or in any other
Obligations owed to it; provided that no such sale, assignment, transfer or
participation shall, without the consent of Company, require Company to file a
registration statement with the Securities and Exchange Commission or apply to
qualify such sale, assignment, transfer or participation under the securities
laws of any state; provided, further that no such sale, assignment or transfer
described in clause (i) above shall be effective unless and until an Assignment
Agreement effecting such sale, assignment or transfer shall have been accepted
by Administrative Agent and recorded in the Register as provided in subsection
9.1B(ii). Except as otherwise provided in this subsection 9.1, no Lender shall,
as between Company and such Lender, be relieved of any of its obligations
hereunder as a result of any sale, assignment or transfer of, or any granting of
participations in, all or any part of its AXEL Commitments or the AXELs, or the
other Obligations owed to such Lender.
B. Assignments.
(i) Amounts and Terms of Assignments. Each AXEL Commitment, AXEL or
other Obligation may (a) be assigned in any amount to another Lender, or
to an Affiliate or a Related Fund of the assigning Lender or another
Lender, with
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the giving of notice to Company, Syndication Agent and Administrative
Agent or (b) be assigned in an aggregate amount of not less than
$5,000,000 (or such lesser amount as shall constitute the aggregate amount
of the AXEL Commitments, AXEL, and other Obligations of the assigning
Lender) to any other Eligible Assignee with the giving of notice to
Company and with the consent of Administrative Agent and Syndication Agent
(which consent shall not be unreasonably withheld or delayed). To the
extent of any such assignment in accordance with either clause (a) or (b)
above, the assigning Lender shall be relieved of its obligations with
respect to its AXEL Commitments, AXELs, or other Obligations or the
portion thereof so assigned. The parties to each such assignment shall
execute and deliver to Administrative Agent, for its acceptance and
recording in the Register, an Assignment Agreement, together with a
processing and recordation fee of $500 if such assignment is to another
Lender or an Affiliate or Related Fund of the assigning Lender, or $2,000,
if such assignment is to any other Eligible Assignee, and such forms,
certificates or other evidence, if any, with respect to United States
federal income tax withholding matters as the assignee under such
Assignment Agreement may be required to deliver to Administrative Agent
pursuant to subsection 2.7B(iii)(a). Upon such execution, delivery,
acceptance and recordation, from and after the effective date specified in
such Assignment Agreement, (y) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment Agreement, shall have the
rights and obligations of a Lender hereunder and (z) the assigning Lender
thereunder shall, to the extent that rights and obligations hereunder have
been assigned by it pursuant to such Assignment Agreement, relinquish its
rights (other than any rights which survive the termination of this
Agreement under subsection 9.9B) and be released from its obligations
under this Agreement and, in the case of an Assignment Agreement covering
all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party
hereto. The AXEL Commitments hereunder shall be modified to reflect the
AXEL Commitment of such assignee and any remaining AXEL Commitment of such
assigning Lender and, if any such assignment occurs after the issuance of
the AXEL Notes hereunder, the assigning Lender shall, upon the
effectiveness of such assignment or as promptly thereafter as practicable,
surrender its applicable AXEL Notes to Administrative Agent for
cancellation, and thereupon new AXEL Notes shall be issued to the assignee
and/or to the assigning Lender, substantially in the form of Exhibit III
annexed hereto with appropriate insertions, to reflect the new AXEL
Commitments and/or outstanding AXELs, the case may be, of the assignee
and/or the assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in Register.
Upon its receipt of an Assignment Agreement executed by an assigning
Lender and an assignee representing that it is an Eligible Assignee,
together with the processing and recordation fee referred to in subsection
9.1B(i) and any forms, certificates or other evidence with respect to
United States federal income tax withholding matters that
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such assignee may be required to deliver to Administrative Agent pursuant
to subsection 2.7B(iii)(a), Administrative Agent shall, if Administrative
Agent has consented to the assignment evidenced thereby (to the extent
such consent is required pursuant to subsection 9.1B(i)), (a) accept such
Assignment Agreement by executing a counterpart thereof as provided
therein (which acceptance shall evidence any required consent of
Administrative Agent to such assignment), (b) record the information
contained therein in the Register, and (c) give prompt notice thereof to
Company. Administrative Agent shall maintain a copy of each Assignment
Agreement delivered to and accepted by it as provided in this subsection
9.1B(ii).
C. Participations. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the regularly scheduled maturity of any
portion of the principal amount of or interest on any AXEL allocated to such
participation or (ii) a reduction of the principal amount of or the rate of
interest payable on any AXEL allocated to such participation, and all amounts
payable by Company hereunder (including amounts payable to such Lender pursuant
to subsections 2.6D and 2.7) shall be determined as if such Lender had not sold
such participation. Company and each Lender hereby acknowledge and agree that,
solely for purposes of subsections 9.4 and 9.5, (a) any participation will give
rise to a direct obligation of Company to the participant and (b) the
participant shall be considered to be a "Lender".
D. Assignments to Federal Reserve Banks. In addition to the assignments
and participations permitted under the foregoing provisions of this subsection
9.1, any Lender may assign and pledge all or any portion of its AXELs, the other
Obligations owed to such Lender, and its AXEL Notes to any Federal Reserve Bank
as collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
Bank; provided that (i) no Lender shall, as between Company and such Lender, be
relieved of any of its obligations hereunder as a result of any such assignment
and pledge and (ii) in no event shall such Federal Reserve Bank be considered to
be a "Lender" or be entitled to require the assigning Lender to take or omit to
take any action hereunder.
E. Information. Each Lender may furnish any information concerning Company
and its Subsidiaries in the possession of that Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject to subsection 9.19.
F. Representations of Lenders. Each Lender listed on the signature pages
hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (A) of the definition thereof; (ii) that it has experience
and expertise in the making of or investing in loans such as the AXELs; and
(iii) that it will make its AXELs for its own account in the ordinary course of
its business and without a view to distribution of such AXELs within the meaning
of the Securities Act or the Exchange Act or other federal securities laws (it
being understood that, subject to the provisions of this subsection 9.1, the
disposition of such
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AXELs or any interests therein shall at all times remain within its exclusive
control). Each Lender that becomes a party hereto pursuant to an Assignment
Agreement shall be deemed to agree that the representations and warranties of
such Lender contained in Section 2(c) of such Assignment Agreement are
incorporated herein by this reference.
9.2 Expenses.
Whether or not the transactions contemplated hereby shall be consummated,
Company agrees to pay promptly (i) all the actual and reasonable costs and
expenses of preparation of the AXEL Loan Documents and any consents, amendments,
waivers or other modifications thereto; (ii) all the costs of furnishing all
opinions by counsel for Company (including any opinions requested by Lenders as
to any legal matters arising hereunder) and of Company's performance of and
compliance with all agreements and conditions on its part to be performed or
complied with under this Agreement and the other AXEL Loan Documents including
with respect to confirming compliance with environmental, insurance and solvency
requirements; (iii) the reasonable fees, expenses and disbursements of counsel
to Arranger and counsel to Administrative Agent (in each case including
allocated costs of internal counsel) in connection with the negotiation,
preparation, execution and administration of the AXEL Loan Documents and any
consents, amendments, waivers or other modifications thereto and any other
documents or matters requested by Company; (iv) all the actual costs and
reasonable expenses of creating and perfecting Liens in favor of Collateral
Agent on behalf of Secured Parties pursuant to any Collateral Document,
including filing and recording fees, expenses and taxes, stamp or documentary
taxes, search fees, title insurance premiums, and reasonable fees, expenses and
disbursements of counsel to Arranger and counsel to Administrative Agent and of
counsel providing any opinions that Arranger, Administrative Agent or Requisite
Lenders may request in respect of the Collateral Documents or the Liens created
pursuant thereto; (v) all the actual costs and reasonable expenses (including
the reasonable fees, expenses and disbursements of any auditors, accountants or
appraisers and any environmental or other consultants, advisors and agents
employed or retained by Administrative Agent or Arranger and its counsel) of
obtaining and reviewing any appraisals provided for under subsection 3.1L or
5.9C, any environmental audits or reports provided for under subsection 3.1M or
5.9B(viii) and any reports provided for under subsection 3.1K; (vi) all the
actual costs and reasonable expenses (including the reasonable fees, expenses
and disbursements of any consultants, advisors and agents employed or retained
by Administrative Agent and its counsel) in connection with the custody or
preservation of any of the Collateral; (vii) all other actual and reasonable
costs and expenses incurred by Syndication Agent, Arranger or Administrative
Agent in connection with the syndication of the AXEL Commitments and the
negotiation, preparation and execution of the AXEL Loan Documents and any
consents, amendments, waivers or other modifications thereto and the
transactions contemplated thereby; and (viii) after the occurrence of an Event
of Default, all costs and expenses, including reasonable attorneys' fees
(including allocated costs of internal counsel) and costs of settlement,
incurred by Arranger, Administrative Agent and Lenders in enforcing any
Obligations of or in collecting any payments due from any Loan Party hereunder
or under the other AXEL Loan
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Documents by reason of such Event of Default (including in connection with the
sale of, collection from, or other realization upon any of the Collateral or the
enforcement of the Subsidiary Guaranty) or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or pursuant to any insolvency or bankruptcy proceedings.
9.3 Indemnity.
In addition to the payment of expenses pursuant to subsection 9.2, whether
or not the transactions contemplated hereby shall be consummated, Company agrees
to defend (subject to Indemnitees' selection of counsel), indemnify, pay and
hold harmless Agents and Lenders, and the officers, partners, directors,
employees, agents and affiliates of any of Agents and Lenders (collectively
called the "Indemnitees"), from and against any and all Indemnified Liabilities
(as hereinafter defined); provided that Company shall not have any obligation to
any Indemnitee hereunder with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise solely from the gross negligence or
willful misconduct of that Indemnitee as determined by a final, non-appealable
judgment of a court of competent jurisdiction.
As used herein, "Indemnified Liabilities" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, actions, judgments, suits, claims (including Environmental Claims),
costs (including the costs of any investigation, study, sampling, testing,
abatement, cleanup, removal, remediation or other response action necessary to
remove, remediate, clean up or abate any Hazardous Materials Activity), expenses
and disbursements of any kind or nature whatsoever (including the reasonable
fees and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto, and any fees or expenses incurred by Indemnitees in
enforcing this indemnity), whether direct, indirect or consequential and whether
based on any federal, state or foreign laws, statutes, rules or regulations
(including securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of (i) this Agreement or
the other AXEL Loan Documents or the Related Agreements or the transactions
contemplated hereby or thereby (including Lenders' agreement to make the AXELs
hereunder or the use or intended use of the proceeds thereof or any enforcement
of any of the AXEL Loan Documents (including any sale of, collection from, or
other realization upon any of the Collateral or the enforcement of the
Subsidiary Guaranty)), (ii) the statements contained in the commitment letter
delivered by any Lender to Company with respect thereto, or (iii) any
Environmental Claim or any Hazardous Materials Activity relating to or arising
from, directly or indirectly, any past or present activity, operation, land
ownership, or practice of Company or any of its Subsidiaries.
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To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 9.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
9.4 Set-Off; Security Interest in Deposit Accounts.
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence of any
Event of Default each Lender is hereby authorized by Company at any time or from
time to time, subject to the consent of Administrative Agent, without notice to
Company or to any other Person (other than Administrative Agent), any such
notice being hereby expressly waived, to set off and to appropriate and to apply
any and all deposits (general or special, including Indebtedness evidenced by
certificates of deposit, whether matured or unmatured, but not including trust
accounts) and any other Indebtedness at any time held or owing by that Lender to
or for the credit or the account of Company against and on account of the
obligations and liabilities of Company to that Lender under this Agreement, and
the other AXEL Loan Documents, including all claims of any nature or description
arising out of or connected with this Agreement any other Loan Document,
irrespective of whether or not (i) that Lender shall have made any demand
hereunder or (ii) the principal of or the interest on the AXELs or any other
amounts due hereunder shall have become due and payable pursuant to Section 7
and although said obligations and liabilities, or any of them, may be contingent
or unmatured. Company hereby further grants to Collateral Agent and each Lender
a security interest in all deposits and accounts maintained with Administrative
Agent or such Lender as security for the Obligations.
9.5 Ratable Sharing.
Lenders hereby agree among themselves that if any of them shall, whether
by voluntary payment (other than a voluntary prepayment of AXELs made and
applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the AXEL
Loan Documents or otherwise, or as adequate protection of a deposit treated as
cash collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of, fees and other amounts then due and owing to that Lender hereunder
or under the other AXEL Loan Documents (collectively, the "Aggregate Amounts
Due" to such Lender) which is greater than the proportion received by any other
Lender in respect of the Aggregate Amounts Due to such other Lender, then the
Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment)
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in the Aggregate Amounts Due to the other Lenders so that all such recoveries of
Aggregate Amounts Due shall be shared by all Lenders in proportion to the
Aggregate Amounts Due to them; provided that if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Company or
otherwise, those purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. Company expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Company to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
9.6 Amendments and Waivers.
A. No amendment, modification, termination or waiver of any provision of
the AXEL Loan Documents, or consent to any departure by the Company therefrom,
shall in any event be effective without the written concurrence of Requisite
Lenders; provided that no such amendment, modification, termination, waiver or
consent shall, without the consent of each Lender (with Obligations directly
affected in the case of the following clause (i)): (i) extend the scheduled
final maturity of any AXEL or AXEL Note, or extend the due date or reduce the
amount of any scheduled principal payment in the case of AXELs or AXELs Notes,
or reduce the rate of interest on any AXEL (other than any waiver of any
increase in the interest rate applicable to any AXEL pursuant to subsection
2.2E) or any commitment fees payable hereunder, or extend the time for payment
of any such interest or fees, or reduce the principal amount of any AXEL, (ii)
amend, modify, terminate or waive any provision of this subsection 9.6, (iii)
reduce the percentage specified in the definition of "Requisite Lenders" (it
being understood that, with the consent of Requisite Lenders, additional
extensions of credit pursuant to this Agreement may be included in the
determination of "Requisite Lenders" on substantially the same basis as the AXEL
Commitments and the AXELs Commitments Loans are included on the Closing Date),
(iv) consent to the assignment or transfer by the Company of any of its rights
and obligations under this Agreement or (v) release all or substantially all the
Liens granted pursuant to the Collateral Documents (including Liens on real
property) or release any Subsidiary from the Subsidiary Guaranty if such release
would constitute a release of all or substantially all of the Collateral;
provided, further that no such amendment, modification, termination or waiver
shall (1) increase the AXEL Commitments of any Lender over the amount thereof
then in effect without the consent of such Lender (it being understood that no
amendment, modification or waiver of any condition precedent, covenant,
Potential Event of Default or Event of Default shall constitute an increase in
the AXEL Commitment of any Lender, and that no increase in the available portion
of any AXEL Commitment of any Lender shall constitute an increase in such AXEL
Commitment of such Lender); or (2) amend, modify, terminate or waive any
provision of Section 8 as the same applies to any Agent, or any other provision
of this Agreement as the same applies to the rights or obligations of any Agent,
in each case without the consent of such Agent.
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B. Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on the Company in any case shall entitle Company to any
other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance
with this subsection 9.6 shall be binding upon each Lender at the time
outstanding, each future Lender and, if signed by Company, the Company.
9.7 Independence of Covenants.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
9.8 Notices.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Arranger, Syndication Agent or
Administrative Agent shall not be effective until received. For the purposes
hereof, the address of each party hereto shall be as set forth under such
party's name on the signature pages hereof or (i) as to Company and
Administrative Agent, such other address as shall be designated by such Person
in a written notice delivered to the other parties hereto and (ii) as to each
other party, such other address as shall be designated by such party in a
written notice delivered to Administrative Agent and Company.
9.9 Survival of Representations, Warranties and Agreements.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the AXELs
hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company set forth in subsections 2.6D, 2.7, 9.2, 9.3
and 9.4 and the agreements of Lenders set forth in subsections 8.2C, 8.4 and 9.5
shall survive the payment of the AXELs, and the termination of this Agreement.
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9.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Administrative Agent or any Lender in
the exercise of any power, right or privilege hereunder or under any other AXEL
Loan Document shall impair such power, right or privilege or be construed to be
a waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
9.11 Marshalling; Payments Set Aside.
Neither Administrative Agent nor any Lender shall be under any obligation
to marshal any assets in favor of Company or any other party or against or in
payment of any or all of the Obligations. To the extent that Company makes a
payment or payments to Administrative Agent or Lenders (or to Administrative
Agent for the benefit of Lenders), or Administrative Agent or Lenders enforce
any security interests or exercise their rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related thereto, shall be revived and continued in full force and effect as
if such payment or payments had not been made or such enforcement or setoff had
not occurred.
9.12 Severability.
In case any provision in or obligation under this Agreement or the AXEL
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
9.13 Obligations Several; Independent Nature of Lenders' Rights.
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or AXEL Commitments of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no action
taken by Lenders pursuant hereto or thereto, shall be deemed to constitute
Lenders as a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement and it shall not be necessary
for any other Lender to be joined as an additional party in any proceeding for
such purpose.
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9.14 Headings.
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
9.15 Applicable Law.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
9.16 Successors and Assigns.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 9.1). Neither Company's
rights or obligations hereunder nor any interest therein may be assigned or
delegated by Company without the prior written consent of all Lenders.
9.17 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND
DELIVERING THIS AGREEMENT, COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SUBSECTION 9.8;
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(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY IN
THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 9.17 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402
OR OTHERWISE.
9.18 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER AXEL LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR
THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including contract claims, tort claims, breach of duty claims and all other
common law and statutory claims. Each party hereto acknowledges that this waiver
is a material inducement to enter into a business relationship, that each has
already relied on this waiver in entering into this Agreement, and that each
will continue to rely on this waiver in their related future dealings. Each
party hereto further warrants and represents that it has reviewed this waiver
with its legal counsel and that it knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION
9.18 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR ANY OF THE OTHER AXEL LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE OBLIGATIONS MADE HEREUNDER. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
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9.19 Confidentiality.
Each Lender shall hold all non-public information obtained pursuant to the
requirements of this Agreement in accordance with such Lender's customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices (and any Lender without such
customary procedures agrees to keep such information confidential), it being
understood and agreed by Company that in any event a Lender may make disclosures
to Affiliates or Related Funds of such Lender or disclosures reasonably required
by any bona fide assignee, transferee or participant in connection with the
contemplated assignment or transfer by such Lender of any AXELs (so long as such
Persons agree in advance in writing to keep such information confidential) or
disclosures required or requested by any governmental agency or representative
thereof or pursuant to legal process; provided that, unless specifically
prohibited by applicable law or court order, each Lender shall notify Company of
any request by any governmental agency or representative thereof (other than any
such request in connection with any examination of such Lender by such
governmental agency) for disclosure of any such non-public information prior to
disclosure of such information; and provided, further that in no event shall any
Lender be obligated or required to return any materials furnished by Company or
any of its Subsidiaries.
9.20 Counterparts; Effectiveness.
This Agreement and any amendments, waivers, consents or supplements hereto
or in connection herewith may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic authorization of delivery thereof.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
AMSCAN HOLDINGS, INC.
By: /s/ Gerald C. Rittenberg
---------------------------
Name:
Title:
Notice Address:
Amscan Holdings, Inc.
80 Grasslands Road
Elmsford, New York 10523
Attention: James M. Harrison
Telecopy: (914) 345-2056
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131
AGENTS AND LENDERS:
GOLDMAN SACHS CREDIT PARTNERS L.P.
individually and as Arranger and Syndication Agent
By: /s/
---------------------------
Authorized Signatory
Notice Address:
Goldman Sachs Credit Partners L.P.
16th Floor
85 Broad Street
New York, New York 10004
Attention: Stephen King (Credit)
Telecopy: (212) 902-2417
With a copy to:
Goldman Sachs Credit Partners L.P.
27th Floor
85 Broad Street
New York, New York 10004
Attention: Kathy King (Operations)
Telecopy: (212) 902-3757
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132
FLEET NATIONAL BANK,
as Administrative Agent
By: /s/ Robert H. Dial
---------------------------
Name:
Title:
Notice Address:
Fleet National Bank
One Federal Street, 5th Floor
Mail Stop MAOFD05P
Boston, Massachusetts 02110
Attention: John Mann
Telecopy: (617) 346-4682
with a copy to:
Fleet National Bank
One Federal Street, 3rd Floor
Mail Stop MAOFD03C
Boston, Massachusetts 02110
Attention: Steve Curran
Telecopy: (617) 346-5093
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133
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Murry K. Stegelmann
---------------------------
Name: Murry K. Stegelmann
Title: Duly Authorized Signatory
Notice Address:
GE Capital
201 High Ridge Road
Stamford, Connecticut 06927-5100
Attention: Joseph Badini,
Associate
Telecopy: (203) 316-7978
With a copy to:
GE Capital
201 High Ridge Road
Stamford, Connecticut 06927-5100
Attention: Janet K. Williams,
Senior Vice President
Telecopy: (203) 316-7978
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134
SOUTHERN PACIFIC BANK
By: /s/ Charles D. Martorane
---------------------------
Name: Charles D. Martorane
Title: Senior Vice President
Notice Address:
Southern Pacific Bank
12300 Wilshire Blvd.
Los Angeles, CA 90025
Attention: Chris Kelleher
Telecopy: (310) 207-4067
With a copy to:
Southern Pacific Bank
12300 Wilshire Blvd.
Los Angeles, CA 90025
Attention: Chuck Martorano
Telecopy: (310) 207-4067
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TRANSAMERICA BUSINESS CREDIT CORPORATION
By: /s/ Perry Vavcoles
---------------------------
Name: Perry Vavcoles
Title: Senior Vice President
Notice Address:
Transamerica Business Credit Corporation
555 Theodore Fremd Avenue, Suite C-301
Rye, New York 10580
Attention: Ron Walker (Credit)
Telecopy: (914) 921-0110
With a copy to:
Transamerica Business Credit Corporation
555 Theodore Fremd Avenue, Suite C-301
Rye, New York 10580
Attention: Maria Bellizzi
Telecopy: (914) 925-7248
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CREDIT AGRICOLE INDOSUEZ
By: /s/ Kenneth Kencel
---------------------------
Name: Kenneth Kencel
Title: MD
By: /s/ Francoise Berthelot
---------------------------
Name: Francoise Berthelot
Title: Vice President
Notice Address:
Credit Agricole Indosuez
1211 Avenue of the Americas
New York, NY 10036-8701
Attention: Francoise Berthelot/
Isabelle Pradel (Credit)
Telecopy: (212) 278-2254
With a copy to:
Credit Agricole Indosuez
1211 Avenue of the Americas
New York, NY 10036-8701
Attention: Raymond Wright/
Michelle Sciaraffo (Loans)
Telecopy: (212) 278-2502
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137
MERRILL LYNCH SENIOR FLOATING
RATE FUND, INC.
By: /s/ Anne McCarthy
---------------------------
Name: Anne McCarthy
Title: Authorized Signatory
Notice Address:
Merrill Lynch Senior Floating Rate Fund,
Inc.
200 Scudders Mill Road - Area 1B
Plainsboro, New Jersey 08536
Attention: AnnMarie Smith
Telecopy: (609) 282-3542
With a copy to:
Merrill Lynch Senior Floating Rate Fund,
Inc.
200 Scudders Mill Road - Area 1B
Plainsboro, New Jersey 08536
Attention: Colleen Wade
Telecopy: (609) 282-3542
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138
PILGRIM AMERICA PRIME RATE TRUST
By: /s/ Thomas C. Hunt
---------------------------
Name: Thomas C. Hunt
Title: Assistant Portfolio Manager
Notice Address:
Pilgrim America Prime Rate Trust
Two Renaissance Square
40 North Central Avenue
Suite 1200
Phoenix, Arizona 85004-3444
Attention: Tim Hunt (Credit)
Telecopy: (602) 417-8327
With a copy to:
Pilgrim America Prime Rate Trust
Two Renaissance Square
40 North Central Avenue
Suite 1200
Phoenix, Arizona 85004-3444
Attention: Melina Dempsey
Telecopy: (602) 417-8321
With a copy to:
State Street Bank and Trust Company
Alternative Structures Unit
Boston, Massachusetts
Attention: Wayne Elpus
Reference: Pilgrim America Prime Rate Trust
Telecopy: (617) 664-5366/5367/5368
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139
CRESCENT/MACH I PARTNERS, L.P.
by: TCW Asset Management Company,
its Investment Manager
By: /s/ Justin L. Driscoll
---------------------------
Name: Justin L. Driscoll
Title: Senior Vice President
Notice Address:
TCW Asset Management Company
200 Park Avenue, Suite 2200
New York, New York 10166-0228
Attention: Mark L Gold/Justin Driscoll
Telecopy: (212) 297-4159
With a copy to:
Crescent/Mach I Partners, L.P.
c/o State Street Bank & Trust Co.
Two International Place
Boston, Massachusetts 02110
Attention: Howie Gorman
Telecopy: (617) 664-5367
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PRIME INCOME TRUST
By: /s/ Rafael Scolari
---------------------------
Name: Rafael Scolari
Title: S.V.P. Portfolio Manager
Notice Address:
Prime Income Trust
c/o Dean Witter InterCapital
2 World Trade Center - 72nd Floor
New York, New York 10048
Attention: Louis Pistecchia (Credit)
Telecopy: (212) 392-5345
With a copy to:
Prime Income Trust
c/o Dean Witter InterCapital
2 World Trade Center - 72nd Floor
New York, New York 10048
Attention: April Chrysostomas
(Administration)
Telecopy: (212) 392-5709
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BDC FINANCE LLC
By: /s/ Richard Ehrlich
---------------------------
Name: Richard Ehrlich
Title: Senior Analyst
Notice Address:
BDC Finance LLC
c/o Black Diamond Capital Market
100 Field Drive, Suite 330
Lake Forest, Illinois 60045
Attention: James J. Zenni (Credit)
Telecopy: (847) 615-9064
With a copy to:
BDC Finance LLC
c/o Black Diamond Capital Market
100 Field Drive, Suite 330
Lake Forest, Illinois 60045
Attention: Jon Schmugge
Telecopy: (847) 615-9064
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