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Exhibit 10.2
APCOA, INC.
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CREDIT AGREEMENT
dated as of March 30, 1998
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THE FIRST NATIONAL BANK OF CHICAGO, as Agent
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TABLE OF CONTENTS
Section Page
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INTRODUCTION.................................................................1
ARTICLE I DEFINITIONS......................................................1
1.1 Certain Definitions...............................................1
1.2 Other Definitions; Rules of Construction.........................16
1.3 Accounting Terms and Determinations..............................16
ARTICLE II THE COMMITMENTS AND THE ADVANCES................................17
2.1 Commitments of the Lenders.......................................17
2.2 Termination and Reduction of Commitments.........................19
2.3 Fees.............................................................19
2.4 Disbursement of Advances.........................................20
2.5 Conditions for First Disbursement................................21
2.6 Further Conditions for Disbursement..............................23
2.7 Subsequent Elections as to Borrowings............................24
2.8 Limitation of Requests and Elections.............................24
2.9 Minimum Amounts; Limitation on Number of Borrowings..............24
2.10 Security and Collateral..........................................25
ARTICLE III PAYMENTS AND PREPAYMENTS OF ADVANCES............................25
3.1 Principal Payments...............................................25
3.2 Interest Payments................................................25
3.3 Letter of Credit Reimbursement Payments..........................26
3.4 Payment Method...................................................29
3.5 No Setoff or Deduction...........................................29
3.6 Payment on Non-Business Day; Payment Computations................29
3.7 Additional Costs.................................................30
3.8 Illegality and Impossibility.....................................31
3.9 Indemnification..................................................31
3.10 Substitution of Lender...........................................31
ARTICLE IV REPRESENTATIONS AND WARRANTIES..................................32
4.1 Corporate Existence and Power....................................32
4.2 Corporate Authority..............................................32
4.3 Binding Effect...................................................33
4.4 Subsidiaries.....................................................33
4.5 Litigation.......................................................33
4.6 Financial Condition..............................................33
4.7 Use of Advances..................................................33
4.8 Consents, Etc....................................................34
4.9 Taxes............................................................34
4.10 Title to Properties..............................................34
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Section Page
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4.11 ERISA............................................................34
4.12 Disclosure.......................................................34
4.13 Environmental and Safety Matters.................................35
4.14 No Default.......................................................36
4.15 Intellectual Property............................................36
4.16 No Burdensome Restrictions.......................................36
4.17 Labor Matters....................................................37
4.18 Solvency.........................................................37
4.19 Not an Investment Company; Other Regulations.....................37
4.20 Subordinated Debt Documents......................................37
4.21 Preferred Stock Documents........................................38
4.22 Standard Acquisition.............................................38
4.23 Bank Accounts....................................................38
4.24 Facility Leases and Facility Management Agreements...............38
ARTICLE V COVENANTS.......................................................38
5.1 Affirmative Covenants............................................38
5.2 Negative Covenants...............................................41
5.3 Additional Covenants.............................................49
ARTICLE VI DEFAULT.........................................................49
6.1 Events of Default................................................49
6.2 Remedies.........................................................51
6.3 Distribution of Proceeds of Collateral...........................52
6.4 Letter of Credit Liabilities.....................................53
ARTICLE VII THE AGENT AND THE LENDERS.......................................54
7.1 Appointment; Nature of Relationship..............................54
7.2 Powers...........................................................54
7.3 General Immunity.................................................54
7.4 No Responsibility for Loans, Recitals, etc.......................54
7.5 Action on Instructions of Lenders................................55
7.6 Employment of Agents and Counsel.................................55
7.7 Reliance on Documents; Counsel...................................55
7.8 Agent's Reimbursement and Indemnification........................55
7.9 Notice of Default................................................55
7.10 Rights as a Lender...............................................56
7.11 Lender Credit Decision...........................................56
7.12 Successor Agent..................................................56
7.13 Collateral Management............................................56
7.14 Right to Indemnity...............................................57
7.15 Sharing of Payments..............................................57
7.16 Withholding Tax Exemption........................................58
ARTICLE VIII MISCELLANEOUS..................................................58
8.1 Amendments, Etc..................................................58
8.2 Notices..........................................................59
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Section Page
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8.3 No Waiver By Conduct; Remedies Cumulative........................59
8.4 Reliance on and Survival of Various Provisions...................59
8.5 Expenses; Indemnification........................................59
8.6 Successors and Assigns...........................................61
8.7 Counterparts.....................................................63
8.8 Governing Law....................................................63
8.9 Table of Contents and Headings...................................63
8.10 Construction of Certain Provisions...............................63
8.11 Integration and Severability.....................................63
8.12 Independence of Covenants........................................64
8.13 Interest Rate Limitation.........................................64
8.14 Judgment and Payment.............................................64
8.15 Year 2000 Problem................................................65
8.16 Submission To Jurisdiction; Waivers..............................65
8.17 Acknowledgments..................................................65
8.18 Confidentiality..................................................65
8.19 WAIVER OF JURY TRIAL.............................................66
EXHIBITS
Exhibit A........................... Guaranty
Exhibit B-1 and B-2................. Pledge Agreement
Exhibit C........................... Revolving Credit Note
Exhibit D-1, D-2, D-3, D-4 and D-5.. Security Agreements
Exhibit E........................... Swingline Note
Exhibit F........................... Request for Advance
Exhibit G........................... Opinion of Counsel
Exhibit H........................... Request for Continuation or
Conversion of Advance
Exhibit I........................... Assignment and Acceptance
SCHEDULES
Schedule 1.1-A......................Preferred Stock
Schedule 1.1-B......................Subordinated Note Documents
Schedule 4.4........................Subsidiaries and Joint
Ventures
Schedule 4.5........................Litigation
Schedule 4.7........................Application of Funds
Schedule 4.13.......................Environmental Matters
Schedule 4.15.......................Intellectual Property
Schedule 4.23.......................Bank Accounts
Schedule 4.24.......................Facility Leases and
Management
Agreements
Schedule 5.2(d).....................Indebtedness
Schedule 5.2(e).....................Liens
Schedule 5.2(f).....................Certain Permitted Acquisition
Schedule 5.2(j).....................Investments, Loans and
Advances
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THIS CREDIT AGREEMENT, dated as of March 30, 1998 (this "Agreement"), is
by and among APCOA, INC., a Delaware corporation (the "Company"), the lenders
party hereto from time to time (collectively, the "Lenders" and individually, a
"Lender"), and THE FIRST NATIONAL BANK OF CHICAGO, a national banking
association, as agent for the Lenders (in such capacity, the "Agent").
INTRODUCTION
The Company desires to obtain a $40,000,000 six year secured revolving
credit facility, including letters of credit, in order to refinance existing
indebtedness, to provide for certain acquisitions and to provide funds and other
financial accommodations for its corporate purposes, and the Lenders are willing
to make such credit facility in favor of the Company on the terms and conditions
herein set forth.
In consideration of the premises and of the mutual agreements herein
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Definitions. As used herein the following terms shall have the
following respective meanings:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Company or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation, partnership, limited
liability company or other business entity, or division thereof, whether through
purchase of assets, merger or otherwise or (ii) directly or indirectly acquires
(in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the Capital Stock of
any Person.
"Adjusted Corporate Base Rate" shall mean the per annum rate equal to the
sum of (a) the Applicable Margin, plus (b) the greater of the Corporate Base
Rate or the Federal Funds Rate plus 1.0%, in each case as in effect from time to
time, which Adjusted Corporate Base Rate shall change simultaneously with any
change in such Corporate Base Rate or Federal Funds Rate, as the case may be.
"Adjusted Corporate Base Rate Loan" shall mean any Loan which bears
interest at the Adjusted Corporate Base Rate.
"Adjusted EBITDA" shall mean without duplication, for any Calculation
Period, the sum of (I) Net Income for such period, exclude to the extent
reflected in determining such Net Income: (i) the income of any Person accrued
prior to the date it becomes a Subsidiary of the Company or is merged into or
consolidated with the Company or any of its Subsidiaries or that Person's assets
are acquired by the Company or any of its Subsidiaries, (ii) the proceeds of any
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insurance policy, (iii) gains (but not losses) from the sale, exchange, transfer
or other disposition of property or assets not in the ordinary course of
business of the Company and its Subsidiaries, and related tax effects in
accordance with Generally Accepted Accounting Principles, (iv) any other
extraordinary or non-recurring gains or other gains not from continuing
operations of the Company or its Subsidiaries, and related tax effects in
accordance with Generally Accepted Accounting Principles, (v) the income of any
Person (including with out limitation any Subsidiary or Joint Venture, but
excluding any Wholly Owned Subsidiary) in which any Person other than the
Company or any of its Subsidiaries has a joint interest or partnership interest
or other ownership interest, to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary or Joint Venture not at
the time permitted by operation of the terms of its charter or of any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, except to the extent of the amount of dividends
or other distributions are actually paid in cash to the Company during such
period, (vi) extraordinary non-cash losses and non-recurring non-cash charges
(including non-cash losses resulting from disposition of Facility Leases and
Facility Management Agreements and the write off of intangible assets during
such period), (vii) income taxes, (viii) minority interests, (ix) interest
income, (x) Net Interest Expense, (xi) depreciation and amortization expense,
and (xii) restructuring charges included in operating expenses taken in
connection with or related to Permitted Acquisitions, provided that such
restructuring charges (A) in connection with the Standard Acquisition and the
Acquisitions described on Schedule 5.2(f) shall be consistent with the
restructuring charges identified in the Pro Forma Financial Statements and (B)
for any other Permitted Acquisition shall have been reviewed and reasonably
approved by the Agent, plus (II) the sum of (i) the Pro Forma EBITDA and
Adjusted EBITDA as calculated herein of any Person related to any Permitted
Acquisition consummated during such period as if such Acquisition had occurred
on the first day of the relevant period and (ii) the Standard Cost Savings for
such period, and the identifiable annualized cost savings and synergies in
connection with or related to Permitted Acquisitions, provided that such cost
savings and synergies exceeding $500,000 in any consecutive twelve month period
shall have been reviewed and reasonably approved by the Agent, including without
limitation the reasonable approval by the Agent of the manner in which such cost
savings and synergies are calculated and included in Adjusted EBITDA. It is
acknowledged and agreed that if the Permitted Acquisitions described on Schedule
5.2(f) are not completed as anticipated then Adjusted EBITDA will be adjusted in
a manner acceptable to the Agent.
"Adjusted Total Debt" as of any date, shall mean the difference of (a) the
sum of (i) the other consolidated Indebtedness of the Company and its
Subsidiaries as of such date, plus (ii) the aggregate liquidation preference of
the Preferred Stock and any other preferred Capital Stock of the Company on
which dividends, redemptions or other distributions are mandatorily payable in
cash or cash equivalents and all accrued and unpaid dividends, redemptions and
other distributions on any of the foregoing, provided that, for purposes of
calculating the covenant as of any date contained in Section 5.2(a) only, the
amount of the preferred Stock and preferred Capital Stock of the Company shall
include only such Preferred Stock and preferred Capital Stock upon which
dividends, redemptions or distributions in cash or cash equivalents are or will
become mandatorily payable thereon within one year of such date, plus (iii)
amounts which have been earned under Earnouts, minus (b) the sum of (i) all Cash
Equivalents of the Company and its Subsidiaries at such date plus (ii) all
contingent reimbursement obligations of the Company in respect of outstanding
letters of credit, bankers acceptances or similar instruments, other than
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letters of credit, bankers acceptances or similar instruments which support or
are otherwise payable with respect to any obligations of the type (without
regard to the Person liable on the primary obligation) described in clauses
(a)(i), (ii) or (iii) of this definition.
"Adjusted Total Debt to Adjusted EBITDA Ratio" shall mean, at any time,
the ratio of (a) Adjusted Total Debt at such time to (b) Adjusted EBITDA, as
calculated as of the four most recently completed fiscal quarters of the
Company, all as determined in accordance with Generally Accepted Accounting
Principles.
"Advance" shall mean any Loan and any Letter of Credit Advance.
"Affiliate", when used with respect to any Person, shall mean any other
Person which, directly or indirectly, controls or is controlled by or is under
common control with such Person. For purposes of this definition "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), with respect to any Person, shall mean possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise. Without limiting the foregoing
definition of Affiliate, any Person shall be deemed to control another Person if
the controlling Person owns or controls 10% or more of any class of voting
securities (or other ownership interest of any kind) of the controlled Person.
"Applicable Lending Office" shall mean, with respect to any Advance made
by any Lender or with respect to such Lender's Commitment, the office of such
Lender or of any Affiliate of such Lender located at the address specified as
the applicable lending office for such Lender set forth next to the name of such
Lender in the signature pages hereof or any other office or Affiliate of such
Lender or of any Affiliate of such Lender hereafter selected and notified to the
Company and the Agent by such Lender.
"Applicable Margin" shall mean, with respect to any Adjusted Corporate
Base Rate Loan, LIBOR Loan, Letter of Credit fee under Section 2.3(b) and
commitment fees under Section 2.3(a), the applicable percentage set forth in the
table below based upon the Adjusted Total Debt to Adjusted EBITDA Ratio, as
adjusted on the sixtieth day after the end of each of the first three fiscal
quarters of each fiscal year of the Company and on the one hundred fifth day
after the end of the last fiscal quarter of each fiscal year of the Company, and
shall remain in effect until the next change to be effected pursuant to this
definition, based upon the Adjusted Total Debt to Adjusted EBITDA Ratio as of
the last day of such fiscal quarter, provided that (a) any change in the
Applicable Margin with respect to any LIBOR Loan during a LIBOR Interest Period
with respect to such LIBOR Loan shall not be effective until after the end of
such LIBOR Interest Period, (b) as of the Effective Date the Applicable Margin
shall be based on an Adjusted Total Debt to Adjusted EBITDA Ratio of greater
than or equal to 6.0:1.0 until adjusted for the first time and (c) if any Event
of Default has occurred and is continuing the Adjusted Total Debt to Adjusted
EBITDA Ratio as of the end of the most recently ended fiscal quarter shall, for
the purposes of this definition, be deemed to be greater than or equal to
6.0:1.0:
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Applicable Margin for all Advances and Fees
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Adjusted LIBOR Loan and
Adjusted Total Debt to Corporate Base Letter of Credit Commitment
Adjusted EBITDA Ratio Rate Loan Fees Fees
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>6.0:1.0 125 bps 250 bps 50 bps
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>5.5:1.0 but <6.0:1.0 100 bps 225 bps 50 bps
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>5.0:1.0 but <5.5:1.0 75 bps 200 bps 50 bps
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>4.5:1.0 but <5.0:1.0 50 bps 175 bps 37.5 bps
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<4.5:1.0 25 bps 150 bps 37.5 bps
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"Assignment and Acceptance" is defined in Section 8.6(c).
"Board of Directors" means the board of directors of the Company, or any
authorized committee of such board of directors.
"Borrowing" shall mean the aggregation of Advances, including each Letter
of Credit issuance, of the Lenders to be made to the Company, or continuations
and conversions of such Loans, made pursuant to Article II on a single date and,
in the case of any Loans, for a single LIBOR Interest Period, which Borrowings
may be classified for purposes of this Agreement by reference to the type of
Loans or the type of Advances comprising the related Borrowing, e.g., a "LIBOR
Borrowing" is a Borrowing comprised of LIBOR Loans and a "Letter of Credit
Borrowing" is an Advance comprised of a single Letter of Credit.
"Business Day" shall mean a day other than a Saturday, Sunday or other day
on which banks in New York, Detroit or Chicago are not open to the public for
carrying on substantially all of their banking functions.
"Calculation Period" shall mean any consecutive four fiscal quarter
period, provided however, for the periods ending on June 30, 1998, September 30,
1998 and December 31, 1998, the Calculation Period shall start on April 1, 1998.
"Capital Expenditures" shall mean, for any period, the additions to
property, plant and equipment and other capital expenditures of the Company and
its Subsidiaries for such period, as the same are (or should be) set forth, in
accordance with Generally Accepted Accounting Principles, in consolidated
financial statements of the Company and its Subsidiaries for such period.
"Capital Lease" of any Person shall mean any lease which, in accordance
with Generally Accepted Accounting Principles, is or should be capitalized on
the books of such Person.
"Capital Stock" shall mean (i) in the case of any corporation, all capital
stock and any securities exchangeable for or convertible into capital stock and
any warrants, rights or other options to purchase or otherwise acquire capital
stock or such securities or any other form of equity securities, (ii) in the
case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, (iii) in the case of a partnership or limited liability company,
partnership or membership interests (whether 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 distribution of assets of, the issuing
Person.
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"Cash Equivalent" shall mean (i) cash in Dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than six
months from the date of acquisition, (iii) marketable direct obligations issued
by any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing within one year from
the date of acquisition thereof and, at the time of acquisition, having one of
the two highest ratings obtainable from either S&P or Moody's, (iv) certificates
of deposit and eurodollar time deposits with maturities of six months or less
from the date of acquisition, bankers' acceptances with maturities not exceeding
six months and overnight bank deposits, in each case with any Lender or with any
domestic commercial bank having capital and surplus in excess of $250,000,000
and a Keefe Bank Watch Rating of "B" or better, (v) repurchase obligations with
a term of not more than seven days for underlying securities of the types
described in clauses (ii), (iii) and (iv) above entered into with any financial
institution meeting the qualifications specified in clause (iv) above, (vi)
commercial paper having one of the two highest ratings obtained from Moody's or
S&P and in each case maturing within six months after the date of acquisition
and (vii) investments in money market funds which invest substantially all their
assets in securities of the type described in clauses (i) through (vi) above.
"Change of Control" shall mean the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than in a
transaction described in clause (vii) below), in one or a series of related
transactions, of all or substantially all of the assets of Parent and its
Subsidiaries or of the Company and its Subsidiaries, in each case, taken as a
whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange
Act) other than the Principals or their Related Parties, (ii) the adoption of a
plan relating to the liquidation or dissolution of Parent or the Company, (iii)
the consummation of any transaction (including, without limitation, any merger
or consolidation) the result of which is that any "person" (as defined above),
other than the Principals and their Related Parties, becomes the "beneficial
owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange
Act, except that a person shall be deemed to have "beneficial ownership" of all
securities that such person has the right to acquire, whether such right is
currently exercisable or is exercisable only upon the occurrence of a subsequent
condition), directly or indirectly, or more than 20% of the Voting Stock of
Parent or the Company (measured by voting power rather than number of shares),
and the Principals or their Related Parties shall fail to own a higher
percentage of the Voting Stock of Holdings or the Company (measured by voting
power rather than number of shares), as the case may be, (iv) the first day on
which a majority of the members of the Board of Directors of the Company are not
Continuing Directors, (v) the occurrence of any "Change of Control" as defined
in the Subordinated Note Indenture or any change of control or similar provision
in any other Subordinated Debt, the Preferred Stock or any other preferred
Capital Stock of the Company, (vi) prior to an IPO, either (A) less than 51% of
the outstanding Voting Stock of the Company shall be owned, directly or
indirectly, beneficially and of record by the Parent and free and clear of any
Liens, or (B) Holberg shall at any time legally or beneficially own less than
51% of the Voting Stock of the Parent, free and clear of any Lien, (vii) the
Parent or the Company consolidates with, or merges with or into, any Person or
sells, assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any Person, or any Person consolidates with,
or merges with or into, the Parent or the Company, in any such event pursuant to
a transaction in which any of the outstanding Voting Stock of the Parent or the
Company is converted into or exchanged for cash, securities or other property,
other than any such transaction where the
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Voting Stock of the Parent or the Company outstanding immediately prior to such
transaction is converted into or exchanged for Voting Stock (other than
Disqualified Stock) of the surviving or transferee Person constituting a
majority of the outstanding shares of such Voting Stock of such surviving or
transferee Person (immediately after giving effect to such issuance), or (viii)
the owners of Holberg as of the Effective Date shall at any time legally or
beneficially own less than 51% of the Voting Stock of Holberg, free and clear of
any Lien.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated thereunder.
"C/L/C" shall mean any commercial letter of credit issued hereunder.
"Commitments" shall mean, with respect to each Lender, the commitment of
each such Lender to make Revolving Credit Loans, and to participate in Letter of
Credit Advances, in amounts not exceeding in the aggregate principal or face
amount outstanding at any time the Commitment amount for such Lender set forth
next to the name of such Lender on the signature pages hereof, or, as to any
Lender becoming a party hereto after the Effective Date, as set forth in the
applicable Assignment and Acceptance, in each case as reduced pursuant to
Section 2.2 or modified pursuant to Section 8.6.
"Consolidated" or "consolidated" shall mean, when used with reference to
any financial term in this Agreement, the aggregate for two or more Persons of
the amounts signified by such term for all such Persons determined on a
consolidated basis in accordance with Generally Accepted Accounting Principles.
"Contingent Liabilities" shall mean as to any Person any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, dividends or
other obligations ("primary obligations") of any Person (the "primary obligor")
in any manner, whether directly or indirectly, including, without limitation,
any obligation of such Person, whether or not contingent, (a) to purchase any
such primary obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligator, (c) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or (d)
otherwise to assure or hold harmless the owner of such primary obligation
against loss in respect thereof, provided however, that the term Contingent
Liabilities shall not include endorsements of instruments for deposit or
collection in the ordinary course of business; provided further, that, for
purposes of calculating the financial covenants contained in Sections 5.2(a)
through (c), Contingent Liabilities shall be only those Contingent Liabilities
that are or should be noted in the financial statements of such Person or the
notes thereto as required under Generally Accepted Accounting Principles or
otherwise described in the definition of Adjusted Total Debt. The amount of any
Contingent Liability shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Liability is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
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"Continuing Directors" shall mean, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the Effective Date or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
"Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Corporate Base Rate" shall mean the per annum rate announced by the Agent
from time to time as its corporate base rate of interest, which Corporate Base
Rate shall change simultaneously with any change in such announced rate.
"Defaulting Lender" shall mean any Lender that fails to make available to
the Agent such Lender's Loans required to be made hereunder or shall have not
made a payment required to be made to the Agent hereunder. Once a Lender becomes
a Defaulting Lender, such Lender shall continue as a Defaulting Lender until
such time as such Defaulting Lender makes available to the Agent the amount of
such Defaulting Lender's Loans and all other amounts required to be paid to the
Agent pursuant to this Agreement.
"Disqualified Stock" shall mean 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 to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, or otherwise has any
distributions or other payments which are mandatory or otherwise required at any
time on or prior to the date that is one year after the Termination Date,
provided that any payment that is required solely due to a customary change of
control provision not more restrictive than the Change of Control default in
this Agreement shall not cause such Capital Stock to be deemed Disqualified
Stock.
"Dollars" and "$" shall mean the lawful money of the United States of
America.
"Domestic Subsidiary" shall mean each present and future Subsidiary of the
Company which is not a Foreign Subsidiary.
"Earnouts" shall mean any payment which may be owing by the Company in
connection with any Acquisition, which payment is contingent upon the earnings
or other financial performance of the assets being acquired pursuant to such
Acquisition.
"Effective Date" shall mean the effective date specified in the final
paragraph of this Agreement.
"Environmental Laws" at any date shall mean all provisions of law,
statutes, ordinances, rules, regulations, judgments, writs, injunctions,
decrees, orders, awards and standards promulgated by the government of the
United States of America or any foreign government or by any state, province,
municipality or other political subdivision thereof or therein or by any court,
CREDIT AGREEMENT Page 7
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agency, instrumentality, regulatory authority or commission of any of the
foregoing concerning the protection of, or regulating the discharge of hazardous
substances into, the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations thereunder.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) which, together with the Company or any Subsidiary of the Company,
would be treated as a single employer under Section 414 of the Code.
"Event of Default" shall mean any of the events or conditions described in
Section 6.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Facility Leases" shall mean agreements for the lease by the Company or
any of its Subsidiaries of real estate utilized as a vehicle parking facility.
"Facility Management Agreements" shall mean agreements (other than
Facility Leases), for the provision by the Company or any of its Subsidiaries of
services for the management or operation of a vehicle parking facility,
including without limitation any such agreement designated as a management
agreement, parking enforcement agreement, operating agreement or license
agreement.
"Federal Funds Rate" shall mean, for any day, an interest rate per annum
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately 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 at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its discretion.
"First Chicago" shall mean The First National Bank of Chicago, a national
banking association, including any of its branches and affiliates.
"Fixed Charge Coverage Ratio" shall mean, as of the last day of any fiscal
quarter of the Company, the ratio of (a) Adjusted EBITDA, to (b) Fixed Charges,
in each case as calculated for the four consecutive fiscal quarters then ending,
provided that Fixed Charges as calculated for the fiscal quarter ending June 30,
1998 shall be deemed equal to product of Fixed Charges for such fiscal quarter
times four, as calculated for the fiscal quarter ending September 30, 1998 shall
be deemed equal to the product of Fixed Charges for the two consecutive fiscal
quarters then ending times two and as calculated for the fiscal quarter ending
December 31, 1998 shall be deemed equal to product of Fixed Charges for the
three consecutive fiscal quarters then ending times four thirds, all as
determined in accordance with Generally Accepted Accounting Principles.
"Fixed Charges" shall mean, for any period, the sum, without duplication,
of (a) Net Interest Expense, plus (b) all payments of principal and other sums
required to be paid during such period by the Company or its Subsidiaries with
respect to Indebtedness of the Company or
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13
its Subsidiaries, plus (c) Net Capital Expenditures during such period by the
Company and its Subsidiaries, plus (d) all dividends, distributions and other
obligations paid with cash or cash equivalents with respect to any class of the
Company's or any of its Subsidiary's Capital Stock or any dividend, payment or
distribution paid in cash or cash equivalents in connection with the redemption,
purchase, retirement or other acquisition, directly or indirectly, of any shares
of the Company's or any of its Subsidiary's Capital Stock, other than the
portion of such dividends, distributions or other payments made by any
Subsidiary to the Company, plus (e) all payments pursuant to any Earnouts,
unless such amount has been previously deducted from Net Income, plus (f) all
accrued income taxes paid or payable in cash for such period for the Company or
its Subsidiaries.
"Foreign Subsidiary" shall mean any present or future Subsidiary of the
Company incorporated or formed in any jurisdiction other than any State of the
United States of America or any other political subdivision thereof.
"Generally Accepted Accounting Principles" shall mean generally accepted
accounting principles as in effect from time to time, applied on a basis
consistent (except for changes concurred in by the Company's independent public
accountants) with the most recent audited consolidated financial statements of
the Company and its Subsidiaries delivered to the Lenders.
"Guaranties" shall mean the guaranties entered into by each of the
Guarantors for the benefit of the Agent and the Lenders pursuant to this
Agreement in substantially the form of Exhibit A hereto, as amended or modified
from time to time.
"Guarantor" shall mean the Parent, each present and future Domestic
Subsidiary which is a Wholly Owned Subsidiary of the Company (other than Atrium
Parking, Inc.), each other present and future Subsidiary or Joint Venture of the
Company which is not prohibited from becoming a Guarantor or any other Person
executing a Guaranty at any time.
"Hazardous Material" is defined in Section 4.13.
"Holberg" shall mean Holberg Industries, Inc., a Delaware corporation.
"Indebtedness" of any Person shall mean, as of any date, without
duplication, (a) all obligations of such Person for borrowed money or evidenced
by bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or bankers' acceptances, (b) all
obligations of such Person as lessee under any Capital Lease, (c) all
obligations which are secured by any Lien existing on any asset or property of
such Person whether or not the obligation secured thereby shall have been
assumed by such Person, provided that if such Person shall not have assumed such
obligation, then the amount of such obligation determined pursuant to this
clause (c) shall not exceed the value of such encumbered asset or property, (d)
the unpaid purchase price for goods, property or services acquired by such
Person, except for trade accounts and accrued expenses payable arising in the
ordinary course of business which are not past due within customary payment
terms, (e) all obligations of such Person in respect of any Swap (valued in an
amount equal to the highest termination payment, if any, that would be payable
by such Person upon termination for any reason on the date of determination),
and (f) all Contingent Liabilities of such Person with respect to or relating to
indebtedness,
CREDIT AGREEMENT Page 9
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obligations and liabilities of others similar in character to those described in
clauses (a) through (e) of this definition.
"Interest Coverage Ratio" shall mean, as of the end of any fiscal quarter,
the ratio of (a) Adjusted EBITDA to (b) Net Interest Expense, in each case as
calculated for the four consecutive fiscal quarters then ending, provided that
Net Interest Expense as calculated for the fiscal quarter ending June 30, 1998
shall be deemed equal to the product of Net Interest Expense for such fiscal
quarter times four, as calculated for the fiscal quarter ending September 30,
1998 shall be deemed equal to the product of Net Interest Expense for the two
consecutive fiscal quarters then ending times two and as calculated for the
fiscal quarter ending December 31, 1998 shall be deemed equal to product of Net
Interest Expense for the three consecutive fiscal quarters then ending times
four thirds, all as determined in accordance with Generally Accepted Accounting
Principles.
"Interest Payment Date" shall mean (a) with respect to any LIBOR Loan, the
last day of each LIBOR Interest Period with respect to such LIBOR Loan, and, in
the case of any LIBOR Interest Period exceeding three months, those days that
occur during such LIBOR Interest Period at intervals of three months after the
first day of such LIBOR Interest Period and (b) in all other cases, the last
Business Day of each March, June, September and December occurring after the
date hereof, commencing with the first such Business Day occurring after the
date of this Agreement.
"IPO" shall mean the sale of Capital Stock (other than Disqualified Stock)
of the Company or the Parent pursuant to (a) a registration statement under the
Securities Act that has been declared effective by the SEC or (b) a public
offering outside the United States and which results, in either case, in an
active trading market for such shares. An active trading market shall be deemed
to exist if such shares are listed on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market System or any major international
trading market exchange.
"Joint Venture" shall mean any corporation, association, trust or other
business entity of which the Company or one or more of its Subsidiaries owns
beneficially at least 25% but less than 100% of the Capital Stock.
"Lender Indebtedness" shall mean (a) the Advances and all other
indebtedness, obligations and liabilities of the Company and of each Guarantor
to the Agent or the Lenders under any Loan Document, and (b) all indebtedness,
obligations and liabilities of the Company and of each Guarantor to any Lender
in respect of any Swaps, in all cases whether now outstanding or hereafter
arising.
"Letter of Credit" shall mean a C/L/C or S/L/C having a stated expiry date
or a date upon which the draft must be reimbursed not later than twelve months
(provided that Letters of Credit which are automatically renewable annually but
may be cancelled by the Agent annually are permissible) after the date of
issuance and not later than one month before the Termination Date, issued by the
Agent on behalf of the Lenders for the account of the Company or a Subsidiary
pursuant to Section 2.1(a) under an application and related documentation
acceptable to the Agent requiring, among other things, immediate reimbursement
by the Company or a Subsidiary
CREDIT AGREEMENT Page 10
15
to the Agent in respect of all drafts or other demand for payment honored
thereunder and all expenses paid or incurred by the Agent relative thereto.
"Letter of Credit Advance" shall mean any issuance of a Letter of Credit
under Section 2.4 made pursuant to Section 2.1(a) in which each Lender acquires
a pro rata risk participation.
"Letter of Credit Documents" shall have the meaning ascribed thereto in
Section 3.3(b).
"LIBOR" shall mean, with respect to any LIBOR Loan and the related LIBOR
Interest Period, the per annum rate that is equal to the sum of:
(a) the Applicable Margin, plus
(b) the rate per annum obtained by dividing (i) the per annum rate of
interest at which deposits in Dollars for such LIBOR Interest Period and in an
aggregate amount comparable to the amount of such LIBOR Loan to be made by the
Agent in its capacity as a Lender hereunder are offered to the Agent by other
prime banks in the London interbank market at approximately 11:00 a.m. local
time in London on the second LIBOR Business Day prior to the first day of such
LIBOR Interest Period by (ii) an amount equal to one minus the stated maximum
rate (expressed as a decimal) of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
that is specified on the first day of such LIBOR Interest Period by the Board of
Governors of the Federal Reserve System (or any successor agency thereto) for
determining the maximum reserve requirement with respect to eurocurrency funding
(currently referred to as "Eurocurrency liabilities" in Regulation D of such
Board) maintained by a member bank of such System;
all as conclusively determined by the Agent, such sum to be rounded up, if
necessary, to the nearest whole multiple of one one-hundredth of one percent
(1/100 of 1%).
"LIBOR Business Day" shall mean, with respect to any LIBOR Loan, a day
which is both a Business Day and a day on which dealings in Dollar deposits are
carried out in the London interbank market with respect to such LIBOR Loan.
"LIBOR Interest Period" shall mean, with respect to any LIBOR Loan, the
period commencing on the day such LIBOR Loan is made or converted to a LIBOR
Loan and ending on the date one, two, three or six months thereafter, as the
Company may elect under Section 2.4 or 2.7, and each subsequent period
commencing on the last day of the immediately preceding LIBOR Interest Period
and ending on the date one, two, three or six months thereafter, as the Company
may elect under Section 2.4 or 2.7, provided, however, that (a) any LIBOR
Interest Period which commences on the last LIBOR Business Day of a calendar
month (or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last LIBOR Business Day
of the appropriate subsequent calendar month, (b) each LIBOR Interest Period
which would otherwise end on a day which is not a LIBOR Business Day shall end
on the next succeeding LIBOR Business Day or, if such next succeeding LIBOR
Business Day falls in the next succeeding calendar month, on the next preceding
LIBOR Business Day, and (c) no LIBOR Interest Period which would end after the
Termination Date shall be permitted.
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16
"LIBOR Loan" shall mean any Loan which bears interest at LIBOR.
"Lien" shall mean any pledge, assignment, hypothecation, mortgage,
security interest deposit arrangement, option, conditional sale or title
retaining contract, sale and leaseback transaction, financing statement filing,
lessor's or lessee's interest under any capital lease, subordination of any
claim or right, or any other type of lien, charge or encumbrance.
"Loan" shall mean any Revolving Credit Loan and any Swingline Loan. Any
such Loan or portion thereof may also be denominated as an Adjusted Corporate
Base Rate Loan or a LIBOR Loan and such Adjusted Corporate Base Rate Loans and
LIBOR Loans are referred to herein as "types" of Loans.
"Loan Documents" shall mean, collectively, this Agreement, the Notes, the
Security Documents and any other agreement, instrument or document executed in
connection with any of the foregoing at any time.
"Material Adverse Effect" shall mean (i) a material adverse effect on the
property, business, operations, financial condition, liabilities, prospects or
capitalization of the Company and its Subsidiaries, taken as a whole, (ii) a
material adverse effect on the ability of the Company and the Guarantors to
perform their collective obligations under the Loan Documents taken as a whole
or (iii) a material adverse effect on the rights and remedies of the Agent or
the Lenders under the Loan Documents.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" shall mean any "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA or Section 414(f) of the Code.
"Net Capital Expenditures" shall mean Capital Expenditures exclusive of
any such Capital Expenditures financed on a non-recourse basis (i.e., on
customary non-recourse terms and with recourse solely to the asset being
financed with such non-recourse debt) by third parties which are not Affiliates
and any Capital Expenditures to complete an Acquisition.
"Net Cash Proceeds" shall mean, (a) in connection with any sale or other
disposition of any asset or any settlement by, or receipt of payment in respect
of, any property insurance claim or condemnation award, the cash proceeds
(including any cash payments received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of such sale, settlement
or payment, net of reasonable and documented attorneys' fees, accountants' fees,
investment banking fees, amounts required to be applied to the repayment of
Indebtedness secured by a Lien expressly permitted hereunder on any asset which
is the subject of such sale, insurance claim or condemnation award (other than
any Lien in favor of the Agent for the benefit of the Agent and the Lenders) and
other customary fees actually incurred in connection therewith and net of taxes
paid or reasonably estimated to be payable as a result thereof and (b) in
connection with any issuance or sale of any equity securities or debt securities
or instruments or the incurrence of loans, the cash proceeds received from such
issuance or incurrence, net of investment banking fees, reasonable and
documented attorneys' fees, accountants' fees, underwriting discounts and
CREDIT AGREEMENT Page 12
17
commissions and other reasonable and customary fees and expenses actually
incurred in connection therewith.
"Net Income" shall mean, for any period, the net income (or loss) of the
Company and its Subsidiaries on a consolidated basis for such period taken as a
single accounting period, determined in accordance with Generally Accepted
Accounting Principles.
"Net Interest Expense" shall mean, for any period, total interest and
related expense and payments in cash or cash equivalents with respect to the
Preferred Stock (including, without limitation, that portion of any Capitalized
Lease obligation attributable to interest expense in conformity with Generally
Accepted Accounting Principles, all dividends, redemptions and other
distributions or other cash payments of any kind due, paid or payable on the
Preferred Stock in cash or cash equivalents, amortization of debt discount, all
capitalized interest, the interest portion of any deferred payment obligations,
all commissions, discounts and other fees and charges owed with respect to
letter of credit and bankers acceptance financing, the net costs and net
payments under any interest rate hedging, cap or similar agreement or
arrangement, prepayment charges, agency fees, administrative fees, commitment
fees and capitalized transaction costs allocated to interest expense) paid,
payable or accrued during such period, without duplication for any other period,
with respect to all outstanding Indebtedness and/or Preferred Stock of the
Company and its Subsidiaries, net of any cash interest income of the Company and
its Subsidiaries, all as determined for the Company and its Subsidiaries on a
consolidated basis for such period in accordance with Generally Accepted
Accounting Principles.
"Note" shall mean any Revolving Credit Note or the Swingline Note.
"Overdue Rate" shall mean (a) in respect of principal of Adjusted
Corporate Base Rate Loans, a rate per annum that is equal to the sum of two
percent (2%) per annum plus the Adjusted Corporate Base Rate, (b) in respect of
principal of LIBOR Loans, a rate per annum that is equal to the sum of two
percent (2%) per annum plus the per annum rate in effect thereon until the end
of the then current LIBOR Interest Period for such Loan and, thereafter, a rate
per annum that is equal to the sum of two percent (2%) per annum plus the
Adjusted Corporate Base Rate, and (c) in respect of other amounts payable by the
Company hereunder (other than interest), a per annum rate that is equal to the
sum of two percent (2%) per annum plus the Adjusted Corporate Base Rate.
"Parent" shall mean AP Holdings, Inc., a Delaware corporation.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Permitted Acquisition" shall mean an Acquisition by the Company or a
Guarantor of all of the assets of a Person which meets the requirements set
forth in Section 5.2(f) of this Agreement.
"Permitted Acquisition Documents" shall mean all purchase agreements and
all other agreements and documents executed or delivered pursuant to a Permitted
Acquisitions.
"Permitted Liens" shall mean Liens permitted by Section 5.2(e) hereof.
CREDIT AGREEMENT Page 13
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"Preferred Stock" shall mean the preferred stock of the Company to be
issued on the Effective Date and described on Schedule 1.1-A hereto.
"Preferred Stock Documents" shall mean all of the agreements, documents
and instruments relating in any way to the Preferred Stock.
"Person" shall include an individual, a corporation, a limited liability
company, an association, a partnership, a trust or estate, a joint stock
company, an unincorporated organization, a joint venture, a trade or business
(whether or not incorporated), a government (foreign or domestic) and any agency
or political subdivision thereof, or any other entity.
"Plan" shall mean any pension plan (other than a Multiemployer Plan)
subject to Title IV of ERISA or to the minimum funding standards of Section 412
of the Code which has been established or maintained by the Company, any
Subsidiary of the Company or any ERISA Affiliate, or by any other Person if the
Company, any Subsidiary of the Company or any ERISA Affiliate could have
liability with respect to such pension plan.
"Pledge Agreements" shall mean each Pledge Agreement entered into by the
Company or any Guarantor for the benefit of the Agent and the Lenders pursuant
to this Agreement substantially in the form attached hereto as Exhibits B-1 and
B-2, as amended or modified from time to time.
"Principals" shall mean Holberg Industries, Inc., John V. Holten or, in
the case of the Company, the Parent.
"Pro Forma EBITDA" shall mean the historical financial results of (i) the
Company and its Subsidiaries, (ii) the entities acquired (net of assets excluded
from such acquisition) by the Company pursuant to the Standard Acquisition
Documents, and (iii) the entities acquired by the Company as identified on
Schedule 5.2(f). For purposes of calculating and determining compliance with the
financial covenants in Section 5.2 (a), (b) and (c) or the Applicable Margin,
Pro Forma EBITDA shall be $11,420,000 for the period ending June 30, 1998,
$7,614,000 for the period ending September 30, 1998, $3,807,000 for the period
ending December 31, 1998 and $0 for any period thereafter.
"Pro Forma Financial Statements" shall mean the pro forma financial
statements and projections prepared by the Company dated March 28, 1998, and
delivered to the Agent prior to the Effective Date.
"Prohibited Transaction" shall mean any transaction involving any Plan
which is proscribed by Section 406 of ERISA or Section 4975 of the Code.
"Real Estate" shall mean all real property at any time owned or leased (as
lessee or sublessee) or managed by the Company or any of its Subsidiaries.
"Reimbursement Agreements" shall mean the letter of credit applications
and reimbursement agreements executed in connection with any Letter of Credit,
as amended or modified from time to time.
CREDIT AGREEMENT Page 14
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"Related Party" with respect to any Principal shall mean (a) any
controlling stockholder, 80% (or more) owned Subsidiary, or spouse or immediate
family member (in the case of an individual) of such Principal or (b) any trust,
corporation, partnership or other entity, the beneficiaries, stockholders,
partners, owners or Persons beneficially holding an 80% or more controlling
interest of which consist of such Principal and/or such other Persons referred
to in the immediately preceding clause (a).
"Reportable Event" shall mean a reportable event as described in Section
4043(b) of ERISA including without limitation those events as to which the
thirty (30) day notice period is waived under Part 2615 of the regulations
promulgated by the PBGC under ERISA.
"Required Lenders" shall mean Lenders holding not less than 51% of the
Commitments (or 51% of the Advances if the Commitments have been terminated).
"Requirement of Law" shall mean as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other governmental authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Revolving Credit Advance" shall mean any Revolving Credit Loan and any
Letter of Credit Advance.
"Revolving Credit Loan" shall mean any borrowing under Section 2.4
evidenced by the Revolving Credit Notes and made pursuant to Section 2.1(a).
"Revolving Credit Notes" shall mean the promissory notes of the Company
evidencing the Revolving Credit Loans, in substantially the form annexed hereto
as Exhibit C, respectively, as amended or modified from time to time and
together with any promissory note or notes issued in exchange or replacement
therefor, and "Revolving Credit Note" shall mean any one of such Revolving
Credit Notes.
"S&P" means Standard & Poor's Rating Services, a division of The McGraw
Hill Companies, Inc.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Security Agreements" shall mean each security agreement entered into by
the Company or any Guarantor for the benefit of the Agent and the Lenders
pursuant to this Agreement substantially in the forms attached hereto as
Exhibits D-1, D-2, D-3, D-4 and D-5, as amended or modified from time to time,
and any other agreement executed by the Company granting a Lien for the benefit
of the Agent and the Lenders in form or substance satisfactory to the Agent, as
amended or modified from time to time.
"Security Documents" shall mean the Pledge Agreements, the Security
Agreements, the Guaranties, the Reimbursement Agreements, and all other
agreements and documents delivered
CREDIT AGREEMENT Page 15
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pursuant to this Agreement or otherwise entered into by any Person to secure or
guaranty the obligations of the Company under this Agreement.
"Seller Note" shall mean any promissory note or other instrument issued
by, or obligation of, the Company or any Guarantor as full or partial payment of
the purchase price for a Permitted Acquisition, provided that the obligations
under all Seller Notes shall be unsecured, other than up to $150,000 aggregate
principal amount of Seller Notes at any time outstanding which may be secured by
a security interest in the assets acquired thereby.
"Senior Discount Notes" shall mean the $70,000,000 11 1/4 Senior Discount
Notes due 2008 issued by the Parent.
"Significant Subsidiaries" shall mean at any date any one or more
Subsidiaries which, if considered in the aggregate and with their Subsidiaries,
(a) for the most recent fiscal quarter of the Company accounted for more than 5%
of the consolidated revenues of the Company and its Subsidiaries or (b) as of
the end of such fiscal quarter, was the owner of more than 5% of the Total
Assets. For purposes of this Agreement, a type of event shall not be deemed to
have occurred with respect to Significant Subsidiaries unless such type of event
has occurred with respect to each of the Subsidiaries required to be included to
constitute "Significant Subsidiaries" as defined in the preceding sentence.
"S/L/C" shall mean any standby letter of credit issued hereunder.
"Standard Acquisition" shall mean the acquisition by the Company pursuant
to the Standard Acquisition Documents.
"Standard Acquisition Documents" shall mean the Combination Agreement by
and among the standard owners party thereto and the Company dated as of January
15, 1999 and all agreements, instruments and documents executed or delivered
pursuant thereto.
"Standard Cost Savings" shall mean the identifiable annualized cost
savings and synergies in connection with the Standard Acquisition and the
Acquisitions identified on Schedule 5.2(f), which shall be consistent with the
annualized cost savings and synergies identified on the Pro Forma Financial
Statements. For purposes of calculating and determining compliance with the
financial covenants in Section 5.2 (a), (b) and (c) or the Applicable Margin,
Standard Cost Savings shall be $8,930,000 for the period ending June 30, 1998,
$7,144,000 for the period ending September 30, 1998, $5,358,000 for the period
ending December 31, 1998, $3,572,000 for the period ending March 31, 1999,
$1,786,00 for the period ending June 30, 1999 and $0 for any period thereafter.
"Subordinated Debt" shall mean, for any Person, any Indebtedness of such
Person which is fully subordinated to all Indebtedness of such Person owing to
the Agent and the Lenders, by written agreements and documents in form and
substance satisfactory to the Required Lenders and which is governed by terms
and provisions, including without limitation maturities, covenants, defaults,
rates and fees, acceptable to the Agent, and shall include, without limitation,
all Indebtedness owing pursuant to the Subordinated Notes.
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"Subordinated Debt Documents" shall mean the Subordinated Note Documents,
and any other agreement or document evidencing or relating to any Subordinated
Debt, whether under the Subordinated Notes or any other Subordinated Debt.
"Subordinated Note Documents" shall mean the Subordinated Note Indenture,
the Subordinated Notes and all agreements, instruments and documents executed in
connection therewith at any time, including without limitation those agreements,
instruments and documents listed on Schedule 1.1-B hereto.
"Subordinated Notes" shall mean the subordinated notes issued by the
Company in the aggregate principal amount of $140,000,000 due 2008 issued
pursuant to the Subordinated Note Indenture.
"Subordinated Note Indenture" shall mean the Senior Subordinated Note
Indenture among the Company and State Street Bank & Trust, as trustee, dated as
of March 30, 1998, as amended or modified from time to time.
"Subsidiary" of any Person shall mean any other Person (whether now
existing or hereafter organized or acquired) in which (other than directors,
qualifying shares required by law) at least a majority of the securities or
other ownership interests of each class having ordinary voting power or
analogous right (other than securities or other ownership interests which have
such power or right only by reason of the happening of a contingency), at the
time as of which any determination is being made, are owned, beneficially and of
record, by such Person or by one or more of the other Subsidiaries of such
Person or by any combination thereof.
"Swaps" means an agreement, device or arrangement providing for payments
which are related to fluctuations of interest rates, exchange rates or forward
rates, including, but not limited to, dollar-denominated or cross-currency
interest rate exchange agreements, forward currency exchange agreements,
interest rate cap or collar protection agreements, forward rate currency or
interest rate options, puts and warrants.
"Swingline Loan" shall mean any loan under Section 2.4 evidenced by the
Swingline Note and made by the Agent to the Company pursuant to Section 2.1(b).
"Swingline Note" shall mean any promissory note of the Company evidencing
the Swingline Loans in substantially the form of Exhibit E hereto, as amended or
modified from time to time and together with any promissory note or notes issued
in exchange or replacement therefor.
"Termination Date" shall mean the earlier to occur of (a) March 30, 2004,
and (b) the date on which the Commitments shall be terminated pursuant to
Section 2.2 or 6.2.
"Total Assets" shall mean, at any time, the consolidated assets of the
Company and its Subsidiaries.
"Unfunded Benefit Liabilities" shall mean, with respect to any Plan as of
any date, the amount of the unfunded benefit liabilities determined in
accordance with Generally Accepted Accounting Principles.
CREDIT AGREEMENT Page 17
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"Unmatured Event" shall mean any event or condition which might become an
Event of Default with notice or lapse of time or both.
"Voting Stock" shall mean any Capital Stock, the holders of which are at
the time entitled, as such holders, to vote for the election of a majority of
the directors (or persons performing similar functions) of the corporation,
association, trust or other business entity involved, whether or not the right
so to vote exists by reasoning of the happening of a contignency.
"Wholly Owned Subsidiary" shall mean any Subsidiary of the Company of
which 100% of the Voting Stock, exclusive of directors' qualifying shares, is
owned by the Company or by another Wholly Owned Subsidiary of the Company.
1.2 Other Definitions; Rules of Construction. As used herein, the terms
"Agent", "Lenders", "Company", and "this Agreement" shall have the respective
meanings ascribed thereto in the introductory paragraph of this Agreement. Such
terms, together with the other terms defined in Section 1.1, shall include both
the singular and the plural forms thereof and shall be construed accordingly.
Use of the terms "herein", "hereof", and "hereunder" shall be deemed references
to this Agreement in its entirety and not to the Section or clause in which such
term appears. References to "Sections" and "subsections" shall be to Sections
and subsections, respectively, of this Agreement unless otherwise specifically
provided.
1.3 Accounting Terms and Determinations.
(a) Except as otherwise expressly provided herein, all accounting
terms used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to the
Lenders hereunder shall (unless otherwise disclosed to the Lenders in writing at
the time of delivery thereof in the manner described in subsection (b) below) be
prepared in accordance with Generally Accepted Accounting Principles; provided
that, if the Company notifies the Agent that it wishes to amend any covenant in
Article V to eliminate the effect of any change in Generally Accepted Accounting
Principles (or if the Agent notifies the Company that the Required Lenders wish
to amend Article V for such purpose), then the Company's compliance with such
covenants shall be determined on the basis of Generally Accepted Accounting
Principles in effect immediately before the relevant change in Generally
Accepted Accounting Principles became effective until either such notice is
withdrawn or such covenant or any such defined term is amended in a manner
satisfactory to the Company and the Required Lenders. Except as otherwise
expressly provided herein, all references to a time of day shall be references
to Chicago, Illinois time.
(b) The Company shall deliver to the Lenders at the same time as the
delivery of any annual or quarterly financial statement under Section 5.1(d)
hereof (i) a description in reasonable detail of any material variation between
the application or other modification of accounting principles employed in the
preparation of such statement and the application or other modification of
accounting principles employed in the preparation of the immediately prior
annual or quarterly financial statements as to which no objection has been made
in accordance with the last sentence of subsection (a) above and (ii) reasonable
estimates of the difference between such statements arising as a consequence
thereof.
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(c) To enable the ready and consistent determination of compliance
with the covenants set forth in Section 5.2 hereof, the Company will not change
the last day of its fiscal year from December 31 of each year, or the last days
of the first three fiscal quarters in each of its fiscal years from March 31,
June 30, and September 30 of each year, respectively.
ARTICLE II
THE COMMITMENTS AND THE ADVANCES
2.1 Commitments of the Lenders.
(a) Revolving Credit Advances. Each Lender agrees, for itself only,
subject to the terms and conditions of this Agreement, to make Revolving Credit
Loans to the Company pursuant to Section 2.4 and to participate in Letter of
Credit Advances to the Company pursuant to Section 3.3, from time to time from
and including the Effective Date to but excluding the Termination Date, not to
exceed in aggregate principal amount at any time outstanding the amount
determined pursuant to Section 2.1(c).
(b) Swingline Loans. (i) The Company may request the Agent to make,
and the Agent may, in its sole discretion, make Swingline Loans to the Company
from time to time on any Business Day during the period from the Effective Date
until the Termination Date in an aggregate principal amount not to exceed at any
time the lesser of (A) $5,000,000 (the "Swingline Facility") and (B) the
aggregate amount of Revolving Credit Advances that could be but is not borrowed
as of such date. Each Lender's Commitment shall be deemed utilized by an amount
equal to such Lender's pro rata share (based on such Lender's Commitment) of
each Swingline Loan for purposes of determining the amount of Revolving Credit
Advances required to be made by such Lender, but no Lender's Commitment,
including First Chicago's, shall be deemed utilized for purposes of determining
commitment fees under Section 2.3(a). Swingline Loans shall bear interest at the
Adjusted Corporate Base Rate. Within the limits of the Swingline Facility, so
long as the Agent, in its sole discretion, elects to make Swingline Loans, the
Company may borrow and reborrow under this Section 2.1(b)(i).
(ii) The Agent may at any time in its sole and absolute discretion
require that any Swingline Loan be refunded by a Revolving Credit Loan which is
an Adjusted Corporate Base Rate Borrowing from the Revolving Lenders, and upon
written notice thereof by the Agent to the Lenders and the Company, the Company
shall be deemed to have requested a Revolving Credit Loan which is an Adjusted
Corporate Base Rate Borrowing in an amount equal to the amount of such Swingline
Loan, and such Adjusted Corporate Base Rate Borrowing shall be made to refund
such Swing Line Loan. Each Lender shall be absolutely and unconditionally
obligated to fund its pro rata share (based on such Lender's Commitment) of such
Adjusted Corporate Base Rate Borrowing or, if applicable, purchase a
participating interest in the Swingline Loans pursuant to Section 2.1(b)(iii)
and such obligation shall not be affected by any circumstance, including,
without limitation, (A) any set-off, counterclaim, recoupment, defense or other
right which such Lender has or may have against the Agent or the Company or any
if its Subsidiaries or anyone else for any reason whatsoever; (B) the occurrence
or continuance of an Unmatured Event or an Event of Default, subject to Section
2.1(b)(iii); (C) any adverse change in the condition (financial or otherwise) of
the Company or any of its Subsidiaries; (D) any breach
CREDIT AGREEMENT Page 19
24
of this Agreement or any other agreement by any other Lender, the Company or any
Guarantor; or (E) any other circumstance, happening or event whatsoever, whether
or not similar to any of the foregoing (including without limitation the
Company's failure to satisfy any conditions contained in Article II or any other
provision of this Agreement).
(iii) If, due to any Event of Default (including without limitation
as a result of the occurrence of an Event of Default with respect to the Company
or any of its Subsidiaries pursuant to Section 6.1(h)) Adjusted Corporate Base
Rate Loans may not be made by the Lenders as described in Section 2.1(b)(ii),
then (A) the Company agrees that each Swingline Loan not paid pursuant to
Section 2.1(b)(ii) shall bear interest, payable on demand by the Agent, at the
Overdue Rate, and (B) effective on the date each such Adjusted Corporate Base
Rate Loan would otherwise have been made, each Lender severally agrees that it
shall unconditionally and irrevocably, without regard to the occurrence of any
Unmatured Event or Event of Default or any other circumstances, in lieu of
deemed disbursement of loans, to the extent of such Lender's Commitment,
purchase a participating interest in the Swingline Loans by paying its
participation percentage thereof. Each Lender will immediately transfer to the
Agent, in same day funds, the amount of its participation. After such payment to
the Agent, each Lender shall share on a pro rata basis (calculated by reference
to its Commitment) in any interest which accrues thereon and in all repayments
thereof. If and to the extent that any Lender shall not have so made the amount
of such participating interest available to the Agent, such Lender and the
Company severally agree to pay to the Agent forthwith on demand such amount
together with interest thereon, for each day from the date of demand by the
Agent until the date such amount is paid to the Agent, at (x) in the case of the
Company, the interest rate specified above and (y) in the case of such Lender,
the Federal Funds Rate for the first five days after the date of demand by the
Agent and thereafter at the interest rate specified above.
(c) Limitation on Amount of Advances. Notwithstanding anything in
this Agreement to the contrary, (i) the aggregate principal amount of the
Advances at any time outstanding to the Company shall not exceed the aggregate
amount of the Commitments at such time and (ii) the aggregate principal amount
of Letter of Credit Advances outstanding at any time shall not exceed
$10,000,000.
2.2 Termination and Reduction of Commitments. (a) The Company shall have
the right to terminate or reduce the Commitments at any time and from time to
time, provided that (i) the Company shall give notice of such termination or
reduction to the Agent specifying the amount and effective date thereof, (ii)
each partial reduction thereof shall be in a minimum amount of $5,000,000 and in
an integral multiple of $1,000,000 and shall reduce such Commitments of all of
the Lenders proportionately in accordance with the respective Commitment amounts
for each such Lender, (iii) no such termination or reduction shall be permitted
with respect to any portion of any such Commitments as to which a request for an
Advance pursuant to Section 2.4 is then pending, and (iv) the Commitments may
not be terminated if any Advances are then outstanding and may not be reduced
below the principal amount of Advances then outstanding. The Commitments or any
portion thereof terminated or reduced pursuant to this Section 2.2 may not be
reinstated.
(b) For purposes of this Agreement, a Letter of Credit Advance (i)
shall be deemed outstanding in an amount equal to the sum of the maximum amount
available to be drawn under
CREDIT AGREEMENT Page 20
25
the related Letter of Credit on or after the date of determination and on or
before the stated expiry date thereof plus the amount of any draws under such
Letter of Credit that have not been reimbursed as provided in Section 3.3 and
(ii) shall be deemed outstanding at all times on and before such stated expiry
date or such earlier date on which all amounts available to be drawn under such
Letter of Credit have been fully drawn, and thereafter until all related
reimbursement obligations have been paid pursuant to Section 3.3. As provided in
Section 3.3, upon each payment made by the Agent in respect of any draft or
other demand for payment under any Letter of Credit, the amount of any Letter of
Credit outstanding immediately prior to such payment shall be automatically
reduced by the amount of each Revolving Credit Loan deemed advanced in respect
of the related reimbursement obligation of the Company.
2.3 Fees (a) The Company agrees to pay the Agent, for the pro rata benefit
of the Lenders, a commitment fee on the daily average unused amount of the
Commitments, for the period from the Effective Date to but excluding the
Termination Date, at a rate equal to the Applicable Margin. For purposes of this
Section 2.3(a), all Letters of Credit shall be considered usage of the
Commitments, and Swingline Loans shall not be considered usage of the
Commitments. Such accrued commitment fees shall be payable quarterly in arrears
on the last Business Day of each March, June, September and December, commencing
on June 30, 1998, and on the Termination Date.
(b) The Company agrees to pay to the Agent, with respect to Letters
of Credit, a fee computed at the Applicable Margin calculated on the maximum
amount available to be drawn from time to time under a Letter of Credit, which
fee shall be paid annually in advance at the time such Letter of Credit is
issued for the period from and including the date of issuance of such Letter of
Credit to and including the stated expiry date of such Letter of Credit, which
fees shall be for the pro rata benefit of the Lenders; provided that a fee
computed at the rate of 0.25% per annum calculated on the face amount of each
Letter of Credit shall be retained from such fee solely for the account of the
Agent. Such fees are nonrefundable and the Company shall not be entitled to any
rebate of any portion thereof if such Letter of Credit does not remain
outstanding through its stated expiry date or for any other reason. The Company
further agrees to pay to the Agent, on demand, such other customary
administrative fees, charges and expenses of the Agent in respect of the
issuance, negotiation, acceptance, amendment, transfer and payment of such
Letter of Credit or otherwise payable pursuant to the application and related
documentation under which such Letter of Credit is issued.
(c) The Company agrees to pay to the Agent agency fees for its
services as Agent under this Agreement and for other services in such amounts as
may from time to time be agreed to in writing between the Company and the Agent.
2.4 Disbursement of Advances. (a) The Company shall give the Agent notice
of its request for each Advance in substantially the form of Exhibit F hereto
not later than noon Chicago time (i) three LIBOR Business Days prior to the date
such Advance is requested to be made if such Advance is to be made as a LIBOR
Borrowing, (ii) five Business Days prior to the date any Letter of Credit
Advance is requested to be made, or such earlier date as reasonably determined
by the Agent, (iii) on the Business Day such Advance is requested to be made in
the case of any Swingline Loan, and (iv) on the Business Day such Advance is
requested to be made in all other cases, which notice shall specify whether a
LIBOR Borrowing, an Adjusted
CREDIT AGREEMENT Page 21
26
Corporate Base Rate Borrowing, a Swingline Loan or a Letter of Credit Advance is
requested and, in the case of each requested LIBOR Borrowing, the LIBOR Interest
Period to be initially applicable to such Borrowing and, in the case of each
Letter of Credit Advance, such information as may be necessary for the issuance
thereof by the Agent. The Agent, reasonably promptly on the same Business Day
such notice is given, shall provide notice of such requested Advance (other than
Swingline Loan) to the relevant Lenders. Subject to the terms and conditions of
this Agreement, the proceeds of each such requested Advance shall be made
available to the Company by depositing the proceeds thereof, in immediately
available funds, in an account maintained and designated by the Company at the
principal office of the Agent. Subject to the terms and conditions of this
Agreement, the Agent shall, on the date such Letter of Credit Advance is
requested to be made, issue the related Letter of Credit on behalf of the
Lenders for the account of the Company. Notwithstanding anything herein to the
contrary, the Agent may decline to issue any requested Letter of Credit on the
basis that the beneficiary, the purpose of issuance or the terms or the
conditions of drawing are unacceptable to it in it reasonable discretion,
provided that the Agent shall not unreasonably decline to issue a Letter of
Credit pursuant to this sentence.
(b) Each Lender, not later than 2:00 p.m. Chicago time on the date
any Borrowing in the form of a Loan for which such Lender has a Commitment is
required to be made, shall make its pro rata share of such Borrowing available
in immediately available funds at the principal office of the Agent for
disbursement to the Company. Unless the Agent shall have received notice from
any Lender prior to the date such Borrowing is requested to be made under this
Section 2.4 that such Lender will not make available to the Agent such Lender's
pro rata portion of such Borrowing, the Agent may assume that such Lender has
made such portion available to the Agent on the date such Borrowing is requested
to be made in accordance with this Section 2.4. If and to the extent such Lender
shall not have so made such pro rata portion available to the Agent, the Agent
may (but shall not be obligated to) make such amount available to the Company,
and such Lender and the Company severally agree to pay to the Agent forthwith on
demand such amount together with interest thereon, for each day from the date
such amount is made available to the Company by the Agent until the date such
amount is repaid to the Agent, at a rate per annum equal to, in the case of the
Company, the interest rate applicable to such Borrowing during such period and,
in the case of any Lender, at the Federal Funds Rate for the first five days and
at the interest rate applicable to such borrowing thereafter. If such Lender
shall pay such amount to the Agent together with interest, such amount so paid
shall constitute a Loan by such Lender as a part of such Borrowing for purposes
of this Agreement. The failure of any Lender to make its pro rata portion of any
such Borrowing available to the Agent shall not relieve any other Lender of its
obligations to make available its pro rata portion of such Borrowing on the date
such Borrowing is requested to be made, but no Lender shall be responsible for
failure of any other Lender to make such pro rata portion available to the Agent
on the date of any such Borrowing.
(c) All Revolving Credit Loans shall be evidenced by the Revolving
Credit Notes and the Swingline Loans shall be evidenced by the Swingline Note
and all such Loans shall be due and payable and bear interest as provided in
Article III. Each Lender and the Agent is hereby authorized by the Company to
record on the schedule attached to the Notes, or in its books and records, the
date, and amount and type of each Loan and the duration of the related LIBOR
Interest Period (if applicable), the amount of each payment or prepayment of
principal
CREDIT AGREEMENT Page 22
27
thereon, and the other information provided for on such schedule, which schedule
or books and records, as the case may be, shall constitute prima facie evidence
of the information so recorded, provided, however, that failure of any Lender or
the Agent to record, or any error in recording, any such information shall not
relieve the Company of its obligation to repay the outstanding principal amount
of the Loans, all accrued interest thereon and other amounts payable with
respect thereto in accordance with the terms of the Notes and this Agreement.
Subject to the terms and conditions of this Agreement, the Company may borrow
Revolving Credit Advances and under this Section 2.4 and under Section 3.3,
prepay Revolving Credit Advances pursuant to Section 3.1 and reborrow Revolving
Credit Advances under this Section 2.4.
(d) Nothing in this Agreement shall be construed to require or
authorize any Lender to issue any Letter of Credit, it being recognized that the
Agent has the sole obligation under this Agreement to issue Letters of Credit
for the risk of the Lenders. Upon issuance of a Letter of Credit by the Agent,
each Lender shall automatically acquire a pro rata risk participation interest
in such Letter of Credit Advance based on its respective Commitment. If the
Agent shall honor a draft or other demand for payment presented or made under
any Letter of Credit, the Agent shall provide notice thereof to each Lender on
the date such draft or demand is honored unless the Company or any of its
Subsidiaries shall have satisfied its reimbursement obligation under Section 3.3
by payment to the Agent on such date. Each Lender, on such date, shall make its
pro rata share of the amount paid by the Agent available in immediately
available funds at the principal office of the Agent for the account of the
Agent. If and to the extent such Lender shall not have made any required pro
rata portion available to the Agent, such Lender and the Company,
unconditionally and irrevocably, severally agree to pay to the Agent forthwith
on demand such amount together with interest thereon, for each day from the date
such amount was paid by the Agent until such amount is so made available to the
Agent at a per annum rate equal to the interest rate applicable during such
period to the related Loan disbursed under Section 3.3 in respect of the
reimbursement obligation of the Company. If such Lender shall pay such amount to
the Agent together with such interest, if any, accrued, such amount so paid
shall constitute a Revolving Credit Loan by such Lender as part of the Revolving
Credit Borrowing disbursed in respect of the reimbursement obligation of the
Company under Section 3.3 for purposes of this Agreement. The failure of any
Lender to make its pro rata portion of any such amount paid by the Agent
available to the Agent shall not relieve any other Lender of its obligation to
make available its pro rata portion of such amount, but no Lender shall be
responsible for failure of any other Lender to make such pro rata portion
available to the Agent. Notwithstanding anything herein to the contrary, it is
acknowledged and agreed that Letters of Credit hereunder may be issued for the
account of any of the Subsidiaries of the Company, provided that for all
purposes of this Agreement both the Company and such Subsidiary shall be deemed
the account party thereon and shall be jointly and severally liable for all
obligations in connection therewith and the Company shall have obtained an
agreement from such Subsidiary that such Subsidiary shall be bound by all of the
terms and provisions of this Agreement with respect to Letters of Credit, such
agreement to be in form of substance satisfactory to the Agent.
2.5 Conditions for First Disbursement. The obligation of the Lenders to
make the first Advance hereunder is subject to receipt by each Lender and the
Agent of the following documents and completion of the following matters, in
form and substance satisfactory to each Lender and the Agent:
CREDIT AGREEMENT Page 23
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(a) Charter Documents. Certificates of recent date of the
appropriate authority or official of the Company's and each Guarantor's
respective jurisdiction of organization listing all charter documents of the
Company or each Guarantor, respectively, on file in that office and certifying
as to the good standing and corporate existence of the Company or each
Guarantor, respectively, together with copies of such charter documents of the
Company or each Guarantor certified as of a recent date by such authority or
official and certified as true and correct as of the Effective Date by a duly
authorized officer of the Company or each Guarantor, respectively;
(b) By-Laws and Corporate Authorizations. Copies of the by-laws of
the Company and operating agreement of each Guarantor together with all
authorizing resolutions and evidence of other corporate action taken by the
Company and each Guarantor to authorize the execution, delivery and performance
by the Company and each Guarantor of this Agreement, the Notes and the Security
Documents to which the Company or such Guarantor, respectively, is a party and
the consummation by the Company or such Guarantor, respectively, of the
transactions contemplated hereby, certified as true and correct as of the
Effective Date by a duly authorized officer of the Company or each Guarantor,
respectively;
(c) Incumbency Certificate. Certificates of incumbency of the
Company and each Guarantor containing, and attesting to the genuineness of, the
signatures of those officers or members, as the case may be, authorized to act
on behalf of the Company or each Guarantor in connection with this Agreement,
the Notes and the Security Documents to which the Company and such Guarantor is
a party and the consummation by the Company or such Guarantor of the
transactions contemplated hereby, certified as true and correct as of the
Effective Date by a duly authorized officer of the Company and each Guarantor;
(d) Notes. The Notes duly executed on behalf of the Company for each
Lender;
(e) Security Documents. The Security Documents duly executed on
behalf of the Company and the Guarantors, as the case may be, granting to the
Lenders and the Agent the collateral and security intended to be provided
pursuant to Section 2.10, together with:
(i) Recording, Filing, Etc. Recordation, filing and other
action (including payment of any applicable taxes or fees) in such jurisdictions
as the Lenders or the Agent may deem necessary or appropriate with respect to
the Security Documents, including the filing of financing statements and similar
documents which the Lenders or the Agent may deem necessary or appropriate to
create, preserve or perfect the liens, security interests and other rights
intended to be granted to the Lenders or the Agent thereunder, together with
Uniform Commercial Code record searches in such offices as the Lenders or the
Agent may request;
(ii) Casualty and Other Insurance. Evidence that the casualty
and other insurance required pursuant to Section 5.1(c), hereof or the Security
Documents is in full force and effect;
(f) Legal Opinions. The favorable written opinion of counsel for the
Company and each Guarantor, substantially in the form of Exhibit G attached
hereto;
(g) Consents, Approvals, Etc. Copies of all governmental and
nongovernmental consents, approvals, authorizations, declarations, registrations
or filings, if any, required on the
CREDIT AGREEMENT Page 24
29
part of the Company or any Guarantor in connection with the execution, delivery
and performance of the Loan Documents or the transactions contemplated hereby or
as a condition to the legality, validity or enforceability of the Loan
Documents, certified as true and correct and in full force and effect as of the
Effective Date by a duly authorized officer of the Company, or if none are
required, a certificate of such officer to that effect;
(h) Subordinated Debt and Preferred Stock. Evidence satisfactory to
the Agent that the Company has incurred Subordinated Debt and issued Preferred
Stock in an aggregate amount equal to or greater than $180,000,000, all in
accordance with the Subordinated Debt Documents and Preferred Stock Documents,
all Subordinated Debt Documents and Preferred Stock Documents shall have been
delivered to the Agent and approved by the Agent and all transactions
contemplated pursuant to the Subordinated Debt Documents and Preferred Stock
Documents shall have been completed;
(i) Standard Acquisition. Evidence satisfactory to the Agent that
the Company is completing the Standard Acquisition simultaneously with the first
Advance hereunder, all in accordance with all laws and regulations and with the
Standard Acquisition Documents, and the Company shall acquire, free and clear of
all Liens (other than Liens permitted by this Agreement), good and marketable
title to all assets being acquired pursuant to the Standard Acquisition;
(j) Payments. Evidence satisfactory to the Agent that all transfers
of funds and payments described on Schedule 4.7 are being accomplished
simultaneously, or at such other time as noted on Schedule 4.7, with the first
Advance hereunder, including without limitation the payment in full of all
indebtedness and other liabilities, and the termination of all commitments to
lend and all Liens relating thereto, as described on Schedule 4.7;
(k) Due Diligence. The Agent shall have received and be satisfied
with all litigation searches, a review of all material contracts and Contingent
Liabilities, and all other due diligence and investigation required by the
Agent;
(l) Certificates. The Agent shall have received, in form and
substance satisfactory to the Agent, a pro forma covenant compliance certificate
as of the Effective Date and as of the end of each of the first four quarters
after the Effective Date; and
(m) Other Conditions. Such other documents and completion of such
other matters as the Agent may reasonably request, including without limitation
copies of all final projections and financial statements and a solvency
certificate executed by the chief financial officer of the Company.
2.6 Further Conditions for Disbursement. The obligation of the Lenders to
make any Advance (including the first Advance), or any continuation or
conversion under Section 2.7, is further subject to the satisfaction of the
following conditions precedent:
(a) The representations and warranties contained in Article IV
hereof and in the Security Documents shall be true and correct in all material
respects on and as of the date such Advance is made (both before and after such
Advance is made) as if such representations and warranties were made on and as
of such date;
CREDIT AGREEMENT Page 25
30
(b) No Event of Default or Unmatured Event shall exist or shall have
occurred and be continuing on the date such Advance is made and the making of
such Advance shall not cause an Event of Default or Unmatured Event; and
(c) In addition to all other applicable conditions, in the case of
any Letter of Credit Advance, the Company shall have delivered to the Agent
issuing the related Letter of Credit an application for such Letter of Credit
and other related documentation requested by and acceptable to the Agent
appropriately completed and duly executed on behalf of the Company.
2.7 Subsequent Elections as to Borrowings. The Company may elect (a) to
continue a LIBOR Borrowing of one type, or a portion thereof, as a LIBOR
Borrowing of the then existing type or (b) may elect to convert a LIBOR
Borrowing of one type, or a portion thereof, to a Borrowing of another type or
(c) elect to convert an Adjusted Corporate Base Rate Borrowing, or a portion
thereof, to a LIBOR Borrowing, in each case by giving notice thereof to the
Agent in substantially the form of Exhibit H hereto not later than 11:00 a.m.
Chicago time three LIBOR Business Days prior to the date any such continuation
of or conversion to a LIBOR Borrowing is to be effective and not later than noon
Chicago time on the Business Day date such continuation or conversion is to be
effective in all other cases, provided that an outstanding LIBOR Borrowing may
only be converted on the last day of the then current LIBOR Interest Period with
respect to such Borrowing, and provided, further, if a continuation of a
Borrowing as, or a conversion of a Borrowing to, a LIBOR Borrowing is requested,
such notice shall also specify the LIBOR Interest Period to be applicable
thereto upon such continuation or conversion. The Agent, reasonably promptly on
the Business Day such notice is given, shall provide notice of such election to
the relevant Lenders. If the Company shall not timely deliver such a notice with
respect to any outstanding LIBOR Borrowing, the Company shall be deemed to have
elected to convert such LIBOR Borrowing to an Adjusted Corporate Base Rate
Borrowing on the last day of the then current LIBOR Interest Period with respect
to such Borrowing.
2.8 Limitation of Requests and Elections. Notwithstanding any other
provision of this Agreement to the contrary, if, upon receiving a request for a
LIBOR Borrowing pursuant to Section 2.4, or a request for a continuation of a
LIBOR Borrowing, or a request for a conversion of an Adjusted Corporate Base
Rate Borrowing to a LIBOR Borrowing pursuant to Section 2.7, (a) in the case of
any LIBOR Borrowing, deposits in Dollars for periods comparable to the LIBOR
Interest Period elected are not available to any Lender in the relevant
interbank or market, or (b) applicable interest rate will not adequately and
fairly reflect the cost to any Lender of making, funding or maintaining the
related LIBOR Borrowing or (c) by reason of national or international financial,
political or economic conditions or by reason of any applicable law, treaty,
rule or regulation (whether domestic or foreign) now or hereafter in effect, or
the interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof, or compliance by any
Lender with any guideline, request or directive of such authority (whether or
not having the force of law), including without limitation exchange controls, it
is impracticable, unlawful or impossible for any Lender (i) to make or fund the
relevant LIBOR Borrowing or (ii) to continue such LIBOR Borrowing or (iii) to
convert a Borrowing to such a LIBOR Borrowing, then the Company shall not be
entitled, so long as such circumstances continue, to request a LIBOR Borrowing
pursuant to Section 2.4 or a continuation of or conversion to a LIBOR Borrowing
pursuant to Section 2.7. In the event that such circumstances no longer exist,
the Lenders shall again, subject to the terms and conditions
CREDIT AGREEMENT Page 26
31
hereof, provide LIBOR Borrowings pursuant to Section 2.4, and requests for
continuations of and conversions to LIBOR Borrowings of the affected type
pursuant to Section 2.7.
2.9 Minimum Amounts; Limitation on Number of Borrowings. Except for (a)
Advances and conversions thereof which exhaust the entire remaining amount of
the Commitments and (b) payments required pursuant to Section 3.8, each
Borrowing and each continuation or conversion pursuant to Section 2.7 and each
prepayment thereof shall be in a minimum amount of, in the case of LIBOR
Borrowings, $2,000,000 and in integral multiples of $500,000, and in the case of
Adjusted Corporate Base Rate Borrowings, $250,000 and in integral multiples of
$50,000. No more than five LIBOR Interest Periods shall be permitted to exist at
any one time with respect to all Advances outstanding hereunder from time to
time.
2.10 Security and Collateral. To secure the payment when due of the Notes
and all other obligations of the Company under this Agreement to the Lenders and
the Agent, the Company shall execute and deliver, or cause to be executed and
delivered, to the Lenders and the Agent Security Documents granting the
following:
(a) Security interests in all present and future accounts,
inventory, equipment, fixtures and all other personal property of the Company
and each Guarantor;
(b) Mortgage liens on all real property and fixtures of the Company
and each Guarantor;
(c) Pledges of all Capital Stock owned by the Company or any
Guarantor, provided that (i) the amount of Capital Stock of any Foreign
Subsidiary pledged to the Agent shall not exceed 65% of the aggregate Capital
Stock of such Foreign Subsidiary and (ii) the Company shall not be required to
pledge the Capital Stock of APCOA Australia Pty. Ltd. or APCOA Pacific Holding
Pty. Ltd. so long as those entities do not have any material assets or
operations;
(d) Guaranties of all Guarantors; and
(e) All other security and collateral described in the Security
Documents.
Notwithstanding the foregoing, it is acknowledged and agreed that the Company
and the Guarantors shall not be required to grant a lien or security interest on
any assets to the extent such assets are specifically excluded from the
collateral pursuant to the terms of the Security Agreements.
ARTICLE III
PAYMENTS AND PREPAYMENTS OF ADVANCES
3.1 Principal Payments.
(a) Unless earlier payment is required under this Agreement, the
Company shall pay to the Lenders on the Termination Date the entire outstanding
principal amount of the Advances outstanding to it. If the Advances at any time
exceed the amount allowed pursuant to
CREDIT AGREEMENT Page 27
32
Section 2.1(c), the Company shall prepay the Advances by an amount equal to or,
at its option, greater than such excess.
(b) The Company may at any time and from time to time prepay all or
a portion of the Loans, without premium or penalty, provided that (i) the
Company may not prepay any portion of any Loan as to which an election of or a
conversion to a LIBOR Loan is pending pursuant to Section 2.7, and (ii) the
Company shall comply with all requirements of Section 3.9 in connection with any
payment of any LIBOR Loan;
3.2 Interest Payments. The Company shall pay interest to the Lenders on
the unpaid principal amount of each Loan, for the period commencing on the date
such Loan is made until such Loan is paid in full, on each Interest Payment Date
and at maturity (whether at stated maturity, by acceleration or otherwise), and
thereafter on demand, at the following rates per annum:
(a) During such periods that such Loan is an Adjusted Corporate Base
Rate Loan, the Adjusted Corporate Base Rate ____ ;
(b) During such periods that such Loan is a LIBOR Loan, the LIBOR
applicable to such Loan for each related LIBOR Interest Period;
Notwithstanding the foregoing paragraphs (a) and (b), the Company shall pay
interest on demand at the Overdue Rate on the outstanding principal amount of
any Loan and any other amount payable by the Company hereunder (other than
interest) upon and during the continuance of any Event of Default if required by
the Required Lenders, provided that the Company shall automatically pay interest
on demand at the Overdue Rate on the outstanding principal amount of any Loan
and any other amount payable by the Company hereunder (other than interest) if
the Advances are accelerated at any time for any reason.
3.3 Letter of Credit Reimbursement Payments. (a) (i) The Company agrees to
pay to the Agent, not later than 1:00 p.m. Chicago time on the date on which the
Agent shall honor a draft or other demand for payment presented or made under
such Letter of Credit, an amount equal to the amount paid by the Agent in
respect of such draft or other demand under such Letter of Credit and all
reasonable expenses paid or incurred by the Agent relative thereto (the
"Reimbursement Amount"). The Agent shall, on the date of each demand for payment
under any Letter of Credit issued by the Agent, give the Company notice thereof
and of the amount of the Company's reimbursement obligation and liability for
expenses relative thereto; provided that the failure of the Agent to give such
notice shall not affect the reimbursement and other obligations of the Company
under this Section 3.3. Unless the Company shall have made such payment to the
Agent on such day, upon each such payment by the Agent, the Company shall be
deemed to have elected to satisfy its reimbursement obligation by an Adjusted
Corporate Base Rate Borrowing in an amount equal to the amount so paid by the
Agent in respect of such draft or other demand under such Letter of Credit, and
the Agent shall be deemed to have disbursed to the Company, for the account of
the Lenders, the Adjusted Corporate Base Rate Loans comprising such Adjusted
Corporate Base Rate Borrowing, and each Lender shall make its share of each such
Adjusted Corporate Base Rate Borrowing available to the Agent in accordance with
this Agreement. Such Adjusted Corporate Base Rate Loans shall be deemed
disbursed notwithstanding any failure to satisfy any conditions for disbursement
of any Loan and, to the
CREDIT AGREEMENT Page 28
33
extent of the Adjusted Corporate Base Rate Loans so disbursed, the reimbursement
obligation of the Company with respect to such Letter of Credit under this
subsection (a)(i) shall be deemed satisfied.
(ii) If, for any reason (including without limitation as a
result of the occurrence of an Event of Default with respect to the Company
pursuant to Section 6.1(h)), Adjusted Corporate Base Rate Loans may not be made
by the Lenders as described in subsection (a)(i) of this Section 3.3, (A) the
Company agrees that each Reimbursement Amount not paid pursuant to the first
sentence of subsection (a)(i) of this Section 3.3 shall bear interest, payable
on demand by the Agent, at the interest rate then applicable to Adjusted
Corporate Base Rate Loans, and (B) effective on the date each such Adjusted
Corporate Base Rate Loan would otherwise have been made with respect to any
Letter of Credit, each Lender severally agrees that it shall unconditionally and
irrevocably, without regard to the occurrence of any Event of Default or
Unmatured Event to the extent of such Lender's pro rata share (based on the
percentage of the aggregate Commitments of all Lenders then constituted by such
Lender's Commitment) purchase a participating interest in each Reimbursement
Amount. Each such Lender will immediately transfer to the Agent, in same day
funds, the amount of its participation. Each such Lender shall share on a pro
rata basis in any interest which accrues thereon and in all repayments thereof.
If and to the extent that any Lender shall not have so made the amount of such
participating interest available to the Agent, such Lender agrees to pay to the
Agent forthwith on demand such amount together with interest thereon, for each
day from the date of demand by the Agent until the date such amount is paid to
the Agent, at the Federal Funds Rate for the first five days after such demand
and at the Overdue Rate thereafter.
(iii) Each Lender shall be obligated, absolutely and
unconditionally, to make Adjusted Corporate Base Rate Loans pursuant to Section
3.3(a)(i) to purchase and fund participation interests in Letters of Credit
pursuant to Section 2.4(d) and 3.3(a)(ii) and the obligation shall not be
affected by any circumstance whatsoever, including, without limitation, (i) any
set off, counterclaim, recoupment, defense or other right which such Lender or
the Company may have against the Agent, the Company or anyone else for any
reason whatsoever, (ii) the occurrence of any Event of Default or Unmatured
Event, (iii) any adverse change in the condition (financial or otherwise) of the
Company or any of their Subsidiaries, (iv) any breach of this Agreement by the
Company, any of its Subsidiaries, the Agent, or any other Lender, or (v) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing, including without limitation any termination or other
limitation on the Commitments or any failure to satisfy any conditions precedent
to any Advance contained herein or any other provision of this Agreement.
(b) The reimbursement obligation of the Company under this Section
3.3 shall be absolute, unconditional and irrevocable and shall remain in full
force and effect until all reimbursement obligations of the Company to the
Lenders hereunder shall have been satisfied, and such obligations of the Company
shall not be affected, modified or impaired upon the happening of any event,
including without limitation, any of the following, whether or not with notice
to, or the consent of, the Company:
CREDIT AGREEMENT Page 29
34
(i) Any lack of validity or enforceability of any Letter of
Credit or any documentation relating to any Letter of Credit or to any
transaction related in any way to such Letter of Credit (the "Letter of Credit
Documents");
(ii) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any interest in
collateral or security, with respect to any of the Letter of Credit Documents;
(iii) The existence of any claim, setoff, defense or other
right which the Company may have at any time against any beneficiary or any
transferee of any Letter of Credit (or any Persons or entities for whom any such
beneficiary or any such transferee may be acting), the Agent or any Lender or
any other Person or entity, whether in connection with any of the Letter of
Credit Documents, the transactions contemplated herein or therein or any
unrelated transactions;
(iv) Any draft or other statement or document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(v) Payment by the Agent to the beneficiary under any Letter
of Credit against presentation of documents which do not comply with the terms
of the Letter of Credit, including failure of any documents to bear any
reference or adequate reference to such Letter of Credit;
(vi) Any failure, omission, delay or lack on the part of the
Agent or any Lender or any party to any of the Letter of Credit Documents to
enforce, assert or exercise any right, power or remedy conferred upon the Agent,
any Lender or any such party under this Agreement or any of the Letter of Credit
Documents, or any other acts or omissions on the part of the Agent, any Lender
or any such party; or
(vii) Any other event or circumstance that would, in the
absence of this clause, result in the release or discharge by operation of law
or otherwise of the Company from the performance or observance of any
obligation, covenant or agreement contained in this Section 3.3.
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which the Company has or may have against the
beneficiary of any Letter of Credit shall be available hereunder to the Company
against the Agent or any Lender. Nothing in this Section 3.3 shall limit the
liability, if any, of the Lenders to the Company pursuant to Section 3.3(c).
(c) The Company hereby indemnifies and agrees to hold harmless the
Lenders, the Agent and their respective officers, directors, employees and
agents, harmless from and against any and all claims, damages, losses,
liabilities, costs or expenses of any kind or nature whatsoever which the
Lenders, the Agent or any such Person may incur or which may be claimed against
any of them by reason of or in connection with any Letter of Credit, and neither
any Lender, the Agent nor any of their respective officers, directors, employees
or agents shall be liable or responsible for: (i) the use which may be made of
any Letter of Credit or for any acts or omissions of any beneficiary in
connection therewith; (ii) the validity, sufficiency or genuineness of documents
or of any endorsement thereon, even if such documents should in fact prove to be
CREDIT AGREEMENT Page 30
35
in any or all respects invalid, insufficient, fraudulent or forged; (iii)
payment by the Agent to the beneficiary under any Letter of Credit against
presentation of documents which do not comply with the terms of any Letter of
Credit, including failure of any documents to bear any reference or adequate
reference to such Letter of Credit; (iv) any error, omission, interruption or
delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit; or (v) any other event or
circumstance whatsoever arising in connection with any Letter of Credit;
provided, however, that the Company shall not be required to indemnify the
Lenders, the Agent and such other Persons, and the Agent and the Lenders shall
be severally liable to the Company to the extent, but only to the extent, of any
direct, as opposed to consequential or incidental, damages suffered by the
Company which were caused by (A) the Agent's wrongful dishonor of any Letter of
Credit after the presentation to it by the beneficiary thereunder of a draft or
other demand for payment and other documentation strictly complying with the
terms and conditions of such Letter of Credit, or (B) the payment by the Agent
to the beneficiary under any Letter of Credit against presentation of documents
which do not comply with the terms of the Letter of Credit to the extent, but
only to the extent, that such payment constitutes gross negligence or wilful
misconduct of the Agent; provided that none of the Agent, any Lender or any such
Person shall have the right to be indemnified hereunder for its own gross
negligence or wilful misconduct as determined by a court of competent
jurisdiction. It is understood that in making any payment under a Letter of
Credit the Agent will rely on documents presented to it under such Letter of
Credit as to any and all matters set forth therein without further investigation
and regardless of any notice or information to the contrary, and such reliance
and payment against documents presented under a Letter of Credit substantially
complying with the terms thereof shall not be deemed gross negligence or wilful
misconduct of the Agent in connection with such payment. It is further
acknowledged and agreed that the Company may have rights against the beneficiary
or others in connection with any Letter of Credit with respect to which the
Lenders or the Agent are alleged to be liable and it shall be a precondition of
the assertion of any liability of the Lenders or the Agent under this Section
that the Company shall first have exhausted all remedies in respect of the
alleged loss against such beneficiary and any other parties obligated or liable
in connection with such Letter of Credit and any related transactions.
3.4 Payment Method. (a) All payments to be made by the Company hereunder
will be made in Dollars and in immediately available funds to the Agent for the
account of the Lenders at its address set forth on the signature pages not later
than 1:00 p.m. Chicago time on the date on which such payment shall become due.
Payments received after 1:00 p.m. Chicago time shall be deemed to be payments
made prior to 1:00 p.m. Chicago time on the next succeeding Business Day. The
Company hereby authorizes the Agent to charge its account with the Agent in
order to cause timely payment of principal, interest and fees due under Section
2.3 to be made (subject to sufficient funds being available in such account for
that purpose).
(b) At the time of making each such payment, the Company shall,
subject to the other terms and conditions of this Agreement, specify to the
Agent that Advance or other obligation of the Company hereunder to which such
payment is to be applied. In the event that the Company fails to so specify the
relevant obligation or if an Event of Default shall have occurred and be
continuing, the Agent may apply such payments as it may determine.
CREDIT AGREEMENT Page 31
36
(c) On the day such payments are deemed received, the Agent shall
remit to the Lenders their pro rata shares of such payments in immediately
available funds, (i) in the case of payments of principal and interest on any
Borrowing, determined with respect to each such Lender by the ratio which the
outstanding principal balance of its Loan included in such Borrowing bears to
the outstanding principal balance of the Loans of all the Lenders included in
such Borrowing and (ii) in the case of fees paid pursuant to Section 2.3 and
other amounts payable hereunder (other than the Agent's fees payable pursuant to
Section 2.3(e) and amounts payable to any Lender under Section 3.7) determined
with respect to each such Lender by the ratio which the Commitment of such
Lender bears to the Commitments of all the Lenders.
3.5 No Setoff or Deduction. All payments of principal and interest on the
Loans and other amounts payable by the Company hereunder shall be made by the
Company without setoff or counterclaim, and free and clear of, and without
deduction or withholding for, or on account of, any present or future taxes,
levies, imposts, duties, fees, assessments, or other charges of whatever nature,
imposed by any governmental authority, or by any department, agency or other
political subdivision or taxing authority.
3.6 Payment on Non-Business Day; Payment Computations. Except as otherwise
provided in this Agreement to the contrary, whenever any installment of
principal of, or interest on, any Loan or any other amount due hereunder becomes
due and payable on a day which is not a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day and, in the case of any
installment of principal, interest shall be payable thereon at the rate per
annum determined in accordance with this Agreement during such extension.
Computations of interest and other amounts due under this Agreement shall be
made on the basis of a year of 360 days for the actual number of days elapsed,
including the first day but excluding the last day of the relevant period
3.7 Additional Costs. (a) In the event that on or after the date hereof,
the adoption of or any change in any applicable law, treaty, rule or regulation
(whether domestic or foreign) now or hereafter in effect and whether or not
presently applicable to any Lender or the Agent, or any interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Lender or the
Agent with any guideline, request or directive of any such authority (whether or
not having the force of law), shall (i) directly affect the basis of taxation of
payments to any Lender or the Agent of any amounts payable by the Company under
this Agreement (other than taxes imposed on the overall net income of any Lender
or the Agent, by the jurisdiction, or by any political subdivision or taxing
authority of any such jurisdiction, in which any Lender or the Agent, as the
case may be, has its principal office), or (ii) shall impose, modify or deem
applicable any reserve, special deposit or similar requirement against assets
of, deposits with or for the account of, or credit extended by any Lender or the
Agent, or (iii) shall impose any other condition with respect to this Agreement,
the Commitments, the Notes or the Loans or any Letter of Credit, and the result
of any of the foregoing (i.e., (i), (ii) or (iii)) is to increase the cost to
any Lender or the Agent, as the case may be, of making, funding or maintaining
any LIBOR Loan or any Letter of Credit or to reduce the amount of any sum
receivable by any Lender or the Agent, as the case may be, thereon, then the
Company shall pay to such Lender or the Agent, as the case may be, from time to
time, upon request by such Lender (with a copy of such request to be provided to
the Agent) or the Agent, additional amounts sufficient to compensate such Lender
or the Agent, as the case
CREDIT AGREEMENT Page 32
37
may be, for such increased cost or reduced sum receivable to the extent, in the
case of any LIBOR Loan, such Lender or the Agent is not compensated therefor in
the computation of the interest rate applicable to such LIBOR Loan. A statement
as to the amount of such increased cost or reduced sum receivable, prepared in
good faith and in reasonable detail by such Lender or the Agent, as the case may
be, and submitted by such Lender or the Agent, as the case may be, to the
Company, shall be conclusive and binding for all purposes absent manifest error
in computation.
(b) In the event that on or after the date hereof, the adoption of
or any change in any applicable law, treaty, rule or regulation (whether
domestic or foreign) now or hereafter in effect and whether or not presently
applicable to any Lender or the Agent, or any interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof, or compliance by any Lender or the Agent with any
guideline, request or directive of any such authority (whether or not having the
force of law), including any risk-based capital guidelines, affects or would
affect the amount of capital required or expected to be maintained by such
Lender or the Agent (or any corporation controlling such Lender or the Agent)
and such Lender or the Agent, as the case may be, determines that the amount of
such capital is increased by or based upon the existence of such Lender's or the
Agent's obligations hereunder and such increase has the effect of reducing the
rate of return on such Lender's or the Agent's (or such controlling
corporation's) capital as a consequence of such obligations hereunder to a level
below that which such Lender or the Agent (or such controlling corporation)
could have achieved but for such circumstances (taking into consideration its
policies with respect to capital adequacy) by an amount deemed by such Lender or
the Agent to be material, then the Company shall pay to such Lender or the
Agent, as the case may be, from time to time, upon request by such Lender (with
a copy of such request to be provided to the Agent) or the Agent, additional
amounts sufficient to compensate such Lender or the Agent (or such controlling
corporation) for any increase in the amount of capital and reduced rate of
return which such Lender or the Agent reasonably determines to be allocable to
the existence of such Lender's or the Agent's obligations hereunder. A statement
as to the amount of such compensation, prepared in good faith and in reasonable
detail by such Lender or the Agent, as the case may be, and submitted by such
Lender or the Agent to the Company, shall be conclusive and binding for all
purposes absent manifest error in computation.
(c) Each Lender will promptly notify the Company and the Agent of
any event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section and will designate
a different Applicable Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not in the judgment of
such Lender be otherwise disadvantageous to such Lender or contrary to its
policies.
3.8 Illegality and Impossibility. In the event that on or after the date
hereof, the adoption of or any change in any applicable law, treaty, rule or
regulation (whether domestic or foreign) or any change in any interpretation or
administration of any applicable law, treaty, rule or regulation (whether
domestic or foreign) now or hereafter in effect and whether or not presently
applicable to any Lender or the Agent, by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Lender
with any guideline, request or directive or such authority (whether or not
having the force of law), including without
CREDIT AGREEMENT Page 33
38
limitation exchange controls, shall make it unlawful or impossible for any
Lender to maintain any LIBOR Loan under this Agreement, such Lender's
outstanding LIBOR Loans, if any, shall be converted automatically to Adjusted
Corporate Base Loans on the respective last days of the then current LIBOR
Interest Periods with respect to such LIBOR Loans or within such earlier period
as required by law. If any such conversion of a LIBOR Loan occurs on a day which
is not the last day of the then current LIBOR Interest Period with respect
thereto, the Company shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 3.9 as if such conversion were a prepayment.
3.9 Indemnification. If the Company makes any payment of principal with
respect to any LIBOR Loan on any other date than the last day of a LIBOR
Interest Period applicable thereto (whether pursuant to Section 3.8, Section 6.2
or otherwise), or if the Company fails to borrow any LIBOR Loan after notice has
been given to the Lenders in accordance with Section 2.4, or if the Company
fails to make any payment of principal or interest in respect of a LIBOR Loan
when due, the Company shall reimburse each Lender on demand for any resulting
loss or expense incurred by each such Lender, including without limitation any
loss incurred in obtaining, liquidating or employing deposits from third
parties, whether or not such Lender shall have funded or committed to fund such
Loan. A statement as to the amount of such loss or expense, prepared in good
faith and in reasonable detail by such Lender and submitted by such Lender to
the Company, shall be conclusive and binding for all purposes absent manifest
error in computation. Calculation of all amounts payable to such Lender under
this Section 3.9 shall be made as though such Lender shall have actually funded
or committed to fund the relevant LIBOR Loan through the purchase of an
underlying deposit in an amount equal to the amount of such Loan and having a
maturity comparable to the related LIBOR Interest Period and through the
transfer of such deposit from an offshore office of such Lender to a domestic
office of such Lender in the United States of America; provided, however, that
such Lender may fund any LIBOR Loan in any manner it sees fit and the foregoing
assumption shall be utilized only for the purpose of calculation of amounts
payable under this Section 3.9.
3.10 Substitution of Lender. If (i) the obligation of any Lender to make
or maintain LIBOR Loans has been suspended pursuant to Section 3.8 when not all
Lender's obligations have been suspended, (ii) any Lender has demanded
compensation under Section 3.7 or (iii) any Lender is a Defaulting Lender, the
Company shall have the right, if no Unmatured Event or Event of Default then
exists, to replace such Lender (a "Replaced Lender") with one or more other
lenders (collectively, the "Replacement Lender") acceptable to the Agent,
provided that (x) at the time of any replacement pursuant to this Section 3.10,
the Replacement Lender shall enter into one or more Assignment and Acceptances,
pursuant to which the Replacement Lender shall acquire the Commitments and
outstanding Advances and other obligations of the Replaced Lender and, in
connection therewith, shall pay to the Replaced Lender in respect thereof an
amount equal to the sum of (A) the amount of principal of, and all accrued
interest on, all outstanding Loans of the Replaced Lender, (B) the amount of all
accrued, but theretofore unpaid, fees owing to the Replaced Lender under Section
2.3 and (C) the amount which would be payable by the Company to the Replaced
Lender pursuant to Section 3.9 if the Company prepaid at the time of such
replacement all of the Loans of such Replaced Lender outstanding at such time
and (y) all obligations of the Company then owing to the Replaced Lender (other
than those specifically described in clause (x) above in respect of which the
assignment purchase price has been, or is concurrently being, deemed paid) shall
be paid in full to such Replaced Lender
CREDIT AGREEMENT Page 34
39
concurrently with such replacement. Upon the execution of the respective
Assignment and Acceptances, the payment of amounts referred to in clauses (x)
and (y) above and, if so requested by the Replacement Lender, delivery to the
Replacement Lender of the appropriate Note or Notes executed by the Company, the
Replacement Lender shall become a Lender hereunder and the Replaced Lender shall
cease to constitute a Lender hereunder. The provisions of this Agreement
(including without limitation Sections 3.9 and 8.5) shall continue to govern the
rights and obligations of a Replaced Lender with respect to any Loans made or
any other actions taken by such lender while it was a Lender. Nothing herein
shall release any Defaulting Lender from any obligation it may have to the
Company, the Agent or any other Lender.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants that:
4.1 Corporate Existence and Power. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of incorporation or organization, and is duly qualified to do
business, and is in good standing, in all additional jurisdictions where such
qualification is necessary under applicable law, except for those jurisdictions
where the failure to so qualify or be in good standing is not reasonably
expected to result in any Material Adverse Effect. The Company has all requisite
corporate power to own or lease the properties used in its business and to carry
on its business as now being conducted and as proposed to be conducted except
where the failure to have such power is not reasonably expected to result in a
Material Adverse Effect, and to execute and deliver the Loan Documents to which
it is a party and to engage in the transactions contemplated by the Loan
Documents.
4.2 Corporate Authority. The execution, delivery and performance by the
Company and the Guarantors of the Loan Documents to which it is a party have
been duly authorized by all necessary corporate action and are not in
contravention of any law, rule or regulation, or any judgment, decree, writ,
injunction, order or award of any arbitrator, court or governmental authority,
or of the terms of the Company's or any Guarantor's charter or by-laws, or of
any contract or undertaking to which the Company or any Guarantor is a party or
by which the Company or any Guarantor or their respective property may be bound
or affected or result in the imposition of any Lien except for Permitted Liens.
4.3 Binding Effect. The Loan Documents to which the Company or any
Guarantor is a party are the legal, valid and binding obligations of the Company
and the Guarantors, respectively, enforceable against the Company and the
Guarantors in accordance with their respective terms, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the rights of creditors generally and by general principles of equity.
4.4 Subsidiaries. Schedule 4.4 hereto correctly sets forth the legal name,
jurisdiction of organization and ownership of each Subsidiary and Joint Venture
of the Company. Each such Subsidiary and Joint Venture and each Person becoming
a Subsidiary or Joint Venture of the Company after the date hereof is and will
be a corporation, partnership or limited liability company duly organized,
validly existing and in good standing under the laws of its jurisdiction
CREDIT AGREEMENT Page 35
40
of incorporation or organization and is and will be duly qualified to do
business in each additional jurisdiction where such qualification is or may be
necessary under applicable law, except for those jurisdictions where the failure
to so qualify or be in good standing is not reasonably likely to result in any
Material Adverse Effect. Each Subsidiary and Joint Venture of the Company has
and will have all requisite power to own or lease the properties used in its
business and to carry on its business as now being conducted and as proposed to
be conducted, except where the failure to have such power is not reasonably
likely to result in a Material Adverse Effect. All outstanding shares of Capital
Stock of each class of each Subsidiary and Joint Venture of the Company have
been and will be validly issued and are and will be fully paid and nonassessable
and, except as otherwise indicated in Schedule 4.4 hereto, are and will be
owned, beneficially and of record, by the Company or another Subsidiary of the
Company free and clear of any Liens other than as permitted under this
Agreement.
4.5 Litigation. Except as set forth in Schedule 4.5 hereto, there is no
action, suit or proceeding pending or, to the best of the Company's knowledge,
threatened against or affecting the Company or any of its Subsidiaries or any
Guarantor before or by any court, governmental authority or arbitrator, which if
adversely decided is reasonably expected to result, either individually or
collectively, in any Material Adverse Effect and, to the best of the Company's
knowledge, there is no basis for any such action, suit or proceeding.
4.6 Financial Condition. The consolidated balance sheet of the Company and
its Subsidiaries and the consolidated statements of income, retained earnings
and cash flows of the Company and its Subsidiaries for the fiscal year ended
December 31, 1997 and reported on by Ernst & Young, independent certified public
accountants, copies of which have been furnished to the Lenders, fairly present,
and the financial statements of the Company and its Subsidiaries delivered
pursuant to Section 5.1(d) will fairly present, the consolidated financial
position of the Company and its Subsidiaries as at the respective dates thereof,
and the consolidated results of operations of the Company and its Subsidiaries
for the respective periods indicated, all in accordance with Generally Accepted
Accounting Principles (subject, in the case of said interim statements, to
year-end audit adjustments). The pro forma projections of consolidated financial
results of the Company and its Subsidiaries for each of the fiscal years ending
December 31, 1998 through December 31, 2003 are based on appropriate assumptions
and the best information available. There has been no Material Adverse Effect
since December 31, 1997. There is no material Contingent Liability of the
Company that is not reflected in such financial statements or in the notes
thereto.
4.7 Use of Advances. The Company will use the proceeds of the initial
Advances hereunder as described in Schedule 4.7, and will use all other Advances
for general corporate purposes. Neither the Company nor any of its Subsidiaries
extends or maintains, in the ordinary course of business, credit for the
purpose, whether immediate, incidental, or ultimate, of buying or carrying
margin stock (within the meaning of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System), and no part of the proceeds of any
Advance will be used for the purpose, whether immediate, incidental, or
ultimate, of buying or carrying any such margin stock or maintaining or
extending credit to others for such purpose.
4.8 Consents, Etc. Except for such consents, approvals, authorizations,
declarations, registrations or filings delivered by the Company pursuant to
Section 2.5(g), if any, each of
CREDIT AGREEMENT Page 36
41
which is in full force and effect, no consent, approval or authorization of or
declaration, registration or filing with any governmental authority or any
nongovernmental Person or entity, which, if not obtained, received or made, is
reasonably expected to result in a Material Adverse Effect including without
limitation any creditor, lessor or stockholder of the Company or any of its
Subsidiaries, is required on the part of the Company or any Guarantor in
connection with the execution, delivery and performance of any Loan Document or
the transactions contemplated hereby or as a condition to the legality, validity
or enforceability of any Loan Document.
4.9 Taxes. The Company and its Subsidiaries have filed all tax returns
(federal, state and local) required to be filed and have paid all taxes shown
thereon to be due and required to be paid including interest and penalties, or
have established adequate financial reserves on their respective books and
records for payment thereof except where the failure to so timely file is not
reasonably likely to result in a Material Adverse Effect. Neither the Company
nor any of its Subsidiaries knows of any actual or proposed tax assessment or
any basis therefor, and no extension of time for the assessment of deficiencies
in any federal or state tax has been granted by the Company or any Subsidiary.
4.10 Title to Properties. Except as otherwise disclosed in the latest
balance sheet delivered pursuant to Section 4.6 or 5.1(d) of this Agreement, the
Company or one or more of its Subsidiaries have a valid and indefeasible
ownership interest in all of the properties and assets reflected in said balance
sheet or subsequently acquired by the Company or any Subsidiary. All of such
properties and assets are free and clear of any Lien except for Permitted Liens.
The Security Documents grant a first priority, enforceable and perfected lien
and security interest which is not void or voidable in all assets of the Company
and each Guarantor subject thereto, subject only to Permitted Liens.
4.11 ERISA. The Company, its Subsidiaries, the ERISA Affiliates and the
Plans are in compliance in all material respects with those provisions of ERISA
and of the Code which are applicable with respect to any Plan. No Prohibited
Transaction and no Reportable Event has occurred with respect to any Plan which
could have a Material Adverse Effect. The Company, its Subsidiaries and the
ERISA Affiliates have met the minimum funding requirements under ERISA and the
Code with respect to each of their respective Plans, other than obligations in
the ordinary course of business to make Plan contributions and pay PBGC premiums
which have been paid when due. Assuming the funds provided by each Lender do not
constitute the plan assets of any pension plan, the execution, delivery and
performance of this Loan Documents does not constitute a Prohibited Transaction.
There is no material Unfunded Benefit Liability with respect to any Plan.
4.12 Disclosure. No report or other information furnished in writing by
the Company or any Subsidiary or Guarantor to any Lender or the Agent in
connection with the negotiation or administration of this Agreement contains to
the best of its knowledge any material misstatement of fact or omits to state
any material fact or any fact necessary to make the statements contained therein
not misleading. No Loan Document nor any other document, certificate, or report
or statement or other information furnished to any Lender or the Agent by or on
behalf of the Company or any Subsidiary or Guarantor in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact in order to make the statements contained
herein and therein not misleading. There is no fact known to the
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Company which materially and adversely affects, or which may reasonably be
expected in the future may materially and adversely affect, the business,
properties, operations or condition, financial or otherwise, of the Company or
any Subsidiary, which has not been set forth in this Agreement or in the other
documents, certificates, statements, reports and other information furnished in
writing to the Lenders by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated hereby taken as a whole, including
without limitation the offering memorandum for the Subordinated Notes.
4.13 Environmental and Safety Matters.
(a) None of the Company, its Subsidiaries, its Joint Ventures nor
(to the Company's best knowledge (without independent investigation or inquiry)
as to any operator other than the Company and any of its Subsidiaries and Joint
Ventures) any operator of the Real Estate or any operations thereon is or,
during the last three (3) years, has been in violation, or alleged violation, of
any Environmental Laws, which violation would have a Material Adverse Effect;
(b) Except as set forth on Schedule 4.13, neither the Company nor
any of its Subsidiaries or its Joint Ventures has received notice from any third
party including, without limitation: any federal, state or local governmental
authority, (i) that any one of them has been identified by the United States
Environmental Protection Agency ("EPA") as a potentially responsible party under
CERCLA with respect to a site listed on the National Priorities List, 40 C.F.R.
Part 300 Appendix B (1986); (ii) that any hazardous waste, as defined by 42
U.S.C. ss.9601(5), any hazardous substances as defined by 42 U.S.C. ss.9601(14),
any pollutant or contaminant as defined by 42 U.S.C. ss.9601(33) and any toxic
substances, oil or hazardous materials or other chemicals or substances
regulated by any Environmental Laws ("Hazardous Materials") which any one of
them has generated, transported or disposed of has been found at any site at
which a federal, state or local agency or other third party has conducted or has
ordered that the Company or any of its Subsidiaries or its Joint Ventures
conduct a remedial investigation, removal or other response action pursuant to
any Environmental Law; or (iii) that it is or shall be a named party to any
claim, action, cause of action, complaint, or legal or administrative proceeding
(in each case, contingent or otherwise) arising out of any third party's
incurrence of costs, expenses, losses or damages of any kind whatsoever in
connection with the release of Hazardous Materials;
(c) Except as set forth on Schedule 4.13 attached hereto, and to the
best knowledge (without independent investigation or inquiry) of the Company as
to any actions, events or circumstances occurring or created prior to the
ownership, lease or management of any of the Real Estate by the Company or any
of its Subsidiaries or Joint Ventures, and as to any operations conducted on any
of the Real Estate by parties other than the Company or any of its Subsidiaries
or Joint Ventures: (i) no portion of the Real Estate has been used, except in
accordance with applicable Environmental Laws, for the handling, processing,
storage (including without limitation the storage of petroleum products in
vehicles parked on any of the Real Estate and storage of petroleum products in
connection with the operation of vehicle rental agencies on any of the Real
Estate) or disposal of Hazardous Materials; and no underground tank or other
underground storage receptacle for Hazardous Materials is located on any portion
of the Real Estate (including without limitation in connection with the
operation of vehicle rental agencies)
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which are not covered by third-party indemnification obligations in favor of the
Company, its Subsidiaries or its Joint Ventures; (ii) in the course of any
activities conducted by the Company, its Subsidiaries or its Joint Ventures or
operators of its properties, no Hazardous Materials have been generated or are
being used on the Real Estate except in accordance with applicable Environmental
Laws, (iii) there have been no releases (i.e. any past or present releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, disposing or dumping) or (to the Company's best knowledge) threatened
releases of Hazardous Materials on, upon, into or from the properties of the
Company, its Subsidiaries or its Joint Ventures, which releases would have a
material adverse effect on the value of any of the Real Estate or adjacent
properties or the environment, (iv) without independent investigation or
inquiry, there have been no releases on, upon, from or into any real property in
the vicinity of any of the Real Estate which, through soil or groundwater
contamination, may have come to be located on, and which would have a material
adverse effect on the value of, the Real Estate; and (v) in addition, any
Hazardous Materials that have been generated on any of the Real Estate have been
transported offsite only by carriers having an identification number issued by
the EPA, treated or disposed of only by treatment or disposal facilities
maintaining valid permits as required under applicable Environmental Laws, which
transporters and facilities have been and are, to the best of the Company's
knowledge, operating in compliance with such permits and applicable
Environmental Laws; and
(d) None of the Company, its Subsidiaries, its Joint Ventures nor
any of the other Real Estate is subject to any applicable environmental law
requiring the performance of Hazardous Materials site assessments, or the
removal or remediation of Hazardous Materials, or the giving of notice to any
governmental agency or the recording or delivery to other Persons of an
environmental disclosure document or statement by virtue of the transactions set
forth herein and contemplated hereby, or as a condition to the recording of any
Security Document or to the effectiveness of any other transactions contemplated
hereby.
4.14 No Default. Neither the Company nor any Subsidiary or Guarantor is in
default or has received any written notice of default under or with respect to
any of its Contractual Obligations in any respect which is reasonably likely to
result in a Material Adverse Effect. No Unmatured Event or Event of Default has
occurred and is continuing.
4.15 Intellectual Property. Set forth on Schedule 4.15 is a complete and
accurate list of all registered patents, trademarks, trade names, service marks
and copyrights, and all applications therefor and licenses thereof, of the
Company and each of its Subsidiaries showing as of the Effective Date the
jurisdiction in which registered, the registration number and the date of
registration. The Company and each of its Subsidiaries owns, or is licensed to
use, all trademarks, trade names, service marks, copyrights, technology,
know-how and processes necessary for the conduct of its business as currently
conducted (the "Intellectual Property") except for those the failure to own or
license which could not reasonably be expected to have a Material Adverse
Effect. No claim has been asserted and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does the Company or any of
its Subsidiaries know of any valid basis for any such claim, the use of such
Intellectual Property by the Company and each of its Subsidiaries does not
infringe on the rights of any Person, and, to the knowledge of the Company, no
Intellectual Property has been infringed, misappropriated or diluted by any
other
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Person except for such claims, infringements, misappropriation and dilutions
that, in the aggregate, could not have a Material Adverse Effect.
4.16 No Burdensome Restrictions. No Requirement of Law or Contractual
Obligation applicable to the Company or any Subsidiary or Guarantor could
reasonably be expected to have a Material Adverse Effect in the absence of a
default thereunder.
4.17 Labor Matters. There are no strikes or other labor disputes against
the Company or any Subsidiary pending or, to the knowledge of the Company,
threatened that (individually or in the aggregate) could reasonably be expected
to have a Material Adverse Effect. Hours worked by and payment made to employees
of the Company and its Subsidiaries have not been in violation of the Fair Labor
Standards Act, if applicable, or any other applicable Requirement of Law dealing
with such matters that (individually or in the aggregate) could reasonably be
expected to have a Material Adverse Effect. All payments due from the Company
and each of its Subsidiaries on account of employee health and welfare insurance
that (individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect if not paid have been paid or accrued as a liability on
the books of the Company and its Subsidiaries.
4.18 Solvency. (a) After giving effect to the transactions described
herein and to the incurrence or assumption of all Indebtedness (including
without limitation the Subordinated Debt, all Advances in connection with the
Standard Acquisition and otherwise incurred or assumed on or about the Effective
Date and all other obligations being incurred or assumed) (i) the fair value of
the assets of the Company and its Subsidiaries on a consolidated basis, at a
fair valuation, will exceed the debts and liabilities, subordinated, contingent
or otherwise, of the Company and its Subsidiaries on a consolidated basis; (ii)
the present fair saleable value of the property of the Company and its
Subsidiaries on a consolidated basis will be greater than the amount that will
be required to pay the probable liability of the Company and its Subsidiaries on
a consolidated basis on their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured; (iii) the Company and its Subsidiaries on a consolidated basis will be
able to pay their debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured; and (iv) the Company
and its Subsidiaries on a consolidated basis will not have unreasonably small
capital with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after the date
hereof.
(b) The Company does not intend to, or to permit any of its
Subsidiaries to, and does not believe that it or any of its Subsidiaries will,
incur debts beyond its ability to pay such debts as they mature, taking into
account the timing of and amounts of cash to be received by it or any such
Subsidiary and the timing of the amounts of cash to be payable on or in respect
of its Indebtedness or the Indebtedness of any such Subsidiary.
4.19 Not an Investment Company; Other Regulations. Neither the Company nor
any of its Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended. Neither the Company nor any of its
Subsidiaries is subject to any regulation under any federal or state statute or
regulation which limits its ability to incur Indebtedness.
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4.20 Subordinated Debt Documents. All representations and warranties of
the Company contained in any Subordinated Debt Document are true and correct in
all material respects. The Company will be issuing the Subordinated Notes in the
principal amount of $140,000,000 on the Effective Date, and all Subordinated
Note Documents are described on Schedule 1.1-B hereto. All Lender Indebtedness
is "Senior Debt" and "Designated Senior Debt" as defined in the Subordinated
Debt Documents and entitled to the benefits of all subordination provisions
contained in the Subordinated Debt Documents. There is no event of default or
event or condition which could become an event of default with notice or lapse
of time or both, under the Subordinated Debt Documents and each of the
Subordinated Debt Documents is in full force and effect. Other than pursuant to
the Subordinated Notes, there is no obligation pursuant to any Subordinated Debt
Document or other document or agreement evidencing or relating to any
Subordinated Debt outstanding or to be outstanding on the Effective Date which
obligates the Company to pay any principal or interest or redeem any of its
Capital Stock or incur any other monetary obligation.
4.21 Preferred Stock Documents. The Company will be receiving net proceeds
in the approximate amount of $40,000,000 on the Effective Date from its issuance
of the Preferred Stock, and all Preferred Stock Documents, and all payments and
other obligations of the Company with respect to the Preferred Stock, are
described on Schedule 1.1-A hereto.
4.22 Standard Acquisition. Simultaneously with the first Advance
hereunder, the Company will complete the Standard Acquisition in accordance with
the Standard Acquisition Documents and in accordance with all laws and
regulations and will acquire, free and clear of all Liens (other than Permitted
Liens), good and marketable title to all assets being acquired pursuant to the
Standard Acquisition. True and correct copies of all Standard Acquisition
Documents have been delivered to the Agent on or prior to the Effective Date.
4.23 Bank Accounts. Schedule 4.23 sets forth, as of the date of this
Credit Agreement, the account numbers and location of all concentration bank
accounts of the Company or any of its Subsidiaries.
4.24 Facility Leases and Facility Management Agreements. Schedule 4.24
hereto sets forth each Facility Lease and each Facility Management Agreement to
which the Company or one of its Subsidiaries is a party as lessee or manager and
specifies the city and state where the parking facility subject to such lease or
management agreement is located.
ARTICLE V
COVENANTS
5.1 Affirmative Covenants. The Company covenants and agrees that, until
the Termination Date and thereafter until payment in full of the Lender
Indebtedness and the performance of all other obligations of the Company under
this Agreement, unless the requisite Lenders pursuant to Section 8.1 shall
otherwise consent in writing, it shall, and, shall cause each of its
Subsidiaries to:
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(a) Preservation of Corporate Existence, Etc. To the extent the
failure to do so is reasonably expected to have a Material Adverse Effect, do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence and its qualification as a foreign corporation or
limited liability company, as the case may be (other than any merger permitted
pursuant to Section 5.2(f) and other than any dissolution or liquidations of any
Subsidiary if the assets of such Subsidiary are transferred to the Company or
any Guarantor in connection with such dissolution or liquidation), in good
standing in each jurisdiction in which such qualification is necessary under
applicable law and the rights, licenses, permits (including those required under
applicable Environmental Laws), franchises, patents, copyrights, trademarks and
trade names material to the conduct of its businesses; provided, however, that
the Company shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any of its
Subsidiaries, if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries, taken as a whole, and that the loss thereof is not adverse in
any material respect to the Agent or the Lenders; and defend all of the
foregoing against all claims, actions, demands, suits or proceedings at law or
in equity or by or before any governmental instrumentality or other agency or
regulatory authority.
(b) Compliance with Laws, Etc. Comply in all material respects with
all applicable laws, rules, regulations and orders of any governmental authority
whether federal, state, local or foreign (including without limitation ERISA,
the Code and Environmental Laws), in effect from time to time, to the extent the
failure to so comply could reasonably be expected to have a Material Adverse
Effect; and pay and discharge, before any interest or penalty for nonpayment
thereof becomes payable, all taxes, assessments and governmental charges or
levies imposed upon it or upon its income, revenues or property, before the same
shall become delinquent or in default, as well as all lawful claims for labor,
materials and supplies or otherwise, which, if unpaid, might give rise to Liens
(other than Permitted Liens) upon such properties or any portion thereof, except
to the extent that payment of any of the foregoing is then being contested in
good faith by appropriate legal proceedings and with respect to which adequate
financial reserves have been established on the books and records of the Company
or such Subsidiary.
(c) Maintenance of Properties; Insurance. Maintain, preserve and
protect all property that is material to the conduct of the business of the
Company or any of its Subsidiaries and keep such property in good repair,
working order and condition (ordinary wear and tear and casualty covered by
insurance excepted) and from time to time make, or cause to be made, all needful
and proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times in accordance with customary and prudent
business practices for similar businesses; and maintain in full force and effect
insurance with responsible and reputable insurance companies or associations in
such amounts, on such terms and covering such risks, including fire and other
risks insured against by extended coverage, as is usually carried by companies
engaged in similar businesses and owning similar properties similarly situated
and maintain in full force and effect public liability insurance, insurance
against claims for personal injury or death or property damage occurring in
connection with any of its activities or any of any properties owned, occupied
or controlled by it, in such amount as it shall reasonably deem
CREDIT AGREEMENT Page 42
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necessary, and maintain such other insurance as may be required by law or as may
reasonably be requested by the Required Lenders for purposes of assuring
compliance with this Section 5.1(c).
(d) Reporting Requirements. Furnish to the Lenders and the Agent the
following:
(i) Promptly and in any event within five Business Days after
becoming aware of the occurrence of (A) any Unmatured Event or Event of Default,
(B) the commencement of any litigation against, by or affecting the Company or
any of its Subsidiaries, which could reasonably be expected to have a Material
Adverse Effect, and any material developments therein, or (C) entering into any
material contract or undertaking that is not entered into in the ordinary course
of business or (D) any development in the business or affairs of the Company or
any of its Subsidiaries which has resulted in or which is likely in the
reasonable judgment of the Company, to result in a Material Adverse Effect, a
statement of the chief financial officer of the Company setting forth details of
such occurrence and the action which the Company or such Subsidiary, as the case
may be, has taken and proposes to take with respect thereto;
(ii) As soon as available and in any event within 45 days
after the end of each fiscal quarter of the Company, the consolidated balance
sheet of the Company and its Subsidiaries as of the end of such quarter, and the
related consolidated statements of income and cash flows for such quarter and
for the period commencing at the end of the previous fiscal year and ending with
the end of such quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding date or period of the preceding
fiscal year and duly certified (subject to year-end audit adjustments) by the
chief financial officer of the Company as having been prepared in accordance
with Generally Accepted Accounting Principles, together with a certificate of
the chief financial officer of the Company stating (A) that no Unmatured Event
or Event of Default has occurred and is continuing or, if an Unmatured Event or
Event of Default has occurred and is continuing, a statement setting forth the
details thereof and the action which the Company has taken and proposes to take
with respect thereto, and (B) beginning with the certificate delivered for the
quarter ending June 30, 1998 that a computation (which computation shall
accompany such certificate and shall be in detail satisfactory to the Agent)
showing compliance with Section 5.2 (a), (b) and (c) hereof is in conformity
with the terms of this Agreement;
(iii) As soon as available and in any event within 90 days
after the end of each fiscal year of the Company, a copy of the consolidated
balance sheet of the Company and its Subsidiaries as of the end of such fiscal
year and the related consolidated statements of income and cash flows for such
fiscal year, with a customary audit report of Ernst & Young LLP, or any of the
six largest independent certified public accounting firms in the United States,
without qualifications unacceptable to the Agent, together with, a certificate
of the chief financial officer of the Company stating (A) that no Unmatured
Event or Event of Default has occurred and is continuing, a statement setting
forth the details thereof and the action which the Company has taken and
proposes to take with respect thereto, and (B) beginning with the certificate
delivered for the quarter ending June 30, 1998 that a computation (which
computation shall accompany such certificate and shall be in reasonable detail)
showing compliance with Section 5.2 (a), (b) and (c) hereof is in conformity
with the terms of this Agreement;
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(iv) Promptly after the sending or filing thereof, copies of
all reports, proxy statements and financial statements which the Company or any
of its Subsidiaries sends to or files with any of their respective security
holders or any securities exchange or the SEC;
(v) Promptly and in any event within 10 Business Days after
receipt, a copy of any management letter or comparable analysis prepared by the
auditors for the Company or any of its Subsidiaries;
(vi) Not later than January 31 of each year of the Company, a
budget and forecast prepared by the Company for the following fiscal year; and
(vii) Promptly, such other information respecting the
business, properties, operations or condition, financial or otherwise, of the
Company or any of their respective Subsidiaries as any Lender or the Agent may
from time to time reasonably request.
(e) Accounting, Access to Records, Books, Etc. Maintain a system of
accounting established and administered in accordance with sound business
practices to permit preparation of financial statements in accordance with
Generally Accepted Accounting Principles and to comply with the requirements of
this Agreement and, upon reasonable prior notice, at any reasonable time and
from time to time, (i) permit any Lender or the Agent, or any agents or
representatives thereof, to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the Company and
its Subsidiaries, and to discuss the affairs, finances and accounts of the
Company and its Subsidiaries with their respective directors, officers and
independent auditors, and by this provision the Company does hereby authorize
such Persons to discuss such affairs, finances and accounts with any Lender or
the Agent, (ii) at the expense of the Agent (unless an Event of Default has
occurred and is continuing), permit the Agent or any of its agents or
representatives to conduct a comprehensive field audit of its books, records,
properties and assets, including without limitation all collateral subject to
the Security Documents and site access.
(f) Additional Security and Collateral. Promptly (i) execute and
deliver and cause each Guarantor to execute and deliver, additional Security
Documents, within 30 days after request therefor by the Agent, sufficient to
grant to the Agent for the benefit of the Lenders and the Agent liens and
security interests in any after acquired property, to the extent required under
Section 2.10, and (ii) cause each Person becoming a Domestic Subsidiary and
which meets the definition of a Guarantor from time to time to execute and
deliver to the Lenders and the Agent, within 30 days after such Person becomes a
Subsidiary, a Guaranty and a Security Agreement, sufficient to grant to the
Agent for the benefit of the Lenders and the Agent liens and security interests
in all collateral of the type described in Section 2.10. The Company shall
notify the Lenders and the Agent, within 10 days after the occurrence thereof,
of the acquisition of any property by the Company or any Guarantor that is not
subject to the existing Security Documents, any Person becoming a Subsidiary and
any other event or condition, other than the passage of time, that may require
additional action of any nature in order to preserve the effectiveness and
perfected status of the liens and security interests of the Lenders and the
Agent with respect to such property pursuant to the Security Documents,
including without limitation delivering the originals of all promissory notes
and other instruments payable to the Company or any Guarantor to the Agent and
delivering the originals of all stock certificates or other certificates
evidencing any Capital Stock owned by the Company or any Guarantor at any time.
CREDIT AGREEMENT Page 44
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(g) Further Assurances. Execute and deliver within 30 days after
request therefor by the Agent, all further instruments and documents and take
all further action that the Agent may reasonably request, in order to give
effect to the intent of, and to aid in the exercise and enforcement of the
rights and remedies of the Lenders under, the Loan Documents.
5.2 Negative Covenants. Until the Termination Date and thereafter until
payment in full of the Lender Indebtedness and the performance of all other
obligations of the Company under this Agreement, the Company agrees that, unless
the requisite Lenders pursuant to Section 8.1 shall otherwise consent in
writing, it shall not, and shall not permit any of its Subsidiaries, to:
(a) Adjusted Total Debt to Adjusted EBITDA Ratio. Permit or suffer
the Adjusted Total Debt to Adjusted EBITDA Ratio to be greater than (i) 6.95 to
1.0 at any time from and including the Effective Date to and including June 29,
1999, (ii) 6.50 to 1.0 at any time from and including June 30, 1999 to and
including June 29, 2000 or (iii) 6.00 to 1.0 at any time from and including June
30, 2000 to and including June 29, 2001, or (iv) 5.50 to 1.0 at any time
thereafter.
(b) Interest Coverage Ratio. Permit or suffer the Interest Coverage
Ratio to be less than (i) 1.1 to 1.0 as of the end of any fiscal quarter of the
Company ending on or before March 31, 1999, (ii) 1.25 to 1.0 as of the end of
any fiscal quarter ending on or after June 30, 1999 but on or before March 31,
2000, (iii) 1.50 to 1.0 as of the end of any fiscal quarter of the Company
ending on or after June 30, 2000 but on or before March 31, 2002, or (iv) 1.75
to 1.0 as of the end of any fiscal quarter of the Company ending thereafter.
(c) Fixed Charge Coverage Ratio. Permit or suffer the Fixed Charge
Coverage Ratio to be less than (i) 0.9 to 1.0 as of the end of any fiscal
quarter of the Company ending on or before March 31, 1999, (ii) 1.0 to 1.0 as of
the end of any fiscal quarter ending on or after June 30, 1999 but on or before
March 31, 2000, (iii) 1.05 to 1.0 as of the end of any fiscal quarter of the
Company ending on or after June 30, 2000 but on or before March 31, 2002, or
(iv) 1.10 to 1.0 as of the end of any fiscal quarter of the Company thereafter.
(d) Indebtedness. Create, incur, assume or in any manner become
liable in respect of, or suffer to exist, or permit or suffer any Subsidiary to
create, incur, assume or in any manner become liable in respect of, or suffer to
exist, any Indebtedness other than:
(i) The Lender Indebtedness;
(ii) The Indebtedness described in Schedule 5.2(d) hereto and
renewals, extensions and refinancings thereof, but no increase in the amount
thereof (as such amount is reduced from time to time) and no modifications of
the terms thereof which is less favorable to the Company or more restrictive on
the Company in any material manner shall be permitted;
(iii) Indebtedness of any Guarantor owing to the Company or to
any other Guarantor;
(iv) Subordinated Debt, including the related subordinated
guarantees, pursuant to the Subordinated Debt Documents, provided that (A)
immediately before and after (on a pro forma basis acceptable to the Agent and
supported by such certificates required by the Agent) the incurrence of any such
Subordinated Debt, no Unmatured Event or Event of Default shall exist or
CREDIT AGREEMENT Page 45
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shall have occurred and be continuing and the Company shall be in pro forma
compliance with all financial and other covenants contained herein as of the
date of incurrence of such Subordinated Debt and for the following year and (B)
all agreements, documents and instruments relating to such Subordinated Debt
shall have been delivered to the Agent prior to the incurrence of such
Subordinated Debt;
(v) Trade accounts payable and accrued expenses arising in the
ordinary course which are past due in an amount which is not material in the
aggregate for the Company and its Subsidiaries on a consolidated basis or which
are being contested in good faith by appropriate proceedings and for which
adequate reserves are maintained on the books of the Company;
(vi) Earnouts with respect to Permitted Acquisitions made by
the Company;
(vii) Indebtedness which is non recourse to the Company or its
Subsidiaries other than a Subsidiary formed specifically for such financing and
owning only the assets acquired with such non recourse financing, provided that
the aggregate amount of such non recourse Indebtedness does not exceed
$15,000,000 and such non recourse terms and the other terms of such financing
are acceptable to the Agent;
(viii) Indebtedness incurred to finance insurance premiums in
the ordinary course of business consistent with past practices of the Company;
(ix) Indebtedness of Subsidiaries which are not Guarantors
owing to the Company or a Guarantor not exceeding an aggregate amount equal to
the book value of 3% of Total Assets; and
(x) Indebtedness other than as described in clauses (i)
through (ix) above not exceeding an aggregate amount equal to the book value of
14% of Total Assets, provided that not more than 50% of the Indebtedness
incurred or otherwise outstanding pursuant to this clause (ix) may be secured by
Liens on any assets.
(e) Liens. Create, incur or suffer to exist any Lien on any of the
assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether now owned or hereafter acquired, of the Company or any of
its Subsidiaries, other than:
(i) liens in favor of the Agent for the benefit of the Lenders
and the Agent;
(ii) liens imposed by law, carriers', warehousemen's or
mechanic's liens, operators' or drillers' liens and liens to secure claims for
labor, material or supplies arising in the ordinary course of business, but only
to the extent that payment thereof shall not at time be due or shall be
contested in good faith by appropriate proceedings diligently conducted, with
respect to which appropriate reserves have been set aside and as to which there
has been no seizure of or foreclosure upon assets subject to such liens;
(iii) deposits or pledges to secure payment of workmen's
compensation, unemployment insurance, old age pensions or other social security,
or to secure the performance of bids, tenders, contracts (other than those
relating to borrowed money) or leases or to secure statutory obligations or
surety or appeal bonds, or to secure indemnity, performance or other
CREDIT AGREEMENT Page 46
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similar bonds in the ordinary course of business, or in connection with
contests, to the extent that payment thereof shall not at the time be due or
shall be contested in good faith by appropriate proceedings diligently conducted
and there have been set aside on its books appropriate reserves with respect
thereto;
(iv) liens securing taxes, assessments, levies or other
governmental charges which are not overdue or which, in an amount not exceeding
$1,000,000 in the aggregate, are being contested in good faith by appropriate
proceedings diligently conducted, with respect to which reasonable reserves have
been set aside and as to which there has been no seizure of or foreclosure upon
assets subject to the liens;
(v) liens consisting of encumbrances, easements or
reservations of, or rights of others for, rights-of-way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, zoning restrictions,
restrictions on the use of real property and minor defects and irregularities in
the title thereto, and other similar encumbrances, none of which in the opinion
of the Agent interferes with the use of the property subject thereto by the
Company or such Subsidiary in the ordinary conduct of its business;
(vi) liens existing on the date hereof and listed on Schedule
5.2(e) hereto (including without limitation the existing liens in favor of
existing creditors required to be discharged on the Effective Date (the
"Discharge Liens"), which shall be identified as such on Schedule 5.2(e)),
provided that (A) neither the Indebtedness secured by any such existing liens
nor the property subject thereto shall increase, and (B) the Discharge Liens
shall be discharged and terminated on or before the Effective Date;
(vii) liens on the daily revenues in favor of Persons other
than the Company or its Affiliates who are parties to the Facility Leases and
Facility Management Agreements for the amounts due to them pursuant thereto;
(viii) purported liens in the ordinary course of business on
fixtures to the extent applicable law permits a mortgagee to claim an interest
therein, provided that such purported liens do not secure any Indebtedness of
the Company of any of its Affiliates;
(ix) any Lien created to secure payment of a portion of the
purchase price of, or existing at the time of acquisition of, any tangible fixed
asset acquired by the Company or any of its Subsidiaries may be created or
suffer to exist upon such tangible fixed asset if the outstanding principal
amount of the Indebtedness secured by such Lien does not exceed the purchase
price paid by the Company or such Subsidiary for such tangible fixed asset
provided that (A) such Lien does not encumber any other asset at any time owned
by the Company or such Subsidiary, (B) not more than one such Lien shall
encumber such tangible fixed asset at any one time and (C) the aggregate amount
of Indebtedness secured by all such Liens is permitted under the terms of this
Agreement;
(x) liens on unearned insurance premiums to secure
Indebtedness referred to in Section 5.2(d)(viii);
(xi) liens arising by applicable law in respect of employees'
wages, salaries or commissions not overdue;
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(xii) liens arising out of judgments or awards not exceeding
$1,000,000 in the aggregate against the Borrower or its Subsidiaries with
respect to which the Borrower or such Subsidiary shall be in good faith
prosecuting an appeal or a proceeding or review and the enforcement of such lien
is stayed pending such appeal or review; and
(xiii) liens securing obligations under Seller Notes in an
aggregate principal amount not exceeding $150,000 at any time outstanding, on
capital stock or assets of any business acquired in Permitted Acquisitions for
which such Seller Notes represented full or partial consideration.
(f) Merger; Acquisitions; Etc. Make any Acquisition; nor merge or
consolidate or amalgamate with any other Person or take any other action having
a similar effect, nor enter into any joint venture or similar arrangement with
any other Person, provided, however, that this Section 5.2(f) shall not prohibit
(i) any merger of any Subsidiary with or into another Subsidiary or any merger
of any Subsidiary into the Company, provided that (A) there is no Unmatured
Event or Event of Default either before or after such merger, (B) if any such
merger involves the Company or a Guarantor, the Company shall be the surviving
corporation and (C) any such merger involves the Company or any Guarantor, the
net worth of the Company or such Guarantor involved in such merger immediately
after the merger would be equal to or greater than its net worth immediately
preceding such merger, (ii) any Acquisition identified on Schedule 5.2(f)
hereto, provided that such Acquisition is completed on substantially the terms
described on such Schedule, there is no Unmatured Event or Event of Default
either before or after any such Acquisition and the Agent shall complete a
satisfactory review of final projections (including opening balance sheet and
sources and uses of funds statement) and such other due diligence with respect
to any such Acquisition, or (iii) any other Acquisition if (A) immediately
before and after (on a pro forma basis acceptable to the Agent and supported by
such certificates or opinions as may be reasonably required by the Agent) such
Acquisition: (w) no Unmatured Event or Event of Default shall exist or shall
have occurred and be continuing, (x) the representations and warranties
contained in the Loan Documents shall be true and correct in all material
respects as if made on the date such Acquisition is consummated, (y) the
aggregate amount of Cash Equivalents on hand of the Company plus the amount that
the Company is able to borrow in Revolving Credit Loans after giving effect to
such Acquisition is and will be at least $5,000,000 above the amount of working
capital required for the Company over such twelve month period of time, as
demonstrated to the Agent's reasonable satisfaction by such pro forma financial
statements and projections as required by the Agent, and (z) the Adjusted Total
Debt to Adjusted EBITDA Ratio is at least 0.25 below the level required under
this Agreement or, if the Adjusted Total Debt to Adjusted EBITDA Ratio is not at
least 0.25 below the level then required under this Agreement at the time of
such Acquisition, the Acquisition on such a pro forma basis does not increase
the Adjusted Total Debt to Adjusted EBITDA Ratio, (B) prior to the consummation
of such Acquisition, the Company shall have provided to the Lenders a
certificate of the chief financial officer of the Company (attaching pro forma
financial statements and projections including computations to demonstrate
compliance and projected compliance with all covenants and conditions
hereunder), stating that such Acquisition complies with this Section 5.2(f),
customary legal opinions reasonably acceptable to the Agent if requested by the
Agent, evidence that such Acquisition is in material compliance with all
applicable laws and regulations (other than such non-compliance which could not
reasonably be expected to have a Material Adverse Effect) and that any other
conditions under this Agreement relating to such transaction
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have been satisfied, all in form and substance satisfactory to the Agent, (C)
the target of such Acquisition is in the same line of business as the Company,
(D) such Acquisition is not hostile and shall have been approved by the board of
directors or similar governing body of the target of such Acquisition and (E)
prior to the consummation of any such Acquisition, other than such Acquisitions
for which the total consideration paid or payable is less than $3,000,000 and
which do not result in any identifiable cost savings and synergies in excess of
$500,000 in any fiscal year of the Company, the Agent shall have completed such
reasonable due diligence and reviewed such agreements and documents with respect
to such Acquisition as reasonably required by the Agent, and the Agent shall be
satisfied with such due diligence and such review.
(g) Disposition of Assets; Etc. Sell, lease, license, transfer,
assign or otherwise dispose of all or any portion of its business, assets,
rights, revenues or property, real, personal or mixed, tangible or intangible,
whether in one or a series of transactions, other than inventory sold in the
ordinary course of business upon customary credit terms and sales of scrap or
obsolete material or equipment which are not material in the aggregate, and
shall not permit or suffer any Subsidiary to do any of the foregoing; provided,
however, that this Section 5.2(g) shall not prohibit any such sale, lease,
license, transfer, assignment or other disposition if (i) the aggregate book
value (disregarding any write-downs of such book value other than ordinary
depreciation and amortization) of all of the business, assets, rights, revenues
and property disposed of after the Effective Date of this Agreement (other than
in reliance on clauses (ii) through (vi) below) shall be less than 10% of the
Total Assets at such time and if, immediately before and after such transaction,
no Unmatured Event or Event of Default shall exist or shall have occurred and be
continuing, (ii) sales of equipment as to which proceeds are used within 180
days to purchase equipment of at least equivalent value to those sold and if,
immediately after such transaction, no Unmatured Event or Event of Default shall
exist or shall have occurred and be continuing, (iii) sales as to which proceeds
are used to make optional prepayments on Advances, provided that such
prepayments on the Advances shall also permanently reduce the Commitments by the
amount of such payments, (iv) transfers of assets, including without limitation
Capital Stock, between Guarantors or between the Company and Guarantors, or (v)
investments which consist of transfers of assets instead of cash and which are
permitted by Section 5.2(j) or (vi) such transfer of assets as pursuant to a
loan or advance permitted pursuant to Section 5.2(j); provided, however, in the
case of any of the foregoing permitted sales, leases, licenses, transfers,
assignments or other dispositions (each an "Asset Sale") described in clauses
(i)-(iv) the Company shall not, and shall not permit any of its Subsidiaries to,
consummate an Asset Sale unless (A) the Company (or the Subsidiary, as the case
may be) receives 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 officer's certificate delivered to the Agent) of the assets and (B)
at least 80% of the consideration therefor received by the Company or such
Subsidiary is in the form of cash; provided that the amount of (x) any
liabilities (as shown on the Company's or such Subsidiary's most recent balance
sheet) of the Company or any Subsidiary that are assumed by the transferee of
any such assets such that the Company or such Subsidiary have no further
liability and (y) any securities, notes or other obligations received by the
Company or any such Subsidiary from such transferee that are converted by the
Company or such Subsidiary into cash (to the extent of the cash received), shall
be deemed to be cash for purposes of this provision and the definition of Net
Cash Proceeds, and the Agent promptly shall obtain a first priority security
interest in any non cash consideration for any Asset Sale.
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(h) Nature of Business. Make or suffer any substantial change in the
nature of its business from that engaged in on the Effective Date or engage in
any other businesses other than those in which it is engaged on the Effective
Date.
(i) Dividends and Other Restricted Payments. Make, pay, declare or
authorize any dividend, payment or other distribution in respect of any class of
its Capital Stock or any dividend, payment or distribution in connection with
the redemption, purchase, retirement or other acquisition, directly or
indirectly, of any shares of its Capital Stock other than such dividends,
payments or other distributions (i) to the extent payable solely in shares of
Capital Stock (other than Disqualified Stock) of the Company, (ii) payable on or
before the Effective Date in an amount not to exceed $8,000,000 to redeem
preferred stock of the Company held by Holberg; (iii) payable upon the exercise
of put rights granted to the sellers in the Standard Acquisition, provided that
both before and after such transaction (on a pro forma basis acceptable to the
Agent and supported by such certificates as may be reasonably required by the
Agent), no Unmatured Event or Event of Default shall exist or shall have
occurred and be continuing or caused thereby, the representations and warranties
contained in the Loan Documents shall be true and correct in all material
respects and the Company shall be in compliance and projected compliance with
all covenants and conditions in this Agreement; and (iv) commencing not less
than five and one-half years after the Effective Date, paid in cash on account
of the Preferred Stock in an aggregate amount not to exceed $8,500,000 per year
or the amount required by the Parent to make mandatory, scheduled payments (but
not any payments pursuant to any acceleration or other modification of the
payments scheduled to be due on the Senior Discount Notes) on the Senior
Discount Notes, provided that both before and after such payment (on a pro forma
basis acceptable to the Agent and supported by such certificates as may be
reasonably required by the Agent), no Unmatured Event or Event of Default shall
exist or shall have occurred and be continuing or caused thereby, the
representations and warranties contained in the Loan Documents shall be true and
correct in all material respects and the Company shall be in compliance and
projected compliance with all covenants and conditions in this Agreement. The
Company will not issue Disqualified Stock, other than the Preferred Stock.
(j) Investments, Loans and Advances. Purchase or otherwise acquire
any Capital Stock of or other ownership interest in, or debt securities of or
other evidences of Indebtedness of, any other Person; nor make any loan or
advance of any of its funds or property or make any other extension of credit
to, or make any other investment or contribution or acquire any interest
whatsoever in, any other Person; nor incur any Contingent Liability except to
the extent permitted under Section 5.2(d); nor permit any Subsidiary to do any
of the foregoing; other than (i) extensions of trade credit made in the ordinary
course of business on customary credit terms and commission, travel and similar
advances made to officers and employees in the ordinary course of business,
provided that advances to officers and employees for purposes other than
commission, relocation and travel shall not exceed $250,000 in aggregate amount
(ii) investments in Cash Equivalents, (iii) Acquisitions permitted pursuant to
Section 5.2(f), (iv) investments, loans and advances in and to any Guarantor, or
any person becoming a Guarantor as a result thereof, (v) those investments,
loans, advances and other transactions described in Schedule 5.2(j) hereto,
having the same terms as existing on the date of this Agreement, but no
extension or renewal thereof shall be permitted, (vi) loans and advances to
Holberg Industries, Inc. in an aggregate outstanding amount at any time not to
exceed $10,000,000, provided that immediately before and after such loan or
advance: (A) no Unmatured Event or Event of Default
CREDIT AGREEMENT Page 50
55
shall exist or shall have occurred and be continuing, (B) the representations
and warranties contained in the Loan Documents shall be true and correct in all
material respects as if made on the date such loan or advance is made, (C) the
aggregate amount of Cash Equivalents on hand of the Company plus the amount that
the Company is able to borrow in Revolving Credit Loans after giving effect to
such loan or advance is and will be at least $5,000,000 above the amount of
working capital required for the Company over such twelve month period of time,
as demonstrated to the Agent's reasonable satisfaction by such pro forma
financial statements and projections as required by the Agent, and (D) the
Adjusted Total Debt to Adjusted EBITDA Ratio is at least 0.25 below the level
required under this Agreement, and provided, further, such loan or advance shall
be evidenced by a promissory note and that all such loans and advances shall be
immediately due and payable upon the occurrence of any Event of Default, (vii)
acquire and own stock, obligations or securities received in settlement of debts
owing to the Company or its Subsidiaries or as consideration for Asset Sales
otherwise permitted under Section 5.2(g); (viii) make or permit to remain
outstanding travel and other like advances to officers and employees of the
Company or a Subsidiary in the ordinary course of business and consistent with
past practices, (ix) investments, loans and advances to Joint Ventures in an
aggregate amount not to exceed three percent (3%) of Total Assets, and (x) other
loans, advances or investments in an aggregate amount not to exceed three
percent (3%) of Total Assets.
(k) Transactions with Affiliates. 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
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliates (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 Subsidiary than those that
would have been obtained in a comparable transaction by the Company or such
Subsidiary with an unrelated Person and (ii) the Company delivers to the Agent
(x) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $1,000,000, a
resolution of the Board of Directors set forth in an officers' certificate
certifying that such Affiliate Transaction complies with clause (i) above and
that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors and (y) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $5,000,000, an opinion as to the fairness
to the Lenders of such Affiliate Transaction from a financial point of view
issued by an accounting, appraisal or investment banking firm of national
standing, provided that (A) any loan, advance or investment permitted by Section
5.2 (j) shall not be subject to clause (ii) above and (B) the following do not
constitute Affiliate Transactions: (1) transactions between or among the Company
and/or the Guarantors, (2) any management fee permitted to be paid under Section
5.2(p), (3) payments to Holberg from time to time of customary investment
banking and advisory fees consistent with past practice in connection with the
Standard Acquisition and other financing and corporate transactions, provided
that such fees paid to Holberg do not exceed the usual and customary fees for
similar services and do not exceed the amounts set forth in the Pro Forma
Financial Statements in the case of the Standard Acquisition and the other
Acquisition and the other Acquisitions described on Schedule 5.2(f), (4) the
Company's lease on behalf of Holberg of a plane under arrangements consistent
with past practices, (5) on or about the Effective Date, the Company's
cancellation and forgiveness of an approximately $4,600,000 advance previously
made to Holberg, (6) reimbursement to Holberg of expenses Holberg has paid on
behalf of the Company, (7) the
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Company's payment of the fees and expenses associated with the Parent's issuance
of the Senior Discount Notes, (8) the insurance arrangements between the Company
and its Subsidiaries than those that are in effect on the date hereof provided
such arrangements are conducted in the ordinary course of business consistent
with past practices and (9) payments under the tax sharing agreement among
Holberg and other members of the affiliated group of corporations of which it is
the common parent consistent with past practices and in compliance with the
Code.
(l) Inconsistent Agreements. Enter into any agreement or permit or
suffer any Subsidiary to enter into any agreement containing any provision which
would be violated or breached by this Agreement or any of the transactions
contemplated hereby or by performance by the Company or any of its Subsidiaries
of its obligations in connection therewith.
(m) Negative Pledge Limitation. Enter into any agreement (other than
the Subordinated Note Indenture, the terms of the Security Documents and any
other agreement entered into in connection with any Joint Venture in the
ordinary course of the Company's business prohibiting liens or security
interests on the Capital Stock of such Joint Venture and the assets of such
Joint Venture consistent with the terms of the Security Documents), including
without limitation any amendments to existing agreements, with any Person other
than the Lenders pursuant hereto which prohibits or limits the ability of the
Company or any Subsidiary to create, incur, assume or suffer to exist any Lien
upon any of its assets, rights, revenues or property, real, personal or mixed,
tangible or intangible, whether now owned or hereafter acquired.
(n) Subsidiary Dividends. Permit any of its Wholly-Owned
Subsidiaries directly or indirectly to create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction which by its
terms materially restricts the ability of any such Subsidiary to (i) pay
dividends or make any other distributions on such Subsidiary's capital stock,
(ii) pay any Indebtedness owed to the Company or any of its other Subsidiaries,
(iii) make any loans or advances to the Company or any of such other
Subsidiaries or (iv) transfer any material portion of its assets to the Company
or any of such other Subsidiaries.
(o) Payments and Modification of Debt. Make, or permit any
Subsidiary to make, any optional payment, defeasance (whether a covenant
defeasance, legal defeasance or other defeasance), prepayment or redemption of
any of its or any of its Subsidiaries' Subordinated Debt or other Indebtedness
or amend or modify, or consent or agree to any amendment or modification of, any
instrument or agreement under which any of its Subordinated Debt is issued or
created or otherwise related thereto, or enter into any agreement or arrangement
providing for any defeasance of any kind of any of its Subordinated Debt, or
designate any Indebtedness (other than the Lender Indebtedness) as Designated
Senior Debt under the Subordinated Debt Documents, provided that the Company may
prepay Seller Notes if immediately before and after (on a pro form basis
acceptable to the Agent and supported by such certificates or opinions as may be
reasonably required by the Agent) such prepayment: (i) no Unmatured Event or
Event of Default shall exist or shall have occurred and be continuing, (ii) the
representations and warranties contained in the Loan Documents shall be true and
correct in all material respects as if made on the date such prepayment is made,
(iii) the aggregate amount of Cash Equivalents on hand of the Company plus the
amount that the Company is able to borrow in Revolving Credit Loans after giving
effect to such prepayment is and will be at least $5,000,000 above the amount
CREDIT AGREEMENT Page 52
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of working capital required for the Company over such twelve month period of
time, as demonstrated to the Agent's reasonable satisfaction by such pro forma
financial statements and projections as required by the Agent, and (iv) the
Adjusted Total Debt to Adjusted EBITDA Ratio is at least 0.25 below the level
required under this Agreement.
(p) Management Fees. Pay, or permit any Subsidiary to pay, directly
or indirectly, any management, consulting, investment banking, advisory or other
fees or payments under any leases or any other payments (including, without
limitation, any amounts paid or payable by the Company or any of its
Subsidiaries to the Parent in respect of overhead expense allocations among
members of the affiliate corporate group) to the Parent or any Affiliates
thereof, except that the Company or any Subsidiary may pay such amounts which in
the aggregate do not exceed in any fiscal year an amount equal to the lesser of
$2,000,000 or an amount equal to 50% of the amount of Adjusted EBITDA in excess
of the amount of Adjusted EBITDA required to comply with Sections 5.2(a), (b)
and (c), provided that (i) such payments do not violate any other terms and
provisions of this Agreement (other than Section 5.2(k)), (ii) the aggregate
amount of Cash Equivalents on hand of the Company plus the amount that the
Company is able to borrow in Revolving Credit Loans after giving effect to such
payment is and will be at least $5,000,000 above the amount of working capital
required for the Company over such twelve month period of time, as demonstrated
to the Agent's reasonable satisfaction by such pro forma financial statements
and projections as required by the Agent, (iii) the pro forma Adjusted Total
Debt to Adjusted EBITDA Ratio is at least 0.25 below the level required under
this Agreement after giving effect to such payment and (iv) no Unmatured Event
or Event of Default exists or would be caused by such payment.
(q) Net Capital Expenditures. Make, or permit any Subsidiary to
make, Net Capital Expenditures that exceed in the aggregate for the Company and
its Subsidiaries (a) $5,000,000 in any fiscal year or (b) $8,000,000 in any
consecutive two fiscal years, plus, in each case, the amount by which the
allowed Net Capital Expenditures for the most recently ended fiscal year
exceeded the actual Net Capital Expenditures for such fiscal year.
5.3 Additional Covenants. If at any time the Company shall enter into or
be a party to any instrument or agreement with respect to any Indebtedness which
in the aggregate, together with any related Indebtedness, exceeds $250,000,
including all such instruments or agreements in existence as of the date hereof
and all such instruments or agreements entered into after the date hereof,
relating to or amending any terms or conditions applicable to any of such
Indebtedness which includes covenants, terms, conditions or defaults not
substantially provided for in this Agreement or more favorable to the lender or
lenders thereunder than those provided for in this Agreement, then the Company
shall promptly so advise the Agent and the Lenders. Thereupon, if the Agent
shall request, upon notice to the Company, the Agent and the Lenders shall enter
into an amendment to this Agreement or an additional agreement (as the Agent may
request), providing for substantially the same covenants, terms, conditions and
defaults as those provided for in such instrument or agreement to the extent
required and as may be selected by the Agent. In addition to the foregoing, any
covenants, terms, conditions or defaults in the Subordinated Debt Documents not
substantially provided for in this Agreement or more favorable to the holders of
Subordinated Debt issued in connection therewith are hereby incorporated by
reference into this Agreement to the same extent as if set forth fully herein,
and no subsequent
CREDIT AGREEMENT Page 53
58
amendment, waiver, termination or modification thereof shall effect any such
covenants, terms, conditions or defaults as incorporated herein.
ARTICLE VI
DEFAULT
6.1 Events of Default. The occurrence of any one of the following events
or conditions shall be deemed an "Event of Default" hereunder unless waived by
the requisite Lenders pursuant to Section 8.1:
(a) Nonpayment. The Company shall fail to pay when due any principal
of the Notes, or any reimbursement obligation under Section 3.3 (whether by
deemed disbursement of a Revolving Credit Loan or otherwise), or, within 5 days
after becoming due, any interest on the Notes or any fees or any other amount
payable hereunder;
(b) Misrepresentation. Any representation or warranty made by the
Company or any Guarantor in any Loan Document or any other certificate, report,
financial statement or other document furnished by or on behalf of the Company
or any Guarantor in connection with this Agreement, shall prove to have been
incorrect in any material respect when made or deemed made;
(c) Certain Covenants. The Company or any Guarantor shall fail to
perform r observe any term, covenant or agreement contained in Section 5.2 or
5.3 hereof;
(d) Other Defaults. The Company or any Guarantor shall fail to
perform or observe any other term, covenant or agreement contained in any Loan
Document (other than those described in Sections 6.1(a) or 6.1(c), and any such
failure shall remain unremedied for 20 calendar days after written notice
thereof shall have been given to the Company by the Agent (or such longer or
shorter period of time as may be specified in such Loan Document);
(e) Other Indebtedness. The Company or any of its Subsidiaries or
any Guarantor shall fail to pay any part of the principal of, the premium, if
any, or the interest on, or any other payment of money due under any of its
Indebtedness (other than Indebtedness hereunder), beyond any period of grace
provided with respect thereto, which individually or together with other such
Indebtedness as to which any such failure exists has an aggregate outstanding
principal amount in excess of $1,000,000; or the Company or any of its
Subsidiaries or any Guarantor shall fail to perform or observe any other term,
covenant or agreement contained in any agreement, document or instrument
evidencing or securing any such Indebtedness having such aggregate outstanding
principal amount, or under which any such Indebtedness was issued or created,
beyond any period of grace, if any, provided with respect thereto if the effect
of such failure is either (i) to cause, or permit the holders of such
Indebtedness (or a trustee on behalf of such holders) to cause, any payment in
respect of such Indebtedness to become due prior to its due date or (ii) to
permit the holders of such Indebtedness (or a trustee on behalf of such holders)
to elect a majority of the board of directors of the Company or Holdings;
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(f) Judgments. One or more judgments or orders for the payment of
money (not fully paid or covered without dispute by insurance) in an aggregate
amount of $1,000,000 in any fiscal year shall be rendered against the Company or
any of its Subsidiaries or any Guarantor, or any other judgment or order
(whether or not for the payment of money) shall be rendered against or shall
affect the Company or any of its Subsidiaries or any Guarantor which causes or
could reasonably be expected to cause a Material Adverse Effect, and either (i)
such judgment or order shall have remained unsatisfied and the Company or such
Subsidiary or Guarantor shall not have taken action necessary to stay
enforcement thereof by reason of pending appeal or otherwise, prior to the
expiration of the applicable period of limitations for taking such action or, if
such action shall have been taken, a final order denying such stay shall have
been rendered, or (ii) enforcement proceedings shall have been commenced by any
creditor upon any such judgment or order;
(g) ERISA. The occurrence of a Reportable Event that results in
liability of the Company, any Subsidiary or Guarantor or any ERISA Affiliate to
the PBGC or to any Plan and such Reportable Event is not corrected within thirty
(30) days after the occurrence thereof; or the occurrence of any Reportable
Event which could constitute grounds for termination of any Plan by the PBGC or
for the appointment by the appropriate United States District Court of a trustee
to administer any Plan and such Reportable Event is not corrected within thirty
(30) days after the occurrence thereof; or the filing by the Company, any
Subsidiary or Guarantor or any ERISA Affiliate of a notice of intent to
terminate a Plan or the institution of other proceedings to terminate a Plan; or
the Company, any Subsidiary or Guarantor or any ERISA Affiliate shall fail to
pay when due any liability to the PBGC or to a Plan; or the PBGC shall have
instituted proceedings to terminate, or to cause a trustee to be appointed to
administer, any Plan; or any Person engages in a Prohibited Transaction with
respect to any Plan which results in liability of the Company, any Subsidiary or
Guarantor, or any ERISA Affiliate there shall occur a complete or partial
withdrawal from, or a default within the meaning of Section 4219(c)(5) of ERISA
with respect to one or more Multiemployer Plans which could cause the Company,
any Subsidiary or Guarantor or any ERISA Affiliate to incur a current payment
obligation; the Company, any Subsidiary or Guarantor or any ERISA Affiliate
shall fail to make a required installment or other payment to any Plan within
the meaning of Section 302(f) of ERISA or Section 412(n) of the Code that
results in or could result in liability of the Company, any Subsidiary of the
Company or any ERISA Affiliate to the PBGC or any Plan; or the withdrawal of the
Company, any of its Subsidiaries or any ERISA Affiliate from a Plan during a
plan year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA; or the Company, any of its Subsidiaries or any ERISA
Affiliate becomes an employer with respect to any Multiemployer Plan without the
prior written consent of the Required Lenders; provided, however, that the
aggregate liability caused by any of the foregoing exceeds $1,000,000;
(h) Insolvency, Etc. The Company, Significant Subsidiaries or any
Guarantor shall be dissolved or liquidated or any judgment, order or decree
therefor shall be entered (other than dissolutions or liquidations of
Subsidiaries permitted by Section 5.1(a)), or shall generally not pay its debts
as they become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors, or
shall institute, or there shall be instituted against the Company, Significant
Subsidiaries or any Guarantor, any proceeding or case seeking to adjudicate it a
bankrupt or insolvent or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its
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debts under any law relating to bankruptcy, insolvency or reorganization or
relief or protection of debtors or seeking the entry of an order for relief, or
the appointment of a receiver, trustee, custodian or other similar official for
it or for any substantial part of its assets, rights, revenues or property, and,
if such proceeding is instituted against the Company or such Significant
Subsidiaries or such Guarantor and is being contested by the Company or such
Significant Subsidiaries or such Guarantor, as the case may be, in good faith by
appropriate proceedings, such proceeding shall remain undismissed or unstayed
for a period of 60 days; or the Company or such Significant Subsidiaries or such
Guarantor shall take any action (corporate or other) to authorize or further any
of the actions described above in this subsection;
(i) Other Documents. Any material provision of any Loan Document or
any Subordinated Debt Document shall at any time for any reason cease to be
valid and binding and enforceable against any obligor thereunder, or the
validity, binding effect or enforceability thereof shall be contested by any
Person or any obligor, shall deny that it has any or further liability or
obligation thereunder, or any Loan Document or any Subordinated Debt Document
shall be terminated, invalidated or set aside, or be declared ineffective or
inoperative or in any way cease to give or provide to the Lenders and the Agent
the benefits purported to be created thereby in any material manner;
(j) Orders, Permits, Etc. The Company or any of its Subsidiaries
shall be enjoined, restrained or any way prevented by the order of any court or
any administrative or regulatory agency from conducting any material part of its
business and such order shall continue in effect for more than thirty (30) days,
or there shall occur the loss, suspension or revocation of, or failure to renew,
any license or permit now held or hereafter acquired by the Company or any of
its Subsidiaries if such loss, suspension, revocation or failure to renew would
have a Material Adverse Effect; or
(k) Control. Any Change of Control shall occur.
6.2 Remedies.
(a) Upon the occurrence and during the continuance of any Event of
Default, by notice to the Company (i) the Agent may, and upon being directed to
do so by the Required Lenders shall, terminate the Commitments or (ii) the Agent
may, and upon being directed to do so by the Required Lenders, shall declare the
outstanding principal of, and accrued interest on, the Notes, all unpaid
reimbursement obligations in respect of drawings under Letters of Credit and all
other amounts owing under this Agreement to be immediately due and payable, or
(iii) the Agent may, and upon being directed to do so by the Required Lenders,
shall demand immediate delivery of cash collateral, and the Company agrees to
deliver such cash collateral upon demand, in an amount equal to the maximum
amount that may be available to be drawn at any time prior to the stated expiry
of all outstanding Letters of Credit, or any one or more of the foregoing,
whereupon the Commitments shall terminate forthwith and all such amounts,
including such cash collateral, shall become immediately due and payable, as the
case may be, provided that in the case of any event or condition described in
Section 6.1(h), the Commitments shall automatically terminate forthwith and all
such amounts, including such cash collateral, shall automatically become
immediately due and payable without notice; in all cases without demand,
presentment, protest, diligence, notice of dishonor or other formality, all of
which are hereby expressly waived. Such cash collateral delivered in respect of
outstanding Letters of Credit shall
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be deposited in a special cash collateral account to be held by the Agent as
collateral security for the payment and performance of the Company's obligations
under this Agreement to the Lenders and the Agent.
(b) The Agent may and, upon being directed to do so by the Required
Lenders, shall, in addition to the remedies provided in Section 6.2(a), exercise
and enforce any and all other rights and remedies available to it or the
Lenders, whether arising under this Agreement or any other Loan Document or
under applicable law, in any manner deemed appropriate by the Agent, including
suit in equity, action at law, or other appropriate proceedings, whether for the
specific performance (to the extent permitted by law) of any covenant or
agreement contained in any other Loan Document or in aid of the exercise of any
power granted in any other Loan Document.
(c) Upon the occurrence and during the continuance of any Event of
Default, each Lender may, subject to Section 7.10, at any time and from time to
time, without notice to the Company (any requirement for such notice being
expressly waived by the Company) set off and apply against any and all of the
obligations of the Company now or hereafter existing under this Agreement,
whether owing to such Lender or any other Lender or the Agent, any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender or any Affiliate of
such Lender to or for the credit or the account of the Company and any property
of the Company from time to time in possession of such Lender, irrespective of
whether or not such Lender shall have made any demand hereunder and although
such obligations may be contingent and unmatured The Company hereby grants to
the Lenders and the Agent a lien on and security interest in all such deposits,
indebtedness and property as collateral security for the payment and performance
of the obligations of the Company under this Agreement. The rights of such
Lender under this Section 6.2(c) are in addition to other rights and remedies
(including, without limitation, other rights of setoff) which such Lender may
have.
6.3 Distribution of Proceeds of Collateral. All proceeds of any
realization on the collateral pursuant to the Security Documents and any
payments received by the Agent or any Lender pursuant to the Guaranties
subsequent to and during the continuance of any Event of Default, shall be
allocated and distributed by the Agent as follows:
(a) First, to the payment of all reasonable costs and expenses,
including without limitation all reasonable attorneys' fees, of the Agent in
connection with the enforcement of the Security Documents and otherwise
administering this Agreement;
(b) Second, to the payment of all fees required to be paid under any
Loan Document including commitment fees, owing to the Lenders and Agent pursuant
to the Lender Indebtedness on a pro rata basis in accordance with the Lender
Indebtedness consisting of fees owing to the Lenders and Agent under the Lender
Indebtedness, for application to payment of such liabilities;
(c) Third, to the Lenders and Agent on a pro rata basis in
accordance with the Lender Indebtedness consisting of interest owing to the
Lenders and Agent under the Lender Indebtedness, and obligations and liabilities
relating to Swaps owing to the Lenders and the Agent under the Lender
Indebtedness for application to payment of such liabilities;
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(d) Fourth, to the Lenders and the Agent on a pro rata basis in
accordance with the Lender Indebtedness consisting of principal (including
without limitation any cash collateral for any outstanding letters of credit),
for application to payment of such liabilities;
(e) Fifth, to the payment of any and all other amounts owing to the
Lenders and the Agent on a pro rata basis in accordance with the total amount of
such Indebtedness owing to each of the Lenders and the Agent, for application to
payment of such liabilities; and
(f) Sixth, to the Company, its Subsidiaries or such other Person as
may be legally entitled thereto.
Notwithstanding the foregoing, no payments of principal, interest or fees
delivered to the Agent for the account of any Defaulting Lender shall be
delivered by the Agent to such Defaulting Lender. Instead, such payments shall,
for so long as such Defaulting Lender shall be a Defaulting Lender, be held by
the Agent, and the Agent is hereby authorized and directed by all parties hereto
to hold such funds in escrow and apply such funds as follows:
(i) First, if applicable to any payments due from such Defaulting
Lender to the Agent, and
(ii) Second, to Loans required to be made by such Defaulting Lender
on any borrowing date to the extent such Defaulting Lender
fails to make such Loans.
Notwithstanding the foregoing, upon the termination of all Commitments and the
payment and performance of all of the Advances and other obligations owing
hereunder (other than those owing to a Defaulting Lender), any funds then held
in escrow by the Agent pursuant to the preceding sentence shall be distributed
to each Defaulting Lender, pro rata in proportion to amounts that would be due
to each Defaulting Lender but for the fact that it is a Defaulting Lender.
6.4 Letter of Credit Liabilities. For the purposes of payments and
distributions under Section 6.3, the full amount of Lender Indebtedness on
account of any letter of credit then outstanding but not drawn upon shall be
deemed to be then due and owing. Amounts distributable to the Lenders or Agent
on account of such Lender Indebtedness under such letters of credit shall be
deposited in a separate collateral account in the name of and under the control
of the Agent and held by the Agent first as security for such letter of credit
Lender Indebtedness and then as security for all other Lender Indebtedness and
the amount so deposited shall be applied to the letter of credit Lender
Indebtedness at such times and to the extent that such letter of credit Lender
Indebtedness become absolute liabilities and if and to the extent that the
letter of credit Lender Indebtedness fail to become absolute Lender Indebtedness
because of the expiration or termination of the underlying letters of credit
without being drawn upon then such amounts shall be applied to the remaining
Lender Indebtedness in the order provided in Section 6.3. The Company hereby
grants to the Agent, for the benefit of the Lenders and Agent, a lien and
security interest in all such funds deposited in such separate collateral
account, as security for all the Lender Indebtedness as set forth above.
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ARTICLE VII
THE AGENT AND THE LENDERS
7.1 Appointment; Nature of Relationship. First Chicago is hereby appointed
by the Lenders as the Agent hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
VII. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the representative of the
Lenders with only those duties as are expressly set forth in this Agreement and
the other Loan Documents. In its capacity as the Lenders' contractual
representative, the Agent (i) does not hereby assume any fiduciary duties to any
of the Lenders, (ii) is a "representative" of the Lenders within the meaning of
Section 9-105 of the Uniform Commercial Code and (iii) is acting as an
independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. Each of the
Lenders hereby agrees to assert no claim against the Agent on any agency theory
or any other theory of liability for breach of fiduciary duty, all of which
claims each Lender hereby waives.
7.2 Powers. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
7.3 General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Company or any of its
Subsidiaries, the Lenders or any Lender for any action taken or omitted to be
taken by it or them hereunder or under any other Loan Document or in connection
herewith or therewith except for its or their own gross negligence or willful
misconduct.
7.4 No Responsibility for Loans, Recitals, etc. Neither the Agent nor any
of its directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into, or verify (i) any statement, warranty or
representation made in connection with any Loan Document or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (iii) the satisfaction of any condition specified in Article II, except
receipt of items required to be delivered to the Agent; (iv) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; or (v) the
value, sufficiency, creation, perfection or priority of any interest in any
collateral security. The Agent shall have no duty to disclose to the Lenders
information that is not required to be furnished by the Company or any
Subsidiary to the Agent at such time, but is voluntarily furnished by the
Company or any Subsidiary to the Agent (either in its capacity as Agent or in
its individual capacity).
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7.5 Action on Instructions of Lenders. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders or the Required Lenders, as the case may be, and such
instructions and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders and on all holders of Notes. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders or the Required Lenders, as the case may be. The Agent
shall be fully justified in failing or refusing to take any action hereunder and
under any other Loan Document unless it shall first be indemnified to its
satisfaction by the Lenders pro rata against any and all liability, cost and
expense that it may incur by reason of taking or continuing to take any such
action.
7.6 Employment of Agents and Counsel. The Agent may execute any of its
duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
duties hereunder and under any other Loan Document.
7.7 Reliance on Documents; Counsel. The Agent shall be entitled to rely
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
7.8 Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Company for which the Agent is entitled to reimbursement by
the Company under the Loan Documents, (ii) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents and
(iii) for any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby, or
the enforcement of any of the terms thereof or of any such other documents,
provided that no Lender shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the Agent. The
obligations of the Lenders under this Section 7.8 shall survive payment of the
Lender Indebtedness and termination of this Agreement.
7.9 Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Unmatured Event or Event of Default hereunder
unless the Agent has received written notice from a Lender or the Company
referring to this Agreement describing such Default or Unmatured Default and
stating that such notice is a "notice of default". In the
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event that the Agent receives such a notice, the Agent shall give prompt notice
thereof to the Lenders.
7.10 Rights as a Lender. In the event the Agent is a Lender, the Agent
shall have the same rights and powers hereunder and under any other Loan
Document as any Lender and may exercise the same as though it were not the
Agent, and the term "Lender" or "Lenders" shall, at any time when the Agent is a
Lender, unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Company or any of its Subsidiaries in which the Company or such
Subsidiary is not restricted hereby from engaging with any other Person. The
Agent, in its individual capacity, is not, subject to Section 8.6, obligated to
remain a Lender.
7.11 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by the Company and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.
7.12 Successor Agent. The Agent may resign at any time by giving written
notice thereof to the Lenders and the Company, such resignation to be effective
upon the appointment of a successor Agent or, if no successor Agent has been
appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. Upon any such resignation, the Required Lenders shall have
the right to appoint, on behalf of the Company and the Lenders, a successor
Agent. If no successor Agent shall have been so appointed by the Required
Lenders within thirty days after the resigning Agent's giving notice of its
intention to resign, then the resigning Agent may appoint, on behalf of the
Company and the Lenders, a successor Agent. If the Agent has resigned and no
successor Agent has been appointed, the Lenders may perform all the duties of
the Agent hereunder and the Company shall make all payments in respect of the
Lender Indebtedness to the applicable Lender and for all other purposes shall
deal directly with the Lenders. No successor Agent shall be deemed to be
appointed hereunder until such successor Agent has accepted the appointment. Any
such successor Agent shall be a commercial bank having capital and retained
earnings of at least $50,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning Agent. Upon the effectiveness of the resignation of the Agent,
the resigning Agent shall be discharged from its duties and obligations
hereunder and under the Loan Documents. After the effectiveness of the
resignation of an Agent, the provisions of this Article VII shall continue in
effect for the benefit of such Agent in respect of any actions taken or omitted
to be taken by it while it was acting as the Agent hereunder and under the other
Loan Documents.
7.13 Collateral Management. The Agent is hereby authorized on behalf of
all of the Lenders, without the necessity of any further consent from any
Lender, from time to time prior to
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an Event of Default, to take any action with respect to the collateral or the
Security Documents which may be necessary (i) to perfect and maintain perfected
the security interest in and liens upon the collateral granted pursuant to the
Security Documents; and (ii) to release portions of the collateral from the
security interests and liens imposed by the Security Documents in connection
with any dispositions of such portions of the collateral permitted hereby. In
the event that the Company or the Guarantors desire to sell or otherwise dispose
of any assets and such sale or disposition is permitted hereby, the Agent shall,
upon timely notice from the Company, release such portions of the collateral
from the security interests and liens imposed by the Security Documents as may
be specified by the Company or the Guarantors in order for the Borrower or the
Guarantors to consummate such proposed sale or disposition, provided that at or
prior to the time of such proposed sale or disposition no Unmatured Event or
Event of Default shall have occurred and be continuing, including, without
limitation, any Unmatured Event or Event of Default that would arise upon
consummation of such sale or disposition. For purposes of the preceding
sentence, the Company shall give timely notice if, not less than two Business
Days prior to the date of such proposed sale or disposition, it shall furnish to
the Agent an officers' certificate setting forth in reasonable detail the
circumstances of such proposed sale or disposition.
7.14 Right to Indemnity. The Agent shall be fully justified in failing or
refusing to take any action hereunder unless it shall first be indemnified to
its satisfaction by the Lenders pro rata against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action.
7.15 Sharing of Payments. The Lenders agree among themselves that, in the
event that any Lender shall obtain payment in respect of any Advance or any
other obligation owing to the Lenders under this Agreement through the exercise
of a right of set-off, banker's lien, counterclaim or otherwise in excess of its
ratable share of payments received by all of the Lenders on account of the
Advances and other obligations (or if no Advances are outstanding, ratably
according to the respective amounts of the Commitments), such Lender shall
promptly purchase from the other Lenders participations in such Advances and
other obligations in such amounts, and make such other adjustments from time to
time, as shall be equitable to the end that all of the Lenders share such
payment in accordance with such ratable shares. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of set-off, banker's lien, counterclaim or otherwise as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by repurchase of
participations theretofore sold, return its share of that benefit to each Lender
whose payment shall have been rescinded or otherwise restored. The Company
agrees that any Lender so purchasing such a participation may, to the fullest
extent permitted by law, exercise all rights of payment, including set-off,
banker's lien or counterclaim, with respect to such participation as fully as if
such Lender were a holder of such Advance or other obligation in the amount of
such participation. The Lenders further agree among themselves that, in the
event that amounts received by the Lenders and the Agent hereunder are
insufficient to pay all such obligations or insufficient to pay all such
obligations when due, the fees and other amounts owing to the Agent in such
capacity shall be paid therefrom before payment of obligations owing to the
Lenders under this Agreement. Except as otherwise expressly provided in this
Agreement, if any Lender or Agent shall fail to remit to the Agent or any other
Lender an amount payable by such Lender or Agent to the Agent or such other
Lender pursuant to this Agreement on the date
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when such amount is due, such payments shall be made together with interest
thereon for each date from the date such amount is due until the date such
amount is paid to the Agent or such other Lender at a rate per annum equal to
the rate at which borrowings are available to the payee in its overnight federal
funds market. It is further understood and agreed among the Lenders and the
Agent that if the Agent shall engage in any other transactions with the Company
and shall have the benefit of any collateral or security therefor which does not
expressly secure the obligations arising under this Agreement except by virtue
of a so-called dragnet clause or comparable provision, the Agent shall be
entitled to apply any proceeds of such collateral or security first in respect
of the obligations arising in connection with such other transaction before
application to the obligations arising under this Agreement.
7.16 Withholding Tax Exemption. Each Lender that is not organized and
incorporated under the laws of the United States or any State thereof agrees to
file with the Agent and the Company, in duplicate, (a) on or before the later of
(i) the Effective Date and (ii) the date such Lender becomes a Lender under this
Agreement and (b) thereafter, for each taxable year of such Lender (in the case
of a Form 4224) or for each third taxable year of such Lender (in the case of
any other form) during which interest or fees arising under this Agreement and
the Notes are received, unless not legally able to do so as a result of a change
in United States income tax enacted, or treaty promulgated, after the date
specified in the preceding clause (a), on or prior to the immediately following
due date of any payment by the Company hereunder, a properly completed and
executed copy of either Internal Revenue Service Form 4224 or Internal Revenue
Service Form 1001 and Internal Revenue Service Form W-8 or Internal Revenue
Service Form W-9 and any additional form necessary for claiming complete
exemption from United States withholding taxes (or such other form as is
required to claim complete exemption from Unites States withholding taxes), if
and as provided by the Code or other pronouncements of the United States
Internal Revenue Service, and such Lender warrants to the Company that the form
so filed will be true and complete; provided that such Lender's failure to
complete and execute such Form 4224 or Form 1001, or Form W-8 or Form W-9, as
the case may be, and any such additional form (or any successor form or forms)
shall not relieve the Company of any of its obligations under this Agreement,
except as otherwise provided in this Section 7.16.
ARTICLE VIII
MISCELLANEOUS
8.1 Amendments, Etc. (a) No amendment, modification, termination or waiver of
any provision of this Agreement nor any consent to any departure therefrom shall
be effective unless the same shall be in writing and signed by the Required
Lenders and, to the extent any rights, obligations or duties of the Agent may be
affected thereby, the Agent, provided, however, that no such amendment,
modification, termination, waiver or consent shall, without the consent of the
Agent and all of the Lenders, (i) authorize or permit the extension of time for,
or any reduction of the amount of, any payment of the principal of, or interest
on, the Notes or any Letter of Credit reimbursement obligation, or any fees or
other amount payable hereunder, (ii) amend or terminate the respective
Commitments of any Lender set forth on the signature pages hereof or modify the
provisions of this Section regarding the taking of any action under this Section
or the
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provisions of Section 7.10 or the definition of Required Lenders, or (iii)
release all or substantially all of the collateral or release any material
Guarantor.
(b) Any such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
(c) Notwithstanding anything herein to the contrary, no Defaulting
Lender shall be entitled to vote (whether to consent or to withhold its consent)
with respect to any amendment, modification, termination or waiver of any
provision of this Agreement or any departure therefrom or any direction from the
Lenders to the Agent, and, for purposes of determining the Required Lenders at
any time, the Commitments and the Advances of each Defaulting Lenders shall be
disregarded.
8.2 Notices. (a) Except as otherwise provided in Section 8.2(c) hereof,
all notices and other communications hereunder shall be in writing and shall be
delivered or sent to the Company, the Agent and the Lenders at the respective
addresses and numbers for notices set forth on the signature pages hereof, or to
such other address as may be designated by the Company, the Agent or any Lender
by notice to the other parties hereto. All notices and other communications
shall be deemed to have been given at the time of actual delivery thereof to
such address, or if sent by certified or registered mail, postage prepaid, to
such address, on the third day after the date of mailing, or in the case of
telex notice, upon receipt of the appropriate answerback, or, in the case of
facsimile notice, upon receipt of a confirmation mechanically produced by the
facsimile machine, provided, however, that notices to the Agent shall not be
effective until received.
(b) Notices by the Company to the Agent with respect to terminations
or reductions of the Commitments pursuant to Section 2.2, requests for Advances
pursuant to Section 2.4, requests for continuations or conversions of Loans
pursuant to Section 2.7 and notices of prepayment pursuant to Section 3.1 shall
be irrevocable and binding on the Company.
(c) Any notice to be given by the Company to the Agent pursuant to
Sections 2.4, 2.7 or 3.1 and any notice to be given by the Agent or any Lender
hereunder, may be given by telephone, and all such notices given by the Company
must be immediately confirmed in writing in the manner provided in Section
8.2(a). Any such notice given by telephone shall be deemed effective upon
receipt thereof by the party to whom such telephonic notice is to be given.
8.3 No Waiver By Conduct; Remedies Cumulative. No course of dealing on the
part of the Agent or any Lender, nor any delay or failure on the part of the
Agent or any Lender in exercising any right, power or privilege hereunder shall
operate as a waiver of such right, power or privilege or otherwise prejudice the
Agent's or such Lender's rights and remedies hereunder; nor shall any single or
partial exercise thereof preclude any further exercise thereof or the exercise
of any other right, power or privilege. No right or remedy conferred upon or
reserved to the Agent or any Lender under any Loan Document is intended to be
exclusive of any other right or remedy, and every right and remedy shall be
cumulative and in addition to every other right or remedy granted thereunder or
now or hereafter existing under any applicable law. Every right and remedy
granted by any Loan Document or by applicable law to the Agent or any Lender may
be exercised from time to time and as often as may be deemed expedient by the
Agent or any Lender.
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8.4 Reliance on and Survival of Various Provisions. All terms, covenants,
agreements, representations and warranties of the Company and any Guarantor made
herein or in any other Loan Document or in any certificate, report, financial
statement or other document furnished by or on behalf of the Company and any
Guarantor in connection with the negotiation and modification of this Agreement
shall be deemed to have been relied upon by the Lenders, notwithstanding any
investigation heretofore or hereafter made by any Lender or on such Lender's
behalf, and those covenants and agreements of the Company set forth in Section
3.7, 3.9 and 8.5 hereof shall survive the repayment in full of the Advances and
the termination of the Commitments.
8.5 Expenses; Indemnification. (a) The Company agrees to pay, or reimburse
the Agent for the payment of, on demand, (i) the reasonable fees and expenses of
counsel to the Agent, including without limitation the fees and expenses of
Dickinson Wright PLLC and any other counsel retained by the Agent in connection
with the preparation, execution, delivery and administration of the Loan
Documents and the consummation of the transactions contemplated hereby, and in
connection with advising the Agent as to its rights and responsibilities with
respect thereto, and in connection with any amendments, waivers or consents in
connection therewith, and (ii) all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing or
recording of the Loan Security Documents and the consummation of the
transactions contemplated hereby, and any and all liabilities with respect to or
resulting from any delay in paying or omitting to pay such taxes or fees, and
(iii) all reasonable costs and expenses of the Agent (including reasonable fees
and expenses of counsel and whether incurred through negotiations, legal
proceedings or otherwise) in connection with any Unmatured Event or Event of
Default or the enforcement of, or the exercise or preservation of any rights
under, any Loan Document or in connection with any refinancing or restructuring
of the credit arrangements provided under this Agreement and (iv) all reasonable
costs and expenses of the Agent (including reasonable fees and expenses of
counsel) in connection with any action or proceeding relating to a court order,
injunction or other process or decree restraining or seeking to restrain the
Agent from paying any amount under, or otherwise relating in any way to, any
Letter of Credit and any and all costs and expenses which any of them may incur
relative to any payment under any Letter of Credit.
(b) The Company agrees to indemnify each Lender, the Agent and each
of their respective officers, directors, employees and agents (collectively, the
"Indemnified Parties") and hold each Indemnified Party harmless from and against
any and all liabilities, losses, damages, costs and expenses of any kind,
including, without limitation, the reasonable fees and disbursements of counsel,
which may be incurred by any Indemnified Party in connection with any
investigative, administrative or judicial proceeding (whether or not such
Indemnified Party shall be designated a party thereto) (collectively, the
"Indemnified Liabilities") at any time relating to (whether before or after the
execution of this Agreement) any of the following:
(i) any actual or proposed use of the Advances hereunder by
the Company or any of its Subsidiaries or any transaction financed or to be
financed in whole or in part, directly or indirectly, with the proceeds of any
Advance;
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(ii) the entering into and performance of this Agreement and
any other Loan Document by any of the Indemnified Parties (including any action
brought by or on behalf of the Company as the result of any determination by any
Lender not to make any Advance);
(iii) any investigation, litigation or proceeding related to
any other Acquisition or proposed Acquisition by the Company or any of its
Subsidiaries of all or any portion of the stock or assets of any Person or to
the issuance of, or any other matter relating to, any Subordinated Debt, whether
or not any Indemnified Party is a party thereto;
(iv) any investigation, litigation or proceeding related to
any environmental cleanup, audit, compliance or other matter relating to any
release by the Company or any of its Subsidiaries of any Hazardous Material or
any violations of Environmental Laws; or
(v) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real property
owned or operated by the Company or any Subsidiary thereof of any Hazardous
Material (including any losses, liabilities, damages, injuries, costs, expenses
or claims asserted or arising under any Environmental Law), regardless of
whether caused by, or within the control of, the Company or such Subsidiary,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the activities of the Indemnified
Party on the property of the Company conducted subsequent to a foreclosure on
such property by any Indemnified Party or by reason of the relevant Indemnified
Party's gross negligence or willful misconduct or breach of this Agreement, and
if and to the extent that the foregoing undertaking may be unenforceable for any
reason, the Company hereby agrees to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. The Company shall be obligated to indemnify
the Indemnified Parties for all Indemnified Liabilities subject to and pursuant
to the foregoing provisions, regardless of whether the Company or any of its
Subsidiaries had knowledge of the facts and circumstances giving rise to such
Indemnified Liability.
Provided that no Indemnified Party shall have the right to be indemnified
hereunder for its own gross negligence or willful misconduct as determined by a
court of competent jurisdiction.
8.6 Successors and Assigns. (a) This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, provided that the Company may not, without the prior consent of all the
Lenders, assign its rights or obligations under any Loan Document and the
Lenders shall not be obligated to make any Advance hereunder to any entity other
than the Company.
(b) Any Lender may sell a participation interest to any financial
institution or institutions, and such financial institution or institutions may
further sell, a participation interest (undivided or divided) in, the Advances
and such Lender's rights and benefits under the Loan Documents, and to the
extent of that participation, such participant or participants shall have the
same rights and benefits against the Company under Section 6.2(c) as it or they
would have had if participation of such participant or participants were the
Lender making the Advances to the Company hereunder, provided, however, that (i)
such Lender's obligations under this Agreement shall remain unmodified and fully
effective and enforceable against such Lender, (ii) such
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71
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain the holder of
its Notes for all purposes of this Agreement, (iv) the Company, the Agent and
the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, (v)
such Lender shall not grant to its participant any rights to consent or withhold
consent to any action taken by such Lender or the Agent under this Agreement
other than action requiring the consent of all of the Lenders hereunder and (iv)
such participation shall in no event be less than $5,000,000. The Agent from
time to time in its sole discretion may appoint agents for the purpose of
servicing and administering this Agreement and the transactions contemplated
hereby and enforcing or exercising any rights or remedies of the Agent provided
under the Loan Documents or otherwise. In furtherance of such agency, the Agent
may from time to time direct that the Company provide notices, reports and other
documents contemplated by this Agreement (or duplicates thereof) to such agent.
The Company hereby consents to the appointment of such agent and agrees to
provide all such notices, reports and other documents and to otherwise deal with
such agent acting on behalf of the Agent in the same manner as would be required
if dealing with the Agent itself.
(c) Each Lender may, with the prior written consent of the Company,
which consent from the Company shall not be unreasonably withheld and may not be
withheld if any Event of Default has occurred and is continuing or if such
assignment is to an Affiliate of a Lender, or to another Lender, and the prior
written consent of the Agent, assign to one or more banks or other entities all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Advances owing to it
and the Note or Notes held by it); provided, however, that (i) each such
assignment shall be of a uniform, and not a varying, percentage of all rights
and obligations, (ii) except in the case of an assignment of all of a Lender's
rights and obligations under this Agreement, (A) unless such assignment is to
another Lender, the amount of the Commitment of the assigning Lender being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $5,000,000, and in integral multiples of $1,000,000 thereafter, or
such lesser amount as the Company and the Agent may consent to and (B) after
giving effect to each such assignment, the amount of the Commitment of the
assigning Lender shall in no event be less than $5,000,000, and (iii) the
parties to each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance in the
form of Exhibit I hereto (an "Assignment and Acceptance"), together with any
Note or Notes subject to such assignment and a processing and recordation fee of
$3,500. Upon such execution, delivery, acceptance and recording, from and after
the effective date specified in such Assignment and Acceptance, (x) 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 and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto).
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(d) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the Company
or the performance or observance by the Company of any of its obligations under
this Agreement or any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Section 4.6 and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance under the Agent,
such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
assignee appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers and discretion under this Agreement as are
delegated to the Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vi) such assignee agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of this Agreement are required to be performed by it as a Lender.
(e) The Agent shall maintain at its address designated on the
signature pages hereof a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitment of, and principal amount of the Advances owing
to, each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Company, the Agent and the Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Company or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with any Note or Notes subject to
such assignment, the Agent shall, if such Assignment and Acceptance has been
completed, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Company. Within five Business Days after its receipt of such
notice, the Company, at its own expense, shall execute and deliver to the Agent
in exchange for the surrendered Note or Notes a new Note or Notes to the order
of such assignee in an amount equal to the Commitment assumed by it pursuant to
such Assignment and Acceptance and, if the assigning Lender has retained a
Commitment hereunder, a new Note to the order of the assigning Lender in an
amount equal to the Commitment retained by it hereunder. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit I hereto.
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(g) The Lenders may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.6, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Company, provided that assignee or
participant agrees to keep all non public information confidential to the same
extent required by this Agreement.
(h) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in, or assign, all or any
portion of its rights under this Agreement (including, without limitation, the
Loans owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Lender in accordance with Regulation A of the Board of Governors of the
Federal Reserve System; provided that such creation of a security interest or
assignment shall not release such Lender from its obligations under this
Agreement.
8.7 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.8 Governing Law. This Agreement is a contract made under, and shall be
governed by and construed in accordance with, the law of the State of Illinois
in the same manner applicable to contracts made and to be performed entirely
within such State and without giving effect to choice of law principles of such
State.
8.9 Table of Contents and Headings. The table of contents and the headings
of the various subdivisions hereof are for the convenience of reference only and
shall in no way modify any of the terms or provisions hereof.
8.10 Construction of Certain Provisions. If any provision of this
Agreement refers to any action to be taken by any Person, or which such Person
is prohibited from taking, such provision shall be applicable whether such
action is taken directly or indirectly by such Person, whether or not expressly
specified in such provision.
8.11 Integration and Severability. This Agreement embodies the entire
agreement and understanding between the Company and the Agent and the Lenders,
and supersedes all prior agreements and understandings, relating to the subject
matter hereof. In case any one or more of the obligations of the Company under
any Loan Document shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
obligations of the Company shall not in any way be affected or impaired thereby,
and such invalidity, illegality or unenforceability in one jurisdiction shall
not affect the validity, legality or enforceability of the obligations of the
Company under any Loan Document in any other jurisdiction.
8.12 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any such covenant, the fact that it would be permitted by an exception to, or
would be otherwise within the limitations of, another covenant shall not avoid
the occurrence of an Unmatured Event or an Event of Default or any event or
condition which with notice or lapse of time, or both, could become such an
Unmatured Event or an Event of Default if such action is taken or such condition
exists.
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8.13 Interest Rate Limitation. Notwithstanding any provision of any Loan
Document, in no event shall the amount of interest paid or agreed to be paid by
the Company exceed an amount computed at the highest rate of interest
permissible under applicable law. If, from any circumstances whatsoever,
fulfillment of any provision of any Loan Document at the time performance of
such provision shall be due, shall involve exceeding the interest rate
limitation validly prescribed by law which a court of competent jurisdiction may
deem applicable hereto, then, ipso facto, the obligations to be fulfilled shall
be reduced to an amount computed at the highest rate of interest permissible
under applicable law, and if for any reason whatsoever the Lender shall ever
receive as interest an amount which would be deemed unlawful under such
applicable law such interest shall be automatically applied to the payment of
principal of the Advances outstanding hereunder (whether or not then due and
payable) and not to the payment of interest, or shall be refunded to the Company
if such principal and all other obligations of the Company to the Lenders have
been paid in full.
8.14 Judgment and Payment. (a) If, for the purpose of obtaining judgment
in any court, it is necessary to convert a sum owing hereunder by the Company in
one currency into another currency, the Company agrees, to the fullest extent
that it may effectively do so, that the rate of exchange used shall be that at
which in accordance with normal banking procedures in the relevant jurisdiction
the relevant Lender could purchase the first currency with such other currency
for the first currency on the Business Day immediately preceding the day on
which the final judgment is given.
(b) The obligations of the Company in respect of any sum due in
Dollars to any party hereto or any holder of the obligations owing hereunder
(the "Applicable Creditor") shall, notwithstanding any payment obligation or
judgment in a currency (the "Payment Currency") other than Dollars, be
discharged only to the extent that, on the Business Day following receipt by the
Applicable Creditor of any sum adjudged to be so due in the Payment Currency,
the Applicable Creditor may in accordance with normal banking procedures in the
relevant jurisdiction purchase Dollars with the Payment Currency; if the amount
of Dollars so purchased is less than the sum originally due to the Applicable
Creditor in Dollars, the Company agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Applicable Creditor against
such loss. The obligations of the Company contained in this Section 8.14 shall
survive the termination of this Agreement and the payment of all other amounts
owing hereunder.
8.15 Year 2000 Problem. The Company and its Subsidiaries have reviewed the
areas within their business and operations which could be adversely affected by,
and have developed or are developing a program to address on a timely basis, the
"Year 2000 Problem" (that is, the risk that computer applications used by the
Company and its Subsidiaries may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999). Based on such review and program, the Company reasonably
believes that the "Year 2000 Problem" will not have a Material Adverse Effect.
8.16 Submission To Jurisdiction; Waivers. The Company hereby irrevocably
and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and
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enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction of any United States federal or Illinois state court sitting in
Chicago, Illinois and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to the Company at the
address specified in Section 8.2, or at such other address of which the Agent
shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the right
to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred to in
this subsection any special, exemplary, punitive or consequential damages.
8.17 Acknowledgments. The Company hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) none of the Agent or any Lender has any fiduciary relationship
with or duty to the Company arising out of or in connection with this Agreement
or any of the other Loan Documents, and the relationship between the Agent and
the Lenders, on the one hand, and the Company, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Company and the Lenders.
8.18 Confidentiality. Each Lender agrees to hold any non public
confidential information which it may receive from the Company pursuant to this
Agreement in confidence except for disclosure: (i) to its Affiliates and to
other Lenders and their respective Affiliates, (ii) to legal counsel,
accountants, and other professional advisors to that Lender or to a potential
participant or assignee, (iii) to regulatory officials, (iv) to any Person as
requested pursuant to or as required by law, regulation, or legal process, (v)
to any Person in connection with any legal proceeding to which that Lender is a
party, and (vi) permitted by this Agreement.
8.19 WAIVER OF JURY TRIAL. THE LENDERS AND THE AGENT AND THE COMPANY,
AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO
A TRIAL BY JURY IN ANY
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LITIGATION BASED UPON OR ARISING OUT OF ANY LOAN DOCUMENT OR ANY RELATED
INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF EITHER OF THEM. NEITHER ANY LENDER, THE AGENT NOR THE
COMPANY SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION
IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY
TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO
HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY ANY PARTY HERETO EXCEPT BY
A WRITTEN INSTRUMENT EXECUTED BY SUCH PARTY.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on the 30th day of March, 1998, which shall be the
Effective Date of this Agreement.
Address for Notices: APCOA, INC.
800 Superior Avenue
Cleveland, Ohio 44114
Attention: General Counsel By: /s/ Michael J. Celebrezze
Facsimile No.: 212-765-8214 -------------------------------
Its:
----------------------------
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Address for Notices: THE FIRST NATIONAL BANK OF CHICAGO,
611 Woodward Avenue as Agent and as a Lender
Detroit, Michigan 48226
Attention: _____________ By: /s/
Facsimile No.: (313) _____ ----------------------------------
Its: AUTHORIZED AGENT
Commitment: $40,000,000 -------------------------------
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[OTHER LENDERS]
CHICAGO 7-3134 327282
CREDIT AGREEMENT Page 75