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EXHIBIT 10.37
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FEDERAL-MOGUL CORPORATION
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$500,000,000
AMENDED AND RESTATED SENIOR SUBORDINATED
CREDIT AGREEMENT
dated as of December 18, 1997
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THE CHASE MANHATTAN BANK,
as Administrative Agent
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CHASE SECURITIES INC.,
as Arranger
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[CHASE LOGO]
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS......................................................................................... 2
1.1 Defined Terms................................................................................... 2
1.2 Other Definitional Provisions................................................................... 27
SECTION 2. AMOUNT AND TERMS OF LOANS........................................................................... 27
2.1 Loans........................................................................................... 27
2.2 Procedure for Borrowing and Conversion.......................................................... 28
2.3 Maturity and Exchange Notes..................................................................... 29
2.4 Repayment of Loans; Evidence of Debt............................................................ 29
2.5 Optional and Mandatory Prepayments.............................................................. 30
2.6 Interest Rates and Payment Dates................................................................ 31
2.7 Computation of Interest and Fees................................................................ 33
2.8 Pro Rata Treatment and Payments................................................................. 33
2.9 Requirements of Law............................................................................. 34
2.10 Taxes........................................................................................... 36
2.11 Indemnity....................................................................................... 38
2.12 Replacement Lenders............................................................................. 38
SECTION 3. REPRESENTATIONS AND WARRANTIES...................................................................... 39
3.1 Financial Condition............................................................................. 39
3.2 No Change....................................................................................... 40
3.3 Corporate Existence; Compliance with Law........................................................ 40
3.4 Corporate Power; Authorization; Enforceable Obligations......................................... 41
3.5 No Legal Bar.................................................................................... 41
3.6 No Material Litigation.......................................................................... 42
3.7 No Default...................................................................................... 42
3.8 Ownership of Property; Liens.................................................................... 42
3.9 Intellectual Property........................................................................... 42
3.10 No Burdensome Restrictions...................................................................... 42
3.11 Taxes........................................................................................... 42
3.12 Federal Regulations............................................................................. 42
3.13 ERISA........................................................................................... 43
3.14 Investment Company Act; Other Regulations....................................................... 43
3.15 Subsidiaries.................................................................................... 43
3.16 Environmental Matters........................................................................... 43
3.17 Accuracy and Completeness of Information........................................................ 44
3.18 Other Unsecured Indebtedness.................................................................... 45
3.19 Foreign Subsidiaries............................................................................ 45
3.20 Solvency........................................................................................ 45
3.21 Purpose of Loans................................................................................ 45
3.22 Delivery of the Transaction Documents........................................................... 45
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3.23 Representations and Warranties Contained in the Transaction Documents................ 45
SECTION 4. CONDITIONS PRECEDENT..................................................................... 46
4.1 Conditions to Effective Date......................................................... 46
4.2 Conditions to Closing Date........................................................... 47
SECTION 5. AFFIRMATIVE COVENANTS.................................................................... 48
5.1 Financial Statements................................................................. 49
5.2 Certificates; Other Information...................................................... 49
5.3 Accrual of Liabilities; Payment of Obligations....................................... 50
5.4 Maintenance of Corporate Existence; Maintenance of Properties........................ 50
5.5 Insurance............................................................................ 50
5.6 Notices.............................................................................. 50
5.7 Compliance with Contractual Obligations and Laws..................................... 51
5.8 Access to Books and Inspection....................................................... 51
5.9 Environmental Laws................................................................... 52
5.10 Additional Guarantees................................................................ 52
5.11 Interest Rate Protection............................................................. 52
5.12 Consummation of Compulsory Acquisition............................................... 52
5.13 Take-Out Financing................................................................... 52
5.14 Exchange Notes....................................................................... 53
5.15 U.K. Acquisition I Corporate Documents............................................... 54
5.16 Further Assurances................................................................... 54
SECTION 6. NEGATIVE COVENANTS....................................................................... 54
6.1 Limitation on Indebtedness........................................................... 54
6.2 Limitation on Restricted Payments.................................................... 56
6.3 Limitation on Restrictions on Distributions from Restricted Subsidiaries............. 58
6.4 Limitation on Sales of Assets and Subsidiary Stock................................... 59
6.5 Limitation on Affiliate Transactions................................................. 61
6.6 Change of Control.................................................................... 61
6.7 Limitation on Capital Stock of Subsidiaries.......................................... 62
6.8 Merger, Consolidation, etc........................................................... 62
6.9 Limitation on Lines of Business...................................................... 63
SECTION 7. EVENTS OF DEFAULT........................................................................ 64
SECTION 8. SUBORDINATION............................................................................ 66
8.1 Agreement To Subordinate............................................................. 66
8.2 Liquidation; Dissolution; Bankruptcy................................................. 66
8.3 Default on Senior Indebtedness....................................................... 67
8.4 Acceleration of Payment of Loans..................................................... 67
8.5 When Distribution Must Be Paid Over.................................................. 68
8.6 Subrogation.......................................................................... 68
8.7 Relative Rights...................................................................... 68
8.8 Subordination May Not Be Impaired By the Borrower.................................... 68
8.9 Rights of Administrative Agent....................................................... 68
8.10 Distribution or Notice to Representative............................................. 69
8.11 Section 8 Not To Prevent Events of Default or Limit Right To Accelerate.............. 69
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8.12 Administrative Agent Entitled to Rely........................................................... 69
8.13 Administrative Agent to Effectuate Subordination................................................ 69
8.14 Administrative Agent Not Fiduciary for Lenders of Senior Indebtedness........................... 69
8.15 Reliance by Lenders of Senior Indebtedness on Subordination Provisions.......................... 69
8.16 Certain Amendments Prohibited................................................................... 70
SECTION 9. THE ADMINISTRATIVE AGENT............................................................................ 70
9.1 Appointment..................................................................................... 70
9.2 Delegation of Duties............................................................................ 70
9.3 Exculpatory Provisions.......................................................................... 70
9.4 Reliance by Administrative Agent................................................................ 70
9.5 Notice of Default............................................................................... 71
9.6 Non-Reliance on Administrative Agent and Other Lenders.......................................... 71
9.7 Indemnification................................................................................. 71
9.8 Administrative Agent in Its Individual Capacity................................................. 72
9.9 Successor Administrative Agent.................................................................. 72
SECTION 10. MISCELLANEOUS...................................................................................... 73
10.1 Amendments and Waivers......................................................................... 73
10.2 Notices........................................................................................ 73
10.3 No Waiver; Cumulative Remedies................................................................. 74
10.4 Survival of Representations and Warranties..................................................... 74
10.5 Payment of Expenses and Taxes.................................................................. 74
10.6 Successors and Assigns; Participations and Assignments......................................... 75
10.7 Adjustments; Set-off........................................................................... 77
10.8 Counterparts................................................................................... 78
10.9 Severability................................................................................... 78
10.10 Integration.................................................................................... 78
10.11 GOVERNING LAW.................................................................................. 78
10.12 Submission To Jurisdiction; Waivers............................................................ 78
10.13 Acknowledgements............................................................................... 79
10.14 Confidentiality................................................................................ 79
10.15 WAIVERS OF JURY TRIAL.......................................................................... 79
10.16 No Guarantee of Domestic Obligations by Foreign Subsidiary of Borrower......................... 80
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SCHEDULES:
1.1 Commitments
2 Subsidiaries
EXHIBITS:
EXHIBIT A Form of Domestic Subsidiary Guarantee
EXHIBIT B Form of Senior Subordinated Indenture
EXHIBIT C-1 Form of Initial Loan Note
EXHIBIT C-2 Form of Term Note
EXHIBIT D Form of Closing Certificate
EXHIBIT E Form of Assignment and Acceptance
EXHIBIT F-1 Form of General Counsel Opinion (Effective Date)
EXHIBIT F-2 Form of Opinion of Cleary Gottlieb Steen & Hamilton (Effective Date)
EXHIBIT F-3 Form of General Counsel Opinion (Closing Date)
EXHIBIT F-4 Form of Opinion of Cleary Gottlieb Steen & Hamilton (Closing Date)
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AMENDED AND RESTATED SENIOR SUBORDINATED CREDIT AGREEMENT,
dated as of December 18, 1997, among FEDERAL-MOGUL CORPORATION, a Michigan
corporation (the "Borrower"), the several lenders from time to time parties
hereto (collectively, the "Lenders"; individually, a "Lender"), and THE CHASE
MANHATTAN BANK, a New York banking corporation, as administrative agent for the
Lenders hereunder (in such capacity, the "Administrative Agent").
W I T N E S S E T H :
WHEREAS, the Borrower is party to the Revolving Credit,
Competitive Advance and Multicurrency Facility Agreement, dated as of June 16,
1997 (the "Existing Credit Agreement"), with the several banks and other
financial institutions party thereto and The Chase Manhattan Bank, as the
administrative agent;
WHEREAS, the Borrower, through an indirect wholly owned
Subsidiary organized under the laws of England ("U.K. Acquisition II"), intends
to acquire (the "Acquisition") T&N PLC, a company organized under the laws of
England (the "Target");
WHEREAS, the Acquisition will be accomplished by means of a
tender offer (the "Tender Offer") to be made by U.K. Acquisition II for up to
100% (but in any event not less than 90%) (the "Minimum Number of Shares") of
the issued and outstanding ordinary shares, (pound)1 par value (the "Target
Shares"), of the Target, and/or Options related thereto, followed by a
compulsory acquisition of any remaining such shares not acquired in the Tender
Offer;
WHEREAS, in order to finance the Acquisition, to refinance the
Existing Credit Agreement and other existing indebtedness of the Borrower and
the Target and to pay fees and expenses in connection with the Acquisition and
the financing thereof, the Borrower has requested the Lenders to establish a
senior subordinated credit facilities aggregating $500,000,000;
WHEREAS, the Lenders are willing to establish such credit
facilities upon and subject to the terms and conditions hereinafter set forth;
WHEREAS, the Borrower and The Chase Manhattan Bank, as Lender
and the Administrative Agent have entered into the Senior Subordinated Credit
Agreement, dated as of October 15, 1997 (the "Senior Subordinated Credit
Agreement");
WHEREAS, the Borrower and the Lenders and the Administrative
Agent desire to amend and restate the Senior Subordinated Credit Agreement upon
and subject to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, the parties hereto hereby agree that on the
Effective Date the Senior Subordinated Credit Agreement shall be amended and
restated in its entirety as follows:
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SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"ABR Borrowing": a Borrowing comprised of ABR Loans.
"ABR Loan": a Loan bearing interest at a rate determined by
reference to the Alternate Base Rate in accordance with the provisions
of Section 2.
"Accepting Holder": as defined in Section 2.5(d).
"Accumulated Funding Deficiency": any accumulated funding
deficiency within the meaning of Section 412 of the Code or Section 302
of ERISA.
"Acquisition": as defined in the recitals hereto.
"Acquisition Documents": the collective reference to each of
the documents effectuating the Acquisition.
"Acquisition Funds": as defined in Section 7.
"Additional Assets": (i) any property or assets (other than
Indebtedness and Capital Stock) to be used by the Borrower or a
Restricted Subsidiary in a Related Business; (ii) the Capital Stock of
a Person that becomes a Restricted Subsidiary as a result of the
acquisition of such Capital Stock by the Borrower or another Restricted
Subsidiary; or (iii) Capital Stock constituting a minority interest in
any Person that at such time is a Restricted Subsidiary; provided,
however, that, in the case of clauses (ii) and (iii), such Restricted
Subsidiary is primarily engaged in a Related Business.
"Administrative Agent": as defined in the recitals hereto
"Adjusted LIBO Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
1.00 - Eurocurrency Reserve Requirements
"Adjusted Margin": with respect to any Loan, 0 basis points
during the three month period commencing on the Initial Maturity Date
and shall increase by an additional 50 basis points at the beginning of
each subsequent three-month period.
"Adjusted Rate": the rate equal to the greatest of (i) 50
basis points plus the interest rate borne by the Loans on the day
immediately preceding the Initial Maturity Date, (ii) 650 basis points
plus the Treasury Rate (as defined below) on the Initial Maturity Date
and (iii) 300 basis points plus the CSI High Yield Index Rate on the
Initial Maturity Date; for purposes hereof, the "Treasury Rate" means
(x) the rate borne by direct obligations of the United States maturing
on the tenth anniversary of the Closing Date or (y) if there are no
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such obligations, the rate determined by linear interpolation between
the rates borne by the two direct obligations of the United States
maturing closest to, but straddling, the tenth anniversary of the
Closing Date, in each case as published by the Board of Governors.
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person, or in the
case of any Lender which is an investment fund, (i) the investment
advisor thereof and (ii) any other investment fund having the same
investment advisor. For purposes of this definition, "control" of a
Person means the power, directly or indirectly, to direct or cause the
direction of the management and policies of such Person, whether
through the ownership of voting securities by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"Affiliate Transaction": as defined in Section 6.5.
"Agreement": this Amended and Restated Senior Subordinated
Credit Agreement, as amended, supplemented or otherwise modified from
time to time.
"Alternate Base Rate": for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to (i) the
Applicable Margin less 1% plus (ii) the greatest of (a) the Prime Rate
in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof: "Prime Rate"
shall mean the rate of interest per annum publicly announced from time
to time by the Administrative Agent as its prime rate in effect at its
principal office in New York City; and "Federal Funds Effective Rate"
shall mean, for any day, the weighted average of the rates per annum on
overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business
Day, the average of the quotations for the day of such transactions
received by the Administrative Agent from three federal funds brokers
of recognized standing selected by it, in each case rounded up to the
nearest 1/100 of 1%. If for any reason the Administrative Agent shall
have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds
Effective Rate for any reason, including the inability or failure of
the Administrative Agent to obtain sufficient quotations in accordance
with the terms thereof, the Alternate Base Rate shall be determined
without regard to clause (b) of the first sentence of this definition,
as appropriate, until the circumstances giving rise to such inability
no longer exist. Any change in the Alternate Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be
effective as of the opening of business on the effective day of such
change in the Prime Rate or the Federal Funds Effective Rate,
respectively. The Prime Rate is not intended to be the lowest rate of
interest charged by Chase in connection with extensions of credit to
debtors.
"Applicable Margin": with respect to any Loan, 450 basis
points during the six (6) month period commencing on the Closing Date
and shall increase by (i) an additional 100 basis points commencing on
the date that is six months after the Closing Date, and (ii) an
additional 50 basis points at the end of each successive three month
period thereafter until the Initial Maturity Date.
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"Asset Disposition": any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers, issuances
or dispositions that are part of a common plan) of shares of Capital
Stock of a Restricted Subsidiary (other than directors' qualifying
shares) of property or other assets (each referred to for the purposes
of this definition as a "disposition") by the Borrower, or any of its
Restricted Subsidiaries (including any disposition by means of a
merger, consolidation or similar transaction), other than (i)
disposition of obsolete or worn out property disposed of in the
ordinary course of business or property that is no longer useful in the
conduct of the Borrower's and/or its Restricted Subsidiaries' business
disposed of in the ordinary course of business; (ii) disposition of
inventory in the ordinary course of business; (iii) transfers resulting
from any casualty or condemnation of property or assets (provided that,
except with respect to the loss or condemnation of all or substantially
all of the assets of the Borrower and its Restricted Subsidiaries, the
proceeds from such casualty or condemnation (including insurance) are
used to commence the replacement or rebuilding the lost or condemned
assets within one year); (iv) intercompany sales or transfers of assets
made in the ordinary course of business; (v) licenses or sublicenses of
intellectual property and general intangibles and licenses, leases or
subleases of other property in the ordinary course of business and
which do not materially interfere with the business of the Borrower and
its Restricted Subsidiaries; (vi) any consignment arrangements or
similar arrangements for the sale of assets in the ordinary course of
business; (vii) the sale or discount of overdue accounts receivable
arising in the ordinary course of business, but only in connection with
the compromise or collection thereof; (viii) a disposition by a
Restricted Subsidiary to the Borrower or by the Borrower or a
Restricted Subsidiary to a Wholly-Owned Subsidiary; (ix) a disposition
subject to Section 6.2; (x) a disposition subject to Section 6.8; and
(xi) sales of receivables under the Borrower's existing accounts
receivable program as in effect on the date hereof.
"Assignee": as defined in Section 10.6(c).
"Attributable Debt": in respect of a Sale/Leaseback
Transaction means, as at the time of determination, the present value
(discounted at the interest rate assumed in making calculations in
accordance with FAS 13, compounded annually) of the total obligations
of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period
for which such lease has been extended).
"Average Life": as of the date of determination, with respect
to any Indebtedness, the quotient obtained by dividing (i) the sum of
the products of the numbers of years from the date of determination to
the dates of each successive scheduled principal payment of such
Indebtedness or redemption or similar payment with respect to such
Indebtedness multiplied by the amount of such payment by (ii) the sum
of all such payments.
"Bank Indebtedness": any and all amounts payable under or in
respect of the Senior Credit Facility or any Guarantee thereof,
including principal, premium (if any), interest (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Borrower whether or not a claim for
postfiling interest is allowed in such proceedings), fees, charges,
expenses, reimbursement obligations, guarantees and all other amounts
payable thereunder or in respect thereof.
"Benefitted Lender": as defined in Section 10.7(a).
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"Blockage Notice": as defined in Section 8.3.
"Board of Directors": as to any Person the board of directors
of such Person or any committee thereof duly authorized to act on
behalf of such board.
"Board of Governors": the Board of Governors of the Federal
Reserve System (or any successor thereto).
"Borrowing": a group of Loans of a single Type made by the
Lenders on a single date and as to which a single Interest Period is in
effect.
"Borrowing Request": as defined in Section 2.2.
"Business": as defined in subsection 3.16.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close.
"Capitalized Lease Obligations": an obligation that is
required to be classified and accounted for as a capitalized lease for
financial reporting purposes in accordance with GAAP, and the amount of
Indebtedness represented by such obligation shall be the capitalized
amount of such obligation determined in accordance with GAAP; and the
Stated Maturity thereof shall be the date of the last payment of rent
or any other amount due under such lease prior to the first date such
lease may be terminated without penalty.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants or options to
purchase any of the foregoing. For all purposes of this Agreement,
"Capital Stock" of the Borrower shall include the 10,000,000 7% Trust
Convertible Preferred Securities (Liquidation Amount $50 per
Convertible Preferred Security) issued by Federal-Mogul Financing Trust
and guaranteed by the Borrower upon terms substantially similar to the
terms described in the Offering Memorandum dated November 24, 1997 and
any other substantially equivalent securities hereafter issued by a
financing vehicle for the benefit of the Borrower, and such Trust
Convertible Preferred Securities and substantially equivalent
securities will be treated as preferred stock of the Borrower and the
Borrower shall not be deemed to have issued any Indebtedness or
Guarantee in connection therewith.
"Cash Equivalents": securities with maturities of 6 months or
less from the date of acquisition which are issued or fully guaranteed
or insured by the United States Government or any agency thereof (or,
in the case of any Senior Indebtedness not denominated in Dollars, the
government which issued such other currency).
"Change of Control" means the occurrence of any of the
following events:
(i) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of
all or substantially all of the assets of the Borrower and its
Subsidiaries to any Person or group of related Persons for
purposes
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of Section 13(d) of the Exchange Act (a "Group") (whether or
not otherwise in compliance with the provisions of this
Agreement); or
(ii) a majority of the Board of Directors of the
Borrower (but not a committee thereof) shall consist of
Persons who are not Continuing Directors; or
(iii) the acquisition by any Person or Group of the
power, directly or indirectly, to vote or direct the voting of
securities having more than 50% of the ordinary voting power
for the election of directors of the Borrower.
"Chase": The Chase Manhattan Bank, a New York banking
corporation.
"City Code": the City Code on Take-overs and Mergers, as
published by the Panel and as amended from time to time.
"Closing Date": the date of the Initial Loans.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment": as to any Lender, its obligation to make a Loan
to the Borrower on the Closing Date in an amount equal to the amount
set forth opposite such Lender's name in Schedule 1.1 under the heading
"Commitment"; collectively, as to all such Lenders, the "Commitments".
"Commitment Percentage": as to any Lender at any time, the
percentage of the aggregate Commitments then constituted by such
Lender's Commitment (or, after the Loans are made on the Closing Date,
the percentage of the aggregate Loans then constituted by such Lender's
Loans).
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414 of the Code.
"Compulsory Acquisition": the acquisition by U.K. Acquisition
II, pursuant to Sections 428 to 430F of the Companies Act 1985, of
England, of all of the issued and outstanding Target Shares not then
owned by U.K. Acquisition II.
"Consolidated Coverage Ratio": as of any date of determination
means, with respect to any Person, the ratio of (i) the aggregate
amount of EBITDA of such Person for the period of the most recent four
consecutive fiscal quarters ending prior to the date of such
determination for which consolidated financial statements of such
person are available to (ii) Consolidated Interest Expense for such
four fiscal quarters (in each case, determined, for each fiscal quarter
of the four fiscal quarters ending prior to the Closing Date, on a pro
forma basis to give effect to the Transactions as if the Transactions
had occurred at the beginning of such four-quarter period); provided,
however, that (1) if the Borrower or any Restricted Subsidiary has
Incurred any Indebtedness since the beginning of such period that
remains outstanding on such date of determination or if the transaction
giving rise to the need to calculate the Consolidated Coverage Ratio is
an Incurrence of Indebtedness or both,
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EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the first day
of such period (except that, in making such computation, the amount of
Indebtedness under any revolving credit facility outstanding on the
date of such calculation shall be computed based on (A) the average
daily balance of such Indebtedness during such four fiscal quarters or
such shorter period when such facility was outstanding or (B) if such
facility was created after the end of such four fiscal quarters, the
average daily balance of such Indebtedness during the period from the
date of creation of such facility to the date of the calculation) and
the discharge of any other Indebtedness repaid, repurchased, defeased
or otherwise discharged with the proceeds of such new Indebtedness as
if such discharge had occurred on the first day of such period, (2) if
since the beginning of such period any Indebtedness of the Borrower or
any of its Restricted Subsidiaries has been repaid, repurchased,
defeased or otherwise discharged (other than Indebtedness under a
revolving credit or similar arrangement unless such revolving credit
Indebtedness has been permanently repaid and has not been replaced),
Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto as if such Indebtedness had been
repaid, repurchased, defeased or otherwise discharged on the first day
of such period, (3) if since the beginning of such period the Borrower
or any Restricted Subsidiary shall have made any Asset Disposition, the
EBITDA for such period shall be reduced by an amount equal to the
EBITDA (if positive) directly attributable to the assets that are the
subject of such Asset Disposition for such period or increased by an
amount equal to the EBITDA (if negative) directly attributable thereto
for such period and Consolidated Interest Expense for such period shall
be reduced by an amount equal to the Consolidated Interest Expense
directly attributable to any Indebtedness of the Borrower or any
Restricted Subsidiary repaid, repurchased, defeased or otherwise
discharged with respect to the Borrower and its continuing Restricted
Subsidiaries in connection with such Asset Disposition for such period
(or, if the Capital Stock of any Restricted Subsidiary is sold, the
Consolidated Interest Expense for such period directly attributable to
the Indebtedness of such Restricted Subsidiary to the extent the
Borrower and its continuing Restricted Subsidiaries are no longer
liable for such Indebtedness after such sale) as if such Asset
Disposition occurred on the first day of such period, (4) if since the
beginning of such period the Borrower or any Restricted Subsidiary (by
merger or otherwise) shall have made an Investment in any Restricted
Subsidiary (or any Person that becomes a Restricted Subsidiary) or an
acquisition of assets, including any acquisition of assets occurring in
connection with a transaction causing a calculation to be made
hereunder, which constitutes all or substantially all of an operating
unit of a business, EBITDA and Consolidated Interest Expense for such
period shall be calculated after giving pro forma effect thereto
(including the Incurrence of any Indebtedness) as if such Investment or
acquisition occurred on the first day of such period and (5) if since
the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Borrower or any
Restricted Subsidiary since the beginning of such period) shall have
made any Asset Disposition or any Investment or acquisition of assets
that would have required an adjustment pursuant to clause (3) or (4)
above if made by the Borrower or a Restricted Subsidiary during such
period, EBITDA and Consolidated Interest Expense for such period shall
be calculated after giving pro forma effect thereto as if such Asset
Disposition, Investment or acquisition of assets occurred on the first
day of such period. For purposes of this definition, whenever pro forma
effect is to be given to an acquisition of assets, the amount of income
or earnings relating thereto and the amount of Consolidated Interest
Expense associated with any Indebtedness Incurred or repaid,
repurchased, defeased or
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otherwise discharged in connection therewith, the pro forma
calculations shall be as determined in good faith by a responsible
financial or accounting officer of the Borrower. If any Indebtedness
bears a floating rate of interest and is being given pro forma effect,
the interest expense on such Indebtedness shall be calculated as if the
rate in effect on the date of determination had been the applicable
rate for the entire period (taking into account any Interest Rate
Agreement applicable to such Indebtedness if such Interest Rate
Agreement has a remaining term as at the date of determination in
excess of 12 months).
"Consolidated Interest Expense": for any period, the total
interest expense of the Borrower and its Restricted Subsidiaries, plus,
to the extent not included in such interest expense, (i) interest
expense attributable to Capitalized Lease Obligations, (ii)
amortization of debt discount, (iii) capitalized interest, (iv)
non-cash interest expense, (v) commissions, discounts and other fees
and charges owed with respect to letters of credit and bankers'
acceptance financing (excluding commissions, discounts and other fees
and charges in respect of trade letters of credit), (vi) interest
actually paid by the Borrower or any such Restricted Subsidiary under
any Guarantee of Indebtedness or other obligation of any other Person,
(vii) net payments (whether positive or negative) pursuant to Interest
Rate Agreements, (viii) the cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are
used by such plan or trust to pay interest or fees to any Person (other
than the Borrower) in connection with Indebtedness Incurred by such
plan or trust and (ix) cash and Disqualified Stock dividends in respect
of all Preferred Stock of Subsidiaries and Disqualified Stock of the
Borrower held by Persons other than the Borrower or a Wholly-Owned
Subsidiary and less to the extent included in such interest expense,
the amortization of capitalized debt issuance costs. Notwithstanding
the foregoing, the Consolidated Interest Expense with respect to any
Restricted Subsidiary of the Borrower, that was not a Wholly-Owned
Subsidiary, shall be included only to the extent (and in the same
proportion) that the net income of such Restricted Subsidiary was
included in calculating Consolidated Net Income.
"Consolidated Net Income": for any period, the consolidated
net income (loss) of the Borrower and its Restricted Subsidiaries;
provided, however, that there shall not be included in such
Consolidated Net Income:
(i) any net income (loss) of any Person if such
Person is not a Restricted Subsidiary, except that (A) the
Borrower's equity in the net income of any such Person for
such period shall be included in such Consolidated Net Income
up to the aggregate amount of cash actually distributed by
such Person during such period to the Borrower or a Restricted
Subsidiary as a dividend or other distribution (subject, in
the case of a dividend or other distribution to a Restricted
Subsidiary, to the limitations contained in clause (iii)
below) and (B) the Borrower's equity in the net loss of such
Person shall be included to the extent of the aggregate
Investment of the Borrower or any of its Restricted
Subsidiaries in such Person,
(ii) any net income (loss) of any Person acquired
by the Borrower or a Restricted Subsidiary in a pooling of
interests transaction attributable to any period prior to the
date of such combination,
(iii) any net income (loss) of any Restricted
Subsidiary if such Subsidiary is subject to restrictions,
directly or indirectly, on the payment of
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dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Borrower, except
that (A) subject to the limitations contained in (iv) below,
the net income of any such Restricted Subsidiary for such
period shall be included in such Consolidated Net Income up to
the aggregate amount of cash that could have been distributed
by such Restricted Subsidiary during such period to the
Borrower or another Restricted Subsidiary as a dividend
(subject, in the case of a dividend that could have been made
to another Restricted Subsidiary, to the limitation contained
in this clause) and (B) the net loss of such Restricted
Subsidiary shall be included to the extent of the aggregate
Investment of the Borrower or any of its other Restricted
Subsidiaries in such Restricted Subsidiary,
(iv) any gain or loss realized upon the sale or
other disposition of any asset of the Borrower or its
consolidated Restricted Subsidiaries (including pursuant to
any Sale/Leaseback Transaction) that is not in the ordinary
course of business,
(v) any extraordinary gain or loss, and
(vi) the cumulative effect of a change in
accounting principles.
"Continuing Director" means, as of the date of determination,
any Person who (i) was a member of the Board of Directors of the
Borrower on September 26, 1997 or (ii) was nominated for election or
elected to the Board of Directors of the Borrower after September 26,
1997 with the affirmative vote of a majority of the Continuing
Directors who were members of such Board of Directors at the time of
such nomination or election.
"Contractual Obligation": 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.
"CSI": Chase Securities Inc., a Delaware corporation.
"CSI High Yield Index Rate": means the average yield to worst
of the CSI High Yield Index as published in the Chase High Yield
Research Weekly Update Report as published by Chase.
"Currency Agreement": in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement
as to which such Person is a party or a beneficiary.
"Default": any event or condition that is, or after notice or
passage of time or both would be, an Event of Default.
"Designated Senior Indebtedness": (i) the Bank Indebtedness
and (ii) any other Senior Indebtedness which, at the date of
determination, has an aggregate principal amount outstanding of, or
under which, at the date of determination, the holders thereof are
committed to lend up to, at least $50,000,000 and is specifically
designated by the Borrower in the instrument evidencing or governing
such Senior Indebtedness as "Designated Senior Indebtedness" for
purposes of this Agreement.
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"Disqualified Stock": with respect to any Person, any Capital
Stock that by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable or exercisable) or upon
the happening of any event (i) matures or is mandatorily redeemable
pursuant to a sinking fund obligation or otherwise, (ii) is convertible
or exchangeable for Indebtedness or Disqualified Stock (excluding
Capital Stock that is convertible or exchangeable solely at the option
of the Borrower or a Restricted Subsidiary provided that any such
conversion or exchange will be deemed an Incurrence of Indebtedness) or
(iii) is redeemable at the option of the holder thereof, in whole or in
part, in each case, on or prior to the first anniversary of the Final
Maturity Date provided, that only the portion of Capital Stock which so
matures or is mandatorily redeemable, is so convertible or exchangeable
or is so redeemable at the option of the holder thereof prior to such
Final Maturity Date shall be deemed to be Disqualified Stock.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Domestic Subsidiary": any Restricted Subsidiary of the
Borrower organized under the laws of any jurisdiction within the United
States.
"Domestic Subsidiary Guarantee": the Domestic Subsidiary
Guarantee, substantially in the form of Exhibit A, to be executed and
delivered by each Domestic Subsidiary (other than any Domestic
Subsidiary which is a Subsidiary of an Excluded Foreign Subsidiary),
including but not limited to, U.S. Finance Subsidiary I, U.S. Finance
Subsidiary II and U.S. Finance Subsidiary III, as the same may from
time to time be amended, supplemented or otherwise modified.
"EBITDA": for any period means the Consolidated Net Income for
such period, plus the following to the extent deducted in calculating
such Consolidated Net Income: (i) income tax expense, (ii) Consolidated
Interest Expense, (iii) depreciation expense, (iv) amortization
expense, (v) exchange or translation losses on foreign currencies, and
(vi) all other non-cash items reducing Consolidated Net Income
(excluding any non-cash item to the extent it represents an accrual of
or reserve for cash disbursements for any subsequent period prior to
the Final Maturity Date of the Securities) and less, to the extent
added in calculating Consolidated Net Income, (x) exchange or
translation gains on foreign currencies and (y) non-cash items
increasing Consolidated Net Income (excluding such non-cash items to
the extent they represent an accrual for cash receipts reasonably
expected to be received prior to the Final Maturity Date), in each case
for such period. Notwithstanding the foregoing, the income tax expense,
depreciation expense and amortization expense of a Subsidiary of the
Borrower shall be included in EBITDA only to the extent (and in the
same proportion) that the net income of such Subsidiary was included in
calculating Consolidated Net Income.
"Effective Date": as defined in Section 4.1.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority
or other Requirements of Law (including common law) regulating,
relating to or imposing liability or standards of conduct concerning
protection of human health or the environment, as now or may at any
time hereafter be in effect.
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"Eurocurrency Reserves Requirements": for any day as applied
to a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves) under any regulations of the Board of Governors
or other Governmental Authority having jurisdiction with respect
thereto dealing with reserve requirements prescribed for eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board of Governors) maintained by a member bank of
such system.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
equal to the rate at which Chase is offered Dollar deposits at or about
11:00 A.M., London time, two Business Days prior to the beginning of
such Interest Period in the London interbank market for delivery on the
first day of such Interest Period for the number of days comprised
therein.
"Eurodollar Borrowing": a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Loan": a Loan bearing interest at a rate
determined by reference to the Adjusted LIBO Rate in accordance with
the provisions of Section 2.
"Excluded Foreign Subsidiary": any Foreign Subsidiary (and any
Domestic Subsidiary which is a Subsidiary of an Excluded Foreign
Subsidiary) if the execution by such Foreign Subsidiary (or Domestic
Subsidiary, as the case may be) of a Note Guarantee would, in the good
faith judgment of the Borrower, result in adverse tax consequences to
the Borrower or would be unlawful for such Foreign Subsidiary (or
Domestic Subsidiary, as the case may be).
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ESOP Guaranty": the Guaranty, dated as of June 30, 1995, as
amended, made by the Borrower in favor of Bank of America National
Trust and Savings Association, as agent under the ESOP Loan Agreement.
"ESOP Loan Agreement": the Loan Agreement, dated as of June
30, 1995, as amended, among the Federal-Mogul Corporation Salaried
Employees' Stock Ownership Trust, as borrower, various financial
institutions, as lenders, and Bank of America National Trust and
Savings Association, as agent.
"Event of Default": any of the events specified in Section 7,
provided that all requirements for the giving of notice, the lapse of
time, or both, and any other conditions, have been satisfied.
"Exchange Act": the Securities Exchange Act of 1934, as
amended.
"Exchange Note": each senior subordinated note issued under
the Senior Subordinated Indenture delivered pursuant to Section 2.3 and
5.14; collectively, the "Exchange Notes".
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12
"Exchange Request": as defined in Section 5.14.
"Existing Credit Agreement": as defined in the Recitals
hereto.
"FDIC": the Federal Deposit Insurance Corporation and any
Governmental Authority which succeeds to the powers and functions
thereof.
"Final Maturity Date": the tenth anniversary of the Closing
Date.
"Foreign Subsidiary": any Restricted Subsidiary of the
Borrower other than a Domestic Subsidiary.
"GAAP": generally accepted accounting principles in the United
States of America (or, in the case of financial statements for any
Foreign Subsidiary Borrower (as defined in the Senior Credit Agreement)
and its Subsidiaries for any period prior to the date it became a
Foreign Subsidiary Borrower, in the country of organization of such
Foreign Subsidiary Borrower) in effect on the Closing Date, including
those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such entity
as are approved by a significant segment of the accounting profession.
"Governmental Authority": any nation or government, any state,
province or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guarantee": (without duplication) any obligation, contingent
or otherwise, of any Person directly or indirectly guaranteeing any
Indebtedness of any other Person, and any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or
pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation of such other Person (whether arising
by virtue of partnership arrangements, or by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise) or (ii) entered
into for purposes of assuring in any other manner the obligee of such
Indebtedness or other obligation of the payment thereof or to protect
such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding
meaning.
"Guarantor Subordinated Obligation": any Indebtedness of a
Note Guarantor (whether outstanding on the date of this Agreement or
thereafter Incurred) which is subordinate or junior in right of payment
to its obligations under the Note Guarantee pursuant to a written
agreement.
"Hedging Obligations": of any Person means the obligations of
such Person pursuant to any Interest Rate Agreement or Currency
Agreement.
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13
"Holder" or "Noteholder": the Person in whose name a Loan (and
any corresponding Note(s)) is registered.
"Incur": issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock
of a Person existing at the time such Person becomes a Subsidiary
(whether by merger, consolidation, acquisition or otherwise) shall be
deemed to be Incurred by such Subsidiary at the time it becomes a
Subsidiary.
"Indebtedness": with respect to any Person on any date of
determination (without duplication):
(i) the principal of and premium, if any, in respect
of indebtedness of such Person for borrowed money,
(ii) the principal of and premium, if any, in respect
of obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments,
(iii) all obligations of such Person in respect of
letters of credit or other similar instruments (including
reimbursement obligations with respect thereto), but excluding
commercial letters of credit or letters of credit issued in
connection with liabilities incurred in the ordinary course of
business (including those issued to self-insure under
applicable workers' compensation statutes), to the extent not
drawn upon or reimbursed within three Business Days after
drawing,
(iv) all obligations of such Person to pay the
deferred and unpaid purchase price of property or services
(except Trade Payables), which purchase price is due more than
six months after the date of placing such property in final
service or taking final delivery and title thereto or the
completion of such services,
(v) all Capitalized Lease Obligations and
Attributable Debt of such Person,
(vi) the amount of all obligations of such Person
with respect to the redemption, repayment or other repurchase
of Disqualified Stock or, with respect to any Subsidiary of
the Borrower, any Preferred Stock (but excluding, in each
case, any accrued dividends),
(vii) all Indebtedness of other Persons secured by a
Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person; provided, however,
that the amount of Indebtedness of such Person shall be the
lesser of (A) the fair market value of such asset at such date
of determination and (B) the amount of such Indebtedness of
such other Persons,
(viii) all Indebtedness of other Persons to the
extent Guaranteed by such Person, and
(ix) to the extent not otherwise included in this
definition, net Hedging Obligations of such Person (such
obligations to be equal at any time of determination to the
termination value of such agreement or arrangement giving rise
to such Hedging Obligation that would be payable by such
Person at such time).
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14
The amount of Indebtedness of any Person at any date shall be
the outstanding balance at such date of all unconditional obligations
as described above and the maximum liability at such date, upon the
occurrence of the contingency giving rise to the obligation, of any
contingent obligations described above at such date. With respect to
any Indebtedness denominated in a foreign currency, for purposes of
determining compliance with any Dollar-denominated restriction on the
Incurrence of such Indebtedness under Section 6.1, the amount of such
Indebtedness shall be calculated based on the currency exchange rate in
effect on the date that such Indebtedness was Incurred, in the case of
term debt, or first committed in the case of revolving debt, provided
that any such Indebtedness outstanding on the Closing Date shall be
calculated based on the currency exchange rate in effect on the Closing
Date.
"Initial Loan": as defined in Section 2.1(a).
"Initial Loan Commitment Period": the period commencing on the
Satisfaction Date (which date shall be a day no earlier than the
Initial Revolving Credit Funding Date (as defined in the Senior Credit
Agreement)) and ending on the earlier of (a) the day immediately
following the date on which the Tender Offer lapses or is withdrawn by
U.K. Acquisition II and (b) May 1, 1998.
"Initial Maturity Date": the one-year anniversary of the
Closing Date.
"Initial Note": as defined in Section 2.4(e)
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": as defined in Section 3.9.
"Interest Payment Date": with respect to any Loan, the last
day of the Interest Period applicable to the Loan, and in addition, the
date of any prepayment of such Loan.
"Interest Period": (i) prior to the Initial Maturity Date, (a)
as to any Eurodollar Borrowing, the periods commencing on the date of
such Eurodollar Borrowing and ending on the earlier of (A) the
numerically corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar month that is three
months thereafter and (B) the Initial Maturity Date, and (b) as to any
ABR Borrowing, the period commencing on the date of such ABR Borrowing
and ending on the earlier of (A) the last day of each consecutive
fiscal quarter of the Borrower following the Closing Date and (B) the
Initial Maturity Date, and (ii) following the Initial Maturity Date,
the period commencing on the Initial Maturity Date and ending on the
last day of each consecutive fiscal quarter of the Borrower following
the Initial Maturity Date, and the period ending on the Final Maturity
Date; provided, however, that if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless, in the case of a Eurodollar
Borrowing only, such next succeeding Business Day would fall in the
next calendar month, in which case such Interest Period shall end on
the
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15
next preceding Business Day. Interest shall accrue from and including
the first day of an Interest Period to but excluding the last day of
such Interest Period.
"Interest Rate Agreement": with respect to any Person any
interest rate protection agreement, interest rate future agreement,
interest rate option agreement, interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement, interest rate hedge
agreement or other similar agreement or arrangement as to which such
Person is party or a beneficiary.
"Investment": in any Person means any direct or indirect
advance, loan (other than advances to customers in the ordinary course
of business that are recorded as accounts payable on the balance sheet
of such Person) or other extension of credit (including by way of
Guarantee or similar arrangement, but excluding any debt or extension
of credit represented by a bank deposit) or capital contribution to (by
means of any transfer of cash or other property to others or any
payment for property or services for the account or use of others), or
any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by, such Person. For purposes of the
definition of "Unrestricted Subsidiary" and Section 6.2, (i)
"Investment" shall include the portion (proportionate to the Borrower's
equity interest in such Subsidiary) of the fair market value of the net
assets of any Subsidiary of the Borrower at the time that such
Subsidiary is designated an Unrestricted Subsidiary; provided, however,
that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, the Borrower shall be deemed to continue to have a
permanent "Investment" in an Unrestricted Subsidiary in an amount (if
positive) equal to (x) the Borrower's "Investment" in such Subsidiary
at the time of such redesignation less (y) the portion (proportionate
to the Borrower's equity interest in such Subsidiary) of the fair
market value of the net assets of such Subsidiary at the time of such
redesignation; and (ii) any property transferred to or from an
Unrestricted Subsidiary shall be valued at its fair market value at the
time of such transfer, in each case as determined in good faith by the
Board of Directors.
"Lenders": as defined in the preamble to this Agreement.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Capitalized Lease Obligations having
substantially the same economic effect as any of the foregoing).
"Loans": as defined in Section 2.1.
"Loan Documents": this Agreement, the Loan Notes and the Note
Guarantees.
"Loan Notes": the collective reference to the Term Notes and
the Initial Notes.
"Loan Participants": as defined in Section 10.6(b).
"Loan Parties": the collective reference to the Borrower, and
each of its Subsidiaries which from time to time is a party to any Loan
Document.
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"Material Adverse Effect": a material adverse effect on (a)
the business, operations, property, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole, (b)
the ability of the Borrower to perform its obligations under this
Agreement or any of the Notes or any of the other Loan Documents to
which it is a party or (c) the validity or enforceability of this
Agreement or any of the Notes or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder
or thereunder.
"Material Environmental Amount": an amount payable by the
Borrower (net of the proceeds of any applicable insurance and amount
reasonably expected to be paid by Persons that are not Affiliates of
the Borrower and that are jointly liable with the Borrower in respect
of such amount) and/or its Subsidiaries in excess of $20,000,000 in any
year or $100,000,000 in the aggregate for remedial costs, compliance
costs, compensatory damages, punitive damages, fines, penalties or any
combination thereof.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Law,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Moody's": Moody's Investors Service, Inc., and its
successors.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA or any successor statute.
"Net Available Cash": from an Asset Disposition means cash
payments received (including any cash payments received by way of
deferred payment of principal pursuant to a note or installment
receivable or otherwise, but only as and when received, but excluding
any other consideration received in the form of assumption by the
acquiring person of Indebtedness or other obligations relating to the
properties or assets that are the subject of such Asset Disposition or
received in any other noncash form) therefrom, in each case net of (i)
all legal, accounting, investment banking, title and recording tax
expenses, commissions and other fees and expenses incurred, and all
Federal, state, provincial, foreign and local taxes required to be paid
or accrued as a liability under GAAP (A) as a consequence of such Asset
Disposition or (B) as a result of any repatriation to the United States
of any proceeds of such Asset Disposition, (ii) all payments made on
any Indebtedness that is secured by any assets subject to such Asset
Disposition, in accordance with the terms of any Lien upon such assets,
or that must by its terms, or in order to obtain a necessary consent to
such Asset Disposition, or by applicable law be repaid out of the
proceeds from such Asset Disposition, (iii) all distributions and other
payments required to be made to minority interest holders in
Subsidiaries or joint ventures as a result of such Asset Disposition,
(iv) the deduction of appropriate amounts to be provided by the seller
as a reserve, in accordance with GAAP, against any liabilities
associated with the assets disposed of in such Asset Disposition and
retained by the Borrower or any Restricted Subsidiary after such Asset
Disposition, (v) any portion of the purchase price from an Asset
Disposition placed in escrow (whether as a reserve for adjustment of
the purchase price, for satisfaction of indemnities in respect of such
Asset Disposition or otherwise in
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connection with such Asset Disposition); provided, however that upon
the termination of such escrow, Net Available Cash shall be increased
by any portion of funds therein released to the Borrower or any
Restricted Subsidiary, and (vi) all payments required to be applied
pursuant to any Senior Indebtedness.
"Net Cash Proceeds": with respect to any issuance or sale of
any securities of the Borrower or any Subsidiary by the Borrower or any
Subsidiary, the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents'
fees, discounts or commissions and brokerage, consultant and other fees
and expenses actually incurred in connection with such issuance or sale
and net of taxes paid or payable as a result of such issuance or sale.
"Nonconsenting Lender": as defined in Section 2.12.
"Non-Excluded Taxes": as defined in Section 2.10(a).
"Non-Funding Lender": as defined in Section 2.12.
"Non-Recourse Debt": Indebtedness (i) as to which neither the
Borrower nor any Restricted Subsidiary (a) provides any guarantee or
credit support of any kind (including any undertaking, guarantee,
indemnity, agreement or instrument that would constitute Indebtedness)
or (b) is directly or indirectly liable (as a guarantor or otherwise)
and (ii) no default with respect to which (including any rights that
the holders thereof may have to take enforcement action against an
Unrestricted Subsidiary) would permit (upon notice, lapse of time or
both) any holder of any other Indebtedness of the Borrower or any
Restricted Subsidiary to declare a default under such other
Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity.
"Note Guarantee": the collective reference to Domestic
Subsidiary Guarantees and the U.K. Acquisition I Guarantee and any
other guarantee by a Subsidiary of the Indebtedness and obligations of
the Borrower hereunder substantially in the forms of Exhibits A1-4, and
as each of the same may be amended, supplemented, waived or otherwise
modified from time to time.
"Note Guarantor": any Domestic Subsidiary or Foreign
Subsidiary which has issued a Note Guarantee.
"Notes": the Loan Notes and the Exchange Notes, as originally
executed or as subsequently amended from time to time pursuant to the
applicable provisions hereof.
"Offer Documents": the Press Release and the Tender Offer
documentation subsequently to be posted by U.K. Acquisition II setting
out the detailed terms of the Tender Offer.
"Optionholders": the holders of Options.
"Options": options to purchase up to 25,000,000 Target
Shares.
"Original Initial Note": as defined in Section 2.4(e).
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"Original Term Note": as defined in Section 2.4(f).
"Panel": the Panel of Take-overs and Mergers in the City of
London.
"Payment Blockage Period": as defined in Section 8.3.
"Payment Sharing Notice": a written notice from the Borrower
or any Lender informing the Administrative Agent that an Event of
Default has occurred and is continuing and directing the Administrative
Agent to allocate payments thereafter received from or on behalf of the
Borrower in accordance with the provisions of Section 2.8.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor
corporation.
"Permitted Indebtedness": (i) Indebtedness of the Borrower
owing to and held by any Restricted Subsidiary or Indebtedness of a
Restricted Subsidiary owing to and held by the Borrower or any
Restricted Subsidiary; provided, however, that any subsequent issuance
or transfer of any Capital Stock or any other event which results in
any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or
any subsequent transfer of any such Indebtedness (except to the
Borrower in accordance with the foregoing) shall be deemed, in each
case, to constitute the Incurrence of such Indebtedness by the issuer
thereof; (ii) Indebtedness represented by (x) the Take-Out Financing,
(y) any Indebtedness (other than the Indebtedness described in clause
(i) of Section 6.1(b) and other than Indebtedness Incurred pursuant to
clause (i) above or clauses (iv), (v) or (vi) below) outstanding on the
Closing Date and (z) any Refinancing Indebtedness Incurred in respect
of any Indebtedness described in this clause (ii) or Incurred pursuant
to Section 6.1(a); (iii) (A) Indebtedness of a Restricted Subsidiary
Incurred and outstanding on the date on which such Restricted
Subsidiary was acquired by the Borrower (other than Indebtedness
Incurred as consideration in, or to provide all or any portion of the
funds or credit support utilized to consummate, the transaction or
series of related transactions pursuant to which such Restricted
Subsidiary became a Subsidiary or was otherwise acquired by the
Borrower), provided, however, that at the time such Restricted
Subsidiary is acquired by the Borrower, the Borrower would have been
able to Incur $1.00 of additional Indebtedness pursuant to Section
6.1(a) after giving effect to the Incurrence of such Indebtedness
pursuant to this clause (iii) and (B) Refinancing Indebtedness Incurred
by a Restricted Subsidiary in respect of Indebtedness Incurred by such
Restricted Subsidiary pursuant to this clause (iii); (iv) Indebtedness
(A) in respect of performance bonds, bankers' acceptances and surety or
appeal bonds provided by the Borrower or any of its Restricted
Subsidiaries to their customers in the ordinary course of their
business, (B) in respect of performance bonds or similar obligations of
the Borrower or any of its Restricted Subsidiaries for or in connection
with pledges, deposits or payments made or given in the ordinary course
of business in connection with or to secure statutory, regulatory or
similar obligations, including obligations under health, safety or
environmental obligations, (C) arising from Guarantees to suppliers,
lessors, licensees, contractors, franchises or customers of obligations
(other than Indebtedness) incurred in the ordinary course of business
and (D) under Currency Agreements and Interest Rate Agreements;
provided, however, that in the case of Currency Agreements and Interest
Rate Agreements, such Currency Agreements and Interest Rate Agreements
are entered into for bona fide hedging purposes of the Borrower or its
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Restricted Subsidiaries (as determined in good faith by the Board of
Directors or senior management of the Borrower) and correspond in terms
of notional amount, currencies and interest rates, as applicable, to
Indebtedness of the Borrower or its Restricted Subsidiaries Incurred
without violation of this Agreement or to business transactions of the
Borrower or its Restricted Subsidiaries on customary terms entered into
in the ordinary course of business; (v) Indebtedness arising from
agreements providing for indemnification, adjustment of purchase price
or similar obligations, or from Guarantees or letters of credit, surety
bonds or performance bonds securing any obligations of the Borrower or
any of its Restricted Subsidiaries pursuant to such agreements, in each
case Incurred in connection with the disposition of any business assets
or Restricted Subsidiary of the Borrower (other than Guarantees of
Indebtedness or other obligations Incurred by any Person acquiring all
or any portion of such business assets or Restricted Subsidiary of the
Borrower for the purpose of financing such acquisition) in a principal
amount not to exceed the gross proceeds actually received by the
Borrower or any of its Restricted Subsidiaries in connection with such
disposition, provided, however, that the principal amount of any
Indebtedness Incurred pursuant to this clause (v), when taken together
with all Indebtedness Incurred pursuant to this clause (v) and then
outstanding, shall not exceed $35,000,000; (vi) Indebtedness consisting
of (A) Guarantees by the Borrower or a Restricted Subsidiary of
Indebtedness Incurred by a Wholly-Owned Subsidiary without violation of
this Agreement and (B) Guarantees by a Restricted Subsidiary of Senior
Indebtedness Incurred by the Borrower without violation of this
Agreement; (vii) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
drawn against insufficient funds in the ordinary course of business,
provided that such Indebtedness is extinguished within two business
days of its incurrence; and (viii) Indebtedness resulting from the
endorsement of negotiable instruments in the ordinary course of
business; (ix) Indebtedness of any Foreign Subsidiary for working
capital purposes in an aggregate principal amount not to exceed
$30,000,000 at one time outstanding; and (x) Indebtedness of any
Domestic Subsidiary for working capital purposes in an aggregate
principal amount not to exceed $30,000,000; provided that such
Indebtedness is repaid within three Business Days of incurrence.
"Permitted Investment": an Investment by the Borrower or any
Restricted Subsidiary in (i) a Wholly-Owned Subsidiary, the Borrower or
a Person that will, upon the making of such Investment, become a
Wholly-Owned Subsidiary; provided, however, that the primary business
of such Wholly-Owned Subsidiary is a Related Business; (ii) another
Person if as a result of such Investment such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially
all its assets to, the Borrower or a Wholly-Owned Subsidiary; provided,
however, that such Person's primary business is a Related Business;
(iii) Temporary Cash Investments or Cash Equivalents; (iv) receivables
owing to the Borrower or any Restricted Subsidiary, if created or
acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; provided,
however, that such trade terms may include such concessionary trade
terms as the Borrower or any such Restricted Subsidiary deems
reasonable under the circumstances; (v) securities received as
consideration in sales of assets made in compliance with Section 6.4;
(vi) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as
expenses for accounting purposes and that are made in the ordinary
course of business; (vii) loans or advances (or guarantees in respect
thereof) to the officers or employees of the Borrower or any Restricted
Subsidiary in accordance with the ordinary course practices of the
Borrower and its Restricted Subsidiaries; (viii) stock,
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obligations or securities received in settlement of debts created in
the ordinary course of business and owing to the Borrower or any
Restricted Subsidiary or in satisfaction of judgments; (ix) Investments
in connection with pledges, deposits, payments or performance bonds
made or given in the ordinary course of business in connection with or
to secure statutory, regulatory or similar obligations, including
obligations under health, safety or environmental obligations; (x)
extensions of trade credit in the ordinary course of business; (xi)
guarantees of Indebtedness (including the Note Guarantees and the
Guarantees entered into in connection with the Senior Credit Facility)
permitted under Section 6.1; (xii) the Acquisition; (xiii) loans and
advances among the Borrower and its Restricted Subsidiaries made in
accordance with Section 6.1; (xiv) (A) Investments in a Related
Business acquired in consideration for the issuance of common equity of
the Borrower and (B) an Investment in a Related Business with the
proceeds of the issuance of common equity to the extent such amounts
have not been previously applied to make an Investment; provided that
no Default or Event of Default shall have occurred and be continuing
and such Permitted Investment shall not be an Investment which is, or
after notice or lapse of time or both, would be an "event of default"
under the terms of any Indebtedness of the Borrower or its Restricted
Subsidiaries; and (xv) Investments in a Related Business previously
disclosed to the Lenders in an aggregate amount, taken together with
all other Investments made pursuant to this clause (xv) that are at
that time outstanding, not to exceed $150,000,000.
"Permitted Issuance": (a) the issuance by the Borrower of
shares of Capital Stock as dividends on issued and outstanding Capital
Stock of the same class of the Borrower or pursuant to any dividend
reinvestment plan, (b) the issuance by the Borrower of options or other
equity securities of the Borrower to outside directors, members of
management or employees of the Borrower or any Subsidiary of the
Borrower, (c) the issuance of securities as interest or dividends on
pay-in-kind debt or preferred equity securities permitted hereunder and
under the other Loan Documents, (d) the issuance to the Borrower or any
Subsidiary (or any director, with respect to directors' qualifying
shares) by any of their respective Subsidiaries of any Capital Stock,
(e) the issuance by the Borrower of shares of its Capital Stock (other
than Disqualified Stock) in connection with a Permitted Investment and
(f) cash payments made in lieu of issuing fractional shares of
Borrower's Capital Stock in an aggregate amount not to exceed $100,000.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"PIK Interest Amount": the aggregate amount equal to the
amount of interest borne by an Initial Note or a Term Note in excess of
14% per annum.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Preferred Stock", as applied to the Capital Stock of any
corporation, Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the
distribution of assets upon any voluntary or involuntary liquidation
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21
or dissolution of such corporation, over shares of Capital Stock of any
other class of such corporation.
"Press Release": the press announcement released by or on
behalf of U.K. Acquisition II on October 16, 1997 publicly announcing a
firm intention to make the Tender Offer.
"Pro Forma Balance Sheet": as defined in Section 3.1(b).
"Prohibited Transaction": any "prohibited transaction" as
defined in Section 406 of ERISA or Section 4975 of the Code.
"Properties": as defined in Section 3.16(a).
"Qualified Capital Stock": any Capital Stock that is not
Disqualified Stock.
"Refinancing Indebtedness": Indebtedness that is Incurred to
refund, refinance, replace, renew, repay or extend (including pursuant
to any defeasance or discharge mechanism) (collectively, "refinances,"
and "refinanced" shall have a correlative meaning) any Indebtedness
existing on the date of this Agreement or Incurred in compliance with
this Agreement (including Indebtedness of the Borrower that refinances
Indebtedness of any Restricted Subsidiary (to the extent permitted in
this Agreement) and Indebtedness of any Restricted Subsidiary that
refinances Indebtedness of another Restricted Subsidiary) including
Indebtedness that refinances Refinancing Indebtedness; provided,
however, that (i) the Refinancing Indebtedness has a Stated Maturity no
earlier than that of the Indebtedness being refinanced, (ii) the
Refinancing Indebtedness has an Average Life at the time such
Refinancing Indebtedness is Incurred that is equal to or greater than
that of the Indebtedness being refinanced and (iii) such Refinancing
Indebtedness is Incurred in an aggregate principal amount (or if issued
with original issue discount, an aggregate issue price) that is equal
to or less than the sum of (x) the aggregate principal amount (or if
issued with original issue discount, the aggregate accreted value) then
outstanding of the Indebtedness being refinanced, plus (y) fees,
underwriting discounts, premiums and other costs and expenses incurred
in connection with such Refinancing Indebtedness; provided further,
however, that Refinancing Indebtedness shall not include (x)
Indebtedness of a Restricted Subsidiary that refinances Indebtedness of
the Borrower or Indebtedness of a Note Guarantor that refinances
Indebtedness of a Restricted Subsidiary that is not a Note Guarantor or
(y) Indebtedness of the Borrower or a Restricted Subsidiary that
refinances Indebtedness of an Unrestricted Subsidiary.
"Register": as defined in Section 10.6(d).
"Regulation G": Regulation G of the Board of Governors as in
effect from time to time.
"Regulation U": Regulation U of the Board of Governors as in
effect from time to time.
"Regulation X": Regulation X of the Board of Governors as in
effect from time to time.
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"Related Business": any business which is the same as or
related, ancillary or complementary to any of the businesses of the
Borrower and its Restricted Subsidiaries on the date hereof, as
reasonably determined by the Board.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA or any regulation thereunder.
"Representative": the trustee, agent or representative (if
any) for an issue of Senior Indebtedness.
"Required Lenders": at any time, Lenders holding 51% or more
in principal amount of outstanding Loans (or, prior to the Closing
Date, 51% or more of the Commitments).
"Requirement of Law": 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.
"Responsible Officer": as to any Person, the chief executive
officer, the president, the chief financial officer, the treasurer, any
assistant treasurer or the controller.
"Restricted Payments": as defined in Section 6.2(a).
"Restricted Subsidiary": any Subsidiary of the Borrower other
than an Unrestricted Subsidiary.
"Sale/Leaseback Transaction": an arrangement relating to
property now owned or hereafter acquired by the Borrower or a
Restricted Subsidiary whereby the Borrower or such Restricted
Subsidiary transfers such property to a Person and the Borrower or such
Restricted Subsidiary leases it from such Person, other than leases
between the Borrower and a Wholly-Owned Subsidiary or between
Wholly-Owned Subsidiaries.
"Satisfaction Date": as defined in Section 4.2.
"SEC": the Securities and Exchange Commission or any
Governmental Authority which succeeds to the powers and functions
thereof.
"Secured Indebtedness": any Indebtedness of the Borrower
secured by a Lien.
"Securities": any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit sharing agreement or arrangement, bonds, debentures, options,
warrants, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or
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interim certificates for the purchase or acquisition of, or any right
to subscribe to, purchase or acquire, any of the foregoing.
"Securities Act": the Securities Act of 1933, as amended from
time to time.
"Senior Credit Agreement": means (i) the Second Amended and
Restated Credit Agreement dated as of December 18, 1997 among the
Borrower, the Foreign Subsidiaries parties thereto, The Chase Manhattan
Bank, as Administrative Agent and the lenders parties thereto from time
to time, as the same may be amended, supplemented or otherwise modified
from time to time and (ii) any renewal, extension, refunding,
restructuring, replacement, or refinancing thereof (whether with the
original administrative agent and lenders or another administrative
agent or agents or other lenders and whether provided under the
original Second Amended and Restated Credit Agreement or any other
agreement or indenture.)
"Senior Credit Documents": the "Loan Documents" as such term
is defined in the Senior Credit Agreement.
"Senior Credit Facility": the collective reference to the
Senior Credit Agreement and the notes issued pursuant thereto and the
guarantee agreements, the security agreements, the indemnity,
subrogation and contribution agreements, the pledge agreements and each
of the other security agreements and other instruments and documents
executed and delivered pursuant to any of the foregoing.
"Senior Credit Facility Loans": loans in an aggregate
principal amount not to exceed $2,750,000,000 borrowed by the Borrower
pursuant to the Senior Credit Facility.
"Senior Indebtedness": the principal of, premium (if any), and
interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization of the Borrower regardless
of whether post-filing interest is allowed in such proceeding) on, and
fees and other amounts owing in respect of, the Bank Indebtedness and
all other Indebtedness and Hedging Obligations of the Borrower, whether
outstanding on the Closing Date or thereafter issued, unless, in the
instrument creating or evidencing the same or pursuant to which the
same is outstanding, it is provided that the obligations in respect of
such Indebtedness are not superior in right of payment to the Loans;
provided, however, that Senior Indebtedness will not include (1) any
obligation of the Borrower to any Subsidiary, (2) any liability for
Federal, state, foreign, local or other taxes owed or owing by the
Borrower, (3) any accounts payable or other liability to trade
creditors arising in the ordinary course of business (including
Guarantees thereof or instruments evidencing such liabilities), (4) any
Indebtedness, Guarantee or obligation of the Borrower that is expressly
subordinate or junior in right of payment to any other Indebtedness,
Guarantee or obligation of the Borrower, including any Senior
Subordinated Indebtedness and any Subordinated Obligations, or (5) any
Capital Stock. "Senior Indebtedness" of a Note Guarantor has a
correlative meaning (including interest accruing on or after the filing
of a petition in bankruptcy or for reorganization of the Borrower or
Note Guarantor, regardless of whether post-filing interest is allowed
in such proceeding).
"Senior Subordinated Credit Agreement": as defined in the
recitals hereto.
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"Senior Subordinated Indebtedness": the Loans, the Exchange
Notes, and any other Indebtedness of the Borrower that specifically
provides that such Indebtedness is to rank pari passu with the Loans
and is not expressly subordinated in right of payment by its terms to
any Indebtedness or other obligation of the Borrower that is not Senior
Indebtedness.
"Senior Subordinated Indenture": the Senior Subordinated
Indenture, substantially in the form of Exhibit B hereto (with such
changes therein as the Borrower may request and Administrative Agent
may approve, such approval not to be unreasonably withheld), if and
when executed and delivered by the Borrower and a trustee thereunder,
as amended, waived, supplemented or otherwise modified from time to
time.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvent" and "Solvency": when used with respect to any
Person, means that, as of any date of determination, (a) the amount of
the "present fair saleable value" of the assets of such Person will, as
of such date, exceed the amount of all "liabilities of such Person,
contingent or otherwise", as of such date, as such quoted terms are
determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present
fair saleable value of the assets of such Person will, as of such date,
be greater than the amount that will be required to pay the liability
of such Person on its debts as such debts become absolute and matured,
(c) such Person will not have, as of such date, an unreasonably small
amount of capital with which to conduct its business, and (d) such
Person will be able to pay its debts as they mature. For purposes of
this definition, (i) "debt" means liability on a "claim", and (ii)
"claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured or (y) right to an equitable remedy for breach of performance
if such breach gives rise to a right to payment, whether or not such
right to an equitable remedy is reduced to judgment, fixed, contingent,
matured or unmatured, disputed, undisputed, secured or unsecured.
"S&P": Standard & Poor's Ratings Service, a division of The
McGraw-Hill Companies, Inc., and its successors.
"Stated Maturity": with respect to any Security, the date
specified in such Security as the fixed date on which the payment of
principal of such security is due and payable, including pursuant to
any mandatory redemption provision (but excluding any provision
providing for the repurchase of such security at the option of the
holder thereof upon the happening of any contingency beyond the control
of the issuer unless such contingency has occurred).
"Subordinated Obligation": any Indebtedness of the Borrower
(whether outstanding on the date of this Agreement or thereafter
Incurred) which is subordinate or junior in right of payment to the
Loans pursuant to a written agreement.
"Subsequent Initial Note": as defined in Section 2.4(e).
"Subsequent Term Note": as defined in Section 2.4(f).
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"Subsidiary": as to any Person, any corporation, association,
partnership or other business entity of which more than 50% of the
total voting power of shares of Capital Stock or other interests
(including partnership interests) entitled (without regard to the
occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by (i) such Person or (ii) one or more
Subsidiaries of such Person.
"Successor Company": as defined in Section 6.8.
"Take-Out Banks": as defined in Section 4.2.
"Takeover Code": the City Code on Takeovers and Mergers in
effect in England.
"Take-Out Financing": any offering of unsecured notes,
debentures or Capital Stock of the Borrower or any Restricted
Subsidiary, whether or not such securities are designated by the
Borrower or any of its Restricted Subsidiaries as Take-Out Financing.
"Target": as defined in the recitals hereto.
"Target Shareholders": the holders of the Target Shares.
"Target Shares": as defined in the recitals hereto.
"Temporary Cash Investments": has the meaning given to "Cash
Equivalents" in the Senior Credit Agreement.
"Tender Offer": as defined in the recitals hereto.
"Term Note": as defined in Section 2.4(f).
"Term Loan": as defined in Section 2.1(b).
"Trade Payables": with respect to any Person, any accounts
payable or any indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person arising in the ordinary
course of business in connection with the acquisition of goods or
services.
"Transaction Documents": the collective reference to the
Acquisition Documents, the Senior Credit Documents, the Loan Documents,
the Senior Subordinated Indenture and the Exchange Notes.
"Transactions": the collective reference to the Tender Offer,
the Compulsory Acquisition, the issuances of Indebtedness under this
Agreement, the Senior Subordinated Indenture, the Take-Out Financing
and the Senior Credit Facility.
"Transferee": as defined in Section 10.6(f).
"Trustee": as defined in Section 2.5(d).
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26
"Type", when used in respect of any Loan or Borrowing, shall
refer to the Rate by reference to which interest on such Loan or
Borrowing is determined. For purposes hereof, the term "Rate" shall
include the Adjusted LIBO Rate and the Alternate Base Rate.
"U.K. Acquisition I": a Wholly Owned Subsidiary of the
Borrower to be organized under the laws of England prior to the Closing
Date.
"U.K. Acquisition I Guarantee": the U.K. Acquisition I
Guarantee in form and substance reasonably satisfactory to the
Administrative Agent, as the same may be amended, supplemented or
otherwise modified from time to time, to be executed and delivered by
U.K. Acquisition I pursuant to Section 5.15, guaranteeing all of the
obligations of the Borrower hereunder.
"U.K. Acquisition II": as defined in the recitals hereto.
"Unrestricted Subsidiary": (i) any Subsidiary (other than a
Note Guarantor) of the Borrower that at the time of determination shall
be designated an Unrestricted Subsidiary in the manner provided below
and (ii) any Subsidiary of an Unrestricted Subsidiary. At any time
after the Initial Maturity Date, the Borrower may designate any of its
Subsidiaries (including any newly acquired or newly formed Subsidiary
of the Borrower) to be an Unrestricted Subsidiary unless such
Subsidiary or any of its Subsidiaries owns any Capital Stock or
Indebtedness of, or owns or holds any Lien on any property of, the
Borrower or any other Subsidiary of the Borrower that is not an
Unrestricted Subsidiary or a Subsidiary of the Subsidiary to be so
designated; provided, however, that either (A) the Subsidiary to be so
designated has total consolidated assets of $10,000 or less or (B) if
such Subsidiary has consolidated assets greater than $10,000, then such
designation would be permitted under Section 6.2. The Borrower may
designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided, however, that immediately after giving effect to such
designation (x) the Borrower could incur at least $1.00 of additional
Indebtedness under Section 6.1(a) and (y) no Default shall have
occurred and be continuing. Any such designation shall be evidenced to
the Administrative Agent by promptly filing with the Administrative
Agent an Officers' Certificate certifying that such designation
complied with the foregoing provisions.
"U.S. Finance Subsidiary I": a special purpose corporation to
be organized as a direct or indirect Subsidiary of the Borrower under
the laws of a state of the United States prior to the Closing Date.
"U.S. Finance Subsidiary II": a special purpose corporation to
be organized as a direct or indirect Subsidiary of the Borrower under
the laws of a state of the United States prior to the Closing Date.
"U.S. Finance Subsidiary III": a special purpose corporation
to be organized as a direct or indirect Subsidiary of the Borrower
under the laws of a state of the United States prior to the Closing
Date.
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"Voting Stock": all classes of Capital Stock of an entity then
outstanding and normally entitled to vote in the election of directors
or all interests in such entity with the ability to control the
management or actions of such entity.
"Wholly-Owned Subsidiary": a Restricted Subsidiary of the
Borrower all the Capital Stock of which (other than directors'
qualifying shares) is owned by the Borrower or another Wholly-Owned
Subsidiary, provided that if on the Closing Date the Borrower shall,
directly or indirectly, own greater than 90% of the Capital Stock of
Target then Target shall constitute a Wholly-Owned Subsidiary, however,
Target shall cease to be a Wholly-Owned Subsidiary if the Borrower has
failed to acquire 100% of the Capital Stock of Target by May 1, 1998.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in any Notes, any other Loan Document or any certificate or
other document made or delivered pursuant hereto.
(b) As used herein and in any Notes and any other Loan
Document, and any certificate or other document made or delivered pursuant
hereto or thereto, accounting terms relating to the Borrower and its
Subsidiaries not defined in Section 1.1 and accounting terms partly defined in
Section 1.1, to the extent not defined, shall have the respective meanings given
to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule, Annex and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF LOANS
2.1 Loans. (a) Subject to the terms and conditions hereof,
each Lender severally agrees to make a loan (individually, an "Initial Loan" and
collectively, the "Initial Loans") to the Borrower on the Closing Date, in an
aggregate principal amount equal to such Lender's Commitment. Any Commitments
not drawn on the Closing Date shall terminate.
(b) Subject to the terms and conditions hereof, each Lender
severally agrees, if the Initial Loans have not been repaid or exchanged for
Exchange Notes on the Initial Maturity Date, to convert the then outstanding
principal amount of its Initial Loans into a loan (individually, a "Term Loan"
and collectively, the "Term Loans"; the Initial Loans and the Term Loans,
collectively, the "Loans") to the Borrower, on the Initial Maturity Date, in an
aggregate principal amount equal to then outstanding principal amount of the
Initial Loans held by such Lender. Upon the making by such Lender of such Term
Loan, each Lender shall cancel on its records a principal amount of the Initial
Loans and the Initial Loans held by such Lender corresponding to the principal
amount of Term Loans made by such Lender, which corresponding principal amount
of the Initial Loans shall be satisfied by the conversion thereof into Term
Loans in accordance with Section 2.2(b).
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(c) Subject to Section 2.6(c), prior to the Initial Maturity
Date, the Borrowing shall be comprised entirely of Eurodollar Loans. Each Lender
may at its option make any Eurodollar Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan; provided that any exercise
of such option shall not affect the obligation of the Borrower to repay such
Loan in accordance with the terms of this Agreement; provided further that, the
Borrower shall not incur any additional expense or fees as a result of any
exercise of such option. Borrowings of more than one Type may be outstanding at
the same time in the event that the Administrative Agent gives notice as
provided in Section 2.6(c). For purposes of the foregoing, Borrowings having
different Interest Periods shall be considered separate Borrowings.
(d) Unless the Administrative Agent shall have received notice
from a Lender prior to the Closing Date that such Lender will not make available
to the Administrative Agent such Lender's portion of the Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
Section 2.1(c) and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If the Administrative Agent shall have so made funds available then, to the
extent that such Lender shall not have made such portion available to the
Administrative Agent, such Lender and the Borrower severally agree to repay to
the Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrower until the date such amount is repaid to the Administrative Agent
at (i) in the case of the Borrower, the interest rate applicable at the time to
the Loans comprising such Borrowing and (ii) in the case of such Lender, a rate
determined by the Administrative Agent to represent its cost of overnight or
short-term funds (which determination shall be conclusive absent manifest
error). If such Lender shall repay to the Administrative Agent such
corresponding amount, (a) such amount shall constitute such Lender's Loan as
part of such Borrowing for purposes of this Agreement and (b) the Administrative
Agent will promptly remit to the Borrower any such corresponding amount repaid
to the Administrative Agent by the Borrower. Nothing contained in this Section
2.1(d) shall relieve any Lender that has failed to make available its ratable
portion of any borrowing hereunder from its obligation to do so in accordance
with the terms hereof.
(e) The failure of any Lender to make the Initial Loan to be
made by it shall not relieve any other Lender of its obligation, if any,
hereunder to make its Initial Loan on the Closing Date, but no Lender shall be
responsible for the failure of any other Lender to make the Initial Loan to be
made by such other Lender on the Closing Date.
2.2 Procedure for Borrowing and Conversion. (a) Subject to the
provisions of Section 2.6(c), in order to request a Borrowing under the
Commitments on the Closing Date, the Borrower shall deliver by hand or by
telecopy to the Administrative Agent a notice (or telephonic notice promptly
confirmed in writing) (the "Borrowing Request") which notice must be received by
the Administrative Agent not later than 12:00 noon, New York City time, three
(3) days before the Closing Date. The Borrowing Request shall be duly completed,
irrevocable, signed by or on behalf of the Borrower and shall specify the
following information: (i) the date of such Borrowing (which shall be the
Closing Date and a Business Day); (ii) the number and location of the account to
which funds are to be disbursed (which shall be an account that complies with
the requirements of this Section 2.2(a)); and (iii) the amount of the Borrowing.
Upon receipt of such notice the Administrative Agent shall promptly notify each
Lender. Not later than 11:00 a.m., New York City time, on the Closing Date, each
Lender shall make available to the Administrative Agent at the office of the
Administrative Agent specified in Section 10.2 (or at such other location as the
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Administrative Agent may direct) an amount in immediately available funds equal
to the amount of the Initial Loan to be made by such Lender. Initial Loan
proceeds received by the Administrative Agent hereunder shall promptly be made
available to the Borrower by the Administrative Agent's crediting the account of
the Borrower, at the office of the Administrative Agent specified in Section
10.2, with the aggregate amount actually received by the Administrative Agent
from the Lenders and in like funds as received by the Administrative Agent.
(b) If the Borrower has not repaid the Initial Loan in full on
or prior to the Initial Maturity Date, then, subject to the right of any Lender
to convert its Initial Loans into Exchange Notes on the Initial Loan Maturity
Date pursuant to Section 2.3(c), each Lender shall convert the then outstanding
principal amount of the Initial Notes into Term Loans under this Section 2.2.
2.3 Maturity and Exchange Notes. (a) All the Initial Loans
will mature on the Initial Maturity Date.
(b) All the Term Loans will mature on the Final Maturity Date.
(c) Each Lender will have the option on or after the Initial
Maturity Date at any time or from time to time to receive Exchange Notes in
exchange for the Term Notes or, on the Initial Maturity Date, the Initial Loans,
of such Lender then outstanding in accordance with Section 5.10 of this
Agreement. The principal amount of the Exchange Notes will equal 100.0% of the
aggregate principal amount (including any accrued and unpaid interest not
required to be paid in cash) of the Loans for which they are exchanged. If a
Default (but not an Event of Default) shall have occurred and be continuing on
the date of such exchange, any notices given or cure periods commenced while the
Loan was outstanding shall be deemed given or commenced (as of the actual dates
thereof) for all purposes with respect to the Exchange Note (with the same
effect as if the Exchange Note had been outstanding as of the actual dates
thereof).
2.4 Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Loan in
accordance with the terms hereof and of the Loan Notes. The Borrower hereby
further agrees to pay to the Administrative Agent for the account of each Lender
interest on the unpaid principal amount of the Loans from time to time
outstanding from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in Section 2.6.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from the Loans (including the PIK Interest Amounts) made by
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time under this Agreement.
(c) The Administrative Agent shall maintain the Register
pursuant to Section 10.6(d), with separate subaccounts therein for each Lender,
in which shall be recorded (i) the amount of each Loan (including the PIK
Interest Amounts) made hereunder, (ii) the amount of any principal or accrued
and unpaid interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) both the amount of any sum received
by the Administrative Agent hereunder from the Borrower and each Lender's share
thereof, if any.
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(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.4(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender to maintain any account pursuant to Section 2.4(b) or the
Administrative Agent to make recordings in the Register pursuant to Section
2.4(c), or any error therein, shall not in any manner affect the obligation of
the Borrower to repay (with applicable interest) the Loans made to the Borrower
by such Lender in accordance with the terms of this Agreement.
(e) To the extent requested by any Lender, the Borrower shall
execute and deliver to such Lender an Initial Note dated the Closing Date
substantially in the form of Exhibit C-1 hereto to evidence the portion of the
Initial Loan made by such Lender and with appropriate insertions ("Original
Initial Notes"). On each Interest Payment Date prior to the Initial Maturity
Date on which the Borrower elects to pay a PIK Interest Amount pursuant to
Section 2.6, to the extent requested by any Lender, the Borrower shall execute
and deliver to such Lender on such Interest Payment Date a note dated such
Interest Payment Date substantially in the form of Exhibit C-1 hereto in a
principal amount equal to such Lender's pro rata portion of such PIK Interest
Amount and with other appropriate insertions (each a "Subsequent Initial Note"
and, together with the Original Initial Notes, the "Initial Notes"). A
Subsequent Initial Note shall bear interest from the date of its issuance at the
same rate borne by all Initial Notes at the date of issuance and from time to
time thereafter.
(f) Unless converted to an Exchange Note and, to the extent
requested by any Lender, the Borrower shall execute and deliver to such Lender a
Term Note dated the Initial Maturity Date substantially in the form of Exhibit
C-2 hereto to evidence the Term Loan made on such date, in the principal amount
of the Initial Notes held by such Lender on such date and with other appropriate
insertions (collectively, the "Original Term Notes"), in exchange for the return
to the Borrower of the Initial Notes held by such Lender. On or after the
Initial Maturity Date, on each Interest Payment Date on which the Borrower
elects to pay a PIK Interest Amount pursuant to Section 2.6(c), to the extent
requested by any Lender, the Borrower shall execute and deliver to such Lender
on such Interest Payment Date a Term Note dated such Interest Payment Date
substantially in the form of Exhibit C-2 hereto in a principal amount equal to
such Lender's pro rata portion of such PIK Interest Amount and with other
appropriate insertions (each a "Subsequent Term Note" and, together with the
Original Term Notes, the "Term Notes"). A Subsequent Term Note shall bear
interest from the date of its issuance at the same rate borne by all Term Notes
at the date of issuance and from time to time thereafter.
2.5 Optional and Mandatory Prepayments. (a) The Borrower may
at any time and from time to time prepay the Loans and Exchange Notes, in whole
or in part, subject to reimbursement of the Lenders' redeployment costs,
provided, however, that on or after the Initial Maturity Date, any prepayment
shall be applied pro rata among the Loans and Exchange Notes as provided in
Section 2.5(d) below. Upon receipt of such notice the Administrative Agent shall
promptly notify each Lender thereof. If such notice is given, the amount
specified in such notice shall be due and payable, and the Borrower shall make
such prepayment, on the date specified therein. Partial prepayments of the Loans
and Exchange Notes shall be in an aggregate principal amount equal to the lesser
of (A) $1,000,000, or a whole multiple of $500,000 in excess thereof and (B) the
aggregate unpaid principal amount of the Loans and Exchange Notes, as the case
may be. Prepayments of the Loans and Exchange Notes pursuant to this Section
2.5(a) shall be applied to the outstanding principal amounts of the Loans and
Exchange Notes ratably according to the
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outstanding principal amounts of such Loans and Exchange Notes as provided in
Section 2.5(d) below.
(b) (i) If, subsequent to the Closing Date, the Borrower or
any of its Subsidiaries shall issue Take-Out Financing (other than Permitted
Issuances), an amount equal to 100% of the Net Cash Proceeds thereof shall be
promptly applied toward the prepayment of the Loans and the Exchange Notes as
provided in Section 2.5(d) below; provided, however, that such Net Cash Proceeds
need not be applied to the prepayment of the Loans and the Exchange Notes to the
extent that such Net Cash Proceeds are required to be and are applied pursuant
to the Senior Credit Agreement in satisfaction of obligations thereunder.
(ii) If, subsequent to the Closing Date, the Borrower or
any of its Subsidiaries shall be required to apply any Net Available Cash
pursuant to Section 6.4(a)(iii)(C), such Net Available Cash shall be promptly
applied toward the prepayment of the Loans and the Exchange Notes as provided in
Section 2.5(d) below.
(iii) The Borrower shall give the Administrative Agent
(which shall promptly notify each Lender) at least three (3) Business Days'
prior notice or, telephone notice promptly confirmed in writing of each
prepayment in whole or in part pursuant to this Agreement setting forth the date
and amount thereof.
(c) Accrued and unpaid interest on the amount of any principal
of the Loans prepaid under this Section 2.5 shall be paid to and on the date of
such prepayment.
(d) As promptly as practicable after the Administrative Agent,
pursuant to Section 2.5(b)(iii), receives notice of a prepayment pursuant to
Sections 2.5(b)(i) or (b)(ii), the Administrative Agent, in cooperation with any
trustee under the Senior Subordinated Indenture (the "Trustee"), shall give
notice to each holder of an Exchange Note of the pro rata amount that would be
payable to such holder in respect of such holder's Exchange Note and the
expected date of such prepayment. Any holder of noncallable Exchange Notes that
wishes to accept such prepayment (each, an "Accepting Holder") shall promptly
notify the Trustee and the Administrative Agent in writing. Offers to prepay the
Loans and Exchange Notes shall be made ratably among the Loans and Exchange
Notes. After the Administrative Agent receives the prepayment amount, such
prepayment amount shall be distributed by the Administrative Agent, in
cooperation with the Trustee, subject to Section 2.8(b), in the following order,
with appropriate adjustments being made to account for the receipt by the
Trustee of any prepayment in respect of the Exchange Notes: First, to the
payment of all amounts described in clauses "First" and "Second" of Section
2.8(b)(i); Second, to the payment of interest then due and payable on the Loans,
Exchange Notes of Accepting Holders and callable Exchange Notes, ratably among
the Lenders, the Accepting Holders and Holders of callable Exchange Notes in
accordance with the aggregate amount of interest owed to each such Lender,
Accepting Holder and Holder; and Third, to the payment of the principal amount
of the Loans, the Exchange Notes of Accepting Holders and the callable Exchange
Notes that is then due and payable, ratably among the Lenders, the Accepting
Holders and Holders of callable Exchange Notes in accordance with the aggregate
principal amount owed to each such Lender, Accepting Holder and Holder. Amounts
offered to and rejected by any Exchange Note holder shall be ratably applied to
prepay the Loans, the Exchange Notes held by Accepting Holders and callable
Exchange Notes. Any offers to prepay non-callable Exchange Notes shall be made
in accordance with the provisions relating thereto in the Senior Subordinated
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Indenture, and with applicable law, and the distribution of the relevant
prepayment amount hereunder shall be made promptly after the expiration of such
offer.
2.6 Interest Rates and Payment Dates. (a) Subject to the
provisions of Section 2.6(c), Initial Loans comprising any Eurodollar Borrowing
shall bear interest for the period from and including the Closing Date to, but
excluding, the Initial Maturity Date on the unpaid principal thereof at a rate
per annum equal to the Adjusted LIBO Rate for the Interest Period in effect for
such Borrowing plus the Applicable Margin; provided that, in the event of
conditions described in clause (c) below, affected Initial Loans shall accrue
interest from and including the date of such event to, but excluding, the
Initial Maturity Date on the unpaid principal thereof at a rate per annum equal
to the Alternate Base Rate from time to time in effect.
(b) Term Loans shall bear interest for the period from and
including the Initial Maturity Date to, but excluding, the Final Maturity Date
or date of exchange for an Exchange Note on the unpaid principal thereof at a
rate per annum equal to the Adjusted Rate plus the Adjusted Margin.
(c) In the event, and on each occasion, that on the day two
(2) Business Days prior to the commencement of any Interest Period for a
Eurodollar Borrowing the Administrative Agent shall have reasonably determined
that (i) Dollar deposits in the principal amounts of the Loans comprising such
Borrowing are not generally available in the London interbank market, (ii) the
rates at which such Dollar deposits are being offered will not adequately and
fairly reflect the cost to any Lender of making or maintaining its Eurodollar
Loan during such Interest Period, or (iii) that reasonable means do not exist
for ascertaining the Adjusted LIBO Rate, the Administrative Agent shall, as soon
as practicable thereafter, give written or telecopy notice of such determination
to the Borrower and the Lenders. In the event of any such determination, until
the Administrative Agent shall have advised the Borrower and the Lenders that
the circumstances giving rise to such notice no longer exist, the Borrowing
shall, on the last day of the current Interest Period therefor shall be
converted to an ABR Borrowing. Each determination by the Administrative Agent
hereunder shall be conclusive absent manifest error.
(d) Notwithstanding the foregoing clauses (a), (b), and (c),
the interest rate borne by the Loans and Exchange Notes shall not exceed 16% per
annum. To the extent the interest on any Loan exceeds a rate of 14% per annum,
the Borrower may elect to pay such excess interest (or portion thereof) by (i)
paying the appropriate PIK Interest Amount through the increase in the principal
amount of the applicable Loans and (ii) if requested by any Lenders, the
issuance of Subsequent Initial Notes or Subsequent Term Notes, as the case may
be, in an aggregate principal amount equal to all or a portion of such excess
interest to be paid.
(e) If all or a portion of (i) the principal amount of any of
the Loans, (ii) any interest payable thereon, or (iii) any commitment fee or
other amount payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise, but taking into account any applicable
grace period under Section 7(a)), such overdue amount shall, without limiting
the rights of the Lenders under Section 7, bear interest at a rate per annum
which is (x) in the case of overdue principal, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this subsection plus
2% or (y) in the case of overdue interest, commitment fees or other amounts due
and payable hereunder, the applicable rate hereunder for any Loan (but without
giving effect to the foregoing clause (x)) plus 2%.
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(f) Interest shall be payable in arrears on each Interest
Payment Date and upon the maturity date of the Loan in respect of which any such
interest is accruing, provided that interest accruing pursuant to Section 2.6(e)
shall be payable from time to time on demand.
2.7 Computation of Interest and Fees. (a) Interest in respect
of ABR Loans comprising each ABR Borrowing, (A) at any time that the Alternate
Base Rate is determined by reference to the Prime Rate shall be calculated on
the basis of a 365 day year (or 366 day year as the case may be) for the actual
days elapsed and (B) at any time that the Alternate Base Rate is determined by
reference to the Federal Funds Effective Rate, shall be calculated on the basis
of a 360-day year for the actual days elapsed.
(b) Eurodollar Loans comprising a Eurodollar Borrowing shall
bear interest (computed on the basis of the actual number of days elapsed over a
year of 360 days) at a rate per annum equal to the Adjusted LIBO Rate for the
Interest Period in effect for such Borrowing plus the Applicable Margin.
(c) Any change in the interest rate on a Loan resulting from a
change in the Alternate Base Rate or the Adjusted LIBO Rate, as the case may be,
shall become effective as of the opening of business on the day on which such
change is announced; provided, however, that no change (other than a change
resulting from a change in Statutory Reserve) in the Adjusted LIBO Rate during
an Interest Period shall affect the interest rate borne by the outstanding
Borrowing during such Interest Period. The Administrative Agent shall, as soon
as practicable, notify the Borrower and the Lenders of the effective date and
the amount of each such change in interest rate.
(d) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error.
2.8 Pro Rata Treatment and Payments. (a) Except to the extent
otherwise provided herein, each borrowing of Loans by the Borrower from the
Lenders and any reduction of the Commitments of the Lenders hereunder shall be
made pro rata according to the relevant Commitment Percentages of the Lenders
with respect to the Loans borrowed or the Commitments to be reduced.
(b) Whenever any payment received by the Administrative Agent
under this Agreement or any Note or any Loan Document is insufficient to pay in
full all amounts then due and payable to the Administrative Agent and the
Lenders under this Agreement:
(i) if the Administrative Agent has not received a Payment
Sharing Notice (or, if the Administrative Agent has received a Payment
Sharing Notice but the Event of Default specified in such Payment
Sharing Notice has been cured or waived in accordance with the
provisions of this Agreement), subject to Section 8, such payment shall
be distributed by the Administrative Agent, in cooperation with the
Trustee, and applied by the Administrative Agent and the Lenders in the
following order, with appropriate adjustment being made to account for
any payment received by the Trustee in respect of the Exchange Notes:
First, to the payment of reasonable fees and expenses due and payable
to the Administrative Agent under and in connection with this Agreement
or any Note Guarantee or due and payable to the Trustee under the
Senior Subordinated Indenture; Second, to the payment of all reasonable
expenses due and payable under Section 10.5 and any equivalent section
of the
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Senior Subordinated Indenture, ratably among the Lenders and the
Exchange Note Holders in accordance with the aggregate amount of such
payments owed to each such Lender or Holder; Third, to the payment of
accrued and unpaid interest then due and payable on the Loans and the
Exchange Notes ratably among the Lenders and the Exchange Note Holders
in accordance with the aggregate amount of interest owed to each Lender
and Exchange Note Holder; and Fourth, to the payment of the principal
amount of the Loans and the Exchange Notes that is then due and
payable, ratably among the Lenders and the Exchange Note Holders in
accordance with the aggregate principal amount owed to each such Lender
and Exchange Note Holder (and in the case of any Exchange Notes that
are not prepayable, subject to the provisions of Section 2.5(d)); or
(ii) if the Administrative Agent has received a Payment
Sharing Notice that remains in effect, subject to Section 8, all
payments received by the Administrative Agent under this Agreement or
any Note shall be distributed by the Administrative Agent and applied
by the Administrative Agent, in cooperation with the Trustee, and the
Lenders in the following order, with appropriate adjustment being made
to account for any payment received by the Trustee in respect of the
Exchange Notes: First, to the payment of all amounts described in
clauses "First" and "Second" of the foregoing clause (i), in the order
set forth therein; Second, to the payment of the interest accrued and
unpaid on all Loans and Exchange Notes, regardless of whether any such
amount is then due and payable, ratably among the Lenders and the
Exchange Note Holders in accordance with the aggregate accrued interest
plus the aggregate principal amount owed to such Lender and the
Exchange Note Holders; and Third, to the payment of the principal
amount of all Loans and Exchange Notes, regardless of whether any such
amount is then due and payable, ratably among the Lenders and the
Exchange Note Holders in accordance with the aggregate principal amount
owed to each Lender and Exchange Note Holder (and in the case of any
Exchange Notes that are not prepayable, subject to the provisions of
Section 2.5(d)).
(c) All payments (including prepayments) to be made by the
Borrower on account of principal, interest and fees shall be made without setoff
or counterclaim and shall be made to the Administrative Agent, for the account
of the Lenders at the Administrative Agent's office located at 270 Park Avenue,
New York, New York 10017, in lawful money of the United States of America and in
immediately available funds. The Administrative Agent shall promptly distribute
such payments in accordance with the provisions of Section 2.8(b) promptly upon
receipt in like funds as received. If any payment hereunder would become due and
payable on a day other than a Business Day, such payment shall become due and
payable on the next succeeding Business Day and, with respect to payments of
principal, interest thereon shall be payable at the then applicable rate during
such extension.
2.9 Requirements of Law. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement or any other Loan Document or
change the basis of taxation of payments to such Lender in respect
thereof (except for taxes covered by Section 2.10 below and the
establishment of a tax based on the net income of such Lender or
changes in the rate of tax on the net income of such Lender);
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(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit (including, without
limitation, letters of credit) by, or any other acquisition of funds
by, any office of such Lender which is not otherwise included in the
determination of the Eurodollar Base Rate hereunder, including, without
limitation, the imposition of any reserves with respect to Eurodollar
liabilities under Regulation D of the Board of Governors; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, continuing, or
maintaining Eurodollar Loans or to reduce any amount receivable hereunder in
respect thereof, then, in either case, the Borrower shall promptly pay such
Lender, upon its demand, any additional amounts necessary to compensate such
Lender for such increased cost or reduced amount receivable, provided that
before making any such demand, each Lender agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions and
so long as such efforts would not be disadvantageous to it, in its reasonable
discretion, in any legal, economic or regulatory manner) to designate a
different Eurodollar lending office if the making of such designation would
allow the Lender or its Eurodollar lending office to continue to perform its
obligations to make Eurodollar Loans or to continue to fund or maintain
Eurodollar Loans and avoid the need for, or materially reduce the amount of,
such increased cost. If any Lender becomes entitled to claim any additional
amounts pursuant to this subsection, it shall promptly notify (in any event no
later than ninety (90) days after such Lender becomes entitled to make such
claim) the Borrower, through the Administrative Agent, of the event by reason of
which it has become so entitled. A certificate as to any additional amounts
payable pursuant to this subsection submitted by such Lender, through the
Administrative Agent, to the Borrower shall be conclusive in the absence of
manifest error. If the Borrower so notifies the Administrative Agent within five
Business Days after any Lender notifies the Borrower of any increased cost
pursuant to the foregoing provisions of this Section 2.9, the Borrower may
convert all Eurodollar Loans of such Lender then outstanding into Alternate Base
Rate Loans and, additionally, reimburse such Lender for any cost in accordance
with Section 2.11. No Lender shall be entitled to compensation under this
subsection 2.9 for any costs incurred or reductions suffered with respect to any
date that it has such costs unless it shall have notified the Company that it
will demand compensation for such costs or reductions not more than 120 days
after the later of (i) such date and (ii) the date on which it shall have become
aware of such costs or reductions; provided that the foregoing shall in no way
operate in derogation of the undertaking contained in the penultimate sentence
of this paragraph (a). Notwithstanding any other provision of subsection 2.9, no
Lender shall demand compensation for any increased cost or reduction referred to
above if it shall not at the time be the general policy or practice of such
Lender to demand such compensation in similar circumstances under comparable
provisions of other credit agreements. In the event that any Lender determines
that any event or circumstances that will lead to a claim under this subsection
2.9 has occurred or will occur, such Lender will use its reasonable best efforts
to so notify the Borrower; provided, that any failure to provide such notice
shall in no way impair the rights of any Lender to demand and receive
compensation under this subsection 2.9, but without prejudice to any claims of
the Borrower for compensation for actual damages sustained as a result of any
failure to observe this undertaking. This covenant shall survive the termination
of this Agreement and the payment of the Loans and all other amounts payable
hereunder.
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(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof does or shall have the effect of
reducing the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such change or compliance
(taking into consideration such Lender's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time, after submission by such Lender to the Borrower (with a
copy to the Administrative Agent) of a prompt written request therefor, the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such reduction. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.10 Taxes. (a) Except as provided below in this Section, all
payments made by the Borrower under this Agreement and any Notes shall be made
free and clear of, and without deduction or withholding for or on account of,
any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, excluding net
income taxes and franchise taxes imposed in lieu of net income taxes. If any
such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Administrative Agent or any Lender hereunder or under any Notes,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement and any Notes, provided, however, that the Borrower shall be entitled
to deduct and withhold any Non-Excluded Taxes and shall not be required to
increase any such amounts payable to any Lender if such Lender fails or is
unable to comply with the requirements of paragraph (b) of this Section or if
such Lender fails to comply with the requirements of paragraph (c) of this
Section 2.10. Whenever any Non-Excluded Taxes are payable by the Borrower, as
promptly as possible thereafter the Borrower shall send to the Administrative
Agent for its own account or for the account of such Lender, as the case may be,
a certified copy of an original official receipt received by the Borrower
showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes
when due to the appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required documentary
evidence, the Borrower shall indemnify the Administrative Agent and the Lenders
for any incremental taxes, interest or penalties that may become payable by the
Administrative Agent or any Lender as a result of any such failure. The
agreements in this subsection shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:
(i) (x) at least five Business Days before the date
of any payment by the Borrower under this Agreement or any
Notes to such Lender, deliver to the Borrower and the
Administrative Agent (A) two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224, or
successor applicable form,
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as the case may be, certifying that it is entitled to receive
payments under this Agreement and any Notes without any
deduction or withholding of any United States federal income
taxes and (B) a duly completed Internal Revenue Service Form
W-8 or W-9, or successor applicable form, as the case may be,
certifying that it is entitled to an exemption from United
States backup withholding tax;
(y) deliver to the Borrower and the Administrative
Agent two further copies of any such form or certification at
least five Business Days before the date that any such form or
certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent
form previously delivered by it to the Borrower; and
(z) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be
requested by the Borrower or the Administrative Agent; or
(ii) in the case of any such Lender that is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code
and that does not comply with sub-paragraph (i) of this
paragraph (b), (x) represent to the Borrower (for the benefit
of the Borrower and the Administrative Agent) that it is not a
bank within the meaning of Section 881(c)(3)(A) of the Code,
(y) deliver to the Borrower on or before the date of any
payment by the Borrower, with a copy to the Administrative
Agent, (A) a certificate stating that such Lender (1) is not a
"bank" under Section 881(c)(3)(A) of the Code, is not subject
to regulatory or other legal requirements as a bank in any
jurisdiction, and has not been treated as a bank for purposes
of any tax, securities law or other filing or submission made
to any Governmental Authority, any application made to a
rating agency or qualification for any exemption from tax,
securities law or other legal requirements, (2) is not a
10-percent shareholder within the meaning of Section
881(c)(3)(B) of the Code and (3) is not a controlled foreign
corporation receiving interest from a related person within
the meaning of Section 881(c)(3)(C) of the Code (any such
certificate a "U.S. Tax Compliance Certificate") and (B) two
duly completed copies of Internal Revenue Service Form W-8, or
successor applicable form, certifying to such Lender's legal
entitlement at the date of such certificate to an exemption
from U.S. withholding tax under the provisions of Section
881(c) of the Code with respect to payments to be made under
this Agreement and any Notes (and to deliver to the Borrower
and the Administrative Agent two further copies of Form W-8 on
or before the date it expires or becomes obsolete and after
the occurrence of any event requiring a change in the most
recently provided form and, if necessary, obtain any
extensions of time reasonably requested by the Borrower or the
Administrative Agent for filing and completing such forms),
and (z) agree, to the extent legally entitled to do so, upon
reasonable request by the Borrower, to provide to the Borrower
(for the benefit of the Borrower and the Administrative Agent)
such other forms as may be reasonably required in order to
establish the legal entitlement of such Lender to an exemption
from withholding with respect to payments under this Agreement
and any Notes; or
unless in any such case any change in treaty, law or regulation has occurred
after the date such Person becomes a Lender hereunder which renders all such
forms and certificates inapplicable or which would prevent such Lender from duly
completing and delivering any such form or certificate
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with respect to it and such Lender so advises the Borrower and the
Administrative Agent. Each Person that shall become a Lender or a Participant
pursuant to Section 10.6 shall, upon the effectiveness of the related transfer,
be required to provide all of the forms, certifications and statements required
pursuant to this Section; provided that in the case of a Participant the
obligations of such Participant pursuant to this paragraph (b) shall be
determined as if such Participant were a Lender except that such Participant
shall furnish all such required forms, certifications and statements to the
Lender from which the related participation shall have been purchased.
(c) Each Lender shall, upon request by the Borrower, deliver
to the Borrower or the applicable Governmental Authority, as the case may be,
any form or certificate required in order that any payment by the Borrower under
this Agreement or any Notes may be made free and clear of, and without deduction
or withholding for or on account of any Non-Excluded Taxes (or to allow any such
deduction or withholding to be at a reduced rate) imposed on such payment under
the laws of any jurisdiction, provided that such Lender is legally entitled to
complete, execute and deliver such form or certificate and such completion,
execution or submission would not materially prejudice the legal position of
such Lender;
2.11 Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by the Borrower in payment when
due of the principal amount of or interest on any Eurodollar Loan, (b) default
by the Borrower in making a borrowing of, conversion into or continuation of
Eurodollar Loans after the Borrower has given a notice requesting the same in
accordance with the provisions of this Agreement, (c) default by the Borrower in
making any prepayment after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (d) the making of a
prepayment of Eurodollar Loans on a day which is not the last day of an Interest
Period with respect thereto, including, without limitation, in each case, any
such loss or expense (but excluding loss of margin) arising from the
reemployment of funds obtained by it or from fees payable to terminate the
deposits from which such funds were obtained. Calculation of all amounts payable
to a Lender under this Section 2.11 shall be made as though such Lender had
actually funded its relevant Eurodollar Loan through the purchase of a deposit
bearing interest at the Eurodollar Rate in an amount equal to the amount of such
Eurodollar Loan and having a maturity comparable to the relevant Interest
Period; provided, however, that each Lender may fund each of its Eurodollar
Loans in any manner it sees fit, and the foregoing assumption shall be utilized
only for the calculation of amounts payable under this Section 2.11. This
covenant shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
2.12 Replacement Lenders. If at any time (a) the Borrower
becomes obligated to pay additional amounts described in Sections 2.9 or 2.10 as
a result of any condition described in such Sections, (b) any Lender becomes
insolvent and its assets become subject to a receiver, liquidator, trustee,
custodian or other Person having similar powers, (c) any Lender becomes a
"Nonconsenting Lender" (as defined below in this Section 2.12) or (d) any Lender
becomes a "Non-Funding Lender", then the Borrower may, on ten (10) Business
Days' prior written notice to the Administrative Agent and such Lender, replace
such Lender by causing such Lender to (and such Lender shall) assign pursuant to
Section 10.6(c) all of its rights and obligations under this Agreement to a
Lender or other entity selected by the Borrower and acceptable to the
Administrative Agent for a purchase price equal to the outstanding principal
amount of such Lender's Loans and all accrued and unpaid interest and fees and
other amounts payable hereunder;
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provided that (i) the Borrower shall have no right to replace the Administrative
Agent, (ii) neither the Administrative Agent nor any Lender shall have any
obligation to the Borrower to find a replacement Lender or other such entity,
(iii) in the event of a replacement of a Nonconsenting Lender or a Lender to
which the Borrower becomes obligated to pay additional amounts pursuant to
clause (a) of this Section 2.12, in order for the Borrower to be entitled to
replace such a Lender, such replacement must take place no later than 180 days
after (A) the date the Nonconsenting Lender shall have notified the Borrower and
the Administrative Agent of its failure to agree to any requested consent,
waiver or amendment or (B) the Lender shall have demanded payment of additional
amounts under one of the subsections described in clause (a) of this Section
2.12, as the case may be, and (iv) in no event shall the Lender hereby replaced
be required to pay or surrender to such replacement Lender or other entity any
of the fees received by such Lender hereby replaced pursuant to this Agreement.
In the case of a replacement of a Lender to which the Borrower becomes obligated
to pay additional amounts pursuant to clause (a) of this Section 2.12, the
Borrower shall pay such additional amounts to such Lender prior to such Lender
being replaced and the payment of such additional amounts shall be a condition
to the replacement of such Lender. In the event that (x) the Borrower or the
Administrative Agent has requested the Lenders to consent to a departure or
waiver of any provisions of the Loan Documents or to agree to any amendment
thereto, (y) the consent, waiver or amendment in question requires the agreement
of all Lenders in accordance with the terms of Section 10.1 and (z) Required
Lenders have agreed to such consent, waiver or amendment, then any Lender who
does not agree to such consent, waiver or amendment shall be deemed a
"Nonconsenting Lender." The Borrower's right to replace a Non-Funding Lender
pursuant to this Section 2.12 is, and shall be, in addition to, and not in lieu
of, all other rights and remedies available to the Borrower against such
Non-Funding Lender under this Agreement, at law, in equity, or by statute.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans, the Borrower hereby represents and
warrants to the Administrative Agent and each Lender that:
3.1 Financial Condition. (a) The consolidated balance sheets
of the Borrower and its consolidated Subsidiaries as at December 31, 1995 and
December 31, 1996, respectively, and the related consolidated statements of
earnings, cash flows and shareholders' equity for the fiscal years ended on such
dates, reported on by Ernst & Young LLP, copies of which have heretofore been
furnished to each Lender, are complete and correct in all material respects and
present fairly the consolidated financial condition of the Borrower and its
consolidated Subsidiaries as at such dates, and the consolidated results of
their operations and their consolidated cash flows for the fiscal years then
ended. The unaudited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at June 30, 1997 and the related unaudited
consolidated statements of earnings and of cash flows for the six-month period
ended on such date, certified by a Responsible Officer, copies of which have
heretofore been furnished to each Lender, are complete and correct and present
fairly the consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such date, and the consolidated results of their operations
and their consolidated cash flows for the six-month period then ended (subject
to normal year-end audit adjustments). All such financial statements, including
the related schedules and notes thereto, have been prepared in accordance with
GAAP applied consistently throughout the periods involved (except as approved by
such accountants or Responsible Officer, as the case may be, and as disclosed
therein). Neither the
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Borrower nor any of its consolidated Subsidiaries (taken as a whole) had, at the
date of the most recent balance sheet referred to above, any material Guarantee,
contingent liability or liability for taxes, or any long-term lease or unusual
forward or long-term commitment, including, without limitation, any interest
rate or foreign currency swap or exchange transaction, which is not reflected in
the foregoing statements or in the notes thereto. During the period from
December 31, 1996 to and including the date hereof there has been no sale,
transfer or other disposition by the Borrower or any of its consolidated
Subsidiaries of any material part of its business or property and no purchase or
other acquisition of any business or property (including any capital stock of
any other Person) material in relation to the consolidated financial condition
of the Borrower and its consolidated Subsidiaries at December 31, 1996, other
than any such sale, transfer or other disposition or purchase or acquisition
that would have been permitted by this Agreement if this Agreement had been in
effect at all times during such period.
(b) The unaudited pro forma consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at June 30, 1997 (including the
notes thereto) (the "Pro Forma Balance Sheet"), copies of which have heretofore
been furnished to each Lender, has been prepared giving effect (as if such
events had occurred on such date) to (i) the consummation of the Acquisition,
(ii) the Loans to be made hereunder and under the Senior Credit Facility and the
use of proceeds thereof and (iii) the payment of fees and expenses in connection
with the foregoing. The Pro Forma Balance Sheet has been prepared based on the
best information available to the Borrower as of the date of delivery thereof,
and presents fairly on a pro forma basis the estimated financial position of the
Borrower and its consolidated Subsidiaries as at June 30, 1997, assuming that
the events specified in the preceding sentence had actually occurred at such
date.
(c) The consolidated balance sheets of the Target and its
consolidated Subsidiaries as at December 31, 1995 and December 31, 1996,
respectively, and the related consolidated statements of earnings, cash flows
and shareholders' equity for the fiscal years ended on such dates, reported on
by KPMG Audit plc, copies of which have heretofore been furnished to each
Lender, are, to the best of the Borrower's knowledge, complete and correct in
all material respects and, to the best of the Borrower's knowledge, present
fairly the consolidated financial condition of the Target and its consolidated
Subsidiaries as at such dates, and the consolidated results of their operations
and their consolidated cash flows for the fiscal years then ended. The unaudited
consolidated balance sheet of the Target and its consolidated Subsidiaries as at
June 30, 1997 and the related unaudited consolidated statements of earnings and
of cash flows for the six-month period ended on such date, copies of which have
heretofore been furnished to each Lender, are, to the best of the Borrower's
knowledge, complete and correct and, to the best of the Borrower's knowledge,
present fairly the consolidated financial condition of the Target and its
consolidated Subsidiaries as at such date, and the consolidated results of their
operations and their consolidated cash flows for the six-month period then ended
(subject to normal year-end audit adjustments).
3.2 No Change. Since December 31, 1996, (a) there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect, except as disclosed in the Borrower's Annual Report on
Form 10-K/A for fiscal year 1996 and (b) to the best of the Borrower's
knowledge, there has been no development or event which has had or could
reasonably be expected to have a material adverse effect on the business,
operations, property, condition (material or otherwise) or prospects of the
Target and its Subsidiaries taken as a whole.
3.3 Corporate Existence; Compliance with Law. Each of the
Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the
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jurisdiction of its organization except to the extent that, with respect to
those Subsidiaries that are not borrowers under the Senior Credit Agreement, the
lack of such organization, existence or good standing could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect, (b) has the
corporate or other power and authority, and the legal right, to own and operate
its property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged except to the extent that, with
respect to those Subsidiaries that are not borrowers under the Senior Credit
Agreement, the lack of such power, authority or legal right could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect, (c) is duly
qualified as a foreign corporation or other entity and in good standing under
the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification except to
the extent that the failure to qualify or be in good standing could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect and (d) is
in compliance with all Requirements of Law except to the extent that the failure
to comply therewith could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect.
3.4 Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party has the corporate or other power and authority, and the legal
right, to execute, deliver and perform the Loan Documents to which it is a party
and, in the case of the Borrower, to borrow hereunder and has taken all
necessary corporate or other action to authorize the borrowings on the terms and
conditions of this Agreement and the Notes to which it is a party and to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party. Each of the Borrower and U.K. Acquisition II has the corporate
power and authority, and the legal right, to consummate the Transactions. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required with
respect to the Borrower or any of its Subsidiaries in connection with the
borrowings hereunder or the consummation of the Transactions or, with the
execution, delivery, performance, validity or enforceability of the Loan
Documents to which it is a party, except for consents, filings, authorizations
or approvals which have been obtained and are in full force and effect, and
except for (i) any such approvals which will be set forth in the Offer Documents
as conditions to the Tender Offer and (ii) other approvals the failure to obtain
which could not reasonably be expected to have a Material Adverse Effect. This
Agreement has been, and each other Loan Document has been or when executed
pursuant hereto will be, duly executed and delivered on behalf of each of the
applicable Loan Parties. This Agreement and each other Loan Document to which a
Loan Party is a party constitutes a legal, valid and binding obligation of such
Person enforceable against such Person in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law) and by an implied
covenant of good faith and fair dealing.
3.5 No Legal Bar. The execution, delivery and performance of
the Loan Documents, the borrowings hereunder, the use of the proceeds thereof
and the consummation of the Transactions will not violate any Requirement of Law
or Contractual Obligation of the Borrower or of any of its Subsidiaries, other
than any such violation which could not reasonably be expected to have a
Material Adverse Effect, and will not result in, or require, the creation or
imposition of any Lien on any of its or their respective properties or revenues
pursuant to any such Requirement of Law or Contractual Obligation, except Liens
created pursuant to the Loan Documents and any Lien which could not reasonably
be expected to have a Material Adverse Effect.
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3.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower or any
of its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to any of the Loan Documents, the Transactions or any
of the transactions contemplated hereby, or (b) which could reasonably be
expected to have a Material Adverse Effect.
3.7 No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
3.8 Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its material real property, and good title to, or a
valid leasehold interest in, all its other material property, and none of such
property is subject to any Lien except as permitted by the Senior Credit
Agreement.
3.9 Intellectual Property. Each of the Borrower and its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted except for those the failure to own or license
which could not reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). 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
Borrower know of any valid basis for any such claim which, in the aggregate,
could reasonably be expected to have a Material Adverse Effect. The use of such
Intellectual Property by the Borrower and its Subsidiaries does not infringe on
the rights of any Person, except for such claims and infringements that, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
3.10 No Burdensome Restrictions. No Requirement of Law or
Contractual Obligation of the Borrower or any of its Subsidiaries could
reasonably be expected to have a Material Adverse Effect.
3.11 Taxes. Each of the Borrower and its Subsidiaries has
filed or caused to be filed all U.S. tax returns and all other material tax
returns which, to the knowledge of the Borrower, are required to be filed and
has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other taxes, fees or
other charges imposed on it or any of its property by any Governmental Authority
(other than any (i) with respect to which the failure to pay, in the aggregate,
would not reasonably be expected to have a Material Adverse Effect or (ii) the
amount or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of the Borrower or its Subsidiaries, as the
case may be); no tax Lien has been filed, and, to the knowledge of the Borrower,
no claim is being asserted, with respect to any such tax, fee or other charge.
3.12 Federal Regulations. No part of the proceeds of any Loan
Notes will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation G and
Regulation U of the Board of Governors of the United States Federal Reserve
System as now and from time to time hereafter in effect or for any purpose which
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violates the provisions of the Regulations of such Board of Governors (including
but not limited to the provisions of Regulation G, Regulation U and Regulation
X) or any similar rule of any other Governmental Authority. If the Borrower is
requested by any Lender or the Administrative Agent, the Borrower will furnish
to the Administrative Agent and each Lender a statement to the foregoing effect
in conformity with the requirements of Form FR U-1 or FR G-3 referred to in said
Regulation U and Regulation G, respectively.
3.13 ERISA. Neither a Reportable Event nor an Accumulated
Funding Deficiency has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of PBGC or a Plan has arisen, during such five-year period.
The present value of all accrued benefits under each Single Employer Plan (based
on those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by an amount which could reasonably be expected to have a Material
Adverse Effect, either individually or in the aggregate with all other Single
Employer Plans under which such accrued benefits exceed such assets. Neither the
Borrower nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan during the five-year period prior to the
date on which this representation is made or deemed made which could, in the
aggregate with other such withdrawals during such period, reasonably be expected
to have a Material Adverse Effect, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any liability under ERISA if the
Borrower or any such Commonly Controlled Entity were to withdraw completely from
all Multiemployer Plans as of the valuation date most closely preceding the date
on which this representation is made or deemed made. No such Multiemployer Plan
is in Reorganization or is Insolvent.
3.14 Investment Company Act; Other Regulations. The Borrower
is not an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
The Borrower is not subject to any law or regulation which limits its ability to
incur the Indebtedness to be incurred by it under the Loan Documents.
3.15 Subsidiaries. As of the date hereof, the Borrower has no
Subsidiaries except those Subsidiaries identified on Schedule 2 to this
Agreement.
3.16 Environmental Matters. (a) The facilities and properties
owned, leased or operated by the Borrower and/or any of its Subsidiaries (the
"Properties") do not contain, and have not previously contained, any Materials
of Environmental Concern in amounts or concentrations which (i) constitute or
constituted a violation of, or (ii) could reasonably be expected to give rise to
liability under, any Environmental Law except in either case insofar as such
violation or liability, or any aggregation thereof, is not reasonably likely to
result in the payment of a Material Environmental Amount.
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(b) The Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, in all material
respects with all applicable Environmental Laws, and there is no contamination
at, under or about the Properties or violation of any Environmental Law with
respect to the Properties or the business operated by the Borrower or any of its
Subsidiaries (the "Business") which could materially interfere with the
continued operation of the Properties or materially impair the aggregate fair
saleable value of the Properties.
(c) Neither the Borrower nor any of its Subsidiaries has
received any notice of violation, alleged violation, non-compliance, liability
or potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Business, nor
does the Borrower or any of its Subsidiaries have knowledge or reason to believe
that any such notice will be received or is being threatened except insofar as
such notice or threatened notice, or any aggregation thereof, does not involve a
matter or matters that is or are reasonably likely to result in the payment of a
Material Environmental Amount.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in a manner
or to a location which could reasonably be expected to give rise to liability
under, any Environmental Law, nor have any Materials of Environmental Concern
been generated, treated, stored or disposed of at, on or under any of the
Properties in violation of, or in a manner that could reasonably be expected to
give rise to liability on the part of the Borrower or any Subsidiary under, any
applicable Environmental Law except insofar as any such violation or liability
referred to in this paragraph, or any aggregation thereof, is not reasonably
likely to result in the payment of a Material Environmental Amount.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary is or will be named as
a party with respect to the Properties or the Business, nor are there any
consent decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business except insofar
as such proceeding, action, decree, order or other requirement, or any
aggregation thereof, is not reasonably likely to result in the payment of a
Material Environmental Amount.
(f) There has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or arising from or
related to the operations of the Borrower or any Subsidiary in connection with
the Properties or otherwise in connection with the Business, in violation of or
in amounts or in a manner that could reasonably give rise to liability under
Environmental Laws except insofar as any such violation or liability referred to
in this paragraph, or any aggregation thereof, is not reasonably likely to
result in the payment of a Material Environmental Amount.
3.17 Accuracy and Completeness of Information. All information
heretofore furnished by each Loan Party to the Lenders for purposes of or in
connection with this Agreement does not, and all such information hereafter
furnished by such Loan Party to any Lender for purposes of this Agreement will
not, contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements made or to be made, in the light
of the circumstances under which they were or will be made, not misleading.
Prior to the date hereof, the Borrower has disclosed to the Lenders in writing
any and all facts which materially and adversely affect (to the extent the
Borrower can as of the date hereof reasonably foresee), the business,
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operations or financial condition of the Borrower and its Subsidiaries, taken as
a whole, or the ability of any Loan Party to perform its obligations under the
Loan Documents. It is understood that no representation or warranty is made
concerning the forecasts, estimates, pro forma information, projections and
statements as to anticipated future performance or conditions, and the
assumptions on which they were based, contained in any such information,
reports, financial statements, exhibits or schedules, except that as of the date
such forecasts, estimates, pro forma information, projections and statements
were generated, (a) such forecasts, estimates, pro forma information,
projections and statements were based on the good faith assumptions of the
management of the Borrower and (b) such assumptions were believed by such
management to be reasonable. It is further understood that the foregoing
statements in this subsection 3.17, to the extent they refer to information in
respect of the Target, are made to the best of the Borrower's knowledge.
3.18 Other Unsecured Indebtedness. The obligations of each of
the Loan Parties under this Agreement and the Notes and the other Loan Documents
rank at least pari passu in right of payment with all other subordinated
Indebtedness of such Loan Parties.
3.19 Foreign Subsidiaries. Each Foreign Subsidiary will have
full right and authority to enter into the Loan Documents to which it is a party
and each Loan Document to which it is a party will constitute a valid and
legally binding obligation of such Foreign Subsidiary enforceable in accordance
with their respective terms except as such terms may be limited by the
application of bankruptcy, moratorium, insolvency and similar laws affecting the
rights of creditors generally and by general equitable principles affecting the
availability of specific performance and other remedies.
3.20 Solvency. Each Loan Party is, and after giving effect to
the Transactions and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.
3.21 Purpose of Loans. The proceeds of the Loans shall be used
to (i) finance a portion of the Acquisition and (ii) pay certain transactions
costs, fees and expenses related to the Acquisition and the financing thereof.
3.22 Delivery of the Transaction Documents. The Administrative
Agent has received for itself and for each Lender a complete photocopy of each
of the Transaction Documents (including all exhibits, schedules and disclosure
letters referred to therein or delivered pursuant thereto, if any) and all
amendments thereto, waivers relating thereto and other side letters or
agreements affecting the terms thereof in any material respect.
3.23 Representations and Warranties Contained in the
Transaction Documents. Each of the other Transaction Documents have been duly
executed and delivered by the Loan Parties party thereto and, to the best
knowledge of the Borrower have been duly executed and are in full effect. The
representations and warranties of the Borrower and to the best of knowledge of
Borrower, the representations and warranties with respect to the Target, are
accurate and correct with respect to each of the Transaction Documents.
SECTION 4. CONDITIONS PRECEDENT
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4.1 Conditions to Effective Date. This Agreement shall become
effective on the date of the satisfaction of the conditions precedent set forth
in this subsection 4.1 (the date on which such conditions are satisfied, the
"Effective Date"):
(a) Credit Agreement. The Administrative Agent shall have
received this Agreement, executed and delivered by a duly authorized
officer (or a duly authorized representative) of the Borrower, with a
counterpart or copy for each Lender.
(b) Corporate Proceedings. The Administrative Agent shall have
received, with a counterpart or copy for each Lender, a copy of the
resolutions, in form and substance satisfactory to the Administrative
Agent, of the Board of Directors of the Borrower and each other Loan
Party, authorizing (i) the execution, delivery and performance by it of
this Agreement and the Loan Documents to which it is a party and (ii)
the borrowings by it contemplated hereunder, certified by the Secretary
or an Assistant Secretary of the Loan Party or such other Loan Party,
as the case may be, as of the Effective Date, which certificate shall
be in form and substance satisfactory to the Administrative Agent and
shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded.
(c) Incumbency Certificate. The Administrative Agent shall
have received, with a counterpart or copy for each Lender, a
certificate of the Borrower, dated the Effective Date, as to the
incumbency and signature of the officers or representatives of each
Loan Party executing any Loan Document on the Effective Date,
satisfactory in form and substance to the Administrative Agent,
executed by any of the Chief Executive Officer, the President, the
Chief Financial Officer, the Treasurer or the Controller of the
Borrower and the Secretary or any Assistant Secretary (or a duly
authorized representative, if such representative is also a duly
authorized officer of the Borrower or otherwise authorized by the
Borrower) of the Borrower.
(d) Corporate Documents. The Administrative Agent shall have
received, with a counterpart or copy for each Lender, true and complete
copies of the certificate of incorporation and by-laws of the Borrower
and each other Loan Party that is a party hereto on the Effective Date,
certified as of the Effective Date as complete and correct copies
thereof by the Secretary or an Assistant Secretary or a duly authorized
representative of the Borrower or such other Loan Party, as the case
may be.
(e) Approvals. All governmental and third party approvals
necessary in connection with the transactions contemplated hereby shall
have been obtained and be in full force and effect (other than (i) any
such approvals which will be set forth in the Offer Documents as
conditions to the Tender Offer and (ii) other approvals the failure to
obtain which could not reasonably be expected to have a Material
Adverse Effect). The Administrative Agent shall have received a
certificate of a Responsible Officer of the Borrower to the foregoing
effect, to which shall be attached copies of any such approvals
theretofore obtained.
(f) Fees. The Administrative Agent shall have received all
fees to be received by the Administrative Agent or Chase on or prior to
the Effective Date in connection with this Agreement.
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(g) Legal Opinions. The Administrative Agent shall have
received the executed legal opinion of (i) Diane L. Kaye, Esq., General
Counsel of the Borrower and (ii) Cleary Gottlieb Steen & Hamilton,
counsel to the Borrower, each given upon the express instructions of
the Borrower, substantially in the forms of Exhibits F-1 and F-2,
respectively.
After the document delivery conditions set forth above in this subsection have
been satisfied, the Administrative Agent will, at the request of the Borrower,
provide to the Borrower written confirmation that such conditions have been
satisfied.
4.2 Conditions to Closing Date. The obligation of each Lender
to make its Initial Loan is subject to the satisfaction of the following
conditions precedent on the date of such Initial Loans, which date shall in any
event be on or after the Effective Date and on or prior to the last day of the
Initial Loan Commitment Period (the date on which such conditions are satisfied,
the "Satisfaction Date"):
(a) Senior Credit Agreement. (i) the Borrower shall have
received net cash proceeds from the issuance of term loans under the
Senior Credit Facility and (ii) the Administrative Agent shall have
received, with a copy for each Lender, true and correct copies,
certified as to authenticity by the Borrower of the Senior Credit
Documents.
(b) Existing Credit Agreement. All loans, accrued interest,
fees and any other amounts owing to the respective lenders and agents
under the Existing Credit Agreement shall have been paid in full, and
the commitments to make loans thereunder shall have been cancelled.
(c) Note Guarantee. The Administrative Agent shall have
received each Note Guarantee executed and delivered by a duly
authorized officer of each Note Guarantor.
(d) Offer Documents; Terms of Tender Offer. The terms of the
Tender Offer as set forth in the Press Release shall have been approved
by the Administrative Agent prior to the public announcement thereof by
U.K. Acquisition II. The Administrative Agent shall have received
copies of the Offer Documents, and of all other documents and materials
filed or released publicly by the Borrower or U.K. Acquisition II in
connection with the Tender Offer, certified as true and correct copies
thereof as of the Closing Date by a Responsible Officer of the
Borrower, and the conditions set forth in such documents shall conform
to the conditions set forth in the Press Release as approved by the
Administrative Agent prior to the release thereof.
(e) The Tender Offer. The Tender Offer shall have been
declared fully unconditional on behalf of U.K. Acquisition II, without
any amendment, supplement, modification or waiver of the terms thereof
contained in the Press Release not consented to by the Required
Lenders, other than (i) any amendments, supplements, modifications or
waivers which in the aggregate are not material and (ii) any waiver of
the conditions contained in the Press Release, relating to matters
other than aggregate purchase price and minimum acceptance conditions,
that is required by the Panel.
(f) Illegality. (i) The borrowings hereunder and the use of
proceeds thereof shall not violate any Requirement of Law of the United
States or the United Kingdom applicable
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to the Borrower and (ii) the making of the Initial Loans shall not
violate any Requirement of Law of the United States or the United
Kingdom applicable to the Lenders.
(g) Representation and Warranties. The representations and
warranties contained in subsections 3.3, 3.4, 3.5, 3.12, and 3.14 shall
be true and correct in all material respects as if made on and as of
such date.
(h) No Injunction, etc. There shall not be in effect any
injunction or restraining order of any Governmental Authority having
jurisdiction to issue such injunction or restraining order prohibiting
the making of the Initial Loans made on such date, the use of the
proceeds thereof or the consummation of the Tender Offer or the
Acquisition.
(i) No Default. No Default or Event of Default shall have
occurred or be continuing under (i) paragraph (a) of Article XII of the
Senior Credit Agreement or (ii) paragraph (f) of Section 7 of this
Agreement (only to the extent such paragraph (f) relates to the
Borrower or U.K. Acquisition II).
(j) Certificate. The Administrative Agent shall have received
a certificate of a Responsible Officer to the effect set forth in
paragraphs (f)(i), (g), (h) and (i) above substantially in the form of
Exhibit D.
(k) Legal Opinions. The Administrative Agent shall have
received the executed legal opinion of (i) Diane L. Kaye, Esq., General
Counsel of the Borrower, substantially in the form of Exhibit F-3 and
(ii) Cleary Gottlieb Steen & Hamilton, counsel to the Borrower,
substantially in the form of Exhibit F-4.
(l) Related Agreements. The Administrative Agent shall have
received, with a copy for each Lender, true and correct copies,
certified as to authenticity by the Borrower of (i) a Loan Note
conforming to the requirements hereof and executed by a duly authorized
officer of the Borrower, pursuant to subsection 2.04(e) and (ii) each
Note Guarantee, if any, to be entered into on the Closing Date,
executed and delivered by a duly authorized officer of the relevant
Note Guarantor.
SECTION 5. AFFIRMATIVE COVENANTS
From and after the Closing Date, the Borrower hereby covenants
and agrees that so long as any of the Commitments remain in effect, any Loan or
Loan Note remains outstanding and unpaid or any other amount is owing to any
Lender or the Administrative Agent hereunder, the Borrower will comply with the
covenants set forth below in this Section 5:
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5.1 Financial Statements. The Borrower will furnish to each
Lender:
(a) as soon as available, but in any event within 120 days
after the end of each fiscal year of the Borrower, a copy of the consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such year
and the related consolidated statements of income and cash flows for such year,
setting forth in each case in comparative form the figures for the previous
year, certified without qualification or exception by independent public
accountants of nationally recognized standing selected by the Borrower, it being
understood and agreed that the delivery of the Borrower's Annual Report on Form
10-K for such fiscal year signed by a Responsible Officer will satisfy the
requirement set forth in this clause; and
(b) as soon as available, but in any event within 60 days
after the end of each of the first three quarterly periods of each fiscal year
of the Borrower, a copy of the unaudited consolidated condensed balance sheet of
the Borrower and its Subsidiaries as at the end of each such quarter and the
related unaudited consolidated condensed statements of income and cash flows of
the Borrower and its Subsidiaries for the portion of the fiscal year through
such date, setting forth in each case in comparative form such figures for the
previous year, certified by a Responsible Officer, it being understood and
agreed that the delivery of the Borrower's Quarterly Report on Form 10-Q for the
relevant fiscal quarter signed by a Responsible Officer will satisfy the
requirement set forth in this clause;
all such financial statements to be complete and correct in all material
respects and prepared in reasonable detail and in accordance with GAAP applied
consistently throughout the periods reflected therein (except for such changes
in accounting principles as may be approved by such Responsible Officer and
concurred in by the Borrower's independent public accountants and disclosed
therein).
5.2 Certificates; Other Information. The Borrower will
furnish to each Lender:
(a) concurrently with each delivery of the financial
statements referred to in subsections 5.1(a) and (b), a certificate of a
Responsible Officer in the form of Exhibit D (i) stating that such officer has
no knowledge of any Default or Event of Default except as specified in such
certificate and (ii) showing in reasonable detail the calculations supporting
such statement in respect of subsections 6.1 and 6.2;
(b) on or prior to February 28 of each year, a copy of the
projections by the Borrower of the operating budget and cash flow budget of the
Borrower and its Subsidiaries for the succeeding fiscal year, such projections
to be accompanied by a certificate of a Responsible Officer to the effect that
such projections have been prepared on a reasonable basis and in good faith, it
being understood that no representation or warranty shall be deemed to be made
concerning the projections and budgets and the assumptions on which they were
based, except that as of the date on which such projections and budgets were
generated, (a) they were based on the good faith assumptions of the management
of the Borrower and (b) such assumptions were believed by such management to be
reasonable;
(c) promptly after the same are sent, copies of all financial
statements and reports which the Borrower sends to its common or preferred
stockholders as a class, and promptly after the same are filed, copies of all
regular, periodic and special reports which the Borrower may file
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with the Securities and Exchange Commission or any successor or analogous
Governmental Authority;
(d) if requested by the Administrative Agent or by any Lender
through the Administrative Agent, promptly after the same is furnished to PBGC,
copies of all information furnished by the Borrower, any Subsidiary or any
Commonly Controlled Entity to PBGC, except, in each case, information furnished
as to ordinary operational aspects of the business of the Borrower or any
Subsidiary and not relating to any deviation by the Borrower or any Subsidiary
from rules and regulations of PBGC; and
(e) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
5.3 Accrual of Liabilities; Payment of Obligations. The
Borrower will maintain, and cause each of its Subsidiaries to maintain, in
accordance with GAAP, appropriate reserves for the accrual of taxes and all
other obligations, liabilities and claims and pay, discharge or otherwise
satisfy, and cause each of its Subsidiaries to pay, discharge or otherwise
satisfy, at or before their maturity or before they become delinquent, as the
case may be, all obligations except (a) where the same are being contested in
good faith by appropriate proceedings diligently pursued or (b) where the
failure so to pay, discharge or otherwise satisfy obligations would not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
5.4 Maintenance of Corporate Existence; Maintenance of
Properties. The Borrower will (a) maintain its corporate existence, rights and
franchises necessary to continue its business and the corporate existence,
rights and franchises necessary to continue the business of each of its
Subsidiaries, provided that the foregoing shall not be a limitation (i) on the
right of the Borrower to discontinue any operations if in the opinion of the
Borrower such discontinuance is in the best interest of the Borrower and would
not materially affect the ability of the Borrower to pay its debts as they
become due, (ii) on asset sales permitted under subsection 6.4 and (iii) on the
right of any Subsidiary of the Borrower to merge with or be liquidated into the
Borrower or another Subsidiary of the Borrower if a Default does not then exist
and would not result therefrom; and (b) maintain, and cause each Subsidiary to
maintain, the properties which are used or useful in its respective operations
in good working order and condition.
5.5 Insurance. The Borrower will maintain, and cause each of
its Subsidiaries to maintain, insurance with financially sound and reputable
companies in such form and upon such terms and in such amounts and against such
risks (including liability for bodily injury and property damage) and subject to
such deductibles or retentions as in the reasonable opinion of the Borrower is
available on commercially reasonable terms and will provide sound and reasonable
protection for the Borrower's or such Subsidiary's assets and operations. At the
Administrative Agent's request, the Borrower will furnish to the Administrative
Agent (with copies for each Lender) certificates of insurance or other evidence
that such insurance is being maintained.
5.6 Notices. The Borrower will (a) promptly give notice in
writing to the Administrative Agent (which shall promptly notify each Lender) of
the occurrence of any Default or Event of Default under this Agreement, or of
the commencement of (i) any material litigation or proceedings affecting the
Borrower or any Subsidiary or (ii) any dispute between the Borrower or any
Subsidiary and any Governmental Authority or any other party if such litigation,
proceedings or dispute could reasonably be expected to result in a Material
Adverse Effect; and (b) as soon as
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possible and in any event within 45 days after the Borrower knows or has reason
to know that any Reportable Event (other than a Reportable Event not subject to
the provision for 30-day notice to PBGC pursuant to the regulations issued under
ERISA) has occurred with respect to any Single Employer Plan or that PBGC or any
Loan Party or any Commonly Controlled Entity has instituted or will institute
proceedings under Title IV of ERISA to terminate any Single Employer Plan,
deliver to the Administrative Agent (which shall promptly notify each Lender) a
certificate of a Responsible Officer of the Borrower setting forth details as to
such Reportable Event and the action that the Borrower proposes to take with
respect thereto, together with a copy of any notice of such Reportable Event
that may be required to be filed with PBGC, or any notice delivered by PBGC
evidencing its intent to institute such proceedings or any notice to PBGC that
such Plan is to be terminated, as the case may be. For all purposes of clause
(b) of this subsection 5.6, the Borrower shall be deemed to have all knowledge
or knowledge of all facts attributable to the administrator of a Single Employer
Plan.
5.7 Compliance with Contractual Obligations and Laws. The
Borrower will, and will cause each of its Subsidiaries to, comply with all
provisions of any Contractual Obligation, applicable law, rule, regulation,
order, writ, judgment, injunction, decree, award or ordinance to which it is
subject, except to the extent that the failure to comply therewith could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect.
5.8 Access to Books and Inspection. The Borrower shall keep
proper books of record and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and give the
Administrative Agent and any reasonable number of representatives of the Lenders
access, at the Borrower's principal office, upon reasonable notice during normal
business hours to, and permit any such representatives to examine, copy or make
excerpts from, any and all books, records and documents in the possession of the
Borrower relating to its affairs and the affairs of the Subsidiaries, and to
inspect any of the properties of the Borrower or the Subsidiaries.
Notwithstanding any provision in this subsection, the Borrower (i) shall be
given a reasonable opportunity upon reasonable notice to have an officer or
officers of the Borrower accompany any such representative during any such
visit, and (ii) shall not be responsible for any expenses incurred by any such
representative.
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5.9 Environmental Laws. The Borrower will, and will cause each
Subsidiary to, (a) comply with, and ensure compliance by all tenants and
subtenants, if any, with, all applicable Environmental Laws and obtain and
comply in all material respects with and maintain, and ensure that all tenants
and subtenants obtain and comply in all material respects with and maintain, any
and all licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws except to the extent that the failure to do so, or
any aggregation thereof, is not reasonably likely to result in the payment of a
Material Environmental Amount, (b) conduct and complete all investigations,
studies, sampling and testing, and all remedial, removal and other actions
required under Environmental Laws and promptly comply in all material respects
with all lawful orders and directives of all Governmental Authorities regarding
Environmental Laws except to the extent that the same are being contested in
good faith by appropriate proceedings and the pendency of such proceedings is
not reasonably likely to result in the payment of a Material Environmental
Amount and (c) defend, indemnify and hold harmless the Administrative Agent and
the Lenders, and their respective employees, agents, officers and directors,
from and against any and all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way relating to the
violation of, noncompliance with or liability under, any Environmental Law
applicable to the operations of the Borrower, any of its Subsidiaries or the
Properties, or any orders, requirements or demands of Governmental Authorities
related thereto, including, without limitation, investigation and laboratory
fees, response costs, court costs, litigation expenses and reasonable attorneys'
and consultants' fees, except to the extent that any of the foregoing arise out
of the gross negligence or willful misconduct of the party seeking
indemnification therefor. The agreements in clause (c) of this subsection shall
survive repayment of the Loans and Loan Notes and all other amounts payable
hereunder.
5.10 Additional Guarantees. With respect to any new Subsidiary
(other than an Excluded Foreign Subsidiary) created or acquired after the
Closing Date by the Borrower or any Domestic Subsidiary (which new Subsidiary,
for purposes of this Section 5.10, shall include any existing Subsidiary that
ceases to be an Excluded Foreign Subsidiary and, at the request of the
Administrative Agent, shall also include any Foreign Subsidiary (other than any
Excluded Foreign Subsidiary) of the Borrower or any Domestic Subsidiary which is
in existence on the Closing Date but does not execute a Note Guarantee on the
Closing Date), the Borrower or its Subsidiaries, as applicable, shall promptly
cause such new Subsidiary to become a party to the relevant Note Guarantee, and
if reasonably requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
5.11 Interest Rate Protection. The Borrower shall, within six
months after the Closing Date, obtain interest rate protection in respect of the
amount, if any, of the floating rate indebtedness of the Borrower and it
Subsidiaries in excess of $1,000,000,000, for periods and pursuant to terms and
conditions reasonably acceptable to the Administrative Agent.
5.12 Consummation of Compulsory Acquisition. As promptly as
reasonably practicable after the Closing Date, the Borrower shall cause U.K.
Acquisition II to consummate the Compulsory Acquisition in respect of the Target
Shares, and related Options, not already owned by U.K. Acquisition II.
5.13 Take-Out Financing. (a) Use its best efforts to cause to
be declared effective a registration statement with respect to the Take-Out
Financing or to effect a private placement
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thereof pursuant to Rule 144A of the Securities Act as soon as reasonably
practicable after the Closing Date. The Borrower will give the Administrative
Agent prior notice of its intention to file the registration statement or to
effect a private placement of the Take-Out Financing. The Borrower will notify
the Administrative Agent promptly upon the receipt of any comments from the SEC
in connection with the registration statement, will furnish the Administrative
Agent with a copy of any written comments from the SEC, will respond in a
reasonably prompt manner and appropriately to any such comments and will furnish
a copy to the Administrative Agent of any such response to the SEC.
(b) In connection with the Borrower's covenants with respect
to this Section 5.13 the Borrower shall deliver to the Administrative Agent, by
the date that is 90 days after the acquisition of 90% of the ordinary shares of
the Target, a substantially complete initial draft of a Registration Statement
or a Rule 144A Offering Memorandum relating to the Take-Out Financing (including
audited financial statements or draft audited financial statements for the three
preceding years, pro forma financial information and such other financial
information as may be required by applicable law).
5.14 Exchange Notes. (a) The Borrower shall, as promptly as
practicable after being requested to do so by the Administrative Agent at any
time after the nine month anniversary of the Closing Date and in any event prior
to the Initial Maturity Date, select a trustee meeting the requirements of
Section 5.14(c) and enter into the Senior Subordinated Indenture. The Borrower
shall cause the Note Guarantors in respect of the Note Guarantees then in effect
to execute and deliver senior subordinated guarantees of the Exchange Notes on
terms similar to those contained in such Note Guarantees.
(b) On or prior to the Initial Maturity Date the Borrower
shall:
(i) execute and deliver, and cause a bank or trust company
acting as trustee thereunder to execute and deliver, the Senior
Subordinated Indenture if such Senior Subordinated Indenture has not
previously been executed and delivered; and
(ii) execute and deliver to each requesting Lender in
accordance with the Senior Subordinated Indenture an Exchange Note
bearing interest as set forth therein in exchange for the relevant
Initial Loan or Term Note dated the date of the issuance of such
Exchange Note, payable to the order of such holder or owner, as the
case may be, in the same principal amount as such Initial Loan or Term
Note (or portion thereof) being exchanged.
The exchange request ("Exchange Request") shall specify the
principal amount of the Term Notes to be exchanged pursuant to this Section
5.14, which shall be at least $1,000,000 and integral multiples of $100,000 in
excess thereof. Initial Loans and Term Notes delivered to Borrower under this
Section 5.14 in exchange for Exchange Notes shall be canceled by the Borrower
and the corresponding amount of the Initial Loan or Term Loan deemed repaid and
the Exchange Notes shall be governed by and construed in accordance with the
terms of the Senior Subordinated Indenture.
(c) The bank or trust company acting as trustee under the
Senior Subordinated Indenture shall at all times be a corporation organized and
doing business under the laws of the United States of America or any state
thereof, in good standing, which is authorized under such
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laws to exercise corporate trust powers and is subject to supervision or
examination by Federal or state authority and which has a combined capital and
surplus of not less than $500,000,000.
(d) If Exchange Notes are issued pursuant to the terms hereof,
then the holders of such Exchange Notes shall have the registration rights, as
set forth in an exhibit to the Senior Subordinated Indenture.
5.15 U.K. Acquisition I Corporate Documents. (a) As soon as
practicable after the Closing Date, the Borrower shall deliver to the
Administrative Agent, with a counterpart or copy for each Lender, the following
documents, certified as complete and correct copies thereof by the Secretary or
an Assistant Secretary or a duly authorized representative of U.K Acquisition I,
in each case in form and substance satisfactory to the Administrative Agent:
(i) the statutory declaration of each member of the
Board of Directors of U.K. Acquisition I;
(ii) the auditor's report in respect of U.K.
Acquisition I;
(iii) the resolutions of the Board of Directors of
U.K. Acquisition I authorizing the execution, delivery and
performance of the Loan Documents to which it is a party
(including a U.K. Acquisition I Guarantee in respect of all
obligations of the Borrower hereunder without limitation as to
amount), certified by the Secretary or an Assistant Secretary
of U.K. Acquisition I, which certificate shall state that the
resolutions thereby certified have not been amended, modified,
revoked or rescinded; and
(iv) such other documents as shall be required to
effect and evidence an exemption from the financial assistance
requirements of Section 151 of the Companies Act.
(b) Promptly upon the completion of steps set forth in
paragraph (a) above, the Borrower shall cause U.K. Acquisition I to (i) execute
and deliver to the Administrative Agent the U.K. Acquisition I Guarantee and
(ii) deliver to the Administrative Agent a legal opinion relating to the U.K.
Acquisition I Guarantee, which opinion shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.
5.16 Further Assurances. Upon reasonable request of the
Administrative Agent, execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Agreement.
SECTION 6. NEGATIVE COVENANTS
From and after the Closing Date, so long as any Loan or Loan
Note remains outstanding and unpaid, or any other amount is owing to any Lender
or the Administrative Agent hereunder or under any other Loan Document:
6.1 Limitation on Indebtedness. (a) The Borrower shall not,
and shall not permit any of its Restricted Subsidiaries to, Incur any
Indebtedness; provided, however, that on or after the
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Initial Maturity Date the Borrower may Incur Indebtedness if on the date of
Incurrence the Consolidated Coverage Ratio would be greater than 2.50 : 1.00, if
such Indebtedness is Incurred on or prior to the first anniversary of the
Initial Maturity Date, and 2.75 : 1.00, if such Indebtedness is Incurred
thereafter.
(b) Notwithstanding Section 6.1(a), the Borrower and its
Restricted Subsidiaries may Incur the following Indebtedness:
(i) Indebtedness Incurred pursuant to (A) the Senior
Credit Agreement (including, without limitation, any renewal,
extension, refunding, restructuring, replacement or
refinancing thereof) or (B) any other agreements or indentures
governing, guaranteeing or securing the Senior Credit
Facility; provided, however, that the aggregate principal
amount of the Indebtedness Incurred pursuant to this clause
(i) does not exceed $2,750,000,000 at any time outstanding,
less repayments of term loans and reductions in term loan
commitments to the extent made in accordance with the Senior
Credit Agreement (and to the extent, in the case of a
repayment of revolving credit Indebtedness, the commitment to
advance the loans repaid has been terminated);
(ii) Indebtedness represented by Capitalized Lease
Obligations, mortgage financings or purchase money
obligations, in each case Incurred for the purpose of
financing all or any part of the purchase price or cost of
construction or improvement of property used in a Related
Business, in each case Incurred no later than 365 days after
the date of such acquisition or the date of completion of such
construction or improvement and Refinancing Indebtedness in
respect of such Capitalized Lease Obligations, mortgage
financings or purchase money obligations; provided, however,
that the principal amount of any Indebtedness Incurred
pursuant to this Section 6.1(b)(ii) shall not exceed
$50,000,000 at any time outstanding;
(iii) Permitted Indebtedness;
(iv) Indebtedness (other than Indebtedness described
in clauses (i)-(iii)) in a principal amount which, when taken
together with the principal amount of all other Indebtedness
Incurred pursuant to this Section 6.1(b)(iv) and then
outstanding, will not exceed $150,000,000; and
(v) Indebtedness in respect of Guarantees by any
Subsidiary which is a party to a Note Guarantee, in respect of
the obligations of the Borrower under the ESOP Guaranty or the
obligations of Federal-Mogul Corporation Salaried Employees'
Ownership Trust under the ESOP Loan Agreement, provided that
each such Guaranty shall provide that when any Note Guarantor
party to such Guaranty is released from its obligations under
the Note Guaranty to which it is a party, such Note Guarantor
shall be released from its obligations under such Guaranty.
(c) Notwithstanding the foregoing, the Borrower shall not
Incur any Indebtedness under Section 6.1(b) if the proceeds thereof are used,
directly or indirectly, to refinance any Subordinated Obligations of the
Borrower unless such Indebtedness shall be subordinated to the Notes to at least
the same extent as such Subordinated Obligations. Restricted Subsidiaries of the
Borrower shall not incur any Indebtedness, the proceeds of which are used,
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directly or indirectly, to refinance Indebtedness of the Borrower. No Note
Guarantor shall Incur any Indebtedness under Section 6.1(b) if the proceeds
thereof are used, directly or indirectly, to refinance any Guarantor
Subordinated Obligation of such Note Guarantor unless such Indebtedness shall be
subordinated to the obligations of such Guarantor under the Note Guarantee to at
least the same extent as such Guarantor Subordinated Obligation.
(d) In addition, the Borrower shall not Incur any Secured
Indebtedness which is not Senior Indebtedness unless contemporaneously therewith
effective provision is made to secure the Notes equally and ratably with such
Secured Indebtedness for so long as such Secured Indebtedness is secured by a
Lien. No Note Guarantor shall Incur any Secured Indebtedness which is not Senior
Indebtedness unless contemporaneously therewith effective provision is made to
secure such Note Guarantor's obligations under the Note Guarantee equally and
ratably with such Secured Indebtedness for so long as such Secured Indebtedness
is secured by a Lien.
(e) The Borrower will not permit any Unrestricted Subsidiary
to incur any Indebtedness other than Non-Recourse Debt; provided, however, if
any such Indebtedness ceases to be Non-Recourse Debt, such event shall be deemed
to constitute an incurrence of Indebtedness by the Borrower or a Restricted
Subsidiary.
(f) The Borrower shall not Incur any Indebtedness if such
Indebtedness is subordinate or junior in ranking in any respect to any Senior
Indebtedness unless such Indebtedness is Senior Subordinated Indebtedness or is
contractually subordinated in right of payment to Senior Subordinated
Indebtedness. No Note Guarantor shall Incur any Indebtedness if such
Indebtedness is contractually subordinate or junior in ranking in any respect to
any Senior Indebtedness of such Note Guarantor unless such Indebtedness is
Senior Subordinated Indebtedness of such Note Guarantor or is contractually
subordinated in right of payment to Senior Subordinated Indebtedness of such
Note Guarantor.
(g) Notwithstanding the foregoing, no Restricted Subsidiary of
the Borrower shall issue any Preferred Stock to any Person other than the
Borrower or a Restricted Subsidiary.
6.2 Limitation on Restricted Payments. (a) On or prior to the
Initial Maturity Date, the Borrower shall not, and shall not permit any
Restricted Subsidiary, directly or indirectly, to (i) declare or pay any
dividend or make any distribution on or in respect of its Capital Stock
(including any payment in connection with any merger or consolidation involving
the Borrower) except dividends or distributions payable solely in its Capital
Stock (other than Disqualified Stock) or in options, warrants or rights to
purchase such Capital Stock and except dividends or distributions payable to the
Borrower or any Restricted Subsidiary (and if such Restricted Subsidiary is not
a Wholly-Owned Subsidiary, its other holders of Capital Stock on a pro rata
basis), (ii) purchase, redeem, retire or otherwise acquire for value any Capital
Stock of the Borrower or any Restricted Subsidiary held by Persons other than
the Borrower or another Subsidiary, in any case other than in exchange for its
Capital Stock (other than Disqualified Stock) or to the extent that after giving
effect to such purchase, redemption, retirement or other acquisition, such
Restricted Subsidiary would become a Wholly-Owned Subsidiary, (iii) purchase,
repurchase, redeem, prepay interest, defease or otherwise acquire or retire for
value, prior to scheduled maturity, scheduled repayment or scheduled sinking
fund payment any Subordinated Obligation (other than the purchase, repurchase or
other acquisition of Subordinated Obligation purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity,
in each case due within one year of the date of acquisition) or (iv) make any
Investment (other than a
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Permitted Investment) in any Person (any such dividend, distribution, purchase,
redemption, repurchase, defeasance, other acquisition, retirement or Investment
being herein referred to as a "Restricted Payment"); provided, however, that the
Borrower or any Restricted Subsidiary may make Restricted Payments so long as no
Default or Event of Default has occurred and is continuing or would be
continuing after giving effect to such Restricted Payment in respect of (A) the
repurchase of Capital Stock of the Borrower or any Subsidiary from an employee
of the Borrower or any Subsidiary or their assigns, estates or heirs upon the
death, retirement or termination of such employee, (B) payments to permit the
Borrower to purchase its Capital Stock in order to fulfill the Borrower's and/or
its Restricted Subsidiaries' obligations under any employee stock purchase plan,
(C) loans or advances to employees of the Borrower or any Subsidiary made in the
ordinary course of business and (D) dividends in respect of (1) the Borrower's
preferred stock at the stated rate, (2) the Borrower's common stock at a rate
not exceeding $.48 per share per year, as adjusted for stock splits and similar
events and (3) Take-Out Financing to the extent the proceeds thereof are
actually applied to the prepayment of Senior Credit Facility Loans or Loans
under this Agreement and the related commitments are terminated;
provided, further, that (i) the aggregate amount of Restricted Payments
permitted in clauses (A), (B) and (C) above (such Restricted Payments,
"Permitted Employee Payments"), shall not exceed $15,000,000 in the aggregate at
any time (giving effect to any repayments); provided, however, that Permitted
Employee Payments shall be included in the calculation of the amount of
Restricted Payments made pursuant to Section 6.2(b) and (ii) the Restricted
Payments permitted by clause (D) shall be included in the calculation of the
amount of Restricted Payments made pursuant to clause 6.2(b).
(b) After the Initial Maturity Date, the Borrower shall not,
and shall not permit any of its Restricted Subsidiaries, directly or indirectly,
to make any Restricted Payment if at the time the Borrower or such Restricted
Subsidiary makes such Restricted Payment: (1) a Default shall have occurred and
be continuing (or would result therefrom); or (2) the Borrower is not able to
incur an additional $1.00 of Indebtedness pursuant to Section 6.1(a); or (3) the
aggregate amount of such Restricted Payment and all other Restricted Payments
declared or made on or after the Initial Maturity Date would exceed 25% of the
Consolidated Net Income accrued during the period (treated as one accounting
period) from the Initial Maturity Date to the end of the most recent fiscal
quarter ending prior to the date of such Restricted Payment as to which
financial results are available (but in no event ending more than 135 days prior
to the date of such Restricted Payment) (or, in case such Consolidated Net
Income shall be a deficit, minus 100% of such deficit);
(c) The provisions of Section 6.2(b) shall not prohibit:
(i) any purchase or redemption of Capital Stock or
Subordinated Obligations of the Borrower made by exchange for, or out
of the proceeds of the substantially concurrent sale of, Capital Stock
of the Borrower (other than Disqualified Stock and other than Capital
Stock issued or sold to a Subsidiary or an employee stock ownership
plan or similar trust); provided, however, that such purchase or
redemption shall be excluded in the calculation of the amount of
Restricted Payments;
(ii) any purchase or redemption of Subordinated
Obligations of the Borrower made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Subordinated
Obligations of the Borrower; provided, however, that such purchase or
redemption shall be excluded in the calculation of the amount of
Restricted Payments;
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(iii) any purchase or redemption of Subordinated
Obligations from Net Available Cash to the extent permitted under
Section 6.4; provided, however, that such purchase or redemption shall
be excluded in the calculation of the amount of Restricted Payments;
(iv) dividends paid within sixty (60) days after the
date of declaration if at such date of declaration such dividend would
have complied with this provision; provided, however, that such
dividend shall be included in the calculation of the amount of
Restricted Payments;
(v) payments to enable the Borrower to make cash
payments to holders of its Capital Stock in lieu of the issuance of
fractional shares of its Capital Stock; provided, however, that such
amount shall be included in the calculation of the amount of Restricted
Payments;
(vi) Restricted Payments of the type permitted by
Section 6.2(a); and
(vii) Restricted Payments to permit the Borrower to
purchase its Capital Stock in order to fulfill the Borrower's and/or
its Subsidiaries' obligations under any employee stock purchase plan in
an aggregate net amount not to exceed $15,000,000; provided, however,
that such amount shall be included in the calculation of the amount of
Restricted Payments.
6.3 Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Borrower shall not, and shall not permit any of its
Restricted Subsidiaries to, create or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any such Restricted
Subsidiary to (i) pay dividends or make any other distributions on its Capital
Stock or pay any Indebtedness or other obligation owed to the Borrower, (ii)
make any loans or advances to the Borrower or (iii) transfer any of its property
or assets to the Borrower; except:
(a) any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the Closing Date, including the Senior
Credit Documents;
(b) any encumbrance or restriction with respect to such a
Restricted Subsidiary pursuant to an agreement relating to any
Indebtedness issued by such Restricted Subsidiary on or prior to the
date on which such Restricted Subsidiary was acquired by the Borrower
and outstanding on such date (other than Indebtedness issued as
consideration in, or to provide all or any portion of the funds or
credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary of the Borrower or was acquired by the
Borrower);
(c) any encumbrance or restriction with respect to such a
Restricted Subsidiary pursuant to an agreement effecting a refinancing
of Indebtedness issued pursuant to an agreement referred to in clauses
(a) or (b) or this clause (c) or contained in any amendment to an
agreement referred to in clauses (a) or (b) or this clause (c);
provided, however, that the encumbrances and restrictions with respect
to such Restricted Subsidiary contained in any such refinancing
agreement or amendment, taken as a whole, are no less favorable to the
Lenders in any material respect, as determined in good faith by the
senior management
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of the Borrower or Board of Directors of the Borrower, than
encumbrances and restrictions with respect to such Restricted
Subsidiary contained in agreements in effect at, or entered into on,
the Closing Date;
(d) in the case of clause (iii) of this Section 6.3, any
encumbrance or restriction (A) that restricts in a customary manner the
subletting, assignment or transfer of any property or asset that is a
lease, license, conveyance or contract or similar property or asset,
(B) by virtue of any transfer of, agreement to transfer, option or
right with respect to, or Lien on, any property or assets of the
Borrower or any Restricted Subsidiary not otherwise prohibited by this
Agreement, (C) that is included in a licensing agreement to the extent
such restrictions limit the transfer of the property subject to such
licensing agreement or (D) arising or agreed to in the ordinary course
of business and that does not, individually or in the aggregate,
detract from the value of property or assets of the Borrower or any of
its Subsidiaries in any manner material to the Borrower or any such
Restricted Subsidiary;
(e) in the case of clause (iii) of this Section 6.3,
restrictions contained in security agreements, mortgages or similar
documents securing Indebtedness of a Restricted Subsidiary to the
extent such restrictions restrict the transfer of the property subject
to such security agreements;
(f) any restriction with respect to such a Restricted
Subsidiary imposed pursuant to an agreement entered into for the sale
or disposition of all or substantially all the Capital Stock or assets
of such Restricted Subsidiary pending the closing of such sale or
disposition; and
(g) encumbrances or restrictions arising or existing by reason
of applicable law.
6.4 Limitation on Sales of Assets and Subsidiary Stock. (a)
The Borrower shall not, and shall not permit any of its Restricted Subsidiaries
to, make any Asset Disposition unless:
(i) the Borrower or such Restricted Subsidiary
receives consideration at the time of such Asset Disposition
at least equal to the fair market value, as determined in good
faith by the Borrower's senior management or the Board of
Directors (including as to the value of all non-cash
consideration), of the shares and assets subject to such Asset
Disposition;
(ii) at least (A) prior to the Initial Maturity Date,
90% and (B) on or after the Initial Maturity Date, 80% of the
consideration thereof received by the Borrower or such
Restricted Subsidiary is in the form of cash or cash
equivalents; and
(iii) an amount equal to 100% of the Net Available
Cash from such Asset Disposition is applied by the Borrower
(or such Restricted Subsidiary, as the case may be):
(A) first, to the extent the Borrower or any
Restricted Subsidiary elects (or is required by the
terms of any Senior Indebtedness), to prepay, repay
or purchase (x) Senior Indebtedness or (y)
Indebtedness (other than Preferred Stock) of a
Wholly-Owned Subsidiary (in each case other than
Indebtedness owed to the Borrower) within (I) sixty
(60) days for the period
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prior to the Initial Maturity Date and (II) 365 days,
for Asset Dispositions occurring on or after the
Initial Maturity Date, from the later of the date of
such Asset Disposition or the receipt of such Net
Available Cash;
(B) second, for any Asset Disposition which
occurs on or after the Initial Maturity Date, within
365 days from the receipt of such Net Available Cash,
to the extent of the balance of such Net Available
Cash after application in accordance with clause (A),
at the Borrower's election either (x) to the
investment in or acquisition of Additional Assets or
(y) to prepay, repay or purchase (1) Senior
Indebtedness or (2) Indebtedness (other than
Preferred Stock) of a Wholly-Owned Subsidiary (in
each case other than Indebtedness owed to the
Borrower);
(C) third, (I) for any Asset Disposition
which occurs prior to the Initial Maturity Date,
within sixty (60) days after the application of Net
Available Cash in accordance with clause (A) or (II)
for any Asset Disposition which occurs on or after
the Initial Maturity Date, after the later of the
application of Net Available Cash in accordance with
clauses (A) and (B) and the date that is 365 days
from the receipt of such Net Available Cash, to the
extent of the balance of such Net Available Cash
after application in accordance with clauses (A) and
(B), to redeem the Loans and Exchange Notes at par
plus accrued and unpaid interest, if any, thereon in
accordance with Section 2.5(d); and
(D) fourth, for any Asset Disposition which
occurs on or after the Initial Maturity Date, to the
extent of the balance of such Net Available Cash
after application in accordance with clauses (A), (B)
and (C), to (w) the investment in or acquisition of
Additional Assets, (x) the making of Temporary Cash
Investments, (y) the prepayment, repayment or
purchase of Indebtedness of the Borrower or
Indebtedness of any Restricted Subsidiary (other than
Indebtedness owed to the Borrower) or (z) any other
purpose otherwise permitted under this Agreement.
provided, however, that, in connection with any prepayment, repayment or
purchase of Indebtedness pursuant to clause (A), (B), (C) or (D), the Borrower
or such Restricted Subsidiary shall retire such Indebtedness and shall cause the
related loan commitment (if any) to be permanently reduced in an amount equal to
the principal amount so prepaid, repaid or purchased.
Notwithstanding the foregoing provisions, the Borrower and its
Restricted Subsidiaries shall not be required to apply any Net Available Cash in
accordance herewith except to the extent that the aggregate Net Available Cash
from all Asset Dispositions which are not applied in accordance with this
covenant exceeds (1) $2,500,000 prior to the Initial Maturity Date and (2)
$5,000,000 thereafter.
For the purposes of this covenant, the following will be
deemed to be cash: (x) the assumption by the transferee of Senior Indebtedness
of the Borrower or Indebtedness of any Restricted Subsidiary of the Borrower and
the release of the Borrower or such Restricted Subsidiary from all liability on
such Senior Indebtedness or Indebtedness in connection with such Asset
Disposition (in which case the Borrower shall, without further action, be deemed
to have applied
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such assumed Indebtedness in accordance with clause (A) of the preceding
paragraph) and (y) securities received by the Borrower or any Restricted
Subsidiary of the Borrower from the transferee that are promptly converted by
the Borrower or such Restricted Subsidiary into cash.
6.5 Limitation on Affiliate Transactions. (a) The Borrower
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, enter into or conduct any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
Affiliate of the Borrower other than a Wholly-Owned Subsidiary (an "Affiliate
Transaction") unless: (i) the terms of such Affiliate Transaction are no less
favorable to the Borrower or such Subsidiary, as the case may be, than those
that could be obtained at the time of such transaction in arm's-length dealings
with a Person who is not such an Affiliate; and (ii) in the event such Affiliate
Transaction involves an aggregate amount in excess of $2,500,000, the terms of
such transaction have been approved by a majority of the members of the Board of
Directors of the Borrower and by a majority of the disinterested members of such
Board, if any (and such majority or majorities, as the case may be, determines
that such Affiliate Transaction satisfies the criteria in (i) above).
(b) The foregoing provisions of Section 6.5(a) shall not apply
to (i) any Restricted Payment permitted to be made pursuant to Section 6.2, (ii)
any issuance of securities, or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment arrangements,
stock options and stock ownership plans approved by the Board of Directors of
the Borrower, (iii) loans or advances to employees in the ordinary course of
business of the Borrower or any of its Restricted Subsidiaries, (iv) any
transaction between Wholly-Owned Subsidiaries or between the Borrower and Wholly
Owned Subsidiaries, (v) indemnification agreements with, and the payment of fees
and indemnities to, directors, officers and employees of the Borrower and its
Restricted Subsidiaries, in each case in the ordinary course of business, (vi)
transactions pursuant to agreements as in existence on the Closing Date and
amendments to such agreements that would not materially increase the amount
payable under such agreements, (vii) any employment, non-competition or
confidentiality agreements entered into by the Borrower or any of its Restricted
Subsidiaries with its employees in the ordinary course of business, (viii)
payments made in connection with the Acquisition, (ix) the issuance of Capital
Stock of the Borrower (other than Disqualified Stock) and (x) any transactions
between (A) Borrower and any of its Restricted Subsidiaries or (B) between
Restricted Subsidiaries of Borrower, as otherwise permitted under this
Agreement.
6.6 Change of Control. (a) Upon a Change of Control on or
after the Initial Maturity Date, each Holder shall have the right to require
that the Borrower repurchase all or any part of such Holder's Loans at a
purchase price in cash equal to 100% of the principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase (subject to the
right of Holders of record on the relevant record date to receive interest on
the relevant interest payment date), such repurchase to be made in accordance
with Section 6.6(b).
(b) Within thirty (30) days following any Change of Control on
or after the Initial Maturity Date, unless the Borrower has mailed a redemption
notice with respect to all the outstanding Loans in connection with such Change
of Control, the Borrower shall mail a notice to each Holder with a copy to the
Trustee stating:
(i) that a Change of Control has occurred and that such Holder
has the right to require the Borrower to purchase such Holder's Loans
at a purchase price in cash equal to
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100% (or in the case of Exchange Notes at a fixed rate of interest,
101%) of the principal amount thereof plus accrued and unpaid interest,
if any, to the date of purchase (subject to the right of Holders of
record on a record date to receive interest on the relevant interest
payment date);
(ii) the repurchase date (which shall be no earlier than
thirty (30) days nor later than sixty (60) days from the date such
notice is mailed);
(iii) the procedures determined by the Borrower, consistent
with this Section, that a Holder must follow in order to have its Loans
purchased; and
(iv) the circumstances, facts and relevant financial
information related thereto.
(c) Holders electing to have a Loan or Loan Note purchased
will be required to surrender the Loan Note, with an appropriate form duly
completed, to the Borrower at the address specified in the notice at least three
(3) Business Days prior to the purchase date. Each Holder will be entitled to
withdraw its election if the Borrower receives, not later than the close of
business (5:00 p.m. New York City time) on one (1) Business Day prior to the
purchase date, a telegram, telex, facsimile transmission or letter from such
Holder setting forth the name of such Holder, the principal amount of the Loans
which were delivered for purchase by such Holder and a statement that such
Holder is withdrawing his election to have such Loans and Loan Notes purchased.
(d) On the purchase date, all Notes purchased by the Borrower
under this Section shall be delivered to the Trustee for cancellation, and the
Borrower shall pay the purchase price plus accrued and unpaid interest, if any,
to the Holders entitled thereto.
6.7 Limitation on Capital Stock of Subsidiaries. The Borrower
shall not permit any of its Restricted Subsidiaries to issue any Capital Stock
to any Person (other than to the Borrower or a Wholly-Owned Subsidiary of the
Borrower) or permit any Person (other than the Borrower or a Wholly-Owned
Subsidiary of the Borrower) to own any Capital Stock of a Restricted Subsidiary
of the Borrower, if in either case as a result thereof such Restricted
Subsidiary would no longer be a Restricted Subsidiary of the Borrower; provided,
however, that this Section 6.7 shall not prohibit (x) the Borrower or any of its
Restricted Subsidiaries from selling, leasing or otherwise disposing of all of
the Capital Stock of any Restricted Subsidiary or (y) the designation of a
Restricted Subsidiary as an Unrestricted Subsidiary in compliance with this
Agreement.
6.8 Merger, Consolidation, etc. The Borrower and Note
Guarantors shall not consolidate with or merge with or into, or convey, transfer
or lease all or substantially all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the
"Successor Company", or "Successor Guarantor", as the case may be)
shall be a corporation, partnership, trust, or limited liability
company organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia (except that a
Successor Guarantor may remain a Foreign Subsidiary in the event of a
consolidation, merger or conveyance, transfer or lease of all or
substantially all of the assets of a Foreign Subsidiary that is a Note
Guarantor) and the Successor Company (if not the Borrower) or Successor
Guarantor shall expressly assume, by an assumption agreement
supplemental hereto, executed by the Successor Company or Successor
Guarantor and delivered to the Administrative Agent, in
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form and substance satisfactory to the Administrative Agent, all the
obligations of the Borrower under the Notes, the Loans and this
Agreement or such Note Guarantor under the Loan Documents;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness which becomes an obligation of the Successor
Company, the Successor Guarantor or any Restricted Subsidiary as a
result of such transaction as having been Incurred by the Successor
Company, the Successor Guarantor or such Restricted Subsidiary at the
time of such transaction), no Default or Event of Default shall have
occurred and be continuing;
(iii) immediately after giving effect to such transaction, the
Successor Company would be able to incur an additional $1.00 of
Indebtedness pursuant to Section 6.1(a); and
(iv) the Borrower shall have delivered to the Administrative
Agent a certificate of a Responsible Officer and an opinion of counsel
to Borrower, each stating that such consolidation, merger, transfer or
lease and such assumption agreement (if any) comply with this
Agreement.
The Successor Company shall succeed to, and be substituted
for, and may exercise every right and power of, the Borrower under this
Agreement, but in the case of a lease of all or substantially all its assets,
the Borrower shall not be released from the obligation to pay the principal of
and interest on the Loans and the Notes.
Notwithstanding clauses (ii) and (iii) of the first sentence
of this Section 6.8: (1) any Restricted Subsidiary of the Borrower may
consolidate with, merge into or transfer all or part of its properties and
assets to the Borrower; (2) any Restricted Subsidiary of the Borrower may
consolidate with, merge into or transfer all or part of its properties and
assets (the "Merging Restricted Subsidiary") to another Restricted Subsidiary of
the Borrower (the "Resulting Restricted Subsidiary"); provided that the
Borrower's and/or its Wholly-Owned Subsidiaries' economic and voting ownership
interests in the Resulting Restricted Subsidiary is equal to or greater than the
economic and voting ownership interests of the Borrower and its Wholly-Owned
Subsidiaries' in the Merging Restricted Subsidiary; and (3) the Borrower may
merge with an Affiliate incorporated solely for the purpose of reincorporating
the Borrower in another jurisdiction to realize tax or other benefits.
6.9 Limitation on Lines of Business. Borrower shall not, and
shall not permit any Restricted Subsidiary to, engage in any business other than
a Related Business.
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SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan
when due in accordance with the terms thereof or hereof, or shall fail
to redeem or purchase Loans when required pursuant to this Agreement or
any Note, in each case whether or not such payment, redemption or
purchase shall be prohibited by Section 8; or the Borrower shall fail
to pay any interest on any Loan, or any other amount payable hereunder,
within ten (10) (or following the Initial Maturity Date, thirty (30))
Business Days after any such interest or other amount becomes due in
accordance with the terms thereof or hereof, in each case, whether or
not such payment shall be prohibited by Section 8; or
(b) Prior to the Initial Maturity Date, any representation or
warranty made or deemed made by the Borrower or any other Loan Party
herein or in any other Loan Document or which is contained in any
certificate, document, or financial or other statement furnished by it
at any time under or in connection with this Agreement or any such
other Loan Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(c) the Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in Section 5.13 or
5.14 or Section 6; or
(d) the Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in
paragraphs (a) through (c) of this Section 7), and such default shall
continue unremedied for a period of 30 days after receipt by the
Borrower of notice of such default from the Administrative Agent or any
Lender; or
(e) The Borrower or any of its Subsidiaries shall (i) default
in any payment or payments of principal or interest in an aggregate
amount for the Borrower and its Subsidiaries of more than $10,000,000
(or its equivalent in another currency) at any one time on any
Indebtedness (other than the Loans) or in the payment of more than
$10,000,000 in the aggregate under any Guarantees, beyond the period of
grace (not to exceed 30 days), if any, provided in the instrument or
agreement under which such Indebtedness or Guarantee was created; or
(ii) default in the observance or performance of any other agreement or
condition relating to any Indebtedness (other than the Loans) the
principal amount of which exceeds $10,000,000 in the aggregate for the
Borrower and its Subsidiaries or any Guarantee guaranteeing
Indebtedness the principal amount of which exceeds $10,000,000 in the
aggregate for the Borrower and its Subsidiaries or contained in any
instrument or agreement evidencing, securing or relating to any such
Indebtedness or Guarantee, beyond any applicable period of grace (not
to exceed 30 days), or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or
to permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Guarantee (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to become due prior
to its stated maturity or such Guarantee to become payable; or
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(f) (i) The Borrower or any of its Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for
it or for all or any substantial part of its assets, or the Borrower or
any of its Subsidiaries shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against the Borrower
or any of its Subsidiaries any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry
of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days;
or (iii) there shall be commenced against the Borrower or any of its
material Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results
in the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) the Borrower or any of its Subsidiaries
shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) the Borrower or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they become due; or
(g) Prior to the Initial Maturity Date (i) Any Person shall
engage in any Prohibited Transaction involving any Plan, (ii) any
Accumulated Funding Deficiency, whether or not waived, shall exist with
respect to any Plan or any Lien in favor of the PBGC or a Plan shall
arise on the assets of the Borrower or any Commonly Controlled Entity,
(iii) a Reportable Event shall occur with respect to, or proceedings
shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan,
which Reportable Event or commencement of proceedings or appointment of
a trustee is, in the reasonable opinion of the Required Lenders, likely
to result in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate for purposes of
Title IV of ERISA, (v) the Borrower or any Commonly Controlled Entity
shall, or in the reasonable opinion of the Required Lenders is likely
to, incur any liability in connection with a withdrawal from, or the
Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other
event or condition shall occur or exist with respect to a Plan; and in
each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could
reasonably be expected to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance as to which the
insurance carrier has admitted liability) of $30,000,000 or more, and
all such judgments or decrees shall not have been vacated, discharged,
stayed or bonded pending appeal within 30 days from the entry thereof;
or
(i) The validity or enforceability of this Agreement, any Loan
Document or any of the other documents required to be delivered in
connection herewith shall be challenged by
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the Borrower or any of its Subsidiaries or shall fail to remain in full
force and effect for any reason other than in accordance with its
express terms; or
(j) A Change of Control shall occur prior to the Initial
Maturity Date;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the Loan Notes shall immediately become due and payable, and (B)
if such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower declare the Commitments to
be terminated forthwith, whereupon the Commitments shall immediately terminate;
and (ii) with the consent of the Required Lenders, the Administrative Agent may,
or upon the request of the Required Lenders, the Administrative Agent shall, by
notice to the Borrower, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the Loan Notes to
be due and payable forthwith, whereupon the same shall immediately become due
and payable, provided, that, notwithstanding the foregoing, during the Initial
Loan Commitment Period (x) if the applicable conditions precedent to any Initial
Loan set forth in Section 4 are satisfied, no such declaration under clause
(B)(i) or (B)(ii) above shall relieve the Lenders of their obligations to make
such Initial Loan, (y) no acceleration of the Loans under clause (B)(i) or
(B)(ii) above shall apply to any outstanding Initial Loans until the end of the
Initial Loan Commitment Period and, in any event, no acceleration of the Loans
under clause (B)(i) or (B)(ii) above shall apply to any amount of outstanding
Loans (whether such Loans were made before or after such acceleration) to the
extent that the proceeds thereof have not been disbursed to pay Target
Shareholders or Optionholders for the purchase of Target Shares or Options
pursuant to the Tender Offer (such undisbursed proceeds, "Acquisition Funds")
and (z) neither the Administrative Agent nor any Lender will take any
enforcement action against any Acquisition Funds or otherwise seek to prevent
the disbursement of any Acquisition Funds to pay Target Shareholders or
Optionholders for the purchase of Target Shares or Options pursuant to the
Tender Offer.
Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
SECTION 8. SUBORDINATION
8.1 Agreement To Subordinate. The Borrower agrees, and each
Lender agrees, that the Loans and Indebtedness evidenced by the Notes is
subordinated in right of payment, to the extent and in the manner provided in
this Section 8, to the prior payment in full in cash or Cash Equivalents of all
Senior Indebtedness and that the subordination is for the benefit of and
enforceable by the holders of Senior Indebtedness. The Loans shall in all
respects rank pari passu with all other Senior Subordinated Indebtedness of the
Borrower and only indebtedness of the Borrower that is Senior Indebtedness shall
rank senior to the Loans in accordance with the provisions set forth herein.
8.2 Liquidation; Dissolution; Bankruptcy. Upon any payment or
distribution of the assets of the Borrower to creditors upon a total or partial
liquidation or a total or partial dissolution
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of the Borrower or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Borrower or its property:
(1) holders of Senior Indebtedness shall be entitled to
receive payment in full in cash or Cash Equivalents of the Senior
Indebtedness before Lenders shall be entitled to receive any payment of
principal of, or premium, if any, or interest on the Loans; and
(2) until the Senior Indebtedness is paid in full in cash or
Cash Equivalents, any payment or distribution to which Lenders would be
entitled but for this Section 8 shall be made to holders of Senior
Indebtedness as their interests may appear.
8.3 Default on Senior Indebtedness. The Borrower may not pay
the principal of, premium, if any, or interest on, the Loans or make any deposit
pursuant to any defeasance provision or otherwise purchase or retire any Loans
(collectively, "pay the Loans") if (i) any Senior Indebtedness is not paid when
due or (ii) any other default on Senior Indebtedness occurs and the maturity of
such Senior Indebtedness is accelerated in accordance with its terms unless, in
either case, (x) the default has been cured or waived in writing and any such
acceleration has been rescinded in writing or (y) such Senior Indebtedness has
been paid in full in cash or Cash Equivalents; provided, however, that the
Borrower may pay the Loans without regard to the foregoing if the Borrower and
the Administrative Agent receive written notice approving such payment from the
Representative of the Designated Senior Indebtedness with respect to which
either of the events set forth in (i) or (ii) above has occurred and is
continuing. During the continuance of any default (other than a default
described in clause (i) or (ii) of the preceding sentence) with respect to any
Designated Senior Indebtedness pursuant to which the maturity thereof may be
accelerated immediately without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, the Borrower may not pay the Loans for a period (a "Payment Blockage
Period") commencing upon the receipt by the Borrower and the Administrative
Agent of written notice (a "Blockage Notice") of such default from the
Representative of such Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period and ending 179 days thereafter (or earlier if
such Payment Blockage Period is terminated (i) by written notice to the
Administrative Agent and the Borrower from the Person or Persons who gave such
Blockage Notice, (ii) by repayment in full of such Designated Senior
Indebtedness or (iii) because the default giving rise to such Blockage Notice is
no longer continuing). Notwithstanding the provisions described in the
immediately preceding sentence (but subject to the provisions contained in the
first sentence of this Section), unless the holders of such Designated Senior
Indebtedness or the Representative of such holders shall have accelerated the
maturity of such Designated Senior Indebtedness, the Borrower may resume
payments on the Loans after such Payment Blockage Period. Not more than one
Blockage Notice may be given in any consecutive 360-day period, irrespective of
the number of defaults with respect to Designated Senior Indebtedness during
such period; provided, however, that if any Blockage Notice within such 360-day
period is given by or on behalf of any holders of Designated Senior Indebtedness
(other than the Bank Indebtedness), the Representative of the Bank Indebtedness
may give another Blockage Notice within such period; provided further, however,
that in no event may the total number of days during which any Payment Blockage
Period or Periods is in effect exceed 179 days in the aggregate during any 360
consecutive day period.
8.4 Acceleration of Payment of Loans. If payment of the Loans
is accelerated because of an Event of Default, the Borrower and the
Administrative Agent shall promptly notify the holders of the Designated Senior
Indebtedness of the acceleration. If any Designated Senior
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Indebtedness is outstanding, the Borrower may not pay the Loans until five (5)
Business Days after the Representative of the Designated Senior Indebtedness
receives notice of such acceleration and, thereafter, may pay the Loans only if
this Section 8 otherwise permits the payment at that time.
8.5 When Distribution Must Be Paid Over. If a distribution is
made to the Lenders that because of this Section 8 should not have been made to
them, the Lenders who receive the distribution shall hold it in trust for
holders of Senior Indebtedness and pay it over to them as their interests may
appear.
8.6 Subrogation. After all Senior Indebtedness is paid in full
and until the Loans are paid in full, the Lenders shall be subrogated to the
rights of holders of Senior Indebtedness to receive distributions applicable to
Senior Indebtedness. A distribution made under this Section 8 to holders of
Senior Indebtedness that otherwise would have been made to the Lenders is not,
as between the Borrower and the Lenders, a payment by the Borrower on Senior
Indebtedness.
8.7 Relative Rights. This Section 8 defines the relative
rights of the Lenders and holders of Senior Indebtedness. Nothing in this
Agreement shall:
(1) impair, as between the Borrower and the Lenders, the
obligation of the Borrower, which is absolute and unconditional, to pay
principal of, premium, if any, and interest on the Loans in accordance
with their terms; or
(2) prevent the Administrative Agent or any Lender from
exercising its available remedies upon a Default, subject to the rights
of holders of Senior Indebtedness to receive distributions otherwise
payable to Lenders.
8.8 Subordination May Not Be Impaired By the Borrower. No
right of any holder of Senior Indebtedness to enforce the subordination of the
Loans and the Indebtedness evidenced by the Notes shall be impaired by any act
or failure to act by the Borrower or by its failure to comply with this
Agreement.
8.9 Rights of Administrative Agent. Notwithstanding Section
8.3, the Administrative Agent may continue to make payments on the Loans and
shall not be charged with knowledge of the existence of facts that would
prohibit the making of any such payments unless, not less than two (2) Business
Days prior to the date of such payment, a Responsible Officer of the
Administrative Agent receives notice to it that payments may not be made under
this Section 8. The Borrower, a Representative or a holder of Senior
Indebtedness may give the notice; provided, however, that, if an issue of Senior
Indebtedness has a Representative, only the Representative may give the notice.
The Administrative Agent in its individual or any other
capacity may hold Senior Indebtedness with the same rights it would have if it
were not the Administrative Agent. The Administrative Agent shall be entitled to
all the rights set forth in this Section 8 with respect to any Senior
Indebtedness that may at any time be held by it, to the same extent as any other
holder of Senior Indebtedness; and nothing in Section 9 shall deprive the
Administrative Agent of any of its rights as such holder. Nothing in this
Section 8 shall apply to claims of, or payments to, the Administrative Agent
under or pursuant to Section 9.7.
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8.10 Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative (if
any).
8.11 Section 8 Not To Prevent Events of Default or Limit Right
To Accelerate. The failure to make a payment pursuant to the Loans by reason of
any provision in this Section 8 shall not be construed as preventing the
occurrence of a Default. Nothing in this Section 8 shall have any effect on the
right of the Lenders or the Administrative Agent to accelerate the maturity of
the Loans subject to Section 8.4.
8.12 Administrative Agent Entitled to Rely. Upon any payment
or distribution pursuant to this Section 8, the Administrative Agent and the
Lenders shall be entitled to rely (i) upon any order or decree of a court of
competent jurisdiction in which any proceedings of the nature referred to in
Section 8.2 are pending, (ii) upon a certificate of the liquidating trustee or
agent or other Person making such payment or distribution to the Administrative
Agent or to the Lenders or (iii) upon the Representatives for the holders of
Senior Indebtedness for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior
Indebtedness and other Indebtedness of the Borrower, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Section 8. In the event that the
Administrative Agent determines, in good faith, that evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Section 8, the
Administrative Agent may request such Person to furnish evidence to the
reasonable satisfaction of the Administrative Agent as to the amount of Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Section 8, and, if such evidence is not
furnished, the Administrative Agent may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.
The provisions of Section 9 shall be applicable to all actions or omissions of
actions by the Administrative Agent pursuant to this Section 8.
8.13 Administrative Agent to Effectuate Subordination. Each
Lender hereby authorizes and directs the Administrative Agent on such Lender's
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Lenders and the holders of Senior
Indebtedness as provided in this Section 8 and appoints the Administrative Agent
as attorney-in-fact for any and all such purposes.
8.14 Administrative Agent Not Fiduciary for Lenders of Senior
Indebtedness. The Administrative Agent shall not be deemed to owe any fiduciary
duty to the holders of Senior Indebtedness and shall not be liable to any such
holders if it shall mistakenly pay over or distribute to the Lenders or the
Borrower or any other Person, money or assets to which any holders of Senior
Indebtedness shall be entitled by virtue of this Section 8 or otherwise.
8.15 Reliance by Lenders of Senior Indebtedness on
Subordination Provisions. Each Lender acknowledges and agrees, that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Senior Indebtedness, whether such
Senior Indebtedness was created or acquired before or after the issuance of the
Loans, to acquire and continue to hold, or to continue to hold, such Senior
Indebtedness and such holder of Senior Indebtedness shall be deemed conclusively
to have relied on such subordination provisions in acquiring and continuing to
hold, or in continuing to hold, such Senior Indebtedness.
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8.16 Certain Amendments Prohibited. This Agreement may not be
amended to make any changes that may adversely affect the rights hereto of any
holder of Senior Indebtedness then outstanding unless the holders of such Senior
Indebtedness (or any group or representative thereof authorized to give a
consent on behalf of such holders) consent to such change.
SECTION 9. THE ADMINISTRATIVE AGENT
9.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the administrative agent of such Lender
under the Loan Documents, and each such Lender irrevocably authorizes the
Administrative Agent, in such capacity, to take such action on its behalf under
the provisions of the Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent by the terms
of the Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
9.2 Delegation of Duties. The Administrative Agent may execute
any of its duties under the Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrower or
any officer thereof contained in this Agreement or any other Loan Document or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of the Borrower to perform its obligations hereunder
or thereunder. The Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower.
9.4 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
Note, writing, resolution, notice, consent, certificate, affidavit, letter,
telecopy, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Borrower),
independent accountants and other experts selected by the
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Administrative Agent. The Administrative Agent may deem and treat the payee of
any Loans as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Loans.
9.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the Borrower or Holdings referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders;
provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.
9.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
has made any representations or warranties to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
the Borrower, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to make
its Loans hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative 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 analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
9.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the
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obligation of the Borrower to do so), ratably according to their respective
Commitment Percentages in effect on the date on which indemnification is sought
(or, if indemnification is sought after the date upon which the Commitments
shall have terminated and the Loans shall have been paid in full, ratably in
accordance with their Commitment Percentages immediately prior to such date),
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Loans) be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct. The agreements in this subsection shall
survive the payment of the Loans and all other amounts payable hereunder.
9.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though the
Administrative Agent were not the Administrative Agent hereunder. With respect
to the Loans made by it, the Administrative Agent shall have the same rights and
powers under the Loan Documents as any Lender and may exercise the same as
though it were not the Administrative Agent, and the terms "Lender" and
"Lenders" shall include the Administrative Agent in its individual capacity.
9.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon thirty (30) days notice to the Lenders
and the Borrower. If the Administrative Agent shall resign as Administrative
Agent under this Agreement and any Note Guarantee, then the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall be subject to the approval of the Borrower (which approval
shall not be unreasonably withheld), whereupon such successor agent shall
succeed to the rights, powers and duties of the Administrative Agent, and the
term "Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and any
Note Guarantee.
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SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement nor any
Loan Note, nor any Note Guarantee, nor any terms hereof or thereof, may be
amended, supplemented, waived or modified except in accordance with the
provisions of this subsection. The Required Lenders may, or, with the written
consent of the Required Lenders, the Administrative Agent may, from time to
time, (a) enter into with the Borrower and each Loan Party which is a party to
the relevant Loan Documents written amendments, supplements, waivers or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights or obligations of the Lenders or of the Borrower hereunder or
thereunder or (b) waive, on such terms and conditions as the Required Lenders or
the Administrative Agent, as the case may be, may specify in such instrument,
any of the requirements of this Agreement or the other Loan Documents or any
Default or Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement, or modification shall (i) (A)
reduce the amount or extend the scheduled date of maturity of any Loan or of any
scheduled installment or mandatory prepayment thereof, (B) reduce the stated
rate of any interest thereon or fee payable hereunder or extend the scheduled
date of any payment thereof or increase the aggregate amount or extend the
expiration date of any Lender's Commitment, (C) restrict on the right of each
Lender to exchange Term Loans, or Initial Loans on the Initial Maturity Date,
for Exchange Notes or amend the rate of such exchange, or (D) change the pro
rata provisions contained in Section 2.8, in each case without the written
consent of each Lender directly affected thereby, (ii) (A) amend, modify, or
waive any provision of this subsection, (B) reduce the percentage specified in
the definition of Required Lenders, (C) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under the Loan Documents
except as expressly permitted hereby, (D) amend, modify or waive any provision
in the Exchange Notes that requires (or would, if any Exchange Notes were
outstanding, require) the approval of all holders of Exchange Notes, or (E)
release all or substantially all of the guarantors under the Note Guarantees, in
each case without the consent of all of the Lenders, or (iii) amend, modify or
waive any provision of Section 9 without the written consent of the then
Administrative Agent. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon the Borrower and the other Loan Parties, the Lenders, the Administrative
Agent, and all future holders of the Loans. In the case of any waiver, the
Borrower and the other Loan Parties, the Lenders and the Administrative Agent
shall be restored to their former positions and rights hereunder and under the
other Loan Documents, and any Default or Event of Default waived shall be deemed
to be cured and not continuing; no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon. No
amendment of Section 8 may be made in violation of Section 8.16.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered by hand, or three (3)
days after being deposited in the mail, postage prepaid (or, if later, the first
Business Day after being so deposited), or, in the case of telecopy notice, when
received (or if received on a day that is not a Business Day or if received
after 5:00 p.m. local time at the place of reception on a Business Day, on the
next succeeding Business Day), addressed as follows in the case of the Borrower
and the Administrative Agent, and as set forth on its signature pages hereto in
the case of the other parties hereto, or to such other address as may be
hereafter notified by the respective parties hereto and any future holders of
the Notes:
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the Borrower: Federal-Mogul Corporation
World Headquarters
26555 Northwestern Highway
Southfield, Michigan 48034
Attention: Sandra W. Galac
Telephone: 248-354-2653
Telecopy: 248-354-8103
The Administrative
Agent: The Chase Manhattan Bank
One Chase Manhattan Plaza
8th Floor
New York, New York 10081
Attention: James Tabois
Telephone: 212-552-7952
Telecopy: 212-552-5650
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to Section 2.2 or 2.5 shall not be effective until
received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the Loan Notes
and Note Guarantees shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the Loan Notes and Note
Guarantees and in any document, certificate or statement delivered pursuant
hereto or in connection herewith shall survive the execution and delivery of
this Agreement and the making of the Loans hereunder.
10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to
pay or reimburse the Administrative Agent for all reasonable out-of-pocket costs
and expenses incurred in connection with the development, preparation and
execution of, and any amendment, supplement or modification to, the Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent (and any special or local
counsel retained by such counsel to assist it), (b) to pay or reimburse each
Lender and the Administrative Agent for all its reasonable out-of-pocket costs
and expenses incurred in connection with the enforcement or preservation of any
rights under the Loan Documents and any such other documents, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent and, at any time after and during the continuance of an
Event of Default, of one counsel to all the Lenders, and (c) to pay, indemnify,
and hold each Lender and the Administrative Agent (and their respective
directors, officers, employees and agents) harmless from, any and all recording
and filing fees and any and all liabilities with respect to, or resulting from
any delay in paying, stamp, excise and other similar
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taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, the Loan Documents and any
such other documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent (and their respective directors, officers, employees,
agents, affiliates and successors) harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of the
Transaction Documents or the use of the proceeds of the Loans in connection with
the Transactions and any such other documents, including, without limitation,
any of the foregoing relating to the use of proceeds of the Loans and Term Notes
(all the foregoing in this clause (d), collectively, the "indemnified
liabilities"), provided that the Borrower shall have no obligation hereunder to
the Administrative Agent, or any Lender (or their respective directors,
officers, employees and agents) with respect to indemnified liabilities arising
from the gross negligence or wilful misconduct of the party seeking
indemnification or expenses incurred by the Administrative Agent or any Lender
in connection with the assignment of Loans to an assignee (except pursuant to
Section 10.6(e) for any assignment pursuant to Section 2.12). The agreements in
this subsection shall survive repayment of the Loans and all other amounts
payable hereunder.
10.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower the Lenders, the Administrative Agent and their respective successors
and assigns, except that the Borrower may not assign or transfer any of its
rights or obligations under this Agreement without the prior written consent of
each Lender and any assignment or transfer by any Lender of its rights or
obligations under the Loan Documents must be made in compliance with this
Section 10.6 (and any purported assignment in violation of this subsection shall
be null and void).
(b) Any Lender may, in accordance with applicable law, at any
time sell to one or more financial institutions or other entities ("Loan
Participants") participating interests in any Loan owing to such Lender, any
Commitment of such Lender or any other interest of such Lender under the Loan
Documents. In the event of any such sale by a Lender of a participating interest
to a Loan Participant, (i) such Lender's obligations under this Agreement to the
other parties to this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible for the performance thereof, (iii) such Lender shall
remain the holder of any such Loan (and any Note evidencing such Loan) for all
purposes under the Loan Documents, (iv) the Borrower and the Administrative
Agent shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under the Loan Documents, and (v) no
Loan Participant under any participation shall have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except with respect to the matters
described in clauses (i) and (ii) of the proviso to the second sentence of
Section 10.1. The Borrower agrees that each Loan Participant shall be entitled
to the benefits of Sections 2.9 and 2.10 with respect to its participation in
the Commitments and the Loans outstanding from time to time as if it was a
Lender; provided that, in the case of Section 2.10 such Loan Participant shall
have complied with the requirements of said Section and provided, further, that
no Loan Participant shall be entitled to receive any greater amount pursuant to
any such Section than the transferor Lender would have been entitled to receive
in respect of the amount of the participation transferred by such transferor
Lender to such Loan Participant had no such transfer occurred.
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(c) Any Lender may, in accordance with applicable law, at any
time and from time to time assign to (i) any Lender or any Affiliate thereof and
(ii) with the prior written consent of the Administrative Agent (such consent
not to be unreasonably withheld, and, prior to the occurrence and continuance of
an Event of Default after consultation with the Borrower) to an additional bank,
financial institution or other entity that is regularly engaged in making or
purchasing loans (an "Assignee"), all or any part of its rights and obligations
under the Loan Documents pursuant to an Assignment and Acceptance, substantially
in the form of Exhibit E, executed by such Assignee, such assigning Lender (and,
in the case of an Assignee that is not then a Lender or an Affiliate thereof, by
the Administrative Agent, and, prior to the occurrence and continuance of an
Event of Default, by the Borrower) and delivered to the Administrative Agent for
its acceptance and recording in the Register, provided that if such assignment
is of less than all of the rights and obligations of the assigning Lender, the
sum of the aggregate principal amount of the Loans and the unused Commitments
remaining with the assigning Lender are not, in each case, less than $5,000,000
(or such lesser amount as may be agreed to by the Borrower and the
Administrative Agent). Upon such execution, delivery, acceptance and recording,
from and after the effective date determined pursuant to such Assignment and
Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder with a Commitment as set forth therein, and
(y) the assigning Lender thereunder shall be released from its obligations under
this Agreement to the extent that such obligations shall have been assumed by
the Assignee pursuant to such Assignment and Acceptance (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such assigning Lender
shall cease to be a party hereto).
(d) The Administrative Agent, which for purposes of this
Section 10.6(d) only shall be deemed an agent of the Borrower, shall maintain at
the address of the Administrative Agent referred to in Section 10.2 a copy of
each Assignment and Acceptance delivered to it and a register (the "Register")
for the recordation of the names and addresses of the Lenders and the
Commitments of, and principal amounts of the Loans owing to, each Lender from
time to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Administrative Agent and the Lenders,
shall treat each Person whose name is recorded in the Register as the owner of a
Loan or other obligation hereunder as the owner thereof for all purposes of the
Loan Documents, notwithstanding any notice to the contrary. Any assignment of
any Loan or other obligation hereunder (whether or not evidenced by a Note)
shall be effective only upon appropriate entries with respect thereto being made
in the Register. The Register shall be available for inspection by the Borrower
or any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee (and, in the case of an Assignee that is
not then a Lender or an Affiliate thereof, executed by the Borrower and the
Administrative Agent), together with payment to the Administrative Agent of a
registration and processing fee of $4,000, the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) on the effective date
determined pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the Lenders and
the Borrower. On or prior to such effective date, the assigning Lender shall
surrender any outstanding Loan Notes held by it all or a portion of which are
being assigned, and the Borrower, at its own expense, shall, upon a request to
the Administrative Agent by the assigning Lender or the Assignee, as applicable,
execute and deliver to the Administrative Agent (in exchange for outstanding
Loan Notes of the assigning Lender, if any) a
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new Loan Note to the order of such Assignee in an amount equal to the amount of
such Assignee's Loans after giving effect to such Assignment and Acceptance and,
if the assigning Lender has retained a Loan hereunder, a new Loan Note, to the
order of the assigning Lender in an amount equal to the amount of such Lender's
Loans after giving effect to such Assignment and Acceptance. Any such new Loan
Notes shall be dated the Closing Date and shall otherwise be in the form of the
Loan Note replaced thereby. Any Loan Notes surrendered by the assigning Lender
shall be returned by the Administrative Agent to the Borrower marked
"cancelled."
(f) the Borrower authorizes each Lender to disclose to any
Loan Participant or Assignee (each, a "Transferee") and any prospective
Transferee any and all financial information in such Lender's possession
concerning the Borrower and its Affiliates which has been delivered to such
Lender by or on behalf of the Borrower pursuant to this Agreement or which has
been delivered to such Lender by or on behalf of the Borrower in connection with
such Lender's credit evaluation of the Borrower and its Affiliates prior to
becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law, provided that no such
assignment, whether to a Federal Reserve Bank or other entity, shall release a
Lender from any of its obligations hereunder or substitute any such Federal
Reserve Bank or other entity for such Lender as a party hereto or permit an
absolute assignment to occur other than in accordance with such provisions of
this subsection.
(h) If, pursuant to this subsection, any interest in this
Agreement or any Loan is transferred to any Transferee (which is not a Lender)
which is organized under the laws of any jurisdiction other than the United
States or any state thereof, the transferor Lender shall cause such Transferee,
concurrently with the effectiveness of such transfer, to agree (for the benefit
of the transferor Lender, the Administrative Agent and the Borrower) to provide
the transferor Lender (and, in the case of any Transferee registered in the
Register, the Administrative Agent and the Borrower) the tax forms and other
documents required to be delivered pursuant to subsection 2.10(b) and to comply
from time to time with all applicable U.S. laws and regulations with regard to
such withholding tax exemption.
10.7 Adjustments; Set-off. (a) If any Lender (a "Benefitted
Lender") shall at any time receive any payment of all or part of its Loans or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 7(f), or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of such other Lender's Loans or interest thereon, such Benefitted Lender
shall purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loan, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
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(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder to set-off and appropriate and apply against such amount any
and all deposits (general or special, time or demand, provisional or final), in
any currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
set-off and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such set-off and application.
10.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set of the
copies of this Agreement signed by all the parties shall be lodged with the
Borrower and the Administrative Agent.
10.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without, to
the extent permitted by law, invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not, to the
extent permitted by law, invalidate or render unenforceable such provision in
any other jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to the subject matter hereof not expressly set forth or referred
to herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
10.12 Submission To Jurisdiction; Waivers. The Borrower
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 enforcement of any
judgement in respect thereof, to the non-exclusive general jurisdiction
of the Courts of the State of New York, the courts of the United States
of America for the Southern District of New York, 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 or
forum and agrees not to plead or claim the same;
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(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 Borrower, at the address specified in Section 10.2 or
at such other address of which the Administrative 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.
10.13 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of the Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or
in connection with the Loan Documents, and the relationship between
Administrative Agent and Lenders, on one hand, and the Borrower, on the
other hand, in connection herewith or therewith is solely that of
creditor and debtor; 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 Borrower and the
Lenders.
10.14 Confidentiality. Each Lender shall hold all non-public
information obtained pursuant to the requirements of this Agreement which has
been identified as confidential by the Borrower in accordance with such Lender's
customary procedures for handling confidential information of this nature, it
being understood and agreed by the Borrower that in any event a Lender may make
disclosures reasonably required by any bona fide assignee, transferee or
participant in connection with the contemplated assignment or transfer by such
Lender of any Loans or any participation therein or as required or requested by
any governmental agency or representative thereof or pursuant to legal process
or by the National Association of Insurance Commissioners or in connection with
the exercise of any remedy under the Loan Documents; provided that, unless
specifically prohibited by applicable law or court order, each Lender shall
notify the Borrower of any request by any governmental agency or representative
thereof (other than any such request in connection with any examination of such
Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information; and provided, further that
in no event shall any Lender be obligated or required to return any materials
furnished by the Borrower or any of its Subsidiaries.
10.15 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY
IN ANY LEGAL ACTION OR
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PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
10.16 No Guarantee of Domestic Obligations by Foreign
Subsidiary of Borrower. Notwithstanding anything to the contrary provided
herein, no Foreign Subsidiary of Borrower shall be required to Guarantee the
Indebtedness hereunder and no assets of any Foreign Subsidiary shall be used to
secure any Indebtedness hereunder.
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SCHEDULE 1.1 TO
CREDIT AGREEMENT
COMMITMENTS
LENDERS COMMITMENT
The Chase Manhattan Bank $130,000,000.00**
Senior High Income Portfolio, Inc. 5,000,000.00
Debt Strategies Fund, Inc. 5,000,000.00
PIMCO High Yield Fund 20,000,000.00
Protective Asset Management 15,000,000.00**
Oak Hill Securities Fund, L.P. 10,000,000.00
Trust Company of the West 20,000,000.00**
Imperial Credit Industries 10,000,000.00**
First Dominion Capital, L.L.C. 5,000,000.00
KZH Holding Corporation III 10,000,000.00
Ares Leveraged Investment Fund, L.P. 20,000,000.00
Franklin Principal Maturity Trust 5,000,000.00
Bank of America National Trust and Savings Association 25,000,000.00
Bayerische Vereinsbank AG, New York Branch 15,000,000.00
Credit Lyonnais (Chicago Branch) 25,000,000.00
Fleet National Bank 25,000,000.00
Royal Bank of Canada 25,000,000.00
The Fuji Bank, Limited 25,000,000.00
Union Bank of Switzerland, New York Branch 75,000,000.00
BHF Bank, Aktiengesellschaft 15,000,000.00
Compagnie Financiere de CIC et de l'Union Europeene 15,000,000.00
----------------
Total $500,000,000.00
===============
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** This amount reflects assignments anticipated to occur after the Closing Date.