Exhibit 10.21
EXECUTION COPY
CREDIT AGREEMENT
DATED AS OF NOVEMBER 22, 2002
AMONG
PATTERSON DENTAL COMPANY,
THE LENDERS,
BANK ONE, NA
AS AGENT AND AS LC ISSUER,
AND
BANC ONE CAPITAL MARKETS, INC.
AS LEAD ARRANGER
TABLE OF CONTENTS
Article 1 DEFINITIONS ....................................................... 1
Article 2 THE CREDITS .......................................................14
2.1. Commitment. ...............................................14
2.2. Required Payments; Termination. ...........................14
2.3. Ratable Loans. ............................................14
2.4. Types of Advances. ........................................14
2.5. Commitment Fee; Reductions in Aggregate Commitment. .......14
2.6. Minimum Amount of Each Advance. ...........................15
2.7. Optional Principal Payments. ..............................15
2.8. Method of Selecting Types and Interest Periods for
New Advances. .............................................15
2.9. Conversion and Continuation of Outstanding Advances. ......15
2.10. Changes in Interest Rate, etc. ............................16
2.11. Rates Applicable After Default. ...........................16
2.12. Method of Payment. ........................................17
2.13. Noteless Agreement; Evidence of Indebtedness. .............17
2.14. Telephonic Notices. .......................................18
2.15. Interest Payment Dates; Interest and Fee Basis. ...........18
2.16. Notification of Advances, Interest Rates, Prepayments
and Commitment Reductions. ................................18
2.17. Lending Installations. ....................................18
2.18. Non-Receipt of Funds by the Agent. ........................19
2.19. Facility LCs. .............................................19
2.20. Extension of Facility Termination Date. ...................23
2.21. Replacement of Lender. ....................................24
Article 3 YIELD PROTECTION; TAXES ...........................................24
3.1. Yield Protection. .........................................24
3.2. Changes in Capital Adequacy Regulations. ..................25
3.3. Availability of Types of Advances. ........................26
3.4. Funding Indemnification. ..................................26
3.5. Taxes. ....................................................26
3.6. Lender Statements; Survival of Indemnity. .................28
Article 4 CONDITIONS PRECEDENT ..............................................29
4.1. Initial Credit Extension. .................................29
4.2. Each Credit Extension. ....................................30
Article 5 REPRESENTATIONS AND WARRANTIES ....................................30
5.1. Existence and Standing. ...................................31
5.2. Authorization and Validity. ...............................31
5.3. No Conflict; Government Consent. ..........................31
5.4. Financial Statements. .....................................31
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5.5. Material Adverse Change. ..................................32
5.6. Taxes. ....................................................32
5.7. Litigation and Contingent Obligations. ....................32
5.8. Subsidiaries. .............................................32
5.9. ERISA. ....................................................32
5.10. Accuracy of Information. ..................................32
5.11. Regulation U. .............................................33
5.12. Material Agreements. ......................................33
5.13. Compliance With Laws. .....................................33
5.14. Ownership of Properties. ..................................33
5.15. Plan Assets; Prohibited Transactions. .....................33
5.16. Environmental Matters. ....................................33
5.17. Investment Company Act. ...................................33
5.18. Public Utility Holding Company Act. .......................34
5.19. Post-Retirement Benefits. .................................34
5.20. Prior Credit Agreement. ...................................34
Article 6 COVENANTS .........................................................34
6.1. Financial Reporting. ......................................34
6.2. Use of Proceeds. ..........................................35
6.3. Notice of Default. ........................................35
6.4. Conduct of Business. ......................................36
6.5. Taxes. ....................................................36
6.6. Insurance. ................................................36
6.7. Compliance with Laws. .....................................36
6.8. Maintenance of Properties. ................................36
6.9. Inspection. ...............................................36
6.10. Intentionally omitted. ....................................36
6.11. Indebtedness. .............................................36
6.12. Merger. ...................................................37
6.13. Sale of Assets. ...........................................37
6.14. Investments and Acquisitions. .............................37
6.15. Liens. ....................................................38
6.16. Affiliates. ...............................................39
6.17. Material Domestic Subsidiaries. ...........................39
6.18. Subordinated Indebtedness. ................................40
6.19. Sale of Accounts. .........................................40
6.20. Financial Covenants. ......................................40
Article 7 DEFAULTS ..........................................................40
Article 8 ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES ....................42
8.1. Acceleration; Facility LC Collateral Account. .............42
8.2. Amendments. ...............................................43
8.3. Preservation of Rights. ...................................44
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Article 9 GENERAL PROVISIONS ................................................44
9.1. Survival of Representations. ..............................44
9.2. Governmental Regulation. ..................................44
9.3. Headings. .................................................45
9.4. Entire Agreement. .........................................45
9.5. Several Obligations; Benefits of this Agreement. ..........45
9.6. Expenses; Indemnification. ................................45
9.7. Numbers of Documents. .....................................46
9.8. Accounting. ...............................................46
9.9. Severability of Provisions. ...............................46
9.10. Nonliability of Lenders. ..................................46
9.11. Confidentiality. ..........................................47
9.12. Nonreliance. ..............................................47
9.13. Disclosure. ...............................................47
Article 10 THE AGENT ........................................................47
10.1. Appointment; Nature of Relationship. ......................47
10.2. Powers. ...................................................47
10.3. General Immunity. .........................................48
10.4. No Responsibility for Loans, Recitals, etc. ...............48
10.5. Action on Instructions of Lenders. ........................48
10.6. Employment of Agents and Counsel. .........................48
10.7. Reliance on Documents; Counsel. ...........................48
10.8. Agent's Reimbursement and Indemnification. ................49
10.9. Notice of Default. ........................................49
10.10. Rights as a Lender. .......................................49
10.11. Lender Credit Decision. ...................................49
10.12. Successor Agent. ..........................................50
10.13. Agent and Arranger Fees. ..................................50
10.14. Delegation to Affiliates. .................................50
Article 11 SETOFF; RATABLE PAYMENTS .........................................51
11.1. Setoff. ...................................................51
11.2. Ratable Payments. .........................................51
Article 12 BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS ................51
12.1. Successors and Assigns. ...................................51
12.2. Participations ............................................52
12.3. Assignments. ..............................................53
12.4. Dissemination of Information. .............................54
12.5. Tax Treatment. ............................................54
Article 13 NOTICES ..........................................................55
13.1. Notices. ..................................................55
13.2. Change of Address. ........................................55
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Article 14 COUNTERPARTS .....................................................55
Article 15 CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL .....55
15.1. CHOICE OF LAW. ............................................55
15.2. CONSENT TO JURISDICTION. ..................................55
15.3. WAIVER OF JURY TRIAL. .....................................56
PRICING SCHEDULE
EXHIBIT A
EXHIBIT B
EXHIBIT C
EXHIBIT D
EXHIBIT E
SCHEDULE 1 SUBSIDIARIES AND OTHER INVESTMENTS
SCHEDULE 2 INDEBTEDNESS AND LIENS
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CREDIT AGREEMENT
This Agreement, dated as of November 22, 2002, is among Patterson
Dental Company, the Lenders and Bank One, NA, a national banking association
having its principal office in Chicago, Illinois, as LC Issuer and as Agent. The
parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
-----------
As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding ownership interests of a partnership or
limited liability company.
"Account" means the Borrower's or a Subsidiary's right to the payment
of money from the sale, lease or other disposition of goods or other assets by
the Borrower or a Subsidiary, a rendering of services by the Borrower or a
Subsidiary, a loan by the Borrower or a Subsidiary, the overpayment of taxes or
other liabilities of the Borrower, or otherwise, however such right to payment
may be evidenced, together with all other rights and interests (including all
liens and security interests) that the Borrower or Subsidiary may at any time
have against any account debtor or other party obligated thereon or against any
of the property of such account debtor or other party.
"Advance" means a borrowing hereunder, (i) made by the Lenders on the
same Borrowing Date, or (ii) converted or continued by the Lenders on the same
date of conversion or continuation, consisting, in either case, of the aggregate
amount of the several Loans of the same Type and, in the case of Eurodollar
Loans, for the same Interest Period.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Agent" means Bank One in its capacity as contractual representative of
the Lenders pursuant to Article 10, and not in its individual capacity as a
Lender, and any successor Agent appointed pursuant to Article 10.
"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders, as reduced from time to time pursuant to the terms hereof.
"Aggregate Outstanding Credit Exposure" means, at any time, the
aggregate of the Outstanding Credit Exposure of all the Lenders.
"Agreement" means this credit agreement, as it may be amended or
modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 5.4.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Fee Rate" means, at any time, the percentage rate per annum
at which Commitment Fees are accruing on the unused portion of the Aggregate
Commitment at such time, or letter of credit fees are accruing on outstanding
standby Facility LCs at such time, as the context may require, in each case as
set forth in the Pricing Schedule.
"Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"Approved Fund" means any Fund that is administered or managed by (i) a
Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Arranger" means Banc One Capital Markets, Inc., a Delaware
corporation, and its successors, in its capacity as Lead Arranger and Sole Book
Runner.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means any of the President or any Vice President
of the Borrower, or any other authorized officer of the Borrower identified in
an incumbency certificate delivered to the Agent, in each case, acting singly.
"Available Aggregate Commitment" means, at any time, the Aggregate
Commitment then in effect minus the Aggregate Outstanding Credit Exposure at
such time.
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"Bank One" means Bank One, NA, a national banking association having
its principal office in Chicago, Illinois, in its individual capacity, and its
successors.
"Borrower" means Patterson Dental Company, a Minnesota corporation, and
its successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York City for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Chicago for the conduct of substantially all of their commercial lending
activities and interbank wire transfers can be made on the Fedwire system.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Change in Control" means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 30% or more of the outstanding shares of voting stock of the
Borrower.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Collateral Shortfall Amount" is defined in Section 8.1.
"Commitment" means, for each Lender, the obligation of such Lender to
make Loans to, and participate in Facility LCs issued upon the application of,
the Borrower in an aggregate amount not exceeding the amount set forth opposite
its signature below, as it may be modified as a result of any assignment that
has become effective pursuant to Section 12.3(c) or as otherwise modified from
time to time pursuant to the terms hereof.
"Consolidated Adjusted EBITDA" means, as to any Person for any period,
the sum of Consolidated EBIT for such period (i) plus consolidated depreciation
and amortization for such period, (ii) plus extraordinary losses incurred other
than in the ordinary course of business, (iii) minus extraordinary gains
realized other than in the ordinary course of business. For Persons acquired by
the Borrower or any Subsidiary during the relevant measurement period, their
3
EBITDA results will be included in the calculation of Consolidated Adjusted
EBITDA as if those Persons were owned by the Borrower or such Subsidiary for the
entire reporting period. Consolidated Adjusted EBITDA will be calculated on a
rolling four-quarter basis.
"Consolidated Adjusted Net Income" means, as to any Person for any
period, the Consolidated Net Income of such Person, provided that, for Persons
acquired by the Borrower or any Subsidiary during the relevant measurement
period, their Consolidated Net Income will be included in the calculation of
Consolidated Adjusted Net Income as if those Persons were owned by the Borrower
or such Subsidiary for the entire reporting period. Consolidated Adjusted Net
Income will be calculated on a rolling four-quarter basis.
"Consolidated EBIT" means, as to any Person and with reference to any
period, Consolidated Net Income plus, to the extent deducted from revenues in
determining Consolidated Net Income, (i) Consolidated Interest Expense, (ii)
expense for federal, state, local and foreign income and franchise taxes paid or
accrued and (iii) extraordinary losses incurred other than in the ordinary
course of business, minus, to the extent included in Consolidated Net Income,
extraordinary gains realized other than in the ordinary course of business, all
calculated for such Person and its Subsidiaries on a consolidated basis.
"Consolidated Interest Expense" means, as to any Person and with
reference to any period, the interest expense of such Person and its
Subsidiaries calculated on a consolidated basis for such period including,
without limitation, such interest expense as may be attributable to capitalized
leases, receivables transaction financing costs, the discount or implied
interest component of off-balance sheet liabilities, all commissions, discounts
and other fees and charges owed with respect to Letters of Credit and net
mark-to-market exposure.
"Consolidated Net Income" means as to any Person and with reference to
any period, the net income (or loss) of such Person and its Subsidiaries
calculated on a consolidated basis for such period, excluding any non-cash
charges or gains which are unusual, non-recurring or extraordinary.
"Consolidated Tangible Net Worth" means, as of any date of
determination, the consolidated total stockholders' equity (including capital
stock, additional paid-in capital and retained earnings) of the Borrower and its
Subsidiaries determined in accordance with Agreement Accounting Principles, less
goodwill and other intangible assets.
"Consolidated Total Debt" means (i) all indebtedness of the Borrower
and its Subsidiaries, on a consolidated basis, reflected on a balance sheet
prepared in accordance with Agreement Accounting Principles, plus, without
duplication (ii) the face amount of all outstanding Letters of Credit in respect
of which the Borrower or any Subsidiary has any reimbursement obligation and the
principal amount of all Contingent Obligations of the Borrower and its
Subsidiaries, plus obligations associated with Capitalized Leases, plus
obligations arising from the sale of accounts receivable and other forms of
off-balance sheet financing, including Receivables Transaction Attributed
Indebtedness.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide
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funds for the payment of, or otherwise becomes or is contingently liable upon,
the obligation or liability of any other Person, or agrees to maintain the net
worth or working capital or other financial condition of any other Person, or
otherwise assures any creditor of such other Person against loss, including,
without limitation, any comfort letter, operating agreement, take-or-pay
contract or application for a Letter of Credit.
"Conversion/Continuation Notice" is defined in Section 2.9.
"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or any
of its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Credit Extension" means the making of an Advance or the issuance of a
Facility LC hereunder.
"Credit Extension Date" means the Borrowing Date for an Advance or the
issuance date for a Facility LC.
"Default" means an event described in Article 7.
"Domestic Subsidiary" means each Subsidiary of the Borrower which is
organized under the laws of the United States of America or any state, territory
or possession thereof.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
(i) the protection of the environment, (ii) the effect of the environment on
human health, (iii) emissions, discharges or releases of pollutants,
contaminants, hazardous substances or wastes into surface water, ground water or
land, or (iv) the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, hazardous
substances or wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the applicable British Bankers' Association LIBOR
rate for deposits in U.S. dollars as reported by any generally recognized
financial information service as of 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, and having a maturity equal to
such Interest Period, provided that, if no such British Bankers' Association
LIBOR rate is available to the Agent, the applicable Eurodollar Base Rate for
the relevant Interest Period shall instead be the rate determined by the Agent
to be the rate at which Bank One or one of its Affiliate banks offers to place
deposits in U.S. dollars with first-class banks in the London interbank market
at approximately 11:00 a.m. (London time) two Business Days
5
prior to the first day of such Interest Period, in the approximate amount of
Bank One's relevant Eurodollar Loan and having a maturity equal to such Interest
Period.
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the Applicable Margin.
"Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or (ii) the jurisdiction
in which the Agent's or such Lender's principal executive office or such
Lender's applicable Lending Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
"Extension Request" is defined in Section 2.20.
"Facility LC" is defined in Section 2.19(a).
"Facility LC Application" is defined in Section 2.19(c).
"Facility LC Collateral Account" is defined in Section 2.19(k).
"Facility Termination Date" means October 31, 2003, or any later date
as may be specified as the Facility Termination Date in accordance with Section
2.20 or any earlier date on which the Aggregate Commitment is reduced to zero or
otherwise terminated pursuant to the terms hereof.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Financial Contract" of a Person means (i) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics or (ii) any Rate Management Transaction.
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"Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the Applicable Margin, in each case
changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the Floating Rate.
"Floating Rate Loan" means a Loan which, except as otherwise provided
in Section 2.11, bears interest at the Floating Rate.
"Fund" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"Guarantor" means each Subsidiary becoming a party to a Guaranty, and
its successors and assigns. The initial Guarantors are PDSI and Webster.
"Guaranty" means that certain Guaranty dated as of November 22, 2002
executed by certain Subsidiaries in favor of the Agent, for the ratable benefit
of the Lenders, as it may be amended or modified and in effect from time to
time.
"Indebtedness" of a Person means, without duplication, such Person's
(i) obligations for borrowed money, (ii) obligations representing the deferred
purchase price of Property or services (other than accounts payable arising in
the ordinary course of such Person's business payable on terms customary in the
trade), (iii) obligations, whether or not assumed, secured by Liens or payable
out of the proceeds or production from Property now or hereafter owned or
acquired by such Person, (iv) obligations which are evidenced by notes,
acceptances, or other instruments, (v) obligations of such Person to purchase
securities or other Property arising out of or in connection with the sale of
the same or substantially similar securities or Property, (vi) Capitalized Lease
Obligations, (vii) Receivables Transaction Attributed Indebtedness, (viii)
Contingent Obligations, (ix) obligations in respect of Letters of Credit, (x)
Net Mark-to-Market Exposure under Rate Management Transactions and other
Financial Contracts, (xi) Off-Balance Sheet Liabilities, (xii) obligations in
respect of Sale and Leaseback Transactions and (xiii) any other obligation for
borrowed money or other financial accommodation which in accordance with
Agreement Accounting Principles would be shown as a liability on the
consolidated balance sheet of such Person.
"Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on the day
which corresponds numerically to such date one, two, three or six months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
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"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade) or contribution of capital by such Person; stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities owned by such
Person; any deposit accounts and certificate of deposit owned by such Person;
and structured notes, derivative financial instruments and other similar
instruments or contracts owned by such Person.
"LC Fee" is defined in Section 2.19(d).
"LC Issuer" means Bank One (or any subsidiary or affiliate of Bank One
designated by Bank One) in its capacity as issuer of Facility LCs hereunder.
"LC Obligations" means, at any time, the sum, without duplication, of
(i) the aggregate undrawn stated amount under all Facility LCs outstanding at
such time plus (ii) the aggregate unpaid amount at such time of all
Reimbursement Obligations.
"LC Payment Date" is defined in Section 2.19(e).
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent,
the office, branch, subsidiary or affiliate of such Lender or the Agent listed
on the signature pages hereof or on a Schedule or otherwise selected by such
Lender or the Agent pursuant to Section 2.17.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Leverage Ratio" means, as of the end of any of the Borrower's fiscal
quarters, the ratio of Consolidated Total Debt as of the end of such fiscal
quarter to Consolidated Adjusted EBITDA for the four consecutive fiscal quarters
then ended.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's loan made
pursuant to Article 2 (or any conversion or continuation thereof).
"Loan Documents" means this Agreement, the Facility LC Applications,
any Notes issued pursuant to Section 2.13 and the Guaranty.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its
8
Subsidiaries taken as a whole, (ii) the ability of the Borrower or any Guarantor
to perform its obligations under the Loan Documents to which it is a party, or
(iii) the validity or enforceability of any of the Loan Documents or the rights
or remedies of the Agent, the LC Issuer or the Lenders thereunder.
"Material Domestic Subsidiary" means, at any time, a Domestic
Subsidiary (other than a special-purpose entity created solely to engage in a
Qualified Receivables Transaction) that meets one or both of the following
criteria: (i) such Domestic Subsidiary's total assets, determined on a
consolidated basis with its Subsidiaries is greater than or equal to fifteen
percent (15%) of the consolidated total assets of the Borrower and its
Subsidiaries; or (ii) such Domestic Subsidiary's Consolidated Adjusted Net
Income is greater than or equal to fifteen percent (15%) of the Borrower's
Consolidated Adjusted Net Income.
"Material Indebtedness" means Indebtedness in an outstanding principal
amount of $5,000,000 or more in the aggregate (or the equivalent thereof in any
currency other than U.S. dollars).
"Material Indebtedness Agreement" means any agreement under which any
Material Indebtedness was created or is governed or which provides for the
incurrence of Indebtedness in an amount which would constitute Material
Indebtedness (whether or not an amount of Indebtedness constituting Material
Indebtedness is outstanding thereunder).
"Modify" and "Modification" are defined in Section 2.19(a).
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"Net Mark-to-Market Exposure" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions. "Unrealized
losses" means the fair market value of the cost to such Person of replacing such
Rate Management Transaction as of the date of determination (assuming the Rate
Management Transaction were to be terminated as of that date), and "unrealized
profits" means the fair market value of the gain to such Person of replacing
such Rate Management Transaction as of the date of determination (assuming such
Rate Management Transaction were to be terminated as of that date).
"Non-U.S. Lender" is defined in Section 3.5(d).
"Note" is defined in Section 2.13.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all Reimbursement Obligations, all accrued and unpaid
fees and all expenses, reimbursements, indemnities and other obligations of the
Borrower to the Lenders or to any Lender, the Agent, the LC Issuer or any
indemnified party arising under the Loan Documents.
9
"Off-Balance Sheet Liability" of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability under any Sale and Leaseback
Transaction which is not a Capitalized Lease, (iii) any liability under any
so-called "synthetic lease" transaction entered into by such Person, or (iv) any
obligation arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the balance sheets of such Person, but excluding from this clause
(iv) Operating Leases; provided, that the term "Off-Balance Sheet Liability"
shall not include Receivables Transaction Attributed Indebtedness.
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"Other Permitted Account Sales" means sales (including licenses), with
limited recourse, or no recourse, by PDSI or Webster of Accounts derived from
sales on contract of furnishings and equipment (but not, however, (i)
open-account sales of supplies, (ii) Accounts derived from provision of services
or (iii) Qualified Receivables Transactions).
"Other Taxes" is defined in Section 3.5(b).
"Outstanding Credit Exposure" means, as to any Lender at any time, the
sum of (i) the aggregate principal amount of its Loans outstanding at such time,
plus (ii) an amount equal to its Pro Rata Share of the LC Obligations at such
time.
"Participants" is defined in Section 12.2(a).
"Payment Date" means the last day of each December, March, June and
September.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"PDSI" means Patterson Dental Supply, Inc., a Minnesota corporation.
"Permitted Investments" means Investments that comply with the
Borrower's investment policy as in effect on the date of this Agreement, a copy
of which investment policy the Borrower has provided to the Agent and the
Lenders.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Pricing Schedule" means the Schedule attached hereto identified as
such.
10
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Pro Rata Share" means, with respect to a Lender, a portion equal to a
fraction the numerator of which is such Lender's Commitment and the denominator
of which is the Aggregate Commitment.
"Purchasers" is defined in Section 12.3(a).
"Qualified Receivables Transaction" means each of (i) the transactions
contemplated by that certain Receivables Sale Agreement dated as of May 10,
2002, among the originators named therein and PDC Funding Company, LLC, as buyer
and that certain Receivables Purchase Agreement dated as of May 10, 2002, among
PDC Funding Company, LLC, the Borrower, Preferred Receivables Funding
Corporation, the financial institutions party thereto and Bank One, as agent, as
such Agreements may be amended, restated, extended or otherwise modified from
time to time and (ii) the transaction contemplated by that certain Third Amended
and Restated Contract Purchase Agreement, dated as of June 19, 2002, among the
Borrower, Patterson Dental Supply, Inc., Webster Veterinary Supply, Inc., U.S.
Bank National Association, individually and as agent, and certain buyers
identified therein, as such Third Amended and Restated Contract Purchase
Agreement may be amended, restated, extended or otherwise modified from time to
time.
"Rate Management Transaction" means any transaction (including an
agreement with respect thereto) now existing or hereafter entered by the
Borrower which is a rate swap, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or equity index
option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
these transactions) or any combination thereof, whether linked to one or more
interest rates, foreign currencies, commodity prices, equity prices or other
financial measures.
"Rate Management Obligations" of a Person means any and all obligations
of such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Management Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.
"Receivables Transaction Attributed Indebtedness" means the aggregate
amount of obligations outstanding under the legal documents entered into as part
of either Qualified Receivables Transaction or any Other Permitted Account Sales
on any date of determination that would be characterized as principal if either
Qualified Receivables Transaction or any Other
11
Permitted Account Sales were structured as a secured lending transaction rather
than as a purchase.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Section 2.19 to reimburse the
LC Issuer for amounts paid by the LC Issuer in respect of any one or more
drawings under Facility LCs.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"Reports" is defined in Section 9.6.
"Required Lenders" means Lenders in the aggregate having at least
fifty-one percent (51%) of the Aggregate Commitment or, if the Aggregate
Commitment has been terminated, Lenders in the aggregate holding at least
fifty-one percent (51%) of the Aggregate Outstanding Credit Exposure.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Response Date" is defined in Section 2.20.
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"Schedule" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.
12
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Subordinated Indebtedness" of a Person means any Indebtedness of such
Person the payment of which is subordinated to payment of the Obligations to the
written satisfaction of the Required Lenders.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which represents more than 10% of the
consolidated assets of the Borrower and its Subsidiaries or property which is
responsible for more than 10% of the consolidated net sales or of the
consolidated net income of the Borrower and its Subsidiaries, in each case, as
would be shown in the consolidated financial statements of the Borrower and its
Subsidiaries as at the beginning of the twelve-month period ending with the
month in which such determination is made (or if financial statements have not
been delivered hereunder for that month which begins the twelve-month period,
then the financial statements delivered hereunder for the quarter ending
immediately prior to that month).
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes and Other Taxes.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or a Eurodollar Advance and with respect to any Loan, its nature as
a Floating Rate Loan or a Eurodollar Loan.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
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"Webster" means Webster Veterinary Supply, Inc., a Minnesota
corporation.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization 100% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE 2
THE CREDITS
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2.1. Commitment. From and including the date of this Agreement and
prior to the Facility Termination Date, each Lender severally agrees, on the
terms and conditions set forth in this Agreement, to (a) make Loans to the
Borrower and (b) participate in Facility LCs issued upon the request of the
Borrower, provided that, after giving effect to the making of each such Loan and
the issuance of each such Facility LC, such Lender's Outstanding Credit Exposure
shall not exceed its Commitment. Subject to the terms of this Agreement, the
Borrower may borrow, repay and reborrow at any time prior to the Facility
Termination Date. The Commitments to extend credit hereunder shall expire on the
Facility Termination Date. The LC Issuer will issue Facility LCs hereunder on
the terms and conditions set forth in Section 2.19.
2.2. Required Payments; Termination. The Aggregate Outstanding Credit
Exposure and all other unpaid Obligations shall be paid in full by the Borrower
on the Facility Termination Date.
2.3. Ratable Loans. Each Advance hereunder shall consist of Loans made
from the several Lenders ratably according to their Pro Rata Shares.
2.4. Types of Advances. The Advances may be Floating Rate Advances or
Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.8 and 2.9.
2.5. Commitment Fee; Reductions in Aggregate Commitment. The Borrower
agrees to pay to the Agent for the account of each Lender according to its Pro
Rata Share a commitment fee at a per annum rate equal to the Applicable Fee Rate
on the average daily Available Aggregate Commitment from the date hereof to and
including the Facility Termination Date, payable on each Payment Date hereafter
and on the Facility Termination Date. The Borrower may permanently reduce the
Aggregate Commitment in whole, or in part ratably among the Lenders in integral
multiples of $10,000,000, upon at least three Business Days' written notice to
the Agent, which notice shall specify the amount of any such reduction,
provided, however, that the amount of the Aggregate Commitment may not be
reduced below the Aggregate Outstanding
14
Credit Exposure. All accrued commitment fees shall be payable on the effective
date of any termination of the obligations of the Lenders to make Credit
Extensions hereunder.
2.6. Minimum Amount of Each Advance. Each Eurodollar Advance shall be
in the minimum amount of $1,000,000 (and in multiples of $100,000 if in excess
thereof), and each Floating Rate Advance shall be in the minimum amount of
$500,000 (and in multiples of $100,000 if in excess thereof), provided, however,
that any Floating Rate Advance may be in the amount of the Available Aggregate
Commitment.
2.7. Optional Principal Payments. The Borrower may from time to time
pay, without penalty or premium, all outstanding Floating Rate Advances, or, in
a minimum aggregate amount of $5,000,000 or any integral multiple of $500,000 in
excess thereof, any portion of the outstanding Floating Rate Advances upon one
Business Day's prior notice to the Agent. The Borrower may from time to time
pay, subject to the payment of any funding indemnification amounts required by
Section 3.4 but without penalty or premium, all outstanding Eurodollar Advances,
or, in a minimum aggregate amount of $5,000,000 or any integral multiple of
$500,000 in excess thereof, any portion of the outstanding Eurodollar Advances
upon three Business Days' prior notice to the Agent.
2.8. Method of Selecting Types and Interest Periods for New Advances.
The Borrower shall select the Type of Advance and, in the case of each
Eurodollar Advance, the Interest Period applicable thereto from time to time.
The Borrower shall give the Agent irrevocable notice (a "Borrowing Notice") not
later than 10:00 a.m. (Chicago time) at least one Business Day before the
Borrowing Date of each Floating Rate Advance and three Business Days before the
Borrowing Date for each Eurodollar Advance, specifying:
(a) the Borrowing Date, which shall be a Business Day, of such
Advance,
(b) the aggregate amount of such Advance,
(c) the Type of Advance selected, and
(d) in the case of each Eurodollar Advance, the Interest
Period applicable thereto.
Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Loan or Loans in funds immediately available in Chicago to
the Agent at its address specified pursuant to Article 13. The Agent will make
the funds so received from the Lenders available to the Borrower at the Agent's
aforesaid address.
2.9. Conversion and Continuation of Outstanding Advances. Floating Rate
Advances shall continue as Floating Rate Advances unless and until such Floating
Rate Advances are converted into Eurodollar Advances pursuant to this Section
2.9 or are repaid in accordance with Section 2.7. Each Eurodollar Advance shall
continue as a Eurodollar Advance until the end of the then applicable Interest
Period therefor, at which time such Eurodollar Advance shall be automatically
converted into a Floating Rate Advance unless (x) such Eurodollar Advance is or
was repaid in accordance with Section 2.7 or (y) the Borrower shall have given
the Agent a Conversion/Continuation Notice (as defined below) requesting that,
at the end of such Interest
15
Period, such Eurodollar Advance continue as a Eurodollar Advance for the same or
another Interest Period. Subject to the terms of Section 2.6, the Borrower may
elect from time to time to convert all or any part of a Floating Rate Advance
into a Eurodollar Advance. The Borrower shall give the Agent irrevocable notice
(a "Conversion/Continuation Notice") of each conversion of a Floating Rate
Advance into a Eurodollar Advance or continuation of a Eurodollar Advance not
later than 10:00 a.m. (Chicago time) at least three Business Days prior to the
date of the requested conversion or continuation, specifying:
(a) the requested date, which shall be a Business Day, of such
conversion or continuation,
(b) the aggregate amount and Type of the Advance which is to
be converted or continued, and
(c) the amount of such Advance which is to be converted into
or continued as a Eurodollar Advance and the duration of the Interest
Period applicable thereto.
2.10. Changes in Interest Rate, etc. Each Floating Rate Advance shall
bear interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is automatically converted from a
Eurodollar Advance into a Floating Rate Advance pursuant to Section 2.9, to but
excluding the date it is paid or is converted into a Eurodollar Advance pursuant
to Section 2.9 hereof, at a rate per annum equal to the Floating Rate for such
day. Changes in the rate of interest on that portion of any Advance maintained
as a Floating Rate Advance will take effect simultaneously with each change in
the Alternate Base Rate. Each Eurodollar Advance shall bear interest on the
outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at the interest rate determined by the Agent as applicable to
such Eurodollar Advance based upon the Borrower's selections under Sections 2.8
and 2.9 and otherwise in accordance with the terms hereof. No Interest Period
may end after the Facility Termination Date.
2.11. Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.8, 2.9 or 2.10, during the continuance of a
Default or Unmatured Default the Required Lenders may, at their option, by
notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that no
Advance may be made as, converted into or continued as a Eurodollar Advance.
During the continuance of a Default the Required Lenders may, at their option,
by notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that (a)
each Eurodollar Advance shall bear interest for the remainder of the applicable
Interest Period at the rate otherwise applicable to such Interest Period plus 2%
per annum, (b) each Floating Rate Advance shall bear interest at a rate per
annum equal to the Floating Rate in effect from time to time plus 2% per annum
and (c) the LC Fee shall be increased by 2% per annum, provided that, during the
continuance of a Default under Section 7.6 or 7.7, the interest rates set forth
in clauses (a) and (b) above and the increase in the LC Fee set forth in clause
(c)
16
above shall be applicable to all Credit Extensions without any election or
action on the part of the Agent or any Lender.
2.12. Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article 13, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by noon (local time) on the date when due
and shall (except in the case of Reimbursement Obligations for which the LC
Issuer has not been fully indemnified by the Lenders, or as otherwise
specifically required hereunder) be applied ratably by the Agent among the
Lenders. Each payment delivered to the Agent for the account of any Lender shall
be delivered promptly by the Agent to such Lender in the same type of funds that
the Agent received at its address specified pursuant to Article 13 or at any
Lending Installation specified in a notice received by the Agent from such
Lender. The Agent is hereby authorized to charge the account of the Borrower
maintained with Bank One for each payment of principal, interest, Reimbursement
Obligations and fees as it becomes due hereunder. Each reference to the Agent in
this Section 2.12 shall also be deemed to refer, and shall apply equally, to the
LC Issuer, in the case of payments required to be made by the Borrower to the LC
Issuer pursuant to Section 2.19(f).
2.13. Noteless Agreement; Evidence of Indebtedness.
(a) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the
Borrower to such Lender resulting from each Loan 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 hereunder.
(b) The Agent shall also maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the Type thereof and
the Interest Period with respect thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from
the Borrower to each Lender hereunder, (iii) the original stated amount
of each Facility LC and the amount of LC Obligations outstanding at any
time, and (iv) the amount of any sum received by the Agent hereunder
from the Borrower and each Lender's share thereof.
(c) The entries maintained in the accounts maintained pursuant
to paragraphs (a) and (b) above shall be prima facie evidence of the
existence and amounts of the Obligations therein recorded; provided,
however, that the failure of the Agent or any Lender to maintain such
accounts or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Obligations in accordance with
their terms.
(d) Any Lender may request that its Loans be evidenced by a
promissory note (a "Note"). In such event, the Borrower shall prepare,
execute and deliver to such Lender a Note payable to the order of such
Lender in a form supplied by the Agent. Thereafter, the Loans evidenced
by such Note and interest thereon shall at all times (prior to any
assignment pursuant to Section 12.3) be represented by one or more
Notes payable to the order of the payee named therein, except to the
extent that any such Lender subsequently
17
returns any such Note for cancellation and requests that such Loans
once again be evidenced as described in paragraphs (a) and (b) above.
2.14. Telephonic Notices. The Borrower hereby authorizes the Lenders
and the Agent to extend, convert or continue Advances, effect selections of
Types of Advances and to transfer funds based on telephonic notices made by any
person or persons the Agent or any Lender in good faith believes to be acting on
behalf of the Borrower, it being understood that the foregoing authorization is
specifically intended to allow Borrowing Notices and Conversion/Continuation
Notices to be given telephonically. The Borrower agrees to deliver promptly to
the Agent a written confirmation, if such confirmation is requested by the Agent
or any Lender, of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders shall govern
absent manifest error.
2.15. Interest Payment Dates; Interest and Fee Basis. Interest accrued
on each Floating Rate Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof and at maturity.
Interest accrued on each Eurodollar Advance shall be payable on the last day of
its applicable Interest Period, on any date on which the Eurodollar Advance is
prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued
on each Eurodollar Advance having an Interest Period longer than three months
shall also be payable on the last day of each three-month interval during such
Interest Period. Interest, commitment fees and LC Fees shall be calculated for
actual days elapsed on the basis of a 360-day year. Interest shall be payable
for the day an Advance is made but not for the day of any payment on the amount
paid if payment is received prior to noon (local time) at the place of payment.
If any payment of principal of or interest on an Advance shall become due on a
day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a principal payment, such extension
of time shall be included in computing interest in connection with such payment.
2.16. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Conversion/Continuation Notice, and repayment notice received
by it hereunder. Promptly after notice from the LC Issuer, the Agent will notify
each Lender of the contents of each request for issuance of a Facility LC
hereunder. The Agent will notify each Lender of the interest rate applicable to
each Eurodollar Advance promptly upon determination of such interest rate and
will give each Lender prompt notice of each change in the Alternate Base Rate.
2.17. Lending Installations. Each Lender may book its Loans and its
participation in any LC Obligations and the LC Issuer may book the Facility LCs
at any Lending Installation selected by such Lender or the LC Issuer, as the
case may be, and may change its Lending Installation from time to time. All
terms of this Agreement shall apply to any such Lending Installation and the
Loans, Facility LCs, participations in LC Obligations and any Notes issued
hereunder shall be deemed held by each Lender or the LC Issuer, as the case may
be, for the benefit of any such Lending Installation. Each Lender and the LC
Issuer may, by written notice to the Agent and the Borrower in accordance with
Article 13, designate replacement or additional Lending Installations through
which Loans will be made by it or Facility LCs will be
18
issued by it and for whose account Loan payments or payments with respect to
Facility LCs are to be made.
2.18. Non-Receipt of Funds by the Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (a) in the case of a Lender, the
proceeds of a Loan or (b) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day for the first three days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower, the interest rate applicable to the relevant Loan.
2.19. Facility LCs.
(a) Issuance. The LC Issuer hereby agrees, on the terms and
conditions set forth in this Agreement, to issue standby and commercial
letters of credit (each, a "Facility LC") and to renew, extend,
increase, decrease or otherwise modify each Facility LC ("Modify," and
each such action a "Modification"), from time to time from and
including the date of this Agreement and prior to the Facility
Termination Date upon the request of the Borrower; provided that
immediately after each such Facility LC is issued or Modified, (i) the
aggregate amount of the outstanding LC Obligations shall not exceed
$10,000,000 and (ii) the Aggregate Outstanding Credit Exposure shall
not exceed the Aggregate Commitment. No Facility LC shall have an
expiry date later than the fifth Business Day prior to the Facility
Termination Date.
(b) Participations. Upon the issuance or Modification by the
LC Issuer of a Facility LC in accordance with this Section 2.19, the LC
Issuer shall be deemed, without further action by any party hereto, to
have unconditionally and irrevocably sold to each Lender, and each
Lender shall be deemed, without further action by any party hereto, to
have unconditionally and irrevocably purchased from the LC Issuer, a
participation in such Facility LC (and each Modification thereof) and
the related LC Obligations in proportion to its Pro Rata Share.
(c) Notice. Subject to Section 2.19(a), the Borrower shall
give the LC Issuer notice prior to 10:00 a.m. (Chicago time) at least
five Business Days prior to the proposed date of issuance or
Modification of each Facility LC, specifying the beneficiary, the
proposed date of issuance (or Modification) and the expiry date of such
Facility LC, and describing the proposed terms of such Facility LC and
the nature of the transactions proposed to be supported thereby. Upon
receipt of such notice, the LC Issuer shall promptly notify the Agent,
and the Agent shall promptly notify each Lender, of the contents
thereof and of the amount of such Lender's participation in such
proposed
19
Facility LC. The issuance or Modification by the LC Issuer of any
Facility LC shall, in addition to the conditions precedent set forth in
Article 4 (the satisfaction of which the LC Issuer shall have no duty
to ascertain), be subject to the conditions precedent that such
Facility LC shall be satisfactory to the LC Issuer and that the
Borrower shall have executed and delivered such application agreement
and/or such other instruments and agreements relating to such Facility
LC as the LC Issuer shall have reasonably requested (each, a "Facility
LC Application"). In the event of any conflict between the terms of
this Agreement and the terms of any Facility LC Application, the terms
of this Agreement shall control.
(d) LC Fees. The Borrower shall pay to the Agent, for the
account of the Lenders ratably in accordance with their respective Pro
Rata Shares, (i) with respect to each standby Facility LC, a letter of
credit fee at a per annum rate equal to the Applicable Fee Rate in
effect from time to time on the average daily undrawn stated amount
under such standby Facility LC, such fee to be payable in arrears on
each Payment Date, and (ii) with respect to each commercial Facility
LC, a one-time letter of credit fee in an amount equal to the product
of one half of the Applicable Fee Rate then in effect times the initial
stated amount (or, with respect to a Modification of any such
commercial Facility LC which increases the stated amount thereof, such
increase in the stated amount) of such Facility LC, such fee to be
payable on the date of such issuance or increase (each such fee
described in this sentence an "LC Fee"). The Borrower shall also pay to
the LC Issuer for its own account (x) at the time of issuance of each
Facility LC, a fronting fee in an amount equal to 0.25% of the face
amount of such Facility LC, and (y) documentary and processing charges
in connection with the issuance or Modification of and draws under
Facility LCs in accordance with the LC Issuer's standard schedule for
such charges as in effect from time to time.
(e) Administration; Reimbursement by Lenders. Upon receipt
from the beneficiary of any Facility LC of any demand for payment under
such Facility LC, the LC Issuer shall notify the Agent and the Agent
shall promptly notify the Borrower and each other Lender as to the
amount to be paid by the LC Issuer as a result of such demand and the
proposed payment date (the "LC Payment Date"). The responsibility of
the LC Issuer to the Borrower and each Lender shall be only to
determine that the documents (including each demand for payment)
delivered under each Facility LC in connection with such presentment
shall be in conformity in all material respects with such Facility LC.
The LC Issuer shall endeavor to exercise the same care in the issuance
and administration of the Facility LCs as it does with respect to
letters of credit in which no participations are granted, it being
understood that in the absence of any gross negligence or willful
misconduct by the LC Issuer, each Lender shall be unconditionally and
irrevocably liable without regard to the occurrence of any Default or
any condition precedent whatsoever, to reimburse the LC Issuer on
demand for (i) such Lender's Pro Rata Share of the amount of each
payment made by the LC Issuer under each Facility LC to the extent such
amount is not reimbursed by the Borrower pursuant to Section 2.19(f)
below, plus (ii) interest on the foregoing amount to be reimbursed by
such Lender, for each day from the date of the LC Issuer's demand for
such reimbursement (or, if such demand is made after 11:00 a.m.
(Chicago time) on such date, from the next succeeding Business Day) to
the date on which such Lender pays the amount to be reimbursed by it,
20
at a rate of interest per annum equal to the Federal Funds Effective
Rate for the first three days and, thereafter, at a rate of interest
equal to the rate applicable to Floating Rate Advances.
(f) Reimbursement by Borrower. The Borrower shall be
irrevocably and unconditionally obligated to reimburse the LC Issuer on
or before the applicable LC Payment Date for any amounts to be paid by
the LC Issuer upon any drawing under any Facility LC, without
presentment, demand, protest or other formalities of any kind; provided
that neither the Borrower nor any Lender shall hereby be precluded from
asserting any claim for direct (but not consequential) damages suffered
by the Borrower or such Lender to the extent, but only to the extent,
caused by (i) the willful misconduct or gross negligence of the LC
Issuer in determining whether a request presented under any Facility LC
issued by it complied with the terms of such Facility LC or (ii) the LC
Issuer's failure to pay under any Facility LC issued by it after the
presentation to it of a request strictly complying with the terms and
conditions of such Facility LC. All such amounts paid by the LC Issuer
and remaining unpaid by the Borrower shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to (x) the
rate applicable to Floating Rate Advances for such day if such day
falls on or before the applicable LC Payment Date and (y) the sum of 2%
plus the rate applicable to Floating Rate Advances for such day if such
day falls after such LC Payment Date. The LC Issuer will pay to each
Lender ratably in accordance with its Pro Rata Share all amounts
received by it from the Borrower for application in payment, in whole
or in part, of the Reimbursement Obligation in respect of any Facility
LC issued by the LC Issuer, but only to the extent such Lender has made
payment to the LC Issuer in respect of such Facility LC pursuant to
Section 2.19(e). Subject to the terms and conditions of this Agreement
(including without limitation the submission of a Borrowing Notice in
compliance with Section 2.8 and the satisfaction of the applicable
conditions precedent set forth in Article 4), the Borrower may request
an Advance hereunder for the purpose of satisfying any Reimbursement
Obligation.
(g) Obligations Absolute. The Borrower's obligations under
this Section 2.19 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense
to payment which the Borrower may have or have had against the LC
Issuer, any Lender or any beneficiary of a Facility LC. The Borrower
further agrees with the LC Issuer and the Lenders that the LC Issuer
and the Lenders shall not be responsible for, and the Borrower's
Reimbursement Obligation in respect of any Facility LC shall not be
affected by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even if such documents should
in fact prove to be in any or all respects invalid, fraudulent or
forged, or any dispute between or among the Borrower, any of its
Affiliates, the beneficiary of any Facility LC or any financing
institution or other party to whom any Facility LC may be transferred
or any claims or defenses whatsoever of the Borrower or of any of its
Affiliates against the beneficiary of any Facility LC or any such
transferee. The LC Issuer shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Facility
LC. The Borrower agrees that any action taken or omitted by the LC
Issuer or any Lender under or in connection with each Facility LC and
the related drafts and documents, if done without gross
21
negligence or willful misconduct, shall be binding upon the Borrower
and shall not put the LC Issuer or any Lender under any liability to
the Borrower. Nothing in this Section 2.19(g) is intended to limit the
right of the Borrower to make a claim against the LC Issuer for damages
as contemplated by the proviso to the first sentence of Section
2.19(f).
(h) Actions of LC Issuer. The LC Issuer shall be entitled to
rely, and shall be fully protected in relying, upon any Facility LC,
draft, writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document 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, independent
accountants and other experts selected by the LC Issuer. The LC Issuer
shall be fully justified in failing or refusing to take any action
under this Agreement unless it shall first have received such advice or
concurrence of the Required Lenders as it reasonably deems appropriate
or it shall first be indemnified to its reasonable 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.
Notwithstanding any other provision of this Section 2.19, the LC Issuer
shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement 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 the Lenders and any future
holders of a participation in any Facility LC.
(i) Indemnification. The Borrower hereby agrees to indemnify
and hold harmless each Lender, the LC Issuer and the Agent, and their
respective directors, officers, agents and employees from and against
any and all claims and damages, losses, liabilities, costs or expenses
which such Lender, the LC Issuer or the Agent may incur (or which may
be claimed against such Lender, the LC Issuer or the Agent by any
Person whatsoever) by reason of or in connection with the issuance,
execution and delivery or transfer of or payment or failure to pay
under any Facility LC or any actual or proposed use of any Facility LC,
including, without limitation, any claims, damages, losses,
liabilities, costs or expenses which the LC Issuer may incur by reason
of or in connection with (i) the failure of any other Lender to fulfill
or comply with its obligations to the LC Issuer hereunder (but nothing
herein contained shall affect any rights the Borrower may have against
any defaulting Lender) or (ii) by reason of or on account of the LC
Issuer issuing any Facility LC which specifies that the term
"Beneficiary" included therein includes any successor by operation of
law of the named Beneficiary, but which Facility LC does not require
that any drawing by any such successor Beneficiary be accompanied by a
copy of a legal document, satisfactory to the LC Issuer, evidencing the
appointment of such successor Beneficiary; provided that the Borrower
shall not be required to indemnify any Lender, the LC Issuer or the
Agent for any claims, damages, losses, liabilities, costs or expenses
to the extent, but only to the extent, caused by (x) the willful
misconduct or gross negligence of the LC Issuer in determining whether
a request presented under any Facility LC complied with the terms of
such Facility LC or (y) the LC Issuer's failure to pay under any
Facility LC after the presentation to it of a request strictly
complying with the terms and conditions of such Facility LC. Nothing in
this Section 2.19(i) is intended to limit the obligations of the
Borrower under any other provision of this Agreement.
22
(j) Lenders' Indemnification. Each Lender shall, ratably in
accordance with its Pro Rata Share, indemnify the LC Issuer, its
affiliates and their respective directors, officers, agents and
employees (to the extent not reimbursed by the Borrower) against any
cost, expense (including reasonable counsel fees and disbursements),
claim, demand, action, loss or liability (except such as result from
such indemnitees' gross negligence or willful misconduct or the LC
Issuer's failure to pay under any Facility LC after the presentation to
it of a request strictly complying with the terms and conditions of the
Facility LC) that such indemnitees may suffer or incur in connection
with this Section 2.19 or any action taken or omitted by such
indemnitees hereunder.
(k) Facility LC Collateral Account. The Borrower agrees that
it will, upon the request of the Agent or the Required Lenders (which
request may be made only after the occurrence and during the
continuance of a Default or Unmatured Default) and until the final
expiration date of any Facility LC and thereafter as long as any amount
is payable to the LC Issuer or the Lenders in respect of any Facility
LC, maintain a special collateral account pursuant to arrangements
satisfactory to the Agent (the "Facility LC Collateral Account") at the
Agent's office at the address specified pursuant to Article 13, in the
name of such Borrower but under the sole dominion and control of the
Agent, for the benefit of the Lenders and in which such Borrower shall
have no interest other than as set forth in Section 8.1. The Borrower
hereby pledges, assigns and grants to the Agent, on behalf of and for
the ratable benefit of the Lenders and the LC Issuer, a security
interest under the Uniform Commercial Code in all of the Borrower's
right, title and interest in and to all funds which may from time to
time be on deposit in the Facility LC Collateral Account to secure the
prompt and complete payment and performance of the Obligations. The
Agent will invest any funds on deposit from time to time in the
Facility LC Collateral Account in certificates of deposit of Bank One
having a maturity not exceeding 30 days. Nothing in this Section
2.19(k) shall either obligate the Agent to require the Borrower to
deposit any funds in the Facility LC Collateral Account or limit the
right of the Agent to release any funds held in the Facility LC
Collateral Account in each case other than as required by Section 8.1.
(l) Rights as a Lender. In its capacity as a Lender, the LC
Issuer shall have the same rights and obligations as any other Lender.
2.20. Extension of Facility Termination Date.
(a) The Borrower may request an extension of the Facility
Termination Date by submitting a request for an extension to the Agent
(an "Extension Request") no more than 60 days prior to the Facility
Termination Date. The Extension Request must specify the new Facility
Termination Date requested by the Borrower and the date (which must be
at least 30 days after the Extension Request is delivered to the Agent)
as of which the Lenders must respond to the Extension Request (the
"Response Date"). The new Facility Termination Date shall be no more
than 364 days after the Facility Termination Date in effect at the time
the Extension Request is received, including the Facility Termination
Date as one of the days in the calculation of the days elapsed.
Promptly upon receipt of an Extension Request, the Agent shall notify
each Lender of the contents thereof and shall request each Lender to
approve the Extension Request. Each Lender may approve
23
or reject the Extension Request in such Lender's sole discretion. Each
Lender approving the Extension Request (each a "Consenting Lender")
shall deliver its written consent to the Agent and the Borrower no
later than the Response Date. Each Lender that fails to so deliver its
written consent shall be deemed to have rejected the Extension Request.
(b) If the consent of Lenders having at least 50% of the
Aggregate Commitment is received by the Agent, the new Facility
Termination Date specified in the Extension Request shall become
effective on the existing Facility Termination Date as to the
Consenting Lenders (and the Agent shall promptly notify the Borrower
and each Lender of the new Facility Termination Date), but the existing
Facility Termination Date shall not be extended as to any Lender that
is not a Consenting Lender (each a "Non-Consenting Lender"). To the
extent that the Facility Termination Date is not extended as to any
Lender pursuant to this Section 2.20, the Commitment of such
Non-Consenting Lender shall automatically terminate in whole on such
unextended Facility Termination Date without any further notice or
other action by the Borrower, such Lender or any other Person;
provided, that such Non-Consenting Lender's rights under Sections 3.1,
3.2, 3.4, 3.5 and 9.6 of this Agreement and -------- its obligations
under Sections 3.5(g) and 10.8 of this Agreement shall survive the
Facility Termination Date for such Non-Consenting Lender as to matters
occurring prior to such date.
2.21. Replacement of Lender.If the Borrower is required pursuant to
Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any
Lender's obligation to make or continue, or to convert Floating Rate Advances
into, Eurodollar Advances shall be suspended pursuant to Section 3.3 (any Lender
so affected an "Affected Lender"), the Borrower may elect, if such amounts
continue to be charged or such suspension is still effective, to replace such
Affected Lender as a Lender party to this Agreement, provided that no Default or
Unmatured Default shall have occurred and be continuing at the time of such
replacement, and provided further that, concurrently with such replacement, (i)
another bank or other entity which is reasonably satisfactory to the Borrower
and the Agent shall agree, as of such date, to purchase for cash the Advances
and other Obligations due to the Affected Lender pursuant to an assignment
substantially in the form of Exhibit C and to become a Lender for all purposes
under this Agreement and to assume all obligations of the Affected Lender to be
terminated as of such date and to comply with the requirements of Section 12.3
applicable to assignments, and (ii) the Borrower shall pay to such Affected
Lender in same day funds on the day of such replacement (A) all interest, fees
and other amounts then accrued but unpaid to such Affected Lender by the
Borrower hereunder to and including the date of termination, including without
limitation payments due to such Affected Lender under Sections 3.1, 3.2 and 3.5,
and (B) an amount, if any, equal to the payment which would have been due to
such Lender on the day of such replacement under Section 3.4 had the Loans of
such Affected Lender been prepaid on such date rather than sold to the
replacement Lender.
ARTICLE 3
YIELD PROTECTION; TAXES
-----------------------
3.1. Yield Protection. If, on or after the date of this Agreement, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive
24
(whether or not having the force of law), or any change in the interpretation or
administration thereof by any governmental or quasi-governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender or applicable Lending
Installation or the LC Issuer with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
(a) subjects any Lender or any applicable Lending Installation
or the LC Issuer to any Taxes, or changes the basis of taxation of
payments (other than with respect to Excluded Taxes) to any Lender or
the LC Issuer in respect of its Eurodollar Loans, Facility LCs or
participations therein, or
(b) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation or the
LC Issuer (other than reserves and assessments taken into account in
determining the interest rate applicable to Eurodollar Advances), or
(c) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending Installation
or the LC Issuer of making, funding or maintaining its Eurodollar
Loans, or of issuing or participating in Facility LCs, or reduces any
amount receivable by any Lender or any applicable Lending Installation
or the LC Issuer in connection with its Eurodollar Loans, Facility LCs
or participations therein, or requires any Lender or any applicable
Lending Installation or the LC Issuer to make any payment calculated by
reference to the amount of Eurodollar Loans, Facility LCs or
participations therein held or interest or LC Fees received by it, by
an amount deemed material by such Lender or the LC Issuer as the case
may be,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or the LC Issuer, as the case may be, of making
or maintaining its Eurodollar Loans or Commitment or of issuing or participating
in Facility LCs or to reduce the return received by such Lender or applicable
Lending Installation or the LC Issuer, as the case may be, in connection with
such Eurodollar Loans, Commitment, Facility LCs or participations therein, then,
within 15 days of demand by such Lender or the LC Issuer, as the case may be,
the Borrower shall pay such Lender or the LC Issuer, as the case may be, such
additional amount or amounts as will compensate such Lender or the LC Issuer, as
the case may be, for such increased cost or reduction in amount received.
3.2. Changes in Capital Adequacy Regulations. If a Lender or the LC
Issuer determines the amount of capital required or expected to be maintained by
such Lender or the LC Issuer, any Lending Installation of such Lender or the LC
Issuer, or any corporation controlling such Lender or the LC Issuer is increased
as a result of a Change, then, within 15 days of demand by such Lender or the LC
Issuer, the Borrower shall pay such Lender or the LC Issuer the amount necessary
to compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender or the LC Issuer determines is attributable
to this Agreement, its Outstanding Credit Exposure or its Commitment to make
Loans and issue or participate in Facility LCs, as the case may be, hereunder
(after taking into account such Lender's or the LC Issuer's policies as to
capital adequacy). "Change" means (i) any change
25
after the date of this Agreement in the Risk-Based Capital Guidelines or (ii)
any adoption of or change in any other law, governmental or quasi-governmental
rule, regulation, policy, guideline, interpretation, or directive (whether or
not having the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any Lender or the LC
Issuer or any Lending Installation or any corporation controlling any Lender or
the LC Issuer. "Risk-Based Capital Guidelines" means (i) the risk-based capital
guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (a) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (b) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, then
the Agent shall suspend the availability of Eurodollar Advances and require any
affected Eurodollar Advances to be repaid or converted to Floating Rate
Advances, subject to the payment of any funding indemnification amounts required
by Section 3.4.
3.4. Funding Indemnification. If any payment of a Eurodollar Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, the Borrower will indemnify each Lender for any
loss or cost incurred by it resulting therefrom, including, without limitation,
any loss or cost in liquidating or employing deposits acquired to fund or
maintain such Eurodollar Advance.
3.5. Taxes.
(a) All payments by the Borrower to or for the account of any
Lender, the LC Issuer or the Agent hereunder or under any Note or
Facility LC Application shall be made free and clear of and without
deduction for any and all Taxes. If the Borrower shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder
to any Lender, the LC Issuer or the Agent, (a) the sum payable shall be
increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section 3.5) such Lender, the LC Issuer or the Agent (as the case may
be) receives an amount equal to the sum it would have received had no
such deductions been made, (b) the Borrower shall make such deductions,
(c) the Borrower shall pay the full amount deducted to the relevant
authority in accordance with applicable law and (d) the Borrower shall
furnish to the Agent the original copy of a receipt evidencing payment
thereof within 30 days after such payment is made.
26
(b) In addition, the Borrower hereby agrees to pay any present
or future stamp or documentary taxes and any other excise or property
taxes, charges or similar levies which arise from any payment made
hereunder or under any Note or Facility LC Application or from the
execution or delivery of, or otherwise with respect to, this Agreement
or any Note or Facility LC Application ("Other Taxes").
(c) The Borrower hereby agrees to indemnify the Agent, the LC
Issuer and each Lender for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed on
amounts payable under this Section 3.5) paid by the Agent, the LC
Issuer or such Lender and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto. Payments due
under this indemnification shall be made within 30 days of the date the
Agent, the LC Issuer or such Lender makes demand therefor pursuant to
Section 3.6.
(d) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof (each a "Non-U.S. Lender")
agrees that it will, not more than ten Business Days after the date of
this Agreement, (i) deliver to the Agent two duly completed copies of
United States Internal Revenue Service Form W-8BEN or W-8ECI,
certifying in either case that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of any
United States federal income taxes, and (ii) deliver to the Agent a
United States Internal Revenue Form W-8 or W-9, as the case may be, and
certify that it is entitled to an exemption from United States backup
withholding tax. Each Non-U.S. Lender further undertakes to deliver to
each of the Borrower and the Agent (x) renewals or additional copies of
such form (or any successor form) on or before the date that such form
expires or becomes obsolete, and (y) after the occurrence of any event
requiring a change in the most recent forms so delivered by it, such
additional forms or amendments thereto as may be reasonably requested
by the Borrower or the Agent. All forms or amendments described in the
preceding sentence shall certify that such Lender is entitled to
receive payments under this Agreement without deduction or withholding
of any United States federal income taxes, unless an event (including
without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise
be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such form
or amendment with respect to it and such Lender advises the Borrower
and the Agent that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax.
(e) For any period during which a Non-U.S. Lender has failed
to provide the Borrower with an appropriate form pursuant to clause
(d), above (unless such failure is due to a change in treaty, law or
regulation, or any change in the interpretation or administration
thereof by any governmental authority, occurring subsequent to the date
on which a form originally was required to be provided), such Non-U.S.
Lender shall not be entitled to indemnification under this Section 3.5
with respect to Taxes imposed by the United States; provided that,
should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its
failure to deliver a form required under clause (d), above, the
Borrower shall take such
27
steps as such Non-U.S. Lender shall reasonably request to assist such
Non-U.S. Lender to recover such Taxes.
(f) Any Lender that is entitled to an exemption from or
reduction of withholding tax with respect to payments under this
Agreement or any Note pursuant to the law of any relevant jurisdiction
or any treaty shall deliver to the Borrower (with a copy to the Agent),
at the time or times prescribed by applicable law, such properly
completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a
reduced rate.
(g) If the U.S. Internal Revenue Service or any other
governmental authority of the United States or any other country or any
political subdivision thereof asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any
Lender (because the appropriate form was not delivered or properly
completed, because such Lender failed to notify the Agent of a change
in circumstances which rendered its exemption from withholding
ineffective, or for any other reason), such Lender shall indemnify the
Agent fully for all amounts paid, directly or indirectly, by the Agent
as tax, withholding therefor, or otherwise, including penalties and
interest, and including taxes imposed by any jurisdiction on amounts
payable to the Agent under this subsection, together with all costs and
expenses related thereto (including attorneys fees and time charges of
attorneys for the Agent, which attorneys may be employees of the
Agent). The obligations of the Lenders under this Section 3.5(g) shall
survive the payment of the Obligations and termination of this
Agreement.
3.6. Lender Statements; Survival of Indemnity. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Borrower to such
Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of
Eurodollar Advances under Section 3.3, so long as such designation is not, in
the judgment of such Lender, disadvantageous to such Lender. Each Lender shall
deliver a written statement of such Lender to the Borrower (with a copy to the
Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such
written statement shall set forth in reasonable detail the calculations upon
which such Lender determined such amount and shall be final, conclusive and
binding on the Borrower in the absence of manifest error. Determination of
amounts payable under such Sections in connection with a Eurodollar Loan shall
be calculated as though each Lender funded its Eurodollar Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit used
as a reference in determining the Eurodollar Rate applicable to such Loan,
whether in fact that is the case or not. Unless otherwise provided herein, the
amount specified in the written statement of any Lender shall be payable on
demand after receipt by the Borrower of such written statement. The obligations
of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of
the Obligations and termination of this Agreement.
28
ARTICLE 4
CONDITIONS PRECEDENT
--------------------
4.1. Initial Credit Extension. The Lenders shall not be required to
make the initial Credit Extension hereunder unless the Borrower has furnished to
the Agent with sufficient copies for the Lenders:
(a) Copies of the articles or certificate of incorporation of
the Borrower, together with all amendments, and a certificate of good
standing, each certified by the appropriate governmental officer in its
jurisdiction of incorporation and accompanied by a certification by the
Secretary or Assistant Secretary of the Borrower that there have been
no changes in the matters certified by such governmental officer since
the date of such governmental officer's certification.
(b) Copies, certified by the Secretary or Assistant Secretary
of the Borrower, of its by-laws and of its Board of Directors'
resolutions and of resolutions or actions of any other body authorizing
the execution of the Loan Documents to which the Borrower is a party.
(c) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Borrower, which shall identify by name and
title and bear the signatures of the Authorized Officers and any other
officers of the Borrower authorized to sign the Loan Documents to which
the Borrower is a party, upon which certificate the Agent and the
Lenders shall be entitled to rely until informed of any change in
writing by the Borrower.
(d) Copies of the articles or certificate of incorporation or
organization of each Guarantor, together with all amendments, and a
certificate of good standing, each certified by the appropriate
governmental officer in its jurisdiction of incorporation or
organization and in each case accompanied by a certification by the
Secretary or Assistant Secretary of such Guarantor that there have been
no changes in the matters certified by such governmental officer since
the date of such governmental officer's certification.
(e) Copies, certified by the Secretary or Assistant Secretary
of each Guarantor, of its by-laws or its operating or other management
agreement and of resolutions of its Board of Director or members and of
resolutions or actions of any other body authorizing the execution of
the Loan Documents to which each Guarantor is a party.
(f) An incumbency certificate, executed by the Secretary or
Assistant Secretary of each Guarantor, which shall identify by name and
title and bear the signatures of the Authorized Officers and any other
officers of each Guarantor authorized to sign the Loan Documents to
which each Guarantor is a party, upon which certificate the Agent and
the Lenders shall be entitled to rely until informed of any change in
writing by each Guarantor.
29
(g) A certificate, signed by the chief financial officer of
the Borrower, stating that on the initial Credit Extension Date no
Default or Unmatured Default has occurred and is continuing.
(h) A written opinion of the Borrower's and the Guarantors'
counsel, addressed to the Lenders in substantially the form of Exhibit
A.
(i) Any Notes requested by a Lender pursuant to Section 2.13
payable to the order of each such requesting Lender.
(j) Written money transfer instructions, in substantially the
form of Exhibit D, addressed to the Agent and signed by an Authorized
Officer, together with such other related money transfer authorizations
as the Agent may have reasonably requested.
(k) If the initial Credit Extension will be the issuance of a
Facility LC, a properly completed Facility LC Application.
(l) A Guaranty executed by each Material Domestic Subsidiary.
(m) Such other documents as any Lender or its counsel may have
reasonably requested.
4.2. Each Credit Extension. The Lenders shall not be required to make
any Credit Extension unless on the applicable Credit Extension Date:
(a) There exists no Default or Unmatured Default.
(b) The representations and warranties contained in Article 5
are true and correct as of such Credit Extension Date except to the
extent any such representation or warranty is stated to relate solely
to an earlier date, in which case such representation or warranty shall
have been true and correct on and as of such earlier date.
(c) All legal matters incident to the making of such Credit
Extension shall be satisfactory to the Lenders and their counsel.
Each Borrowing Notice or request for issuance of a Facility LC with
respect to each such Credit Extension shall constitute a representation and
warranty by the Borrower that the conditions contained in Sections 4.2(a) and
(b) have been satisfied. Any Lender may require a duly completed compliance
certificate in substantially the form of Exhibit B as a condition to making a
Credit Extension.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower represents and warrants to the Lenders that:
30
5.1. Existence and Standing. Each of the Borrower and its Subsidiaries
is a corporation, partnership (in the case of Subsidiaries only) or limited
liability company duly and properly incorporated or organized, as the case may
be, validly existing and (to the extent such concept applies to such entity) in
good standing under the laws of its jurisdiction of incorporation or
organization and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted, except where the failure to
have such authority could not reasonably be expected to have a Material Adverse
Effect.
5.2. Authorization and Validity. The Borrower has the power and
authority and legal right to execute and deliver the Loan Documents to which it
is a party and to perform its obligations thereunder. The execution and delivery
by the Borrower of the Loan Documents to which it is a party and the performance
of its obligations thereunder have been duly authorized by proper corporate
proceedings, and the Loan Documents to which the Borrower is a party constitute
legal, valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their terms, except as enforceability may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.
5.3. No Conflict; Government Consent. Neither the execution and
delivery by the Borrower of the Loan Documents to which it is a party, nor the
consummation of the transactions therein contemplated, nor compliance with the
provisions thereof will violate (a) any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on the Borrower or any of its
Subsidiaries or (b) the Borrower's or any Subsidiary's articles or certificate
of incorporation, partnership agreement, certificate of partnership, articles or
certificate of organization, by-laws, or operating or other management
agreement, as the case may be, or (c) the provisions of any indenture,
instrument or agreement to which the Borrower or any of its Subsidiaries is a
party or is subject, or by which it, or its Property, is bound, or conflict with
or constitute a default thereunder, or result in, or require, the creation or
imposition of any Lien in, of or on the Property of the Borrower or a Subsidiary
pursuant to the terms of any such indenture, instrument or agreement. No order,
consent, adjudication, approval, license, authorization, or validation of, or
filing, recording or registration with, or exemption by, or other action in
respect of any governmental or public body or authority, or any subdivision
thereof, which has not been obtained by the Borrower or any of its Subsidiaries,
is required to be obtained by the Borrower or any of its Subsidiaries in
connection with the execution and delivery of the Loan Documents, the borrowings
under this Agreement, the payment and performance by the Borrower of the
Obligations or the legality, validity, binding effect or enforceability of any
of the Loan Documents.
5.4. Financial Statements. The audited consolidated financial
statements of the Borrower and its Subsidiaries for the fiscal year ended April
27, 2002 and the unaudited financial statements for the fiscal quarter ended
July 27, 2002 heretofore delivered to the Lenders were prepared in accordance
with generally accepted accounting principles in effect on the date such
statements were prepared and fairly present the consolidated financial condition
and operations of the Borrower and its Subsidiaries at such date and the
consolidated results of their operations for the period then ended.
31
5.5. Material Adverse Change. Since July 27, 2002, there has been no
change in the business, Property, condition (financial or otherwise) or results
of operations of the Borrower and its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect.
5.6. Taxes. The Borrower and its Subsidiaries have filed all United
States federal tax returns and all other tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Borrower or any of its Subsidiaries, except such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided in accordance with Agreement Accounting Principles
and as to which no Lien exists. The United States income tax returns of the
Borrower and its Subsidiaries have been audited by the Internal Revenue Service
through the fiscal year ended April 25, 1998. No tax liens have been filed and
no claims are being asserted with respect to any such taxes. The charges,
accruals and reserves on the books of the Borrower and its Subsidiaries in
respect of any taxes or other governmental charges are adequate. If the Borrower
or any of its Subsidiaries is a limited liability company, each such limited
liability company qualifies for partnership tax treatment under United States
federal tax law.
5.7. Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or which seeks to prevent, enjoin or delay the making of
any Credit Extensions. Other than any liability incident to any litigation,
arbitration or proceeding which could not reasonably be expected to have a
Material Adverse Effect, the Borrower has no material contingent obligations not
provided for or disclosed in the financial statements referred to in Section
5.4.
5.8. Subsidiaries. Schedule 1 contains an accurate list of all
Subsidiaries of the Borrower as of the date of this Agreement, setting forth
their respective jurisdictions of organization and the percentage of their
respective capital stock or other ownership interests owned by the Borrower or
other Subsidiaries. All of the issued and outstanding shares of capital stock or
other ownership interests of such Subsidiaries have been (to the extent such
concepts are relevant with respect to such ownership interests) duly authorized
and issued and are fully paid and non-assessable.
5.9. ERISA. Neither the Borrower nor any member of the Controlled Group
maintains, participates in or contributes to, or has at any time within the past
15 years maintained, participated in or contributed to, any Plan. With respect
to any Plan that the Borrower or any member of the Controlled Group previously
maintained, participated in or contributed to, the Plan has been terminated in a
"standard termination" under Title IV of ERISA, and no such Person has or
reasonably expects to have, any liability with respect to any Plan.
5.10. Accuracy of Information. No information, exhibit or report
furnished by the Borrower or any of its Subsidiaries to the Agent or to any
Lender in connection with the negotiation of, or compliance with, the Loan
Documents contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statements contained therein not
misleading.
32
5.11. Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of the value of those assets of the Borrower and its
Subsidiaries which are subject to any limitation on sale, pledge, or other
restriction hereunder.
5.12. Material Agreements. Neither the Borrower nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (a) any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect or (b) any
agreement or instrument evidencing or governing Indebtedness.
5.13. Compliance With Laws. The Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property except for any failure
to comply with any of the foregoing which could not reasonably be expected to
have a Material Adverse Effect.
5.14. Ownership of Properties. Except as set forth on Schedule 2, on
the date of this Agreement, the Borrower and its Subsidiaries will have good
title, free of all Liens other than those permitted by Section 6.15, to all of
the Property and assets reflected in the Borrower's most recent consolidated
financial statements provided to the Agent as owned by the Borrower and its
Subsidiaries.
5.15. Plan Assets; Prohibited Transactions. The Borrower is not an
entity deemed to hold "plan assets" within the meaning of 29 C.F.R. ss.
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code), and neither the execution of this Agreement nor the making of
Credit Extensions hereunder gives rise to a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code.
5.16. Environmental Matters. In the ordinary course of its business,
the officers of the Borrower consider the effect of Environmental Laws on the
business of the Borrower and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the Borrower
due to Environmental Laws. On the basis of this consideration, the Borrower has
concluded that Environmental Laws cannot reasonably be expected to have a
Material Adverse Effect. Neither the Borrower nor any Subsidiary has received
any notice to the effect that its operations are not in material compliance with
any of the requirements of applicable Environmental Laws or are the subject of
any federal or state investigation evaluating whether any remedial action is
needed to respond to a release of any toxic or hazardous waste or substance into
the environment, which non-compliance or remedial action could reasonably be
expected to have a Material Adverse Effect.
5.17. Investment Company Act. Neither the Borrower nor any Subsidiary
is an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
33
5.18. Public Utility Holding Company Act. Neither the Borrower nor any
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
5.19. Post-Retirement Benefits. The present value of the expected cost
of post-retirement medical and insurance benefits payable by the Borrower and
its Subsidiaries to its employees and former employees, as estimated by the
Borrower in accordance with procedures and assumptions deemed reasonable by the
Required Lenders is zero.
5.20. Prior Credit Agreement. The Amended and Restated Credit Agreement
dated as of April 28, 2000, as from time to time in effect, by and among the
Borrower, U.S. Bank National Association, individually and as agent, and the
other banks party thereto, has been terminated (except for those provisions that
expressly survive the termination thereof) and all loans outstanding and other
amounts owed to the lenders or agents thereunder have been or shall
simultaneously with the initial Credit Extension hereunder be paid in full.
ARTICLE 6
COVENANTS
---------
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. The Borrower will maintain, for itself and
each Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, and furnish to the
Lenders:
(a) Within 90 days after the close of each of its fiscal
years, an unqualified (except for qualifications relating to changes in
accounting principles or practices reflecting changes in generally
accepted accounting principles and required or approved by the
Borrower's independent certified public accountants) audit report
certified by independent certified public accountants acceptable to the
Lenders, prepared in accordance with Agreement Accounting Principles on
a consolidated basis (and, if requested by the Agent or any Lender and
available, on a consolidating basis, though, in any event,
consolidating statements need not be certified by such accountants) for
itself and its Subsidiaries, including balance sheets as of the end of
such period, related profit and loss and reconciliation of surplus
statements, and a statement of cash flows, accompanied by (i) any
management letter prepared by said accountants, and (ii) a certificate
of said accountants that, in the course of their examination necessary
for their certification of the foregoing, they have obtained no
knowledge of any Default or Unmatured Default, or if, in the opinion of
such accountants, any Default or Unmatured Default shall exist, stating
the nature and status thereof.
(b) Within 45 days after the close of the first three
quarterly periods of each of its fiscal years, for itself and its
Subsidiaries, unaudited consolidated (and, if requested by the Agent or
any Lender and available, consolidating) balance sheets as at the close
of
34
each such period and consolidated (and, if requested by the Agent or
any Lender and available, consolidating) profit and loss and
reconciliation of surplus statements and a statement of cash flows for
the period from the beginning of such fiscal year to the end of such
quarter, all certified by its chief financial officer.
(c) Together with the financial statements required under
Sections 6.1(a) and (b), a compliance certificate in substantially the
form of Exhibit B signed by its chief financial officer showing the
calculations necessary to determine compliance with this Agreement and
stating that no Default or Unmatured Default exists, or if any Default
or Unmatured Default exists, stating the nature and status thereof.
(d) Prior to adoption thereof, written notice of the intent of
the Borrower or any member of the Controlled Group to adopt any Plan.
(e) As soon as possible and in any event within 10 days after
the Borrower knows that any Reportable Event has occurred with respect
to any Plan, a statement, signed by the chief financial officer of the
Borrower, describing said Reportable Event and the action which the
Borrower proposes to take with respect thereto.
(f) As soon as possible and in any event within 10 days after
receipt by the Borrower, a copy of (i) any notice or claim to the
effect that the Borrower or any of its Subsidiaries is or may be liable
to any Person as a result of the release by the Borrower, any of its
Subsidiaries, or any other Person of any toxic or hazardous waste or
substance into the environment, and (ii) any notice alleging any
violation of any federal, state or local environmental, health or
safety law or regulation by the Borrower or any of its Subsidiaries,
which, in either case, could reasonably be expected to have a Material
Adverse Effect.
(g) Promptly upon the furnishing thereof to the shareholders
of the Borrower, copies of all financial statements, reports and proxy
statements so furnished.
(h) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly or other regular reports
which the Borrower or any of its Subsidiaries files with the Securities
and Exchange Commission.
(i) Such other information (including non-financial
information) as the Agent or any Lender may from time to time
reasonably request.
6.2. Use of Proceeds. The Borrower will, and will cause each Subsidiary
to, use the proceeds of the Credit Extensions for general corporate purposes.
The Borrower will not, nor will it permit any Subsidiary to, use any of the
proceeds of the Credit Extensions to purchase or carry any "margin stock" (as
defined in Regulation U).
6.3. Notice of Default. The Borrower will, and will cause each
Subsidiary to, give prompt notice in writing to the Lenders of the occurrence of
any Default or Unmatured Default and of any other development, financial or
otherwise, which could reasonably be expected to have a Material Adverse Effect.
35
6.4. Conduct of Business. The Borrower will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly incorporated or organized,
validly existing and (to the extent such concept applies to such entity) in good
standing as a domestic corporation, partnership or limited liability company in
its jurisdiction of incorporation or organization, as the case may be, and,
except to the extent the failure to do so could not reasonably be expected to
have a Material Adverse Effect, maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted.
6.5. Taxes. The Borrower will, and will cause each Subsidiary to,
timely file complete and correct United States federal and applicable foreign,
state and local tax returns required by law and pay when due all taxes,
assessments and governmental charges and levies upon it or its income, profits
or Property, except those which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been set aside in
accordance with Agreement Accounting Principles. At any time that the Borrower
or any of its Subsidiaries is organized as a limited liability company, each
such limited liability company will qualify for partnership tax treatment under
United States federal tax law.
6.6. Insurance. The Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies insurance on
all their Property in such amounts and covering such risks as is consistent with
sound business practice, and the Borrower will furnish to any Lender upon
request full information as to the insurance carried.
6.7. Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including,
without limitation, all Environmental Laws, except to the extent the failure to
do so could not reasonably be expected to have a Material Adverse Effect.
6.8. Maintenance of Properties. The Borrower will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times.
6.9. Inspection. The Borrower will, and will cause each Subsidiary to,
permit the Agent and the Lenders, by their respective representatives and
agents, to inspect any of the Property, books and financial records of the
Borrower and each Subsidiary, to examine and make copies of the books of
accounts and other financial records of the Borrower and each Subsidiary, and to
discuss the affairs, finances and accounts of the Borrower and each Subsidiary
with, and to be advised as to the same by, their respective officers at such
reasonable times and intervals as the Agent or any Lender may designate.
6.10. Intentionally omitted.
6.11. Indebtedness. The Borrower will not permit any Subsidiary to
create, incur or suffer to exist any Indebtedness, except:
(a) Indebtedness existing on the date hereof and described in
Schedule 2.
36
(b) Indebtedness arising under Financial Contracts that are
entered into in the ordinary course of business and not for speculative
purposes.
(c) Receivables Transaction Attributed Indebtedness in an
aggregate amount not in excess of $250,000,000 at any time.
(d) Contingent Obligations under the Guaranty.
(e) Off-Balance Sheet Liabilities in an aggregate amount not
in excess of $10,000,000 at any time.
(f) Indebtedness of Subsidiaries to other Subsidiaries or to
the Borrower.
(g) Other Indebtedness of Subsidiaries in an aggregate amount
for all Subsidiaries not in excess of $10,000,000 at any time.
6.12. Merger. The Borrower will not, nor will it permit any Subsidiary
to, merge or consolidate with or into any other Person, except that (a) a
Subsidiary may merge into the Borrower or a Wholly-Owned Subsidiary and (b) the
Borrower or any Subsidiary may from time to time be party to a merger in
connection with an Acquisition by the Borrower or such Subsidiary that is
permitted under Section 6.14, so long as the Borrower or such Subsidiary is the
survivor of such merger.
6.13. Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property to any other
Person, except:
(a) Sales of inventory in the ordinary course of business.
(b) Leases, sales or other dispositions of its Property that,
together with all other Property of the Borrower and its Subsidiaries
previously leased, sold or disposed of (other than inventory in the
ordinary course of business) as permitted by this Section during the
twelve-month period ending with the month in which any such lease, sale
or other disposition occurs, do not constitute a Substantial Portion of
the Property of the Borrower and its Subsidiaries.
(c) Any transfer of an interest in accounts or notes
receivable, contracts and related assets as part of any Qualified
Receivables Transaction or Other Permitted Account Sales, so long as
the Receivables Transaction Attributed Indebtedness does not exceed
$250,000,000.
6.14. Investments and Acquisitions. The Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or remain a partner in any partnership or joint venture, or to make any
Acquisition of any Person, except:
(a) Permitted Investments.
37
(b) Investments in the Borrower and in Subsidiaries that are
Guarantors.
(c) Investments in Subsidiaries that are not Guarantors;
provided that the aggregate of all Investments (whether made before, on
or after the date hereof) in Subsidiaries that are not Guarantors may
not at any time exceed twenty percent (20%) of the consolidated total
assets of the Borrower and its Subsidiaries; it further being
understood that any Subsidiary that is not a Guarantor as of the date
of this Agreement may become a Guarantor by executing and delivering to
the Agent a counterpart to the Guaranty in the form of Annex I to the
Guaranty, along with such other documents, opinions and information as
the Agent may require regarding such Subsidiary and the enforceability
of such Guaranty, and that Investments in any such Subsidiary that has
become a Guarantor shall, so long as such Subsidiary remains a
Guarantor, not be considered in determining the amount of Investments
permitted under this subsection (c).
(d) Equity Investments in existence on the date hereof and
described in Schedule 1.
(e) Investments comprised of capital contributions (whether in
the form of cash, a note, or other assets) to a Subsidiary or other
special-purpose entity created solely to engage in either Qualified
Receivables Transaction or otherwise resulting from transfers of assets
permitted by Section 6.13(c) to such a special-purpose entity.
(f) Acquisitions as to which the Borrower has, prior to the
closing of such Acquisition, delivered to the Agent a certificate of an
Authorized Officer of the Borrower setting forth in reasonable detail
financial calculations demonstrating that, on a pro forma basis
(assuming that such Acquisition (and any related incurrence of
Indebtedness) had occurred on the first day of the four-fiscal quarter
period ending at the last fiscal quarter-end) after giving effect to
such Acquisition, (x) the ratio of Consolidated Total Debt at the last
fiscal quarter-end to Consolidated Adjusted EBITDA for the four-fiscal
quarter period ending at the last fiscal quarter-end will not exceed
1.75 to 1.0 and (y) no Default or Unmatured Default will exist.
6.15. Liens. The Borrower will not, nor will it permit any Subsidiary
to, create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries, except:
(a) Liens for taxes, assessments or governmental charges or
levies on its Property if the same shall not at the time be delinquent
or thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings and for which adequate
reserves in accordance with Agreement Accounting Principles shall have
been set aside on its books.
(b) Liens imposed by law, such as carriers', warehousemen's,
landlords' and mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of obligations not
more than 60 days past due or which are being contested in good faith
by appropriate proceedings and for which adequate reserves shall have
been set aside on its books.
38
(c) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation.
(d) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature
generally existing with respect to properties of a similar character
and which do not in any material way affect the marketability of the
same or interfere with the use thereof in the business of the Borrower
or its Subsidiaries.
(e) Liens existing on the date hereof and described in
Schedule 2.
(f) Liens incurred in connection with any transfer of an
interest in accounts or notes receivable, contracts or related assets
as part of any Qualified Receivables Transaction or Other Permitted
Account Sales, but only to the extent the Receivables Transaction
Attributed Indebtedness is permitted Indebtedness pursuant to Section
6.11(c).
(g) Any Lien securing either a loan whose proceeds were used
by the Borrower or a Subsidiary to acquire assets or a Capitalized
Lease, provided that such Lien does not extend to any assets other than
those acquired with such loan proceeds or subject to such Capitalized
Lease and that the aggregate amount payable under all such loans and
Capitalized Leases at any time does not exceed $5,000,000.
6.16. Affiliates. The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except (a) in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower or
such Subsidiary than the Borrower or such Subsidiary would obtain in a
comparable arms-length transaction and (b) transactions between the Borrower or
any Subsidiary, on the one hand, and any Subsidiary or other special-purpose
entity created to engage solely in either Qualified Receivables Transaction.
6.17. Material Domestic Subsidiaries. Promptly, and in any event within
30 days, after a Person shall become a Material Domestic Subsidiary that is not
a Material Domestic Subsidiary on the date hereof, the Borrower shall cause such
new Material Domestic Subsidiary to become a Guarantor under the Guaranty by
executing and delivering to the Agent a counterpart to the Guaranty in the form
of Annex I to the Guaranty, along with such other documents, opinions and
information as the Agent may require regarding such Material Domestic Subsidiary
and the enforceability of such Guaranty. If at any time (a) the aggregate assets
of all of the Borrower's Domestic Subsidiaries that are not Guarantors under the
Guaranty exceeds twenty percent (20%) of the consolidated total assets of the
Borrower and its Subsidiaries, or (b) the aggregate Consolidated Adjusted Net
Income for the four consecutive fiscal quarters most recently ended of all of
the Borrower's Domestic Subsidiaries that are not Guarantors under the Guaranty
exceeds twenty percent (20%) of the Borrower's Consolidated Adjusted Net Income
for such period, the Borrower will, within 30 days after its senior management
becomes aware (or reasonably should have become aware) of such event, cause to
be executed and delivered to the
39
Agent counterparts to the Guaranty in the form of Annex I to the Guaranty
(together with such other documents, opinions and information as the Agent may
require) with respect to additional Domestic Subsidiaries to the extent
necessary so that, after giving effect thereto, the threshold levels in clauses
(a) and (b) above are not exceeded.
6.18. Subordinated Indebtedness. The Borrower will not, and will not
permit any Subsidiary to, make any amendment or modification to the indenture,
note or other agreement evidencing or governing any Subordinated Indebtedness,
or directly or indirectly voluntarily prepay, defease or in substance defease,
purchase, redeem, retire or otherwise acquire, any Subordinated Indebtedness.
6.19. Sale of Accounts. The Borrower will not, nor will it permit any
Subsidiary to, sell or otherwise dispose of any notes receivable or accounts
receivable, with or without recourse except to the extent permitted by Section
6.13(c).
6.20. Financial Covenants.
(a) Consolidated Tangible Net Worth. The Borrower will at all
times maintain Consolidated Tangible Net Worth of not less than the sum
of (i) $300,000,000, plus (ii) 50% of the cumulative positive quarterly
Consolidated Net Income for all fiscal quarters of the Borrower
following the fiscal quarter of the Borrower ending April 27, 2002
(without taking into account any net loss in any such fiscal quarter),
plus (iii) 100% of the amount, if any, by which stockholder's equity of
the Borrower is, in accordance with Agreement Accounting Principles,
increased for all fiscal quarters of the Borrower following the fiscal
quarter of the Borrower ending April 27, 2002 as a result of (A) the
issuance of any capital stock of the Borrower or (B) any Acquisition.
(b) Leverage Ratio. The Borrower will maintain, as of the end
of each fiscal quarter, a Leverage Ratio of not greater than 2.0 to
1.0.
ARTICLE 7
DEFAULTS
--------
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on behalf
of the Borrower or any of its Subsidiaries to the Lenders or the Agent under or
in connection with this Agreement, any Credit Extension, or any certificate or
information delivered in connection with this Agreement or any other Loan
Document shall be materially false on the date as of which made.
7.2. Nonpayment of principal of any Loan when due, nonpayment of any
Reimbursement Obligation within one Business Day after the same becomes due, or
nonpayment of interest upon any Loan or of any commitment fee, LC Fee or other
obligations under any of the Loan Documents within five days after the same
becomes due.
40
7.3. The breach by the Borrower of any of the terms or provisions of
Article 6.
7.4. The breach by the Borrower (other than a breach which constitutes
a Default under another Section of this Article 7) of any of the terms or
provisions of this Agreement which is not remedied within five days after
written notice from the Agent or any Lender.
7.5. Failure of the Borrower or any of its Subsidiaries to pay when due
any Material Indebtedness; or the default by the Borrower or any of its
Subsidiaries in the performance (beyond the applicable grace period with respect
thereto, if any) of any term, provision or condition contained in any Material
Indebtedness Agreement, or any other event shall occur or condition exist, the
effect of which default, event or condition is to cause, or to permit the
holder(s) of such Material Indebtedness or the lender(s) under any Material
Indebtedness Agreement to cause, such Material Indebtedness to become due prior
to its stated maturity or any commitment to lend under any Material Indebtedness
Agreement to be terminated prior to its stated expiration date; or any Material
Indebtedness of the Borrower or any of its Subsidiaries shall be declared to be
due and payable or required to be prepaid or repurchased (other than by a
regularly scheduled payment) prior to the stated maturity thereof; or the
Borrower or any of its Subsidiaries shall not pay, or admit in writing its
inability to pay, its debts generally as they become due.
7.6. The Borrower or any of its Subsidiaries shall (a) have an order
for relief entered with respect to it under the Federal bankruptcy laws as now
or hereafter in effect, (b) make an assignment for the benefit of creditors, (c)
apply for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
Substantial Portion of its Property, (d) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (e)
take any corporate or partnership action to authorize or effect any of the
foregoing actions set forth in this Section 7.6 or (f) fail to contest in good
faith any appointment or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of the Borrower or
any of its Subsidiaries, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Borrower or any of its Subsidiaries or any
Substantial Portion of its Property, or a proceeding described in Section 7.6(d)
shall be instituted against the Borrower or any of its Subsidiaries and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of 30 consecutive days.
7.8. Any court, government or governmental agency shall condemn, seize
or otherwise appropriate, or take custody or control of, all or any portion of
the Property of the Borrower and its Subsidiaries which, when taken together
with all other Property of the Borrower and its Subsidiaries so condemned,
seized, appropriated, or taken custody or control of, during the twelve-month
period ending with the month in which any such action occurs, constitutes a
Substantial Portion.
41
7.9. The Borrower or any of its Subsidiaries shall fail within 30 days
to pay, bond or otherwise discharge one or more (a) judgments or orders for the
payment of money in excess of $1,000,000 (or the equivalent thereof in
currencies other than U.S. Dollars) in the aggregate, or (b) nonmonetary
judgments or orders which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, which judgment(s), in any such case,
is/are not stayed on appeal or otherwise being appropriately contested in good
faith.
7.10. Nonpayment by the Borrower or any Subsidiary of any Rate
Management Obligation when due or the breach by the Borrower or any Subsidiary
of any term, provision or condition contained in any Rate Management Transaction
or any transaction of the type described in the definition of "Rate Management
Transactions," whether or not any Lender or Affiliate of a Lender is a party
thereto.
7.11. Any Change in Control shall occur.
7.12. The Borrower or any of its Subsidiaries shall (i) be the subject
of any proceeding or investigation pertaining to the release by the Borrower,
any of its Subsidiaries or any other Person of any toxic or hazardous waste or
substance into the environment, or (ii) violate any Environmental Law, which, in
the case of an event described in clause (i) or clause (ii), could reasonably be
expected to have a Material Adverse Effect.
7.13. Any Guaranty shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Guaranty, or any Guarantor shall fail to comply with any
of the terms or provisions of any Guaranty to which it is a party, or any
Guarantor shall deny that it has any further liability under any Guaranty to
which it is a party, or shall give notice to such effect.
ARTICLE 8
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
----------------------------------------------
8.1. Acceleration; Facility LC Collateral Account.
(a) If any Default described in Section 7.6 or 7.7 occurs with
respect to the Borrower, the obligations of the Lenders to make Loans
hereunder and the obligation and power of the LC Issuer to issue
Facility LCs shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on
the part of the Agent, the LC Issuer or any Lender and the Borrower
will be and become thereby unconditionally obligated, without any
further notice, act or demand, to pay to the Agent an amount in
immediately available funds, which funds shall be held in the Facility
LC Collateral Account, equal to the difference of (x) the amount of LC
Obligations at such time, less (y) the amount on deposit in the
Facility LC Collateral Account at such time which is free and clear of
all rights and claims of third parties and has not been applied against
the Obligations (such difference, the "Collateral Shortfall Amount").
If any other Default occurs, the Required Lenders (or the Agent with
the consent of the Required Lenders) may (i) terminate or suspend the
obligations of the Lenders to make Loans hereunder and the obligation
and power of the LC Issuer to issue
42
Facility LCs, or declare the Obligations to be due and payable, or
both, whereupon the Obligations shall become immediately due and
payable, without presentment, demand, protest or notice of any kind,
all of which the Borrower hereby expressly waives, and (ii) upon notice
to the Borrower and in addition to the continuing right to demand
payment of all amounts payable under this Agreement, make demand on the
Borrower to pay, and the Borrower will, forthwith upon such demand and
without any further notice or act, pay to the Agent the Collateral
Shortfall Amount, which funds shall be deposited in the Facility LC
Collateral Account.
(b) If at any time while any Default is continuing, the Agent
determines that the Collateral Shortfall Amount at such time is greater
than zero, the Agent may make demand on the Borrower to pay, and the
Borrower will, forthwith upon such demand and without any further
notice or act, pay to the Agent the Collateral Shortfall Amount, which
funds shall be deposited in the Facility LC Collateral Account.
(c) The Agent may at any time or from time to time after funds
are deposited in the Facility LC Collateral Account, apply such funds
to the payment of the Obligations and any other amounts as shall from
time to time have become due and payable by the Borrower to the Lenders
or the LC Issuer under the Loan Documents.
(d) At any time while any Default is continuing, neither the
Borrower nor any Person claiming on behalf of or through the Borrower
shall have any right to withdraw any of the funds held in the Facility
LC Collateral Account. After all of the Obligations have been
indefeasibly paid in full and the Aggregate Commitment has been
terminated, any funds remaining in the Facility LC Collateral Account
shall be returned by the Agent to the Borrower or paid to whomever may
be legally entitled thereto at such time.
(e) If, within 30 days after acceleration of the maturity of
the Obligations or termination of the obligations of the Lenders to
make Loans and the obligation and power of the LC Issuer to issue
Facility LCs hereunder as a result of any Default (other than any
Default as described in Section 7.6 or 7.7 with respect to the
Borrower) and before any judgment or decree for the payment of the
Obligations due shall have been obtained or entered, the Required
Lenders (in their sole discretion) shall so direct, the Agent shall, by
notice to the Borrower, rescind and annul such acceleration and/or
termination.
8.2. Amendments. Subject to the provisions of this Section 8.2, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of all of the Lenders:
(a) Extend the final maturity of any Loan (except by extension
of the Facility Termination Date pursuant to Section 2.20), or extend
the expiry date of any Facility LC to a date after the Facility
Termination Date or forgive all or any portion of the principal amount
thereof or any Reimbursement Obligation related thereto, or reduce the
rate or
43
extend the time of payment of interest or fees thereon or Reimbursement
Obligations related thereto.
(b) Reduce the percentage specified in the definition of
Required Lenders.
(c) Extend the Facility Termination Date (except by extension
of the Facility Termination Date pursuant to Section 2.20), or reduce
the amount or extend the payment date for, the mandatory payments
required under Section 2.2, or increase the amount of the Aggregate
Commitment or of the Commitment of any Lender hereunder or the
commitment to issue Facility LCs, or permit the Borrower to assign its
rights under this Agreement.
(d) Amend this Section 8.2.
(e) Release any Guarantor that remains a Material Domestic
Subsidiary.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent, and no amendment of any
provision relating to the LC Issuer shall be effective without the written
consent of the LC Issuer. The Agent may waive payment of the fee required under
Section 12.3(c) without obtaining the consent of any other party to this
Agreement.
8.3. Preservation of Rights. No delay or omission of the Lenders, the
LC Issuer or the Agent to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Credit Extension notwithstanding the
existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Credit Extension shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lenders required pursuant to Section 8.2, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Agent, the LC Issuer and the Lenders until the Obligations have been paid
in full.
ARTICLE 9
GENERAL PROVISIONS
------------------
9.1. Survival of Representations. All representations and warranties of
the Borrower contained in this Agreement shall survive the making of the Credit
Extensions herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, neither the LC Issuer nor any Lender shall be
obligated to extend credit to the Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.
44
9.3. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire agreement
and understanding among the Borrower, the Agent, the LC Issuer and the Lenders
and supersede all prior agreements and understandings among the Borrower, the
Agent, the LC Issuer and the Lenders relating to the subject matter thereof
other than those contained in the fee letter described in Section 10.13 which
shall survive and remain in full force and effect during the term of this
Agreement.
9.5. Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any of
its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors and assigns, provided, however, that the parties
hereto expressly agree that the Arranger shall enjoy the benefits of the
provisions of Sections 9.6, 9.10, 10.11 and 10.13 to the extent specifically set
forth therein and shall have the right to enforce such provisions on its own
behalf and in its own name to the same extent as if it were a party to this
Agreement.
9.6. Expenses; Indemnification.
(a) The Borrower shall reimburse the Agent and the Arranger
for any costs, internal charges and out-of-pocket expenses (including
attorneys' fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent) paid or incurred by the Agent
or the Arranger in connection with the preparation, negotiation,
execution, delivery, syndication, distribution (including, without
limitation, via the internet), review, amendment, modification, and
administration of the Loan Documents. The Borrower also agrees to
reimburse the Agent, the Arranger, the LC Issuer and the Lenders for
any costs, internal charges and out-of-pocket expenses (including
attorneys' fees and time charges of attorneys for the Agent, the
Arranger, the LC Issuer and the Lenders, which attorneys may be
employees of the Agent, the Arranger, the LC Issuer or the Lenders)
paid or incurred by the Agent, the Arranger, the LC Issuer or any
Lender in connection with the collection and enforcement of the Loan
Documents. Expenses being reimbursed by the Borrower under this Section
include, without limitation, costs and expenses incurred in connection
with the Reports described in the following sentence. The Borrower
acknowledges that from time to time Bank One may prepare and may
distribute to the Lenders (but shall have no obligation or duty to
prepare or to distribute to the Lenders) certain audit reports (the
"Reports") pertaining to the Borrower's assets for internal use by Bank
One from information furnished to it by or on behalf of the Borrower,
after Bank One has exercised its rights of inspection pursuant to this
Agreement.
(b) The Borrower hereby further agrees to indemnify the Agent,
the Arranger, the LC Issuer, each Lender, their respective affiliates,
and each of their directors, officers
45
and employees against all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without limitation, all
expenses of litigation or preparation therefor whether or not the
Agent, the Arranger, the LC Issuer, any Lender or any affiliate is a
party thereto) which any of them may pay or incur arising out of or
relating to this Agreement, the other Loan Documents, the transactions
contemplated hereby or the direct or indirect application or proposed
application of the proceeds of any Credit Extension hereunder except to
the extent that they are determined in a final non-appealable judgment
by a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of the party seeking indemnification.
The obligations of the Borrower under this Section 9.6 shall survive
the termination of this Agreement.
9.7. Numbers of Documents. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
9.8. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles, except that any calculation or determination which is to be made on
a consolidated basis shall be made for the Borrower and all its Subsidiaries,
including those Subsidiaries, if any, which are unconsolidated on the Borrower's
audited financial statements.
9.9. Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.10. Nonliability of Lenders. The relationship between the Borrower on
the one hand and the Lenders, the LC Issuer and the Agent on the other hand
shall be solely that of borrower and lender. Neither the Agent, the Arranger,
the LC Issuer nor any Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Agent, the Arranger, the LC Issuer nor any Lender
undertakes any responsibility to the Borrower to review or inform the Borrower
of any matter in connection with any phase of the Borrower's business or
operations. The Borrower agrees that neither the Agent, the Arranger, the LC
Issuer nor any Lender shall have liability to the Borrower (whether sounding in
tort, contract or otherwise) for losses suffered by the Borrower in connection
with, arising out of, or in any way related to, the transactions contemplated
and the relationship established by the Loan Documents, or any act, omission or
event occurring in connection therewith, unless it is determined in a final
non-appealable judgment by a court of competent jurisdiction that such losses
resulted from the gross negligence or willful misconduct of the party from which
recovery is sought. Neither the Agent, the Arranger, the LC Issuer nor any
Lender shall have any liability with respect to, and the Borrower hereby waives,
releases and agrees not to sue for, any special, indirect, consequential or
punitive damages suffered by the Borrower in connection with, arising out of, or
in any way related to the Loan Documents or the transactions contemplated
thereby.
46
9.11. Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from the Borrower pursuant to this Agreement in
confidence, except for disclosure (a) to its Affiliates and to other Lenders and
their respective Affiliates, (b) to legal counsel, accountants, and other
professional advisors to such Lender or to a Transferee, (c) to regulatory
officials, (d) to any Person as requested pursuant to or as required by law,
regulation, or legal process, (e) to any Person in connection with any legal
proceeding to which such Lender is a party, (f) to such Lender's direct or
indirect contractual counterparties in swap agreements or to legal counsel,
accountants and other professional advisors to such counterparties, (g)
permitted by Section 12.4 and (h) to rating agencies if requested or required by
such agencies in connection with a rating relating to the Credit Extensions
hereunder.
9.12. Nonreliance. Each Lender hereby represents that it is not relying
on or looking to any margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) for the repayment of the Credit
Extensions provided for herein.
9.13. Disclosure. The Borrower and each Lender hereby acknowledge and
agree that Bank One and/or its Affiliates from time to time may hold investments
in, make other loans to or have other relationships with the Borrower and its
Affiliates.
ARTICLE 10
THE AGENT
---------
10.1. Appointment; Nature of Relationship. Bank One, NA is hereby
appointed by each of the Lenders as its contractual representative (herein
referred to as the "Agent") hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
10. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (x) does not hereby assume any fiduciary
duties to any of the Lenders, (y) is a "representative" of the Lenders within
the meaning of the term "secured party" as defined in the Illinois Uniform
Commercial Code and (z) is acting as an independent contractor, the rights and
duties of which are limited to those expressly set forth in this Agreement and
the other Loan Documents. Each of the Lenders hereby agrees to assert no claim
against the Agent on any agency theory or any other theory of liability for
breach of fiduciary duty, all of which claims each Lender hereby waives.
10.2. Powers. The Agent shall have and may exercise such powers under
the Loan Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
47
10.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent nor
any of its directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into, or verify (a) any statement, warranty
or representation made in connection with any Loan Document or any borrowing
hereunder; (b) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article 4, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; (f) the
value, sufficiency, creation, perfection or priority of any Lien in any
collateral security; or (g) the financial condition of the Borrower or any
guarantor of any of the Obligations or of any of the Borrower's or any such
guarantor's respective Subsidiaries. The Agent shall have no duty to disclose to
the Lenders information that is not required to be furnished by the Borrower to
the Agent at such time, but is voluntarily furnished by the Borrower to the
Agent (either in its capacity as Agent or in its individual capacity).
10.5. Action on Instructions of Lenders. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and under
any other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute any of
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or
48
persons, and, in respect to legal matters, upon the opinion of counsel selected
by the Agent, which counsel may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (a) for any amounts not
reimbursed by the Borrower for which the Agent is entitled to reimbursement by
the Borrower under the Loan Documents, (b) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents
(including, without limitation, for any expenses incurred by the Agent in
connection with any dispute between the Agent and any Lender or between two or
more of the Lenders) and (c) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of the Loan Documents or
any other document delivered in connection therewith or the transactions
contemplated thereby (including, without limitation, for any such amounts
incurred by or asserted against the Agent in connection with any dispute between
the Agent and any Lender or between two or more of the Lenders), or the
enforcement of any of the terms of the Loan Documents or of any such other
documents, provided that (i) no Lender shall be liable for any of the foregoing
to the extent any of the foregoing is found in a final non-appealable judgment
by a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the Agent and (ii) any indemnification required
pursuant to Section 3.5(g) shall, notwithstanding the provisions of this Section
10.8, be paid by the relevant Lender in accordance with the provisions thereof.
The obligations of the Lenders under this Section 10.8 shall survive payment of
the Obligations and termination of this Agreement.
10.9. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Agent has received written notice from a Lender or the
Borrower referring to this Agreement describing such Default or Unmatured
Default and stating that such notice is a "notice of default". In the event that
the Agent receives such a notice, the Agent shall give prompt notice thereof to
the Lenders.
10.10. Rights as a Lender. In the event the Agent is a Lender, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Loans as any Lender and may
exercise the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with the Borrower or
any of its Subsidiaries in which the Borrower or such Subsidiary is not
restricted hereby from engaging with any other Person.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement
49
and the other Loan Documents. Each Lender also acknowledges that it will,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement and the other Loan Documents.
10.12. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of the Borrower and the Lenders, a successor Agent. If no successor Agent
shall have been so appointed by the Required Lenders within thirty days after
the resigning Agent's giving notice of its intention to resign, then the
resigning Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Agent. Notwithstanding the two immediately preceding sentences: (x)
subject to clause (y) of this sentence, the consent of the Borrower shall be
required prior to the appointment of a successor Agent unless such successor
Agent is a Lender or an Affiliate of a Lender, provided that the consent of the
Borrower shall not be required if a Default has occurred and is continuing; and
(y) the Agent may at any time without the consent of the Borrower or any Lender,
appoint any of its Affiliates which is a commercial bank as a successor Agent
hereunder. If the Agent has resigned or been removed and no successor Agent has
been appointed, the Lenders may perform all the duties of the Agent hereunder
and the Borrower shall make all payments in respect of the Obligations to the
applicable Lender and for all other purposes shall deal directly with the
Lenders. No successor Agent shall be deemed to be appointed hereunder until such
successor Agent has accepted the appointment. Any such successor Agent shall be
a commercial bank having capital and retained earnings of at least $100,000,000.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent. Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents. After the effectiveness of the resignation or removal
of an Agent, the provisions of this Article 10 shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents. In the event that there is a successor to the Agent by merger, or the
Agent assigns its duties and obligations to an Affiliate pursuant to this
Section 10.12, then the term "Prime Rate" as used in this Agreement shall mean
the prime rate, base rate or other analogous rate of the new Agent.
10.13. Agent and Arranger Fees. The Borrower agrees to pay to the Agent
and the Arranger, for their respective accounts, the fees agreed to by the
Borrower, the Agent and the Arranger pursuant to that certain letter agreement
dated May 20, 2002, or as otherwise agreed from time to time.
10.14. Delegation to Affiliates. The Borrower and the Lenders agree
that the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection
50
with this Agreement shall be entitled to the same benefits of the
indemnification, waiver and other protective provisions to which the Agent is
entitled under Articles 9 and 10.
ARTICLE 11
SETOFF; RATABLE PAYMENTS
------------------------
11.1. Setoff. In addition to, and without limitation of, any rights of
the Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of the Borrower may
be offset and applied toward the payment of the Obligations and Rate Management
Obligations owing to such Lender, whether or not the Obligations or Rate
Management Obligations, or any part thereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Outstanding Credit Exposure (other than payments
received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than
that received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Aggregate Outstanding Credit Exposure held by the
other Lenders so that after such purchase each Lender will hold its Pro Rata
Share of the Aggregate Outstanding Credit Exposure ratable proportion of Loans.
If any Lender, whether in connection with setoff or amounts which might be
subject to setoff or otherwise, receives collateral or other protection for its
Obligations or such amounts which may be subject to setoff, such Lender agrees,
promptly upon demand, to take such action necessary such that all Lenders share
in the benefits of such collateral ratably in proportion to their respective Pro
Rata Shares of the Aggregate Outstanding Credit Exposure. In case any such
payment is disturbed by legal process, or otherwise, appropriate further
adjustments shall be made.
ARTICLE 12
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns permitted hereby, except
that (a) the Borrower shall not have the right to assign its rights or
obligations under the Loan Documents without the prior written consent of each
Lender, (b) any assignment by any Lender must be made in compliance with Section
12.3, and (c) any transfer by Participation must be made in compliance with
Section 12.2. Any attempted assignment or transfer by any party not made in
compliance with this Section 12.1 shall be null and void, unless such attempted
assignment or transfer is treated as a participation in accordance with Section
12.3(c). The parties to this Agreement acknowledge that clause (b) of this
Section 12.1 relates only to absolute assignments and this Section 12.1 does not
prohibit assignments creating security interests, including, without limitation,
(x) any pledge or assignment by any Lender of all or any portion of its rights
under this Agreement and any Note
51
to a Federal Reserve Bank or (y) in the case of a Lender which is a fund, any
pledge or assignment of all or any portion of its rights under this Agreement
and any Note to its trustee in support of its obligations to its trustee;
provided, however, that no such pledge or assignment creating a security
interest shall release the transferor Lender from its obligations hereunder
unless and until the parties thereto have complied with the provisions of
Section 12.3. The Agent may treat the Person which made any Loan or which holds
any Note as the owner thereof for all purposes hereof unless and until such
Person complies with Section 12.3; provided, however, that the Agent may in its
discretion (but shall not be required to) follow instructions from the Person
which made any Loan or which holds any Note to direct payments relating to such
Loan or Note to another Person. Any assignee of the rights to any Loan or any
Note agrees by acceptance of such assignment to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the owner of the rights to any Loan (whether or not a Note has been
issued in evidence thereof), shall be conclusive and binding on any subsequent
holder or assignee of the rights to such Loan.
12.2. Participations
(a) Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with applicable law,
at any time sell to one or more banks or other entities
("Participants") participating interests in any Outstanding Credit
Exposure of such Lender, any Note held by 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 participating
interests to a Participant, such Lender's obligations under the Loan
Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the owner of its Outstanding
Credit Exposure and the holder of any Note issued to it in evidence
thereof for all purposes under the Loan Documents, all amounts payable
by the Borrower under this Agreement shall be determined as if such
Lender had not sold such participating interests, and the Borrower and
the Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under the Loan
Documents.
(b) Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other
than any amendment, modification or waiver with respect to any Credit
Extension or Commitment in which such Participant has an interest which
would require consent of all of the Lenders pursuant to the terms of
Section 8.2 or of any other Loan Document.
(c) Benefit of Certain Provisions. The Borrower agrees that
each Participant shall be deemed to have the right of setoff provided
in Section 11.1 in respect of its participating interest in amounts
owing under the Loan Documents to the same extent as if the amount of
its participating interest were owing directly to it as a Lender under
the Loan Documents, provided that each Lender shall retain the right of
setoff provided in Section 11.1 with respect to the amount of
participating interests sold to each Participant. The Lenders agree to
share with each Participant, and each Participant, by exercising the
52
right of setoff provided in Section 11.1, agrees to share with each
Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 11.2 as if
each Participant were a Lender. The Borrower further agrees that each
Participant shall be entitled to the benefits of Sections 3.1, 3.2, 3.4
and 3.5 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to Section 12.3, provided that (i) a
Participant shall not be entitled to receive any greater payment under
Section 3.1, 3.2 or 3.5 than the Lender who sold the participating
interest to such Participant would have received had it retained such
interest for its own account, unless the sale of such interest to such
Participant is made with the prior written consent of the Borrower, and
(ii) any Participant not incorporated under the laws of the United
States of America or any State thereof agrees to comply with the
provisions of Section 3.5 to the same extent as if it were a Lender.
12.3. Assignments.
(a) Permitted Assignments. Any Lender may at any time assign
to one or more banks or other entities ("Purchasers") all or any part
of its rights and obligations under the Loan Documents. Such assignment
shall be substantially in the form of Exhibit C or in such other form
as may be agreed to by the parties thereto. Each such assignment with
respect to a Purchaser which is not a Lender or an Affiliate of a
Lender or an Approved Fund shall either be in an amount equal to the
entire applicable Commitment and Loans of the assigning Lender (unless
each of the Borrower, the LC Issuer and the Agent otherwise consents)
be in an aggregate amount not less than $5,000,000. The amount of the
assignment shall be based on the Commitment or outstanding Loans (if
the Commitment has been terminated) subject to the assignment,
determined as of the date of such assignment or as of the "Trade Date,"
if the "Trade Date" is specified in the assignment.
(b) Consents. The consent of the Borrower shall be required
prior to an assignment becoming effective unless the Purchaser is a
Lender, an Affiliate of a Lender or an Approved Fund, provided that the
consent of the Borrower shall not be required if a Default has occurred
and is continuing. The consent of the Agent shall be required prior to
an assignment becoming effective unless the Purchaser is a Lender, an
Affiliate of a Lender or an Approved Fund. The consent of the LC Issuer
shall be required prior to an assignment of a Commitment becoming
effective unless the Purchaser is a Lender with a Commitment. Any
consent required under this Section 12.3(b) shall not be unreasonably
withheld or delayed.
(c) Effect; Effective Date. Upon (i) delivery to the Agent of
an assignment, together with any consents required by Sections 12.3(a)
and 12.3(b), and (ii) payment of a $3,000 fee to the Agent for
processing such assignment (unless such fee is waived by the Agent),
such assignment shall become effective on the effective date specified
in such assignment. The assignment shall contain a representation by
the Purchaser to the effect that none of the consideration used to make
the purchase of the Commitment and Outstanding Credit Exposure under
the applicable assignment agreement constitutes "plan assets" as
defined under ERISA and that the rights and interests of the Purchaser
in and under the Loan Documents will not be "plan assets" under ERISA.
On and after the
53
effective date of such assignment, such Purchaser shall for all
purposes be a Lender party to this Agreement and any other Loan
Document executed by or on behalf of the Lenders and shall have all the
rights and obligations of a Lender under the Loan Documents, to the
same extent as if it were an original party thereto, and the transferor
Lender shall be released with respect to the Commitment and Outstanding
Credit Exposure assigned to such Purchaser without any further consent
or action by the Borrower, the Lenders or the Agent. In the case of an
assignment covering all of the assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a
Lender hereunder but shall continue to be entitled to the benefits of,
and subject to, those provisions of this Agreement and the other Loan
Documents which survive payment of the Obligations and termination of
the applicable agreement. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with
this Section 12.3 shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations
in accordance with Section 12.2. Upon the consummation of any
assignment to a Purchaser pursuant to this Section 12.3(c), the
transferor Lender, the Agent and the Borrower shall, if the transferor
Lender or the Purchaser desires that its Loans be evidenced by Notes,
make appropriate arrangements so that new Notes or, as appropriate,
replacement Notes are issued to such transferor Lender and new Notes
or, as appropriate, replacement Notes, are issued to such Purchaser, in
each case in principal amounts reflecting their respective Commitments,
as adjusted pursuant to such assignment.
(d) Register. The Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at one of its offices in Chicago,
Illinois a copy of each Assignment and Assumption delivered to it and a
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 pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive, and the
Borrower, the Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to
the contrary. The Register shall be available for inspection by the
Borrower and any Lender, at any reasonable time and from time to time
upon reasonable prior notice.
12.4. Dissemination of Information. The Borrower authorizes each Lender
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries, including
without limitation any information contained in any Reports; provided that each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.
12.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is not incorporated under the laws of the
United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 3.5(d).
54
ARTICLE 13
NOTICES
-------
13.1. Notices. Except as otherwise permitted by Section 2.14 with
respect to borrowing notices, all notices, requests and other communications to
any party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the Borrower or the Agent, at its address or facsimile number set
forth on the signature pages hereof, (y) in the case of any Lender, at its
address or facsimile number set forth below its signature hereto or (z) in the
case of any party, at such other address or facsimile number as such party may
hereafter specify for the purpose by notice to the Agent and the Borrower in
accordance with the provisions of this Section 13.1. Each such notice, request
or other communication shall be effective (i) if given by facsimile
transmission, when transmitted to the facsimile number specified in this Section
and confirmation of receipt is received, (ii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, or (iii) if given by any other means, when delivered
(or, in the case of electronic transmission, received) at the address specified
in this Section; provided that notices to the Agent under Article 2 shall not be
effective until received.
13.2. Change of Address. The Borrower, the Agent and any Lender may
each change the address for service of notice upon it by a notice in writing to
the other parties hereto.
ARTICLE 14
COUNTERPARTS
------------
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Agent, the LC Issuer and the Lenders and each party has notified the Agent by
facsimile transmission or telephone that it has taken such action.
ARTICLE 15
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
------------------------------------------------------------
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET
SEQ, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE
STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
15.2. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO,
55
ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN
DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT
OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT, THE
LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS
OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE
AGENT, THE LC ISSUER OR ANY LENDER OR ANY AFFILIATE OF THE AGENT, THE LC ISSUER
OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING
OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN
A COURT IN CHICAGO, ILLINOIS.
15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT, THE LC ISSUER AND
EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
[Signature Pages Follow]
56
IN WITNESS WHEREOF, the Borrower, the Lenders, the LC Issuer and the
Agent have executed this Agreement as of the date first above written.
PATTERSON DENTAL COMPANY
By:
------------------------------------
Title:
----------------------------------
1031 Mendota Heights Road
St. Paul, Minnesota 55120
Attention: R. Stephen Armstrong
Telephone: (651) 686-1600
FAX: (651) 686-8984
[Signature Page 1 of 4 to Credit Agreement]
Commitments
- -----------
$20,000,000 BANK ONE, NA,
Individually and as Agent
-----------------------------------------
Title:
---------------------------------
1 Bank One Plaza
Chicago, Illinois 60670
Attention:
-----------------------------
Telephone: ( )
FAX: ( )
[Signature Page 2 of 4 to Credit Agreement]
$20,000,000 U.S. BANK NATIONAL ASSOCIATION
By:
------------------------------------
Title:
----------------------------------
----------------------------------
----------------------------------
Attention:
-----------------------------
Telephone: ( )
FAX: ( )
[Signature Page 3 of 4 to Credit Agreement]
$10,000,000 THE NORTHERN TRUST COMPANY
By:
------------------------------------
Title:
----------------------------------
----------------------------------
----------------------------------
Attention:
-----------------------------
Telephone: ( )
FAX: ( )
[Signature Page 4 of 4 to Credit Agreement]
PRICING SCHEDULE
================================================================================
APPLICABLE LEVEL I STATUS LEVEL II
MARGIN STATUS
- --------------------------------------------------------------------------------
Eurodollar Rate 0.45% 0.70%
- --------------------------------------------------------------------------------
Floating Rate 0% 0%
================================================================================
================================================================================
APPLICABLE LEVEL I STATUS LEVEL II
FEE RATE STATUS
- --------------------------------------------------------------------------------
Letter of Credit Fee 0.45% 0.70%
- --------------------------------------------------------------------------------
Commitment Fee 0.125% 0.20%
================================================================================
For the purposes of this Schedule, the following terms have the
following meanings, subject to the final paragraph of this Schedule:
"Financials" means the annual or quarterly financial statements of the
Borrower delivered pursuant to Section 6.1(a) or (b).
"Level I Status" exists at any date if, as of the last day of the
fiscal quarter of the Borrower referred to in the most recent Financials, the
Leverage Ratio is less than 1.25 to 1.00.
"Level II Status" exists at any date, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, if the
Borrower has not qualified for Level I Status.
"Status" means either Level I Status or Level II Status.
The Applicable Margin and Applicable Fee Rate shall be determined in
accordance with the foregoing table based on the Borrower's Status as reflected
in the then most recent Financials. Adjustments, if any, to the Applicable
Margin or Applicable Fee Rate shall be effective five Business Days after the
Agent has received the applicable Financials. If the Borrower fails to deliver
the Financials to the Agent at the time required pursuant to Section 6.1, then
the Applicable Margin and Applicable Fee Rate shall be the highest Applicable
Margin and Applicable Fee Rate set forth in the foregoing table until five days
after such Financials are so delivered.