EXHIBIT 10.5
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CREDIT AGREEMENT
among
K-III COMMUNICATIONS CORPORATION,
VARIOUS LENDING INSTITUTIONS,
THE BANK OF NEW YORK
and
BANKERS TRUST COMPANY,
AS CO-SYNDICATION AGENTS,
THE BANK OF NOVA SCOTIA,
AS DOCUMENTATION AGENT
and
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT
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Dated as of April 21, 1997
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$150,000,000
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TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit...................................... 1
1.01 Commitments.................................................. 1
1.02 Minimum Borrowing Amounts, etc............................... 1
1.03 Notice of Borrowing.......................................... 1
1.04 Disbursement of Funds........................................ 2
1.05 Register..................................................... 3
1.06 Conversions.................................................. 3
1.07 Pro Rata Borrowings.......................................... 4
1.08 Interest..................................................... 4
1.09 Interest Periods............................................. 5
1.10 Increased Costs, Illegality, etc............................. 6
1.11 Compensation................................................. 9
1.12 Change of Lending Office..................................... 10
SECTION 2. Fees; Commitments............................................... 10
2.01 Fees ........................................................ 10
2.02 Voluntary Reduction of Commitments........................... 10
2.03 Mandatory Reduction of Commitments, etc...................... 11
SECTION 3. Payments........................................................ 11
3.01 Voluntary Prepayments........................................ 11
3.02 Mandatory Repayments......................................... 12
3.03 Method and Place of Payment.................................. 12
3.04 Net Payments................................................. 13
SECTION 4. Conditions Precedent............................................ 14
4.01 Execution of Agreement....................................... 14
4.02 No Default; Representations and Warranties................... 14
4.03 Opinions of Counsel.......................................... 15
4.04 Corporate Proceedings........................................ 15
4.05 Existing Credit Agreements................................... 15
4.06 Subsidiary Guaranty.......................................... 15
4.07 Notice of Borrowing.......................................... 16
(i)
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4.08 Payment of Fees, etc......................................... 16
4.09 Contribution Agreement....................................... 16
4.10 Existing Indebtedness Agreements............................. 16
SECTION 5. Representations, Warranties and Agreements...................... 16
5.01 Corporate Status............................................. 17
5.02 Corporate Power and Authority................................ 17
5.03 No Violation................................................. 17
5.04 Litigation................................................... 18
5.05 Use of Proceeds; Margin Regulations.......................... 18
5.06 Governmental Approvals....................................... 18
5.07 Investment Company Act....................................... 19
5.08 Public Utility Holding Company Act........................... 19
5.09 True and Complete Disclosure................................. 19
5.10 Financial Statements; Financial Condition.................... 19
5.11 Tax Returns and Payments..................................... 20
5.12 Compliance with ERISA........................................ 20
5.13 Subsidiaries................................................. 21
5.14 Intellectual Property........................................ 21
5.15 Compliance with Statutes, etc................................ 22
SECTION 6. Affirmative Covenants........................................... 22
6.01 Information Covenants........................................ 22
6.02 Books, Records and Inspections............................... 25
6.03 Payment of Taxes............................................. 25
6.04 Corporate Franchises......................................... 25
6.05 Compliance with Statutes, etc................................ 26
6.06 ERISA........................................................ 26
6.07 End of Fiscal Years; Fiscal Quarters......................... 27
6.08 Use of Proceeds.............................................. 27
6.09 Ownership of Subsidiaries.................................... 27
6.10 Maintenance of Corporate Separateness........................ 27
SECTION 7. Negative Covenants.............................................. 28
7.01 Changes in Business.......................................... 28
7.02 Consolidation, Merger, Sale or Purchase of Assets, etc....... 28
7.03 Liens........................................................ 31
7.04 Indebtedness................................................. 33
7.05 Advances, Investments and Loans.............................. 35
(ii)
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7.06 Contingent Obligations....................................... 38
7.07 Dividends, etc............................................... 39
7.08 Transactions with Affiliates................................. 41
7.09 Fixed Charge Coverage Ratio.................................. 41
7.10 Interest Coverage Ratio...................................... 42
7.11 Leverage Ratio............................................... 42
7.12 Issuance of Stock............................................ 43
7.13 Modifications of Certain Agreements, etc..................... 43
7.14 Limitation on the Creation of Subsidiaries; Redesignation of
Partially-Owned Restricted Subsidiaries................. 44
7.15 Limitation on Payments Under the Non-Compete Notes........... 45
SECTION 8. Events of Default............................................... 45
8.01 Payments..................................................... 45
8.02 Representations, etc......................................... 45
8.03 Covenants.................................................... 46
8.04 Default Under Other Agreements............................... 46
8.05 Bankruptcy, etc.............................................. 46
8.06 ERISA........................................................ 47
8.07 Subsidiary Guaranty.......................................... 47
8.08 Judgments.................................................... 48
8.09 Ownership.................................................... 48
SECTION 9. Definitions..................................................... 48
SECTION 10. The Administrative Agent....................................... 74
10.01 Appointment................................................. 74
10.02 Delegation of Duties........................................ 75
10.03 Exculpatory Provisions...................................... 75
10.04 Reliance by Administrative Agent............................ 76
10.05 Notice of Default........................................... 76
10.06 Non-Reliance on Administrative Agent and Other Banks........ 76
10.07 Indemnification............................................. 77
10.08 Administrative Agent in Its Individual Capacity............. 78
10.09 Holders..................................................... 78
10.10 Resignation of the Administrative Agent; Successor Agent.... 78
SECTION 11. Miscellaneous.................................................. 78
11.01 Payment of Expenses, etc.................................... 79
(iii)
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11.02 Right of Setoff............................................. 79
11.03 Notices..................................................... 80
11.04 Benefit of Agreement........................................ 80
11.05 No Waiver; Remedies Cumulative.............................. 82
11.06 Payments Pro Rata........................................... 82
11.07 Calculations; Computations.................................. 83
11.08 Governing Law; Submission to Jurisdiction; Venue............ 84
11.09 Counterparts................................................ 85
11.10 Effectiveness............................................... 85
11.11 Headings Descriptive........................................ 85
11.12 Amendment or Waiver......................................... 85
11.13 Survival.................................................... 86
11.14 Domicile of Revolving Loans................................. 86
11.15 Confidentiality............................................. 86
11.16 Waiver of Jury Trial........................................ 86
ANNEX I List of Banks
ANNEX II Bank Addresses
ANNEX III Subsidiaries
ANNEX IV Liens
ANNEX V Existing Debt/Existing Contingent Obligations
ANNEX VI Existing Preferred Stock
EXHIBIT A -- Form of Notice of Borrowing
EXHIBIT B-1 -- Form of Opinion of Simpson, Thacher & Bartlett
EXHIBIT B-2 -- Form of Opinion of Beverly C. Chell, Esq.
EXHIBIT B-3 -- Form of Opinion of White & Case
EXHIBIT C -- Form of Officer's Certificate
EXHIBIT D -- Form of Subsidiary Guaranty
EXHIBIT E -- Form of Contribution Agreement
EXHIBIT F -- Form of Assignment and Assumption Agreement
EXHIBIT G -- Form of Subsidiary Assumption Agreement
(iv)
CREDIT AGREEMENT, dated as of April 21, 1997, among K-III
COMMUNICATIONS CORPORATION, a Delaware corporation (the "Company"), the lending
institutions listed from time to time on Annex I hereto (each a "Bank" and,
collectively, the "Banks"), THE BANK OF NEW YORK and BANKERS TRUST COMPANY, as
Co-Syndication Agents, THE BANK OF NOVA SCOTIA, as Documentation Agent and THE
CHASE MANHATTAN BANK, as Administrative Agent (the "Administrative Agent").
Unless otherwise defined herein, all capitalized terms used herein and defined
in Section 9 are used herein as so defined.
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions herein set
forth, the Banks are willing to make available the credit facility provided for
herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 Commitments. Subject to and upon the terms and conditions
herein set forth, each Bank severally agrees at any time and from time to time
on and after the Effective Date, to make a revolving loan or revolving loans
(each a "Revolving Loan" and, collectively, the "Revolving Loans") to the
Company, which Revolving Loans (i) shall, at the option of the Company, be Base
Rate Loans or Eurodollar Loans, provided that all Revolving Loans made as part
of the same Borrowing shall, unless otherwise specifically provided herein,
consist of Revolving Loans of the same Type, (ii) may be repaid and reborrowed
in accordance with the provisions hereof and (iii) shall not exceed for any Bank
at any time outstanding that aggregate principal amount which equals the
Revolving Loan Commitment of such Bank at such time.
1.02 Minimum Borrowing Amounts, etc. The aggregate principal amount
of each Borrowing shall not be less than the Minimum Borrowing Amount. More than
one Borrowing may be incurred on any day, provided that at no time shall there
be outstanding more than 5 Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Company desires to incur
Revolving Loans hereunder, it shall give the Administrative Agent at its Notice
Office, prior to 12:00 Noon (New York time), at least three Business Days' prior
written notice (or telephonic notice promptly confirmed in writing) of each
Borrowing of Eurodollar Loans and at least one Business Day's prior written
notice (or telephonic notice promptly confirmed in writing) of each Borrowing of
Base Rate Loans to be incurred hereunder. Each such notice (each a "Notice of
Borrowing"), except as otherwise expressly provided in Section 1.10, shall be
irrevocable, and, in the case of each written notice and each confirmation of
telephonic notice, shall be in the form of Exhibit A, appropriately completed to
specify (i) the aggregate principal amount of the Revolving Loans to be made
pursuant to such Borrowing, (ii) the date of such Borrowing (which shall be a
Business Day) and (iii) whether the respective Borrowing shall consist of Base
Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the Interest Period to
be initially applicable thereto. The Administrative Agent shall promptly give
each Bank written notice (or telephonic notice promptly confirmed in writing) of
each proposed Borrowing, of such Bank's proportionate share thereof, and of the
other matters covered by the Notice of Borrowing.
(b) Without in any way limiting the obligation of the Company to
confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent may prior to receipt of written confirmation act without
liability upon the basis of such telephonic notice, believed by the
Administrative Agent, in good faith to be from the chairman, a vice chairman,
the president, a vice president, a treasurer, an assistant treasurer or the
director of treasury operations of the Company. In each such case, the Company
hereby waives the right to dispute the Administrative Agent's record of the
terms of such telephonic notice.
1.04 Disbursement of Funds. No later than 1:00 P.M. (New York time)
on the date specified in each Notice of Borrowing, each Bank will make available
its Pro Rata Share of each Borrowing requested to be made on such date in the
manner provided below. All such amounts shall be made available to the
Administrative Agent in U.S. Dollars and immediately available funds at the
Payment Office and the Administrative Agent promptly will make available to the
Company by depositing to its account at the Payment Office the aggregate of the
amounts so made available in the type of funds received. Unless the
Administrative Agent shall have been notified by any Bank prior to the date of
Borrowing that such Bank does not intend to make available to the Administrative
Agent its portion of the Borrowing or Borrowings to be made on such date, the
Administrative Agent may assume that such
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Bank has made such amount available to the Administrative Agent on such date of
Borrowing, and the Administrative Agent, in reliance upon such assumption, may
(in its sole discretion and without any obligation to do so) make available to
the Company a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent by such Bank and the Administrative
Agent has made available same to the Company, the Administrative Agent shall be
entitled to recover such corresponding amount from such Bank. If such Bank does
not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the Company, and
the Company shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to recover
from the Bank or the Company, as the case may be, interest on such corresponding
amount in respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the Company to the date such
corresponding amount is recovered by the Administrative Agent, at a rate per
annum equal to (x) if paid by such Bank, the overnight Federal Funds rate or (y)
if paid by the Company, the then applicable rate of interest, calculated in
accordance with Section 1.08, for the Revolving Loans. Nothing herein shall be
deemed to relieve any Bank from its obligation to fulfill its commitments
hereunder or to prejudice any rights which the Company may have against any Bank
as a result of any failure by such Bank to make Revolving Loans hereunder.
1.05 Register. (a) The Administrative Agent shall maintain a
register for the recordation of the Revolving Loan Commitments of the Banks from
time to time and the principal amount of the Revolving Loans owing to each Bank
(the "Register"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error. The Register shall be available for
inspection by the Company or any Bank at any reasonable time and from time to
time upon reasonable prior notice.
(b) The Company hereby agrees to provide a Note, promptly upon the
request of any Bank, to the extent such Bank has requested such Note in
connection with any pledge or assignment by such Bank of any or all of its
Revolving Loans hereunder to a Federal Reserve Bank.
1.06 Conversions. The Company shall have the option to convert on
any Business Day all or a portion at least equal to the applicable Minimum
Borrowing Amount of the outstanding principal amount of the Revolving Loans into
a Borrowing or Borrowings of another Type of Revolving Loan; provided that (i)
no
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such partial conversion of a Borrowing of Eurodollar Loans shall reduce the
outstanding principal amount of the Eurodollar Loans made pursuant to such
Borrowing to less than the Minimum Borrowing Amount applicable thereto, (ii)
Base Rate Loans may not be converted into Eurodollar Loans if a Default or
Event of Default is in existence and the Administrative Agent and/or the
Required Banks have notified the Company that such a conversion will not be
permitted as a result thereof and (iii) Borrowings of Eurodollar Loans resulting
from this Section 1.06 shall be limited in number as provided in Section 1.02.
Each such conversion shall be effected by the Company by giving the
Administrative Agent at its Notice Office, prior to 12:00 Noon (New York time),
at least three Business Days (or one Business Day in the case of a conversion
into Base Rate Loans) prior written notice (or telephonic notice promptly
confirmed in writing) (each a "Notice of Conversion") specifying the Revolving
Loans to be so converted, the Type of Revolving Loans to be converted into and,
if to be converted into a Borrowing of Eurodollar Loans, the Interest Period to
be initially applicable thereto. The Administrative Agent shall give each Bank
prompt notice of any such proposed conversion affecting any of its Revolving
Loans.
1.07 Pro Rata Borrowings. All Borrowings of Revolving Loans under
this Agreement shall be made by the Banks pro rata on the basis of their
Revolving Loan Commitments. It is understood that no Bank shall be responsible
for any default by any other Bank of its obligation to make Revolving Loans
hereunder and that each Bank shall be obligated to make the Revolving Loans to
be made by it hereunder, regardless of the failure of any other Bank to make its
Revolving Loans hereunder.
1.08 Interest. (a) The unpaid principal amount of each Base Rate
Loan shall bear interest from the date of the Borrowing thereof until maturity
(whether by acceleration or otherwise) at a rate per annum which shall at all
times be the Applicable Margin plus the Base Rate in effect from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall bear
interest from the date of the Borrowing thereof until maturity (whether by
acceleration or otherwise) at a rate per annum which shall at all times be the
Applicable Margin plus the relevant Eurodollar Rate.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Revolving Loan shall bear interest at a rate per
annum equal to the Base Rate in effect from time to time plus the sum of (i) 2%
and (ii) the
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Applicable Margin for Base Rate Loans; provided that principal in respect of
Eurodollar Loans shall bear interest after the same becomes due (whether by
acceleration or otherwise) until the end of the applicable Interest Period for
such Eurodollar Loan at a per annum rate equal to 2% in excess of the rate of
interest applicable on the due date therefor.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on the last
Business Day of each March, June, September and December, (ii) in respect of
each Eurodollar Loan, on the last day of each Interest Period applicable thereto
and, in the case of an Interest Period in excess of three months, on each date
occurring at three month intervals after the first day of such Interest Period
and (iii) in respect of each Revolving Loan, on any prepayment or conversion (on
the amount prepaid or converted), at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand.
(e) All computations of interest hereunder shall be made in
accordance with Section 11.07(b).
(f) The Administrative Agent, upon determining the interest rate for
any Borrowing of Eurodollar Loans for any Interest Period, shall promptly notify
the Company and the Banks thereof.
1.09 Interest Periods. At the time the Company gives a Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 12:00 Noon (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans, it shall have the right to elect by giving the
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) of the Interest Period applicable to such Borrowing, which Interest
Period shall, at the option of the Company, be a one, two, three, six or, if
available to each of the Banks (as determined by each such Bank in good faith
based on prevailing conditions in the interbank Eurodollar market on any date of
determination thereof), nine month period. Notwithstanding anything to the
contrary contained above:
(i) the initial Interest Period for any Borrowing of Eurodollar
Loans shall commence on the date of such Borrowing (including the date of
any conversion from a Borrowing of Base Rate Loans) and each Interest
Period
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occurring thereafter in respect of such Borrowing shall commence on the
day on which the next preceding Interest Period applicable thereto
expires;
(ii) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last Business Day
of such calendar month;
(iii) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided that if any Interest Period would
otherwise expire on a day which is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) no Interest Period shall extend beyond the Final Maturity Date;
and
(v) no Interest Period may be elected at any time when a Default or
Event of Default is then in existence and the Administrative Agent and/or
the Required Banks have notified the Company that such an election will
not be permitted as a result thereof.
If upon the expiration of any Interest Period, the Company has failed to elect a
new Interest Period to be applicable to the respective Borrowing of Eurodollar
Loans as provided above, or a Default or an Event of Default then exists and the
Administrative Agent and/or the Required Banks have given the notice referred to
in clause (v) above, the Company shall be deemed to have elected to convert such
Borrowing into a Borrowing of Base Rate Loans effective as of the expiration
date of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that (x) in the case of
clause (i) below, the Administrative Agent or (y) in the case of clauses (ii)
and (iii) below, any Bank, shall have determined (which determination shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto):
(i) on any date for determining the Eurodollar Rate for any Interest
Period that, by reason of any changes arising after the date of this
Agreement affecting the interbank Eurodollar market, adequate and fair
means do not
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exist for ascertaining the applicable interest rate on the basis provided
for in the definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loans because of (x) any change since the date of this
Agreement in any applicable law, governmental rule, regulation, guideline,
order or request (whether or not having the force of law), or in the
interpretation or administration thereof and including the introduction of
any new law or governmental rule, regulation, guideline, order or request
such as, for example, but not limited to, (A) a change since the Effective
Date in the basis of taxation of payment to any Bank of the principal of
or interest on the Revolving Loans or any other amounts payable hereunder
(except for changes with respect to Taxes and those taxes described in
clauses (x) and (y) of the proviso in the second sentence of Section 4.04)
or (B) a change since the Effective Date in official reserve requirements,
but, in all events, excluding reserves required under Regulation D
to the extent included in the computation of the Eurodollar Rate and/or
(y) other circumstances affecting such Bank, the interbank Eurodollar
market or the position of such Bank in such market; or
(iii) at any time since the Effective Date, that the making or
continuance of any Eurodollar Loan has become unlawful by compliance by
such Bank in good faith with any law, governmental rule, regulation,
guideline or order (or would conflict with any such governmental rule,
regulation, guideline or order not having the force of law but with which
such Bank customarily complies even though the failure to comply therewith
would not be unlawful), or has become impracticable as a result of a
contingency occurring after the Effective Date which materially and
adversely affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent in the case
of clause (i) above) shall (x) on such date and (y) within 10 Business Days of
the date on which such event no longer exists give notice (by telephone
confirmed in writing) to the Company and (except in the case of clause (i)) to
the Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Banks). Thereafter (x) in the
case of clause (i) above, Eurodollar Loans shall no longer be available until
such time as the Administrative Agent notifies the Company and the Banks that
the circumstances giving rise to such notice by the Administrative Agent no
longer exist, and any Notice of Borrowing or Notice of Conversion given by the
Company with respect to Eurodollar Loans which have not
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yet been incurred shall be deemed rescinded by the Company, (y) in the case of
clause (ii) above, the Company agrees to pay to such Bank, upon written demand
therefor (accompanied by the written notice referred to below), such additional
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Bank in its sole discretion shall
determine) as shall be required to compensate such Bank for such increased costs
or reductions in amounts received or receivable hereunder (a written notice as
to the additional amounts owed to such Bank, showing the basis for the
calculation thereof, submitted to the Company by such Bank shall, absent
manifest error, be final and conclusive and binding upon all parties hereto) and
(z) in the case of clause (iii) above, the Company shall take one of the actions
specified in Section 1.10(b) as promptly as possible and, in any event, within
the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Company may (and in
the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii) the
Company shall) either (i) if the affected Eurodollar Loan is then being made
pursuant to a Borrowing, cancel said Borrowing by giving the Administrative
Agent telephonic notice (confirmed promptly in writing) thereof promptly (but in
any event no later than the later of (x) the Business Day next preceding the
date of such Borrowing and (y) one Business Day after the Company was notified
by a Bank pursuant to Section 1.10(a)(ii) or (iii)), or (ii) if the affected
Eurodollar Loan is then outstanding, upon at least three Business Days' notice
to the Administrative Agent, require the affected Bank to convert each such
Eurodollar Loan into a Base Rate Loan (which conversion, in the case of the
circumstances described in Section 1.10(a)(iii), shall occur no later than the
last day of the Interest Period then applicable to such Eurodollar Loan (or such
earlier date as shall be required by applicable law)); provided that if more
than one Bank is affected at any time, then all affected Banks must be treated
the same pursuant to this Section 1.10(b).
(c) (i) If any Bank shall have determined that after the Effective
Date, the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Bank with any request or directive regarding capital adequacy (whether
or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Bank's capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Bank could
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have achieved but for such adoption, change or compliance (taking into
consideration such Bank's policies with respect to capital adequacy), then from
time to time, within 15 days after demand by such Bank (with a copy to the
Administrative Agent), accompanied by the notice referred to in the last
sentence of this clause (i), the Company shall pay to such Bank such additional
amount or amounts as will compensate such Bank for such reduction. Each Bank,
upon determining in good faith that any additional amounts will be payable
pursuant to this Section 1.10(c), will give prompt written notice thereof to the
Company, which notice shall set forth the basis of the calculation of such
additional amounts, although the failure to give any such notice shall not
release or diminish the Company's obligations to pay additional amounts pursuant
to this Section 1.10(c).
(ii) If (x) any Bank becomes a Defaulting Bank or otherwise defaults
in its obligations to make Revolving Loans, (y) any Bank has notified the
Company that one of its Eurodollar Loans is affected by the circumstances
described in Section 1.10(a)(ii) or (iii), or (z) any Bank is owed increased
costs or other amounts under Section 1.10(c)(i) or 3.04 and, in the case of such
clause (y) or (z), compensation or other action with respect to such event is
not otherwise requested generally by the other Banks, the Company shall have the
right, if no Default or Event of Default then exists and, in the case of a Bank
described in clause (y) or (z) above, such Bank has not changed its applicable
lending office with the effect of eliminating such increased cost, to replace
such Bank (the "Replaced Bank") with another commercial bank or banks or other
financial institutions (collectively, the "Replacement Bank") reasonably
acceptable to the Administrative Agent, provided that (i) at the time of any
replacement pursuant to this Section 1.10(c)(ii), the Replacement Bank shall
enter into one or more assignment agreements pursuant to Section 11.04(b) hereof
(and with all fees payable pursuant to said Section 11.04(b) to be paid by the
Replacement Bank) pursuant to which the Replacement Bank shall acquire all of
the Revolving Loan Commitments and outstanding Revolving Loans of the Replaced
Bank and, in connection therewith, shall pay to the Replaced Bank in respect
thereof an amount equal to the sum of (a) an amount equal to the principal of,
and all accrued interest on, all outstanding Revolving Loans of the Replaced
Bank and (b) an amount equal to all accrued, but theretofore unpaid, Fees owing
to the Replaced Bank pursuant to Section 2.01 hereof and (ii) all obligations of
the Company owing to the Replaced Bank (other than those specifically described
in clause (i) above in respect of which the assignment purchase price has been,
or is concurrently being, paid) shall be paid in full to such Replaced Bank
concurrently with such replacement. Upon the execution of the respective
assignment documentation pursuant to clause (i) above and the payment of amounts
referred to in clauses (i) above and (ii) above, the Replacement
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Bank shall become a Bank or Banks hereunder, as the case may be, and the
Replaced Bank shall cease to constitute a Bank hereunder, except with respect to
indemnification provisions (including, without limitation, Sections 1.10, 1.11,
3.04, 10.07 and 11.01 of this Agreement) under this Agreement, which shall
survive as to such Replaced Bank.
1.11 Compensation. The Company agrees to compensate each Bank in the
appropriate currency, upon its written request (which request shall set forth
the basis for requesting such compensation), for all reasonable losses, expenses
and liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Bank to fund its Eurodollar Loans but excluding loss of
anticipated profit with respect to any Revolving Loans) which such Bank may
sustain: (i) if for any reason (other than a default by such Bank or the
Administrative Agent) a Borrowing of Eurodollar Loans does not occur on a date
specified therefor in a Notice of Borrowing or Notice of Conversion (whether or
not withdrawn by the Company or deemed withdrawn pursuant to Section 1.10(a));
(ii) if any repayment, prepayment or conversion of any Eurodollar Loans occurs
on a date which is not the last day of an Interest Period applicable thereto;
(iii) if any prepayment of any Eurodollar Loans is not made on any date
specified in a notice of prepayment given by the Company; or (iv) as a
consequence of (x) any other default by the Company to repay its Revolving Loans
when required by the terms of this Agreement or (y) an election made pursuant to
Section 1.10(b). Calculation of all amounts payable to a Bank under this Section
1.11 shall be made as though that Bank had actually funded its relevant
Eurodollar Loan through the purchase of a Eurodollar deposit bearing interest at
the Eurodollar Rate in an amount equal to the amount of that Revolving Loan,
having a maturity comparable to the relevant Interest Period and through the
transfer of such Eurodollar deposit from an offshore office of that Bank to a
domestic office of that Bank in the United States of America; provided, however,
that each Bank may fund each of its Eurodollar Loans in any manner it sees fit
and the foregoing assumption shall be utilized only for the calculation of
amounts payable under this Section 1.11.
1.12 Change of Lending Office. Each Bank agrees that, upon the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), Section 1.10(c)(i) or 3.04 with respect to such Bank, it will, if
requested by the Company, use reasonable efforts (subject to overall policy
considerations of such Bank) to designate another lending office for any
Revolving Loans affected by such event; provided that such designation is made
on such terms that in the sole judgment of such Bank, such Bank and its lending
office suffer no economic, legal or
-10-
regulatory disadvantage, with the object of avoiding the consequences of the
event giving rise to the operation of any such Section. Nothing in this Section
1.12 shall affect or postpone any of the obligations of the Company or the right
of any Bank provided in Sections 1.10 or 3.04.
SECTION 2. Fees; Commitments.
2.01 Fees. (a) The Company agrees to pay to the Administrative
Agent for distribution to each Non-Defaulting Bank a commitment fee (the
"Commitment Fee") for the period from the Effective Date to but not including
the date the Total Revolving Loan Commitment has been terminated, computed at a
per annum rate equal to the Applicable Commitment Fee Percentage on the daily
average Aggregate Unutilized Revolving Loan Commitment of such Non-Defaulting
Bank. Accrued Commitment Fees shall be due and payable quarterly in arrears on
the last Business Day of March, June, September and December of the year
following the Effective Date and the date upon which the Total Revolving Loan
Commitment is terminated.
(b) The Company shall pay to the Administrative Agent, for its own
account, such other fees as have been agreed to in writing by the Company and
the Administrative Agent.
(c) All computations of Fees shall be made in accordance with
Section 11.07(b).
2.02 Voluntary Reduction of Commitments. Upon at least three
Business Days' prior written notice (or telephonic notice promptly confirmed in
writing) to the Administrative Agent at its Notice Office (which notice the
Administrative shall promptly transmit to each of the Banks), the Company shall
have the right, without premium or penalty, to terminate or partially reduce the
Total Unutilized Revolving Loan Commitment; provided that (x) any such
termination or partial reduction shall apply to proportionately and permanently
reduce the Revolving Loan Commitment of each of the Banks, (y) any partial
reduction pursuant to this Section 2.02 shall be in the amount of at least
$2,000,000 and (z) the reduction to the Total Unutilized Revolving Loan
Commitment shall in no case be in an amount which would cause the Revolving Loan
Commitment of any Bank to be reduced (as required by the preceding clause (x))
by an amount which exceeds the remainder of the Aggregate Unutilized Revolving
Loan Commitment of such Bank as in effect
-11-
immediately before giving effect to such reduction.
2.03 Mandatory Reduction of Commitments, etc. (a) The Total
Revolving Loan Commitment (and the Revolving Loan Commitment of each Bank) shall
terminate in its entirety on the earlier of (i) the date which is the earlier of
(x) 30 days after any date on which a Specified Change of Control Event occurs
and (y) the date on which any Senior Notes or any other Indebtedness of the
Company or its Restricted Subsidiaries are required to be repurchased, redeemed
or prepaid as a result of any such Specified Change of Control Event and (ii)
the Final Maturity Date.
(b) Each reduction to the Total Revolving Loan Commitment pursuant
to this Section 2.03 shall be applied proportionately to reduce the Revolving
Loan Commitment of each Bank.
SECTION 3. Payments.
3.01 Voluntary Prepayments. The Company shall have the right to
prepay the Revolving Loans incurred by it, in whole or in part, without premium
or penalty except as otherwise provided in this Agreement, from time to time on
the following terms and conditions: (i) the Company shall give the
Administrative Agent at the Notice Office written notice (or telephonic notice
promptly confirmed in writing) of its intent to prepay the Revolving Loans, the
amount of such prepayment and (in the case of Eurodollar Loans) the specific
Borrowing(s) pursuant to which made, which notice shall be given by the Company
prior to 12:00 Noon (New York time) at least two Business Days prior to the date
of such prepayment, which notice shall promptly be transmitted by the
Administrative Agent to each of the Banks; (ii) each partial prepayment of any
Borrowing shall be in an aggregate principal amount of at least $1,000,000 and,
if greater, in an integral multiple of $500,000, provided that no partial
prepayment of Eurodollar Loans made pursuant to a Borrowing shall reduce the
aggregate principal amount of the Revolving Loans outstanding pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto; and (iii) each prepayment in respect of any Revolving Loans made
pursuant to a Borrowing shall be applied pro rata among such Revolving Loans;
provided that at the Company's election in connection with any prepayment of
Revolving Loans pursuant to this Section 3.01, such prepayment shall not be
applied to any Revolving Loans of a Defaulting Bank.
3.02 Mandatory Repayments. (a) (i) If on any date the
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aggregate outstanding principal amount of Revolving Loans made by Non-Defaulting
Banks (in each case after giving effect to all other repayments thereof on such
date) exceeds the Adjusted Total Commitment as then in effect, the Company shall
repay on such date the principal of Revolving Loans of Non-Defaulting Banks in
an aggregate amount equal to such excess.
(ii) If on any date the aggregate outstanding principal amount
of Revolving Loans made by any Defaulting Bank exceeds the Revolving Loan
Commitment of such Defaulting Bank, the Company shall repay the Revolving Loans
of such Defaulting Bank in an amount equal to such excess.
(b) With respect to each repayment of Revolving Loans required
by this Section 3.02, the Company may designate the Types of Revolving Loans
which are to be repaid and the specific Borrowing(s) pursuant to which made;
provided that (i) Eurodollar Loans may be designated for repayment pursuant to
this Section 3.02 only on the last day of an Interest Period applicable thereto
unless all Eurodollar Loans with Interest Periods ending on such date of
required repayment and all Base Rate Loans have been paid in full; (ii) each
repayment of any Revolving Loans made pursuant to a Borrowing shall be applied
pro rata among such Revolving Loans; (iii) notwithstanding the provisions of the
preceding clause (ii), no repayment of Revolving Loans pursuant to Section
3.02(a)(i) shall be applied to the Revolving Loans of a Defaulting Bank; and
(iv) repayments of Revolving Loans of Defaulting Banks pursuant to Section
3.02(a)(ii) shall be applied pro rata among such Revolving Loans. In the absence
of a designation by the Company as described in the preceding sentence, the
Administrative Agent shall, subject to the above, make such designation in its
sole discretion with a view, but no obligation, to minimize breakage costs owing
under Section 1.11.
3.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Administrative Agent for the ratable account of the Banks entitled thereto
(based on each Bank's Pro Rata Share, if any), no later than 1:00 P.M. (New York
time) on the date when due and shall be made in immediately available funds and
in lawful money of the United States of America at the Payment Office. Any
payments under this Agreement which are made later than 1:00 P.M. (New York
time) shall be deemed to have been made on the next succeeding Business Day;
provided, however, that to the extent that the Administrative Agent shall have
received any payment under this Agreement after 1:00 P.M. (New York time) on a
Business Day, the Administrative Agent shall use its best efforts to distribute
such payment as promptly as practicable
-13-
on such date to the Banks (other than any Bank that has consented in writing to
waive its pro rata share of such payment) pro rata based upon their respective
shares, if any, of the Obligations with respect to which such payment was
received, and to the extent that any such Bank receives its portion of such
payment from the Administrative Agent on such same date by a time satisfactory
to such Bank, such payment to such Bank shall be deemed to have been made on
such date. Whenever any payment to be made hereunder shall be stated to be due
on a day which is not a Business Day, the due date thereof shall be extended to
the next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.
3.04 Net Payments. All payments made by the Company hereunder will
be made without setoff, counterclaim or other defense. Promptly upon notice from
any Bank to the Company, the Company agrees to pay, prior to the date on which
penalties attach thereto, all present and future income, stamp and other taxes,
levies, or costs and charges whatsoever imposed, assessed, levied or collected
on or in respect of a Revolving Loan solely as a result of the interest rate
being determined by reference to the Eurodollar Rate, and/or the provisions of
this Agreement relating to the Eurodollar Rate, and/or the recording,
registration, notarization or other formalization of any thereof and/or any
payments of principal, interest or other amounts made on a Revolving Loan when
the interest rate is determined by reference to the Eurodollar Rate (all such
taxes, levies, costs and charges being herein collectively called "Taxes");
provided that Taxes shall not include (x) taxes imposed on or measured by the
overall net income or receipts of the Administrative Agent or any Bank by the
United States of America or any political subdivision or taxing authority
thereof or therein or (y) taxes on or measured by the overall net income of any
foreign office, branch or subsidiary of the Administrative Agent or that Bank by
any foreign country or subdivision thereof in which the Administrative Agent's
or that Bank's office, branch or subsidiary is doing business. The Company
agrees to also pay such additional amounts equal to increases in taxes payable
by that Bank described in the foregoing proviso which increases arise solely
from the receipt by that Bank of payments made by the Company described in the
immediately preceding sentence of this Section 3.04. Promptly after the date on
which payment of any such Tax is due pursuant to applicable law, the Company
will, at the request of that Bank, furnish to that Bank evidence, in form and
substance satisfactory to that Bank, that the Company has met its obligation
under this Section 3.04. The Company agrees to indemnify each Bank against, and
reimburse each Bank on demand for, any Taxes, as reasonably determined by that
Bank in its good faith. Such Bank shall provide the Company with appropriate
receipts for any payments or reimbursements made by the
-14-
Company pursuant to this Section 3.04. Notwithstanding the foregoing, the
Company shall be entitled, to the extent it is required to do so by law, to
deduct or withhold and pay to the appropriate taxing authority within the time
prescribed by applicable law (and shall not be required to make payments as
otherwise required in this Section on account of such deductions or
withholdings) income or other similar taxes imposed by the United States of
America from interest, fees or other amounts payable hereunder for the account
of the Administrative Agent or any Bank other than the Administrative Agent or
any Bank (i) who is a U.S. Person for Federal income tax purposes or (ii) who
has the Prescribed Forms on file with the Company for the applicable year to the
extent deduction or withholding of such taxes is not required as a result of the
filing of such Prescribed Forms, provided that if the Company shall so deduct or
withhold any such taxes, it shall provide a statement to the Administrative
Agent and such Bank, setting forth the amount of such taxes so deducted or
withheld, the applicable rate and any other information or documentation which
the Administrative Agent or such Bank may reasonably request for assisting the
Administrative Agent or such Bank to obtain any allowable credits or deductions
for the taxes so deducted or withheld in the jurisdiction or jurisdictions in
which the Administrative Agent or such Bank is subject to tax.
SECTION 4. Conditions Precedent. The obligation of each Bank to make
each Revolving Loan to the Company hereunder is subject, at the time of the
making of each such Revolving Loan (except as otherwise hereinafter indicated),
to the satisfaction of the following conditions:
4.01 Execution of Agreement. On or prior to the Initial Borrowing
Date, this Agreement shall have been executed and delivered in accordance with
Section 11.10.
4.02 No Default; Representations and Warranties. At the time of the
making of each Revolving Loan and also after giving effect thereto (i) there
shall exist no Default or Event of Default and (ii) all representations and
warranties contained herein or in the other Credit Documents in effect at such
time shall be true and correct in all material respects with the same effect as
though such representations and warranties had been made on and as of the date
of such Revolving Loan, unless stated to relate to a specific earlier date, in
which case such representations and warranties shall be true and correct in all
material respects as of such earlier date.
4.03 Opinions of Counsel. On the Effective Date, the
-15-
Administrative Agent shall have received opinions, addressed to each of the
Banks and dated the Effective Date, (i) from Simpson, Thacher & Bartlett,
special counsel to the Credit Parties, which opinion shall cover the matters
contained in Exhibit B-1 and such other matters incident to the transactions
contemplated herein as the Administrative Agent may reasonably request, (ii)
from Beverly C. Chell, Esq., counsel to the Credit Parties, which opinion shall
cover the matters contained in Exhibit B-2 and such other matters incident to
the transactions contemplated herein as the Administrative Agent may reasonably
re quest, and (iii) from White & Case, special counsel to the Administrative
Agent, which opinion shall cover the matters contained in Exhibit B-3.
4.04 Corporate Proceedings. (a) On the Effective Date, the
Administrative Agent shall have received from the Company and each Subsidiary
Guarantor, a certificate, dated the Effective Date, signed by the chairman, a
vice chair man, the president, any vice-president or the treasurer of such
Person, and attested to by the secretary or any assistant secretary of such
Person, in the form of Exhibit C with appropriate insertions and, to the extent
required, together with copies of the Certificate of Incorporation, By-Laws and
the resolutions of such Person referred to in such certificate, and the
foregoing shall be satisfactory to the Administrative Agent.
(b) On the Effective Date, all corporate and legal proceedings and
all instruments and agreements in connection with the transactions contemplated
by this Agreement and the other Credit Documents shall be reasonably
satisfactory in form and substance to the Administrative Agent, and the
Administrative Agent shall have received all information and copies of all
certificates, documents and papers, including good standing certificates and any
other records of corporate proceedings and governmental approvals, if any, which
the Administrative Agent reasonably may have requested in connection therewith,
such documents and papers, where appropriate, to be certified by proper
corporate or governmental authorities.
4.05 Existing Credit Agreements. At the time of the making of each
Revolving Loan, the Indebtedness to be incurred by the Company under this
Agreement shall be permitted under (x) Section 8.04(j) of the $1,250,000,000
Credit Agreement and (y) Section 7.04(j) of the $250,000,000 Credit Agreement.
4.06 Subsidiary Guaranty. On the Effective Date, each Subsidiary
Guarantor shall have duly authorized, executed and delivered a guaranty in the
form of Exhibit D hereto (as amended, modified or supplemented from time to
-16-
time in accordance with the terms hereof and thereof, the "Subsidiary
Guaranty"), and the Subsidiary Guaranty shall be in full force and effect.
4.07 Notice of Borrowing. The Administrative Agent shall have
received a Notice of Borrowing satisfying the requirements of Section 1.03 with
respect to any Borrowing of Revolving Loans.
4.08 Payment of Fees, etc. On the Effective Date, all costs, fees
and expenses, and all other compensation contemplated by this Agreement, due to
the Administrative Agent or the Banks shall have been paid to the extent due.
4.09 Contribution Agreement. On the Effective Date, the Subsidiary
Guarantors shall have entered into a contribution agreement in the form of
Exhibit E hereto (as amended, modified or supplemented from time to time in
accordance with the terms hereof and thereof, the "Contribution Agreement"), and
the Contribution Agreement shall be in full force and effect.
4.10 Existing Indebtedness Agreements. On or prior to the Initial
Borrowing Date, there shall have been delivered to (or made available for review
by) the Banks copies, certified (in the case of those delivered) as true and
correct by an appropriate officer of the Company making such delivery, of all
agreements evidencing or relating to the Existing Debt or the Existing
Contingent Obligations with respect to Indebtedness for borrowed money
(collectively, the "Existing Indebtedness Agreements").
The acceptance of the benefits of each Revolving Loan shall
constitute a representation and warranty by the Company to each of the Banks
that all of the applicable conditions specified above exist as of the date of
such Revolving Loan. All of the certificates, legal opinions and other documents
and papers referred to in this Section 4, unless otherwise specified, shall be
delivered to the Administrative Agent at its Notice Office for the account of
each of the Banks and in sufficient counterparts for each of the Banks and shall
be reasonably satisfactory in form and substance to the Administrative Agent.
SECTION 5. Representations, Warranties and Agreements. In order to
induce the Banks to enter into this Agreement and to make the Revolving Loans
provided for herein, the Company makes the following representations and
warranties to, and agreements with, the Banks, all of which shall survive the
execution and
-17-
delivery of this Agreement, the making of the Revolving Loans (with the making
of each Revolving Loan on and after the Initial Borrowing Date being deemed to
constitute a representation and warranty that the matters specified in this
Section 5 are true and correct in all material respects on and as of the Initial
Borrowing Date and as of the date of each such Revolving Loan, unless stated to
relate to a specific earlier date):
5.01 Corporate Status. The Company and each of its Restricted Subsidiaries (i)
is a duly organized and validly existing corporation under the laws of the
jurisdiction of its organization and has the corporate power and authority to
own its property and assets and to transact the business in which it is engaged
and presently proposes to engage, (ii) is in good standing under the laws of the
jurisdiction of its organization and (iii) is duly qualified and is authorized
to do business and is in good standing in all jurisdictions where it is required
to be so qualified, except, in the cases of clauses (ii) and (iii) above, for
such failures to be in good standing and failures to be so qualified which, in
the aggregate, would not have a material adverse effect on the condition
(financial or other wise), operations, assets, liabilities or prospects of the
Company and its Restricted Subsidiaries taken as a whole.
5.02 Corporate Power and Authority. Each of the Company and each of
its Restricted Subsidiaries has the corporate power and authority to execute,
deliver and carry out the terms and provisions of the Credit Documents to which
it is a party and has taken all necessary corporate action to authorize the
execution, delivery and performance of the Credit Documents to which it is a
party. Each of the Company and each of its Restricted Subsidiaries has duly
executed and delivered each Credit Document to which it is a party and each such
Credit Document constitutes the legal, valid and binding obligation of such
Person enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting creditors' rights
and by equitable principles (regardless of whether enforcement is sought in
equity or at law).
5.03 No Violation. Neither the execution, delivery or performance
by the Company or any of its Restricted Subsidiaries of the Credit Documents to
which it is a party nor compliance by them with the terms and provisions
thereof, nor the consummation of the transactions contemplated therein (i) will
contravene in any material respect any applicable provision of any law, statute,
rule or regulation, or any order, writ, injunction or decree of any court or
govern-
-18-
mental instrumentality, (ii) will conflict or be inconsistent with or result in
any breach of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the property or assets of
the Company or any of its Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, credit agreement, loan agreement or other material
agreement or instrument to which the Company or any of its Subsidiaries is a
party or by which any of them or any of their respective property or assets is
bound or to which it may be subject or (iii) will violate any provision of the
Certificate of Incorporation or By-Laws of the Company or any of its
Subsidiaries.
5.04 Litigation. There are no actions, suits or proceedings
pending, or, to the best knowledge of the Company, threatened, with respect to
the Company or any of its Subsidiaries (i) that are likely to have a material
adverse effect on the condition (financial or otherwise), operations, assets,
liabilities or prospects of the Company and its Restricted Subsidiaries taken as
a whole or (ii) that could reasonably be expected to have a material adverse
effect on the rights or remedies of the Banks or the Administrative Agent or on
the ability of the Company or of the Subsidiary Guarantors, taken as a whole, in
either case, to perform its or their respective obligations hereunder and under
the other Credit Documents to which it is or they are, or will be, a party.
5.05 Use of Proceeds; Margin Regulations. (a) The proceeds of all
Revolving Loans shall be used for general corporate and working capital purposes
of the Company and its Subsidiaries (including, without limitation, to finance
Permitted Acquisitions and refinance Senior Notes and pay related costs and
expenses thereto).
(b) Neither the making of any Revolving Loan hereunder, nor the use
of the proceeds thereof, will violate the provisions of Regulation G, T, U or X
of the Board of Governors of the Federal Reserve System and no part of the
proceeds of any Revolving Loan will be used to purchase or carry any Margin
Stock or to extend credit for the purpose of purchasing or carrying any Margin
Stock, provided that the Company may use the proceeds of Revolving Loans to
purchase Margin Stock in compliance with Regulations G, T, U and X, so long as
at the time of the making of such Revolving Loan, and after giving effect
thereto, not more than 25% of the value of the assets subject to the provisions
of Section 7 of the Company, or of the Company and its Restricted Subsidiaries
on a consolidated basis, shall constitute Margin Stock.
-19-
5.06 Governmental Approvals. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required in
connection with (i) the execution, delivery and performance of any Credit
Document or (ii) the legality, validity, binding effect or enforceability of any
Credit Document, except those which have been obtained or made or those the
absence of which, individually or in the aggregate, could not reasonably be
expected to have a material adverse effect on either (x) the condition
(financial or otherwise), operations, assets, liabilities or prospects of the
Company and its Restricted Subsidiaries taken as a whole or (y) the rights or
remedies of the Banks or the Administrative Agent or on the ability of the
Company or of the Subsidiary Guarantors, taken as a whole, in either case, to
perform its or their respective obligations hereunder and under the other Credit
Documents to which it is or they are, or will be, a party.
5.07 Investment Company Act. Neither the Company nor any of its
Restricted Subsidiaries is an "investment company" or a company "controlled" by
an "investment company," within the meaning of the Investment Company Act of
1940, as amended.
5.08 Public Utility Holding Company Act. Neither the Company nor
any of its Restricted Subsidiaries 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.
5.09 True and Complete Disclosure. (a) All factual information
(taken as a whole) heretofore or contemporaneously furnished by the Company or
any of its Subsidiaries in writing to the Administrative Agent and/or any Bank
on or before the Initial Borrowing Date (including, without limitation, all
information contained in the Credit Documents) for purposes of or in connection
with this Agreement or any transaction contemplated herein is true and complete
in all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any material fact necessary to
make such information (taken as a whole) not misleading at such time in light of
the circumstances under which such information was provided, it being understood
and agreed that for purposes of this Section 5.09(a), such factual information
shall not include projections and pro forma financial information.
-20-
(b) The projections and pro forma financial information contained in
the factual information referred to in paragraph (a) above were based on good
faith estimates and assumptions believed by such Persons to be reasonable at the
time made, it being recognized by the Banks that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by any such projections may differ from the projected
results.
5.10 Financial Statements; Financial Condition. (a) The consolidated balance
sheet of the Company and its Subsidiaries as at December 31, 1996 and the
related consolidated statements of income and cash flows of the Company and its
Subsidiaries for the fiscal year ended as of said date, which statements have
been examined by Deloitte & Touche, independent certified public accountants,
who delivered an unqualified opinion in respect thereof, present fairly the
financial position of the Company and its Subsidiaries at the date of said
statements and the results for the period covered thereby. All such financial
statements have been prepared in accordance with GAAP consistently applied
except to the extent provided in the notes to said financial statements.
(b) Since December 31, 1996 and after giving effect to the
incurrence of Indebtedness hereunder and the other transactions contemplated
hereby, there has been no material adverse change in the condition (financial or
otherwise), operations, assets, liabilities or prospects of the Company and its
Restricted Subsidiaries taken as a whole (other than any change in general
economic conditions or any change in conditions affecting the Business
generally).
5.11 Tax Returns and Payments. Each of the Company and each of its
Restricted Subsidiaries has filed all Federal income tax returns and all other
material tax returns, domestic and foreign, required to be filed by it and has
paid all Federal taxes and assessments shown to be due on such returns and all
other material taxes and assessments, domestic and foreign, in each case payable
by it which have become due, other than those not yet delinquent and except for
those contested in good faith and for which adequate reserves have been provided
in accordance with GAAP.
5.12 Compliance with ERISA. As of the Effective Date, there are no
Plans and neither the Company nor any of its Restricted Subsidiaries nor any
ERISA Affiliate has incurred any unpaid material liability or reasonably expects
to incur any material liability with respect to any "employee pension benefit
plan" (as defined in
-21-
Section 3(2) of ERISA) covered by Title IV of ERISA. As of the date of each
subsequent Revolving Loan, each Plan is in substantial compliance with ERISA
and the Code; no Reportable Event has occurred with respect to a Plan; no Plan
is insolvent or in reorganization; no Plan has an accumulated or waived funding
deficiency, has permitted decreases in its funding standard account or has
applied for an extension of any amortization period within the meaning of
Section 412 of the Code; neither the Company nor any of its Restricted
Subsidiaries nor any ERISA Affiliate has incurred or reasonably expects to incur
any liability to or on account of a Plan pursuant to ERISA or the Code; no
proceedings have been instituted by the PBGC to terminate any Plan; no condition
exists which presents a material risk to the Company, any of its Restricted
Subsidiaries or any ERISA Affiliate of incurring a liability to or on account of
a Plan pursuant to ERISA or the Code; no lien imposed under the Code or ERISA on
the assets of the Company, any of its Restricted Subsidiaries or any ERISA
Affiliate exists or is likely to arise on account of any Plan; and the Company
and its Restricted Subsidiaries do not maintain or contribute to any "employee
welfare benefit plan" (as defined in Section 3(1) of ERISA), which provides
benefits to retired employees (other than as required by Section 601 of ERISA)
where, with respect to any of the foregoing representations in this Section
5.12, the liability for or the lien which could arise as a result of, the
particular circumstance or event which is the subject of the representation,
would be reasonably likely to result in a material adverse effect on the
condition (financial or otherwise), operations, assets, liabilities or prospects
of the Company and its Restricted Subsidiaries taken as a whole. Using actuarial
assumptions and computation methods consistent with subpart 1 of subtitle E of
Title IV of ERISA, the aggregate liabilities of the Company, its Restricted
Subsidiaries and ERISA Affiliates to all Plans which are "multiemployer plans"
(as defined in Section 4001(a)(3) of ERISA) (each a "Multiemployer Plan") in the
event of a complete withdrawal therefrom, as of the close of the most recent
fiscal year of each such Plan would not be reasonably likely to be an amount
that could result in a material adverse effect on the condition (financial or
otherwise), operations, assets, liabilities or prospects of the Company and its
Restricted Subsidiaries taken as a whole. Notwithstanding anything in this
Section 5.12 to the contrary, all representations and warranties made with
respect to any Plan which is a Multiemployer Plan shall be made to the best
knowledge of the Company.
5.13 Subsidiaries. On the Effective Date, the corporations listed on
Annex III under the name of the Company are the only Subsidiaries of the
Company. Annex III correctly sets forth, as of the Effective Date, the
percentage ownership (direct and indirect) of the Company in each class of
capital stock of each of its Subsidiaries and also identifies the direct owner
thereof.
-22-
5.14 Intellectual Property. (a) The Company and each of its
Restricted Subsidiaries owns, or is licensed or otherwise authorized to sell,
distribute, use or exploit, all material copyrights, literary works, texts and
other works of authorship fixed in any tangible medium of expression necessary
for the present conduct of its business ("Copyrights"), except to the extent
that the failure to own or obtain licenses or authorizations with respect to
any of the foregoing, individually or in the aggregate, would not have a
material adverse effect on the condition (financial or otherwise), operations,
assets, liabilities or prospects of the Company and its Restricted Subsidiaries
taken as a whole.
(b) The Company and each of its Restricted Subsidiaries owns or is
licensed to use all the patents, trademarks, permits, service marks, trade
names, technology, know-how and formulas, or rights with respect to the
foregoing, necessary for the present conduct of its business, except to the
extent that the failure to own or obtain licenses with respect to any of the
foregoing, individually or in the aggregate, would not have a material adverse
effect on the condition (financial or otherwise), operations, assets,
liabilities or prospects of the Company and its Restricted Subsidiaries taken as
a whole (together with the Copyrights, "Intellectual Property").
(c) All Intellectual Property is protected in all material respects
under the laws of the United States relating to such Intellectual Property and
has been duly and properly registered or filed with or issued by the
appropriate governmental offices and jurisdictions for such registrations,
filings or issuances, except to the extent that the failure to make or obtain
such registrations, filings or issuances would not have a material adverse
effect on the condition (financial or otherwise), operations, assets,
liabilities or prospects of the Company and its Restricted Subsidiaries taken as
a whole.
(d) No material claim has been asserted by any Person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property. The use of such Intellectual
Property by the Company or its Restricted Subsidiaries does not infringe on the
rights of any Person, except for such claims and infringements as do not,
individually or in the aggregate, give rise to any liabilities on the part of
the Company and its Restricted Subsidiaries that are material to the Company and
its Restricted Subsidiaries taken as a whole.
5.15 Compliance with Statutes, etc. The Company and each of its
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Restricted Subsidiaries is in compliance with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including compliance with all
applicable Environmental Laws with respect to any Real Property and the
requirements of any permits issued under such Environmental Laws with respect to
any such Real Property or the operations of the Company or any of its
Subsidiaries), except such noncompliances as would not, in the aggregate, have a
material adverse effect on the condition (financial or otherwise), operations,
assets, liabilities or prospects of the Company and its Restricted Subsidiaries
taken as a whole.
SECTION 6. Affirmative Covenants. The Company hereby covenants and
agrees that on the Effective Date and thereafter for so long as this Agreement
is in effect and until the Revolving Loan Commitments have terminated, no Notes
are outstanding and the Revolving Loans together with interest, Fees and all
other Obligations are paid in full:
6.01 Information Covenants. The Company will furnish to each Bank:
(a) Annual Financial Statements. Within 100 days after the close of
each fiscal year of the Company, the consolidated balance sheets of each
of (A) the Company and its Subsidiaries and of (B) the Company and its
Restricted Subsidiaries, as at the end of such fiscal year and, in each
case, the related consolidated statements of income and retained earnings
and of cash flows for such fiscal year, setting forth for such fiscal
year, in comparative form, the corresponding figures for the preceding
fiscal year and, in the case of the figures with respect to the Company
and its Restricted Subsidiaries the corresponding figures from the budget
for such fiscal year delivered pursuant to Section 6.01(c); all of which
shall be examined by Deloitte & Touche or such other independent certified
public accountants of recognized national standing as shall be acceptable
to the Administrative Agent, whose opinion shall not be qualified as to
the scope of audit or as to the status of the Company and its Subsidiaries
or of the Company and its Restricted Subsidiaries, as the case may be, as
a going concern, together with a certificate of such accounting firm
stating that in the course of its regular audit of the business of the
Company and its Subsidiaries, which audit was conducted in accordance with
generally accepted auditing standards, no Default or Event
-24-
of Default which has occurred and is continuing has come to its attention
or, if such a Default or Event of Default has come to its attention a
statement as to the nature thereof (provided that in no event shall such
accountants be liable as a result of this Agreement by reason of any
failure to obtain knowledge of any Default or Event of Default that would
not be disclosed in the course of their audit examination).
(b) Quarterly Financial Statements. As soon as available and in any
event within 50 days after the close of each of the first three quarterly
accounting periods in each fiscal year of the Company (beginning with the
quarterly accounting period ending March 31, 1997) and, at the sole option
of the Company, at any time prior to 100 days after the close of the
fourth quarterly accounting period in each fiscal year, the consolidated
balance sheet of each of (A) the Company and its Subsidiaries and of (B)
the Company and its Restricted Subsidiaries, as at the end of such
quarterly period and the related consolidated statements of income and
retained earnings and of cash flows for such quarterly period and for the
elapsed portion of the fiscal year ended with the last day of such
quarterly period; all of which shall be in reasonable detail and certified
by the chief financial officer or other Authorized Officer of the Company
that they fairly present the financial condition of the Company and its
Subsidiaries or of the Company and its Restricted Subsidiaries, as the
case may be, as of the dates indicated and the results of their operations
and changes in their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end audit adjustments.
(c) Budgets; etc. Not more than 90 days after the commencement of
each fiscal year of the Company, budgets of the Company and its Restricted
Subsidiaries in reasonable detail for each of the four fiscal quarters of
such fiscal year setting forth Consolidated EBITDA and consolidated sales
and setting forth, with appropriate discussion, the principal assumptions
upon which such budgets are based.
(d) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Section 6.01(a) and (b), a
certificate of the chief financial officer, controller or chief accounting
officer of the Company (i) to the effect that no Default or Event of
Default exists or, if any Default or Event of Default does exist,
specifying the nature and extent thereof, which certificate shall set
forth the calculations required to establish whether the Company and its
Subsidiaries were in compliance with the provisions of
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Sections 7.04(c), 7.05(d), 7.07 and Sections 7.09 through and including
7.11, as at the end of such fiscal quarter or year, as the case may be and
(ii) setting forth the calculations demonstrating (A) with respect to each
Affected Transaction consummated during the most recently ended fiscal
quarter, that the Company was in compliance, on a Pro Forma Basis, with
Sections 7.09, 7.10 and 7.11 and (B) with respect to each business sold
(or deemed sold) pursuant to Section 7.02(c) hereof, compliance by the
Company with clause (iii) of such Section 7.02(c). In addition, at the
time of the delivery of the financial statements provided for in Section
6.01(a) and (b), a certificate of the chief financial officer, controller
or chief accounting officer of the Company setting forth the amount of,
and calculations required to establish the amount of, Excess Cash Flow for
the respective fiscal year or quarter.
(e) Notice of Default or Litigation. Promptly, and in any event
within three Business Days after any officer of the Company obtains
knowledge thereof, notice of (x) the occurrence of any event which
constitutes a Default or Event of Default, which notice shall specify the
nature thereof, the period of existence thereof and what action the
Company proposes to take with respect thereto and (y) the commencement of,
or threat of, or any significant development in, any litigation or
governmental proceeding pending against the Company or any of its
Subsidiaries which is likely to have a material adverse effect on the
condition (financial or otherwise), operations, assets, liabilities or
prospects of the Company and its Restricted Subsidiaries taken as a
whole, or the ability of the Company or of the Subsidiary Guarantors,
taken as a whole, in either case, to perform its or their respective
obligations hereunder or under any other Credit Document.
(f) Auditors' Reports. Promptly upon receipt thereof, a copy of each
report or "management letter" submitted to the Company or any of its
Subsidiaries by its independent accountants in connection with any annual,
interim or special audit made by them of the books of the Company or any
of its Subsidiaries.
(g) Other Information. Promptly upon transmission thereof, copies of
any filings and registrations with, and reports to, the SEC by the Company
or any of its Subsidiaries and, with reasonable promptness, such other
information or documents (financial or otherwise) as the Administrative
Agent on its own behalf or on behalf of the Required Banks may reasonably
request from time to time.
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6.02 Books, Records and Inspections. The Company will, and will
cause each of its Restricted Subsidiaries to, permit, upon notice to the chief
financial officer or other Authorized Officer of the Company, officers and
designated representatives of the Administrative Agent or the Required Banks to
visit and inspect any of the properties or assets of the Company and any of its
Restricted Subsidiaries in whomsoever's possession, and to examine the books of
account of the Company and any of its Restricted Subsidiaries and discuss the
affairs, finances and accounts of the Company and of any of its Restricted
Subsidiaries with, and be advised as to the same by, their officers and
independent accountants, all at such reasonable times and intervals and to such
reasonable extent as the Administrative Agent or the Required Banks may desire.
6.03 Payment of Taxes. The Company will pay and discharge, and will
cause each of its Restricted Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which material penalties attach thereto, and all lawful claims for sums that
have become due and payable which, if unpaid, might become a Lien not otherwise
permitted under Section 7.03(a) or charge upon any properties of the Company or
any of its Restricted Subsidiaries; provided that neither the Company nor any of
its Restricted Subsidiaries shall be required to pay any such tax, assessment,
charge, levy or claim which is being contested in good faith and by proper
proceedings if it has maintained adequate reserves with respect thereto in
accordance with GAAP.
6.04 Corporate Franchises. The Company will do, and will cause each
of its Restricted Subsidiaries to do, or cause to be done, all things necessary
to preserve and keep in full force and effect its existence and its rights,
franchises, licenses, permits and Intellectual Property rights except to the
extent its failures to do so would not, in the aggregate, have a material
adverse effect on the condition (financial or otherwise), operations, assets,
liabilities or prospects of the Company and its Restricted Subsidiaries taken as
a whole; provided, however, that any transaction permitted by Section 7.02 will
not constitute a breach of this Section 6.04.
6.05 Compliance with Statutes, etc. The Company will, and will
cause each of its Restricted Subsidiaries to, comply with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all governmental bodies, domestic or foreign, in respect of the conduct of its
business and the
-27-
ownership of its property (including applicable statutes, regulations, orders
and restrictions relating to environmental standards and controls) other than
those the non-compliance with which would not have a material adverse effect on
the condition (financial or otherwise), operations, assets, liabilities or
prospects of the Company and its Restricted Subsidiaries taken as a whole or on
the ability of the Company or of the Subsidiary Guarantors, taken as a whole, in
either case, to perform its or their obligations hereunder or under any other
Credit Document.
6.06 ERISA. As soon as possible and, in any event, within 30 days
after the Company, any of its Restricted Subsidiaries or any ERISA Affiliate
knows or could reasonably be expected to know of the occurrence of any of the
following and where it could reasonably be expected that a material liability of
the Company and its Restricted Subsidiaries and ERISA Affiliates, taken as a
whole, could result in connection therewith, the Company will deliver to each of
the Banks a certificate of the chief financial officer or other Authorized
Officer of the Company setting forth details as to such occurrence and such
action, if any, which the Company, such Restricted Subsidiary or such ERISA
Affiliate is required or proposes to take, together with any notices required or
proposed to be given to or filed with or by the Company, such Restricted
Subsidiary, such ERISA Affiliate, the PBGC, a Plan participant or the Plan
administrator with respect thereto: that a Reportable Event has occurred; that
an accumulated funding deficiency has been incurred or an application is
reasonably likely to be or has been made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under Section
412 of the Code with respect to a Plan; that a Plan has been or is reasonably
likely to be terminated, reorganized, partitioned or declared insolvent under
Title IV of ERISA; that a Plan has an Unfunded Current Liability giving rise to
a lien under ERISA or the Code; that proceedings are reasonably likely to be or
have been instituted to terminate a Plan; that a proceeding has been instituted
pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan;
or that the Company, any of its Restricted Subsidiaries or any ERISA Affiliate
will or is reasonably likely to incur any liability (including any contingent or
secondary liability) to or on account of the termination of or withdrawal from a
Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with
respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or
Section 409 or 502(i) or 502(1) of ERISA. At the request of any Bank, the
Company will deliver to such Bank a complete copy of the annual report (Form
5500) of each Plan required to be filed with the Internal Revenue Service.
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6.07 End of Fiscal Years; Fiscal Quarters. The Company will, for
financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries', fiscal years to end on December 31 of each year and (ii) each of
its, and each of its Subsidiaries', fiscal quarters to end on March 31, June 30,
September 30 and December 31 of each year.
6.08 Use of Proceeds. All proceeds of the Revolving Loans shall be
used as provided in Section 5.05.
6.09 Ownership of Subsidiaries. The Company will, at all times,
maintain, directly or indirectly, ownership of at least a majority of the
capital stock of its Restricted Subsidiaries, except to the extent 100% of the
capital stock owned by the Company or any Restricted Subsidiary of any such
Restricted Subsidiary is sold, transferred or disposed of in a transaction
permitted by Section 7.02(c) or (j) or any such Restricted Subsidiary is merged,
consolidated or liquidated in a transaction permitted by Section 7.02(e),
provided that the Company shall not be required to own a majority of the capital
stock of Canadian Sailings Inc. so long as the Company continues to hold at
least as much of such capital stock as is held on the Effective Date.
6.10 Maintenance of Corporate Separateness. The Company will, and
will cause each of its Subsidiaries to, satisfy customary corporate formalities,
including the holding of regular board of directors' and shareholders' meetings
and the maintenance of corporate offices and records. Neither the Company nor
any Restricted Subsidiary shall make any payment to a creditor of any
Unrestricted Subsidiary in respect of any liability of such Unrestricted
Subsidiary, and no bank account of an Unrestricted Subsidiary shall be
commingled with any bank account of the Company or any of its Restricted
Subsidiaries. Any financial statements distributed to any creditors of an
Unrestricted Subsidiary shall clearly establish the separateness of such
Unrestricted Subsidiary from the Company and its Restricted Subsidiaries.
Finally, neither the Company nor any of its Subsidiaries shall take any action,
or conduct its affairs in a manner, which is likely to result in the corporate
existence of any Unrestricted Subsidiary which is a direct Subsidiary of the
Company or any Restricted Subsidiary being ignored by any court of competent
jurisdiction, or in the assets and liabilities of the Company or any Restricted
Subsidiary being substantively consolidated with those of any Unrestricted
Subsidiary in a bankruptcy, reorganization or other insolvency proceeding.
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SECTION 7. Negative Covenants. The Company hereby covenants and
agrees that as of the Effective Date, and thereafter for so long as this
Agreement is in effect and until the Revolving Loan Commitments have terminated,
no Notes are outstanding and the Revolving Loans, together with interest, Fees
and all other Obligations are paid in full:
7.01 Changes in Business. The Company will not, and will not permit
any of its Restricted Subsidiaries to, engage in any businesses other than
Businesses, provided that the Company and its Restricted Subsidiaries may engage
in businesses other than a Business so long as the businesses engaged in by the
Company and its Restricted Subsidiaries, taken as a whole, consist substantially
of Businesses.
7.02 Consolidation, Merger, Sale or Purchase of Assets, etc. The
Company will not, and will not permit any of its Restricted Subsidiaries to,
wind up, liquidate or dissolve its affairs or enter into any transaction of
merger or consolidation, or convey, sell, lease or otherwise dispose of (or
agree to do any of the foregoing at any future time) all or any part of its
property or assets, or enter into any partnerships, joint ventures or
sale-leaseback transactions, or purchase or otherwise acquire (in one or a
series of related transactions) any part of the property or assets (other than
purchases or other acquisitions of inventory, materials and equipment (and, to
the extent consistent with industry practices, other tangible and intangible
assets) in the ordinary course of business) of any Person, except that the
following shall be permitted:
(a) any sale, transfer or other disposition of (x) inventory in the
ordinary course of business or (y) any other tangible or intangible asset
in the ordinary course of business of the Company and/or its Restricted
Subsidiaries;
(b) the advances, investments and loans permitted pursuant to
Section 7.05;
(c) Asset Sales constituting the disposition of a business
(including, without limitation, to the extent permitted in this Section
7.02(c), sales of the capital stock of a Restricted Subsidiary but
excluding sales of the stock of an Unrestricted Subsidiary); provided that
(i) no Default or Event of Default exists at such time or would exist
immediately after giving effect thereto; (ii) such sale, transfer or
disposition (or deemed sale, transfer or disposition pursuant to any
Permitted Restricted Subsidiary Conversion) (x) is for fair market value,
as determined in good faith by management of the Company (or, in the
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case of any Permitted Restricted Subsidiary Conversion or Permitted
Restricted Asset Sale, to the extent requested by the Administrative Agent
or the Required Banks, as determined by a written opinion of value
reasonably satisfactory to the Administrative Agent by an Appraisal Firm)
and (y) except in the case of a Permitted Restricted Subsidiary Conversion
otherwise permitted pursuant to the terms hereof, results in consideration
in the form of cash, promissory notes issued by the respective purchaser
and/or other assets, provided that, to the extent any such other assets
are received by the Company and/or its Restricted Subsidiaries in
connection with any such Asset Sale, (I) the market value of such other
assets, when added to the aggregate amount of other consideration received
in connection with such Asset Sale, shall equal or exceed the market value
of the assets so sold (such value to be set forth, to the extent requested
by the Administrative Agent or the Required Banks, in a written opinion of
value reasonably satisfactory to the Administrative Agent by an Appraisal
Firm) and (II) such assets are permitted to be acquired by the Company or
any of its Restricted Subsidiaries pursuant to Section 7.02(g) at the time
of consummation of such Asset Sale (both before and after giving effect to
such Asset Sale); (iii) the businesses sold (or deemed sold pursuant to
any Permitted Restricted Subsidiary Conversion) by the Company and/or its
Restricted Subsidiaries pursuant to this Section 7.02(c) in any fiscal
year of the Company shall not, in the aggregate, have EBITDA in the
immediately preceding fiscal year in an amount in excess of 25% of the
Consolidated EBITDA of the Company and its Restricted Subsidiaries for
such preceding fiscal year, determined on a pro forma basis as if (A) any
dispositions (or deemed dispositions pursuant to any Permitted Restricted
Subsidiary Conversion) consummated during such preceding fiscal year had
been consummated on the first day of such preceding fiscal year and (B)
any acquisitions consummated after the beginning of such preceding fiscal
year but prior to the date of any proposed Asset Sale pursuant to this
Section 7.02(c) had been consummated on the first day of such preceding
fiscal year; and (iv) to the extent such sale, transfer or disposition
constitutes a sale, transfer or disposition of less than 100% of the
capital stock of any Restricted Subsidiary of the Company, after giving
effect to such sale, transfer or disposition, the Company shall own at
least a majority of the capital stock of such Restricted Subsidiary;
(d) Asset Sales constituting the disposition of the capital stock
owned by the Company and its Restricted Subsidiaries of Unrestricted
Subsidiaries;
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(e) any Restricted Subsidiary may be merged or consolidated with or
into, or be liquidated into, the Company or any other Restricted
Subsidiary of the Company, or all or any part of its business, properties
and assets may be conveyed, leased, sold or otherwise transferred to the
Company or any other Restricted Subsidiary, provided that (v) in any such
merger or consolidation involving the Company, the Company shall be the
surviving corporation, (w) no Default or Event of Default exists or would
exist after giving effect thereto, (x) no Excluded Foreign Restricted
Subsidiary or Excluded Domestic Restricted Subsidiary may be the surviving
corporation of any such merger or consolidation (other than, in the case
of an Excluded Foreign Restricted Subsidiary, a merger or consolidation
with another Excluded Foreign Restricted Subsidiary and other than, in the
case of an Excluded Domestic Restricted Subsidiary, a merger or
consolidation with another Excluded Domestic Restricted Subsidiary), (y)
no businesses, properties or assets may be transferred to Excluded Foreign
Restricted Subsidiaries if after giving effect to such transfer the Net
Investments in Excluded Foreign Restricted Subsidiaries would exceed
$30,000,000 and (z) to the extent any business, properties or assets are
transferred to Excluded Domestic Restricted Subsidiaries in connection
with any such merger or consolidation the Company shall have determined,
with respect to such transaction, that the Company and its Restricted
Subsidiaries would have been in compliance, on a Pro Forma Basis, with
Sections 7.09, 7.10 and 7.11 of this Agreement;
(f) the Company and/or its Restricted Subsidiaries may lease real or
personal property (so long as such lease does not create Capitalized
Lease Obligations except as otherwise permitted by Section 7.04);
(g) so long as no Default or Event of Default exists or would result
therefrom, the Company and its Restricted Subsidiaries may acquire assets,
the capital stock of, or other ownership interests in, any Person (any
such acquisition permitted by this clause (g), a "Permitted Acquisition");
provided that (A) after giving effect to any such acquisition, the Company
and its Restricted Subsidiaries shall be in compliance with Section 7.01
hereof; (B) the Company shall have determined, with respect to such
acquisition, that, on a Pro Forma Basis, the Company and its Restricted
Subsidiaries would have been in compliance with Sections 7.09, 7.10 and
7.11 of this Agreement; and (C) to the extent that such acquisition is of
the capital stock of or other ownership interest in another Person (such
Person, the "Acquired Entity"), (I) such acquisition must be of at least a
majority of such capital stock or of such
-32-
ownership interests, such Person shall constitute a Restricted Subsidiary
and all of the applicable provisions of Section 7.14 shall have been
complied with in respect of such Restricted Subsidiary and (II) the Board
of Directors or other governing body of the Acquired Entity shall not have
indicated, either publicly or privately to the Company or any of its
Restricted Subsidiaries, its opposition to the consummation by the Company
or such Subsidiary of such acquisition;
(h) the Company and its Restricted Subsidiaries may sell or
discount, in each case without recourse, accounts receivable arising in
the ordinary course of business, but only in connection with the
compromise or collection thereof;
(i) Capital Expenditures by the Company and/or its Restricted
Subsidiaries made in the ordinary course of business; and
(j) the Company and its Restricted Subsidiaries may sell assets (and
may effect Permitted Restricted Subsidiary Conversions) other than in the
ordinary course of business, so long as (x) each such asset is sold (or
deemed sold pursuant to any Permitted Restricted Subsidiary Conversion) at
fair market value, as determined in good faith by management of the
Company; (y) each such sale (or deemed sale pursuant to any Permitted
Restricted Subsidiary Conversion) results in consideration in the form of
cash, promissory notes issued by the respective purchaser and/or other
assets, provided that, to the extent any such other assets are received by
the Company and/or its Restricted Subsidiaries in connection with any such
asset sale, (I) the market value of such other assets, when added to the
aggregate amount of other consideration received in connection with such
asset sale, shall equal or exceed the market value of the assets so sold
and (II) such assets are permitted to be acquired by the Company or any of
its Restricted Subsidiaries pursuant to Section 7.02(g) at the time of
consummation of such asset sale (both before and after giving effect to
such asset sale); and (z) the aggregate value of all assets so sold (or
deemed sold pursuant to any Permitted Restricted Subsidiary Conversion) by
the Company and its Restricted Subsidiaries in any fiscal year shall not
exceed $25,000,000.
7.03 Liens. The Company will not, and will not permit any of its
Restricted Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon or with respect to any property or assets of any kind (real or personal,
tangible or
-33-
intangible) of the Company or its Restricted Subsidiaries, whether
now owned or hereafter acquired, or sell any such property or assets subject to
an understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable or notes with
recourse to the Company or any of its Restricted Subsidiaries) or assign any
right to receive income, except:
(a) Liens for taxes not yet due or Liens for taxes being contested
in good faith and by appropriate proceedings for which adequate reserves
have been established in accordance with GAAP;
(b) Liens in respect of property or assets of the Company or any of
its Restricted Subsidiaries imposed by law which were incurred in the
ordinary course of business and which have not arisen to secure
Indebtedness for borrowed money, such as carriers', warehousemen's and
mechanics' Liens, statutory landlord's Liens, and other similar Liens
arising in the ordinary course of business, and which either (x) do not in
the aggregate materially detract from the value of such property or assets
or materially impair the use thereof in the operation of the business of
the Company or its Restricted Subsidiaries or (y) are being contested in
good faith by appropriate proceedings, which proceedings have the effect
of preventing the forfeiture or sale of the property or asset subject to
such Lien;
(c) Liens in existence on the Effective Date which are listed, and
the property subject thereto described, in Annex IV, without giving effect
to any extensions or renewal thereof ("Permitted Liens");
(d) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 8.08;
(e) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, performance and return-of-money bonds and other
similar obligations incurred in the ordinary course of business (exclusive
of obligations in respect of the payment for borrowed money);
(f) leases or subleases granted to third Persons not interfering in
any material respect with the business of the Company or any of its
Restricted
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Subsidiaries;
(g) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the
business of the Company or any of its Restricted Subsidiaries;
(h) Liens arising from UCC financing statements regarding leases
permitted by this Agreement;
(i) purchase money Liens securing payables arising from the purchase
by the Company or any of its Restricted Subsidiaries of any equipment or
goods in the normal course of business, provided that such payables shall
not constitute Indebtedness;
(j) any interest or title of a lessor or sublessor under any lease
permitted by this Agreement;
(k) Liens created pursuant to Capital Leases permitted pursuant to
Section 7.04(c);
(l) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of custom duties in connection with the
importation of goods so long as such Liens attach only to the imported
goods;
(m) Liens on assets acquired (or owned by a Restricted Subsidiary
acquired) after the Effective Date securing Indebtedness permitted under
Section 7.04(g), provided that at the time of such acquisition the value
of the assets subject to such Liens does not exceed 10% of the total value
of the assets so acquired, or of the assets of the Restricted Subsidiary
so acquired, as the case may be;
(n) Liens arising out of consignment or similar arrangements for the
sale of goods entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business;
(o) Liens created under this Agreement and/or the other Credit
Documents;
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(p) Liens created under the Existing Credit Agreements and the other
Additional Facility Documents; and
(q) Liens not otherwise permitted hereunder which secure
Indebtedness, Contingent Obligations or other obligations (in each case
permitted hereunder) not exceeding (as to the Company and its Restricted
Subsidiaries) $20,000,000 in the aggregate at any time outstanding.
7.04 Indebtedness. The Company will not, and will not permit any of
its Restricted Subsidiaries to, contract, create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(b) Indebtedness incurred pursuant to the Existing Credit Agreements
and the other Additional Facility Documents;
(c) Capitalized Lease Obligations of the Company and its Restricted
Subsidiaries; provided that the aggregate Capitalized Lease Obligations
under all Capital Leases outstanding at any one time shall not exceed
$50,000,000;
(d) Existing Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the Effective Date and listed on Part A of
Annex V hereto ("Existing Debt"), without giving effect to any subsequent
extension, renewal or refinancing thereof except pursuant to Section
7.04(i);
(e) Indebtedness to the extent permitted pursuant to Section
7.05(c);
(f) Indebtedness evidenced by the Subordinated Exchange Debentures
after the issuance thereof in an aggregate principal amount not to exceed
$500,000,000 at any time outstanding;
(g) Indebtedness of a Restricted Subsidiary acquired after the
Effective Date (or Indebtedness assumed at the time of an acquisition of
an asset securing such Indebtedness), provided that (i) such Indebtedness
was not incurred in connection with or in anticipation of such acquisition
and (ii) at the time of such acquisition such Indebtedness does not exceed
10% of the total value of the assets of the Restricted Subsidiary so
acquired, or of the asset so acquired,
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as the case may be;
(h) additional Indebtedness of the Company and its Restricted
Subsidiaries not otherwise permitted hereunder; provided that (A) in no
event shall the final maturity of such Indebtedness occur prior to June
30, 2004, (B) in no event shall such Indebtedness have a shorter average
life than the loans under the Existing Credit Agreements, (C) in no event
shall such Indebtedness contain terms and conditions (including, without
limitation, with respect to the obligor and guarantors, if any, in respect
of such Indebtedness, prepayment and redemption provisions, covenants,
defaults, security, remedies and, if applicable, subordination provisions)
materially less favorable to the Company and its Restricted Subsidiaries
or to the Banks than the terms and conditions of (I) in the case of
Indebtedness issued to the public or in accordance with Rule 144A or
similar rule under the Securities Act of 1933, as amended, the Senior
Notes, (II) in the case of other senior Indebtedness, this Agreement and
the other Credit Documents, and (III) in the case of other Indebtedness,
similar Indebtedness of the Company then outstanding or if no similar
Indebtedness of the Company is then outstanding, the Senior Notes (in each
case excluding the impact of market conditions on the interest rate and
other economic terms) and (D) the Company shall have determined, with
respect to the incurrence of such Indebtedness, that the Company and its
Restricted Subsidiaries would have been in compliance, on Pro Forma Basis,
with Sections 7.09, 7.10 and 7.11 of this Agreement (any Indebtedness
issued pursuant to this Section 7.04(h), "Additional Indebtedness"),
provided further, that the aggregate principal amount of any such
Additional Indebtedness incurred directly by the Subsidiary Guarantors
(taken as a whole), when added to the aggregate principal amount of
Indebtedness incurred directly by the Subsidiary Guarantors (taken as a
whole) pursuant to Section 7.04(j), shall not exceed $300,000,000 at any
time outstanding;
(i) Indebtedness of the Company and its Restricted Subsidiaries
constituting Permitted Refinancing Debt; and
(j) additional Indebtedness of the Company and its Restricted
Subsidiaries (including, but not limited to, Non-Facility Letter of Credit
Outstandings) not exceeding in an aggregate principal amount at any one
time outstanding an amount equal to (x) $150,000,000 less (y) the
aggregate principal amount of Revolving Loans outstanding pursuant to this
Agreement, provided that the aggregate principal amount of such
Indebtedness incurred by
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the Subsidiary Guarantors (taken as a whole), when added to the aggregate
principal amount of Additional Indebtedness incurred by the Subsidiary
Guarantors (taken as a whole) pursuant to Section 7.04(h), shall not
exceed $300,000,000 at any time outstanding.
7.05 Advances, Investments and Loans. The Company will not, and
will not permit any of its Restricted Subsidiaries to, lend money or credit or
make advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any Person, except:
(a) the Company and its Restricted Subsidiaries may invest in cash
and Cash Equivalents;
(b) the Company or any of its Restricted Subsidiaries may acquire
and hold receivables owing to it, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with
customary trade terms of the Company or such Restricted Subsidiary, as the
case may be;
(c) the Company may make intercompany loans and advances to any
Restricted Subsidiary, and any Restricted Subsidiary may make intercompany
loans and advances to any other Restricted Subsidiary or the Company
(collectively, "Intercompany Loans"), provided that (i) no Intercompany
Loan may be made to an Excluded Foreign Restricted Subsidiary at any time
if after giving effect to such Intercompany Loan the Net Investments in
Excluded Foreign Restricted Subsidiaries would exceed $30,000,000, and
(ii) no such Intercompany Loan may be made by the Company or a
Wholly-Owned Restricted Subsidiary to an Excluded Domestic Restricted
Subsidiary;
(d) so long as no Default or Event of Default exists or would result
therefrom, the Company and its Restricted Subsidiaries may make loans and
advances of cash to, or cash capital contributions in, any Unrestricted
Subsidiary of the Company; provided that (i) the sum of (A) the aggregate
amount of capital contributions made in, plus the aggregate principal
amount of loans or advances outstanding at any one time made to,
Unrestricted Subsidiaries after the Effective Date pursuant to this clause
(d) (such amount, the "Unrestricted Subsidiary Investment Amount") plus
(B) the Aggregate Conversion Amount at such time, shall not exceed the
Unrestricted Subsidiary Investment Limit then in effect, and (ii) the
Unrestricted Subsidiary receiving cash proceeds from such loan, advance or
contribution shall utilize the entire
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amount of cash so received to effectuate an acquisition of assets or
capital stock of a Person not an affiliate of the Company and its
Subsidiaries (other than pursuant to a Permitted Restricted Subsidiary
Conversion or a Permitted Restricted Asset Sale) or to develop the
Business and to finance the working capital needs of such Unrestricted
Subsidiary;
(e) the Company and its Restricted Subsidiaries shall be permitted
to (i) make Permitted Acquisitions, (ii) engage in any transaction to the
extent permitted by Section 7.02(e) and (iii) acquire and hold promissory
notes issued by the purchasers of assets sold in accordance with Section
7.02(c) or 7.02(j);
(f) the Company and any of its Restricted Subsidiaries may acquire
and own investments (including debt obligations) received in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(g) the Company or any Subsidiary Guarantor may acquire capital
stock or other equity securities (or warrants, rights or options with
respect thereto) issued by any other Restricted Subsidiary;
(h) Interest Rate Protection Agreements permitted by Section 7.06(d)
shall be permitted;
(i) investments by the Company or Restricted Subsidiaries in (x)
Subsidiary Guarantors, provided that if the Subsidiary Guarantor in which
such investment is made is a newly-formed Subsidiary or a Partially-Owned
Restricted Subsidiary newly designated as a Subsidiary Guarantor pursuant
to Section 7.14(b)(x), all of the applicable provisions of Section 7.14
shall have been satisfied with respect to such Restricted Subsidiary, (y)
Excluded Domestic Restricted Subsidiaries, provided that, the Company
shall have determined, in connection with any such investment, that the
Company and its Restricted Subsidiaries would have been in compliance, on
a Pro Forma Basis, with Sections 7.09, 7.10 and 7.11 of this Agreement and
(z) in Excluded Foreign Restricted Subsidiaries, provided that no
investment in an Excluded Foreign Restricted Subsidiary may be made at any
time if after giving effect to such investment the Net Investments in
Excluded Foreign Restricted Subsidiaries would exceed $30,000,000;
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(j) the Company and its Restricted Subsidiaries may make loans and
advances to officers, employees and agents in the ordinary course of
business (i) constituting travel advances or (ii) otherwise equal in the
aggregate for the Company and its Restricted Subsidiaries, in the case of
all loans and advances pursuant to this clause (ii), to no more than
$10,000,000 at any one time out standing less the principal amount of all
Contingent Obligations then outstanding pursuant to Section 7.06(h);
(k) the Company may acquire obligations of, or make loans or
advances to, one or more management investors in connection with such
management investors' acquisition of shares of capital stock of the
Company, provided that (x) the aggregate amount of cash actually advanced
to all such management investors by the Company and its Restricted
Subsidiaries shall not exceed $10,000,000 at any time, and (y) the
aggregate principal amount of all such obligations, loans and advances
shall not exceed $25,000,000 at any one time outstanding; and
(l) advances, investments and loans not otherwise permitted
hereunder with an aggregate cost or principal amount, as the case may be,
not to exceed $25,000,000 at any time outstanding.
7.06 Contingent Obligations. The Company will not, and will not
permit any of its Restricted Subsidiaries to, contract, create, incur, assume or
suffer to exist any Contingent Obligations, except:
(a) any Subsidiary Guarantor may become liable as guarantor with
respect to any Indebtedness, obligation or liability of the Company or any
other Subsidiary Guarantor to the extent that such Indebtedness,
obligation or liability is otherwise permitted by this Agreement, provided
that a Subsidiary Guarantor (x) may not guaranty any Subordinated Exchange
Debentures and (y) may only guaranty Permitted Refinancing Debt if and to
the extent either (A) it guarantied the indebtedness refinanced thereby or
(B) such Subsidiary Guarantor would have guarantied the indebtedness
refinanced thereby if it had been a Subsidiary of the Company while such
indebtedness was outstanding;
(b) Contingent Obligations pursuant to the Subsidiary Guaranty;
(c) Contingent Obligations pursuant to the Additional Facility
Documents;
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(d) Contingent Obligations under Interest Rate Protection Agreements
with respect to the Revolving Loans, loans incurred under the Existing
Credit Agreements or any other floating rate Indebtedness of the Company
and its Restricted Subsidiaries otherwise permitted by this Agreement;
(e) Contingent Obligations pursuant to the Contribution Agreement;
(f) Contingent Obligations of the Company outstanding on the
Effective Date and listed on Part B of Annex V hereto ("Existing
Contingent Obligations"), without giving effect to any subsequent
extension, renewal or refinancing thereof;
(g) the Company may become liable as guarantor with respect to any
Indebtedness, obligation or liability of any Subsidiary Guarantor to the
extent that such Indebtedness, obligation or liability is otherwise
permitted by this Agreement;
(h) the Company and its Restricted Subsidiaries may guaranty in the
ordinary course of business loans and advances to officers, employees and
agents so long as the aggregate principal amount of the loans and advances
so guaranteed does not exceed $10,000,000 less the principal amount of all
loans and advances outstanding pursuant to Section 7.05(j); and
(i) additional Contingent Obligations (including, without
limitation, Contingent Obligations consisting of Non-Facility Letters of
Credit and reimbursement obligations with respect thereto) not otherwise
permitted hereunder not exceeding (for the Company and all of its
Restricted Subsidiaries) in aggregate principal amount at any time
outstanding an amount equal to the lesser of (x) $30,000,000 and (y) when
added to the aggregate principal amount of Indebtedness outstanding under
Sections 7.04(a) and 7.04(j) at such time, $150,000,000.
7.07 Dividends, etc. The Company will not, and will not permit any
of its Restricted Subsidiaries to, declare or pay any dividends (other than
dividends payable solely in capital stock of such Person) or return any capital
to, its stockholders or authorize or make any other distribution, payment or
delivery of property or cash to its stockholders as such, or redeem, retire,
purchase or otherwise acquire, directly or indirectly, for a consideration, any
shares of any class of its
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capital stock now or here after outstanding (or any warrants for or options or
stock appreciation rights in respect of any of such shares), or set aside any
funds for any of the foregoing purposes, and the Company will not permit any of
its Restricted Subsidiaries to purchase or otherwise acquire for consideration
any shares of any class of the capital stock of the Company or any other
Subsidiary, as the case may be, now or hereafter outstanding (or any options or
warrants or stock appreciation rights issued by such Person with respect to its
capital stock) (all of the foregoing "Dividends"), except that:
(a) the Company may pay regularly accruing dividends on each
issuance of Preferred Stock through the issuance of additional shares of
such Preferred Stock, provided that the Company may pay such regularly
accruing dividends on its Preferred Stock in cash so long as no Default or
Event of Default exists at such time or would result therefrom;
(b) any Subsidiary of the Company may pay Dividends to the Company
or to any Wholly-Owned Restricted Subsidiary of the Company;
(c) any Partially-Owned Restricted Subsidiary may pay cash Dividends
to its stockholders, provided that the Company and its Restricted
Subsidiaries must receive at least their proportionate share of any
Dividends paid by such Subsidiary;
(d) so long as no Default or Event of Default exists at such time or
would result therefrom (x) the Company may issue its Subordinated Exchange
Debentures in exchange for its Senior Preferred Stock in accordance with
the terms thereof, (y) the Company may issue its Subordinated Exchange
Debentures in exchange for its Series B Preferred Stock in accordance with
the terms thereof and (z) the Company may issue its Subordinated Exchange
Debentures in exchange for its Series C Preferred Stock in accordance with
the terms thereof, provided that in each such case, the Company shall have
determined, with respect to such issuance, that the Company and its
Restricted Subsidiaries would have been in compliance, on a Pro Forma
Basis, with Sections 7.09, 7.10 and 7.11 of this Agreement;
(e) the Company may exchange shares of its common stock in
replacement for shares of outstanding Preferred Stock;
(f) the Company may issue Permitted Replacement Preferred Stock so
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long as either (x) such stock is issued in exchange for or (y) all of the
proceeds from such issuance are used to redeem or repurchase, shares of
outstanding Preferred Stock;
(g) the Company may redeem or repurchase shares of its common stock
from management investors; provided that (x) no Default or Event of
Default is then in existence or would arise therefrom and (y) the
aggregate amount of all cash paid in respect of all such shares and equity
interests so redeemed or repurchased does not exceed the sum of (i)
$5,000,000 in any fiscal year or $15,000,000 in the aggregate after the
Effective Date and (ii) the amount of cash proceeds received by the
Company in respect of the issuance of common equity to management
investors on or after the Effective Date;
(h) the Company and its Subsidiaries may enter into transactions
permitted under Section 7.05(g);
(i) the Company and its Restricted Subsidiaries may acquire the
capital stock of Unrestricted Subsidiaries in accordance with the
provisions of this Agreement;
(j) so long as no Default or Event of Default exists at such time or
would result therefrom, the Company may redeem or repurchase shares of its
Preferred Stock at a price equal to the liquidation preference thereof
plus accrued but unpaid dividends thereon and any applicable premium with
respect thereto in exchange for, or with the proceeds of, Additional
Preferred Stock and/or Indebtedness incurred under Sections 7.04(h) and/or
7.04(j) (it being understood and agreed that such redemption and/or
repurchase need not occur contemporaneously with the issuance of such
Additional Preferred Stock or Indebtedness);
(k) so long as no Default or Event of Default exists at such time or
would result therefrom, the Company may declare and pay cash Dividends to
the holders of its common stock (including, without limitation,
repurchases of shares of its common stock), provided that (x) the
aggregate amount of cash Dividends paid pursuant to this clause (k) during
any fiscal year of the Company does not exceed $25,000,000 and (y) the
Company shall have determined, in connection with such Dividend, that the
Company and its Restricted Subsidiaries would have been in compliance, on
a Pro Forma Basis, with Sections 7.09, 7.10 and 7.11 of this Agreement;
and
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(l) the Company may pay additional cash Dividends to the holders of
its common stock so long as (x) no Default or Event of Default exists at
such time or would result therefrom, (y) the Leverage Ratio at such time
is less than 4.00:1.00 and (z) the Company shall have determined, in
connection with such Dividend, that the Company and its Restricted
Subsidiaries would have been in compliance, on a Pro Forma Basis, with
Sections 7.09, 7.10 and 7.11 of this Agreement.
7.08 Transactions with Affiliates. The Company will not, and will
not permit any of its Restricted Subsidiaries to, enter into any transaction or
series of transactions, whether or not in the ordinary course of business, with
any Affiliate (other than the Company or any Restricted Subsidiary) other than
on terms and conditions substantially as favorable to the Company or such
Restricted Subsidiary as would be obtainable by the Company or such Restricted
Subsidiary at the time in a comparable arm's-length transaction with a Person
other than an Affiliate; provided that (i) the Company may pay management and
transaction fees to KKR or its affiliates which have been disclosed in writing
to the Banks prior to the Effective Date; (ii) the payment of transaction fees
to KKR for the rendering of financial advice and services in connection with
acquisitions, dispositions and financings by the Company and its Restricted
Subsidiaries in amounts which are in accordance with past practices shall be
permitted; (iii) loans and advances to officers, employees and agents in the
ordinary course of business shall be permitted; (iv) customary fees may be paid
to non-officer directors of the Company and/or its Restricted Subsidiaries; (v)
the loans, advances and contributions made (or deemed made) in Unrestricted
Subsidiaries in compliance with Section 7.05(d) shall be permitted; and (vi)
transactions specifically permitted by the provisions of this Agreement to occur
between the Company, its Restricted Subsidiaries and their respective Affiliates
shall be permitted to the extent so otherwise specifically permitted.
7.09 Fixed Charge Coverage Ratio. The Company will not permit the
ratio of (i) Consolidated EBITDA of the Company and its Restricted Subsidiaries
to (ii) Consolidated Fixed Charges of the Company and its Restricted
Subsidiaries, for any Test Period, to be less than 1.05 to 1.0.
7.10 Interest Coverage Ratio. The Company will not permit the ratio
of (i) Consolidated EBITDA of the Company and its Restricted Subsidiaries to
(ii) Consolidated Interest Expense of the Company and its Restricted
Subsidiaries for any Test Period ending during a period listed below to be less
than the ratio set forth opposite such period below:
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Period Ratio
------ -----
Effective Date to and including
June 30, 1999 1.80 to 1.00
July 1, 1999 to and including
June 30, 2000 2.00 to 1.00
July 1, 2000 to and including
June 30, 2001 2.25 to 1.00
July 1, 2001 and thereafter 2.50 to 1.00
7.11 Leverage Ratio. The Company will not permit the ratio (the
"Leverage Ratio") of (i) Consolidated Debt of the Company and its Restricted
Subsidiaries at any date of determination thereof to (ii) Consolidated EBITDA of
the Company and its Restricted Subsidiaries for the Test Period then last ended,
to exceed, at any time during a period set forth below, the ratio set forth
opposite such period below:
Period Ratio
------ -----
Effective Date to and including
June 30, 1999 6.00 to 1.00
July 1, 1999 to and including
June 30, 2000
5.50 to 1.00
July 1, 2000 to and including
June 30, 2001 5.00 to 1.00
July 1, 2001 and thereafter 4.50 to 1.00
7.12 Issuance of Stock. The Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, issue, sell,
assign, pledge or otherwise encumber or dispose of any shares of its or such
Restricted Subsidiary's preferred or preference stock or other redeemable equity
securities (or warrants,
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rights or options to acquire shares of any of the foregoing) except:
(a) in the case of shares of capital stock of the Company and its
Restricted Subsidiaries, to the extent permitted by Section 7.02, 7.03,
7.05, 7.07 or 7.13(b);
(b) issuances by Restricted Subsidiaries to the Company or to
Wholly-Owned Restricted Subsidiaries; and
(c) issuances by the Company of additional preferred stock not
otherwise permitted hereunder; provided that (A) in no event shall such
preferred stock contain any provision requiring mandatory redemption or
permitting any put with respect to all or any portion of such stock prior
to June 30, 2004, (B) in no event shall such preferred stock contain terms
and conditions (including, without limitation, pay-in-kind features,
liquidation preferences, voting rights and exchange rights) materially
less favorable to the Company and its Restricted Subsidiaries or to the
Banks than the terms and conditions of the Existing Preferred Stock
(excluding the impact of market conditions on the dividend rate and other
economic terms) and (C) the Company shall have determined, in connection
with such issuance, that the Company and its Restricted Subsidiaries would
have been in compliance, on a Pro Forma Basis, with Sections 7.09, 7.10
and 7.11 of this Agreement, provided that, for purposes of the calculation
of compliance with Section 7.09, the ratio set forth in Section 7.09 shall
be deemed to equal 1.25 to 1.0 (any Preferred Stock issued pursuant to
this Section 7.12(c), "Additional Preferred Stock").
7.13 Modifications of Certain Agreements, etc. The Company will not,
and will not permit any of its Subsidiaries to: (a) after the issuance thereof,
amend or modify (or permit the amendment or modification) of any of the terms or
provisions of the Senior Notes, the Additional Facility Documents, the Preferred
Stock, the Subordinated Exchange Debentures, any Additional Indebtedness, any
Permitted Refinancing Debt or any agreement related to any of the foregoing
other than pursuant to a Permitted Amendment and/or (b) make (or give any notice
in respect thereof) any voluntary or optional payment or prepayment or
redemption or acquisition for value of (including, without limitation, by way of
depositing with the trustee with respect thereto money or securities before due
for the purpose of paying when due) or exchange of any Subordinated Exchange
Debentures, or any Permitted Refinancing Debt (to the extent issued to refinance
Subordinated Exchange
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Debentures), provided that the Subordinated Exchange Debentures and any
Permitted Refinancing Debt previously issued to refinance same may be (i)
refinanced with (A) Additional Indebtedness (to the extent that such Additional
Indebtedness would have qualified as Permitted Refinancing Debt in respect
thereof if it had been issued contemporaneously with such refinancing) and/or
Permitted Refinancing Debt or (B) the proceeds from a common equity issuance by
the Company or an issuance by the Company of Additional Preferred Stock, in each
case, after the Effective Date or (ii) exchanged for Additional Preferred Stock
or non-redeemable common equity of the Company (it being understood and agreed
that any refinancing of such Indebtedness need not occur contemporaneously with
the issuance of such Additional Indebtedness, Additional Preferred Stock and/or
common equity). In addition, the Company will not, and will not permit any of
its Restricted Subsidiaries to, agree to modify, supplement, amend, rescind or
otherwise alter the terms, conditions or provisions of its Certificate of
Incorporation (including, without limitation, by the filing of any certificate
of designation) or its By-Laws in any material respect, other than such
modifications, supplements or amendments that would not materially adversely
affect the interests of the Banks under this Agreement or the other Credit
Documents.
7.14 Limitation on the Creation of Subsidiaries; Redesignation of
Partially-Owned Restricted Subsidiaries. (a) Notwithstanding anything to the
contrary contained in this Agreement, the Company shall not, and shall not
permit any Subsidiary to, establish, create or acquire after the Effective Date
any Subsidiary unless (w) such Subsidiary is an Unrestricted Subsidiary; (x)
such Subsidiary is an Excluded Foreign Restricted Subsidiary; (y) such
Subsidiary is a Partially-Owned Restricted Subsidiary and at the time of
creation or acquisition thereof, the Company shall have made a Non-Guarantor
Designation with respect to such Partially-Owned Restricted Subsidiary in
accordance with the terms hereof; or (z) such Subsidiary is a Restricted
Subsidiary (other than a Restricted Subsidiary of the type described in clauses
(x) or (y) above) and each such new Restricted Subsidiary becomes a party to the
Subsidiary Guaranty by executing a Subsidiary Assumption Agreement in the form
of Exhibit G hereto.
(b) At any time and from time to time, (x) the Company may
redesignate any Excluded Domestic Restricted Subsidiary as a Subsidiary
Guarantor by giving notice thereof to the Administrative Agent and by causing
such Subsidiary to become a party to the Subsidiary Guaranty by executing a
Subsidiary Assumption Agreement in the form of Exhibit G hereto, and (y) the
Company may redesignate any Subsidiary Guarantor which is a Partially-Owned
Restricted Subsidiary as an Excluded Domestic Restricted Subsidiary by making a
Non-Guarantor Designation
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with respect to such Subsidiary in accordance with the terms hereof.
(c) At the time of the creation of any Subsidiary described in
clause (z) of Section 7.14(a) and at the time of any redesignation pursuant to
clause (x) of Section 7.14(b), each such new Subsidiary Guarantor shall execute
and deliver, or cause to be executed and delivered, in each case to the extent
not previously executed and delivered, all other relevant documentation of the
type described in Section 4 as such new Subsidiary Guarantor would have had to
deliver if such new Restricted Subsidiary had been a Restricted Subsidiary and a
Subsidiary Guarantor on the Effective Date.
(d) Notwithstanding anything to the contrary contained in this
Section 7.14 or elsewhere in this Agreement, in no event shall any Subsidiary of
the Company guaranty any Indebtedness of the Company or any Wholly-Owned
Subsidiary unless such Subsidiary is a party to the Subsidiary Guaranty;
provided that, to the extent not prohibited by Section 7.04 hereof, (x) Excluded
Foreign Restricted Subsidiaries may guaranty Indebtedness of other Excluded
Foreign Restricted Subsidiaries and (y) Unrestricted Subsidiaries may guaranty
Indebtedness of other Unrestricted Subsidiaries.
7.15 Limitation on Payments Under the Non-Compete Notes. The Company
will not, and will not permit any of its Subsidiaries to, make any payment
representing the principal of, or interest on, any Non-Compete Note at any time
when any Default or Event of Default exists or would exist immediately after
giving effect to such payment.
SECTION 8. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
8.01 Payments. (a) The Company shall (i) default in the payment
when due of any principal of the Revolving Loans or (ii) default, and such
default shall continue for five or more days, in the payment when due of any
interest on the Revolving Loans or any Fees or any other amounts owing hereunder
or under any other Credit Document or (b) any Subsidiary Guarantor shall default
in the payment when due of any amount in respect of any payment of the type
described in clause (a)(ii) above pursuant to the Subsidiary Guaranty, and such
default shall continue for five or more days; or
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8.02 Representations, etc. Any representation, warranty or
statement made by the Company or any Subsidiary Guarantor herein or in any other
Credit Document or in any statement or certificate delivered pursuant hereto or
thereto shall prove to be untrue in any material respect on the date as of which
made or deemed made; or
8.03 Covenants. The Company shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 6.08 or 7, or (b) default in the due performance or observance by it of
any term, covenant or agreement (other than those referred to in Section 8.01,
8.02 or clause (a) of this Section 8.03) contained in this Agreement and such
default shall continue unremedied for a period of at least 30 days after notice
to the defaulting party by the Administrative Agent or the Required Banks; or
8.04 Default Under Other Agreements. (a) The Company or any of its
Restricted Subsidiaries shall (i) default in any payment with respect to any
Indebtedness or Contingent Obligation (other than the Obligations) beyond the
period of grace, if any, provided in the instrument or agreement under which
such Indebtedness or Contingent Obligation was created or (ii) default in the
observance or performance of any agreement or condition relating to any such
Indebtedness or Contingent Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
or Contingent Obligation (or a trustee or agent on behalf of such holder or
holders) to cause any such Indebtedness or Contingent Obligation to become due
prior to its stated maturity; or (b) any Indebtedness or Contingent Obligation
(other than the Obligations) of the Company or any of its Restricted
Subsidiaries shall be declared to be due and payable, or shall be required to be
prepaid other than by a regularly scheduled required prepayment or as a
mandatory prepayment (unless such required prepayment or mandatory prepayment
results from a default thereunder or an event of the type that constitutes an
Event of Default), prior to the stated maturity thereof, provided that it shall
not constitute an Event of Default pursuant to clause (a) or (b) of this Section
8.04 unless the principal amount of any one issue of such Indebtedness or
Contingent Obligation exceeds $7,500,000 or the aggregate amount of all such
Indebtedness and Contingent Obligations referred to in clauses (a) and (b) above
exceeds $15,000,000 at any one time; or
8.05 Bankruptcy, etc. The Company or any of its Restricted
Subsidiaries shall commence a voluntary case concerning itself under Title 11 of
the
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United States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against the Company or any of its Restricted Subsidiaries and the petition is
not controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
the Company or any of its Restricted Subsidiaries; or the Company or any of its
Restricted Subsidiaries commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to the Company or any of its Restricted Subsidiaries; or there
is commenced against the Company or any of its Restricted Subsidiaries any such
proceeding which remains undismissed for a period of 60 days; or the Company or
any of its Restricted Subsidiaries is adjudicated insolvent or bankrupt; or any
order of relief or other order approving any such case or proceeding is entered;
or the Company or any of its Restricted Subsidiaries suffers any appointment of
any custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of 60 days; or the Company or any
of its Restricted Subsidiaries makes a general assignment for the benefit of
creditors; or any corporate action is taken by the Company or any of its
Restricted Subsidiaries for the purpose of effecting any of the foregoing; or
8.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof or a waiver of such standard
or extension of any amortization period is sought or granted under Section 412
of the Code; any Plan is, shall have been or is likely to be terminated or the
subject of termination proceedings under ERISA; any Plan shall have an Unfunded
Current Liability; or the Company, any Restricted Subsidiary or any ERISA
Affiliate has incurred or is likely to incur a liability to or on account of a
Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204
or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code; or the
Company or any Restricted Subsidiary has incurred or is likely to incur
liabilities pursuant to one or more employee welfare benefit plans (as defined
in Section 3(1) of ERISA) which provide benefits to retired employees (other
than as required by Section 601 of ERISA); and (b) there shall result from any
such event or events the imposition of a lien, the granting of a security
interest, or a liability or a material risk of incurring a liability, on the
part of the Company, any of its Restricted Subsidiaries or any ERISA Affiliate,
which lien, security interest or liability will have a material adverse effect
on the condition (financial or otherwise), operations, assets, liabilities or
prospects of the Company and its Restricted Subsidiaries taken as a whole; or
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8.07 Subsidiary Guaranty. (a) The Subsidiary Guaranty or any
provision thereof shall cease to be in full force and effect, or any Subsidiary
Guarantor thereunder or any Person acting on behalf of such Subsidiary Guarantor
shall deny or disaffirm such Subsidiary Guarantor's obligations under such
Subsidiary Guaranty or (b) except as otherwise provided in Section 8.01(b), any
Subsidiary Guarantor shall default in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed pursuant to
the Subsidiary Guaranty, provided that in the case of Section 13 of the
Subsidiary Guaranty, if the default constitutes a failure to perform or comply
with any provision, covenant or agreement contained in Section 6 (other than
Section 6.08) of this Agreement, such default shall continue unremedied for a
period of at least 30 days after notice to the defaulting Subsidiary Guarantor
by the Administrative Agent or the Required Banks; or
8.08 Judgments. One or more judgments or decrees shall be entered
against the Company or any of its Restricted Subsidiaries involving a liability
of $8,000,000 or more in the case of any one such judgment or decree or
$20,000,000 or more in the aggregate for all such judgments and decrees for the
Company and its Restricted Subsidiaries (not paid or to the extent not covered
by insurance) and any such judgments or decrees shall not have been vacated,
discharged or stayed or bonded pending appeal within 60 days from the entry
thereof; or
8.09 Ownership. A Change of Control Event shall have occurred;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent shall, upon the written
request of the Required Banks, by written notice to the Company, take any or all
of the following actions, without prejudice to the rights of the Administrative
Agent or any Bank to enforce its claims against the Company, except as otherwise
specifically provided for in this Agreement (provided that if an Event of
Default specified in Section 8.05 shall occur with respect to the Company, the
result which would occur upon the giving of written notice by the Administrative
Agent as specified in clauses (i) and (ii) below shall occur automatically
without the giving of any such notice): (i) declare the Total Revolving Loan
Commitment (or the unutilized portion thereof) terminated, whereupon the
Revolving Loan Commitment of each Bank (or the unutilized portion thereof) shall
forthwith terminate immediately and any Commitment Fees shall forthwith become
due and payable without any other notice of any kind; and (ii)
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declare the principal of and any accrued interest in respect of all Revolving
Loans and all obligations owing hereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Company.
SECTION 9. Definitions. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Additional Facility Documents" shall mean and include each of the
documents and other agreements entered into by the Company or any of its
Subsidiaries in connection with the Existing Credit Agreements (including,
without limitation, the Existing Credit Agreements and any guaranty or
guaranties relating thereto), as in effect on the Effective Date and as the same
may be modified, supplemented or amended from time to time pursuant to the terms
hereof and thereof.
"Additional Indebtedness" shall have the meaning provided in Section
7.04(h).
"Additional Preferred Stock" shall have the meaning provided in
Section 7.12(c).
"Adjusted Total Commitment" shall mean at any time the Total
Revolving Loan Commitment less the aggregate Revolving Loan Commitments of all
Defaulting Banks.
"Administrative Agent" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 10.10.
"Affected Period" shall mean, with respect to each Affected
Transaction, the period commencing on the date occurring twelve months prior to
the last day of the then most recently ended fiscal quarter of the Company and
ending on the date such Affected Transaction is consummated.
"Affected Transaction" shall mean and include each of the following:
(i) any transfer of assets to an Excluded Domestic Restricted Subsidiary in
connection
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with a transaction permitted pursuant to Section 7.02(e), (ii) any Permitted
Acquisition, (iii) any incurrence of Additional Indebtedness, (iv) any
investment in an Excluded Domestic Restricted Subsidiary pursuant to Section
7.05(d), (v) any issuance of Subordinated Exchange Debentures, (vi) the payment
of any Dividend as permitted by Section 7.07(k) or (l), (vii) any issuance of
Additional Preferred Stock, (viii) any Permitted Restricted Subsidiary
Conversion or Non-Guarantor Designation and (ix) any designation of an
Unrestricted Subsidiary as a Restricted Subsidiary pursuant to the definition of
"Restricted Subsidiaries."
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to control a corporation if
such Person possesses, directly or indirectly, the power (i) to vote 10% or more
of the securities having ordinary voting power for the election of directors of
such corporation or (ii) to direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Aggregate Conversion Amount" shall mean, at any time, the sum of
the Conversion Value Amount with respect to each Permitted Restricted Subsidiary
Conversion consummated after the Effective Date but on or prior to the date of
determination thereof.
"Aggregate Unutilized Revolving Loan Commitment" with respect to any
Bank at any time shall mean such Bank's Revolving Loan Commitment at such time
less the aggregate outstanding principal amount of all Revolving Loans made by
such Bank.
"Agreement" shall mean this Credit Agreement, as the same may be
from time to time modified, amended and/or supplemented.
"Applicable Commitment Fee Percentage" shall mean 1/8 of 1%.
"Applicable Margin" shall mean, at any time, (a) with respect to
Base Rate Loans, the margin set forth below under the heading Applicable Base
Rate Margin and (b) with respect to Eurodollar Loans, the margin set forth below
under the heading Applicable Eurodollar Margin, in each case, opposite the ratio
of (i) Consolidated Debt as of the last day of the most recent fiscal year or
fiscal quarter in respect of which the Banks shall have received Section 6.01
Financials to (ii)
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Consolidated EBITDA for the Test Period ending on the last day of such fiscal
year or fiscal quarter (it being under stood that each Applicable Margin shall
be in effect from the date the respective Section 6.01 Financials are required
to be delivered to the Banks until the date the next such Section 6.01
Financials are required to be delivered to the Banks at which time the
Applicable Margin shall be reset in accordance with the foregoing provisions of
this definition):
Applicable Applicable
Eurodollar Base Rate
Debt/EBITDA Ratio Margin Margin
- ----------------- ------ ------
5.50:1 or Greater 1-1/2% 1/8 of 1%
Less than 5.50:1 but equal
to or greater than 5.00:1 1-1/8% 0%
Less than 5.00:1 but equal
to or greater than 4.50:1 7/8 of 1% 0%
Less than 4.50:1 but equal
to or greater than 4.00:1 5/8 of 1% 0%
Less than 4.00:1 1/2 of 1% 0%
; provided that if (A) any Section 6.01 Financials are not delivered when
required (the "Late Section 6.01 Financials") and such Late Section 6.01
Financials establish that any Applicable Margin would have been increased or
reduced to an amount set forth in the table above on the date that such Late
Section 6.01 Financials were required to have been delivered (the "Required
Delivery Date") and (B) the Company shall have made any interest payment during
the period from the Required Delivery Date to the actual date of delivery of
such Late Section 6.01 Financials based upon any such lower or higher Applicable
Margin, then (x) in the case of actual payments based on any such lower
Applicable Margin, the Company shall pay in the form of a supplemental interest
payment, an amount which equals the difference between the amount of interest
which would otherwise have been paid determined as if the Late Section 6.01
Financials were delivered on the Required Delivery Date and the amount of such
interest so paid, which supplemental interest payment shall be due and payable
on the date of delivery of the Late Section 6.01 Financials and (y) in the case
of actual payments made based on such higher Applicable Margin, the Banks shall
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retain all such amounts so paid.
"Appraisal Firm" shall mean an independent appraisal firm (which may
be an investment banking firm of national recognition) selected by, and at the
expense of, the Company and reasonably satisfactory to the Administrative Agent.
"Asset Sale" shall mean any sale, transfer or other disposition by
the Company or any of its Restricted Subsidiaries to any Person other than the
Company or any Restricted Subsidiary of any asset (including, without
limitation, any capital stock or other securities of another Person, but
excluding any sale, transfer or other disposition by the Company of its capital
stock) of the Company or such Restricted Subsidiary, including, without
limitation, a Permitted Restricted Asset Sale and any sale, transfer or other
disposition deemed made pursuant to a Permitted Restricted Subsidiary Conversion
(other than (x) any sale, transfer or disposition of Cash Equivalents; and (y)
any sale, transfer or disposition permitted by Section 7.02(a), (e) or (h)).
"Authorized Officer" shall mean any officer of the Company
designated as such in writing to the Administrative Agent by the Company, in
each case to the extent reasonably acceptable to the Administrative Agent.
"Bank" shall have the meaning provided in the first paragraph of
this Agreement.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing or (ii) a
Bank having notified the Administrative Agent and/or the Company that it does
not intend to comply with the obligations under Section 1.01, in the case of
either (i) or (ii) as a result of the appointment of a receiver or conservator
with respect to such Bank at the direction or request of any regulatory agency
or authority.
"Bankruptcy Code" shall have the meaning provided in Section 8.05.
"Base Rate" at any time shall mean the higher of (x) the rate which
is 1/2 of 1% in excess of the Federal Funds Effective Rate and (y) the Prime
Lending Rate as in effect from time to time.
"Base Rate Loan" shall mean each Revolving Loan bearing interest at
the rates provided in Section 1.08(a).
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"Borrowing" shall mean a borrowing of Revolving Loans from all Banks
on a given date (or resulting from conversions on a given date), in each case,
as required by the provisions of this Agreement, being of a single Type of
Revolving Loans and having, in the case of Eurodollar Loans, the same Interest
Period, provided that Base Rate Loans incurred pursuant to Section 1.10(b) shall
be considered part of any related Borrowing of Eurodollar Loans.
"Business" shall mean and include the communications, information,
education, publishing and/or media businesses.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in U.S. dollar deposits in the interbank Eurodollar market.
"Capital Expenditures" shall mean, for any period, any expenditures
(whether paid in cash or accrued as liabilities and including in all events all
amounts expended or capitalized under Capital Leases) by any Person during that
period that, in conformity with GAAP, are or are required to be included in the
property, plant or equipment reflected in the balance sheet of such Person.
"Capital Lease," as applied to any Person, shall mean any lease of
any property (whether real, personal or mixed) by that Person as lessee which,
in conformity with GAAP, is accounted for as a capital lease on the balance
sheet of that Person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Company or any of its Restricted Subsidiaries in each case
taken at the amount thereof accounted for as liabilities in accordance with
GAAP.
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (ii) U.S. dollar denominated time
deposits, certificates of
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deposit and bankers acceptances of (x) any Bank, (y) any commercial bank of
recognized standing having capital and surplus in excess of $500,000,000 or (z)
any bank whose short-term commercial paper rating from Standard & Poor's Ratings
Group ("S&P") is at least A-2 or the equivalent thereof or from Moody's
Investors Service, Inc. ("Moody's") is at least P-2 or the equivalent thereof
(any such bank or Bank, an "Approved Bank"), in each case with maturities of not
more than one year from the date of acquisition, (iii) commercial paper issued
by any Approved Bank or by the parent company of any Approved Bank and
commercial paper issued by, or guaranteed by, any industrial or financial
company with a short-term commercial paper rating of at least A-2 or the
equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody's,
or guaranteed by any industrial company with a long term unsecured debt rating
of at least A or A2, or the equivalent of each thereof, from S&P or Moody's, as
the case may be, and in each case maturing within one year after the date of
acquisition, (iv) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or Moody's and (v) investments in
money market funds substantially all the assets of which are comprised of
securities of the types described in clauses (i) through (iv) above.
"Change of Control Event" shall mean (a) any "Change of Control" or
similar term as defined in the indentures governing the terms of the Senior
Notes as in effect on the Effective Date or in any agreement governing any
Indebtedness incurred pursuant to Section 7.04(f), (h), (i) or (j), (b) KKR or
one or more Affiliates of KKR shall cease to own (directly or indirectly) at
least 25% on a fully diluted basis of the economic and voting interest in the
Company's common stock or (c) any Person or "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended)
becomes the "beneficial owner" (as defined in Rule 13d-3 of the Securities
Exchange Act of 1934, as amended) of more of the voting common stock of the
Company than that owned (directly or indirectly) by KKR and its Affiliates.
"Chase" shall mean The Chase Manhattan Bank or any successor thereto
by merger.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code amendatory thereof,
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supplemental thereto or substituted therefor.
"Commitment Fee" shall have the meaning provided in Section 2.01(a).
"Company" shall have the meaning provided in the first paragraph of
this Agreement.
"Consolidated Capital Expenditures" shall mean, for any period, the
aggregate of all Capital Expenditures by the Company and its Restricted
Subsidiaries at such time determined on a consolidated basis.
"Consolidated Current Assets" shall mean, at any time, the current
assets (other than cash and Cash Equivalents, and deferred income taxes to the
extent included in current assets) of the Company and its Restricted
Subsidiaries at such time determined on a consolidated basis.
"Consolidated Current Liabilities" shall mean, at any time, the
current liabilities of the Company and its Restricted Subsidiaries determined on
a consolidated basis, but excluding (i) all short-term Indebtedness for borrowed
money, (ii) the current portion of any long-term Indebtedness of the Company or
its Restricted Subsidiaries, (iii) deferred income taxes, (iv) liabilities
arising from cash overdrafts and (v) liabilities arising from the honoring by a
bank or other financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business, provided that such
liabilities are extinguished within three Business Days of their incurrence; in
each case to the extent included in current liabilities.
"Consolidated Debt" shall mean all Indebtedness of the Company and
its Restricted Subsidiaries, determined on a consolidated basis, other than
Indebtedness owing by the Company to any of its Restricted Subsidiaries or by
any of the Company's Restricted Subsidiaries to the Company or any other
Restricted Subsidiary of the Company, provided that, for purposes of this
definition, (x) only the principal amount of Indebtedness outstanding under the
Non-Compete Notes issued as of the date of determination (net of the amount of
any reduction to the amounts owed under such Non-Compete Notes made in
accordance with the terms of the Non-Competition Agreement referred to in the
definition of Non-Compete Notes) shall be included and (y) Indebtedness of any
Partially-Owned Restricted Subsidiary shall be included in Consolidated Debt in
an aggregate amount equal to the percentage equity ownership of the Company in
such Partially-Owned Restricted Subsidiary multiplied by the
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aggregate Indebtedness of such Partially-Owned Restricted Subsidiary.
"Consolidated EBITDA" shall mean, for any period, (A) the sum
(without duplication) of the amounts for such period of (i) the net income (or
loss) of the Company and its Restricted Subsidiaries on a consolidated basis for
such period taken as a single accounting period, provided that, except as
provided in clauses (I) through (III) below, there shall be excluded from
Consolidated EBITDA (x) the net income (or loss) of all Unrestricted
Subsidiaries and all Partially-Owned Restricted Subsidiaries for such period and
(y) all cash or other payments received during such period by the Company and
its Restricted Subsidiaries from any Unrestricted Subsidiaries from dividends or
distributions (including tax sharing payments), in each case to the extent
otherwise included, (ii) provisions for taxes based on income, (iii)
Consolidated Interest Expense, (iv) amortization or write-off of deferred
financing costs, (v) losses on sales of assets (excluding sales in the ordinary
course of business) and other extraordinary losses, (vi) non-cash amounts
charged as compensation for "phantom stock" arrangements, (vii) all non-cash
interest expense not included in the foregoing clause (vi), (viii) depreciation
expense and (ix) amortization expense, in the case of each of clauses (ii)
through (ix) above to the extent deducted in determining net income (or loss)
pursuant to clause (i) above for such period, less (B) the amount for such
period of gains on sales of assets (excluding sales in the ordinary course of
business) and other extraordinary gains, in each case, to the extent included in
determining net income (or loss) pursuant to clause (A)(i) above for such
period, all as determined on a consolidated basis; provided, however, that (I)
for purposes of Section 7.11 and the definitions of Applicable Margin, (1) there
shall be included in determining Consolidated EBITDA for any period (x) the net
income (or loss) of any person, business, property or asset (other than an
Unrestricted Subsidiary) acquired and not subsequently sold or otherwise
disposed of (but not including the net income (or loss) of any related person,
business, property or assets to the extent not so acquired) by the Company or
one of its Restricted Subsidiaries during such period (each such person,
business, property or asset acquired and not subsequently disposed of, an
"Acquired Entity or Business"), and the net income (or loss) of any Unrestricted
Subsidiary that is converted into a Restricted Subsidiary during such period
(each, a "Converted Restricted Subsidiary"), in each case based on the actual
net income (or loss) of such Acquired Entity or Business or Converted Restricted
Subsidiary for the entire period (including the portion thereof occurring prior
to such acquisition or conversion) and (y) an increase in respect of each
Acquired Entity or Business acquired during such period equal to the cost
adjustment amount applicable to the relevant period determined by the Company to
represent the savings secured by the Company in connection with its reduction of
salary and other employment
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expenses and lease and other contractual expenses with respect to such Acquired
Entity or Business and (2) there shall be excluded in determining Consolidated
EBITDA for any period the net income (or loss) of any person, business, property
or asset (other than an Unrestricted Subsidiary) sold or disposed of by the
Company or one of its Restricted Subsidiaries during such period (each such
person, business, property or asset so sold or disposed of, a "Sold Entity or
Business"), and the net income (or loss) of any Restricted Subsidiary that is
converted into an Unrestricted Subsidiary during such period (each, a "Converted
Unrestricted Subsidiary"), in each case based on the actual net income (or loss)
of such Sold Entity or Business or Converted Unrestricted Subsidiary for the
entire period (including the portion thereof occurring prior to such sale,
disposition or conversion), (II) for purposes of this definition, subject to
clause (III) below, there shall be included or excluded any of the items
described in the above clauses (A) and (B) attributable to a Partially-Owned
Restricted Subsidiary, but only to the extent of the equity percentage ownership
of the Company in such Partially-Owned Restricted Subsidiary and (III) in the
event the aggregate portion of Consolidated EBITDA for any period attributable
to Partially-Owned Restricted Subsidiaries (the "Limited EBITDA Component")
exceeds an amount equal to 15% of the aggregate amount of Consolidated EBITDA of
the Company and its Restricted Subsidiaries for such period, the Limited EBITDA
Component (and accordingly Consolidated EBITDA), in each case, for such period,
shall be reduced such that the Limited EBITDA Component for such period equals
15% of the aggregate amount of such Consolidated EBITDA for such period.
"Consolidated Fixed Charges" shall mean, for any period, the sum,
without duplication, of the amounts for such period of (i) Consolidated Interest
Expense, plus consolidated cash Dividend expense payable in respect of all
Preferred Stock and common stock of the Company, (ii) provisions for taxes based
on income other than (x) changes in deferred taxes, (y) taxes on gains resulting
from sales of assets (other than sales in the ordinary course of business) and
(z) taxes on gains on extraordinary items, (iii) Consolidated Capital
Expenditures paid in cash, (iv) scheduled payments on Indebtedness for borrowed
money (including the term loans outstanding under the Existing Credit Agreements
but excluding the revolving loans outstanding under the Existing Credit
Agreements) and on the Non-Compete Notes (other than, in the case of any
payments referred to in this clause (iv), any interest payments to the extent
included in Consolidated Interest Expense) and (v) the Net Maximum Exposure
Reduction, if positive, for such period; all as determined on a consolidated
basis for the Company and its Restricted Subsidiaries; provided that for
purposes of this definition, fixed charges of the type referred to in clauses
(i)-(v) above of any Partially-Owned Restricted Subsidiary shall be included in
Consolidated
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Fixed Charges in an aggregate amount equal to the percentage equity ownership of
the Company in such Partially-Owned Restricted Subsidiary multiplied by the
fixed charges of the type referred to above of such Partially-Owned Restricted
Subsidiary for the respective period.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including that attributable to Capital Leases in accordance
with GAAP but excluding non-cash interest expenses) of the Company and its
Restricted Subsidiaries determined on a consolidated basis with respect to all
outstanding Indebtedness of the Company and its Restricted Subsidiaries,
including, without limitation, all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance financing
and net costs (i.e., costs minus benefits) under Interest Rate Protection
Agreements, but excluding, however, amortization of deferred financing costs to
the extent included in total interest expense, all as determined on a
consolidated basis; provided that for purposes of this definition, interest
expense of the type referred to above of any Partially-Owned Restricted
Subsidiary shall be included in Consolidated Interest Expense in an aggregate
amount equal to the percentage equity ownership of the Company in such
Partially-Owned Restricted Subsidiary multiplied by the interest expense of the
type referred to above of such Partially-Owned Restricted Subsidiary for the
respective period.
"Contingent Obligations" shall mean as to any Person (i) any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (x) for the purchase or payment of any such primary obligation or
(y) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (d) otherwise to assure or hold
harmless the owner of such primary obligation against loss in respect thereof
and (ii) any Interest Rate Protection Agreement; provided, how ever, that the
term Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in
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respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Contribution Agreement" shall have the meaning provided in Section
4.09.
"Conversion Value Amount" shall have the meaning set forth in the
definition of Permitted Restricted Subsidiary Conversion.
"Copyrights" shall have the meaning provided in Section 5.14(a).
"Credit Documents" shall mean this Agreement, any Notes to the
extent issued, the Subsidiary Guaranty and the Contribution Agreement.
"Credit Party" shall mean the Company and each Subsidiary Guarantor.
"Default" shall mean any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
"Dividends" shall have the meaning provided in Section 7.07.
"EBITDA" shall mean, for any Restricted Subsidiary or business, for
any period, the portion of Consolidated EBITDA attributable to such Restricted
Subsidiary or business.
"Effective Date" shall have the meaning provided in Section 11.10.
"Environmental Law" shall mean any federal, state, provincial or
local statute, law, rule, regulation, ordinance, code, policy or rule of common
law now or hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent, decree or judgment, relating to the environment, health, safety
or Hazardous Materials.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and the
rulings
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issued thereunder. Section references to ERISA are to ERISA as in effect at the
date of this Agreement and any subsequent provisions of ERISA amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Company or any Subsidiary of the Company would
be deemed to be a "single employer" within the meaning of Section 414(b), (c),
(m) or (o) of the Code.
"Eurodollar Loans" shall mean each Revolving Loan bearing interest
at the rates provided in Section 1.08(b).
"Eurodollar Rate" shall mean with respect to each Interest Period
for a Eurodollar Loan, (i) the arithmetic average (rounded to the nearest 1/100
of 1%) of the offered quotation to first-class banks in the interbank Eurodollar
market by each Reference Bank for U.S. dollar deposits of amounts in same day
funds comparable to the outstanding principal amount of the Eurodollar Loan of
such Reference Bank for which an interest rate is then being determined with
maturities comparable to the Interest Period to be applicable to such Eurodollar
Loan, determined as of 10:00 A.M. (New York time) on the date which is two
Business Days prior to the commencement of such Interest Period divided (and
rounded upward to the next whole multiple of 1/16 of 1%) by (ii) a percentage
equal to 100% minus the then stated maximum rate of all reserve requirements
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves) applicable to any member bank of the Federal Reserve System
in respect of Eurocurrency liabilities as defined in Regulation D (or any
successor category of liabilities under Regulation D); provided that if one or
more of the Reference Banks fails to provide the Administrative Agent with its
aforesaid rate, then the Eurodollar Rate in respect of Revolving Loans shall be
determined based on the rate or rates provided to the Administrative Agent by
the other Reference Banks or Bank.
"Event of Default" shall have the meaning provided in Section 8.
"Excess Cash Flow" shall mean, for any period, the remainder of (x)
the sum of (i) Consolidated EBITDA for such period and (ii) the decrease, if
any, in Working Capital from the first day to the last day of such period, minus
(y) the sum of (i) the amount of Consolidated Fixed Charges for such period (but
in the case of Consolidated Capital Expenditures included therein, only to the
extent such expenditures are not financed by Indebtedness (other than Revolving
Loans
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hereunder)) and (ii) the increase, if any, in Working Capital from the first day
to the last day of such period, provided that in calculating the amount referred
to in clause (x)(ii) or (y)(ii) above, as the case may be, (A) for any period
during which the Company and/or any of its Restricted Subsidiaries have
consummated an Asset Sale pursuant to Section 7.02(c) or a Permitted
Acquisition, the portion of the change in Working Capital for such period
attributable to the entity or business sold or purchased shall be based (x) in
the case of an Asset Sale, on the change in Working Capital attributable to the
entity or business sold from the first day of such period to the date of the
consummation of such sale and (y) in the case of an acquisition, on the change
in Working Capital attributable to the entity or business acquired from the date
of consummation of such acquisition to the last day of such period and (B)
Working Capital shall only include the assets and liabilities of a
Partially-Owned Restricted Subsidiary to the extent of the percentage equity
interest of the Company in such Partially-Owned Restricted Subsidiary.
"Excess Cash Flow Amount" shall mean an amount which initially shall
be zero and which shall be (i) increased on the date of delivery of Section 6.01
Financials in respect of the first three fiscal quarters in each year of the
Company (commencing with the fiscal quarter ended June 30, 1996) by an amount
(if positive) equal to 75% of Excess Cash Flow for the fiscal quarter in respect
of which such Section 6.01 Financials are delivered, provided that in the event
that Excess Cash Flow for the first and/or second fiscal quarter in any fiscal
year is negative, then for purposes of this clause (i) the Excess Cash Flow for
the third fiscal quarter in such fiscal year shall be deemed to be reduced by
the amount of such negative Excess Cash Flow for such first and/or second
quarter, and (ii) increased on the date of delivery of Section 6.01 Financials
in respect of each fiscal year of the Company by an amount (if positive) equal
to 75% of the Excess Cash Flow for such fiscal year less an amount (if any)
equal to the aggregate amount by which the Excess Cash Flow Amount was increased
pursuant to clause (i) above in respect of the first, second and third quarters
in such fiscal year.
"Excluded Domestic Restricted Subsidiary" shall mean any
Partially-Owned Restricted Subsidiary with respect to which the Company shall
have made a Non-Guarantor Designation in accordance with the provisions hereof.
"Excluded Foreign Restricted Subsidiaries" shall mean (i) Daily
Racing Form of Canada Ltd., a Canada corporation, (ii) Admirefruit Limited, a
U.K. corporation, (iii) Canadian Red Book, Inc., a Canada corporation, (iv)
Canadian Sailings Inc., a Canada corporation and (v) each Restricted Subsidiary
of the
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Company established, created or acquired after the Effective Date which is
incorporated in a jurisdiction outside the United States, except to the extent
the requirements set forth in clause (z) of 7.14(a), and Section 7.14(c), are
satisfied with respect to such Subsidiary.
"Existing Contingent Obligations" shall have the meaning provided in
Section 7.06(f).
"Existing Credit Agreements" shall mean and include each of the
$1,250,000,000 Credit Agreement and the $250,000,000 Credit Agreement.
"Existing Debt" shall have the meaning provided in Section 7.04(d).
"Existing Indebtedness Agreements" shall have the meaning provided
in Section 4.10.
"Existing Preferred Stock" shall include preferred stock of the
Company issued prior to the Effective Date and listed on Annex VI hereto,
without giving effect to any extension or replacement thereof, as the same may
be modified, supplemented or amended from time to time pursuant to the terms
hereof and thereof.
"Federal Funds Effective Rate" shall mean, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean (i) all amounts payable pursuant to, or referred
to in, Section 2.01 and (ii) all other fees payable to the Administrative Agent
or any Bank as may be agreed to from time to time between the Company and the
Administrative Agent or such Bank, as the case may be.
"Final Maturity Date" shall mean April 20, 1998.
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"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; it being understood and
agreed that determinations in accordance with GAAP for purposes of Section 7,
including defined terms as used therein, are subject (to the extent provided
therein) to Section 11.07(a).
"Hazardous Materials" shall mean (a) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; and (b) any chemicals, materials or substances defined as or
included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "restricted hazardous materials," "extremely hazardous
wastes," "restrictive hazardous wastes," "toxic substances," "toxic
pollutants," "contaminants" or "pollutants," or words of similar import, under
any applicable Environmental Law.
"Indebtedness" of any Person shall mean without duplication (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets or services payable to the sellers thereof or any of such seller's
assignees which in accordance with GAAP would be shown on the liability side of
the balance sheet of such Person, (iii) the face amount of all letters of credit
issued for the account of such Person and, without duplication, all drafts drawn
thereunder, (iv) all Indebtedness of a second Person secured by any Lien on any
property owned by such first Person, whether or not such Indebtedness has been
assumed, (v) all Capitalized Lease Obligations of such Person and (vi) all
obligations of such Person to pay a specified purchase price for goods or
services whether or not delivered or accepted, i.e., take-or-pay and similar
obligations, provided that Indebtedness shall not include (x) trade payables
and accrued expenses, in each case arising in the ordinary course of business
and (y) any obligations under Interest Rate Protection Agreements.
"Initial Borrowing Date" shall mean the date on or after the
Effective Date upon which the initial Borrowing of Revolving Loans hereunder
occurs.
"Intellectual Property" shall have the meaning provided in Section
5.14(b).
"Intercompany Loan" shall have the meaning provided in Section
7.05(c).
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"Interest Period" with respect to any Eurodollar Loan, shall mean
the interest period applicable thereto, as determined pursuant to Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedging agreement or other similar agreement or arrangement
designed to protect the Company or any of its Subsidiaries against fluctuations
in interest rates.
"KKR" shall mean Kohlberg Kravis Roberts & Co., a Delaware limited
partnership.
"Leasehold" of any Person means all of the right, title and interest
of such Person as lessee or licensee in, to and under leases or licenses of
land, improvements and/or fixtures.
"Leverage Ratio" shall have the meaning provided in Section 7.11.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any similar
recording or notice statute, and any lease having substantially the same effect
as the foregoing).
"Margin Stock" shall have the meaning provided in Regulation U.
"Minimum Borrowing Amount" shall mean $3,000,000.
"Minimum Retention Amount" shall mean, at any time, $5,000,000
multiplied by a fraction (i) the numerator of which shall be the Total Revolving
Loan Commitment at such time and (ii) the denominator of which shall be
$100,000,000.
"Net Investments in Excluded Foreign Restricted Subsidiaries" shall
mean the remainder of (i) the sum of (x) the aggregate value of all businesses,
properties and assets transferred by the Company and/or its Restricted
Subsidiaries (other than Excluded Foreign Restricted Subsidiaries) to Excluded
Foreign Restricted Subsidiaries after the Effective Date, (y) the aggregate
outstanding principal amount of all Intercompany Loans made to Excluded Foreign
Restricted Subsidiaries by the Company and/or its Restricted Subsidiaries (other
than Excluded Foreign Restricted Subsidiaries) after the Effective Date and (z)
the aggregate amount of all investments
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by the Company and its Restricted Subsidiaries (other than Excluded Foreign
Restricted Subsidiaries) in Excluded Foreign Restricted Subsidiaries after the
Effective Date, minus (ii) the sum of (x) the aggregate value of all businesses,
properties and assets transferred by Excluded Foreign Restricted Subsidiaries to
the Company and/or its Restricted Subsidiaries (other than Excluded Foreign
Restricted Subsidiaries) after the Effective Date and (y) the aggregate amount
of all cash dividends and other cash distributions on common stock paid by
Excluded Foreign Restricted Subsidiaries to the Company and its Restricted
Subsidiaries (other than Excluded Foreign Restricted Subsidiaries) after the
Effective Date.
"Net Maximum Exposure Reduction" shall have the meaning provided
therefor in the $1,250,000,000 Credit Agreement.
"Non-Compete Notes" shall mean the promissory notes issued by K-III
Holdings Corporation III pursuant to the Non-Competition Agreement, dated as of
June 17, 1991, among K-III Holdings Corporation III, News America Holdings
Incorporated and the other parties thereto in an aggregate principal amount not
to exceed $50,000,000, as such notes may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof.
"Non-Defaulting Bank" shall mean each Bank other than a Defaulting
Bank.
"Non-Facility Letter of Credit Outstandings" shall mean, at any
time, the sum of (i) the aggregate maximum amount available to be drawn
(regardless of whether any conditions for drawing could then be met) under all
outstanding Non-Facility Letters of Credit and (ii) the aggregate amount of all
Non-Facility Unpaid Drawings.
"Non-Facility Letters of Credit" shall mean each letter of credit
(other than any letter of credit issued pursuant to the Existing Credit
Agreements) issued for the account of the Company or any of its Restricted
Subsidiaries, provided that the reimbursement obligations of the Company or such
Restricted Subsidiary with respect to such letter of credit may be secured only
to the extent permitted by Section 7.03(q).
"Non-Facility Unpaid Drawings" shall mean all amounts paid or
disbursed by the issuers of Non-Facility Letters of Credit which have not been
reimbursed.
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"Non-Guarantor Designation" shall mean and include each of (x) the
designation by the Company of any newly created or acquired Partially-Owned
Restricted Subsidiary and (y) the redesignation of any existing Partially-Owned
Restricted Subsidiary which is a Subsidiary Guarantor, in each case, as an
Excluded Domestic Restricted Subsidiary by delivery of a written notice to the
Administrative Agent of such designation or redesignation, as the case may be;
provided that the Company may only make a Non-Guarantor Designation hereunder
if, at the time of such designation (i) no Default or Event of Default exists or
would result therefrom and (ii) the Company shall have determined, with respect
to such designation, that the Company and its Restricted Subsidiaries would have
been in compliance, on a Pro Forma Basis, with Sections 7.09, 7.10 and 7.11 of
this Agreement.
"Note" shall mean and include each promissory note, in the form
agreed by the Company and the Administrative Agent prior to the Effective Date,
to the extent issued pursuant to Section 1.05(b) hereof.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent at
1 Chase Manhattan Plaza, New York, New York 10081, or such other office as the
Administrative Agent may designate to the Company and the Banks from time to
time.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
the Administrative Agent or any Bank pursuant to the terms of this Agreement or
any other Credit Document.
"$1,250,000,000 Credit Agreement" shall mean the Credit Agreement,
dated as of May 24, 1996, among the Company, Canadian Sailings Inc., a Canada
corporation, various lending institutions, The Bank of Nova Scotia, as the
Canadian lender, The Bank of New York and Bankers Trust Company, as
Co-Syndication Agents, The Bank of Nova Scotia, as Documentation Agent, and The
Chase Manhattan Bank, as Administrative Agent, as amended, modified,
supplemented or
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extended from time to time in accordance with the terms thereof.
"Partially-Owned Restricted Subsidiary" shall mean any Restricted
Subsidiary of the Company to the extent that the Company and its Wholly-Owned
Restricted Subsidiaries shall own less than 100% of the capital stock of such
Restricted Subsidiary.
"Payment Office" shall mean the office of the Administrative Agent
at 1 Chase Manhattan Plaza, New York, New York 10081, or such other office as
the Administrative Agent may designate to the Company and the Banks from time to
time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisition" shall have the meaning provided in Section
7.02(g).
"Permitted Amendments" shall mean, to any amendment or supplement to
or waiver of the documents governing or evidencing (x) any issue of Indebtedness
which does not (i) add, directly or indirectly, any new covenant, event of
default, collateral requirement or repayment requirement (including pursuant to
any put arrangement), (ii) modify in any manner materially adverse to the issuer
or guarantors thereof any existing covenant, event of default, collateral
requirement or repayment requirement (including any shortening or any
amortization requirements), (iii) increase the interest rate thereon or modify
in any manner the time or manner of payment of such interest (including any
option or right to pay such interest in kind), (iv) modify any of the
subordination provisions or (v) contain any provision which, in the opinion of
the Administrative Agent, is materially adverse to the interests of the Banks,
(y) any issue of Preferred Stock which does not (i) add, directly or indirectly,
any new covenant, default, voting, redemption, exchange or put provision, (ii)
modify in any manner adverse to the issuer thereof any existing covenant,
default, voting, redemption, exchange or put provision, (iii) increase the
dividend rate thereon or modify in any manner the time or manner of payment of
such dividends (including any option or right to pay such dividends in kind) or
(iv) contain any provision which, in the opinion of the Administrative Agent, is
materially adverse to the interests of the Banks or (z) the sole effect of which
is to (i) delete covenants or events of default and/or (ii) add to, or in crease
existing, exceptions to the covenants contained therein, or waive any of the
covenants contained therein or any rights of the
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holders of such Indebtedness or Preferred Stock, as the case may be, set forth
therein.
"Permitted Liens" shall have the meaning provided in Section
7.03(c).
"Permitted Refinancing Debt" shall mean Indebtedness issued in
connection with a refinancing of any or all of the Existing Debt, the
Subordinated Exchange Debentures, any Additional Indebtedness or any other
Permitted Refinancing Debt; provided that (i) such Indebtedness has a longer
average life than the Indebtedness being refinanced and (ii) such Indebtedness,
and the agreements and other documents entered into by the Company and/or any of
its Restricted Subsidiaries in connection therewith shall contain terms and
conditions (including, without limitation, with respect to the obligor and
guarantors, if any, in respect of such Indebtedness, amortization schedules,
interest rates, redemption provisions, covenants, defaults, security, remedies
and, if the Indebtedness so refinanced is subordinated to any other Indebtedness
of the Company or its Restricted Subsidiaries, subordination provisions) not
materially less favorable to the Company and its Restricted Subsidiaries or to
the Banks than the terms and conditions of the Indebtedness so refinanced
(excluding, for purposes of this clause (ii), the impact of market conditions on
the interest rate and other economic terms).
"Permitted Replacement Preferred Stock" shall mean preferred stock
of the Company issued in connection with the replacement and cancellation of any
outstanding Preferred Stock; provided that such preferred stock and the
agreements, certificates of designation and other documents entered into by the
Company in connection therewith shall contain terms and conditions (including,
without limitation, dividend rates, pay-in-kind features, redemption provisions,
put rights, liquidation preferences, voting rights and exchange rights) not
materially less favorable to the Company or to the Banks than the terms and
conditions of the preferred stock being replaced (excluding the impact of market
conditions on the dividend rate and other economic terms), as such preferred
stock may be amended, modified or supplemented from time to time in accordance
with the terms hereof and thereof.
"Permitted Restricted Asset Sale" shall mean any sale, transfer or
other disposition by the Company or any of its Restricted Subsidiaries (other
than Canadian Sailings Inc.) to any Unrestricted Subsidiary of any asset
(including, without limitation, any capital stock or other securities of another
Person, but excluding any sale, transfer or other disposition by the Company of
its capital stock) of the Company or such Restricted Subsidiary; provided that
the Company or such Restricted Subsidiary shall only be permitted to effectuate
a Permitted Restricted
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Asset Sale so long as (i) no Default or Event of Default exists or would result
therefrom, (ii) the Company shall have delivered to the Administrative Agent the
opinion of value of an Appraisal Firm to the extent required by Section 7.02(c)
and (iii) the Company shall have, or shall have caused such Restricted
Subsidiary to have, complied with the other terms and conditions of Section
7.02(c) or (j), as the case may be.
"Permitted Restricted Subsidiary Conversion" shall mean the
redesignation by the Company of a Restricted Subsidiary (other than Canadian
Sailings Inc.) of the Company as an Unrestricted Subsidiary of the Company
pursuant to a written notice to the Administrative Agent and the Banks; provided
that any such redesignation of a Restricted Subsidiary as an Unrestricted
Subsidiary shall be deemed to constitute a sale of all of the assets of the
respective Restricted Subsidiary for all purposes of this Agreement; provided
further, that the Company shall only be permitted to effectuate a Permitted
Restricted Subsidiary Conversion so long as (i) no Default or Event of Default
exists or would result therefrom, (ii) the Company shall have delivered to the
Administrative Agent the opinion of value of management of the Company or, to
the extent required by Section 7.02(c), the Appraisal Firm required by such
Section (the value set forth in any such opinion, the "Conversion Value
Amount"), (iii) the Company shall have complied with the other terms and
conditions of Section 7.02(c) or (j), as the case may be, (iv) the Aggregate
Conversion Amount at such time, when added to the Unrestricted Subsidiary
Investment Amount at such time shall not exceed the Unrestricted Subsidiary
Investment Limit then in effect and (v) the Company shall have determined, with
respect to such conversion, that the Company and its Restricted Subsidiaries
would have been in compliance, on a Pro Forma Basis, with Sections 7.09, 7.10
and 7.11 of this Agreement.
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan, as
defined in Section 4001 of ERISA, which is maintained or contributed to by (or
to which there is an obligation to contribute of) the Company, any Restricted
Subsidiary or an ERISA Affiliate, and each such plan for the five year period
immediately following the latest date on which the Company, any Restricted
Subsidiary or an ERISA Affiliate maintained, contributed to or had an obligation
to contribute to such plan.
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"Preferred Stock" shall mean and include the Existing Preferred
Stock and, once issued, any Additional Preferred Stock and any Permitted
Replacement Preferred Stock.
"Prescribed Forms" shall mean such duly executed form(s) or
statement(s), and in such number of copies, which may, from time to time, be
prescribed by law and which, pursuant to applicable provisions of (a) an income
tax treaty between the United States and the country of residence of the Bank
providing the form(s) or statement(s), (b) the Code or (c) any applicable rule
or regulation under the Code, permit the Company to make payments hereunder for
the account of such Bank free of deduction or withholding of income or similar
taxes.
"Prime Lending Rate" shall mean the rate which the Administrative
Agent announces from time to time as its prime commercial lending rate, the
Prime Lending Rate to change when and as such prime commercial lending rate
changes. The Prime Lending Rate is a reference rate and does not necessarily
represent the lowest or best rate actually charged to any customer. The
Administrative Agent may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"Pro Forma Basis" shall mean, with respect to each Affected
Transaction in connection with which any calculation of compliance with any
financial covenant or financial term is required, the calculation thereof on a
pro forma basis, for the Test Period ended on the last day of the most recently
ended fiscal quarter, determined as if (x) such Affected Transaction, each other
Affected Transaction effected by Company during the Affected Period and any
reduction of Consolidated Debt during such Affected Period effected with the
proceeds received by the Company and/or its Restricted Subsidiaries of (A) the
issuance of common equity by the Company or (B) the sale of the capital stock or
other ownership interest of the Company in an Unrestricted Subsidiary (to the
extent not otherwise included in Consolidated EBITDA), in each case, had
occurred on the first day of such Affected Period and (y) with respect to any
Affected Transaction involving the issuance of Indebtedness or Preferred Stock,
such Indebtedness and/or Preferred Stock had remained outstanding at all times
during such Affected Period.
"Pro Rata Share" shall mean, for each Bank, the percentage obtained
by dividing such Bank's Revolving Loan Commitment by the Total Revolving Loan
Commitment; provided that, if at any time of the determination of a Bank's "Pro
Rata Share," any Revolving Loan Commitments under this Agreement shall have been
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terminated, Pro Rata Share shall be calculated with reference to the amount of
Revolving Loans outstanding rather than such Revolving Loan Commitments.
"Real Property" of any Person shall mean all of the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Reference Banks" shall mean Chase, The Bank of New York and Bankers
Trust Company.
"Register" shall have the meaning provided in Section 1.05(a).
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing margin requirements.
"Replaced Bank" shall have the meaning provided in Section
1.10(c)(ii).
"Replacement Bank" shall have the meaning provided in Section
1.10(c)(ii).
"Reportable Event" shall mean an event described in Section 4043(c)
of ERISA with respect to a Plan other than those events as to which the 30-day
notice is waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC
Regulation Section 2615.
"Required Banks" shall mean Non-Defaulting Banks, the sum of whose
Revolving Loan Commitments (or after the termination thereof, the then total
outstanding Revolving Loans) constitute at least 51% of the Adjusted Total
Commitment (or after the termination thereof, the then total outstanding
Revolving Loans of Non-Defaulting Banks).
"Restricted Subsidiaries" shall mean (x) all of the Subsidiaries of
the Company in existence on the Effective Date, including, without limitation,
Canadian
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Sailings Inc., (y) any Subsidiary owned (directly or indirectly) by the Company
that is created, established or acquired after the Effective Date and which does
not constitute an Unrestricted Subsidiary on the date of the creation,
establishment and/or acquisition thereof and (z) any Unrestricted Subsidiary of
the Company to the extent designated by the Company as a Restricted Subsidiary
hereunder by written notice to the Administrative Agent; provided that the
Company shall only be permitted to so designate a new Restricted Subsidiary so
long as (i) no Default or Event of Default exists or would result therefrom,
(ii) at least 51% of the capital stock of such newly-designated Restricted
Subsidiary is owned by the Company or one or more Wholly-Owned Restricted
Subsidiaries and all of the applicable provisions of Section 7.14 shall have
been complied with in respect of such newly-designated Restricted Subsidiary,
(iii) the Company shall have determined, with respect to such designation, that
the Company and its Restricted Subsidiaries would have been in compliance, on a
Pro Forma Basis, with Sections 7.09, 7.10 and 7.11 of this Agreement and (iv)
such Unrestricted Subsidiary is permitted to be designated a Restricted
Subsidiary pursuant to the Senior Note Documents; provided further, that, at the
time of any Permitted Restricted Subsidiary Conversion or the sale of 100% of
the capital stock owned by the Company or any Restricted Subsidiary of a
Restricted Subsidiary to an Unrestricted Subsidiary pursuant to a Permitted
Restricted Asset Sale, the Restricted Subsidiary so converted or sold shall no
longer constitute a Restricted Subsidiary hereunder.
"Revolving Loan" shall have the meaning provided in Section 1.01.
"Revolving Loan Commitment" shall mean, with respect to each Bank,
the amount set forth opposite such Bank's name in Annex I hereto directly below
the column entitled "Revolving Loan Commitment", as same may be reduced from
time to time pursuant to Sections 2.02, 2.03 and/or 8.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Section 6.01 Financials" shall mean the financial statements
delivered, or to be delivered, pursuant to Section 6.01(a) or (b).
"Senior Note Documents" shall mean and include each of the documents
and other agreements entered into by the Company or any of its Subsidiaries
(including, without limitation, the indentures pursuant to which each issuance
of the Senior Notes are issued and any guaranty or guaranties relating
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thereto) relating to the issuance by the Company of any Senior Notes, as in
effect on the Effective Date and as the same may be modified, supplemented or
amended from time to time pursuant to the terms hereof and thereof.
"Senior Notes" shall mean and include the Company's (x) 10-5/8%
Senior Secured Notes due 2002, (y) 10-1/4% Senior Notes due 2004 and (z) 8-1/2%
Senior Notes due 2006, in each case, as in effect on the Effective Date and as
the same may be modified, supplemented or amended from time to time pursuant to
the terms hereof and thereof.
"Senior Preferred Stock" shall mean the Company's $2.875 Senior
Exchangeable Preferred Stock, as in effect on the Effective Date and as the same
may be modified, supplemented or amended from time to time pursuant to the terms
hereof and thereof.
"Series B Preferred Stock" shall mean the Company's $11.625 Series B
Exchangeable Preferred Stock, as in effect on the Effective Date and as the same
may be modified, supplemented or amended from time to time pursuant to the terms
hereof and thereof.
"Series C Preferred Stock" shall mean the Company's Series C
Exchangeable Preferred Stock, as in effect on the Effective Date and as the same
may be modified, supplemented or amended from time to time pursuant to the terms
hereof and thereof.
"Specified Change of Control Event" shall mean a Change of Control
Event of the type described in clause (a) of the definition thereof.
"Subordinated Exchange Debentures" shall mean and include the
Company's (x) 11-1/2% Subordinated Debentures due 2004, (y) 11-5/8% Class B
Subordinated Exchange Debentures due 2005 and (z) 10% Subordinated Exchange
Debentures due 2008, in each case, in the form delivered to the Banks on the
Effective Date and as the same may be modified, supplemented or amended from
time to time pursuant to the terms hereof and thereof.
"Subsidiary" of any Person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation
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shall have or might have voting power by reason of the happening of any
contingency) is at the time owned by such Person directly or indirectly through
Subsidiaries and (ii) any partnership, association, joint venture or other
entity in which such Person directly or indirectly through Subsidiaries, has
more than a 50% equity interest at the time, provided that Canadian Sailings
Inc. shall be deemed to be a Subsidiary of the Company for all purposes.
"Subsidiary Guarantor" shall mean (i) each Restricted Subsidiary in
existence on the Effective Date (other than Excluded Foreign Restricted
Subsidiaries) and (ii) each Restricted Subsidiary of the Company formed after
the Effective Date and each Excluded Domestic Restricted Subsidiary designated
as such by the Company, in each case, which has executed and delivered a
counterpart of the Subsidiary Guaranty to the Administrative Agent on behalf of
the Banks, provided that any such Restricted Subsidiary which is a
Partially-Owned Restricted Subsidiary shall cease to constitute a Subsidiary
Guarantor to the extent the Company shall have made a Non-Guarantor Designation
with respect to such Subsidiary in accordance with the terms hereof.
"Subsidiary Guaranty" shall have the meaning provided in Section
4.06.
"Taxes" shall have the meaning provided in Section 3.04.
"Test Period" shall mean the four consecutive fiscal quarters of the
Company then last ended.
"Total Revolving Loan Commitment" shall mean the sum of the
Revolving Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at any
time, the Total Revolving Loan Commitment at such time less the aggregate
principal amount of all Revolving Loans at such time.
"$250,000,000 Credit Agreement" shall mean the Credit Agreement,
dated as of May 24, 1996, among the Company, various lending institutions, The
Bank of New York and Bankers Trust Company, as Co-Syndication Agents, The Bank
of Nova Scotia, as Documentation Agent, and The Chase Manhattan Bank, as
Administrative Agent, as amended, modified, supplemented or extended from time
to time in accordance with the terms thereof.
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"Type" shall mean any type of Revolving Loan determined with respect
to the interest option applicable thereto, i.e., a Base Rate Loan or Eurodollar
Loan.
"UCC" shall mean the Uniform Commercial Code as in effect in the
State of New York.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
such Plan as of the close of its most recent plan year exceeds the fair market
value of the assets allocable thereto, each determined in accordance with
Statement of Financial Accounting Standards No. 87, based upon the actuarial
assumptions used by the Plan's actuary in the most recent annual valuation of
the Plan.
"Unrestricted Subsidiary" shall mean (i) any Subsidiary of the
Company that is formed or acquired after the Effective Date, which is funded
through loans, advances and/ or capital contributions as permitted by, and in
compliance with, Section 7.05(d), provided that at the time of the initial loan,
advance or capital contribution by the Company or any Restricted Subsidiary to
such Subsidiary (x) the Company designates such Subsidiary as an Unrestricted
Subsidiary in a written notice to the Administrative Agent and (y) such
Subsidiary and the Company shall have entered into a tax sharing agreement in
form and substance reasonably satisfactory to the Required Banks, (ii) any
Restricted Subsidiary of the Company redesignated as an Unrestricted Subsidiary
pursuant to a Permitted Restricted Subsidiary Conversion and any Restricted
Subsidiary sold to an Unrestricted Subsidiary pursuant to a Permitted Restricted
Asset Sale, in each case to the extent consummated in accordance with the terms
of the respective definitions thereof and Section 7.02(c) or 7.02(j), as the
case may be, and (iii) each Subsidiary of an Unrestricted Subsidiary; provided
that, at the time of any designation of the type described in clause (z) of the
definition of "Restricted Subsidiary," the Subsidiary so designated shall no
longer constitute an Unrestricted Subsidiary hereunder.
"Unrestricted Subsidiary Investment Amount" shall have the meaning
provided in Section 7.05(d).
"Unrestricted Subsidiary Investment Limit" shall mean, at any time,
the sum of (i) $200,000,000, (ii) the Excess Cash Flow Amount at such time,
(iii) an amount equal to all cash or other payments received by the Company and
its
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Restricted Subsidiaries from Unrestricted Subsidiaries from dividends or
distributions after the Effective Date (provided that for purposes of this
clause (iii), cash and other payments received by a Partially-Owned Restricted
Subsidiary shall be added to the Unrestricted Subsidiary Investment Limit only
to the extent of the equity percentage ownership of the Company in such
Partially-Owned Restricted Subsidiary), plus (iv) an amount equal to the
aggregate net proceeds received by the Company from the issuance of equity
securities of the Company after the Effective Date, provided that if the net
proceeds from any such equity issuance are not utilized to make a loan or
advance to, or a cash capital contribution in, an Unrestricted Subsidiary
pursuant to Section 7.05(d) within 30 days following the date of such equity
issuance, then the net proceeds from such equity issuance shall no longer be
added to the Unrestricted Subsidiary Investment Limit.
"U.S. Dollars" and "$" shall mean freely transferable lawful money
of the United States of America.
"Wholly-Owned Restricted Subsidiary" shall mean any Restricted
Subsidiary of the Company which is not a Partially-Owned Restricted Subsidiary.
"Working Capital" shall mean the excess of Consolidated Current
Assets over Consolidated Current Liabilities.
"Written" or "in writing" shall mean any form of written
communication or a communication by means of telex, telecopier device, telegraph
or cable.
SECTION 10. The Administrative Agent.
10.01 Appointment. Each Bank hereby irrevocably designates and
appoints Chase as Administrative Agent of such Bank and to act as specified
herein and in the other Credit Documents, and each such Bank hereby irrevocably
authorizes Chase as the Administrative Agent for such Bank, to take such action
on its behalf under the provisions of this Agreement and the other Credit
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Credit Documents, together with such other powers as are reasonably
incidental thereto. The Administrative Agent agrees to act as such upon the
express conditions contained in this Section 10. Notwithstanding any provision
to the contrary elsewhere in this
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Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein or in the other Credit
Documents, or any fiduciary relationship with any Bank, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Administrative Agent.
The provisions of this Section 10 are solely for the benefit of the
Administrative Agent and the Banks, and neither the Company nor any of its
Subsidiaries shall have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement,
the Administrative Agent shall act solely as agent of the Banks and the
Administrative Agent neither assumes and nor shall it be deemed to have assumed
any obligation or relationship of agency or trust with or for the Company or any
of its Subsidiaries.
10.02 Delegation of Duties. The Administrative Agent may execute any
of its duties under this Agreement or any other Credit Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care except to the extent
otherwise required by Section 10.03.
10.03 Exculpatory Provisions. Neither the Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or the
other Credit Documents (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Banks for
any recitals, statements, representations or warranties made by the Company, any
of its Subsidiaries or any of their respective officers contained in this
Agreement or the other Credit Documents or in any certificate, report, statement
or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Credit Document or for any failure of the Company or any of its Subsidiaries or
any of their respective officers to perform its obligations hereunder or
thereunder. The Administrative Agent shall not be under any obligation to any
Bank to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or the other
Credit Documents, or to inspect the properties, books or records of the Company
or any of its Subsidiaries. The Administrative Agent shall not be responsible to
any Bank for the effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this
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Agreement or any other Credit Document or for any representations, warranties,
recitals or statements made herein or therein or made in any written or oral
statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by the Administrative Agent to the Banks or by or on behalf of
the Company to the Administrative Agent, or any Bank or be required to ascertain
or inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained herein or therein or as to the use
of the proceeds of the Revolving Loans or of the existence or possible existence
of any Default or Event of Default.
10.04 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to the
Company), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Credit
Document unless it shall first receive such advice or concurrence of the
Required Banks as it deems appropriate or it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Credit Documents in
accordance with a request of the Required Banks, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Banks.
10.05 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default here under unless the Administrative Agent has actually received notice
from a Bank or the Company referring to this Agreement, describing such Default
or Event of Default and stating that such notice is a "notice of default." In
the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give prompt notice thereof to the Banks. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Banks; provided
that, unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
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Event of Default as it shall deem advisable in the best interests of the Banks.
10.06 Non-Reliance on Administrative Agent and Other Banks. Each
Bank expressly acknowledges that neither the Administrative Agent nor any of its
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of the Company or any of its Subsidiaries, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Bank. Each Bank
represents to the Administrative Agent that it has, independently and without
reliance upon the Administrative Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, assets, operations, property, financial
and other condition, prospects and creditworthiness of the Company and its
Subsidiaries and made its own decision to make its Revolving Loans hereunder and
enter into this Agreement. Each Bank also represents that it will, independently
and without reliance upon the Administrative Agent or any other Bank, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement, and to make such investigation as it
deems necessary to inform itself as to the business, assets, operations,
property, financial and other condition, prospects and creditworthiness of the
Company and its Subsidiaries. The Administrative Agent shall not have any duty
or responsibility to provide any Bank with any credit or other information
concerning the business, operations, assets, property, financial and other
condition, prospects or creditworthiness of the Company or any of its
Subsidiaries which may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
10.07 Indemnification. The Banks agree to indemnify the
Administrative Agent in its capacity as such ratably according to their
respective "percentages" (which shall equal, for each Non-Defaulting Bank, that
percentage determined by dividing such Bank's Revolving Loan Commitment by the
Adjusted Total Commitment, it being understood and agreed that references to
Revolving Loan Commitments (as well as to the Adjusted Total Commitment) at a
time when any such Revolving Loan Commitment (or Adjusted Total Commitment) has
been terminated shall be references to such terminated Revolving Loan Commitment
(or Adjusted Total Commitment, as the case may be) as in effect immediately
prior to such termination), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
reasonable expenses or disbursements of
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any kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Obligations) be imposed on, incurred by or
asserted against the Administrative Agent in its capacity as such in any way
relating to or arising out of this Agreement or any other Credit Document, or
any documents contemplated by or referred to herein or the transactions
contemplated hereby or any action taken or omitted to be taken by the
Administrative Agent under or in connection with any of the foregoing, but only
to the extent that any of the foregoing is not paid by the Company or any of its
Subsidiaries; provided that no Bank shall be liable to the Administrative Agent
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the gross negligence or willful misconduct of the
Administrative Agent. If and to the extent any amount paid to the Administrative
Agent is subsequently recovered by the Administrative Agent from the Company or
any of its Subsidiaries, the Administrative Agent shall promptly pay to each
Bank to the extent such Bank paid the Administrative Agent, its "percentage" of
the amount so recovered. If any indemnity furnished to the Administrative Agent
for any purpose shall, in the opinion of the Administrative Agent be
insufficient or become impaired, the Administrative Agent may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished. The agreements in this
Section 10.07 shall survive the payment of all Obligations.
10.08 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its respective affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Company and
its Subsidiaries as though the Administrative Agent were not the Administrative
Agent hereunder. With respect to the Revolving Loans made by it and all
Obligations owing to it, the Administrative Agent shall have the same rights and
powers under this Agreement as any Bank and may exercise the same as though it
were not the Administrative Agent, and the terms "Bank" and "Banks" shall
include the Administrative Agent in its individual capacity.
10.09 Holders. The Administrative Agent may deem and treat the payee
of any Note which has been issued hereunder as the owner thereof for all
purposes hereof unless and until a written notice of the assignment, transfer or
endorsement thereof, as the case may be, shall have been filed with the
Administrative Agent. Any request, authority or consent of any Person or entity
who, at the time of making such request or giving such authority or consent, is
the holder of any such Note shall be conclusive and binding on any subsequent
holder, transferee, assignee or indorsee, as the case may be, of such Note or of
any Note or Notes issued in exchange therefor.
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10.10 Resignation of the Administrative Agent; Successor Agent. The
Administrative Agent may resign as the Administrative Agent upon 20 days' notice
to the Banks. Upon the resignation of the Administrative Agent, the Required
Banks shall appoint from among the Banks a successor Administrative Agent for
the Banks subject to prior approval by the Company (such approval not to be
unreasonably withheld), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall include such successor agent effective upon its
appointment, and the resigning Administrative Agent's rights, powers and duties
as the Administrative Agent shall be terminated, without any other or further
act or deed on the part of such former Administrative Agent or any of the
parties to this Agreement. After the resignation of the Administrative Agent
hereunder, the provisions of this Section 10 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement.
SECTION 11. Miscellaneous.
11.01 Payment of Expenses, etc. The Company agrees to: (i) whether
or not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Administrative Agent (including, without
limitation, the reasonable fees and disbursements of White & Case) in connection
with the negotiation, preparation, execution and delivery of the Credit
Documents and the documents and instruments referred to therein and any
amendment, waiver or consent relating thereto and in connection with the
Administrative Agent's syndication efforts with respect to this Agreement; (ii)
pay all reasonable out-of-pocket costs and expenses of the Administrative Agent
and each of the Banks in connection with the enforcement of the Credit Documents
and the documents and instruments referred to therein and, after an Event of
Default shall have occurred and be continuing, the protection of the rights of
the Administrative Agent and each of the Banks thereunder (including, without
limitation, the reasonable fees and disbursements of counsel (including in-house
counsel) for the Administrative Agent and for each of the Banks); (iii) pay and
hold each of the Banks harmless from and against any and all present and future
stamp and other similar taxes with respect to the foregoing matters and save
each of the Banks harmless from and against any and all liabilities with respect
to or resulting from any delay or omission (other than to the extent
attributable to such Bank) to pay such taxes; and (iv) indemnify the
Administrative Agent and each Bank, its officers, directors, employees,
represent-
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tives and agents from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them as a result of,
or arising out of, or in any way related to, or by reason of, any investigation,
litigation or other proceeding (whether or not the Administrative Agent or any
Bank is a party thereto) related to the entering into and/or performance of any
Credit Document or the use of the proceeds of any Revolving Loans hereunder or
the consummation of any other transactions contemplated in any Credit Document
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation, litigation or other
proceeding (but excluding any such losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified).
11.02 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Bank is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Company or any of its Subsidiaries or
to any other Person, any such notice being hereby expressly waived, to set off
and to appropriate and apply any and all deposits (general or special) and any
other Indebtedness at any time held or owing by such Bank (including, without
limitation, by branches and agencies of such Bank wherever located) to or for
the credit or the account of any Credit Party against and on account of the
Obligations and liabilities of such Credit Party to such Bank under this
Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations of such Credit Party purchased by such
Bank pursuant to Section 11.06(b), and all other claims of any nature or
description arising out of or connected with this Agreement or any other Credit
Document, irrespective of whether or not such Bank shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured.
11.03 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including facsimile communication) and mailed, facsimilied or delivered, if to
the Company, at the address specified opposite its signature below or in the
other relevant Credit Documents, as the case may be; if to any Bank, at its
address specified for such Bank on Annex II hereto; or, at such other address as
shall be designated by any party in a written notice to the other parties
hereto. All such notices and communications shall be mailed, facsimilied or
cabled or sent by overnight courier, and shall be effective when received.
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11.04 Benefit of Agreement. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided that the Company may not assign or
transfer any of its respective rights or obligations hereunder without the prior
written consent of the Banks. Each Bank may at any time grant participations in
any of its rights hereunder to another financial institution; provided further,
that, in the case of any such participation, the participant shall not have any
rights under this Agreement or any of the other Credit Documents (the
participant's rights against such Bank in respect of such participation to be
those set forth in the agreement executed by such Bank in favor of the
participant relating thereto) and all amounts payable by the Company hereunder
shall be determined as if such Bank had not sold such participation, except that
the participant shall be entitled to receive the additional amounts under
Sections 1.10, 1.11 and 3.04 of this Agreement to, and only to, the extent that
such Bank would be entitled to such benefits if the participation had not been
entered into or sold; and provided further, that no Bank shall transfer, grant
or assign any participation under which the participant shall have rights to
approve any amendment to or waiver of this Agreement or any other Credit
Document except to the extent such amendment or waiver would (i) extend the
final scheduled maturity of any Revolving Loan in which such participant is
participating (it being understood that any waiver of an installment on, or the
application of any prepayment or the method of application of any prepayment to
the amortization of the Revolving Loans shall not constitute an extension of the
final scheduled maturity date), or reduce the rate or extend the time of payment
of interest or Fees thereon (except in connection with a waiver of the
applicability of any post-default increase in interest rates), or reduce the
principal amount thereof, or increase such participant's participating interest
in any Revolving Loan Commitment over the amount thereof then in effect (it
being understood that a waiver of any Default or Event of Default or of a
mandatory reduction in the Total Revolving Loan Commitment shall not constitute
a change in the terms of any Revolving Loan Commitment and that an increase in
any Revolving Loan Commitment shall be permitted without the consent of any
participant if such participant's participation is not increased as a result
thereof), (ii) release all or substantially all of the Subsidiary Guarantors
from the Subsidiary Guaranty (except as expressly provided in the Credit
Documents) or (iii) in each case consent to the assignment or transfer by the
Company or any other Subsidiaries of the Company of any of its rights and
obligations under this Agreement or any other Credit Document except in
accordance with the terms hereof and thereof.
(b) Notwithstanding the foregoing, (x) any Bank may assign all or a
portion of its Revolving Loans and/or Revolving Loan Commitment and its rights
and
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obligations hereunder to its parent corporation and/or any affiliate of such
Bank which is at least 50% owned by such Bank and/or its parent company and (y)
with the consent of the Administrative Agent and the Company (which consents
shall not be unreasonably withheld), any Bank may assign all or a portion of its
Revolving Loans and/or Revolving Loan Commitment and its rights and obligations
hereunder to one or more commercial banks or other financial institutions
(including one or more Banks). No assignment pursuant to the immediately
preceding sentence shall (x) to the extent such transaction represents an
assignment to an institution other than one or more Banks hereunder, be in an
aggregate amount less than the minimum of $5,000,000 or (y) so long as no
Default or Event of Default then exists, reduce the Revolving Loan Commitments
of the assigning Bank to an aggregate amount less than the Minimum Retention
Amount unless the same are reduced to $0. If any Bank so sells or assigns all or
a part of its rights here under, any reference in this Agreement or the other
Credit Documents to such assigning Bank shall thereafter refer to such Bank and
to the respective assignee Bank to the extent of their respective interests and
the respective assignee Bank shall have, to the extent of such assignment
(unless otherwise provided therein), the same rights and benefits as it would if
it were such assigning Bank. Each assignment pursuant to this Section 11.04(b)
shall be effected by the assigning Bank and the assignee Bank executing an
Assignment and Assumption Agreement substantially in the form of Exhibit F
(appropriately completed). At the time of any such assignment, (i) Annex I
shall be deemed to be amended to reflect the Revolving Loan Commitments of the
respective assignee Bank (which shall result in a direct reduction to the
respective Revolving Loan Commitments of the assigning Bank) and of the other
Banks, (ii) the Administrative Agent shall record such assignment and the
resultant effects thereof on the Revolving Loans and/or Revolving Loan
Commitments of the assigning Bank and the assignee Bank in the Register and
(iii) the Administrative Agent shall receive from the assigning Bank and/or the
assignee Bank at the time of each assignment the payment of a nonrefundable
assignment fee in an aggregate amount of $3,000 with respect to each such
assignment (provided that in the event of simultaneous assignments relating to
this Agreement and the Existing Credit Agreements, the fees for such assignments
shall total $3,000). Each Bank and the Company agree to execute such documents
(including, without limitation, amendments to this Agreement and the other
Credit Documents) as shall be necessary to effect the foregoing. Promptly
following any assignment pursuant to this Section 11.04(b), the assigning Bank
shall promptly notify the Company thereof. Nothing in this Section 11.04(b)
shall prevent or prohibit any Bank from pledging its Revolving Loans or, if
issued, Notes hereunder to a Federal Reserve Bank in support of borrowings made
by such Bank from such Federal Reserve Bank.
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(c) Notwithstanding any other provisions of this Section 11.04, no
transfer or assignment of the interests or obligations of any Bank hereunder or
any grant of participations therein shall be permitted if such transfer,
assignment or grant would require the Company to file a registration statement
with the SEC or to qualify the Revolving Loans under the "Blue Sky" laws of any
State.
11.05 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Administrative Agent or any Bank in exercising any right, power or
privilege here under or under any other Credit Document and no course of dealing
between the Company and the Administrative Agent or any Bank shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the Administrative
Agent or any Bank would otherwise have. No notice to or demand on the Company in
any case shall entitle the Company to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Banks to any other or further action in any
circumstances without notice or demand.
11.06 Payments Pro Rata. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of the Company in
respect of any Obligations of the Company hereunder, it shall, except as
otherwise provided in this Agreement, distribute such payment to the Banks
(other than any Bank that has consented in writing to waive its pro rata share
of such payment) pro rata based upon their respective shares, if any, of the
Obligations with respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Revolving Loans or Fees, of a sum which with respect to the related sum
or sums received by other Banks is in a greater proportion than the total of
such Obligation then owed and due to such Bank bears to the total of such
Obligation then owed and due to all of the Banks immediately prior to such
receipt, then such Bank receiving such excess payment shall purchase for cash
without recourse or warranty from the other Banks an interest in the Obligations
of the Company to such Banks in such amount as shall result in a
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proportional participation by all of the Banks in such amount; provided that if
all or any portion of such excess amount is there after recovered from such
Bank, such purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 11.06(a) and (b) shall be subject to the
express pro visions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Banks as opposed to Defaulting Banks.
11.07 Calculations; Computations. (a) The financial statements to be
furnished to the Banks pursuant hereto shall be made and prepared in accordance
with GAAP consistently applied throughout the periods involved (except as set
forth in the notes thereto or as otherwise disclosed in writing by the Company
to the Banks); provided that except as otherwise specifically provided herein,
all computations determining compliance with Section 7, including definitions
used therein, shall utilize accounting principles and policies in effect at the
time of the preparation of, and in conformity with those used to prepare, the
December 31, 1996 historical financial statements delivered to the Banks
pursuant to Section 6.10(a); provided further, that in the event that the
Accounting Standards Executive Committee of the AICPA adopts the statement of
position (substantially in the proposed form as of the Effective Date) relating
to computer software developed or obtained for internal use, and the Company's
independent auditors concur with such accounting change as it relates to the
presentation of the Company's financial statements, then compliance with Section
8 will thereafter be determined giving effect to such statement of position.
(b) All computations of interest (other than interest on Base Rate
Loans) and Fees hereunder shall be made on the actual number of days elapsed
over a year of 360 days. All computations of interest on Base Rate Loans
hereunder shall be made on the actual number of days elapsed over a year of 365
days.
11.08 Governing Law; Submission to Jurisdiction; Venue. (a) THIS
AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Agreement or any other Credit Document may be brought in
the courts of the State of New York or of the United States for the
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Southern District of New York, and, by execution and delivery of this Agreement,
the Company hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. The Company hereby further irrevocably waives any claim that any such
courts lack jurisdiction over the Company, and agrees not to plead or claim, in
any legal action or proceeding with respect to this Agreement or any other
Credit Document brought in any of the aforesaid courts, that any such court
lacks jurisdiction over the Company. The Company irrevocably consents to the
service of process in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to the Company, at its
address for notices pursuant to Section 11.03, such service to become effective
30 days after such mailing. The Company hereby irrevocably waives and agrees not
to plead or claim in any action or proceeding commenced hereunder or under any
other Credit Document that service of process was in any way invalid or
ineffective. The Company hereby represents and warrants that its chief executive
office is located at 745 Fifth Avenue, New York, New York 10151, and the Company
hereby further agrees that it shall not move its chief executive office unless
it shall give the Administrative Agent not less than 30 days' prior written
notice of its intention so to do. The Company agrees that (x) prior to moving
its chief executive office outside New York City and (y) and if for any reason
any designee, appointee and agent previously appointed pursuant to this sentence
shall cease to be available to act as such, the Company shall designate a
designee, appointee and agent or replacement designee, appointee and agent, as
the case may be, in New York City on the terms and for the purposes of this
provision satisfactory to the Administrative Agent. Nothing herein shall affect
the right of the Administrative Agent, any Bank or the holder of any Note to
serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against the Company in any other jurisdiction.
(b) The Company hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in clause (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an inconvenient forum.
11.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
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shall together constitute one and the same instrument. A complete set of
counterparts executed by all the parties hereto shall be lodged with the Company
and the Administrative Agent.
11.10 Effectiveness. This Agreement shall become effective on the
date (the "Effective Date") on which the Company, the Administrative Agent and
each of the Banks shall have signed a copy hereof (whether the same or different
copies) and shall have delivered the same to the Administrative Agent at its
Notice Office or, in the case of the Banks, shall have given to the
Administrative Agent telephonic (confirmed in writing), written or facsimile
notice (actually received) at such office that the same has been signed and
mailed to it. The Administrative Agent will give the Company and each Bank
prompt written notice of the occurrence of the Effective Date.
11.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
11.12 Amendment or Waiver. Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the Company and the Required Banks; provided that no such
change, waiver, discharge or termination shall, without the consent of each Bank
(other than a Defaulting Bank) affected thereby, (i) extend the final scheduled
maturity of any Revolving Loan (it being understood that any waiver of the
application of any prepayment of or the method of application of any prepayment
to the amortization of the Revolving Loans shall not constitute any such
extension), or reduce the rate or extend the time of payment of interest (other
than as a result of waiving the applicability of any post-default increase in
interest rates) or Fees thereon, or reduce the principal amount thereof, or
increase the Revolving Loan Commitments of any Bank over the amount thereof then
in effect (it being understood that a waiver of any Default or Event of Default
or of a mandatory repayment or reduction in the Total Revolving Loan Commitment
shall not constitute a change in the terms of any Commitment of any Bank), (ii)
release all or substantially all of the Subsidiary Guarantors from the
Subsidiary Guaranty (except as expressly provided in the Credit Documents),
(iii) amend, modify or waive any provision of this Section, or Section 1.10,
1.11, 3.04, 8.01, 10.07, 11.01, 11.02, 11.04, 11.06 or 11.07(b), (iv) reduce the
percentage specified in, or otherwise modify, the definition of, Required Banks,
or (v) consent to the assignment or transfer by any Credit Party of any of its
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rights and obligations under this Agreement or any other Credit Document except
in accordance with the terms hereof or thereof. No provision of Section 11 may
be amended without the consent of the Administrative Agent.
11.13 Survival. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 3.04, 10.07 or 11.01, shall survive the
execution and delivery of this Agreement and the making and repayment of the
Revolving Loans and the satisfaction of all other Obligations.
11.14 Domicile of Revolving Loans. Each Bank may transfer and carry
its Revolving Loans at, to or for the account of any branch office, subsidiary
or affiliate of such Bank, provided, that the Company shall not be responsible
for costs arising under Sections 1.10, 1.11 or 3.04 resulting from any such
transfer (other than a transfer pursuant to Section 1.12) to the extent such
costs would not otherwise be applicable to such Bank in the absence of such
transfer.
11.15 Confidentiality. Each of the Banks agrees that it will use its
best efforts not to disclose without the prior consent of the Company (other
than to its employees, auditors, counsel or other professional advisors, to
affiliates or to another Bank if the Bank or such Bank's holding or parent
company in its sole discretion deter mines that any such party should have
access to such information) any information with respect to the Company or any
of its Subsidiaries which is furnished pursuant to this Agreement and which is
designated by the Company to the Banks in writing as confidential, provided that
any Bank may disclose any such information (a) as has become generally available
to the public, (b) as may be required or appropriate in any report, statement or
testimony submitted to any municipal, state, provincial or Federal regulatory
body having or claiming to have jurisdiction over such Bank or to the Federal
Reserve Board or the Federal Deposit Insurance Corporation or similar
organizations (whether in the United States or elsewhere) or their successors,
(c) as may be required or appropriate in response to any summons or subpoena or
in connection with any litigation, (d) in order to comply with any law, order,
regulation or ruling applicable to such Bank and (e) to any prospective
transferee in connection with any contemplated transfer of any of the Revolving
Loans and/or Revolving Loan Commitments or any interest herein by such Bank,
provided that such prospective transferee agrees to be bound by the provisions
of this Section.
11.16 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING
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OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
* * *
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IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
Address:
745 Fifth Avenue
New York, NY 10151 K-III COMMUNICATIONS
CORPORATION
Telephone No.: (212) 745-0101
Telecopier No.: (212) 745-0199 By _____________________________
Attention: Beverly Chell, Esq. Title:
THE CHASE MANHATTAN
BANK, Individually
and as Administrative Agent
By _____________________________
Title:
BANKERS TRUST COMPANY,
Individually and as
Co-Syndication Agent
By _____________________________
Title:
BANK OF AMERICA NT&SA
By _____________________________
Title:
BANK OF MONTREAL,
CHICAGO BRANCH
By _____________________________
Title:
CAISSE NATIONALE DE
CREDIT AGRICOLE
By _____________________________
Title:
CREDIT LYONNAIS
NEW YORK BRANCH
By _____________________________
Title:
CREDIT SUISSE FIRST BOSTON
By _____________________________
Title:
By _____________________________
Title:
FLEET NATIONAL BANK
By _____________________________
Title:
LTCB TRUST COMPANY
By _____________________________
Title:
NATIONSBANK OF TEXAS, N.A.
By _____________________________
Title:
ROYAL BANK OF CANADA
By _____________________________
Title:
SOCIETE GENERALE
By _____________________________
Title:
THE BANK OF NEW YORK,
Individually and as
Co-Syndication Agent
By _____________________________
Title:
THE BANK OF NOVA SCOTIA,
Individually and as
Documentation Agent
By _____________________________
Title:
THE DAI-ICHI KANGYO BANK, LTD.,
NEW YORK BRANCH
By _____________________________
Title:
THE INDUSTRIAL BANK OF
JAPAN, LIMITED
By _____________________________
Title:
THE SANWA BANK, LIMITED,
NEW YORK BRANCH
By _____________________________
Title:
TORONTO DOMINION
(NEW YORK), INC.
By _____________________________
Title:
ANNEX I
LIST OF BANKS
Revolving Loan
Bank Commitment
- ---- ----------
The Chase Manhattan Bank $8,333,333.39
Bankers Trust Company 8,333,333.33
Bank of America NT&SA 8,333,333.33
Bank of Montreal 8,333,333.33
Caisse Nationale de 8,333,333.33
Credit Agricole
Credit Lyonnais 8,333,333.33
New York Branch
Credit Suisse First Boston 8,333,333.33
Fleet National Bank 8,333,333.33
LTCB Trust Company 8,333,333.33
NationsBank of Texas, N.A 8,333,333.33
Royal Bank of Canada 8,333,333.33
Societe Generale 8,333,333.33
ANNEX I
Page 2
The Bank of New York 8,333,333.33
The Bank of Nova Scotia 8,333,333.33
The Dai-Ichi Kangyo Bank, 8,333,333.33
Ltd., New York Branch
The Industrial Bank of 8,333,333.33
Japan, Limited
The Sanwa Bank, Limited, 8,333,333.33
New York Branch
Toronto Dominion 8,333,333.33
(New York), Inc.
ANNEX II
BANK ADDRESSES
Bank Address
- ---- -------
The Chase Manhattan Bank 270 Park Avenue
New York, New York 10017
Telephone No.: (212) 270-8945
Telecopier No.: (212) 270-4164
Attention: James R. Kuster
Bankers Trust Company One Bankers Trust Plaza
New York, New York 10006
Telephone No.: (212) 250-7199
Telecopier No.: (212) 250-7200
Attention: Jeff Bennett
Bank of America NT&SA 335 Madison Avenue
5th Floor
New York, New York 10017
Telephone No.: (212) 503-8352
Telecopier No.: (212) 503-7173
Attention: Amy Trapp
Bank of Montreal 430 Park Avenue
New York, New York 10022
Telephone No.: (212) 605-1426
Telecopier No.: (212) 605-1621
Attention: Virginia Davies
Caisse Nationale de Credit Agricole 520 Madison Avenue
New York, New York 10022
Telephone No.: (212) 418-2217
Telecopier No.: (212) 418-2228
Attention: John McCloskey
Credit Lyonnais 1301 Avenue of the Americas
New York Branch New York, New York 10019
Telephone No.: (212) 261-7863
Telecopier No.: (212) 459-3176
Attention: Nick Bellamy
Credit Suisse First Boston 11 Madison Avenue
New York, New York 10010
Telephone No.: (212) 325-9174
Telecopier No.: (212) 325-8314
Attention: Judy Smith
- ---------------------------------------------------------------------------
Fleet National Bank 75 State Street
Boston, Massachusetts 02109
Telephone No.: (617) 346-3761
Telecopier No.: (617) 346-3777
Attention: Alex Ivanov
LTCB Trust Company 165 Broadway
49th Floor
New York, New York 10006
Telephone No.: (212) 335-4453
Telecopier No.: (212) 608-2371
Attention: Hisao Inagawa
NationsBank of Texas, N.A. Communications Finance Division
901 Main Street, 64th Floor
Dallas, Texas 75202
Telephone No.: (214) 508-0517
Telecopier No.: (214) 508-9390
Attention: Tony Cacheria
Royal Bank of Canada One Financial Square
New York, New York 10005-3531
Telephone No.: (212) 428-6288
Telecopier No.: (212) 428-6460
Attention: Barbara Meijer
Societe Generale 1221 Avenue of the Americas
New York, New York 10020
Telephone No.: (212) 278-6852
Telecopier No.: (212) 278-6240
Attention: Elaine Khalil
- ---------------------------------------------------------------------------
The Bank of New York 1 Wall Street
16th Floor
New York, New York 10286
Telephone No.: (212) 635-8608
Telecopier No.: (212) 635-8595
Attention: Ted Ryan
The Bank of Nova Scotia One Liberty Plaza,
26th Floor
New York, New York 10006
Telephone No.: (212) 225-5042
Telecopier No.: (212) 225-5090
Attention: Vincent Fitzgerald
Canadian Notice Office and
Canadian Payment Office:
International Banking Division
Loan Administration and Agency Services
44 Kings Street West, 14th Floor
Toronto, Ontario
Canada M5H 1H1
Telephone No.: (416) 866-5901/2816/4089
Telecopier No.: (416) 866-5991
Attention: Wallace Yeung/Nancy
Buccat/Nancy Tong
The Dai-Ichi Kangyo Bank, Ltd., One World Trade Center
New York Branch New York, New York 10048
Telephone No.: (212) 432-6655
Telecopier No.: (212) 524-0579
Attention: Michael Wellington
The Industrial Bank of 1251 Avenue of the Americas
Japan, Limited New York, New York 10020-1104
Telephone No.: (212) 282-3517
Telecopier No.: (212) 282-4490
Attention: Patricia Carrenard
The Sanwa Bank, Limited, New York Park Avenue Plaza
Branch 55 East 52nd Street
New York, New York 10055
Telephone No.: (212) 339-6204
Telecopier No.: (212) 754-1304
Attention: Shayn March
907 Fannin Street
Houston, Texas 77010
Telephone No.: (713) 653-8242
Telecopier No.: (713) 951-9921
Attention: Jorge Garcia
with a copy to:
31 West 52nd Street
New York, New York 10019
Telephone No.: (212) 468-0731
Toronto Dominion (New York), Telecopier No.: (212) 262-1928
Inc. Attention: David Oliver
ANNEX III
SUBSIDIARIES
ANNEX IV
LIENS
ANNEX V
PART A. EXISTING DEBT
[To include existing Senior Notes and Non-Compete Notes]
PART B. EXISTING CONTINGENT OBLIGATIONS
ANNEX VI
EXISTING PREFERRED STOCK
SUBSIDIARY GUARANTY
GUARANTY, dated as of April 21, 1997, made by the undersigned (each
a "Guarantor" and together with any other entity that becomes a party hereto
pursuant to Section 26 hereof, the "Guarantors"). Except as otherwise defined
herein, terms used herein and defined in the Credit Agreement (as hereinafter
defined) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, K-III Communications Corporation (the "Company"), various
financial institutions (the "Banks"), The Bank of New York and Bankers Trust
Company, as Co-Syndication Agents, The Bank of Nova Scotia, as Documentation
Agent, and The Chase Manhattan Bank, as Administrative Agent (the
"Administrative Agent"), have entered into a Credit Agreement, dated as of April
21, 1997 (as amended, modified or supplemented from time to time, the "Credit
Agreement"), providing for the making of Revolving Loans as contemplated therein
(the Banks, the Co-Syndication Agents, the Documentation Agent and the
Administrative Agent herein called the "Bank Creditors");
WHEREAS, on the date hereof the Company is a party to certain
Interest Rate Protection Agreements with one or more Banks and/or an affiliate
of one or more Banks and in the future the Company may enter into one or more
additional Interest Rate Protection Agreements with one or more Banks and/or an
affiliate of one or more Banks (any such Bank or affiliate of a Bank party to
any such Interest Rate Protection Agreement (even if the respective Bank
subsequently ceases to be a Bank under the Credit Agreement for any reason) and
their subsequent assigns, if any, herein called an "Interest Rate Protection
Creditor", and all Interest Rate Protection Creditors, together with the Bank
Creditors, collectively herein called the "Creditors");
WHEREAS, the Company owns, directly or indirectly, 100% of the
capital stock of each Guarantor;
WHEREAS, it is a condition precedent to the making of Revolving
Loans under the Credit Agreement that each Guarantor shall have executed and
delivered this Guaranty; and
WHEREAS, each Guarantor will obtain benefits from the incurrence of
Revolving Loans by the Company under the Credit Agreement and, accordingly,
desires to execute this Guaranty in order to satisfy the conditions described in
the preceding paragraph and to induce the Banks to make Revolving Loans to the
Company;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Guarantor, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby makes the following representations and
warranties to the Creditors and hereby covenants and agrees with each Creditor
as follows:
1. Each Guarantor, jointly and severally, irrevocably and
unconditionally, guarantees (i) to the Bank Creditors the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of (x) the principal of and interest on the Revolving Loans made to (and to the
extent issued, the Notes issued by) the Company under the Credit Agreement and
(y) all other obligations (including obligations which, but for the automatic
stay under Section 362(a) of the Bankruptcy Code, would become due) and
liabilities owing by the Company to the Bank Creditors under the Credit
Agreement (including, without limitation, indemnities, Fees and interest
thereon) now existing or hereafter incurred under, arising out of or in
connection with the Credit Agreement or any other Credit Document and the due
performance and compliance with the terms of the Credit Documents by the Company
(all such principal, interest, liabilities and obligations being herein
collectively called the "Credit Agreement Obligations") and (ii) to each
Interest Rate Protection Creditor the full and prompt payment when due (whether
at the stated maturity, by acceleration or otherwise) of all obligations
(including obligations which, but for the automatic stay under Section 362(a) of
the Bankruptcy Code, would become due) and liabilities owing by the Company
under any Interest Rate Protection Agreements, whether now in existence or
hereafter arising, and the
3
due performance and compliance by the Company with all terms, conditions and
agreements contained therein (all such obligations and liabilities being herein
collectively called the "Interest Rate Protection Obligations", and together
with the Credit Agreement Obligations, collectively, the "Guaranteed
Obligations"). Each Guarantor understands, agrees and confirms that the
Creditors may enforce this Guaranty up to the full amount of the Guaranteed
Obligations against each Guarantor without proceeding against any other
Guarantor or the Company, against any security for the Guaranteed Obligations,
or under any other guaranty covering all or a portion of the Guaranteed
Obligations. All payments by each Guarantor under this Guaranty shall be made on
the same basis as payments by the Company under Sections 3.03 and 3.04 of the
Credit Agreement.
2. Additionally, each Guarantor, jointly and severally,
unconditionally and irrevocably, guarantees the payment of any and all
Guaranteed Obligations of the Company to the Creditors whether or not due or
payable by the Company upon the occurrence in respect of the Company of any of
the events specified in Section 8.05 of the Credit Agreement, and
unconditionally and irrevocably, jointly and severally, promises to pay such
Guaranteed Obligations to the Creditors, or order, on demand, in lawful money of
the United States.
3. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the indebtedness of the
Company whether executed by such Guarantor, any other Guarantor, any other
guarantor or by any other party, and the liability of each Guarantor hereunder
shall not be affected or impaired by (a) any direction as to application of
payment by the Company or by any other party, (b) any other continuing or other
guaranty, undertaking or maximum liability of a guarantor or of any other party
as to the indebtedness of the Company, (c) any payment on or in reduction of any
such other guaranty or undertaking, (d) any dissolution, termination or
increase, decrease or change in personnel by the Company or (e) any payment made
to any Creditor on the indebtedness which any Creditor repays the Company
pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and each Guarantor waives any
right to the deferral or modification of its obligations hereunder by reason of
any such proceeding.
4. The obligations of each Guarantor hereunder are independent of
the obligations of any other Guarantor, any other guarantor or the Company, and
a separate action or actions may be brought and prosecuted against each
Guarantor
4
whether or not action is brought against any other Guarantor, any other
guarantor or the Company and whether or not any other Guarantor, any other
guarantor or the Company be joined in any such action or actions. Each Guarantor
waives, to the fullest extent permitted by law, the benefit of any statute of
limitations affecting its liability hereunder or the enforcement thereof. Any
payment by the Company or other circumstance which operates to toll any statute
of limitations as to the Company shall operate to toll the statute of
limitations as to each Guarantor.
5. Each Guarantor hereby waives notice of acceptance of this
Guaranty and notice of any liability to which it may apply, and waives
promptness, diligence, presentment, demand of payment, protest, notice of
dishonor or nonpayment of any such liabilities, suit or taking of other action
by the Administrative Agent or any other Creditor against, and any other notice
to, any party liable thereon (including such Guarantor or any other guarantor).
6. Any Creditor may at any time and from time to time without the
consent of, or notice to, any Guarantor, without incurring responsibility to
such Guarantor, without impairing or releasing the obligations of such Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
(a) change the manner, place or terms of payment of, and/or change
or extend the time of payment of, renew or alter, any of the Guaranteed
Obligations, any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the guaranty herein made shall apply to
the Guaranteed Obligations as so changed, extended, renewed or altered;
(b) sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any
time pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
there against;
(c) exercise or refrain from exercising any rights against the
Company or others or otherwise act or refrain from acting;
(d) settle or compromise any of the Guaranteed Obligations, any
5
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Company to creditors of such
Company;
(e) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Company to the Creditors regardless of
what liabilities of the Company remain unpaid;
(f) consent to or waive any breach of, or any act, omission or
default under, any of the Interest Rate Protection Agreements, the Credit
Documents or any of the instruments or agreements referred to therein, or
otherwise amend, modify or supplement any of the Interest Rate Protection
Agreements, the Credit Documents or any of such other instruments or agree
ments; and/or
(g) act or fail to act in any manner referred to in this Guaranty
which may deprive such Guarantor of its right to subrogation against the
Company to recover full indemnity for any payments made pursuant to this
Guaranty.
7. No invalidity, irregularity or unenforceability of all or any
part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guaranty, and this Guaranty shall be primary,
absolute and unconditional notwithstanding the occurrence of any event or the
existence of any other circumstances which might constitute a legal or equitable
discharge of a surety or guarantor except payment in full of the Guaranteed
Obligations.
8. This Guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Creditor in exercising any right, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which any Creditor would otherwise have. No notice to or demand on any Guarantor
in any case shall entitle such Guarantor to any other further notice or demand
in similar or other circumstances or
6
constitute a waiver of the rights of any Creditor to any other or further action
in any circum stances without notice or demand. It is not necessary for any
Creditor to inquire into the capacity or powers of the Company or any of their
Subsidiaries or the officers, directors, partners or agents acting or purporting
to act on their behalf, and any indebtedness made or created in reliance upon
the professed exercise of such powers shall be guaranteed hereunder.
9. Any indebtedness of the Company now or hereafter held by any
Guarantor is hereby subordinated to the indebtedness of the Company to the
Creditors; and such indebtedness of the Company to any Guarantor, if the
Administrative Agent, after an Event of Default has occurred, so requests, shall
be collected, enforced and received by such Guarantor as trustee for the
Creditors and be paid over to the Creditors on account of the indebtedness of
the Company to the Creditors, but without affecting or impairing in any manner
the liability of such Guarantor under the other provisions of this Guaranty.
Prior to the transfer by any Guarantor of any note or negotiable instrument
evidencing any indebtedness of the Company to such Guarantor, such Guarantor
shall mark such note or negotiable instrument with a legend that the same is
subject to this subordination. Without limiting the generality of the foregoing,
each Guarantor hereby agrees with the Creditors that it will not exercise any
right of subrogation which it may at any time otherwise have as a result of this
Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or
otherwise) until the Total Revolving Loan Commitment has terminated and all
Guaranteed Obligations have been irrevocably paid in full in cash.
10. (a) Each Guarantor waives any right (except as shall be required
by applicable statute and cannot be waived) to require the Creditors to (A)
proceed against the Company, any other Guarantor, any other guarantor or any
other party, (B) proceed against or exhaust any security held from the Company,
any other Guarantor, any other guarantor or any other party or (C) pursue any
other remedy in the Creditors' power whatsoever. Each Guarantor waives any
defense based on or arising out of any defense of the Company, any other
Guarantor, any other guarantor or any other party other than payment in full of
the Guaranteed Obligations, including without limitation any defense based on or
arising out of the disability of the Company, any other Guarantor, any other
guarantor or any other party, or the unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Company other than payment in full of the Guaranteed
Obligations. The Creditors may, at their election, foreclose on any security
held by the Administrative Agent or the other Creditors by one or more
7
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Creditors may have against the
Company or any other party, or any security, without affecting or impairing in
any way the liability of any Guarantor hereunder except to the extent the
Guaranteed Obligations have been paid in full. Each Guarantor waives any defense
arising out of any such election by the Creditors, even though such election
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of such Guarantor against the Company or any other party
or any security.
(b) Each Guarantor waives all presentments, demands for performance,
protests and notices, including without limitation notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. Each Guarantor assumes all responsibility for being and keeping
itself informed of the Company's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that the Creditors shall have no duty
to advise any Guarantor of information known to them regarding such
circumstances or risks.
11. The Creditors agree that this Guaranty may be enforced only by
the action of the Administrative Agent acting upon the instructions of the
Required Banks and that no Creditor shall have any right individually to seek to
enforce or to enforce this Guaranty, it being understood and agreed that such
rights and remedies may be exercised by the Administrative Agent for the benefit
of the Creditors upon the terms of this Guaranty. The Creditors further agree
that this Guaranty may not be enforced against any director, officer, employee
or stockholder of any Guarantor.
12. In order to induce the Banks to make Revolving Loans pursuant to
the Credit Agreement, and in order to induce the Interest Rate Protection
Creditors to execute, deliver and perform the Interest Rate Protection
Agreements, each Guarantor represents, warrants and covenants that:
(a) Such Guarantor and each of its Restricted Subsidiaries (i) is a
duly organized and validly existing corporation under the laws of the
jurisdiction of its incorporation and has the corporate power and
authority to own its property and assets and to transact the business in
which it is engaged and presently
8
proposes to engage (ii) is in good standing under the laws of the
jurisdiction of its organization and (iii) is duly qualified and is
authorized to do business and is in good standing in all jurisdictions
where it is required to be so qualified, except, in the case of clauses
(ii) and (iii) above, for such failures to be in good standing and
failures to be so qualified which, in the aggregate, would not have a
material adverse effect on the condition (financial or otherwise),
operations, assets, liabilities or prospects of the Company and its
Restricted Subsidiaries taken as a whole.
(b) Such Guarantor has the corporate power and authority to execute,
deliver and carry out the terms and provisions of this Guaranty and has
taken all necessary corporate action to authorize the execution, delivery
and performance by it of this Guaranty. Such Guarantor has duly executed
and delivered this Guaranty, and this Guaranty constitutes the legal,
valid and binding obligation of such Guarantor enforceable in accordance
with its terms, except to the extent that the enforceability hereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at
law).
(c) Neither the execution, delivery or performance by such Guarantor
of this Guaranty, nor compliance by it with the terms and provisions
hereof, (i) will contravene in any material respect any applicable
provision of any law, statute, rule or regulation or any order, writ,
injunction or decree of any court or governmental instrumentality, (ii)
will conflict or be inconsistent with or result in any breach of any of
the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of the property or assets of such
Guarantor or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement, loan agreement or
other material agreement or instrument to which such Guarantor or any of
its Subsidiaries is a party or by which it or any of its property or
assets is bound or to which it may be subject or (iii) will violate any
provision of the Certificate of Incorporation or By-Laws of such Guarantor
or any of its Subsi diaries.
(d) No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exemption by,
any
9
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with, (i) the
execution, delivery and performance of this Guaranty, or (ii) the
legality, validity, binding effect or enforceability of this Guaranty,
except those which have been obtained or made.
13. Each Guarantor covenants and agrees that on and after the date
hereof and until the termination of the Total Revolving Loan Commitment and all
Interest Rate Protection Agreements and when no Note remains outstanding and all
Guaranteed Obligations have been paid in full, such Guarantor shall take, or
will refrain from taking, as the case may be, all actions that are necessary to
be taken or not taken so that no violation of any provision, covenant or
agreement contained in Section 6 or 7 of the Credit Agreement, and so that no
Event of Default, is caused by the actions of such Guarantor or any of its
Subsidiaries.
14. The Guarantors hereby jointly and severally agree to pay all
reasonable out-of-pocket costs and expenses (x) of each Creditor in connection
with the enforcement of this Guaranty and, after an Event of Default shall have
occurred and be continuing, the protection of such Creditor's rights hereunder
and (y) of the Administrative Agent in connection with any amendment, waiver or
consent relating hereto (including, without limitation, the reasonable fees and
disbursements of counsel (including in-house counsel) employed by any of the
Creditors or by the Administrative Agent, as the case may be).
15. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Creditors and their
successors and assigns.
16. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated except with the written consent of the Required
Banks (or to the extent required by Section 11.12 of the Credit Agreement, with
the written consent of each Bank) and each Guarantor affected thereby (it being
understood that the addition or release of any Guarantor hereunder shall not
constitute a change, waiver, discharge or termination affecting any Guarantor
other than the Guarantor so added or released).
17. Each Guarantor acknowledges that an executed (or conformed) copy
of each of the Credit Documents has been made available to its principal
executive
10
officers and such officers are familiar with the contents thereof.
18. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default (such term to
mean and include any "Event of Default" as defined in the Credit Agreement or
any payment default under any Interest Rate Protection Agreement continuing
after any applicable grace period), each Creditor is hereby authorized at any
time or from time to time, without notice to any Guarantor or to any other
Person, any such notice being expressly waived, to set off and to appropriate
and apply any and all deposits (general or special) and any other indebtedness
at any time held or owing by such Creditor to or for the credit or the account
of such Guarantor, against and on account of the obligations and liabilities of
such Guarantor to such Creditor under this Guaranty, irrespective of whether or
not such Creditor shall have made any demand hereunder and although said
obligations, liabilities, deposits or claims, or any of them, shall be
contingent or unmatured.
19. All notices, requests, demands or other communications pursuant
hereto shall be deemed to have been duly given or made when delivered to the
Person to which such notice, request, demand or other communication is required
or permitted to be given or made under this Guaranty, addressed to such party at
(i) in the case of any Bank Creditor, as provided in the Credit Agreement, (ii)
in the case of any Guarantor, at its address set forth opposite its signature
below and (iii) in the case of any Interest Rate Protection Creditor, at such
address as such Interest Rate Protection Creditor shall have specified in
writing to the Guarantors; or in any case at such other address as any of the
Persons listed above may hereafter notify the others in writing.
20. If claim is ever made upon any Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (a) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (b) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the Company), then and in such event each
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon such Guarantor, notwithstanding any revocation hereof or
of any other instrument evidenc ing any liability of the Company, and such
Guarantor shall be and remain liable to the
11
aforesaid payees hereunder for the amount so repaid or recovered to the same
extent as if such amount had never originally been received by any such payee.
21. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE CREDITORS
AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Guaranty or any other Credit Document may be brought in the
courts of the State of New York or of the United States of America for the
Southern District of New York, and, by execution and delivery of this Guaranty,
each Guarantor hereby accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts and
hereby irrevocably waives any right it may have to object to the laying of venue
of any such action or proceeding in the aforesaid courts and hereby further
irrevocably waives and agrees not to plead or claim that any such action or
proceeding has been brought in an inconvenient forum. Each Guarantor irrevocably
consents to the service of process in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
each Guarantor at its address set forth opposite its signature below; such
service to become effective 30 days after such mailing. Each Guarantor hereby
irrevocably waives and agrees not to plead or claim in any action or proceeding
commenced hereunder or under any other Credit Document that service of process
was in any way invalid or ineffective. Nothing herein shall affect the right of
any of the Creditors to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against any Guarantor in any
other jurisdiction.
22. In the event that (x) all of the capital stock of one or more
Guarantors is sold or otherwise disposed of or liquidated in compliance with the
requirements of Section 7.02 of the Credit Agreement (or such sale or other
disposition has been approved in writing by the Required Banks (or all Banks if
required by Section 11.12 of the Credit Agreement)) and the proceeds of such
sale, disposition or liquidation are applied in accordance with the provisions
of the Credit Agreement, to the extent applicable, or (y) the Company designates
any Guarantor which is a Partially-Owned Restricted Subsidiary as an Excluded
Domestic Restricted Subsidiary by making a Non-Guarantor Designation with
respect to such Guarantor in accordance with the terms of the Credit Agreement,
such Guarantor shall be released from this Guaranty and this Guaranty shall, as
to each such Guarantor or Guarantors, terminate, and have no further force or
effect (it being understood and agreed that the sale of any Person that owns,
directly or indirectly, the capital stock of any Guarantor shall be deemed to be
a sale of such Guarantor for the purposes of this Section 22).
12
23. This Guaranty may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Guarantors and the Administrative
Agent.
24. EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS GUARANTY, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
25. All payments made by any Guarantor hereunder will be made
without setoff, counterclaim or other defense.
26. At each time that (x) each Restricted Subsidiary of the Company
is formed or acquired after the Initial Borrowing Date except, with respect to
any newly formed or acquired Partially-Owned Restricted Subsidiary, to the
extent the Company shall have made a Non-Guarantor Designation as to such
Partially-Owned Restricted Subsidiary or (y) any Excluded Domestic Restricted
Subsidiary is designated by the Company as a Subsidiary Guarantor, in each case,
in accordance with the terms of the Credit Agreement, it shall (unless otherwise
agreed in writing by the Required Banks, or to the extent required by Section
11.12 of the Credit Agreement, by all of the Banks) upon execution of a
counterpart of this Guaranty or of a Subsidiary Assumption Agreement become a
Guarantor for all purposes of this Guaranty.
* * * *
13
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
Address for each Guarantor
- --------------------------
745 Fifth Avenue
New York, New York 10151
Attention: Beverly Chell, Esq.
Telephone No.: (212) 745-0101 ARGUS PUBLISHERS CORPORATION
AMERICAN HEAT VIDEO PRODUCTIONS, INC.
Telecopier No.: (212) 745-0199 ASTN, INC.
A WEP COMPANY
BACON'S INFORMATION, INC.
BANKERS CONSULTING COMPANY
CHANNEL ONE COMMUNICATIONS
CORPORATION
DAILY RACING FORM, INC.
DATA BOOK, INC.
DRF FINANCE, INC.
THE ELECTRONICS SOURCE BOOK, INC.
EXCELLENCE IN TRAINING CORPORATION
FUNK & WAGNALLS YEARBOOK CORP.
GARETH STEVENS, INC.
HAAS PUBLISHING COMPANIES, INC.
HEALTH & SCIENCES NETWORK, INC.
IDTN LEASING CORPORATION
INDUSTRIAL TRAINING SYSTEMS
CORPORATION
INTERMODAL PUBLISHING COMPANY, LTD.
INTERTEC MARKET REPORTS, INC.
INTERTEC PRESENTATIONS, INC.
INTERTEC PUBLISHING CORPORATION
K-III DIRECTORY CORPORATION
K-III HOLDINGS CORPORATION III
K-III HPC, INC.
K-III KG CORPORATION - MASSACHUSETTS
K-III MAGAZINE CORPORATION
K-III MAGAZINE FINANCE CORPORATION
K-III PRIME CORPORATION
K-III REFERENCE CORPORATION
THE KATHARINE GIBBS CORPORATION -
MELVILLE
THE KATHARINE GIBBS CORPORATION -
NEW YORK
THE KATHARINE GIBBS SCHOOL OF
MONTCLAIR, INC.
THE KATHARINE GIBBS SCHOOL OF
NORWALK, INC.
THE KATHARINE GIBBS SCHOOL OF
PISCATAWAY, INC.
THE KATHARINE GIBBS SCHOOL OF
PROVIDENCE, INC.
THE KATHARINE GIBBS SCHOOLS, INC.
KRAMES COMMUNICATIONS INCORPORATED
LAW ENFORCEMENT TELEVISION NETWORK,
INC. (Texas)
LAW ENFORCEMENT TELEVISION NETWORK,
INC. (Delaware)
LIFETIME LEARNING SYSTEMS, INC.
LOCKERT JACKSON & ASSOCIATES, INC.
MCMULLEN ARGUS PUBLISHING, INC.
MH WEST,INC.
MUSICAL AMERICAN PUBLISHING, INC.
NELSON INFORMATION, INC.
NEWBRIDGE COMMUNICATIONS, INC.
PARAMOUNT PUBLISHING, INC.
PJS PUBLICATIONS, INC.
QWIZ ACQUISITION CORPORATION
R.E.R. PUBLISHING CORPORATION
STAGEBILL, INC.
STRAIGHT DOWN, INC.
SYMBOLS OF EXCELLENCE PUBLISHERS, INC.
TEL-A-TRAIN, INC.
TI-IN ACQUISITION CORPORATION
TUNNELL PUBLICATIONS, INC.
WEEKLY READER CORPORATION
WESTCOTT COMMUNICATIONS, INC.
WESTCOTT COMMUNICATIONS MICHIGAN,
INC.
WESTCOTT ECI, INC.
WESTERN EMPIRE PUBLICATIONS, INC.
By______________________________________
Title
Accepted and Agreed to:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By____________________________
Title:
CONTRIBUTION AGREEMENT
CONTRIBUTION AGREEMENT, dated as of April 21, 1997, among each of
the Subsidiary Guarantors (as defined in the Credit Agreement referred to below)
of K-III Communications Corporation (the "Company") listed on the signature
pages hereto (each a "Guarantor" and together with any other entity that becomes
a party hereto pursuant to Section 11 hereof, the "Guarantors"). As used herein,
the term "Contributor" shall mean each of the Guarantors required to make any
payment to any other Guarantor pursuant to Section 1 of this Contribution
Agreement. Except as otherwise defined herein, capitalized terms used herein and
not otherwise defined shall have the meaning assigned to those terms in the
Credit Agreement (as hereinafter defined).
W I T N E S S E T H :
WHEREAS, the Company, various lending institutions from time to time
party thereto (the "Banks"), The Bank of New York and Bankers Trust Company, as
Co-Syndication Agents, The Bank of Nova Scotia, as Documentation Agent, and The
Chase Manhattan Bank, as Administrative Agent, have entered into a Credit
Agreement, dated as of April 21, 1997 (as amended, modified or supplemented from
time to time, the "Credit Agreement"), providing for the making of Revolving
Loans as contemplated therein;
WHEREAS, it is a condition precedent to the making of Revolving
Loans under the Credit Agreement that each Guarantor shall have executed and
delivered the Subsidiary Guaranty;
WHEREAS, each Guarantor will obtain benefits from the incurrence of
Revolving Loans by the Company under the Credit Agreement and, accordingly, each
Guarantor has executed and delivered the Subsidiary Guaranty in order to satisfy
the condition precedent described in the preceding paragraph and to induce the
Banks to
make Revolving Loans to the Company;
WHEREAS, pursuant to the Subsidiary Guaranty, each of the Guarantors
has agreed unconditionally and irrevocably, and jointly and severally, to
guaranty as primary obligor and not merely as surety the Guaranteed Obligations
(as defined in the Subsidiary Guaranty); and
WHEREAS, the Guarantors wish to enter into this Contribution
Agreement to effect an equitable sharing of the Guaranteed Obligations;
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. CONTRIBUTION. At any time a payment in respect of the Guaranteed
Obligations is made under the Subsidiary Guaranty, the right of contribution, if
any, of each Guarantor against each Contributor shall be determined as provided
in the immediately following sentence, with the right of contribution of each
Guarantor to be revised and restated as of each date on which a payment (a
"Relevant Payment") is made on the Guaranteed Obligations under the Subsidiary
Guaranty. At any time that a Relevant Payment is made by a Guarantor that
results in the aggregate payments made by such Guarantor in respect of the
Guaranteed Obligations to and including the date of the Relevant Payment
exceeding such Guarantor's Contribution Percentage (as hereinafter defined) of
the aggregate payments made by all Guarantors in respect of the Guaranteed
Obligations to and including the date of the Relevant Payment (such excess, the
"Aggregate Excess Amount"), each such Guarantor shall have a right of
contribution against each Contributor who has made payments in respect of the
Guaranteed Obligations to and including the date of the Relevant Payment in an
aggregate amount less than such Contributor's Contribution Percentage of the
aggregate payments made to and including the date of the Relevant Payment by all
Guarantors in respect of the Guaranteed Obligations (the aggregate amount of
such deficit, the "Aggregate Deficit Amount") in an amount equal to (x) a
fraction the numerator of which is the Aggregate Excess Amount of such Guarantor
and the denominator of which is the Aggregate Excess Amount of all Guarantors
multiplied by (y) the Aggregate Deficit Amount of such Contributor. A
Guarantor's right of contribution, if any, pursuant to the preceding sentences
shall arise at the time of each computation, subject to adjustment to the time
of any subsequent computation; provided, that no Guarantor may take any action
to enforce such right until the Guaranteed Obligations have been paid in full
and the Total Revolving Loan Commitment has been terminated, it being expressly
recognized and agreed by all parties hereto that any Guarantor's right of
contribution arising pursuant to this
2
Contribution Agreement against any Contributor shall be expressly junior and
subordinate to such Contributor's obligations and liabilities in respect of the
Guaranteed Obligations and any other obligations owing under the Subsidiary
Guaranty. As used in this Agreement, (i) each Contributor's "Contribution
Percentage" shall mean the percentage obtained by dividing (x) the Adjusted Net
Worth of such Contributor by (y) the aggregate Adjusted Net Worth of all
Guarantors; (ii) the "Adjusted Net Worth" of each Guarantor shall mean the
greater of (x) the Net Worth of such Guarantor or (y) zero; and (iii) the "Net
Worth" of each Guarantor shall mean the amount by which the fair salable value
of such Guarantor's assets on the Initial Borrowing Date exceeds its existing
debts and other liabilities (including contingent liabilities, but without
giving effect to (1) any Guaranteed Obligations arising under the Subsidiary
Guaranty, (2) the obligations of such Guarantor in respect of the Additional
Facility Documents, (3) any obligations arising under Article 10 of the
respective indentures governing the terms of the Senior Notes and (4) any
obligations of such Guarantor in respect of the Company's other Indebtedness for
borrowed money), in each case after giving effect to the transactions occurring
on the Initial Borrowing Date.
2. NO OTHER CONTRIBUTION OR SUBROGATION RIGHTS. All parties hereto
recognize and agree that, except for any right of contribution arising pursuant
to Section 1, each Guarantor who makes any payment in respect of the Guaranteed
Obligations shall have no right of contribution or subrogation against any other
Guarantor in respect of such payment, any such right of contribution or
subrogation arising under law or otherwise being expressly waived by all
Guarantors.
3. CONTRIBUTION RIGHT AS AN ASSET. Each of the Guarantors recognizes
and acknowledges that the rights to contribution arising hereunder shall
constitute an asset in favor of the party entitled to such contribution. In this
connection, each Guarantor has the right to waive its contribution right against
any other Guarantor to the extent that after giving effect to such waiver such
Guarantor would remain solvent, in the determination of the Required Banks.
4. AMENDMENT OR WAIVER. Any provision of this Contribution Agreement
may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed by the parties hereto and consented to by the Required Banks.
5. BENEFIT OF AGREEMENT. The provisions of this Contribution
Agreement shall be binding upon and inure to the benefit of the parties hereto
and
3
their respective successors and assigns. To the extent any such successor shall
be a successor to all or part of the assets of a Guarantor, such successor shall
also constitute a Guarantor, with a Contribution Percentage equal to the
Contribution Percentage of the predecessor corporation or as otherwise consented
to by the Required Banks.
6. PRESERVATION OF RIGHTS. This Contribution Agreement shall not
limit any right which any Guarantor may have against any other Person which is
not a party hereto.
7. TERMINATION. This Contribution Agreement, as it may be amended,
supplemented or otherwise modified from time to time, shall remain in effect and
shall not be terminated as to any Guaranteed Obligation until such Guaranteed
Obligation has been discharged or otherwise satisfied in accordance with the
laws of the State of New York.
8. GOVERNING LAW. THIS CONTRIBUTION AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
9. COUNTERPARTS. This Contribution Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
10. EFFECTIVENESS. This Contribution Agreement shall become
effective upon execution hereof by each such party and delivery of executed
counterparts hereof by them to the Administrative Agent.
11. ADDITIONAL GUARANTORS. At each time that (x) each Restricted
Subsidiary of the Company is formed or acquired after the Initial Borrowing Date
except, with respect to any newly formed or acquired Partially-Owned Restricted
Subsidiary, to the extent the Company shall have made a Non-Guarantor
Designation as to such Partially-Owned Restricted Subsidiary or (y) any Excluded
Domestic Restricted Subsidiary is designated by the Company as a Subsidiary
Guarantor, in each case, in accordance with the terms of the Credit Agreement,
it shall upon execution of a counterpart hereof or of a Subsidiary Assumption
Agreement become a Guarantor for all purposes of this Contribution Agreement.
4
* * * *
5
IN WITNESS WHEREOF, the parties hereto have caused this Contribution
Agreement to be duly executed by their respective authorized officers as of the
date first above written.
ARGUS PUBLISHERS CORPORATION
AMERICAN HEAT VIDEO PRODUCTIONS, INC.
ASTN, INC.
A WEP COMPANY
BACON'S INFORMATION, INC.
BANKERS CONSULTING COMPANY
CHANNEL ONE COMMUNICATIONS
CORPORATION
DAILY RACING FORM, INC.
DATA BOOK, INC.
DRF FINANCE, INC.
THE ELECTRONICS SOURCE BOOK, INC.
EXCELLENCE IN TRAINING CORPORATION
FUNK & WAGNALLS YEARBOOK CORP.
GARETH STEVENS, INC.
HAAS PUBLISHING COMPANIES, INC.
HEALTH & SCIENCES NETWORK, INC.
IDTN LEASING CORPORATION
INDUSTRIAL TRAINING SYSTEMS
CORPORATION
INTERMODAL PUBLISHING COMPANY, LTD.
INTERTEC MARKET REPORTS, INC.
INTERTEC PRESENTATIONS, INC.
INTERTEC PUBLISHING CORPORATION
K-III DIRECTORY CORPORATION
K-III HOLDINGS CORPORATION III
K-III HPC, INC.
K-III KG CORPORATION - MASSACHUSETTS
K-III MAGAZINE CORPORATION
K-III MAGAZINE FINANCE CORPORATION
K-III PRIME CORPORATION
K-III REFERENCE CORPORATION
THE KATHARINE GIBBS CORPORATION -
MELVILLE
THE KATHARINE GIBBS CORPORATION -
NEW YORK
THE KATHARINE GIBBS SCHOOL OF
MONTCLAIR, INC.
THE KATHARINE GIBBS SCHOOL OF
NORWALK, INC.
THE KATHARINE GIBBS SCHOOL OF
PISCATAWAY, INC.
THE KATHARINE GIBBS SCHOOL OF
PROVIDENCE, INC.
THE KATHARINE GIBBS SCHOOLS, INC.
KRAMES COMMUNICATIONS INCORPORATED
LAW ENFORCEMENT TELEVISION NETWORK,
INC. (Texas)
LAW ENFORCEMENT TELEVISION NETWORK,
INC. (Delaware)
LIFETIME LEARNING SYSTEMS, INC.
LOCKERT JACKSON & ASSOCIATES, INC.
MCMULLEN ARGUS PUBLISHING, INC.
MH WEST,INC.
MUSICAL AMERICAN PUBLISHING, INC.
NELSON INFORMATION, INC.
NEWBRIDGE COMMUNICATIONS, INC.
PARAMOUNT PUBLISHING, INC.
PJS PUBLICATIONS, INC.
QWIZ ACQUISITION CORPORATION
R.E.R. PUBLISHING CORPORATION
STAGEBILL, INC.
STRAIGHT DOWN, INC.
SYMBOLS OF EXCELLENCE PUBLISHERS, INC.
TEL-A-TRAIN, INC.
TI-IN ACQUISITION CORPORATION
TUNNELL PUBLICATIONS, INC.
WEEKLY READER CORPORATION
WESTCOTT COMMUNICATIONS, INC.
WESTCOTT COMMUNICATIONS MICHIGAN,
INC.
WESTCOTT ECI, INC.
WESTERN EMPIRE PUBLICATIONS, INC.
By__________________________
Title: