Exhibit 10.5
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CREDIT AGREEMENT
among
PRIMEDIA INC.,
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 March 11, 1999
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$150,000,000
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CHASE SECURITIES INC.,
as Lead Arranger and Book Manager
TABLE OF CONTENTS
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PAGE
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...........................................................................................2
1.06 Conversions........................................................................................3
1.07 Pro Rata Borrowings................................................................................3
1.08 Interest...........................................................................................3
1.09 Interest Periods...................................................................................4
1.10 Increased Costs, Illegality, etc...................................................................5
1.11 Compensation.......................................................................................7
1.12 Change of Lending Office...........................................................................8
SECTION 2. Fees; Commitments.................................................................................8
2.01 Fees...............................................................................................8
2.02 Voluntary Reduction of Commitments.................................................................8
2.03 Termination of Commitments.........................................................................9
SECTION 3. Payments..........................................................................................9
3.01 Voluntary Prepayments..............................................................................9
3.02 Mandatory Repayments...............................................................................9
3.03 Method and Place of Payment.......................................................................10
3.04 Net Payments......................................................................................10
SECTION 4. Conditions Precedent.............................................................................11
4.01 Execution of Agreement............................................................................11
4.02 No Default; Representations and Warranties........................................................11
4.03 Opinions of Counsel...............................................................................12
4.04 Corporate Proceedings.............................................................................12
4.05 Subsidiary Guaranty...............................................................................12
4.06 Notice of Borrowing...............................................................................12
4.07 Payment of Fees, etc..............................................................................12
4.08 Contribution Agreement............................................................................12
4.09 Existing Indebtedness Agreements..................................................................13
4.10 The Amended and Restated Credit Agreement.........................................................13
SECTION 5. Representations, Warranties and Agreements.......................................................13
5.01 Corporate Status..................................................................................13
5.02 Corporate Power and Authority.....................................................................13
5.03 No Violation......................................................................................14
5.04 Litigation........................................................................................14
5.05 Use of Proceeds; Margin Regulations...............................................................14
5.06 Governmental Approvals............................................................................14
5.07 Investment Company Act............................................................................15
5.08 Public Utility Holding Company Act................................................................15
5.09 True and Complete Disclosure......................................................................15
5.10 Financial Statements; Financial Condition.........................................................15
5.11 Tax Returns and Payments..........................................................................16
5.12 Compliance with ERISA.............................................................................16
5.13 Subsidiaries......................................................................................17
5.14 Intellectual Property.............................................................................17
5.15 Compliance with Statutes, etc.....................................................................18
SECTION 6. Affirmative Covenants............................................................................18
6.01 Information Covenants.............................................................................18
6.02 Books, Records and Inspections....................................................................20
6.03 Payment of Taxes..................................................................................20
6.04 Corporate Franchises..............................................................................20
6.05 Compliance with Statutes, etc.....................................................................20
6.06 ERISA.............................................................................................21
6.07 End of Fiscal Years; Fiscal Quarters..............................................................21
6.08 Use of Proceeds...................................................................................21
6.09 Ownership of Subsidiaries.........................................................................21
6.10 Maintenance of Corporate Separateness.............................................................21
SECTION 7. Negative Covenants..............................................................................22
7.01 Changes in Business...............................................................................22
7.02 Consolidation, Merger, Sale or Purchase of Assets, etc............................................22
7.03 Liens.............................................................................................25
7.04 Indebtedness......................................................................................26
7.05 Advances, Investments and Loans...................................................................28
7.06 Contingent Obligations............................................................................30
7.07 Dividends, etc....................................................................................30
7.08 Transactions with Affiliates......................................................................32
7.09 Fixed Charge Coverage Ratio.......................................................................33
7.10 Interest Coverage Ratio...........................................................................33
7.11 Leverage Ratio....................................................................................33
7.12 Issuance of Stock.................................................................................33
7.13 Modifications of Certain Agreements, etc..........................................................33
7.14 Limitation on the Creation of Subsidiaries; Redesignation of Partially-Owned Restricted
Subsidiaries....................................................................................34
SECTION 8. Events of Default...............................................................................35
8.01 Payments..........................................................................................35
8.02 Representations, etc..............................................................................35
8.03 Covenants.........................................................................................35
8.04 Default Under Other Agreements....................................................................35
8.05 Bankruptcy, etc...................................................................................36
8.06 ERISA.............................................................................................36
8.07 Subsidiary Guaranty...............................................................................37
8.08 Judgments.........................................................................................37
8.09 Ownership.........................................................................................37
SECTION 9. Definitions.....................................................................................38
SECTION 10. The Administrative Agent.......................................................................58
10.01 Appointment......................................................................................58
10.02 Delegation of Duties.............................................................................58
10.03 Exculpatory Provisions...........................................................................58
10.04 Reliance by Administrative Agent.................................................................59
10.05 Notice of Default................................................................................59
10.06 Non-Reliance on Administrative Agent and Other Banks.............................................60
10.07 Indemnification..................................................................................60
10.08 Administrative Agent in Its Individual Capacity..................................................61
10.09 Holders..........................................................................................61
10.10 Resignation of the Administrative Agent; Successor Agent.........................................61
SECTION 11. Miscellaneous..................................................................................61
11.01 Payment of Expenses, etc..........................................................................61
11.02 Right of Setoff...................................................................................62
11.03 Notices...........................................................................................62
11.04 Benefit of Agreement..............................................................................63
11.05 No Waiver; Remedies Cumulative....................................................................64
11.06 Payments Pro Rata.................................................................................64
11.07 Calculations; Computations........................................................................65
11.08 Governing Law; Submission to Jurisdiction; Venue..................................................65
11.09 Counterparts......................................................................................66
11.10 Effectiveness.....................................................................................66
11.11 Headings Descriptive..............................................................................67
11.12 Amendment or Waiver...............................................................................67
11.13 Survival..........................................................................................67
11.14 Domicile of Loans.................................................................................67
11.15 Confidentiality...................................................................................67
11.16 Waiver of Jury Trial..............................................................................68
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 LLP
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
CREDIT AGREEMENT, dated as of March 11, 1999, among PRIMEDIA INC., 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 and prior to the Final Maturity Date, to make a revolving
loan or revolving loans (each a "Loan" and, collectively, the "Loans") to the
Company, which Loans (i) shall, at the option of the Company, be Base Rate Loans
or Eurodollar Loans, PROVIDED that all Loans made as part of the same Borrowing
shall, unless otherwise specifically provided herein, consist of Loans of the
same Type, (ii) may be repaid and reborrowed in accordance with the provisions
hereof, (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 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 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 which is required to make
Loans pursuant to the Borrowing specified in the respective Notice of Borrowing
written notice (or telephonic notice promptly confirmed in writing) of each
proposed Borrowing, of such Bank's proportionate share thereof, if any, and of
the other matters covered by the Notice of Borrowing.
(a) 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 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 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 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
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principal amount of the 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 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 Loans into a Borrowing or
Borrowings of another Type of Loan; PROVIDED that (i) no 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 Loans to be so converted, the Type of 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 Loans.
1.07 PRO RATA BORROWINGS. All Borrowings of 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 Loans hereunder and that each Bank
shall be obligated to make the Loans to be made by it hereunder, regardless of
the failure of any other Bank to make its 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 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
Applicable Margin for Base Rate Loans; PROVIDED
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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 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 or twelve 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 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
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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 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 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
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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 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
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assets as a consequence of its commitments or obligations hereunder to a level
below that which such Bank could 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 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 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 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 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, 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
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required by such Bank to fund its Eurodollar Loans but excluding loss of
anticipated profit with respect to any 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 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 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 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 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 with a Revolving Loan Commitment 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).
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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 Agent
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, (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 immediately before giving effect to such reduction.
2.03 TERMINATION OF COMMITMENTS. 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.
SECTION 3. PAYMENTS.
3.01 VOLUNTARY PREPAYMENTS. The Company shall have the right to prepay the
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 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 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
Loans made pursuant to a Borrowing shall be applied PRO RATA among such Loans;
PROVIDED that at the Company's election in connection with any prepayment of
Loans pursuant to this Section 3.01, such prepayment shall not be applied to any
Loans of a Defaulting Bank.
3.02 MANDATORY REPAYMENTS. (a) If on any date the aggregate outstanding
principal amount of 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 Loans of Non-Defaulting Banks in an aggregate amount equal to such
excess.
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(b) If on any date the aggregate outstanding principal amount of Loans made
by any Defaulting Bank exceeds the Revolving Loan Commitment of such Defaulting
Bank, the Company shall repay the Loans of such Defaulting Bank in an amount
equal to such excess.
(c) Notwithstanding anything to the contrary contained in this Agreement,
all then outstanding Loans under this Agreement shall be repaid in full on the
Final Maturity Date.
(d) With respect to each repayment of Loans required by this Section 3.02,
the Company may designate the Types of 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 Loans made pursuant to
a Borrowing shall be applied PRO RATA among such Loans; (iii) notwithstanding
the provisions of the preceding clause (ii), no repayment of Revolving Loans
pursuant to Section 3.02(a) 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(b) 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 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
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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 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 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 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
Loan to the Company hereunder is subject, at the time of the making of each such
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.
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4.02 NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of the making
of each 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 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 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 request, and (iii) from White
& Case LLP, 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 chairman,
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 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 time in
accordance with the terms hereof and thereof, the "Subsidiary Guaranty"), and
the Subsidiary Guaranty shall be in full force and effect.
4.06 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.
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4.07 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.
4.08 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.
4.09 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").
4.10 THE AMENDED AND RESTATED CREDIT AGREEMENT. On or prior to the Initial
Borrowing Date, the Restatement Effecting Date under (and as defined in) the
Amended and Restated Credit Agreement shall have occurred.
The acceptance of the benefits of each 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 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 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
delivery of this Agreement, the making of the Loans (with the making of each
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 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
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adverse effect on the condition (financial or otherwise), 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
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 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 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).
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(b) Neither the making of any Loan hereunder, nor the use of the proceeds
thereof, will violate the provisions of Regulation T, U or X of the Board of
Governors of the Federal Reserve System and no part of the proceeds of any 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 Loans to purchase Margin Stock in compliance with
Regulations T, U and X, so long as at the time of the making of such 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.
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, (i) the Information
Memorandum and (ii) 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.
-15-
(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 sheets of the Company and its Subsidiaries as at December 31, 1997 and
September 30, 1998 and the related consolidated statements of income and cash
flows of the Company and its Subsidiaries for the fiscal year or nine-month
period, as the case may be, ended as of said dates, which, in the case of the
December 31, 1997 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 dates 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 (subject, in the case of the September 30, 1998
statements, to normal year-end audit adjustments).
(b) Since December 31, 1997 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 Section 3(2) of ERISA) covered by Title IV of ERISA. As of the
date of each subsequent 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
-16-
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.
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
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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 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 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
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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 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, 1999) 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 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
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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.
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
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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 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
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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.
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 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.
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 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
-22-
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 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
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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;
(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
-24-
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 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
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
-25-
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
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;
-26-
(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;
(p) Liens created under the Existing Credit Agreements and the other
Existing 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 Existing 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),
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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, 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 the ECA Maturity Date, (B) in no
event shall such Indebtedness have a shorter average life than the Loans under
and as defined in 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 $150,000,000, PROVIDED that the aggregate principal amount of such
Indebtedness incurred directly by the Subsidiary Guarantors (taken as a whole),
when added to the aggregate principal amount of Additional Indebtedness incurred
directly 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:
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(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 ECA 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 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;
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(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;
(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
outstanding 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;
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(b) Contingent Obligations pursuant to the Subsidiary Guaranty;
(c) Contingent Obligations pursuant to the Existing Facility Documents;
(d) Contingent Obligations under Interest Rate Protection Agreements with
respect to the Loans, loans incurred under the Additional Credit Agreement 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 Section 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 capital stock now or hereafter 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
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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 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
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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
(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
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Interest Expense of the Company and its Restricted Subsidiaries for any Test
Period to be less than 1.80:1.00.
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, 6.00:1.00.
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, 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 the ECA Maturity Date, (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 Existing 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 Debentures), PROVIDED that the Subordinated Exchange
Debentures and any Permitted Refinancing Debt previously issued to refinance
same may be (i)
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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
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
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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 Loans or (ii) default, and such default shall continue for
five or more days, in the payment when due of any interest on the 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
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
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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 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
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the condition (financial or otherwise), operations, assets, liabilities or
prospects of the Company and its Restricted Subsidiaries taken as a whole; or
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) declare the
principal of and any accrued interest in respect of all 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 Indebtedness" shall have the meaning provided in Section
7.04(h).
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"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 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 ECA 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.
"Amended and Restated Credit Agreement" shall mean the Amended and Restated
Credit Agreement, dated as of May 24, 1996 and amended and restated as of March
11, 1999, among the Company, Canadian Sailings Inc., a Canada corporation,
various lending
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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 extended from time to time in
accordance with the terms thereof.
"Applicable Commitment Fee Percentage" shall mean 0.375%.
"Applicable Margin" shall mean, at any time, (a) with respect to Base Rate
Loans, 0.75% and (b) with respect to Eurodollar Loans, 1.75%.
"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(a) or 1.01(b), 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 Loan bearing interest at the rates
provided in Section 1.08(a).
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"Borrowing" shall mean a borrowing of 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 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 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
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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,
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
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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 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,
(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
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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
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 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.
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"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, HOWEVER, 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 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 4.08.
"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.
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"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.
"ECA Maturity Date" shall mean July 31, 2004 (I.E., the Final Maturity Date
under and as defined in the Amended and Restated Credit Agreement).
"ECA Effective Date" shall mean May 28, 1996 (I.E., the Original Effective
Date under and as defined in the Amended and Restated Credit Agreement).
"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
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 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
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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 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 Loans 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.
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"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
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 Amended and
Restated Credit Agreement and the $250,000,000 Credit Agreement.
"Existing 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.
"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
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from time to time between the Company and the Administrative Agent or such Bank,
as the case may be.
"Final Maturity Date" shall mean December 30, 1999.
"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.
"Information Memorandum" shall mean the Confidential Information Memorandum
dated February, 1999 and distributed to the Banks prior to the Effective Date.
"Initial Borrowing Date" shall mean the date on or after the Effective Date
upon which the initial Borrowing of 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).
"Interest Period" with respect to any Eurodollar Loan, shall mean the
interest period applicable thereto, as determined pursuant to Section 1.09.
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"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).
"Loan" shall have the meaning provided in Section 1.01.
"Margin Stock" shall have the meaning provided in Regulation U.
"Maximum Exposure" shall have the meaning provided in the Existing Credit
Agreements.
"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 $150,000,000.
"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 ECA 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 ECA Effective Date and
(z) the aggregate amount of all investments by the Company and its Restricted
Subsidiaries (other than Excluded Foreign Restricted Subsidiaries) in Excluded
Foreign Restricted Subsidiaries after the ECA 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 ECA
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
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Restricted Subsidiaries (other than Excluded Foreign Restricted Subsidiaries)
after the ECA Effective Date.
"Net Maximum Exposure Reduction" shall have the meaning provided therefor
in the Existing Credit Agreements.
"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.
"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).
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"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.
"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 270
Park Avenue, New York, New York 10017, 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 increase
existing, exceptions to the covenants contained therein, or waive any of the
covenants contained therein or any rights of the 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).
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"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 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
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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.
"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
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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
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 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
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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 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 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) 7-5/8% Senior
Secured Notes due 2008, (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.
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"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 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 4.05.
"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.
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$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.
"Type" shall mean any type of 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) $200,000,000, (ii) the Excess Cash Flow Amount at such time, (iii) an
amount equal to all cash or other payments received by the Company and its
Restricted Subsidiaries from Unrestricted Subsidiaries from dividends or
distributions after the ECA Effective Date (PROVIDED that for purposes of this
clause (iii), cash and other payments received by a Partially-Owned Restricted
Subsidiary shall be added to the Unrestricted Subsidiary Investment Limit only
to the extent of the equity percentage ownership of the Company in such
Partially-Owned Restricted Subsidiary), PLUS (iv) an amount equal to the
aggregate net proceeds received by the Company from the
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issuance of equity securities of the Company after the ECA Effective Date,
PROVIDED that if the net proceeds from any such equity issuance are not utilized
to make a loan or advance to, or a cash capital contribution in, an Unrestricted
Subsidiary pursuant to Section 7.05(d) within 30 days following the date of such
equity issuance, then the net proceeds from such equity issuance shall no longer
be added to the Unrestricted Subsidiary Investment Limit.
"U.S. Dollars" and "$" 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 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.
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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
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 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
hereunder 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
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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
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 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 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
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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 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.
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.
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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 LLP) 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,
representatives 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 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.
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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.
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 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 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 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 Loans and/or Revolving Loan Commitment and its rights and obligations
hereunder to its parent corporation and/or any affiliate of such Bank which is
at least 50% owned by such Bank and/or
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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 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 and/or Term Loans 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 hereunder, 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,
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 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 Additional Credit Agreement, 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 Loans or, if issued, Notes
hereunder to a Federal Reserve Bank in support of borrowings made by such Bank
from such Federal Reserve Bank.
(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 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
hereunder 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
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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 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 proportional participation by
all of the Banks in such amount; PROVIDED that if all or any portion of such
excess amount is thereafter 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 provisions 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, 1997 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 Original Effective Date)
relating to computer software developed or obtained for internal use, and the
Company's
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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 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
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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
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 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 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) and (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 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.
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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
Loans and the satisfaction of all other Obligations.
11.14 DOMICILE OF LOANS. Each Bank may transfer and carry its 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 determines 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 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 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 PRIMEDIA INC.
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:
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BANKERS TRUST COMPANY,
Individually and as
Co-Syndication Agent
By
-----------------------------------
Title:
THE BANK OF NEW YORK,
Individually and as
Co-Syndication Agent
By
-----------------------------------
Title:
THE BANK OF NOVA SCOTIA,
Individually, as Canadian Lender
and as Documentation Agent
By
-----------------------------------
Title:
BANK OF AMERICA NT&SA
By
-----------------------------------
Title:
NATIONSBANK OF TEXAS, N.A.
By
-----------------------------------
Title:
UNION BANK OF CALIFORNIA
By
-----------------------------------
Title:
-71-
SOCIETE GENERALE, NEW YORK
BRANCH
By
-----------------------------------
Title:
BANK OF MONTREAL, CHICAGO BRANCH
By
-----------------------------------
Title:
BANK OF HAWAII
By
-----------------------------------
Title:
PNC BANK, NATIONAL ASSOCIATION
By
-----------------------------------
Title:
-72-
ANNEX I
LIST OF BANKS
Bank Revolving Loan
---- Commitment
----------
The Chase Manhattan Bank $ 20,000,000
Bank of America NT&SA 20,000,000
The Bank of New York 20,000,000
The Bank of Nova Scotia 20,000,000
Bankers Trust Company 20,000,000
Union Bank of California, N.A. 10,000,000
Societe Generale, New York Branch 10,000,000
Bank of Montreal, Chicago Branch 10,000,000
Bank of Hawaii 10,000,000
PNC Bank, National Association 10,000,000
Total $150,000,000
============
ANNEX II
BANK ADDRESSES
--------------
Bank Address
- ---- -------
The Chase Manhattan Bank, N.A. 270 Park Avenue
New York, New York 10017
Telephone No.: (212) _______
Telecopier No.: (212) _______
Attention:
Bankers Trust Company One Bankers Trust Plaza
New York, New York 10006
Telephone No.: (212) 250-1724
Telecopier No.: (212) 250-7218
Attention: Gregory Shefrin
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
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
Bank of America NT&SA 335 Madison Avenue
5th Floor
New York, New York 10017
Telephone No.: (212) 503-7980
Telecopier No.: (212) 503-7173
Attention: Thomas J. Kane
NationsBank of Texas, N.A. Bank of America
Entertainment/Media Group
335 Madison Avenue
New York, New York 10017
Telephone No.: (212) 503-7980
Telecopier No.: (212) 503-7173
Attention: Thomas J. Kane
Union Bank of California, N.A. 445 South Figueroa Street
15th Floor
Los Angeles, California 90071
Telephone No.: (213) 236-5812
Telecopier No.: (213) 236-5747
Attention: Michael K. McShane
Societe Generale, 1221 Avenue of the Americas
New York Branch New York, New York 10020
Telephone No.: (212) 278-6852
Telecopier No.: (212) 278-6240
Attention: Elaine Khalil
Bank of Montreal, 430 Park Avenue
Chicago Branch New York, New York 10022
Telephone No.: (212) 605-1438
Telecopier No.: (212) 605-1648
Attention: Naghmeh Hashemifard
Bank of Hawaii 1850 North Central Avenue
Suite 400
Phoenix, Arizona 85004
Telephone No.: (602) 257-2485
Telecopier No.: (602) 257-2235
Attention: Eric Pelletier
PNC Bank, National Association 1600 Market Street
21st Floor
Philadelphia, Pennsylvania 19103
Telephone No.: (215) 585-5165
Telecopier No.: (215) 585-6680
Attention: John Iadanza
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
------------------------
EXHIBIT A
FORM OF NOTICE OF BORROWING
---------------------------
[Date]
The Chase Manhattan Bank,
as Administrative Agent for the
Banks party to the Credit Agreement
referred to below
270 Park Avenue
New York, New York 10017
Attention: ____________________
Ladies and Gentlemen:
The undersigned refers to the Credit Agreement, dated as of March 11, 1999
(as amended, modified or supplemented from time to time, the "Credit Agreement,"
the terms defined therein being used herein as therein defined), among PRIMEDIA
Inc., certain Banks from time to time party thereto, The Bank of New York and
Bankers Trust Company, as Co-Syndication Agents, The Bank of Nova Scotia, as
Documentation Agent, and you, as Administrative Agent for such Banks, and hereby
gives you irrevocable notice, pursuant to Section 1.03 of the Credit Agreement,
that the undersigned hereby requests a Borrowing under the Credit Agreement, and
in that connection sets forth below the information relating to such Borrowing
(the "Proposed Borrowing") as required by Section 1.03 of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is ________, 19__.1
(ii) The aggregate principal amount of the Proposed Borrowing is
$_____________.
(iii) The Proposed Borrowing is to consist of [Base Rate Loans]
[Eurodollar Loans].
[(iv) The initial Interest Period for the Proposed Borrowing is ___
months.]2
- ----------
1 A Notice of Borrowing must be given at least one Business Day prior to the
date of the Proposed Borrowing in the case of Base Rate Loans and three
Business Days prior to the date of the Proposed Borrowing in the case of
Eurodollar Loans.
2 To be included for a Proposed Borrowing of Eurodollar Loans.
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in the Credit Agreement or
the other Credit Documents are and will be true and correct in all material
respects, before and after giving effect to the Proposed Borrowing and to the
application of the proceeds thereof, as though made on and as of such date,
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; and
(B) no Default or Event of Default has occurred and is continuing, or would
result from such Proposed Borrowing or from the application of the proceeds
thereof.
Very truly yours,
PRIMEDIA Inc.
By
----------------------------
Title:
EXHIBIT B-1
[FORM OF OPINION OF SIMPSON, THACHER & BARTLETT]
EXHIBIT B-2
[FORM OF OPINION OF BEVERLY C. CHELL, ESQ.,
COUNSEL TO THE CREDIT PARTIES]
EXHIBIT B-3
__________, 19___
To: The Administrative Agent and various lending
institutions (collectively, the "Banks") party
to the Credit Agreement referred to below
Re: Credit Agreement, dated as March 11, 1999 (the "Credit Agreement"), among
PRIMEDIA Inc. (the "Borrower"), 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") for the Banks
Ladies and Gentlemen:
We have acted as special counsel to the Administrative Agent under the
Credit Agreement in connection with the execution and delivery of the Credit
Agreement. This opinion is delivered to you pursuant to Section 4.03(iii) of the
Credit Agreement. Unless otherwise defined herein, all capitalized terms used
herein shall have the respective meanings set forth in the Credit Agreement.
In connection with this opinion, we have examined the originals, or
certified, conformed or reproduction copies, of all records, agreements,
instruments and documents as we have deemed relevant or necessary as the basis
for the opinions hereinafter expressed. In stating our opinion, we have assumed
the genuineness of all signatures on original or certified copies, the
authenticity of documents submitted to us as originals and the conformity to
original or certified copies of all copies submitted to us as certified or
reproduction copies.
We have also assumed, for purposes of the opinions expressed herein, that
the parties to the Credit Agreement have the corporate power and authority to
enter into and perform the Credit Agreement and that the Credit Agreement has
been duly authorized, executed and delivered by each such party.
Exhibit B-3
Page 2
Based upon the foregoing, and subject to the limitations set
forth herein, we are of the opinion that the Credit Agreement constitutes the
legal, valid and binding obligation of the Borrower, enforceable in accordance
with its terms except to the extent that enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally and by equity principles (regardless of
whether enforcement is sought in equity or at law).
We have not been requested to render and, with your
permission, we express no opinion as to the applicability to the obligations of
the Borrower under the Credit Agreement of Section 548 of the Bankruptcy Code
and Article 10 of the New York Debtor & Creditor Law relating to fraudulent
transfers and obligations.
This opinion is limited to the federal law of the United
States of America and the laws of the State of New York.
Very truly yours,
EXHIBIT C
[NAME OF COMPANY OR SUBSIDIARY GUARANTOR]
Officers' Certificate
I, the undersigned, [Chairman/Vice Chairman/President/Vice-President] of
[NAME OF THE COMPANY OR SUBSIDIARY GUARANTOR], a corporation organized and
existing under the laws of _______________ (the "Company"), DO HEREBY CERTIFY on
behalf of the Company that:
1. This Certificate is furnished pursuant to Section 4.04 of the Credit
Agreement, dated as of March 11, 1999 among PRIMEDIA Inc., the Banks from time
to time party thereto, 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 (such Credit Agreement, as in
effect on the date of this Certificate, being herein called the "Credit
Agreement"). Unless otherwise defined herein capitalized terms used in this
Certificate shall have the meanings assigned to those terms in the Credit
Agreement.
2. The persons named below have been duly elected, have duly qualified and,
as of and at all times since _____________3 (to and including the date hereof)
have been officers of the Company, holding the respective offices below set
opposite their names, and the signatures below set opposite their names are
their genuine signatures.
NAME4 OFFICE SIGNATURE
----- ------ ---------
---------- ---------- ----------
---------- ---------- ----------
3. Attached hereto as Exhibit A is a certified copy of the Certificate of
Incorporation of the Company as filed with the relevant state governmental
authority on the date indicated on such copy, together with all amendments
thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of the By-Laws
of the Company as in effect on _______, together with all amendments thereto
adopted through the date hereof.
5. Attached hereto as Exhibit C is a true and correct copy of resolutions
duly adopted by the Board of
- ----------
3 Insert a date prior to the time of any corporate action relating to the
Credit Agreement.
4 Include name, office and signature of each officer who will sign any Credit
Document, including the officer who will sign the certification at the end
of this certificate.
Directors of the Company by unanimous written consent of the Board of Directors
of the Company, which resolutions have not been revoked, modified, amended or
rescinded and are still in full force and effect. Except as attached hereto as
Exhibit C, no resolutions have been adopted by the Board of Directors of the
Company which deal with the execution, delivery or performance of any of the
Credit Documents.
[6. The Subordinated Exchange Debentures have not been issued as of the
date hereof.
7. The Company currently has no direct or indirect Unrestricted
Subsidiaries.]5
[8.] On the date hereof, the representations and warranties contained in
the Credit Agreement or the other Credit Documents are true and correct in all
material respects, both before and after giving effect to each Revolving Loan to
be made on the date hereof and the application of the proceeds thereof, 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.
[9.] On the date hereof, no Default or Event of Default has occurred and is
continuing or would result from the Revolving Loans to be made on the date
hereof or from the application of the proceeds thereof.
[10.] I know of no proceeding for the dissolution or liquidation of the
Company or threatening its existence.
- ----------
5 Insert paragraphs 6 and 7 in Certificate for K-III Communications
Corporation only.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
_____________, 19__.
[Name of Company]
-------------------------------
Name:
Title:
I, the undersigned, [SECRETARY/ASSISTANT SECRETARY] of the Company, DO HEREBY
CERTIFY that:
1. [Insert name of Person making the above certifications] is the duly
elected and qualified ___________ of the Company and the signature above is
[his/her] genuine signature.
2. The certifications made by [name] in items 2, 3, 4 and 5 above are true
and correct.
3. I know of no proceeding for the dissolution or liquidation of the
Company or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
____________, 19__.
[Name of Company]
-------------------------------
Name:
Title:
EXHIBIT D
SUBSIDIARY GUARANTY
GUARANTY, dated as of _________, 19_____, 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, PRIMEDIA Inc. (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 March 11, 1999 (as amended, modified or
supplemented from time to time, the "Credit Agreement"), providing for the
making of 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 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 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 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
Exhibit D
Page 2
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 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
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
Exhibit D
Page 3
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
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
thereagainst;
(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
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;
Exhibit D
Page 4
(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 agreements; 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 constitute a waiver of the rights of any
Creditor to any other or further action in any circumstances 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
Exhibit D
Page 5
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 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.
Exhibit D
Page 6
12. In order to induce the Banks to make 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 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 Subsidiaries.
(d) No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with, or exemption by, any
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
Exhibit D
Page 7
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
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.
Exhibit D
Page 8
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
evidencing any liability of the Company, and such Guarantor shall be and remain
liable to the 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
Exhibit D
Page 9
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).
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.
* * *
Exhibit D
Page 10
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 AMERICAN GUIDANCE SERVICE, INC.
New York, New York 10151 AMERICAN HEAT VIDEO PRODUCTIONS, INC.
Attention: Beverly Chell, Esq. THE APARTMENT GUIDE OF NASHVILLE, INC.
ARGUS PUBLISHERS CORPORATION
Telephone No.: (212) 745-0101 BACON'S INFORMATION, INC.
Telecopier No.: (212) 745-0199 BANKERS CONSULTING COMPANY
BOWHUNTER MAGAZINE, INC.
CAMBRIDGE RESEARCH GROUP, LTD.
CANOE & KAYAK, INC.
CARDINAL BUSINESS MEDIA, INC.
CARDINAL BUSINESS MEDIA HOLDINGS, INC.
CHANNEL ONE COMMUNICATIONS CORP.
CLIMBING, INC.
COMMCORP, LLC
COVER CONCEPTS MARKETING SERVICES, LLC
COWLES BUSINESS MEDIA, INC.
COWLES ENTHUSIAST MEDIA, INC.
COWLES HISTORY GROUP, INC.
CSK PUBLISHING COMPANY INCORPORATED
CUMBERLAND PUBLISHING, INC.
THE ELECTRONICS SOURCE BOOK, INC.
EXCELLENCE IN TRAINING CORPORATION
FILMS FOR THE HUMANITIES & SCIENCES, INC.
FUNK & WAGNALLS YEARBOOK CORP.
GARETH STEVENS, INC.
GO LO ENTERTAINMENT, INC.
GUINN COMMUNICATIONS, INC.
HAAS PUBLISHING COMPANIES, INC.
HEALTH & SCIENCES NETWORK, INC.
HORSE & RIDER, INC.
INTERMODEL PUBLISHING COMPANY, LTD.
IDTN LEASING CORPORATION
INDUSTRIAL TRAINING SYSTEMS CORPORATION
INTELLICHOICE, INC.
KITPLANES ACQUISITION COMPANY
LAW ENFORCEMENT TELEVISION NETWORK, INC.
LIFETIME LEARNING SYSTEMS, INC.
LITTLE ROCK APARTMENT GUIDE, INC.
LOCKERT JACKSON & ASSOCIATES, INC.
Exhibit D
Page 11
LOW RIDER PUBLISHING GROUP, INC.
MADDUX PUBLISHING, INC.
MCMULLEN ARGUS PUBLISHING, INC.
MEMPHIS APARTMENT GUIDE, INC.
MIRAMAR COMMUNICATIONS, INC.
PICTORAL, INC.
PLAZA COMMUNICATIONS, INC.
PRIMEDIA HOLDINGS III INC.
PRIMEDIA INFORMATION INC.
PRIMEDIA INTERTEC CORPORATION
PRIMEDIA MAGAZINES INC.
PRIMEDIA MAGAZINE FINANCE INC.
PRIMEDIA REFERENCE INC.
PRIMEDIA SPECIAL INTEREST PUBLICATIONS INC.
PRIMEDIA VENTURES, INC.
PRIMEDIA WORKPLACE LEARNING, INC.
QWIZ, INC.
R.E.R. PUBLISHING CORPORATION
RETAILVISION, INC.
SIMBA INFORMATION
SOUTHWEST ART, INC.
SYMBOL OF EXCELLENCE PUBLISHERS, INC.
TEL-A-TRAIN, INC.
THE VIRTUAL FLYSHOP, INC.
TI-IN ACQUISITION CORPORATION
TSECRP, INC.
VEGETARIAN TIMES, INC.
WEEKLY READER CORPORATION
WESCOTT 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:
EXHIBIT E
CONTRIBUTION AGREEMENT
----------------------
CONTRIBUTION AGREEMENT, dated as of _______, 19___, among each of the
Subsidiary Guarantors (as defined in the Credit Agreement referred to below) of
PRIMEDIA Inc. (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 March 11, 1999 (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 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 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
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
Exhibit E
Page 2
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 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.
Exhibit E
Page 3
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 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
Exhibit E
Page 4
shall upon execution of a counterpart hereof or of a Subsidiary Assumption
Agreement become a Guarantor for all purposes of this Contribution Agreement.
* * *
Exhibit E
Page 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.
AMERICAN GUIDANCE SERVICE, INC.
AMERICAN HEAT VIDEO PRODUCTIONS, INC.
THE APARTMENT GUIDE OF NASHVILLE, INC.
ARGUS PUBLISHERS CORPORATION
BACON'S INFORMATION, INC.
BANKERS CONSULTING COMPANY
BOWHUNTER MAGAZINE, INC.
CAMBRIDGE RESEARCH GROUP, LTD.
CANOE & KAYAK, INC.
CARDINAL BUSINESS MEDIA, INC.
CARDINAL BUSINESS MEDIA HOLDINGS, INC.
CHANNEL ONE COMMUNICATIONS CORP.
CLIMBING, INC.
COMMCORP, LLC
COVER CONCEPTS MARKETING SERVICES, LLC
COWLES BUSINESS MEDIA, INC.
COWLES ENTHUSIAST MEDIA, INC.
COWLES HISTORY GROUP, INC.
CSK PUBLISHING COMPANY INCORPORATED
CUMBERLAND PUBLISHING, INC.
THE ELECTRONICS SOURCE BOOK, INC.
EXCELLENCE IN TRAINING CORPORATION
FILMS FOR THE HUMANITIES & SCIENCES, INC.
FUNK & WAGNALLS YEARBOOK CORP.
GARETH STEVENS, INC.
GO LO ENTERTAINMENT, INC.
GUINN COMMUNICATIONS, INC.
HAAS PUBLISHING COMPANIES, INC.
HEALTH & SCIENCES NETWORK, INC.
HORSE & RIDER, INC.
INTERMODEL PUBLISHING COMPANY, LTD.
IDTN LEASING CORPORATION
INDUSTRIAL TRAINING SYSTEMS CORPORATION
INTELLICHOICE, INC.
KITPLANES ACQUISITION COMPANY
LAW ENFORCEMENT TELEVISION NETWORK, INC.
LIFETIME LEARNING SYSTEMS, INC.
LITTLE ROCK APARTMENT GUIDE, INC.
LOCKERT JACKSON & ASSOCIATES, INC.
LOW RIDER PUBLISHING GROUP, INC.
MADDUX PUBLISHING, INC.
Exhibit E
Page 6
MCMULLEN ARGUS PUBLISHING, INC.
MEMPHIS APARTMENT GUIDE, INC.
MIRAMAR COMMUNICATIONS, INC.
PICTORAL, INC.
PLAZA COMMUNICATIONS, INC.
PRIMEDIA HOLDINGS III INC.
PRIMEDIA INFORMATION INC.
PRIMEDIA INTERTEC CORPORATION
PRIMEDIA MAGAZINES INC.
PRIMEDIA MAGAZINE FINANCE INC.
PRIMEDIA REFERENCE INC.
PRIMEDIA SPECIAL INTEREST PUBLICATIONS INC.
PRIMEDIA VENTURES, INC.
PRIMEDIA WORKPLACE LEARNING, INC.
QWIZ, INC.
R.E.R. PUBLISHING CORPORATION
RETAILVISION, INC.
SIMBA INFORMATION
SOUTHWEST ART, INC.
SYMBOL OF EXCELLENCE PUBLISHERS, INC.
TEL-A-TRAIN, INC.
THE VIRTUAL FLYSHOP, INC.
TI-IN ACQUISITION CORPORATION
TSECRP, INC.
VEGETARIAN TIMES, INC.
WEEKLY READER CORPORATION
WESCOTT COMMUNICATIONS MICHIGAN, INC.
WESTCOTT ECI, INC.
WESTERN EMPIRE PUBLICATIONS, INC.
By
---------------------------------
Title:
EXHIBIT F
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
-------------------------------------------
DATE: ________, 19__
Reference is made to the Credit Agreement described in Item 2 of Annex I
annexed hereto (as such agreement may hereafter be amended, modified or
supplemented from time to time, the "Credit Agreement"). Unless otherwise
defined in Annex I attached hereto, all capitalized terms shall have their
respective meanings as set forth in the Credit Agreement. _____________ (the
"Assignor") and ______________ (the "Assignee") hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without recourse
and without representation or warranty (other than as expressly provided
herein), and the Assignee hereby purchases and assumes from the Assignor, that
interest in and to all of the Assignor's rights and obligations under the Credit
Agreement as of the date hereof which represents the percentage interest
specified in Item 4 of Annex I (the "Assigned Share") of all of the outstanding
rights and obligations under the Credit Agreement including, without limitation,
with respect to the Assigned Share of the Total Revolving Loan Commitment and
all rights and obligations with respect to the Assigned Share of the Loans.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any liens or security interests; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the other Credit Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any Subsidiary Guarantor or the performance or observance by the
Borrower or any Subsidiary Guarantor of any of its obligations under the Credit
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement and the other Credit Documents, together with copies of the financial
statements referred to therein and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Assumption Agreement; (ii) agrees that it will,
independently and without reliance upon the Administrative Agent, the Assignor
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 decisions in taking or
not taking action under the Credit Agreement; (iii) appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under the Credit Agreement and the other Credit Documents as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; [and] (iv) agrees that it will
Exhibit F
Page 2
perform in accordance with their terms all of the obligations which by the terms
of the Credit Agreement are required to be performed by it as a Bank[; and (v)
attaches the forms prescribed by the Internal Revenue Service of the United
States certifying as to the Assignee's status for purposes of determining
exemption from United States withholding taxes with respect to all payments to
be made to the Assignee under the Credit Agreement or such other documents as
are necessary to indicate that all such payments are subject to such taxes at a
rate reduced by an applicable tax treaty].6
4. Following the execution of this Assignment and Assumption Agreement by
the Assignor and the Assignee, an executed original hereof (together with all
attachments) will be delivered to the Administrative Agent. The effective date
of this Assignment and Assumption Agreement shall be the date of execution
hereof by the Assignor and the Assignee and the consent hereto by the
Administrative Agent and the Company, and receipt by the Administrative Agent of
the nonrefundable assignment fee referred to in Section 11.04(b) of the Credit
Agreement, unless a later date is otherwise specified in Item 5 of Annex I
hereto (the "Settlement Date").
5. Upon the delivery of a fully executed original hereof to the
Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Assumption Agreement, have the rights and obligations of a Bank thereunder and
under the other Credit Documents and (ii) the Assignor shall, to the extent
provided in this Assignment and Assumption Agreement, relinquish its rights and
be released from its obligations under the Credit Agreement and the other Credit
Documents.
6. It is agreed that the Assignee shall be entitled to (x) all interest on
the Assigned Share of the Loans at the rates specified in Item 6 of Annex I; and
(y) all Commitment Fees on the Assigned Share of the Total Revolving Loan
Commitment at the rate specified in Item 7 of Annex I; which, in each case,
accrue on and after the Settlement Date, such interest and Commitment Fees, to
be paid by the Administrative Agent directly to the Assignee. It is further
agreed that all payments of principal made on the Assigned Share of the Loans
which occur on and after the Settlement Date will be paid directly by the
Administrative Agent to the Assignee. Upon the Settlement Date, the Assignee
shall pay to the Assignor an amount specified by the Assignor in writing which
represents the Assigned Share of the principal amount of the respective Loans
made by the Assignor pursuant to the Credit Agreement which are outstanding on
the Settlement Date, net of any closing costs, and which are being assigned
hereunder. The Assignor and the Assignee shall make all appropriate adjustments
in payments under the Credit Agreement for periods prior to the Settlement Date
directly between themselves on the Settlement Date.
- ----------
6 If the Assignee is organized under the laws of a jurisdiction outside the
United States.
Exhibit F
Page 3
7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
* * *
Exhibit F
Page 4
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution also being made
on Annex I hereto.
[NAME OF ASSIGNOR],
as Assignor
By____________________________
Title:
[NAME OF ASSIGNEE],
as Assignee
By____________________________
Title:
ANNEX I
ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT
ANNEX I
1. The Borrower: PRIMEDIA Inc.
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of March 11, 1999, among PRIMEDIA Inc., the
Banks from time to time party thereto, 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.
3. Date of Assignment and Assumption Agreement:
4. Amounts (as of date of item #3 above):
Outstanding Revolving Loan
Principal of Loans Commitment
------------------ ----------
a. Aggregate Amount for all Banks $______ $______
b. Assigned Share ______% ______%
c. Amount of Assigned Share $______ $______
5. Settlement Date:
6. Rate of Interest to
the Assignee: As set forth in Section 1.08 of the Credit Agreement
(unless otherwise agreed to by the Assignor and the
Assignee)7
[7. Commitment Fees As set forth in Section 2.01(a) of the Credit
Agreement (unless otherwise agreed to by the Assignor
and the Assignee)]8
- ----------
7 The Company and the Administrative Agent shall direct the entire amount of
the interest to the Assignee at the rate set forth in Section 1.08 of the
Credit Agreement, with the Assignor and Assignee effecting any agreed upon
sharing of interest through payments by the Assignee to the Assignor.
8 The Company and the Administrative Agent shall direct the entire amount of
the Commitment Fees to the Assignee at the rate set forth in Section
2.01(a) of the Credit Agreement, with the Assignor and the Assignee
effecting any agreed upon sharing of Commitment Fees through payment by the
Assignee to the Assignor.
Page 2
8. Notice:
ASSIGNOR:
---------------------------------
---------------------------------
---------------------------------
---------------------------------
Attention:
Telephone:
Telecopier:
Reference:
ASSIGNEE:
---------------------------------
---------------------------------
---------------------------------
---------------------------------
Attention:
Telephone:
Telecopier:
Reference:
Payment Instructions:
ASSIGNOR:
---------------------------------
---------------------------------
---------------------------------
---------------------------------
Attention:
Reference:
ASSIGNEE:
---------------------------------
---------------------------------
---------------------------------
---------------------------------
Attention:
Reference:
Page 3
Accepted and Agreed:
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By By
------------------------ --------------------------
------------------------ --------------------------
(Print Name and Title) (Print Name and Title)
FORM OF SUBSIDIARY ASSUMPTION AGREEMENT
---------------------------------------
SUBSIDIARY ASSUMPTION AGREEMENT (the "Agreement") dated as of _________,
_____, by _______________, a _________ corporation (the "New Restricted
Subsidiary"). Unless otherwise defined herein, capitalized terms used herein and
defined in the Credit Agreement referred to below are used herein as so defined.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, PRIMEDIA Inc. (the "Company"), various financial institutions
party thereto, 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 an Credit Agreement dated as of
March 11, 1999 (as amended through the date hereof, the "Credit Agreement");
WHEREAS, in connection with the Credit Agreement, each Wholly-Owned
Restricted Subsidiary of the Company (other than Excluded Foreign Restricted
Subsidiaries) has entered into a Subsidiary Guaranty, dated as of _________,
19____ (as amended through the date hereof, the "Subsidiary Guaranty");
WHEREAS, in connection with the Credit Agreement, each Wholly-Owned
Restricted Subsidiary of the Company (other than Excluded Foreign Restricted
Subsidiaries) has entered into a Contribution Agreement, dated as of _________,
19___ (as amended through the date hereof, the "Contribution Agreement" and
together with the Subsidiary Guaranty, the "Subsidiary Documents");
WHEREAS, on _________, ____, the New Restricted Subsidiary was
[[newly-formed/acquired] as a [___%] directly owned Subsidiary of
_______________, a ___________ corporation][an Excluded Domestic Restricted
Subsidiary [__%] directly owned by ______________, a ______________ corporation,
that has been designated by the Company as a Subsidiary Guarantor in accordance
with the terms of the Credit Agreement];
WHEREAS, pursuant to Section 7.14 of the Credit Agreement, the New
Restricted Subsidiary desires to become a party to the Subsidiary Documents; and
WHEREAS, the New Restricted Subsidiary desires to execute and deliver this
Agreement in order to become a party to each of the Subsidiary Documents;
NOW, THEREFORE, IT IS AGREED:
1. SUBSIDIARY GUARANTY. By executing and delivering this Agreement, the New
Restricted Subsidiary hereby becomes a party to the Subsidiary Guaranty as a
"Guarantor" thereunder, and hereby expressly assumes all obligations and
liabilities of a "Guarantor" thereunder. The New Restricted Subsidiary hereby
makes each of the representations and
Page ii
warranties contained in Section 12 of the Subsidiary Guaranty on the date
hereof, after giving effect to this Agreement.
2. CONTRIBUTION AGREEMENT. By executing and delivering this Agreement, the
New Restricted Subsidiary hereby becomes a party to the Contribution Agreement
as a "Guarantor" thereunder, and hereby expressly assumes all obligations and
liabilities of a "Guarantor" thereunder.
3. COUNTERPARTS. This 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.
4. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
* * *
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be duly
executed and delivered as of the date first above written.
[NEW RESTRICTED SUBSIDIARY]
By___________________________
Title:
ACKNOWLEDGED:
THE CHASE MANHATTAN BANK,
as Administrative Agent for the Banks
By_______________________________________
Title: