Exhibit 10.1
CONFORMED EXECUTION COPY
BRIDGE CREDIT AGREEMENT
DATED AS OF SEPTEMBER 12, 2003
AMONG
PATTERSON DENTAL COMPANY,
AS THE BORROWER
THE LENDERS FROM TIME TO TIME PARTIES HERETO
BANC ONE MEZZANINE CORPORATION,
AS ADMINISTRATIVE AGENT
AND
BANK OF AMERICA, N.A.,
AS SYNDICATION AGENT
================================================================================
BANC ONE CAPITAL MARKETS, INC. AND
BANC OF AMERICA SECURITIES LLC,
AS CO-LEAD ARRANGERS AND JOINT BOOK RUNNERS
================================================================================
SIDLEY AUSTIN BROWN & WOOD LLP
Bank One Plaza
10 South Dearborn Street
Chicago, Illinois 60603
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.....................................................1
1.1. Certain Defined Terms...........................................1
1.2. Plural Forms...................................................17
ARTICLE II THE CREDITS....................................................17
2.1. Loans..........................................................17
2.2. Required Payments; Termination.................................18
2.3. Ratable Loans; Types of Advances...............................19
2.4. Facility Fee...................................................19
2.5. Minimum Amount of Each Advance.................................19
2.6. Optional Principal Payments....................................19
2.7. Conversion and Continuation of Outstanding Advances; No
Conversion or Continuation of Eurodollar Advances After
Default........................................................20
2.8. Changes in Interest Rate, etc..................................20
2.9. Rates Applicable After Default.................................21
2.10. Method of Payment..............................................21
2.11. Noteless Agreement; Evidence of Indebtedness...................21
2.12. Telephonic Notices.............................................22
2.13. Interest Payment Dates; Interest and Fee Basis.................22
2.14. Notification of Advances, Interest Rates and Prepayments;
Availability of Loans..........................................23
2.15. Lending Installations..........................................23
2.16. Non-Receipt of Funds by the Agent..............................23
2.17. Replacement of Lender..........................................23
ARTICLE III YIELD PROTECTION; TAXES........................................24
3.1. Yield Protection...............................................24
3.2. Changes in Capital Adequacy Regulations........................25
3.3. Availability of Types of Advances..............................25
3.4. Funding Indemnification........................................25
3.5. Taxes..........................................................26
3.6. Lender Statements; Survival of Indemnity.......................28
3.7. Alternative Lending Installation...............................28
ARTICLE IV CONDITIONS PRECEDENT...........................................28
4.1. Effectiveness of Commitments...................................28
4.2. Initial Credit Extension.......................................31
ARTICLE V REPRESENTATIONS AND WARRANTIES.................................31
5.1. Existence and Standing.........................................31
5.2. Authorization and Validity.....................................31
5.3. No Conflict; Government Consent................................32
5.4. Financial Statements...........................................32
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5.5. Material Adverse Change........................................32
5.6. Taxes..........................................................33
5.7. Litigation and Contingent Obligations..........................33
5.8. Subsidiaries...................................................33
5.9. ERISA..........................................................33
5.10. Accuracy of Information........................................33
5.11. Regulation U...................................................34
5.12. Material Agreements............................................34
5.13. Compliance With Laws...........................................34
5.14. Ownership of Properties........................................34
5.15. Plan Assets; Prohibited Transactions...........................34
5.16. Environmental Matters..........................................34
5.17. Investment Company Act.........................................35
5.18. Public Utility Holding Company Act.............................35
5.19. Insurance......................................................35
5.20. Solvency.......................................................35
5.21. No Default or Unmatured Default................................35
5.22. Reportable Transaction.........................................35
5.23. Post-Retirement Benefits.......................................35
5.24. AbilityOne Acquisition.........................................35
ARTICLE VI COVENANTS......................................................36
6.1. Financial Reporting............................................36
6.2. Use of Proceeds................................................38
6.3. Notice of Default..............................................38
6.4. Conduct of Business............................................38
6.5. Taxes..........................................................38
6.6. Insurance......................................................38
6.7. Compliance with Laws...........................................39
6.8. Maintenance of Properties......................................39
6.9. Inspection; Keeping of Books and Records.......................39
6.10. Dividends......................................................39
6.11. Merger.........................................................39
6.12. Sale of Assets.................................................40
6.13. Investments and Acquisitions...................................40
6.14. Indebtedness...................................................43
6.15. Liens..........................................................44
6.16. Affiliates.....................................................46
6.17. Financial Contracts............................................47
6.18. Subsidiary Covenants...........................................47
6.19. Contingent Obligations.........................................47
6.20. Leverage Ratio.................................................47
6.21. Interest Expense Coverage Ratio................................48
6.22. Minimum Consolidated Net Worth.................................48
6.23. Additional Subsidiary Guarantors...............................48
6.24. Foreign Subsidiary Investments.................................48
6.25. Subordinated Indebtedness......................................48
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6.26. Sale of Accounts...............................................48
ARTICLE VII DEFAULTS.......................................................49
ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES.................52
8.1. Acceleration...................................................52
8.2. Amendments.....................................................52
8.3. Preservation of Rights.........................................53
ARTICLE IX GENERAL PROVISIONS.............................................53
9.1. Survival of Representations....................................53
9.2. Governmental Regulation........................................53
9.3. Headings.......................................................53
9.4. Entire Agreement...............................................53
9.5. Several Obligations; Benefits of this Agreement................53
9.6. Expenses; Indemnification......................................54
9.7. Numbers of Documents...........................................55
9.8. Accounting.....................................................55
9.9. Severability of Provisions.....................................55
9.10. Nonliability of Lenders........................................55
9.11. Confidentiality................................................56
9.12. Lenders Not Utilizing Plan Assets..............................56
9.13. Nonreliance....................................................56
9.14. Disclosure.....................................................57
9.15. Performance of Obligations.....................................57
ARTICLE X THE AGENT......................................................57
10.1. Appointment; Nature of Relationship............................57
10.2. Powers.........................................................58
10.3. General Immunity...............................................58
10.4. No Responsibility for Loans, Recitals, etc.....................58
10.5. Action on Instructions of Lenders..............................58
10.6. Employment of Agents and Counsel...............................59
10.7. Reliance on Documents; Counsel.................................59
10.8. Agent's Reimbursement and Indemnification......................59
10.9. Notice of Default..............................................60
10.10. Rights as a Lender.............................................60
10.11. Lender Credit Decision.........................................60
10.12. Successor Agent................................................60
10.13. Agent and Arranger Fees........................................61
10.14. Delegation to Affiliates.......................................61
10.15. No Duties Imposed on Syndication Agents, Documentation Agents
or Arrangers...................................................61
ARTICLE XI SETOFF; RATABLE PAYMENTS.......................................62
11.1. Setoff.........................................................62
11.2. Ratable Payments...............................................62
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ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS..............62
12.1. Successors and Assigns; Designated Lenders.....................62
12.2. Participations.................................................64
12.3. Assignments....................................................65
12.4. Dissemination of Information...................................67
12.5. Tax Certifications.............................................67
ARTICLE XIII NOTICES........................................................67
13.1. Notices; Effectiveness; Electronic Communication...............67
13.2. Change of Address, Etc.........................................68
ARTICLE XIV COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC
EXECUTION......................................................68
14.1. Counterparts; Effectiveness....................................68
14.2. Electronic Execution of Assignments............................68
ARTICLE XV CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL...69
15.1 CHOICE OF LAW..................................................69
15.2 CONSENT TO JURISDICTION........................................69
15.3 WAIVER OF JURY TRIAL...........................................69
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SCHEDULES
Commitment Schedule
Pricing Schedule
Schedule 5.8 - Subsidiaries
Schedule 6.13 - Investments
Schedule 6.14 - Indebtedness
Schedule 6.15 - Liens
EXHIBITS
Exhibit A - Form of the Credit Parties' Counsel's Opinion
Exhibit B - Form of Compliance Certificate
Exhibit C - Form of Assignment and Assumption Agreement
Exhibit D - Form of Loan/Credit Related Money Transfer Instruction
Exhibit E - Form of Promissory Note (if requested)
Exhibit F - Form of Designation Agreement
Exhibit G - List of Closing Documents
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BRIDGE CREDIT AGREEMENT
This Bridge Credit Agreement, dated as of September 12, 2003, is entered
into by and among Patterson Dental Company, a Minnesota corporation, as the
Borrower, the Lenders and Banc One Mezzanine Corporation, as Administrative
Agent. The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1. Certain Defined Terms. As used in this Agreement:
"AbilityOne" means AbilityOne Products Corp., a Delaware corporation.
"AbilityOne Acquisition" means the acquisition by the Borrower or a
Subsidiary or Subsidiaries of the Borrower of all of the capital stock of
AbilityOne on the terms and conditions set forth in the AbilityOne Acquisition
Agreement.
"AbilityOne Acquisition Agreement" means that certain Agreement and Plan of
Merger dated as of August 15, 2003 by and among the Borrower, RETEP, Inc.,
AbilityOne Products Corp., and AbilityOne II, L.L.C., as representative of the
company stockholders, as in effect on the Closing Date and without giving effect
to any subsequent amendment or modification thereto.
"AbilityOne Corporation" means AbilityOne Corporation, a Michigan
corporation.
"Accounting Changes" is defined in Section 9.8 hereof.
"Accounts" means the Borrower's or a Subsidiary's right to the payment of
money from the sale, lease or other disposition of goods or other assets by the
Borrower or a Subsidiary, a rendering of services by the Borrower or a
Subsidiary, a loan by the Borrower or a Subsidiary, the overpayment of taxes or
other liabilities of the Borrower, or otherwise, however such right to payment
may be evidenced, together with all other rights and interests (including all
liens and security interests) that the Borrower or Subsidiary may at any time
have against any account debtor or other party obligated thereon or against any
of the property of such account debtor or other party.
"Acquisition" means any transaction, or any series of related transactions,
consummated on or after the Closing Date, by which the Borrower or any of its
Subsidiaries (i) acquires any going concern business or all or substantially all
of the assets of any Person, or division thereof, whether through purchase of
assets, merger or otherwise or (ii) directly or indirectly acquires from one or
more Persons (in one transaction or as the most recent transaction in a series
of transactions) at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage of voting power) of the outstanding
ownership interests of a partnership or limited liability company of any Person.
"Advance" means a borrowing hereunder consisting of the aggregate amount of
several Loans (i) made by some or all of the Lenders on the same date, or (ii)
converted or continued by the Lenders on the same date of conversion or
continuation, consisting, in either case, of the aggregate amount of the several
Loans of the same Type and, in the case of Eurodollar Loans, for the same
Interest Period.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of 10% or more of any class of voting securities (or other ownership
interests) of the controlled Person or possesses, directly or indirectly, the
power to direct or cause the direction of the management or policies of the
controlled Person, whether through ownership of voting securities, by contract
or otherwise.
"Agent" means BOMC in its capacity as contractual representative of the
Lenders pursuant to Article X, and not in its individual capacity as a Lender,
as Administrative Agent, and any successor Agent appointed pursuant to Article
X.
"Aggregate Commitment" means the aggregate of the Commitments of all the
Lenders. The initial Aggregate Commitment as of the Closing Date is Six Hundred
Million and 00/100 Dollars ($600,000,000). After giving effect to the initial
Advance hereunder on the Funding Date, any unused portion of the Aggregate
Commitment shall terminate and be of no further force or effect.
"Aggregate Outstanding Credit Exposure" means, at any time, the aggregate
of the Outstanding Credit Exposure of all the Lenders.
"Agreement" means this Bridge Credit Agreement, as it may be amended,
restated, supplemented or otherwise modified and as in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect in the United States from time to time, applied in a
manner consistent with that used in preparing the financial statements of the
Borrower referred to in Section 5.4; provided, however, that except as provided
in Section 9.8, with respect to the calculation of the financial covenants set
forth in Sections 6.20, 6.21 and 6.22 (and the defined terms used in such
Sections), "Agreement Accounting Principles" means generally accepted accounting
principles as in effect in the United States as of the Closing Date, applied in
a manner consistent with that used in preparing the financial statements of the
Borrower referred to in Section 5.4 hereof.
"Alternate Base Rate" means, for any day, a fluctuating rate of interest
per annum equal to the higher of (i) the Prime Rate for such day and (ii) the
sum of (a) the Federal Funds Effective Rate for such day and (b) one-half of one
percent (0.5% ) per annum.
"Applicable Fee Rate" means, with respect to the Facility Fee at any time,
the percentage rate per annum which is applicable at such time with respect to
such fee as set forth in the Pricing Schedule.
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"Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"Approved Fund" means any Fund that is administered or managed by (i) a
Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Arrangers" means, collectively, Banc One Capital Markets, Inc., a Delaware
corporation, and its successors, and Banc of America Securities LLC, and its
successors, in their capacities as Co-Lead Arrangers and Joint Book Runners.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Assignment Agreement" is defined in Section 12.3.1.
"Authorized Officer" means any of the chief executive officer, president,
chief operating officer, chief financial officer, treasurer or assistant
treasurer of the Borrower, acting singly.
"BOMC" means Banc One Mezzanine Corporation, in its individual capacity,
and its successors.
"Borrower" means Patterson Dental Company, a Minnesota corporation, and its
permitted successors and assigns (including, without limitation, a debtor in
possession on its behalf).
"Borrowing Notice" is defined in Section 2.1.2.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago, Illinois for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in Dollars are carried
on in the London interbank market and (ii) for all other purposes, a day (other
than a Saturday or Sunday) on which banks generally are open in Chicago,
Illinois for the conduct of substantially all of their commercial lending
activities and interbank wire transfers can be made on the Fedwire system.
"Capitalized Lease" of a Person means any lease of Property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Equivalent Investments" means (i) short-term obligations of, or fully
guaranteed by, the United States of America, (ii) commercial paper rated A-1 or
better by S&P or P-1 or
3
better by Moody's, (iii) demand deposit accounts maintained in the ordinary
course of business, (iv) certificates of deposit issued by and time deposits
with commercial banks (whether domestic or foreign) having capital and surplus
in excess of $100,000,000, and (v) money market funds investing primarily in
assets of the type described in clauses (i) and (ii) of this definition;
provided in each case that the same provides for payment of both principal and
interest (and not principal alone or interest alone) and is not subject to any
contingency regarding the payment of principal or interest.
"Change in Control" means (i) the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the SEC under the Securities Exchange Act of 1934) of 30% or more of
the outstanding shares of voting stock of the Borrower; (ii) other than pursuant
to a transaction otherwise permitted under this Agreement, the Borrower shall
cease to own, directly or indirectly and free and clear of all Liens or other
encumbrances, all of the outstanding shares of voting stock of the Guarantors on
a fully diluted basis; or (iii) the majority of the Board of Directors of the
Borrower fails to consist of Continuing Directors.
"Closing Date" means September 12, 2003
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and any rule or regulation issued
thereunder.
"Commitment" means, for each Lender, such Lender's obligation to make Loans
on the Funding Date to the Borrower in an aggregate amount not exceeding the
amount set forth for such Lender on the Commitment Schedule.
"Commitment Schedule" means the Schedule identifying each Lender's
Commitment as of the Closing Date attached hereto and identified as such.
"Consolidated Adjusted EBITDA" means, as to any Person for any period, the
sum of Consolidated EBIT for such period plus consolidated depreciation and
amortization for such period. For Persons acquired by the Borrower or any
Subsidiary during the relevant measurement period, their EBITDA results will be
included in the calculation of Consolidated Adjusted EBITDA as if those Persons
were owned by the Borrower or such Subsidiary for the entire reporting period.
Consolidated Adjusted EBITDA will be calculated on a rolling four-quarter basis.
"Consolidated Adjusted Net Income" means, as to any Person for any period,
the Consolidated Net Income of such Person, provided that, for Persons acquired
by the Borrower or any Subsidiary during the relevant measurement period, their
Consolidated Net Income will be included in the calculation of Consolidated
Adjusted Net Income as if those Persons were owned by the Borrower or such
Subsidiary for the entire reporting period. Consolidated Adjusted Net Income
will be calculated on a rolling four-quarter basis.
"Consolidated EBIT" means, as to any Person and with reference to any
period, Consolidated Net Income plus, to the extent deducted from revenues in
determining Consolidated Net Income, (i) Consolidated Interest Expense, and (ii)
expense for federal, state,
4
local and foreign income and franchise taxes paid or accrued, all calculated for
such Person and its Subsidiaries on a consolidated basis.
"Consolidated Interest Expense" means, as to any Person and with reference
to any period, the interest expense of such Person and its Subsidiaries
calculated on a consolidated basis for such period including, without
limitation, such interest expense as may be attributable to capitalized leases,
receivables transaction financing costs, the discount or implied interest
component of off-balance sheet liabilities, all commissions, discounts and other
fees and charges owed with respect to Letters of Credit and net mark-to-market
exposure.
"Consolidated Net Income" means as to any Person and with reference to any
period, the net income (or loss) of such Person and its Subsidiaries calculated
on a consolidated basis for such period, excluding any non-cash charges or gains
which are unusual, non-recurring or extraordinary.
"Consolidated Net Worth" means, as of any date of determination, the
consolidated total stockholders' equity (including capital stock, additional
paid-in capital and retained earnings) of the Borrower and its Subsidiaries
determined in accordance with Agreement Accounting Principles.
"Consolidated Total Debt" means (i) all indebtedness of the Borrower and
its Subsidiaries, on a consolidated basis, reflected on a balance sheet prepared
in accordance with Agreement Accounting Principles, plus, without duplication
(ii) the face amount of all outstanding Letters of Credit in respect of which
the Borrower or any Subsidiary has any reimbursement obligation and the
principal amount of all Contingent Obligations of the Borrower and its
Subsidiaries, plus Capitalized Lease Obligations, plus obligations arising from
the sale of accounts receivable and other forms of off-balance sheet financing,
including Off-Balance Sheet Liabilities.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract, application for a Letter of Credit or the
obligations of any such Person as general partner of a partnership with respect
to the liabilities of the partnership.
"Continuing Director" means, with respect to any Person as of any date of
determination, any member of the board of directors of such Person who (i) was a
member of such board of directors on the Closing Date, or (ii) was nominated for
election or elected to such board of directors with the approval of the required
majority of the Continuing Directors who were members of such board at the time
of such nomination or election; provided that if any individual who is so
elected or nominated in connection with a merger, consolidation, acquisition or
similar transaction and who was not a Continuing Director prior thereto,
together with all other individuals so elected or nominated in connection with
such merger, consolidation, acquisition or similar transaction who were not
Continuing Directors prior thereto, constitute a majority of the
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members of the board of directors of such Person, such individual shall not be a
Continuing Director.
"Controlled Group" means all members of a controlled group of corporations
or other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any of
its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Conversion/Continuation Notice" is defined in Section 2.7.
"Credit Extension" means the making of an Advance hereunder.
"Credit Party" means, collectively, the Borrower and each of the
Guarantors.
"Default" means an event described in Article VII.
"Designated Lender" means, with respect to each Designating Lender, each
Eligible Designee designated by such Designating Lender pursuant to Section
12.1.2.
"Designating Lender" means, with respect to each Designated Lender, the
Lender that designated such Designated Lender pursuant to Section 12.1.2.
"Designation Agreement" is defined in Section 12.1.2.
"Disqualified Stock" means any preferred or other capital stock that, by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder thereof, in whole or in part, on or prior
to the date that is ninety-one (91) days after the Facility Termination Date.
"Dollar", "dollar" and "$" means the lawful currency of the United States
of America.
"Domestic Subsidiary" means any Subsidiary of any Person that is not a
Foreign Subsidiary.
"Eligible Designee" means a special purpose corporation, partnership,
trust, limited partnership or limited liability company that is administered by
the respective Designating Lender or an Affiliate of such Designating Lender and
(i) is organized under the laws of the United States of America or any state
thereof, (ii) is engaged primarily in making, purchasing or otherwise investing
in commercial loans in the ordinary course of its business and (iii) issues (or
the parent of which issues) commercial paper rated at least A-1 or the
equivalent thereof by S&P or P-1 or the equivalent thereof by Moody's.
"Environmental Laws" means any and all applicable federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
(i) the protection of the environment, (ii) the effect of the environment on
human health, (iii) emissions, discharges or releases of pollutants,
contaminants,
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hazardous substances or wastes into surface water, ground water or land, or (iv)
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rules or regulations promulgated thereunder.
"Eurodollar Advance" means an Advance which, except as otherwise provided
in Section 2.9, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the applicable British Bankers' Association LIBOR rate
for deposits in Dollars as reported by any generally recognized financial
information service as of 11:00 a.m. (London time) two (2) Business Days prior
to the first day of such Interest Period, and having a maturity equal to such
Interest Period, provided that, if no such British Bankers' Association LIBOR
rate is available to the Agent, the applicable Eurodollar Base Rate for the
relevant Interest Period shall instead be the rate determined by the Agent to be
the rate at which BOMC or one of its affiliate banks offers to place deposits in
Dollars with first-class banks in the London interbank market at approximately
11:00 a.m. (London time) two (2) Business Days prior to the first day of such
Interest Period, in the approximate amount of BOMC's relevant Eurodollar Loan
and having a maturity equal to such Interest Period.
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.9, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the then Applicable Margin, changing as and when the Applicable Margin
changes.
"Excluded Taxes" means, in the case of each Lender or applicable Lending
Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or any political
combination or subdivision or taxing authority thereof or (ii) the jurisdiction
in which the Agent's or such Lender's principal executive office or such
Lender's applicable Lending Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another document
is specifically referenced.
"Existing Credit Agreements" means (i) that certain Credit Agreement, dated
as of November 22, 2002, by and among the Borrower, the lenders parties thereto,
Banc One Capital Markets, Inc., as lead arranger, and Bank One, NA, as agent, as
the same has been amended, restated, supplemented or otherwise modified from
time to time, and (ii) that certain Credit Agreement, dated as of March 27,
2002, among AbilityOne Corporation, certain of its subsidiaries party thereto,
the lenders party thereto, Wachovia Bank, National Association, as
administrative agent, Antares Capital Corporation, Bank of America, N.A.,
Madison Capital
7
Funding LLC and BNP Paribas, as the same has been amended, restated,
supplemented or otherwise modified from time to time.
"Facility Fee" is defined in Section 2.4.
"Facility Termination Date" means the earlier of (a) March 12, 2004, (b)
September 19, 2003 if the AbilityOne Acquisition has not occurred prior thereto,
and (c) the date the Loans shall be required to be paid in full pursuant to
Section 8.1 hereof.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three (3)
Federal funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Financing" means, with respect to any Person, (i) the issuance or sale by
such Person of any equity interests in such Person, or (ii) the issuance,
assumption, incurrence or sale by such Person of any Indebtedness (other than
Indebtedness described in Sections 6.14.1 through 6.14.10, but including any
replacement, renewal, refinancing or extension of any Indebtedness permitted
under Section 6.14.2); provided, however, that the foregoing shall not permit
the incurrence by the Borrower or any Subsidiary of any Indebtedness if such
incurrence is not otherwise permitted by this Agreement.
"Floating Rate" means, for any day, a rate per annum equal to the sum of
(i) the Alternate Base Rate for such day, changing when and as the Alternate
Base Rate changes plus (ii) the then Applicable Margin, changing as and when the
Applicable Margin changes.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.9, bears interest at the Floating Rate.
"Floating Rate Loan" means a Loan which, except as otherwise provided in
Section 2.9, bears interest at the Floating Rate.
"Foreign Subsidiary" means (i) any Subsidiary of any Person that is not
organized under the laws of a jurisdiction located in the United States of
America and (ii) any Subsidiary of a Person described in clause (i) hereof that
is organized under the laws of a jurisdiction located in the United States of
America.
"Foreign Subsidiary Investment" means the sum, without duplication, of (i)
the aggregate outstanding principal amount of all intercompany loans made on or
after the Closing Date from any Credit Party to any Foreign Subsidiary; (ii) all
outstanding Investments made on or after the Closing Date by any Credit Party in
any Foreign Subsidiary; and (iii) an amount equal to the net benefit derived by
the Foreign Subsidiaries resulting from any non-arm's-length transactions, or
any other transfer of assets conducted, in each case entered into on or after
the Closing Date, between any Credit Party, on the one hand, and such Foreign
Subsidiaries, on the other hand,
8
other than (a) transactions in the ordinary course of business, (b) in respect
of legal, accounting, reporting, listing and similar administrative services
provided by any Credit Party to any such Foreign Subsidiary in the ordinary
course of business consistent with past practice, and (c) the AbilityOne
Acquisition.
"Fund" means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"Funding Date" means a date on which the initial Advance is made hereunder.
"Guarantor" means each of the Borrower's Material Domestic Subsidiaries
(other than any SPV) and all other Material Domestic Subsidiaries of the
Borrower which become Guarantors in satisfaction of the provisions of Section
6.23, in each case, together with their respective permitted successors and
assigns. The initial Guarantors are AbilityOne Corporation, AbilityOne, PDSI and
Webster.
"Guaranty" means the Guaranty, dated as of September 12, 2003, made by
certain Subsidiaries of the Borrower in favor of the Agent for the benefit of
the Lenders, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"Indebtedness" of a Person means, at any time, without duplication, such
Person's (i) obligations for borrowed money, (ii) obligations representing the
deferred purchase price of Property or services (other than current accounts
payable arising in the ordinary course of such Person's business payable on
terms customary in the trade), (iii) obligations, whether or not assumed,
secured by Liens or payable out of the proceeds or production from Property now
or hereafter owned or acquired by such Person, (iv) obligations which are
evidenced by notes, bonds, debentures, acceptances, or other instruments, (v)
obligations to purchase securities or other Property arising out of or in
connection with the sale of the same or substantially similar securities or
Property, (vi) Capitalized Lease Obligations, (vii) Contingent Obligations of
such Person, (viii) reimbursement obligations under letters of credit, bankers'
acceptances, surety bonds and similar instruments (ix) Off-Balance Sheet
Liabilities, (x) obligations under Sale and Leaseback Transactions, (xi) Net
Mark-to-Market Exposure under Rate Management Transactions, (xii) Disqualified
Stock, and (xiii) any other obligation for borrowed money or other financial
accommodation which in accordance with Agreement Accounting Principles would be
shown as a liability on the consolidated balance sheet of such Person.
"Interest Expense Coverage Ratio" is defined in Section 6.21.
"Interest Period" means, with respect to a Eurodollar Advance, a period of
one, two, three or six months, or, to the extent available to all of the
Lenders, nine or twelve months, commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on but
exclude the day which corresponds numerically to such date one, two, three or
six months, or if applicable nine or twelve months, thereafter, provided,
however, that if there is no such numerically corresponding day in such next,
second, third, sixth, ninth or twelfth succeeding month, such Interest Period
shall end on the last Business Day of such next, second, third, sixth, ninth or
twelfth succeeding month. If an Interest Period would otherwise
9
end on a day which is not a Business Day, such Interest Period shall end on the
next succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Investment" of a Person means any loan, advance (other than commission,
travel, relocation and similar advances to directors, officers and employees
made in the ordinary course of business), extension of credit (other than
accounts receivable arising in the ordinary course of business on terms
customary in the trade) or contribution of capital by such Person; stocks,
bonds, mutual funds, partnership interests, notes, debentures or other
securities owned by such Person; any deposit accounts and certificates of
deposit owned by such Person; and structured notes, derivative financial
instruments and other similar instruments or contracts owned by such Person.
"Lenders" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent, the
office, branch, subsidiary or affiliate of such Lender or the Agent listed on
the signature pages hereof or on the administrative information sheets provided
to the Agent in connection herewith or on a Schedule or otherwise selected by
such Lender or the Agent pursuant to Section 2.15.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Leverage Ratio" means, as the end of any of the Borrower's fiscal
quarters, the ratio of Consolidated Total Debt as of the end of such fiscal
quarter to Consolidated Adjusted EBITDA for the four consecutive fiscal quarters
then ended; provided, that the Leverage Ratio shall be calculated, with respect
to Permitted Acquisitions, on a pro forma basis using historical financial
statements and containing reasonable adjustments satisfactory to the Agent,
broken down by fiscal quarter in the Borrower's reasonable judgment.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement, and, in the case of stock, stockholders agreements, voting trust
agreements and all similar arrangements).
"Loan" means, with respect to a Lender, such Lender's loan made pursuant to
Article II (or any conversion or continuation thereof).
"Loan Documents" means this Agreement, the Guaranty, and all other
documents, instruments, notes (including any Notes issued pursuant to Section
2.11 (if requested)) and agreements executed in connection herewith or therewith
or contemplated hereby or thereby, as the same may be amended, restated or
otherwise modified and in effect from time to time.
10
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), operations or results of
operations, performance or prospects of the Borrower and its Subsidiaries taken
as a whole, (ii) the ability of the Borrower or any Subsidiary to perform its
obligations under the Loan Documents, (iii) the validity or enforceability of
any of the Loan Documents or (iv) the rights or remedies of the Agent or the
Lenders under any of the Loan Documents.
"Material Domestic Subsidiary" means (i) PDSI and Webster, and (ii) any
other Domestic Subsidiary of the Borrower (other than an SPV) that meets one or
both of the following criteria: (i) such Domestic Subsidiary's total assets,
determined on a consolidated basis with its Subsidiaries is greater than or
equal to fifteen percent (15%) of the consolidated total assets of the Borrower
and its Subsidiaries; or (ii) such Domestic Subsidiary's Consolidated Adjusted
Net Income is greater than or equal to fifteen percent (15%) of the Borrower's
Consolidated Adjusted Net Income, in each case as reported in the most recent
annual or quarterly financial statements of the Borrower delivered pursuant to
Section 6.1.1 or 6.1.2.
"Material Indebtedness" means any Indebtedness in an outstanding principal
amount of $10,000,000 or more in the aggregate (or the equivalent thereof in any
currency other than Dollars).
"Material Indebtedness Agreement" means any agreement under which any
Material Indebtedness was created or is governed or which provides for the
incurrence of Indebtedness in an amount which would constitute Material
Indebtedness (whether or not an amount of Indebtedness constituting Material
Indebtedness is outstanding thereunder).
"Moody's" means Moody's Investors Service, Inc. and any successor thereto.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, which is covered by Title IV of ERISA and to which the
Borrower or any member of the Controlled Group is obligated to make
contributions.
"Net Cash Proceeds" means, with respect to any sale of Property or any
Financing by any Person, (a) cash (freely convertible into Dollars) received by
such Person or any Subsidiary of such Person from such sale of Property
(including cash received as consideration for the assumption or incurrence of
liabilities incurred in connection with or in anticipation of such sale of
Property) or Financing, after (i) provision for all income or other taxes
measured by or resulting from such sale of Property, (ii) payment of all
reasonable brokerage commissions and other fees and expenses related to such
sale of Property or Financing, and (iii) all amounts used to repay Indebtedness
secured by a Lien on any asset disposed of in such sale of Property which is or
may be required (by the express terms of the instrument governing such
Indebtedness) to be repaid in connection with such sale of Property (including
payments made to obtain or avoid the need for the consent of any holder of such
Indebtedness) or Financing.
"Net Mark-to-Market Exposure" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions. "Unrealized
losses" means the fair market value of the cost to such Person of replacing such
Rate Management Transaction as of the date of determination
11
(assuming the Rate Management Transaction were to be terminated as of that
date), and "unrealized profits" means the fair market value of the gain to such
Person of replacing such Rate Management Transaction as of the date of
determination (assuming such Rate Management Transaction were to be terminated
as of that date).
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Note" is defined in Section 2.11.
"Obligations" means all Loans, advances, debts, liabilities, obligations,
covenants and duties owing by the Borrower or any Subsidiary to the Agent, any
Lender, the Arrangers, any affiliate of the Agent, any Lender or the Arrangers,
or any indemnitee under the provisions of Section 9.6 or any other provisions of
the Loan Documents, in each case of any kind or nature, present or future,
arising under this Agreement or any other Loan Document, whether or not
evidenced by any note, guaranty or other instrument, whether or not for the
payment of money, whether arising by reason of an extension of credit, loan,
foreign exchange risk, guaranty, indemnification, or in any other manner,
whether direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired. The term includes, without limitation, all interest, charges,
expenses, fees, attorneys' fees and disbursements, paralegals' fees (in each
case whether or not allowed), and any other sum chargeable to the Borrower or
any Subsidiary under this Agreement or any other Loan Document.
"Off-Balance Sheet Liability" of a Person means the principal component of
(i) any repurchase obligation or liability of such Person with respect to
accounts or notes receivable sold by such Person, (ii) any liability under any
Sale and Leaseback Transaction which is not a Capitalized Lease, (iii) any
liability under any so-called "synthetic lease" or "tax ownership operating
lease" transaction entered into by such Person, (iv) any Receivables Purchase
Facility or (v) any obligation arising with respect to any other transaction
which is the functional equivalent of or takes the place of borrowing but which
does not constitute a liability on the consolidated balance sheets of such
Person, but excluding from this clause (v) all Operating Leases.
"Off-Balance Sheet Trigger Event" is defined in Section 7.17.
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"Other Taxes" is defined in Section 3.5(ii).
"Outstanding Credit Exposure" means, as to any Lender at any time, the sum
of the aggregate principal amount of its Loans outstanding at such time.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each March, June, September and
December and the Facility Termination Date.
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"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"PDSI" means Patterson Dental Supply, Inc., a Minnesota corporation.
"Permitted Acquisition" is defined in Section 6.13.5.
"Permitted Purchase Money Debt" is defined in Section 6.14.5.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan, excluding any Multiemployer
Plan, which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code as to which the Borrower or any member
of the Controlled Group may have any liability.
"Pricing Schedule" means the Schedule identifying the Applicable Margin and
Applicable Fee Rate attached hereto and identified as such.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by BOMC or its parent (which is not necessarily the
lowest rate charged to any customer), changing when and as said prime rate
changes.
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"Pro Rata Share" means, with respect to a Lender, (i) prior to the Funding
Date, a portion equal to a fraction the numerator of which is such Lender's
Commitment at such time (in each case, as adjusted from time to time in
accordance with the provisions of this Agreement) and the denominator of which
is the Aggregate Commitment at such time, and (ii) from and after the Funding
Date and the funding of the Loans, a fraction the numerator of which is such
Lender's Outstanding Credit Exposure at such time and the denominator of which
is the sum of the Aggregate Outstanding Credit Exposure at such time.
"Purchase Price" means the total consideration and other amounts payable in
connection with any Acquisition, including, without limitation, any portion of
the consideration payable in cash, all Indebtedness, liabilities and contingent
obligations incurred or assumed in connection with such Acquisition and all
transaction costs and expenses incurred in connection with such Acquisition, but
exclusive of the value of any capital stock or other equity interests of the
Borrower or any Subsidiary issued as consideration for such Acquisition.
"Purchasers" is defined in Section 12.3.1.
"Rate Management Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Management Transactions, and (ii) any and all
13
cancellations, buy backs, reversals, terminations or assignments of any Rate
Management Transactions.
"Rate Management Transaction" means any transaction (including an agreement
with respect thereto) now existing or hereafter entered into by the Borrower or
a Subsidiary which is a rate swap, basis swap, forward rate transaction,
commodity swap, commodity option, equity or equity index swap, equity or equity
index option, bond option, interest rate option, foreign exchange transaction,
cap transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
these transactions) or any combination thereof, whether linked to one or more
interest rates, foreign currencies, commodity prices, equity prices or other
financial measures.
"Receivables Purchase Documents" means each of (i) that certain Receivables
Sale Agreement dated as of May 10, 2002, among the originators named therein and
PDC Funding Company, LLC, as buyer and that certain Receivables Purchase
Agreement dated as of May 10, 2002, among PDC Funding Company, LLC, the
Borrower, Preferred Receivables Funding Corporation, the financial institutions
party thereto and Bank One, as agent, as such agreements may be amended,
restated, extended or otherwise modified from time to time and (ii) that certain
Third Amended and Restated Contract Purchase Agreement, dated as of June 19,
2002, among the Borrower, PDSI, Webster, U.S. Bank National Association,
individually and as agent, and certain buyers identified therein, as such Third
Amended and Restated Contract Purchase Agreement may be amended, restated,
extended or otherwise modified from time to time.
"Receivables Purchase Facility" means (i) the transactions contemplated by
the Receivables Purchase Documents and (ii) other sales (including licenses),
with limited recourse, or no recourse, by PDSI or Webster of Accounts derived
from sales on contract of furnishings and equipment (but not, however, (a) open
account sales of supplies or (b) Accounts derived from provisions of services).
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks, non-banks and non-broker lenders for the purpose
of purchasing or carrying margin stocks applicable to member banks of the
Federal Reserve System.
"Regulation X" means Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).
14
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan
subject to Title IV of ERISA, excluding, however, such events as to which the
PBGC has by regulation waived the requirement of Section 4043(a) or (b) of ERISA
that it be notified within 30 days of the occurrence of such event, provided,
however, that a failure to meet the minimum funding standard of Section 412 of
the Code and of Section 302 of ERISA shall be a Reportable Event regardless of
the issuance of any such waiver of the notice requirement in accordance with
either Section 4043(a) or (b) of ERISA or Section 412(d) of the Code.
"Required Lenders" means (i) prior to the Funding Date, Lenders in the
aggregate having more than 50% of the Aggregate Commitment at such time, and
(ii) from and after the Funding Date, Lenders in the aggregate having more than
50% of the Aggregate Outstanding Credit Exposure at such time.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on
"Eurocurrency liabilities" (as defined in Regulation D).
"S&P" means Standard and Poor's Ratings Group, a division of The
McGraw-Hill Companies, Inc., and any successor thereto.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"Schedule" refers to a specific schedule to this Agreement, unless another
document is specifically referenced.
"SEC" means the United States Securities and Exchange Commission, and any
successor thereto.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Solvent" means, when used with respect to any Person, that at the time of
determination:
(i) the fair value of its assets (both at fair valuation and at present
fair saleable value) is equal to or in excess of the total amount of
its liabilities, including, without limitation, contingent
liabilities; and
(ii) it is then able and expects to be able to pay its debts as they
mature; and
(iii) it has capital sufficient to carry on its business as conducted and
as proposed to be conducted.
15
With respect to contingent liabilities (such as litigation, guarantees and
pension plan liabilities), such liabilities shall be computed at the amount
which, in light of all the facts and circumstances existing at the time,
represent the amount which can be reasonably be expected to become an actual or
matured liability.
"SPV" means any special purpose entity established for the purpose of
purchasing receivables in connection with a receivables securitization
transaction permitted under the terms of this Agreement.
"Subordinated Indebtedness" of a Person means any Indebtedness of such
Person the payment of which is subordinated to payment of the Obligations to the
written satisfaction of the Required Lenders.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of the Borrower
and its Subsidiaries, Property which represents more than 10% of the
consolidated assets of the Borrower and its Subsidiaries or property which is
responsible for more than 10% of the consolidated net sales or of the
Consolidated Net Income of the Borrower and its Subsidiaries, in each case, as
would be shown in the consolidated financial statements of the Borrower and its
Subsidiaries as at the end of the four fiscal quarter period ending with the
fiscal quarter immediately prior to the fiscal quarter in which such
determination is made (or if financial statements have not been delivered
hereunder for that fiscal quarter which ends the four fiscal quarter period,
then the financial statements delivered hereunder for the quarter ending
immediately prior to that quarter).
"Taxes" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes and Other Taxes.
"Transaction Documents" means the Loan Documents and the documents executed
and delivered by the Borrower or any of its Subsidiaries in connection with the
AbilityOne Acquisition including, without limitation, the AbilityOne Acquisition
Agreement.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating Rate
Advance or a Eurodollar Advance and with respect to any Loan, its nature as a
Floating Rate Loan or a Eurodollar Loan.
16
"Unfunded Liabilities" means the amount (if any) by which the present value
of all vested and unvested accrued benefits under each Single Employer Plan
subject to Title IV of ERISA exceeds the fair market value of all such Plan's
assets allocable to such benefits, all determined as of the then most recent
valuation date for such Plan for which a valuation report is available, using
PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"Webster" means Webster Veterinary Supply, Inc., a Minnesota corporation.
"Weighted Average Life to Maturity" means when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required scheduled payments
of principal, including payment at final maturity, in respect thereof, by (b)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
principal amount of such Indebtedness.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of the
outstanding voting securities (other than directors' qualifying shares) of which
shall at the time be owned or controlled, directly or indirectly, by such Person
or one or more Wholly-Owned Subsidiaries of such Person, or by such Person and
one or more Wholly-Owned Subsidiaries of such Person, or (ii) any partnership,
limited liability company, association, joint venture or similar business
organization 100% of the ownership interests having ordinary voting power of
which shall at the time be so owned or controlled.
1.2. Plural Forms. The foregoing definitions shall be equally applicable to
both the singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1. Loans.
2.1.1 Amounts of Loans. Subject to the terms and conditions set forth
in this Agreement, each Lender severally and not jointly agrees to make on
the Funding Date, a term loan, in Dollars, to the Borrower in an aggregate
amount up to such Lender's Commitment. All Loans shall be made by the
Lenders on the Funding Date simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any failure by any other Lender to perform its obligation
to make any Loan hereunder nor shall the Commitment of any Lender be
increased or decreased as a result of any such failure.
2.1.2 Borrowing Notice. The Borrower shall deliver to the Agent an
irrevocable notice (a "Borrowing Notice") signed by it on the Funding Date.
Such Borrowing Notice shall specify (i) the aggregate amount of the Loans
being requested and (ii) instructions
17
for the disbursement of proceeds of such Loans. The Loans shall initially
be Floating Rate Loans and thereafter may be continued as Floating Rate
Loans or converted into Eurodollar Rate Loans in the manner provided in
Section 2.7 and subject to the other conditions and limitations therein set
forth and set forth in this Article II. Any Borrowing Notice given pursuant
to this Section 2.1.2 shall be irrevocable.
2.1.3 Making of Loans. Promptly after receipt of the Borrowing Notice
under Section 2.1.2 in respect of the Loans, the Agent shall notify each
Lender by telecopy, or other similar form of transmission, of the proposed
Advance. Each Lender shall deposit an amount equal to its Pro Rata Share of
the Loans with the Agent at its office in Chicago, Illinois, in immediately
available funds, on the Funding Date, as specified in the Borrowing Notice.
Subject to the fulfillment of the conditions precedent set forth in Article
IV, the Agent shall make the proceeds of such amounts received by it
available to the Borrower at the Agent's office in Chicago, Illinois on
such date and shall disburse such proceeds in accordance with the
Borrower's disbursement instructions set forth in such Borrowing Notice.
The failure of any Lender to deposit the amount described above with the
Agent on such date shall not relieve any other Lender of its obligations
hereunder to make its Loan on such date.
2.1.4 Repayment of the Loans. The Loans shall be repaid in a single
installment payable on the Facility Termination Date. No installment of any
Loan may be reborrowed once repaid. In addition to the scheduled payments
on the Loans, the Borrower (i) may make the voluntary prepayments described
in Section 2.6 for credit against the scheduled payments on the Loans
pursuant to Section 2.6 and (ii) shall make the mandatory prepayments
prescribed in Section 2.2 for credit against the scheduled payments on the
Loans pursuant to Section 2.2.
2.2. Required Payments; Termination. (a) Any outstanding Advances and all
other unpaid Obligations shall be paid in full by the Borrower on the Facility
Termination Date. Until all of the Obligations (other than contingent indemnity
obligations) shall have been fully paid and satisfied and all financing
arrangements among the Borrower and the Lenders hereunder and under the other
Loan Documents shall have been terminated, all of the rights and remedies under
this Agreement and the other Loan Documents shall survive.
(b) Asset Sales and Insurance Proceeds. Upon (1) the consummation of
any sale, lease, conveyance, transfer, casualty or other disposition ("Asset
Sale") of Property (other than sales permitted under Sections 6.12.1 through
6.12.6) by the Borrower or any Subsidiary of the Borrower or (2) the receipt by
the Borrower or any of its Subsidiaries of proceeds from insurance in connection
with any property loss or casualty ("Loss Proceeds"), and in each case, except
as provided in the second sentence of this clause (b), within five (5) Business
Days after the Borrower's or any of its Subsidiaries' (x) receipt of any Net
Cash Proceeds from any such Asset Sale or any such Loss Proceeds, or (y)
conversion to cash or Cash Equivalent Investments of non-cash proceeds (whether
principal or interest and including securities, release of escrow arrangements
or lease payments) received from any Asset Sale, the Borrower shall make a
mandatory prepayment of the Obligations, subject to the provisions governing the
application of payments set forth in Section 2.2(d), in an amount equal to one
hundred percent (100%) of such Net Cash Proceeds or Loss Proceeds or such
proceeds converted from non-cash to cash or Cash
18
Equivalent Investments. Unless a Default or Unmatured Default shall have
occurred and is continuing, in the event that the Borrower shall have given the
Agent written notice within thirty (30) days after an Asset Sale or event giving
rise to such Loss Proceeds of its intention to replace the assets or use such
Net Cash Proceeds or Loss Proceeds, as applicable, to acquire other like-kind
assets (which shall include, without limitation, assets acquired pursuant to a
Permitted Acquisition) within twelve (12) months following such Asset Sale or
the receipt of such Loss Proceeds, as applicable, then such Net Cash Proceeds or
Loss Proceeds shall not be subject to the provisions of the first sentence of
this clause (b) unless and to the extent that such applicable period shall have
expired without such replacement having been made.
(c) Financings. Upon the consummation of any Financing by the Borrower
or any Subsidiary of the Borrower, within three (3) Business Days after the
Borrower's or any of its Subsidiaries' receipt of any Net Cash Proceeds from
such Financing, the Borrower shall make a mandatory prepayment of the
Obligations, subject to the provisions governing the application of payments set
forth in Section 2.2(d), in an amount equal to one hundred percent (100%) of
such Net Cash Proceeds.
(d) Application of Designated Prepayments. Each mandatory prepayment
required by clauses (b) and (c) of this Section 2.2 shall be referred to herein
as a "Designated Prepayment." Designated Prepayments shall be applied to repay
Loans ratably in an amount equal to such Designated Prepayment.
(e) Application and Priority of Prepayments. With respect to the
reduction of the Loans on any date, Designated Prepayments shall first be
applied to Floating Rate Loans and to any Eurodollar Rate Loans maturing on such
date and then to subsequently maturing Eurodollar Rate Loans in order of
maturity.
2.3. Ratable Loans; Types of Advances. Each Advance hereunder shall consist
of Loans made from the several Lenders ratably in proportion to their respective
Pro Rata Shares. The Advances may be Floating Rate Advances or Eurodollar
Advances, or a combination thereof, selected by the Borrower in accordance with
Section 2.7.
2.4. Facility Fee. The Borrower shall pay to the Agent, for the account of
the Lenders a facility fee (the "Facility Fee") at a per annum rate equal to the
Applicable Fee Rate multiplied by (i) prior to the Funding Date, each Lender's
Commitment, and (ii) on and after the Funding Date, each Lender's Outstanding
Credit Exposure, from the Closing Date to and including the date on which all of
the Loans shall be repaid in full. All such Facility Fees payable hereunder
shall be payable quarterly in arrears on each Payment Date.
2.5. Minimum Amount of Each Advance. Each Eurodollar Advance shall be in
the minimum amount of $1,000,000 (and in multiples of $100,000 if in excess
thereof), and each Floating Rate Advance shall be in the minimum amount of
$1,000,000 (and in multiples of $100,000 if in excess thereof).
2.6. Optional Principal Payments. The Borrower may from time to time pay,
without penalty or premium, all outstanding Floating Rate Advances, or any
portion of the outstanding Floating Rate Advances, in a minimum aggregate amount
of $1,000,000 or any integral multiple
19
of $1,000,000 in excess thereof, upon one (1) Business Day's prior notice to the
Agent. The Borrower may from time to time pay, subject to the payment of any
funding indemnification amounts required by Section 3.4 but without penalty or
premium, all outstanding Eurodollar Advances, or, in a minimum aggregate amount
of $1,000,000 or any integral multiple of $1,000,000 in excess thereof, any
portion of the outstanding Eurodollar Advances upon three (3) Business Days'
prior notice to the Agent.
2.7. Conversion and Continuation of Outstanding Advances; No Conversion or
Continuation of Eurodollar Advances After Default. Floating Rate Advances shall
continue as Floating Rate Advances unless and until such Floating Rate Advances
are converted into Eurodollar Advances pursuant to this Section 2.7 or are
repaid in accordance with Section 2.6. Each Eurodollar Advance shall continue as
a Eurodollar Advance until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Advance shall be automatically converted
into a Floating Rate Advance unless (x) such Eurodollar Advance is or was repaid
in accordance with Section 2.6 or (y) the Borrower shall have given the Agent a
Conversion/Continuation Notice (as defined below) requesting that, at the end of
such Interest Period, such Eurodollar Advance continue as a Eurodollar Advance
for the same or another Interest Period. Subject to the terms of Section 2.6 and
the payment of any funding indemnification amounts required by Section 3.4, the
Borrower may elect from time to time to convert all or any part of an Advance of
any Type into any other Type or Types of Advances. Notwithstanding anything to
the contrary contained in this Section 2.7, during the continuance of a Default
or an Unmatured Default, the Agent may (or shall at the direction of the
Required Lenders), by notice to the Borrower, declare that no Advance may be
made as, converted to or, following the expiration of any Interest Periods then
in effect, continued as a Eurodollar Advance. The Borrower shall give the Agent
irrevocable notice (a "Conversion/Continuation Notice") of each conversion of an
Advance or continuation of a Eurodollar Advance not later than 12:00 noon
(Chicago time) on the same Business Day, in the case of a conversion into a
Floating Rate Advance, or three (3) Business Days, in the case of a conversion
into or continuation of a Eurodollar Advance, prior to the date of the requested
conversion or continuation, specifying:
(i) the requested date, which shall be a Business Day, of such conversion
or continuation,
(ii) the aggregate amount and Type of the Advance which is to be converted
or continued, and
(iii) the amount of such Advance which is to be converted into or continued
as a Eurodollar Advance and the duration of the Interest Period
applicable thereto.
2.8. Changes in Interest Rate, etc. Each Floating Rate Advance shall bear
interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is automatically converted from a
Eurodollar Advance into a Floating Rate Advance pursuant to Section 2.7, to but
excluding the date it is paid or is converted into a Eurodollar Advance pursuant
to Section 2.7 hereof, at a rate per annum equal to the Floating Rate for such
day. Changes in the rate of interest on that portion of any Advance maintained
as a Floating Rate Advance will take effect simultaneously with each change in
the Alternate Base Rate. Each
20
Eurodollar Advance shall bear interest on the outstanding principal amount
thereof from and including the first day of the Interest Period applicable
thereto to (but not including) the last day of such Interest Period at the
interest rate determined by the Agent as applicable to such Eurodollar Advance
based upon the Borrower's selections under Section 2.7 and otherwise in
accordance with the terms hereof. No Interest Period may end after the Facility
Termination Date.
2.9. Rates Applicable After Default. During the continuance of a Default
the Required Lenders may, at their option, by notice to the Borrower (which
notice may be revoked at the option of the Required Lenders notwithstanding any
provision of Section 8.2 requiring unanimous consent of the Lenders to changes
in interest rates), declare that (i) each Eurodollar Advance shall bear interest
for the remainder of the applicable Interest Period at a rate per annum equal to
the Floating Rate in effect from time to time plus 2% per annum, (ii) each
Floating Rate Advance shall bear interest at a rate per annum equal to the
Floating Rate in effect from time to time plus 2% per annum; provided that,
during the continuance of a Default under Section 7.2, 7.3 (solely arising as a
result of a breach of any of Sections 6.20 through 6.22), 7.6 or 7.7, the
interest rates set forth in clauses (i) and (ii) above shall be applicable to
all Credit Extensions, Advances, fees and other Obligations hereunder without
any election or action on the part of the Agent or any Lender.
2.10. Method of Payment. All payments of the Obligations hereunder shall be
made, without setoff, deduction, or counterclaim, in immediately available funds
to the Agent at the Agent's address specified pursuant to Article XIII, or at
any other Lending Installation of the Agent specified in writing by the Agent to
the Borrower, by 12:00 noon (Chicago time) on the date when due and shall
(except as otherwise specifically required hereunder) be applied ratably by the
Agent among the Lenders. Each payment delivered to the Agent for the account of
any Lender shall be delivered promptly by the Agent to such Lender in the same
type of funds that the Agent received at its address specified pursuant to
Article XIII or at any Lending Installation specified in a notice received by
the Agent from such Lender. The Agent is hereby authorized to charge the account
of the Borrower maintained with BOMC for each payment of the Obligations as it
becomes due hereunder.
2.11. Noteless Agreement; Evidence of Indebtedness.
(i) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender from time to
time, including the amounts of principal and interest payable and paid
to such Lender from time to time hereunder.
(ii) The Agent shall also maintain accounts in which it will record (a) the
date and the amount of each Loan made hereunder, the Type thereof and
the Interest Period (in the case of a Eurodollar Advance) with respect
thereto, (b) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each Lender
hereunder, (c) the effective date and amount of each Assignment
Agreement delivered to and accepted by it and the parties thereto
pursuant to Section 12.3, (d) the amount of any sum received by the
Agent
21
hereunder from the Borrower and each Lender's share thereof, and (e)
all other appropriate debits and credits as provided in this
Agreement, including, without limitation, all fees, charges, expenses
and interest.
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of the
existence and amounts of the Obligations therein recorded; provided,
however, that the failure of the Agent or any Lender to maintain such
accounts or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Obligations in accordance with
their terms.
(iv) Any Lender may request that its Loans be evidenced by a promissory
note in substantially the form of Exhibit E (a "Note"). In such event,
the Borrower shall prepare, execute and deliver to such Lender such
Note payable to the order of such Lender or its registered assigns.
Thereafter, the Loans evidenced by such Note and interest thereon
shall at all times (prior to any assignment pursuant to Section 12.3)
be represented by one or more Notes payable to the order of the payee
named therein, except to the extent that any such Lender subsequently
returns any such Note for cancellation and requests that such Loans
once again be evidenced as described in paragraphs (i) and (ii) above.
2.12. Telephonic Notices. The Borrower hereby authorizes the Lenders and
the Agent to extend, convert or continue Advances, effect selections of Types of
Advances and to transfer funds based on telephonic notices made by any person or
persons the Agent or any Lender in good faith believes to be acting on behalf of
the Borrower, it being understood that the foregoing authorization is
specifically intended to allow Borrowing Notices and Conversion/Continuation
Notices to be given telephonically. The Borrower agrees to deliver promptly to
the Agent a written confirmation, signed by an Authorized Officer, if such
confirmation is requested by the Agent or any Lender, of each telephonic notice.
If the written confirmation differs in any material respect from the action
taken by the Agent and the Lenders, the records of the Agent and the Lenders
shall govern absent manifest error.
2.13. Interest Payment Dates; Interest and Fee Basis. Interest accrued on
each Floating Rate Advance shall be payable in arrears on each Payment Date,
commencing with the first such date to occur after the Closing Date, on any date
on which the Floating Rate Advance is prepaid, whether due to acceleration or
otherwise, and at maturity. Interest accrued on that portion of the outstanding
principal amount of any Floating Rate Advance converted into a Eurodollar
Advance on a day other than a Payment Date shall be payable on the date of
conversion. Interest accrued on each Eurodollar Advance shall be payable on the
last day of its applicable Interest Period, on any date on which the Eurodollar
Advance is prepaid, whether by acceleration or otherwise, and at maturity.
Interest accrued on each Eurodollar Advance having an Interest Period longer
than three (3) months shall also be payable on the last day of each three-month
interval during such Interest Period. Interest on Eurodollar Advances and all
fees hereunder shall be calculated for actual days elapsed on the basis of a
360-day year. Interest on Floating Rate Advances shall be calculated for actual
days elapsed on the basis of a 365/366-day year. Interest shall be payable for
the day an Advance is made but not for the day of any payment on the amount paid
if payment is received prior to 12:00 noon (Chicago time) at the place of
payment. If any payment
22
of principal of or interest on an Advance, any fees or any other amounts payable
to the Agent or any Lender hereunder shall become due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest, fees and commissions in connection with such
payment.
2.14. Notification of Advances, Interest Rates and Prepayments;
Availability of Loans. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Borrowing Notice, Conversion/Continuation
Notice, and repayment notice received by it hereunder. The Agent will notify the
Borrower and each Lender of the interest rate applicable to each Eurodollar
Advance promptly upon determination of such interest rate and will give the
Borrower and each Lender prompt notice of each change in the Alternate Base
Rate. Not later than 12:00 noon (Chicago time) on the Funding Date, each Lender
shall make available its Loan or Loans in funds immediately available in Chicago
to the Agent at its address specified pursuant to Article XIII. The Agent will
promptly make the funds so received from the Lenders available to the Borrower
at the Agent's aforesaid address.
2.15. Lending Installations. Each Lender may book its Loans at any Lending
Installation selected by such Lender, and may change its Lending Installation
from time to time. All terms of this Agreement shall apply to any such Lending
Installation and the Loans and any Notes issued hereunder shall be deemed held
by each Lender for the benefit of any such Lending Installation. Each Lender
may, by written notice to the Agent and the Borrower in accordance with Article
XIII, designate replacement or additional Lending Installations through which
Loans will be made by it and for whose account Loan payments are to be made.
2.16. Non-Receipt of Funds by the Agent. Unless the Borrower or a Lender,
as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day for the first three days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower, the interest rate applicable to the relevant Loan.
2.17. Replacement of Lender. If the Borrower is required pursuant to
Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any
Lender's obligation to make or continue, or to convert Floating Rate Advances
into, Eurodollar Advances shall be suspended pursuant to Section 3.3 (any Lender
so affected an "Affected Lender"), the Borrower may elect, if such amounts
continue to be charged or such suspension is still effective, to terminate or
replace the Loans of such Affected Lender, provided that no Default or Unmatured
Default shall have occurred and be continuing at the time of such termination or
replacement, and provided
23
further that, concurrently with such termination or replacement, (i) if the
Affected Lender is being replaced, another bank or other entity which is
reasonably satisfactory to the Borrower and the Agent shall agree, as of such
date, to purchase for cash the Outstanding Credit Exposure of the Affected
Lender pursuant to an Assignment Agreement substantially in the form of Exhibit
C and to become a Lender for all purposes under this Agreement and to assume all
obligations of the Affected Lender to be terminated as of such date and to
comply with the requirements of Section 12.3 applicable to assignments, and (ii)
the Borrower shall pay to such Affected Lender in immediately available funds on
the day of such replacement (A) all interest, fees and other amounts then
accrued but unpaid to such Affected Lender by the Borrower hereunder to and
including the date of termination, including without limitation payments due to
such Affected Lender under Sections 3.1, 3.2 and 3.5, and (B) an amount, if any,
equal to the payment which would have been due to such Lender on the day of such
replacement under Section 3.4 had the Loans of such Affected Lender been prepaid
on such date rather than sold to the replacement Lender, in each case to the
extent not paid by the purchasing Lender and (iii) if the Affected Lender is
being terminated, the Borrower shall pay to such Affected Lender all Obligations
due to such Affected Lender (including the amounts described in the immediately
preceding clauses (i) and (ii) plus the outstanding principal balance of such
Affected Lender's Credit Extensions).
ARTICLE III
YIELD PROTECTION; TAXES
3.1. Yield Protection. If, on or after the Closing Date, the adoption of
any law or any governmental or quasi-governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law), or any change
in any such law, rule, regulation, policy, guideline or directive or in the
interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
(i) subjects any Lender or any applicable Lending Installation to any
Taxes, or changes the basis of taxation of payments (other than with
respect to Excluded Taxes) to any Lender in respect of its Eurodollar
Loans, or
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by,
any Lender or any applicable Lending Installation (other than reserves
and assessments taken into account in determining the interest rate
applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to increase the
cost to any Lender, any applicable Lending Installation of making,
funding or maintaining its Commitment or Eurodollar Loans, or reduces
any amount receivable by any Lender or any applicable Lending
Installation in connection with its Commitment or Eurodollar Loans, or
requires any Lender or any applicable Lending Installation to make any
payment calculated by reference to the amount of
24
Commitment or Eurodollar Loans held or interest received by it, by an
amount deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation of making or maintaining its Eurodollar Loans or
Commitment, as applicable, or to reduce the return received by such Lender or
applicable Lending Installation in connection with such Eurodollar Loans or
Commitment, then, within 15 days of demand, accompanied by the written statement
required by Section 3.6, by such Lender, the Borrower shall pay such Lender such
additional amount or amounts as will compensate such Lender for such increased
cost or reduction in amount received.
3.2. Changes in Capital Adequacy Regulations. If a Lender determines the
amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change, then, within 15 days of demand,
accompanied by the written statement required by Section 3.6, by such Lender,
the Borrower shall pay such Lender the amount necessary to compensate for any
shortfall in the rate of return on the portion of such increased capital which
such Lender determines is attributable to this Agreement, its Outstanding Credit
Exposure or its Commitment to make Loans, as applicable, hereunder (after taking
into account such Lender's policies as to capital adequacy). "Change" means (i)
any change after the Closing Date in the Risk-Based Capital Guidelines or (ii)
any adoption of, or change in, or change in the interpretation or administration
of any other law, governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force of law)
after the Closing Date which affects the amount of capital required or expected
to be maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "Risk-Based Capital Guidelines" means (i) the risk-based
capital guidelines in effect in the United States on the Closing Date, including
transition rules, and (ii) the corresponding capital regulations promulgated by
regulatory authorities outside the United States implementing the July 1988
report of the Basle Committee on Banking Regulation and Supervisory Practices
Entitled "International Convergence of Capital Measurements and Capital
Standards," including transition rules, and any amendments to such regulations
adopted prior to the Closing Date.
3.3. Availability of Types of Advances. If (x) any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or (y) the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, or
(iii) no reasonable basis exists for determining the Eurodollar Base Rate, then
the Agent shall suspend the availability of Eurodollar Advances and require any
affected Eurodollar Advances to be repaid or converted to Floating Rate Advances
on the respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law, subject to the
payment of any funding indemnification amounts required by Section 3.4.
3.4. Funding Indemnification. If any payment of a Eurodollar Advance occurs
on a date which is not the last day of the applicable Interest Period, whether
because of acceleration, prepayment or otherwise, or a Eurodollar Advance is not
made or continued, or a Floating Rate
25
Advance is not converted into a Eurodollar Advance, on the date specified by the
Borrower for any reason other than default by the Lenders, or a Eurodollar
Advance is not prepaid on the date specified by the Borrower for any reason, the
Borrower will indemnify each Lender for any reasonable loss or cost incurred by
it resulting therefrom, including, without limitation, any reasonable loss or
cost in liquidating or employing deposits acquired to fund or maintain such
Eurodollar Advance.
3.5. Taxes. (i) All payments by the Borrower to or for the account of any
Lender or the Agent hereunder or under any Note shall be made free and clear of
and without deduction for any and all Taxes. If the Borrower shall be required
by law to deduct any Taxes from or in respect of any sum payable hereunder to
any Lender or the Agent, (a) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 3.5) such Lender or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (b) the Borrower shall make such deductions, (c) the
Borrower shall pay the full amount deducted to the relevant authority in
accordance with applicable law and (d) the Borrower shall furnish to the Agent
the original copy of a receipt evidencing payment thereof or, if a receipt
cannot be obtained with reasonable efforts, such other evidence of payment as is
reasonably acceptable to the Agent, in each case within 30 days after such
payment is made.
(ii) In addition, the Borrower shall pay any present or future stamp or
documentary taxes and any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under
any Note or from the execution or delivery of, or otherwise with
respect to, this Agreement or any Note or any other Loan Document
("Other Taxes").
(iii) The Borrower shall indemnify the Agent and each Lender for the full
amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed on amounts payable under this Section
3.5) paid by the Agent or such Lender as a result of its Commitment,
any Credit Extensions made by it hereunder, or otherwise in connection
with its participation in this Agreement and any liability (including
penalties, interest and expenses) arising therefrom or with respect
thereto. Payments due under this indemnification shall be made within
30 days of the date the Agent or such Lender makes demand therefor
pursuant to Section 3.6.
(iv) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Lender") agrees
that it will, not more than ten Business Days after the date on which
it becomes a party to this Agreement (but in any event before a
payment is due to it hereunder), (i) deliver to each of the Borrower
and the Agent two duly completed copies of United States Internal
Revenue Service Form W-8BEN or W-8ECI or successor forms, certifying
in either case that such Non-U.S. Lender is entitled to receive
payments under this Agreement or under any Note without deduction or
withholding of any United States federal income taxes, or (ii) in the
case of a Non-U.S. Lender that is fiscally transparent, deliver to the
Agent a United States Internal Revenue Service Form W-8IMY or
successor form together with the applicable accompanying duly
26
completed copies of United States Internal Revenue Service applicable
Forms W-8 or W-9 or successor forms, as the case may be, and certify
that it is entitled to an exemption from United States withholding
tax. Each Non-U.S. Lender further undertakes to deliver to each of the
Borrower and the Agent renewals or additional copies of such form (or
any successor form) (x) on or before the date that such form expires
or becomes obsolete, (y) after the occurrence of any event requiring a
change in the most recent forms so delivered by it, and (z) from time
to time upon reasonable request by the Borrower or the Agent. All
forms or amendments described in the preceding sentence shall certify
that such Lender is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly completing
and delivering any such form or amendment with respect to it and such
Lender advises the Borrower and the Agent that it is not capable of
receiving payments without any deduction or withholding of United
States federal income tax.
(v) For any period during which a Non-U.S. Lender has failed to provide
the Borrower with an appropriate form pursuant to clause (iv) above
(unless such failure is due to a change in treaty, law or regulation,
or any change in the interpretation or administration thereof by any
governmental authority, occurring subsequent to the date on which a
form originally was required to be provided), such Non-U.S. Lender
shall not be entitled to indemnification under this Section 3.5 with
respect to Taxes imposed by the United States; provided that, should a
Non-U.S. Lender which is otherwise exempt from or subject to a reduced
rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause (iv) above, the Borrower shall
take such steps as such Non-U.S. Lender shall reasonably request to
assist such Non-U.S. Lender to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any
Note pursuant to the law of any relevant jurisdiction or any treaty
shall deliver to the Borrower (with a copy to the Agent), at the time
or times prescribed by applicable law, such properly completed and
executed documentation prescribed by applicable law as will permit
such payments to be made without withholding or at a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political
subdivision thereof asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered or properly completed,
because such Lender failed to notify the Agent of a change in
circumstances which rendered its exemption from withholding
ineffective, or for any other reason), such Lender shall indemnify the
Agent fully for all amounts paid, directly or indirectly, by the Agent
as tax, withholding therefor, or
27
otherwise, including penalties and interest, and including taxes
imposed by any jurisdiction on amounts payable to the Agent under this
subsection, together with all costs and expenses related thereto
(including attorneys fees of attorneys for the Agent). The obligations
of the Lenders under this Section 3.5(vii) shall survive the payment
of the Obligations and termination of this Agreement.
3.6. Lender Statements; Survival of Indemnity. Each Lender shall deliver a
written statement of such Lender to the Borrower (with a copy to the Agent) as
to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such written
statement shall set forth in reasonable detail the calculations upon which such
Lender determined such amount and shall be final, conclusive and binding on the
Borrower in the absence of manifest error. Determination of amounts payable
under such Sections in connection with a Eurodollar Loan shall be calculated as
though each Lender funded its Eurodollar Loan through the purchase of a deposit
of the type, currency and maturity corresponding to the deposit used as a
reference in determining the Eurodollar Rate applicable to such Loan, whether in
fact that is the case or not. Unless otherwise provided herein, the amount
specified in the written statement of any Lender shall be payable on demand
after receipt by the Borrower of such written statement. The obligations of the
Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the
Obligations and termination of this Agreement.
3.7. Alternative Lending Installation. To the extent reasonably possible,
each Lender shall designate an alternate Lending Installation with respect to
its Eurodollar Loans to reduce any liability of the Borrower to such Lender
under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of Eurodollar
Advances under Section 3.3, so long as such designation is not, in the judgment
of such Lender, reasonably disadvantageous to such Lender. A Lender's
designation of an alternative Lending Installation shall not affect the
Borrower's rights under Section 2.17 to replace a Lender.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Effectiveness of Commitments. This Agreement shall not become
effective, nor shall any Lender be required to make any Credit Extension
hereunder, unless on or before September 19, 2003 the following conditions
precedent have been satisfied and the Borrower has furnished to the Agent with
sufficient copies for the Lenders:
4.1.1 Copies of the articles or certificate of incorporation (or the
equivalent thereof) of each Credit Party, in each case, together with all
amendments thereto, and a certificate of good standing, each certified by
the appropriate governmental officer in its jurisdiction of organization
and accompanied by a certification by the Secretary or Assistant Secretary
of such Credit Party that there have been no changes in the matters
certified by such governmental officer since the date of such governmental
officer's certification.
4.1.2 Copies, certified by the Secretary or Assistant Secretary (or
the equivalent thereof) of each Credit Party, in each case, of its by-laws
and of its Board of Directors'
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resolutions and of resolutions or actions of any other body authorizing the
execution of the Loan Documents to which such Credit Party is a party.
4.1.3 An incumbency certificate, executed by the Secretary or
Assistant Secretary (or the equivalent thereof) of each Credit Party which
shall identify by name and title and bear the signatures of the Authorized
Officers and any other officers of each such Credit Party authorized to
sign the Loan Documents to which it is a party, upon which certificate the
Agent and the Lenders shall be entitled to rely until informed of any
change in writing by the applicable Credit Party.
4.1.4 A certificate reasonably acceptable to the Agent signed by the
chief financial officer of the Borrower, stating that on the Funding Date
(a) no Default or Unmatured Default has occurred and is continuing, (b) all
of the representations and warranties in Article V shall be true and
correct (or, in the case of representations and warranties applicable to
AbilityOne, true and correct to the best of such officer's knowledge) as of
such date and (c) no material adverse change in the business, Property,
condition (financial or otherwise), operations or results of operations,
performance or prospects of the Borrower and its Subsidiaries taken as a
whole has occurred since April 26, 2003 and, to the best of such officer's
knowledge, of AbilityOne and its Subsidiaries taken as a whole has occurred
since December 31, 2002.
4.1.5 An initial compliance certificate, dated as of the Closing Date
and reflecting calculations as of July 26, 2003, in substantially the form
of Exhibit B hereto.
4.1.6 Pro forma opening financial statements for the Borrower giving
effect to the AbilityOne Acquisition as of the last day of the twelve-month
period ending on July 26, 2003, and (ii) projections updating the
projections previously provided to the Agents on or about August 15, 2003.
4.1.7 A written opinion of Matthew Levitt, counsel to the Credit
Parties, in form and substance reasonably satisfactory to the Agent and
addressed to the Lenders in substantially the form of Exhibit A hereto.
4.1.8 Duly executed originals of this Agreement and the Guaranty from
each of the Credit Parties parties thereto and duly executed originals of
any Notes requested by a Lender pursuant to Section 2.11 payable to the
order of each such requesting Lender, and copies of the AbilityOne
Acquisition Agreement that will be in effect on and after the date of this
Agreement in form and substance satisfactory to the Agent and its counsel.
4.1.9 Evidence satisfactory to the Agent that (i) all conditions
precedent to the consummation of the AbilityOne Acquisition have been
satisfied or waived by the Borrower and all of the representations and
warranties in the AbilityOne Acquisition Agreement are accurate in all
material respects as of the date on which the AbilityOne Acquisition is
consummated; (ii) the AbilityOne Acquisition has been approved by all
necessary corporate action of the Borrower's and AbilityOne's respective
directors and shareholders; (iii) the AbilityOne Acquisition Agreement
includes a condition precedent to the consummation of the AbilityOne
Acquisition providing that no material adverse
29
change shall have occurred with respect to AbilityOne and its Subsidiaries
taken as a whole since December 31, 2002; (iv) all required U.S.
governmental approvals related to the AbilityOne Acquisition have been
obtained and all related filings made and any applicable waiting periods
shall have expired or been terminated, including those prescribed by the
Hart-Scott-Rodino Antitrust Improvements Act, as amended; (v) the
AbilityOne Acquisition shall close contemporaneously with the funding under
this Agreement; (vi) no material breach, default or waiver of any term or
provision of the AbilityOne Acquisition Agreement by the Borrower or any of
its Subsidiaries, which are parties thereto, or, to the best of the
Borrower's knowledge, the other parties thereto, has occurred (except for
such breaches, defaults and waivers, if any, consented to in writing by the
Agent) and no action has been taken by any competent authority which, in
the reasonable judgment of the Agent and the Arrangers restrains, prevents
or imposes any material adverse condition upon, or seeks to restrain,
prevent or impose any material adverse condition upon, the AbilityOne
Acquisition; and (vii) after giving effect to the AbilityOne Acquisition,
the Borrower shall own, directly or indirectly, not less than one hundred
percent of the capital stock of AbilityOne.
4.1.10 Written money transfer instructions, in substantially the form
of Exhibit D, addressed to the Agent and signed by an Authorized Officer,
together with such other related money transfer authorizations as the Agent
may have reasonably requested.
4.1.11 The Agent shall have determined that (i) there is an absence of
any material adverse change or disruption in primary or secondary loan
syndication markets, financial markets or in capital markets generally that
would likely impair syndication of the Loans hereunder, and (ii) the
Borrower has fully cooperated with the Agent's syndication efforts,
including, without limitation, by providing the Agent with information
regarding the Borrower's and its Subsidiaries' operations and prospects and
such other information as the Agent deems necessary to successfully
syndicate the Loans hereunder.
4.1.12 Evidence satisfactory to the Agent that the Existing Credit
Agreement shall have been or shall simultaneously on the Closing Date be
terminated (except for those provisions that expressly survive the
termination thereof), all loans outstanding and other amounts owed to the
lenders or agents thereunder shall have been, or shall simultaneously with
the initial Advance hereunder, be paid in full, and all liens and security
interests granted in connection therewith shall have been or shall
simultaneously on the Closing Date be terminated.
4.1.13 A certificate of value, solvency and other appropriate factual
information in form and substance reasonably satisfactory to the Agent and
Arrangers from the chief financial officer of the Borrower (on behalf of
the Borrower and its Subsidiaries) in his or her representative capacity
supporting the conclusions that as of the initial funding date the Borrower
and its Subsidiaries on a consolidated basis are Solvent and will be
Solvent subsequent to incurring the Indebtedness contemplated under the
Loan Documents, will be able to pay its debts and liabilities as they
become due and will not be left with unreasonably small working capital for
general corporate purposes.
30
4.1.14 Evidence satisfactory to the Agent that the Borrower has paid
to the Agent and the Arrangers the fees agreed to in the fee letter dated
August 26, 2003, among the Agent, the Arrangers and the Borrower.
4.1.15 Such other documents as any Lender or its counsel may have
reasonably requested, including, without limitation, those documents set
forth in Exhibit G hereto.
4.2. Initial Credit Extension. The Lenders shall not be required to make
the initial Credit Extension unless on the Funding Date:
4.2.1 There exists no Default or Unmatured Default.
4.2.2 The representations and warranties contained in Article V are
true and correct as of the Funding Date except to the extent any such
representation or warranty is stated to relate solely to an earlier date,
in which case such representation or warranty shall have been true and
correct on and as of such earlier date.
4.2.3 All legal matters incident to the making of such Credit
Extension shall be satisfactory to the Lenders and their counsel.
Each Borrowing Notice with respect to each such Credit Extension shall
constitute a representation and warranty by the Borrower that the conditions
contained in Sections 4.2.1, 4.2.2 and 4.2.3 have been satisfied. Any Lender may
require a duly completed compliance certificate in substantially the form of
Exhibit B as a condition to making a Credit Extension.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each Lender and the Agent as of
each of (i) the Closing Date, (ii) the Funding Date (after giving effect to the
transactions contemplated by the Transaction Documents) and (iii) each other
date as required by Section 4.2:
5.1. Existence and Standing. Each of the Borrower and its Subsidiaries is a
corporation, partnership (in the case of Subsidiaries only) or limited liability
company duly and properly incorporated or organized, as the case may be, validly
existing and (to the extent such concept applies to such entity) in good
standing under the laws of its jurisdiction of incorporation or organization,
(ii) has all requisite corporate, partnership or limited liability company power
and authority, as the case may be, to own, operate and encumber its Property and
(iii) is qualified to do business and is in good standing (to the extent such
concept applies to such entity) in all jurisdictions where the nature of the
business conducted by it makes such qualification necessary and where failure to
so qualify would reasonably be expected to have a Material Adverse Effect.
5.2. Authorization and Validity. Each Credit Party has the requisite
corporate, partnership or limited liability company power and authority and
legal right to execute and deliver the Transaction Documents to which it is a
party and to perform its obligations thereunder. The execution and delivery by
each Credit Party of the Transaction Documents to which it is a party and the
performance of its obligations thereunder have been duly authorized
31
by proper corporate, partnership or limited liability company, as the case may
be, proceedings, and the Transaction Documents to which each Credit Party is a
party constitute legal, valid and binding obligations of such Credit Party
enforceable against such Credit Party in accordance with their terms, except as
enforceability may be limited by (i) bankruptcy, insolvency, fraudulent
conveyances, reorganization or similar laws relating to or affecting the
enforcement of creditors' rights generally; (ii) general equitable principles
(whether considered in a proceeding in equity or at law); and (iii) requirements
of reasonableness, good faith and fair dealing.
5.3. No Conflict; Government Consent. Neither the execution and delivery by
any Credit Party of the Transaction Documents to which it is a party, nor the
consummation by such Credit Party of the transactions therein contemplated, nor
compliance by such Credit Party with the provisions thereof will violate (i) any
applicable law, rule, regulation, order, writ, judgment, injunction, decree or
award binding on such Credit Party or (ii) such Credit Party's articles or
certificate of incorporation, partnership agreement, certificate of partnership,
articles or certificate of organization, by-laws, or operating agreement or
other management agreement, as the case may be, or (iii) the provisions of any
indenture, instrument or agreement to which such Credit Party is a party or is
subject, or by which it, or its Property, is bound, or conflict with, or
constitute a default under, or result in, or require, the creation or imposition
of any Lien in, of or on the Property of such Credit Party pursuant to the terms
of, any such indenture, instrument or agreement. No order, consent,
adjudication, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, or other action in respect of
any governmental or public body or authority, or any subdivision thereof, which
has not been obtained by any Credit Party, is required to be obtained by such
Credit Party in connection with the execution and delivery of the Transaction
Documents, the borrowings under this Agreement, the payment and performance by
the Credit Parties of the Obligations, the consummation of the AbilityOne
Acquisition or the legality, validity, binding effect or enforceability of any
of the Transaction Documents.
5.4. Financial Statements. The April 26, 2003 consolidated financial
statements of the Borrower and its Subsidiaries and, to the best of the
Borrower's knowledge, the December 31, 2002 consolidated financial statements of
AbilityOne and its Subsidiaries, in each case, heretofore delivered to the Agent
and the Lenders were prepared in accordance with generally accepted accounting
principles in effect on the date such statements were prepared and fairly
present the consolidated financial condition and operations of the Borrower and
its Subsidiaries and, to the best of the Borrower's knowledge, AbilityOne and
its Subsidiaries, as applicable, at such date and the consolidated results of
their operations for the period then ended.
5.5. Material Adverse Change. Since April 26, 2003, there has been no
change in the business, Property, condition (financial or otherwise), operations
or results of operations, performance or prospects of the Borrower and its
Subsidiaries taken as a whole which could reasonably be expected to have a
Material Adverse Effect. To the best of the Borrower's knowledge, since December
31, 2002, there has been no change in the business, Property, condition
(financial or otherwise), operations or results of operations, performance or
prospects of AbilityOne and its Subsidiaries taken as a whole which could
reasonably be expected to have a Material Adverse Effect.
32
5.6. Taxes. The Borrower and the Subsidiaries have filed all United States
federal tax returns and all other tax returns which are required to be filed and
have paid all taxes due pursuant to said returns or pursuant to any assessment
received by the Borrower or any Subsidiaries, except in respect of such taxes,
if any, as are being contested in good faith and as to which adequate reserves
have been provided in accordance with Agreement Accounting Principles and as to
which no Lien exists (except as permitted by Section 6.15.1) and as to which the
failure to file such return or pay such taxes could not reasonably be expected
to have a Material Adverse Effect. The United States income tax returns of the
Borrower and the Subsidiaries (other than AbilityOne and its Subsidiaries) have
been audited by the Internal Revenue Service through the fiscal year ended April
25, 1998. No liens have been filed and no claims are being asserted with respect
to such taxes. The charges, accruals and reserves on the books of the Borrower
and the Subsidiaries in respect of any taxes or other governmental charges are
adequate.
5.7. Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or which seeks to prevent, enjoin or delay the making of
any Loans or the consummation of the AbilityOne Acquisition. Other than any
liability incident to any litigation, arbitration or proceeding which could not
reasonably be expected to have a Material Adverse Effect, the Borrower and its
Subsidiaries has no material contingent obligations required to be reflected on
the Borrower's consolidated balance sheet in accordance with generally accepted
accounting principles and not provided for or disclosed in the financial
statements referred to in Section 5.4.
5.8. Subsidiaries. Schedule 5.8 contains an accurate list of all
Subsidiaries of the Borrower as of the Funding Date (after giving effect to the
AbilityOne Acquisition), setting forth their respective jurisdictions of
organization and the percentage of their respective capital stock or other
ownership interests owned by the Borrower or other Subsidiaries. All of the
issued and outstanding shares of capital stock or other ownership interests of
such Subsidiaries have been (to the extent such concepts are relevant with
respect to such ownership interests) duly authorized and issued and are fully
paid and non-assessable.
5.9. ERISA. The Unfunded Liabilities of all Single Employer Plans do not in
the aggregate exceed $10,000,000. Neither the Borrower nor any other member of
the Controlled Group has incurred, or is reasonably expected to incur, pursuant
to Section 4201 of ERISA, any withdrawal liability to Multiemployer Plans. Each
Plan complies in all material respects with all applicable requirements of law
and regulations. No Reportable Event has occurred with respect to any Plan.
Neither the Borrower nor any other member of the Controlled Group has withdrawn
from any Multiemployer Plan within the meaning of Title IV of ERISA or initiated
steps to do so, and, to the knowledge of the Borrower, no steps have been taken
to reorganize or terminate, within the meaning of Title IV of ERISA, any
Multiemployer Plan.
5.10. Accuracy of Information. The information, exhibits or reports
furnished by the Borrower or any Subsidiary to the Agent or to any Lender in
connection with the negotiation of, or compliance with, the Transaction
Documents do not contain any material misstatement of fact or omit to state a
material fact or any fact necessary to make the statements contained therein, in
33
light of the circumstances under which they were made, not misleading. The
projected and pro-forma financial information furnished by or on behalf of any
Credit Party to the Agent or any Lender in connection with the negotiation of,
or compliance with, the Transaction Documents, were prepared in good faith based
upon assumptions believed to be reasonable at the time.
5.11. Regulation U. Neither the Borrower nor any Subsidiary is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose, whether immediate, incidental or ultimate of buying or
carrying margin stock (as defined in Regulation U), and after applying the
proceeds of each Credit Extension, margin stock (as defined in Regulation U)
constitutes less than 25% of the value of those assets of the Borrower and the
Subsidiaries which are subject to any limitation on sale, pledge, or any other
restriction hereunder.
5.12. Material Agreements. Neither the Borrower nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any agreement or instrument to which it is a party,
which default could reasonably be expected to have a Material Adverse Effect or
(ii) any agreement or instrument evidencing or governing Indebtedness.
5.13. Compliance With Laws. The Borrower and the Subsidiaries have complied
in all material respects with all applicable statutes, rules, regulations,
orders and restrictions of any domestic or foreign government or any
instrumentality or agency thereof having jurisdiction over the conduct of their
respective businesses or the ownership of their respective Property except for
any failure to comply with any of the foregoing which could not reasonably be
expected to have a Material Adverse Effect.
5.14. Ownership of Properties. The Borrower and the Subsidiaries have good
title, free of all Liens other than those permitted by Section 6.15, to all of
the assets reflected in the Borrower's most recent consolidated financial
statements provided to the Agent, as owned by the Borrower and the Subsidiaries
except (i) assets sold or otherwise transferred as permitted under Section 6.12
and (ii) to the extent the failure to hold such title could not reasonably be
expected to have a Material Adverse Effect.
5.15. Plan Assets; Prohibited Transactions. None of the Credit Parties is
an entity deemed to hold "plan assets" within the meaning of 29 C.F.R. (S)
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code), and assuming the accuracy of the representations and
warranties made in Section 9.12 and in any assignment made pursuant to Section
12.3.3, neither the execution of this Agreement nor the making of Loans
hereunder gives rise to a prohibited transaction within the meaning of Section
406 of ERISA or Section 4975 of the Code.
5.16. Environmental Matters. In the ordinary course of its business, the
officers of the Borrower and the Subsidiaries consider the effect of
Environmental Laws on the business of the Borrower and the Subsidiaries, in the
course of which they identify and evaluate potential risks
34
and liabilities accruing to the Borrower or any Subsidiary due to Environmental
Laws. On the basis of this consideration, the Borrower has concluded that
Environmental Laws cannot reasonably be expected to have a Material Adverse
Effect. Neither the Borrower nor any Subsidiary has received any notice to the
effect that its operations are not in material compliance with any of the
requirements of applicable Environmental Laws or are the subject of any federal
or state investigation evaluating whether any remedial action is needed to
respond to a release of any toxic or hazardous waste or substance into the
environment, which non-compliance or remedial action could reasonably be
expected to have a Material Adverse Effect.
5.17. Investment Company Act. Neither the Borrower nor any Subsidiary is an
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
5.18. Public Utility Holding Company Act. Neither the Borrower nor any
Subsidiary is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended.
5.19. Insurance. The Borrower maintains, and has caused each Subsidiary to
maintain, with financially sound and reputable insurance companies insurance on
all their Property in such amounts, subject to such deductibles and
self-insurance retentions and covering such properties and properties and risks
as is consistent with sound business practice.
5.20. Solvency. After giving effect to (i) the Credit Extensions to be made
on the Funding Date or such other date as Credit Extensions requested hereunder
are made, (ii) the other transactions contemplated by this Agreement and the
other Transaction Documents, and (iii) the payment and accrual of all
transaction costs with respect to the foregoing, the Borrower and its
Subsidiaries taken as a whole are Solvent.
5.21. No Default or Unmatured Default. No Default or Unmatured Default has
occurred and is continuing.
5.22. Reportable Transaction. The Borrower does not intend to treat the
Advances and related transactions as being a "reportable transaction" (within
the meaning of the Treasury Regulation Section 1.6011-4). In the event the
Borrower determines to take any action inconsistent with such intention, it will
promptly notify the Agent thereof. The Borrower acknowledges that one or more of
the Lenders may treat its Advances as part of a transaction that is subject to
Treasury Regulation Section 1.6011-4 or Section 301.6112-1, and the Agent and
such Lender or Lenders, as applicable, may file such IRS forms or maintain such
lists and other records as they may determine is required by such Treasury
Regulations.
5.23. Post-Retirement Benefits. The present value of the expected cost of
post-retirement medical and insurance benefits payable by the Borrower and its
Subsidiaries to its employees and former employees, as estimated by the Borrower
in accordance with procedures and assumptions deemed reasonable by the Required
Lenders is zero.
5.24. AbilityOne Acquisition. (i) All conditions precedent to the
consummation of the AbilityOne Acquisition have been satisfied or waived by the
Borrower and all of the
35
representations and warranties in the AbilityOne Acquisition Agreement are
accurate in all material respects with respect to the Borrower and, to the best
of the Borrower's knowledge, accurate in all material respects with respect to
AbilityOne, in each case, as of the date on which the AbilityOne Acquisition is
consummated and the AbilityOne Acquisition Agreement is in full force and
effect; (ii) the AbilityOne Acquisition has been approved by all necessary
corporate action of the Borrower's and, to the best of the Borrower's knowledge,
AbilityOne's respective directors and shareholders; (iii) the AbilityOne
Acquisition Agreement includes a condition precedent to the consummation of the
AbilityOne Acquisition providing that no material adverse change shall have
occurred with respect to AbilityOne and its Subsidiaries taken as a whole since
December 31, 2002; (iv) all required U.S. governmental approvals related to the
AbilityOne Acquisition have been obtained and all related filings made and any
applicable waiting periods shall have expired or been terminated, including
those prescribed by the Hart-Scott-Rodino Antitrust Improvements Act, as
amended; (v) no material breach, default or waiver of any term or provision of
the AbilityOne Acquisition Agreement by the Borrower or any of its Subsidiaries,
which are parties thereto, or, to the best of the Borrower's knowledge, the
other parties thereto, has occurred (except for such breaches, defaults and
waivers, if any, consented to in writing by the Agent) and no action has been
taken by any competent authority which restrains, prevents or imposes any
material adverse condition upon, or seeks to restrain, prevent or impose any
material adverse condition upon, the AbilityOne Acquisition; and (vi) after
giving effect to the AbilityOne Acquisition, the Borrower shall own, directly or
indirectly, not less than one hundred percent of the capital stock of
AbilityOne.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. The Borrower will maintain, for itself and each
Subsidiary, a system of accounting established and administered in accordance
with generally accepted accounting principles, and furnish to the Lenders:
6.1.1 Within 90 days after the close of each of the Borrower's fiscal
years, financial statements prepared in accordance with Agreement
Accounting Principles on a consolidated basis, for itself and its
Subsidiaries, including balance sheets as of the end of such period,
statements of income and statements of cash flows, accompanied by (a) an
audit report, unqualified as to scope, of a nationally recognized firm of
independent public accountants or other independent public accountants
reasonably acceptable to the Required Lenders; (b) any management letter
prepared by said accountants, and (c) a certificate of said accountants
that, in the course of their examination necessary for their certification
of the foregoing, they have obtained no knowledge of any Default or
Unmatured Default, or if, in the opinion of such accountants, any Default
or Unmatured Default shall exist, stating the nature and status thereof.
6.1.2 Within 45 days after the close of the first three quarterly
periods of each of the Borrower's fiscal years, for the Borrower and its
Subsidiaries, consolidated unaudited
36
balance sheets as at the close of each such period and consolidated
statements of income and a statement of cash flows for the period from the
beginning of such fiscal year to the end of such quarter, all certified as
to fairness of presentation, compliance with Agreement Accounting
Principles and consistency by its chief financial officer or treasurer.
6.1.3 Together with the financial statements required under Sections
6.1.1 and 6.1.2, a compliance certificate in substantially the form of
Exhibit B signed by its chief financial officer or treasurer showing the
calculations necessary to determine compliance with this Agreement, which
certificate shall also state that no Default or Unmatured Default exists,
or if any Default or Unmatured Default exists, stating the nature and
status thereof, and a certificate executed and delivered by the chief
executive officer or chief financial officer stating that the Borrower and
each of its respective principal officers are in compliance with all
requirements of Section 302 and Section 906 of the Sarbanes-Oxley Act of
2002 and all rules and regulations related thereto.
6.1.4 Within 120 days after the close of each of the Borrower's fiscal
years, a copy of the plan and forecast (including a projected balance
sheet, income statements and funds flow statements, and any narrative
prepared with respect thereto) of the Borrower and its Subsidiaries for the
upcoming fiscal year prepared in such detail as shall be reasonably
satisfactory to the Agent.
6.1.5 Within 270 days after the close of each fiscal year of the
Borrower, if applicable, a copy of the actuarial report showing the
Unfunded Liabilities of each Single Employer Plan as of the valuation date
occurring in such fiscal year, certified by an actuary enrolled under
ERISA.
6.1.6 As soon as possible and in any event within 10 days after the
Borrower knows that any Reportable Event has occurred with respect to any
Plan, a statement, signed by the chief financial officer or treasurer of
the Borrower, describing said Reportable Event and the action which the
Borrower proposes to take with respect thereto.
6.1.7 As soon as possible and in any event within 10 days after
receipt by the Borrower or any Subsidiary, a copy of (a) any notice or
claim to the effect that the Borrower or any Subsidiary is or may be liable
to any Person as a result of the release by the Borrower, any Subsidiary,
or any other Person of any toxic or hazardous waste or substance into the
environment, and (b) any notice alleging any violation of any Environmental
Law by the Borrower or any Subsidiary, which, in either case, could
reasonably be expected to have a Material Adverse Effect.
6.1.8 Promptly upon the furnishing thereof to the shareholders of the
Borrower, copies of all financial statements, reports and proxy statements
so furnished.
6.1.9 Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports which
the Borrower or any Subsidiary files with the SEC, including, without
limitation, all certifications and other filings
37
required by Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002
and all rules and regulations related thereto.
6.1.10 Such other information (including non-financial information) as
the Agent or any Lender may from time to time reasonably request.
6.2. Use of Proceeds. The Borrower will, and will cause each Subsidiary to,
use the proceeds of the Credit Extensions solely to finance the AbilityOne
Acquisition (including repayment of Indebtedness outstanding under the Existing
Credit Agreement and to pay fees and expenses incurred in connection with this
Agreement and the AbilityOne Acquisition). The Borrower shall use the proceeds
of Credit Extensions in compliance with all applicable legal and regulatory
requirements and any such use shall not result in a violation of any such
requirements, including, without limitation, Regulation U and X, the Securities
Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended,
and the regulations promulgated thereunder.
6.3. Notice of Default. Within five (5) Business Days after an Authorized
Officer becomes aware thereof, the Borrower will, and will cause each Subsidiary
to, give notice in writing to the Lenders of the occurrence of (i) any Default
or Unmatured Default, (ii) the occurrence of any Off-Balance Sheet Trigger Event
or any material default under or with respect to any Material Indebtedness or
any material service agreement to which the Borrower or any Subsidiary is a
party (together with copies of all default notices, if any, pertaining thereto)
and (iii) any other development, financial or otherwise, which could reasonably
be expected to have a Material Adverse Effect.
6.4. Conduct of Business. The Borrower will, and will cause each Subsidiary
to, carry on and conduct its business in substantially the same manner and in
substantially the same fields of enterprise as conducted by the Borrower or its
Subsidiaries as of the Closing Date, and do all things necessary to remain duly
incorporated or organized, validly existing and (to the extent such concept
applies to such entity) in good standing as a domestic corporation, partnership
or limited liability company in its jurisdiction of incorporation or
organization, as the case may be, as in effect on the Closing Date, and, except
to the extent failure to do so could not reasonably be expected to have a
Material Adverse Effect, maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted.
6.5. Taxes. The Borrower will, and will cause each Subsidiary to, timely
file complete and correct United States federal and applicable foreign, state
and local tax returns required by law and pay when due all taxes, assessments
and governmental charges and levies upon it or its income, profits or Property,
except (i) those which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been set aside in
accordance with Agreement Accounting Principles and (ii) those taxes,
assessments, charges and levies which by reason of the amount involved or the
remedies available to the applicable taxing authority could not reasonably be
expected to have a Material Adverse Effect.
6.6. Insurance. The Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies insurance on
all their Property in such amounts, subject to such deductibles and
self-insurance retentions, and covering such properties
38
and risks as is consistent with sound business practice, and the Borrower will
furnish to any Lender upon request full information as to the insurance carried.
6.7. Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including,
without limitation, all Environmental Laws and Section 302 and Section 906 of
the Sarbanes-Oxley Act of 2002, except where the failure to do so, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
6.8. Maintenance of Properties. Subject to Section 6.12, the Borrower will,
and will cause each Subsidiary to, do all things necessary to maintain,
preserve, protect and keep its Property used in the operation of its business in
good repair, working order and condition (ordinary wear and tear excepted), and
make all necessary and proper repairs, renewals and replacements so that its
business carried on in connection therewith may be properly conducted at all
times, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
6.9. Inspection; Keeping of Books and Records. The Borrower will, and will
cause each Subsidiary to, permit the Agent and the Lenders, by their respective
representatives and agents, to inspect any of the Property, books and financial
records of the Borrower and each Subsidiary, to examine and make copies of the
books of accounts and other financial records of the Borrower and each
Subsidiary, and to discuss the affairs, finances and accounts of the Borrower
and each Subsidiary with, and to be advised as to the same by, their respective
officers at such reasonable times and intervals as the Agent or any Lender may
designate. The Borrower shall keep and maintain, and cause each of the
Subsidiaries to keep and maintain, in all material respects, complete, accurate
and proper books of record and account in which entries in conformity with
Agreement Accounting Principles shall be made of all dealings and transactions
in relation to their respective businesses and activities. If a Default has
occurred and is continuing, the Borrower, upon the Agent's request, shall turn
over copies of any such records to the Agent or its representatives.
6.10. Dividends. The Borrower will not, nor will it permit any Subsidiary
to, declare or pay any dividend or make any distribution on its capital stock
(other than dividends payable in its own capital stock) or redeem, repurchase or
otherwise acquire or retire any of its capital stock at any time outstanding,
except that (i) any Subsidiary of the Borrower may declare and pay dividends or
make distributions to the Borrower or to a Guarantor and (ii) the Borrower may
declare and pay dividends on its capital stock, and may repurchase shares of its
capital stock pursuant to the share repurchase program described in note 11 to
its audited financial statements for the year ended April 26, 2003, provided
that no Default or Unmatured Default shall exist before or after giving effect
to such dividends or be created as a result thereof.
6.11. Merger. The Borrower will not, nor will it permit any Subsidiary to,
merge or consolidate with or into any other Person, except that:
6.11.1 A Guarantor may merge into (i) the Borrower, provided the
Borrower shall be the continuing or surviving corporation, or (ii) another
Guarantor or any other
39
Person that becomes a Guarantor promptly upon the completion of the
applicable merger or consolidation.
6.11.2 A Subsidiary that is not a Guarantor and not required to be a
Guarantor may merge or consolidate with or into the Borrower or any
Wholly-Owned Subsidiary.
6.11.3 Any Subsidiary of the Borrower may consummate any merger or
consolidation in connection with any Permitted Acquisition.
6.12. Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell, transfer or otherwise dispose of its Property to any
other Person, except:
6.12.1 Sales of inventory in the ordinary course of business.
6.12.2 A disposition of assets (i) by the Borrower or any Subsidiary
to any Credit Party, (ii) by a Subsidiary that is not a Guarantor and not
required to be a Guarantor to any other Subsidiary and (iii) subject to
Section 6.24, by any Credit Party to any Foreign Subsidiary.
6.12.3 A disposition of obsolete property, property no longer used in
the business of the Borrower or any Subsidiary or other assets in the
ordinary course of business of the Borrower or any Subsidiary.
6.12.4 So long as no Default or Unmatured Default has occurred, a
disposition of assets for an aggregate purchase price of up to $270,000,000
outstanding at any time pursuant to, and in accordance with, the
Receivables Purchase Facilities.
6.12.5 The license or sublicense of software, trademarks, and other
intellectual property in the ordinary course of business which do not
materially interfere with the business of the Borrower or any Subsidiary.
6.12.6 Consignment arrangements (as consignor or consignee) or similar
arrangements for the sale of goods in the ordinary course of business and
consistent with the past practices of the Borrower and the Subsidiaries.
6.12.7 Leases, sales or other dispositions of its Property that (i)
are for consideration consisting at least seventy-five percent (75%) of
cash, (ii) are for not less than fair market value, and (iii) together with
all other Property of the Borrower and the Subsidiaries previously leased,
sold or disposed of (other than dispositions otherwise permitted by this
Section 6.12) as permitted by this Section 6.12.7 during the twelve-month
period ending with the month in which any such lease, sale or other
disposition occurs, do not constitute in the aggregate a Substantial
Portion of the Property of the Borrower and its Subsidiaries.
6.13. Investments and Acquisitions. The Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Investments
(including without limitation, loans and advances to, and other Investments
in, Subsidiaries), or to create any Subsidiary or to become or
40
remain a partner in any partnership or joint venture, or to make any Acquisition
of any Person, except:
6.13.1 Cash and Cash Equivalent Investments and other Investments that
comply with the Borrower's investment policy as in effect on the Closing
Date, a copy of which the Borrower has provided to the Agent.
6.13.2 Existing Investments in Subsidiaries and other Investments in
existence on the Closing Date and described in Schedule 6.13 and any
renewal or extension of any such Investments that does not increase the
amount of the Investment being renewed or extended as determined as of such
date of renewal or extension.
6.13.3 Investments in trade receivables or 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.
6.13.4 Investments consisting of intercompany loans permitted under
Section 6.14.6.
6.13.5 The AbilityOne Acquisition (subject to the conditions set forth
in this Agreement) and all other Acquisitions meeting the following
requirements or otherwise approved by the Required Lenders (each such
Acquisition including the AbilityOne Acquisition constituting a "Permitted
Acquisition"):
(i) as of the date of the consummation of such Acquisition, no Default or
Unmatured Default shall have occurred and be continuing or would
result from such Acquisition, and the representation and warranty
contained in Section 5.11 shall be true both before and after giving
effect to such Acquisition;
(ii) such Acquisition is consummated on a non-hostile basis pursuant to a
negotiated acquisition agreement approved by the board of directors or
other applicable governing body of the seller or entity to be
acquired, and no material challenge to such Acquisition (excluding the
exercise of appraisal rights) shall be pending or threatened in
writing by any shareholder or director of the seller or entity to be
acquired;
(iii) the business to be acquired in such Acquisition is similar or related
to one or more of the lines of business in which the Borrower and the
Subsidiaries are engaged on the Closing Date;
(iv) as of the date of the consummation of such Acquisition, all material
governmental and corporate approvals required in connection therewith
shall have been obtained;
(v) the Purchase Price for each such Acquisition together with the
Purchase Price of all other Permitted Acquisitions shall not exceed an
amount equal to
41
$100,000,000 beginning on the Closing Date and ending on the Facility
Termination Date;
(vi) with respect to each Permitted Acquisition with respect to which the
Purchase Price shall be greater than $30,000,000, not less than
fifteen (15) days prior to the consummation of such Permitted
Acquisition, the Borrower shall have delivered to the Agent a pro
forma consolidated balance sheet, income statement and cash flow
statement of the Borrower and the Subsidiaries (the "Acquisition Pro
Forma"), based on the Borrower's most recent financial statements
delivered pursuant to Section 6.1.1 and using historical financial
statements for the acquired entity provided by the seller(s) or which
shall be complete and shall fairly present, in all material respects,
the financial condition and results of operations and cash flows of
the Borrower and its Subsidiaries in accordance with Agreement
Accounting Principles, but taking into account such Permitted
Acquisition and the repayment of any Indebtedness in connection with
such Permitted Acquisition, and such Acquisition Pro Forma shall
reflect that, on a pro forma basis, the Borrower would have been in
compliance with the financial covenants set forth in Sections 6.20,
6.21 and 6.22 for the four fiscal quarter period reflected in the
compliance certificate most recently delivered to the Agent pursuant
to Section 6.1.3 prior to the consummation of such Permitted
Acquisition (giving effect to such Permitted Acquisition as if made on
the first day of such period); and
(vii) prior to (or, with respect to clause (A) below, concurrently with)
the consummation of each such Permitted Acquisition, the Borrower
shall deliver to the Agent a documentation, information and
certification package in form and substance acceptable to the Agent,
including, without limitation;
(A) a supplement to the Guaranty if the Permitted Acquisition is an
Acquisition of equities and the target company will not be merged
with the Borrower or any existing Domestic Subsidiary;
(B) the financial statements of the target entity together with any
pro forma financial statements, projections, forecasts and
budgets prepared by the Borrower in connection therewith;
(C) a copy of the acquisition agreement for such Acquisition,
together with drafts of the material schedules thereto;
(D) a copy of all documents, instruments and agreements with respect
to any Indebtedness to be incurred or assumed in connection with
such Acquisition; and
(E) such other documents or information as shall be reasonably
requested by the Agent or any Lender.
6.13.6 Investments constituting promissory notes and other non-cash
consideration received in connection with any transfer of assets permitted
under Section 6.12.7.
42
6.13.7 Customer advances in the ordinary course of business.
6.13.8 Extensions of customer or trade credit in the ordinary course
of business consistent with the Borrower's and the Subsidiaries' past
practices.
6.13.9 Investments constituting Rate Management Transactions permitted
under Section 6.17.
6.13.10 Subject to Section 6.24, the creation or formation of new
Subsidiaries (as opposed to the Acquisition of new Subsidiaries), so long
as all applicable requirements under Section 6.23 shall have been, or
concurrently therewith are, satisfied.
6.13.11 Investments constituting expenditures for any purchase or
other acquisition of any asset which would be classified as a fixed or
capital asset on a consolidated balance sheet of the Borrower and its
Subsidiaries prepared in accordance with Agreement Accounting Principles to
the extent otherwise permitted under this Agreement.
6.13.12 Investments by (i) the Borrower and its Subsidiaries in any
Credit Party, (ii) any Subsidiary which is not a Guarantor and is not
required to be a Guarantor in any other Subsidiary which is not a Guarantor
and is not required to be a Guarantor and (iii) subject to Section 6.24,
any Credit Party in any Foreign Subsidiary.
6.13.13 Deposits made in the ordinary course of business and referred
to in Sections 6.15.4, 6.15.6 and 6.15.7.
6.13.14 Investments in connection with any Receivables Purchase
Facility permitted under this Agreement.
6.13.15 Additional Investments in an amount not to exceed $10,000,000
at any one time outstanding.
6.14. Indebtedness. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
6.14.1 The Obligations.
6.14.2 Indebtedness existing on the Closing Date and described in
Schedule 6.14, and any replacement, renewal, refinancing or extension of
any such Indebtedness that (i) does not exceed the aggregate principal
amount (plus accrued interest and any applicable premium and associated
fees and expenses) of the Indebtedness being replaced, renewed, refinanced
or extended, (ii) does not have a Weighted Average Life to Maturity at the
time of such replacement, renewal, refinancing or extension that is less
than the Weighted Average Life to Maturity of the Indebtedness being
replaced, renewed, refinanced or extended and (iii) does not rank at the
time of such replacement, renewal, refinancing or extension senior to the
Indebtedness being replaced, renewed, refinanced or extended.
6.14.3 Indebtedness arising under Rate Management Transactions;
43
6.14.4 Amounts owing under the Receivables Purchase Facilities, the
principal amount of which shall not exceed $270,000,000 in the aggregate at
any time.
6.14.5 Secured or unsecured purchase money Indebtedness (including
Capitalized Leases) incurred by the Borrower or any Subsidiary after the
Closing Date to finance the acquisition of assets used in its business, if
(1) at the time of such incurrence, no Default or Unmatured Default has
occurred and is continuing or would result from such incurrence, (2) such
Indebtedness does not exceed the lower of the fair market value or the cost
of the applicable fixed assets on the date acquired, (3) such Indebtedness
does not exceed the lower of the fair market value or the costs of the
applicable fixed assets on the date acquired, (4) such Indebtedness does
not exceed $10,000,000 in the aggregate outstanding at any time, and (5)
any Lien securing such Indebtedness is permitted under Section 6.15 (such
Indebtedness being referred to herein as "Permitted Purchase Money
Indebtedness").
6.14.6 Indebtedness arising from intercompany loans and advances made
by (i) the Borrower or any Subsidiary to any Credit Party, (ii) any
Subsidiary that is not a Guarantor to any other Subsidiary that is not a
Guarantor or (iii) subject to Section 6.24, any Credit Party to any Foreign
Subsidiary; provided that all such Indebtedness shall be expressly
subordinated to the Obligations.
6.14.7 Indebtedness incurred or assumed by the Borrower or any
Subsidiary in connection with a Permitted Acquisition but not created in
contemplation of such event.
6.14.8 Indebtedness constituting Contingent Obligations otherwise
permitted by Section 6.19.
6.14.9 Indebtedness under (i) performance bonds and surety bonds and
(ii) bank overdrafts outstanding for not more than two (2) Business Days,
in each case incurred in the ordinary course of business.
6.14.10 To the extent the same constitutes Indebtedness, obligations
in respect of earn-out arrangements permitted pursuant to a Permitted
Acquisition.
6.14.11 Additional Indebtedness in an aggregate principal amount in
Dollars not to exceed $10,000,000 at any time.
6.15. Liens. The Borrower will not, nor will it permit any Subsidiary to,
create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any Subsidiary, except:
6.15.1 Liens, if any, securing Obligations.
6.15.2 Liens for taxes, assessments or governmental charges or levies
on its Property if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in good
faith and by appropriate proceedings and for which adequate reserves in
accordance with Agreement Accounting Principles shall have been set aside
on its books.
44
6.15.3 Liens imposed by law, such as landlords', wage earners',
carriers', warehousemen's and mechanics' liens and other similar liens
arising in the ordinary course of business which secure payment of
obligations not more than 45 days past due or which are being contested in
good faith by appropriate proceedings and for which adequate reserves in
accordance with Agreement Accounting Principles shall have been set aside
on its books.
6.15.4 Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation.
6.15.5 Liens existing on the Closing Date and described in Schedule
6.15.
6.15.6 Deposits securing liability to insurance carriers under
insurance or self-insurance arrangements.
6.15.7 Deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business.
6.15.8 Easements, reservations, rights-of-way, restrictions, survey
exceptions and other similar encumbrances as to real property of the
Borrower and the Subsidiaries which customarily exist on properties of
corporations engaged in similar activities and similarly situated and which
are not material in amount and that do not materially interfere with the
conduct of the business of the Borrower or such Subsidiary conducted at the
property subject thereto.
6.15.9 Liens arising by reason of any judgment, decree or order of any
court or other governmental authority, but only to the extent and for an
amount and for a period not resulting in a Default under Section 7.8.
6.15.10 Liens arising in connection with a Receivables Purchase
Facility permitted under Section 6.14.4.
6.15.11 Liens existing on any specific fixed asset of any Subsidiary
of the Borrower at the time such Subsidiary becomes a Subsidiary and not
created in contemplation of such event.
6.15.12 Liens on any specific fixed asset securing Indebtedness
incurred or assumed for the purpose of financing or refinancing all or any
part of the cost of acquiring or constructing such asset; provided that
such Lien attaches to such asset concurrently with or within six (6) months
after the acquisition or completion or construction thereof.
6.15.13 Liens existing on any specific fixed asset of any Subsidiary
of the Borrower at the time such Subsidiary is merged or consolidated with
or into the Borrower or any Subsidiary and not created in contemplation of
such event.
45
6.15.14 Liens existing on any specific fixed asset prior to the
acquisition thereof by the Borrower or any Subsidiary and not created in
contemplation thereof; provided that such Liens do not encumber any other
property or assets, other than improvements thereon and proceeds thereof.
6.15.15 Liens arising out of the refinancing, extension, renewal or
refunding of any Indebtedness secured by any Lien permitted under Sections
6.15.5 and 6.15.11 through 6.15.14; provided that (i) such Indebtedness is
not secured by any additional assets, other than improvements thereon and
proceeds thereof, and (ii) the amount of such Indebtedness secured by any
such Lien is not increased.
6.15.16 Liens securing Permitted Purchase Money Indebtedness; provided
that such Liens shall not apply to any property of the Borrower or any
Subsidiary other than that purchased with the proceeds of such Permitted
Purchase Money Indebtedness, other than improvements thereon and proceeds
thereof.
6.15.17 Liens in respect of Capitalized Lease Obligations to the
extent permitted hereunder and Liens arising under any equipment, furniture
or fixtures leases or Property consignments to the Borrower or any
Subsidiary otherwise permitted under the Loan Documents.
6.15.18 Licenses, leases or subleases granted to others in the
ordinary course of business consistent with the Borrower's and the
Subsidiaries' past practices that do not materially interfere with the
conduct of the business of the Borrower and the Subsidiaries taken as a
whole.
6.15.19 Statutory and contractual landlords' Liens under leases to
which the Borrower or any Subsidiary is a party.
6.15.20 Liens in favor of a banking institution arising as a matter of
applicable law encumbering deposits (including the right of set-off) held
by such banking institutions incurred in the ordinary course of business
and which are within the general parameters customary in the banking
industry.
6.15.21 Liens in favor of customs and revenue authorities arising as a
matter of applicable law to secure the payment of customs' duties in
connection with the importation of goods.
6.15.22 Any interest or title of a lessor, sublessor, licensee or
licensor under any lease or license agreement permitted by this Agreement.
6.15.23 Liens not otherwise permitted under this Section 6.15 to the
extent attaching to Properties and assets with an aggregate fair market
value not in excess of, and securing liabilities not in excess of,
$10,000,000, in the aggregate at any one time outstanding.
6.16. Affiliates. The Borrower will not enter into, directly or indirectly,
or permit any Subsidiary to enter into, directly or indirectly, any transaction
(including, without limitation, the
46
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate (other than the Borrower and the Guarantors) except
(a) in the ordinary course of business and pursuant to the reasonable
requirements of the Borrower's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary than the
Borrower or such Subsidiary would obtain in a comparable arm's-length
transaction and (b) in connection with any Receivables Purchase Facility
permitted under Section 6.14.4.
6.17. Financial Contracts. The Borrower will not, nor will it permit any
Subsidiary to, enter into or remain liable upon any Rate Management Transactions
except for those entered into (i) by the Borrower and its Subsidiaries in the
ordinary course of business for bona fide hedging purposes and not for
speculative purposes and (ii) by any SPV in connection with a Receivables
Purchase Facility permitted hereunder.
6.18. Subsidiary Covenants. The Borrower will not, and will not permit any
Subsidiary (other than any SPV) to, create or otherwise cause to become
effective any consensual encumbrance or restriction of any kind on the ability
of any Subsidiary (other than any SPV) (i) to pay dividends or make any other
distribution on its stock, (ii) to pay any Indebtedness or other obligation owed
to the Borrower or any Subsidiary, (iii) to make loans or advances or other
Investments in the Borrower or any Subsidiary, or (iv) to sell, transfer or
otherwise convey any of its property to the Borrower or any Subsidiary, except
for such encumbrances or restrictions existing under or by reason of (a) this
Agreement and the other Loan Documents, (b) customary provisions restricting
subletting or assignment of any lease governing any leasehold interest of the
Borrower or any of its Subsidiaries, (c) customary provisions restricting
assignment of any licensing agreement or other contract entered into by Borrower
and its Subsidiaries in the ordinary course of business, (d) restrictions on the
transfer of any asset pending the close of the sale of such asset and (e)
restrictions on the transfer of any assets subject to a Lien permitted by
Section 6.15.
6.19. Contingent Obligations. The Borrower will not, nor will it permit any
Subsidiary to, make or suffer to exist any Contingent Obligation (including,
without limitation, any Contingent Obligation with respect to the obligations of
a Subsidiary), except Contingent Obligations arising with respect to (i) this
Agreement and the other Loan Documents, (ii) customary indemnification
obligations in favor of purchasers in connection with asset dispositions
permitted hereunder, (iii) customary indemnification obligations under such
Person's charter and bylaws (or equivalent formation documents), (iv)
indemnities in favor of the Persons issuing title insurance policies insuring
the title to any property, (v) guarantees of (a) real property leases of the
Borrower and its Subsidiaries and (b) personal property Operating Leases of the
Borrower and its Subsidiaries, in each case entered into in the ordinary course
of business by the Borrower or any of the Subsidiaries, (vi) the Receivables
Purchase Facility and (vii) other Contingent Obligations constituting guarantees
of Indebtedness of the Borrower or any of its Subsidiaries permitted under
Section 6.14, provided that to the extent such Indebtedness is subordinated to
the Obligations each such Contingent Obligation shall be subordinated to the
Obligations on terms reasonably acceptable to the Agent.
6.20. Leverage Ratio. The Borrower will maintain, as of the end of each
fiscal quarter, a Leverage Ratio of not greater than 3.25 to 1.00.
47
6.21. Interest Expense Coverage Ratio. The Borrower will not permit the
ratio (the "Interest Expense Coverage Ratio"), determined as of the end of each
of its fiscal quarters for the then most-recently ended four fiscal quarters of
(i) Consolidated EBIT during such period to (ii) Consolidated Interest Expense
during such period, all calculated for the Borrower and its Subsidiaries on a
consolidated basis, to be less than 3.00 to 1.00.
6.22. Minimum Consolidated Net Worth. The Borrower will at all times
maintain Consolidated Net Worth of not less than the sum of (i) $500,000,000,
plus (ii) 50% of the cumulative positive quarterly Consolidated Net Income for
all fiscal quarters of the Borrower following the fiscal quarter of the Borrower
ending July 26, 2003 (without taking into account any net loss in any such
fiscal quarter), plus (iii) 100% of the amount, if any, by which stockholder's
equity of the Borrower is, in accordance with Agreement Accounting Principles,
increased for all fiscal quarters of the Borrower following the fiscal quarter
of the Borrower ending July 26, 2003 as a result of (A) the issuance of any
capital stock of the Borrower or (B) any Acquisition (including the AbilityOne
Acquisition).
6.23. Additional Subsidiary Guarantors. The Borrower shall execute or shall
cause to be executed on the date any Person becomes a Material Domestic
Subsidiary of the Borrower (other than an SPV), a supplement to the Guaranty
pursuant to which such Material Domestic Subsidiary shall become a Guarantor,
and shall deliver or cause to be delivered to the Agent all appropriate
corporate resolutions and other documentation (including opinions of counsel) in
each case in form and substance reasonably satisfactory to the Agent. If at any
time (a) the aggregate assets of all of the Borrower's Domestic Subsidiaries
that are not Guarantors under the Guaranty exceeds twenty percent (20%) of the
consolidated total assets of the Borrower and its Subsidiaries, or (b) the
aggregate Consolidated Adjusted Net Income for the four consecutive fiscal
quarters most recently ended of all of the Borrower's Domestic Subsidiaries that
are not Guarantors under the Guaranty exceeds twenty percent (20%) of the
Borrower's Consolidated Adjusted Net Income for such period, the Borrower will,
within 30 days after its senior management becomes aware (or reasonably should
have become aware) of such event, cause to be executed and delivered to the
Agent a supplement to the Guaranty (together with such other documents, opinions
and information as the Agent may require) with respect to additional Domestic
Subsidiaries to the extent necessary so that, after giving effect thereto, the
threshold levels in clauses (a) and (b) above are not exceeded.
6.24. Foreign Subsidiary Investments. The Borrower will not, nor will it
permit any other Credit Party to, enter into or suffer to exist Foreign
Subsidiary Investments at any time in an aggregate amount greater than
$50,000,000.
6.25. Subordinated Indebtedness. The Borrower will not, and will not permit
any Subsidiary to, make any amendment or modification to the indenture, note or
other agreement evidencing or governing any Subordinated Indebtedness, or
directly or indirectly voluntarily prepay, defease or in substance defease,
purchase, redeem, retire or otherwise acquire, any Subordinated Indebtedness.
6.26. Sale of Accounts. The Borrower will not, nor will it permit any
Subsidiary to, sell or otherwise dispose of any notes receivable or accounts
receivable, with or without recourse except to the extent permitted by Section
6.12.4.
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ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall constitute
a Default:
7.1 Any representation or warranty made or deemed made by or on behalf of
the Borrower or any Subsidiary to the Lenders or the Agent under or in
connection with this Agreement, any Credit Extension, or any certificate or
information delivered in connection with this Agreement or any other Transaction
Document shall be false in any material respect on the date as of which made or
deemed made.
7.2 Nonpayment of (i) principal of any Loan when due, or (ii) interest upon
any Loan or any Facility Fee or other Obligations under any of the Loan
Documents within five (5) days after such interest, fee or other Obligation
becomes due.
7.3 The breach by the Borrower of any of the terms or provisions of any of
Sections 6.1 through 6.3 or any of Sections 6.10 through 6.26.
7.4 The breach by the Borrower (other than a breach which constitutes a
Default under another Section of this Article VII) or any other Credit Party of
any of the terms or provisions of this Agreement or any other Loan Document to
which it is a party which is not remedied within five (5) days after the earlier
to occur of (i) written notice from the Agent or any Lender to the Borrower or
(ii) an Authorized Officer otherwise become aware of any such breach.
7.5 Failure of the Borrower or any Subsidiary to pay when due any Material
Indebtedness (beyond the applicable grace period with respect thereto, if any);
or the default by the Borrower or any Subsidiary in the performance (beyond the
applicable grace period with respect thereto, if any) of any term, provision or
condition contained in any Material Indebtedness Agreement, or any other event
shall occur or condition exist, the effect of which default, event or condition
is to cause, or to permit the holder(s) of such Material Indebtedness or the
lender(s) under any Material Indebtedness Agreement to cause, such Material
Indebtedness to become due prior to its stated maturity or any commitment to
lend under any Material Indebtedness Agreement to be terminated prior to its
stated expiration date; or any Material Indebtedness of the Borrower or any
Subsidiary shall be declared to be due and payable or required to be prepaid or
repurchased (other than by a regularly scheduled payment) prior to the stated
maturity thereof; or the Borrower or any Subsidiary shall not pay, or admit in
writing its inability to pay, its debts generally as they become due.
7.6 The Borrower or any Subsidiary shall (i) have an order for relief
entered with respect to it under the Federal bankruptcy laws as now or hereafter
in effect, (ii) make an assignment for the benefit of creditors, (iii) apply
for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
Substantial Portion of its Property, (iv) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement,
49
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file an
answer or other pleading denying the material allegations of any such proceeding
filed against it, (v) take any corporate or partnership action to authorize or
effect any of the foregoing actions set forth in this Section 7.6 or (vi) fail
to contest in good faith any appointment or proceeding described in Section 7.7.
7.7 Without the application, approval or consent of the Borrower or any
Subsidiary, a receiver, trustee, examiner, liquidator or similar official shall
be appointed for the Borrower or any Subsidiary or any Substantial Portion of
its Property, or a proceeding described in Section 7.6(iv) shall be instituted
against the Borrower or any Subsidiary and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a period
of 30 consecutive days.
7.8 Any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of, all or any portion of the
Property of the Borrower and the Subsidiaries which, when taken together with
all other Property of the Borrower and the Subsidiaries so condemned, seized,
appropriated, or taken custody or control of, during the twelve-month period
ending with the month in which any such action occurs, constitutes a Substantial
Portion.
7.9 The Borrower or any Subsidiary shall fail within 30 days to pay, bond
or otherwise discharge one or more (i) judgments or orders for the payment of
money in excess of $5,000,000 (or the equivalent thereof in currencies other
than Dollars) in the aggregate, or (ii) nonmonetary judgments or orders which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, which judgment(s), in any such case, is/are not (a)
stayed on appeal or otherwise being appropriately contested in good faith or (b)
paid in full by third-party insurers under the Borrower's or any Subsidiary's
insurance policies.
7.10 The Unfunded Liabilities of all Single Employer Plans shall exceed
$10,000,000 in the aggregate, or any Reportable Event shall occur in connection
with any Plan.
7.11 Nonpayment by the Borrower or any Subsidiary of any Rate Management
Obligation, in an outstanding principal amount of $5,000,000 or more, when due
or the breach by the Borrower or any Subsidiary of any term, provision or
condition contained in any Rate Management Transaction or any transaction of the
type described in the definition of "Rate Management Transactions," whether or
not any Lender or Affiliate of a Lender is a party thereto.
7.12 Any Change in Control shall occur.
7.13 The Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred,
pursuant to Section 4201 of ERISA, withdrawal liability to such Multiemployer
Plan in an amount which, when aggregated with all other amounts required to be
paid to Multiemployer Plans by the Borrower or any other member of the
Controlled Group as withdrawal liability (determined as of the date of such
notification), exceeds $10,000,000 or requires payments exceeding $10,000,000
per annum.
7.14 The Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in
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reorganization or is being terminated, within the meaning of Title IV of ERISA,
if as a result of such reorganization or termination the aggregate annual
contributions of the Borrower and the other members of the Controlled Group
(taken as a whole) to all Multiemployer Plans which are then in reorganization
or being terminated have been or will be increased, in the aggregate, over the
amounts contributed to such Multiemployer Plans for the respective plan years of
such Multiemployer Plans immediately preceding the plan year in which the
reorganization or termination occurs by an amount exceeding $10,000,000.
7.15 The Borrower or any Subsidiary shall (i) be the subject of any
proceeding or investigation pertaining to the release by the Borrower or any
Subsidiary or any other Person of any toxic or hazardous waste or substance into
the environment, or (ii) violate any Environmental Law, which, in the case of an
event described in clause (i) or clause (ii), has resulted in liability to the
Borrower or any Subsidiary in an amount equal to $10,000,000 or more, which
liability is not paid, bonded or otherwise discharged within 60 days or which is
not stayed on appeal and being appropriately contested in good faith.
7.16 Any Loan Document shall fail to remain in full force or effect against
the Borrower or any Subsidiary or any action shall be taken or shall fail to be
taken to discontinue or to assert the invalidity or unenforceability of, or
which results in the discontinuation or invalidity or unenforceability of, any
Loan Document.
7.17 An event (such event, an "Off-Balance Sheet Trigger Event") shall
occur which (i) permits the investors or purchasers in respect of Off-Balance
Sheet Liabilities of the Borrower or any Affiliate of the Borrower to require
the amortization or liquidation of such Off-Balance Sheet Liabilities as a
result of the non-payment of any Off-Balance Sheet Liability having an aggregate
outstanding principal amount (or similar outstanding liability) greater than or
equal to $5,000,000 and (x) such Off-Balance Sheet Trigger Event shall not be
remedied or waived within the later to occur of the tenth day after the
occurrence thereof or the expiry date of any grace period related thereto under
the agreement evidencing such Off-Balance Sheet Liabilities, or (y) such
investors shall require the amortization or liquidation of such Off-Balance
Sheet Liabilities as a result of such Off-Balance Sheet Trigger Event, (ii)
results in the termination of reinvestments of collections or proceeds of
receivables and related assets under the agreements evidencing such Off-Balance
Sheet Liabilities, or (iii) causes or otherwise permits the replacement or
substitution of the Borrower or any Affiliate thereof as the servicer under the
agreements evidencing such Off-Balance Sheet Liabilities; provided, however,
that this Section 7.17 shall not apply on any date with respect to (a) any
voluntary request by the Borrower or an Affiliate thereof for an above-described
amortization, liquidation, or termination of reinvestments so long as the
aforementioned investors or purchasers cannot independently require on such date
such amortization, liquidation or termination of reinvestments or (b) any
scheduled amortization or liquidation at the stated maturity of the facility
evidencing such Off-Balance Sheet Liabilities.
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ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration. (i) If any Default described in Section 7.6 or 7.7
occurs with respect to any Credit Party, the obligations of the Lenders to make
Loans hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part of
the Agent or any Lender. If any other Default occurs, the Required Lenders (or
the Agent with the consent of the Required Lenders) may terminate or suspend the
obligations of the Lenders to make Loans hereunder, or declare the Obligations
to be due and payable, or both, whereupon the Obligations shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which the Borrower hereby expressly waives.
(ii) If, after acceleration of the maturity of the Obligations or
termination of the obligations of the Lenders to make Loans hereunder
as a result of any Default (other than any Default as described in
Section 7.6 or 7.7 with respect to any Credit Party) and before any
judgment or decree for the payment of the Obligations due shall have
been obtained or entered, the Required Lenders (in their sole
discretion) shall so direct, the Agent shall, by notice to the
Borrower, rescind and annul such acceleration and/or termination.
8.2. Amendments. Subject to the provisions of this Section 8.2, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or thereunder
or waiving any Default hereunder or thereunder; provided, however, that no such
supplemental agreement shall, without the consent of each Lender affected
thereby:
8.2.1 Extend the Facility Termination Date, extend the final maturity
of any Loan to a date after the Facility Termination Date, or postpone any
regularly scheduled payment of principal of any Loan or forgive all or any
portion of the principal amount thereof, or reduce the rate or extend the
time of payment of interest or fees thereon (other than (x) a waiver of the
application of the default rate of interest pursuant to Section 2.9 hereof
and (y) any reduction of the amount of or any extension of the payment date
for the mandatory payments required under Section 2.2, in each case which
shall only require the approval of the Required Lenders).
8.2.2 Reduce the percentage specified in the definition of Required
Lenders or any other percentage of Lenders specified to be the applicable
percentage in this Agreement to act on specified matters or amend the
definition of "Pro Rata Share".
8.2.3 Increase the amount of the Commitment of any Lender hereunder,
or permit the Borrower to assign its rights or obligations under this
Agreement.
8.2.4 Amend this Section 8.2.
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8.2.5 Other than in connection with a transaction permitted under this
Agreement, release any Guarantor that remains a Material Domestic
Subsidiary from its obligations under the Guaranty.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. The Agent may waive payment
of the fee required under Section 12.3.3 without obtaining the consent of any
other party to this Agreement.
8.3. Preservation of Rights. No delay or omission of the Lenders or the
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Credit Extension notwithstanding the existence of a Default or
Unmatured Default or the inability of the Borrower to satisfy the conditions
precedent to such Credit Extension shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by, or by the Agent with the consent of, the requisite number of Lenders
required pursuant to Section 8.2, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Agent and the
Lenders until all of the Obligations have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and warranties of the
Borrower contained in this Agreement shall survive the making of the Credit
Extensions herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, no Lender shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3. Headings. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Agent and the Lenders and supersede all
prior agreements and understandings among the Borrower, the Agent and the
Lenders relating to the subject matter thereof other than those contained in the
fee letter described in Section 10.13 which shall survive and remain in full
force and effect during the term of this Agreement.
9.5. Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any of
its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or
53
benefit upon any Person other than the parties to this Agreement and their
respective successors and assigns, provided, however, that the parties hereto
expressly agree that the Arrangers shall enjoy the benefits of the provisions of
Sections 9.6, 9.10 and 10.11 to the extent specifically set forth therein and
shall have the right to enforce such provisions on its own behalf and in its own
name to the same extent as if it were a party to this Agreement.
9.6. Expenses; Indemnification.
(i) The Borrower shall reimburse the Agent and the Arrangers for any
reasonable costs, internal charges and out-of-pocket expenses
(including outside attorneys' and paralegals' fees and expenses of and
fees for other advisors and professionals engaged by the Agent or the
Arrangers and, unless a Default shall be continuing, with the consent
of the Borrower) paid or incurred by the Agent or the Arrangers in
connection with the investigation, preparation, negotiation,
documentation, execution, delivery, syndication, distribution
(including, without limitation, via the internet), review, amendment,
modification and administration of the Transaction Documents. The
Borrower also agrees to reimburse the Agent, the Arrangers and the
Lenders for any costs, internal charges and out-of-pocket expenses
(including outside attorneys' and paralegals' fees and expenses of
outside attorneys and paralegals for the Agent, the Arrangers and the
Lenders) paid or incurred by the Agent, the Arrangers or any Lender in
connection with the collection and enforcement of the Loan Documents.
Expenses being reimbursed by the Borrower under this Section include,
without limitation, costs and expenses incurred in connection with the
Reports described in the following sentence. The Borrower acknowledges
that from time to time BOMC may prepare and may distribute to the
Lenders (but shall have no obligation or duty to prepare or to
distribute to the Lenders) certain audit reports (the "Reports")
pertaining to the Borrower's assets for internal use by BOMC from
information furnished to it by or on behalf of the Borrower, after
BOMC has exercised its rights of inspection pursuant to this
Agreement.
(ii) The Borrower hereby further agrees to indemnify the Agent, the
Arrangers, each Lender, their respective affiliates, and each of their
directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without
limitation, all expenses of litigation or preparation therefor whether
or not the Agent, the Arrangers, any Lender or any affiliate is a
party thereto, and all outside attorneys' and paralegals' fees and
expenses of outside attorneys and paralegals of the party seeking
indemnification) which any of them may pay or incur arising out of or
relating to this Agreement, the other Transaction Documents, the
AbilityOne Acquisition and the other transactions contemplated hereby
or the direct or indirect application or proposed application of the
proceeds of any Credit Extension hereunder except to the extent that
they are determined in a final non-appealable judgment by a court of
competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the party seeking indemnification. The
obligations of the Borrower under this Section 9.6 shall survive the
termination of this Agreement.
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9.7. Numbers of Documents. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Agent with sufficient counterparts
so that the Agent may furnish one to each of the Lenders, to the extent that the
Agent deems necessary.
9.8. Accounting. Except as provided to the contrary herein, all accounting
terms used in the calculation of any financial covenant or test shall be
interpreted and all accounting determinations hereunder in the calculation of
any financial covenant or test shall be made in accordance with Agreement
Accounting Principles. If any changes in generally accepted accounting
principles are hereafter required or permitted and are adopted by the Borrower
or any Subsidiary with the agreement of its independent certified public
accountants and such changes result in a change in the method of calculation of
any of the financial covenants, tests, restrictions or standards herein or in
the related definitions or terms used therein ("Accounting Changes"), the
parties hereto agree, at the Borrower's request, to enter into negotiations, in
good faith, in order to amend such provisions in a credit neutral manner so as
to reflect equitably such changes with the desired result that the criteria for
evaluating the Borrower's and its Subsidiaries' financial condition shall be the
same after such changes as if such changes had not been made; provided, however,
until such provisions are amended in a manner reasonably satisfactory to the
Agent and the Required Lenders, no Accounting Change shall be given effect in
such calculations. In the event such amendment is entered into, all references
in this Agreement to Agreement Accounting Principles shall mean generally
accepted accounting principles, including the Accounting Change, as of the date
of such amendment. Notwithstanding the foregoing, all financial statements to be
delivered by The Borrower pursuant to Section 6.1 shall be prepared in
accordance with generally accepted accounting principles in effect at such time.
9.9. Severability of Provisions. Any provision in any Loan Document that is
held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as
to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
9.10. Nonliability of Lenders. The relationship between the Borrower on the
one hand and the Lenders and the Agent on the other hand shall be solely that of
borrower and lender. Neither the Agent (except to the limited extent as provided
by Section 12.3.4 relating to maintaining the Register), the Arrangers nor any
Lender shall have any fiduciary responsibilities to the Borrower or any other
Credit Party. Neither the Agent, the Arrangers nor any Lender undertakes any
responsibility to the Borrower or any other Credit Party to review or inform any
Credit Party of any matter in connection with any phase of any Credit Party's
business or operations. The Borrower agrees that neither the Agent, the
Arrangers nor any Lender shall have liability to the Borrower (whether sounding
in tort, contract or otherwise) for losses suffered by the Borrower in
connection with, arising out of, or in any way related to, the transactions
contemplated and the relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith, unless it is determined in
a final non-appealable judgment by a court of competent jurisdiction that such
losses resulted from the gross negligence or willful misconduct of the party
from which recovery is sought. Neither the Agent, the Arrangers nor any Lender
shall have any liability with respect to, and the Borrower hereby waives,
releases and agrees not to sue for, any special, indirect, consequential or
punitive
55
damages suffered by the Borrower or any Subsidiary in connection with, arising
out of, or in any way related to the Loan Documents or the transactions
contemplated thereby.
9.11. Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from the Borrower pursuant to this Agreement in
confidence in accordance with its respective customary practices (but in any
event in accordance with reasonable confidentiality practices), except for
disclosure (i) to its Affiliates and to other Lenders and their respective
Affiliates, for use solely in connection with the transactions contemplated
hereby, (ii) to legal counsel, accountants, and other professional advisors to
such Lender or to a Transferee who are expected to be involved in the evaluation
of such information in connection with the transactions contemplated hereby, in
each case which have been informed as to the confidential nature of such
information, (iii) to regulatory officials having jurisdiction over it, (iv) to
any Person as required by law, regulation, or legal process, (v) of information
that presently or hereafter becomes available to such Lender on a
non-confidential basis from a source other than the Borrower and other than as a
result of disclosure not otherwise permitted by this Section 9.11, (vi) to any
Person in connection with any legal proceeding to which such Lender is a party,
(vii) to such Lender's direct or indirect contractual counterparties in credit
derivative transactions or to legal counsel, accountants and other professional
advisors to such counterparties, in each case which have been informed as to the
confidential nature of such information, (viii) permitted by Section 12.4 and
(ix) to rating agencies if requested or required by such agencies in connection
with a rating relating to the Credit Extensions hereunder. Without limiting
Section 9.4, the Borrower agrees that the terms of this Section 9.11 shall set
forth the entire agreement between the Borrower and each Lender (including the
Agent) with respect to any confidential information previously or hereafter
received by such Lender in connection with this Agreement or any other Loan
Document, and this Section 9.11 shall supersede any and all prior
confidentiality agreements entered into by such Lender with respect to such
confidential information. Notwithstanding anything herein to the contrary,
confidential information shall not include, and each party hereto (and each
employee, representative or other agent of any party hereto) may disclose to any
and all Persons, without limitation of any kind, the U.S. federal income tax
treatment and U.S. federal income tax structure of the transactions contemplated
hereby and all materials of any kind (including opinions or other tax analyses)
that are or have been provided to such party relating to such tax treatment or
tax structure, and it is hereby confirmed that each party hereto has been
authorized to make such disclosures since the commencement of discussions
regarding the transactions contemplated hereby.
9.12. Lenders Not Utilizing Plan Assets. Each Lender and Designated Lender
represents and warrants that none of the consideration used by such Lender or
Designated Lender to make its Loans constitutes for any purpose of ERISA or
Section 4975 of the Code assets of any "plan" as defined in Section 3(3) of
ERISA or Section 4975 of the Code and the rights and interests of such Lender or
Designated Lender in and under the Loan Documents shall not constitute such
"plan assets" under ERISA.
9.13. Nonreliance. Each Lender hereby represents that it is not relying on
or looking to any margin stock (as defined in Regulation U) as collateral in the
extension or maintenance of the credit provided for herein.
56
9.14. Disclosure. The Borrower and each Lender hereby acknowledge and agree
that each Lender and/or its Affiliates from time to time may hold investments
in, make other loans to or have other relationships with the Borrower and its
Affiliates.
9.15. Performance of Obligations. The Borrower agrees that the Agent may,
but shall have no obligation to (i) at any time, pay or discharge taxes, liens,
security interests or other encumbrances levied or placed on or threatened
against any collateral for the Obligations and (ii) after the occurrence and
during the continuance of a Default make any other payment or perform any act
required of the Borrower or any Subsidiary under any Loan Document or take any
other action which the Agent in its discretion deems necessary or desirable to
protect or preserve the collateral, if any, for the Obligations, including,
without limitation, any action to (x) effect any repairs or obtain any insurance
called for by the terms of any of the Loan Documents and to pay all or any part
of the premiums therefor and the costs thereof and (y) pay any rents payable by
the Borrower or any Subsidiary which are more than 30 days past due, or as to
which the landlord has given notice of termination, under any lease. The Agent
shall use its best efforts to give the Borrower notice of any action taken under
this Section 9.15 prior to the taking of such action or promptly thereafter
provided the failure to give such notice shall not affect the Borrower's
obligations in respect thereof. The Borrower agrees to pay the Agent, upon
demand, the principal amount of all funds advanced by the Agent under this
Section 9.15, together with interest thereon at the rate from time to time
applicable to Floating Rate Loans from the date of such advance until the
outstanding principal balance thereof is paid in full. If the Borrower fails to
make payment in respect of any such advance under this Section 9.15 within one
(1) Business Day after the date the Borrower receives written demand therefor
from the Agent, the Agent shall promptly notify each Lender and each Lender
agrees that it shall thereupon make available to the Agent, in Dollars in
immediately available funds, the amount equal to such Lender's Pro Rata Share of
such advance. If such funds are not made available to the Agent by such Lender
within one (1) Business Day after the Agent's demand therefor, the Agent will be
entitled to recover any such amount from such Lender together with interest
thereon at the Federal Funds Effective Rate for each day during the period
commencing on the date of such demand and ending on the date such amount is
received. The failure of any Lender to make available to the Agent its Pro Rata
Share of any such unreimbursed advance under this Section 9.15 shall neither
relieve any other Lender of its obligation hereunder to make available to the
Agent such other Lender's Pro Rata Share of such advance on the date such
payment is to be made nor increase the obligation of any other Lender to make
such payment to the Agent. All outstanding principal of, and interest on,
advances made under this Section 9.15 shall constitute Obligations until paid in
full by the Borrower.
ARTICLE X
THE AGENT
10.1. Appointment; Nature of Relationship. BOMC is hereby appointed by each
of the Lenders as its contractual representative (herein referred to as the
"Agent") hereunder and under each other Loan Document, and each of the Lenders
irrevocably authorizes the Agent to act as the contractual representative of
such Lender with the rights and duties expressly set forth herein and in the
other Loan Documents. The Agent agrees to act as such contractual representative
upon the express conditions contained in this Article X. Notwithstanding the use
of the defined
57
term "Agent," it is expressly understood and agreed that the Agent shall not
have any fiduciary responsibilities to any of the Lenders by reason of this
Agreement or any other Loan Document and that the Agent is merely acting as the
contractual representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan Documents. In its
capacity as the Lenders' contractual representative, the Agent (i) does not
hereby assume any fiduciary duties to any of the Lenders, (ii) is a
"representative" of the Lenders within the meaning of the term "secured party"
as defined in the Illinois Uniform Commercial Code and (iii) is acting as an
independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. Each of the
Lenders, for itself and on behalf of its Affiliates, hereby agrees to assert no
claim against the Agent on any agency theory or any other theory of liability
for breach of fiduciary duty, all of which claims each Lender and each Affiliate
of each Lender hereby waives.
10.2. Powers. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties or fiduciary duties to the Lenders, or any
obligation to the Lenders to take any action thereunder except any action
specifically provided by the Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, any Subsidiary or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is determined in a final, non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent nor any
of its directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into, or verify (a) any statement, warranty or
representation made in connection with any Loan Document or any borrowing
hereunder; (b) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; (f) the
value sufficiency, creation, perfection or priority of any Lien in any
collateral security; or (g) the financial condition of the Borrower, any
Subsidiary or any guarantor of any of the Obligations or of any of the
Borrower's, such Subsidiary's or any such guarantor's respective Subsidiaries.
The Agent shall have no duty to disclose to the Lenders information that is not
required to be furnished by the Borrower to the Agent at such time, but is
voluntarily furnished by the Borrower to the Agent (either in its capacity as
Agent or in its individual capacity).
10.5. Action on Instructions of Lenders. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders (or all of the Lenders in the event that and to the extent that
this Agreement expressly requires such approval), and such
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instructions and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders. The Lenders hereby acknowledge that the Agent
shall be under no duty to take any discretionary action permitted to be taken by
it pursuant to the provisions of this Agreement or any other Loan Document
unless it shall be requested in writing to do so by the Required Lenders (or all
of the Lenders in the event that and to the extent that this Agreement expressly
requires such approval). The Agent shall be fully justified in failing or
refusing to take any action hereunder and under any other Loan Document unless
it shall first be indemnified to its satisfaction by the Lenders pro rata
against any and all liability, cost and expense that it may incur by reason of
taking or continuing to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute any of its
duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to rely
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex, electronic mail message, statement, paper or document believed
by it to be genuine and correct and to have been signed or sent by the proper
person or persons, and, in respect to legal matters, upon the opinion of counsel
selected by the Agent, which counsel may be employees of the Agent. For purposes
of determining compliance with the conditions specified in Sections 4.1 and 4.2,
each Lender that has signed this Agreement (or otherwise become party hereto
pursuant to an Assignment Agreement) shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Agent shall have received notice from such
Lender prior to the applicable date specifying its objection thereto.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to the Lenders' Pro Rata
Shares of the Aggregate Commitment (or, from and after the Funding Date, of the
Aggregate Outstanding Credit Exposure) (i) for any amounts not reimbursed by the
Borrower for which the Agent is entitled to reimbursement by any Credit Party
under the Loan Documents, (ii) for any other expenses incurred by the Agent on
behalf of the Lenders, in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents (including, without
limitation, for any expenses incurred by the Agent in connection with any
dispute between the Agent and any Lender or between two or more of the Lenders)
and (iii) for any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby
(including, without limitation, for any such amounts incurred by or asserted
against the Agent in connection with any dispute between the Agent and any
Lender or between two or more of the Lenders), or the enforcement of any of the
terms of the Loan Documents or of any such other documents, provided that (i) no
Lender shall be liable for any of the foregoing to the extent any of the
foregoing is found in a
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final, non-appealable judgment by a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of the Agent and (ii)
any indemnification required pursuant to Section 3.5(vii) shall, notwithstanding
the provisions of this Section 10.8, be paid by the relevant Lender in
accordance with the provisions thereof. The obligations of the Lenders under
this Section 10.8 shall survive payment of the Obligations and termination of
this Agreement.
10.9. Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Unmatured Default hereunder unless
the Agent has received written notice from a Lender or the Borrower referring to
this Agreement describing such Default or Unmatured Default and stating that
such notice is a "notice of default". In the event that the Agent receives such
a notice, the Agent shall give prompt notice thereof to the Lenders.
10.10. Rights as a Lender. In the event the Agent is a Lender, the Agent
shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Credit Extensions as any Lender
and may exercise the same as though it were not the Agent, and the term "Lender"
or "Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with the Borrower or
any Subsidiary in which the Borrower or such Subsidiary is not restricted hereby
from engaging with any other Person. The Agent, in its individual capacity, is
not obligated to remain a Lender.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arrangers or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Arrangers or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
10.12. Successor Agent. The Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower, such resignation to be effective
upon the appointment of a successor Agent or, if no successor Agent has been
appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of the Borrower and the Lenders, a successor Agent. If no successor Agent
shall have been so appointed by the Required Lenders within thirty days after
the resigning Agent's giving notice of its intention to resign, then the
resigning Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Agent. Notwithstanding the two immediately preceding sentences: (x)
subject to clause (y) of this sentence, the consent of the Borrower shall be
required prior to the appointment of a successor Agent unless such successor
Agent is a Lender or an Affiliate of a
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Lender, provided that the consent of the Borrower shall not be required if a
Default has occurred and is continuing, and (y) the Agent may at any time
without the consent of the Borrower or any Lender, appoint any of its Affiliates
which is a commercial bank as a successor Agent hereunder. If the Agent has
resigned or been removed and no successor Agent has been appointed, the Lenders
may perform all the duties of the Agent hereunder and the Borrower shall make
all payments in respect of the Obligations to the applicable Lender and for all
other purposes shall deal directly with the Lenders. No successor Agent shall be
deemed to be appointed hereunder until such successor Agent has accepted the
appointment. Any such successor Agent shall be a commercial bank having capital
and retained earnings of at least $100,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the resigning or removed Agent. Upon the effectiveness of the
resignation or removal of the Agent, the resigning or removed Agent shall be
discharged from its duties and obligations hereunder and under the Loan
Documents. After the effectiveness of the resignation or removal of an Agent,
the provisions of this Article X shall continue in effect for the benefit of
such Agent in respect of any actions taken or omitted to be taken by it while it
was acting as the Agent hereunder and under the other Loan Documents. In the
event that there is a successor to the Agent by merger, or the Agent assigns its
duties and obligations to an Affiliate pursuant to this Section 10.12, then the
term "Prime Rate" as used in this Agreement shall mean the prime rate, base rate
or other analogous rate of the new Agent.
10.13. Agent and Arranger Fees. The Borrower agrees to pay to the Agent and
the Arrangers, for their respective accounts, the fees agreed to by the
Borrower, the Agent, Bank of America, N.A. and the Arrangers pursuant to that
certain letter agreement dated August 26, 2003, or as otherwise agreed from time
to time.
10.14. Delegation to Affiliates. The Borrower and the Lenders agree that
the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.
10.15. No Duties Imposed on Syndication Agents, Documentation Agents or
Arrangers. None of the Persons identified on the cover page to this Agreement,
the signature pages to this Agreement or otherwise in this Agreement as a
"Syndication Agent," "Documentation Agent" or "Arranger" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than, if such Person is a Lender, those applicable to all Lenders as such.
Without limiting the foregoing, none of the Persons identified on the cover page
to this Agreement, the signature pages to this Agreement or otherwise in this
Agreement as a "Syndication Agent," "Documentation Agent" or "Arranger" shall
have or be deemed to have any fiduciary duty to or fiduciary relationship with
any Lender. Each of the Lenders acknowledges that it has not relied, and will
not rely, on any of the Persons so identified in deciding to enter into this
Agreement or in taking or not taking action hereunder.
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ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any other Default occurs and continues, any and all deposits
(including all account balances, whether provisional or final and whether or not
collected or available) and any other Indebtedness at any time held or owing by
any Lender or any Affiliate of any Lender to or for the credit or account of the
Borrower or any Subsidiary may be offset and applied toward the payment of the
Obligations owing to such Lender, whether or not the Obligations, or any part
thereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Outstanding Credit Exposure (other than payments
received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than
that received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a participation in the Aggregate Outstanding Credit Exposure held by
the other Lenders so that after such purchase each Lender will hold its Pro Rata
Share of the Aggregate Outstanding Credit Exposure. If any Lender, whether in
connection with setoff or amounts which might be subject to setoff or otherwise,
receives collateral or other protection for its Obligations or such amounts
which may be subject to setoff, such Lender agrees, promptly upon demand, to
take such action necessary such that all Lenders share in the benefits of such
collateral ratably in proportion to their respective Pro Rata Shares of the
Aggregate Outstanding Credit Exposure. In case any such payment is disturbed by
legal process, or otherwise, appropriate further adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns; Designated Lenders.
12.1.1 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower,
the Agent and the Lenders and their respective successors and assigns
permitted hereby, except that (i) the Borrower shall have no right to
assign its rights or obligations under the Loan Documents without the prior
written consent of each Lender, (ii) any assignment by any Lender must be
made in compliance with Section 12.3, and (iii) any transfer by
Participants must be made in compliance with Section 12.2. Any attempted
assignment or transfer by any party not made in compliance with this
Section 12.1 shall be null and void, unless such attempted assignment or
transfer is treated as a participation in accordance with Section 12.3.2.
The parties to this Agreement acknowledge that clause (ii) of this Section
12.1 relates only to absolute assignments and this Section 12.1 does not
prohibit assignments creating security interests, including, without
limitation, (x) any pledge or assignment by any Lender of all or any
portion of its rights under this Agreement and any Note to a Federal
Reserve Bank, (y) in the case of a Lender which is a Fund, any pledge or
assignment of all or any portion of its rights under this Agreement and any
Note to its trustee in support of its obligations to its trustee or (z) any
pledge or
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assignment by any Lender of all or any portion of its rights under this
Agreement and any Note to direct or indirect contractual counterparties in
credit derivative transactions relating to the Loans; provided, however,
that no such pledge or assignment creating a security interest shall
release the transferor Lender from its obligations hereunder unless and
until the parties thereto have complied with the provisions of Section
12.3. The Agent may treat the Person which made any Loan or which holds any
Note as the owner thereof for all purposes hereof unless and until such
Person complies with Section 12.3; provided, however, that the Agent may in
its discretion (but shall not be required to) follow instructions from the
Person which made any Loan or which holds any Note to direct payments
relating to such Loan or Note to another Person. Any assignee of the rights
to any Loan or any Note agrees by acceptance of such assignment to be bound
by all the terms and provisions of the Loan Documents. Any request,
authority or consent of any Person, who at the time of making such request
or giving such authority or consent is the owner of the rights to any Loan
(whether or not a Note has been issued in evidence thereof), shall be
conclusive and binding on any subsequent holder or assignee of the rights
to such Loan.
12.1.2 Designated Lenders.
(i) Subject to the terms and conditions set forth in this Section 12.1.2,
any Lender may from time to time elect to designate an Eligible
Designee to provide all or any part of the Loans to be made by such
Lender pursuant to this Agreement; provided that the designation of an
Eligible Designee by any Lender for purposes of this Section 12.1.2
shall be subject to the approval of the Agent (which consent shall not
be unreasonably withheld or delayed). Upon the execution by the
parties to each such designation of an agreement in the form of
Exhibit F hereto (a "Designation Agreement") and the acceptance
thereof by the Agent, the Eligible Designee shall become a Designated
Lender for purposes of this Agreement. The Designating Lender shall
thereafter have the right to permit the Designated Lender to provide
all or a portion of the Loans to be made by the Designating Lender
pursuant to the terms of this Agreement and the making of the Loans or
portion thereof shall satisfy the obligations of the Designating
Lender to the same extent, and as if, such Loan was made by the
Designating Lender. As to any Loan made by it, each Designated Lender
shall have all the rights a Lender making such Loan would have under
this Agreement and otherwise; provided, (x) that all voting rights
under this Agreement shall be exercised solely by the Designating
Lender, (y) each Designating Lender shall remain solely responsible to
the other parties hereto for its obligations under this Agreement,
including the obligations of a Lender in respect of Loans made by its
Designated Lender and (z) no Designated Lender shall be entitled to
reimbursement under Article III hereof for any amount which would
exceed the amount that would have been payable by the Borrower to the
Lender from which the Designated Lender obtained any interests
hereunder. No additional Notes shall be required with respect to Loans
provided by a Designated Lender; provided, however, to the extent any
Designated Lender shall advance funds, the Designating Lender shall be
deemed to hold the Notes in its possession as an agent for such
Designated Lender to the extent of the Loan funded by such Designated
Lender. Such Designating Lender shall act as Agent
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for its Designated Lender and give and receive notices and
communications hereunder. Any payments for the account of any
Designated Lender shall be paid to its Designating Lender as Agent for
such Designated Lender and neither the Borrower nor the Agent shall be
responsible for any Designating Lender's application of such payments.
In addition, any Designated Lender may (1) with notice to, but without
the consent of the Borrower or the Agent, assign all or portions of
its interests in any Loans to its Designating Lender or to any
financial institution consented to by the Agent providing liquidity
and/or credit facilities to or for the account of such Designated
Lender and (2) subject to advising any such Person that such
information is to be treated as confidential in accordance with
Section 9.11, disclose on a confidential basis any non-public
information relating to its Loans to any rating agency, commercial
paper dealer or provider of any guarantee, surety or credit or
liquidity enhancement to such Designated Lender.
(ii) Each party to this Agreement hereby agrees that it shall not institute
against, or join any other Person in instituting against, any
Designated Lender any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding or other proceedings under any
federal or state bankruptcy or similar law for one year and a day
after the payment in full of all outstanding senior indebtedness of
any Designated Lender; provided that the Designating Lender for each
Designated Lender hereby agrees to indemnify, save and hold harmless
each other party hereto for any loss, cost, damage and expense arising
out of its inability to institute any such proceeding against such
Designated Lender. This Section 12.1.2 shall survive the termination
of this Agreement.
12.2. Participations.
12.2.1 Permitted Participants; Effect. Any Lender may at any time sell
to one or more banks or other entities ("Participants") participating
interests in any Outstanding Credit Exposure of such Lender, any Note held
by such Lender, any Commitment of such Lender or any other interest of such
Lender under the Loan Documents. In the event of any such sale by a Lender
of participating interests to a Participant, such Lender's obligations
under the Loan Documents shall remain unchanged, such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the owner of its Outstanding Credit
Exposure and the holder of any Note issued to it in evidence thereof for
all purposes under the Loan Documents, all amounts payable by the Borrower
under this Agreement shall be determined as if such Lender had not sold
such participating interests, and the Borrower and the Agent shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under the Loan Documents.
12.2.2 Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than
any amendment, modification or waiver with respect to any Credit Extension
or Commitment in which such Participant has an interest which would require
consent of all of the Lenders pursuant to the terms of Section 8.2.
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12.2.3 Benefit of Certain Provisions. The Borrower agrees that each
Participant shall be deemed to have the right of setoff provided in Section
11.1 in respect of its participating interest in amounts owing under the
Loan Documents to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under the Loan Documents,
provided that each Lender shall retain the right of setoff provided in
Section 11.1 with respect to the amount of participating interests sold to
each Participant. The Lenders agree to share with each Participant, and
each Participant, by exercising the right of setoff provided in Section
11.1, agrees to share with each Lender, any amount received pursuant to the
exercise of its right of setoff, such amounts to be shared in accordance
with Section 11.2 as if each Participant were a Lender. The Borrower
further agrees that each Participant shall be entitled to the benefits of
Sections 3.1, 3.2, 3.4 and 3.5 to the same extent as if it were a Lender
and had acquired its interest by assignment pursuant to Section 12.3,
provided that (i) a Participant shall not be entitled to receive any
greater payment under Section 3.1, 3.2 or 3.5 than the Lender who sold the
participating interest to such Participant would have received had it
retained such interest for its own account, unless the sale of such
interest to such Participant is made with the prior written consent of the
Borrower, and (ii) any Participant not incorporated under the laws of the
United States of America or any State thereof agrees to comply with the
provisions of Section 3.5 to the same extent as if it were a Lender.
12.3. Assignments.
12.3.1 Permitted Assignments. Any Lender may at any time assign to one
or more banks or other entities ("Purchasers") all or any part of its
rights and obligations under the Loan Documents. Such assignment shall be
evidenced by an agreement substantially in the form of Exhibit C or in such
other form as may be agreed to by the parties thereto (each such agreement,
an "Assignment Agreement"). Each such assignment with respect to a
Purchaser which is not a Lender or an Affiliate of a Lender or an Approved
Fund shall, unless otherwise consented to in writing by the Borrower and
the Agent, either be in an amount equal to the entire applicable
Outstanding Credit Exposure of the assigning Lender or (unless each of the
Agent and, prior to the occurrence and continuance of a Default, the
Borrower, otherwise consents) be in an aggregate amount not less than
$5,000,000. The amount of the assignment shall be based on the Outstanding
Credit Exposure subject to the assignment, determined as of the date of
such assignment or as of the "Trade Date," if the "Trade Date" is specified
in the Assignment Agreement.
12.3.2 Consents. The consent of the Borrower shall be required prior
to an assignment becoming effective unless the Purchaser is a Lender, an
Affiliate of a Lender or an Approved Fund (other than a Lender or Affiliate
of a Lender or an Approved Fund that becomes a Lender solely by means of
the settlement of a credit derivative), provided that the consent of the
Borrower shall not be required if (i) a Default or Unmatured Default has
occurred and is continuing or (ii) if such assignment is in connection with
the physical settlement of any Lender's obligations to direct or indirect
contractual counterparties in credit derivative transactions relating to
the Loans; provided, that the assignment without the Borrower's consent
pursuant to clause (ii) shall not increase the Borrower's liability under
Section 3.5. The consent of the Agent shall be required prior
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to an assignment becoming effective unless the Purchaser is a Lender, an
Affiliate of a Lender or an Approved Fund (other than a Lender or Affiliate
of a Lender or an Approved Fund that becomes a Lender solely by means of
the settlement of a credit derivative). Any consent required under this
Section 12.3.2 shall not be unreasonably withheld or delayed.
12.3.3 Effect; Effective Date. Upon (i) delivery to the Agent of an
Assignment Agreement, together with any consents required by Sections
12.3.1 and 12.3.2, and (ii) payment of a $3,500 fee to the Agent by the
assigning Lender or the Purchaser for processing such assignment (unless
such fee is waived by the Agent or unless such assignment is made to such
assigning Lender's Affiliate), such assignment shall become effective on
the effective date specified in such assignment. The Assignment Agreement
shall contain a representation and warranty by the Purchaser to the effect
that none of the funds, money, assets or other consideration used to make
the purchase and assumption of the Commitment and Outstanding Credit
Exposure under the applicable Assignment Agreement constitutes "plan
assets" as defined under ERISA and that the rights, benefits and interests
of the Purchaser in and under the Loan Documents will not be "plan assets"
under ERISA. On and after the effective date of such assignment, such
Purchaser shall for all purposes be a Lender party to this Agreement and
any other Loan Document executed by or on behalf of the Lenders and shall
have all the rights, benefits and obligations of a Lender under the Loan
Documents, to the same extent as if it were an original party thereto, and
the transferor Lender shall be released with respect to the Outstanding
Credit Exposure assigned to such Purchaser without any further consent or
action by the Borrower, the Lenders or the Agent. In the case of an
assignment covering all of the assigning Lender's rights, benefits and
obligations under this Agreement, such Lender shall cease to be a Lender
hereunder but shall continue to be entitled to the benefits of, and subject
to, those provisions of this Agreement and the other Loan Documents which
survive payment of the Obligations and termination of the Loan Documents.
Any assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this Section 12.3 shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with Section 12.2. Upon the
consummation of any assignment to a Purchaser pursuant to this Section
12.3.3, the transferor Lender, the Agent and the Borrower shall, if the
transferor Lender or the Purchaser desires that its Loans be evidenced by
Notes, make appropriate arrangements so that, upon cancellation and
surrender to the Borrower of the Notes (if any) held by the transferor
Lender, new Notes or, as appropriate, replacement Notes are issued to such
transferor Lender, if applicable, and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case in principal
amounts reflecting their respective Commitments (or, from and after the
Funding Date, their respective Outstanding Credit Exposure), as adjusted
pursuant to such assignment.
12.3.4 Register. The Agent, acting solely for this purpose as an agent
of the Borrower (and the Borrower hereby designates the Agent to act in
such capacity), shall maintain at one of its offices in Chicago, Illinois a
copy of each Assignment and Assumption delivered to it and a register (the
"Register") for the recordation of the names and addresses of the Lenders,
and the Commitments of, and principal amounts of and
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interest on the Loans owing to, each Lender pursuant to the terms hereof
from time to time and whether such Lender is an original Lender or assignee
of another Lender pursuant to an assignment under this Section 13.3. The
entries in the Register shall be conclusive, and the Borrower, the Agent
and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower and any Lender,
at any reasonable time and from time to time upon reasonable prior notice.
12.4. Dissemination of Information. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and the Subsidiaries; provided
that each Transferee and prospective Transferee agrees to be bound by Section
9.11 of this Agreement.
12.5. Tax Certifications. If any interest in any Loan Document is
transferred to any Transferee which is not organized under the laws of the
United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 3.5(iv).
ARTICLE XIII
NOTICES
13.1. Notices; Effectiveness; Electronic Communication.
13.1.1 Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in Section 13.1.2), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by
telecopier as follows:
(i) if to the Borrower, at its address or telecopier number set forth on
the signature page hereof;
(ii) if to the Agent, at its address or telecopier number set forth on the
signature page hereof;
(iii) if to a Lender, to it at its address (or telecopier number) set forth
in its administrative questionnaire delivered to the Agent.
Notices sent by hand or overnight courier service, or mailed by certified
or registered mail, shall be deemed to have been given when received;
notices sent by telecopier shall be deemed to have been given when sent
(except that, if not given during normal business hours for the recipient,
shall be deemed to have been given at the opening of business on the next
Business Day for the recipient). Notices delivered through electronic
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communications to the extent provided in Section 13.1.2, shall be effective
as provided in Section 13.1.2.
13.1.2 Electronic Communications. Notices and other communications to
the Lenders may be delivered or furnished by electronic communication
(including e-mail and internet or intranet websites) pursuant to procedures
approved by the Agent or as otherwise determined by the Agent, provided
that the foregoing shall not apply to notices to any Lender pursuant to
Article II if such Lender has notified the Agent that it is incapable of
receiving notices under such Article by electronic communication. The Agent
or the Borrower may, in its respective discretion, agree to accept notices
and other communications to it hereunder by electronic communications
pursuant to procedures approved by it or as it otherwise determines,
provided that such determination or approval may be limited to particular
notices or communications.
Unless the Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender's
receipt of an acknowledgement from the intended recipient (such as by the
"return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other
communication is not given during the normal business hours of the
recipient, such notice or communication shall be deemed to have been given
at the opening of business on the next Business Day for the recipient, and
(ii) notices or communications posted to an Internet or intranet website
shall be deemed received upon the deemed receipt by the intended recipient
at its e-mail address as described in the foregoing clause (i) of
notification that such notice or communication is available and identifying
the website address therefor.
13.2. Change of Address, Etc. Any party hereto may change its address or
telecopier number for notices and other communications hereunder by notice to
the other parties hereto.
ARTICLE XIV
COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION
14.1. Counterparts; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. Except as provided in Article IV, this
Agreement shall become effective when it shall have been executed by the Agent
and when the Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the parties hereto, and thereafter
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.
14.2. Electronic Execution of Assignments. The words "execution," "signed,"
"signature," and words of like import in any assignment and assumption agreement
shall be deemed to include electronic signatures or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed
68
signature or the use of a paper-based recordkeeping system, as the case may be,
to the extent and as provided for in any applicable law, including the Federal
Electronic Signatures in Global and National Commerce Act, or any other state
laws based on the Uniform Electronic Transactions Act.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS, INCLUDING 735 ILCS SECTION 105/5-1 ET SEQ.
BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS, OF THE STATE OF
ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
15.2. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER
IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER
AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT SITTING
IN CHICAGO, ILLINOIS.
15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH LENDER HEREBY
WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
The remainder of this page is intentionally blank
69
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have executed
this Agreement as of the date first above written.
PATTERSON DENTAL COMPANY,
as the Borrower
By: /s/ R. Stephen Armstrong
--------------------------------------
Print Name: R. Stephen Armstrong
Title: Executive Vice President & CFO
1031 Mendota Heights Road
St. Paul, MN 55120
Attention: R. Stephen Armstrong, Executive
Vice President and Chief Financial
Officer
Telephone: (651) 686-1769
FAX: (651) 686-8984
BANC ONE MEZZANINE CORPORATION,
individually and as Administrative Agent
By: /s/ Marsha A. Cruzan
--------------------------------------
Print Name: Marsha Cruzan
Title: Managing Director
1 Bank One Plaza
Chicago, Illinois 60670
Attention: Anthony Maggiore
111 East Wisconsin Avenue
Milwaukee, WI 53202
Telephone: (414) 765-3111
FAX: (414) 765-2625
BANK OF AMERICA, N.A.,
individually and as Syndication Agent
By: /s/ Philip Durand
--------------------------------------
Print Name: Philip S. Durand
Title: Managing Director
Attention: Philip S. Durand
Telephone: (704) 386-4955
FAX: (704) 388-6002
COMMITMENT SCHEDULE
LENDER COMMITMENT
- --------------------------------------------------------------------------------
Banc One Mezzanine Corporation $300,000,000
Bank of America, N.A. $300,000,000
AGGREGATE COMMITMENT $600,000,000
PRICING SCHEDULE
================================================================================
Applicable Level I Level II
Margin Status Status
- --------------------------------------------------------------------------------
Eurodollar Rate 1.00% 1.20%
- --------------------------------------------------------------------------------
Floating Rate 0.00% 0.00%
================================================================================
================================================================================
Applicable Fee Level I Level II
Rate Status Status
- --------------------------------------------------------------------------------
Facility Fee 0.250% 0.300%
- --------------------------------------------------------------------------------
================================================================================
The Applicable Margin and Applicable Fee Rate shall be determined
based upon Level I until the delivery of the Financials for the fiscal period
ending October 25, 2003.
If at any time the Borrower shall receive non-investment grade ratings
from Moody's and S&P with respect to the Borrower's senior unsecured long-term
debt securities without third-party credit enhancement, an additional premium
equal to 0.75% and 1.00% shall be added to the Applicable Margins set forth
above for Level I Status and Level II Status, respectively.
For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:
"Financials" means the annual or quarterly financial statements of the
Borrower delivered pursuant to Section 6.1.1 or 6.1.2.
"Level I Status" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, the Leverage
Ratio is less than 3.00 to 1.00.
"Level II Status" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, the Leverage
Ratio is greater than or equal to 3.00 to 1.00.
"Status" means Level I Status or Level II Status.
The Applicable Margin and Applicable Fee Rate shall be determined in
accordance with the foregoing table based on the Borrower's Status as reflected
in the then most recent Financials. Adjustments, if any, to the Applicable
Margin or Applicable Fee Rate shall be effective five Business Days after the
Agent has received the applicable Financials. If the Borrower fails to deliver
the Financials to the Agent at the time required pursuant to Section 6.1, then
the Applicable Margin and Applicable Fee Rate shall be the highest Applicable
Margin and Applicable Fee Rate set forth in the foregoing table until five days
after such Financials are so delivered.