<PAGE>
FILED PURSUANT TO RULE 424(b)(3)
FILE NO. 333-31649
L-3 COMMUNICATIONS CORPORATION
SUPPLEMENT NO. 5 TO PROSPECTUS DATED MAY 22, 1998 FOR THE
10 3/8% SENIOR SUBORDINATED NOTES DUE 2007
SUPPLEMENT NO. 2 TO PROSPECTUS DATED MAY 22, 1998 FOR THE
8 1/2% SENIOR SUBORDINATED NOTES DUE 2008
THE DATE OF THIS SUPPLEMENT IS DECEMBER 15, 1998
ON NOVEMBER 16, 1998, L-3 COMMUNICATIONS CORPORATION FILED THE ATTACHED
QUARTERLY REPORT ON FORM 10Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998
<PAGE>
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-----------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998
L-3 COMMUNICATIONS HOLDINGS, INC.
AND
L-3 COMMUNICATIONS CORPORATION
600 THIRD AVENUE
NEW YORK, NY 10016
TELEPHONE: (212) 697-1111
State of incorporation: Delaware
IRS identification numbers: 13-3937434 and 13-3937436
===============================================================================
<PAGE>
L-3 COMMUNICATIONS HOLDINGS, INC. AND
L-3 COMMUNICATIONS CORPORATION
FORM 10-Q QUARTERLY REPORT FOR
QUARTER ENDED SEPTEMBER 30, 1998
PART I -- FINANCIAL INFORMATION:
<TABLE>
<CAPTION>
PAGE NO.
----------
<S> <C> <C>
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets as of September 30, 1998 and
December 31, 1997......................................................... 3
Condensed Consolidated (Combined) Statements of Operations for the Three
and Nine Months ended September 30, 1998 and September 30, 1997 .......... 4-5
Condensed Consolidated (Combined) Statements of Cash Flows for the Nine
Months ended September 30, 1998 and September 30, 1997.................... 6
Notes to Condensed Consolidated (Combined) Financial Statements ........... 7
ITEM 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition........................................................ 13
PART II--OTHER INFORMATION:
ITEM 6. Exhibits and Reports on Form 8-K........................................... 20
</TABLE>
2
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
- -----------------------------
L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SEPTEMBER 30, 1998 DECEMBER 31, 1997
------------------ -----------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ...................................... $ 5,687 $ 77,474
Contracts in process ........................................... 345,812 167,202
Net assets held for sale ....................................... -- 6,653
Deferred income taxes .......................................... 8,461 13,298
Other current assets ........................................... 16,444 2,750
------------------ -----------------
Total current assets .......................................... 376,404 267,377
------------------ -----------------
Property, plant and equipment ................................... 143,125 95,034
Less, accumulated depreciation and amortization ................ 25,941 12,025
------------------ -----------------
117,184 83,009
------------------ -----------------
Intangibles, primarily cost in excess of net assets acquired,
net
of amortization ................................................ 608,380 297,503
Deferred income taxes ........................................... 53,939 24,217
Other assets .................................................... 40,359 31,298
------------------ -----------------
$1,196,266 $703,404
================== =================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt .............................. $ -- $ 5,000
Accounts payable, trade ........................................ 55,326 33,052
Accrued employment costs ....................................... 56,178 31,162
Customer advances .............................................. 40,097 15,989
Amounts in excess of costs incurred ............................ 18,531 18,469
Accrued interest ............................................... 16,664 4,419
Other current liabilities ...................................... 48,593 27,476
------------------ -----------------
Total current liabilities ..................................... 235,389 135,567
------------------ -----------------
Pension and postretirement benefits ............................. 94,438 38,113
Other liabilities ............................................... 11,662 5,009
Long-term debt .................................................. 560,000 392,000
Commitments and contingencies
Common stock subject to repurchase agreement .................... -- 19,048
Shareholders' Equity
Common Stock, $.01 par value; authorized 100,000,000 shares,
issued 27,363,617 and 17,056,000 shares ....................... 274 171
Capital surplus ................................................ 272,160 110,191
Retained earnings .............................................. 30,995 12,305
Equity adjustments ............................................. (8,652) (9,000)
------------------ -----------------
Total Shareholders' equity ...................................... 294,777 113,667
------------------ -----------------
$1,196,266 $703,404
================== =================
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
L-3 COMMUNICATIONS HOLDINGS , INC.
AND L-3 COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
----------------------
1998 1997
---------- ----------
<S> <C> <C>
Sales....................................... $291,312 $174,822
Cost and expenses .......................... 261,244 156,968
---------- ----------
Operating income ........................... 30,068 17,854
Interest income ............................ 711 428
Interest expense ........................... 13,584 9,717
---------- ----------
Income before income taxes ................. 17,195 8,565
Income taxes ............................... 6,728 3,289
---------- ----------
Net income ................................. $ 10,467 $ 5,276
========== ==========
Earnings per common share:
Basic ..................................... $ 0.38 $ 0.26
---------- ----------
Diluted ................................... $ 0.37 $ 0.26
---------- ----------
Weighted average common shares outstanding:
Basic ..................................... 27,364 20,000
---------- ----------
Diluted ................................... 28,663 20,000
---------- ----------
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
L-3 COMMUNICATIONS HOLDINGS, INC.
AND L-3 COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED (COMBINED) STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PREDECESSOR
COMPANY COMPANY COMPANY
------------------ ------------------ --------------
NINE MONTHS SIX MONTHS THREE MONTHS
ENDED ENDED ENDED
SEPTEMBER 30, 1998 SEPTEMBER 30, 1997 MARCH 31, 1997
------------------ ------------------ --------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
Sales ............................. $708,300 $342,852 $158,873
Cost and expenses ................. 644,681 314,287 150,937
------------------ ------------------ --------------
Operating income .................. 63,619 28,565 7,936
Interest income ................... 2,287 537 --
Interest expense .................. 35,230 19,796 8,441
------------------ ------------------ --------------
Income (loss) before income taxes 30,676 9,306 (505)
Income taxes ...................... 11,986 5,349 (247)
------------------ ------------------ --------------
Net income (loss) ................. $ 18,690 $ 3,957 $ (258)
================== ================== ==============
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Earnings per common share:
Basic ..................................... $ 0.78 $ 0.20
-------- --------
Diluted ................................... $ 0.75 $ 0.20
-------- --------
Weighted average common shares outstanding:
Basic ..................................... 23,870 20,000
-------- --------
Diluted ................................... 25,044 20,000
-------- --------
</TABLE>
See notes to condensed consolidated (combined) financial statements.
5
<PAGE>
L-3 COMMUNICATIONS HOLDINGS , INC.
AND L-3 COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED (COMBINED) STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
PREDECESSOR
COMPANY COMPANY COMPANY
------------------ ------------------ --------------
NINE MONTHS SIX MONTHS THREE MONTHS
ENDED ENDED ENDED
SEPTEMBER 30, 1998 SEPTEMBER 30, 1997 MARCH 31, 1997
------------------ ------------------ --------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) ............................... $ 18,690 $ 3,957 $ (258)
Depreciation and amortization ................... 26,651 13,063 7,790
Noncash compensation charge ..................... -- 4,410 --
Amortization of deferred debt issue costs ...... 1,805 1,012 --
Deferred income taxes ........................... 11,611 5,349 --
Changes in operating assets and liabilities, net
of amounts acquired.............................
Contracts in process .......................... (13,887) 11,658 (17,475)
Other current assets .......................... 1,521 (1,113) (481)
Other assets .................................. (681) 3,912 (765)
Accounts payable .............................. (536) (4,879) (207)
Accrued employment costs ...................... 8,684 12,651 (625)
Customer advances ............................. (18,376) 2,518 1,146
Amounts in excess of costs incurred ........... (1,578) (1,643) (3,037)
Accrued interest .............................. 11,351 11,752 --
Other current liabilities ..................... 200 (6,741) (1,867)
Pension and postretirement benefits ........... 135 (567) --
Other liabilities ............................. 2,255 1,039 (500)
All other operating activities ................ 348 -- --
------------------ ------------------ --------------
Net cash from (used in) operating activities ... 48,193 56,378 (16,279)
------------------ ------------------ --------------
INVESTING ACTIVITIES:
Acquisition of businesses, net of cash acquired (412,526) (470,700) --
Net change in assets held for sale .............. -- 1,503 --
Proceeds from assets held for sale .............. 6,653 -- --
Purchases of investments ........................ (300) (4,020) --
Capital expenditures ............................ (12,691) (6,436) (4,300)
Disposition of property, plant and equipment ... 1,029 649 --
------------------ ------------------ --------------
Net cash used in investing activities ........... (417,835) (479,004) (4,300)
------------------ ------------------ --------------
FINANCING ACTIVITIES:
Borrowings under revolving credit facility ..... 271,800 175,000 --
Repayment of borrowings under revolving credit
facility ....................................... (116,800) -- --
Proceeds from sale of 8 1/2% senior subordinated
notes .......................................... 180,000 -- --
Proceeds from sale of 10 3/8% senior
subordinated notes ............................. -- 225,000 --
Proceeds from sale of common stock, net ........ 139,500 80,000 --
Debt issuance costs ............................. (7,718) (15,607) --
Repayment of term loan facilities ............... (172,000) (2,000) --
Proceeds from exercise of stock options ........ 3,073 -- --
Advances from Lockheed Martin ................... -- -- 20,579
------------------ ------------------ --------------
Net cash from financing activities .............. 297,855 462,393 20,579
------------------ ------------------ --------------
Net increase (decrease) in cash ................. (71,787) 39,767 --
Cash and cash equivalents, beginning of the
period ......................................... 77,474 -- --
------------------ ------------------ --------------
Cash and cash equivalents, end of the period ... $ 5,687 $ 39,767 $ --
================== ================== ==============
</TABLE>
See notes to condensed consolidated (combined) financial statements.
6
<PAGE>
L-3 COMMUNICATIONS HOLDINGS INC. AND
L-3 COMMUNICATIONS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
(COMBINED) FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
1. BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS
The accompanying unaudited condensed consolidated (combined) financial
statements include the assets, liabilities and results of operations of L-3
Communications Holdings, Inc. ("Holdings", and together with its
subsidiaries, "L-3" or the "Company"), the successor company, following the
change in ownership effective as of April 1, 1997. Prior to April 1, 1997,
the statements comprise the operations of (i) nine business units previously
purchased by Lockheed Martin Corporation ("Lockheed Martin") as part of its
acquisition of Loral Corporation ("Loral") in April 1996 and (ii) one
business unit, Communication Systems-East, purchased by Lockheed Martin as
part of its acquisition of the aerospace business of GE in April 1993
(collectively, the "Business" or the "Predecessor Company"). The combined
financial statements of the Predecessor Company reflect the Businesses'
results of operations and cash flows included in Lockheed Martin's historical
financial statements. Significant intercompany and inter-business
transactions and balances have been eliminated.
The accompanying unaudited condensed consolidated (combined) financial
statements also include the financial statements of L-3 Communications
Corporation ("L-3 Communications"), which is wholly owned by Holdings.
Holdings owns all of the authorized, issued and outstanding common stock, par
value $0.01 per share, of L-3 Communications. Holdings has no other assets or
liabilities and conducts no operations other than through its subsidiary, L-3
Communications.
The accompanying unaudited condensed consolidated (combined) financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities
and Exchange Commission ("SEC"); accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. The combined statement of
operations for the three months ended March 31, 1997 has been derived from
the audited financial statements of the Predecessor Company for such period.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation of the results for the
interim periods presented have been included. The results of operations for
the interim periods are not necessarily indicative of results for the full
year. For further information, the interim financial statements should be
read in conjunction with the Company's Consolidated (Combined) Financial
Statements as of December 31, 1997 and notes thereto included in L-3
Communications' Annual Report on Form 10-K for fiscal year ended December 31,
1997, as amended by Form 10-K/A.
The Company is a supplier of sophisticated secure communications systems
and specialized communication products including secure, high data rate
communication systems, microwave components, avionics and ocean systems,
telemetry, instrumentation and space products. The Company's customers
include the Department of Defense (the "DoD"), selected U.S. Government
intelligence agencies, major aerospace/defense prime contractors and
commercial customers.
Substantially all the Company's products are sold to agencies of the U.S.
Government, primarily the DoD, to foreign government agencies or to prime
contractors or subcontractors thereof. All domestic government contracts and
subcontracts of the Businesses are subject to audit and various cost
controls, and include standard provisions for termination for the convenience
of the U.S. Government. Multi-year U.S. Government contracts and related
orders are subject to cancellation if funds for contract performance for any
subsequent year become unavailable. Foreign government contracts generally
include comparable provisions relating to termination for the convenience of
the government.
2. COMMON STOCK INITIAL PUBLIC OFFERING
On May 19, 1998, Holdings sold 6.9 million shares of its Common Stock in
an Initial Public Offering ("IPO") representing 25.2% of Holdings' Common
Stock. The net proceeds of the IPO amounted to
7
<PAGE>
L-3 COMMUNICATIONS HOLDINGS INC. AND
L-3 COMMUNICATIONS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
(COMBINED) FINANCIAL STATEMENTS--CONTINUED
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
$139,500 and were contributed by Holdings to L-3 Communications. After the
completion of the IPO, the Lehman Partnership and Lockheed Martin owned 36.6%
and 24.9%, respectively, of the outstanding shares of Holdings' Common Stock.
Immediately prior to the IPO, each authorized share of Holdings Class A
Common Stock, Class B Common Stock and Class C Common Stock was converted
into one class of common stock, the Common Stock. Each outstanding share of
Class A and Class B Common Stock was converted into one share of Holdings
Common Stock. There was no outstanding Class C Common Stock. The authorized
Holdings Common Stock was increased to 100,000,000 shares.
3. ACQUISITIONS
On August 13, 1998, the Company purchased all of the outstanding stock of SPD
Technologies, Inc. ("SPD") for $230,000 of cash, subject to adjustment based on
final closing adjusted net assets. On March 30, 1998 the Company purchased the
assets of the Ocean Systems business ("Ocean Systems") of AlliedSignal, Inc.
for $67,500 of cash. On March 4, 1998, the Company purchased the assets of ILEX
Systems ("ILEX") for $51,900 of cash, subject to adjustment based on closing
net assets, and additional consideration based on post-acquisition performance
of ILEX. On February 5, 1998, the Company purchased the assets of Satellite
Transmission Systems division ("STS") of California Microwave, Inc. for $27,000
of cash, subject to adjustment based upon closing net assets.
Additionally, during the nine months ended September 30, 1998, the Company
purchased five other companies for an aggregate purchase price of $24,750
paid in cash, before adjustments, as appropriate, based on closing date net
assets and additional consideration based on post-acquisition performance.
These acquisitions individually or in the aggregate are not expected to have
a material effect on the results of operations or financial position of the
Company.
The Company financed the above-mentioned acquisitions using cash on hand,
proceeds from the IPO and borrowings. All of the acquisitions have been
accounted for as purchase business combinations and are included in the
Company's results of operation from their effective dates.
The assets and liabilities recorded in connection with the acquisitions of
SPD, Ocean Systems, ILEX and STS are based upon preliminary estimates. Actual
adjustments will be based on the final purchase prices and the final
appraisals and other analyses of fair values which are in process. Management
does not expect that differences between the preliminary and final purchase
price allocations will have a material impact on the Company's financial
position or results of operations. The assets and liabilities recorded in
connection with the acquisitions of SPD, Ocean Systems, ILEX and STS were
$318,825 and $77,557, $136,670 and $68,000, $58,370 and $3,939, and $34,471
and $6,949, respectively.
Had the L-3 Acquisition and the SPD, Ocean Systems, ILEX and STS
acquisitions occurred on January 1, 1997, the unaudited pro forma sales, net
income and diluted earnings per share for the nine months ended September 30,
1998 and 1997 would have been $834,500, $18,300 and $0.64, and $718,800,
$6,900 and $0.25, respectively. The pro forma results are based on various
assumptions and are not necessarily indicative of what would have occurred
had the acquisitions been consummated on January 1, 1997.
8
<PAGE>
L-3 COMMUNICATIONS HOLDINGS INC. AND
L-3 COMMUNICATIONS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
(COMBINED) FINANCIAL STATEMENTS--CONTINUED
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
4. CONTRACTS IN PROGRESS
Billings and accumulated costs and profits on long-term contracts,
principally with the U.S. Government, and other billed receivables comprise
the following:
<TABLE>
<CAPTION>
SEPTEMBER 30, 1998 DECEMBER 31, 1997
------------------ -----------------
<S> <C> <C>
Billed contract receivables ......................... $ 83,947 $ 37,980
Unbilled contract receivables ....................... 72,390 32,653
Other billed receivables, principally commercial and
affiliates ......................................... 77,977 32,785
Inventoried costs ................................... 145,395 82,954
------------------ -----------------
379,709 186,372
Less, unliquidated progress payments ................ (33,897) (19,170)
------------------ -----------------
Net contracts in process ............................ $345,812 $167,202
================== =================
</TABLE>
5. DEBT
The Company's long-term debt consists of the following:
<TABLE>
<CAPTION>
SEPTEMBER 30, 1998 DECEMBER 31, 1997
------------------ -----------------
<S> <C> <C>
Senior Credit Facilities:
Term Loan Facilities .................. $ -- $172,000
Revolving Credit Facilities ........... 155,000 --
10 3/8% Senior Subordinated Notes due
2007 .................................. 225,000 225,000
8 1/2% Senior Subordinated Notes due
2008 .................................. 180,000 --
------------------ -----------------
Total debt ........................... 560,000 397,000
Less current portion ................... -- 5,000
------------------ -----------------
Total long-term debt ................. $560,000 $392,000
================== =================
</TABLE>
In February 1998, an amendment to the Senior Credit Facilities increased
the Revolving Credit Facility there under to $200,000. During the third
quarter of 1998, the Senior Credit Facilities were further amended to add a
Revolving 364 Day Credit Facility for $185,000. The Revolving 364 Day Credit
Facility expires 364 days after the closing of the amendment, at which time
the Company may (i) request that the creditors extend it for one additional
364 day period or (ii) exercise an option to convert any or all of the
borrowings outstanding thereunder into term loans which amortize over a two
year period beginning March 31, 2001, and must be paid in full no later than
March 31, 2003. Accordingly, borrowings under the Revolving 364 Day Credit
Facility are classified as a long term obligation. Approximately $28,330 of
the Revolving Credit Facility and $175,000 of the Revolving 364 Day Credit
Facility are available at September 30, 1998, net of outstanding letters of
credit of $26,670 drawn against the Revolving Credit Facility. The Revolving
Credit Facility and the Revolving 364 Day Credit Facility comprise the
Revolving Credit Facilities.
In May 1998, L-3 Communications sold $180,000 of 81/2% senior subordinated
notes (the "1998 Notes") due May 15, 2008 with interest payable semi-annually
on May 15 and November 15 of each year, commencing November 15, 1998. The
1998 Notes are redeemable at the option of L-3 Communications, in whole or in
part, at any time on or after May 15, 2003, at various redemption prices plus
accrued and
9
<PAGE>
L-3 COMMUNICATIONS HOLDINGS INC. AND
L-3 COMMUNICATIONS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
(COMBINED) FINANCIAL STATEMENTS--CONTINUED
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
unpaid interest to the applicable redemption date. In addition, prior to May
15, 2001, L-3 Communications may redeem up to 35% of the aggregate principal
amount of 1998 Notes at a redemption price of 108.500% of the principal
amount thereof, plus accrued and unpaid interest to the redemption date with
the net cash proceeds of one or more equity offerings by Holdings that are
contributed to L-3 Communications as common equity capital.
The Senior Credit Facilities, the $225,000 of 10 3/8% senior subordinated
notes due May 1, 2007 (the "1997 Notes") and the 1998 Notes agreements
contain financial and restrictive covenants that limit, among other things,
the ability of the Company to borrow additional funds, dispose of assets, or
pay cash dividends. The Senior Credit Facilities contain financial covenants
which require that (i) the Company's debt ratio, as defined, be less than or
equal to 5.00 for the quarter ended September 30, 1998, and that the maximum
allowable debt ratio, as defined therein, thereafter declines over time to
less than or equal to 3.25 for the quarters ending September 30, 2002 and
thereafter, and (ii) the Company's interest coverage ratio, as defined
therein, be at least 2.00 for the quarter ended September 30, 1998, and
thereafter increasing over time the interest coverage ratio, as defined
therein, to at least 3.00 for any fiscal quarters ending September 30, 2002
and thereafter. Through and at September 30, 1998 the Company was in
compliance with these covenants at all times.
The indebtedness under the Senior Credit Facilities is guaranteed by
Holdings and by certain of L-3 Communications' direct domestic subsidiaries.
The payment of principal, premium, if any, and interest on the 1997 Notes and
1998 Notes is unconditionally guaranteed, on an unsecured senior subordinated
basis, jointly and severally, by substantially all of L-3 Communications'
domestic subsidiaries, all of which are wholly-owned subsidiaries.
6. STOCK OPTIONS
On May 1, 1998, the Company granted options to certain employees to
purchase 285,370 shares of Common Stock at an exercise price of $22.00 per
share and on terms substantially similar to the 1997 Options granted in 1997.
On August 14, 1998, the Company granted options to certain employees to
purchase 142,200 shares of Common Stock at an exercise price of $32.75 per
share and on terms substantially similar to the 1997 Options granted in 1997.
7. SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental disclosures to the Condensed Consolidated Statement of Cash
Flows follow:
<TABLE>
<CAPTION>
NINE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, 1998 SEPTEMBER 30, 1997
------------------ ------------------
<S> <C> <C>
Cash paid for interest .... $19,828 $4,332
Cash paid for income taxes $ 203 $ --
</TABLE>
During the nine months ended September 30, 1998, the Company recorded an
income tax benefit of $524 directly to shareholders' equity related to the
exercise of stock options.
Prior to the L-3 Acquisition, the Predecessor Company participated in the
Lockheed Martin cash management system, under which all cash was received and
all payments were made by Lockheed Martin. For purposes of the statement of
cash flows, all transactions with Lockheed Martin were deemed to have been
settled in cash at the time they were recorded by the Predecessor Company.
10
<PAGE>
L-3 COMMUNICATIONS HOLDINGS INC. AND
L-3 COMMUNICATIONS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
(COMBINED) FINANCIAL STATEMENTS--CONTINUED
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
8. NEW ACCOUNTING PRONOUNCEMENTS
On January 1, 1998 the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 130, "Reporting Comprehensive Income". SFAS No. 130
established standards for reporting and display of comprehensive income and
its components (revenue, expenses, gains and losses) in a full set of general
purpose financial statements. For the nine months ended September 30, 1998,
comprehensive income was $19,038 and was comprised of net income of $18,690
and other comprehensive income of $348 relating to foreign currency
translations. For the nine months ended September 30, 1997, there were no
differences between net income and comprehensive income.
In September 1997, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 131, "Disclosure about Segments of an Enterprise and Related
Information". SFAS No. 131 establishes accounting standards for the way that
public enterprises report information about operating segments and requires
that those enterprises report selected information about operating segments
in interim financial reports issued to shareholders. In February 1998, the
FASB issued SFAS No. 132, "Employers' Disclosures about Pensions and Other
Postretirement Benefits". SFAS No. 132 revises employers' disclosures about
pension and other postretirement benefits plans. It does not change the
measurement or recognition of those plans. It standardizes the disclosure
requirements for pensions and other postretirements benefits to the extent
practicable, requires additional information on changes in the benefit
obligations and fair values of plan assets that will facilitate financial
analysis, and eliminates certain disclosures that are no longer as useful as
they were when SFAS No. 87 "Employers' Accounting for Pensions", SFAS No. 88
"Employers' Accounting for Settlements and Curtailments of Defined Benefit
Plans and for Termination Benefits" and SFAS No. 106 "Employers Accounting
for Postretirement Benefits Other Than Pensions" were issued. SFAS 132
suggests combined formats for presentation of pension and other
postretirement benefits disclosures. The Company is currently evaluating the
impact, if any, of SFAS No. 131 and SFAS No. 132.
In April 1998, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued Statement of
Position 98-5, "Reporting on the Costs of Start-Up Activities" ("SOP 98-5"),
which provides guidance on the financial reporting of start-up and
organization costs. It requires costs of start-up activities and organization
costs to be expensed as incurred. SOP 98-5 is effective for fiscal years
beginning after December 15, 1998. The Company is currently evaluating the
impact, if any, of SOP 98-5.
In September 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities". SFAS No. 133 establishes
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts and for hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and measure
those instruments at fair value. The Company is currently evaluating the
impact, if any, of SFAS No. 133 which is effective for all quarters of fiscal
years beginning after June 15, 1999.
11
<PAGE>
L-3 COMMUNICATIONS HOLDINGS INC. AND
L-3 COMMUNICATIONS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
(COMBINED) FINANCIAL STATEMENTS--CONTINUED
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
9. CONTINGENCIES
Management is continually assessing the Company's obligations with respect
to applicable environmental protection laws. While it is difficult to
determine the timing and ultimate cost to be incurred by the Company in order
to comply with these laws, based upon available internal and external
assessments with respect to those environmental loss contingencies of which
management of the Company is aware, the Company believes that even without
considering potential insurance recoveries, if any, there are no
environmental loss contingencies that, individually or in the aggregate,
would be material to the Company's result of operations. The Company accrues
for these contingencies when it is probable that a liability has been
incurred and the amount of the loss can be reasonably estimated.
The Company is engaged in providing products and services under contracts
with the U.S. Government and to a lesser degree, under foreign government
contracts, some of which are funded by the U.S. Government. All such
contracts are subject to extensive legal and regulatory requirements, and,
periodically, agencies of the U.S. Government investigate whether such
contracts were and are being conducted in accordance with these requirements.
Under government procurement regulations, an indictment of the Company by a
Federal grand jury could result in the Company being suspended for a period
of time from eligibility for awards of new government contracts. A conviction
could result in debarment from contracting with the federal government for a
specified term.
The Company is periodically subject to litigation, claims or assessments
and various contingent liabilities (including environmental matters)
incidental to its business. With respect to those investigative actions,
items of litigation, claims or assessments of which they are aware,
management of the Company believes that, after taking into account certain
provisions that have been made with respect to these matters, the ultimate
resolution of any such investigative actions, items of litigation, claims or
assessments would not have a material adverse effect on the financial
position or result of operations of the Company.
SUBSEQUENT EVENTS
On November 6, 1998, L-3 Communications acquired all the outstanding stock of
DBS Microwave Inc. ("DBS") for $13,000 of cash subject to adjustment based on
closing net assets, as defined, and additional consideration based on the
post-acquisition performance of DBS. The acquisition was financed with
borrowings under the Revolving Credit Facilities.
12
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
GENERAL
The Company is a leading merchant supplier of sophisticated secure
communication systems and specialized communication products including
secure, high data rate communication systems, microwave components, avionics
and ocean systems, telemetry, instrumentation and space products. These
systems and products are critical elements of virtually all major
communication, command and control, intelligence gathering and space systems.
The Company's systems and specialized products are used to connect a variety
of airborne, space, ground-and sea-based communication systems and are
incorporated into the transmission, processing, recording, monitoring and
dissemination functions of these communication systems. The Company's
customers include the DoD, selected Government intelligence agencies, major
aerospace/defense prime contractors, foreign governments and commercial
customers.
All domestic government contracts and subcontracts of the Company are
subject to audit and various cost controls, and include standard provisions
for termination for the convenience of the Government. Multi-year Government
contracts and related orders are subject to cancellation if funds for
contract performance for any subsequent year become unavailable. Foreign
government contracts generally include comparable provisions relating to
termination for the convenience of the relevant foreign government.
The defense industry has recently undergone significant changes
precipitated by ongoing federal budget pressures and new roles and missions
to reflect changing strategic and tactical threats. Since the mid-1980's, the
overall U.S. defense budget has declined in real dollars. In response, the
DoD has focused its resources on enhancing its military readiness, joint
operations and digital command and control communications by incorporating
advanced electronics to improve the performance, reduce operating costs and
extend the life expectancy of its existing and future platforms. The emphasis
on system interoperability, force multipliers and providing battlefield
commanders with real-time data is increasing the electronics content of
nearly all of the major military procurement and research programs. As a
result, the DoD's budget for communications and defense electronics is
expected to grow. According to Federal Sources, an independent private
consulting group, the defense budget for command, control, communications and
intelligence (C(3)I) is expected to increase from $31.0 billion in the fiscal
year ended September 30, 1998 to $42.0 billion in the fiscal year ended
September 30, 2002, a compound annual growth rate of 6.3%.
RESULTS OF OPERATIONS
The following information should be read in conjunction with the condensed
consolidated (combined) financial statements and the notes thereto included
herein, which reflect the Company's results of operations from the effective
date of the L-3 Acquisition, April 1, 1997, and also include the results of
operations of SPD, Ocean Systems, ILEX and STS (collectively, the "1998
Acquisitions") from the effective dates of such acquisitions. The results of
operations presented below exclude the results of operations of the 1998
Acquisitions for periods prior to their effective dates.
The condensed consolidated (combined) financial statements also reflect
the results of operations of the Predecessor Company for the three months
ended March 31, 1997. Operating income of the Company and the Predecessor
Company are not directly comparable between the nine month periods ended
September 30, 1998 and 1997, because of the effects of valuation of assets
and liabilities recorded in accordance with Accounting Principles Board
Opinion No. 16 ("APB 16") by the Company in the purchase accounting for the
L-3 Acquisition. The results of operations of the Predecessor Company for the
three months ended March 31, 1997 include certain costs and expenses
allocated by Lockheed Martin for corporate office expenses based primarily on
the allocation methodology prescribed by government regulations pertaining to
government contractors. Interest expense was allocated based on Lockheed
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<PAGE>
Martin's actual weighted average consolidated interest rate applied to the
portion of the beginning of the year invested equity deemed to be financed by
consolidated debt based on Lockheed Martin's debt to equity ratio on such
date. The provision (benefit) for income taxes was allocated to the
Predecessor Company as if it were a separate taxpayer, calculated by applying
statutory rates to reported pre-tax income after considering items that do
not enter into the determination of taxable income and tax credits. Also
pension and post employment benefit costs were allocated based on employee
headcount. Accordingly, the results of operations of the Predecessor Company
discussed herein may not be the same as would have occurred had the
Predecessor Company been an independent entity.
THREE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1997
Sales increased to $291.3 million for the three months ended September 30,
1998 (the "1998 Third Quarter") from $174.8 million for the three months
ended September 30, 1997 (the "1997 Third Quarter"). Operating income
increased to $30.0 million in the 1998 Third Quarter from $17.9 million in
the 1997 Third Quarter. Net income increased to $10.5 million in the 1998
Third Quarter from $5.3 million in the 1997 Third Quarter. Basic earnings per
share and diluted earnings per share were $0.38 and $0.37 for the 1998 Third
Quarter and $0.26 and $0.26 for the 1997 Third Quarter, respectively.
The increases in basic and diluted weighted average shares outstanding
were primarily attributable to the Holdings IPO and the exercise of stock
options (see "Liquidity and Capital Resources" below). Diluted earnings per
share gives effect to the Holdings stock options which were granted to
employees in 1997 and 1998.
Sales increased by $116.5 million in the 1998 Third Quarter compared to
the 1997 Third Quarter. The 1998 Acquisitions contributed sales of
approximately $100.0 million. The remaining increase was primarily
attributable to higher sales volumes on secure telephone equipment (STE),
aviation recorders, display systems and unmanned aerial vehicles (UAV)
programs, partially offset by lower sales volume on commercial
telecommunications products.
Operating income increased by $12.1 million to $30.0 million in the 1998
Third Quarter from $17.9 million in the 1997 Third Quarter. Operating income
as a percentage of sales ("operating margin") was 10.3% for the 1998 Third
Quarter compared to 10.2% for the 1997 Third Quarter. The increase in
operating income is principally attributable to improved margins on sales of
space communications and military communication systems, aviation recorders
and display systems, partially offset by lower sales volume on commercial
telecommunications products and lower margins from the STS acquired business.
The 1998 Acquisitions contributed $9.5 million of operating income to the
1998 Third Quarter.
EBITDA for the 1998 Third Quarter increased by $16.3 million to $40.6
million from $24.3 million in the 1997 Third Quarter. EBITDA is defined as
operating income plus depreciation expense and amortization expense
(excluding the amortization of debt issuance costs) and the non-recurring,
noncash compensation charge. EBITDA is not a substitute for operating income,
net income or cash flows from operating activities as determined in
accordance with generally accepted accounting principles as a measure of
profitability or liquidity. EBITDA is presented as additional information
because the Company believes it to be a useful indicator of the Company's
ability to meet debt service and capital expenditure requirements. EBITDA as
a percentage of sales ("EBITDA margin") for the 1998 Third Quarter remained
the same at 13.9% compared to the 1997 Third Quarter. The increase in EBITDA
was attributable to the items affecting the trends in operating income
between the 1998 Third Quarter and the 1997 Third Quarter discussed above.
Interest expense, net for the 1998 Third Quarter was $12.8 million
compared to $9.3 million for the 1997 Third Quarter. The increase was
primarily attributable to higher average outstanding debt balances during the
1998 Third Quarter compared to the 1997 Third Quarter as a result of
borrowings made under the Revolving Credit Facility primarily in connection
with the SPD and Ocean Systems acquisitions and the issuance of the 1998
Notes in May 1998.
The effective income tax rate for the 1998 Third Quarter was 39.1%,
reflecting the estimated effective income tax rate for the year ending
December 31, 1998. The effective income tax rate was 39.0% for the 1997 Third
Quarter.
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<PAGE>
NINE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 1997
The results of operations for the nine months ended September 30, 1997
(the "1997 Period") were obtained by combining, without adjustment, the
historical results of operations of the Predecessor Company for the three
months ended March 31, 1997 with the historical results of operations of the
Company for the six months period ended September 30, 1997. Changes between
periods for the nine months ended September 30, 1998 (the "1998 Period") and
the 1997 Period are affected by the timing of the L-3 Acquisition and the
1998 Acquisitions.
The following table sets forth selected income statement data for the
Company and the Predecessor Company for the periods indicated.
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1997
-------------------------------------------
PREDECESSOR
COMPANY COMPANY COMPANY
NINE MONTHS SIX MONTHS THREE MONTHS
ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, MARCH 31,
1998 1997 1997 COMBINED
--------------- --------------- -------------- ----------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Sales ............................................. $708.3 $342.8 $158.9 $501.7
--------------- --------------- -------------- ----------
Operating income .................................. 63.6 28.6 7.9 36.5
Interest expense, net ............................. 32.9 19.2 8.4 27.6
Income tax expense (benefit) ...................... 12.0 5.4 (0.2) 5.2
--------------- --------------- -------------- ----------
Net income (loss) ................................. $ 18.7 $ 4.0 $ (0.3) $ 3.7
=============== =============== ============== ==========
Earnings per share:
Basic ............................................ $ 0.78
Diluted .......................................... $ 0.75
Weighted average shares outstanding:
Basic ............................................ 23.9
Diluted .......................................... 25.0
Depreciation and amortization expenses included in
operating income ................................. $ 26.7 $ 17.5 $ 7.8 $ 25.3
EBITDA ............................................ $ 90.3 $ 46.1 $ 15.7 $ 61.8
</TABLE>
Sales increased to $708.3 million for the 1998 Period from $501.7 million
for the 1997 Period. Operating income for the 1998 Period increased by $27.1
million to $63.6 million from $36.5 million in the 1997 Period. Net income
increased to $18.7 million from $3.7 million in the 1997 Period. Basic
earnings per share and diluted earnings per share for the 1998 Period were
$0.78 and $0.75, respectively, based on weighted average shares outstanding
of 23.9 million and 25.0 million, respectively.
Sales increased by $206.6 million in the 1998 Period compared to the 1997
Period. The 1998 Acquisitions contributed sales of approximately $160.0
million. The remaining increase was primarily attributable to an increase in
production and shipments on the CHBDL, Raptor and UAV programs and increased
sales volumes on STE, aviation recorders, display systems and RF safety and
monitoring products, partially offset by lower sales volume on commercial
telecommunications products.
Operating income increased by $27.1 million to $63.6 million in the 1998
Period from $36.5 million in the 1997 Period. Operating margin increased to
9.0% for the 1998 Period compared to 7.3% for the 1997 Period. The increase
in operating income for the 1998 Period is principally attributable to (i)
improved margins on sales of space communications and military communication
systems, aviation recorders and display systems and increased sales volume on
higher margin RF safety and monitoring products, partially offset by lower
sales volume on commercial telecommunications products and lower margins from
the STS acquired business, (ii) the negative impact on operating income for
the 1997 Period from the non-recurring, noncash compensation charge of $4.4
million or $0.22 per share recorded effective April 1, 1997, related to the
initial capitalization of the Company, and (iii) losses incurred in the 1997
Period by the Predecessor Company on three programs at Communication Systems
- -- East. The 1998 Acquisitions
15
<PAGE>
contributed $10.1 million of operating income to the 1998 Period. Excluding
the non-recurring, noncash compensation charge, operating margin for the 1997
Period was 8.2%.
EBITDA for the 1998 Period increased by $28.5 million to $90.3 million
from $61.8 million in the 1997 Period. EBITDA margin increased to 12.7% for
the 1998 Period from 12.3% for the 1997 Period. The increases in EBITDA and
EBITDA margin were primarily attributable to the items affecting the trends
in operating income between the 1998 Period and the 1997 Period discussed
above, excluding the non-recurring, noncash compensation charge which is not
included in EBITDA.
Interest expense, net for the Company in the 1998 Period was $32.9
million, compared to $27.6 million in the 1997 Period for the Company and
Predecessor Company combined. The increase was attributable to higher average
outstanding debt balances in the 1998 Period, partially offset by higher
interest income in the 1998 Period.
The effective income tax rate of the Company for the 1998 Period was
39.1%, reflecting the estimated effective income tax rate for the year ended
December 31, 1998. The effective tax rate for the 1997 Period for the Company
and Predecessor Company combined was 58.0%, and was significantly impacted by
the $4.4 million non-recurring noncash compensation charge recorded effective
April 1, 1998 and the Predecessor Company's amortization of costs in excess
of net assets acquired for the three months ended March 31, 1997 both of
which were not deductible for income tax purposes.
LIQUIDITY AND CAPITAL RESOURCES
During the third quarter of 1998, the Senior Credit Facilities were
amended to add to the existing $200.0 million Revolving Credit Facility, the
Revolving 364 Day Credit Facility for $185.0 million. The Revolving 364 Day
Credit Facility expires 364 days after the closing of the amendment, at which
time the Company may (i) request that the creditors extend it for one
additional 364 day period or (ii) exercise an option to convert any or all of
the borrowings outstanding thereunder into term loans which amortize over a two
year period beginning March 31, 2001, and must be paid in full no later than
March 31, 2003.
The Revolving 364 Day Credit Facility together with the Company's
Revolving Credit Facility, increased borrowings available to the Company,
before reductions for outstanding letters of credit, to $385.0 million. At
September 30, 1998, available borrowings under the Revolving Credit Facility
and Revolving 364 Day Credit facility were $28.3 million and $175.0 million,
respectively, after reductions for borrowings of $145.0 and $10.0 million,
respectively, and outstanding letters of credit drawn against the Revolving
Credit Facility of approximately $26.7 million.
The Senior Credit Facilities, the 1998 Notes and the 1997 Notes contain
financial covenants, which remain in effect so long as any amount is owed
thereunder by L-3 Communications. The financial covenants under the Senior
Credit Facilities require that (i) L-3 Communications' debt ratio, as
defined, be less than or equal to 5.00 for the quarter ended September 30,
1998, and that the maximum allowable debt ratio, as defined, thereafter
declining over time to less than or equal to 3.25 for the quarters ending
September 30, 2002 and thereafter, and (ii) L-3 Communications' interest
coverage ratio, as defined, be at least 2.00 for the quarter ended September
30, 1998 and thereafter increasing over time the interest coverage ratio, as
defined, to at least 3.00 for any fiscal quarters ending September 30, 2002
and thereafter. As of September 30, 1998, L-3 Communications was in
compliance with these covenants at all times.
The Company has a substantial amount of indebtedness. Based upon the
current level of operations, management believes that the Company's cash flow
from operations, together with available borrowings under the Revolving
Credit Facilities, will be adequate to meet its anticipated requirements for
working capital, capital expenditures, research and development expenditures,
program and other discretionary investments, interest payments and scheduled
principal payments for the foreseeable future including at least the next
three years. There can be no assurance, however, that the Company's business
will continue to generate cash flow at or above current levels or that
currently anticipated improvements will be achieved. If the Company is unable
to generate sufficient cash flow from operations in the future to service its
debt, it may be required to sell assets, reduce capital expenditures,
refinance all or a portion of its existing debt or obtain additional
financing. The Company's ability to make scheduled principal payments, to pay
interest on or to refinance its indebtedness depends on its future
performance and financial results,
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<PAGE>
which, to a certain extent, are subject to general conditions in or affecting
the defense industry and to general economic, political, financial,
competitive, legislative and regulatory factors beyond its control. There can
be no assurance that sufficient funds will be available to enable the Company
to service its indebtedness, including the 1997 Notes and 1998 Notes, or make
necessary capital expenditures and program and discretionary investments.
ACQUISITIONS
During the first quarter of 1998, the Company purchased the assets of
Ocean Systems for $67.5 million of cash, the assets of ILEX for $51.9 million
of cash, subject to adjustment based on closing net assets and additional
consideration based on post-acquisition performance of ILEX, and the assets
of STS for $27.0 million in cash, subject to adjustment based upon closing
net assets. During the third quarter of 1998, the Company acquired the stock
of SPD for $230.0 million in cash, subject to adjustment based on closing
adjusted net assets, as defined.
Additionally, during the nine months ended September 30, 1998, the Company
purchased five other companies for an aggregate purchase price of $24.8
million of cash, before adjustments, as appropriate, based on closing date
net assets and additional consideration based on post-acquisition
performance. These five other acquisitions individually or in the aggregate
are not expected to have a material effect on the results of operations or
financial position of the Company.
On November 6, 1998, L-3 Communications acquired all of the outstanding stock
of DBS Microwave Inc. ("DBS") for $13.0 million of cash, subject to adjustment
based on closing net assets, as defined, and additional consideration based on
the post-acquisition performance of DBS. The acquisition was financed with
borrowings under the Revolving Credit Facilities.
The Company considers and executes strategic acquisitions on an ongoing
basis and may be evaluating acquisitions or engaged in acquisition
negotiations at any given time.
BALANCE SHEET
The increases in contracts in process, other current assets, property,
plant and equipment, net of accumulated depreciation and amortization,
intangibles, customer advances, other current liabilities, and pension and
post-retirement benefits of $178.6 million, $13.7 million, $34.2 million,
$310.9 million, $24.1 million, $21.1 million, and $56.3 million,
respectively, from December 31, 1997 to September 30, 1998 are principally
related to the acquired businesses. The increase in other assets of $9.1
million is primarily attributable to debt issuance costs incurred in
connection with the 1998 Notes and amendments to the Senior Credit Facilities
which have been deferred and are being amortized over the terms of underlying
debt.
Working capital increased by $9.2 million to $141.0 million at September
30, 1998 from $131.8 million at December 31, 1997. Working capital, excluding
cash and the current portion of long term debt, increased $76.0 million and was
primarily attributable to the working capital of the acquired businesses. The
Company's current ratio at September 30, 1998 decreased to 1.6:1 compared
with 2.0:1 at December 31, 1997.
17
<PAGE>
STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED WITH NINE MONTHS ENDED
SEPTEMBER 30, 1997
The following table sets forth selected cash flow statement data for the
Company and the Predecessor Company for the Periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1997
-----------------------------------------------
PREDECESSOR
COMPANY COMPANY COMPANY
NINE MONTHS SIX MONTHS THREE MONTHS
ENDED ENDED ENDED
SEPTEMBER 30, 1998 SEPTEMBER 30, 1997 MARCH 31, 1997 COMBINED
------------------ ------------------ --------------- ----------
<S> <C> <C> <C> <C>
Net cash from (used in) operating
activities ............................. $ 48.2 $ 56.4 $(16.3) $ 40.1
Net cash (used in) investing activities (417.8) (479.0) (4.3) (483.3)
Net cash from financing activities ..... 297.9 462.4 20.6 483.0
</TABLE>
NET CASH FROM (USED IN) OPERATING ACTIVITIES: Cash from operating
activities of the Company for the nine months ended September 30, 1998 was
$48.2 million. Earnings after adjustment for non-cash items and deferred
income taxes provided $58.8 million, and uses of cash for changes in
operating assets and liabilities, net of amounts acquired was $10.6 million.
Net cash from operating activities for the nine months ended September 30,
1997 was $40.1 million. Earnings after adjustment for noncash items and
deferred income taxes provided $35.3 million. Changes in operating assets and
liabilities, consisting primarily of increases in accrued employment costs
and accrued interest and decreases in accounts payable and other current
liabilities, all attributable to timings of payments contributed $4.8
million.
NET CASH (USED IN) INVESTING ACTIVITIES: Cash used in investing activities
for the nine months ended September 30, 1998 was $417.8 million and consisted
primarily of $412.5 million, net of cash acquired, paid by the Company for
acquisitions of businesses. The Company typically makes capital expenditures
related primarily to improvement of manufacturing facilities and equipment.
The Company expects that its capital expenditures for 1998 will be
approximately $27.0 million.
Cash used in investing activities for the nine months ended September 30,
1997 was $483.3 million and consisted primarily of $470.7 million paid by the
Company for the L-3 Acquisition.
NET CASH FROM FINANCING ACTIVITIES: For the nine months ended September
30, 1998, the Company's cash from financing activities was $297.9 million.
On May 19, 1998, Holdings sold 6.9 million shares of its Common Stock in
the IPO representing 25.2% of Holdings' Common Stock. The net proceeds from
the IPO amounted to $139.5 million after underwriting discounts and
commissions and expenses of $12.3 million. Concurrent with the IPO, L-3
Communications sold $180.0 million aggregate principal amount of the 1998
Notes, whose net proceeds amounted to $173.8 million after debt issuance
costs of $6.2 million. The combined net proceeds from the IPO and the 1998
Notes of $313.3 million were used to (i) prepay all $171.0 million of
borrowings outstanding under the Term Loan Facilities, and (ii) repay $67.8
million of then outstanding borrowings under the Revolving Credit Facility
which were primarily made to finance the Ocean Systems acquisition, and (iii)
partially finance the SPD acquisition. During the third quarter of 1998, the
Company also made borrowings, net of repayments, under the Revolving Credit
Facility of $155.0 million primarily to partially finance the SPD
acquisition.
Cash from financing activities of the Company was $483.0 million for the
nine months ended September 30, 1997, and was primarily due to the debt
incurred and proceeds from the issuance of common stock related to the
initial capitalization of the Company and the financing of the L-3
Acquisition. Cash from financing activities also included $20.6 million of
advances from Lockheed Martin to the Predecessor Company. Prior to the L-3
Acquisition, the Predecessor Company participated in the Lockheed Martin cash
management system, under which all cash was received and all payments were
18
<PAGE>
made by Lockheed Martin. For purposes of the statement of cash flows, all
transactions with Lockheed Martin were deemed to have been settled in cash at
the time they were recorded by the Predecessor Company.
CONTINGENCIES
See Note 9 to the Condensed Consolidated (Combined) Financial Statements.
RECENT ACCOUNTING PRONOUNCEMENTS
In September 1997, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 131,
"Disclosure about Segments of an Enterprise and Related Information". SFAS
No. 131 establishes accounting standards for the way that public enterprises
report information about operating segments and requires that those
enterprises report selected information about operating segments in interim
financial reports issued to shareholders. In February 1998, the FASB issued
SFAS No. 132, "Employers' Disclosures about Pensions and Other Postretirement
Benefits". SFAS No. 132 revises employers' disclosures about pension and
other postretirement benefits plans. It does not change the measurement or
recognition of those plans. It standardizes the disclosure requirements for
pensions and other postretirements benefits to the extent practicable,
requires additional information on changes in the benefit obligations and
fair values of plan assets that will facilitate financial analysis, and
eliminates certain disclosures that are no longer as useful as they were when
SFAS No. 87 "Employers' Accounting for Pensions", SFAS No. 88 "Employers'
Accounting for Settlements and Curtailments of Defined Benefit Plans and for
Termination Benefits" and SFAS No. 106 "Employers Accounting for
Postretirement Benefits Other Than Pensions" were issued. SFAS 132 suggests
combined formats for presentation of pension and other postretirement
benefits disclosures. The Company is currently evaluating the impact, if any,
of SFAS No. 131 and SFAS No. 132.
In April 1998, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued Statement of
Position 98-5, "Reporting on the Costs of Start-Up Activities" ("SOP 98-5"),
which provides guidance on the financial reporting of start-up and
organization costs. It requires costs of start-up activities and organization
costs to be expensed as incurred. SOP 98-5 is effective for fiscal years
beginning after December 15, 1998. The Company is currently evaluating the
impact, if any, of SOP 98-5.
In September 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities". SFAS No. 133 establishes
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts and for hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and measure
those instruments at fair value. The Company is currently evaluating the
impact, if any, of SFAS No. 133 which is effective for all quarters of fiscal
years beginning after September 15, 1999.
YEAR 2000
The inability of business processes to continue to function correctly
after the beginning of the Year 2000 could have serious adverse effects on
companies and entities throughout the world. Because the Company's business
units operate autonomously, each business unit has undertaken an effort to
identify and mitigate Year 2000 issues related to their information systems,
products, facilities, suppliers and customers. Therefore, the Company's Year
2000 effort is a composite of its business units' Year 2000 efforts,
coordinated through a Company-wide program instituted to oversee, guide and
track business units' Year 2000 efforts and to facilitate Company-wide
communications regarding Year 2000 methods.
Each business unit has appointed a Year 2000 project manager who oversees
a team responsible for performing its Year 2000 efforts in four phases: (i)
define, identify and inventory possible sources of Year 2000 issues,
including internal systems and products and services sold to customers; (ii)
analyze and determine the nature and extent of Year 2000 issues and develop
project plans to address those issues; (iii)
19
<PAGE>
implement and execute project plans to remediate or replace non-compliant
items, as appropriate, based upon assessed risk and priority; and (iv)
commence and complete testing, continue monitoring readiness and prepare
necessary contingency plans. The progress of this program is monitored at
each business unit with oversight by Corporate Management. This oversight
includes periodic reviews as well as visits to each business unit to monitor
progress with the plans. Management plans to complete the first three phases of
the program for a substantial majority of critical systems within the Company
by the end of March 1999 and to have nearly all significant information
systems, products and facilities in the final phase of the program by mid-1999.
The total costs associated with the Company's Year 2000 efforts are
estimated to be $16.2 million and include $7.1 million of capitalizable costs
with the remaining costs expensed as incurred. The Company has incurred
approximately $6.6 million of such costs to date. Substantially all of the
remaining estimated costs are expected to be incurred in 1999.
The Company believes that there is low risk with respect to its operations
that any internal critical system will not be Year 2000 compliant by the end of
1999. The Company's business operations are also dependent on the Year 2000
readiness of its customers and infrastructure suppliers in areas such as
utilities, communications, transportation and other services. In those
environments, there could be instances of failure that could cause disruptions
in business transaction processes of the Company. The likelihood and effects of
failures in infrastructure systems and in the customer and supply chains cannot
be estimated, but such a failure could potentially result in a material adverse
impact on results of operations, liquidity or financial position of the
Company. The Company continues to attempt to assess the Year 2000 compliance
and readiness of its material third-party suppliers and customers. Such
attempts include written inquiries as to their Year 2000 certification of
compliance. As indicated above, contingency plans for suppliers, customers and
critical systems impacted by Year 2000 issues will be developed in the 4th
quarter. These estimates and projections could change as work progresses.
Safe Harbor Statement under the Private Securities Litigation Reform Act
of 1995: Except for the historical information contained herein, the matters
discussed in this quarterly report are forward-looking statements which
involve risks and uncertainties that could cause actual results to differ
materially from the Company's current expectations, including but not limited
to economic, competitive, leverage, and technological factors and risks
inherent in government contracts, affecting the Company's operations,
markets, products, services and prices, and other factors discussed in the
Company's filings with the Securities and Exchange Commission.
20
<PAGE>
PART II -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K(A)
(a) Exhibits
11. L-3 Communications Holdings, Inc. Computation of Basic Earnings
Per Share and Diluted Earnings Per Share
99.1 Amended and Restated Credit Agreement, dated August 13, 1998
99.2 364 Day Credit Agreement, dated August 13, 1998
(b) Reports on Form 8-K
Report filed on August 19, 1998 regarding the acquisition of SPD
Technologies Inc.
Report filed on October 27, 1998 regarding the acquisition of SPD
Technologies Inc.
Report filed on October 30, 1998 regarding the acquisition of SPD
Technologies, Inc.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
L-3 Communications Holdings, Inc.
and
L-3 Communications Corporation
-----------------------------------
Registrants
Date: November 13, 1998 Robert V. LaPenta
-----------------------------------
President and Chief Financial
Officer
(Principal Financial Officer)
21
<PAGE>
EXHIBIT 11
L-3 COMMUNICATIONS HOLDINGS, INC.
COMPUTATION OF BASIC EARNINGS PER SHARE
AND DILUTED EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS SIX MONTHS
ENDED ENDED ENDED
September 30,1998 September 30,1998 September 30,1997
----------------- ----------------- -----------------
<S> <C> <C> <C>
BASIC:
Net income $ 10,467 $ 18,690 $ 3,957
======== ======== ========
Weighted average common share outstanding 27,364 23,870 20,000
======== ======== ========
Basic earnings per share $ 0.38 $ 0.78 $ 0.20
======== ======== ========
DILUTED:
Net income $ 10,467 $ 18,690 $ 3,957
======== ======== ========
Common and potential common shares:
Weighted average common shares outstanding 27,364 23,870 20,000
Assumed exercise of options 2,883 2,802 --
Assumed purchase of common shares for treasury (1,584) (1,628) --
-------- -------- --------
Common and potential common shares 28,663 25,044 20,000
======== ======== ========
Diluted earnings per share $ 0.37 $ 0.75 $ 0.20
======== ======== ========
</TABLE>
<PAGE>
===============================================================================
AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
L-3 COMMUNICATIONS CORPORATION,
A DELAWARE CORPORATION,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
THE CERTAIN FINANCIAL INSTITUTIONS NAMED AS CO-AGENTS HEREIN,
BANCAMERICA ROBERTSON STEPHENS
AND
LEHMAN COMMERCIAL PAPER INC.,
AS ARRANGERS,
BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION,
AS ADMINISTRATIVE AGENT
AND
LEHMAN COMMERCIAL PAPER INC.,
AS DOCUMENTATION AGENT AND SYNDICATION AGENT
DATED AS OF AUGUST 13, 1998
===============================================================================
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS......................................................1
1.1. Defined Terms.....................................................1
1.2. Other Definitional Provisions....................................23
1.3. Interrelationship with Original Credit Agreement.................23
1.4. Confirmation of Existing Obligations.............................24
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS........................24
2.1. Commitments......................................................24
2.2. Procedure for Borrowing..........................................26
2.3. Commitment Fee...................................................27
2.4. Termination or Reduction of Revolving Credit
Commitments.....................................................27
2.5. Repayment of Loans; Evidence of Debt.............................27
2.6. Optional Prepayments; Mandatory Prepayments and
Reduction of Commitments........................................29
2.7. Conversion and Continuation Options..............................31
2.8. Minimum Amounts and Maximum Number of Tranches...................32
2.9. Interest Rates and Payment Dates.................................32
2.10. Computation of Interest and Fees................................33
2.11. Inability to Determine Interest Rate............................33
2.12. Pro Rata Treatment and Payments.................................34
2.13. Illegality......................................................35
2.14. Requirements of Law.............................................36
2.15. Taxes...........................................................37
2.16. Indemnity.......................................................40
2.17. Replacement of Lenders..........................................41
2.18. Certain Fees....................................................41
2.19. Certain Rules Relating to the Payment of Additional
Amounts.........................................................42
SECTION 3. LETTERS OF CREDIT................................................42
3.1. L/C Commitment...................................................42
3.2. Procedure for Issuance of Letters of Credit......................43
3.3. Fees, Commissions and Other Charges..............................43
3.4. L/C Participation................................................44
3.5. Reimbursement Obligation of the Borrower.........................45
3.6. Obligations Absolute.............................................46
i
<PAGE>
3.7. Letter of Credit Payments........................................47
3.8. Application......................................................47
3.9. Determination of Exchange Rate...................................47
SECTION 4. REPRESENTATIONS AND WARRANTIES...................................47
4.1. Financial Condition..............................................47
4.2. No Change........................................................48
4.3. Corporate Existence; Compliance with Law.........................48
4.4. Corporate Power; Authorization; Enforceable
Obligations.....................................................48
4.5. No Legal Bar.....................................................49
4.6. No Material Litigation...........................................49
4.7. No Default.......................................................49
4.8. Ownership of Property; Liens.....................................49
4.9. Intellectual Property............................................49
4.10. Taxes...........................................................50
4.11. Federal Regulations.............................................50
4.12. ERISA...........................................................50
4.13. Investment Company Act; Other Regulations.......................51
4.14. Subsidiaries....................................................51
4.15. Purpose of Loans................................................51
4.16. Environmental Matters...........................................51
4.17. Collateral Documents............................................52
4.18. Accuracy and Completeness of Information........................53
4.19. Labor Matters...................................................53
SECTION 5. CONDITIONS PRECEDENT.............................................53
5.1. Conditions to Initial Loans......................................53
5.2. Conditions to Each Extension of Credit...........................56
SECTION 6. AFFIRMATIVE COVENANTS............................................57
6.1. SEC Filings......................................................57
6.2. Certificates; Other Information..................................57
6.3. Payment of Obligations...........................................58
6.4. Conduct of Business; Maintenance of Existence and
Property; Compliance with Law...................................58
6.5. Insurance........................................................59
6.6. Inspection of Property; Books and Records; Discussions...........59
6.7. Notices..........................................................59
6.8. Environmental Laws...............................................60
6.9. Further Assurances...............................................60
6.10. Additional Collateral...........................................60
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<PAGE>
6.11. [Intentionally Omitted.]........................................61
6.12. Foreign Jurisdictions...........................................61
6.13. Government Contracts............................................61
6.14. Lien Searches...................................................61
SECTION 7. NEGATIVE COVENANTS...............................................62
7.1. Financial Condition Covenants....................................62
7.2. Limitation on Indebtedness.......................................63
7.3. Limitation on Liens..............................................64
7.4. Limitation on Guarantee Obligations..............................66
7.5. Limitation on Fundamental Changes................................67
7.6. Limitation on Sale of Assets.....................................67
7.7. Limitation on Dividends..........................................68
7.8. Limitation on Capital Expenditures...............................68
7.9. Limitation on Investments, Loans and Advances....................69
7.10. Limitation on Optional Payments and Modifications of
Instruments and Agreements......................................70
7.11. Limitation on Transactions with Affiliates......................71
7.12. Limitation on Sales and Leasebacks..............................71
7.13. Limitation on Changes in Fiscal Year............................71
7.14. Limitation on Negative Pledge Clauses...........................71
7.15. Limitation on Lines of Business.................................72
7.16. Designated Senior Debt..........................................72
SECTION 8. EVENTS OF DEFAULT................................................72
SECTION 9. THE AGENTS; THE ARRANGERS........................................76
9.1. Appointment......................................................76
9.2. Delegation of Duties.............................................76
9.3. Exculpatory Provisions...........................................76
9.4. Reliance by Agents...............................................76
9.5. Notice of Default................................................77
9.6. Non-Reliance on Agents and Other Lenders.........................77
9.7. Indemnification..................................................77
9.8. Agents, in Their Individual Capacities...........................78
9.9. Successor Administrative Agent, Syndication Agent and
Documentation Agent.............................................78
9.10. The Arrangers and the Co-Agents.................................79
iii
<PAGE>
SECTION 10. MISCELLANEOUS...................................................79
10.1. Amendments and Waivers..........................................79
10.2. Notices.........................................................80
10.3. No Waiver; Cumulative Remedies..................................82
10.4. Survival of Representations and Warranties......................83
10.5. Payment of Expenses and Taxes...................................83
10.6. Successors and Assigns; Participation and Assignments...........84
10.7. Adjustments; Set-off............................................88
10.8. Counterparts....................................................88
10.9. Severability....................................................88
10.10. Integration....................................................89
10.11. GOVERNING LAW..................................................89
10.12. SUBMISSION TO JURISDICTION; WAIVERS............................89
10.13. Acknowledgments................................................90
10.14. WAIVERS OF JURY TRIAL..........................................90
10.15. Confidentiality................................................90
10.16. Conversion of Currencies.......................................90
10.17. Year 2000......................................................91
10.18. Existing Agreements Superseded.................................91
iv
<PAGE>
EXHIBITS
Exhibit A-1 Form of Revolving Credit Note
Exhibit A-2 Form of Swing Line Note
Exhibit B-1 Form of Parent Guarantee
Exhibit B-2 Form of Subsidiary Guarantee
Exhibit B-3 Form of Parent Pledge Agreement
Exhibit B-4A Form of Borrower Pledge Agreement
Exhibit B-4B Form of Charge Over Shares
Exhibit B-5 Form of Subsidiary Pledge Agreement
Exhibit C-1 Form of Legal Opinion of Simpson Thacher and Bartlett
Exhibit C-2 Form of Internal Counsel Opinion
Exhibit D Form of Borrowing Certificate
Exhibit E Form of Certificate of Non-U.S. Lender
Exhibit F Form of Assignment and Acceptance
SCHEDULES
Schedule I Lenders and Commitments
Schedule II Pricing Grid
Schedule III Transaction Documents
Schedule 4.4 Required Consents
Schedule 4.5 No Legal Bar
Schedule 4.6 Material Litigation
Schedule 4.8 Real Property
Schedule 4.9 Intellectual Property Claims
Schedule 4.10 Taxes
Schedule 4.14 Subsidiaries
Schedule 7.2(f) Existing Indebtedness
Schedule 7.3(f) Existing Liens
Schedule 7.4 Existing Guarantee Obligations
Schedule 7.9(c) Officers
Schedule 7.9(g) Existing Investments
Schedule 7.9(k) Approved Investments
v
<PAGE>
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 13,
1998, among L-3 Communications Corporation, a Delaware corporation (the
"Borrower") which is wholly owned by L-3 Communications Holdings, Inc., a
Delaware corporation ("Holdings"), the several banks and other financial
institutions or entities from time to time parties hereto (the "Lenders"),
Lehman Commercial Paper Inc. ("LCPI") and BancAmerica Robertson Stephens, as
arrangers (each, in such capacity, an "Arranger" and together, the
"Arrangers"), LCPI, as syndication agent and documentation agent (in such
capacity, the "Syndication Agent" and the "Documentation Agent"), Bank of
America National Trust & Savings Association ("BOA"), as administrative agent
for the Agents (as defined below) and the Lenders (in such capacity, the
"Administrative Agent") and certain financial institutions named as co-agents,
AMENDS AND RESTATES IN FULL the Credit Agreement, dated as of April 30, 1997
(as amended, supplemented and/or modified from time to time prior to the date
hereof, the "Original Credit Agreement"), among the Borrower, the lenders party
thereto from time to time (the "Original Lenders"), Lehman Brothers Inc., as
arranger (the "Original Arranger"), the Syndication Agent, the Documentation
Agent and BOA, as administrative agent; this amendment and restatement of the
Original Credit Agreement, as amended, supplemented, restated or otherwise
modified from time to time, is hereinafter referred to as this "Agreement" or
the "Credit Agreement".
WHEREAS, the Borrower has requested that the Original Credit Agreement
be amended and restated in full as set forth herein.
NOW, THEREFORE, the parties hereto hereby agree to amend and restate
the Original Credit Agreement as follows:
SECTION 1. DEFINITIONS
1.1. Defined Terms.
As used in this Agreement, the following terms shall have the
following meanings:
"Acquired Business": a company or business unit acquired by the
Borrower or any of its Subsidiaries, provided that the Borrower has
delivered to the Administrative Agent historical financial statements of
such company or business unit prepared in accordance with GAAP.
"Adjustment Date": the fifth day following the receipt by the
Administrative Agent of the financial statements for the most recently
completed fiscal period furnished pursuant to subsection 6.1 and the
compliance certificate with respect to such financial statements furnished
pursuant to subsection 6.2(c). For purposes of determining the Applicable
Margin and the Commitment Fee Rate, the first "Adjustment Date" shall mean
the date on which the financial statements for the fiscal quarter ended
December 31, 1998 furnished pursuant to subsection 6.1 and the related
compliance certificate furnished pursuant to subsection 6.2(c) are
delivered to the Administrative Agent pursuant to subsection 6.1 and
6.2(c), respectively.
<PAGE>
"Administrative Agent": BOA, or following the resignation of BOA as
Administrative Agent, any other Lender which may be appointed as
Administrative Agent pursuant to subsection 9.9.
"Affected Class": as defined in subsection 10.1.
"Affected Lender": as defined in subsection 10.7.
"Affiliate": as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person
means the power, directly or indirectly, either to (a) vote 10% or more of
the securities having ordinary voting power for the election of directors
of such Person or (b) direct or cause the direction of the management and
policies of such Person, whether by contract or otherwise.
"Agents": the collective reference to the Syndication Agent, the
Documentation Agent and the Administrative Agent.
"Aggregate Outstanding Extensions of Credit": as to any Lender with
respect to any Type of Loan at any time, an amount equal to the sum of (a)
the aggregate principal amount of all Loans of such Type made by such
Lender then outstanding and (b) such Lender's Commitment Percentage of the
L/C Obligations then outstanding.
"Agreement": this Credit Agreement, as amended, restated, supplemented
or otherwise modified from time to time.
"Agreement Currency": as defined in subsection 10.16(b).
"Alternative Currency": any currency which as of the time of any
issuance or renewal, as applicable, of a Foreign L/C is freely tradeable
and convertible into Dollars and has been approved as an "Alternative
Currency" for the purposes of this Agreement by the Issuing Lender.
"Applicable Creditor": as defined in subsection 10.16(b).
"Applicable Holdback": as defined in subsection 2.6(b)(ii).
"Applicable Issuing Lender": an Issuing Lender as to which any
proposed Assignee under subsection 10.6 shall become an L/C Participant
upon giving effect to the relevant Assignment and Acceptance.
"Applicable Margin": at any time, the percentages set forth on
Schedule II under the relevant column heading opposite the level of the
Debt Ratio most recently determined; provided that (a) the Applicable
Margins commencing on the Closing Date shall be those set forth in Schedule
II opposite a Debt Ratio captioned "greater than or equal to 4.25 until the
first Adjustment Date, (b) the Applicable Margins determined for any
Adjustment Date (including the first Adjustment Date) shall remain in
effect until a
2
<PAGE>
subsequent Adjustment Date for which the Debt Ratio falls within a
different level and (c) if the financial statements and related compliance
certificate for any fiscal period are not delivered by the date due
pursuant to subsections 6.1 and 6.2, the Applicable Margins shall be (i)
for the first 35 days subsequent to such due date, the Applicable Margin in
effect prior to such due date and (ii) thereafter, those set forth opposite
a Debt Ratio captioned "greater than or equal to 4.75," in either case,
until the date of delivery of such financial statements and compliance
certificate.
"Application": an application, in such form as the Issuing Lender may
specify from time to time, requesting the Issuing Lender to issue a Letter
of Credit.
"Asset Contribution": as defined in the recitals to the Original
Credit Agreement.
"Asset Sale": any sale, sale-leaseback, or other disposition by any
Person or any Subsidiary thereof of any of its property or assets,
including the stock of any Subsidiary of such Person, except sales and
dispositions permitted by subsection 7.6 other than subsection 7.6(b)
or (e).
"Assignee": as defined in subsection 10.6(c).
"Attributable Debt": in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the
rate of interest implicit in such transaction, determined in accordance
with GAAP) of the obligation of the lessee for net rental payments during
the remaining term of the lease included in such sale and leaseback
transaction (including any period for which such lease has been extended or
may, at the option of the lessor, be extended).
"Available Commitment": as to any Lender and any Type of Loan, at any
time, an amount equal to the excess, if any, of (a) such Lender's
Commitment with respect to such Type of Loan over (b) such Lender's
Aggregate Outstanding Extensions of Credit with respect to such Type of
Loan.
"Base Rate": for any day, the higher of: (a) 0.50% per annum above the
latest Federal Funds Rate; and (b) the rate of interest in effect for such
day as publicly announced from time to time by BOA in San Francisco,
California, as its "reference rate." (The "reference rate" is a rate set by
BOA based upon various factors including BOA's costs and desired return,
general economic conditions and other factors, and is used as a reference
point for pricing some loans, which may be priced at, above, or below such
announced rate.)
"Base Rate Loans": Loans the rate of interest applicable to which is
based upon the Base Rate.
"BOA": as defined in the recitals to this Agreement.
3
<PAGE>
"Borrower Pledge Agreement": the Amended and Restated Borrower Pledge
Agreement substantially in the form of Exhibit B-4A, to be executed and
delivered by the Borrower, as the same may be amended, supplemented or
otherwise modified.
"Borrowing Date": any Business Day specified in a notice pursuant to
subsection 2.2 as a date on which the Borrower requests the Lenders to make
Loans hereunder.
"Business": as defined in subsection 4.16.
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City or San Francisco, California are
authorized or required by law to close and, if the applicable Business Day
relates to Eurodollar Loans or Foreign L/Cs, any day on which dealings are
carried on in the applicable London interbank market.
"Calculation Date": with respect to each Foreign L/C, during the
period that such Foreign L/C is outstanding (or the Reimbursement
Obligation in connection therewith has not been fully satisfied) (i) the
last Business Day of a fiscal month, (ii) the date on which such Letter of
Credit is to be issued or renewed by the Issuing Lender, (iii) the date on
which any draft presented under such Letter of Credit is paid by the
Issuing Lender, (iv) such other dates as the Borrower may reasonably
request from time to time, and (v) such other dates as the Issuing Lender
or the Administrative Agent may select from time to time, provided that the
Borrower receives prompt notice thereof.
"Capital Expenditures" for any fiscal period, the aggregate of all
expenditures that, in conformity with GAAP (but excluding capitalized
interest), are or are required to be included as additions during such
period to property, plant or equipment reflected on the consolidated
balance sheet of the Borrower and its Subsidiaries, excluding the
expenditures relating to the Transaction.
"Capital Lease Obligations": of any Person as of the date of
determination, the aggregate liability of such Person under Financing
Leases reflected on a balance sheet of such Person under GAAP.
"Capital Partners": Lehman Brothers Capital Partners III, L.P.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"Cash Equivalents": (a) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed or insured by the
United States Government or any agency thereof, (b) certificates of deposit
and time deposits with maturities of one year or less from the date of
acquisition and overnight bank deposits of any Lender or of any commercial
bank having capital and surplus in excess of $500,000,000, (c)
4
<PAGE>
repurchase obligations of any Lender or of any commercial bank
satisfying the requirements of clause (b) of this definition, having a term
of not more than 90 days with respect to securities issued or fully
guaranteed or insured by the United States Government, (d) commercial paper
of a domestic issuer rated at least A-2 by Standard and Poor's Ratings
Group ("S&P") or P-2 by Moody's Investors Service, Inc. ("Moody's"), or
carrying an equivalent rating by a nationally recognized rating agency if
both of S&P and Moody's cease publishing ratings of investments, (e)
securities with maturities of one year or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the
United States, by any political subdivision or taxing authority of any such
state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at
least A by S&P or A by Moody's, (f) securities with maturities of one year
or less from the date of acquisition backed by standby letters of credit
issued by any Lender or any commercial bank satisfying the requirements of
clause (b) of this definition or (g) shares of money market mutual or
similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition.
"Change of Control": the occurrence of any of the following events:
(i) the Principals and their Related Parties, as a whole, shall at any
time cease to own, directly or indirectly, 51% of the Voting Stock of
Holdings (measured by voting power rather than number of shares),
determined on a fully diluted basis, and any "person" (as such term is
defined in Section 13(d)(3) of the Exchange Act) other than the Principals
and their Related Parties shall become the "beneficial owner" (as such term
is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly
or indirectly, of more than 25% of the Voting Stock of Holdings (measured
by voting power rather than number of shares);
(ii) a majority of the members of the Board of Directors of Holdings
fail to be (a) members of the Board of Directors incumbent as of the
Closing Date, or (b) members nominated by the members of the Board of
Directors incumbent on the Closing Date, or (c) members appointed by
members of the Board nominated under clause (a) or (b);
(iii) Holdings shall, at any time, cease to own 100% of the Capital
Stock of the Borrower; or
(iv) a "Change of Control" shall have occurred under the Indenture or
the New Subordinated Debt Indenture.
"Charge Over Shares": the Charge Over Shares substantially in the form
of Exhibit B-4B, to be executed and delivered by the Borrower, as the same
may be amended, supplemented or otherwise modified.
"Class": (i) Lenders having Loan Exposure (taken together as a single
class) and (ii) Facility B Lenders having Facility B Loan Exposure (taken
together as a single class).
5
<PAGE>
"Closing Date": the date on which the conditions precedent set forth
in subsection 5.1 are satisfied.
"Co-Agents": collectively, Fleet National Bank, The Bank of New York,
The Bank of Nova Scotia, Credit Lyonnais New York Branch, The First
National Bank of Chicago, First Union Commercial Corporation, Marine
Midland Bank, and Societe Generale, New York Branch.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all assets of the Credit Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by any
Pledge Agreement.
"Commitment": as to any Lender, such Lender's Revolving Credit
Commitment.
"Commitment Fee Rate": at any time, the applicable rates per annum on
Schedule II under the relevant column heading for the Revolving Credit
Facility set forth opposite the level of the Debt Ratio most recently
determined; provided that (a) the Commitment Fee Rate commencing on the
Closing Date shall be that set forth in Schedule II opposite a Debt Ratio
captioned "greater than or equal to 4.25" until the first Adjustment Date,
(b) the Commitment Fee Rate determined for any Adjustment Date (including
the first Adjustment Date) shall remain in effect until a subsequent
Adjustment Date for which the Debt Ratio falls within a different level and
(c) if the financial statements and related compliance certificate for any
fiscal period are not delivered by the date due pursuant to subsections 6.1
and 6.2, the Commitment Fee Rate shall be (i) for the first 35 days
subsequent to such due date, the Commitment Fee Rate in effect prior to
such due date and (ii) thereafter, that set forth opposite a Debt Ratio
captioned "greater than or equal to 4.75," in either case, until the date
of delivery of such financial statements and compliance certificate.
"Commitment Percentage": as to the Commitment of any Lender with
respect to any Type of Loan at any time, the percentage which the
Commitment of such Lender with respect to such Type of Loan then
constitutes of the aggregate Commitments with respect to such Type of Loan
(or, at any time after such Commitments shall have expired or terminated,
the percentage which the aggregate amount of the Aggregate Outstanding
Extensions of Credit of such Lender with respect to such Type of Loan
constitutes of the aggregate amount of the Aggregate Outstanding Extensions
of Credit of all Lenders with respect to such Type of Loan).
"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of
Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 (b) or (c) of the
Code.
"Consolidated EBITDA": as of the last day of any fiscal quarter,
Consolidated Net Income of the Borrower, its Subsidiaries and, without
duplication, the Acquired
6
<PAGE>
Businesses (excluding, without duplication, (x) extraordinary gains
and losses in accordance with GAAP, (y) gains and losses in connection with
asset dispositions whether or not constituting extraordinary gains and
losses and (z) gains or losses on discontinued operations) for such period,
plus (i) Consolidated Interest Expense of the Borrower, its Subsidiaries
and, without duplication, the Acquired Businesses for such period, plus
(ii) to the extent deducted in computing such Consolidated Net Income of
the Borrower, its Subsidiaries and, without duplication, the Acquired
Businesses, the sum of income taxes, depreciation and amortization for the
four fiscal quarters ended on such date.
"Consolidated Cash Interest Expense": as of the last day of any fiscal
quarter, the amount of interest expense, paid in cash, of the Borrower and
its Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP for the four fiscal quarters ended on such date.
"Consolidated Interest Expense": for any Person, as of the last day of
any fiscal quarter, the amount of interest expense of such Person for such
period, determined on a consolidated basis in accordance with GAAP for the
four fiscal quarters ended on such date.
"Consolidated Net Income": for any Person and for any fiscal period,
net income of such Person, determined on a consolidated basis in accordance
with GAAP.
"Consolidated Total Assets": at any date, all assets of the Borrower
and its Subsidiaries as determined according to the consolidated balance
sheet contained in the SEC filing most recently delivered pursuant to
subsection 6.1 or, if no such SEC filing has yet been delivered, the
balance sheet referred to in subsection 4.1(a)(ii).
"Consolidated Total Debt": at any date, all Indebtedness of the
Borrower and its Subsidiaries outstanding on such date for borrowed money
or the deferred purchase price of property, including, without limitation,
in respect of Financing Leases but excluding Indebtedness permitted
pursuant to subsection 7.2(g).
"Consolidated Working Capital": at any date, the excess of (a) the sum
of all amounts (other than cash and Cash Equivalents) that would, in
accordance with GAAP, be set forth opposite the caption "total current
assets" (or any like caption) on a consolidated balance sheet of the
Borrower and its Subsidiaries at such date over (b) the sum of all amounts
that would, in accordance with GAAP, be set forth opposite the caption
"total current liabilities" (or any like caption) on a consolidated balance
sheet of the Borrower and its Subsidiaries on such date (excluding, to the
extent it would otherwise be included under current liabilities, any
short-term Consolidated Total Debt and the current portion of any long-term
Consolidated Total Debt).
"Constitutional Documents": as to any Person, the articles or
certificate of incorporation and by-laws, partnership agreement or other
organizational documents of such Person.
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"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Credit Documents": this Agreement, the Notes, the Applications, the
Guarantees and the Pledge Agreements.
"Credit Parties": the Borrower, Holdings, and each Subsidiary of the
Borrower which is a party to a Credit Document.
"Debt Ratio": as at the last day of any fiscal quarter, the ratio of
(a) Consolidated Total Debt minus Designated Cash Balances on such date to
(b) Consolidated EBITDA.
"Default": any of the events specified in Section 8, whether or not
any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Designated Cash Balances": at any time, the lesser of (a) actual
unrestricted cash balances on hand of Borrower and its Subsidiaries which
are not subject to any Liens in favor of any Person (other than those
described in subsection 7.3(o) hereof) and (b) $50,000,000.
"Dollar Equivalent": at any time, (a) as to any amount denominated in
Dollars, the amount thereof at such time, and (b) as to any amount
denominated in an Alternative Currency, the equivalent amount in Dollars as
determined on the basis of the Exchange Rate for the purchase of Dollars
with such Alternative Currency as of the most recent Calculation Date.
"Dollars" and "$": dollars in lawful currency of the United States of
America.
"Domestic L/C": a Letter of Credit denominated in Dollars.
"Dow Jones Page 3750": the display designated as page "3750" on the
Dow Jones Market Service (formerly known as the Telerate Service) or such
other page as may replace the "3750" page on that service or such other
service or services as may be nominated by the British Bankers' Association
for the purpose of displaying London interbank offered rates for Dollar
deposits.
"Environmental Laws": any and all laws, rules, orders, regulations,
statutes, ordinances, codes, decrees, or other legally enforceable
requirement (including, without limitation, common law) of any foreign
government, the United States, or any state, local, municipal or other
governmental authority, regulating, relating to or imposing liability or
standards of conduct concerning protection of the environment or of human
health as affected by the environment as has been, is now, or may at any
time hereafter be, in effect, including, but not limited to, the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 U.S.C. ss. ss. 9601 et seq.; the Toxic Substance
Control Act, 15 U.S.C. ss. ss. 9601 et seq.; the Hazardous Materials
8
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Transportation Act, 49 U.S.C. ss. ss. 1802 et seq.; the Resource
Conservation and Recovery Act, 42 U.S.C. ss. ss. 6901 et seq.; the Clean
Water Act; 33 U.S.C. ss. ss. 1251 et seq.; the Clean Air Act, 42 U.S.C. ss.
ss. 7401 et seq.; or other similar federal and/or state environmental laws.
"Environmental Permits": any and all permits, licenses, registrations,
notifications, exemptions and any other authorization required under any
applicable Environmental Law.
"Equity Documents": the Stockholders Agreement, the Subscription
Agreements and the Option Agreements.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": means for any day for any
Interest Period the maximum reserve percentage (expressed as a decimal,
rounded upward to the next 1/100th of 1%) in effect on such day (whether or
not applicable to any Lender) under regulations issued from time to time by
the FRB for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect
to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities").
"Eurodollar Business Day": means any Business Day on which commercial
banks are open in London for the transaction of international business,
including dealings in Dollar deposits in the international interbank
markets.
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"Eurodollar Rate": means, for any Interest Period, with respect to
Eurodollar Loans comprising part of the same borrowing, the rate of
interest per annum (rounded upward to the next 1/100th of 1%) determined by
the Administrative Agent as follows:
Eurodollar Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage": for any day for any Interest Period
the maximum reserve percentage (expressed as a decimal, rounded upward to
the next 1/100th of 1%) in effect on such day (whether or not applicable to
any Lender) under regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as "Eurocurrency liabilities").
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"Event of Default": any of the events specified in Section 8, provided
that any requirement for the giving of notice, the lapse of time, or both,
or any other condition, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the excess of
(a) the sum, without duplication, of (i) Consolidated Net Income for the
Borrower and its Subsidiaries for such fiscal year, (ii) the net decrease,
if any, in Consolidated Working Capital during such fiscal year, (iii) to
the extent deducted in computing such Consolidated Net Income for the
Borrower and its Subsidiaries, non-cash interest expense, depreciation and
amortization for such fiscal year, (iv) extraordinary non-cash losses
during such fiscal year subtracted in the determination of Consolidated Net
Income for the Borrower and its Subsidiaries for such fiscal year, (v)
change in deferred tax liability of the Borrower for such fiscal year, (vi)
non-cash losses in connection with asset dispositions whether or not
constituting extraordinary losses and (vii) non-cash ordinary losses less
(b) the sum, without duplication, of (i) the aggregate amount of permitted
cash Capital Expenditures made by the Borrower and its Subsidiaries during
such fiscal year, (ii) the net increase, if any, in Consolidated Working
Capital during such fiscal year, (iii) the aggregate amount of payments of
principal in respect of any Indebtedness not prohibited hereunder during
such fiscal year (other than prepayments of (x) Revolving Credit Loans not
accompanied by reductions of the Commitments hereunder and/or (y) Facility
B Loans not accompanied by reductions of Facility B Commitments), (iv)
deferred income tax credit of the Borrower for such fiscal year, (v)
extraordinary non-cash gains during such fiscal year added in the
determination of Consolidated Net Income for the Borrower and its
Subsidiaries for such fiscal year, (vi) non-cash gains in connection with
asset dispositions whether or not constituting extraordinary gains and
(vii) non-cash ordinary gains.
"Exchange Act": the Securities Exchange Act of 1934, as amended.
"Exchange Rate": on any day, with respect to any Alternative Currency,
the spot rate at which Dollars are offered on such day by the Issuing
Lender in San Francisco, California (or such other location selected by the
Issuing Lender) for such Alternative Currency.
"Facility B Administrative Agent": the "Administrative Agent" as
defined in the Facility B Credit Agreement.
"Facility B Agents": the "Agents" as defined in the Facility B Credit
Agreement.
"Facility B Commitments": the "Commitments" as defined in the Facility
B Credit Agreement.
"Facility B Credit Agreement": that certain 364 Day Credit Agreement
of even date herewith among the Borrower, the Facility B Lenders, BOA as
administrative agent, LCPI as syndication agent and documentation agent,
LCPI and BankAmerica Robertson Stephens as arrangers and certain other
financial institutions named therein as co-agents,
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as the same may be amended, supplemented, restated or otherwise
modified from time to time.
"Facility B Credit Documents": the "Credit Documents" as defined in
the Facility B Credit Agreement.
"Facility B Eurodollar Tranche": "Eurodollar Tranche" as defined in
the Facility B Credit Agreement.
"Facility B L/C Obligations": the "L/C Obligations" as defined in the
Facility B Credit Agreement.
"Facility B Lenders": the "Lenders" as defined in the Facility B
Credit Agreement.
"Facility B Loan Exposure": the "Loan Exposure" as defined in the
Facility B Credit Agreement.
"Facility B Loans": the "Loans" as defined in the Facility B Credit
Agreement.
"Facility B Notes": the "Notes" as defined in the Facility B Credit
Agreement.
"Facility B Reimbursement Obligations": the "Reimbursement
Obligations" as defined in the Facility B Credit Agreement.
"Federal Funds Effective Rate": for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the FRB (including any such successor,
"H.15(519)") for such day opposite the caption "Federal Funds (Effective)".
If on any relevant day the appropriate rate for such previous day is not
yet published in H.15(519), the rate for such day will be the arithmetic
mean of the rates for the last transaction in overnight Federal funds
arranged prior to 9:00 a.m. (New York City time) on that day by each of
three leading brokers of Federal funds transactions in New York City
selected by the Administrative Agent.
"Financial L/C": a standby Letter of Credit not constituting a
Performance L/C.
"Financing Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"Foreign L/C": a Letter of Credit denominated in an Alternative
Currency.
"Foreign L/C Obligations": at any time, an amount equal to the sum of
(i) the Dollar Equivalent of the aggregate then undrawn and unexpired face
amount of all then outstanding Foreign L/Cs and (ii) the Dollar Equivalent
of the aggregate amount of all drawings under Foreign L/Cs which have not
then been reimbursed pursuant to subsection 3.5.
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"Foreign Subsidiary": any Subsidiary which is organized under the laws
of any jurisdiction outside the United States or under the laws of the U.S.
Virgin Islands.
"FRB": means the Board of Governors of the Federal Reserve System, and
any governmental authority succeeding to any of its principal functions.
"GAAP": generally accepted accounting principles in the United States
of America in effect on the Closing Date.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has issued a
reimbursement or similar obligation, in either case guaranteeing or in
effect guaranteeing any Indebtedness, leases, dividends or other
obligations (the "primary obligations") of any other third Person (the
"primary obligor") in any manner, whether directly or indirectly,
including, without limitation, reimbursement obligations under letters of
credit and any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation
or (2) to maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary obligor,
(iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the
lower of (a) an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guarantee Obligation is made
and (b) the maximum amount for which such guaranteeing person may be liable
pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which
such guaranteeing person may be liable are not stated or determinable, in
which case the amount of such Guarantee Obligation shall be such
guaranteeing person's maximum reasonably anticipated liability in respect
thereof as determined by the Borrower in good faith.
"Guarantees": the Parent Guarantee and the Subsidiary Guarantees.
"Immaterial Subsidiary": any Subsidiary of the Borrower having assets
not exceeding five percent (5%) of the Consolidated Total Assets.
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<PAGE>
"Indebtedness": of any Person at any date, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of
property or services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with customary
practices and accrued expenses incurred in the ordinary course of
business), (b) any other indebtedness of such Person which is evidenced by
a note, bond, debenture or similar instrument, (c) all obligations of such
Person under Financing Leases, (d) all obligations of such Person in
respect of acceptances issued or created for the account of such Person and
all reimbursement and other obligations with respect to any letters of
credit and surety bonds, whether or not matured or drawn, (e) all
liabilities secured by any Lien on any property owned by such Person even
though such Person has not assumed or otherwise become liable for the
payment thereof and (f) all Attributable Debt of such Person with respect
to sale and leaseback transactions of such Person.
"Indenture": the Indenture between the Borrower and The Bank of New
York, as trustee, pursuant to which the Subordinated Notes are issued.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Interest Payment Date": (a) as to any Base Rate Loan, the last
Business Day of each March, June, September and December, (b) as to any
Eurodollar Loan having an Interest Period of three months or less, the last
Business Day of such Interest Period, and (c) as to any Eurodollar Loan
having an interest period longer than three months, (i) each Business Day
which is three months or a whole multiple thereof after the first day of
such Interest Period and (ii) the last Business Day of such Interest
Period.
"Interest Period": with respect to any Eurodollar Loan:
(a) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three, six or, if made available by the
Administrative Agent and the Lenders, nine or twelve months
thereafter, as selected by the Borrower in its notice of borrowing or
notice of conversion, as the case may be, given with respect thereto;
and
(b) thereafter, each period commencing on the last day of the
preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three or six or, if made available by the
Administrative Agent and Lenders, nine or twelve months thereafter, as
selected by the Borrower by irrevocable notice to the Administrative
Agent not less than three Business Days prior to the last day of the
then current Interest Period with respect thereto.
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<PAGE>
provided that, all of the foregoing provisions relating to Interest Periods
are subject to the following:
(i) if any Interest Period pertaining to a Eurodollar Loan would
otherwise end on a day that is not a Business Day, such Interest Period
shall be extended to the next succeeding Business Day unless the result of
such extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the immediately
preceding Business Day;
(ii) any Interest Period for any Loan that would otherwise extend
beyond the applicable Termination Date shall end on the applicable
Termination Date; and
(iii) any Interest Period pertaining to a Eurodollar Loan that begins
on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month in which such
Interest Period would otherwise be scheduled to end) shall end on the last
Business Day of the appropriate calendar month.
"Interest Rate Agreement": any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement.
"Interest Rate Agreement Obligations": the obligations of the Borrower
or any of its Subsidiaries to make payments to counterparties under
Interest Rate Agreements in the event of the occurrence of a termination
event thereunder.
"Issuing Lender": BOA, in its capacity as issuer of any Letter of
Credit or, at the election of BOA, such other Lender or Lenders that agrees
to act as Issuing Lender at the request of the Borrower, or upon
resignation by BOA as an Issuing Lender at any time upon notice to the
other parties to this Agreement, such other Lender or Lenders that agree to
act as Issuing Lender at the request of the Borrower and to whom the
Required Lenders consent in writing.
"Judgment Currency": as defined in subsection 10.16 (b).
"LCPI": as defined in the recitals to this Agreement.
"L/C Fee Payment Date": the last Business Day of each March, June,
September and December.
"L/C Obligations": at any time, an amount equal to the sum of (a) the
Dollar Equivalent of the aggregate then undrawn and unexpired amount of the
then outstanding Letters of Credit and (b) the Dollar Equivalent of the
aggregate amount of drawings under Letters of Credit which have not then
been reimbursed pursuant to subsection 3.5.
"L/C Participants": a collective reference to all the Revolving Credit
Lenders other than the Applicable Issuing Lender.
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<PAGE>
"Lender" and "Lenders": the persons identified as Lenders and listed
on the signature pages of this Agreement (including the Issuing Lender and
the Swing Line Lender), together with their successors and permitted
assigns pursuant to subsection 10.6.
"Letters of Credit": as defined in subsection 3.1(a).
"LIBOR": as to any Interest Period, the rate per annum determined on
the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period quoted
on the second Eurodollar Business Day prior to the first day of such
Interest Period, as such rate appears on the Dow Jones Page 3750 as of
11:00 A.M. (London time) on such date, as determined by the Administrative
Agent and notified to the Lenders and the Borrower on such second prior
Eurodollar Business Day. If LIBOR cannot be determined based on the Dow
Jones Page 3750, LIBOR means the rate per annum, as supplied to the
Administrative Agent, quoted by BOA's London Branch to prime banks in the
London interbank market for deposits in Dollars at approximately 11:00 A.M.
(London time) two Eurodollar Business Days prior to the first day of such
Interest Period in an amount approximately equal to the principal amount of
the Loans to which such Interest Period is to apply and for a period of
time comparable to such Interest Period.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement
and any Financing Lease having substantially the same economic effect as
any of the foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Account": as defined in subsection 2.5(d).
"Loan Exposure": with respect to any Lender as of any date of
determination, (i) if there are no outstanding Letters of Credit or
Revolving Credit Loans, that Lender's Revolving Credit Commitment, and (ii)
otherwise, the sum of (a) the aggregate outstanding principal amount of the
Revolving Credit Loans of that Lender plus (b) in the event that Lender is
an Issuing Lender, the Dollar Equivalent of the aggregate stated or face
amount in respect of all Letters of Credit issued by that Lender and
outstanding (in each case net of any participations purchased by other
Lenders in such Letters of Credit or any unreimbursed drawings thereunder)
plus (c) in the event that such Lender is the Swing Line Lender, the
aggregate principal amount of Swing Line Loans made by such Lender then
outstanding (net of any participations purchased by other Lenders in such
Swing Line Loans) plus (d) the Dollar Equivalent of the aggregate amount of
all participations purchased by that Lender in any outstanding Swing Line
Loans or Letters of Credit or any unreimbursed drawings under any Letters
of Credit.
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<PAGE>
"Material Adverse Effect": a material adverse effect on (a) the
business, assets, operations, property or condition (financial or
otherwise) of Holdings and its Subsidiaries taken as a whole or (b) the
validity or enforceability of this or any of the other Credit Documents or
the rights or remedies of the Agents or the Lenders hereunder or
thereunder.
"Materials of Environmental Concern": any hazardous or toxic
substances, materials or wastes, defined or regulated as such in or under,
or that could give rise to liability under, any applicable Environmental
Law, including, without limitation, asbestos, polychlorinated biphenyls,
urea-formaldehyde insulation, gasoline or petroleum (including crude oil or
any fraction thereof) or petroleum products.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Net Proceeds": the aggregate cash proceeds (including Cash
Equivalents) received by Holdings or any of its Subsidiaries in respect of:
(a) any issuance by the Borrower or any of its Subsidiaries of
Indebtedness after the Closing Date;
(b) any Asset Sale; and
(c) any cash payments received in respect of promissory notes or
other evidences of indebtedness delivered to Holdings or such
Subsidiary in respect of an Asset Sale;
in each case net of (without duplication) (i), (A) in the case of
an Asset Sale, the amount required to repay any Indebtedness (other
than the Loans) secured by a Lien on any assets of Holdings or a
Subsidiary of Holdings that are sold or otherwise disposed of in
connection with such Asset Sale and (B) reasonable and appropriate
amounts established by Holdings or such Subsidiary, as the case may
be, as a reserve against liabilities associated with such Asset Sale
and retained by Holdings or such Subsidiary, (ii) the reasonable
expenses (including legal fees and brokers' and underwriters'
commissions, lenders fees, credit enhancement fees, accountants' fees,
investment banking fees, survey costs, title insurance premiums and
other customary fees, in any case, paid to third parties or, to the
extent permitted hereby, Affiliates) incurred in effecting such
issuance or sale and (iii) any taxes reasonably attributable to such
sale and reasonably estimated by Holdings or such Subsidiary to be
actually payable.
"New Investment Sublimit" shall mean, as of any date of determination
thereof, an amount equal to (a) $100,000,000 plus (b) (i) Net Proceeds
derived from Asset Sales during the immediately preceding twelve (12) month
period and (ii) Net Proceeds from any Asset Sale that were reinvested
within the twelve (12) month period following such Asset Sale for the
purposes permitted in subsection 7.9(k) to the extent not included in
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<PAGE>
subclause (i) of this clause (b) plus (c) net cash proceeds derived from
the issuance of any equity securities of Holdings which are contributed to
the Borrower as additional equity capital minus the amount of any Capital
Expenditures funded in any fiscal year of the Borrower and its Subsidiaries
which exceeds the amounts permitted during such fiscal year pursuant to
subsection 7.8 hereof (without giving effect to the second proviso thereto
referring to subsection 7.9(k)).
"New IPO": the issuance of 6,900,000 shares of common stock of
Holdings to the public on or about May 22, 1998.
"New Subordinated Debt Documents": the New Subordinated Notes, the New
Subordinated Notes Indenture, the Underwriting Agreement dated as of May
18, 1998 among Borrower, its domestic Subsidiaries, Lehman Brothers Inc.,
and BancAmerica Robertson Stephens and any other documents or agreements
executed in connection therewith.
"New Subordinated Debt Indenture": the Indenture between the Borrower
and the Bank of New York, as trustee, pursuant to which the New
Subordinated Notes were issued.
"New Subordinated Notes": the Borrower's 8 1/2% Senior Subordinated
Notes, due 2008 ("Initial New Subordinated Notes") issued on or about May
22, 1998 and any notes, having the same terms as the Initial New
Subordinated Notes, issued in exchange for the Initial New Subordinated
Notes as contemplated by the documents governing the issuance of the
Initial New Subordinated Notes.
"Non-Excluded Taxes": as defined in subsection 2.15.
"Non-U.S. Lender": as defined in subsection 2.15(b).
"Nonconsenting Lenders": as defined in subsection 2.17.
"Notes": The Revolving Credit Notes and the Swing Line Note (or any of
them).
"Obligations": as defined in the Guarantees and the Pledge Agreements.
"Option Agreements": the Option Agreements between Holdings and each
of Frank C. Lanza and Robert V. LaPenta, each dated as of the Original
Closing Date.
"Original Agents": the "Agents" under and as defined in the Original
Credit Agreement.
"Original Closing Date": April 30, 1997.
"Original Credit Agreement": as defined in the preamble to this
Agreement.
"Original Lenders": as defined in the preamble to this Agreement.
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"Parent Distributions": as defined in the Parent Guarantee.
"Parent Guarantee": the Amended and Restated Parent Guarantee
substantially in the form of Exhibit B-1, to be executed and delivered by
Holdings, as the same may be amended, supplemented or otherwise modified.
"Parent Pledge Agreement": the Amended and Restated Parent Pledge
Agreement substantially in the form of Exhibit B-3, to be executed and
delivered by Holdings, as the same may be amended, supplemented or
otherwise modified.
"Participant": as defined in subsection 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA, or any successor thereto.
"Performance L/C": a standby Letter of Credit issued to ensure the
performance of services and/or delivery of goods by or on behalf of the
Borrower.
"Permitted Liens": Liens permitted to exist under subsection 7.3.
"Permitted Stock Payments": (A) dividends by the Borrower to Holdings
in amounts equal to the amounts required for Holdings to (i) pay franchise
taxes and other fees required to maintain its legal existence and (ii)
provide for other operating costs of up to $1,000,000 per fiscal year, (B)
dividends by the Borrower to Holdings in amounts equal to amounts required
for Holdings to pay federal, state and local income taxes to the extent
such income taxes are actually due and owing; provided that the aggregate
amount paid under this clause (B) does not exceed the amount that the
Borrower would be required to pay in respect of the income of the Borrower
and its Subsidiaries if the Borrower were a stand alone entity that was not
owned by Holdings, and (C) from and after May 1, 1999, dividends by the
Borrower to Holdings payable solely out of Excess Cash Flow, provided that,
with respect to this clause (C), (i) as of the last day of the most
recently completed fiscal quarter the Debt Ratio is less than or equal to
3.5 to 1, and (ii) the aggregate amount of dividends paid by the Borrower
to Holdings under this clause (C) since the date of this Agreement does not
exceed $5,000,000.
"Person": an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan covered by
ERISA and in respect of which the Borrower or any Commonly Controlled
Entity maintains, administers, contributes to or is required to contribute
to, or under which the Borrower or any Commonly Controlled Entity may incur
any liability.
"Pledge Agreements": the collective reference to the Parent Pledge
Agreement, the Borrower Pledge Agreement, the Charge Over Shares, the
Subsidiary Pledge Agreement, and any other security documents hereafter
delivered to the Administrative
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<PAGE>
Agent granting a Lien on any asset or assets of any Person to secure
the obligations and liabilities of the Borrower hereunder and under any of
the other Credit Documents or to secure any guarantee of any such
obligations and liabilities.
"Principals": each of Lehman Brothers Holdings, Inc., Capital
Partners, the Seller, Frank C. Lanza and Robert V. LaPenta.
"Properties": as defined in subsection 4.16.
"Purchase Agreement": the Purchase Agreement, dated as of April 25,
1997, among the Borrower and each of Lehman Brothers, Inc. and BancAmerica
Securities, Inc.
"Refunded Swing Line Loan": as defined in subsection 2.1(b)(iii).
"Register": as defined in subsection 10.6(d).
"Registration Rights Agreement": the Registration Rights Agreement,
dated as of April 30, 1997, among the Borrower and each of Lehman Brothers,
Inc. and BancAmerica Securities, Inc.
"Regulation U": Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"Reimbursement Amount": as defined in subsection 3.5(a).
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to subsection 3.5 for amounts drawn
under Letters of Credit.
"Related Party": with respect to the Principals, (a) any controlling
stockholder, 51% (or more) owned Subsidiary, or spouse or immediate family
member (in the case of an individual) of such Principal or (b) a trust,
corporation, partnership or other entity, the beneficiaries, stockholders,
partners, owners or Persons beneficially holding an 51% or more controlling
interest of which consist of the Principals and/or such other Persons
referred to in the immediately preceding clause (a).
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty-day notice period is
waived under the regulations of the PBGC.
"Required Lenders": at any time, Lenders the Loan Exposure for all
Types of Loans of which aggregate more than 50%.
"Requirement of Law": as to any Person, the Constitutional Documents
of such Person, and any law, treaty, rule or regulation or determination of
an arbitrator or a court
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or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of
its property is subject.
"Requisite Class Lenders": at any time, (a) for the Class of Lenders
having Loan Exposure, Lenders having or holding 66 2/3% of the aggregate
Loan Exposure of all Lenders, and (b) for the Class of Facility B Lenders
having Facility B Loan Exposure, Facility B Lenders having or holding 66
2/3% of the aggregate Facility B Loan Exposure of all Facility B Lenders.
"Responsible Officer": the chief executive officer, the president or
vice president of the Borrower or, with respect to financial matters, the
chief financial officer, vice president-finance or treasurer of the
Borrower.
"Restricted Government Contracts": as defined in the Pledge
Agreements.
"Revolving Credit Commitment": the commitment of a Lender, initially
as set forth on Schedule I hereto, to make Revolving Credit Loans to the
Borrower pursuant to subsection 2.1(a) and to issue and/or purchase
participations in Letters of Credit pursuant to Section 3; and "Revolving
Credit Commitments" means such commitments of all Lenders in the aggregate,
which shall be $200,000,000.
"Revolving Credit Commitment Period": the period from and including
the date hereof to but not including the Termination Date or such earlier
date on which the Revolving Credit Commitments shall terminate as provided
herein.
"Revolving Credit Lender": any Lender or Lenders having a Revolving
Credit Commitment or a Revolving Credit Loan outstanding.
"Revolving Credit Loans": the Loans made by Revolving Credit Lenders
to the Borrower pursuant to Subsection 2.1(a).
"Revolving Credit Notes": (i) the promissory notes of the Borrower, if
any, issued pursuant to subsection 2.5(f) on the Closing Date to evidence
the Revolving Credit Loans of any Lender and (ii) any promissory notes
issued by the Borrower pursuant to subsection 10.6(d) in connection with
assignments of the Revolving Credit Commitments and Revolving Credit Loans
of any Lenders, in each case substantially in the form of Exhibit A-1
annexed hereto, as they may be amended, supplemented or otherwise modified
from time to time.
"Revolving 364 Day Commitment": as defined in the Facility B Credit
Agreement.
"SPD Technologies": SPD Technologies Inc., a Delaware corporation.
"SPD Technologies Acquisition Agreement": the Agreement and Plan of
Merger, dated as of July 2, 1998, among L-3 Communications Corporation, SPD
Merger Co., SPD Technologies, Inc. and Midmark Capital L.P.
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"SEC": the Securities and Exchange Commission.
"Securities Act": Securities Act of 1933, as amended.
"Seller": Lockheed Martin Corporation, a Maryland corporation.
"Similar Business": a business, at least a majority of whose revenues
in the most recently ended calendar year were derived from (i) the sale of
defense products, electronics, communications systems, aerospace products,
avionics products and/or communications products, (ii) any services related
thereto, (iii) any business or activity that is reasonably similar thereto
or a reasonable extension, development or expansion thereof or ancillary
thereto or any business of the Borrower and/or its Subsidiaries existing as
of the Closing Date, and (iv) any combination of any of the foregoing.
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Stockholders Agreement": the Stockholders Agreement, dated as of
April 30, 1997, by and among the Borrower, Holdings, the Seller, the
Principals and any other party that may from time to time become a party
thereto as provided therein, as the same may be amended, supplemented or
otherwise modified from time to time.
"Subordinated Debt": indebtedness outstanding under the Subordinated
Notes and indebtedness outstanding under the New Subordinated Notes.
"Subordinated Debt Documents": the Indenture, the Registration Rights
Agreement, the Purchase Agreement and the Subordinated Notes.
"Subordinated Notes": the Borrower's 10 3/8 % Senior Subordinated
Notes, due 2007 (the "Initial Subordinated Notes"), issued on the Original
Closing Date, and any subordinated notes of the Borrower, having the same
terms as the Initial Subordinated Notes, issued in exchange for the Initial
Subordinated Notes as contemplated by the Subordinated Debt Documents.
"Subscription Agreements": the Common Stock Subscription Agreements
between Holdings and each of Frank C. Lanza, Robert V. LaPenta, Capital
Partners and the Seller, each dated as of the Original Closing Date.
"Subsidiary": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, directly or
indirectly, by such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Borrower.
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"Subsidiary Guarantees": the Amended and Restated Subsidiary Guarantee
substantially in the form of Exhibit B-2, to be executed and delivered by
the Borrower's Subsidiaries (other than any Immaterial Subsidiary or
Foreign Subsidiary of the Borrower), as the same may be amended,
supplemented or otherwise modified.
"Subsidiary Pledge Agreement": the Amended and Restated Subsidiary
Pledge Agreement substantially in the form of Exhibit B-5, to be executed
and delivered by the Borrower's Subsidiaries (other than any Immaterial
Subsidiary or Foreign Subsidiary of the Borrower), as the same may be
amended, supplemented or otherwise modified.
"Swing Line Lender": means BOA, or, following the resignation of BOA
as Swing Line Lender at any time upon notice to the other parties to this
Agreement, any other Lender which is appointed as Swing Line Lender by the
Required Lenders and reasonably acceptable to Borrower.
"Swing Line Loans": as defined in subsection 2.1(b).
"Swing Line Note": as defined in subsection 2.5(f).
"Term Loans": as defined in the Facility B Credit Agreement.
"Termination Date": March 31, 2003.
"Tranche": the collective reference to Eurodollar Loans with
then-current Interest Periods which all begin on the same date and end on
the same date (whether or not such Loans shall originally have been made on
the same day); Tranches may be identified as "Eurodollar Tranches".
"Transaction": the transactions contemplated by the Transaction
Documents.
"Transaction Agreement": that certain Transaction Agreement, dated as
of March 28, 1997 by and among Lockheed Martin Corporation, a Maryland
corporation, Holdings, Capital Partners and its Affiliates, Frank C. Lanza
and Robert V. LaPenta.
"Transaction Documents": (i) the Transaction Agreement, the Schedules
thereto and the documents set forth on Schedule III hereto, (ii) the Equity
Documents, (iii) the Subordinated Debt Documents and (iv) the New
Subordinated Debt Documents.
"Transferee": as defined in subsection 10.6(f).
"Type": a Revolving Credit Loan or a Swing Line Loan, as applicable.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended from time to time.
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"U.S. Taxes": any tax, assessment, or other charge or levy and any
liabilities with respect thereto, including any penalties, additions to
tax, fines or interest thereon, imposed by or on behalf of the United
States or any taxing authority thereof.
"Voting Stock": of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
"Year 2000 Problem": any significant risk that computer hardware,
software or equipment containing embedded microchips essential to the
business or operations of the Borrower or any of its Subsidiaries will not,
in the case of dates or time periods occurring after December 31, 1999,
function at least as effectively and reliably as in the case of dates or
time periods occurring before January 1, 2000, including the making of
accurate leap year calculations.
1.2. Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined
meanings when used in any Credit Document or any certificate or other
document made or delivered pursuant hereto.
(b) As used herein and in any Credit Document, and any
certificate or other document made or delivered pursuant hereto,
accounting terms relating to the Borrower and its Subsidiaries not
defined in subsection 1.1 and accounting terms partly defined in
subsection 1.1, to the extent not defined, shall have the respective
meanings given to them under GAAP.
(c) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and Section, subsection, Schedule and Exhibit references
are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
1.3. Interrelationship with Original Credit Agreement.
(a) As stated in the preamble hereof, this Credit Agreement is
intended to amend and restate the provisions of the Original Credit
Agreement and, notwithstanding any substitution of Notes as of the
Closing Date, except as expressly modified herein, (x) all of the
terms and provisions of the Original Credit Agreement shall continue
to apply for the period prior to the Closing Date, including any
determinations of payment dates, interest rates, Events of Default or
any amount that may be payable to the Original Agents or the Original
Lenders (or their assignees or replacements hereunder), and (y) the
obligations under the Original Credit Agreement shall continue to be
paid or prepaid on or prior to the
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Closing Date, and shall from and after the Closing Date continue
to be owing and be subject to the terms of this Credit Agreement. All
references in the Notes and the other Credit Documents to (i) the
Original Credit Agreement or the "Credit Agreement" shall be deemed to
include references to this Credit Agreement and (ii) the "Lenders" or
a "Lender" or to the "Agents" or any "Agent" shall mean such terms as
defined in this Credit Agreement. As to all periods occurring on or
after the Closing Date, all of the covenants set forth in the Original
Credit Agreement shall be of no further force and effect, it being
understood that all obligations of the Borrower under the Original
Credit Agreement shall be governed by this Credit Agreement from and
after the Closing Date.
(b) The Borrower, the Agents and the Lenders acknowledge and
agree that all outstanding Loans (including all outstanding L/C
Obligations) are hereby converted into Revolving Credit Loans (and, as
applicable, L/C Obligations) outstanding hereunder effective as of the
Closing Date. The Borrower, the Agents and the Lenders acknowledge and
agree that all interest, fees, costs and reimbursable expenses
accruing or arising under the Original Credit Agreement which remain
unpaid and outstanding as of the Closing Date shall be and remain
outstanding and payable as an obligation under this Agreement and the
other Credit Documents.
1.4. Confirmation of Existing Obligations. The Borrower hereby
reaffirms and admits the validity and enforceability of this Agreement and the
other Credit Documents and all of its obligations thereunder and agrees and
admits that, as of the date hereof, it has no defenses to, or offsets or
counterclaim against, any of its obligations to the Agents or any Lender under
the Credit Documents of any kind whatsoever.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS
2.1. Commitments. (a) Revolving Credit Loans. Subject to the terms and
conditions hereof, each Revolving Credit Lender severally agrees to
make revolving credit loans to the Borrower, from time to time during
the Revolving Credit Commitment Period, in an aggregate principal
amount at any one time outstanding which, when added to the aggregate
principal amount of outstanding Swing Line Loans in which such Lender
has purchased a participation (or, in the case of the Swing Line
Lender, the Swing Line Loans made by such Swing Line Lender less the
participations purchased in such Swing Line Loans by any other Lender)
and such Lender's Commitment Percentage of the then outstanding L/C
Obligations, does not exceed the amount of such Lender's Revolving
Credit Commitment. During the Revolving Credit Commitment Period, the
Borrower may use the Revolving Credit Commitments by borrowing,
prepaying the Revolving Credit Loans, in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof.
(b) Swing Line Loans. (i) Subject to the terms and conditions
hereof, the Swing Line Lender agrees to make $10,000,000 of the credit
otherwise available to
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the Borrower under the Revolving Credit Commitments by making swing line
loans (individually, a "Swing Line Loan"; collectively, the "Swing Line
Loans") to the Borrower from time to time during the Revolving Credit
Commitment Period; provided, that no Swing Line Loan shall be made if,
after giving effect thereto, the aggregate principal amount of Revolving
Credit Loans then outstanding plus the aggregate principal amount of Swing
Line Loans then outstanding, plus the aggregate amount of L/C Obligations
would exceed the Revolving Credit Commitments of the Revolving Credit
Lenders. Amounts borrowed by the Borrower under this subsection 2.1(b) may
be repaid and, through but excluding the Termination Date, reborrowed. All
Swing Line Loans shall be made as Base Rate Loans and may not be converted
into Eurodollar Loans. In order to borrow a Swing Line Loan, the Borrower
shall give the Swing Line Lender, with a copy to the Administrative Agent,
irrevocable notice (which notice must be received by the Swing Line Lender
prior to 12:00 Noon, New York City time) on the requested Borrowing Date
specifying the amount of the requested Swing Line Loan which shall be in a
minimum amount of $500,000 or whole multiples of $100,000 in excess
thereof. The proceeds of the Swing Line Loan will be made available by the
Swing Line Lender to the Borrower at the office of the Swing Line Lender by
crediting the account of the Borrower at such office with such proceeds.
(ii) The Swing Line Loans shall be evidenced by a Loan Account and, if
requested by the Swing Line Lender, a promissory note of the Borrower,
substantially in the form of Exhibit A-2 (the "Swing Line Note"), with
appropriate insertions, payable to the order of the Swing Line Lender and
representing the obligation of the Borrower to pay the unpaid principal
amount of the Swing Line Loans, with interest thereon as prescribed in
subsection 2.9. The Swing Line Note, if any, shall (i) be dated the Closing
Date, (ii) be stated to mature on the Termination Date and (iii) bear
interest, payable on the dates specified in 2.9, for the period from the
date thereof to the Termination Date on the unpaid principal amount thereof
from time to time outstanding at the applicable interest rate per annum
specified in subsection 2.9.
(iii) The Swing Line Lender, at any time in its sole and absolute
discretion, may on behalf of the Borrower (which hereby irrevocably directs
the Swing Line Lender to act on its behalf) request each Lender, including
the Swing Line Lender, to make a Revolving Credit Loan (which shall be a
Base Rate Loan) in an amount equal to such Lender's Commitment Percentage
of such Swing Line Loan (the "Refunded Swing Line Loans") outstanding on
the date such notice is given. Unless any of the events described in clause
(f) of Section 8 shall have occurred (in which event the procedures of
subsection 2.1(b)(iv) shall apply) each Lender shall, not later than 12:00
P.M., New York City time, on the Business Day next succeeding the date on
which such notice is given, make available to the Swing Line Lender in
immediately available funds the amount equal to the Revolving Credit Loan
to be made by such Lender. The proceeds of such Revolving Credit Loans
shall be immediately applied to repay the Refunded Swing Line Loans. Upon
any request by the Swing Line Lender to the Lenders pursuant to this
subsection 2.1(b)(iii), the Administrative Agent shall promptly give notice
to the Borrower of such request.
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(iv) If prior to the making of a Revolving Credit Loan pursuant to
subsection 2.1(b)(iii) one of the events described in clause (f) of Section
8 shall have occurred, each Lender will, on the date such Loan was to have
been made, purchase an undivided participating interest in the Swing Line
Loans in an amount equal to its Commitment Percentage. Each Lender will
immediately transfer to the Swing Line Lender, in immediately available
funds, the amount of its participation.
(v) Whenever, at any time after the Swing Line Lender has received
from any Lender such Lender's participating interest in a Swing Line Loan,
the Swing Line Lender receives any payment on account thereof, the Swing
Line Lender will distribute to such Lender its participating interest in
such amount (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender's participating
interest was outstanding and funded); provided, however, that in the event
that such payment received by the Swing Line Lender is required to be
returned, such Lender will return to the Swing Line Lender any portion
thereof previously distributed to it.
(vi) Each Lender's obligation to purchase participating interests
pursuant to subsection 2.1(b)(iv) shall be absolute and unconditional and
shall not be affected by any circumstance, including, without limitation,
(a) any set-off, counterclaim, recoupment, defense or other right which
such Lender or the Borrower may have against the Swing Line Lender, any
other Lender or anyone else for any reason whatsoever, (b) the occurrence
or continuance of any Default or Event of Default; (c) any adverse change
in the condition (financial or otherwise) of the Borrower; (d) any breach
of this Agreement by the Borrower or any other Lender; or (e) any other
circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing.
(c) Except for Swing Line Loans, which shall be Base Rate Loans,
the Loans may from time to time be (i) Eurodollar Loans, (ii) Base
Rate Loans or (iii) a combination thereof, as determined by the
Borrower and notified to the Administrative Agent in accordance with
subsections 2.2 and 2.7, provided that, no Revolving Credit Loan shall
be made as a Eurodollar Loan after the day that is one month prior to
the Termination Date.
2.2. Procedure for Borrowing. The Borrower may borrow under the
Revolving Credit Commitments during the Revolving Credit Commitment Period on
any Business Day, provided that the Borrower shall give the Administrative
Agent irrevocable notice (which notice must be received by the Administrative
Agent prior to (a) 11:00 A.M., New York City time, three Business Days prior to
the requested Borrowing Date, if all or any part of the requested Loans are to
be initially Eurodollar Loans, (b) 11:00 A.M., New York City time, on the
requested Borrowing Date in the case of a Base Rate Loan other than a Swing
Line Loan), specifying (i) the amount to be borrowed of each Type of Loan, (ii)
the requested Borrowing Date, (iii) whether the borrowing is to be of
Eurodollar Loans, Base Rate Loans or a combination thereof and (iv) if the
borrowing is to be entirely or partly of Eurodollar Loans, the respective
lengths of the initial Interest Periods therefor. Each borrowing under the
Commitments shall be in an amount equal to (x) in the case of Base Rate Loans
(other than Swing Line Loans or Refunded Swing Line Loans), $2,000,000 or a
whole multiple of $100,000 in excess thereof (or, if the then Available
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Commitments are less than $2,000,000, such lesser amount), (y) in the case of
Swing Line Loans, as provided in subsection 2.1(b)(i) and (z) in the case of
Eurodollar Loans, $5,000,000 or a whole multiple of $100,000 in excess thereof.
Upon receipt of any such notice from the Borrower, the Administrative Agent
shall promptly notify each Lender thereof. Each Lender will make the amount of
its pro rata share of each borrowing available to the Administrative Agent for
the account of the Borrower at the office of the Administrative Agent specified
in subsection 10.2 prior to 11:00 A.M., New York City time (in the case of
Eurodollar Loans) or 2:30 P.M., New York City time (in the case of Base Rate
Loans), on the Borrowing Date requested by the Borrower in funds immediately
available to the Administrative Agent. Such borrowing will then be made
available to the Borrower by the Administrative Agent in accordance with the
Borrower's payment instructions with the aggregate of the amounts made
available to the Administrative Agent by the Lenders and in like funds as
received by the Administrative Agent. All notices given by the Borrower under
this subsection 2.2 may be made by telephonic notice promptly confirmed in
writing.
2.3. Commitment Fee.
The Borrower agrees to pay to the Administrative Agent for the account
of each Revolving Credit Lender a commitment fee for the period from and
including the first day of the Revolving Credit Commitment Period to and
including the Termination Date, computed at the Commitment Fee Rate on the
daily amount of the Available Commitment of such Revolving Credit Lender during
the period for which payment is made, payable quarterly in arrears on the last
Business Day of each March, June, September and December and on the Termination
Date, commencing on the first of such dates to occur after the date hereof.
2.4. Termination or Reduction of Revolving Credit Commitments.
The Borrower shall have the right, upon not less than three Business
Days' written notice to the Administrative Agent, to terminate the Revolving
Credit Commitments or, from time to time, to reduce the amount of the Revolving
Credit Commitments ratably among the Revolving Credit Lenders; provided that no
such termination or reduction shall be permitted if, after giving effect
thereto and to any prepayments of the Revolving Credit Loans made on the
effective date thereof, the aggregate principal amount of the Revolving Credit
Loans then outstanding, when added to the then outstanding L/C Obligations and
the outstanding Swing Line Loans, would exceed the Revolving Credit Commitments
then in effect. Any such reduction shall be in an amount equal to $2,000,000 or
a whole multiple of $500,000 in excess thereof and shall reduce permanently the
Revolving Credit Commitments then in effect.
2.5. Repayment of Loans; Evidence of Debt.
(a) Payments on Revolving Credit Loans and Swing Line Loans. The
Borrower hereby unconditionally promises to pay to the Administrative
Agent on the Termination Date (or such earlier date on which the Loans
become due and payable pursuant to Section 8) (x) for the account of
each Revolving Credit Lender the then unpaid principal amount of each
Revolving Credit Loan of such Lender and (y) for the account of the
Swing Line Lender (and each other
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Revolving Credit Lender that has purchased a participation in
then outstanding Swing Line Loans) the then unpaid principal amount of
Swing Line Loans.
(b) Interest. The Borrower hereby further agrees to pay interest
on the unpaid principal amount of the Loans from time to time
outstanding from the date such Loans are made until payment in full
thereof at the rates per annum, and on the dates, set forth in
subsection 2.9.
(c) Recording. Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing indebtedness of the
Borrower to such Lender resulting from each Loan of such Lender from
time to time, including the amounts of principal and interest payable
and paid to such Lender from time to time under this Agreement.
(d) Loan Accounts and Register; Notes. (i) The Loans made by, and
the Commitments of, each Lender shall be evidenced by one or more loan
accounts ("Loan Accounts") maintained by such Lender and by the Register
maintained by the Administrative Agent in the ordinary course of business.
The Register maintained by the Administrative Agent shall, in the event of
a discrepancy between the entries in the Administrative Agent's books and
any Lender's books relating to such matters, be controlling and, absent
manifest error, shall be conclusive as to the amount of the Loans made by
the Lender to the Borrower, the interest and payments thereon and any other
amounts owing in respect of this Agreement. The Borrower hereby designates
the Administrative Agent to serve as the Borrower's agent, solely for
purposes of this subsection 2.5(d) and subsection 10.6, to maintain the
Register on which it will record the Commitments from time to time of each
of the Lenders, the Loans made by each of the Lenders and each repayment in
respect of the principal amount of the Loans of each Lender. The Borrower
agrees to indemnify the Administrative Agent from and against any and all
losses, claims, damages and liabilities of whatsoever nature which may be
imposed on, asserted against or incurred by the Administrative Agent in
performing its duties under this subsection 2.5(d) and subsection 10.6
(other than any losses, claims, damages and liabilities to the extent
incurred by reason of the gross negligence or willful misconduct of the
Administrative Agent).
(ii) If requested by any Lender, the Borrower shall execute and
deliver to such Lender (and deliver a copy thereof to the Administrative
Agent) one or more promissory notes evidencing the Loans owing to such
Lender pursuant to this Agreement in accordance with subsection 2.5(f).
(e) Prima Facie Evidence. The entries made in the Register and
the Loan Accounts of each Lender maintained pursuant to subsection
2.5(d) shall, to the extent permitted by applicable law, be prima
facie evidence of the existence and amounts of the obligations of the
Borrower therein recorded; provided, however, that the failure of any
Lender or the Administrative Agent to maintain the Register or any
such Loan Account, or any error therein, shall not in any manner
affect the obligation of the Borrower to repay (with applicable
interest)
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the Loans made to the Borrower by such Lender in accordance with
the terms of this Agreement. For the avoidance of doubt, the existence
or non-existence of any Note representing any Obligations owing to any
Lender hereunder shall not affect the existence, amount, validity or
enforceability of such Obligations, which in all events shall be
absolute and unconditional.
(f) Notes. The Borrower agrees that the Borrower will execute and
deliver to each Lender that requests any such Note pursuant to
subsection 2.5(d)(ii), a promissory note of the Borrower evidencing
the Revolving Credit Loans of such Lender, substantially in the form
of Exhibit A-1 with appropriate insertions as to date and principal
amount (a "Revolving Credit Note"). The Borrower also agrees that, if
requested by the Swing Line Lender, the Borrower will execute and
deliver to the Swing Line Lender a promissory note of the Borrower
evidencing the Swing Line Loans of the Swing Line Lender,
substantially in the form of Exhibit A-2 with appropriate insertions
as to date and principal amount.
2.6. Optional Prepayments; Mandatory Prepayments and Reduction of
Commitments.
(a) Subject to subsections 2.12 and 2.16, the Borrower may at any
time and from time to time prepay any Loans, in whole or in part,
without premium or penalty, upon irrevocable notice to the
Administrative Agent prior to 11:00 A.M., New York City time, three
Business Days prior to the date of prepayment in the case of
Eurodollar Loans or on any Business Day in the case of Base Rate
Loans, specifying the date and amount of prepayment, the Type of Loan
to be prepaid (which Loans shall be prepaid on a pro rata basis among
the applicable Lenders) and whether the prepayment is of Eurodollar
Loans, Base Rate Loans or a combination thereof, and, if of a
combination thereof, the amount allocable to each. Upon receipt of any
such notice, the Administrative Agent shall promptly notify each
applicable Lender thereof. If any such notice is given, the amount
specified in such notice shall be due and payable on the date
specified therein, together with any amounts payable pursuant to
subsection 2.16. Partial prepayments shall be in an aggregate
principal amount of $2,000,000 or a whole multiple of $100,000 in
excess thereof.
(b) (i) If, subsequent to the Closing Date, Holdings or any of
its Subsidiaries shall incur or permit the incurrence of any Indebtedness
(other than Indebtedness permitted pursuant to subsection 7.2), 100% of the
Net Proceeds thereof shall be promptly ratably applied toward the
prepayment of the Loans and the Facility B Loans and permanent reduction of
the Commitments and the Facility B Commitments as set forth in clause (iv)
of this subsection 2.6(b). Nothing in this paragraph (b) shall be deemed to
permit any Indebtedness not permitted by subsection 7.2.
(ii) If, subsequent to the Closing Date, Holdings or any of its
Subsidiaries shall receive Net Proceeds from any Asset Sale, such Net
Proceeds, subject to the
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Applicable Holdback (defined below) shall be promptly and ratably
applied toward the prepayment of the Loans and the Facility B Loans and
permanent reduction of the Commitments and the Facility B Commitments as
set forth in clause (iv) of this subsection 2.6(b); provided that Net
Proceeds from any Asset Sales shall not be required to be so applied to the
extent that such Net Proceeds are used by the Borrower or such Subsidiary
to acquire assets to be employed in the business of the Borrower or its
Subsidiaries within 365 days of receipt thereof, but if such Net Proceeds,
subject to the Applicable Holdback (as defined below), are not so used,
100% of the amount of such Net Proceeds not so used shall be applied toward
the prepayment of the Loans and the permanent reduction of the Commitments
as set forth in clause (iv) of this subsection 2.6(b) on the earlier of (x)
the 366th day after receipt of such Net Proceeds and (y) the date on which
the Borrower has determined that such Net Proceeds shall not be so used. As
used herein, "Applicable Holdback" shall mean an amount of Net Proceeds not
in excess of $20,000,000 derived from any Asset Sales occurring since the
Closing Date that has not been applied toward the prepayment of Loans and
the permanent reduction of the Commitments as set forth in clause (iv) of
subsection 2.6(b) which Borrower and/or its applicable Subsidiary may
retain and not apply as a mandatory prepayment without the requirement of
utilizing the same to acquire assets to be employed in the business of the
Borrower or such applicable Subsidiary; provided, that if any Event of
Default shall have occurred and be continuing, the Applicable Holdback
amount shall be automatically reduced to zero unless and until such Event
of Default is acknowledged in writing by the Required Lenders (or all the
Lenders in cases where the unanimous consent of the Lenders is required) as
cured or waived.
(iii) [Intentionally Omitted]
(iv) Except during any period in which an Event of Default has
occurred and is continuing, any mandatory prepayments required by this
subsection 2.6 shall be applied ratably to the outstanding principal amount
of Loans and Facility B Loans with a corresponding ratable permanent
reduction of the Revolving Credit Commitments and the Revolving 364 Day
Commitments (or, if applicable, the Term Loans on a pro rata basis to
reduce the unpaid scheduled installments of principal of the Term Loans in
inverse order of maturity). Revolving Credit Commitment and Revolving 364
Day Commitment reductions made pursuant to subsections 2.6(b)(i) and (ii)
hereof (and the corresponding subsections of the Facility B Credit
Agreement) shall be applied to each Lender's respective Revolving Credit
Commitment and/or each Facility B Lender's Revolving 364 Day Commitment, as
applicable, on a pro rata basis and shall reduce permanently such
Commitments and Revolving 364 Day Commitments. At any time that an Event of
Default has occurred and is continuing, all mandatory prepayments shall be
applied in accordance with the terms of subsection 2.12 hereof (and the
corresponding subsection of the Facility B Credit Agreement). Mandatory
prepayments shall not be subject to any minimum amount requirement.
(v) In addition, if after giving effect to (i) any reduction of
the Revolving Credit Commitments under subsection 2.4, 2.5 or 2.6 or (ii)
any recalculation of the
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Exchange Rate pursuant to subsection 3.9, the aggregate outstanding
principal amount of Swing Line Loans plus the aggregate outstanding
principal amount of Revolving Credit Loans plus the aggregate outstanding
amount of L/C Obligations shall exceed the aggregate amount of the
Revolving Credit Commitments, such reduction or recalculation shall be
accompanied by prepayment in the amount of such excess to be applied (x)
first, to the outstanding Swing Line Loans and (y) second, to outstanding
Revolving Credit Loans (in each case, together with any amounts payable
under subsection 2.16)); provided that if the aggregate principal amount of
Swing Line Loans and Revolving Credit Loans then outstanding is less than
the amount of such excess (because Letters of Credit constitute a portion
of such excess), the Borrower shall immediately, without notice or demand,
to the extent of the balance of such excess, replace outstanding Letters of
Credit and/or deposit an amount (but in no event greater than such balance)
in a cash collateral account opened by the Administrative Agent for the
benefit of the Revolving Credit Lenders (such deposit to be in Dollars with
respect to Domestic L/Cs and the applicable Alternative Currency with
respect to Foreign L/Cs). The Borrower hereby grants to the Administrative
Agent, for the benefit of the Issuing Lender and the L/C Participants in
such Letters of Credit, a security interest in such cash collateral to
secure all obligations of the Borrower under this Agreement and the other
Credit Documents. Any amounts deposited in such accounts shall be released
to the Borrower on any Calculation Date on which the aggregate outstanding
principal amount of Swing Line Loans plus the aggregate outstanding
principal amount of Revolving Credit Loans plus the aggregate outstanding
amount of L/C Obligations equals or is less than the aggregate amount of
the Revolving Credit Commitments, provided that no Default or Event of
Default has occurred and is continuing.
2.7. Conversion and Continuation Options. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to Base Rate Loans, by
giving the Administrative Agent prior irrevocable notice of such
election at or before 11:00 A.M. New York City time, on the Business
Day immediately preceding the date of the proposed conversion and of
the amount and Type of Loan to be converted, provided that any such
conversion of Eurodollar Loans may only be made on the last day of an
Interest Period with respect thereto. The Borrower may elect from time
to time to convert Base Rate Loans (other than Swing Line Loans) to
Eurodollar Loans by giving the Administrative Agent prior irrevocable
notice of such election at or before 11:00 A.M., New York City time,
on the third Business Day immediately preceding the date of the
proposed conversion and of the amount and Type of Loan to be
converted. Any such notice of conversion to Eurodollar Loans shall
specify the length of the initial Interest Period or Interest Periods
therefor. Upon receipt of any such notice the Administrative Agent
shall promptly notify each applicable Lender thereof. All or any part
of outstanding Eurodollar Loans and Base Rate Loans may be converted
as provided herein, provided that (i) no Loan may be converted into a
Eurodollar Loan when any Event of Default has occurred and is then
continuing and (ii) no Loan may be converted into a Eurodollar Loan
after the date that is one month prior to the Termination Date.
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(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by
the Borrower giving notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth
in subsection 1.1, of the length of the next Interest Period to be
applicable to such Loans and of the amount and Type of Loan to be
converted, provided that no Eurodollar Loan may be continued as such
(i) when any Event of Default has occurred and is then continuing or
(ii) after the date that is one month prior to the Termination Date
and provided, further, that if the Borrower shall fail to give such
notice or if such continuation is not permitted such Loans shall be
automatically converted to Base Rate Loans on the last day of such
then expiring Interest Period.
(c) All notices given by Borrower under this subsection 2.7 may
be made by telephonic notice promptly confirmed in writing.
2.8. Minimum Amounts and Maximum Number of Tranches. All borrowings,
conversions and continuations of Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or
a whole multiple of $100,000 in excess thereof. All Loans hereunder may be
converted or continued into Base Rate Loans without reference to the minimum
principal amount requirements for new Base Rate borrowings set forth in
subsection 2.2 above. In no event shall the number of outstanding Eurodollar
Tranches plus outstanding Facility B Eurodollar Tranches exceed 15 at any time.
2.9. Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined
for such day plus the Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin.
(c) If all or a portion of (i) any principal of any Loan, (ii)
any interest payable thereon, (iii) any commitment fee or (iv) any
other amount payable hereunder shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise), the principal of
the Loans and any such overdue interest, commitment fee or other
amount shall bear interest at a rate per annum which is (x) in the
case of principal, the rate that would otherwise be applicable thereto
pursuant to the foregoing provisions of this subsection plus 2% or (y)
in the case of any such overdue interest, commitment fee or other
amount, the rate described in paragraph (b) of this subsection plus
2%, in each case from the date of such non-payment until such overdue
principal, interest, commitment fee or other amount is paid in full
(as well after as before judgment).
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(d) Interest shall be payable with respect to each Loan in
arrears on each Interest Payment Date and on the Termination Date,
provided that interest accruing pursuant to paragraph (c) of this
subsection shall be payable from time to time on demand.
2.10. Computation of Interest and Fees. (a) Interest on Base Rate
Loans and fees shall be calculated on the basis of a 365- (or 366-, as
the case may be) day year for the actual days elapsed; all other
interest shall be calculated on the basis of a 360-day year for the
actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan
resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on
the day on which such change becomes effective. The Administrative
Agent shall as soon as practicable notify the Borrower and the Lenders
of the effective date and the amount of each such change in interest
rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive
and binding on the Borrower and the Lenders in the absence of manifest
error. The Administrative Agent shall, at the request of the Borrower,
deliver to the Borrower a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to
subsection 2.9(a) or (c).
2.11. Inability to Determine Interest Rate. If prior to the first
day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that,
by reason of circumstances affecting the eurodollar market, adequate
and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or to be
determined for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such
Interest Period, the Administrative Agent shall give telecopy or
telephonic notice thereof to the Borrower and the Lenders as soon as
practicable thereafter. If such notice is given (x) any Eurodollar
Loans requested to be made on the first day of such Interest Period
shall be made as Base Rate Loans, (y) any Loans that were to have been
converted on the first day of such Interest Period to Eurodollar Loans
shall be converted to or continued as Base Rate Loans and (z) any
outstanding Eurodollar Loans shall be converted, on the first day of
such Interest Period, to Base Rate Loans. Until such notice has been
withdrawn in writing by the Administrative Agent (which the
Administrative Agent agrees to do when the Administrative Agent has
determined, or has been
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instructed by the Required Lenders that, the circumstances that
prompted the delivery of such notice no longer exist), no further
Eurodollar Loans shall be made or continued as such, nor shall the
Borrower have the right to convert Loans to Eurodollar Loans.
2.12. Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Revolving Credit Lenders hereunder, each payment by
the Borrower on account of any commitment fee hereunder and any
reduction of the Revolving Credit Commitments of Revolving Credit
Lenders shall be made pro rata according to the respective Commitment
Percentages of the Revolving Credit Lenders. Except during any period
in which an Event of Default has occurred and is continuing, each
payment (including each prepayment) by the Borrower on account of
principal of and interest on the Revolving Credit Loans, and any
application by the Administrative Agent of the proceeds of any
Collateral, shall be made pro rata according to the respective
outstanding principal amounts of such Loans then held by the Lenders.
All payments (including prepayments) to be made by the Borrower
hereunder in respect of any Loan, whether on account of principal,
interest, Reimbursement Obligations (whether in respect of Domestic
L/Cs or Foreign L/Cs), fees, expenses or otherwise, shall be made
without set off or counterclaim and shall be made prior to 11:00 A.M.,
New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders with respect to such Loans, at
the Administrative Agent's office specified in subsection 10.2, in
Dollars and in immediately available funds; provided, that, with
respect to any Reimbursement Obligations of the Borrower arising from
the presentment to the Issuing Lender of a draft under a Foreign L/C,
the Borrower may make payment in the applicable Alternative Currency
if such payment is received by the Issuing Lender on the date such
draft is paid by the Issuing Lender. At any time that an Event of
Default has occurred and is continuing, all payments (including
prepayments) made by Borrower hereunder and any application by the
Administrative Agent of the proceeds of any Collateral shall be
applied in the following order: (1) to the ratable payment of all
amounts due and owing by the Borrower pursuant to subsection 10.5 of
this Agreement or subsection 10.5 of the Facility B Credit Agreement
to the Agents and/or the Facility B Agents, and after payment in full
thereof, to any other Lender or Facility B Lender; (2) to the ratable
payment of all interest, fees and commissions due and owing under this
Agreement or the Facility B Credit Agreement to the Agents, the
Facility B Agents, the Swing Line Lender, any Lender or any Facility B
Lender; (3) to the ratable payment (or cash collateralization) of the
aggregate outstanding principal amount of Loans and Facility B Loans
and the aggregate L/C Obligations and Facility B L/C Obligations; and
(4) to the ratable payment of all other obligations of the Borrower to
the Agents, the Facility B Agents, the Swing Line Lender, any Lender
or any Facility B Lender under any Credit Document or Facility B
Credit Document. For purposes of applying payments and proceeds
distributed under clause 3 above, each Lender will first apply such
amounts to all outstanding Loans of such Lender before such amounts
will be held
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as cash collateral for L/C Obligations in which such Lender is a
L/C Participant. The Administrative Agent and the Facility B
Administrative Agent shall ratably distribute such payments to the
applicable Lenders and the Facility B Lenders promptly upon receipt in
like funds as received. If any payment hereunder becomes due and
payable on a day other than a Business Day, such payment shall be
extended to the next succeeding Business Day, and, with respect to
payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.
(b) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not
make the amount that would constitute its Commitment Percentage of
such borrowing available to the Administrative Agent, the
Administrative Agent may assume that such Lender is making such amount
available to the Administrative Agent on such Borrowing Date, and the
Administrative Agent may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If such amount is
not made available to the Administrative Agent by the required time on
the Borrowing Date therefor, such Lender shall pay to the
Administrative Agent, on demand, such amount with interest thereon at
a rate equal to the daily average Federal Funds Effective Rate for the
period until such Lender makes such amount immediately available to
the Administrative Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error. If
such Lender's Commitment Percentage of such borrowing is not made
available to the Administrative Agent by such Lender within three
Business Days of such Borrowing Date, the Administrative Agent shall
also be entitled to recover such amount with interest thereon at the
rate per annum applicable to Base Rate Loans hereunder, on demand,
from the Borrower. The failure of any Lender to make any Loan to be
made by it shall not relieve any other Lender of its obligation
hereunder to make its Loan on such Borrowing Date.
2.13. Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such
and convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled and
(b) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans 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. If any such conversion of a Eurodollar Loan occurs
on a day which is not the last day of the then current Interest Period with
respect thereto, the Borrower shall pay to such Lender such amounts, if any, as
may be required pursuant to subsection 2.16. If circumstances subsequently
change so that any affected Lender shall determine that it is no longer so
affected, such Lender will promptly notify the Borrower and the Administrative
Agent, and upon receipt of such notice, the
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obligations of such Lender to make or continue Eurodollar Loans or to convert
Base Rate Loans into Eurodollar Loans shall be reinstated.
2.14. Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not
having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement, any Note, any Letter of Credit, any Application
or any Eurodollar Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded Taxes
covered by subsection 2.15 and changes in the rate of net income taxes
(including branch profits taxes and minimum taxes) or franchise taxes
(imposed in lieu of net income taxes) of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender
upon written demand such additional amount or amounts as will compensate such
Lender for such increased cost or reduced amount receivable; provided that
before making any such demand, each Lender agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions and
so long as such efforts would not be disadvantageous to it, in its reasonable
discretion, in any legal, economic or regulatory manner) to designate a
different Eurodollar lending office if the making of such designation would
allow the Lender or its Eurodollar lending office to continue to perform its
obligations to make Eurodollar Loans or to continue to fund or maintain
Eurodollar Loans and avoid the need for, or reduce the amount of, such
increased cost. If any Lender becomes entitled to claim any additional amounts
pursuant to this subsection, it shall promptly notify the Borrower, through the
Administrative Agent, of the event by reason of which it has become so
entitled. If the Borrower so notifies the Administrative Agent within five
Business Days after any Lender notifies the Borrower of any increased cost
pursuant to the foregoing provisions of this Section, the Borrower may convert
all Eurodollar Loans of such Lender then outstanding into Base Rate Loans in
accordance with the terms hereof. Each Lender shall notify the Borrower within
120 days after it becomes aware of the imposition of such costs; provided that
if such Lender fails to so notify the Borrower within such 120-day period, such
Lender shall not be entitled to claim any additional amounts pursuant to this
subsection for any period ending on a date which is prior to 120 days before
such notification.
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(b) If any Lender shall have determined that the adoption of or
any change in any Requirement of Law regarding capital adequacy or in
the interpretation or application thereof or compliance by such Lender
or any corporation controlling such Lender with any request or
directive regarding capital adequacy (whether or not having the force
of law) from any Governmental Authority made subsequent to the date
hereof shall have the effect of reducing the rate of return on such
Lender's or such corporation's capital as a consequence of its
obligations hereunder or under any Letter of Credit to a level below
that which such Lender or such corporation could have achieved but for
such adoption, change or compliance (taking into consideration such
Lender's or such corporation's policies with respect to capital
adequacy) by an amount deemed by such Lender to be material, then from
time to time, after submission by such Lender to the Borrower (with a
copy to the Administrative Agent) of a prompt written request
therefor, the Borrower shall promptly pay to such Lender such
additional amount or amounts as will compensate such Lender for such
reduction. Each Lender shall notify the Borrower within 120 days after
it becomes aware of the imposition of such additional amount or
amounts; provided that if such Lender fails to so notify the Borrower
within such 120-day period, such Lender shall not be entitled to claim
any additional amount or amounts pursuant to this subsection for any
period ending on a date which is prior to 120 days before such
notification.
(c) If any Lender becomes entitled to claim any additional
amounts pursuant to this subsection, it shall promptly notify the
Borrower (with a copy to the Administrative Agent) of the event by
reason of which it has become so entitled. A certificate as to any
additional amounts payable pursuant to this subsection, showing the
calculation thereof in reasonable detail, submitted by such Lender to
the Borrower (with a copy to the Administrative Agent) shall be
conclusive in the absence of manifest error. The agreements in this
subsection shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
2.15. Taxes. (a) Except as provided in this subsection 2.15, all
payments made by the Borrower under this Agreement and any Notes shall
be made free and clear of, and without deduction or withholding for or
on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by
any Governmental Authority ("Taxes"), excluding Taxes on net income
(including, without limitation, branch profits taxes and minimum
taxes) and franchise taxes (imposed in lieu of net income taxes)
imposed on any Agent or any Lender as a result of a present or former
connection between any Agent or such Lender and the jurisdiction of
the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any
such connection arising solely from such Agent or such Lender having
executed, delivered or performed its obligations or received a payment
under, or enforced,
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this Agreement or any Note). If any such non-excluded taxes,
levies, imposts, duties, charges, fees deductions or withholdings
("Non-Excluded Taxes") are required to be withheld from any amounts
payable to any Agent or any Lender hereunder or under any Note, the
amounts so payable to such Agent or such Lender shall be increased to
the extent necessary to yield to such Agent or such Lender (after
payment of all Non-Excluded Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrower shall not be required
to increase any such amounts payable to any Lender that is not
organized under the laws of the United States of America or a state
thereof with respect to any Taxes that are imposed on amounts payable
to such Lender at the time such Lender becomes a party to this
Agreement or that are attributable to such Lender's failure to comply
with the requirements of paragraph (b) of this subsection. Whenever
any Non-Excluded Taxes are payable by the Borrower, as promptly as
possible thereafter, the Borrower shall send to the relevant Agent for
its own account or for the account of such Lender, as the case may be,
a certified copy of an original official receipt, if any, received by
the Borrower showing payment thereof. If the Borrower fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or
fails to remit to the relevant Agent the required receipts or other
required documentary evidence, the Borrower shall indemnify the Agents
and the Lenders for any incremental taxes, interest or penalties that
may become payable by any Agent or any Lender as a result of any such
failure. The agreements in this subsection shall survive the
termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
(b) Each Lender, Assignee and Participant that is not a citizen
or resident of the United States of America, a corporation,
partnership created or organized in or under the laws of the United
States of America, any estate that is subject to U.S. federal income
taxation regardless of the source of its income or any trust which is
subject to the supervision of a court within the United States and the
control of a United States fiduciary as described in Section
7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver to the
Borrower and the Administrative Agent, and if applicable, the
assigning Lender (or, in the case of a Participant, to the Lender from
which the related participation shall have been purchased) on or
before the date on which it becomes a party to this Agreement (or, in
the case of a Participant, on or before the date on which such
Participant purchases the related participation) either:
(A) two duly completed and signed copies of either Internal Revenue
Service Form 1001 (relating to such Non-U.S. Lender and entitling it to a
complete exemption from withholding of U.S. Taxes on all amounts to be
received by such Non-U.S. Lender pursuant to this Agreement and the other
Credit Documents) or Form 4224 (relating to all amounts to be received by
such Non-U.S. Lender pursuant to this Agreement and the other Credit
Documents), or successor and related applicable forms, as the case may be;
or
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(B) in the case of a Non-U.S. Lender that is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code and that does not comply with
the requirements of clause (A) hereof, (x) a statement in the form of
Exhibit E (or such other form of statement as shall be reasonably requested
by the Borrower from time to time) to the effect that such Non-U.S. Lender
is eligible for a complete exemption from withholding of U.S. Taxes under
Code Section 871(h) or 881(c), and (y) two duly completed and signed copies
of Internal Revenue Service Form W-8 or successor and related applicable
form (it being understood and agreed that no Participant and, without the
prior written consent of the Borrower described in clause (B) of the
proviso to the first sentence of subsection 10.6(c), no Assignee shall be
entitled to deliver any forms or statements pursuant to this clause (B),
but rather shall be required to deliver forms pursuant to clause (A) of
this subsection 2.15(b)).
Further, each Non-U.S. Lender agrees (i) to deliver to the Borrower and the
Administrative Agent, and if applicable, the assigning Lender (or, in the case
of a Participant, to the Lender from which the related participation shall have
been purchased) two further duly completed and signed copies of such Forms 1001
or 4224, as the case may be, or successor and related applicable forms, on or
before the date that any such form expires or becomes obsolete and promptly
after the occurrence of any event requiring a change from the most recent
form(s) previously delivered by it to the Borrower (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) in accordance with applicable U.S. laws and regulations and (ii) in
the case of a Non-U.S. Lender that delivers a statement in the form of Exhibit
E (or such other form of statement as shall have been requested by the
Borrower), to deliver to the Borrower and the Administrative Agent, and if
applicable, the assigning Lender, such statement on an annual basis on the
anniversary of the date on which such Non-U.S. Lender became a party to this
Agreement and to deliver promptly to the Borrower and the Administrative Agent,
and if applicable, the assigning Lender, such additional statements and forms
as shall be reasonably requested by the Borrower from time to time unless, in
any such case, any change in law or regulation has occurred subsequent to the
date such Lender became a party to this Agreement (or in the case of a
Participant, the date on which such Participant purchased the related
participation) which renders all such forms inapplicable or which would prevent
such Lender (or Participant) from properly completing and executing any such
form with respect to it and such Lender promptly notifies the Borrower and the
Administrative Agent (or, in the case of a Participant, the Lender from which
the related participation shall have been purchased) if it is no longer able to
deliver, or if it is required to withdraw or cancel, any form or statement
previously delivered by it pursuant to this subsection 2.15(b). Each Non-U.S.
Lender agrees to indemnify and hold harmless the Borrower from and against any
taxes, penalties, interest or other costs or losses (including, without
limitation, reasonable attorneys' fees and expenses) incurred or payable by the
Borrower as a result of the failure of the Borrower to comply with its
obligations to deduct or withhold any U.S. Taxes from any payments made
pursuant to this Agreement to such Non-U.S.
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Lender or the Administrative Agent which failure resulted from the Borrower's
reliance on any form, statement, certificate or other information provided to
it by such Non-U.S. Lender pursuant to clause (B) or clause (ii) of this
subsection 2.15(b). The Borrower hereby agrees that for so long as a Non-U.S.
Lender complies with this subsection 2.15(b), the Borrower shall not withhold
any amounts from any payments made pursuant to this Agreement to such Non-U.S.
Lender, unless the Borrower reasonably determines that it is required by law to
withhold or deduct any amounts from any payments made to such Non-U.S. Lender
pursuant to this Agreement. A Non-U.S. Lender shall not be required to deliver
any form or statement pursuant to the immediately preceding sentences in this
subsection 2.15(b) that such Non-U.S. Lender is not legally able to deliver (it
being understood and agreed that the Borrower shall withhold or deduct such
amounts from any payments made to such Non-U.S. Lender that the Borrower
reasonably determines are required by law and that payments resulting from a
failure to comply with this paragraph (b) shall not be subject to payment or
indemnity by the Borrower pursuant to subsection 2.15(a)). If any Credit Party
other than the Borrower makes any payment to any Non-U.S. Lender under any
Credit Document, the foregoing provisions of this subsection 2.15 shall apply
to such Non-U.S. Lender and such Credit Party as if such Credit Party were the
Borrower (but a Non-U.S. Lender shall not be required to provide any form or
make any statement to any such Credit Party unless such Non-U.S. Lender has
received a request to do so from such Credit Party and has a reasonable time to
comply with such request).
(c) If a Lender shall become aware that it is entitled to receive
a refund (whether by way of a direct payment or by offset) in respect
of a Non-Excluded Tax paid by the Borrower, which refund, in the good
faith judgment of such Lender, is allocable to such payment made
pursuant to this Section, it shall promptly notify the Borrower of the
availability of such refund and shall, within 30 days after the
receipt of a request from the Borrower, apply for such refund at the
Borrower's sole expense. If any Lender receives such refund (as
described in the preceding sentence), it shall repay the amount of
such refund (together with any interest received thereon) to the
Borrower if all the payments due under this Section has been paid in
full.
2.16. Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of Eurodollar
Loans on a day which is not the last day of an Interest Period with respect
thereto (but excluding loss of margin). Such indemnification under this
subsection 2.16 may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans
provided for herein (but excluding loss of margin) over (ii) the amount of
interest (as reasonably determined by such Lender) which would have accrued to
such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank eurodollar market. Each Lender
claiming any payment pursuant to this subsection 2.16 shall do so by giving
notice thereof to the Borrower and the Administrative Agent (showing
calculation of the
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amount claimed in reasonable detail) within 60 Business Days after a failure to
borrow, convert or continue Eurodollar Loans, or to prepay, after notice or
after a prepayment of Eurodollar Loans on a day which is not the last day of an
Interest Period therefor. This covenant shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
2.17. Replacement of Lenders. If at any time (a) the Borrower becomes
obligated to pay additional amounts described in subsections 2.13, 2.14 or 2.15
as a result of any condition described in such subsections, (b) any Lender
ceases to make Eurodollar Loans pursuant to subsection 2.13, (c) any Lender
becomes insolvent and its assets become subject to a receiver, liquidator,
trustee, custodian or other Person having similar powers or (d) any Lender
becomes a "Nonconsenting Lender" (hereinafter defined), then the Borrower may,
on five (5) Business Days' prior written notice to the Administrative Agent and
such Lender, replace such Lender by causing such Lender to (and such Lender
shall) assign pursuant to subsection 10.6 all of its rights and obligations
under this Agreement to a Lender or other entity selected by the Borrower and
acceptable to the Administrative Agent for a purchase price equal to the
outstanding principal amount of such Lender's Loans and all accrued interest
and fees and other amounts payable hereunder (including amounts payable under
subsection 2.16 as though such Loans were being paid instead of being
purchased); provided that (i) the Borrower shall have no right to replace the
Administrative Agent, (ii) neither the Administrative Agent nor any Lender
shall have any obligation to the Borrower to find a replacement Lender, (iii)
in the event of a replacement of a Nonconsenting Lender or a Lender to which
the Borrower becomes obligated to pay additional amounts under one of the
subsections described in clause (a) above, in order for the Borrower to be
entitled to replace such a Lender, such replacement must take place no later
than 180 days after (A) the date the Nonconsenting Lender shall have notified
the Borrower and the Administrative Agent of its failure to agree to any
requested consent, waiver or amendment or (B) the Lender shall have demanded
payment of additional amounts under one of the subsections described in clause
(a) above, as the case may be, and (iv) in no event shall the Lender hereby
replaced be required to pay or surrender to its replacement Lender or other
entity any of the fees received by such Lender hereby replaced pursuant to this
Agreement. In the case of a replacement of a Lender to which the Borrower
becomes obligated to pay additional amounts pursuant to this subsection 2.17,
the Borrower shall pay such additional amounts to such Lender prior to such
Lender being replaced and the payment of such additional amounts shall be a
condition to the replacement of such Lender. In the event that (x) the Borrower
or the Administrative Agent has requested the Lenders to consent to a departure
or waiver of any provisions of the Credit Documents or to agree to any
amendment thereto, (y) the consent, waiver or amendment in question requires
the agreement of all Lenders in accordance with the terms of subsection 10.1
and (z) the Required Lenders have agreed to such consent, waiver or amendment,
then any Lender who does not agree to such consent, waiver or amendment shall
be deemed a "Nonconsenting Lender."
2.18. Certain Fees. The Borrower agrees to pay to the Administrative
Agent, for its own account, the non-refundable fees at the times and in the
amounts as set forth in that certain fee letter between the Administrative
Agent and the Borrower dated on or about the date hereof.
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2.19. Certain Rules Relating to the Payment of Additional Amounts. (a)
Upon the request, and at the expense, of the Borrower, each Lender to
which the Borrower is required to pay any additional amount pursuant
to subsection 2.14 or 2.15 shall reasonably afford the Borrower the
opportunity to contest, and reasonably cooperate with the Borrower in
contesting, the imposition of any Non-Excluded Taxes or other amounts
giving rise to such payment; provided that (i) such Lender shall not
be required to afford the Borrower the opportunity to so contest
unless the Borrower shall have confirmed in writing to such Lender its
obligation to pay such amounts pursuant to this Agreement and (ii) the
Borrower shall reimburse such Lender for its reasonable attorneys' and
accountants' fees and disbursements incurred in so cooperating with
the Borrower in contesting the imposition of such Non-Excluded Taxes.
(b) Each Lender agrees that if it makes any demand for payment
under subsection 2.14 or 2.15(a), or if any adoption or change of the
type described in subsection 2.13 shall occur with respect to it, it
will use reasonable efforts (consistent with its internal policy and
legal and regulatory restrictions and so long as such efforts would
not be disadvantageous to it, as determined in its reasonable
discretion) to designate a different lending office if the making of
such a designation would allow the Lender to continue to make and
maintain Eurodollar Loans and would reduce or obviate the need for the
Borrower to make payments under subsection 2.14 or 2.15(a), or would
eliminate or reduce the effect of any adoption or change described in
subsection 2.13.
SECTION 3. LETTERS OF CREDIT
3.1. L/C Commitment. (a) Subject to the terms and conditions hereof,
the Issuing Lender, in reliance on the agreements of the Revolving
Credit Lenders set forth in subsection 3.4(a), agrees to issue letters
of credit ("Letters of Credit") for the account of the Borrower on any
Business Day during the Revolving Credit Commitment Period in such
form as may be approved from time to time by the Issuing Lender;
provided that the Issuing Lender shall have no obligation to issue any
Letter of Credit if, after giving effect to such issuance, (x) the L/C
Obligations would exceed the Revolving Credit Commitment or (y) the
Available Commitment with respect to Revolving Credit Loans of all
Revolving Credit Lenders less the aggregate principal amount of the
Swing Line Loans then outstanding would be less than zero.
(b) Each Domestic L/C shall (i) be denominated in Dollars, (ii)
be a Performance L/C or a Financial L/C issued to support obligations
of the Borrower or any of its Subsidiaries, contingent or otherwise,
or be a commercial letter of credit for the purchase of goods and
(iii) expire no later than the fifth Business Day prior to the
Termination Date.
(c) Each Foreign L/C shall (i) be denominated in an Alternative
Currency, (ii) be a Performance L/C or a Financial L/C issued to
support
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obligations of the Borrower or any of its Subsidiaries, contingent or
otherwise, or be a commercial letter of credit for the purchase of
goods, and (iii) expire no later than the fifth Business Day prior to
the Termination Date. For purposes of this Agreement, the amount
deemed outstanding under each Foreign L/C at any time, and the amount
of the Borrower's Reimbursement Obligations under subsection 3.5 for
any amounts paid by the Issuing Lender in connection with any Foreign
L/C, shall be the Dollar Equivalent, as determined on the most recent
Calculation Date, of (x) such Letter of Credit or (y) the
Reimbursement Amount (as defined in Subsection 3.5(a)), as applicable.
(d) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, Domestic L/Cs shall
also be subject to the laws of the State of New York.
(e) The Issuing Lender shall not at any time be obligated to
issue any Letter of Credit hereunder if (i) such issuance would
conflict with, or cause the Issuing Lender or any L/C Participant to
exceed any limits imposed by, any applicable Requirement of Law or any
policies of the Issuing Lender or (ii) in the case of any Foreign L/C,
it has determined that it cannot provide such Letter of Credit in the
applicable Alternative Currency.
3.2. Procedure for Issuance of Letters of Credit. The Borrower may
from time to time request that the Issuing Lender issue a Letter of Credit at
any time prior to the fifth Business Day prior to the Termination Date by
delivering to the Issuing Lender with a copy to the Administrative Agent at its
address for notices specified herein an Application therefor, completed to the
satisfaction of the Issuing Lender, and such other certificates, documents and
other papers and information as the Issuing Lender may reasonably request. Upon
receipt of any Application, the Issuing Lender will process such Application
and the certificates, documents and other papers and information delivered to
it in connection therewith in accordance with its customary procedures and
shall promptly issue the Letter of Credit requested thereby (but in no event
shall the Issuing Lender be required to issue any Letter of Credit earlier than
three Business Days after its receipt of the Application therefor and all such
other certificates, documents and other papers and information relating
thereto) by issuing the original of such Letter of Credit to the beneficiary
thereof or as otherwise may be agreed by the Issuing Lender and the Borrower.
The Issuing Lender shall furnish a copy of such Letter of Credit to the
Borrower and the Administrative Agent (with copies for each Lender) promptly
following the issuance thereof.
3.3. Fees, Commissions and Other Charges. (a) The Borrower shall pay
to the Administrative Agent, for the account of the Issuing Lender and
the L/C Participants, a letter of credit fee with respect to each
Letter of Credit, computed for the period from and including the date
of issuance of such Letter of Credit to the expiration date of such
Letter of Credit at a rate per annum equal to (i) in the case of any
such Letter of Credit issued as a Performance L/C, one-half (1/2) of
the Applicable Margin then in effect for Eurodollar Loans, of the
Dollar Equivalent of the aggregate face amount of such Letters of
Credit outstanding and (ii) in the case of any other Letter of Credit
(except for the type described in
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clause (i) above), the Applicable Margin then in effect for Eurodollar
Loans, of the Dollar Equivalent of the aggregate face amount of such
Letters of Credit outstanding, payable, in each such case, in arrears
on each L/C Fee Payment Date and on the Termination Date; provided,
that, with respect to any Foreign L/C, the Dollar Equivalent of the
face amount of such Letter of Credit shall be recalculated on each
Calculation Date during the period that such Letter of Credit is
outstanding. Such fees shall be payable to the Administrative Agent to
be shared ratably among the Revolving Credit Lenders in accordance
with their respective Commitment Percentages. In addition, the
Borrower shall pay to the Issuing Lender, for its sole account, a fee
equal to 0.1250% per annum of the Dollar Equivalent of the aggregate
face amount of all outstanding Letters of Credit payable quarterly in
arrears on each L/C Fee Payment Date and on the Termination Date;
provided, that, with respect to any Foreign L/C, the Dollar Equivalent
of the face amount of such Letter of Credit shall be recalculated on
each Calculation Date during the period that such Letter of Credit is
outstanding.
(b) In addition to the foregoing fees and commissions, the
Borrower shall pay or reimburse the Issuing Lender for such normal and
customary costs and expenses as are incurred or charged by the Issuing
Lender in issuing, effecting payment under, amending or otherwise
administering any Letter of Credit.
(c) The Administrative Agent shall, promptly following its
receipt thereof, distribute to the Issuing Lender and the relevant L/C
Participants all fees and commissions received by the Administrative
Agent for their respective accounts pursuant to this subsection.
3.4. L/C Participation. (a) The Issuing Lender irrevocably agrees to
sell and hereby sells to each L/C Participant, and, to induce the
Issuing Lender to issue Letters of Credit hereunder, each L/C
Participant irrevocably agrees to accept and purchase and hereby
accepts and purchases from the Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant's own account
and risk an undivided interest equal to such L/C Participant's
Commitment Percentage from time to time in effect in the Issuing
Lender's obligations and rights under each Letter of Credit issued
hereunder and the amount of each draft paid by the Issuing Lender
thereunder. Each L/C Participant unconditionally and irrevocably
agrees with the Issuing Lender that, if a draft is paid under any
Letter of Credit for which the Issuing Lender is not reimbursed in
full by the Borrower in accordance with the terms of this Agreement or
any such reimbursement payment received by the Issuing Lender is
avoided or required to be returned in accordance with applicable law,
such L/C Participant shall pay to the Issuing Lender upon demand in
Dollars at the Issuing Lender's address for notices specified herein
an amount equal to such L/C Participant's then Commitment Percentage
of the Dollar Equivalent of the amount of such draft (determined on
the date such draft is paid), or any part thereof, which is not so
indefeasibly reimbursed; provided that, if such demand is made prior
to 11:00 A.M., New York City time, on a Business Day,
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such L/C Participant shall make such payment to the Issuing Lender
prior to the end of such Business Day and otherwise such L/C
Participant shall make such payment on the next succeeding Business
Day.
(b) If any amount required to be paid by any L/C Participant to
the Issuing Lender pursuant to subsection 3.4(a) in respect of any
portion of any payment made by the Issuing Lender under any Letter of
Credit is paid to the Issuing Lender within three Business Days after
the date such payment is due, such L/C Participant shall pay to the
Issuing Lender on demand an amount equal to the product of (i) such
amount, times (ii) the daily average Federal Funds Effective Rate, as
quoted by the Issuing Lender, during the period from and including the
date such payment is required to the date on which such payment is
immediately available to the Issuing Lender, times (iii) a fraction
the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. If any such amount
required to be paid by any L/C Participant pursuant to subsection
3.4(a) is not in fact made available to the Issuing Lender by such L/C
Participant within three Business Days after the date such payment is
due, the Issuing Lender shall be entitled to recover from such L/C
Participant, on demand, such amount with interest thereon calculated
from such due date at the rate per annum applicable to Base Rate Loans
hereunder. A certificate of the Issuing Lender submitted to any L/C
Participant with respect to any amounts owing under this subsection
shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C
Participant its pro rata share of such payment in accordance with
subsection 3.4(a), the Issuing Lender receives any payment related to
such Letter of Credit (whether directly from the Borrower or
otherwise, including proceeds of collateral applied thereto by the
Issuing Lender), or any payment of interest on account thereof, the
Issuing Lender will, if such payment is received prior to 11:00 A.M.,
New York City time, on a Business Day, distribute to such L/C
Participant its pro rata share thereof prior to the end of such
Business Day and otherwise the Issuing Lender will distribute such
payment on the next succeeding Business Day; provided, however, that
in the event that any such payment received by the Issuing Lender and
distributed to the L/C Participants shall be required to be returned
by the Issuing Lender, each such L/C Participant shall return to the
Issuing Lender the portion thereof previously distributed by the
Issuing Lender to it.
3.5. Reimbursement Obligation of the Borrower. (a) The Borrower agrees
to reimburse the Issuing Lender on the same Business Day on which the
Issuing Lender notifies the Borrower of the date and amount of a draft
presented under any Letter of Credit and paid by the Issuing Lender
provided such notice is received by 1:00 P.M., New York City time, on
such Business Day, and the next Business Day if such notice is
received after such time. The Issuing Lender shall provide notice to
the Borrower on each Business Day on which a draft is
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presented indicating the Dollar Equivalent of the amount of (i) such
draft so paid (and, in the case of a Foreign L/C, the amount of such
draft so paid stated in the applicable Alternative Currency) and (ii)
any taxes, fees, charges or other costs or expenses incurred by the
Issuing Lender in connection with such payment ((i) and (ii)
collectively with any interest accruing pursuant to paragraph (b)
below, the "Reimbursement Amount"). Each such payment shall be made to
the Issuing Lender at its address for notices specified herein in
lawful money of the United States of America and in immediately
available funds; provided, that, with respect to any Reimbursement
Obligations of the Borrower arising from the presentment to the
Issuing Lender of a draft under a Foreign L/C, the Borrower may make
payment in the applicable Alternative Currency if such payment is
received by the Issuing Lender on the date such draft is paid by the
Issuing Lender.
(b) Interest shall be payable on the Dollar Equivalent of any and
all amounts remaining unpaid by the Borrower under this subsection
from the date a draft presented under any Letter of Credit is paid by
the Issuing Lender until payment in full (i) at the rate which would
be payable on any Loans that are Base Rate Loans at such time until
such payment is required to be made pursuant to subsection 3.5(a), and
(ii) thereafter, at the rate which would be payable on any Loans that
are Base Rate Loans at such time which were then overdue.
(c) For the avoidance of doubt, subject to the provisos in the
third sentence of subsection 2.12(a) and the last sentence of
subsection 3.5(a) of this Agreement, all payments due from the
Borrower hereunder in respect of Foreign L/Cs (and Reimbursement
Obligations in connection therewith) shall be made in Dollars as
provided in subsection 2.12 of this Agreement.
3.6. Obligations Absolute. (a) The Borrower's obligations under
subsection 3.5(a) shall be absolute and unconditional under any and
all circumstances and irrespective of any set-off, counterclaim or
defense to payment which the Borrower may have or have had against the
Issuing Lender, any L/C Participant or any beneficiary of a Letter of
Credit.
(b) The Borrower also agrees with the Issuing Lender that the
Issuing Lender shall not be responsible for, and the Borrower's
Reimbursement Obligations under subsection 3.5(a) shall not be
affected by, among other things, (i) the validity or genuineness of
documents or of any endorsements thereon, even though such documents
shall in fact prove to be invalid, fraudulent or forged (unless the
Issuing Lender has knowledge of such invalidity, fraud or forgery),
(ii) any dispute between or among the Borrower and any beneficiary of
any Letter of Credit or any other party to which such Letter of Credit
may be transferred, or (iii) any claims whatsoever of the Borrower
against any beneficiary of such Letter of Credit or any such
transferee.
(c) Neither the Issuing Lender nor any L/C Participant shall be
liable for any error, omission, interruption or delay in transmission,
dispatch or delivery
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of any message or advice, however transmitted, in connection with
any Letter of Credit, except for errors or omissions caused by the
Issuing Lender's gross negligence or willful misconduct.
(d) The Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the
related drafts or documents, if done in the absence of gross
negligence or willful misconduct and in accordance with the standards
of care specified in the Uniform Commercial Code of the State of New
York, shall be binding on the Borrower and shall not result in any
liability of the Issuing Lender or any L/C Participant to the
Borrower.
3.7. Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Lender shall promptly notify
the Borrower and the Administrative Agent of the date and the Dollar Equivalent
of the amount thereof (and, in the case of a Foreign L/C, the amount thereof
stated in the applicable Alternative Currency). If any draft shall be presented
for payment under any Letter of Credit, the responsibility of the Issuing
Lender to the Borrower in connection with such draft shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment appear on their face to be
in conformity with such Letter of Credit.
3.8. Application.
To the extent that any provision of any Application related to any
Letter of Credit is inconsistent with the provisions of this Section 3, the
provisions of this Section 3 shall govern and control.
3.9. Determination of Exchange Rate.
On each Calculation Date with respect to each outstanding Foreign L/C,
the Issuing Lender shall determine the Exchange Rate as of such Calculation
Date with respect to the applicable Alternative Currency and shall promptly
notify the Administrative Agent and the Borrower thereof and of the Dollar
Equivalent of all Foreign L/Cs outstanding on such Calculation Date. The
Exchange Rate so determined shall become effective on such Calculation Date and
shall remain effective until the next succeeding Calculation Date.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents, the Issuing Lender, the Swing Line Lender and
the Lenders to enter into this Agreement and to make the Loans and issue or
participate in the Letters of Credit, the Borrower hereby represents and
warrants to the Agents, the Issuing Lender, the Swing Line Lender and each
Lender that:
4.1. Financial Condition.
(a) The following financial statements concerning Borrower and
its Subsidiaries have been delivered to the Agents and the Lenders and
have been prepared in accordance with GAAP consistently applied
throughout the periods
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covered (except as disclosed therein and except, with respect to
unaudited financial statements, for the absence of footnotes and
normal year-end audit adjustments) and present fairly in all material
respects the financial position of the Persons covered thereby as at
the dates thereof and the results of their operations and cash flows
for the periods then ended:
(i) The audited consolidated balance sheets at December 31, 1997 and
the related statements of income and cash flows of Borrower and its
Subsidiaries for the fiscal year then ended, certified by Price Waterhouse
Coopers L.L.P.
(ii) The unaudited condensed consolidated balance sheet(s) at March
31, 1998 and the related statement(s) of income and cash flows of Borrower
and its Subsidiaries for the fiscal quarter then ended.
(b) The unaudited pro forma consolidated balance sheet of the
Borrower and its consolidated Subsidiaries which has been delivered
pursuant to subsection 5.1(o) has been prepared based on the best
information available to the Borrower as of the date of delivery
thereof and presents fairly on a pro forma basis the estimated
financial position of the Borrower and its consolidated Subsidiaries,
as at June 30, 1998, adjusted to give effect to the acquisition of SPD
Technologies.
4.2. No Change. Since December 31, 1997 there has been no development,
event or circumstance which has had or could reasonably be expected to have a
Material Adverse Effect.
4.3. Corporate Existence; Compliance with Law. Each of Holdings, the
Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is, or will be on or before the
date set forth in subsection 6.12, duly qualified as a foreign corporation and
in good standing under the laws of each jurisdiction where its ownership, lease
or operation of property or the conduct of its business requires such
qualification, except to the extent that the failure to so qualify could not,
in the aggregate, reasonably be expected to have a Material Adverse Effect and
(d) is in compliance with all Requirements of Law except to the extent that the
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.
4.4. Corporate Power; Authorization; Enforceable Obligations. Each of
Holdings, the Borrower and its Subsidiaries has the corporate power and
authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party and, in the case of the Borrower, to borrow
hereunder and has taken all necessary corporate action to authorize the
borrowings on the terms and conditions of this Agreement and to authorize the
execution, delivery and performance of such Credit Documents. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
borrowings hereunder or with the execution, delivery,
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performance, validity or enforceability of the Credit Documents to which the
Borrower and each other Credit Party is a party, except those referred to in
subsections 4.17 and 6.13 and those set forth on Schedule 4.4. This Agreement
has been, and each other Credit Document will be, duly executed and delivered
on behalf of the Borrower and each other Credit Party. This Agreement
constitutes, and each other Credit Document to which it is a party when
executed and delivered will constitute, a legal, valid and binding obligation
of each Credit Party thereto enforceable against each such Credit Party, as the
case may be, in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a proceeding in equity or
at law) and an implied covenant of good faith and fair dealing.
4.5. No Legal Bar. Except as set forth on Schedule 4.5 or as could not
reasonably be expected to, individually or in the aggregate, have a Material
Adverse Effect, the execution, delivery and performance of each Credit
Document, the borrowing and use of the proceeds of the Loans and the
consummation of the transactions contemplated by the Credit Documents: (a) will
not violate any Requirement of Law or any Contractual Obligation applicable to
or binding upon Holdings, the Borrower or any Subsidiary of the Borrower or any
of their respective properties or assets and (b) will not result in the
creation or imposition of any Lien on any of its properties or assets pursuant
to any Requirement of Law applicable to it or any of its Contractual
Obligations, except for the Liens arising under the Pledge Agreements.
4.6. No Material Litigation. Except as set forth on Schedule 4.6, no
litigation by, investigation by, or proceeding of or before any arbitrator or
any Governmental Authority is pending or, to the knowledge of the Borrower,
overtly threatened by or against the Borrower or any of its Subsidiaries or
against any of its or their respective properties or revenues with respect to
any Credit Document or any of the transactions contemplated hereby or thereby
or which could reasonably be expected to have a Material Adverse Effect.
4.7. No Default. Neither Holdings, the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a
Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.
4.8. Ownership of Property; Liens. Each of Holdings, the Borrower and
its Subsidiaries (i) has good record and insurable title in fee simple to all
the real property listed on Schedule 4.8, (ii) has good record and insurable
title in fee simple to, or a valid leasehold interest in, all its other
material real property, (iii) has good title to, or a valid leasehold interest
in, all its other material property and (iv) none of such property in clauses
(i) through (iii) is or shall be subject to any Lien except as permitted by
subsection 7.3.
4.9. Intellectual Property. Holdings, the Borrower and each of its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted except for those the failure to own or license
which could not reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). To the best of the Borrower's knowledge, and except
as set
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forth on Schedule 4.9, no claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor does the
Borrower know of any valid basis for any such claim which could reasonably be
expected to have a Material Adverse Effect. The use of such Intellectual
Property by Holdings, the Borrower and its Subsidiaries does not infringe on
the rights of any Person, except for such claims and infringements that, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
4.10. Taxes. Except as set forth on Schedule 4.10, each of Holdings,
the Borrower and its Subsidiaries has filed or caused to be filed all material
tax returns which, to the knowledge of the Borrower, are required to be filed
and has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other material
taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of Holdings, the Borrower or its Subsidiaries, as the case may be); no
tax Lien has been filed, and, to the knowledge of the Borrower, no claim is
being asserted, with respect to any such tax, fee or other charge.
4.11. Federal Regulations. No part of the proceeds of any Loans will
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect.
4.12. ERISA. The Borrower has provided to the Agents a true and
correct copy of all Agreements, arrangements and understandings relating to the
transfer of Plans from the Seller to the Borrower (the "Transfer Agreements").
The Transfer Agreements are in full force and effect and have not been waived
or modified without the consent of the Agents (which shall not be unreasonably
withheld) except to the extent any such waiver or modification, singly or in
the aggregate, could not be reasonably expected to have a Material Adverse
Effect. Except as could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, no Reportable Event has occurred
with respect to any Single Employer Plan, all contributions required to be made
with respect to a Plan have been timely made; none of the Borrower or any of
its Subsidiaries nor any Commonly Controlled Entity has incurred any material
liability to or on account of a Plan pursuant to Section 409, 502(i), 502(1),
515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29),
4971, 4975 or 4980 of the Code or expects to incur any liability (including any
indirect, contingent or secondary liability) under any of the foregoing
Sections with respect to any Plan; no termination or, or institution of
proceedings to terminate or appoint a trustee to administer, a Single Employer
Plan has occurred; and each Plan has complied in all material respects with the
applicable provisions of ERISA and the Code (except that with respect to any
Multiemployer Plan, such representation is deemed made only to the knowledge of
the Borrower). No "accumulated funding deficiency" (within the meaning of
Section 412 of the Code or Section 302 of ERISA), extension of any amortization
period (within the meaning of Section 412 of the Code) or Lien in favor of the
PBGC or a Plan has arisen or has occurred during the five-year period prior to
the date on which
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this representation is made or deemed made with respect to any Single Employer
Plan. As of the last annual valuation date prior to the date on which this
representation is made or deemed made, the fair market value of the assets
available for benefits under each Single Employer Plan did not exceed the
actuarial present value of all accumulated benefit obligations under such Plan
by more than $20,000,000, all as determined in accordance with Statement of
Financial Accounting Standards No. 87. Neither the Borrower nor any Commonly
Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan for which there is any outstanding liability, and neither
the Borrower nor any Commonly Controlled Entity would become subject to any
liability under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made in an amount which would be reasonably likely to have a Material
Adverse Effect. To the best knowledge of the Borrower, no such Multiemployer
Plan is in Reorganization or Insolvent.
4.13. Investment Company Act; Other Regulations. None of the Borrower
or any of its Subsidiaries is an "investment company," or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended. None of the Borrower or any of its
subsidiaries is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
4.14. Subsidiaries. The Subsidiaries of the Borrower and their
respective jurisdictions of incorporation shall be as set forth on Schedule
4.14.
4.15. Purpose of Loans. The proceeds of the Loans shall be used by the
Borrower (i) to pay fees and expenses related to the preparation and
negotiation of this Agreement and the other Credit Documents and (ii) for
general corporate and working capital purposes in the ordinary course of
business of the Borrower and its Subsidiaries, including, without limitation,
the making of Investments permitted under subsection 7.9.
4.16. Environmental Matters.
Except insofar as any exception to any of the following, or any
aggregation of such exceptions, is not reasonably likely to result in a
Material Adverse Effect:
(a) The facilities and properties owned, leased or operated
Holdings, by the Borrower or any of its Subsidiaries (the
"Properties") do not contain, and have not previously contained, any
Materials of Environmental Concern in amounts or concentrations which
(i) constitute or constituted a violation of, or (ii) could reasonably
be expected to give rise to liability under, any applicable
Environmental Law.
(b) None of Holdings, the Borrower nor any of its Subsidiaries
has received any written notice of violation, alleged violation,
non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the Business, nor does
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the Borrower have knowledge or reason to believe that any such
notice will be received or is being threatened.
(c) Materials of Environmental Concern have not been transported
or disposed of from the Properties in violation of, or in a manner or
to a location which could reasonably be expected to give rise to
liability under, any applicable Environmental Law, nor have any
Materials of Environmental Concern been generated, treated, stored or
disposed of at, on or under any of the Properties in violation of, or
in a manner that could reasonably be expected to give rise to
liability under, any applicable Environmental Law.
(d) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened,
under any Environmental Law to which Holdings, the Borrower or any
Subsidiary is or, to the knowledge of the Borrower, will be named as a
party or with respect to the Properties or the Business, nor are there
any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to
the Properties or the Business.
(e) There has been no release or threat of release of Materials
of Environmental Concern at or from the Properties, or arising from or
related to the operations of Holdings, the Borrower or any Subsidiary
in connection with the Properties or otherwise in connection with the
Business, in violation of or in amounts or in a manner that could
reasonably give rise to liability under any applicable Environmental
Laws.
(f) The Properties and all operations at the Properties are in
compliance, and have in the last 3 years been in compliance, in all
material respects with all applicable Environmental Laws, and there is
no contamination at, under or about the Properties or violation of any
applicable Environmental Law with respect to the Properties or the
business operated by Holdings, the Borrower or any of its Subsidiaries
(the "Business") which could materially interfere with the continued
operation of the Properties or materially impair the fair saleable
value thereof.
(g) Holdings, the Borrower and its Subsidiaries hold and are in
compliance with all Environmental Permits necessary for their
operations.
4.17. Collateral Documents. Upon execution and delivery thereof by the
parties thereto, each Pledge Agreement will be effective to create in favor of
the Administrative Agent, for the ratable benefit of the Lenders, a legal,
valid and enforceable security interest in the pledged stock described therein
and, when stock certificates representing or constituting the pledged stock
described therein are delivered to the Administrative Agent, together with
undated stock powers executed in blank therefor, such security interest shall,
subject to the existence of
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Permitted Liens, constitute a perfected first lien on, and security interest
in, all right, title and interest of the pledgor party thereto in the pledged
stock described therein.
4.18. Accuracy and Completeness of Information. No fact is known to
Holdings, the Borrower or any of its Subsidiaries which has had or could
reasonably be expected to have a Material Adverse Effect, which has not been
disclosed to the Lenders by Holdings, the Borrower or its Subsidiaries in
writing prior to the date hereof. Neither Holdings, the Borrower nor any
Subsidiary of the Borrower is aware of any material liability of the Borrower
or any of its Subsidiaries which is not fully disclosed in the most recent
financial statements delivered to the Agents and Lenders pursuant to
subsections 4.1 and 6.1 hereto.
4.19. Labor Matters. There are no strikes pending or, to the
Borrower's knowledge, overtly threatened against Holdings, the Borrower or any
of its Subsidiaries which, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect. The hours worked and payments
made to employees of Holdings, the Borrower and each of its Subsidiaries (and
their predecessors) have not been in violation of the Fair Labor Standards Act
or any other applicable Requirement of Law, except to the extent such
violations could not, or in the aggregate, be reasonably expected to have a
Material Adverse Effect.
SECTION 5. CONDITIONS PRECEDENT
5.1. Conditions to Initial Loans. The agreement of each Lender to make
the initial extension of credit requested to be made by it is subject to the
satisfaction, immediately prior to or concurrently with the making of such
extension of credit (including the making of any Loan or the issuance of any
Letter of Credit) on the Closing Date, of the following conditions precedent:
(a) Credit Documents. The Administrative Agent shall have
received (i) this Agreement, (ii) the Guarantees and (iii) the Pledge
Agreements, in each case executed, duly acknowledged and delivered by
duly authorized officers of each party thereto, with a counterpart or
a conformed copy for each Lender. Notwithstanding the foregoing, no
Immaterial Subsidiary or Foreign Subsidiary of the Borrower shall be
required to execute a Subsidiary Guarantee or Subsidiary Pledge
Agreement, and no more than 65% of the capital stock of or equity
interests in any Foreign Subsidiary of the Borrower or any of its
Subsidiaries if more than 65% of the assets of such Subsidiary are
securities of foreign companies (such determination to be made on the
basis of fair market value), shall be required to be pledged
hereunder.
(b) Fees and Expenses. The Agents, the Arrangers and the Lenders
shall have received all fees, expenses and other consideration
required to be paid on or before the Closing Date and all attorneys
fees and disbursements incurred by the Agents in connection with this
Agreement shall have been paid on or before the Closing Date.
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(c) Good Standing Certificates. The Administrative Agent shall
have received certificates of good standing for each Credit Party
issued by the Secretary of State (or other relevant governmental
officers) of the jurisdiction of incorporation of each Credit Party.
(d) Consents, Authorizations and Filings, Etc. All consents,
authorizations and filings, if any, required in connection with the
execution, delivery and performance by the Credit Parties, and the
validity and enforceability against the Credit Parties, of the Credit
Documents to which any of them is a party, shall have been obtained or
made, and such consents, authorizations and filings shall be in full
force and effect, except such consents, authorizations and filings,
the failure to obtain which would not have a Material Adverse Effect.
(e) Insurance. The Lenders shall have received (i) a reasonably
satisfactory schedule describing all insurance maintained by the
Borrower and its Subsidiaries pursuant to subsection 6.5, and (ii)
binders (or other customary evidence as to the obtaining and
maintenance by the Borrower and its Subsidiaries of such insurance)
for each policy set forth on such schedule insuring against casualty
and other usual and customary risks.
(f) Litigation. On the Closing Date, there shall be no actions,
suits or proceedings pending or threatened against any Credit Party
(a) with respect to this Agreement or any other Credit Document or any
Transaction Document or the transactions contemplated hereby or
thereby or (b) which the Agents or the Required Lenders shall
determine could reasonably be expected to have a Material Adverse
Effect.
(g) Borrowing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of the
Borrower, dated the Closing Date, substantially in the form of Exhibit
D, with appropriate insertions and attachments, reasonably
satisfactory in form and substance to the Administrative Agent,
executed by the President or any Vice President and the Secretary or
any Assistant Secretary of the Borrower.
(h) Corporate Proceedings of the Borrower. The Administrative
Agent shall have received, with a counterpart for each Lender, a copy
of the resolutions, in form and substance reasonably satisfactory to
the Administrative Agent, of the Board of Directors of the Borrower
authorizing (i) the execution, delivery and performance of the Credit
Documents to which it is a party, (ii) the borrowings contemplated
hereunder, and (iii) the stock pledges pursuant to the Borrower Pledge
Agreement, certified by the Secretary or an Assistant Secretary of the
Borrower as of the Closing Date, which certificate shall be in form
and substance reasonably satisfactory to the Administrative Agent and
shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded.
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(i) Borrower Incumbency Certificate. The Administrative Agent
shall have received, with a counterpart for each Lender, a Certificate
of the Borrower, dated the Closing Date, as to the incumbency and
signature of the officers of the Borrower executing any Credit
Document reasonably satisfactory in form and substance to the
Administrative Agent, executed by the President or any Vice President
and the Secretary or any Assistant Secretary of the Borrower.
(j) Corporate Proceedings of Other Credit Parties. The
Administrative Agent shall have received, with a counterpart for each
Lender, a copy of the resolutions, in form and substance satisfactory
to the Administrative Agent, of the Board of Directors of each Credit
Party (other than the Borrower) authorizing (i) the execution,
delivery and performance of the Credit Documents to which it is a
party, and (ii) the granting by it of the Liens created pursuant to
the Pledge Agreements to which it is a party, certified by the
Secretary or an Assistant Secretary of each such Credit Party as of
the Closing Date, which certificate shall be in form and substance
reasonably satisfactory to the Administrative Agent and shall state
that the resolutions thereby certified have not been amended,
modified, revoked or rescinded.
(k) Credit Party Incumbency Certificates. The Administrative
Agent shall have received, with a counterpart for each Lender, a
certificate of each Credit Party (other than the Borrower), dated the
Closing Date, as to the incumbency and signature of the officers of
such Credit Party executing any Credit Document, reasonably
satisfactory in form and substance to the Administrative Agent,
executed by the President or any Vice President and the Secretary or
any Assistant Secretary of each such Credit Party.
(l) Corporate Documents. The Administrative Agent shall have
received, with a counterpart for each Lender, true and complete copies
of the certificate of incorporation and by-laws of each Credit Party,
certified as of the Closing Date as complete and correct copies
thereof by the Secretary or an Assistant Secretary of the such Credit
Party.
(m) Legal Opinions. The Administrative Agent shall have received,
with a counterpart for each Lender the executed legal opinion of each
of Simpson Thacher and Bartlett, special counsel to the Credit
Parties, and Christopher C. Cambria, Vice President - General Counsel
and Secretary of the Borrower and counsel to the other Credit Parties,
substantially in the form of Exhibits C-1 and C-2, respectively. Each
such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Agents may
reasonably require.
(n) Pledged Stock; Stock Powers. The Administrative Agent shall
have received the certificates representing the shares pledged
pursuant to each of the Pledge Agreements together with an undated
stock power for each such certificate executed in blank by a duly
authorized officer of the pledgor thereof.
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(o) Pro Forma Financials. The Lenders shall have received a
reasonably satisfactory unaudited pro forma consolidated balance sheet
of the Borrower and its Subsidiaries as of June 30, 1998 (after the
issuance of the New Subordinated Debt and the consummation of the New
IPO) which shall present fairly, in all material respects, on a pro
forma basis, the estimated financial condition of the Borrower and its
Subsidiaries as of such date, as adjusted to give effect to the
acquisition by the Borrower of SPD Technologies pursuant to the SPD
Technologies Acquisition Agreement.
(p) Projections. Each Lender shall have received financial
projections of the Borrower in form and substance reasonably
satisfactory to the Agents prepared by the Borrower.
(q) No Default. No Default or Event of Default shall have
occurred and be continuing.
(r) Facility B Credit Agreement. All conditions set forth in
clauses (a) through (q) of subsection 5.1 of the Facility B Credit
Agreement shall have been satisfied.
5.2. Conditions to Each Extension of Credit. The agreement of each
Lender to make any extension of credit (including the issuance of any Letter of
Credit) requested to be provided by it on any date (including, without
limitation, its initial Loan and Letter(s) of Credit but excluding Revolving
Credit Loans made to repay Refunded Swing Line Loans) is subject to the
satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations
and warranties made by any Credit Party in or pursuant to the Credit
Documents shall be true and correct in all material respects on and as
of such date as if made on and as of such date, except for any
representation and warranty which is expressly made as of an earlier
date, which representation and warranty shall have been true and
correct in all material respects as of such earlier date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or will occur or exist after
giving effect to the extensions of credit requested to be made on such
date. Borrower shall not be in violation of Section 4.09 {Incurrence
of Indebtedness and Issuance of Preferred Stock} of either the
Indenture or the New Subordinated Debt Indenture on such date nor will
such a violation occur or exist after giving effect to the extensions
of credit requested to be made on such date.
(c) Additional Matters. All corporate and other proceedings, and
all documents, instruments and other legal matters in connection with
the transactions contemplated by this Agreement and the other Credit
Documents shall be satisfactory in form and substance to the Agents,
and the Administrative Agent shall have received such other documents
and legal opinions in respect of
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any aspect or consequence of the transactions contemplated hereby
or thereby as it shall reasonably request.
Each borrowing by, and each Letter of Credit issued on behalf of, the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date thereof that the conditions contained in this subsection have been
satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect or any amount is owing to any Lender or any Agent hereunder or under any
other Credit Document, the Borrower shall and (except in the case of delivery
of financial information, reports and notices) shall cause each of its
Subsidiaries to:
6.1. SEC Filings. The Borrower will file on a timely basis with the
SEC, to the extent such filings are accepted by the SEC and whether or not the
Borrower has a class of securities registered under the Exchange Act, the
annual reports, quarterly reports (including with respect to the fourth quarter
of each fiscal year) and other documents that the Borrower would be required to
file if the Borrower were subject to section 13(a) or 15(d) of the Exchange
Act. The Borrower will also be required (i) to deliver to the Administrative
Agent and each Lender, copies of such reports and documents within five days
after the date on which the Borrower files such reports and documents with the
SEC or the date on which the Borrower would be required to file such reports
and documents if the Borrower were so required and (ii) if filing such reports
and documents with the SEC is not accepted by the SEC or is prohibited under
the Exchange Act, to promptly notify the Administrative Agent in writing of the
occurrence of any such event and to supply at the Borrower's cost copies of
such reports and documents to the Administrative Agent and any Lender upon
request.
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
6.2. Certificates; Other Information. Furnish to the Administrative
Agent with copies for each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsection 6.1, a certificate of the independent
certified public accountants reporting on such financial statements
stating that, in performing their audit, nothing came to their
attention that caused them to believe that the Borrower failed to
comply with the provisions of subsection 7.1, except as specified in
such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsection 6.1, a certificate of a Responsible Officer
stating that, to the best of such Officer's knowledge, during such
period (i) no Subsidiary has been formed
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or acquired (or, if any such Subsidiary has been formed or
acquired, the Borrower has complied with the requirements of
subsection 6.10 with respect thereto) and (ii) such Officer has
obtained no knowledge of any Default or Event of Default except as
specified in such certificate;
(c) concurrently with the delivery of financial statements
pursuant to subsection 6.1, a certificate of a Responsible Officer of
the Borrower setting forth, in reasonable detail, the computations, as
applicable, of (i) the Debt Ratio and (ii) the financial covenants set
forth in subsection 7.1, as of such last day or for the fiscal period
then ended, as the case may be;
(d) not later than 60 days after the end of each fiscal year of
the Borrower, a copy of the projections by the Borrower of the
operating budget and cash flow budget of the Borrower and its
Subsidiaries for the succeeding fiscal year, such projections to be
accompanied by a certificate of a Responsible Officer to the effect
that such projections have been prepared on the basis of sound
financial planning practice and that such Officer has no reason to
believe they are incorrect or misleading in any material respect;
(e) within five days after the same are sent, copies of all
financial statements and reports which the Borrower or Holdings sends
to its stockholders; and
(f) promptly, such additional financial and other information as
any Lender may from time to time reasonably request.
6.3. Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or its Subsidiaries, as the case may be.
6.4. Conduct of Business; Maintenance of Existence and Property;
Compliance with Law. Except as permitted by subsection 7.5 and subsection 7.6,
(a) continue to engage in business of the same general type as now conducted by
it; (b) preserve, renew and keep in full force and effect its corporate
existence and take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business; (c)
keep all property useful and necessary in its business in good working order
and condition (ordinary wear and tear and damage by fire and/or other casualty
or taking by condemnation excepted) except if (i) in the reasonable business
judgment of the Borrower or such Subsidiary, as the case may be, it is in its
best economic interest not to preserve and maintain such rights, privileges or
franchises, and (ii) such failure to preserve and maintain such privileges,
rights or franchises would not materially adversely affect the rights of the
Lenders hereunder or the value of the Collateral, and except as otherwise
permitted pursuant to subsection 7.5; and (d) comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, be reasonably expected to have a
Material Adverse Effect.
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6.5. Insurance. The Borrower will, and will cause each of its
Subsidiaries to maintain, with financially sound and reputable insurance
companies, insurance in such amounts and against such risks as are customarily
maintained by companies of similar stature engaged in the same or similar
businesses operating in the same or similar locations.
6.6. Inspection of Property; Books and Records; Discussions. Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records (except to the
extent any such access is restricted by a Requirement of Law) at any reasonable
time on a Business Day and as often as may reasonably be desired and to discuss
the business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants;
provided that the Administrative Agent or such Lender shall notify the Borrower
prior to any contact with such accountants and give the Borrower the
opportunity to participate in such discussions; provided, further, that the
Borrower shall notify the Administrative Agent of any such visits, inspections
or discussions prior to each occurrence thereof.
6.7. Notices. Promptly give notice to the Administrative Agent and
each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries, (ii)
litigation, investigation or proceeding which may exist at any time
between the Borrower or any of its Subsidiaries and any Governmental
Authority, which in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect or (iii) any material asset sale (describing
in reasonable detail the assets sold, the consideration received
therefor and the proposed use of the proceeds thereof);
(c) any other litigation or proceeding affecting the Borrower or
any of its Subsidiaries in which the amount involved is $7,500,000 or
more and not covered by insurance or in which injunctive or similar
relief is sought; and
(d) the following events, as soon as possible and in any event
within 45 days after the Borrower knows or has reason to know thereof:
(i) the incurrence of an accumulated funding deficiency or the filing
of an application to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under
Section 412 of the Code with respect to a Plan, the creation of any
Lien in favor of the PBGC or a Plan, the occurrence of any "Trigger
Event" (as defined in the Transfer Agreements) and the reassumption by
the Seller of sponsorship of any Single Employer Plan, (ii) except
where such
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event or liability could not reasonably be expected to have a
Material Adverse Effect, the occurrence or expected occurrence of any
Reportable Event with respect to any Plan (other than a Multiple
Employer Plan), or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan, or a failure
to make any required contribution to a Plan, (iii) the institution of
proceedings by the PBGC with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Single Employer Plan
or Multiemployer Plan or (iv) except as could not reasonably be
expected to have a Material Adverse Effect, the institution of
proceedings or the taking of any other action with respect to the
withdrawal from or termination of any Single Employer Plan;
Each notice pursuant to this subsection shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower proposes to take with respect
thereto.
6.8. Environmental Laws. (a)(i) Comply in all material respects
with all Environmental Laws applicable to it, and obtain, comply in
all material respects with and maintain any and all material
Environmental Permits necessary for its operations as conducted and as
planned; and (ii) take all reasonable efforts to ensure that all of
its tenants, subtenants, contractors, subcontractors, and invitees
comply in all material respects with all applicable Environmental
Laws, and obtain, comply in all material respects with and maintain
any and all material Environmental Permits, applicable to any of them.
Notwithstanding the foregoing, upon learning of any actual or
suspected noncompliance, the Borrower or one or more of its
Subsidiaries, as appropriate, shall promptly undertake all reasonable
efforts to achieve material compliance.
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions in each case
required under applicable Environmental Laws and promptly comply in
all material respects with all lawful orders and directives of all
Governmental Authorities regarding applicable Environmental Laws
except to the extent that the same are being contested in good faith
by appropriate proceedings and the pendency of such proceedings could
not be reasonably expected to have a Material Adverse Effect.
6.9. Further Assurances. Upon the reasonable request of the
Administrative Agent, promptly perform or cause to be performed any and all
acts and execute or cause to be executed and delivered any and all documents
which are necessary or advisable to maintain in favor of the Administrative
Agent, for the benefit of the Lenders, Liens on the Collateral that are duly
perfected in accordance with all applicable Requirements of Law.
6.10. Additional Collateral. (a) With respect to any Capital Stock of
any newly created or acquired Subsidiary or any newly issued Capital
Stock of any existing Subsidiary acquired after the Closing Date by
the Borrower or any of its Subsidiaries that is intended to be subject
to the Lien created by any of the Pledge
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Agreements but which is not so subject, promptly (and in any event
within 30 days after the acquisition thereof): (i) execute and deliver
to the Administrative Agent such amendments to the relevant Pledge
Agreements or such other documents as the Administrative Agent shall
deem necessary or advisable to grant to the Administrative Agent, for
the benefit of the Lenders, a Lien on such Capital Stock, (ii) take
all actions necessary or advisable to cause such Lien to be duly
perfected in accordance with all applicable Requirements of Law,
including delivering all such original certificates evidencing such
Capital Stock to the Administrative Agent together with undated stock
powers executed in blank therefor, and (iii) if requested by the
Administrative Agent or the Required Lenders, deliver to the
Administrative Agent legal opinions relating to the matters described
in clauses (i) and (ii) immediately preceding, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to
the Administrative Agent.
(b) With respect to any Person that, subsequent to the Closing
Date, becomes a direct or indirect Subsidiary of the Borrower,
promptly (and in any event within 30 days after such Person becomes a
Subsidiary): (i) cause such new Subsidiary to become a party to the
Subsidiary Pledge Agreement and the Subsidiary Guarantee and (ii) if
requested by the Administrative Agent or the Required Lenders, deliver
to the Administrative Agent legal opinions relating to the matters
described in clause (i) immediately preceding, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to
the Administrative Agent. Notwithstanding the foregoing, no Immaterial
Subsidiary or Foreign Subsidiary of the Borrower shall be required to
execute a Subsidiary Guarantee or Subsidiary Pledge Agreement, and no
more than 65% of the Capital Stock of or equity interests in any
Foreign Subsidiary of the Borrower or any of its Subsidiaries if more
than 65% of the assets of such Subsidiary are securities of foreign
companies (such determination to be made on the basis of fair market
value), shall be required to be pledged hereunder.
6.11. [Intentionally Omitted.]
6.12. Foreign Jurisdictions. Maintain due qualification as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except to the extent that the failure to so
qualify could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
6.13. Government Contracts. The Borrower and its Subsidiaries shall
apply for and maintain all material facility security clearances and personnel
security clearances required of the Borrower under all Requirements of Law to
perform and deliver under any and all Government Contracts and as otherwise may
be necessary to continue to perform the business of the Borrower and its
Subsidiaries.
6.14. Lien Searches.
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Not later than 45 days following the Closing Date, the Borrower shall
deliver to the Administrative Agent the results of a search of Uniform
Commercial Code, tax and judgment filings made with respect to each of the
Borrower and its Subsidiaries (other than any Immaterial Subsidiaries) in each
jurisdiction in which the Borrower or such applicable Subsidiary maintains its
principal place of business or any material assets and a certificate of a
Responsible Officer certifying that such lien search results do not disclose
any Liens, except for Liens permitted hereunder.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as any portion of the
Commitments remain in effect or any amount is owing to any Lender or any of the
Agents hereunder or under any other Credit Document, the Borrower shall not,
and (except with respect to subsection 7.1), shall not permit any of its
Subsidiaries to, directly or indirectly:
7.1. Financial Condition Covenants.
(a) Debt Ratio. Permit the Debt Ratio at the last day of any
fiscal quarter to be greater than the ratio set forth below opposite
the fiscal quarter during which such fiscal quarter occurs:
Fiscal Quarter Ending Ratio
--------------------- -----
September 30, 1998 5.00
December 31, 1998 5.00
March 31, 1999 5.00
June 30, 1999 5.00
September 30, 1999 4.75
December 31, 1999 4.75
March 31, 2000 4.75
June 30, 2000 4.75
September 30, 2000 4.50
December 31, 2000 4.50
March 31, 2001 4.50
June 30, 2001 4.50
September 30, 2001 3.75
December 31, 2001 3.75
March 31, 2002 3.75
June 30, 2002 3.75
September 30, 2002 3.25
and thereafter
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(b) Interest Coverage. Permit the ratio of (i) Consolidated
EBITDA to (ii) Consolidated Cash Interest Expense during any Test
Period to be less than the ratio set forth opposite such period below
(such ratio, the "Interest Coverage Ratio"):
Test Period Interest Coverage Ratio
----------- -----------------------
7/1/98 - 9/30/98 2.00
10/1/98 - 12/31/98 2.00
1/1/99 - 3/31/99 2.00
4/1/99 - 6/30/99 2.00
7/1/99 - 9/30/99 2.25
10/1/99 - 12/31/99 2.25
1/1/00 - 3/31/00 2.25
4/1/00 - 6/30/00 2.25
7/1/00 - 9/30/00 2.50
10/1/00 - 12/31/00 2.50
1/1/01 - 3/31/01 2.50
4/1/01 - 6/30/01 2.50
7/1/01 - 9/30/01 2.75
10/1/01 - 12/31/01 2.75
1/1/02 - 3/31/02 2.75
4/1/02 - 6/30/02 2.75
7/1/02 - 9/30/02 3.00
10/1/02 - and thereafter 3.00
7.2. Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness (including in respect of Interest Rate Agreements),
except:
(a) Indebtedness of the Borrower under this Agreement and the
Facility B Credit Agreement;
(b) Indebtedness of the Borrower incurred to finance the
acquisition of fixed or capital assets (whether pursuant to a loan, a
Financing Lease or otherwise) in an aggregate principal amount not
exceeding $25,000,000 at any time outstanding;
(c) Indebtedness assumed in connection with any Investment
permitted pursuant to subsection 7.9(k) hereof.
(d) additional Indebtedness of the Borrower not exceeding
$50,000,000 in aggregate principal amount at any one time outstanding
(of which
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up to $35,000,000 may be secured by Liens permitted pursuant to
subsection 7.3(i) hereof);
(e) Indebtedness of the Borrower in respect of not more than (i)
$225,000,000 principal amount of Subordinated Notes issued on the
Original Closing Date and (ii) $180,000,000 principal amount of New
Subordinated Notes issued on May 22, 1998;
(f) the Indebtedness of the Borrower and its Subsidiaries
outstanding on the Closing Date and reflected on Schedule 7.2(f), and
refundings or refinancings thereof, provided that no such refunding or
refinancing shall shorten the maturity or increase the principal
amount of the original Indebtedness;
(g) Guarantee Obligations permitted by subsection 7.4;
(h) the incurrence by any Credit Party of intercompany
Indebtedness between or among the Credit Parties; provided, however,
that if the Borrower is the obligor on such Indebtedness, such
Indebtedness is expressly subordinated to the prior payment in full in
cash of all Obligations;
(i) Indebtedness secured by Permitted Liens;
(j) Indebtedness of the Borrower or any of its Subsidiaries
(other than as described under subsection 7.2(a) above) incurred in
connection with the issuance of any surety bonds, performance letters
of credit or other similar performance bonds required pursuant to any
Contractual Obligation or Requirement of Law to which Borrower or any
of its Subsidiaries are subject in an aggregate principal amount not
exceeding $100,000,000 at any time outstanding, less, without
duplication, the aggregate amount of then existing Guarantee
Obligations permitted under 7.4(g); and
(k) Up to $30,000,000 of purchase money Indebtedness the proceeds
of which are utilized to acquire the real property (including
improvements thereon) and related assets currently utilized by the
Borrower's communications systems - west division in Salt Lake City,
Utah, on terms reasonably satisfactory to the Agents.
7.3. Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings, provided that adequate reserves
with respect thereto are maintained on the books of the Borrower or
its Subsidiaries, as the case may be, in conformity with GAAP;
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(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and
deposits securing liability to insurance carriers under insurance or
self-insurance arrangements;
(d) 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;
(e) easements, rights-of-way, zoning restrictions, other
restrictions and other similar encumbrances previously or hereafter
incurred in the ordinary course of business which, in the aggregate,
are not substantial in amount and which do not in any case materially
detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the Borrower or
such Subsidiary;
(f) Liens in existence on the date hereof listed on Schedule
7.3(f), securing Indebtedness permitted by subsection 7.2(f), provided
that no such Lien is expanded to cover any additional property (other
than after-acquired title in or on such property and proceeds of the
existing collateral in accordance with the instrument creating such
Lien) after the Closing Date and that the amount of Indebtedness
secured thereby is not increased and extensions, renewals or
replacements thereof provided that no such extension, renewal or
replacement shall shorten the fixed maturity or increase the principal
amount of the original Indebtedness; and provided, further, that the
assets of the Borrower and its Subsidiaries encumbered by such Liens
are existing equipment and other existing tangible assets;
(g) Liens securing Indebtedness of the Borrower and its
Subsidiaries permitted by subsections 7.2(b) and 7.2(k) incurred to
finance the acquisition of fixed or capital assets, provided that (i)
such Liens shall be created substantially simultaneously with the
acquisition of such fixed or capital assets, (ii) such Liens do not at
any time encumber any property other than the property financed by
such Indebtedness (other than after acquired title in or on such
property and proceeds of the existing collateral in accordance with
the instrument creating such Lien) and (iii) the principal amount of
Indebtedness secured by any such Lien shall at no time exceed 100% of
the original purchase price of such property of such property at the
time it was acquired;
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(h) Liens on the property or assets of a corporation which
becomes a Subsidiary after the date hereof securing Indebtedness
permitted by subsection 7.2(c), provided that (i) such Liens existed
at the time such corporation became a Subsidiary and were not created
in anticipation thereof, (ii) any such Lien is not expanded to cover
any property or assets of such corporation after the time such
corporation becomes a Subsidiary (other than after acquired title in
or on such property and proceeds of the existing collateral in
accordance with the instrument creating such Lien), and (iii) the
amount of Indebtedness secured thereby is not increased;
(i) Liens (not otherwise permitted hereunder) which secure
obligations not exceeding (as to the Borrower and all Subsidiaries)
$35,000,000 in aggregate amount at any time outstanding;
(j) Liens created pursuant to the Pledge Agreements;
(k) Liens on the property of the Borrower or any of its
Subsidiaries in favor of landlords securing licenses, subleases or
leases entered into in the ordinary course of business;
(l) licenses, leases or subleases permitted hereunder granted to
other Persons not interfering in any material respect in the business
of the Borrower or any of its Subsidiaries;
(m) so long as no Default or Event of Default shall have occurred
and be continuing under clause (f) of Section 8, attachment or
judgment Liens in an aggregate amount outstanding at any one time not
in excess of $7,500,000;
(n) Liens arising from precautionary Uniform Commercial Code
financing statement filings with respect to operating leases or
consignment arrangements entered into by the Borrower, or any of its
subsidiaries in the ordinary course of business; and
(o) Liens in favor of a banking institution arising by operation
of 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.
7.4. Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the date hereof and
listed on Schedule 7.4 and extensions, renewals and replacements
thereof, provided, however, that no such extension, renewal or
replacement shall shorten the fixed maturity or increase the principal
amount of the Indebtedness guaranteed by the original guarantee;
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(b) Guarantee Obligations incurred after the date hereof in an
aggregate amount not to exceed $30,000,000 at any one time outstanding
for the Borrower and its Subsidiaries;
(c) guarantees made by the Subsidiaries of the Borrower pursuant
to the Subordinated Debt Documents and the New Subordinated Debt
Documents;
(d) Guarantee Obligations under the Credit Documents and the
Facility B Credit Documents;
(e) L/C Obligations and the Facility B L/C Obligations;
(f) Guarantee Obligations of the Borrower or any Subsidiary in
respect of obligations of a Subsidiary permitted to be incurred by
such Subsidiary by this Agreement; and
(g) Guarantee Obligations in respect of surety bonds and/or
performance letters of credit which shall not exceed $100,000,000 at
any time less, without duplication, the amount of outstanding
Indebtedness permitted under subsection 7.2(j).
7.5. Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of its property,
business or assets, or make any material change in its present method of
conducting business, except:
(a) any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower (provided that the Borrower shall be the continuing or
surviving corporation) or with or into any one or more wholly owned
Subsidiaries of the Borrower (provided that the wholly owned Subsidiary or
Subsidiaries shall be the continuing or surviving corporations); and
(b) any wholly owned Subsidiary may sell, lease, transfer or otherwise
dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to the Borrower or any other wholly owned Subsidiary of the
Borrower that is a Credit Party.
7.6. Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person other than the
Borrower or any wholly owned Subsidiary, except:
(a) the sale or other disposition of obsolete or worn out property in
the ordinary course of business;
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(b) the sale of any property or assets not otherwise permitted by this
subsection 7.6; provided that the Net Proceeds thereof shall be applied
pursuant to subsection 2.6(b)(ii);
(c) as permitted pursuant to subsection 7.5(b);
(d) the sale, lease, transfer or exchange of inventory in the ordinary
course of business;
(e) transfers resulting from any casualty or condemnation of property
or assets;
(f) intercompany sales or transfers of assets made in the ordinary
course of business;
(g) licenses, leases or subleases of tangible property in the ordinary
course of business;
(h) any consignment arrangements or similar arrangements for the sale
of assets in the ordinary course of business;
(i) the sale or discount of overdue accounts receivable arising in the
ordinary course of business, but only in connection with the compromise or
collection thereof; and
(j) the conveyance, sale, assignment or contribution to any new
Subsidiary of the Borrower or any existing Subsidiary of the Borrower
assets of the Borrower or any Subsidiary of the Borrower not exceeding five
percent (5%) of the Consolidated Total Assets.
7.7. Limitation on Dividends. Declare or pay any dividend (other than
dividends payable solely in common stock of the Borrower) on, or make any
payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other acquisition
of, any shares of any class of Capital Stock of the Borrower or any warrants or
options to purchase any such Capital Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of the Borrower or
any Subsidiary other than Permitted Stock Payments.
7.8. Limitation on Capital Expenditures. Make or commit to make (by
way of the acquisition of securities of a Person or otherwise) any expenditure
in respect of the purchase or other acquisition of fixed or capital assets
(excluding any such asset acquired in connection with normal replacement and
maintenance programs properly charged to current operations) except for capital
expenditures in the ordinary course of business not exceeding $45,000,000 in
the aggregate for the Borrower and its Subsidiaries during any fiscal year of
the Borrower; provided, that up to 50% of any such amount not so expended in
the fiscal year for which it is permitted above may be carried over for
expenditure in the next following fiscal year; provided, further, that Borrower
and/or its Subsidiaries may exceed the annual limit on capital expenditures
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set forth above by utilizing any amounts available for Investments permitted
under subsection 7.9(k) hereto to fund such additional Capital Expenditures.
7.9. Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of or any assets constituting a
business unit of, or make any other investment in, any Person ("Investments"),
except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) loans to officers of the Borrower listed on Schedule 7.9(c) in
aggregate principal amounts outstanding not to exceed the respective
amounts set forth for such officers on said Schedule;
(d) loans and advances to employees of the Borrower or its
Subsidiaries for travel, entertainment and relocation expenses in the
ordinary course of business in an aggregate amount for the Borrower and its
Subsidiaries not to exceed $1,000,000 at any one time outstanding;
(e) investments by the Borrower in its Subsidiaries that are Credit
Parties and investments by such Subsidiaries in the Borrower and in other
Subsidiaries that are Credit Parties;
(f) so long as no Event of Default has occurred and is continuing,
loans by the Borrower to its employees (other than any Principals or their
Related Parties) in connection with (i) management incentive plans, (ii)
management stock purchase plans, and (iii) obligations of employee
option-holders of Storm Control Systems, Inc. to fund the exercise of such
options, which loans in (i), (ii) and (iii) in the aggregate do not exceed
$5,000,000;
(g) Investments in existence on the Closing Date set forth on Schedule
7.9(g) and extensions, renewals, modifications or restatements or
replacements thereof; provided that no such extension, renewal,
modification or restatement shall increase the amount of the original loan,
advance or investment;
(h) promissory notes and other similar non-cash consideration received
by the Borrower and its Subsidiaries in connection with the dispositions
permitted by subsection 7.6(b);
(i) Investments permitted by subsection 7.6(b) and subsection 7.6(j);
(j) Investments (including debt obligations and Capital Stock)
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;
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(k) Investments made to acquire (i) all or any portion of the Capital
Stock, or all or any portion of the assets, of any Person (other than the
Borrower or any of its Subsidiaries) that is engaged in a Similar Business,
or (ii) all or substantially all of the assets of any division of any
Person (other than the Borrower or any of its Subsidiaries) that is engaged
in a Similar Business; provided, that, (a) if such Investment is an
acquisition of a majority of the Voting Stock of any Person, such Person's
board of directors or similar governing body shall have approved such
acquisition and (b) at the time of each such Investment described above in
clauses (i) and (ii) (both before and after giving effect to such
Investment), there shall exist no Default or Event of Default and the
aggregate consideration paid (regardless of form, including in the case of
an acquisition of assets, any assumed obligations) in connection with all
Investments made pursuant to this subsection 7.9(k) shall not exceed the
New Investment Sublimit (without deducting therefrom (x) the portion of any
purchase price for any Investment funded with Capital Stock of Holdings,
(y) consideration paid by the Borrower in connection with the acquisition
of SPD Technologies pursuant to the SPD Technologies Acquisition Agreement
and (z) any consideration paid after the Closing Date by the Borrower in
connection with any Investment which (I) has already been approved or
consented to under the Original Credit Agreement or any Investment for
which the Borrower has provided a compliance certificate pursuant to
Section 7.9(p) of the Original Credit Agreement and (II) is listed on
Schedule 7.9(k) hereto); provided, further, that in connection with each
individual, or series of related, Investments made pursuant to this
subsection 7.9(k) with an aggregate consideration (i) equal to or less than
$100,000,000, the Borrower shall deliver to the Administrative Agent, on or
prior to the date which is one Business Day prior to the consummation of
such Investment or Investments, a certificate of a Responsible Officer that
certifies that no Default or Event of Default has occurred and is
continuing or will be caused as a result of consummating such proposed
Investment.
7.10. Limitation on Optional Payments and Modifications of Instruments
and Agreements. (a) Make any optional payment or prepayment on or
redemption or purchase of, or deliver any funds to any trustee for the
prepayment, redemption or defeasance of, any Subordinated Debt or
amend, modify or change, or consent or agree to any amendment,
modification or change to any of the material terms of any such
Subordinated Debt Documents or New Subordinated Debt Documents (other
than any such amendment, modification or change which would extend the
maturity or reduce the amount of any payment of principal thereof or
which would reduce the rate or extend the date for payment of interest
thereon).
(b) Amend its Constitutional Documents in any manner which could
adversely affect the rights of the Lenders under the Credit Documents
or their ability to enforce the same.
(c) Modify or amend, or waive any provision or condition
contained in, any of the Transaction Documents in any manner that
could reasonably be expected to be adverse to the Lenders.
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7.11. Limitation on Transactions with Affiliates. (a) Enter into any
transaction, including, without limitation, any purchase, sale, lease
or exchange of property or the rendering of any service, with any
Affiliate unless such transaction is (i) otherwise permitted under
this Agreement, (ii) in the ordinary course of the Borrower's or such
Subsidiary's business and (iii) upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary, as the case may be, than
it would obtain in a comparable arm's length transaction with a Person
which is not an Affiliate.
(b) In addition, notwithstanding the foregoing, the Borrower and
its Subsidiaries shall be entitled to make the following payments
and/or to enter into the following transactions:
(i) the payment of reasonable and customary fees and reimbursement of
expenses payable to directors of the Borrower and Holdings;
(ii) the employment arrangements with respect to the procurement of
services of directors, officers and employees in the ordinary course of
business and the payment of reasonable fees in connection therewith;
(iii) payments to directors and officers of the Borrower and its
Subsidiaries in respect of the indemnification of such Persons in such
respective capacities from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements, as the case may be, pursuant to the
Constitutional Documents or other corporate action of the Borrower or its
Subsidiaries, respectively, or pursuant to applicable law; and
(iv) transactions described in the Transaction Documents.
7.12. Limitation on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by the Borrower or any Subsidiary of
real or personal property which has been or is to be sold or transferred by the
Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of the Borrower or such Subsidiary; provided that the
Borrower may enter into a sale and leaseback transaction if the Borrower could
have (a) incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction and (b) incurred a Lien to
secure such Indebtedness, in each case in accordance with the restrictions
contained in this Agreement and the other Credit Documents.
7.13. Limitation on Changes in Fiscal Year. Permit the fiscal year of
the Borrower to end on a day other than December 31.
7.14. Limitation on Negative Pledge Clauses. Enter into with any
Person any agreement, other than (a) this Agreement and the Facility B Credit
Agreement, (b) the Subordinated Debt Documents and the New Subordinated Debt
Documents and (c) any industrial revenue bonds, purchase money mortgages or
Financing Leases permitted by this Agreement (in
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which cases, any prohibition or limitation shall only be effective against the
assets financed thereby other than after acquired title in or on such property
and proceeds of the existing collateral in accordance with the instrument
creating such Lien), which prohibits or limits the ability of the Borrower or
any of its Subsidiaries to create, incur, assume or suffer to exist any Lien
upon any of its property, assets or revenues, whether now owned or hereafter
acquired.
7.15. Limitation on Lines of Business. Enter into any business, either
directly or through any Subsidiary (other than an Immaterial Subsidiary),
except for Similar Businesses.
7.16. Designated Senior Debt. Designate any Indebtedness or other
obligation, other than Indebtedness under the Credit Documents, as "Designated
Senior Debt," as such term is defined in the Indenture as in effect on the
Original Closing Date or the New Subordinated Debt Indenture as in effect on
May 22, 1998, or any comparable designation that confers upon the holders of
such Indebtedness or other obligation (or any Person acting on their behalf)
the right to initiate blockage periods under the Indenture or the New
Subordinated Debt Indenture or any other Indebtedness or other obligation of
the Borrower and its Subsidiaries (other than as a result of a payment
default).
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or any
Reimbursement Obligation when due in accordance with the terms thereof or
hereof; or the Borrower shall fail to pay any interest on any Loan, or any
other amount payable hereunder, within five days after any such interest or
other amount becomes due in accordance with the terms thereof or hereof;
(b) Any representation or warranty made or deemed made by the Borrower
or any other Credit Party herein or in any other Credit Document or which
is contained in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this Agreement or
any such other Credit Document shall prove to have been incorrect in any
material respect on or as of the date made or deemed made;
(c) The Borrower or any other Credit Party shall default in the
observance or performance of any agreement contained in Section 7 or
subsection 6.7(a) of this Agreement, Section 4 of the Parent Guarantee,
Section 4 of the Subsidiary Guarantee, Section 4 of the Parent Pledge
Agreement, Section 4 of the Borrower Pledge Agreement, or Section 4 of the
Subsidiary Pledge Agreement;
(d) The Borrower or any other Credit Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Credit Document (other than as provided in
paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 days;
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(e) The Borrower or any of its Subsidiaries shall (i) default (x) in
any payment of principal of or interest of any Indebtedness (other than the
Loans, the L/C Obligations and any intercompany debt) or Interest Rate
Agreement Obligations or (y) in the payment of any Guarantee Obligation
(excluding any guaranties of the Obligations), beyond the period of grace,
if any, provided in the instrument or agreement under which such
Indebtedness, Interest Rate Agreement Obligation or Guarantee Obligation
was created; or (ii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness, Interest Rate
Agreement Obligation or Guarantee Obligation or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Guarantee Obligation
(or a trustee or agent on behalf of such holder or holders or beneficiary
or beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or such Guarantee
Obligation to become payable; provided, however, that no Default or Event
of Default shall exist under this paragraph unless (i) the aggregate amount
of Indebtedness, Interest Rate Agreement Obligations and/or Guarantee
Obligations in respect of which any default or other event or condition
referred to in this paragraph shall have occurred shall be equal to at
least $7,500,000 and (ii) such default continues for a period in excess of
10 days;
(f) (i) Holdings, the Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking appointment
of a receiver, trustee, custodian, conservator or other similar official
for it or for all or any substantial part of its assets, or Holdings, the
Borrower or any of its Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against
Holdings, the Borrower or any of its Subsidiaries any case, proceeding or
other action of a nature referred to in clause (i) above which (A) results
in the entry of an order for relief or any such adjudication or appointment
or (B) remains undismissed, undischarged or unbonded for a period of 60
days; or (iii) there shall be commenced against the Holdings, Borrower or
any of its Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results in
the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days from
the entry thereof; or (iv) Holdings, the Borrower or any of its
Subsidiaries shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii), or (iii) above; or (v) Holdings, the Borrower or any of
its Subsidiaries shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they become due;
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(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, reasonably likely to result in the termination of
such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan
shall terminate for purposes of Title IV of ERISA, (v) the Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other similar event or condition shall occur or exist with
respect to a Plan that is not in the ordinary course; and in each case in
clauses (i) through (vi) above, such event or condition, together with all
other such events or conditions, if any, could reasonably be expected to
have a Material Adverse Effect;
(h) One or more judgments or decrees shall be entered against
Holdings, the Borrower or any of its Subsidiaries involving in the
aggregate a liability (not paid or fully covered by insurance (which
coverage has been acknowledged by the appropriate insurers)) of $7,500,000
or more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the entry
thereof;
(i) (i) Any of the Pledge Agreements shall cease, for any reason, to
be in full force and effect (unless released by the Administrative Agent at
the direction of the requisite Lenders or as otherwise permitted under this
Agreement or the other Credit Documents), or the Borrower or any other
Credit Party which is a party to any of the Pledge Agreements shall so
assert or (ii) the Lien created by any of the Pledge Agreements shall cease
to be enforceable and of the same effect and priority purported to be
created thereby (and, if such invalidity is such so as to be amenable to
cure without materially disadvantaging the position of the Administrative
Agent and the Lenders, as the case may be, as secured parties thereunder,
the Credit Party shall have failed to cure such invalidity within 30 days
after notice from the Administrative Agent);
(j) The Guarantee Obligation of any Credit Party under the Credit
Documents shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or any
Credit Party or any Person acting on behalf of any Credit Party, shall deny
or disaffirm its obligations under such Guarantee Obligation;
(k) There shall have occurred a Change in Control; or
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(l) An "Event of Default" as defined in the Facility B Credit
Agreement shall have occurred and be continuing;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section above with respect to
the Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement (including, without limitation, all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters
of Credit shall have presented the documents required thereunder) and the Notes
shall immediately become due and payable, and (B) if such event is any other
Event of Default, either or both of the following actions may be taken: (i)
with the consent of the Required Lenders, the Administrative Agent may, or upon
the request of the Required Lenders, the Administrative Agent shall, by notice
to the Borrower declare the Commitments to be terminated forthwith, whereupon
the Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice of default to the
Borrower, declare the Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) and the Notes to be due and payable forthwith, whereupon the same
shall immediately become due and payable.
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Borrower shall at such time deposit in
a cash collateral account opened by the Administrative Agent an amount equal to
the Dollar Equivalent of the aggregate then undrawn and unexpired amount of
such Letters of Credit. The Borrower hereby grants to the Administrative Agent,
for the benefit of the Issuing Lender and the L/C Participants (and the benefit
of each such "Issuing Lender" and the "L/C Participants" as defined in the
Facility B Credit Agreement), a security interest in such cash collateral to
secure all obligations of the Borrower under this Agreement, the Facility B
Credit Agreement, the other Credit Documents and the other Facility B Credit
Documents. Amounts held in such cash collateral account shall be applied by the
Administrative Agent in accordance with subsection 2.12 hereof. The Borrower
shall execute and deliver to the Administrative Agent, for the account of the
Issuing Lender and the L/C Participants (and each applicable "Issuing Lender"
and the "L/C Participants" as defined in the Facility B Credit Agreement), such
further documents and instruments as the Administrative Agent may request to
evidence the creation and perfection of the within security interest in such
cash collateral account.
EXCEPT AS EXPRESSLY PROVIDED ABOVE IN THIS SECTION, PRESENTMENT,
DEMAND, PROTEST AND ALL OTHER NOTICES OF ANY KIND ARE HEREBY EXPRESSLY WAIVED.
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SECTION 9. THE AGENTS; THE ARRANGERS
9.1. Appointment. Each Lender hereby irrevocably designates and
appoints each of the Agents as the agent of such Lender under this Agreement
and the other Credit Documents, and each such Lender irrevocably authorizes
each of the Agents, in such capacity, to take such action on its behalf under
the provisions of this Agreement and the other Credit Documents and to exercise
such powers and perform such duties as are expressly delegated to such Agent by
the terms of this Agreement and the other Credit Documents, together with such
other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, none of the Agents shall
have any duties or responsibilities, except those expressly set forth herein,
or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Credit Document or otherwise exist against any
of the Agents.
9.2. Delegation of Duties. The Agents may execute any of their duties
under this Agreement and the other Credit Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. None of the Agents shall be responsible for
the negligence or misconduct of any agents or attorneys in-fact selected by it
with reasonable care.
9.3. Exculpatory Provisions. Neither any of the Agents nor any of
their officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Credit
Document (except for its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower or any
officer thereof contained in this Agreement or any other Credit Document or in
any certificate, report, statement or other document referred to or provided
for in, or received by such Agent under or in connection with, this Agreement
or any other Credit Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
Credit Document or for any failure of the Borrower to perform its obligations
hereunder or thereunder. None of the Agents shall be under any obligation to
any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Credit Document, or to inspect the properties, books or records of the
Borrower.
9.4. Reliance by Agents. The Agents shall be entitled to rely, and
shall be fully protected in relying, upon any Note, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and other
experts selected by such Agent. The Agents may deem and treat the payee of any
Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with such
Agent. Except as expressly provided in this Agreement, the Agents shall be
fully justified in failing or refusing to take any action under this Agreement
or any other Credit Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems
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appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agents shall in all cases
be fully protected in acting, or in refraining from acting, under this
Agreement and the other Credit Documents in accordance with a request of the
Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders
of the Loans.
9.5. Notice of Default. No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
such Agent has received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that any Agent receives such a
notice, such Agent shall give notice thereof to the Lenders. Each Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that unless and until
such Agent shall have received such directions, such Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
9.6. Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither any of the Agents nor any of their officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by any of the Agents
hereafter taken, including any review of the affairs of the Borrower, shall be
deemed to constitute any representation or warranty by any of the Agents to any
Lender. Each Lender represents to each of the Agents that it has, independently
and without reliance upon any of the Agents or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and credit worthiness of the Borrower and made
its own decision to make its Loans hereunder and enter into this Agreement.
Each Lender also represents that it will, independently and without reliance
upon any of the Agents or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Credit Documents, and to make such investigation
as it deems necessary to inform itself as to the business, operations,
property, financial and other condition and creditworthiness of the Borrower.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by any of the Agents hereunder (or copies of which
have been provided to the Administrative Agent pursuant to this Agreement),
none of the Agents shall have any duty or responsibility to provide any Lender
with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
any Credit Party which may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
9.7. Indemnification. The Lenders agree to indemnify each of the
Agents in their respective capacities as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their respective Commitment Percentages with respect to
all Types of Loans in effect on the date on which
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indemnification is sought, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against any of the Agents in any way
relating to or arising out of, the Commitments, this Agreement, any of the
other Credit Documents or any documents contemplated by or referred to herein
or therein or the transactions contemplated hereby or thereby or any action
taken or omitted by any of the Agents under or in connection with any of the
foregoing provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from such
Agent's gross negligence or willful misconduct. The agreements in this
subsection shall survive the payment of the Loans and all other amounts payable
hereunder.
9.8. Agents, in Their Individual Capacities. The Agents and their
respective Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the Borrower as though the Agents were not
acting in such capacities hereunder and under the other Credit Documents. With
respect to the Loans made or renewed by it and any Note issued to it or Loan
Account maintained by it and with respect to any Letter of Credit issued or
participated in by it, each Agent shall have the same rights and powers under
this Agreement and the other Credit Documents as any Lender and may exercise
the same as though it were not an Agent, and the terms "Lender" and "Lenders"
shall include the Agents in their individual capacities.
9.9. Successor Administrative Agent, Syndication Agent and
Documentation Agent.
The Administrative Agent may resign as Administrative Agent upon 30
days' notice to the Lenders. If the Administrative Agent resigns under this
Agreement, the Required Lenders shall appoint from among the Lenders a
successor administrative agent for the Lenders, which successor administrative
agent shall, unless a Default or Event of Default shall have occurred and be
continuing, be approved by the Borrower. If no successor administrative agent
is appointed prior to the effective date of the resignation of the
Administrative Agent, the Administrative Agent may appoint, after consulting
with the Lenders and the Borrower, a successor administrative agent from among
the Lenders. Upon the acceptance of its appointment as successor administrative
agent hereunder, such successor administrative agent shall succeed to all the
rights, powers and duties of the retiring Administrative Agent and the term
"Administrative Agent" shall mean such successor administrative agent and the
retiring Administrative Agent's appointment, powers and duties as
Administrative Agent shall be terminated. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement. If no
successor administrative agent has accepted appointment as Administrative Agent
by the date which is 30 days following a retiring Administrative Agent's notice
of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of
the duties of the Administrative Agent hereunder until such time, if
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any, as the Required Lenders appoint a successor administrative agent as
provided for above. Similarly, the Syndication Agent and/or the Documentation
Agent may resign as Syndication Agent and/or Documentation Agent, as the case
may be, upon 30 days' notice to the Lenders. The procedure for replacement and
effective date of resignation for the Syndication Agent and the Documentation
Agent shall be identical to that provided above for the Administrative Agent.
9.10. The Arrangers and the Co-Agents. Except as expressly set forth
herein, each of the Arrangers and the Co-Agents, in their respective capacities
as such, shall have no duties or responsibilities, and shall incur no
liabilities, under this Agreement or the other Credit Documents.
SECTION 10. MISCELLANEOUS
10.1. Amendments and Waivers. Neither this Agreement nor any other
Credit Document, nor any terms hereof or thereof may be amended, supplemented,
waived or modified except in accordance with the provisions of this subsection.
The Required Lenders may, or, with the written consent of the Required Lenders,
the Administrative Agent may, from time to time, (a) enter into with the
Borrower written amendments, supplements or modifications hereto and to the
other Credit Documents for the purpose of adding any provisions to this
Agreement or the other Credit Documents or changing in any manner the rights of
the Lenders or of the Borrower hereunder or thereunder or (b) waive, on such
terms and conditions as the Required Lenders or the Administrative Agent, as
the case may be, may specify in such instrument, any of the requirements of
this Agreement or the other Credit Documents or any Default or Event of Default
and its consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall (i) reduce the amount or extend any
scheduled date of maturity of any Loan, extend the expiration of any Letter of
Credit beyond the Termination Date, or reduce the stated rate or amount of any
interest or fee payable hereunder or extend the scheduled date of any payment
thereof, in each case without the consent of each Lender affected thereby, or
increase the commitment of any Lender or extend the expiry of the commitment of
any Lender without the consent of such Lender, (ii) amend, modify or waive the
definition of Required Lenders, or consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement and the
other Credit Documents, in each case without the written consent of all the
Lenders, (iii) release all or substantially all of the Collateral or release
all or substantially all of the Credit Parties from their Guarantee Obligations
under the Credit Documents without the consent of all Lenders, (iv) amend,
modify or waive any provision of Section 9 without the written consent of the
then Agents, (v) amend, modify or waive any provision of subsection 2.1(b), any
other provision of this Agreement relating to the Swing Line Loans or the Swing
Line Note, if any, without the written consent of the Swing Line Lender, or
(vi) amend, modify or waive any provision of this Agreement or any other Credit
Document which would directly and adversely affect the Arrangers or the Agents
or the Issuing Lender or the Swing Line Lender without the written consent of
the Arrangers, the Agents or the Issuing Lender or the Swing Line Lender, as
the case may be. In addition to the foregoing, (A) no amendment, modification,
termination or waiver of any provision of subsection 2.5, subsection 2.6 or
subsection 2.12 which has the effect of changing any interim scheduled
payments, voluntary or mandatory prepayments, the application of any scheduled
payment or voluntary or
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mandatory prepayment, the application of proceeds of any Collateral or any
Commitment reductions applicable to any Class (an "Affected Class") in a manner
that disproportionately disadvantages such Class relative to the other Class
shall be effective without the written concurrence of the Requisite Class
Lenders of the Affected Class (it being understood and agreed that any
amendment, modification, termination or waiver of any provision which only
postpones or reduces any interim scheduled payment, voluntary or mandatory
prepayment or Commitment reduction from those set forth in subsection 2.6 with
respect to only one Class shall be deemed to not disproportionately
disadvantage the other Class and, therefore, shall not require the consent of
Requisite Class Lenders of such other Class), (B) no amendment, modification,
termination or waiver of any provision of any Guarantee or Pledge Agreement
shall be effective without the written concurrence of the Requisite Class
Lenders for each Class and (C) no amendment, modification or waiver with
respect to any provision of this subsection 10.1 or to the definition of
"Requisite Class Lenders" shall be effective without the written concurrence of
all Lenders and all Facility B Lenders. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Borrower, the Lenders, the Agents and the Issuing Lender
and all future holders of the Loans. Any extension of a Letter of Credit by the
Issuing Lender shall be treated hereunder as issuance of a new Letter of
Credit. In the case of any waiver, the Borrower, the Lenders and the Agents and
the Issuing Lender shall be restored to their former positions and rights
hereunder and under the other Credit Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereon.
10.2. Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows in the case of the Borrower, the Administrative Agent, Swing Line
Lender, Issuing Lender, the Syndication Agent and the Documentation Agent, and
as set forth in Schedule I in the case of the other parties hereto, or to such
other address as may be hereafter notified by the respective parties hereto:
Holdings, the Borrower
or any of its
Subsidiaries: L-3 Communications Corporation
600 Third Avenue, 34th Floor
New York, NY 10016
Attention: Robert LaPenta
Fax: (212) 805-5470
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with a copy to
Attention: Christopher C. Cambria
Fax: (212) 805-5494
The Administrative
Agent: Addresses for notices of borrowing,
prepayments and other
administrative matters:
Bank of America NT & SA
1850 Gateway Boulevard, 5th Floor
Concord, CA 94520
Attention: Agency Administrative
Services #5596
Josephine T. Flores,
Vice President
Fax: (925) 675-8500
Tel: (925) 675-8374
Addresses for all other notices
(including with respect to amendments
and waivers):
Bank of America NT & SA 1455 Market
Street, 12th Floor San Francisco, CA
94103
Attention: Agency Management #10831
Dietmar Schiel, Vice
President
Fax: (415) 436-3425
Tel: (415) 436-2769
with a copy to:
Bank of America NT & SA
335 Madison Avenue
New York, NY 10017
Attention: Steve Aronowitz
Fax: (212) 503-7066
Tel: (212) 503-7950
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The Swing Line Lender:
Bank of America NT & SA
231 South LaSalle Street
Chicago, IL 60697
Attention: Renee Waller
Fax: (312) 974-9626
Tel: (312) 828-3874
The Issuing Lender:
Bank of America NT & SA
333 S. Beaudry Avenue, 19th Floor
Los Angeles CA 90017-1486
Attention: Trade Operations Center -
Standby Letters of Credit
#22621
Sandra M. Leon, Vice
President
Fax: (213) 345-6694
Tel: (213) 345-5231
The Documentation
Agent: Lehman Commercial Paper Inc.
3 World Financial Center, 9th Floor
New York, New York 10285
Attention: Michelle Swanson
Fax: (212) 528-0819
The Syndication
Agent: Lehman Commercial Paper Inc.
3 World Financial Center, 9th Floor
New York, New York 10285
Attention: Michelle Swanson
Fax: (212) 528-0819
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsection 2.2, 2.4, 2.6, 2.7, 2.12 or 3.2 shall not
be effective until received.
10.3. No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of any Agent or any Lender, any right, remedy,
power or privilege hereunder or under the other Credit Documents shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other or
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further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.4. Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Credit Documents and in any
document, certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Agreement and the
making of the Loans hereunder.
10.5. Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse each of the Agents for all of their respective reasonable
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Credit Documents and any other documents prepared
in connection herewith or therewith, and the consummation and administration of
the transactions contemplated hereby and thereby, including, without
limitation, the reasonable fees, charges and disbursements of a single counsel
for the Lenders (in addition to any local counsel), (b) to pay or reimburse
each Lender and each Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Credit Documents and any such other documents, including,
without limitation, the fees and disbursements of counsel to each Lender and of
counsel to any Agent, (c) to pay, indemnify, and hold each Lender and each
Agent and each Issuing Lender harmless from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any delay
in paying, stamp, excise and other similar taxes, if any, which may be payable
or determined to be payable in connection with the execution and delivery of,
or consummation or administration of any of the transactions contemplated by,
or any amendment, supplement or modification of, or any waiver or consent under
or in respect of, this Agreement, the other Credit Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and each Arranger,
each Agent and each Issuing Lender harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement or the other Credit Documents or the use of the proceeds of
the Loans in connection with the Transaction, including, without limitation,
any of the foregoing relating to the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of the
Borrower, any of its Subsidiaries or any of the Properties (all the foregoing
in this clause (d), collectively, the "indemnified liabilities"), it being
understood that the Borrower shall have an obligation hereunder to the Lender
or any Agent with respect to any indemnified liabilities incurred by any
Agents, Arranger or the Issuing Lender or any Lender as a result of any
Materials of Environmental Concern that are first manufactured, emitted,
generated, treated, released, spilled, stored or disposed of on, at or from any
Property or any violation of any Environmental Law, which in any case first
occurs on or with respect to such Property (i) after the Property is
transferred to any Agent, Arranger, Issuing Lender or any Lender or their
successors or assigns by foreclosure sale, deed in lieu of foreclosure, or
similar transfer or, following such transfer, (ii) in connection with, but
prior to, the sale, leasing or other transfer of such Property by such Agent,
Arranger, Issuing Lender, or any Lender or their successors or assigns to one
or more third
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parties; provided, however, that the Borrower shall have no obligation
hereunder to any Agent or the Issuing Lender or any Lender with respect to
otherwise indemnified liabilities arising from the gross negligence or willful
misconduct of such Agent or the Issuing Lender or any such Lender, or with
respect to otherwise indemnified liabilities following the sale, leasing or
other transfer of such Property to one or more third parties. The agreements in
this subsection shall survive repayment of the Loans and all other amounts
payable hereunder.
10.6. Successors and Assigns; Participation and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Agents and their respective successors and
assigns, except that the Borrower may not assign or transfer any of
its rights or obligations under this Agreement without the prior
written consent of each Lender.
(b) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more banks
or other entities ("Participants") participating interests in any Loan
owing to such Lender or any other interest of such Lender hereunder
and under the other Credit Documents. In the event of any such sale by
a Lender of a participating interest to a Participant, such Lender's
obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the
other Credit Documents, and the Borrower and the Agents shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and the other
Credit Documents. No Lender shall be entitled to create in favor of
any Participant, in the participation agreement pursuant to which such
Participant's participating interest shall be created or otherwise,
any right to vote on, consent to or approve any matter relating to
this Agreement or any other Credit Document except for those specified
in clauses (i), (ii) and (iii) of the proviso to subsection 10.1. The
Borrower agrees that if amounts outstanding under this Agreement are
due or unpaid, or shall have been declared or shall have become due
and payable upon the occurrence of an Event of Default, each
Participant shall, to the maximum extent permitted by applicable law,
be deemed to have the right of setoff in respect of its participating
interest in amounts owing under this Agreement to the same extent as
if the amount of its participating interest were owing directly to it
as a Lender under this Agreement; provided that, in purchasing such
participating interest, such Participant shall be deemed to have
agreed to share with the Lenders the proceeds thereof as provided in
subsection 10.7(a) as fully as if it were a Lender hereunder. The
Borrower also agrees that each Participant shall be entitled to the
benefits of subsections 2.14, 2.15 and 2.16 with respect to its
participation in the Letters of Credit, the Commitments and the Loans
outstanding from time to time as if it was a Lender; provided that in
the case of subsection 2.15, such Participant shall have complied with
the requirements of said subsection; provided, further, that no
Participant shall be entitled to receive any greater amount pursuant
to any such subsection
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than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such
transferor Lender to such Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time and from time to time
assign to any Lender, any affiliate thereof or, in the case of Lender
that is an investment fund which is regularly engaged in making,
purchasing or investing in loans or securities (an "Investment Fund"),
any other such Investment Fund which is under common management with
such Lender, or, with the consent of the Borrower, the Administrative
Agent, the Syndication Agent and each Applicable Issuing Lender (which
in each case shall not be unreasonably withheld), to an additional
bank, Investment Fund or financial institution (an "Assignee") all or
any part of its rights and obligations under this Agreement and the
other Credit Documents pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit F, executed by such Assignee,
such assigning Lender (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Borrower, the
Administrative Agent, the Syndication Agent and each Applicable
Issuing Lender) and delivered to the Administrative Agent for its
acceptance and recording in the Register with a copy to the
Syndication Agent, provided that, in the case of any such assignment
to an additional bank or financial institution, (A) either (x) such
assignment is of all the rights and obligations of the assigning
Lender or (y) the sum of the aggregate principal amount of the Loans,
the aggregate amount of the L/C Obligations and the aggregate amount
of the unused Commitments being assigned and, if such assignment is of
less than all of the rights and obligations of the assigning Lender,
the sum of the aggregate principal amount of the Loans, the aggregate
amount of the L/C Obligations and the aggregate amount of the unused
Commitments remaining with the assigning Lender are each not less than
$5,000,000 (or such lesser amount as may be agreed to by the Borrower
and the Administrative Agent) and (B) each Assignee which is a
Non-U.S. Lender shall comply with the provisions of clause (A) of
subsection 2.15(b) hereof, or, with the prior written consent of the
Borrower, which shall not be unreasonably withheld, the provisions of
clause (B) of subsection 2.15(b) hereof (and, in either case, with all
of the other provisions of subsection 2.15(b) hereof). Upon such
execution, delivery, acceptance and recording, from and after the
effective date determined pursuant to such Assignment and Acceptance,
(x) the Assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder with a Commitment as set forth
therein and (y) the assigning Lender thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such assigning
Lender shall cease to be a party hereto). Notwithstanding any
provision of this paragraph (c) and paragraph (f) of this subsection,
the consent of the Borrower shall not be required for any assignment
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which occurs at any time when any of the events described in clause
(f) of Section 8 shall have occurred and be continuing.
(d) The Administrative Agent, on behalf of the Borrower, shall
maintain at the address of the Administrative Agent referred to in
subsection 10.2 a copy of each Assignment and Acceptance delivered to
it and a register (the "Register") for the recordation of the names
and addresses of the Lenders and Commitments of and principal amounts
of the Loans of each Type owing to each Lender from time to time and
the registered owners of the Obligations evidenced by the Notes and
the Loan Accounts. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Administrative
Agent and the Lenders shall treat each Person whose name is recorded
in the Register as the owner of a Loan, a Note or other Obligation
hereunder as the owner thereof for all purposes of this Agreement and
the other Credit Documents, notwithstanding any notice to the
contrary. Any assignment of any Loan, Commitment or other obligation
evidenced by a Note or a Loan Account shall be effective only upon
appropriate entries with respect thereto being made in the Register,
and prior to such recordation, all amounts owing to the assignor with
respect thereto shall remain owing to the assignor. Any assignment or
transfer of all or part of an Obligation evidenced by a Note shall be
registered in the Register only upon surrender for registration of
assignment or transfer of the Note evidencing such Obligation, duly
endorsed by (or accompanied by a written instrument of assignment or
transfer duly executed by) the holder thereof, and thereupon one or
more new Notes shall be issued to the designated Assignee, if
requested, and the old Note shall be returned by the Administrative
Agent to the Borrower marked "canceled."
(e) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an Assignee (and, in the case of an Assignee
that is not then a Lender or an affiliate thereof, by the Borrower the
Administrative Agent, the Syndication Agent and each Applicable
Issuing Lender) together with payment to the Administrative Agent of a
registration and processing fee of $3,000 (provided that no such
payment shall be required whenever LCPI or BOA is the assigning
Lender), the Administrative Agent shall (i) promptly accept such
Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the
Lenders and the Borrower. Following the effective date of any such
Assignment and Acceptance, the Administrative Agent shall be entitled
to update Schedule I hereto to reflect the then outstanding
Commitments of each Lender whereupon such amended Schedule I shall be
substituted for the pre-existing Schedule I and be deemed a part of
this Agreement without any further action or consent of any party and
the Administrative Agent shall promptly deliver a copy of such amended
Schedule I to each Lender and the Borrower.
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(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective
Transferee, subject to the provisions of subsection 10.15, any and all
financial information in such Lender's possession concerning the
Borrower and its Affiliates which has been delivered to such Lender by
or on behalf of the Borrower pursuant to this Agreement or which has
been delivered to such Lender by or on behalf of the Borrower in
connection with such Lender's credit evaluation of the Borrower and
its Affiliates prior to becoming a party to this Agreement.
(g) If, pursuant to this subsection 10.6, any interest in this
Agreement or any Loan is transferred to any Transferee which would be
a Non-U.S. Lender upon the effectiveness of such transfer, the
assigning Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, (i) to represent to the assigning
Lender (for the benefit of the assigning Lender, the Administrative
Agent and the Borrower) that under applicable law and treaties no U.S.
Taxes will be required to be withheld by the Administrative Agent, the
Borrower or the assigning Lender with respect to any payments to be
made to such Transferee in respect of the Loans, (ii) to furnish to
the assigning Lender (and, in the case of any Assignee registered in
the Register, the Administrative Agent and the Borrower such Internal
Revenue Service Forms required to be furnished pursuant to subsection
2.15(b) and (iii) to agree (for the benefit of the assigning Lender,
the Administrative Agent and the Borrower) to be bound by the
provisions of subsection 2.15(b).
(h) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning
assignments of Loans and Notes relate only to absolute assignments and
that such provisions do not prohibit assignments creating security
interests, including, without limitation, any pledge or assignment by
a Lender of any Loan or Note to any Federal Reserve Bank in accordance
with applicable law.
(i) Notwithstanding any other provision contained in this
Agreement or any other Credit Document to the contrary, (x) any Lender
may assign all or any portion of the Loans held by it to any Federal
Reserve Bank or the United States Treasury as collateral security
pursuant to Regulation A of the Federal Reserve Board and any
Operating Circular issued by such Federal Reserve Bank, provided that
any payment in respect of such assigned Loans made by the Borrower to
or for the account of the assigning or pledging Lender in accordance
with the terms of this Agreement shall satisfy the Borrower's
obligations hereunder in respect to such assigned Loans to the extent
of such payments and (y) with the consent of the Administrative Agent
(not to be unreasonably withheld), any Lender which is an Investment
Fund may pledge all or any portion of its Loans to its trustee in
support of its obligations to its trustee. No such assignment shall
release the assigning Lender from its obligations hereunder.
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10.7. Adjustments; Set-off. (a) If any Lender (a "benefited Lender")
shall at any time receive any payment of all or part of its Loans or
the Reimbursement Obligations owing to it, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the
nature referred to in clause (f) of Section 8, or otherwise), in a
greater proportion than any such payment to or collateral received by
any other Lender or Facility B Lender (any such affected Lender or
Facility B Lender, hereinafter, an "Affected Lender"), if any, in
respect of the Borrower's obligations owing to such other Affected
Lender, whether under this Agreement or the Facility B Credit
Agreement, including any interest thereon, such benefited Lender shall
purchase for cash from each other Affected Lender a participating
interest in such portion of each such other Affected Lender's Loans or
the Reimbursement Obligations owing to it and/or Facility B Loans or
Facility B Reimbursement Obligations owing to it, or shall provide
such other Affected Lenders with the benefits of any such collateral,
or the proceeds thereof, as shall be necessary to cause such benefited
Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Affected Lenders; provided, however,
that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefited Lender, such purchase shall
be rescinded, and the purchase price and benefits returned, to the
extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior
notice to the Borrower, any such notice being expressly waived by the
Borrower to the extent permitted by applicable law, upon any amount
becoming due and payable by the Borrower hereunder (whether at the
stated maturity, by acceleration or otherwise) to set-off and
appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such
Lender or any branch or agency thereof to or for the credit or the
account of the Borrower. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such set-off and
application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such set-off and
application.
10.8. Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by facsimile transmission), and all of said counterparts taken together shall
be deemed to constitute one and the same instrument. A set of the copies of
this Agreement signed by all the parties shall be lodged with the Borrower and
the Administrative Agent.
10.9. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such
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prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
10.10. Integration. This Agreement and the other Credit Documents
represent the agreement of the Borrower, the Agents and the Lenders with
respect to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by any Agent or any Lender relative to subject
matter hereof not expressly set forth or referred to herein or in the other
Credit Documents.
10.11. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12. SUBMISSION TO JURISDICTION; WAIVERS. THE BORROWER HEREBY
IRREVOCABLY AND UNCONDITIONALLY:
(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO
WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN
RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH
ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO
PLEAD OR CLAIM THE SAME;
(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL
(OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE
BORROWER AT ITS ADDRESS SET FORTH IN SUBSECTION 10.2 OR AT SUCH OTHER
ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT
THERETO;
(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT TO SUE IN ANY OTHER JURISDICTION; AND
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(e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT
MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO
IN THIS SUBSECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES.
10.13. Acknowledgments. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Credit Documents;
(b) none of the Arrangers, the Agents nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection
with this Agreement or any of the other Credit Documents, and the
relationship between any of the Agents and the Lenders, on one hand, and
the Borrower, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Credit
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Borrower and the Lenders.
10.14. WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS, THE ARRANGERS,
THE LENDERS AND THE OTHER PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.15. Confidentiality. Each Lender agrees to keep confidential all
non-public information provided to it by the Borrower pursuant to this
Agreement that is designated by the Borrower in writing as confidential
(excluding any such information already in the possession of such Lender or
provided to such Lender by a third party not in violation of this Agreement
which, in either case, is not, to the knowledge of such Lender, subject to a
confidentiality agreement); provided that nothing herein shall prevent any
Lender from disclosing any such information (i) to any Agent or any other
Lender or any of its Affiliates, (ii) to any Transferee or prospective
Transferee or to any direct or indirect contractual counterparties in swap
agreements or such contractual counterparties' professional advisors which
receives such information and agrees to be bound by the confidentiality
provisions hereof, (iii) to its employees, directors, agents, attorneys,
accountants and other professional advisors, (iv) upon the request or demand of
any Governmental Authority having jurisdiction over such Lender, (v) in
response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, (vi) which has been
publicly disclosed other than in breach of this Agreement, or (vii) in
connection with the exercise of any remedy hereunder.
10.16. Conversion of Currencies. (a) If, for the purpose of obtaining
judgment in any court, it is necessary to convert a sum owing
hereunder in one currency into another currency, each party hereto
agrees, to the fullest extent that it may effectively do so, that the
rate of exchange used shall be that at which in
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accordance with normal banking procedures in the relevant jurisdiction
the first currency could be purchased with such other currency on the
Business Day immediately preceding the date on which final judgment is
given.
(b) The obligations of the Borrower in respect of any sum due to
any party hereto or any holder of the obligations owing hereunder (the
"Applicable Creditor") shall, notwithstanding any judgment in a
currency (the "Judgment Currency") other than the currency in which
such sum is stated to be due hereunder (the "Agreement Currency"), be
discharged only to the extent that, on the Business Day following
receipt by the Applicable Creditor of any sum adjudged to be so due in
the Judgment Currency, the Applicable Creditor may in accordance with
normal banking procedures in the relevant jurisdiction purchase the
Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency so purchased is less than the sum originally due to
the Applicable Creditor in the Agreement Currency, the Borrower
agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify the Applicable Creditor against such loss. The
obligations of the Borrower contained in this subsection 10.16 shall
survive the termination of this Agreement and the payment of all other
amounts owing hereunder.
10.17. Year 2000. The Borrower has reviewed, or will expeditiously
review, its operations and those of its Subsidiaries with a view to assessing
whether its businesses, or the businesses of any of its Subsidiaries, will be
vulnerable to a Year 2000 Problem. The Borrower shall take all actions
necessary and commit adequate resources to assure that its computer-based and
other systems (and those of all of its Subsidiaries) are able to effectively
process data, including dates before, on and after January 1, 2000, without
experiencing any Year 2000 Problem that could reasonably be expected to cause a
Material Adverse Effect. At the request of the Required Lenders, the Borrower
will provide the Administrative Agent with assurances and substantiations
(including, but not limited to, the results of internal or external audit
reports prepared in the ordinary course of business) reasonably acceptable to
the Administrative Agent as to the capability of the Borrower and its
Subsidiaries to conduct its and their businesses and operations before, on and
after January 1, 2000 without experiencing a Year 2000 Problem causing a
Material Adverse Effect. The Borrower represents and warrants that it has a
reasonable basis to believe that no Year 2000 Problem will cause a Material
Adverse Effect.
10.18. Existing Agreements Superseded. As set forth in subsection 1.3
hereof, the Original Credit Agreement is superseded by this Credit Agreement,
which has been executed in renewal, amendment, restatement and modification,
but not in novation or extinguishment of, the obligations under the Original
Credit Agreement.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
L-3 COMMUNICATIONS CORPORATION
By:
--------------------------------
Title:
LEHMAN COMMERCIAL PAPER INC.,
as Documentation Agent,
Syndication Agent,
an Arranger and as a Lender
By:
--------------------------------
Title:
BANK OF AMERICA NT & SA
as Administrative Agent
By:
--------------------------------
Title:
BANK OF AMERICA NT & SA
as a Lender
By:
--------------------------------
Title:
BANCAMERICA ROBERTSON STEPHENS,
as an Arranger
By:
--------------------------------
Title:
Signature pages to Amended and Restated Credit Agreement
<PAGE>
BANK OF AMERICA NT & SA
as an Issuing Lender
By:
--------------------------------
Title:
BANK OF AMERICA NT & SA
as Swing Line Lender
By:
--------------------------------
Title:
Signature pages to Amended and Restated Credit Agreement
<PAGE>
THE BANK OF NEW YORK
By:
--------------------------------
Title:
Signature pages to Amended and Restated Credit Agreement
<PAGE>
THE BANK OF NOVA SCOTIA
By:
--------------------------------
Title:
Signature pages to Amended and Restated Credit Agreement
<PAGE>
CREDIT LYONNAIS NEW YORK BRANCH
By:
--------------------------------
Title:
Signature pages to Amended and Restated Credit Agreement
<PAGE>
THE FIRST NATIONAL BANK OF CHICAGO
By:
--------------------------------
Title:
Signature pages to Amended and Restated Credit Agreement
<PAGE>
FIRST UNION COMMERCIAL CORPORATION
By:
--------------------------------
Title:
Signature pages to Amended and Restated Credit Agreement
<PAGE>
FLEET NATIONAL BANK
By:
--------------------------------
Title:
Signature pages to Amended and Restated Credit Agreement
<PAGE>
THE FUJI BANK, LIMITED NEW YORK
BRANCH
By:
--------------------------------
Title:
Signature pages to Amended and Restated Credit Agreement
<PAGE>
MARINE MIDLAND BANK
By:
--------------------------------
Title:
Signature pages to Amended and Restated Credit Agreement
<PAGE>
SOCIETE GENERALE, NEW YORK BRANCH
By:
--------------------------------
Title:
Signature pages to Amended and Restated Credit Agreement
<PAGE>
Schedule I
To Credit Agreement
Lenders/Address for Notices Revolving Credit Commitment
LEHMAN COMMERCIAL PAPER INC. $25,714,285.72
3 World Financial Center, 9th
Floor
New York, New York 10285
Attention: Michelle Swanson
Fax : (212) 528-0819
BANK OF AMERICA NATIONAL TRUST $25,714,285.72
AND SAVINGS ASSOCIATION
231 South LaSalle Street
Chicago, IL 60697
Attention: Renee Waller
Fax: (312) 974-9626
Tel: (312) 828-3874
with a copy to other parties
listed in ss.10.2 for BOA.
CREDIT LYONNAIS NEW YORK BRANCH $17,142,857.14
1301 Avenue of the Americas
New York, NY 10019-6022
Attention: Alex Averbukh
Mary Collier
Fax: (212) 459-3179
Tel: (212) 261-7335
FLEET NATIONAL BANK $17,142,857.14
One Federal Street
Boston, MA 02211
Attention: Roger Boucher
Fax: (617) 346-0145
Tel: (617) 346-0616
I-1
<PAGE>
MARINE MIDLAND BANK $17,142,857.14
140 Broadway
New York, NY 10005-1196
Attention: Susan LeFevre
Fax: (212) 658-2586
Tel: (212) 658-2200
THE BANK OF NOVA SCOTIA $17,142,857.14
One Liberty Plaza
New York, NY 10006
Attention: Tim Finneran
Fax: (212) 225-5090
Tel: (212) 225-5159
THE FIRST NATIONAL BANK OF $17,142,857.14
CHICAGO
153 West 51st Street
New York, NY 10019-6025
Attention: Amy Robbins
Fax: (212) 373-1180
Tel: (212) 373-1023
THE FUJI BANK, LIMITED NEW YORK $11,428,571.44
BRANCH
Two World Trade Center, 79th Floor
New York, NY 10048-0001
Attention: Jay Shankar
Fax: (212) 912-0516
Tel: (212) 898-2143
SOCIETE GENERALE, NEW YORK $17,142,857.14
BRANCH
1221 Avenue of the Americas
New York, NY 10020
Attention: Bob Peterson
Fax: (212) 278-7490
Tel: (212) 278-7037
I-2
<PAGE>
THE BANK OF NEW YORK $17,142,857.14
One Wall Street
New York, NY 10286
Attention: Ken Sneider
Fax: (212) 635-6999
Tel: (212) 635-6863
FIRST UNION COMMERCIAL $17,142,857.14
CORPORATION
1970 Chain Bridge Road, 9th Floor
McLean, VA 22102
Attention: Chris Hetterly
Fax: (703) 760-6019
Tel: (703) 760-5965
I-3
<PAGE>
Schedule II
to Credit Agreement
PRICING GRID**
<TABLE>
<CAPTION>
REVOLVING CREDIT
FACILITY REVOLVING CREDIT
APPLICABLE FACILITY, REVOLVING
MARGIN-EURODOLLAR APPLICABLE CREDIT
DEBT RATIO RATE* MARGIN-BASE RATE* COMMITMENT FEE
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(is greater than or equal to) 4.75x 187.5 87.5 50
(is greater than or equal to) 4.25x 162.5 62.5 50
(is greater than or equal to) 3.75x 137.5 37.5 45
(is greater than or equal to) 3.25x 112.5 12.5 37.5
(is greater than or equal to) 2.75x 87.5 0.0 30
(is less than or equal to) 2.75x 62.5 0.0 25
</TABLE>
- -------------------
* Notwithstanding the foregoing grid: (a) the Applicable Margin for the
Revolving Credit Facility for the period following the Closing Date
through but excluding the first Adjustment Date under this Agreement will
be .625% for Base Rate Loans and 1.625% for Eurodollar Loans and (b) the
Commitment Fee Rate for the Revolving Credit Facility for the period
following the Closing Date through but excluding the first Adjustment
Date under this Agreement will be 0.50%
** Pricing Grid (except for Debt Ratio) reflects basis points.
<PAGE>
===============================================================================
364 DAY CREDIT AGREEMENT
AMONG
L-3 COMMUNICATIONS CORPORATION,
A DELAWARE CORPORATION,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
THE CERTAIN FINANCIAL INSTITUTIONS NAMED AS CO-AGENTS HEREIN,
BANCAMERICA ROBERTSON STEPHENS
AND
LEHMAN COMMERCIAL PAPER INC.,
AS ARRANGERS,
BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION,
AS ADMINISTRATIVE AGENT
AND
LEHMAN COMMERCIAL PAPER INC.,
AS DOCUMENTATION AGENT AND SYNDICATION AGENT
DATED AS OF AUGUST 13, 1998
===============================================================================
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS......................................................1
1.1. Defined Terms.....................................................1
1.2. Other Definitional Provisions....................................24
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS........................25
2.1. Commitments......................................................25
2.2. Procedure for Borrowing..........................................26
2.3. Commitment Fee...................................................27
2.4. Termination or Reduction of Revolving 364 Day
Commitments.....................................................27
2.5. Extension of Revolving 364 Day Termination Date;
Conversion Option; Repayment of Loans; Evidence of
Debt............................................................27
2.6. Optional Prepayments; Mandatory Prepayments and
Reduction of Commitments........................................31
2.7. Conversion and Continuation Options..............................33
2.8. Minimum Amounts and Maximum Number of Tranches...................34
2.9. Interest Rates and Payment Dates.................................34
2.10. Computation of Interest and Fees................................35
2.11. Inability to Determine Interest Rate............................35
2.12. Pro Rata Treatment and Payments.................................36
2.13. Illegality......................................................38
2.14. Requirements of Law.............................................38
2.15. Taxes...........................................................40
2.16. Indemnity.......................................................42
2.17. Replacement of Lenders..........................................43
2.18. Certain Fees....................................................44
2.19. Certain Rules Relating to the Payment of Additional
Amounts.........................................................44
SECTION 3. LETTERS OF CREDIT................................................44
3.1. L/C Commitment...................................................44
3.2. Procedure for Issuance of Letters of Credit......................45
3.3. Fees, Commissions and Other Charges..............................46
3.4. L/C Participation................................................46
3.5. Reimbursement Obligation of the Borrower.........................48
3.6. Obligations Absolute.............................................48
3.7. Letter of Credit Payments........................................49
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<PAGE>
3.8. Application......................................................49
3.9. Determination of Exchange Rate...................................49
SECTION 4. REPRESENTATIONS AND WARRANTIES...................................50
4.1. Financial Condition..............................................50
4.2. No Change........................................................50
4.3. Corporate Existence; Compliance with Law.........................50
4.4. Corporate Power; Authorization; Enforceable
Obligations.....................................................51
4.5. No Legal Bar.....................................................51
4.6. No Material Litigation...........................................51
4.7. No Default.......................................................51
4.8. Ownership of Property; Liens.....................................52
4.9. Intellectual Property............................................52
4.10. Taxes...........................................................52
4.11. Federal Regulations.............................................52
4.12. ERISA...........................................................52
4.13. Investment Company Act; Other Regulations.......................53
4.14. Subsidiaries....................................................53
4.15. Purpose of Loans................................................53
4.16. Environmental Matters...........................................53
4.17. Collateral Documents............................................55
4.18. Accuracy and Completeness of Information........................55
4.19. Labor Matters...................................................55
SECTION 5. CONDITIONS PRECEDENT.............................................55
5.1. Conditions to Initial Loans......................................55
5.2. Conditions to Each Extension of Credit...........................58
SECTION 6. AFFIRMATIVE COVENANTS............................................59
6.1. SEC Filings......................................................59
6.2. Certificates; Other Information..................................59
6.3. Payment of Obligations...........................................60
6.4. Conduct of Business; Maintenance of Existence and
Property; Compliance with Law...................................60
6.5. Insurance........................................................61
6.6. Inspection of Property; Books and Records; Discussions...........61
6.7. Notices..........................................................61
6.8. Environmental Laws...............................................62
6.9. Further Assurances...............................................63
6.10. Additional Collateral...........................................63
6.11. [Intentionally Omitted.]........................................63
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<PAGE>
6.12. Foreign Jurisdictions...........................................64
6.13. Government Contracts............................................64
6.14. Lien Searches...................................................64
SECTION 7. NEGATIVE COVENANTS...............................................64
7.1. Financial Condition Covenants....................................64
7.2. Limitation on Indebtedness.......................................65
7.3. Limitation on Liens..............................................67
7.4. Limitation on Guarantee Obligations..............................69
7.5. Limitation on Fundamental Changes................................69
7.6. Limitation on Sale of Assets.....................................70
7.7. Limitation on Dividends..........................................70
7.8. Limitation on Capital Expenditures...............................71
7.9. Limitation on Investments, Loans and Advances....................71
7.10. Limitation on Optional Payments and Modifications of
Instruments and Agreements......................................72
7.11. Limitation on Transactions with Affiliates......................73
7.12. Limitation on Sales and Leasebacks..............................73
7.13. Limitation on Changes in Fiscal Year............................74
7.14. Limitation on Negative Pledge Clauses...........................74
7.15. Limitation on Lines of Business.................................74
7.16. Designated Senior Debt..........................................74
SECTION 8. EVENTS OF DEFAULT................................................74
SECTION 9. THE AGENTS; THE ARRANGERS........................................78
9.1. Appointment......................................................78
9.2. Delegation of Duties.............................................78
9.3. Exculpatory Provisions...........................................78
9.4. Reliance by Agents...............................................78
9.5. Notice of Default................................................79
9.6. Non-Reliance on Agents and Other Lenders.........................79
9.7. Indemnification..................................................80
9.8. Agents, in Their Individual Capacities...........................80
9.9. Successor Administrative Agent, Syndication Agent and
Documentation Agent.............................................80
9.10. The Arrangers and the Co-Agents.................................81
SECTION 10. MISCELLANEOUS...................................................81
10.1. Amendments and Waivers..........................................81
10.2. Notices.........................................................82
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<PAGE>
10.3. No Waiver; Cumulative Remedies..................................84
10.4. Survival of Representations and Warranties......................84
10.5. Payment of Expenses and Taxes...................................85
10.6. Successors and Assigns; Participation and Assignments...........85
10.7. Adjustments; Set-off............................................89
10.8. Counterparts....................................................90
10.9. Severability....................................................90
10.10. Integration....................................................90
10.11. GOVERNING LAW..................................................91
10.12. SUBMISSION TO JURISDICTION; WAIVERS............................91
10.13. Acknowledgments................................................91
10.14. WAIVERS OF JURY TRIAL..........................................92
10.15. Confidentiality................................................92
10.16. Conversion of Currencies.......................................92
10.17. Year 2000......................................................93
iv
<PAGE>
EXHIBITS
Exhibit A-1 Form of Revolving 364 Day Note
Exhibit A-2 Form of Term Note
Exhibit B-1 Form of Parent Guarantee
Exhibit B-2 Form of Subsidiary Guarantee
Exhibit B-3 Form of Parent Pledge Agreement
Exhibit B-4A Form of Borrower Pledge Agreement
Exhibit B-4B Form of Charge Over Shares
Exhibit B-5 Form of Subsidiary Pledge Agreement
Exhibit C-1 Form of Legal Opinion of Simpson Thacher and Bartlett
Exhibit C-2 Form of Internal Counsel Opinion
Exhibit D Form of Borrowing Certificate
Exhibit E Form of Certificate of Non-U.S. Lender
Exhibit F Form of Assignment and Acceptance
Exhibit G Form of Increased Commitment Agreement
Exhibit H Form of Lender Addition Agreement
SCHEDULES
Schedule I Lenders and Commitments
Schedule II Pricing Grid
Schedule III Transaction Documents
Schedule 4.4 Required Consents
Schedule 4.5 No Legal Bar
Schedule 4.6 Material Litigation
Schedule 4.8 Real Property
Schedule 4.9 Intellectual Property Claims
Schedule 4.10 Taxes
Schedule 4.14 Subsidiaries
Schedule 7.2(f) Existing Indebtedness
Schedule 7.3(f) Existing Liens
Schedule 7.4 Existing Guarantee Obligations
Schedule 7.9(c) Officers
Schedule 7.9(g) Existing Investments
Schedule 7.9(k) Approved Investments
v
<PAGE>
THIS 364 DAY CREDIT AGREEMENT, dated as of August 13, 1998, is among
L-3 Communications Corporation, a Delaware corporation (the "Borrower") which
is wholly owned by L-3 Communications Holdings, Inc., a Delaware corporation
("Holdings"), the several banks and other financial institutions or entities
from time to time parties hereto (the "Lenders"), Lehman Commercial Paper Inc.
("LCPI") and BancAmerica Robertson Stephens, as arrangers (each, in such
capacity, an "Arranger" and together, the "Arrangers"), LCPI, as syndication
agent and documentation agent (in such capacity, the "Syndication Agent" and
the "Documentation Agent"), Bank of America National Trust & Savings
Association ("BOA"), as administrative agent for the Agents (as defined below)
and the Lenders (in such capacity, the "Administrative Agent"), and certain
financial institutions named as Co-Agents (as amended, supplemented, restated
or otherwise modified from time to time, is hereinafter referred to as this
"Agreement" or the "Credit Agreement").
WHEREAS, the Borrower has requested that the Lenders extend credit to
it for working capital and general corporate purposes of the Borrower and its
Subsidiaries upon the terms and subject to conditions set forth herein; and
WHEREAS, the Lenders are willing to extend such credit to the Borrower
upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1. Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
"Acquired Business": a company or business unit acquired by the
Borrower or any of its Subsidiaries, provided that the Borrower has
delivered to the Administrative Agent historical financial statements of
such company or business unit prepared in accordance with GAAP.
"Adjustment Date": the fifth day following the receipt by the
Administrative Agent of the financial statements for the most recently
completed fiscal period furnished pursuant to subsection 6.1 and the
compliance certificate with respect to such financial statements furnished
pursuant to subsection 6.2(c). For purposes of determining the Applicable
Margin and the Commitment Fee Rate, the first "Adjustment Date" shall mean
the date on which the financial statements for the fiscal quarter ended
December 31, 1998 furnished pursuant to subsection 6.1 and the related
compliance certificate furnished pursuant to subsection 6.2(c) are
delivered to the Administrative Agent pursuant to subsection 6.1 and
6.2(c), respectively.
"Administrative Agent": BOA, or following the resignation of BOA as
Administrative Agent, any other Lender which may be appointed as
Administrative Agent pursuant to subsection 9.9.
"Affected Class": as defined in subsection 10.1.
<PAGE>
"Affected Lender": as defined in subsection 10.7.
"Affiliate": as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person
means the power, directly or indirectly, either to (a) vote 10% or more of
the securities having ordinary voting power for the election of directors
of such Person or (b) direct or cause the direction of the management and
policies of such Person, whether by contract or otherwise.
"Agents": the collective reference to the Syndication Agent, the
Documentation Agent and the Administrative Agent.
"Aggregate Outstanding Extensions of Credit": as to any Lender with
respect to any Type of Loan at any time, an amount equal to the sum of (a)
the aggregate principal amount of all Loans of such Type made by such
Lender then outstanding and (b) such Lender's Commitment Percentage of the
L/C Obligations then outstanding.
"Agreement": this Credit Agreement, as amended, restated, supplemented
or otherwise modified from time to time.
"Agreement Currency": as defined in subsection 10.16(b).
"Alternative Currency": any currency which as of the time of any
issuance or renewal, as applicable, of a Foreign L/C is freely tradeable
and convertible into Dollars and has been approved as an "Alternative
Currency" for the purposes of this Agreement by the Issuing Lender.
"Applicable Converted Commitment": as defined in subsection 2.5(b).
"Applicable Creditor": as defined in subsection 10.16(b).
"Applicable Holdback": as defined in subsection 2.6(b)(ii).
"Applicable Issuing Lender": an Issuing Lender as to which (a) any
proposed New Lender under subsection 2.1(a) shall become an L/C Participant
upon giving effect to the relevant Lender Addition Agreement and/or (b) any
proposed Assignee under subsection 10.6 shall become an L/C Participant
upon giving effect to the relevant Assignment and Acceptance.
"Applicable Margin": at any time, the percentages set forth on
Schedule II under the relevant column heading opposite the level of the
Debt Ratio most recently determined; provided that (a) the Applicable
Margins commencing on the Closing Date shall be those set forth in Schedule
II opposite a Debt Ratio captioned "greater than or equal to 4.25 until the
first Adjustment Date, (b) the Applicable Margins determined for any
Adjustment Date (including the first Adjustment Date) shall remain in
effect until a subsequent Adjustment Date for which the Debt Ratio falls
within a different level and (c) if the financial statements and related
compliance certificate for any fiscal period are
2
<PAGE>
not delivered by the date due pursuant to subsections 6.1 and 6.2, the
Applicable Margins shall be (i) for the first 35 days subsequent to such
due date, the Applicable Margin in effect prior to such due date and (ii)
thereafter, those set forth opposite a Debt Ratio captioned "greater than
or equal to 4.75," in either case, until the date of delivery of such
financial statements and compliance certificate.
"Application": an application, in such form as the Issuing Lender may
specify from time to time, requesting the Issuing Lender to issue a Letter
of Credit.
"Asset Contribution": as defined in the recitals to the Original
Credit Agreement.
"Asset Sale": any sale, sale-leaseback, or other disposition by any
Person or any Subsidiary thereof of any of its property or assets,
including the stock of any Subsidiary of such Person, except sales and
dispositions permitted by subsection 7.6 other than subsection 7.6(b)
or (e).
"Assignee": as defined in subsection 10.6(c).
"Attributable Debt": in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the
rate of interest implicit in such transaction, determined in accordance
with GAAP) of the obligation of the lessee for net rental payments during
the remaining term of the lease included in such sale and leaseback
transaction (including any period for which such lease has been extended or
may, at the option of the lessor, be extended).
"Available Commitment": as to any Lender and any Type of Loan, at any
time, an amount equal to the excess, if any, of (a) such Lender's
Commitment with respect to such Type of Loan over (b) such Lender's
Aggregate Outstanding Extensions of Credit with respect to such Type of
Loan.
"Base Rate": for any day, the higher of: (a) 0.50% per annum above the
latest Federal Funds Rate; and (b) the rate of interest in effect for such
day as publicly announced from time to time by BOA in San Francisco,
California, as its "reference rate." (The "reference rate" is a rate set by
BOA based upon various factors including BOA's costs and desired return,
general economic conditions and other factors, and is used as a reference
point for pricing some loans, which may be priced at, above, or below such
announced rate.)
"Base Rate Loans": Loans the rate of interest applicable to which is
based upon the Base Rate.
"BOA": as defined in the recitals to this Agreement.
"Borrower Pledge Agreement": the Amended and Restated Borrower Pledge
Agreement substantially in the form of Exhibit B-4A, to be executed and
delivered by the Borrower, as the same may be amended, supplemented or
otherwise modified.
3
<PAGE>
"Borrowing Date": any Business Day specified in a notice pursuant to
subsection 2.2 as a date on which the Borrower requests the Lenders to make
Loans hereunder.
"Business": as defined in subsection 4.16.
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City or San Francisco, California are
authorized or required by law to close and, if the applicable Business Day
relates to Eurodollar Loans or Foreign L/Cs, any day on which dealings are
carried on in the applicable London interbank market.
"Calculation Date": with respect to each Foreign L/C, during the
period that such Foreign L/C is outstanding (or the Reimbursement
Obligation in connection therewith has not been fully satisfied) (i) the
last Business Day of a fiscal month, (ii) the date on which such Letter of
Credit is to be issued or renewed by the Issuing Lender, (iii) the date on
which any draft presented under such Letter of Credit is paid by the
Issuing Lender, (iv) such other dates as the Borrower may reasonably
request from time to time, and (v) such other dates as the Issuing Lender
or the Administrative Agent may select from time to time, provided that the
Borrower receives prompt notice thereof.
"Capital Expenditures" for any fiscal period, the aggregate of all
expenditures that, in conformity with GAAP (but excluding capitalized
interest), are or are required to be included as additions during such
period to property, plant or equipment reflected on the consolidated
balance sheet of the Borrower and its Subsidiaries, excluding the
expenditures relating to the Transaction.
"Capital Lease Obligations": of any Person as of the date of
determination, the aggregate liability of such Person under Financing
Leases reflected on a balance sheet of such Person under GAAP.
"Capital Partners": Lehman Brothers Capital Partners III, L.P.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"Cash Equivalents": (a) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed or insured by the
United States Government or any agency thereof, (b) certificates of deposit
and time deposits with maturities of one year or less from the date of
acquisition and overnight bank deposits of any Lender or of any commercial
bank having capital and surplus in excess of $500,000,000, (c) repurchase
obligations of any Lender or of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more
than 90 days with respect to securities issued or fully guaranteed or
insured by the United States Government, (d) commercial paper of a domestic
issuer rated at least A-2 by Standard
4
<PAGE>
and Poor's Ratings Group ("S&P") or P-2 by Moody's Investors Service,
Inc. ("Moody's"), or carrying an equivalent rating by a nationally
recognized rating agency if both of S&P and Moody's cease publishing
ratings of investments, (e) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A by
Moody's, (f) securities with maturities of one year or less from the date
of acquisition backed by standby letters of credit issued by any Lender or
any commercial bank satisfying the requirements of clause (b) of this
definition or (g) shares of money market mutual or similar funds which
invest exclusively in assets satisfying the requirements of clauses (a)
through (f) of this definition.
"Change of Control": the occurrence of any of the following events:
(i) the Principals and their Related Parties, as a whole, shall at any
time cease to own, directly or indirectly, 51% of the Voting Stock of
Holdings (measured by voting power rather than number of shares),
determined on a fully diluted basis, and any "person" (as such term is
defined in Section 13(d)(3) of the Exchange Act) other than the Principals
and their Related Parties shall become the "beneficial owner" (as such term
is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly
or indirectly, of more than 25% of the Voting Stock of Holdings (measured
by voting power rather than number of shares);
(ii) a majority of the members of the Board of Directors of Holdings
fail to be (a) members of the Board of Directors incumbent as of the
Closing Date, or (b) members nominated by the members of the Board of
Directors incumbent on the Closing Date, or (c) members appointed by
members of the Board nominated under clause (a) or (b);
(iii) Holdings shall, at any time, cease to own 100% of the Capital
Stock of the Borrower; or
(iv) a "Change of Control" shall have occurred under the Indenture or
the New Subordinated Debt Indenture.
"Charge Over Shares": the Charge Over Shares substantially in the form
of Exhibit B-4B, to be executed and delivered by the Borrower, as the same
may be amended, supplemented or otherwise modified.
"Class": (i) Lenders having Loan Exposure (taken together as a single
class) and (ii) Facility A Lenders having Facility A Loan Exposure (taken
together as a single class).
"Closing Date": the date on which the conditions precedent set forth
in subsection 5.1 are satisfied.
5
<PAGE>
"Co-Agents": collectively, Fleet National Bank, The Bank of New York,
The Bank of Nova Scotia, Credit Lyonnais New York Branch, The First
National Bank of Chicago, First Union Commercial Corporation, Marine
Midland Bank, and Societe Generale, New York Branch.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all assets of the Credit Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by any
Pledge Agreement.
"Commitment": as to any Lender, such Lender's Revolving 364 Day
Commitment and, subject to satisfaction of the conditions precedent in
subsection 2.5(b) hereto, Term Loan Commitment.
"Commitment Fee Rate": at any time, the applicable rates per annum on
Schedule II under the relevant column heading for the Revolving 364 Day
Facility set forth opposite the level of the Debt Ratio most recently
determined; provided that (a) the Commitment Fee Rate commencing on the
Closing Date shall be that set forth in Schedule II opposite a Debt Ratio
captioned "greater than or equal to 4.25" until the first Adjustment Date,
(b) the Commitment Fee Rate determined for any Adjustment Date (including
the first Adjustment Date) shall remain in effect until a subsequent
Adjustment Date for which the Debt Ratio falls within a different level and
(c) if the financial statements and related compliance certificate for any
fiscal period are not delivered by the date due pursuant to subsections 6.1
and 6.2, the Commitment Fee Rate shall be (i) for the first 35 days
subsequent to such due date, the Commitment Fee Rate in effect prior to
such due date and (ii) thereafter, that set forth opposite a Debt Ratio
captioned "greater than or equal to 4.75," in either case, until the date
of delivery of such financial statements and compliance certificate.
"Commitment Percentage": as to the Commitment of any Lender with
respect to any Type of Loan at any time, the percentage which the
Commitment of such Lender with respect to such Type of Loan then
constitutes of the aggregate Commitments with respect to such Type of Loan
(or, at any time after such Commitments shall have expired or terminated,
the percentage which the aggregate amount of the Aggregate Outstanding
Extensions of Credit of such Lender with respect to such Type of Loan
constitutes of the aggregate amount of the Aggregate Outstanding Extensions
of Credit of all Lenders with respect to such Type of Loan).
"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of
Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 (b) or (c) of the
Code.
"Consolidated EBITDA": as of the last day of any fiscal quarter,
Consolidated Net Income of the Borrower, its Subsidiaries and, without
duplication, the Acquired Businesses (excluding, without duplication, (x)
extraordinary gains and losses in
6
<PAGE>
accordance with GAAP, (y) gains and losses in connection with asset
dispositions whether or not constituting extraordinary gains and losses and
(z) gains or losses on discontinued operations) for such period, plus (i)
Consolidated Interest Expense of the Borrower, its Subsidiaries and,
without duplication, the Acquired Businesses for such period, plus (ii) to
the extent deducted in computing such Consolidated Net Income of the
Borrower, its Subsidiaries and, without duplication, the Acquired
Businesses, the sum of income taxes, depreciation and amortization for the
four fiscal quarters ended on such date.
"Consolidated Cash Interest Expense": as of the last day of any fiscal
quarter, the amount of interest expense, paid in cash, of the Borrower and
its Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP for the four fiscal quarters ended on such date.
"Consolidated Interest Expense": for any Person, as of the last day of
any fiscal quarter, the amount of interest expense of such Person for such
period, determined on a consolidated basis in accordance with GAAP for the
four fiscal quarters ended on such date.
"Consolidated Net Income": for any Person and for any fiscal period,
net income of such Person, determined on a consolidated basis in accordance
with GAAP.
"Consolidated Total Assets": at any date, all assets of the Borrower
and its Subsidiaries as determined according to the consolidated balance
sheet contained in the SEC filing most recently delivered pursuant to
subsection 6.1 or, if no such SEC filing has yet been delivered, the
balance sheet referred to in subsection 4.1(a)(ii).
"Consolidated Total Debt": at any date, all Indebtedness of the
Borrower and its Subsidiaries outstanding on such date for borrowed money
or the deferred purchase price of property, including, without limitation,
in respect of Financing Leases but excluding Indebtedness permitted
pursuant to subsection 7.2(g).
"Consolidated Working Capital": at any date, the excess of (a) the sum
of all amounts (other than cash and Cash Equivalents) that would, in
accordance with GAAP, be set forth opposite the caption "total current
assets" (or any like caption) on a consolidated balance sheet of the
Borrower and its Subsidiaries at such date over (b) the sum of all amounts
that would, in accordance with GAAP, be set forth opposite the caption
"total current liabilities" (or any like caption) on a consolidated balance
sheet of the Borrower and its Subsidiaries on such date (excluding, to the
extent it would otherwise be included under current liabilities, any
short-term Consolidated Total Debt and the current portion of any long-term
Consolidated Total Debt).
"Constitutional Documents": as to any Person, the articles or
certificate of incorporation and by-laws, partnership agreement or other
organizational documents of such Person.
7
<PAGE>
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Conversion Option": as defined in subsection 2.5(b).
"Credit Documents": this Agreement, the Notes, the Applications, the
Guarantees and the Pledge Agreements.
"Credit Parties": the Borrower, Holdings, and each Subsidiary of the
Borrower which is a party to a Credit Document.
"Debt Ratio": as at the last day of any fiscal quarter, the ratio of
(a) Consolidated Total Debt minus Designated Cash Balances on such date to
(b) Consolidated EBITDA.
"Default": any of the events specified in Section 8, whether or not
any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Designated Cash Balances": at any time, the lesser of (a) actual
unrestricted cash balances on hand of Borrower and its Subsidiaries which
are not subject to any Liens in favor of any Person (other than those
described in subsection 7.3(o) hereof) and (b) $50,000,000.
"Dollar Equivalent": at any time, (a) as to any amount denominated in
Dollars, the amount thereof at such time, and (b) as to any amount
denominated in an Alternative Currency, the equivalent amount in Dollars as
determined on the basis of the Exchange Rate for the purchase of Dollars
with such Alternative Currency as of the most recent Calculation Date.
"Dollars" and "$": dollars in lawful currency of the United States of
America.
"Domestic L/C": a Letter of Credit denominated in Dollars.
"Dow Jones Page 3750": the display designated as page "3750" on the
Dow Jones Market Service (formerly known as the Telerate Service) or such
other page as may replace the "3750" page on that service or such other
service or services as may be nominated by the British Bankers' Association
for the purpose of displaying London interbank offered rates for Dollar
deposits.
"Environmental Laws": any and all laws, rules, orders, regulations,
statutes, ordinances, codes, decrees, or other legally enforceable
requirement (including, without limitation, common law) of any foreign
government, the United States, or any state, local, municipal or other
governmental authority, regulating, relating to or imposing liability or
standards of conduct concerning protection of the environment or of human
health as affected by the environment as has been, is now, or may at any
time hereafter be, in effect, including, but not limited to, the
Comprehensive Environmental Response,
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Compensation and Liability Act of 1980, as amended, 42 U.S.C. ss. ss.
9601 et seq.; the Toxic Substance Control Act, 15 U.S.C. ss. ss. 9601 et
seq.; the Hazardous Materials Transportation Act, 49 U.S.C. ss. ss. 1802 et
seq.; the Resource Conservation and Recovery Act, 42 U.S.C. ss. ss. 6901 et
seq.; the Clean Water Act; 33 U.S.C. ss. ss. 1251 et seq.; the Clean Air
Act, 42 U.S.C. ss. ss. 7401 et seq.; or other similar federal and/or state
environmental laws.
"Environmental Permits": any and all permits, licenses, registrations,
notifications, exemptions and any other authorization required under any
applicable Environmental Law.
"Equity Documents": the Stockholders Agreement, the Subscription
Agreements and the Option Agreements.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": means for any day for any
Interest Period the maximum reserve percentage (expressed as a decimal,
rounded upward to the next 1/100th of 1%) in effect on such day (whether or
not applicable to any Lender) under regulations issued from time to time by
the FRB for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect
to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities").
"Eurodollar Business Day": means any Business Day on which commercial
banks are open in London for the transaction of international business,
including dealings in Dollar deposits in the international interbank
markets.
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"Eurodollar Loans Maturity Date": (a) For any date on which any
Eurodollar Loans are outstanding, the Business Day on which the Interest
Period for all such outstanding Eurodollar Loans concurrently terminate and
(b) for any date on which no Eurodollar Loans are outstanding, any Business
Day.
"Eurodollar Rate": means, for any Interest Period, with respect to
Eurodollar Loans comprising part of the same borrowing, the rate of
interest per annum (rounded upward to the next 1/100th of 1%) determined by
the Administrative Agent as follows:
Eurodollar Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage": for any day for any Interest Period
the maximum reserve percentage (expressed as a decimal, rounded upward to
the next 1/100th of 1%) in effect on such day (whether or not applicable to
any Lender) under
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regulations issued from time to time by the FRB for determining the
maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurocurrency funding
(currently referred to as "Eurocurrency liabilities").
"Event of Default": any of the events specified in Section 8, provided
that any requirement for the giving of notice, the lapse of time, or both,
or any other condition, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the excess of
(a) the sum, without duplication, of (i) Consolidated Net Income for the
Borrower and its Subsidiaries for such fiscal year, (ii) the net decrease,
if any, in Consolidated Working Capital during such fiscal year, (iii) to
the extent deducted in computing such Consolidated Net Income for the
Borrower and its Subsidiaries, non-cash interest expense, depreciation and
amortization for such fiscal year, (iv) extraordinary non-cash losses
during such fiscal year subtracted in the determination of Consolidated Net
Income for the Borrower and its Subsidiaries for such fiscal year, (v)
change in deferred tax liability of the Borrower for such fiscal year, (vi)
non-cash losses in connection with asset dispositions whether or not
constituting extraordinary losses and (vii) non-cash ordinary losses less
(b) the sum, without duplication, of (i) the aggregate amount of permitted
cash Capital Expenditures made by the Borrower and its Subsidiaries during
such fiscal year, (ii) the net increase, if any, in Consolidated Working
Capital during such fiscal year, (iii) the aggregate amount of payments of
principal in respect of any Indebtedness not prohibited hereunder during
such fiscal year (other than prepayments of (x) Revolving 364 Day Loans not
accompanied by reductions of the Commitments hereunder and/or (y) Facility
A Loans not accompanied by reductions of Facility A Commitments), (iv)
deferred income tax credit of the Borrower for such fiscal year, (v)
extraordinary non-cash gains during such fiscal year added in the
determination of Consolidated Net Income for the Borrower and its
Subsidiaries for such fiscal year, (vi) non-cash gains in connection with
asset dispositions whether or not constituting extraordinary gains and
(vii) non-cash ordinary gains.
"Exchange Act": the Securities Exchange Act of 1934, as amended.
"Exchange Rate": on any day, with respect to any Alternative Currency,
the spot rate at which Dollars are offered on such day by the Issuing
Lender in San Francisco, California (or such other location selected by the
Issuing Lender) for such Alternative Currency.
"Extending Lender": any Lender consenting to the Extension Option.
"Extension Option": as defined in subsection 2.5(a).
"Facility A Administrative Agent": the "Administrative Agent" as
defined in the Facility A Credit Agreement.
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"Facility A Agents": the "Agents" as defined in the Facility A Credit
Agreement.
"Facility A Commitments": the "Commitments" as defined in the Facility
A Credit Agreement.
"Facility A Credit Agreement": that certain Amended and Restated
Credit Agreement of even date herewith among the Borrower, the Facility A
Lenders, BOA as administrative agent, LCPI as syndication agent and
documentation agent, LCPI and BankAmerica Robertson Stephens as arrangers
and certain financial institutions named as co-agents, as the same may be
amended, supplemented, restated or otherwise modified from time to time.
"Facility A Credit Documents": the "Credit Documents" as defined in
the Facility A Credit Agreement.
"Facility A Eurodollar Tranche": "Eurodollar Tranche" as defined in
the Facility A Credit Agreement.
"Facility A L/C Obligations": the "L/C Obligations" as defined in the
Facility A Credit Agreement.
"Facility A Lenders": the "Lenders" as defined in the Facility A
Credit Agreement.
"Facility A Loan Exposure": the "Loan Exposure" as defined in the
Facility A Credit Agreement.
"Facility A Loans": the "Loans" as defined in the Facility A Credit
Agreement.
"Facility A Notes": the "Notes" as defined in the Facility A Credit
Agreement.
"Facility A Reimbursement Obligations": the "Reimbursement
Obligations" as defined in the Facility A Credit Agreement.
"Federal Funds Effective Rate": for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the FRB (including any such successor,
"H.15(519)") for such day opposite the caption "Federal Funds (Effective)".
If on any relevant day the appropriate rate for such previous day is not
yet published in H.15(519), the rate for such day will be the arithmetic
mean of the rates for the last transaction in overnight Federal funds
arranged prior to 9:00 a.m. (New York City time) on that day by each of
three leading brokers of Federal funds transactions in New York City
selected by the Administrative Agent.
"Financial L/C": a standby Letter of Credit not constituting a
Performance L/C.
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"Financing Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"Foreign L/C": a Letter of Credit denominated in an Alternative
Currency.
"Foreign L/C Obligations": at any time, an amount equal to the sum of
(i) the Dollar Equivalent of the aggregate then undrawn and unexpired face
amount of all then outstanding Foreign L/Cs and (ii) the Dollar Equivalent
of the aggregate amount of all drawings under Foreign L/Cs which have not
then been reimbursed pursuant to subsection 3.5.
"Foreign Subsidiary": any Subsidiary which is organized under the laws
of any jurisdiction outside the United States or under the laws of the U.S.
Virgin Islands.
"FRB": means the Board of Governors of the Federal Reserve System, and
any governmental authority succeeding to any of its principal functions.
"GAAP": generally accepted accounting principles in the United States
of America in effect on the Closing Date.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has issued a
reimbursement or similar obligation, in either case guaranteeing or in
effect guaranteeing any Indebtedness, leases, dividends or other
obligations (the "primary obligations") of any other third Person (the
"primary obligor") in any manner, whether directly or indirectly,
including, without limitation, reimbursement obligations under letters of
credit and any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation
or (2) to maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary obligor,
(iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the
lower of (a) an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guarantee Obligation is made
and (b) the maximum amount for
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<PAGE>
which such guaranteeing person may be liable pursuant to the terms of
the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in
good faith.
"Guarantees": the Parent Guarantee and the Subsidiary Guarantees.
"Immaterial Subsidiary": any Subsidiary of the Borrower having assets
not exceeding five percent (5%) of the Consolidated Total Assets.
"Increased Commitment Agreement": as defined in subsection 2.1(a)(i).
"Indebtedness": of any Person at any date, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of
property or services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with customary
practices and accrued expenses incurred in the ordinary course of
business), (b) any other indebtedness of such Person which is evidenced by
a note, bond, debenture or similar instrument, (c) all obligations of such
Person under Financing Leases, (d) all obligations of such Person in
respect of acceptances issued or created for the account of such Person and
all reimbursement and other obligations with respect to any letters of
credit and surety bonds, whether or not matured or drawn, (e) all
liabilities secured by any Lien on any property owned by such Person even
though such Person has not assumed or otherwise become liable for the
payment thereof and (f) all Attributable Debt of such Person with respect
to sale and leaseback transactions of such Person.
"Indenture": the Indenture between the Borrower and The Bank of New
York, as trustee, pursuant to which the Subordinated Notes are issued.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Interest Payment Date": (a) as to any Base Rate Loan, the last
Business Day of each March, June, September and December, (b) as to any
Eurodollar Loan having an Interest Period of three months or less, the last
Business Day of such Interest Period, and (c) as to any Eurodollar Loan
having an interest period longer than three months, (i) each Business Day
which is three months or a whole multiple thereof after the first day of
such Interest Period and (ii) the last Business Day of such Interest
Period.
"Interest Period": with respect to any Eurodollar Loan:
(a) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one,
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two, three, six or, if made available by the Administrative Agent
and the Lenders, nine or twelve months thereafter, as selected by the
Borrower in its notice of borrowing or notice of conversion, as the
case may be, given with respect thereto;
(b) thereafter, each period commencing on the last day of the
preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three or six or, if made available by the
Administrative Agent and Lenders, nine or twelve months thereafter, as
selected by the Borrower by irrevocable notice to the Administrative
Agent not less than three Business Days prior to the last day of the
then current Interest Period with respect thereto; and
(c) solely for the purpose of permitting the Borrower to (i)
convert Revolving 364 Day Loans into Term Loans on the Revolving 364
Day Termination Date pursuant to the exercise of the Conversion
Option, (ii) repay Revolving 364 Day Loans owing to Nonconsenting
Lenders on the Revolving 364 Day Termination Date in connection with
the exercise of the Extension Option, (iii) fund any scheduled
amortization payment pursuant to subsection 2.5(b) in respect of any
Term Loans then outstanding and (iv) permit the addition of any New
Lender or increase the Revolving 364 Day Commitment of any existing
Lender pursuant to subsection 2.1(a)(i), a period commencing on the
last day of the preceding Interest Period applicable to such
Eurodollar Loan and ending on a Business Day which is no less than
seven (7) and no more than thirty (30) days thereafter, as selected by
the Borrower by irrevocable notice to the Administrative Agent not
less than three Business Days prior to the last day of the then
current Interest Period with respect thereto.
provided that, all of the foregoing provisions relating to Interest Periods
are subject to the following:
(i) if any Interest Period pertaining to a Eurodollar Loan would
otherwise end on a day that is not a Business Day, such Interest Period
shall be extended to the next succeeding Business Day unless the result of
such extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the immediately
preceding Business Day;
(ii) any Interest Period for any Loan that would otherwise extend
beyond the applicable Termination Date shall end on the applicable
Termination Date;
(iii) any Interest Period pertaining to a Eurodollar Loan that begins
on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month in which such
Interest Period would otherwise be scheduled to end) shall end on the last
Business Day of the appropriate calendar month; and
(iv) no Interest Period with respect to any portion of any Type of
Term Loan shall extend beyond a date on which the Borrower is required to
make a scheduled
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payment of principal of Term Loans of such Type unless the sum of (a)
the aggregate principal amount of Term Loans of such Type that are Base
Rate Loans plus (b) the aggregate principal amount of Term Loans of such
Type that are Eurodollar Rate Loans with Interest Periods expiring on or
before such date equals or exceeds the principal amount required to be paid
on Term Loans of such Type on such date.
"Interest Rate Agreement": any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement.
"Interest Rate Agreement Obligations": the obligations of the Borrower
or any of its Subsidiaries to make payments to counterparties under
Interest Rate Agreements in the event of the occurrence of a termination
event thereunder.
"Issuing Lender": BOA, in its capacity as issuer of any Letter of
Credit or, at the election of BOA, such other Lender or Lenders that agrees
to act as Issuing Lender at the request of the Borrower, or upon
resignation by BOA as an Issuing Lender at any time upon notice to the
other parties to this Agreement, such other Lender or Lenders that agree to
act as Issuing Lender at the request of the Borrower and to whom the
Required Lenders consent in writing.
"Judgment Currency": as defined in subsection 10.16 (b).
"LCPI": as defined in the recitals to this Agreement.
"L/C Fee Payment Date": the last Business Day of each March, June,
September and December.
"L/C Obligations": at any time, an amount equal to the sum of (a) the
Dollar Equivalent of the aggregate then undrawn and unexpired amount of the
then outstanding Letters of Credit and (b) the Dollar Equivalent of the
aggregate amount of drawings under Letters of Credit which have not then
been reimbursed pursuant to subsection 3.5.
"L/C Participants": a collective reference to all the Revolving 364
Day Lenders other than the Applicable Issuing Lender.
"Lender" and "Lenders": the persons identified as Lenders and listed
on the signature pages of this Agreement (including the Issuing Lender),
together with their successors and permitted assigns pursuant to subsection
10.6; provided that the term "Lenders", when used in the context of a
particular Commitment, shall mean Lenders having that Commitment.
"Lender Addition Agreement": as defined in subsection 2.1(a)(i).
"Letters of Credit": as defined in subsection 3.1(a).
"LIBOR": as to any Interest Period, the rate per annum determined on
the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on
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the first day of such Interest Period quoted on the second Eurodollar
Business Day prior to the first day of such Interest Period, as such rate
appears on the Dow Jones Page 3750 as of 11:00 A.M. (London time) on such
date, as determined by the Administrative Agent and notified to the Lenders
and the Borrower on such second prior Eurodollar Business Day. If LIBOR
cannot be determined based on the Dow Jones Page 3750, LIBOR means the rate
per annum, as supplied to the Administrative Agent, quoted by BOA's London
Branch to prime banks in the London interbank market for deposits in
Dollars at approximately 11:00 A.M. (London time) two Eurodollar Business
Days prior to the first day of such Interest Period in an amount
approximately equal to the principal amount of the Loans to which such
Interest Period is to apply and for a period of time comparable to such
Interest Period.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement
and any Financing Lease having substantially the same economic effect as
any of the foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Account": as defined in subsection 2.5(g).
"Loan Exposure": with respect to any Lender as of any date of
determination, (i) if there are no outstanding Letters of Credit or
Revolving 364 Day Loans, that Lender's Revolving 364 Day Commitment, and
(ii) otherwise, the sum of (a) the aggregate outstanding principal amount
of the Revolving 364 Day Loans of that Lender plus (b) in the event that
Lender is an Issuing Lender, the Dollar Equivalent of the aggregate stated
or face amount in respect of all Letters of Credit issued by that Lender
and outstanding (in each case net of any participations purchased by other
Lenders in such Letters of Credit or any unreimbursed drawings thereunder)
plus (c) in the event that Lender is a Term Lender, the outstanding
principal amount of the Term Loans of that Lender plus (d) the Dollar
Equivalent of the aggregate amount of all participations purchased by that
Lender in any outstanding Letters of Credit or any unreimbursed drawings
under any Letters of Credit.
"Material Adverse Effect": a material adverse effect on (a) the
business, assets, operations, property or condition (financial or
otherwise) of Holdings and its Subsidiaries taken as a whole or (b) the
validity or enforceability of this or any of the other Credit Documents or
the rights or remedies of the Agents or the Lenders hereunder or
thereunder.
"Materials of Environmental Concern": any hazardous or toxic
substances, materials or wastes, defined or regulated as such in or under,
or that could give rise to liability under, any applicable Environmental
Law, including, without limitation,
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<PAGE>
asbestos, polychlorinated biphenyls, urea-formaldehyde insulation,
gasoline or petroleum (including crude oil or any fraction thereof) or
petroleum products.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Net Proceeds": the aggregate cash proceeds (including Cash
Equivalents) received by Holdings or any of its Subsidiaries in respect of:
(a) any issuance by the Borrower or any of its Subsidiaries of
Indebtedness after the Closing Date;
(b) any Asset Sale; and
(c) any cash payments received in respect of promissory notes or
other evidences of indebtedness delivered to Holdings or such
Subsidiary in respect of an Asset Sale;
in each case net of (without duplication) (i), (A) in the case of an
Asset Sale, the amount required to repay any Indebtedness (other than
the Loans) secured by a Lien on any assets of Holdings or a Subsidiary
of Holdings that are sold or otherwise disposed of in connection with
such Asset Sale and (B) reasonable and appropriate amounts established
by Holdings or such Subsidiary, as the case may be, as a reserve
against liabilities associated with such Asset Sale and retained by
Holdings or such Subsidiary, (ii) the reasonable expenses (including
legal fees and brokers' and underwriters' commissions, lenders fees,
credit enhancement fees, accountants' fees, investment banking fees,
survey costs, title insurance premiums and other customary fees, in
any case, paid to third parties or, to the extent permitted hereby,
Affiliates) incurred in effecting such issuance or sale and (iii) any
taxes reasonably attributable to such sale and reasonably estimated by
Holdings or such Subsidiary to be actually payable.
"New Investment Sublimit" shall mean, as of any date of determination
thereof, an amount equal to (a) $100,000,000 plus (b) (i) Net Proceeds
derived from Asset Sales during the immediately preceding twelve (12) month
period and (ii) Net Proceeds from any Asset Sale that were reinvested
within the twelve (12) month period following such Asset Sale for the
purposes permitted in subsection 7.9(k) to the extent not included in
subclause (i) of this clause (b) plus (c) net cash proceeds derived from
the issuance of any equity securities of Holdings which are contributed to
the Borrower as additional equity capital minus the amount of any Capital
Expenditures funded in any fiscal year of the Borrower and its Subsidiaries
which exceeds the amounts permitted during such fiscal year pursuant to
subsection 7.8 hereof (without giving effect to the second proviso thereto
referring to subsection 7.9(k)).
"New IPO": the issuance of 6,900,000 shares of common stock of
Holdings to the public on or about May 22, 1998.
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"New Lender": as defined in subsection 2.1(a)(i).
"New Subordinated Debt Documents": the New Subordinated Notes, the New
Subordinated Notes Indenture, the Underwriting Agreement dated as of May
18, 1998 among Borrower, its domestic Subsidiaries, Lehman Brothers Inc.,
and BancAmerica Robertson Stephens and any other documents or agreements
executed in connection therewith.
"New Subordinated Debt Indenture": the Indenture between the Borrower
and the Bank of New York, as trustee, pursuant to which the New
Subordinated Notes were issued.
"New Subordinated Notes": the Borrower's 8 1/2% Senior Subordinated
Notes, due 2008 ("Initial New Subordinated Notes") issued on or about May
22, 1998 and any notes, having the same terms as the Initial New
Subordinated Notes, issued in exchange for the Initial New Subordinated
Notes as contemplated by the documents governing the issuance of the
Initial New Subordinated Notes.
"Non-Excluded Taxes": as defined in subsection 2.15.
"Non-U.S. Lender": as defined in subsection 2.15(b).
"Nonconsenting Lenders": as defined in subsection 2.17.
"Notes": The Revolving 364 Day Notes and the Term Notes (or any of
them).
"Obligations": as defined in the Guarantees and the Pledge Agreements.
"Option Agreements": the Option Agreements between Holdings and each
of Frank C. Lanza and Robert V. LaPenta, each dated as of the Original
Closing Date.
"Original Agents": the "Agents" under and as defined in the Original
Credit Agreement.
"Original Closing Date": April 30, 1997.
"Original Credit Agreement": as defined in the Facility A Credit
Agreement.
"Original Lenders": as defined in the Facility A Credit Agreement.
"Parent Distributions": as defined in the Parent Guarantee.
"Parent Guarantee": the Amended and Restated Parent Guarantee
substantially in the form of Exhibit B-1, to be executed and delivered by
Holdings, as the same may be amended, supplemented or otherwise modified.
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"Parent Pledge Agreement": the Amended and Restated Parent Pledge
Agreement substantially in the form of Exhibit B-3, to be executed and
delivered by Holdings, as the same may be amended, supplemented or
otherwise modified.
"Participant": as defined in subsection 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA, or any successor thereto. "Performance
L/C": a standby Letter of Credit issued to ensure the performance of
services and/or delivery of goods by or on behalf of the Borrower.
"Permitted Liens": Liens permitted to exist under subsection 7.3.
"Permitted Stock Payments": (A) dividends by the Borrower to Holdings
in amounts equal to the amounts required for Holdings to (i) pay franchise
taxes and other fees required to maintain its legal existence and (ii)
provide for other operating costs of up to $1,000,000 per fiscal year, (B)
dividends by the Borrower to Holdings in amounts equal to amounts required
for Holdings to pay federal, state and local income taxes to the extent
such income taxes are actually due and owing; provided that the aggregate
amount paid under this clause (B) does not exceed the amount that the
Borrower would be required to pay in respect of the income of the Borrower
and its Subsidiaries if the Borrower were a stand alone entity that was not
owned by Holdings, and (C) from and after May 1, 1999, dividends by the
Borrower to Holdings payable solely out of Excess Cash Flow, provided that,
with respect to this clause (C), (i) as of the last day of the most
recently completed fiscal quarter the Debt Ratio is less than or equal to
3.5 to 1, and (ii) the aggregate amount of dividends paid by the Borrower
to Holdings under this clause (C) since the date of this Agreement does not
exceed $5,000,000.
"Person": an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan covered by
ERISA and in respect of which the Borrower or any Commonly Controlled
Entity maintains, administers, contributes to or is required to contribute
to, or under which the Borrower or any Commonly Controlled Entity may incur
any liability.
"Pledge Agreements": the collective reference to the Parent Pledge
Agreement, the Borrower Pledge Agreement, the Charge Over Shares, the
Subsidiary Pledge Agreement, and any other security documents hereafter
delivered to the Administrative Agent granting a Lien on any asset or
assets of any Person to secure the obligations and liabilities of the
Borrower hereunder and under any of the other Credit Documents or to secure
any guarantee of any such obligations and liabilities.
"Principals": each of Lehman Brothers Holdings, Inc., Capital
Partners, the Seller, Frank C. Lanza and Robert V. LaPenta.
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"Properties": as defined in subsection 4.16.
"Purchase Agreement": the Purchase Agreement, dated as of April 25,
1997, among the Borrower and each of Lehman Brothers, Inc. and BancAmerica
Securities, Inc.
"Register": as defined in subsection 10.6(d).
"Registration Rights Agreement": the Registration Rights Agreement,
dated as of April 30, 1997, among the Borrower and each of Lehman Brothers,
Inc. and BancAmerica Securities, Inc.
"Regulation U": Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"Reimbursement Amount": as defined in subsection 3.5(a).
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to subsection 3.5 for amounts drawn
under Letters of Credit.
"Related Party": with respect to the Principals, (a) any controlling
stockholder, 51% (or more) owned Subsidiary, or spouse or immediate family
member (in the case of an individual) of such Principal or (b) a trust,
corporation, partnership or other entity, the beneficiaries, stockholders,
partners, owners or Persons beneficially holding an 51% or more controlling
interest of which consist of the Principals and/or such other Persons
referred to in the immediately preceding clause (a).
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty-day notice period is
waived under the regulations of the PBGC.
"Required Lenders": at any time, Lenders the Loan Exposure for all
Types of Loans of which aggregate more than 50%.
"Requirement of Law": as to any Person, the Constitutional Documents
of such Person, and any law, treaty, rule or regulation or determination of
an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Requisite Class Lenders": at any time, (a) for the Class of Lenders
having Loan Exposure, Lenders having or holding 66 2/3% of the aggregate
Loan Exposure of all Lenders, and (b) for the Class of Facility A Lenders
having Facility A Loan Exposure, Facility A Lenders having or holding 66
2/3% of the aggregate Facility A Loan Exposure of all Facility A Lenders.
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"Responsible Officer": the chief executive officer, the president or
vice president of the Borrower or, with respect to financial matters, the
chief financial officer, vice president-finance or treasurer of the
Borrower.
"Restricted Government Contracts": as defined in the Pledge
Agreements.
"Revolving Credit Commitment": as defined in the Facility A Credit
Agreement.
"Revolving 364 Day Commitment": the commitment of a Lender, as set
forth on Schedule I hereto as amended from time to time pursuant to this
Agreement, to make Revolving 364 Day Loans to the Borrower pursuant to
Subsection 2.1(a)(i); and "Revolving 364 Day Commitments" means such
commitments of all Lenders in the aggregate, which shall initially be
$150,000,000 and, subject to the terms of subsection 2.1(a)(i), may
hereafter be increased to an amount not to exceed $200,000,000 at any time.
"Revolving 364 Day Commitment Period": the period from and including
the date hereof to but not including the Revolving 364 Day Termination Date
or such earlier date on which the Revolving 364 Day Commitments shall
terminate as provided herein.
"Revolving 364 Day Lender": any Lender or Lenders having a Revolving
364 Day Commitment or a Revolving 364 Day Loan outstanding.
"Revolving 364 Day Loans": the Loans made by Revolving 364 Day Lenders
to the Borrower pursuant to Subsection 2.1(a)(i).
"Revolving 364 Day Notes": (i) the promissory notes of the Borrower,
if any, issued pursuant to subsection 2.5(i) on the Closing Date to
evidence the Revolving 364 Day Loans of any Lender and (ii) any promissory
notes issued by the Borrower pursuant to subsection 10.6(d) in connection
with assignments of the Revolving 364 Day Commitments and Revolving 364 Day
Loans of any Lenders, in each case substantially in the form of Exhibit A-1
annexed hereto, as they may be amended, supplemented or otherwise modified
from time to time.
"Revolving 364 Day Termination Date": the date which is 364 days from
the Closing Date (or if such day is not a Business Day, the Business Day
immediately preceding such date), as the same may be extended in accordance
with subsection 2.5(a) hereof.
"SPD Technologies": SPD Technologies Inc., a Delaware corporation.
"SPD Technologies Acquisition Agreement": the Agreement and Plan of
Merger, dated as of July 2, 1998, among L-3 Communications Corporation, SPD
Merger Co., SPD Technologies, Inc. and Midmark Capital L.P.
"SEC": the Securities and Exchange Commission.
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"Securities Act": Securities Act of 1933, as amended.
"Seller": Lockheed Martin Corporation, a Maryland corporation.
"Similar Business": a business, at least a majority of whose revenues
in the most recently ended calendar year were derived from (i) the sale of
defense products, electronics, communications systems, aerospace products,
avionics products and/or communications products, (ii) any services related
thereto, (iii) any business or activity that is reasonably similar thereto
or a reasonable extension, development or expansion thereof or ancillary
thereto or any business of the Borrower and/or its Subsidiaries existing as
of the Closing Date, and (iv) any combination of any of the foregoing.
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Stockholders Agreement": the Stockholders Agreement, dated as of
April 30, 1997, by and among the Borrower, Holdings, the Seller, the
Principals and any other party that may from time to time become a party
thereto as provided therein, as the same may be amended, supplemented or
otherwise modified from time to time.
"Subordinated Debt": indebtedness outstanding under the Subordinated
Notes and indebtedness outstanding under the New Subordinated Notes.
"Subordinated Debt Documents": the Indenture, the Registration Rights
Agreement, the Purchase Agreement and the Subordinated Notes.
"Subordinated Notes": the Borrower's 10 3/8 % Senior Subordinated
Notes, due 2007 (the "Initial Subordinated Notes"), issued on the Original
Closing Date, and any subordinated notes of the Borrower, having the same
terms as the Initial Subordinated Notes, issued in exchange for the Initial
Subordinated Notes as contemplated by the Subordinated Debt Documents.
"Subscription Agreements": the Common Stock Subscription Agreements
between Holdings and each of Frank C. Lanza, Robert V. LaPenta, Capital
Partners and the Seller, each dated as of the Original Closing Date.
"Subsidiary": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, directly or
indirectly, by such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Borrower.
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"Subsidiary Guarantees": the Amended and Restated Subsidiary Guarantee
substantially in the form of Exhibit B-2, to be executed and delivered by
the Borrower's Subsidiaries (other than any Immaterial Subsidiary or
Foreign Subsidiary of the Borrower), as the same may be amended,
supplemented or otherwise modified.
"Subsidiary Pledge Agreement": the Amended and Restated Subsidiary
Pledge Agreement substantially in the form of Exhibit B-5, to be executed
and delivered by the Borrower's Subsidiaries (other than any Immaterial
Subsidiary or Foreign Subsidiary of the Borrower), as the same may be
amended, supplemented or otherwise modified.
"Swing Line Lender": as defined in the Facility A Credit Agreement.
"Term Loan Commitment or Term Loan Commitments": the commitments of a
Lender to convert all outstanding Revolving 364 Day Loans as of the
Revolving 364 Day Termination Date into Term Loans pursuant to subsection
2.5(b); and Term Loan Commitments means such commitments of all Lenders in
the aggregate, which shall not exceed an amount equal to the lesser of (x)
the aggregate amount of Revolving 364 Day Loans outstanding as of the
Revolving 364 Day Termination Date and (y) the aggregate amount of the
Revolving 364 Day Commitments existing on the Revolving 364 Day Termination
Date.
"Term Lender": any Lender having a Term Loan Commitment or a Term Loan
outstanding.
"Term Loans": the Loans made or deemed made by the Term Lenders to the
Borrower pursuant to subsection 2.1(a)(ii).
"Term Notes": (i) the promissory notes of the Borrower, if any, which
may be hereafter issued pursuant to subsection 2.5(b) on or about the
Revolving 364 Day Termination Date to evidence all Revolving 364 Day Loans
which were converted into Term Loans of any Lender and (ii) any promissory
notes issued by the Borrower pursuant to subsection 10.6(d) in connection
with assignments of the Term Loan Commitments and Term Loans of any Lender,
in each case substantially in the form of Exhibit A-2 annexed hereto, as
they may be amended, supplemented or otherwise modified from time to time.
"Termination Date": (i) with respect to the Term Loans, if any, March
31, 2003, and (ii) with respect to the Revolving 364 Day Commitments, the
Revolving 364 Day Termination Date.
"Tranche": the collective reference to Eurodollar Loans with
then-current Interest Periods which all begin on the same date and end on
the same date (whether or not such Loans shall originally have been made on
the same day); Tranches may be identified as "Eurodollar Tranches".
"Transaction": the transactions contemplated by the Transaction
Documents.
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"Transaction Agreement": that certain Transaction Agreement, dated as
of March 28, 1997 by and among Lockheed Martin Corporation, a Maryland
corporation, Holdings, Capital Partners and its Affiliates, Frank C. Lanza
and Robert V. LaPenta.
"Transaction Documents": (i) the Transaction Agreement, the Schedules
thereto and the documents set forth on Schedule III hereto, (ii) the Equity
Documents, (iii) the Subordinated Debt Documents and (iv) the New
Subordinated Debt Documents.
"Transferee": as defined in subsection 10.6(f).
"Type": a Revolving 364 Day Loan or a Term Loan, as applicable.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended from time to time.
"U.S. Taxes": any tax, assessment, or other charge or levy and any
liabilities with respect thereto, including any penalties, additions to
tax, fines or interest thereon, imposed by or on behalf of the United
States or any taxing authority thereof.
"Voting Stock": of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
"Year 2000 Problem": any significant risk that computer hardware,
software or equipment containing embedded microchips essential to the
business or operations of the Borrower or any of its Subsidiaries will not,
in the case of dates or time periods occurring after December 31, 1999,
function at least as effectively and reliably as in the case of dates or
time periods occurring before January 1, 2000, including the making of
accurate leap year calculations.
1.2. Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined
meanings when used in any Credit Document or any certificate or other
document made or delivered pursuant hereto.
(b) As used herein and in any Credit Document, and any
certificate or other document made or delivered pursuant hereto,
accounting terms relating to the Borrower and its Subsidiaries not
defined in subsection 1.1 and accounting terms partly defined in
subsection 1.1, to the extent not defined, shall have the respective
meanings given to them under GAAP.
(c) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and Section, subsection, Schedule and Exhibit references
are to this Agreement unless otherwise specified.
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(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS
2.1. Commitments. (a) Subject to the terms and conditions hereof, each
Lender severally agrees to make the loans described in this subsection
2.1(a) as applicable to the Borrower.
(i) Revolving 364 Day Loans. Each Revolving 364 Day Lender severally
agrees to make revolving credit loans to the Borrower, from time to time
during the Revolving 364 Day Commitment Period, in an aggregate principal
amount at any one time outstanding which, when added to such Lender's
Commitment Percentage with respect to Revolving 364 Day Loans of the then
outstanding L/C Obligations, does not exceed the amount of such Lender's
Revolving 364 Day Commitment. During the Revolving 364 Day Commitment
Period, the Borrower may use the Revolving 364 Day Commitments by
borrowing, prepaying the Revolving 364 Day Loans, in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof. Prior
to the Revolving 364 Day Termination Date, the Borrower may increase the
aggregate Revolving 364 Day Commitments by (A) entering into a binding
written agreement, substantially in the form of Exhibit G attached hereto,
with any Lender to increase the Revolving 364 Day Commitment of such Lender
(an "Increased Commitment Agreement") which Increased Commitment Agreement
shall be presented to the Administrative Agent for acknowledgment and
acceptance (which shall not be withheld unless the effect thereof would be
to exceed the maximum permitted amount herein for all Revolving 364 Day
Commitments in the aggregate) and/or (B) subject to the prior written
approval of the Agents and each Applicable Issuing Lender, entering into a
binding written agreement substantially in the form of Exhibit H hereto (a
"Lender Addition Agreement") with any bank, financial institution or
Investment Fund to become a Lender under this Agreement by making a
Revolving 364 Day Commitment and causing such Person to take all other
actions required to become a new Revolving 364 Day Lender hereunder (a "New
Lender"); provided that, the aggregate Revolving 364 Day Commitments of all
Lenders (including New Lenders) may not exceed $200,000,000 at any time. In
order to become a New Lender, a party must execute a Lender Addition
Agreement attached hereto and deliver the same to the Administrative Agent,
the Syndication Agent, each Applicable Issuing Lender and the Borrower for
counter-execution. On the Eurodollar Loans Maturity Date (or, subject to
compliance with subsection 2.16, on any Business Day) occurring on or
immediately following the date that (i) the Administrative Agent has
acknowledged its acceptance of any Increased Commitment Agreement delivered
pursuant to clause (A) above or (ii) any Lender Addition Agreement has been
executed by all necessary parties and delivered to the Administrative
Agent, the increase in any such Lender's 364 Day Commitment contemplated
thereby shall become effective and/or the New Lender shall become a party
to this Agreement, as applicable. Promptly thereafter, the Administrative
Agent shall amend Schedule I hereto to accurately reflect the Revolving 364
Day Commitments of the Revolving 364 Day Lenders then in existence,
whereupon such amended Schedule I shall
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be substituted for the pre-existing Schedule I, be deemed a part of
this Agreement without any further action or consent of any party and be
promptly distributed to each Lender and the Borrower by the Administrative
Agent. The Agents shall cooperate with the Borrower in adding New Lenders
to this Agreement and each Agent, in its capacity as a Lender, agrees that,
without the prior written consent of the Borrower, it will maintain for a
period of 90 days following the Closing Date, Commitments under this
Agreement and Revolving Credit Commitments under the Facility A Credit
Agreement in an aggregate amount of not less than $40,000,000 (the "minimum
hold position"); provided that, following the termination of such 90 day
period, each of the Agents shall be permitted to assign all or any portion
of their respective commitments in accordance with subsection 10.6 hereof
and/or subsection 10.6 of the Facility A Credit Agreement without regard to
any such minimum hold position.
(ii) Term Loans. In the event the conditions in subsection 2.5(b) to
the exercise of the Conversion Option are satisfied, each Extending Lender
severally agrees to convert, effective upon the Revolving 364 Day
Termination Date, a principal amount of Revolving 364 Day Loans of such
Lender into a Term Loan of such Lender to the Borrower in an aggregate
principal amount which does not exceed the lesser of (a) the principal
amount of Revolving 364 Day Loans of such Lender outstanding on the
Revolving 364 Day Termination Date and (b) the principal amount of such
Lender's 364 Day Commitment outstanding on the Revolving 364 Day
Termination Date. Amounts borrowed under this subsection 2.1(a)(ii) and
subsequently repaid may not be reborrowed.
(b) The Loans may from time to time be (i) Eurodollar Loans, (ii)
Base Rate Loans or (iii) a combination thereof, as determined by the
Borrower and notified to the Administrative Agent in accordance with
subsections 2.2 and 2.7, provided that, except as contemplated in
clause (c) of the definition of Interest Period, no Revolving 364 Day
Loan shall be made as a Eurodollar Loan after the day that is one
month prior to the applicable Termination Date.
2.2. Procedure for Borrowing. The Borrower may borrow under the
Revolving 364 Day Commitments during the Revolving 364 Day Commitment Period on
any Business Day, provided that the Borrower shall give the Administrative
Agent irrevocable notice (which notice must be received by the Administrative
Agent prior to (a) 11:00 A.M., New York City time, three Business Days prior to
the requested Borrowing Date, if all or any part of the requested Loans are to
be initially Eurodollar Loans, (b) 11:00 A.M., New York City time, on the
requested Borrowing Date in the case of a Base Rate Loan), specifying (i) the
amount to be borrowed of each Type of Loan, (ii) the requested Borrowing Date,
(iii) whether the borrowing is to be of Eurodollar Loans, Base Rate Loans or a
combination thereof and (iv) if the borrowing is to be entirely or partly of
Eurodollar Loans, the respective lengths of the initial Interest Periods
therefor. Each borrowing under the Commitments shall be in an amount equal to
(x) in the case of Base Rate Loans, $2,000,000 or a whole multiple of $100,000
in excess thereof (or, if the then Available Commitments are less than
$2,000,000, such lesser amount), and (y) in the case of Eurodollar Loans,
$5,000,000 or a whole multiple of $100,000 in excess thereof; provided that the
Borrower may nevertheless borrow amounts below such minimum amounts in clauses
(x) or (y) above solely for the purpose of (i) converting Revolving 364 Day
Loans into Term Loans on
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the Revolving 364 Day Termination Date, (ii) repaying Revolving 364 Day Loans
owing to any Nonconsenting Lenders on the Revolving 364 Day Termination Date,
(iii) funding any scheduled amortization payment pursuant to subsection 2.5(b)
in respect of any Term Loans then outstanding and (iv) permitting the addition
of any New Lender or increasing the Revolving 364 Day Commitment of any
existing Lender pursuant to subsection 2.1(a)(i). Upon receipt of any such
notice from the Borrower, the Administrative Agent shall promptly notify each
Lender thereof. Each Lender will make the amount of its pro rata share of each
borrowing available to the Administrative Agent for the account of the Borrower
at the office of the Administrative Agent specified in subsection 10.2 prior to
11:00 A.M., New York City time (in the case of Eurodollar Loans) or 2:30 P.M.,
New York City time (in the case of Base Rate Loans), on the Borrowing Date
requested by the Borrower in funds immediately available to the Administrative
Agent. Such borrowing will then be made available to the Borrower by the
Administrative Agent in accordance with the Borrower's payment instructions
with the aggregate of the amounts made available to the Administrative Agent by
the Lenders and in like funds as received by the Administrative Agent. All
notices given by the Borrower under this subsection 2.2 may be made by
telephonic notice promptly confirmed in writing.
2.3. Commitment Fee.
The Borrower agrees to pay to the Administrative Agent for the account
of each Revolving 364 Day Lender a commitment fee for the period from and
including the first day of the Revolving 364 Day Commitment Period to and
including the Revolving 364 Day Termination Date, computed at the Commitment
Fee Rate on the daily amount of the Available Commitment of such Revolving 364
Day Lender during the period for which payment is made, payable quarterly in
arrears on the last Business Day of each March, June, September and December
and on the Termination Date, commencing on the first of such dates to occur
after the date hereof.
2.4. Termination or Reduction of Revolving 364 Day Commitments.
The Borrower shall have the right, upon not less than three Business
Days' written notice to the Administrative Agent, to terminate the Revolving
364 Day Commitments or, from time to time, to reduce the amount of the
Revolving 364 Day Commitments ratably among the Revolving 364 Day Lenders;
provided that no such termination or reduction shall be permitted if, after
giving effect thereto and to any prepayments of the Revolving 364 Day Loans
made on the effective date thereof, the aggregate principal amount of the
Revolving 364 Day Loans then outstanding, when added to the then outstanding
L/C Obligations, would exceed the Revolving 364 Day Commitments then in effect.
Any such reduction shall be in an amount equal to $2,000,000 or a whole
multiple of $500,000 in excess thereof and shall reduce permanently the
Revolving 364 Day Commitments then in effect.
2.5. Extension of Revolving 364 Day Termination Date; Conversion
Option; Repayment of Loans; Evidence of Debt.
(a) Extension of Revolving 364 Day Termination Date. The Borrower
may elect to forward to the Administrative Agent (for distribution to
each Lender)
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no earlier than sixty (60) but no later than fifty-five (55) days
prior to the initially scheduled Revolving 364 Day Termination Date a
written request asking each Revolving 364 Day Lender to consent to the
extension of the Revolving 364 Day Termination Date for one (1)
additional 364 day period. Not later than 30 days after receipt of
such written request, each Lender shall advise the Administrative
Agent and the Borrower in writing whether such Lender consents to the
proposed extension if all the conditions, including those set forth in
subsection 5.2 of this Agreement, thereto have been satisfied. If all
of the Revolving 364 Day Lenders have consented in writing to such
extension and all conditions set forth in subsection 5.2 shall have
been satisfied, then effective on the initially scheduled Revolving
364 Day Termination Date, the Revolving 364 Day Termination Date shall
be deemed automatically extended by an additional 364 day period
(herein, the "Extension Option"). If less than all of the Revolving
364 Day Lenders consent to the exercise of the proposed Extension
Option (the "Extending Lenders"), the Borrower may replace all, some
or none of such Nonconsenting Lenders on or before the initially
scheduled Revolving 364 Day Termination Date pursuant to subsection
2.17 and repay all outstanding Revolving 364 Day Loans owing to each
Nonconsenting Lender that is not being replaced, if any, on the
initially scheduled Revolving 364 Day Termination Date (without giving
effect to the Extension Option); provided that if the Extending
Lenders do not hold more than 50% of the outstanding Revolving 364 Day
Commitments, the Borrower will not be entitled to exercise the
Extension Option with respect to any Extending Lenders nor shall any
Lender failing to consent to the Extension Option be deemed a
Nonconsenting Lender and be subject to replacement under subsection
2.17 as a result thereof. Subject to the foregoing proviso, if the
Borrower desires to exercise the Extension Option with the Extending
Lenders, Borrower shall provide the Administrative Agent (for
distribution to each Lender) with not less than five (5) days prior
written notice thereof in addition to satisfying all conditions
precedent set forth above (other than the requirement that all
Revolving 364 Day Lenders have timely consented to the Extension
Option). On the date the Extension Option becomes effective, Schedule
I hereto shall be deemed amended to accurately reflect the Revolving
364 Day Commitments of the Revolving 364 Day Lenders then in existence
and the Administrative Agent shall promptly deliver a copy of such
amended Schedule I to each Lender and the Borrower.
(b) Conversion Option. Subject to the terms of this subsection
2.5(b), whether or not the Extension Option is utilized, the Borrower
shall be entitled as of the Revolving 364 Day Termination Date to
convert the principal amount of any or all Revolving 364 Day Loans
(but not any obligations in respect of any Letters of Credit)
outstanding as of the Revolving 364 Day Termination Date into Term
Loans so long as each of the following conditions are met as of the
effective date of such conversion to the satisfaction of the
Administrative Agent (the "Conversion Option"): (i) each of the
conditions precedent set forth in subsection 5.2 of this Agreement
shall be satisfied, (ii) not later than five (5) Business Days
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before the Revolving 364 Day Termination Date, all Letters of
Credit shall have terminated and/or been released and canceled to the
satisfaction of the Issuing Lender and the Administrative Agent and
all outstanding L/C Obligations in respect of any Letters of Credit
shall have been paid in full in cash or cash collateralized on terms
deemed satisfactory by the Administrative Agent and the Issuing Lender
and (iii) not later than five (5) days before the Revolving 364 Day
Termination Date, the Borrower shall have provided the Administrative
Agent (for distribution to each Lender) (x) written notice of the
Borrower's desire to exercise the Conversion Option, (y) a certificate
of a Responsible Officer of the Borrower specifying the aggregate
amount of Revolving 364 Day Loans to be paid in full and the amount of
such Loans which will be converted to Term Loans, in each case, on the
Revolving 364 Day Termination Date and certifying that all conditions
precedent to exercise of the Conversion Option are satisfied and will
remain satisfied on the Revolving 364 Day Termination Date and (z)
Term Notes in the form of Exhibit A-2 hereto for each Lender that
requests a Term Note pursuant to subsection 2.5(g)(ii) in the amount
of each such Lender's respective Revolving 364 Day Loans which are to
be converted into Term Loans of such Lender. If the Conversion Option
is exercised, the Term Loans shall be repaid by the Borrower in nine
(9) consecutive quarterly installments commencing on March 31, 2001,
by funding on each amortization payment date set forth below an amount
necessary to cause the aggregate principal amount of Term Loans
outstanding on any such date to not exceed an amount equal to the
product of (x) the "Applicable Percentage" set forth opposite such
amortization payment date multiplied by (y) the aggregate amount of
Revolving 364 Day Commitments of all Lenders in existence on the
Revolving 364 Day Termination Date (the "Applicable Converted
Commitment"):
Applicable Percentage of the
Amortization Payment Date Applicable Converted Commitment
------------------------- -------------------------------
3/31/01 90.0%
6/30/01 80.0%
9/30/01 70.0%
12/31/01 60.0%
3/31/02 50.0%
6/30/02 40.0%
9/30/02 30.0%
12/31/02 20.0%
3/31/03 0.0%
provided that the scheduled installments of principal of the Term Loans set
forth above shall be reduced in connection with any voluntary or mandatory
prepayments of the Term Loans in accordance with subsection 2.6 (as provided in
such subsection); and provided further that the Term Loans and all other
amounts owed hereunder with respect to the Term Loans shall be paid in full no
later than March 31, 2003, and the final installment payable by the Borrower in
respect
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of the Term Loans on such date shall be in an amount, if such amount is
different from that specified above, sufficient to repay all amounts owing by
the Borrower under this Agreement with respect to the Term Loans.
(c) Replacement of Nonconsenting Lenders. If any Revolving 364
Day Lender declines to consent or fails to timely indicate its consent
to the exercise by Borrower of the Extension Option and the Extending
Lenders hold more than 50% of the Revolving 364 Day Commitments, such
Lender shall be deemed a Nonconsenting Lender and be subject to
replacement in accordance with the terms of subsection 2.17 hereof.
(d) Payments on Revolving 364 Day Loans. Subject to the exercise
of the Conversion Option in accordance with the terms of subsection
2.5(b), the Borrower hereby unconditionally promises to pay to the
Administrative Agent on the Revolving 364 Day Termination Date (or
such earlier date on which the Loans become due and payable pursuant
to Section 8) for the account of each Revolving 364 Day Lender the
then unpaid principal amount of each Revolving 364 Day Loan of such
Lender.
(e) Interest. The Borrower hereby further agrees to pay interest
on the unpaid principal amount of the Loans from time to time
outstanding from the date such Loans are made until payment in full
thereof at the rates per annum, and on the dates, set forth in
subsection 2.9.
(f) Recording. Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing indebtedness of the
Borrower to such Lender resulting from each Loan of such Lender from
time to time, including the amounts of principal and interest payable
and paid to such Lender from time to time under this Agreement.
(g) Loan Accounts and Register; Notes. (i) The Loans made by, and
the Commitments of, each Lender shall be evidenced by one or more loan
accounts ("Loan Accounts") maintained by such Lender and by the Register
maintained by the Administrative Agent in the ordinary course of business.
The Register maintained by the Administrative Agent shall, in the event of
a discrepancy between the entries in the Administrative Agent's books and
any Lender's books relating to such matters, be controlling and, absent
manifest error, shall be conclusive as to the amount of the Loans made by
the Lender to the Borrower, the interest and payments thereon and any other
amounts owing in respect of this Agreement. The Borrower hereby designates
the Administrative Agent to serve as the Borrower's agent, solely for
purposes of this subsection 2.5(g) and subsection 10.6, to maintain the
Register on which it will record the Commitments from time to time of each
of the Lenders, the Loans made by each of the Lenders and each repayment in
respect of the principal amount of the Loans of each Lender. The Borrower
agrees to indemnify the Administrative Agent from and against any and all
losses, claims, damages and liabilities of whatsoever nature which may be
imposed on, asserted against or incurred by the Administrative Agent in
performing its
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duties under this subsection 2.5(g) and subsection 10.6 (other than any
losses, claims, damages and liabilities to the extent incurred by reason of
the gross negligence or willful misconduct of the Administrative Agent).
(ii) If requested by any Lender, the Borrower shall execute and
deliver to such Lender (and deliver a copy thereof to the Administrative
Agent) one or more promissory notes evidencing the Loans owing to such
Lender pursuant to this Agreement in accordance with subsection 2.5(i).
(h) Prima Facie Evidence. The entries made in the Register and
the Loan Accounts of each Lender maintained pursuant to subsection
2.5(g) shall, to the extent permitted by applicable law, be prima
facie evidence of the existence and amounts of the obligations of the
Borrower therein recorded; provided, however, that the failure of any
Lender or the Administrative Agent to maintain the Register or any
such Loan Account, or any error therein, shall not in any manner
affect the obligation of the Borrower to repay (with applicable
interest) the Loans made to the Borrower by such Lender in accordance
with the terms of this Agreement. For the avoidance of doubt, the
existence or non-existence of any Note representing any Obligations
owing to any Lender hereunder shall not affect the existence, amount,
validity or enforceability of such Obligations, which in all events
shall be absolute and unconditional.
(i) Notes. The Borrower agrees that the Borrower will execute and
deliver to each Lender that requests any such Note pursuant to
subsection 2.5(g)(ii), a promissory note of the Borrower evidencing
the Revolving 364 Day Loans of such Lender, substantially in the form
of Exhibit A-1 with appropriate insertions as to date and principal
amount (a "Revolving 364 Day Note").
2.6. Optional Prepayments; Mandatory Prepayments and Reduction of
Commitments.
(a) Subject to subsections 2.12 and 2.16, the Borrower may at any
time and from time to time prepay any Loans, in whole or in part,
without premium or penalty, upon irrevocable notice to the
Administrative Agent prior to 11:00 A.M., New York City time, three
Business Days prior to the date of prepayment in the case of
Eurodollar Loans or on any Business Day in the case of Base Rate
Loans, specifying the date and amount of prepayment, the Type of Loan
to be prepaid (which Loans shall be prepaid on a pro rata basis among
the applicable Lenders) and whether the prepayment is of Eurodollar
Loans, Base Rate Loans or a combination thereof, and, if of a
combination thereof, the amount allocable to each. Upon receipt of any
such notice, the Administrative Agent shall promptly notify each
applicable Lender thereof. If any such notice is given, the amount
specified in such notice shall be due and payable on the date
specified therein, together with any amounts payable pursuant to
subsection 2.16. Partial prepayments shall be in an aggregate
principal amount of $2,000,000 or a whole multiple of $100,000 in
excess thereof. In the event of any voluntary prepayment
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of the Term Loans, such voluntary prepayment shall be deemed
applied to the next scheduled amortization payment(s) as described in
subsection 2.5(b) (rather than be applied in inverse order of
maturity).
(b) (i) If, subsequent to the Closing Date, Holdings or any of
its Subsidiaries shall incur or permit the incurrence of any Indebtedness
(other than Indebtedness permitted pursuant to subsection 7.2), 100% of the
Net Proceeds thereof shall be promptly ratably applied toward the
prepayment of the Loans and the Facility A Loans and permanent reduction of
the Commitments and the Facility A Commitments as set forth in clause (iv)
of this subsection 2.6(b). Nothing in this paragraph (b) shall be deemed to
permit any Indebtedness not permitted by subsection 7.2.
(ii) If, subsequent to the Closing Date, Holdings or any of its
Subsidiaries shall receive Net Proceeds from any Asset Sale, such Net
Proceeds, subject to the Applicable Holdback (defined below) shall be
promptly and ratably applied toward the prepayment of the Loans and the
Facility A Loans and permanent reduction of the Commitments and the
Facility A Commitments as set forth in clause (iv) of this subsection
2.6(b); provided that Net Proceeds from any Asset Sales shall not be
required to be so applied to the extent that such Net Proceeds are used by
the Borrower or such Subsidiary to acquire assets to be employed in the
business of the Borrower or its Subsidiaries within 365 days of receipt
thereof, but if such Net Proceeds, subject to the Applicable Holdback (as
defined below), are not so used, 100% of the amount of such Net Proceeds
not so used shall be applied toward the prepayment of the Loans and the
permanent reduction of the Commitments as set forth in clause (iv) of this
subsection 2.6(b) on the earlier of (x) the 366th day after receipt of such
Net Proceeds and (y) the date on which the Borrower has determined that
such Net Proceeds shall not be so used. As used herein, "Applicable
Holdback" shall mean an amount of Net Proceeds not in excess of $20,000,000
derived from any Asset Sales occurring since the Closing Date that has not
been applied toward the prepayment of Loans and the permanent reduction of
the Commitments as set forth in clause (iv) of subsection 2.6(b) which
Borrower and/or its applicable Subsidiary may retain and not apply as a
mandatory prepayment without the requirement of utilizing the same to
acquire assets to be employed in the business of the Borrower or such
applicable Subsidiary; provided, that if any Event of Default shall have
occurred and be continuing, the Applicable Holdback amount shall be
automatically reduced to zero unless and until such Event of Default is
acknowledged in writing by the Required Lenders (or all the Lenders in
cases where the unanimous consent of the Lenders is required) as cured or
waived.
(iii) [Intentionally Omitted]
(iv) Except during any period in which an Event of Default has
occurred and is continuing, any mandatory prepayments required by this
subsection 2.6 shall be applied ratably to the outstanding principal amount
of Loans and Facility A Loans with a corresponding ratable permanent
reduction of the Revolving Credit Commitments and the Revolving 364 Day
Commitments (or, if applicable, the Term Loans on a pro rata basis to
reduce the unpaid scheduled installments of principal of the Term Loans in
inverse order
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of maturity). Revolving Credit Commitment and Revolving 364 Day
Commitment reductions made pursuant to subsections 2.6(b)(i) and (ii)
hereof (and the corresponding subsections of the Facility A Credit
Agreement) shall be applied to each Lender's respective Revolving 364 Day
Commitment and/or each Facility A Lender's Revolving Credit Commitment, as
applicable, on a pro rata basis and shall reduce permanently such
Commitments and Revolving Credit Commitments. At any time that an Event of
Default has occurred and is continuing, all mandatory prepayments shall be
applied in accordance with the terms of subsection 2.12 hereof (and the
corresponding subsection of the Facility A Credit Agreement). Mandatory
prepayments shall not be subject to any minimum amount requirement.
(v) If after giving effect to (i) any reduction of the Revolving 364
Day Commitments under subsection 2.4, 2.5 or 2.6 or (ii) any recalculation
of the Exchange Rate pursuant to subsection 3.9, the aggregate outstanding
principal amount of Revolving 364 Day Loans plus the aggregate outstanding
amount of L/C Obligations shall exceed the aggregate amount of the
Revolving 364 Day Commitments, such reduction or recalculation shall be
accompanied by prepayment in the amount of such excess to be applied to the
Revolving 364 Day Loans; provided that if the aggregate principal amount of
Revolving 364 Day Loans then outstanding is less than the amount of such
excess (because Letters of Credit constitute a portion of such excess), the
Borrower shall immediately, without notice or demand, to the extent of the
balance of such excess, replace outstanding Letters of Credit and/or
deposit an amount (but in no event greater than such balance) in a cash
collateral account opened by the Administrative Agent for the benefit of
the Revolving 364 Day Lenders (such deposit to be in Dollars with respect
to Domestic L/Cs and the applicable Alternative Currency with respect to
Foreign L/Cs). The Borrower hereby grants to the Administrative Agent, for
the benefit of the Issuing Lender and the L/C Participants in such Letters
of Credit, a security interest in such cash collateral to secure all
obligations of the Borrower under this Agreement and the other Credit
Documents. Any amounts deposited in such accounts shall be released to the
Borrower on any Calculation Date on which the aggregate outstanding
principal amount of Revolving 364 Day Loans plus the aggregate outstanding
amount of L/C Obligations equals or is less than the aggregate amount of
the Revolving 364 Day Commitments, provided that no Default or Event of
Default has occurred and is continuing.
2.7. Conversion and Continuation Options. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to Base Rate Loans, by
giving the Administrative Agent prior irrevocable notice of such
election at or before 11:00 A.M. New York City time, on the Business
Day immediately preceding the date of the proposed conversion and of
the amount and Type of Loan to be converted, provided that any such
conversion of Eurodollar Loans may only be made on the last day of an
Interest Period with respect thereto. The Borrower may elect from time
to time to convert Base Rate Loans to Eurodollar Loans by giving the
Administrative Agent prior irrevocable notice of such election at or
before 11:00 A.M., New York City time, on the third Business Day
immediately preceding the date of the proposed conversion and of the
amount and Type of Loan to be converted. Any such notice of conversion
to Eurodollar Loans shall specify the
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length of the initial Interest Period or Interest Periods therefor.
Upon receipt of any such notice the Administrative Agent shall
promptly notify each applicable Lender thereof. All or any part of
outstanding Eurodollar Loans and Base Rate Loans may be converted as
provided herein, provided that (i) no Loan may be converted into a
Eurodollar Loan when any Event of Default has occurred and is then
continuing and (ii) no Loan may be converted into a Eurodollar Loan
after the date that is one month prior to the Termination Date with
respect to such Loan.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by
the Borrower giving notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth
in subsection 1.1, of the length of the next Interest Period to be
applicable to such Loans and of the amount and Type of Loan to be
converted, provided that no Eurodollar Loan may be continued as such
(i) when any Event of Default has occurred and is then continuing or
(ii) after the date that is one month prior to the Termination Date
with respect to such Loan and provided, further, that if the Borrower
shall fail to give such notice or if such continuation is not
permitted such Loans shall be automatically converted to Base Rate
Loans on the last day of such then expiring Interest Period.
(c) All notices given by Borrower under this subsection 2.7 may
be made by telephonic notice promptly confirmed in writing.
2.8. Minimum Amounts and Maximum Number of Tranches. All borrowings,
conversions and continuations of Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or
a whole multiple of $100,000 in excess thereof; provided that the Borrower may
nevertheless borrow amounts in any Eurodollar Tranche below such minimum
amounts solely for the purpose of (i) converting Revolving 364 Day Loans into
Term Loans on the Revolving 364 Day Termination Date, (ii) repaying Revolving
364 Day Loans owing to any Nonconsenting Lenders on the Revolving 364 Day
Termination Date (iii) funding any scheduled amortization payment pursuant to
subsection 2.5(b) in respect of any Term Loans then outstanding or (iv)
permitting the addition of any New Lender or any increasing the Revolving 364
Day Commitment of any existing Lender pursuant to subsection 2.1(a)(i). All
Loans hereunder may be converted or continued into Base Rate Loans without
reference to the minimum principal amount requirements for new Base Rate
borrowings set forth in subsection 2.2 above. In no event shall the number of
outstanding Eurodollar Tranches under this Agreement plus the number of
outstanding Facility A Eurodollar Tranches exceed 15 at any time.
2.9. Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined
for such day plus the Applicable Margin.
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(b) Each Base Rate Loan shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin.
(c) If all or a portion of (i) any principal of any Loan, (ii)
any interest payable thereon, (iii) any commitment fee or (iv) any
other amount payable hereunder shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise), the principal of
the Loans and any such overdue interest, commitment fee or other
amount shall bear interest at a rate per annum which is (x) in the
case of principal, the rate that would otherwise be applicable thereto
pursuant to the foregoing provisions of this subsection plus 2% or (y)
in the case of any such overdue interest, commitment fee or other
amount, the rate described in paragraph (b) of this subsection plus
2%, in each case from the date of such non-payment until such overdue
principal, interest, commitment fee or other amount is paid in full
(as well after as before judgment).
(d) Interest shall be payable with respect to each Loan in
arrears on each Interest Payment Date and on the Termination Date with
respect to such Loan, provided that interest accruing pursuant to
paragraph (c) of this subsection shall be payable from time to time on
demand.
2.10. Computation of Interest and Fees. (a) Interest on Base Rate
Loans and fees shall be calculated on the basis of a 365- (or 366-, as
the case may be) day year for the actual days elapsed; all other
interest shall be calculated on the basis of a 360-day year for the
actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan
resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on
the day on which such change becomes effective. The Administrative
Agent shall as soon as practicable notify the Borrower and the Lenders
of the effective date and the amount of each such change in interest
rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive
and binding on the Borrower and the Lenders in the absence of manifest
error. The Administrative Agent shall, at the request of the Borrower,
deliver to the Borrower a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to
subsection 2.9(a) or (c).
2.11. Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that,
by reason of circumstances affecting the eurodollar market, adequate
and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period, or
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(b) the Administrative Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or to be
determined for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such
Interest Period, the Administrative Agent shall give telecopy or
telephonic notice thereof to the Borrower and the Lenders as soon as
practicable thereafter. If such notice is given (x) any Eurodollar
Loans requested to be made on the first day of such Interest Period
shall be made as Base Rate Loans, (y) any Loans that were to have been
converted on the first day of such Interest Period to Eurodollar Loans
shall be converted to or continued as Base Rate Loans and (z) any
outstanding Eurodollar Loans shall be converted, on the first day of
such Interest Period, to Base Rate Loans. Until such notice has been
withdrawn in writing by the Administrative Agent (which the
Administrative Agent agrees to do when the Administrative Agent has
determined, or has been instructed by the Required Lenders that, the
circumstances that prompted the delivery of such notice no longer
exist), no further Eurodollar Loans shall be made or continued as
such, nor shall the Borrower have the right to convert Loans to
Eurodollar Loans.
2.12. Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Revolving 364 Day Lenders hereunder, each payment by
the Borrower on account of any commitment fee hereunder and any
reduction of the Revolving 364 Day Commitments of Revolving 364 Day
Lenders shall be made pro rata according to the respective Commitment
Percentages of the Revolving 364 Day Lenders. Except during any period
in which an Event of Default has occurred and is continuing, each
payment (including each prepayment) by the Borrower on account of
principal of and interest on any Term Loans and/or the Revolving 364
Day Loans, and any application by the Administrative Agent of the
proceeds of any Collateral, shall be made pro rata according to the
respective outstanding principal amounts of such Loans then held by
the Lenders. All payments (including prepayments) to be made by the
Borrower hereunder in respect of any Loan, whether on account of
principal, interest, Reimbursement Obligations (whether in respect of
Domestic L/Cs or Foreign L/Cs), fees, expenses or otherwise, shall be
made without set off or counterclaim and shall be made prior to 11:00
A.M., New York City time, on the due date thereof to the
Administrative Agent, for the account of the Lenders with respect to
such Loans, at the Administrative Agent's office specified in
subsection 10.2, in Dollars and in immediately available funds;
provided, that, with respect to any Reimbursement Obligations of the
Borrower arising from the presentment to the Issuing Lender of a draft
under a Foreign L/C, the Borrower may make payment in the applicable
Alternative Currency if such payment is received by the Issuing Lender
on the date such draft is paid by the Issuing Lender. At any time that
an Event of Default has occurred and is continuing, all payments
(including prepayments) made by Borrower hereunder and any application
by the Administrative Agent of the proceeds of any Collateral shall be
applied in the following order: (1) to the
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ratable payment of all amounts due and owing by the Borrower pursuant
to subsection 10.5 of this Agreement or subsection 10.5 of the
Facility A Credit Agreement to the Agents and/or the Facility A
Agents, and after payment in full thereof, to any other Lender or
Facility A Lender; (2) to the ratable payment of all interest, fees
and commissions due and owing under this Agreement or the Facility A
Credit Agreement to the Agents, the Facility A Agents, the Swing Line
Lender, any Lender or any Facility A Lender; (3) to the ratable
payment (or cash collateralization) of the aggregate outstanding
principal amount of Loans and Facility A Loans and the aggregate L/C
Obligations and Facility A L/C Obligations; and (4) to the ratable
payment of all other obligations of the Borrower to the Agents, the
Facility A Agents, the Swing Line Lender, any Lender or any Facility A
Lender under any Credit Document or Facility A Credit Document. For
purposes of applying payments and proceeds distributed under clause 3
above, each Lender will first apply such amounts to all outstanding
Loans of such Lender before such amounts will be held as cash
collateral for L/C Obligations in which such Lender is a L/C
Participant. The Administrative Agent and the Facility A
Administrative Agent shall ratably distribute such payments to the
applicable Lenders and the Facility A Lenders promptly upon receipt in
like funds as received. If any payment hereunder becomes due and
payable on a day other than a Business Day, such payment shall be
extended to the next succeeding Business Day, and, with respect to
payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.
(b) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not
make the amount that would constitute its Commitment Percentage of
such borrowing available to the Administrative Agent, the
Administrative Agent may assume that such Lender is making such amount
available to the Administrative Agent on such Borrowing Date, and the
Administrative Agent may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If such amount is
not made available to the Administrative Agent by the required time on
the Borrowing Date therefor, such Lender shall pay to the
Administrative Agent, on demand, such amount with interest thereon at
a rate equal to the daily average Federal Funds Effective Rate for the
period until such Lender makes such amount immediately available to
the Administrative Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error. If
such Lender's Commitment Percentage of such borrowing is not made
available to the Administrative Agent by such Lender within three
Business Days of such Borrowing Date, the Administrative Agent shall
also be entitled to recover such amount with interest thereon at the
rate per annum applicable to Base Rate Loans hereunder, on demand,
from the Borrower. The failure of any Lender to make any Loan to be
made by it shall not relieve any other Lender of its obligation
hereunder to make its Loan on such Borrowing Date.
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2.13. Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such
and convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled and
(b) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans 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. If any such conversion of a Eurodollar Loan occurs
on a day which is not the last day of the then current Interest Period with
respect thereto, the Borrower shall pay to such Lender such amounts, if any, as
may be required pursuant to subsection 2.16. If circumstances subsequently
change so that any affected Lender shall determine that it is no longer so
affected, such Lender will promptly notify the Borrower and the Administrative
Agent, and upon receipt of such notice, the obligations of such Lender to make
or continue Eurodollar Loans or to convert Base Rate Loans into Eurodollar
Loans shall be reinstated.
2.14. Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not
having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement, any Note, any Letter of Credit, any Application
or any Eurodollar Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded Taxes
covered by subsection 2.15 and changes in the rate of net income taxes
(including branch profits taxes and minimum taxes) or franchise taxes
(imposed in lieu of net income taxes) of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting
into, continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender
upon written demand such additional amount or amounts as will compensate such
Lender for such increased cost or reduced amount receivable; provided that
before making any such demand, each Lender agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions and
so long as such efforts would not be disadvantageous to it, in its reasonable
discretion, in any legal, economic or regulatory manner) to designate a
different
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Eurodollar lending office if the making of such designation would allow the
Lender or its Eurodollar lending office to continue to perform its obligations
to make Eurodollar Loans or to continue to fund or maintain Eurodollar Loans
and avoid the need for, or reduce the amount of, such increased cost. If any
Lender becomes entitled to claim any additional amounts pursuant to this
subsection, it shall promptly notify the Borrower, through the Administrative
Agent, of the event by reason of which it has become so entitled. If the
Borrower so notifies the Administrative Agent within five Business Days after
any Lender notifies the Borrower of any increased cost pursuant to the
foregoing provisions of this Section, the Borrower may convert all Eurodollar
Loans of such Lender then outstanding into Base Rate Loans in accordance with
the terms hereof. Each Lender shall notify the Borrower within 120 days after
it becomes aware of the imposition of such costs; provided that if such Lender
fails to so notify the Borrower within such 120-day period, such Lender shall
not be entitled to claim any additional amounts pursuant to this subsection for
any period ending on a date which is prior to 120 days before such
notification.
(b) If any Lender shall have determined that the adoption of or
any change in any Requirement of Law regarding capital adequacy or in
the interpretation or application thereof or compliance by such Lender
or any corporation controlling such Lender with any request or
directive regarding capital adequacy (whether or not having the force
of law) from any Governmental Authority made subsequent to the date
hereof shall have the effect of reducing the rate of return on such
Lender's or such corporation's capital as a consequence of its
obligations hereunder or under any Letter of Credit to a level below
that which such Lender or such corporation could have achieved but for
such adoption, change or compliance (taking into consideration such
Lender's or such corporation's policies with respect to capital
adequacy) by an amount deemed by such Lender to be material, then from
time to time, after submission by such Lender to the Borrower (with a
copy to the Administrative Agent) of a prompt written request
therefor, the Borrower shall promptly pay to such Lender such
additional amount or amounts as will compensate such Lender for such
reduction. Each Lender shall notify the Borrower within 120 days after
it becomes aware of the imposition of such additional amount or
amounts; provided that if such Lender fails to so notify the Borrower
within such 120-day period, such Lender shall not be entitled to claim
any additional amount or amounts pursuant to this subsection for any
period ending on a date which is prior to 120 days before such
notification.
(c) If any Lender becomes entitled to claim any additional
amounts pursuant to this subsection, it shall promptly notify the
Borrower (with a copy to the Administrative Agent) of the event by
reason of which it has become so entitled. A certificate as to any
additional amounts payable pursuant to this subsection, showing the
calculation thereof in reasonable detail, submitted by such Lender to
the Borrower (with a copy to the Administrative Agent) shall be
conclusive in the absence of manifest error. The agreements in this
subsection shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
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2.15. Taxes. (a) Except as provided in this subsection 2.15, all
payments made by the Borrower under this Agreement and any Notes shall
be made free and clear of, and without deduction or withholding for or
on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by
any Governmental Authority ("Taxes"), excluding Taxes on net income
(including, without limitation, branch profits taxes and minimum
taxes) and franchise taxes (imposed in lieu of net income taxes)
imposed on any Agent or any Lender as a result of a present or former
connection between any Agent or such Lender and the jurisdiction of
the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any
such connection arising solely from such Agent or such Lender having
executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any Note). If any such
non-excluded taxes, levies, imposts, duties, charges, fees deductions
or withholdings ("Non-Excluded Taxes") are required to be withheld
from any amounts payable to any Agent or any Lender hereunder or under
any Note, the amounts so payable to such Agent or such Lender shall be
increased to the extent necessary to yield to such Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts
specified in this Agreement, provided, however, that the Borrower
shall not be required to increase any such amounts payable to any
Lender that is not organized under the laws of the United States of
America or a state thereof with respect to any Taxes that are imposed
on amounts payable to such Lender at the time such Lender becomes a
party to this Agreement or that are attributable to such Lender's
failure to comply with the requirements of paragraph (b) of this
subsection. Whenever any Non-Excluded Taxes are payable by the
Borrower, as promptly as possible thereafter, the Borrower shall send
to the relevant Agent for its own account or for the account of such
Lender, as the case may be, a certified copy of an original official
receipt, if any, received by the Borrower showing payment thereof. If
the Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the relevant Agent
the required receipts or other required documentary evidence, the
Borrower shall indemnify the Agents and the Lenders for any
incremental taxes, interest or penalties that may become payable by
any Agent or any Lender as a result of any such failure. The
agreements in this subsection shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable
hereunder.
(b) Each Lender, Assignee and Participant that is not a citizen
or resident of the United States of America, a corporation,
partnership created or organized in or under the laws of the United
States of America, any estate that is subject to U.S. federal income
taxation regardless of the source of its income or any trust which is
subject to the supervision of a court within the United States and the
control of a United States fiduciary as described in Section
7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver to the
Borrower and the
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Administrative Agent, and if applicable, the assigning Lender (or, in
the case of a Participant, to the Lender from which the related
participation shall have been purchased) on or before the date on
which it becomes a party to this Agreement (or, in the case of a
Participant, on or before the date on which such Participant purchases
the related participation) either:
(A) two duly completed and signed copies of either Internal Revenue
Service Form 1001 (relating to such Non-U.S. Lender and entitling it to a
complete exemption from withholding of U.S. Taxes on all amounts to be
received by such Non-U.S. Lender pursuant to this Agreement and the other
Credit Documents) or Form 4224 (relating to all amounts to be received by
such Non-U.S. Lender pursuant to this Agreement and the other Credit
Documents), or successor and related applicable forms, as the case may be;
or
(B) in the case of a Non-U.S. Lender that is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code and that does not comply with
the requirements of clause (A) hereof, (x) a statement in the form of
Exhibit E (or such other form of statement as shall be reasonably requested
by the Borrower from time to time) to the effect that such Non-U.S. Lender
is eligible for a complete exemption from withholding of U.S. Taxes under
Code Section 871(h) or 881(c), and (y) two duly completed and signed copies
of Internal Revenue Service Form W-8 or successor and related applicable
form (it being understood and agreed that no Participant and, without the
prior written consent of the Borrower described in clause (B) of the
proviso to the first sentence of subsection 10.6(c), no Assignee shall be
entitled to deliver any forms or statements pursuant to this clause (B),
but rather shall be required to deliver forms pursuant to clause (A) of
this subsection 2.15(b)).
Further, each Non-U.S. Lender agrees (i) to deliver to the Borrower and the
Administrative Agent, and if applicable, the assigning Lender (or, in the case
of a Participant, to the Lender from which the related participation shall have
been purchased) two further duly completed and signed copies of such Forms 1001
or 4224, as the case may be, or successor and related applicable forms, on or
before the date that any such form expires or becomes obsolete and promptly
after the occurrence of any event requiring a change from the most recent
form(s) previously delivered by it to the Borrower (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) in accordance with applicable U.S. laws and regulations and (ii) in
the case of a Non-U.S. Lender that delivers a statement in the form of Exhibit
E (or such other form of statement as shall have been requested by the
Borrower), to deliver to the Borrower and the Administrative Agent, and if
applicable, the assigning Lender, such statement on an annual basis on the
anniversary of the date on which such Non-U.S. Lender became a party to this
Agreement and to deliver promptly to the Borrower and the Administrative Agent,
and if applicable, the assigning Lender, such additional statements and forms
as shall be reasonably requested by the Borrower from time to time unless, in
any such case, any change in law or regulation has occurred subsequent to the
date such Lender became a party to this Agreement (or in the case of a
Participant, the date on which such Participant purchased the related
participation) which renders all such forms inapplicable or which would prevent
such Lender (or Participant) from properly completing and executing any such
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form with respect to it and such Lender promptly notifies the Borrower and the
Administrative Agent (or, in the case of a Participant, the Lender from which
the related participation shall have been purchased) if it is no longer able to
deliver, or if it is required to withdraw or cancel, any form or statement
previously delivered by it pursuant to this subsection 2.15(b). Each Non-U.S.
Lender agrees to indemnify and hold harmless the Borrower from and against any
taxes, penalties, interest or other costs or losses (including, without
limitation, reasonable attorneys' fees and expenses) incurred or payable by the
Borrower as a result of the failure of the Borrower to comply with its
obligations to deduct or withhold any U.S. Taxes from any payments made
pursuant to this Agreement to such Non-U.S. Lender or the Administrative Agent
which failure resulted from the Borrower's reliance on any form, statement,
certificate or other information provided to it by such Non-U.S. Lender
pursuant to clause (B) or clause (ii) of this subsection 2.15(b). The Borrower
hereby agrees that for so long as a Non-U.S. Lender complies with this
subsection 2.15(b), the Borrower shall not withhold any amounts from any
payments made pursuant to this Agreement to such Non-U.S. Lender, unless the
Borrower reasonably determines that it is required by law to withhold or deduct
any amounts from any payments made to such Non-U.S. Lender pursuant to this
Agreement. A Non-U.S. Lender shall not be required to deliver any form or
statement pursuant to the immediately preceding sentences in this subsection
2.15(b) that such Non-U.S. Lender is not legally able to deliver (it being
understood and agreed that the Borrower shall withhold or deduct such amounts
from any payments made to such Non-U.S. Lender that the Borrower reasonably
determines are required by law and that payments resulting from a failure to
comply with this paragraph (b) shall not be subject to payment or indemnity by
the Borrower pursuant to subsection 2.15(a)). If any Credit Party other than
the Borrower makes any payment to any Non-U.S. Lender under any Credit
Document, the foregoing provisions of this subsection 2.15 shall apply to such
Non-U.S. Lender and such Credit Party as if such Credit Party were the Borrower
(but a Non-U.S. Lender shall not be required to provide any form or make any
statement to any such Credit Party unless such Non-U.S. Lender has received a
request to do so from such Credit Party and has a reasonable time to comply
with such request).
(c) If a Lender shall become aware that it is entitled to receive
a refund (whether by way of a direct payment or by offset) in respect
of a Non-Excluded Tax paid by the Borrower, which refund, in the good
faith judgment of such Lender, is allocable to such payment made
pursuant to this Section, it shall promptly notify the Borrower of the
availability of such refund and shall, within 30 days after the
receipt of a request from the Borrower, apply for such refund at the
Borrower's sole expense. If any Lender receives such refund (as
described in the preceding sentence), it shall repay the amount of
such refund (together with any interest received thereon) to the
Borrower if all the payments due under this Section has been paid in
full.
2.16. Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of Eurodollar
Loans on a day which is not the
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last day of an Interest Period with respect thereto (but excluding loss of
margin). Such indemnification under this subsection 2.16 may include an amount
equal to the excess, if any, of (i) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of such Interest Period (or, in the case of
a failure to borrow, convert or continue, the Interest Period that would have
commenced on the date of such failure) in each case at the applicable rate of
interest for such Loans provided for herein (but excluding loss of margin) over
(ii) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market. Each Lender claiming any payment pursuant to this subsection 2.16 shall
do so by giving notice thereof to the Borrower and the Administrative Agent
(showing calculation of the amount claimed in reasonable detail) within 60
Business Days after a failure to borrow, convert or continue Eurodollar Loans,
or to prepay, after notice or after a prepayment of Eurodollar Loans on a day
which is not the last day of an Interest Period therefor. This covenant shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
2.17. Replacement of Lenders. If at any time (a) the Borrower becomes
obligated to pay additional amounts described in subsections 2.13, 2.14 or 2.15
as a result of any condition described in such subsections, (b) any Lender
ceases to make Eurodollar Loans pursuant to subsection 2.13, (c) any Lender
becomes insolvent and its assets become subject to a receiver, liquidator,
trustee, custodian or other Person having similar powers or (d) any Lender
becomes a "Nonconsenting Lender" (hereinafter defined), then the Borrower may,
on five (5) Business Days' prior written notice to the Administrative Agent and
such Lender, replace such Lender by causing such Lender to (and such Lender
shall) assign pursuant to subsection 10.6 all of its rights and obligations
under this Agreement to a Lender or other entity selected by the Borrower and
acceptable to the Administrative Agent for a purchase price equal to the
outstanding principal amount of such Lender's Loans and all accrued interest
and fees and other amounts payable hereunder (including amounts payable under
subsection 2.16 as though such Loans were being paid instead of being
purchased); provided that (i) the Borrower shall have no right to replace the
Administrative Agent, (ii) neither the Administrative Agent nor any Lender
shall have any obligation to the Borrower to find a replacement Lender, (iii)
in the event of a replacement of a Nonconsenting Lender or a Lender to which
the Borrower becomes obligated to pay additional amounts under one of the
subsections described in clause (a) above, in order for the Borrower to be
entitled to replace such a Lender, such replacement must take place no later
than 180 days after (A) the date the Nonconsenting Lender shall have notified
the Borrower and the Administrative Agent of its failure to agree to any
requested consent, waiver or amendment or (B) the Lender shall have demanded
payment of additional amounts under one of the subsections described in clause
(a) above, as the case may be, and (iv) in no event shall the Lender hereby
replaced be required to pay or surrender to its replacement Lender or other
entity any of the fees received by such Lender hereby replaced pursuant to this
Agreement. In the case of a replacement of a Lender to which the Borrower
becomes obligated to pay additional amounts pursuant to this subsection 2.17,
the Borrower shall pay such additional amounts to such Lender prior to such
Lender being replaced and the payment of such additional amounts shall be a
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condition to the replacement of such Lender. In the event that (x) the Borrower
or the Administrative Agent has requested the Lenders to consent to a departure
or waiver of any provisions of the Credit Documents or to agree to any
amendment thereto or consent to the Extension Option, (y) the consent, waiver
or amendment in question requires the agreement of all Lenders in accordance
with the terms of subsection 10.1 or relates to a request to exercise the
Extension Option under subsection 2.5(a) and (z) the Required Lenders have
agreed to such consent, waiver or amendment, then any Lender who does not agree
to such consent, waiver or amendment shall be deemed a "Nonconsenting Lender."
2.18. Certain Fees. The Borrower agrees to pay to the Administrative
Agent, for its own account, the non-refundable fees at the times and in the
amounts as set forth in that certain fee letter between the Administrative
Agent and the Borrower dated on or about the date hereof.
2.19. Certain Rules Relating to the Payment of Additional Amounts. (a)
Upon the request, and at the expense, of the Borrower, each Lender to
which the Borrower is required to pay any additional amount pursuant
to subsection 2.14 or 2.15 shall reasonably afford the Borrower the
opportunity to contest, and reasonably cooperate with the Borrower in
contesting, the imposition of any Non-Excluded Taxes or other amounts
giving rise to such payment; provided that (i) such Lender shall not
be required to afford the Borrower the opportunity to so contest
unless the Borrower shall have confirmed in writing to such Lender its
obligation to pay such amounts pursuant to this Agreement and (ii) the
Borrower shall reimburse such Lender for its reasonable attorneys' and
accountants' fees and disbursements incurred in so cooperating with
the Borrower in contesting the imposition of such Non-Excluded Taxes.
(b) Each Lender agrees that if it makes any demand for payment
under subsection 2.14 or 2.15(a), or if any adoption or change of the
type described in subsection 2.13 shall occur with respect to it, it
will use reasonable efforts (consistent with its internal policy and
legal and regulatory restrictions and so long as such efforts would
not be disadvantageous to it, as determined in its reasonable
discretion) to designate a different lending office if the making of
such a designation would allow the Lender to continue to make and
maintain Eurodollar Loans and would reduce or obviate the need for the
Borrower to make payments under subsection 2.14 or 2.15(a), or would
eliminate or reduce the effect of any adoption or change described in
subsection 2.13.
SECTION 3. LETTERS OF CREDIT
3.1. L/C Commitment. (a) Subject to the terms and conditions hereof,
the Issuing Lender, in reliance on the agreements of the Revolving 364
Day Lenders set forth in subsection 3.4(a), agrees to issue letters of
credit ("Letters of Credit") for the account of the Borrower on any
Business Day during the Revolving 364 Day Commitment Period in such
form as may be approved from time to time by the Issuing Lender;
provided that the Issuing Lender shall have no obligation to
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issue any Letter of Credit if, after giving effect to such issuance,
(x) the L/C Obligations would exceed the L/C Commitment or (y) the
Available Commitment with respect to Revolving 364 Day Loans of all
Revolving 364 Day Lenders then outstanding would be less than zero.
(b) Each Domestic L/C shall (i) be denominated in Dollars, (ii)
be a Performance L/C or a Financial L/C issued to support obligations
of the Borrower or any of its Subsidiaries, contingent or otherwise,
or be a commercial letter of credit for the purchase of goods and
(iii) expire no later than the fifth Business Day prior to the
Revolving 364 Day Termination Date.
(c) Each Foreign L/C shall (i) be denominated in an Alternative
Currency, (ii) be a Performance L/C or a Financial L/C issued to
support obligations of the Borrower or any of its Subsidiaries,
contingent or otherwise, or be a commercial letter of credit for the
purchase of goods, and (iii) expire no later than the fifth Business
Day prior to the Revolving 364 Day Termination Date. For purposes of
this Agreement, the amount deemed outstanding under each Foreign L/C
at any time, and the amount of the Borrower's Reimbursement
Obligations under subsection 3.5 for any amounts paid by the Issuing
Lender in connection with any Foreign L/C, shall be the Dollar
Equivalent, as determined on the most recent Calculation Date, of (x)
such Letter of Credit or (y) the Reimbursement Amount (as defined in
Subsection 3.5(a)), as applicable.
(d) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, Domestic L/Cs shall
also be subject to the laws of the State of New York.
(e) The Issuing Lender shall not at any time be obligated to
issue any Letter of Credit hereunder if (i) such issuance would
conflict with, or cause the Issuing Lender or any L/C Participant to
exceed any limits imposed by, any applicable Requirement of Law or any
policies of the Issuing Lender or (ii) in the case of any Foreign L/C,
it has determined that it cannot provide such Letter of Credit in the
applicable Alternative Currency.
3.2. Procedure for Issuance of Letters of Credit. The Borrower may
from time to time request that the Issuing Lender issue a Letter of Credit at
any time prior to the fifth Business Day prior to the Revolving 364 Day
Termination Date by delivering to the Issuing Lender with a copy to the
Administrative Agent at its address for notices specified herein an Application
therefor, completed to the satisfaction of the Issuing Lender, and such other
certificates, documents and other papers and information as the Issuing Lender
may reasonably request. Upon receipt of any Application, the Issuing Lender
will process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the
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original of such Letter of Credit to the beneficiary thereof or as otherwise
may be agreed by the Issuing Lender and the Borrower. The Issuing Lender shall
furnish a copy of such Letter of Credit to the Borrower and the Administrative
Agent (with copies for each Lender) promptly following the issuance thereof.
3.3. Fees, Commissions and Other Charges. (a) The Borrower shall pay
to the Administrative Agent, for the account of the Issuing Lender and
the L/C Participants, a letter of credit fee with respect to each
Letter of Credit, computed for the period from and including the date
of issuance of such Letter of Credit to the expiration date of such
Letter of Credit at a rate per annum equal to (i) in the case of any
such Letter of Credit issued as a Performance L/C, one-half (1/2) of
the Applicable Margin then in effect for Eurodollar Loans, of the
Dollar Equivalent of the aggregate face amount of such Letters of
Credit outstanding and (ii) in the case of any other Letter of Credit
(except for the type described in clause (i) above), the Applicable
Margin then in effect for Eurodollar Loans, of the Dollar Equivalent
of the aggregate face amount of such Letters of Credit outstanding,
payable, in each such case, in arrears on each L/C Fee Payment Date
and on the Termination Date; provided, that, with respect to any
Foreign L/C, the Dollar Equivalent of the face amount of such Letter
of Credit shall be recalculated on each Calculation Date during the
period that such Letter of Credit is outstanding. Such fees shall be
payable to the Administrative Agent to be shared ratably among the
Revolving 364 Day Lenders in accordance with their respective
Commitment Percentages with respect to Revolving 364 Day Loans. In
addition, the Borrower shall pay to the Issuing Lender, for its sole
account, a fee equal to 0.1250% per annum of the Dollar Equivalent of
the aggregate face amount of all outstanding Letters of Credit payable
quarterly in arrears on each L/C Fee Payment Date and on the Revolving
364 Day Termination Date; provided, that, with respect to any Foreign
L/C, the Dollar Equivalent of the face amount of such Letter of Credit
shall be recalculated on each Calculation Date during the period that
such Letter of Credit is outstanding.
(b) In addition to the foregoing fees and commissions, the
Borrower shall pay or reimburse the Issuing Lender for such normal and
customary costs and expenses as are incurred or charged by the Issuing
Lender in issuing, effecting payment under, amending or otherwise
administering any Letter of Credit.
(c) The Administrative Agent shall, promptly following its
receipt thereof, distribute to the Issuing Lender and the relevant L/C
Participants all fees and commissions received by the Administrative
Agent for their respective accounts pursuant to this subsection.
3.4. L/C Participation. (a) The Issuing Lender irrevocably agrees to
sell and hereby sells to each L/C Participant, and, to induce the
Issuing Lender to issue Letters of Credit hereunder, each L/C
Participant irrevocably agrees to accept and purchase and hereby
accepts and purchases from the Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant's own account
and risk
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an undivided interest equal to such L/C Participant's Commitment
Percentage with respect to Revolving 364 Day Loans from time to time
in effect in the Issuing Lender's obligations and rights under each
Letter of Credit issued hereunder and the amount of each draft paid by
the Issuing Lender thereunder. Each L/C Participant unconditionally
and irrevocably agrees with the Issuing Lender that, if a draft is
paid under any Letter of Credit for which the Issuing Lender is not
reimbursed in full by the Borrower in accordance with the terms of
this Agreement or any such reimbursement payment received by the
Issuing Lender is avoided or required to be returned in accordance
with applicable law, such L/C Participant shall pay to the Issuing
Lender upon demand in Dollars at the Issuing Lender's address for
notices specified herein an amount equal to such L/C Participant's
then Commitment Percentage with respect to Revolving 364 Day Loans of
the Dollar Equivalent of the amount of such draft (determined on the
date such draft is paid), or any part thereof, which is not so
indefeasibly reimbursed; provided that, if such demand is made prior
to 11:00 A.M., New York City time, on a Business Day, such L/C
Participant shall make such payment to the Issuing Lender prior to the
end of such Business Day and otherwise such L/C Participant shall make
such payment on the next succeeding Business Day.
(b) If any amount required to be paid by any L/C Participant to
the Issuing Lender pursuant to subsection 3.4(a) in respect of any
portion of any payment made by the Issuing Lender under any Letter of
Credit is paid to the Issuing Lender within three Business Days after
the date such payment is due, such L/C Participant shall pay to the
Issuing Lender on demand an amount equal to the product of (i) such
amount, times (ii) the daily average Federal Funds Effective Rate, as
quoted by the Issuing Lender, during the period from and including the
date such payment is required to the date on which such payment is
immediately available to the Issuing Lender, times (iii) a fraction
the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. If any such amount
required to be paid by any L/C Participant pursuant to subsection
3.4(a) is not in fact made available to the Issuing Lender by such L/C
Participant within three Business Days after the date such payment is
due, the Issuing Lender shall be entitled to recover from such L/C
Participant, on demand, such amount with interest thereon calculated
from such due date at the rate per annum applicable to Base Rate Loans
hereunder. A certificate of the Issuing Lender submitted to any L/C
Participant with respect to any amounts owing under this subsection
shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C
Participant its pro rata share of such payment in accordance with
subsection 3.4(a), the Issuing Lender receives any payment related to
such Letter of Credit (whether directly from the Borrower or
otherwise, including proceeds of collateral applied thereto by the
Issuing Lender), or any payment of interest on account thereof, the
Issuing Lender will, if such payment is received prior to 11:00 A.M.,
New York City time, on a Business Day, distribute to such L/C
Participant its pro rata share thereof prior to
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the end of such Business Day and otherwise the Issuing Lender
will distribute such payment on the next succeeding Business Day;
provided, however, that in the event that any such payment received by
the Issuing Lender and distributed to the L/C Participants shall be
required to be returned by the Issuing Lender, each such L/C
Participant shall return to the Issuing Lender the portion thereof
previously distributed by the Issuing Lender to it.
3.5. Reimbursement Obligation of the Borrower. (a) The Borrower agrees
to reimburse the Issuing Lender on the same Business Day on which the
Issuing Lender notifies the Borrower of the date and amount of a draft
presented under any Letter of Credit and paid by the Issuing Lender
provided such notice is received by 1:00 P.M., New York City time, on
such Business Day, and the next Business Day if such notice is
received after such time. The Issuing Lender shall provide notice to
the Borrower on each Business Day on which a draft is presented
indicating the Dollar Equivalent of the amount of (i) such draft so
paid (and, in the case of a Foreign L/C, the amount of such draft so
paid stated in the applicable Alternative Currency) and (ii) any
taxes, fees, charges or other costs or expenses incurred by the
Issuing Lender in connection with such payment ((i) and (ii)
collectively with any interest accruing pursuant to paragraph (b)
below, the "Reimbursement Amount"). Each such payment shall be made to
the Issuing Lender at its address for notices specified herein in
lawful money of the United States of America and in immediately
available funds; provided, that, with respect to any Reimbursement
Obligations of the Borrower arising from the presentment to the
Issuing Lender of a draft under a Foreign L/C, the Borrower may make
payment in the applicable Alternative Currency if such payment is
received by the Issuing Lender on the date such draft is paid by the
Issuing Lender.
(b) Interest shall be payable on the Dollar Equivalent of any and
all amounts remaining unpaid by the Borrower under this subsection
from the date a draft presented under any Letter of Credit is paid by
the Issuing Lender until payment in full (i) at the rate which would
be payable on any Loans that are Base Rate Loans at such time until
such payment is required to be made pursuant to subsection 3.5(a), and
(ii) thereafter, at the rate which would be payable on any Loans that
are Base Rate Loans at such time which were then overdue.
(c) For the avoidance of doubt, subject to the provisos in the
third sentence of subsection 2.12(a) and the last sentence of
subsection 3.5(a) of this Agreement, all payments due from the
Borrower hereunder in respect of Foreign L/Cs (and Reimbursement
Obligations in connection therewith) shall be made in Dollars as
provided in subsection 2.12 of this Agreement.
3.6. Obligations Absolute. (a) The Borrower's obligations under
subsection 3.5(a) shall be absolute and unconditional under any and
all circumstances and irrespective of any set-off, counterclaim or
defense to payment which the Borrower may have or have had against the
Issuing Lender, any L/C Participant or any beneficiary of a Letter of
Credit.
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(b) The Borrower also agrees with the Issuing Lender that the
Issuing Lender shall not be responsible for, and the Borrower's
Reimbursement Obligations under subsection 3.5(a) shall not be
affected by, among other things, (i) the validity or genuineness of
documents or of any endorsements thereon, even though such documents
shall in fact prove to be invalid, fraudulent or forged (unless the
Issuing Lender has knowledge of such invalidity, fraud or forgery),
(ii) any dispute between or among the Borrower and any beneficiary of
any Letter of Credit or any other party to which such Letter of Credit
may be transferred, or (iii) any claims whatsoever of the Borrower
against any beneficiary of such Letter of Credit or any such
transferee.
(c) Neither the Issuing Lender nor any L/C Participant shall be
liable for any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit, except for errors or omissions
caused by the Issuing Lender's gross negligence or willful misconduct.
(d) The Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the
related drafts or documents, if done in the absence of gross
negligence or willful misconduct and in accordance with the standards
of care specified in the Uniform Commercial Code of the State of New
York, shall be binding on the Borrower and shall not result in any
liability of the Issuing Lender or any L/C Participant to the
Borrower.
3.7. Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Lender shall promptly notify
the Borrower and the Administrative Agent of the date and the Dollar Equivalent
of the amount thereof (and, in the case of a Foreign L/C, the amount thereof
stated in the applicable Alternative Currency). If any draft shall be presented
for payment under any Letter of Credit, the responsibility of the Issuing
Lender to the Borrower in connection with such draft shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment appear on their face to be
in conformity with such Letter of Credit.
3.8. Application. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 3, the provisions of this Section 3 shall govern and control.
3.9. Determination of Exchange Rate. On each Calculation Date with
respect to each outstanding Foreign L/C, the Issuing Lender shall determine the
Exchange Rate as of such Calculation Date with respect to the applicable
Alternative Currency and shall promptly notify the Administrative Agent and the
Borrower thereof and of the Dollar Equivalent of all Foreign L/Cs outstanding
on such Calculation Date. The Exchange Rate so determined shall become
effective on such Calculation Date and shall remain effective until the next
succeeding Calculation Date.
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SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents, the Issuing Lender, and the Lenders to enter
into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, the Borrower hereby represents and warrants to the Agents,
the Issuing Lender, and each Lender that:
4.1. Financial Condition.
(a) The following financial statements concerning Borrower and
its Subsidiaries have been delivered to the Agents and the Lenders and
have been prepared in accordance with GAAP consistently applied
throughout the periods covered (except as disclosed therein and
except, with respect to unaudited financial statements, for the
absence of footnotes and normal year-end audit adjustments) and
present fairly in all material respects the financial position of the
Persons covered thereby as at the dates thereof and the results of
their operations and cash flows for the periods then ended:
(i) The audited consolidated balance sheets at December 31, 1997 and
the related statements of income and cash flows of Borrower and its
Subsidiaries for the fiscal year then ended, certified by Price Waterhouse
Coopers L.L.P.
(ii) The unaudited condensed consolidated balance sheet(s) at
March 31, 1998 and the related statement(s) of income and cash flows of
Borrower and its Subsidiaries for the fiscal quarter then ended.
(b) The unaudited pro forma consolidated balance sheet of the
Borrower and its consolidated Subsidiaries which has been delivered
pursuant to subsection 5.1(o) has been prepared based on the best
information available to the Borrower as of the date of delivery
thereof and presents fairly on a pro forma basis the estimated
financial position of the Borrower and its consolidated Subsidiaries,
as at June 30, 1998, adjusted to give effect to the acquisition of SPD
Technologies.
4.2. No Change. Since December 31, 1997 there has been no development,
event or circumstance which has had or could reasonably be expected to have a
Material Adverse Effect.
4.3. Corporate Existence; Compliance with Law. Each of Holdings, the
Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is, or will be on or before the
date set forth in subsection 6.12, duly qualified as a foreign corporation and
in good standing under the laws of each jurisdiction where its ownership, lease
or operation of property or the conduct of its business requires such
qualification, except to the extent that the failure to so qualify could not,
in the aggregate, reasonably be expected to have a Material Adverse Effect and
(d) is in
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compliance with all Requirements of Law except to the extent that the failure
to comply therewith could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect.
4.4. Corporate Power; Authorization; Enforceable Obligations. Each of
Holdings, the Borrower and its Subsidiaries has the corporate power and
authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party and, in the case of the Borrower, to borrow
hereunder and has taken all necessary corporate action to authorize the
borrowings on the terms and conditions of this Agreement and to authorize the
execution, delivery and performance of such Credit Documents. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
borrowings hereunder or with the execution, delivery, performance, validity or
enforceability of the Credit Documents to which the Borrower and each other
Credit Party is a party, except those referred to in subsections 4.17 and 6.13
and those set forth on Schedule 4.4. This Agreement has been, and each other
Credit Document will be, duly executed and delivered on behalf of the Borrower
and each other Credit Party. This Agreement constitutes, and each other Credit
Document to which it is a party when executed and delivered will constitute, a
legal, valid and binding obligation of each Credit Party thereto enforceable
against each such Credit Party, as the case may be, in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered
in a proceeding in equity or at law) and an implied covenant of good faith and
fair dealing.
4.5. No Legal Bar. Except as set forth on Schedule 4.5 or as could not
reasonably be expected to, individually or in the aggregate, have a Material
Adverse Effect, the execution, delivery and performance of each Credit
Document, the borrowing and use of the proceeds of the Loans and the
consummation of the transactions contemplated by the Credit Documents: (a) will
not violate any Requirement of Law or any Contractual Obligation applicable to
or binding upon Holdings, the Borrower or any Subsidiary of the Borrower or any
of their respective properties or assets and (b) will not result in the
creation or imposition of any Lien on any of its properties or assets pursuant
to any Requirement of Law applicable to it or any of its Contractual
Obligations, except for the Liens arising under the Pledge Agreements.
4.6. No Material Litigation. Except as set forth on Schedule 4.6, no
litigation by, investigation by, or proceeding of or before any arbitrator or
any Governmental Authority is pending or, to the knowledge of the Borrower,
overtly threatened by or against the Borrower or any of its Subsidiaries or
against any of its or their respective properties or revenues with respect to
any Credit Document or any of the transactions contemplated hereby or thereby
or which could reasonably be expected to have a Material Adverse Effect.
4.7. No Default. Neither Holdings, the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a
Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.
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4.8. Ownership of Property; Liens. Each of Holdings, the Borrower and
its Subsidiaries (i) has good record and insurable title in fee simple to all
the real property listed on Schedule 4.8, (ii) has good record and insurable
title in fee simple to, or a valid leasehold interest in, all its other
material real property, (iii) has good title to, or a valid leasehold interest
in, all its other material property and (iv) none of such property in clauses
(i) through (iii) is or shall be subject to any Lien except as permitted by
subsection 7.3.
4.9. Intellectual Property. Holdings, the Borrower and each of its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted except for those the failure to own or license
which could not reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). To the best of the Borrower's knowledge, and except
as set forth on Schedule 4.9, no claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor does the
Borrower know of any valid basis for any such claim which could reasonably be
expected to have a Material Adverse Effect. The use of such Intellectual
Property by Holdings, the Borrower and its Subsidiaries does not infringe on
the rights of any Person, except for such claims and infringements that, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
4.10. Taxes. Except as set forth on Schedule 4.10, each of Holdings,
the Borrower and its Subsidiaries has filed or caused to be filed all material
tax returns which, to the knowledge of the Borrower, are required to be filed
and has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other material
taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of Holdings, the Borrower or its Subsidiaries, as the case may be); no
tax Lien has been filed, and, to the knowledge of the Borrower, no claim is
being asserted, with respect to any such tax, fee or other charge.
4.11. Federal Regulations. No part of the proceeds of any Loans will
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect.
4.12. ERISA. The Borrower has provided to the Agents a true and
correct copy of all Agreements, arrangements and understandings relating to the
transfer of Plans from the Seller to the Borrower (the "Transfer Agreements").
The Transfer Agreements are in full force and effect and have not been waived
or modified without the consent of the Agents (which shall not be unreasonably
withheld) except to the extent any such waiver or modification, singly or in
the aggregate, could not be reasonably expected to have a Material Adverse
Effect. Except as could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, no Reportable Event has occurred
with respect to any Single Employer Plan, all contributions required to be made
with respect to a Plan have been timely made; none of the Borrower or any of
its Subsidiaries nor any Commonly Controlled Entity has incurred any
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material liability to or on account of a Plan pursuant to Section 409, 502(i),
502(1), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section
401(a)(29), 4971, 4975 or 4980 of the Code or expects to incur any liability
(including any indirect, contingent or secondary liability) under any of the
foregoing Sections with respect to any Plan; no termination or, or institution
of proceedings to terminate or appoint a trustee to administer, a Single
Employer Plan has occurred; and each Plan has complied in all material respects
with the applicable provisions of ERISA and the Code (except that with respect
to any Multiemployer Plan, such representation is deemed made only to the
knowledge of the Borrower). No "accumulated funding deficiency" (within the
meaning of Section 412 of the Code or Section 302 of ERISA), extension of any
amortization period (within the meaning of Section 412 of the Code) or Lien in
favor of the PBGC or a Plan has arisen or has occurred during the five-year
period prior to the date on which this representation is made or deemed made
with respect to any Single Employer Plan. As of the last annual valuation date
prior to the date on which this representation is made or deemed made, the fair
market value of the assets available for benefits under each Single Employer
Plan did not exceed the actuarial present value of all accumulated benefit
obligations under such Plan by more than $20,000,000, all as determined in
accordance with Statement of Financial Accounting Standards No. 87. Neither the
Borrower nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan for which there is any outstanding
liability, and neither the Borrower nor any Commonly Controlled Entity would
become subject to any liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made in an amount which would be reasonably
likely to have a Material Adverse Effect. To the best knowledge of the
Borrower, no such Multiemployer Plan is in Reorganization or Insolvent.
4.13. Investment Company Act; Other Regulations. None of the Borrower
or any of its Subsidiaries is an "investment company," or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended. None of the Borrower or any of its
subsidiaries is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
4.14. Subsidiaries. The Subsidiaries of the Borrower and their
respective jurisdictions of incorporation shall be as set forth on Schedule
4.14.
4.15. Purpose of Loans. The proceeds of the Loans shall be used by the
Borrower (i) to pay fees and expenses related to the preparation and
negotiation of this Agreement and the other Credit Documents and (ii) for
general corporate and working capital purposes in the ordinary course of
business of the Borrower and its Subsidiaries, including, without limitation,
the making of Investments permitted under subsection 7.9.
4.16. Environmental Matters.
Except insofar as any exception to any of the following, or any
aggregation of such exceptions, is not reasonably likely to result in a
Material Adverse Effect:
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(a) The facilities and properties owned, leased or operated
Holdings, by the Borrower or any of its Subsidiaries (the
"Properties") do not contain, and have not previously contained, any
Materials of Environmental Concern in amounts or concentrations which
(i) constitute or constituted a violation of, or (ii) could reasonably
be expected to give rise to liability under, any applicable
Environmental Law.
(b) None of Holdings, the Borrower nor any of its Subsidiaries
has received any written notice of violation, alleged violation,
non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the Business, nor does the Borrower
have knowledge or reason to believe that any such notice will be
received or is being threatened.
(c) Materials of Environmental Concern have not been transported
or disposed of from the Properties in violation of, or in a manner or
to a location which could reasonably be expected to give rise to
liability under, any applicable Environmental Law, nor have any
Materials of Environmental Concern been generated, treated, stored or
disposed of at, on or under any of the Properties in violation of, or
in a manner that could reasonably be expected to give rise to
liability under, any applicable Environmental Law.
(d) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened,
under any Environmental Law to which Holdings, the Borrower or any
Subsidiary is or, to the knowledge of the Borrower, will be named as a
party or with respect to the Properties or the Business, nor are there
any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to
the Properties or the Business.
(e) There has been no release or threat of release of Materials
of Environmental Concern at or from the Properties, or arising from or
related to the operations of Holdings, the Borrower or any Subsidiary
in connection with the Properties or otherwise in connection with the
Business, in violation of or in amounts or in a manner that could
reasonably give rise to liability under any applicable Environmental
Laws.
(f) The Properties and all operations at the Properties are in
compliance, and have in the last 3 years been in compliance, in all
material respects with all applicable Environmental Laws, and there is
no contamination at, under or about the Properties or violation of any
applicable Environmental Law with respect to the Properties or the
business operated by Holdings, the Borrower or any of its Subsidiaries
(the "Business") which could materially interfere with the continued
operation of the Properties or materially impair the fair saleable
value thereof.
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(g) Holdings, the Borrower and its Subsidiaries hold and are in
compliance with all Environmental Permits necessary for their
operations.
4.17. Collateral Documents. Upon execution and delivery thereof by the
parties thereto, each Pledge Agreement will be effective to create in favor of
the Administrative Agent, for the ratable benefit of the Lenders, a legal,
valid and enforceable security interest in the pledged stock described therein
and, when stock certificates representing or constituting the pledged stock
described therein are delivered to the Administrative Agent, together with
undated stock powers executed in blank therefor, such security interest shall,
subject to the existence of Permitted Liens, constitute a perfected first lien
on, and security interest in, all right, title and interest of the pledgor
party thereto in the pledged stock described therein.
4.18. Accuracy and Completeness of Information. No fact is known to
Holdings, the Borrower or any of its Subsidiaries which has had or could
reasonably be expected to have a Material Adverse Effect, which has not been
disclosed to the Lenders by Holdings, the Borrower or its Subsidiaries in
writing prior to the date hereof. Neither Holdings, the Borrower nor any
Subsidiary of the Borrower is aware of any material liability of the Borrower
or any of its Subsidiaries which is not fully disclosed in the most recent
financial statements delivered to the Agents and Lenders pursuant to
subsections 4.1 and 6.1 hereto.
4.19. Labor Matters. There are no strikes pending or, to the
Borrower's knowledge, overtly threatened against Holdings, the Borrower or any
of its Subsidiaries which, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect. The hours worked and payments
made to employees of Holdings, the Borrower and each of its Subsidiaries (and
their predecessors) have not been in violation of the Fair Labor Standards Act
or any other applicable Requirement of Law, except to the extent such
violations could not, or in the aggregate, be reasonably expected to have a
Material Adverse Effect.
SECTION 5. CONDITIONS PRECEDENT
5.1. Conditions to Initial Loans. The agreement of each Lender to make
the initial extension of credit requested to be made by it is subject to the
satisfaction, immediately prior to or concurrently with the making of such
extension of credit (including the making of any Loan or the issuance of any
Letter of Credit) on the Closing Date, of the following conditions precedent:
(a) Credit Documents. The Administrative Agent shall have
received (i) this Agreement, (ii) the Guarantees and (iii) the Pledge
Agreements, in each case executed, duly acknowledged and delivered by
duly authorized officers of each party thereto, with a counterpart or
a conformed copy for each Lender. Notwithstanding the foregoing, no
Immaterial Subsidiary or Foreign Subsidiary of the Borrower shall be
required to execute a Subsidiary Guarantee or Subsidiary Pledge
Agreement, and no more than 65% of the capital stock of or equity
interests in any Foreign Subsidiary of the Borrower or any of its
Subsidiaries if more than 65% of the assets of such Subsidiary are
securities of foreign
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companies (such determination to be made on the basis of fair
market value), shall be required to be pledged hereunder.
(b) Fees and Expenses. The Agents, the Arrangers and the Lenders
shall have received all fees, expenses and other consideration
required to be paid on or before the Closing Date and all attorneys
fees and disbursements incurred by the Agents in connection with this
Agreement shall have been paid on or before the Closing Date.
(c) Good Standing Certificates. The Administrative Agent shall
have received certificates of good standing for each Credit Party
issued by the Secretary of State (or other relevant governmental
officers) of the jurisdiction of incorporation of each Credit Party.
(d) Consents, Authorizations and Filings, Etc. All consents,
authorizations and filings, if any, required in connection with the
execution, delivery and performance by the Credit Parties, and the
validity and enforceability against the Credit Parties, of the Credit
Documents to which any of them is a party, shall have been obtained or
made, and such consents, authorizations and filings shall be in full
force and effect, except such consents, authorizations and filings,
the failure to obtain which would not have a Material Adverse Effect.
(e) Insurance. The Lenders shall have received (i) a reasonably
satisfactory schedule describing all insurance maintained by the
Borrower and its Subsidiaries pursuant to subsection 6.5, and (ii)
binders (or other customary evidence as to the obtaining and
maintenance by the Borrower and its Subsidiaries of such insurance)
for each policy set forth on such schedule insuring against casualty
and other usual and customary risks.
(f) Litigation. On the Closing Date, there shall be no actions,
suits or proceedings pending or threatened against any Credit Party
(a) with respect to this Agreement or any other Credit Document or any
Transaction Document or the transactions contemplated hereby or
thereby or (b) which the Agents or the Required Lenders shall
determine could reasonably be expected to have a Material Adverse
Effect.
(g) Borrowing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of the
Borrower, dated the Closing Date, substantially in the form of Exhibit
D, with appropriate insertions and attachments, reasonably
satisfactory in form and substance to the Administrative Agent,
executed by the President or any Vice President and the Secretary or
any Assistant Secretary of the Borrower.
(h) Corporate Proceedings of the Borrower. The Administrative
Agent shall have received, with a counterpart for each Lender, a copy
of the resolutions, in form and substance reasonably satisfactory to
the Administrative Agent, of the
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Board of Directors of the Borrower authorizing (i) the execution,
delivery and performance of the Credit Documents to which it is a
party, (ii) the borrowings contemplated hereunder, and (iii) the stock
pledges pursuant to the Borrower Pledge Agreement, certified by the
Secretary or an Assistant Secretary of the Borrower as of the Closing
Date, which certificate shall be in form and substance reasonably
satisfactory to the Administrative Agent and shall state that the
resolutions thereby certified have not been amended, modified, revoked
or rescinded.
(i) Borrower Incumbency Certificate. The Administrative Agent
shall have received, with a counterpart for each Lender, a Certificate
of the Borrower, dated the Closing Date, as to the incumbency and
signature of the officers of the Borrower executing any Credit
Document reasonably satisfactory in form and substance to the
Administrative Agent, executed by the President or any Vice President
and the Secretary or any Assistant Secretary of the Borrower.
(j) Corporate Proceedings of Other Credit Parties. The
Administrative Agent shall have received, with a counterpart for each
Lender, a copy of the resolutions, in form and substance satisfactory
to the Administrative Agent, of the Board of Directors of each Credit
Party (other than the Borrower) authorizing (i) the execution,
delivery and performance of the Credit Documents to which it is a
party, and (ii) the granting by it of the Liens created pursuant to
the Pledge Agreements to which it is a party, certified by the
Secretary or an Assistant Secretary of each such Credit Party as of
the Closing Date, which certificate shall be in form and substance
reasonably satisfactory to the Administrative Agent and shall state
that the resolutions thereby certified have not been amended,
modified, revoked or rescinded.
(k) Credit Party Incumbency Certificates. The Administrative
Agent shall have received, with a counterpart for each Lender, a
certificate of each Credit Party (other than the Borrower), dated the
Closing Date, as to the incumbency and signature of the officers of
such Credit Party executing any Credit Document, reasonably
satisfactory in form and substance to the Administrative Agent,
executed by the President or any Vice President and the Secretary or
any Assistant Secretary of each such Credit Party.
(l) Corporate Documents. The Administrative Agent shall have
received, with a counterpart for each Lender, true and complete copies
of the certificate of incorporation and by-laws of each Credit Party,
certified as of the Closing Date as complete and correct copies
thereof by the Secretary or an Assistant Secretary of the such Credit
Party.
(m) Legal Opinions. The Administrative Agent shall have received,
with a counterpart for each Lender the executed legal opinion of each
of Simpson Thacher and Bartlett, special counsel to the Credit
Parties, and Christopher C. Cambria, Vice President - General Counsel
and Secretary of the Borrower and
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counsel to the other Credit Parties, substantially in the form of
Exhibits C-1 and C-2, respectively. Each such legal opinion shall
cover such other matters incident to the transactions contemplated by
this Agreement as the Agents may reasonably require.
(n) Pledged Stock; Stock Powers. The Administrative Agent shall
have received the certificates representing the shares pledged
pursuant to each of the Pledge Agreements together with an undated
stock power for each such certificate executed in blank by a duly
authorized officer of the pledgor thereof.
(o) Pro Forma Financials. The Lenders shall have received a
reasonably satisfactory unaudited pro forma consolidated balance sheet
of the Borrower and its Subsidiaries as of June 30, 1998 (after the
issuance of the New Subordinated Debt and the consummation of the New
IPO) which shall present fairly, in all material respects, on a pro
forma basis, the estimated financial condition of the Borrower and its
Subsidiaries as of such date, as adjusted to give effect to the
acquisition by the Borrower of SPD Technologies pursuant to the SPD
Technologies Acquisition Agreement.
(p) Projections. Each Lender shall have received financial
projections of the Borrower in form and substance reasonably
satisfactory to the Agents prepared by the Borrower.
(q) No Default. No Default or Event of Default shall have
occurred and be continuing.
(r) Facility A Credit Agreement. All conditions set forth in
clauses (a) through (q) of subsection 5.1 of the Facility A Credit
Agreement shall have been satisfied.
5.2. Conditions to Each Extension of Credit. The agreement of each
Lender to make any extension of credit (including the issuance of any Letter of
Credit) requested to be provided by it on any date (including, without
limitation, its initial Loan and Letter(s) of Credit) is subject to the
satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations
and warranties made by any Credit Party in or pursuant to the Credit
Documents shall be true and correct in all material respects on and as
of such date as if made on and as of such date, except for any
representation and warranty which is expressly made as of an earlier
date, which representation and warranty shall have been true and
correct in all material respects as of such earlier date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or will occur or exist after
giving effect to the extensions of credit requested to be made on such
date. Borrower shall not be in violation of Section 4.09 {Incurrence
of Indebtedness and Issuance of Preferred
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Stock} of either the Indenture or the New Subordinated Debt
Indenture on such date nor will such a violation occur or exist after
giving effect to the extensions of credit requested to be made on such
date.
(c) Additional Matters. All corporate and other proceedings, and
all documents, instruments and other legal matters in connection with
the transactions contemplated by this Agreement and the other Credit
Documents shall be satisfactory in form and substance to the Agents,
and the Administrative Agent shall have received such other documents
and legal opinions in respect of any aspect or consequence of the
transactions contemplated hereby or thereby as it shall reasonably
request.
Each borrowing by, and each Letter of Credit issued on behalf of, the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date thereof that the conditions contained in this subsection have been
satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect or any amount is owing to any Lender or any Agent hereunder or under any
other Credit Document, the Borrower shall and (except in the case of delivery
of financial information, reports and notices) shall cause each of its
Subsidiaries to:
6.1. SEC Filings. The Borrower will file on a timely basis with the
SEC, to the extent such filings are accepted by the SEC and whether or not the
Borrower has a class of securities registered under the Exchange Act, the
annual reports, quarterly reports (including with respect to the fourth quarter
of each fiscal year) and other documents that the Borrower would be required to
file if the Borrower were subject to section 13(a) or 15(d) of the Exchange
Act. The Borrower will also be required (i) to deliver to the Administrative
Agent and each Lender, copies of such reports and documents within five days
after the date on which the Borrower files such reports and documents with the
SEC or the date on which the Borrower would be required to file such reports
and documents if the Borrower were so required and (ii) if filing such reports
and documents with the SEC is not accepted by the SEC or is prohibited under
the Exchange Act, to promptly notify the Administrative Agent in writing of the
occurrence of any such event and to supply at the Borrower's cost copies of
such reports and documents to the Administrative Agent and any Lender upon
request.
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
6.2. Certificates; Other Information. Furnish to the Administrative
Agent with copies for each Lender:
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(a) concurrently with the delivery of the financial statements
referred to in subsection 6.1, a certificate of the independent
certified public accountants reporting on such financial statements
stating that, in performing their audit, nothing came to their
attention that caused them to believe that the Borrower failed to
comply with the provisions of subsection 7.1, except as specified in
such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsection 6.1, a certificate of a Responsible Officer
stating that, to the best of such Officer's knowledge, during such
period (i) no Subsidiary has been formed or acquired (or, if any such
Subsidiary has been formed or acquired, the Borrower has complied with
the requirements of subsection 6.10 with respect thereto) and (ii)
such Officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate;
(c) concurrently with the delivery of financial statements
pursuant to subsection 6.1, a certificate of a Responsible Officer of
the Borrower setting forth, in reasonable detail, the computations, as
applicable, of (i) the Debt Ratio and (ii) the financial covenants set
forth in subsection 7.1, as of such last day or for the fiscal period
then ended, as the case may be;
(d) not later than 60 days after the end of each fiscal year of
the Borrower, a copy of the projections by the Borrower of the
operating budget and cash flow budget of the Borrower and its
Subsidiaries for the succeeding fiscal year, such projections to be
accompanied by a certificate of a Responsible Officer to the effect
that such projections have been prepared on the basis of sound
financial planning practice and that such Officer has no reason to
believe they are incorrect or misleading in any material respect;
(e) within five days after the same are sent, copies of all
financial statements and reports which the Borrower or Holdings sends
to its stockholders; and
(f) promptly, such additional financial and other information as
any Lender may from time to time reasonably request.
6.3. Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or its Subsidiaries, as the case may be.
6.4. Conduct of Business; Maintenance of Existence and Property;
Compliance with Law. Except as permitted by subsection 7.5 and subsection 7.6,
(a) continue to engage in business of the same general type as now conducted by
it; (b) preserve, renew and keep in full force and effect its corporate
existence and take all reasonable action to maintain all rights,
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privileges and franchises necessary or desirable in the normal conduct of its
business; (c) keep all property useful and necessary in its business in good
working order and condition (ordinary wear and tear and damage by fire and/or
other casualty or taking by condemnation excepted) except if (i) in the
reasonable business judgment of the Borrower or such Subsidiary, as the case
may be, it is in its best economic interest not to preserve and maintain such
rights, privileges or franchises, and (ii) such failure to preserve and
maintain such privileges, rights or franchises would not materially adversely
affect the rights of the Lenders hereunder or the value of the Collateral, and
except as otherwise permitted pursuant to subsection 7.5; and (d) comply with
all Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith could not, in the aggregate, be reasonably expected
to have a Material Adverse Effect.
6.5. Insurance. The Borrower will, and will cause each of its
Subsidiaries to maintain, with financially sound and reputable insurance
companies, insurance in such amounts and against such risks as are customarily
maintained by companies of similar stature engaged in the same or similar
businesses operating in the same or similar locations.
6.6. Inspection of Property; Books and Records; Discussions. Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records (except to the
extent any such access is restricted by a Requirement of Law) at any reasonable
time on a Business Day and as often as may reasonably be desired and to discuss
the business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants;
provided that the Administrative Agent or such Lender shall notify the Borrower
prior to any contact with such accountants and give the Borrower the
opportunity to participate in such discussions; provided, further, that the
Borrower shall notify the Administrative Agent of any such visits, inspections
or discussions prior to each occurrence thereof.
6.7. Notices. Promptly give notice to the Administrative Agent and
each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries, (ii)
litigation, investigation or proceeding which may exist at any time
between the Borrower or any of its Subsidiaries and any Governmental
Authority, which in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect or (iii) any material asset sale (describing
in reasonable detail the assets sold, the consideration received
therefor and the proposed use of the proceeds thereof);
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(c) any other litigation or proceeding affecting the Borrower or
any of its Subsidiaries in which the amount involved is $7,500,000 or
more and not covered by insurance or in which injunctive or similar
relief is sought; and
(d) the following events, as soon as possible and in any event
within 45 days after the Borrower knows or has reason to know thereof:
(i) the incurrence of an accumulated funding deficiency or the filing
of an application to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under
Section 412 of the Code with respect to a Plan, the creation of any
Lien in favor of the PBGC or a Plan, the occurrence of any "Trigger
Event" (as defined in the Transfer Agreements) and the reassumption by
the Seller of sponsorship of any Single Employer Plan, (ii) except
where such event or liability could not reasonably be expected to have
a Material Adverse Effect, the occurrence or expected occurrence of
any Reportable Event with respect to any Plan (other than a Multiple
Employer Plan), or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan, or a failure
to make any required contribution to a Plan, (iii) the institution of
proceedings by the PBGC with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Single Employer Plan
or Multiemployer Plan or (iv) except as could not reasonably be
expected to have a Material Adverse Effect, the institution of
proceedings or the taking of any other action with respect to the
withdrawal from or termination of any Single Employer Plan;
Each notice pursuant to this subsection shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower proposes to take with respect
thereto.
6.8. Environmental Laws. (a)(i) Comply in all material respects with
all Environmental Laws applicable to it, and obtain, comply in all
material respects with and maintain any and all material Environmental
Permits necessary for its operations as conducted and as planned; and
(ii) take all reasonable efforts to ensure that all of its tenants,
subtenants, contractors, subcontractors, and invitees comply in all
material respects with all applicable Environmental Laws, and obtain,
comply in all material respects with and maintain any and all material
Environmental Permits, applicable to any of them. Notwithstanding the
foregoing, upon learning of any actual or suspected noncompliance, the
Borrower or one or more of its Subsidiaries, as appropriate, shall
promptly undertake all reasonable efforts to achieve material
compliance.
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions in each case
required under applicable Environmental Laws and promptly comply in
all material respects with all lawful orders and directives of all
Governmental Authorities regarding applicable Environmental Laws
except to the extent that the same are being
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contested in good faith by appropriate proceedings and the pendency of
such proceedings could not be reasonably expected to have a Material
Adverse Effect.
6.9. Further Assurances. Upon the reasonable request of the
Administrative Agent, promptly perform or cause to be performed any and all
acts and execute or cause to be executed and delivered any and all documents
which are necessary or advisable to maintain in favor of the Administrative
Agent, for the benefit of the Lenders, Liens on the Collateral that are duly
perfected in accordance with all applicable Requirements of Law.
6.10. Additional Collateral. (a) With respect to any Capital Stock of
any newly created or acquired Subsidiary or any newly issued Capital
Stock of any existing Subsidiary acquired after the Closing Date by
the Borrower or any of its Subsidiaries that is intended to be subject
to the Lien created by any of the Pledge Agreements but which is not
so subject, promptly (and in any event within 30 days after the
acquisition thereof): (i) execute and deliver to the Administrative
Agent such amendments to the relevant Pledge Agreements or such other
documents as the Administrative Agent shall deem necessary or
advisable to grant to the Administrative Agent, for the benefit of the
Lenders, a Lien on such Capital Stock, (ii) take all actions necessary
or advisable to cause such Lien to be duly perfected in accordance
with all applicable Requirements of Law, including delivering all such
original certificates evidencing such Capital Stock to the
Administrative Agent together with undated stock powers executed in
blank therefor, and (iii) if requested by the Administrative Agent or
the Required Lenders, deliver to the Administrative Agent legal
opinions relating to the matters described in clauses (i) and (ii)
immediately preceding, which opinions shall be in form and substance,
and from counsel, reasonably satisfactory to the Administrative Agent.
(b) With respect to any Person that, subsequent to the Closing
Date, becomes a direct or indirect Subsidiary of the Borrower,
promptly (and in any event within 30 days after such Person becomes a
Subsidiary): (i) cause such new Subsidiary to become a party to the
Subsidiary Pledge Agreement and the Subsidiary Guarantee and (ii) if
requested by the Administrative Agent or the Required Lenders, deliver
to the Administrative Agent legal opinions relating to the matters
described in clause (i) immediately preceding, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to
the Administrative Agent. Notwithstanding the foregoing, no Immaterial
Subsidiary or Foreign Subsidiary of the Borrower shall be required to
execute a Subsidiary Guarantee or Subsidiary Pledge Agreement, and no
more than 65% of the Capital Stock of or equity interests in any
Foreign Subsidiary of the Borrower or any of its Subsidiaries if more
than 65% of the assets of such Subsidiary are securities of foreign
companies (such determination to be made on the basis of fair market
value), shall be required to be pledged hereunder.
6.11. [Intentionally Omitted.]
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6.12. Foreign Jurisdictions. Maintain due qualification as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except to the extent that the failure to so
qualify could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
6.13. Government Contracts. The Borrower and its Subsidiaries shall
apply for and maintain all material facility security clearances and personnel
security clearances required of the Borrower under all Requirements of Law to
perform and deliver under any and all Government Contracts and as otherwise may
be necessary to continue to perform the business of the Borrower and its
Subsidiaries.
6.14. Lien Searches. Not later than 45 days following the Closing
Date, the Borrower shall deliver to the Administrative Agent the results of a
search of Uniform Commercial Code, tax and judgment filings made with respect
to each of the Borrower and its Subsidiaries (other than any Immaterial
Subsidiaries) in each jurisdiction in which the Borrower or such applicable
Subsidiary maintains its principal place of business or any material assets and
a certificate of a Responsible Officer certifying that such lien search results
do not disclose any Liens, except for Liens permitted hereunder.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as any portion of the
Commitments remain in effect or any amount is owing to any Lender or any of the
Agents hereunder or under any other Credit Document, the Borrower shall not,
and (except with respect to subsection 7.1), shall not permit any of its
Subsidiaries to, directly or indirectly:
7.1. Financial Condition Covenants.
(a) Debt Ratio. Permit the Debt Ratio at the last day of any
fiscal quarter to be greater than the ratio set forth below opposite
the fiscal quarter during which such fiscal quarter occurs:
Fiscal Quarter Ending Ratio
--------------------- -----
September 30, 1998 5.00
December 31, 1998 5.00
March 31, 1999 5.00
June 30, 1999 5.00
September 30, 1999 4.75
December 31, 1999 4.75
March 31, 2000 4.75
June 30, 2000 4.75
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September 30, 2000 4.50
December 31, 2000 4.50
March 31, 2001 4.50
June 30, 2001 4.50
September 30, 2001 3.75
December 31, 2001 3.75
March 31, 2002 3.75
June 30, 2002 3.75
September 30, 2002 3.25
and thereafter
(b) Interest Coverage. Permit the ratio of (i) Consolidated
EBITDA to (ii) Consolidated Cash Interest Expense during any Test
Period to be less than the ratio set forth opposite such period below
(such ratio, the "Interest Coverage Ratio"):
Test Period Interest Coverage Ratio
----------- -----------------------
7/1/98 - 9/30/98 2.00
10/1/98 - 12/31/98 2.00
1/1/99 - 3/31/99 2.00
4/1/99 - 6/30/99 2.00
7/1/99 - 9/30/99 2.25
10/1/99 - 12/31/99 2.25
1/1/00 - 3/31/00 2.25
4/1/00 - 6/30/00 2.25
7/1/00 - 9/30/00 2.50
10/1/00 - 12/31/00 2.50
1/1/01 - 3/31/01 2.50
4/1/01 - 6/30/01 2.50
7/1/01 - 9/30/01 2.75
10/1/01 - 12/31/01 2.75
1/1/02 - 3/31/02 2.75
4/1/02 - 6/30/02 2.75
7/1/02 - 9/30/02 3.00
10/1/02 - and thereafter 3.00
7.2. Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness (including in respect of Interest Rate Agreements),
except:
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(a) Indebtedness of the Borrower under this Agreement and the
Facility A Credit Agreement;
(b) Indebtedness of the Borrower incurred to finance the
acquisition of fixed or capital assets (whether pursuant to a loan, a
Financing Lease or otherwise) in an aggregate principal amount not
exceeding $25,000,000 at any time outstanding;
(c) Indebtedness assumed in connection with any Investment
permitted pursuant to subsection 7.9(k) hereof.
(d) additional Indebtedness of the Borrower not exceeding
$50,000,000 in aggregate principal amount at any one time outstanding
(of which up to $35,000,000 may be secured by Liens permitted pursuant
to subsection 7.3(i) hereof);
(e) Indebtedness of the Borrower in respect of not more than (i)
$225,000,000 principal amount of Subordinated Notes issued on the
Original Closing Date and (ii) $180,000,000 principal amount of New
Subordinated Notes issued on May 22, 1998;
(f) the Indebtedness of the Borrower and its Subsidiaries
outstanding on the Closing Date and reflected on Schedule 7.2(f), and
refundings or refinancings thereof, provided that no such refunding or
refinancing shall shorten the maturity or increase the principal
amount of the original Indebtedness;
(g) Guarantee Obligations permitted by subsection 7.4;
(h) the incurrence by any Credit Party of intercompany
Indebtedness between or among the Credit Parties; provided, however,
that if the Borrower is the obligor on such Indebtedness, such
Indebtedness is expressly subordinated to the prior payment in full in
cash of all Obligations;
(i) Indebtedness secured by Permitted Liens;
(j) Indebtedness of the Borrower or any of its Subsidiaries
(other than as described under subsection 7.2(a) above) incurred in
connection with the issuance of any surety bonds, performance letters
of credit or other similar performance bonds required pursuant to any
Contractual Obligation or Requirement of Law to which Borrower or any
of its Subsidiaries are subject in an aggregate principal amount not
exceeding $100,000,000 at any time outstanding, less, without
duplication, the aggregate amount of then existing Guarantee
Obligations permitted under 7.4(g); and
(k) Up to $30,000,000 of purchase money Indebtedness the proceeds
of which are utilized to acquire the real property (including
improvements thereon) and related assets currently utilized by the
Borrower's communications
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systems - west division in Salt Lake City, Utah, on terms reasonably
satisfactory to the Agents.
7.3. Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings, provided that adequate reserves
with respect thereto are maintained on the books of the Borrower or
its Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and
deposits securing liability to insurance carriers under insurance or
self-insurance arrangements;
(d) 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;
(e) easements, rights-of-way, zoning restrictions, other
restrictions and other similar encumbrances previously or hereafter
incurred in the ordinary course of business which, in the aggregate,
are not substantial in amount and which do not in any case materially
detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the Borrower or
such Subsidiary;
(f) Liens in existence on the date hereof listed on Schedule
7.3(f), securing Indebtedness permitted by subsection 7.2(f), provided
that no such Lien is expanded to cover any additional property (other
than after-acquired title in or on such property and proceeds of the
existing collateral in accordance with the instrument creating such
Lien) after the Closing Date and that the amount of Indebtedness
secured thereby is not increased and extensions, renewals or
replacements thereof provided that no such extension, renewal or
replacement shall shorten the fixed maturity or increase the principal
amount of the original Indebtedness; and provided, further, that the
assets of the Borrower and its Subsidiaries encumbered by such Liens
are existing equipment and other existing tangible assets;
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(g) Liens securing Indebtedness of the Borrower and its
Subsidiaries permitted by subsections 7.2(b) and 7.2(k) incurred to
finance the acquisition of fixed or capital assets, provided that (i)
such Liens shall be created substantially simultaneously with the
acquisition of such fixed or capital assets, (ii) such Liens do not at
any time encumber any property other than the property financed by
such Indebtedness (other than after acquired title in or on such
property and proceeds of the existing collateral in accordance with
the instrument creating such Lien) and (iii) the principal amount of
Indebtedness secured by any such Lien shall at no time exceed 100% of
the original purchase price of such property of such property at the
time it was acquired;
(h) Liens on the property or assets of a corporation which
becomes a Subsidiary after the date hereof securing Indebtedness
permitted by subsection 7.2(c), provided that (i) such Liens existed
at the time such corporation became a Subsidiary and were not created
in anticipation thereof, (ii) any such Lien is not expanded to cover
any property or assets of such corporation after the time such
corporation becomes a Subsidiary (other than after acquired title in
or on such property and proceeds of the existing collateral in
accordance with the instrument creating such Lien), and (iii) the
amount of Indebtedness secured thereby is not increased;
(i) Liens (not otherwise permitted hereunder) which secure
obligations not exceeding (as to the Borrower and all Subsidiaries)
$35,000,000 in aggregate amount at any time outstanding;
(j) Liens created pursuant to the Pledge Agreements;
(k) Liens on the property of the Borrower or any of its
Subsidiaries in favor of landlords securing licenses, subleases or
leases entered into in the ordinary course of business;
(l) licenses, leases or subleases permitted hereunder granted to
other Persons not interfering in any material respect in the business
of the Borrower or any of its Subsidiaries;
(m) so long as no Default or Event of Default shall have occurred
and be continuing under clause (f) of Section 8, attachment or
judgment Liens in an aggregate amount outstanding at any one time not
in excess of $7,500,000;
(n) Liens arising from precautionary Uniform Commercial Code
financing statement filings with respect to operating leases or
consignment arrangements entered into by the Borrower, or any of its
subsidiaries in the ordinary course of business; and
(o) Liens in favor of a banking institution arising by operation
of law encumbering deposits (including the right of set-off) held by
such banking
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institutions incurred in the ordinary course of business and
which are within the general parameters customary in the banking
industry.
7.4. Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the date hereof and
listed on Schedule 7.4 and extensions, renewals and replacements
thereof, provided, however, that no such extension, renewal or
replacement shall shorten the fixed maturity or increase the principal
amount of the Indebtedness guaranteed by the original guarantee;
(b) Guarantee Obligations incurred after the date hereof in an
aggregate amount not to exceed $30,000,000 at any one time outstanding
for the Borrower and its Subsidiaries;
(c) guarantees made by the Subsidiaries of the Borrower pursuant
to the Subordinated Debt Documents and the New Subordinated Debt
Documents;
(d) Guarantee Obligations under the Credit Documents and the
Facility A Credit Documents;
(e) L/C Obligations and the Facility A L/C Obligations;
(f) Guarantee Obligations of the Borrower or any Subsidiary in
respect of obligations of a Subsidiary permitted to be incurred by
such Subsidiary by this Agreement; and
(g) Guarantee Obligations in respect of surety bonds and/or
performance letters of credit which shall not exceed $100,000,000 at
any time less, without duplication, the amount of outstanding
Indebtedness permitted under subsection 7.2(j).
7.5. Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of its property,
business or assets, or make any material change in its present method of
conducting business, except:
(a) any Subsidiary of the Borrower may be merged or consolidated
with or into the Borrower (provided that the Borrower shall be the
continuing or surviving corporation) or with or into any one or more
wholly owned Subsidiaries of the Borrower (provided that the wholly
owned Subsidiary or Subsidiaries shall be the continuing or surviving
corporations); and
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(b) any wholly owned Subsidiary may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or any other wholly owned
Subsidiary of the Borrower that is a Credit Party.
7.6. Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person other than the
Borrower or any wholly owned Subsidiary, except:
(a) the sale or other disposition of obsolete or worn out
property in the ordinary course of business;
(b) the sale of any property or assets not otherwise permitted by
this subsection 7.6; provided that the Net Proceeds thereof shall be
applied pursuant to subsection 2.6(b)(ii);
(c) as permitted pursuant to subsection 7.5(b);
(d) the sale, lease, transfer or exchange of inventory in the
ordinary course of business;
(e) transfers resulting from any casualty or condemnation of
property or assets;
(f) intercompany sales or transfers of assets made in the
ordinary course of business;
(g) licenses, leases or subleases of tangible property in the
ordinary course of business;
(h) any consignment arrangements or similar arrangements for the
sale of assets in the ordinary course of business;
(i) the sale or discount of overdue accounts receivable arising
in the ordinary course of business, but only in connection with the
compromise or collection thereof; and
(j) the conveyance, sale, assignment or contribution to any new
Subsidiary of the Borrower or any existing Subsidiary of the Borrower
assets of the Borrower or any Subsidiary of the Borrower not exceeding
five percent (5%) of the Consolidated Total Assets.
7.7. Limitation on Dividends. Declare or pay any dividend (other than
dividends payable solely in common stock of the Borrower) on, or make any
payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other acquisition
of, any shares of any class of Capital Stock of the Borrower or any warrants or
options to purchase any such Capital Stock, whether now or
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hereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in obligations of
the Borrower or any Subsidiary other than Permitted Stock Payments.
7.8. Limitation on Capital Expenditures. Make or commit to make (by
way of the acquisition of securities of a Person or otherwise) any expenditure
in respect of the purchase or other acquisition of fixed or capital assets
(excluding any such asset acquired in connection with normal replacement and
maintenance programs properly charged to current operations) except for capital
expenditures in the ordinary course of business not exceeding $45,000,000 in
the aggregate for the Borrower and its Subsidiaries during any fiscal year of
the Borrower; provided, that up to 50% of any such amount not so expended in
the fiscal year for which it is permitted above may be carried over for
expenditure in the next following fiscal year; provided, further, that Borrower
and/or its Subsidiaries may exceed the annual limit on capital expenditures set
forth above by utilizing any amounts available for Investments permitted under
subsection 7.9(k) hereto to fund such additional Capital Expenditures.
7.9. Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of or any assets constituting a
business unit of, or make any other investment in, any Person ("Investments"),
except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) loans to officers of the Borrower listed on Schedule 7.9(c)
in aggregate principal amounts outstanding not to exceed the
respective amounts set forth for such officers on said Schedule;
(d) loans and advances to employees of the Borrower or its
Subsidiaries for travel, entertainment and relocation expenses in the
ordinary course of business in an aggregate amount for the Borrower
and its Subsidiaries not to exceed $1,000,000 at any one time
outstanding;
(e) investments by the Borrower in its Subsidiaries that are
Credit Parties and investments by such Subsidiaries in the Borrower
and in other Subsidiaries that are Credit Parties;
(f) so long as no Event of Default has occurred and is
continuing, loans by the Borrower to its employees (other than any
Principals or their Related Parties) in connection with (i) management
incentive plans, (ii) management stock purchase plans, and (iii)
obligations of employee option-holders of Storm Control Systems, Inc.
to fund the exercise of such options, which loans in (i), (ii) and
(iii) in the aggregate do not exceed $5,000,000;
(g) Investments in existence on the Closing Date set forth on
Schedule 7.9(g) and extensions, renewals, modifications or
restatements or replacements thereof;
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provided that no such extension, renewal, modification or
restatement shall increase the amount of the original loan, advance or
investment;
(h) promissory notes and other similar non-cash consideration
received by the Borrower and its Subsidiaries in connection with the
dispositions permitted by subsection 7.6(b);
(i) Investments permitted by subsection 7.6(b) and subsection
7.6(j);
(j) Investments (including debt obligations and Capital Stock)
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;
(k) Investments made to acquire (i) all or any portion of the
Capital Stock, or all or any portion of the assets, of any Person
(other than the Borrower or any of its Subsidiaries) that is engaged
in a Similar Business, or (ii) all or substantially all of the assets
of any division of any Person (other than the Borrower or any of its
Subsidiaries) that is engaged in a Similar Business; provided, that,
(a) if such Investment is an acquisition of a majority of the Voting
Stock of any Person, such Person's board of directors or similar
governing body shall have approved such acquisition and (b) at the
time of each such Investment described above in clauses (i) and (ii)
(both before and after giving effect to such Investment), there shall
exist no Default or Event of Default and the aggregate consideration
paid (regardless of form, including in the case of an acquisition of
assets, any assumed obligations) in connection with all Investments
made pursuant to this subsection 7.9(k) shall not exceed the New
Investment Sublimit (without deducting therefrom (x) the portion of
any purchase price for any Investment funded with Capital Stock of
Holdings, (y) consideration paid by the Borrower in connection with
the acquisition of SPD Technologies pursuant to the SPD Technologies
Acquisition Agreement and (z) any consideration paid after the Closing
Date by the Borrower in connection with any Investment which (I) has
already been approved or consented to under the Original Credit
Agreement or any Investment for which the Borrower has provided a
compliance certificate pursuant to Section 7.9(p) of the Original
Credit Agreement and (II) is listed on Schedule 7.9(k) hereto);
provided, further, that in connection with each individual, or series
of related, Investments made pursuant to this subsection 7.9(k) with
an aggregate consideration (i) equal to or less than $100,000,000, the
Borrower shall deliver to the Administrative Agent, on or prior to the
date which is one Business Day prior to the consummation of such
Investment or Investments, a certificate of a Responsible Officer that
certifies that no Default or Event of Default has occurred and is
continuing or will be caused as a result of consummating such proposed
Investment.
7.10. Limitation on Optional Payments and Modifications of Instruments
and Agreements. (a) Make any optional payment or prepayment on or
redemption or purchase of, or deliver any funds to any trustee for the
prepayment, redemption or defeasance of, any Subordinated Debt or
amend, modify or change, or consent or agree to any
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amendment, modification or change to any of the material terms of any
such Subordinated Debt Documents or New Subordinated Debt Documents
(other than any such amendment, modification or change which would
extend the maturity or reduce the amount of any payment of principal
thereof or which would reduce the rate or extend the date for payment
of interest thereon).
(b) Amend its Constitutional Documents in any manner which could
adversely affect the rights of the Lenders under the Credit Documents
or their ability to enforce the same.
(c) Modify or amend, or waive any provision or condition
contained in, any of the Transaction Documents in any manner that
could reasonably be expected to be adverse to the Lenders.
7.11. Limitation on Transactions with Affiliates. (a) Enter into any
transaction, including, without limitation, any purchase, sale, lease
or exchange of property or the rendering of any service, with any
Affiliate unless such transaction is (i) otherwise permitted under
this Agreement, (ii) in the ordinary course of the Borrower's or such
Subsidiary's business and (iii) upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary, as the case may be, than
it would obtain in a comparable arm's length transaction with a Person
which is not an Affiliate.
(b) In addition, notwithstanding the foregoing, the Borrower and
its Subsidiaries shall be entitled to make the following payments
and/or to enter into the following transactions:
(i) the payment of reasonable and customary fees and reimbursement of
expenses payable to directors of the Borrower and Holdings;
(ii) the employment arrangements with respect to the procurement of
services of directors, officers and employees in the ordinary course of
business and the payment of reasonable fees in connection therewith;
(iii) payments to directors and officers of the Borrower and its
Subsidiaries in respect of the indemnification of such Persons in such
respective capacities from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements, as the case may be, pursuant to the
Constitutional Documents or other corporate action of the Borrower or its
Subsidiaries, respectively, or pursuant to applicable law; and
(iv) transactions described in the Transaction Documents.
7.12. Limitation on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by the Borrower or any Subsidiary of
real or personal property which has been or is to be sold or transferred by the
Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the
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security of such property or rental obligations of the Borrower or such
Subsidiary; provided that the Borrower may enter into a sale and leaseback
transaction if the Borrower could have (a) incurred Indebtedness in an amount
equal to the Attributable Debt relating to such sale and leaseback transaction
and (b) incurred a Lien to secure such Indebtedness, in each case in accordance
with the restrictions contained in this Agreement and the other Credit
Documents.
7.13. Limitation on Changes in Fiscal Year. Permit the fiscal year of
the Borrower to end on a day other than December 31.
7.14. Limitation on Negative Pledge Clauses. Enter into with any
Person any agreement, other than (a) this Agreement and the Facility A Credit
Agreement, (b) the Subordinated Debt Documents and the New Subordinated Debt
Documents and (c) any industrial revenue bonds, purchase money mortgages or
Financing Leases permitted by this Agreement (in which cases, any prohibition
or limitation shall only be effective against the assets financed thereby other
than after acquired title in or on such property and proceeds of the existing
collateral in accordance with the instrument creating such Lien), which
prohibits or limits the ability of the Borrower or any of its Subsidiaries to
create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired.
7.15. Limitation on Lines of Business. Enter into any business, either
directly or through any Subsidiary (other than an Immaterial Subsidiary),
except for Similar Businesses.
7.16. Designated Senior Debt. Designate any Indebtedness or other
obligation, other than Indebtedness under the Credit Documents, as "Designated
Senior Debt," as such term is defined in the Indenture as in effect on the
Original Closing Date or the New Subordinated Debt Indenture as in effect on
May 22, 1998, or any comparable designation that confers upon the holders of
such Indebtedness or other obligation (or any Person acting on their behalf)
the right to initiate blockage periods under the Indenture or the New
Subordinated Debt Indenture or any other Indebtedness or other obligation of
the Borrower and its Subsidiaries (other than as a result of a payment
default).
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or any
Reimbursement Obligation when due in accordance with the terms thereof or
hereof; or the Borrower shall fail to pay any interest on any Loan, or any
other amount payable hereunder, within five days after any such interest or
other amount becomes due in accordance with the terms thereof or hereof;
(b) Any representation or warranty made or deemed made by the Borrower
or any other Credit Party herein or in any other Credit Document or which
is contained in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this Agreement or
any such other Credit Document shall prove to have been incorrect in any
material respect on or as of the date made or deemed made;
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(c) The Borrower or any other Credit Party shall default in the
observance or performance of any agreement contained in Section 7 or
subsection 6.7(a) of this Agreement, Section 4 of the Parent Guarantee,
Section 4 of the Subsidiary Guarantee, Section 4 of the Parent Pledge
Agreement, Section 4 of the Borrower Pledge Agreement, or Section 4 of the
Subsidiary Pledge Agreement;
(d) The Borrower or any other Credit Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Credit Document (other than as provided in
paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 days;
(e) The Borrower or any of its Subsidiaries shall (i) default (x) in
any payment of principal of or interest of any Indebtedness (other than the
Loans, the L/C Obligations and any intercompany debt) or Interest Rate
Agreement Obligations or (y) in the payment of any Guarantee Obligation
(excluding any guaranties of the Obligations), beyond the period of grace,
if any, provided in the instrument or agreement under which such
Indebtedness, Interest Rate Agreement Obligation or Guarantee Obligation
was created; or (ii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness, Interest Rate
Agreement Obligation or Guarantee Obligation or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Guarantee Obligation
(or a trustee or agent on behalf of such holder or holders or beneficiary
or beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or such Guarantee
Obligation to become payable; provided, however, that no Default or Event
of Default shall exist under this paragraph unless (i) the aggregate amount
of Indebtedness, Interest Rate Agreement Obligations and/or Guarantee
Obligations in respect of which any default or other event or condition
referred to in this paragraph shall have occurred shall be equal to at
least $7,500,000 and (ii) such default continues for a period in excess of
10 days;
(f) (i) Holdings, the Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking appointment
of a receiver, trustee, custodian, conservator or other similar official
for it or for all or any substantial part of its assets, or Holdings, the
Borrower or any of its Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against
Holdings, the Borrower or any of its Subsidiaries any case, proceeding or
other action of a nature referred to in clause (i) above which (A) results
in the entry of an order for relief or any such adjudication or appointment
or (B) remains undismissed, undischarged or unbonded for a period of 60
days; or (iii) there shall be commenced against the Holdings, Borrower or
any of its
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Subsidiaries any case, proceeding or other action seeking issuance of
a warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets which results in the entry of an
order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or
(iv) Holdings, the Borrower or any of its Subsidiaries shall take any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) Holdings, the Borrower or any of its Subsidiaries shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due;
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, reasonably likely to result in the termination of
such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan
shall terminate for purposes of Title IV of ERISA, (v) the Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other similar event or condition shall occur or exist with
respect to a Plan that is not in the ordinary course; and in each case in
clauses (i) through (vi) above, such event or condition, together with all
other such events or conditions, if any, could reasonably be expected to
have a Material Adverse Effect;
(h) One or more judgments or decrees shall be entered against
Holdings, the Borrower or any of its Subsidiaries involving in the
aggregate a liability (not paid or fully covered by insurance (which
coverage has been acknowledged by the appropriate insurers)) of $7,500,000
or more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the entry
thereof;
(i) (i) Any of the Pledge Agreements shall cease, for any reason, to
be in full force and effect (unless released by the Administrative Agent at
the direction of the requisite Lenders or as otherwise permitted under this
Agreement or the other Credit Documents), or the Borrower or any other
Credit Party which is a party to any of the Pledge Agreements shall so
assert or (ii) the Lien created by any of the Pledge Agreements shall cease
to be enforceable and of the same effect and priority purported to be
created thereby (and, if such invalidity is such so as to be amenable to
cure without materially disadvantaging the position of the Administrative
Agent and the Lenders, as the case may be, as secured parties thereunder,
the Credit Party shall have failed to cure such invalidity within 30 days
after notice from the Administrative Agent);
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(j) The Guarantee Obligation of any Credit Party under the Credit
Documents shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or any
Credit Party or any Person acting on behalf of any Credit Party, shall deny
or disaffirm its obligations under such Guarantee Obligation;
(k) There shall have occurred a Change in Control; or
(l) An "Event of Default" as defined in the Facility A Credit
Agreement shall have occurred and be continuing;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section above with respect to
the Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement (including, without limitation, all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters
of Credit shall have presented the documents required thereunder) and the Notes
shall immediately become due and payable, and (B) if such event is any other
Event of Default, either or both of the following actions may be taken: (i)
with the consent of the Required Lenders, the Administrative Agent may, or upon
the request of the Required Lenders, the Administrative Agent shall, by notice
to the Borrower declare the Commitments to be terminated forthwith, whereupon
the Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice of default to the
Borrower, declare the Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) and the Notes to be due and payable forthwith, whereupon the same
shall immediately become due and payable.
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Borrower shall at such time deposit in
a cash collateral account opened by the Administrative Agent an amount equal to
the Dollar Equivalent of the aggregate then undrawn and unexpired amount of
such Letters of Credit. The Borrower hereby grants to the Administrative Agent,
for the benefit of the Issuing Lender and the L/C Participants (and the benefit
of each such "Issuing Lender" and the "L/C Participants" as defined in the
Facility A Credit Agreement), a security interest in such cash collateral to
secure all obligations of the Borrower under this Agreement, the Facility A
Credit Agreement, the other Credit Documents and the other Facility A Credit
Documents. Amounts held in such cash collateral account shall be applied by the
Administrative Agent in accordance with subsection 2.12 hereof. The Borrower
shall execute and deliver to the Administrative Agent, for the account of the
Issuing Lender and the L/C Participants (and each applicable "Issuing Lender"
and the "L/C Participants" as defined in the Facility A Credit Agreement), such
further documents and instruments as the Administrative Agent may request to
evidence the creation and perfection of the within security interest in such
cash collateral account.
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EXCEPT AS EXPRESSLY PROVIDED ABOVE IN THIS SECTION, PRESENTMENT,
DEMAND, PROTEST AND ALL OTHER NOTICES OF ANY KIND ARE HEREBY EXPRESSLY WAIVED.
SECTION 9. THE AGENTS; THE ARRANGERS
9.1. Appointment. Each Lender hereby irrevocably designates and
appoints each of the Agents as the agent of such Lender under this Agreement
and the other Credit Documents, and each such Lender irrevocably authorizes
each of the Agents, in such capacity, to take such action on its behalf under
the provisions of this Agreement and the other Credit Documents and to exercise
such powers and perform such duties as are expressly delegated to such Agent by
the terms of this Agreement and the other Credit Documents, together with such
other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, none of the Agents shall
have any duties or responsibilities, except those expressly set forth herein,
or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Credit Document or otherwise exist against any
of the Agents.
9.2. Delegation of Duties. The Agents may execute any of their duties
under this Agreement and the other Credit Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. None of the Agents shall be responsible for
the negligence or misconduct of any agents or attorneys in-fact selected by it
with reasonable care.
9.3. Exculpatory Provisions. Neither any of the Agents nor any of
their officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Credit
Document (except for its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower or any
officer thereof contained in this Agreement or any other Credit Document or in
any certificate, report, statement or other document referred to or provided
for in, or received by such Agent under or in connection with, this Agreement
or any other Credit Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
Credit Document or for any failure of the Borrower to perform its obligations
hereunder or thereunder. None of the Agents shall be under any obligation to
any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Credit Document, or to inspect the properties, books or records of the
Borrower.
9.4. Reliance by Agents. The Agents shall be entitled to rely, and
shall be fully protected in relying, upon any Note, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and other
experts selected by such Agent. The Agents may deem and treat the payee of any
Note as the owner thereof for all purposes
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unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with such Agent. Except as expressly provided in this
Agreement, the Agents shall be fully justified in failing or refusing to take
any action under this Agreement or any other Credit Document unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agents shall in all cases
be fully protected in acting, or in refraining from acting, under this
Agreement and the other Credit Documents in accordance with a request of the
Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders
of the Loans.
9.5. Notice of Default. No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
such Agent has received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that any Agent receives such a
notice, such Agent shall give notice thereof to the Lenders. Each Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that unless and until
such Agent shall have received such directions, such Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
9.6. Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither any of the Agents nor any of their officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by any of the Agents
hereafter taken, including any review of the affairs of the Borrower, shall be
deemed to constitute any representation or warranty by any of the Agents to any
Lender. Each Lender represents to each of the Agents that it has, independently
and without reliance upon any of the Agents or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and credit worthiness of the Borrower and made
its own decision to make its Loans hereunder and enter into this Agreement.
Each Lender also represents that it will, independently and without reliance
upon any of the Agents or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Credit Documents, and to make such investigation
as it deems necessary to inform itself as to the business, operations,
property, financial and other condition and creditworthiness of the Borrower.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by any of the Agents hereunder (or copies of which
have been provided to the Administrative Agent pursuant to this Agreement),
none of the Agents shall have any duty or responsibility to provide any Lender
with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
any Credit Party which may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
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9.7. Indemnification. The Lenders agree to indemnify each of the
Agents in their respective capacities as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their respective Commitment Percentages with respect to
all Types of Loans in effect on the date on which indemnification is sought,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Loans) be imposed on, incurred by or asserted
against any of the Agents in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Credit Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by any of the
Agents under or in connection with any of the foregoing provided that no Lender
shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from such Agent's gross negligence
or willful misconduct. The agreements in this subsection shall survive the
payment of the Loans and all other amounts payable hereunder.
9.8. Agents, in Their Individual Capacities. The Agents and their
respective Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the Borrower as though the Agents were not
acting in such capacities hereunder and under the other Credit Documents. With
respect to the Loans made or renewed by it and any Note issued to it or Loan
Account maintained by it and with respect to any Letter of Credit issued or
participated in by it, each Agent shall have the same rights and powers under
this Agreement and the other Credit Documents as any Lender and may exercise
the same as though it were not an Agent, and the terms "Lender" and "Lenders"
shall include the Agents in their individual capacities.
9.9. Successor Administrative Agent, Syndication Agent and
Documentation Agent.
The Administrative Agent may resign as Administrative Agent upon 30
days' notice to the Lenders. If the Administrative Agent resigns under this
Agreement, the Required Lenders shall appoint from among the Lenders a
successor administrative agent for the Lenders, which successor administrative
agent shall, unless a Default or Event of Default shall have occurred and be
continuing, be approved by the Borrower. If no successor administrative agent
is appointed prior to the effective date of the resignation of the
Administrative Agent, the Administrative Agent may appoint, after consulting
with the Lenders and the Borrower, a successor administrative agent from among
the Lenders. Upon the acceptance of its appointment as successor administrative
agent hereunder, such successor administrative agent shall succeed to all the
rights, powers and duties of the retiring Administrative Agent and the term
"Administrative Agent" shall mean such successor administrative agent and the
retiring Administrative Agent's appointment, powers and duties as
Administrative Agent shall be terminated. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement. If no
successor administrative agent has accepted appointment as Administrative Agent
by the date which is 30
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days following a retiring Administrative Agent's notice of resignation, the
retiring Administrative Agent's resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor administrative agent as provided for above. Similarly, the
Syndication Agent and/or the Documentation Agent may resign as Syndication
Agent and/or Documentation Agent, as the case may be, upon 30 days' notice to
the Lenders. The procedure for replacement and effective date of resignation
for the Syndication Agent and the Documentation Agent shall be identical to
that provided above for the Administrative Agent.
9.10. The Arrangers and the Co-Agents. Except as expressly set forth
herein, each of the Arrangers and the Co-Agents, in their respective capacities
as such, shall have no duties or responsibilities, and shall incur no
liabilities, under this Agreement or the other Credit Documents.
SECTION 10. MISCELLANEOUS
10.1. Amendments and Waivers. Neither this Agreement nor any other
Credit Document, nor any terms hereof or thereof may be amended, supplemented,
waived or modified except in accordance with the provisions of this subsection.
The Required Lenders may, or, with the written consent of the Required Lenders,
the Administrative Agent may, from time to time, (a) enter into with the
Borrower written amendments, supplements or modifications hereto and to the
other Credit Documents for the purpose of adding any provisions to this
Agreement or the other Credit Documents or changing in any manner the rights of
the Lenders or of the Borrower hereunder or thereunder or (b) waive, on such
terms and conditions as the Required Lenders or the Administrative Agent, as
the case may be, may specify in such instrument, any of the requirements of
this Agreement or the other Credit Documents or any Default or Event of Default
and its consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall (i) reduce the amount or extend any
scheduled date of maturity of any Loan, extend the expiration of any Letter of
Credit beyond the Revolving 364 Day Termination Date, or reduce the stated rate
or amount of any interest or fee payable hereunder or extend the scheduled date
of any payment thereof, in each case without the consent of each Lender
affected thereby, or increase the commitment of any Lender or extend the expiry
of the commitment of any Lender without the consent of such Lender, (ii) amend,
modify or waive the definition of Required Lenders, or consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement and the other Credit Documents, in each case without the
written consent of all the Lenders, (iii) release all or substantially all of
the Collateral or release all or substantially all of the Credit Parties from
their Guarantee Obligations under the Credit Documents without the consent of
all Lenders, (iv) amend, modify or waive any provision of Section 9 without the
written consent of the then Agents, or (v) amend, modify or waive any provision
of this Agreement or any other Credit Document which would directly and
adversely affect the Arrangers or the Agents or the Issuing Lender without the
written consent of the Arrangers, the Agents or the Issuing Lender, as the case
may be. In addition to the foregoing, (A) no amendment, modification,
termination or waiver of any provision of subsection 2.5, subsection 2.6 or
subsection 2.12 which has the effect of changing any interim scheduled
payments, voluntary or mandatory prepayments, the application of any scheduled
payment or voluntary or mandatory prepayment, the application of proceeds of
any Collateral or any
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Commitment reductions applicable to any Class (an "Affected Class") in a manner
that disproportionately disadvantages such Class relative to the other Class
shall be effective without the written concurrence of the Requisite Class
Lenders of the Affected Class (it being understood and agreed that any
amendment, modification, termination or waiver of any provision which only
postpones or reduces any interim scheduled payment, voluntary or mandatory
prepayment or Commitment reduction from those set forth in subsection 2.6 with
respect to only one Class shall be deemed to not disproportionately
disadvantage the other Class and, therefore, shall not require the consent of
Requisite Class Lenders of such other Class), (B) no amendment, modification,
termination or waiver of any provision of any Guarantee or Pledge Agreement
shall be effective without the written concurrence of the Requisite Class
Lenders for each Class and (C) no amendment, modification or waiver with
respect to any provision of this subsection 10.1 or to the definition of
"Requisite Class Lenders" shall be effective without the written concurrence of
all Lenders and all Facility A Lenders. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Borrower, the Lenders, the Agents and the Issuing Lender
and all future holders of the Loans. Any extension of a Letter of Credit by the
Issuing Lender shall be treated hereunder as issuance of a new Letter of
Credit. In the case of any waiver, the Borrower, the Lenders and the Agents and
the Issuing Lender shall be restored to their former positions and rights
hereunder and under the other Credit Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereon.
10.2. Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows in the case of the Borrower, the Administrative Agent, Issuing Lender,
the Syndication Agent and the Documentation Agent, and as set forth in Schedule
I in the case of the other parties hereto, or to such other address as may be
hereafter notified by the respective parties hereto:
Holdings, the Borrower
or any of its
Subsidiaries: L-3 Communications Corporation
600 Third Avenue, 34th Floor
New York, NY 10016
Attention: Robert LaPenta
Fax: (212) 805-5470
with a copy to
Attention: Christopher C. Cambria
Fax: (212) 805-5494
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The Administrative
Agent: Addresses for notices of borrowing,
prepayments and other
administrative matters:
Bank of America NT & SA
1850 Gateway Boulevard, 5th Floor
Concord, CA 94520
Attention: Agency Administrative
Services #5596
Josephine T. Flores,
Vice President
Fax: (925) 675-8500
Tel: (925) 675-8374
Addresses for all other notices
(including with respect to amendments
and waivers):
Bank of America NT & SA
1455 Market Street, 12th Floor
San Francisco, CA 94103
Attention: Agency Management #10831
Dietmar Schiel, Vice
President
Fax: (415) 436-3425
Tel: (415) 436-2769
with a copy to:
Bank of America NT & SA
335 Madison Avenue
New York, NY 10017
Attention: Steve Aronowitz
Fax: (212) 503-7066
Tel: (212) 503-7950
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The Issuing Lender:
Bank of America NT & SA
333 S. Beaudry Avenue, 19th Floor
Los Angeles CA 90017-1486
Attention: Trade Operations Center -
Standby Letters of Credit
#22621
Sandra M. Leon, Vice
President
Fax: (213) 345-6694
Tel: (213) 345-5231
The Documentation
Agent: Lehman Commercial Paper Inc.
3 World Financial Center, 9th Floor
New York, New York 10285
Attention: Michelle Swanson
Fax: (212) 528-0819
The Syndication
Agent: Lehman Commercial Paper Inc.
3 World Financial Center, 9th Floor
New York, New York 10285
Attention: Michelle Swanson
Fax: (212) 528-0819
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsection 2.2, 2.4, 2.6, 2.7, 2.12 or 3.2 shall not
be effective until received.
10.3. No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of any Agent or any Lender, any right, remedy,
power or privilege hereunder or under the other Credit Documents shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
10.4. Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Credit Documents and in any
document, certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Agreement and the
making of the Loans hereunder.
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10.5. Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse each of the Agents for all of their respective reasonable
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Credit Documents and any other documents prepared
in connection herewith or therewith, and the consummation and administration of
the transactions contemplated hereby and thereby, including, without
limitation, the reasonable fees, charges and disbursements of a single counsel
for the Lenders (in addition to any local counsel), (b) to pay or reimburse
each Lender and each Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Credit Documents and any such other documents, including,
without limitation, the fees and disbursements of counsel to each Lender and of
counsel to any Agent, (c) to pay, indemnify, and hold each Lender and each
Agent and each Issuing Lender harmless from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any delay
in paying, stamp, excise and other similar taxes, if any, which may be payable
or determined to be payable in connection with the execution and delivery of,
or consummation or administration of any of the transactions contemplated by,
or any amendment, supplement or modification of, or any waiver or consent under
or in respect of, this Agreement, the other Credit Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and each Arranger,
each Agent and each Issuing Lender harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement or the other Credit Documents or the use of the proceeds of
the Loans in connection with the Transaction, including, without limitation,
any of the foregoing relating to the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of the
Borrower, any of its Subsidiaries or any of the Properties (all the foregoing
in this clause (d), collectively, the "indemnified liabilities"), it being
understood that the Borrower shall have an obligation hereunder to the Lender
or any Agent with respect to any indemnified liabilities incurred by any
Agents, Arranger or the Issuing Lender or any Lender as a result of any
Materials of Environmental Concern that are first manufactured, emitted,
generated, treated, released, spilled, stored or disposed of on, at or from any
Property or any violation of any Environmental Law, which in any case first
occurs on or with respect to such Property (i) after the Property is
transferred to any Agent, Arranger, Issuing Lender or any Lender or their
successors or assigns by foreclosure sale, deed in lieu of foreclosure, or
similar transfer or, following such transfer, (ii) in connection with, but
prior to, the sale, leasing or other transfer of such Property by such Agent,
Arranger, Issuing Lender, or any Lender or their successors or assigns to one
or more third parties; provided, however, that the Borrower shall have no
obligation hereunder to any Agent or the Issuing Lender or any Lender with
respect to otherwise indemnified liabilities arising from the gross negligence
or willful misconduct of such Agent or the Issuing Lender or any such Lender,
or with respect to otherwise indemnified liabilities following the sale,
leasing or other transfer of such Property to one or more third parties. The
agreements in this subsection shall survive repayment of the Loans and all
other amounts payable hereunder.
10.6. Successors and Assigns; Participation and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of the
Borrower, the
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Lenders, the Agents and their respective successors and assigns,
except that the Borrower may not assign or transfer any of its rights
or obligations under this Agreement without the prior written consent
of each Lender.
(b) Any Lender may, in the ordinary course of its business and in
accordance with applicable law and the limitations set forth in
subsection 2.1(a)(ii), at any time sell to one or more banks or other
entities ("Participants") participating interests in any Loan owing to
such Lender or any other interest of such Lender hereunder and under
the other Credit Documents. In the event of any such sale by a Lender
of a participating interest to a Participant, such Lender's
obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the
other Credit Documents, and the Borrower and the Agents shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and the other
Credit Documents. No Lender shall be entitled to create in favor of
any Participant, in the participation agreement pursuant to which such
Participant's participating interest shall be created or otherwise,
any right to vote on, consent to or approve any matter relating to
this Agreement or any other Credit Document except for those specified
in clauses (i), (ii) and (iii) of the proviso to subsection 10.1. The
Borrower agrees that if amounts outstanding under this Agreement are
due or unpaid, or shall have been declared or shall have become due
and payable upon the occurrence of an Event of Default, each
Participant shall, to the maximum extent permitted by applicable law,
be deemed to have the right of setoff in respect of its participating
interest in amounts owing under this Agreement to the same extent as
if the amount of its participating interest were owing directly to it
as a Lender under this Agreement; provided that, in purchasing such
participating interest, such Participant shall be deemed to have
agreed to share with the Lenders the proceeds thereof as provided in
subsection 10.7(a) as fully as if it were a Lender hereunder. The
Borrower also agrees that each Participant shall be entitled to the
benefits of subsections 2.14, 2.15 and 2.16 with respect to its
participation in the Letters of Credit, the Commitments and the Loans
outstanding from time to time as if it was a Lender; provided that in
the case of subsection 2.15, such Participant shall have complied with
the requirements of said subsection; provided, further, that no
Participant shall be entitled to receive any greater amount pursuant
to any such subsection than the transferor Lender would have been
entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such
transfer occurred.
(c) Any Lender may, in the ordinary course of its business and in
accordance with applicable law and the limitations set forth in
subsection 2.1(a)(ii), at any time and from time to time assign to any
Lender, any affiliate thereof or, in the case of Lender that is an
investment fund which is regularly engaged in making, purchasing or
investing in loans or securities (an "Investment
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Fund"), any other such Investment Fund which is under common
management with such Lender, or, with the consent of the Borrower, the
Administrative Agent, the Syndication Agent and each Applicable
Issuing Lender (which in each case shall not be unreasonably
withheld), to an additional bank, Investment Fund or financial
institution (an "Assignee") all or any part of its rights and
obligations under this Agreement and the other Credit Documents
pursuant to an Assignment and Acceptance, substantially in the form of
Exhibit F, executed by such Assignee, such assigning Lender (and, in
the case of an Assignee that is not then a Lender or an affiliate
thereof, by the Borrower, the Administrative Agent, the Syndication
Agent and each Applicable Issuing Lender) and delivered to the
Administrative Agent for its acceptance and recording in the Register
with a copy to the Syndication Agent, provided that, in the case of
any such assignment to an additional bank or financial institution,
(A) either (x) such assignment is of all the rights and obligations of
the assigning Lender or (y) the sum of the aggregate principal amount
of the Loans, the aggregate amount of the L/C Obligations and the
aggregate amount of the unused Commitments being assigned and, if such
assignment is of less than all of the rights and obligations of the
assigning Lender, the sum of the aggregate principal amount of the
Loans, the aggregate amount of the L/C Obligations and the aggregate
amount of the unused Commitments remaining with the assigning Lender
are each not less than $5,000,000 (or such lesser amount as may be
agreed to by the Borrower and the Administrative Agent) and (B) each
Assignee which is a Non-U.S. Lender shall comply with the provisions
of clause (A) of subsection 2.15(b) hereof, or, with the prior written
consent of the Borrower, which shall not be unreasonably withheld, the
provisions of clause (B) of subsection 2.15(b) hereof (and, in either
case, with all of the other provisions of subsection 2.15(b) hereof).
Upon such execution, delivery, acceptance and recording, from and
after the effective date determined pursuant to such Assignment and
Acceptance, (x) the Assignee thereunder shall be a party hereto and,
to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder with a Commitment as set
forth therein and (y) the assigning Lender thereunder shall, to the
extent provided in such Assignment and Acceptance, be released from
its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such
assigning Lender shall cease to be a party hereto). Notwithstanding
any provision of this paragraph (c) and paragraph (f) of this
subsection, the consent of the Borrower shall not be required for any
assignment which occurs at any time when any of the events described
in clause (f) of Section 8 shall have occurred and be continuing.
(d) The Administrative Agent, on behalf of the Borrower, shall
maintain at the address of the Administrative Agent referred to in
subsection 10.2 a copy of each Assignment and Acceptance delivered to
it and a register (the "Register") for the recordation of the names
and addresses of the Lenders and Commitments of and principal amounts
of the Loans of each Type owing to each
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Lender from time to time and the registered owners of the
Obligations evidenced by the Notes and the Loan Accounts. The entries
in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Administrative Agent and the Lenders shall treat
each Person whose name is recorded in the Register as the owner of a
Loan, a Note or other Obligation hereunder as the owner thereof for
all purposes of this Agreement and the other Credit Documents,
notwithstanding any notice to the contrary. Any assignment of any
Loan, Commitment or other obligation evidenced by a Note or a Loan
Account shall be effective only upon appropriate entries with respect
thereto being made in the Register, and prior to such recordation, all
amounts owing to the assignor with respect thereto shall remain owing
to the assignor. Any assignment or transfer of all or part of an
Obligation evidenced by a Note shall be registered in the Register
only upon surrender for registration of assignment or transfer of the
Note evidencing such Obligation, duly endorsed by (or accompanied by a
written instrument of assignment or transfer duly executed by) the
holder thereof, and thereupon one or more new Notes shall be issued to
the designated Assignee, if requested, and the old Note shall be
returned by the Administrative Agent to the Borrower marked
"canceled."
(e) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an Assignee (and, in the case of an Assignee
that is not then a Lender or an affiliate thereof, by the Borrower the
Administrative Agent, the Syndication Agent and each Applicable
Issuing Lender) together with payment to the Administrative Agent of a
registration and processing fee of $3,000 (provided that no such
payment shall be required whenever LCPI or BOA is the assigning
Lender), the Administrative Agent shall (i) promptly accept such
Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the
Lenders and the Borrower. Following the effective date of any such
Assignment and Acceptance, the Administrative Agent shall be entitled
to update Schedule I hereto to reflect the then outstanding
Commitments of each Lender whereupon such amended Schedule I shall be
substituted for the pre-existing Schedule I and be deemed a part of
this Agreement without any further action or consent of any party and
the Administrative Agent shall promptly deliver a copy of such amended
Schedule I to each Lender and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective
Transferee, subject to the provisions of subsection 10.15, any and all
financial information in such Lender's possession concerning the
Borrower and its Affiliates which has been delivered to such Lender by
or on behalf of the Borrower pursuant to this Agreement or which has
been delivered to such Lender by or on behalf of the Borrower in
connection with such Lender's credit evaluation of the Borrower and
its Affiliates prior to becoming a party to this Agreement.
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(g) If, pursuant to this subsection 10.6, any interest in this
Agreement or any Loan is transferred to any Transferee which would be
a Non-U.S. Lender upon the effectiveness of such transfer, the
assigning Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, (i) to represent to the assigning
Lender (for the benefit of the assigning Lender, the Administrative
Agent and the Borrower) that under applicable law and treaties no U.S.
Taxes will be required to be withheld by the Administrative Agent, the
Borrower or the assigning Lender with respect to any payments to be
made to such Transferee in respect of the Loans, (ii) to furnish to
the assigning Lender (and, in the case of any Assignee registered in
the Register, the Administrative Agent and the Borrower such Internal
Revenue Service Forms required to be furnished pursuant to subsection
2.15(b) and (iii) to agree (for the benefit of the assigning Lender,
the Administrative Agent and the Borrower) to be bound by the
provisions of subsection 2.15(b).
(h) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning
assignments of Loans and Notes relate only to absolute assignments and
that such provisions do not prohibit assignments creating security
interests, including, without limitation, any pledge or assignment by
a Lender of any Loan or Note to any Federal Reserve Bank in accordance
with applicable law.
(i) Notwithstanding any other provision contained in this
Agreement or any other Credit Document to the contrary, (x) any Lender
may assign all or any portion of the Loans held by it to any Federal
Reserve Bank or the United States Treasury as collateral security
pursuant to Regulation A of the Federal Reserve Board and any
Operating Circular issued by such Federal Reserve Bank, provided that
any payment in respect of such assigned Loans made by the Borrower to
or for the account of the assigning or pledging Lender in accordance
with the terms of this Agreement shall satisfy the Borrower's
obligations hereunder in respect to such assigned Loans to the extent
of such payments and (y) with the consent of the Administrative Agent
(not to be unreasonably withheld), any Lender which is an Investment
Fund may pledge all or any portion of its Loans to its trustee in
support of its obligations to its trustee. No such assignment shall
release the assigning Lender from its obligations hereunder.
10.7. Adjustments; Set-off. (a) If any Lender (a "benefited
Lender") shall at any time receive any payment of all or part of its
Loans or the Reimbursement Obligations owing to it, or interest
thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in clause (f) of Section 8, or
otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender or Facility A Lender (any such
affected Lender or Facility A Lender, hereinafter, an "Affected
Lender"), if any, in respect of the Borrower's obligations owing to
such other Affected Lender, whether under this Agreement or the
Facility A Credit Agreement, including any interest thereon, such
benefited
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Lender shall purchase for cash from each other Affected Lender a
participating interest in such portion of each such other Affected
Lender's Loans or the Reimbursement Obligations owing to it and/or
Facility A Loans or Facility A Reimbursement Obligations owing to it,
or shall provide such other Affected Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to
cause such benefited Lender to share the excess payment or benefits of
such collateral or proceeds ratably with each of the Affected Lenders;
provided, however, that if all or any portion of such excess payment
or benefits is thereafter recovered from such benefited Lender, such
purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior
notice to the Borrower, any such notice being expressly waived by the
Borrower to the extent permitted by applicable law, upon any amount
becoming due and payable by the Borrower hereunder (whether at the
stated maturity, by acceleration or otherwise) to set-off and
appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such
Lender or any branch or agency thereof to or for the credit or the
account of the Borrower. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such set-off and
application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such set-off and
application.
10.8. Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by facsimile transmission), and all of said counterparts taken together shall
be deemed to constitute one and the same instrument. A set of the copies of
this Agreement signed by all the parties shall be lodged with the Borrower and
the Administrative Agent.
10.9. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10. Integration. This Agreement and the other Credit Documents
represent the agreement of the Borrower, the Agents and the Lenders with
respect to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by any Agent or any Lender relative to subject
matter hereof not expressly set forth or referred to herein or in the other
Credit Documents.
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10.11. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12. SUBMISSION TO JURISDICTION; WAIVERS. THE BORROWER HEREBY
IRREVOCABLY AND UNCONDITIONALLY:
(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO
WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN
RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH
ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO
PLEAD OR CLAIM THE SAME;
(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL
(OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE
BORROWER AT ITS ADDRESS SET FORTH IN SUBSECTION 10.2 OR AT SUCH OTHER
ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT
THERETO;
(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT TO SUE IN ANY OTHER JURISDICTION; AND
(e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT
MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO
IN THIS SUBSECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES.
10.13. Acknowledgments. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Credit Documents;
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(b) none of the Arrangers, the Agents nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection
with this Agreement or any of the other Credit Documents, and the
relationship between any of the Agents and the Lenders, on one hand, and
the Borrower, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Credit
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Borrower and the Lenders.
10.14. WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS, THE ARRANGERS,
THE LENDERS AND THE OTHER PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.15. Confidentiality. Each Lender agrees to keep confidential all
non-public information provided to it by the Borrower pursuant to this
Agreement that is designated by the Borrower in writing as confidential
(excluding any such information already in the possession of such Lender or
provided to such Lender by a third party not in violation of this Agreement
which, in either case, is not, to the knowledge of such Lender, subject to a
confidentiality agreement); provided that nothing herein shall prevent any
Lender from disclosing any such information (i) to any Agent or any other
Lender or any of its Affiliates, (ii) to any Transferee or prospective
Transferee or to any direct or indirect contractual counterparties in swap
agreements or such contractual counterparties' professional advisors which
receives such information and agrees to be bound by the confidentiality
provisions hereof, (iii) to its employees, directors, agents, attorneys,
accountants and other professional advisors, (iv) upon the request or demand of
any Governmental Authority having jurisdiction over such Lender, (v) in
response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, (vi) which has been
publicly disclosed other than in breach of this Agreement, or (vii) in
connection with the exercise of any remedy hereunder.
10.16. Conversion of Currencies. (a) If, for the purpose of obtaining
judgment in any court, it is necessary to convert a sum owing
hereunder in one currency into another currency, each party hereto
agrees, to the fullest extent that it may effectively do so, that the
rate of exchange used shall be that at which in accordance with normal
banking procedures in the relevant jurisdiction the first currency
could be purchased with such other currency on the Business Day
immediately preceding the date on which final judgment is given.
(b) The obligations of the Borrower in respect of any sum due to
any party hereto or any holder of the obligations owing hereunder (the
"Applicable Creditor") shall, notwithstanding any judgment in a
currency (the "Judgment Currency") other than the currency in which
such sum is stated to be due hereunder (the "Agreement Currency"), be
discharged only to the extent that, on the Business Day following
receipt by the Applicable Creditor of any sum
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adjudged to be so due in the Judgment Currency, the Applicable
Creditor may in accordance with normal banking procedures in the
relevant jurisdiction purchase the Agreement Currency with the
Judgment Currency; if the amount of the Agreement Currency so
purchased is less than the sum originally due to the Applicable
Creditor in the Agreement Currency, the Borrower agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify the
Applicable Creditor against such loss. The obligations of the Borrower
contained in this subsection 10.16 shall survive the termination of
this Agreement and the payment of all other amounts owing hereunder.
10.17. Year 2000. The Borrower has reviewed, or will expeditiously
review, its operations and those of its Subsidiaries with a view to assessing
whether its businesses, or the businesses of any of its Subsidiaries, will be
vulnerable to a Year 2000 Problem. The Borrower shall take all actions
necessary and commit adequate resources to assure that its computer-based and
other systems (and those of all of its Subsidiaries) are able to effectively
process data, including dates before, on and after January 1, 2000, without
experiencing any Year 2000 Problem that could reasonably be expected to cause a
Material Adverse Effect. At the request of the Required Lenders, the Borrower
will provide the Administrative Agent with assurances and substantiations
(including, but not limited to, the results of internal or external audit
reports prepared in the ordinary course of business) reasonably acceptable to
the Administrative Agent as to the capability of the Borrower and its
Subsidiaries to conduct its and their businesses and operations before, on and
after January 1, 2000 without experiencing a Year 2000 Problem causing a
Material Adverse Effect. The Borrower represents and warrants that it has a
reasonable basis to believe that no Year 2000 Problem will cause a Material
Adverse Effect.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
L-3 COMMUNICATIONS CORPORATION
By:
------------------------------------
Title:
LEHMAN COMMERCIAL PAPER INC.,
as Documentation Agent, Syndication
Agent, an Arranger and as a Lender
By:
------------------------------------
Title:
BANK OF AMERICA NT & SA
as Administrative Agent
By:
------------------------------------
Title:
BANK OF AMERICA NT & SA
as a Lender
By:
------------------------------------
Title:
BANCAMERICA ROBERTSON STEPHENS,
as an Arranger
By:
------------------------------------
Title:
Signature pages to 364 Day Credit Agreement
<PAGE>
BANK OF AMERICA NT & SA
as an Issuing Lender
By:
------------------------------------
Title:
Signature pages to 364 Day Credit Agreement
<PAGE>
THE BANK OF NEW YORK
By:
------------------------------------
Title:
Signature pages to 364 Day Credit Agreement
<PAGE>
THE BANK OF NOVA SCOTIA
By:
------------------------------------
Title:
Signature pages to 364 Day Credit Agreement
<PAGE>
CREDIT LYONNAIS NEW YORK BRANCH
By:
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Title:
Signature pages to 364 Day Credit Agreement
<PAGE>
THE FIRST NATIONAL BANK OF CHICAGO
By:
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Title:
Signature pages to 364 Day Credit Agreement
<PAGE>
FIRST UNION COMMERCIAL CORPORATION
By:
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Title:
Signature pages to 364 Day Credit Agreement
<PAGE>
FLEET NATIONAL BANK
By:
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Title:
Signature pages to 364 Day Credit Agreement
<PAGE>
THE FUJI BANK, LIMITED NEW YORK BRANCH
By:
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Title:
Signature pages to 364 Day Credit Agreement
<PAGE>
MARINE MIDLAND BANK
By:
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Title:
Signature pages to 364 Day Credit Agreement
<PAGE>
SOCIETE GENERALE, NEW YORK BRANCH
By:
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Title:
Signature pages to 364 Day Credit Agreement
<PAGE>
Schedule I
To Credit Agreement
Lenders/Address for Notices Revolving 364 Day Commitment
LEHMAN COMMERCIAL PAPER INC. $19,285,714.28
3 World Financial Center, 9th
Floor
New York, New York 10285
Attention: Michelle Swanson
Fax : (212) 528-0819
BANK OF AMERICA NATIONAL TRUST $19,285,714.28
AND SAVINGS ASSOCIATION
231 South LaSalle Street
Chicago, IL 60697
Attention: Renee Waller
Fax: (312) 974-9626
Tel: (312) 828-3874
with a copy to other parties
listed in ss.10.2 for BOA.
CREDIT LYONNAIS NEW YORK BRANCH $12,857,142.86
1301 Avenue of the Americas
New York, NY 10019-6022
Attention: Alex Averbukh
Mary Collier
Fax: (212) 459-3179
Tel: (212) 261-7335
FLEET NATIONAL BANK $12,857,142.86
One Federal Street
Boston, MA 02211
Attention: Roger Boucher
Fax: (617) 346-0145
Tel: (617) 346-0616
I-1
<PAGE>
MARINE MIDLAND BANK $12,857,142.86
140 Broadway
New York, NY 10005-1196
Attention: Susan LeFevre
Fax: (212) 658-2586
Tel: (212) 658-2200
THE BANK OF NOVA SCOTIA $12,857,142.86
One Liberty Plaza
New York, NY 10006
Attention: Tim Finneran
Fax: (212) 225-5090
Tel: (212) 225-5159
THE FIRST NATIONAL BANK OF $12,857,142.86
CHICAGO
153 West 51st Street
New York, NY 10019-6025
Attention: Amy Robbins
Fax: (212) 373-1180
Tel: (212) 373-1023
THE FUJI BANK, LIMITED NEW YORK $8,571,428.56
BRANCH
Two World Trade Center, 79th Floor
New York, NY 10048-0001
Attention: Jay Shankar
Fax: (212) 912-0516
Tel: (212) 898-2143
SOCIETE GENERALE, NEW YORK $12,857,142.86
BRANCH
1221 Avenue of the Americas
New York, NY 10020
Attention: Bob Peterson
Fax: (212) 278-7490
Tel: (212) 278-7037
I-2
<PAGE>
THE BANK OF NEW YORK $12,857,142.86
One Wall Street
New York, NY 10286
Attention: Ken Sneider
Fax: (212) 635-6999
Tel: (212) 635-6863
FIRST UNION COMMERCIAL $12,857,142.86
CORPORATION
1970 Chain Bridge Road, 9th Floor
McLean, VA 22102
Attention: Chris Hetterly
Fax: (703) 760-6019
Tel: (703) 760-5965
I-3
<PAGE>
Schedule II
to Credit Agreement
PRICING GRID**
<TABLE>
<CAPTION>
REVOLVING 364 DAY
FACILITY AND TERM REVOLVING 364 DAY
LOAN APPLICABLE FACILITY AND TERM REVOLVING 364
MARGIN-EURODOLLAR LOAN APPLICABLE DAY COMMITMENT
DEBT RATIO RATE* MARGIN-BASE RATE* FEE
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(is greater than or equal to) 4.75x 187.5 87.5 30
(is greater than or equal to) 4.25x 162.5 62.5 30
(is greater than or equal to) 3.75x 137.5 37.5 25
(is greater than or equal to) 3.25x 112.5 12.5 20
(is greater than or equal to) 2.75x 87.5 0.0 15
(is less than or equal to) 2.75x 62.5 0.0 12.5
</TABLE>
- -------------------
* Notwithstanding the foregoing grid: (a) the Applicable Margin for the
Revolving 364 Day Facility for the period following the Closing Date
through but excluding the first Adjustment Date under this Agreement will
be .625% for Base Rate Loans and 1.625% for Eurodollar Loans, and (b) the
Commitment Fee Rate for the Revolving 364 Day Facility for the period
following the Closing Date through but excluding the first Adjustment
Date under this Agreement will be 0.30%.
** Pricing Grid (except for Debt Ratio) reflects basis points.
