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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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, 1999
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Commission File Number: 1-14371
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INFORMATION HOLDINGS INC.
(Exact name of registrant as specified in its charter)
DELAWARE 06-1518007
(State of incorporation) (IRS Employer Identification Number)
2777 SUMMER STREET, SUITE 209
STAMFORD, CONNECTICUT 06905
(Address of principal executive offices) (Zip Code)
(203) 961-9106
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. /X/ Yes / / No
As of September 30, 1999, there were 16,948,071 shares of the Company's
common stock, par value $0.01 per share, outstanding.
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INFORMATION HOLDINGS INC.
INDEX
<TABLE>
<CAPTION>
PAGE NUMBER
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets 1
As of September 30, 1999 (Unaudited) and December 31, 1998
Consolidated Statements of Operations (Unaudited) for the 2
Three Months Ended September 30, 1999 and 1998 and
Nine Months Ended September 30, 1999 and 1998
Consolidated Statements of Cash Flows (Unaudited) for the 3
Nine Months Ended September 30, 1999 and 1998
Notes to Consolidated Financial Statements (Unaudited) 4
Item 2. Management's Discussion and Analysis of Financial Condition 8
and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk 13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities and Use of Proceeds 14
Item 6. Exhibits and Reports on Form 8-K 14
Signature 15
</TABLE>
<PAGE>
INFORMATION HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,890 $ 57,270
Accounts receivable (NET OF ALLOWANCE FOR DOUBTFUL ACCOUNTS AND
SALES RETURNS OF $2,824 AND $911, RESPECTIVELY) 17,936 9,286
Inventories 5,240 4,832
Prepaid expenses and other current assets 2,886 1,945
Deferred income taxes 870 777
-------- ---------
Total current assets 29,822 74,110
Property and equipment, net 4,439 4,173
Pre-publication costs (NET OF ACCUMULATED AMORTIZATION OF $2,650 AND
$2,350, RESPECTIVELY) 3,087 3,474
Publishing rights and other intangible assets, net 78,818 21,265
Goodwill, net 15,688 336
Other assets 2,945 1,433
-------- ---------
TOTAL $134,799 $ 104,791
======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of capitalized lease obligations $ 275 $ 261
Accounts payable 18,120 4,074
Accrued expenses 1,901 1,821
Royalties payable 981 1,935
Deferred subscription revenue 6,365 8,530
-------- ---------
Total current liabilities 27,642 16,621
Capital leases 2,484 2,694
Deferred income taxes 15,517 --
Other long-term liabilities 799 683
-------- ---------
Total liabilities 46,442 19,998
-------- ---------
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value; 1,000,000 shares
authorized; none issued $ -- $ --
Common stock, $.01 par value; 50,000,000 shares
authorized; 16,948,071 issued and outstanding 169 169
Additional paid-in capital 84,808 84,750
Retained earnings(deficit) 3,380 (126)
-------- ---------
Total stockholders' equity 88,357 84,793
-------- ---------
TOTAL $134,799 $ 104,791
======== =========
</TABLE>
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.
-1-
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INFORMATION HOLDINGS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------- -----------------------
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues $ 14,833 $ 11,511 $ 39,865 $ 32,584
Cost of sales 3,847 2,752 10,590 8,128
-------- -------- -------- --------
Gross profit 10,986 8,759 29,275 24,456
-------- -------- -------- --------
Operating expenses:
Selling, general and administrative 7,208 5,881 20,890 18,200
Depreciation and amortization 1,683 1,356 3,741 3,927
Severance and special bonuses -- 1,050 -- 1,050
-------- -------- -------- --------
Total operating expenses 8,891 8,287 24,631 23,177
-------- -------- -------- --------
Income from operations 2,095 472 4,644 1,279
-------- -------- -------- --------
Other income (expense):
Interest income 288 466 1,539 691
Interest expense (66) (71) (210) (228)
Other expense -- -- (18) --
-------- -------- -------- --------
Income before income taxes 2,317 867 5,955 1,742
Provision for income taxes 1,030 43 2,449 135
-------- -------- -------- --------
Net income $ 1,287 $ 824 $ 3,506 $ 1,607
======== ======== ======== ========
Net income per common share amounts:
Basic earnings $ 0.08 $ 0.21
======== ========
Diluted earnings $ 0.08 $ 0.20
======== ========
Pro forma income data:
Income before income taxes, as reported $ 867 $ 1,742
Pro forma income taxes 43 135
-------- --------
Pro forma net income $ 824 $ 1,607
======== ========
Pro forma earnings per share $ 0.05 $ 0.09
======== ========
</TABLE>
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.
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INFORMATION HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------
1999 1998
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,506 $ 1,607
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 1,155 875
Amortization of goodwill and other intangibles 2,586 3,052
Amortization of pre-publication costs 1,821 1,634
Deferred taxes (105) --
Loss on disposal of property and equipment 18 --
Changes in operating assets and liabilities:
Accounts receivable, net (4,537) (328)
Inventories (443) (464)
Prepaid expenses and other current assets (829) (1,290)
Accounts payable and accrued expenses 2,889 364
Royalties payable (954) (476)
Deferred subscription revenue (2,330) (1,639)
Other, net (464) (641)
-------- --------
Net Cash Provided by Operating Activities 2,313 2,694
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment 11 --
Purchases of property and equipment (1,020) (757)
Pre-publication costs (1,246) (1,167)
Increase in short-term investments -- (30,148)
Acquisitions of businesses and titles (53,425) (4,268)
-------- --------
Net Cash Used in Investing Activities (55,680) (36,340)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayments under revolving credit facility -- (2,000)
Financing costs for new credit facility (875) --
Net repayments under capital leases (196) (171)
Issuance of common stock 58 51,441
Capital contributions -- 11
-------- --------
Net Cash (Used in) Provided by Financing Activities (1,013) 49,281
-------- --------
NET (DECREASE) INCREASE IN
CASH AND CASH EQUIVALENTS (54,380) 15,635
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 57,270 10,280
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,890 $ 25,915
======== ========
</TABLE>
SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.
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INFORMATION HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
A. BASIS OF PRESENTATION
The consolidated balance sheet of Information Holdings Inc. (IHI , or
the Company) at December 31, 1998 has been derived from IHI's Annual
Report on Form 10-K for the year then ended. All other consolidated
financial statements contained herein have been prepared by IHI and are
unaudited. The financial statements should be read in conjunction with
the financial statements for the year ended December 31, 1998 and the
notes thereto contained in IHI's Annual Report on Form 10-K for the
year then ended.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with Article 10 of Regulation S-X for interim
financial statements required to be filed with the Securities and
Exchange Commission and do not include all information and footnotes
required by generally accepted accounting principles for complete
financial statements. However, in the opinion of management, the
accompanying unaudited consolidated financial statements contain all
adjustments, consisting only of normal recurring adjustments, necessary
to present fairly the consolidated financial position of IHI as of
September 30, 1999, and the consolidated results of its operations and
its cash flows for the periods presented herein. Results for the three
and nine months ended September 30, 1999 are not necessarily indicative
of the results to be expected for the full fiscal year.
B. INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out
method) or market. Inventories at September 30, 1999 and December 31,
1998 consist solely of finished goods. The vast majority of inventories
are books, which are reviewed periodically on a title-by-title basis
for salability. The cost of inventory determined to be impaired is
charged to income in the period of determination.
C. PRE-PUBLICATION COSTS
Certain expenses related to books, primarily comprised of design and
other pre-production costs, are deferred and charged to expense over
the estimated product life. These costs are primarily amortized over a
four-year period following release of the applicable book, using an
accelerated amortization method. During 1999, the Company removed from
its Balance Sheet fully amortized pre-publication costs of
approximately $1,645,000.
D. RECLASSIFICATIONS
Certain amounts in the fiscal 1998 financial statements have been
reclassified to conform to the 1999 financial statement presentation.
-4-
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INFORMATION HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
E. EARNINGS PER SHARE DATA
The following table sets forth the computation of basic and diluted
earnings per share for the periods indicated.
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED ENDED
------------- -------------
(IN THOUSANDS, EXCEPT PER SHARE DATA) SEPTEMBER 30, SEPTEMBER 30,
1999 1999
<S> <C> <C>
Basic:
Net income $ 1,287 $ 3,506
Average shares outstanding 16,946 16,944
------------ ------------
Basic EPS $ 0.08 $ 0.21
============ ============
Diluted:
Net income $ 1,287 $ 3,506
============ ============
Average shares outstanding 16,946 16,944
Net effect of dilutive stock options -
based on the treasury stock method 182 176
------------ ------------
Total 17,128 17,120
============ ============
Diluted EPS $ 0.08 $ 0.20
============ ============
</TABLE>
During the third quarter of 1999, employees exercised stock options to
acquire 4,882 shares at an exercise price of $12 per share.
No historical earnings per share data are presented for the three
months and nine months ended September 30, 1998, as the Company does
not consider such data meaningful. The pro forma earnings per share
data presented were computed using 16,943,189 shares outstanding, which
reflects all shares outstanding following the Company's initial public
offering in August 1998, as if such shares were outstanding since
January 1, 1998.
F. IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1999, the Financial Accounting Standards Board (FASB) issued
Statement No. 137, "Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB Statement No. 133.
The Statement defers for one year the effective date of FASB Statement
No. 133, "Accounting for Derivative Instruments and Hedging
Activities," which establishes accounting and reporting standards for
derivative instruments and for hedging activities. The rule will now
apply to all fiscal quarters of all fiscal years beginning after June
15, 2000. In the opinion of the Company's management, adoption of this
new accounting standard will not have any impact on the Company's
consolidated financial position or results of operations.
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INFORMATION HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
G. ACQUISITIONS
On September 1, 1999, the Company acquired the assets of the Corporate
Intelligence (CI) business of Innovator Corporation for cash
consideration of approximately $8,000,000. CI provides intellectual
property information and related software and searching tools,
primarily through the Internet. The purchase price was
preliminarily allocated to publishing rights and other intangible
assets of $7,900,000 and non-compete agreements of $100,000.
On August 12, 1999, the Company acquired all of the outstanding capital
stock of Master Data Center, Inc. (MDC), a Michigan corporation, for
cash consideration of approximately $33,000,000. MDC provides patent
annuity tax payment services for owners of intellectual property in
domestic and foreign markets and complementary software products for
managing patent and trademark portfolios. The purchase price was
preliminarily allocated to net liabilities assumed of $7,150,000, and
publishing rights and other intangible assets of $40,150,000. The
Company also recorded goodwill and an offsetting deferred income tax
liability as a result of the gross up of acquired intangible assets in
the amount of $15,622,000. This goodwill is being amortized using the
straight-line method over 20 years. Amortization expense for the nine
months ended September 30, 1999 was $105,000.
On July 19, 1999, the Company acquired all of the assets of Faxpat,
Inc. (Faxpat) for cash consideration of approximately $9,300,000.
Faxpat is a leading provider of patent documents and file histories to
the legal and corporate markets. The purchase price was
preliminarily allocated to net tangible assets of $500,000, publishing
rights and other intangible assets of $8,700,000 and non-compete
agreements of $100,000.
The above acquisitions have all been accounted for using the purchase
method of accounting and, accordingly, the results of their operations
have been included in the Company's results of operations from their
respective dates of acquisition.
The pro forma unaudited results of operations for the nine months ended
September 30, 1999 and September 30, 1998, assuming consummation of the
MDC acquisition as of January 1, 1998 are as follows:
<TABLE>
<CAPTION>
NINE MONTHS NINE MONTHS
ENDED ENDED
------------- -------------
(IN THOUSANDS, EXCEPT PER SHARE DATA) SEPTEMBER 30, SEPTEMBER 30,
1999 1998
<S> <C> <C>
Revenues $ 44,797 $ 38,271
Net income 2,608 1,667
Per common share amounts:
Basic earnings $ 0.15 $ 0.10
============ ============
Diluted earnings $ 0.15 $ 0.10
============ ============
</TABLE>
The pro forma financial information is presented for informational
purposes only and is not necessarily indicative of the operating
results that would have occurred had the acquisition been consummated
as of the above date, nor are they necessarily indicative of future
operating results.
-6-
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INFORMATION HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
H. REVOLVING CREDIT FACILITY
On September 24, 1999, the Company entered into a seven-year revolving
credit facility in an amount not to exceed $50,000,000 initially,
including a $10,000,000 sublimit for the issuance of standby letters of
credit (the Credit Facility). Total commitments under the Credit
Facility shall be permanently reduced to $45,000,000 at the end of the
third year, $37,500,000 at the end of the fourth year, $25,000,000 at
the end of the fifth year and $12,500,000 at the end of the sixth year.
The proceeds from the Credit Facility are intended to be used to fund
acquisitions, to meet short-term working capital needs and for general
corporate purposes.
Borrowings under the Credit Facility bear interest at either the higher
of the bank's prime rate and one-half of 1% in excess of the overnight
federal funds rate plus a margin of 0.50% to 1.25% or the Eurodollar
Rate plus a margin of 1.5% to 2.25% depending on the Company's ratio of
indebtedness to earnings before interest, taxes, depreciation and
amortization. The Company also pays a commitment fee of 0.375% on the
unused portion of the Credit Facility. As of September 30, 1999, the
Company had no outstanding borrowings under the Credit Facility.
Under the terms of the Credit Facility, the Company is required to
maintain certain financial ratios related to fixed charge coverage,
leverage and interest coverage, in addition to certain other covenants.
As of September 30, 1999, the Company was in compliance with all
covenants. The Credit Facility is secured by a first priority perfected
pledge of all notes and capital stock owned by the Company's
subsidiaries and a first priority perfected security interest in all
other assets of the Company and its subsidiaries, subject to certain
exceptions. Obligations under the Credit Facility will be guaranteed by
the Company and its subsidiaries. The Credit Facility also prohibits
the Company from incurring certain additional indebtedness, limits
certain investments, mergers or consolidations and restricts
substantial asset sales, and dividends.
I. SUBSEQUENT EVENT
LEGAL PROCEEDINGS
As previously disclosed, Mason P. Slaine, the Company's President and
Chief Executive Officer, and Michael E. Danziger, a director of the
Company, are shareholders, officers and directors of Rand Publishing
Company Inc. (Rand), a private holding company that has made
investments in the publishing industry, and are defendants in a lawsuit
alleging that Mr. Slaine breached his fiduciary duty to certain other
investors and usurped corporate opportunities available to Rand by
investing in the Company and by participating in the acquisition by the
Company of various businesses.
On December 2, 1998, Rand and Mr. Slaine filed a motion to dismiss the
Rand investors' complaint against them. The court granted the motion on
November 3, 1999 on the grounds that the plaintiffs had not alleged
with particularity the efforts, if any, they had made to impel the
board of directors of Rand to initiate these derivative claims in the
first instance. The motion was granted with leave to plaintiffs to
serve an amended complaint setting forth in detail the reasons why such
demand on the Rand board would have been futile.
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INFORMATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
Three Months Ended September 30, 1999 Compared to
Three Months Ended September 30, 1998
- -------------------------------------------------
REVENUES. In the third quarter of 1999, the Company had revenues of
$14.8 million compared to revenues of $11.5 million in the third quarter of
1998, an increase of $3.3 million or 28.9%. The increase in revenues is
primarily due to revenues of $1.3 at Master Data Center, which was acquired in
August 1999; an increase of $1.1 million in sales of patents and file histories
at Optipat and Faxpat, businesses acquired in 1999; an increase of $0.9 in
Internet sales at MicroPatent; and an increase of $0.5 million in book sales at
CRC Press. These increases were partly offset by a decline of $0.6 million at
CRC's Auerbach unit, due in part to a transition to a web-based product line.
COST OF SALES. Cost of sales increased $1.1 million or 39.8% to $3.8
million in the third quarter of 1999 compared to $2.7 million in the
corresponding quarter in 1998. Cost of sales expressed as a percentage of
revenues in the third quarter of 1999 increased to 25.9% from 23.9% for the
corresponding quarter of 1998. The increase in the costs of sales percentage
over the comparable period in 1998 is primarily attributable to the acquisition
of MDC which has lower gross margins than the other IHI units; and the
acquisitions of Optipat and Faxpat which have higher cost structures than
MicroPatent. These increases were partially offset by slightly lower costs at
CRC Press primarily related to book publishing operations.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (SG&A). SG&A expenses
increased $1.3 million or 22.6% in the third quarter of 1999, to $7.2 million
from $5.9 million in the third quarter of 1998, principally as a result of
operating expenses of businesses acquired in 1999 and increased personnel costs
at CRC Press, due to business growth. SG&A expenses as a percentage of revenues
decreased to 48.6% in the third quarter of 1999, compared to 51.1% in the
corresponding 1998 quarter.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization in the
third quarter of 1999 increased $0.3 million, or 24.1%, to $1.7 million from
$1.4 million in the corresponding quarter in 1998, due primarily to increased
amortization of intangible assets as a result of acquisitions during fiscal
1999.
SEVERANCE AND SPECIAL BONUSES. Included in the third quarter of 1998 is
a charge of $1.0 million related to severance and special bonuses at a
subsidiary.
INTEREST INCOME. Interest income decreased to $0.3 million from $0.5
million due primarily to the use of the proceeds from the initial public
offering for acquisitions during the third quarter of 1999.
INCOME TAXES. The provision for income taxes as a percentage of pre-tax
income for the three months ended September 30, 1999 is 44.5%, which differs
from the statutory rate primarily as a result of non-deductible amortization in
excess of the purchase price over net assets acquired. This compares with an
effective tax rate of 5.0% in the prior year. The Company did not record a
provision for Federal income taxes in the prior year period due to the use of
net operating loss carry-forwards.
-8-
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INFORMATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
Nine Months Ended September 30, 1999 Compared to
Nine Months Ended September 30, 1998
- ------------------------------------------------
REVENUES. In the first nine months of 1999, the Company had revenues of
$39.9 million compared to revenues of $32.6 million in the first nine months of
1998, an increase of $7.3 million or 22.3%. The increase in revenues is
primarily due to an increase of $2.0 million in book sales at CRC Press; an
increase of $1.9 million in Internet sales at MicroPatent; an increase of $1.5
million in CRC Press electronic product sales; an increase of $2.1 million in
sales of patents and file histories at Optipat and Faxpat; and revenues of $1.3
million at MDC. These increases were partly offset by a decline of $1.2 million
at CRC's Auerbach unit, due in part to a transition to a web-based product line.
COST OF SALES. Cost of sales increased $2.5 million or 30.3% to $10.6
million in the first nine months of 1999 compared to $8.1 million in the
corresponding period in 1998. Cost of sales expressed as a percentage of
revenues in the first nine months of 1999 increased to 26.6% from 24.9% for the
corresponding period of 1998. The increase in the costs of sales percentage over
the comparable period in 1998 is primarily attributable to the inclusion of
recently acquired businesses, which have lower gross margins than the existing
businesses.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (SG&A). SG&A expenses
increased $2.7 million or 14.8% in the first nine months of 1999, to $20.9
million from $18.2 million for the first nine months of 1998, principally as a
result of operating expenses of businesses acquired in 1999 and increased
personnel costs at CRC Press, due to business growth. SG&A expenses as a
percentage of revenues decreased to 52.4% in the first nine months of 1999,
compared with 55.9% in the corresponding 1998 period.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization for the
first nine months of 1999 decreased $0.2 million, or 4.7%, to $3.7 million from
$3.9 million in the corresponding period in 1998, due primarily to decreased
amortization of intangible assets.
SEVERANCE AND SPECIAL BONUSES. Included in the first nine months of
1998 is a charge of $1.0 million related to severance and special bonuses at a
subsidiary.
INTEREST INCOME. Interest income increased to $1.5 million from $0.7
million due primarily to interest earned on the proceeds from the initial public
offering.
INCOME TAXES. The provision for income taxes as a percentage of pre-tax
income for the nine months ended September 30, 1999 is 41.1%, which differs from
the statutory rate primarily as a result of non-deductible amortization in
excess of the purchase price over net assets acquired. This compares with an
effective tax rate of 7.7% in the prior year. The Company did not record a
provision for Federal income taxes in the prior year period due to the use of
net operating loss carry-forwards.
-9-
<PAGE>
INFORMATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
FINANCIAL CONDITION:
Prior to August 1998, the financing requirements of the Company have been funded
through cash generated by operating activities and capital contributions from
the founding stockholders. In August 1998, the Company completed an initial
public offering of its common stock to raise funds. On September 24, 1999, the
Company entered into a seven-year revolving credit facility in an amount not to
exceed $50,000,000 initially, including a $10,000,000 sublimit for the issuance
of standby letters of credit (the Credit Facility). Total commitments under the
Credit Facility shall be permanently reduced to $45,000,000 at the end of the
third year, $37,500,000 at the end of the fourth year, $25,000,000 at the end of
the fifth year and $12,500,000 at the end of the sixth year. The proceeds from
the Credit Facility are intended to be used to fund acquisitions, to meet
short-term working capital needs and for general corporate purposes.
Borrowings under the Credit Facility bear interest at either the higher of the
bank's prime rate and one-half of 1% in excess of the overnight federal funds
rate plus a margin of 0.50% to 1.25% or the Eurodollar Rate plus a margin of
1.5% to 2.25% depending on the Company's ratio of indebtedness to earnings
before interest, taxes, depreciation and amortization. The Company also pays a
commitment fee of 0.375% on the unused portion of the Credit Facility. As of
September 30, 1999, the Company had no outstanding borrowings under the Credit
Facility.
Under the terms of the Credit Facility, the Company is required to maintain
certain financial ratios related to fixed charge coverage, leverage and interest
coverage, in addition to certain other covenants. As of September 30, 1999, the
Company was in compliance with all covenants. The Credit Facility is secured by
a first priority perfected pledge of all notes and capital stock owned by the
Company's subsidiaries and a first priority perfected security interest in all
other assets of the Company and its subsidiaries, subject to certain exceptions.
Obligations under the Credit Facility will be guaranteed by the Company and its
subsidiaries. The Credit Facility also prohibits the Company from incurring
certain additional indebtedness, limits certain investments, mergers or
consolidations and restricts substantial asset sales, and dividends.
Cash and cash equivalents totaled $2.9 million at September 30, 1999 compared to
$57.3 million at December 31, 1998. Excluding cash and cash equivalents, the
Company had working capital of $(0.7) million at September 30, 1999 compared to
working capital of $0.2 million at December 31, 1998. Since the Company receives
patent annuity tax payments and subscription payments in advance, the Company's
existing operations are expected to maintain very low or negative working
capital balances, excluding cash. Included in current liabilities at September
30, 1999 are obligations related to annuity payments and deferred revenue of
approximately $19.7 million.
-10-
<PAGE>
INFORMATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
FINANCIAL CONDITION (CONTINUED):
Cash generated from operating activities was $2.3 million for the nine months
ended September 30, 1999, derived from net income of $3.5 million plus non-cash
charges of $5.5 million less an increase in operating assets, net of liabilities
of $6.7 million. The increase in net operating assets is primarily the result of
increased customer receivables as a result of the businesses acquired in fiscal
1999, offset by payment of royalties and other expenses related to book
publishing operations.
Cash used in investing activities was $55.7 million for the nine months ended
September 30, 1999 due to acquisition costs of $53.4 million and capital
expenditures, including pre-publication costs, of $2.3 million. Excluding
acquisitions of businesses and titles, the Company's existing operations are not
capital intensive.
Cash used in financing activities was $1.0 million for the nine months ended
September 30, 1999, primarily related to payments of $0.2 million on
approximately $2.8 million of capitalized lease obligations and $0.9 of fees
associated with the new Credit Facility. The Company has no outstanding debt
obligations at September 30, 1999 related to the new Credit Facility.
The Company believes that funds generated by operations, together with cash on
hand and borrowings available under its current credit facility will be
sufficient to fund the cash requirements of its existing operations for the
foreseeable future. The Company currently has no commitments for material
capital expenditures or agreements with respect to any prospective material
acquisitions. The Company may require or choose to obtain additional capital or
financing to consummate future acquisitions.
SEASONALITY
The Company's business is somewhat seasonal, with revenues typically reaching
slightly higher levels during the third and fourth quarters of each calendar
year, based on historical publication schedules. In 1998, 30% of the Company's
revenues were generated during the fourth quarter with the first, second and
third quarters accounting for 23%, 22% and 25% of revenues, respectively. In
addition, the Company may experience fluctuation in revenues from period to
period based on the timing of acquisitions and new product launches.
YEAR 2000 COMPLIANCE
The Year 2000 issue is the result of computer systems that use two digits rather
than four to define the applicable year, which may prevent such systems from
accurately processing dates ending in the Year 2000 and after. This could result
in system failures or in miscalculations causing disruption of operations,
including, but not limited to, an inability to process transactions, to send and
receive electronic data, or to engage in routine business activities and
operations.
-11-
<PAGE>
INFORMATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
YEAR 2000 COMPLIANCE (CONTINUED):
The Company has completed its assessment of all currently used computer systems
and is in the final stages of completing a plan of action to correct those areas
that will be affected by the Year 2000 issue. Conversion of all critical data
processing systems is virtually complete. The Company anticipates that the
conversion of the remaining critical systems and all non-critical systems will
be completed by the end of November 1999. Presently, the Company has completed
the conversion of all environmental equipment, telephones, personal computer
hardware and software outside of the Company's information systems.
The Company expects the cost for all upgrades to be approximately $110,000; the
cost incurred to date is $70,000. The estimate includes internal costs, but
excludes the costs to upgrade and replace systems in the normal course of
business. The Company's goal is to complete any upgrade requirements by the end
of fiscal 1999, but does not expect that the cost for subsequent upgrades will
be material to the Company's consolidated financial statements.
Management's assessment of the risks associated with the Year 2000 project and
the status of the Company's contingency plans are unchanged from that described
in the 1998 Annual Report on Form 10-K.
FORWARD-LOOKING STATEMENTS
The information above contains forward-looking statements, including, without
limitation, statements relating to the Company's plans, strategies, objectives,
expectations, and intentions that are made pursuant to the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995. Readers are
cautioned that forward-looking statements contained in this Form 10-Q should be
read in conjunction with the Company's disclosures under the heading IMPORTANT
FACTORS RELATING TO FORWARD-LOOKING STATEMENTS contained in the Company's 1998
Annual Report on Form 10-K.
-12-
<PAGE>
INFORMATION HOLDINGS INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
None.
-13-
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As previously disclosed, Mason P. Slaine, the Company's President and
Chief Executive Officer, and Michael E. Danziger, a director of the
Company, are shareholders, officers and directors of Rand Publishing
Company Inc. (Rand), a private holding company that has made
investments in the publishing industry, and are defendants in a lawsuit
alleging that Mr. Slaine breached his fiduciary duty to certain other
investors and usurped corporate opportunities available to Rand by
investing in the Company and by participating in the acquisition by the
Company of various businesses.
On December 2, 1998, Rand and Mr. Slaine filed a motion to dismiss the
Rand investors' complaint against them. The court granted the motion on
November 3, 1999 on the grounds that the plaintiffs had not alleged
with particularity the efforts, if any, they had made to impel the
board of directors of Rand to initiate these derivative claims in the
first instance. The motion was granted with leave to plaintiffs to
serve an amended complaint setting forth in detail the reasons why such
demand on the Rand board would have been futile.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
<TABLE>
<S> <C>
The following report relates to the Company's initial public offering:
Commission file number of registration statement: 333-56665
Effective Date: August 6, 1998
Expenses incurred through September 30, 1999:
Underwriting discounts $ 3,887,747
Other expenses $ 1,589,413
Total expenses $ 5,477,160
Application of proceeds through September 30, 1999:
Acquisition of business and titles $ 51,112,080
Temporary investments (US Treasury Bills) $ --
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
10.1 Credit Agreement among IHI, Warburg, Pincus Information
Ventures, Inc., Information Ventures L.L.C., various lenders,
Bank of America, N.A., as Documentation Agent, and Bankers
Trust Company, as Administrative Agent, dated as of September
24, 1999.
10.2 Form of Pledge Agreement entered into by IHI and its
subsidiaries and Bankers Trust Company, as collateral Agent,
dated as of September 24, 1999.
10.3 Form of Security Agreement among IHI, Warburg, Pincus
Information Ventures, Inc., Information Ventures L.L.C.,
certain of its subsidiaries and Bankers Trust Company, as
Collateral Agent, dated as of September 24, 1999.
10.4 Form of Subsidiaries Guaranty, dated as of September 24, 1999.
27.1 Financial Data Schedule
(b) Reports on Form 8-K:
1 Current Report on Form 8-K dated August 20, 1999, Item 2 was
reported. The registrant announced that it had completed its
acquisition of all of the outstanding capital stock of Master
Data Center, Inc., a Michigan corporation, for cash
consideration of approximately $33,000,000.
-14-
<PAGE>
SIGNATURE
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.
INFORMATION HOLDINGS INC.
Date: November 12, 1999 By: /s/ Vincent A. Chippari
------------------------------------------------
Vincent A. Chippari
Executive Vice President and Chief Financial Officer
Signing on behalf of the registrant and
as principal financial and accounting officer
-15-
<PAGE>
Exhibit 10.1
[CONFORMED COPY WITH
EXHIBITS G, H AND I
CONFORMED AS EXECUTED]
================================================================================
CREDIT AGREEMENT
among
INFORMATION HOLDINGS, INC.,
WARBURG, PINCUS INFORMATION VENTURES, INC.,
INFORMATION VENTURES L.L.C.,
VARIOUS LENDERS
BANK OF AMERICA, N.A.,
as DOCUMENTATION AGENT,
and
BANKERS TRUST COMPANY,
as ADMINISTRATIVE AGENT
----------------------------------
BANC OF AMERICA SECURITIES LLC,
as JOINT-LEAD ARRANGER and CO-BOOK MANAGER
DEUTSCHE BANK SECURITIES INC.,
as JOINT-LEAD ARRANGER and CO-BOOK MANAGER
----------------------------------
Dated as of September 24, 1999
----------------------------------
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
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SECTION 1. Amount and Terms of Credit.................................................1
1.01 The Commitments.........................................................1
1.02 Minimum Amount of Each Borrowing........................................3
1.03 Notice of Borrowing.....................................................3
1.04 Disbursement of Funds...................................................4
1.05 Notes...................................................................4
1.06 Conversions.............................................................5
1.07 Pro Rata Borrowings.....................................................6
1.08 Interest................................................................6
1.09 Interest Periods........................................................7
1.10 Increased Costs, Illegality, etc........................................7
1.11 Compensation...........................................................10
1.12 Change of Lending Office...............................................10
1.13 Replacement of Lenders.................................................10
SECTION 2. Letters of Credit.........................................................11
2.01 Letters of Credit......................................................11
2.02 Maximum Letter of Credit Outstandings; Final Maturities................12
2.03 Letter of Credit Requests; Minimum Stated Amount.......................13
2.04 Letter of Credit Participations........................................13
2.05 Agreement to Repay Letter of Credit Drawings...........................15
2.06 Increased Costs........................................................16
SECTION 3. Commitment Commission; Fees; Reductions of Commitment.....................16
3.01 Fees...................................................................16
3.02 Voluntary Termination of Unutilized Commitments........................17
3.03 Mandatory Reduction of Commitments.....................................18
SECTION 4. Prepayments; Payments; Taxes..............................................19
4.01 Voluntary Prepayments..................................................19
4.02 Mandatory Repayments...................................................20
4.03 Method and Place of Payment............................................21
4.04 Net Payments...........................................................21
SECTION 5. Conditions Precedent to the Effective Date................................23
5.01 Execution of Agreement; Notes..........................................24
5.02 Officer's Certificate..................................................24
</TABLE>
(i)
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5.03 Opinions of Counsel....................................................24
5.04 Corporate Documents; Proceedings; etc..................................24
5.05 Plans; Shareholders' Agreements; Management Agreements; Employment
Agreements; Non-Compete Agreements; Collective Bargaining
Agreements; Tax Sharing Agreements; Existing Indebtedness
Agreements..........................................................24
5.06 Existing Indebtedness; Preferred Stock.................................26
5.07 Margin Regulations.....................................................26
5.08 Adverse Change, etc....................................................26
5.09 Litigation.............................................................26
5.10 Pledge Agreement.......................................................27
5.11 Security Agreement.....................................................27
5.12 Subsidiaries Guaranty..................................................27
5.13 Financial Statements; Pro Forma Financial Statements, Projections......27
5.14 Solvency Certificate; Insurance Certificates...........................27
5.15 Fees, etc..............................................................28
SECTION 6. Conditions Precedent to All Credit Events.................................28
6.01 Effective Date.........................................................28
6.02 No Default; Representations and Warranties.............................28
6.03 Notice of Borrowing; Letter of Credit Request..........................28
SECTION 7. Representations, Warranties and Agreements................................29
7.01 Company Status.........................................................29
7.02 Company and Other Power and Authority..................................29
7.03 No Violation...........................................................30
7.04 Approvals..............................................................30
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc.......................................30
7.06 Litigation.............................................................31
7.07 True and Complete Disclosure...........................................31
7.08 Use of Proceeds; Margin Regulations....................................32
7.09 Tax Returns and Payments...............................................32
7.10 Compliance with ERISA..................................................32
7.11 The Security Documents.................................................33
7.12 Properties.............................................................34
7.13 Capitalization.........................................................34
7.14 Subsidiaries...........................................................34
7.15 Compliance with Statutes, etc..........................................35
7.16 Investment Company Act.................................................35
7.17 Public Utility Holding Company Act.....................................35
7.18 Environmental Matters..................................................35
7.19 Labor Relations........................................................36
7.20 Patents, Licenses, Franchises and Formulas.............................36
7.21 Indebtedness...........................................................36
</TABLE>
(ii)
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<TABLE>
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7.22 Special Purpose Corporation............................................37
7.23 Insurance..............................................................37
SECTION 8. Affirmative Covenants.....................................................37
8.01 Information Covenants..................................................37
8.02 Books, Records, Inspections, Audits and Annual Meetings................39
8.03 Maintenance of Property; Insurance.....................................40
8.04 Corporate Franchises...................................................41
8.05 Compliance with Statutes, etc..........................................41
8.06 Compliance with Environmental Laws.....................................41
8.07 ERISA..................................................................42
8.08 End of Fiscal Years; Fiscal Quarters...................................43
8.09 Performance of Obligations.............................................43
8.10 Payment of Taxes.......................................................43
8.11 Additional Security; Further Assurances................................43
8.12 Year 2000 Compliance...................................................44
SECTION 9. Negative Covenants........................................................45
9.01 Liens..................................................................45
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc.................47
9.03 Dividends..............................................................50
9.04 Indebtedness...........................................................51
9.05 Advances, Investments and Loans........................................53
9.06 Transactions with Affiliates...........................................54
9.07 Consolidated Fixed Charge Coverage Ratio...............................55
9.08 Maximum Leverage Ratio.................................................55
9.09 Consolidated Interest Coverage Ratio...................................55
9.10 Modifications of Certificate of Incorporation, By-Laws and
Certain Other Agreements; etc.......................................56
9.11 Limitation on Certain Restrictions on Subsidiaries.....................56
9.12 Limitation on Issuance of Capital Stock................................57
9.13 Business...............................................................57
9.14 Limitation on Creation of Subsidiaries.................................57
SECTION 10. Events of Default........................................................58
10.01 Payments..............................................................58
10.02 Representations, etc..................................................58
10.03 Covenants.............................................................58
10.04 Default Under Other Agreements........................................58
10.05 Bankruptcy, etc.......................................................59
10.06 ERISA.................................................................59
10.07 Security Documents....................................................60
10.08 Guaranties............................................................60
10.09 Judgments.............................................................60
</TABLE>
(iii)
<PAGE>
<TABLE>
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10.10 Change of Control.....................................................60
SECTION 11. Definitions and Accounting Terms.........................................61
11.01 Defined Terms.........................................................61
SECTION 12. The Administrative Agent.................................................79
12.01 Appointment...........................................................79
12.02 Nature of Duties......................................................80
12.03 Lack of Reliance on the Administrative Agent..........................80
12.04 Certain Rights of the Administrative Agent............................81
12.05 Reliance..............................................................81
12.06 Indemnification.......................................................81
12.07 The Administrative Agent in its Individual Capacity...................81
12.08 Holders...............................................................82
12.09 Resignation by the Administrative Agent................................82
SECTION 13. Miscellaneous............................................................82
13.01 Payment of Expenses, etc..............................................82
13.02 Right of Setoff.......................................................83
13.03 Notices...............................................................84
13.04 Benefit of Agreement; Assignments; Participations.....................85
13.05 No Waiver; Remedies Cumulative........................................86
13.06 Payments Pro Rata.....................................................87
13.07 Calculations; Computations; Accounting Terms..........................87
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL................................................88
13.09 Counterparts..........................................................89
13.10 Effectiveness.........................................................89
13.11 Headings Descriptive..................................................89
13.12 Amendment or Waiver; etc..............................................89
13.13 Survival..............................................................91
13.14 Domicile of Loans.....................................................91
13.15 Register..............................................................91
13.16 Confidentiality.......................................................91
13.17 Limitation on Additional Amounts, etc.................................92
SECTION 14. Parent Guaranty..........................................................93
14.01 Guaranty..............................................................93
14.02 Bankruptcy............................................................93
14.03 Nature of Liability...................................................93
14.04 Independent Obligation................................................94
14.05 Authorization.........................................................94
14.06 Reliance..............................................................95
</TABLE>
(iv)
<PAGE>
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14.07 Subordination.........................................................95
14.08 Waiver................................................................95
14.09 Nature of Liability....................................................97
</TABLE>
SCHEDULE I Revolving Loan Commitments
SCHEDULE II Lender Addresses
SCHEDULE III Real Properties
SCHEDULE IV Plans
SCHEDULE V Subsidiaries
SCHEDULE VI Existing Indebtedness
SCHEDULE VII Insurance
SCHEDULE VIII Existing Liens
SCHEDULE IX Existing Investments
SCHEDULE X Certain Tax Matters
SCHEDULE XI Certain Affiliate Transactions
SCHEDULE XII Initial Shareholders
SCHEDULE 5.09 Litigation
SCHEDULE 7.05(c) Liabilities
EXHIBIT A Form of Notice of Borrowing
EXHIBIT B-1 Form of Revolving Note
EXHIBIT B-2 Form of Swingline Note
EXHIBIT C Form of Letter of Credit Request
EXHIBIT D Form of Section 4.04(b)(ii) Certificate
EXHIBIT E Form of Opinion of Willkie Farr & Gallagher,
Special Counsel to the Credit Parties
EXHIBIT F Form of Officers' Certificate
EXHIBIT G Form of Pledge Agreement
EXHIBIT H Form of Security Agreement
EXHIBIT I Form of Subsidiaries Guaranty
EXHIBIT J Form of Solvency Certificate
EXHIBIT K Form of Assignment and Assumption Agreement
EXHIBIT L Form of Intercompany Note
(v)
<PAGE>
CREDIT AGREEMENT, dated as of September 24, 1999, among
INFORMATION HOLDINGS, INC., a Delaware corporation ("Holdings"), WARBURG,
PINCUS INFORMATION VENTURES, INC., a Delaware corporation ("WPIV" and
together with Holdings, the "Parent Guarantors"), INFORMATION VENTURES
L.L.C., a Delaware limited liability company (the "Borrower"), the Lenders
party hereto from time to time, BANK OF AMERICA, N.A., as Documentation
Agent, and BANKERS TRUST COMPANY, as Administrative Agent (all capitalized
terms used herein and defined in Section 11 are used herein as therein
defined).
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions set
forth herein, the Lenders are willing to make available to the Borrower the
credit facility provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. AMOUNT AND TERMS OF CREDIT.
1.01 THE COMMITMENTS. (a) Subject to and upon the terms and
conditions set forth herein, each Lender severally agrees to make, at any
time and from time to time on and after the Effective Date and prior to the
Final Maturity Date, a revolving loan or revolving loans (each a "Revolving
Loan" and, collectively, the "Revolving Loans") to the Borrower, which
Revolving Loans (i) shall, at the option of the Borrower, be incurred and
maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans,
PROVIDED that except as otherwise specifically provided in Section 1.10(b),
all Revolving Loans comprising the same Borrowing shall at all times be of
the same Type, (ii) may be repaid and reborrowed in accordance with the
provisions hereof, (iii) shall not exceed for any Lender at any time
outstanding that aggregate principal amount which, when added to the product
of (x) such Lender's RL Percentage and (y) the sum of (I) the aggregate
amount of all Letter of Credit Outstandings (exclusive of Unpaid Drawings
which are repaid with the proceeds of, and simultaneously with the incurrence
of, the respective incurrence of Revolving Loans) at such time and (II) the
aggregate principal amount of all Swingline Loans (exclusive of Swingline
Loans which are repaid with the proceeds of, and simultaneously with the
incurrence of, the respective incurrence of Revolving Loans) then
outstanding, equals the Revolving Loan Commitment of such Lender at such time
and (iv) shall not exceed for all Lenders at any time outstanding that
aggregate principal amount which, when added to the sum of (I) the aggregate
amount of all Letter of Credit Outstandings (exclusive of Unpaid Drawings
which are repaid with the proceeds of, and simultaneously with the incurrence
of, the respective incurrence of Revolving Loans) at such time and (II) the
aggregate principal amount of all Swingline Loans (exclusive of Swingline
Loans which are repaid with the proceeds of, and simultaneously with the
incurrence of, the respective incurrence of Revolving Loans) then
outstanding, equals the Total Revolving Loan Commitment at such time.
(b) Subject to and upon the terms and conditions set forth
herein, the Swingline Lender agrees to make, at any time and from time to
time on and after the Effective
<PAGE>
Date and prior to the Swingline Expiry Date, a revolving loan or revolving
loans (each a "Swingline Loan" and, collectively, the "Swingline Loans") to
the Borrower, which Swingline Loans (i) shall be made and maintained as Base
Rate Loans, (ii) may be repaid and reborrowed in accordance with the
provisions hereof, (iii) shall not exceed in aggregate principal amount at
any time outstanding, when combined with the aggregate principal amount of
all Revolving Loans then outstanding and the aggregate amount of all Letter
of Credit Outstandings at such time, an amount equal to the Total Revolving
Loan Commitment at such time, and (iv) shall not exceed in aggregate
principal amount at any time outstanding the Maximum Swingline Amount.
Notwithstanding anything to the contrary contained in this Section 1.01(b),
(x) the Swingline Lender shall not be obligated to make any Swingline Loans
at a time when a Lender Default exists unless the Swingline Lender has
entered into arrangements satisfactory to it and the Borrower to eliminate
the Swingline Lender's risk with respect to the Defaulting Lender's or
Lenders' participation in such Swingline Loans, including by cash
collateralizing such Defaulting Lender's or Lenders' RL Percentage of the
outstanding Swingline Loans and (y) the Swingline Lender shall not make any
Swingline Loan after it has received written notice from the Borrower, any
other Credit Party or the Required Lenders stating that a Default or an Event
of Default exists and is continuing until such time as the Swingline Lender
shall have received written notice (I) of rescission of all such notices from
the party or parties originally delivering such notice or (II) of the waiver
of such Default or Event of Default by the requisite Lenders.
(c) On any Business Day, the Swingline Lender may, in its
sole discretion, give notice to the Lenders that the Swingline Lender's
outstanding Swingline Loans shall be funded with one or more Borrowings of
Revolving Loans (PROVIDED that such notice shall be deemed to have been
automatically given upon the occurrence of a Default or an Event of Default
under Section 10.05 or upon the exercise of any of the remedies provided in
the last paragraph of Section 10), in which case one or more Borrowings of
Revolving Loans constituting Base Rate Loans (each such Borrowing, a
"Mandatory Borrowing") shall be made on the immediately succeeding Business
Day by all Lenders PRO RATA based on each Lender's RL Percentage (determined
before giving effect to any termination of the Revolving Loan Commitments
pursuant to the last paragraph of Section 10) and the proceeds thereof shall
be applied directly by the Swingline Lender to repay the Swingline Lender for
such outstanding Swingline Loans. Each Lender hereby irrevocably agrees to
make Revolving Loans upon one Business Day's notice pursuant to each
Mandatory Borrowing in the amount and in the manner specified in the
preceding sentence and on the date specified in writing by the Swingline
Lender notwithstanding (i) the amount of the Mandatory Borrowing may not
comply with the Minimum Borrowing Amount otherwise required hereunder, (ii)
whether any conditions specified in Section 6 are then satisfied, (iii)
whether a Default or an Event of Default then exists, (iv) the date of such
Mandatory Borrowing and (v) the amount of the Total Revolving Loan Commitment
at such time. In the event that any Mandatory Borrowing cannot for any reason
be made on the date otherwise required above (including, without limitation,
as a result of the commencement of a proceeding under the Bankruptcy Code
with respect to the Borrower), then each Lender hereby agrees that it shall
forthwith purchase (as of the date the Mandatory Borrowing would otherwise
have occurred, but adjusted for any payments received from the Borrower on or
after such date and prior to such purchase) from the Swingline Lender such
participations in the outstanding Swingline Loans as shall be necessary to
cause the Lenders to
2
<PAGE>
share in such Swingline Loans ratably based upon their respective RL
Percentages (determined before giving effect to any termination of the
Revolving Loan Commitments pursuant to the last paragraph of Section 10),
PROVIDED that (x) all interest payable on the Swingline Loans shall be for
the account of the Swingline Lender until the date as of which the respective
participation is required to be purchased and, to the extent attributable to
the purchased participation, shall be payable to the participant from and
after such date and (y) at the time any purchase of participations pursuant
to this sentence is actually made, the purchasing Lender shall be required to
pay the Swingline Lender interest on the principal amount of participation
purchased for each day from and including the day upon which the Mandatory
Borrowing would otherwise have occurred to but excluding the date of payment
for such participation, at the overnight Federal Funds Rate.
1.02 MINIMUM AMOUNT OF EACH BORROWING. The aggregate
principal amount of each Borrowing of Revolving Loans or Swingline Loans
shall not be less than the Minimum Borrowing Amount applicable thereto. More
than one Borrowing may occur on the same date, but at no time shall there be
outstanding more than twelve Borrowings of Eurodollar Loans.
1.03 NOTICE OF BORROWING. (a) Whenever the Borrower desires
to incur (x) Eurodollar Loans hereunder, the Borrower shall give the
Administrative Agent at the Notice Office at least three Business Days' prior
notice of each Eurodollar Loan to be incurred hereunder and (y) Base Rate
Loans hereunder (excluding Swingline Loans and Revolving Loans made pursuant
to a Mandatory Borrowing), the Borrower shall give the Administrative Agent
at the Notice Office at least one Business Day's prior notice of each Base
Rate Loan to be incurred hereunder, PROVIDED that (in each case) any such
notice shall be deemed to have been given on a certain day only if given
before 12:00 Noon (New York time) on such day. Each such notice (each a
"Notice of Borrowing"), except as otherwise expressly provided in Section
1.10, shall be irrevocable and shall be given by the Borrower in writing, or
by telephone promptly confirmed in writing, in the form of Exhibit A,
appropriately completed to specify the aggregate principal amount of the
Revolving Loans to be incurred pursuant to such Borrowing, the date of such
Borrowing (which shall be a Business Day), whether the Revolving Loans being
incurred pursuant to such Borrowing are to be initially maintained as Base
Rate Loans or, to the extent permitted hereunder, Eurodollar Loans and, if
Eurodollar Loans, the initial Interest Period to be applicable thereto. The
Administrative Agent shall promptly give each Lender notice of such proposed
Borrowing, of such Lender's proportionate share thereof and of the other
matters required by the immediately preceding sentence to be specified in the
Notice of Borrowing.
(b) (i) Whenever the Borrower desires to incur Swingline
Loans hereunder, the Borrower shall give the Swingline Lender no later than
1:00 P.M. (New York time) on the date that a Swingline Loan is to be
incurred, written notice or telephonic notice promptly confirmed in writing
of each Swingline Loan to be incurred hereunder. Each such notice shall be
irrevocable and specify in each case (A) the date of Borrowing (which shall
be a Business Day) and (B) the aggregate principal amount of the Swingline
Loans to be incurred pursuant to such Borrowing.
3
<PAGE>
(ii) Mandatory Borrowings shall be made upon the notice
specified in Section 1.01(c), with the Borrower irrevocably agreeing, by its
incurrence of any Swingline Loan, to the making of the Mandatory Borrowings
as set forth in Section 1.01(c).
(c) Without in any way limiting the obligation of the
Borrower to confirm in writing any telephonic notice of any Borrowing or
prepayment of Loans, the Administrative Agent or the Swingline Lender, as the
case may be, may act without liability upon the basis of telephonic notice of
such Borrowing or prepayment, as the case may be, believed by the
Administrative Agent or the Swingline Lender, as the case may be, in good
faith to be from any Authorized Officer of the Borrower, prior to receipt of
written confirmation. In each such case, the Borrower hereby waives the right
to dispute the Administrative Agent's or Swingline Lender's record of the
terms of such telephonic notice of such Borrowing or prepayment of Loans, as
the case may be, absent manifest error.
1.04 DISBURSEMENT OF FUNDS. No later than 12:00 Noon (New
York time) on the date specified in each Notice of Borrowing (or (x) in the
case of Swingline Loans, no later than 3:00 P.M. (New York time) on the date
specified pursuant to Section 1.03(b)(i) or (y) in the case of Mandatory
Borrowings, no later than 1:00 P.M. (New York time) on the date specified in
Section 1.01(c)), each Lender will make available its PRO RATA portion
(determined in accordance with Section 1.07) of each such Borrowing requested
to be made on such date (or in the case of Swingline Loans, the Swingline
Lender will make available the full amount thereof). All such amounts will be
made available in Dollars and in immediately available funds at the Payment
Office, and, except for Revolving Loans made pursuant to a Mandatory
Borrowing, the Administrative Agent will make available to the Borrower at
the Payment Office the aggregate of the amounts so made available by the
Lenders. Unless the Administrative Agent shall have been notified by any
Lender prior to the date of Borrowing that such Lender does not intend to
make available to the Administrative Agent such Lender's portion of any
Borrowing to be made on such date, the Administrative Agent may assume that
such Lender has made such amount available to the Administrative Agent on
such date of Borrowing and the Administrative Agent may (but shall not be
obligated to), in reliance upon such assumption, make available to the
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent by such Lender, the Administrative
Agent shall be entitled to recover such corresponding amount on demand from
such Lender. If such Lender does not pay such corresponding amount forthwith
upon the Administrative Agent's demand therefor, the Administrative Agent
shall promptly notify the Borrower and the Borrower shall immediately pay
such corresponding amount to the Administrative Agent. The Administrative
Agent also shall be entitled to recover on demand from such Lender or the
Borrower, as the case may be, interest on such corresponding amount in
respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the Borrower until the date such
corresponding amount is recovered by the Administrative Agent, at a rate per
annum equal to (i) if recovered from such Lender, at the overnight Federal
Funds Rate and (ii) if recovered from the Borrower, the rate of interest
applicable to the respective Borrowing, as determined pursuant to Section
1.08. Nothing in this Section 1.04 shall be deemed to relieve any Lender from
its obligation to make Loans hereunder or to prejudice any rights which the
Borrower may have against any Lender as a result of any failure by such
Lender to make Loans hereunder.
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1.05 NOTES. (a) The Borrower's obligation to pay the
principal of, and interest on, the Loans made by each Lender shall be
evidenced (i) if Revolving Loans, by a promissory note duly executed and
delivered by the Borrower substantially in the form of Exhibit B-1, with
blanks appropriately completed in conformity herewith (each a "Revolving
Note" and, collectively, the "Revolving Notes") and (ii) if Swingline Loans,
by a promissory note duly executed and delivered by the Borrower
substantially in the form Exhibit B-2, with blanks appropriately completed in
conformity herewith (the "Swingline Note").
(b) The Revolving Note issued to each Lender shall (i) be
executed by the Borrower, (ii) be payable to such Lender or its registered
assigns and be dated the Effective Date (or, if issued after the Effective
Date, be dated the date of the issuance thereof), (iii) be in a stated
principal amount equal to the Revolving Loan Commitment of such Lender (or,
if issued after the termination thereof, be in a stated principal amount
equal to the outstanding Revolving Loans of such Lender at such time) and be
payable in the outstanding principal amount of the Revolving Loans evidenced
thereby, (iv) mature on the Final Maturity Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the Base
Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi)
be subject to voluntary prepayment as provided in Section 4.01, and mandatory
repayment as provided in Section 4.02, and (vii) be entitled to the benefits
of this Agreement and the other Credit Documents.
(c) The Swingline Note issued to the Swingline Lender shall
(i) be executed by the Borrower, (ii) be payable to the Swingline Lender or
its registered assigns and be dated the Effective Date, (iii) be in a stated
principal amount equal to the Maximum Swingline Amount and be payable in the
outstanding principal amount of the Swingline Loans evidenced thereby from
time to time, (iv) mature on the Swingline Expiry Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the Base
Rate Loans evidenced thereby, (vi) be subject to voluntary prepayment as
provided in Section 4.01, and mandatory repayment as provided in Section
4.02, and (vii) be entitled to the benefits of this Agreement and the other
Credit Documents.
(d) Each Lender will note on its internal records the
amount of each Loan made by it and each payment in respect thereof and will
prior to any transfer of any of its Notes endorse on the reverse side thereof
the outstanding principal amount of Loans evidenced thereby. Failure to make
any such notation or any error in such notation shall not affect the
Borrower's obligations in respect of such Loans.
1.06 CONVERSIONS. The Borrower shall have the option to
convert, on any Business Day occurring, all or a portion equal to at least the
Minimum Borrowing Amount of the outstanding principal amount of Revolving Loans
made pursuant to one or more Borrowings of one or more Types of Revolving Loans
into a Borrowing of another Type of Revolving Loan, PROVIDED that, (i) except as
otherwise provided in Section 1.10(b), Eurodollar Loans may be converted into
Base Rate Loans only on the last day of an Interest Period applicable to the
Loans being converted and no such partial conversion of Eurodollar Loans shall
reduce the outstanding principal amount of such Eurodollar Loans made pursuant
to a single Borrowing to less than the Minimum Borrowing Amount applicable
thereto, (ii) Base Rate Loans may only be converted into Eurodollar Loans if no
Event of Default is in existence on the date of the conversion, and if a Default
is in existence, Base Rate Loans may only be converted
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into Eurodollar Loans with a one month Interest Period and (iii) no
conversion pursuant to this Section 1.06 shall result in a greater number of
Borrowings of Eurodollar Loans than is permitted under Section 1.02. Each
such conversion shall be effected by the Borrower by giving the
Administrative Agent at the Notice Office prior to 12:00 Noon (New York time)
at least three Business Days' prior notice (each a "Notice of Conversion")
specifying the Revolving Loans to be so converted, the Borrowing or
Borrowings pursuant to which such Revolving Loans were made and, if to be
converted into Eurodollar Loans, the Interest Period to be initially
applicable thereto. The Administrative Agent shall give each Lender prompt
notice of any such proposed conversion affecting any of its Revolving Loans.
Upon any such conversion the proceeds thereof will be deemed to be applied
directly on the day of such conversion to prepay the outstanding principal
amount of the Revolving Loans being converted. Swingline Loans may not be
converted pursuant to this Section 1.06.
1.07 PRO RATA BORROWINGS. All Borrowings of Revolving Loans
under this Agreement shall be incurred from the Lenders PRO RATA on the basis
of their Revolving Loan Commitments. It is understood that no Lender shall be
responsible for any default by any other Lender of its obligation to make
Revolving Loans hereunder and that each Lender shall be obligated to make the
Revolving Loans provided to be made by it hereunder, regardless of the
failure of any other Lender to make its Revolving Loans hereunder.
1.08 INTEREST. (a) The Borrower agrees to pay interest in
respect of the unpaid principal amount of each Base Rate Loan from the date
of Borrowing thereof until the earlier of (i) the maturity thereof (whether
by acceleration or otherwise) and (ii) the conversion of such Base Rate Loan
to a Eurodollar Loan pursuant to Section 1.06, at a rate per annum which
shall be equal to the sum of the Applicable Margin for Base Rate Loans plus
the Base Rate in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Eurodollar Loan from the date of Borrowing
thereof until the earlier of (i) the maturity thereof (whether by
acceleration or otherwise) and (ii) the conversion of such Eurodollar Loan to
a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10, as applicable, at a
rate per annum which shall, during each Interest Period applicable thereto,
be equal to the sum of the Applicable Margin for Eurodollar Loans plus the
Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount payable
hereunder shall, in each case, bear interest at a rate per annum equal to the
rate which is 2% in excess of the rate then borne by such Loans. Interest
which accrues under this Section 1.08(c) shall be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on each
Quarterly Payment Date, (ii) in respect of each Eurodollar Loan, on the last
day of each Interest Period applicable thereto and, in the case of an
Interest Period in excess of three months, on each date occurring at three
month intervals after
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the first day of such Interest Period, and on any repayment or prepayment (on
the amount repaid or prepaid), and (iii) in respect of each Loan, at maturity
(whether by acceleration or otherwise) and, after such maturity, on demand.
(e) Upon each Interest Determination Date, the
Administrative Agent shall determine the Eurodollar Rate for each Interest
Period applicable to Eurodollar Loans and shall promptly notify the Borrower
and the Lenders thereof. Each such determination shall, absent manifest
error, be final and conclusive and binding on all parties hereto.
1.09 INTEREST PERIODS. At the time the Borrower gives any
Notice of Borrowing or Notice of Conversion in respect of the making of, or
conversion into, any Eurodollar Loan (in the case of the initial Interest
Period applicable thereto) or on the third Business Day prior to the
expiration of an Interest Period applicable to such Eurodollar Loan (in the
case of any subsequent Interest Period), the Borrower shall have the right to
elect, by giving the Administrative Agent notice thereof, the interest period
(each an "Interest Period") applicable to such Eurodollar Loan, which
Interest Period shall, at the option of the Borrower be a one, two, three or
six-month period (or, if available to all Lenders, nine or twelve-month
period), PROVIDED that:
(i) all Eurodollar Loans comprising a Borrowing shall at
all times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan
shall commence on the date of Borrowing of such Eurodollar Loan
(including the date of any conversion thereto from a Base Rate Loan)
and each Interest Period occurring thereafter in respect of such
Eurodollar Loan shall commence on the day on which the next
preceding Interest Period applicable thereto expires;
(iii) if any Interest Period for a Eurodollar Loan begins
on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month;
(iv) if any Interest Period for a Eurodollar Loan would
otherwise expire on a day which is not a Business Day, such Interest
Period shall expire on the next succeeding Business Day; PROVIDED,
HOWEVER, that if any Interest Period for a Eurodollar Loan would
otherwise expire on a day which is not a Business Day but is a day
of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding
Business Day;
(v) no Interest Period may be selected at any time when an
Event of Default is then in existence, and only a one month Interest
Period may be selected at any time when a Default is then in
existence; and
(vi) no Interest Period in respect of any Borrowing of
Eurodollar Loans shall be selected which extends beyond the Final
Maturity Date.
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If upon the expiration of any Interest Period applicable to
a Borrowing of Eurodollar Loans, the Borrower has failed to elect, or is not
permitted to elect, a new Interest Period to be applicable to such Eurodollar
Loans as provided above, the Borrower shall be deemed to have elected to
convert such Eurodollar Loans into Base Rate Loans effective as of the
expiration date of such current Interest Period.
1.10 INCREASED COSTS, ILLEGALITY, ETC. (a) In the event
that any Lender shall have determined (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto
but, with respect to clause (i) below, may be made only by the Administrative
Agent):
(i) on any Interest Determination Date that, by reason of
any changes arising after the date of this Agreement affecting the
interbank Eurodollar market, adequate and fair means do not exist
for ascertaining the applicable interest rate on the basis provided
for in the definition of Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased
costs or reductions in the amounts received or receivable hereunder
with respect to any Eurodollar Loan because of (x) any change since
the date of this Agreement in any applicable law or governmental
rule, regulation, order, guideline or request (whether or not having
the force of law) or in the interpretation or administration thereof
and including the introduction of any new law or governmental rule,
regulation, order, guideline or request, such as, for example, but
not limited to: (A) a change in the basis of taxation of payment to
any Lender of the principal of or interest on the Notes or any other
amounts payable hereunder (except for changes in the rate of tax on,
or determined by reference to, the net income or profits of such
Lender pursuant to the laws of the jurisdiction in which such Lender
is organized or in which such Lender's principal office or
applicable lending office is located or any subdivision thereof or
therein), but, in any event, without duplication of any amounts
payable to such Lender under Section 4.04 (although no such Lender
shall be entitled to any amounts under this Section 1.10(a)(ii) in
respect of any Taxes to the extent that such Lender fails to provide
the forms or certification required to be provided by it under
Section 4.04(b)) or (B) a change in official reserve requirements,
but, in all events, excluding reserves required under Regulation D
to the extent included in the computation of the Eurodollar Rate
and/or (y) other circumstances occurring since the date of this
Agreement affecting such Lender, the interbank Eurodollar market or
the position of such Lender in such market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has been made (x) unlawful by any law or
governmental rule, regulation or order, (y) impossible by compliance
by any Lender in good faith with any governmental request (whether
or not having force of law) or (z) impracticable as a result of a
contingency occurring after the date of this Agreement which
materially and adversely affects the interbank Eurodollar market;
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then, and in any such event, such Lender (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice (by telephone promptly
confirmed in writing) to the Borrower and, except in the case of clause (i)
above, to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Lenders).
Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no
longer be available until such time as the Administrative Agent notifies the
Borrower and the Lenders that the circumstances giving rise to such notice by
the Administrative Agent no longer exist, and any Notice of Borrowing or
Notice of Conversion given by the Borrower with respect to Eurodollar Loans
which have not yet been incurred (including by way of conversion) shall be
deemed rescinded by the Borrower, (y) in the case of clause (ii) above, the
Borrower shall, subject to the provisions of Section 13.17 (to the extent
applicable), pay to such Lender, within 30 days after such Lender's written
request therefor, such additional amounts (in the form of an increased rate
of, or a different method of calculating, interest or otherwise as such
Lender in its reasonable discretion shall determine) as shall be required to
compensate such Lender for such increased costs or reductions in amounts
received or receivable hereunder (a written notice as to the additional
amounts owed to such Lender, showing in reasonable detail the basis for the
calculation thereof, submitted to the Borrower by such Lender shall, absent
manifest error, be final and conclusive and binding on all the parties
hereto) and (z) in the case of clause (iii) above, the Borrower shall take
one of the actions specified in Section 1.10(b) as promptly as possible and,
in any event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may
(and in the case of a Eurodollar Loan affected by the circumstances described
in Section 1.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is
then being made initially or pursuant to a conversion, cancel such Borrowing
by giving the Administrative Agent telephonic notice (confirmed in writing)
on the same date that the Borrower was notified by the affected Lender or the
Administrative Agent pursuant to Section 1.10(a)(ii) or (iii) or (y) if the
affected Eurodollar Loan is then outstanding, upon at least three Business
Days' written notice to the Administrative Agent, require the affected Lender
to convert such Eurodollar Loan into a Base Rate Loan, PROVIDED that, if more
than one Lender is affected at any time, then all affected Lenders must be
treated the same pursuant to this Section 1.10(b).
(c) If any Lender determines that after the date of this
Agreement the introduction of or any change in any applicable law or
governmental rule, regulation, order, guideline, directive or request
(whether or not having the force of law) concerning capital adequacy, or any
change in interpretation or administration thereof by any governmental
authority, central bank or comparable agency, will have the effect of
increasing the amount of capital required or expected to be maintained by
such Lender or any corporation controlling such Lender based on the existence
of such Lender's Revolving Loan Commitment hereunder or its obligations
hereunder, then the Borrower shall, subject to the provisions of Section
13.17 (to the extent applicable), pay to such Lender, within 30 days after
its written demand therefor, such additional amounts as shall be required to
compensate such Lender or such other corporation for the increased cost to
such Lender or such other corporation or the reduction in the rate of return
to such Lender or such other corporation as a result of such increase of
capital. In determining such additional amounts,
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each Lender will act reasonably and in good faith and will use averaging and
attribution methods which are reasonable, PROVIDED that such Lender's
determination of compensation owing under this Section 1.10(c) shall, absent
manifest error, be final and conclusive and binding on all the parties
hereto. Each Lender, upon determining that any additional amounts will be
payable pursuant to this Section 1.10(c), will give prompt written notice
thereof to the Borrower, which notice shall show in reasonable detail the
basis for calculation of such additional amounts.
(d) Notwithstanding anything to the contrary contained in
this Section 1.10, unless a Lender gives notice to the Borrower that the
Borrower is obligated to pay any amount under this Section 1.10 within 180
days after the later of (x) the date such Lender incurs the respective
increased costs or reduction in return the rate of return or (y) the date
such Lender has actual knowledge of its incurrence of the respective
increased costs or reduction in the rate of return, then such Lender shall
only be entitled to be compensated for such amount by the Borrower pursuant
to this Section 1.10 to the extent the respective increased costs or
reduction in the rate of return are incurred or suffered on or after the date
which occurs 180 days prior to such Lender giving notice to the Borrower that
the Borrower is obligated to pay the respective amounts pursuant to this
Section 1.10.
1.11 COMPENSATION. The Borrower shall, subject to the
provisions of Section 13.17 (to the extent applicable), compensate each
Lender, upon its written request (which request shall set forth in reasonable
detail the basis for requesting such compensation), for all reasonable
losses, expenses and liabilities (including, without limitation, any loss,
expense or liability incurred by reason of the liquidation or reemployment of
deposits or other funds required by such Lender to fund its Eurodollar Loans
but excluding loss of anticipated profits, including loss of Applicable
Margin) which such Lender may sustain: (i) if for any reason (other than a
default by such Lender or the Administrative Agent) a Borrowing of, or
conversion from or into, Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.10(a));
(ii) if any repayment (including any repayment made pursuant to Section 4.01,
Section 4.02 or as a result of an acceleration of the Loans pursuant to
Section 10) or conversion of any of its Eurodollar Loans occurs on a date
which is not the last day of an Interest Period with respect thereto; (iii)
if any prepayment of any of its Eurodollar Loans is not made on any date
specified in a notice of prepayment given by the Borrower; or (iv) as a
consequence of (x) any other default by the Borrower to repay its Loans when
required by the terms of this Agreement or any Note held by such Lender or
(y) any election made pursuant to Section 1.10(b).
1.12 CHANGE OF LENDING OFFICE. Each Lender agrees that on
the occurrence of any event giving rise to the operation of Section
1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06 or Section 4.04 with
respect to such Lender, it will, if requested by the Borrower, use reasonable
efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans or Letters of Credit affected
by such event, PROVIDED that such designation is made on such terms that such
Lender and its lending office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to
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the operation of such Section. Nothing in this Section 1.12 shall affect or
postpone any of the obligations of the Borrower or the right of any Lender
provided in Sections 1.10, 2.06 and 4.04.
1.13 REPLACEMENT OF LENDERS. (x) If any Lender becomes a
Defaulting Lender or otherwise defaults in its obligations to make Revolving
Loans, (y) upon the occurrence of an event giving rise to the operation of
Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06 or Section 4.04
with respect to any Lender which results in such Lender (or such Lender and
other Lenders) charging to the Borrower increased costs in excess of those
being generally charged by the other Lenders or (z) in the case of a refusal
by a Lender to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Lenders as (and to the extent) provided in Section 13.12(b), the
Borrower shall have the right, if no Default or Event of Default then exists
(or, in the case of preceding clause (z), no Default or Event of Default will
exist immediately after giving effect to such replacement), to replace such
Lender (the "Replaced Lender") with one or more other Eligible Transferees,
none of whom shall constitute a Defaulting Lender at the time of such
replacement (collectively, the "Replacement Lender") and each of whom shall
be required to be reasonably acceptable to the Administrative Agent, PROVIDED
that (i) at the time of any replacement pursuant to this Section 1.13, the
Replacement Lender shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 13.04(b) (and with all fees payable pursuant
to said Section 13.04(b) to be paid by the Replacement Lender) pursuant to
which the Replacement Lender shall acquire the entire Revolving Loan
Commitment and outstanding Revolving Loans of, and in each case
participations in Letters of Credit by, the Replaced Lender and, in
connection therewith, shall pay to (x) the Replaced Lender in respect thereof
an amount equal to the sum of (I) an amount equal to the principal of, and
all accrued interest on, all outstanding Revolving Loans of the Replaced
Lender, (II) an amount equal to all Unpaid Drawings that have been funded by
(and not reimbursed to) such Replaced Lender, together with all then unpaid
interest with respect thereto at such time and (III) an amount equal to all
accrued, but theretofore unpaid, Fees owing to the Replaced Lender pursuant
to Section 3.01, (y) the Issuing Lender an amount equal to such Replaced
Lender's RL Percentage of any Unpaid Drawing (which at such time remains an
Unpaid Drawing) to the extent such amount was not theretofore funded by such
Replaced Lender to such Issuing Lender and (z) the Swingline Lender an amount
equal to such Replaced Lender's RL Percentage of any Mandatory Borrowing to
the extent such amount was not theretofore funded by such Replaced Lender to
the Swingline Lender and (ii) all obligations of the Borrower due and owing
to the Replaced Lender at such time (other than those specifically described
in clause (i) above in respect of which the assignment purchase price has
been, or is concurrently being, paid) shall be paid in full to such Replaced
Lender concurrently with such replacement. Upon the execution of the
respective Assignment and Assumption Agreement, the payment of amounts
referred to in clauses (i) and (ii) above and, if so requested by the
Replacement Lender, delivery to the Replacement Lender of the appropriate
Revolving Note executed by the Borrower, the Replacement Lender shall become
a Lender hereunder and the Replaced Lender shall cease to constitute a Lender
hereunder, except with respect to indemnification provisions under this
Agreement (including, without limitation, Sections 1.10, 1.11, 2.06, 4.04,
12.06 and 13.01), which shall survive as to such Replaced Lender.
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SECTION 2. LETTERS OF CREDIT.
2.01 LETTERS OF CREDIT. (a) Subject to and upon the terms
and conditions set forth herein, the Borrower may request that the Issuing
Lender issue, at any time and from time to time on and after the Effective
Date and prior to the 30th day prior to the Final Maturity Date, (x) for the
account of the Borrower and for the benefit of any holder (or any trustee,
agent or other similar representative for any such holders) of L/C
Supportable Obligations of the Borrower or any of its Subsidiaries, an
irrevocable standby letter of credit, in a form customarily used by the
Issuing Lender or in such other form as has been approved by the Issuing
Lender (each such standby letter of credit, a "Standby Letter of Credit"), in
support of such L/C Supportable Obligations and (y) for the account of the
Borrower, an irrevocable sight commercial letter of credit in a form
customarily used by the Issuing Lender or in such other form as has been
approved by the Issuing Lender (each such commercial letter of credit, a
"Trade Letter of Credit", and each such Trade Letter of Credit and each
Standby Letter of Credit, a "Letter of Credit"), in support of customary
commercial transactions of the Borrower and its Subsidiaries. All Letters of
Credit shall be denominated in Dollars and shall be issued on a sight basis
only.
(b) Subject to and upon the terms and conditions set forth
herein, the Issuing Lender agrees that it will, at any time and from time to
time on and after the Effective Date and prior to the 30th day prior to the
Final Maturity Date, following its receipt of the respective Letter of Credit
Request, issue for the account of the Borrower, one or more Letters of Credit
(x) in the case of Standby Letters of Credit, in support of such L/C
Supportable Obligations of the Borrower or any of its Subsidiaries as are
permitted to remain outstanding without giving rise to a Default or an Event
of Default, hereunder and (y) in the case of Trade Letters of Credit, in
support of customary commercial transactions of the Borrower or any of its
Subsidiaries, PROVIDED that the Issuing Lender shall be under no obligation
to issue any Letter of Credit of the types described above if at the time of
such issuance:
(i) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to enjoin or
restrain the Issuing Lender from issuing such Letter of Credit or
any requirement of law applicable to the Issuing Lender or any
request or directive (whether or not having the force of law) from
any governmental authority with jurisdiction over the Issuing Lender
shall prohibit, or request that the Issuing Lender refrain from, the
issuance of letters of credit generally or such Letter of Credit in
particular or shall impose upon the Issuing Lender with respect to
such Letter of Credit any restriction or reserve or capital
requirement (for which the Issuing Lender is not otherwise
compensated under Section 2.06 or otherwise) not in effect on the
date hereof, or any unreimbursed loss, cost or expense which was not
applicable or in effect with respect to the Issuing Lender as of the
date hereof and which the Issuing Lender reasonably and in good
faith deems material to it;
(ii) the Issuing Lender shall have received notice from the
Borrower, any other Credit Party or the Required Lenders prior to
the issuance of such Letter of Credit of the type described in the
second sentence of Section 2.03(b); or
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(iii) a Lender Default exists, unless the Issuing Lender
has entered into arrangements satisfactory to it and the Borrower to
eliminate the Issuing Lender's risk with respect to the Defaulting
Lender's or Lenders' participations in Letters of Credit, including
cash collateralizing such Defaulting Lender's or Lenders' RL
Percentage of outstanding Swingline Loans.
2.02 MAXIMUM LETTER OF CREDIT OUTSTANDINGS; FINAL
MATURITIES. Notwithstanding anything to the contrary contained in this
Agreement, (i) no Letter of Credit shall be issued the Stated Amount of
which, when added to the Letter of Credit Outstandings (exclusive of Unpaid
Drawings which are repaid on the date of, and prior to the issuance of, the
respective Letter of Credit) at such time would exceed either (x) $10,000,000
or (y) when added to the aggregate principal amount of all Revolving Loans
then outstanding and the aggregate principal amount of all Swingline Loans
then outstanding, an amount equal to the Total Revolving Loan Commitment at
such time and (ii) each Letter of Credit shall by its terms terminate on or
before the earlier of (x) (A) in the case of Standby Letters of Credit, the
date which occurs 12 months after the date of the issuance thereof (although
any such Standby Letter of Credit may be extendable for successive periods of
up to 12 months, but not beyond the third Business Day prior to the Final
Maturity Date, on terms acceptable to the Issuing Lender) and (B) in the case
of Trade Letters of Credit, the date which occurs 180 days after the date of
issuance thereof and (y) three Business Days prior to the Final Maturity Date.
2.03 LETTER OF CREDIT REQUESTS; MINIMUM STATED AMOUNT. (a)
Whenever the Borrower desires that a Letter of Credit be issued for its
account, the Borrower shall give the Administrative Agent and the Issuing
Lender at least five Business Days' (or such shorter period as is acceptable
to the Issuing Lender) written notice thereof (including by way of facsimile
transmission). Each notice shall be in the form of Exhibit C appropriately
completed (each a "Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be
deemed to be a representation and warranty by the Borrower that such Letter
of Credit may be issued in accordance with, and will not violate the
requirements of, Section 2.02. Unless the Issuing Lender has received notice
from the Borrower, any other Credit Party or the Required Lenders before it
issues a Letter of Credit that one or more of the conditions specified in
Section 5 or 6 are not then satisfied, or that the issuance of such Letter of
Credit would violate Section 2.02, then the Issuing Lender may, subject to
the terms and conditions of this Agreement, issue the requested Letter of
Credit for the account of the Borrower in accordance with the Issuing
Lender's usual and customary practices. Upon its issuance of or amendment or
modification to any Standby Letter of Credit, the Issuing Lender shall
promptly notify in writing the Borrower and the Administrative Agent of such
issuance, amendment or modification and such notification shall be
accompanied by a copy of the issued Letter of Credit or amendment or
modification. Promptly after receipt of such notice, the Administrative Agent
shall notify the Lenders accordingly. In the event a Lender so requests, the
Administrative Agent shall provide such Lender with a copy of any issued
Letter of Credit or amendment or modification.
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(c) The initial Stated Amount of each Letter of Credit
shall not be less than $100,000 or such lesser amount as is reasonably
acceptable to the Issuing Lender.
2.04 LETTER OF CREDIT PARTICIPATIONS. (a) Immediately upon
the issuance by the Issuing Lender of any Letter of Credit, the Issuing
Lender shall be deemed to have sold and transferred to each Lender, other
than the Issuing Lender (each such Lender, in its capacity under this Section
2.04, a "Participant"), and each such Participant shall be deemed irrevocably
and unconditionally to have purchased and received from the Issuing Lender,
without recourse or warranty, an undivided interest and participation, to the
extent of such Participant's RL Percentage, in such Letter of Credit, each
drawing or payment made thereunder and the obligations of the Borrower under
this Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto. Upon any change in the Revolving Loan Commitments or RL
Percentages of the Lenders pursuant to Section 1.13 or 13.04, it is hereby
agreed that, with respect to all outstanding Letters of Credit and Unpaid
Drawings, there shall be an automatic adjustment to the participations
pursuant to this Section 2.04 to reflect the new RL Percentages of the
assignor and assignee Lender, as the case may be.
(b) In determining whether to pay under any Letter of
Credit, the Issuing Lender shall not have an obligation relative to the other
Lenders other than to confirm that any documents required to be delivered
under such Letter of Credit appear to have been delivered and that they
appear to substantially comply on their face with the requirements of such
Letter of Credit. Any action taken or omitted to be taken by the Issuing
Lender under or in connection with any Letter of Credit if taken or omitted
in the absence of gross negligence or willful misconduct (as finally
determined by a court of competent jurisdiction), shall not create for the
Issuing Lender any resulting liability to the Borrower, any other Credit
Party, any Lender or any other Person.
(c) In the event that the Issuing Lender makes any payment
under any Letter of Credit and the Borrower shall not have reimbursed such
amount in full to the Issuing Lender pursuant to Section 2.05(a), the Issuing
Lender shall promptly notify the Administrative Agent, which shall promptly
notify each Participant of such failure, and each Participant shall promptly
and unconditionally pay to the Issuing Lender the amount of such
Participant's RL Percentage of such unreimbursed payment in Dollars and in
same day funds. If the Administrative Agent so notifies, prior to 11:00 A.M.
(New York time) on any Business Day, any Participant required to fund a
payment under a Letter of Credit, such Participant shall make available to
the Issuing Lender in Dollars such Participant's RL Percentage of the amount
of such payment on such Business Day in same day funds. If and to the extent
such Participant shall not have so made its RL Percentage of the amount of
such payment available to the Issuing Lender, such Participant agrees to pay
to the Issuing Lender, forthwith on demand such amount, together with
interest thereon, for each day from such date until the date such amount is
paid to the Issuing Lender at the overnight Federal Funds Rate for the first
three days and at the interest rate applicable to Revolving Loans maintained
as Base Rate Loans for each day thereafter. The failure of any Participant to
make available to the Issuing Lender its RL Percentage of any payment under
any Letter of Credit shall not relieve any other Participant of its
obligation hereunder to make available to the Issuing Lender its RL
Percentage of any Letter of Credit on the date required, as
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specified above, but no Participant shall be responsible for the failure of
any other Participant to make available to the Issuing Lender such other
Participant's RL Percentage of any such payment.
(d) Whenever the Issuing Lender receives a payment of a
reimbursement obligation as to which it has received any payments from the
Participants pursuant to clause (c) above, the Issuing Lender shall pay to
each Participant which has paid its RL Percentage thereof, in Dollars and in
same day funds, an amount equal to such Participant's share (based upon the
proportionate aggregate amount originally funded by such Participant to the
aggregate amount funded by all Participants) of the principal amount of such
reimbursement obligation and interest thereon accruing after the purchase of
the respective participations.
(e) Upon the request of any Participant, the Issuing Lender
shall furnish to such Participant copies of any Letter of Credit issued by it
and such other documentation as may reasonably be requested by such
Participant.
(f) The obligations of the Participants to make payments to
the Issuing Lender with respect to Letters of Credit issued by it shall be
irrevocable and not subject to any qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other
right which the Borrower or any of its Subsidiaries may have at any
time against a beneficiary named in a Letter of Credit, any
transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), the Administrative Agent, any
Participant, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated
herein or any unrelated transactions (including any underlying
transaction between the Borrower or any Subsidiary of the Borrower
and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document
presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS. (a) The
Borrower agrees to reimburse the Issuing Lender, by making payment to the
Administrative Agent in immediately available funds at the Payment Office,
for any payment or disbursement made by the Issuing
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Lender under any Letter of Credit (each such amount, so paid until
reimbursed, an "Unpaid Drawing"), not later than one Business Day following
receipt by the Borrower of notice of such payment or disbursement (provided
that no such notice shall be required to be given if a Default or an Event of
Default under Section 10.05 shall have occurred and be continuing, in which
case the Unpaid Drawing shall be due and payable immediately without
presentment, demand, protest or notice of any kind (all of which are hereby
waived by the Borrower)), with interest on the amount so paid or disbursed by
the Issuing Lender, to the extent not reimbursed prior to 1:00 P.M. (New York
time) on the date of such payment or disbursement, from and including the
date paid or disbursed to but excluding the date the Issuing Lender was
reimbursed by the Borrower therefor at a rate per annum which shall be the
Base Rate in effect from time to time plus the Applicable Margin for Base
Rate Loans; PROVIDED, HOWEVER, to the extent such amounts are not reimbursed
prior to 1:00 P.M. (New York time) on the third Business Day following the
receipt by the Borrower of notice of such payment or disbursement or
following the occurrence of a Default or an Event of Default under Section
10.05, interest shall thereafter accrue on the amounts so paid or disbursed
by the Issuing Lender (and until reimbursed by the Borrower) at a rate per
annum which shall be the Base Rate in effect from time to time plus the
Applicable Margin for Base Rate Loans plus 2%, in each such case, with
interest to be payable on demand. The Issuing Lender shall give the Borrower
prompt written notice of each Drawing under any Letter of Credit, PROVIDED
that the failure to give any such notice shall in no way affect, impair or
diminish the Borrower's obligations hereunder.
(b) The obligations of the Borrower under this Section
2.05 to reimburse the Issuing Lender with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Borrower may have or have had
against any Lender (including in its capacity as issuer of the Letter of
Credit or as Participant), including, without limitation, any defense based
upon the failure of any drawing under a Letter of Credit (each a "Drawing")
to conform to the terms of the Letter of Credit or any nonapplication or
misapplication by the beneficiary of the proceeds of such Drawing; PROVIDED,
HOWEVER, that the Borrower shall not be obligated to reimburse the Issuing
Lender for any wrongful payment made by the Issuing Lender under a Letter of
Credit as a result of acts or omissions constituting willful misconduct or
gross negligence on the part of the Issuing Lender (as finally determined by
a court of competent jurisdiction).
2.06 INCREASED COSTS. If at any time after the date of this
Agreement, the introduction of or any change in any applicable law, rule,
regulation, order, guideline or request or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by the Issuing Lender
or any Participant with any request or directive by any such authority
(whether or not having the force of law), shall either (i) impose, modify or
make applicable any reserve, deposit, capital adequacy or similar requirement
against letters of credit issued by the Issuing Lender or participated in by
any Participant, or (ii) impose on the Issuing Lender or any Participant any
other conditions relating, directly or indirectly, to this Agreement; and the
result of any of the foregoing is to increase the cost to the Issuing Lender
or any Participant of issuing, maintaining or participating in any Letter of
Credit, or reduce the amount of any sum received or receivable by the Issuing
Lender or any
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Participant hereunder or reduce the rate of return on its capital with
respect to Letters of Credit (except for changes in the rate of tax on, or
determined by reference to, the net income or profits of the Issuing Lender
or such Participant pursuant to the laws of the jurisdiction in which it is
organized or in which its principal office or applicable lending office is
located or any subdivision thereof or therein), then, within 30 days after
the delivery of the certificate referred to below to the Borrower by the
Issuing Lender or any Participant (a copy of which certificate shall be sent
by the Issuing Lender or such Participant to the Administrative Agent), the
Borrower shall, subject to the provisions of Section 13.17 (to the extent
applicable), pay to the Issuing Lender or such Participant such additional
amount or amounts as will compensate such Lender for such increased cost or
reduction in the amount receivable or reduction on the rate of return on its
capital. The Issuing Lender or any Participant, upon determining that any
additional amounts will be payable pursuant to this Section 2.06, will give
prompt written notice thereof to the Borrower, which notice shall include a
certificate submitted to the Borrower by the Issuing Lender or such
Participant (a copy of which certificate shall be sent by the Issuing Lender
or such Participant to the Administrative Agent), setting forth in reasonable
detail the basis for the calculation of such additional amount or amounts
necessary to compensate the Issuing Lender or such Participant. The
certificate required to be delivered pursuant to this Section 2.06 shall,
absent manifest error, be final and conclusive and binding on the Borrower.
SECTION 3. COMMITMENT COMMISSION; FEES; REDUCTIONS OF
COMMITMENT.
3.01 FEES. (a) The Borrower agrees to pay to the
Administrative Agent for distribution to each Non-Defaulting Lender, a
commitment commission (the "Commitment Commission") for the period from and
including the Effective Date to but excluding the Final Maturity Date (or
such earlier date on which the Total Revolving Loan Commitment shall have
been terminated), computed at a rate for each day equal to the Applicable
Margin for Commitment Commission on the daily average Unutilized Revolving
Loan Commitment of such Non-Defaulting Lender. Accrued Commitment Commission
shall be due and payable quarterly in arrears on each Quarterly Payment Date
and on the Final Maturity Date (or such earlier date on which the Total
Revolving Loan Commitment shall have been terminated).
(b) The Borrower agrees to pay to the Administrative Agent
for distribution to each Non-Defaulting Lender (based on each such Lender's
respective RL Percentage) a fee in respect of each Letter of Credit issued
hereunder (the "Letter of Credit Fee") for the period from and including the
date of issuance of such Letter of Credit to and including the date of
termination or expiration of such Letter of Credit, computed at a rate per
annum equal to the Applicable Margin for Eurodollar Loans then in effect on
the daily Stated Amount of such Letter of Credit. Accrued Letter of Credit
Fees shall be due and payable quarterly in arrears on each Quarterly Payment
Date and on the first day after the termination of the Total Revolving Loan
Commitment upon which no Letters of Credit remain outstanding.
(c) The Borrower agrees to pay to the Issuing Lender, for
its own account, a facing fee in respect of each Letter of Credit issued
hereunder (the "Facing Fee") for the period from and including the date of
issuance of such Letter of Credit to and including the date of the
termination of such Letter of Credit, computed at a rate equal to 1/4 of 1%
per annum on the daily
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Stated Amount of such Letter of Credit, provided that in any event the
minimum amount of the Facing Fee payable in any 12 month period for each
Letter of Credit shall be $500; it being agreed that, on the date of issuance
of any Letter of Credit and on each anniversary thereof prior to the
termination of such Letter of Credit, if $500 will exceed the amount of
Facing Fees that will accrue with respect to such Letter of Credit for the
immediately succeeding 12 month period, the full $500 shall be payable on the
date of issuance of such Letter of Credit and on each such anniversary
thereof. Except as otherwise provided in the proviso to the immediately
preceding sentence, accrued Facing Fees shall be due and payable quarterly in
arrears on each Quarterly Payment Date and upon the first day after the
termination of the Total Revolving Loan Commitment upon which no Letters of
Credit remain outstanding.
(d) The Borrower agrees to pay to the Issuing Lender, for
its own account, upon each payment under, issuance of, or amendment to, any
Letter of Credit, such amount as shall at the time of such event be the
administrative charge and the reasonable expenses which the Issuing Lender is
generally imposing in connection with such occurrence with respect to letters
of credit.
(e) The Borrower agrees to pay to the Administrative Agent
and the Documentation Agent, for their own respective accounts, such other
fees as have been agreed to in writing by the Borrower and the Administrative
Agent.
3.02 VOLUNTARY TERMINATION OF UNUTILIZED COMMITMENTS. (a)
Upon at least one Business Day's prior written notice to the Administrative
Agent at the Notice Office (which notice the Administrative Agent shall
promptly transmit to each of the Lenders), the Borrower shall have the right,
at any time or from time to time, without premium or penalty, to terminate
the Total Unutilized Revolving Loan Commitment, in whole or in part, pursuant
to this Section 3.02(a), in an integral multiple of $100,000, in the case of
partial reductions to the Total Unutilized Revolving Loan Commitment,
PROVIDED that each such reduction shall apply proportionately to permanently
reduce the Revolving Loan Commitment of each Lender.
(b) In the event of a refusal by a Lender to consent to
certain proposed changes, waivers, discharges or terminations with respect to
this Agreement which have been approved by the Required Lenders as (and to
the extent) provided in Section 13.12(b), the Borrower may, subject to its
compliance with the requirements of Section 13.12(b), upon five Business
Days' prior written notice to the Administrative Agent at the Notice Office
(which notice the Administrative Agent shall promptly transmit to each of the
Lenders) terminate the entire Revolving Loan Commitment of such Lender, so
long as all Revolving Loans, together with accrued and unpaid interest, Fees
and all other amounts, owing to such Lender are repaid concurrently with the
effectiveness of such termination pursuant to Section 4.01(b) (at which time
Schedule I shall be deemed modified to reflect such changed amounts), and at
such time, such Lender shall no longer constitute a "Lender" for purposes of
this Agreement, except with respect to indemnifications under this Agreement
(including, without limitation, Sections 1.10, 1.11, 2.06, 4.04, 12.06 and
13.01), which shall survive as to such repaid Lender.
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3.03 MANDATORY REDUCTION OF COMMITMENTS. (a) The Total
Revolving Loan Commitment (and the Revolving Loan Commitment of each Lender)
shall terminate in its entirety on September 10, 1999 unless the Effective
Date has occurred on or before such date.
(b) In addition to any other mandatory commitment
reductions pursuant to this Section 3.03, on each date on or after the
Effective Date upon which Holdings or any of its Subsidiaries receives any
cash proceeds from any incurrence by Holdings or any of its Subsidiaries of
Indebtedness for borrowed money (other than Indebtedness for borrowed money
permitted to be incurred pursuant to Section 9.04 as such Section is in
effect on the Effective Date), the Total Revolving Loan Commitment shall be
permanently reduced on such date by an amount equal to 100% of the Net Debt
Proceeds of the respective incurrence of Indebtedness.
(c) In addition to any other mandatory commitment
reductions pursuant to this Section 3.03, within two Business Days after each
date on or after the Effective Date upon which Holdings or any of its
Subsidiaries receives any cash proceeds from any Asset Sale, the Total
Revolving Loan Commitment shall be permanently reduced on such date by an
amount equal to 100% of the Net Sale Proceeds from such Asset Sale; PROVIDED
that (x) with respect to no more than $5,000,000 in the aggregate of cash
proceeds from Asset Sales in any fiscal year of Holdings, such Net Sale
Proceeds therefrom shall not give rise to a reduction to the Total Revolving
Loan Commitment pursuant to this Section 3.03(c) on such date to the extent
that no Default or Event of Default then exists and Holdings has delivered a
certificate to the Administrative Agent on or prior to such date stating that
such Net Sale Proceeds shall be used to purchase assets that replace the
assets that were the subject of such Asset Sale or assets that will be used
in the business of the Borrower or its Subsidiaries (collectively,
"Replacement Assets") within 180 days following the date of such Asset Sale
(which certificate shall set forth the estimates of the proceeds to be so
expended), and (y) with respect to any one Asset Sale during the term of this
Agreement of greater than $5,000,000, but no more than $20,000,000, in the
aggregate of cash proceeds, such Net Sale Proceeds therefrom (and not only
the amount in excess of $5,000,000) shall not give rise to a reduction to the
Total Revolving Loan Commitment pursuant to this Section 3.03(c) on such date
to the extent that no Default or Event of Default then exists and Holdings
has delivered a certificate to the Administrative Agent on or prior to such
date stating that such Net Sale Proceeds shall be used to purchase
Replacement Assets within 60 days following the date of such Asset Sale
(which certificate shall set forth the estimates of the proceeds to be so
expended), and so long as at the time of such Asset Sale the Net Sale
Proceeds therefrom are delivered to the Administrative Agent to be held in a
cash collateral account satisfactory to the Administrative Agent until such
time as such Net Sale Proceeds are reinvested in Replacement Assets (at which
time all or such portion of the Net Sale Proceeds which are reinvested in
Replacement Assets shall be released from such cash collateral account) and
PROVIDED FURTHER, that if all or any portion of such Net Sale Proceeds are
not so reinvested in Replacement Assets within such 180 day period or 60 day
period, as the case may be, the Total Revolving Loan Commitment shall be
permanently reduced on the last day of such period (or such earlier date as
may be designated by the Borrower) by an amount equal to such remaining
portion.
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(d) In addition to any other mandatory commitment
reductions pursuant to this Section 3.03, within 10 days following each date
on or after the Effective Date upon which Holdings or any of its Subsidiaries
receives any cash proceeds from any Recovery Event, the Total Revolving Loan
Commitment shall be permanently reduced by an amount equal to 100% of the Net
Insurance Proceeds from such Recovery Event, PROVIDED that so long as no
Default or Event of Default then exists, such Net Insurance Proceeds shall
not be required to reduce the Total Revolving Loan Commitment on such date to
the extent that Holdings has delivered a certificate to the Administrative
Agent on or prior to such date stating that such Net Insurance Proceeds shall
be used to replace or restore any properties or assets in respect of which
such Net Insurance Proceeds were paid within 365 days following the date of
the receipt of such Net Insurance Proceeds (which certificate shall set forth
the estimates of the proceeds to be so expended).
(e) In addition to any other mandatory commitment
reductions pursuant to this Section 3.03, the Total Revolving Loan Commitment
(and the Revolving Loan Commitment of each Lender) shall (a) be permanently
reduced (to the extent not previously reduced) to $45,000,000 on the third
anniversary of the Effective Date, $37,500,000 on the fourth anniversary of
the Effective Date, $25,000,000 on the fifth anniversary of the Effective
Date and $12,500,000 on the sixth anniversary of the Effective Date and (b)
terminate in its entirety on the earlier of (i) the date on which a Change of
Control occurs (unless the Required Lenders otherwise agree in writing) and
(ii) the Final Maturity Date.
(f) Each reduction to the Total Revolving Loan Commitment
pursuant to this Section 3.03 shall be applied proportionately to permanently
reduce the Revolving Loan Commitment of each Lender.
SECTION 4. PREPAYMENTS; PAYMENTS; TAXES.
4.01 VOLUNTARY PREPAYMENTS. (a) The Borrower shall have the
right to prepay the Loans, without premium or penalty, in whole or in part at
any time and from time to time on the following terms and conditions: (i) the
Borrower shall give the Administrative Agent prior to 1:00 P.M. (New York
time) at the Notice Office (x) at least one Business Day's prior written
notice (or telephonic notice promptly confirmed in writing) of its intent to
prepay Base Rate Loans (or same day notice in the case of a prepayment of
Swingline Loans) and (y) at least three Business Days' prior written notice
(or telephonic notice promptly confirmed in writing) of its intent to prepay
Eurodollar Loans, the amount of such prepayment and the Types of Loans to be
prepaid and, in the case of Eurodollar Loans, the specific Borrowing or
Borrowings pursuant to which made, which notice the Administrative Agent
shall, except in the case of Swingline Loans, promptly transmit to each of
the Lenders; (ii) each partial prepayment of Revolving Loans pursuant to this
Section 4.01(a) shall be in an aggregate principal amount of at least
$1,000,000, and (z) each partial prepayment of Swingline Loans pursuant to
this Section 4.01(a) shall be in an aggregate principal amount of at least
$50,000, PROVIDED that if any partial prepayment of Eurodollar Loans made
pursuant to any Borrowing shall reduce the outstanding principal amount of
Eurodollar Loans made pursuant to such Borrowing to an amount less than the
Minimum Borrowing Amount applicable thereto, then such Borrowing may not be
continued as a
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Borrowing of Eurodollar Loans and any election of an Interest Period with
respect thereto given by the Borrower shall have no force or effect; and
(iii) each prepayment pursuant to this Section 4.01(a) in respect of any
Revolving Loans made pursuant to a Borrowing shall be applied PRO RATA among
the Lenders which made such Revolving Loans, provided that at the Borrower's
election in connection with any prepayment of Revolving Loans pursuant to
this Section 4.01(a), such prepayment shall not, so long no Default or Event
of Default then exists, be applied to any Revolving Loan of a Defaulting
Lender.
(b) In the event of a refusal by a Lender to consent to
certain proposed changes, waivers, discharges or terminations with respect to
this Agreement which have been approved by the Required Lenders as (and to
the extent) provided in Section 13.12(b), the Borrower may, upon five
Business Days' prior written notice to the Administrative Agent at the Notice
Office (which notice the Administrative Agent shall promptly transmit to each
of the Lenders) repay all Revolving Loans of, together with accrued and
unpaid interest, Fees and other amounts owing to, such Lender in accordance
with, and subject to the requirements of, said Section 13.12(b) so long as
(A) the entire Revolving Loan Commitment of such Lender is terminated
concurrently with such repayment pursuant to Section 3.02(b) (at which time
Schedule I shall be deemed modified to reflect the changed Revolving Loan
Commitments) and (B) the consents, if any, required under Section 13.12(b) in
connection with the repayment pursuant to this clause (b) have been obtained.
4.02 MANDATORY REPAYMENTS. (a) On any day on which the sum
of the aggregate outstanding principal amount of the Revolving Loans,
Swingline Loans and the Letter of Credit Outstandings exceeds the Total
Revolving Loan Commitment as then in effect, the Borrower shall prepay on
such day the principal of Swingline Loans and, after all Swingline Loans have
been repaid in full (if no Swingline Loans are outstanding), Revolving Loans
in an amount equal to such excess. If, after giving effect to the prepayment
of all outstanding Swingline Loans and Revolving Loans, the aggregate amount
of the Letter of Credit Outstandings exceeds the Total Revolving Loan
Commitment as then in effect, the Borrower shall pay to the Administrative
Agent at the Payment Office on such day an amount of cash and/or Cash
Equivalents equal to the amount of such excess (up to a maximum amount equal
to the Letter of Credit Outstandings at such time), such cash and/or Cash
Equivalents to be held as security for all obligations of the Borrower to the
Issuing Lender and the Lenders hereunder in a cash collateral account to be
established by the Administrative Agent.
(b) With respect to each repayment of Revolving Loans
required by this Section 4.02 (including repayments resulting from the
reduction of the Total Revolving Loan Commitment pursuant to Section 3.03),
the Borrower may designate the Types of Revolving Loans which are to be
repaid and, in the case of Eurodollar Loans, the specific Borrowing or
Borrowings pursuant to which made, PROVIDED that: (i) repayments of
Eurodollar Loans pursuant to this Section 4.02 may only be made on the last
day of an Interest Period applicable thereto unless all Eurodollar Loans with
Interest Periods ending on such date of required repayment and all Base Rate
Loans have been paid in full; (ii) if any repayment of Eurodollar Loans made
pursuant to a single Borrowing shall reduce the outstanding Eurodollar Loans
made pursuant to such Borrowing to an amount less than the Minimum Borrowing
Amount applicable thereto,
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such Borrowing shall be converted at the end of the then current Interest
Period into a Borrowing of Base Rate Loans; and (iii) each repayment of any
Revolving Loans made pursuant to a Borrowing shall be applied PRO RATA among
the Lenders which made such Revolving Loans. In the absence of a designation
by the Borrower as described in the preceding sentence, the Administrative
Agent shall, subject to the above, make such designation in its sole
discretion.
(c) Notwithstanding anything to the contrary contained in
this Agreement or in any other Credit Document, (i) all then outstanding
Revolving Loans shall be repaid in full on the Final Maturity Date, (ii) all
then outstanding Loans shall be repaid in full on the date on which a Change
of Control occurs (unless the Required Lenders otherwise agree in writing)
and (iii) all then outstanding Swingline Loans shall be repaid in full on the
Swingline Expiry Date.
4.03 METHOD AND PLACE OF PAYMENT. Except as otherwise
specifically provided herein, all payments under this Agreement or under any
Note shall be made to the Administrative Agent for the account of the Lender
or Lenders entitled thereto not later than 1:00 P.M. (New York time) on the
date when due and shall be made in Dollars in immediately available funds at
the Payment Office. Whenever any payment to be made hereunder or under any
Note shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.
4.04 NET PAYMENTS. (a) All payments made by the Borrower
hereunder or under any Note will be made without setoff, counterclaim or
other defense. Except as provided in Section 4.04(b), all such payments will
be made free and clear of, and without deduction or withholding for, any
present or future taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature now or hereafter imposed by any jurisdiction or by
any political subdivision or taxing authority thereof or therein with respect
to such payments (but excluding, except as provided in the second succeeding
sentence, any tax imposed on or measured by the net income or profits of a
Lender pursuant to the laws of the jurisdiction in which it is organized or
the jurisdiction in which the principal office or applicable lending office
of such Lender is located or, in each case, any subdivision thereof or
therein) and all interest, penalties or similar liabilities with respect to
such non-excluded taxes, levies, imposts, duties, fees, assessments or other
charges (all such non-excluded taxes, levies, imposts, duties, fees,
assessments or other charges being referred to collectively as "Taxes"). If
any Taxes are so levied or imposed, the Borrower agrees to pay the full
amount of such Taxes, and such additional amounts as may be necessary so that
every payment of all amounts due under this Agreement or under any Note,
after withholding or deduction for or on account of any Taxes, will not be
less than the amount provided for herein or in such Note. If any amounts are
payable in respect of Taxes pursuant to the preceding sentence, the Borrower
agrees to reimburse each Lender, upon the written request of such Lender, for
taxes imposed on or measured by the net income or profits of such Lender
pursuant to the laws of the jurisdiction in which such Lender is organized or
in which the principal office or applicable lending office of such Lender is
located or under the laws of any political subdivision or taxing authority of
any such jurisdiction in which such Lender is organized or in which the
principal office or applicable lending office of such Lender is located and
for any withholding of taxes as such Lender shall determine are payable by,
or withheld
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from, such Lender, in respect of such amounts so paid to or on behalf of such
Lender pursuant to the preceding sentence and in respect of any amounts paid
to or on behalf of such Lender pursuant to this sentence. The Borrower will
furnish to the Administrative Agent within 45 days after the date the payment
of any Taxes is due pursuant to applicable law certified copies of tax
receipts evidencing such payment by the Borrower. The Borrower agrees to
indemnify and hold harmless each Lender, and reimburse such Lender upon its
written request, for the amount of any Taxes so levied or imposed and paid by
such Lender.
(b) Each Lender that is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income
tax purposes agrees to deliver to the Borrower and the Administrative Agent
on or prior to the Effective Date, or in the case of a Lender that is an
assignee or transferee of an interest under this Agreement pursuant to
Section 1.13 or 13.04 (unless the respective Lender was already a Lender
hereunder immediately prior to such assignment or transfer), on the date of
such assignment or transfer to such Lender, (i) two accurate and complete
original signed copies of Internal Revenue Service Form 4224 or 1001 (or
successor forms) certifying to such Lender's entitlement to a complete
exemption from United States withholding tax with respect to payments to be
made under this Agreement and under any Note, or (ii) if the Lender is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code and cannot
deliver either Internal Revenue Service Form 1001 or 4224 (or successor
forms) pursuant to clause (i) above, (x) a certificate substantially in the
form of Exhibit D (any such certificate, a "Section 4.04(b)(ii) Certificate")
and (y) two accurate and complete original signed copies of Internal Revenue
Service Form W-8 (or successor form) certifying to such Lender's entitlement
to a complete exemption from United States withholding tax with respect to
payments of interest to be made under this Agreement and under any Note. In
addition, each Lender agrees that from time to time after the Effective Date,
when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, such Lender
will deliver to the Borrower and the Administrative Agent two new accurate
and complete original signed copies of Internal Revenue Service Form 4224 or
1001 (or successor forms), or Form W-8 (or successor form) and a Section
4.04(b)(ii) Certificate, as the case may be, and such other forms as may be
required in order to confirm or establish the entitlement of such Lender to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note, or such Lender shall
immediately notify the Borrower and the Administrative Agent of its inability
to deliver any such Form or Section 4.04(b)(ii) Certificate, in which case
such Lender shall not be required to deliver any such Form or Section
4.04(b)(ii) Certificate pursuant to this Section 4.04(b). Notwithstanding
anything to the contrary contained in Section 4.04(a), but subject to the
immediately succeeding sentence, (x) the Borrower shall be entitled, to the
extent it is required to do so by law, to deduct or withhold income or
similar taxes imposed by the United States (or any political subdivision or
taxing authority thereof or therein) from interest, Fees or other amounts
payable hereunder for the account of any Lender which is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) for U.S.
Federal income tax purposes to the extent that such Lender has not provided
to the Borrower U.S. Internal Revenue Service Forms that establish a complete
exemption from such deduction or withholding and (y) the Borrower shall not
be obligated pursuant to Section 4.04(a) hereof to gross-up payments to be
made to a Lender in respect of income or similar taxes imposed by the United
States if (I) such Lender has not provided to the
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Borrower the Internal Revenue Service Forms or the Section 4.04(b)(ii)
Certificate required to be provided to the Borrower pursuant to this Section
4.04(b) or (II) in the case of a payment, other than interest, to a Lender
described in clause (ii) above, to the extent that such Forms do not
establish a complete exemption from withholding of such taxes.
Notwithstanding anything to the contrary contained in the preceding sentence
or elsewhere in this Section 4.04, the Borrower agrees to pay any additional
amounts and to indemnify each Lender in the manner set forth in Section
4.04(a) (without regard to the identity of the jurisdiction requiring the
deduction or withholding) in respect of any Taxes deducted or withheld by it
as described in the immediately preceding sentence solely as a result of any
changes after the Effective Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof,
relating to the deducting or withholding of such Taxes.
(c) If the Borrower pays any additional amounts under this
Section 4.04 to a Lender and such Lender determines in its sole discretion
that it has actually received or realized in connection therewith any refund
or any reduction of, or credit against, its Tax liabilities in or with
respect to the taxable year in which the additional amount is paid (a "Tax
Benefit"), such Lender shall pay to the Borrower an amount that such Lender
shall, in its sole discretion, determine is equal to the net benefit, after
tax, which was obtained by such Lender in such year as a consequence of such
Tax Benefit; PROVIDED, HOWEVER, that (i) any Lender may determine, in its
sole discretion, whether to seek a Tax Benefit, (ii) any Taxes that are
imposed on a Lender as a result of a disallowance or reduction (including
through the expiration of any tax credit carryover or carryback of such
Lender that otherwise would not have expired) of any Tax Benefit with respect
to which such Lender has made a payment to the Borrower pursuant to this
Section 4.04(c) shall be treated as a Tax for which the Borrower is obligated
to indemnify such Lender pursuant to this Section 4.04 without any exclusions
or defenses and (iii) nothing in this Section 4.04(c) shall require any
Lender to disclose any confidential information to the Borrower (including,
without limitation, its tax returns).
(d) The provisions of this Section 4.04 are subject to the
provisions of Section 13.17 (to the extent applicable).
SECTION 5. CONDITIONS PRECEDENT TO THE EFFECTIVE DATE. The
occurrence of the Effective Date pursuant to Section 13.10 and the obligation
of each Lender to make Loans, and the obligation of the Issuing Lender to
issue Letters of Credit, on the Effective Date, is subject to the
satisfaction of the following conditions:
5.01 EXECUTION OF AGREEMENT; NOTES. On or prior to the
Effective Date, (i) this Agreement shall have been executed and delivered as
provided in Section 13.10 and (ii) there shall have been delivered to the
Administrative Agent for the account of each of the Lenders the appropriate
Revolving Note executed by the Borrower and to the Swingline Lender, the
Swingline Note executed by the Borrower, in each case, in the amount,
maturity and as otherwise provided herein.
5.02 OFFICER'S CERTIFICATE. On the Effective Date, the
Administrative Agent shall have received a certificate from each of Holdings,
WPIV and the Borrower, dated the Effective
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Date and signed on behalf of each such Credit Party by the Chairman of the
Board, the President or any Vice President of such Credit Party, stating on
behalf of such Credit Party that all of the conditions in Sections 5.08, 5.09
and 6.02 have been satisfied on such date.
5.03 OPINIONS OF COUNSEL. On the Effective Date, the
Administrative Agent shall have received (i) from Willkie Farr & Gallagher,
special counsel to the Credit Parties, an opinion addressed to the
Administrative Agent, the Collateral Agent and each of the Lenders and dated
the Effective Date covering the matters set forth in Exhibit E, and (ii)
opinions of local counsel to the Credit Parties, which opinions referred to
in clauses (i) and (ii) of this Section 5.03 shall be in form and substance
reasonably satisfactory to the Administrative Agent, the Documentation Agent
and the Required Lenders.
5.04 CORPORATE DOCUMENTS; PROCEEDINGS; ETC. (a) On the
Effective Date, the Administrative Agent shall have received a certificate
from each Credit Party, dated the Effective Date, signed by the Chairman of
the Board, the President or any Vice President of such Credit Party, and
attested to by the Secretary or any Assistant Secretary of such Credit Party,
in the form of Exhibit F with appropriate insertions, together with copies of
the certificate of incorporation (or equivalent organizational document) and
by-laws of such Credit Party and the resolutions of such Credit Party
referred to in such certificate, and the foregoing shall be in form and
substance reasonably acceptable to the Administrative Agent and the
Documentation Agent.
(b) All corporate and legal proceedings and all instruments
and agreements in connection with the transactions contemplated by this
Agreement and the other Credit Documents shall be reasonably satisfactory in
form and substance to the Administrative Agent, the Documentation Agent and
the Required Lenders, and the Administrative Agent shall have received all
information and copies of all documents and papers, including records of
corporate proceedings, governmental approvals, good standing certificates and
bring-down telegrams or facsimiles, if any, which the Administrative Agent
reasonably may have requested in connection therewith, such documents and
papers where appropriate to be certified by proper corporate or governmental
authorities.
5.05 PLANS; SHAREHOLDERS' AGREEMENTS; MANAGEMENT
AGREEMENTS; EMPLOYMENT AGREEMENTS; NON-COMPETE AGREEMENTS; COLLECTIVE
BARGAINING AGREEMENTS; TAX SHARING AGREEMENTS; EXISTING INDEBTEDNESS
AGREEMENTS. On or prior to the Effective Date, there shall have been
delivered or made available to the Administrative Agent true and correct
copies of the following documents:
(i) all Plans (and for each Plan that is required to file
an annual report on Internal Revenue Service Form 5500-series, a
copy of the most recent such report (including, to the extent
required, the related financial and actuarial statements and
opinions and other supporting statements, certifications, schedules
and information), and for each Plan that is a "single-employer
plan," as defined in Section 4001(a)(15) of ERISA, the most recently
prepared actuarial valuation therefor) and any other "employee
benefit plans," as defined in Section 3(3) of ERISA, and any other
material agreements, plans or arrangements, with or for the benefit
of current or former employees of Holdings
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or any of its Subsidiaries or any ERISA Affiliate (provided that the
foregoing shall apply in the case of any multiemployer plan, as
defined in 4001(a)(3) of ERISA, only to the extent that any document
described therein is in the possession of Holdings or any Subsidiary
of Holdings or any ERISA Affiliate or reasonably available thereto
from the sponsor or trustee of any such plan);
(ii) all collective bargaining agreements applying or
relating to any employee of Holdings or any of its Subsidiaries
(collectively, the "Collective Bargaining Agreements");
(iii) all agreements entered into by Holdings or any of its
Subsidiaries governing the terms and relative rights of its capital
stock and any agreements entered into by shareholders relating to
any such entity with respect to its capital stock (collectively, the
"Shareholders' Agreements");
(iv) all material agreements with members of, or with
respect to, the management of Holdings or any of its Subsidiaries
(collectively, the "Management Agreements");
(v) all material employment agreements entered into by
Holdings or any of its Subsidiaries (collectively, the "Employment
Agreements");
(vi) any non-compete agreement entered into by Holdings or
any of its Subsidiaries (collectively, the "Non-Compete Agreements");
(vii) all tax sharing, tax allocation and other similar
agreements entered into by Holdings or any of its Subsidiaries
(collectively, the "Tax Sharing Agreements"); and
(viii) all agreements evidencing or relating to
Indebtedness of Holdings or any of its Subsidiaries which is to
remain outstanding after giving effect to the Effective Date
(collectively, the "Existing Indebtedness Agreements");
all of which Plans, Collective Bargaining Agreements, Shareholders'
Agreements, Management Agreements, Employment Agreements, Non-Compete
Agreements, Tax Sharing Agreement and Existing Indebtedness Agreements shall
be in form and substance reasonably satisfactory to the Administrative Agent,
the Documentation Agent and the Required Lenders and shall be in full force
and effect on the Effective Date.
5.06 EXISTING INDEBTEDNESS; PREFERRED STOCK. On the
Effective Date, after giving effect to the Loans incurred on the Effective
Date, Holdings and its Subsidiaries shall have no outstanding Indebtedness or
preferred stock other than (i) the Obligations and (ii) such other
indebtedness, if any, permitted to remain outstanding pursuant to Section
9.04.
5.07 MARGIN REGULATIONS. On the Effective Date, all Loans
and other financing to the Borrower and its Subsidiaries under this Agreement
shall be in full compliance with all
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applicable requirements of Regulations T, U and X of the Board of Governors
of the Federal Reserve System.
5.08 ADVERSE CHANGE, ETC. (a) Since December 31, 1998,
nothing shall have occurred (and neither the Administrative Agent nor the
Documentation Agent nor the Lenders shall have become aware of any facts or
conditions not previously known) which the Administrative Agent, the
Documentation Agent or the Required Lenders shall reasonably determine (a)
has had, or could reasonably be expected to have, a material adverse effect
on the rights or remedies of the Lenders, the Documentation Agent or the
Administrative Agent, or on the ability of any Credit Party to perform its
obligations to them hereunder or under any other Credit Document or (b) has
had, or could reasonably be expected to have, a material adverse effect on
the entering into of the Credit Documents or on the business, operations,
financial condition or prospects of Holdings and its Subsidiaries taken as a
whole.
(b) On or prior to the Effective Date, all necessary
governmental (domestic and foreign) and material third party approvals and/or
consents in connection with the transactions contemplated by the Credit
Documents and otherwise referred to herein or therein shall have been
obtained and remain in effect, and all applicable waiting periods with
respect thereto shall have expired without any action being taken by any
competent authority which restrains, prevents or imposes materially adverse
conditions upon, the consummation of the transactions contemplated by the
Credit Documents or otherwise referred to herein or therein. Additionally,
there shall not exist any judgment, order, injunction or other restraint
issued or filed or a hearing seeking injunctive relief or other restraint
pending or notified prohibiting or imposing materially adverse conditions
upon, or materially delaying, or making economically unfeasible, the
consummation of the transactions contemplated by the Credit Documents or
otherwise required to herein or therein.
5.09 LITIGATION. Except as set forth on Schedule 5.09
hereof, on the Effective Date, there shall be no actions, suits or
proceedings pending or threatened (i) with respect to this Agreement or any
other Credit Document or (ii) which the Administrative Agent, the
Documentation Agent or the Required Lenders shall determine could reasonably
be expected to have a material adverse effect on (a) the entering into of the
Credit Documents or on the business, operations, financial condition or
prospects of Holdings and its Subsidiaries taken as a whole, (b) the rights
or remedies of the Lenders, the Documentation Agent or the Administrative
Agent hereunder or under any other Credit Document or (c) the ability of any
Credit Party to perform its respective obligations to the Lenders, the
Documentation Agent or the Administrative Agent hereunder or under any other
Credit Document.
5.10 PLEDGE AGREEMENT. On the Effective Date, each Credit
Party shall have duly authorized, executed and delivered the Pledge Agreement
in the form of Exhibit G (as amended, modified or supplemented from time to
time, the "Pledge Agreement") and shall have delivered to the Collateral
Agent, as pledgee thereunder, all of the Pledged Securities, if any, referred
to therein and owned by such Credit Party, (x) endorsed in blank in the case
of promissory notes constituting Pledged Securities and (y) together with
executed and undated stock powers in the case of capital stock constituting
Pledged Securities.
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5.11 SECURITY AGREEMENT. On the Effective Date, each Credit
Party shall have duly authorized, executed and delivered the Security
Agreement in the form of Exhibit H (as modified, supplemented or amended from
time to time, the "Security Agreement") covering all of such Credit Party's
present and future Security Agreement Collateral, together with:
(i) proper Financing Statements (Form UCC-1 or the
equivalent) fully executed for filing under the UCC or other
appropriate filing offices of each jurisdiction as may be necessary
or, in the reasonable opinion of the Collateral Agent, desirable to
perfect the security interests purported to be created by the
Security Agreement;
(ii) certified copies of Requests for Information or Copies
(Form UCC-11), or equivalent reports, listing all effective
financing statements that name any Credit Party or any of its
Subsidiaries as debtor and that are filed in the jurisdictions
referred to in clause (i) above, together with copies of such other
financing statements that name any Credit Party or any of its
Subsidiaries as debtor (none of which shall cover the Collateral
except to the extent evidencing Permitted Liens or in respect of
which the Collateral Agent shall have received termination
statements (Form UCC-3 or the equivalent) as shall be required by
local law fully executed for filing);
(iii) evidence of the completion of all other recordings
and filings of, or with respect to, the Security Agreement as may be
necessary to perfect the security interests intended to be created
by the Security Agreement; and
(iv) evidence that all other actions necessary to perfect
and protect the security interests purported to be created by the
Security Agreement have been taken.
5.12 SUBSIDIARIES GUARANTY. On the Effective Date, each
Subsidiary Guarantor, if any, shall have duly authorized, executed and
delivered the Subsidiaries Guaranty in the form of Exhibit I (as amended,
modified or supplemented from time to time, the "Subsidiaries Guaranty").
5.13 FINANCIAL STATEMENTS; PRO FORMA FINANCIAL STATEMENTS,
PROJECTIONS. On or prior to the Effective Date, the Administrative Agent
shall have received true and correct copies of the historical financial
statements, the PRO FORMA financial statements and the Projections referred
to in Sections 7.05(a) and (d).
5.14 SOLVENCY CERTIFICATE; INSURANCE CERTIFICATES. On or
prior to the Effective Date, the Administrative Agent shall have received:
(i) a solvency certificate from the Chief Financial Officer
of Holdings in the form of Exhibit J (as amended, modified or
supplemented from time to time, the "Solvency Certificate"), which
solvency certificate shall be in form and substance reasonably
satisfactory to the Administrative Agent, the Documentation Agent
and the Required Lenders and shall set forth the conclusions that,
after giving effect to the entering into of the Credit Documents,
Holdings and its Subsidiaries taken as a whole is not insolvent,
will not be rendered insolvent by the indebtedness incurred in
connection therewith, will
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not be left with unreasonably small capital with which to engage in
their business and will not have incurred debts beyond their ability
to pay debts as they mature; and
(ii) certificates of insurance complying with the
requirements of Section 8.03 for the business and properties of
Holdings and its Subsidiaries, in form and substance reasonably
satisfactory to the Administrative Agent and naming the Collateral
Agent as an additional insured and as loss payee, and stating that
such insurance shall not be cancelled without at least 30 days prior
written notice by the insurer to the Collateral Agent (or such
shorter period of time as a particular insurance company generally
provides).
5.15 FEES, ETC. On the Effective Date, the Borrower shall
have paid to the Administrative Agent, the Documentation Agent and/or the
Lenders all costs, fees and expenses (including, without limitation,
reasonable legal fees and expenses) payable to the Administrative Agent, the
Documentation Agent and/or the Lenders to the extent then due.
SECTION 6. CONDITIONS PRECEDENT TO ALL CREDIT EVENTS. The
obligation of each Lender to make Loans (including any Loans made on the
Effective Date), and the obligation of the Issuing Lender to issue Letters of
Credit, is subject, at the time of each such Credit Event (except as
hereinafter indicated), to the satisfaction of the following conditions:
6.01 EFFECTIVE DATE. The Effective Date shall have
occurred.
6.02 NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the
time of each such Credit Event and also after giving effect thereto (i) there
shall exist no Default or Event of Default and (ii) all representations and
warranties contained herein and in the other Credit Documents shall be true
and correct in all material respects with the same effect as though such
representations and warranties had been made on the date of such Credit Event
(it being understood and agreed that any representation or warranty which by
its terms is made as of a specified date shall be required to be true and
correct in all material respects only as of such specified date).
6.03 NOTICE OF BORROWING; LETTER OF CREDIT REQUEST. (a)
Prior to the making of each Revolving Loan (other than a Revolving Loan made
pursuant to a Mandatory Borrowing), the Administrative Agent shall have
received a Notice of Borrowing meeting the requirements of Section 1.03(a).
Prior to the making of each Swingline Loan, the Swingline Lender shall have
received the notice referred to in Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the Issuing Lender shall have received a Letter of
Credit Request meeting the requirements of Section 2.03.
The occurrence of the Effective Date and the acceptance of
the benefits of each Credit Event shall constitute a representation and
warranty by Holdings, WPIV and the Borrower to the Administrative Agent and
each of the Lenders that all the conditions specified in Section 5 (with
respect to the occurrence of the Effective Date and Credit Events on the
Effective Date)
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and in this Section 6 (with respect to the occurrence of the Effective Date
and Credit Events on or after the Effective Date) and applicable to such
Credit Event exist as of that time. All of the Notes, certificates, legal
opinions and other documents and papers referred to in Section 5 and in this
Section 6, unless otherwise specified, shall be delivered to the
Administrative Agent at the Notice Office for the account of each of the
Lenders and, except for the Notes, in sufficient counterparts or copies for
each of the Lenders and shall be in form and substance reasonably
satisfactory to the Administrative Agent and the Required Lenders.
SECTION 7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. In
order to induce the Lenders to enter into this Agreement and to make the
Loans, and issue (or participate in) the Letters of Credit as provided
herein, each of the Parent Guarantors and the Borrower makes the following
representations, warranties and agreements, in each case after giving effect
to the entering into of the Credit Documents, all of which shall survive the
execution and delivery of this Agreement and the Notes and the making of the
Loans and issuance of the Letters of Credit, and with the occurrence of the
Effective Date and each other Credit Event on or after the Effective Date
being deemed to constitute a representation and warranty that the matters
specified in this Section 7 are true and correct in all material respects on
and as of the Effective Date and on the date of each such other Credit Event
(it being understood and agreed that any representation or warranty which by
its terms is made as of a specified date shall be required to be true and
correct in all material respects only as of such specified date).
7.01 COMPANY STATUS. Each Credit Party and each of its
Subsidiaries (i) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (ii) has the Company
power and authority to own its property and assets and to transact the
business in which it is engaged and presently proposes to engage and (iii) is
duly qualified and is authorized to do business and is in good standing in
each jurisdiction where the ownership, leasing or operation of its property
or the conduct of its business requires such qualifications except for
failures to be so qualified which, individually or in the aggregate, could
not reasonably be expected to have a material adverse effect on the business,
operations or financial condition of Holdings and its Subsidiaries taken as a
whole.
7.02 COMPANY AND OTHER POWER AND AUTHORITY. Each Credit
Party has the Company power and authority to execute, deliver and perform the
terms and provisions of each of the Credit Documents to which it is party and
has taken all necessary corporate action to authorize the execution, delivery
and performance by it of each of such Credit Documents. Each Credit Party has
duly executed and delivered each of the Credit Documents to which it is
party, and each of such Credit Documents constitutes its legal, valid and
binding obligation enforceable in accordance with its terms, except to the
extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
generally affecting creditors' rights and by equitable principles (regardless
of whether enforcement is sought in equity or at law).
7.03 NO VIOLATION. Neither the execution, delivery or
performance by any Credit Party of the Credit Documents to which it is a
party, nor compliance by it with the terms and provisions thereof, (i) will
contravene any provision of any law, statute, rule or regulation or any
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order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict with or result in any breach of any of
the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien (except pursuant to the Security Documents) upon
any of the property or assets of Holdings or any of its Subsidiaries pursuant
to the terms of any indenture, mortgage, deed of trust, credit agreement or
loan agreement, or any other material agreement, contract or instrument, to
which Holdings or any of its Subsidiaries is a party or by which it or any of
its property or assets is bound or to which it may be subject or (iii) will
violate any provision of the certificate of incorporation or by-laws (or
equivalent organizational documents) of Holdings or any of its Subsidiaries.
7.04 APPROVALS. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except for those that have otherwise been obtained or made on or prior to
the Effective Date and which remain in full force and effect on the Effective
Date), or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with, (i) the execution, delivery and performance of any Credit Document or
(ii) the legality, validity, binding effect or enforceability of any such
Credit Document.
7.05 FINANCIAL STATEMENTS; FINANCIAL CONDITION; UNDISCLOSED
LIABILITIES; PROJECTIONS; ETC. (a) The consolidated balance sheets of
Holdings and its Subsidiaries for the fiscal year and fiscal quarter ended on
December 31, 1998 and June 30, 1999, respectively and the related
consolidated statements of income, cash flows and shareholders' equity of
Holdings and its Subsidiaries for the fiscal year or fiscal quarter, as the
case may be, ended on such dates, copies of which have been furnished to the
Lenders prior to the Effective Date, present fairly in all material respects
the consolidated financial position of Holdings and its Subsidiaries at the
date of such balance sheets and the consolidated results of the operations of
Holdings and its Subsidiaries for the periods covered thereby. All of the
foregoing historical financial statements have been prepared in accordance
with generally accepted accounting principles consistently applied except as
disclosed in the notes thereto. The PRO FORMA consolidated financial
statements of Holdings and its Subsidiaries as of December 31, 1998, after
giving effect to the entering into of the Credit Documents and the financing
therefor, copies of which have been furnished to the Lenders prior to the
Effective Date, present fairly in all material respects the PRO FORMA
consolidated financial position of Holdings and its Subsidiaries as of
December 31, 1998 and the PRO FORMA consolidated results of operations of
Holdings and its Subsidiaries for the fiscal year ended December 31, 1998.
After giving effect to the entering into of the Credit Documents, since
December 31, 1998, nothing shall have occurred that has had, or could
reasonably be expected to have, a material adverse effect on the business,
operations or financial condition of Holdings and its Subsidiaries taken as a
whole.
(b) On and as of the Effective Date and after giving effect
to the entering into of the Credit Documents and to all Indebtedness
(including any Loans) being incurred or assumed and Liens created by the
Credit Parties in connection therewith (a) the sum of the assets, at a fair
valuation, of Holdings and its Subsidiaries taken as a whole will exceed its
debts; (b) Holdings and its Subsidiaries taken as a whole has not incurred
and does not intend to incur, and
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does not believe that it will incur, debts beyond its ability to pay such
debts as such debts mature; and (c) Holdings and its Subsidiaries taken as a
whole will have sufficient capital with which to conduct its business. For
purposes of this Section 7.05(b), "debt" means any liability on a claim, and
"claim" means (i) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured or (ii) right
to an equitable remedy for breach of performance if such breach gives rise to
a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed,
secured or unsecured. The amount of contingent liabilities at any time shall
be computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
(c) Except as fully disclosed in the financial statements
delivered pursuant to Section 7.05(a) and as set forth on Schedule 7.05(c)
hereof, there were as of the Effective Date no liabilities or obligations
with respect to Holdings or any of its Subsidiaries of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether or not due)
which, either individually or in aggregate, could reasonably be expected to
be material to Holdings and its Subsidiaries taken as a whole. As of the
Effective Date, neither Holdings, nor WPIV nor the Borrower knows of any
basis for the assertion against it or any of its Subsidiaries of any
liability or obligation of any nature whatsoever that is not fully disclosed
in the financial statements delivered pursuant to Section 7.05(a) which,
either individually or in the aggregate, could reasonably be expected to be
material to Holdings and its Subsidiaries taken as a whole.
(d) On and as of the Effective Date, the Projections
delivered to the Administrative Agent and the Lenders prior to the Effective
Date have been prepared in good faith and are based on reasonable
assumptions, and there are no statements or conclusions in the Projections
which are based upon or include information known to Holdings, WPIV or the
Borrower to be misleading in any material respect or which fail to take into
account material information known to Holdings, WPIV or the Borrower
regarding the matters reported therein. On the Effective Date, Holdings, WPIV
and the Borrower believe that the Projections are reasonable, it being
recognized by the Lenders, however, that projections as to future events are
not to be viewed as facts and that the actual results during the period or
periods covered by the Projections may differ from the projected results and
that the differences may be material.
7.06 LITIGATION. There are no actions, suits or proceedings
pending or, to the best knowledge of Holdings, WPIV and the Borrower,
threatened (i) with respect to the Credit Documents or (ii) that are
reasonably likely to materially and adversely affect the business, operations
or financial condition of Holdings and its Subsidiaries taken as a whole.
7.07 TRUE AND COMPLETE DISCLOSURE. All factual information
(taken as a whole) furnished by or on behalf of any Credit Party in writing
to the Administrative Agent or any Lender (including, without limitation, all
information contained in the Credit Documents) for purposes of or in
connection with this Agreement, the other Credit Documents or any transaction
contemplated herein or therein is, and all other such factual information
(taken as a whole) hereafter furnished by or on behalf of any Credit Party in
writing to the Administrative Agent or
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any Lender will be, true and accurate in all material respects on the date as
of which such information is dated or certified and not incomplete by
omitting to state any fact necessary to make such information (taken as a
whole) not misleading in any material respect at such time in light of the
circumstances under which such information was provided.
7.08 USE OF PROCEEDS; MARGIN REGULATIONS. (a) All proceeds
of the Loans shall be used for the working capital and general corporate
purposes of the Borrower and its Subsidiaries and to pay fees and expenses
incurred in connection with the Credit Documents.
(b) No part of any Credit Event (or the proceeds thereof)
will be used to purchase or carry any Margin Stock or to extend credit for
the purpose of purchasing or carrying any Margin Stock. Neither the making of
any Loan nor the use of the proceeds thereof nor the occurrence of any other
Credit Event will violate or be inconsistent with the provisions of
Regulation T, U or X of the Board of Governors of the Federal Reserve System.
7.09 TAX RETURNS AND PAYMENTS. Each of Holdings and each of
its Subsidiaries has filed, or received extensions for, all federal and state
income tax returns and all other material tax returns, domestic and foreign,
required to be filed by it and has paid all federal and state income taxes
and all other material taxes and assessments payable by it which have become
due, except for those contested in good faith and fully provided for on the
financial statements of Holdings and its Subsidiaries in accordance with
generally accepted accounting principles. Holdings and each of its
Subsidiaries have at all times paid, or have provided adequate reserves (in
the good faith judgment of the management of Holdings) for the payment of,
all federal, state and material local and foreign income taxes applicable for
all prior fiscal years and for the current fiscal year to date. Except as
disclosed on Schedule X, there is no material action, suit, proceeding,
investigation, audit or claim now pending or, to the best knowledge of
Holdings, WPIV and the Borrower threatened, by any authority regarding any
taxes relating to Holdings or any of its Subsidiaries. As of the Effective
Date, neither Holdings nor any of its Subsidiaries has entered into an
agreement or waiver or been requested to enter into an agreement or waiver
extending any statute of limitations relating to the payment or collection of
taxes of Holdings or any of its Subsidiaries, or is aware of any
circumstances that would cause the taxable years or other taxable periods of
Holdings or any of its Subsidiaries not to be subject to the normally
applicable statute of limitations.
7.10 COMPLIANCE WITH ERISA. Schedule IV sets forth, as of
the Effective Date, each Plan; except to the extent that failure of any of
the following statements to be true, would not, individually or in the
aggregate, have a material and adverse effect on the business, operations or
financial condition of Holdings and its Subsidiaries taken as a whole: each
Plan (and each related trust, insurance contract or fund) is in substantial
compliance with its terms and with all applicable laws, including, without
limitation, ERISA and the Code; each Plan (and each related trust, if any)
which is intended to be qualified under Section 401(a) of the Code has
received a determination letter from the Internal Revenue Service to the
effect that it meets the requirements of Sections 401(a) and 501(a) of the
Code or application for such determination has been made; no Reportable Event
has occurred; no Plan which is a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) is insolvent or in reorganization; no Plan has an
Unfunded
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Current Liability; no Plan which is subject to Section 412 of the Code or
Section 302 of ERISA has an accumulated funding deficiency, within the
meaning of such sections of the Code or ERISA, or has applied for or received
a waiver of an accumulated funding deficiency or an extension of any
amortization period, within the meaning of Section 412 of the Code or Section
303 or 304 of ERISA; all contributions required to be made with respect to a
Plan have been timely made except as would not result in any material
liability; neither Holdings nor any Subsidiary of Holdings nor any ERISA
Affiliate has incurred any material liability (including any indirect,
contingent or secondary liability) to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212
of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or expects to incur
any such material liability under any of the foregoing sections with respect
to any Plan; no condition exists which presents a material risk to Holdings
or any Subsidiary of Holdings or any ERISA Affiliate of incurring a material
liability to or on account of a Plan pursuant to the foregoing provisions of
ERISA and the Code; no proceedings have been instituted to terminate or
appoint a trustee to administer any Plan which is subject to Title IV of
ERISA; no action, suit, proceeding, hearing, audit or investigation with
respect to the administration, operation or the investment of assets of any
Plan (other than routine claims for benefits) is pending, or to the knowledge
of Holdings and its Subsidiaries, expected or threatened; using actuarial
assumptions and computation methods consistent with Part 1 of subtitle E of
Title IV of ERISA, the aggregate liabilities of Holdings and its Subsidiaries
and its ERISA Affiliates to all Plans which are multiemployer plans (as
defined in Section 4001(a)(3) of ERISA) in the event of a complete withdrawal
therefrom, as of the close of the most recent fiscal year of each such Plan
ended prior to the date of the most recent Credit Event, would not exceed
$50,000; each group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) which covers or has covered employees or
former employees of Holdings, any Subsidiary of Holdings or any ERISA
Affiliate has at all times been operated in material compliance with the
provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of
the Code; no lien imposed under the Code or ERISA on the assets of Holdings
or any Subsidiary of Holdings or any ERISA Affiliate exists or is likely to
arise on account of any Plan; and Holdings and its Subsidiaries may cease
contributions to or terminate any employee benefit plan maintained by any of
them without incurring any material liability.
7.11 THE SECURITY DOCUMENTS. (a) The provisions of the
Security Agreement are effective to create in favor of the Collateral Agent
for the benefit of the Secured Creditors a legal, valid and enforceable
security interest in all right, title and interest of the Credit Parties in
the Security Agreement Collateral described therein to the extent that a
security interest can be created therein under the UCC, and the Collateral
Agent, for the benefit of the Secured Creditors, has a fully perfected first
lien on, and security interest in, all right, title and interest of the
Credit Parties in all of the Security Agreement Collateral described therein
(to the extent such security interest can be perfected by filing a UCC-1
financing statement or, to the extent required by the Security Agreement, by
taking possession of the respective Security Agreement Collateral), subject
to no other Liens other than Permitted Liens. In addition, the recordation of
the Grant of Security Interest in U.S. Patents and Trademarks in the form
attached to the Security Agreement in the United States Patent and Trademark
Office, together with filings on Form UCC-1 made pursuant to the Security
Agreement, will create, as may be perfected by such filing and recordation, a
perfected security interest in the United States trademarks and patents
covered by
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the Security Agreement and specifically identified in such Grant and the
recordation of the Grant of Security Interest in U.S. Copyrights in the form
attached to the Security Agreement with the United States Copyright Office,
together with filings on Form UCC-1 made pursuant to the Security Agreement,
will create, as may be perfected by such filing and recordation, a perfected
security interest in the United States copyrights covered by the Security
Agreement and specifically identified in such Grant.
(b) The security interests created in favor of the
Collateral Agent, as pledgee, for the benefit of the Secured Creditors, under
the Pledge Agreement constitute first priority perfected security interests
in the Pledge Agreement Collateral described therein, subject to no security
interests of any other Person, except Permitted Liens. No filings or
recordings (other than those made pursuant to the Security Agreement) are
required to perfect (or maintain the perfection or priority of) the security
interests created in the Pledge Agreement Collateral.
(c) After the execution and delivery thereof pursuant to
Section 8.11, the Mortgages create, for the obligations purported to be
secured thereby, a valid and enforceable perfected security interest in and
mortgage lien on all of the Mortgaged Properties in favor of the Collateral
Agent (or such other trustee as may be required or desired under local law)
for the benefit of the Secured Creditors, superior to and prior to the rights
of all third persons (except that the security interest and mortgage lien
created in the Mortgaged Properties may be subject to the Permitted
Encumbrances related thereto and other Permitted Liens) and subject to no
other Liens (other than Permitted Liens). Schedule III contains a true and
complete list of each parcel of Real Property owned or leased by Holdings and
its Subsidiaries on the Effective Date, and the type of interest therein held
by Holdings or such Subsidiary. Holdings and each of its Subsidiaries have
good and marketable title to all fee-owned Real Property and valid leasehold
title to all Leaseholds, in each case free and clear of all Liens except
those described in the first sentence of this subsection (c).
7.12 PROPERTIES. Holdings and each of its Subsidiaries have
good and marketable title to all material properties owned by them, including
all property reflected in the balance sheets referred to in Section 7.05(a)
(except as sold or otherwise disposed of since the date of such balance sheet
in the ordinary course of business or as permitted by the terms of this
Agreement), free and clear of all Liens, other than Permitted Liens.
7.13 CAPITALIZATION. On the Effective Date and after giving
effect to the entering into of the Credit Documents and the other
transactions contemplated hereby, 100% of the membership interest of the
Borrower shall be owned by Holdings and WPIV. All outstanding membership
interests of the Borrower have been duly and validly issued, are fully paid
and nonassessable. The Borrower does not have outstanding any securities
convertible into or exchangeable for its membership interests or outstanding
any rights to subscribe for or to purchase, or any options for the purchase
of, or any agreement providing for the issuance (contingent or otherwise) of,
or any calls, commitments or claims of any character relating to, its
membership interests.
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7.14 SUBSIDIARIES. As of the Effective Date, Holdings has no
Subsidiaries other than WPIV, the Borrower and its Subsidiaries and the
Borrower has no Subsidiaries other than those Subsidiaries listed on Schedule
V. Schedule V correctly sets forth, as of the Effective Date, the percentage
ownership (direct or indirect) of Holdings in each class of capital stock or
other equity of each of its Subsidiaries and also identifies the direct owner
thereof.
7.15 COMPLIANCE WITH STATUTES, ETC. Each of Holdings and each of its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and
the ownership of its property (including applicable statutes, regulations,
orders and restrictions relating to environmental standards and controls),
except such noncompliances as could not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the business,
operations or financial condition of Holdings and its Subsidiaries taken as a
whole.
7.16 INVESTMENT COMPANY ACT. Neither Holdings nor 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.
7.17 PUBLIC UTILITY HOLDING COMPANY ACT. Neither Holdings nor any of its
Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
7.18 ENVIRONMENTAL MATTERS. (a) Holdings and each of its Subsidiaries
have complied with, and on the date of each Credit Event are in compliance
with, all applicable Environmental Laws and the requirements of any permits
issued under such Environmental Laws. There are no pending or, to the
knowledge of Holdings, WPIV and the Borrower, threatened Environmental Claims
against Holdings or any of its Subsidiaries (including any such claim arising
out of the ownership, lease or operation by Holdings or any of its
Subsidiaries of any Real Property no longer owned, leased or operated by
Holdings or any of its Subsidiaries) or any Real Property owned, leased or
operated by Holdings or any of its Subsidiaries. There are no facts,
circumstances, conditions or occurrences with respect to the business or
operations of Holdings or any of its Subsidiaries, or any Real Property
owned, leased or operated by Holdings or any of its Subsidiaries (including
any Real Property formerly owned, leased or operated by Holdings or any of
its Subsidiaries but no longer owned, leased or operated by Holdings or any
of its Subsidiaries) or, to the knowledge of Holdings, WPIV or the Borrower,
any property adjoining or adjacent to any such Real Property, that could
reasonably be expected (i) to form the basis of an Environmental Claim
against Holdings or any of its Subsidiaries or any Real Property owned,
leased or operated by Holdings or any of its Subsidiaries or (ii) to cause
any Real Property owned, leased or operated by Holdings or any of its
Subsidiaries to be subject to any restrictions on the ownership, occupancy or
transferability of such Real Property by Holdings or any of its Subsidiaries
under any applicable Environmental Law.
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(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any Real Property owned,
leased or operated by Holdings or any of its Subsidiaries where such
generation, use, treatment, storage or transportation has violated or has
given rise to an Environmental Claim under, or could reasonably be expected
to violate or give rise to an Environmental Claim under, any Environmental
Law. Hazardous Materials have not at any time been Released or disposed of on
or from any Real Property owned, leased or operated by Holdings or any of its
Subsidiaries where such Release or disposal has violated or given rise to an
Environmental Claim under, or could reasonably be expected to violate or give
rise to an Environmental Claim under, any applicable Environmental Law.
(c) Notwithstanding anything to the contrary in this Section 7.18, the
representations and warranties made in this Section 7.18 shall not be untrue
unless the effect of any or all violations, claims, restrictions, failures
and noncompliances of the types described above in this Section 7.18 could
reasonably be expected to, either individually or in the aggregate, have a
material adverse effect on the business, operations or financial condition of
Holdings and its Subsidiaries taken as a whole.
7.19 LABOR RELATIONS. Neither Holdings nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to
have a material adverse effect on Holdings and its Subsidiaries taken as a
whole. There is (i) no unfair labor practice complaint pending against
Holdings or any of its Subsidiaries or, to the knowledge of Holdings or the
Borrower, threatened against any of them, before the National Labor Relations
Board, and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against Holdings or any of its
Subsidiaries or, to the knowledge of Holdings, WPIV and the Borrower,
threatened against any of them, (ii) no strike, labor dispute, slowdown or
stoppage pending against Holdings or any of its Subsidiaries or, to the
knowledge of Holdings, WPIV and the Borrower, threatened against Holdings or
any of its Subsidiaries and (iii) no union representation question exists
with respect to the employees of Holdings or any of its Subsidiaries, except
(with respect to any matter specified in clause (i), (ii) or (iii) above,
either individually or in the aggregate) such as could not reasonably be
expected to have a material adverse effect on the business, operations or
financial condition of Holdings and its Subsidiaries taken as a whole.
7.20 PATENTS, LICENSES, FRANCHISES AND FORMULAS. Each of Holdings and
each of its Subsidiaries owns or has the right to use all the patents,
trademarks, permits, service marks, trade names, copyrights, licenses,
franchises, proprietary information (including but not limited to rights in
computer programs and databases) and formulas, or rights with respect to the
foregoing, and has obtained assignments of all leases and other rights of
whatever nature, necessary for the present conduct of its business, without
any known conflict with the rights of others which, or the failure to obtain
which, as the case may be, could reasonably be expected to result in a
material adverse effect on the business, operations or financial condition of
Holdings and its Subsidiaries taken as a whole.
7.21 INDEBTEDNESS. Schedule VI sets forth a true and complete list of
all Indebtedness (including Contingent Obligations) of Holdings and its
Subsidiaries as of the
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Effective Date and which is to remain outstanding after giving effect to the
entering into of the Credit Documents (excluding the Loans and the Letters of
Credit, the "Existing Indebtedness"), in each case showing the aggregate
principal amount thereof and the name of the respective borrower and any
Credit Party or any of its Subsidiaries which directly or indirectly
guarantees such debt.
7.22 SPECIAL PURPOSE CORPORATION. Each of the Parent Guarantors has no
significant assets (other than the capital stock of the Borrower) or material
liabilities (other than those liabilities under this Agreement, the other
Credit Documents to which it is a party and as otherwise permitted by Section
9.13(b)).
7.23 INSURANCE. Schedule VII sets forth a true and complete listing of
all insurance maintained by Holdings and its Subsidiaries as of the Effective
Date, and with the amounts insured (and any deductibles) set forth therein.
SECTION 8. AFFIRMATIVE COVENANTS. Each of the Parent Guarantors and the
Borrower hereby covenants and agrees that on and after the Effective Date and
until the Total Revolving Loan Commitment and all Letters of Credit have
terminated and the Loans, Notes and Unpaid Drawings, together with interest,
Fees and all other Obligations (other than indemnities described in Section
13.13 which are not then due and payable) incurred hereunder and thereunder,
are paid in full:
8.01 INFORMATION COVENANTS. Holdings will furnish to each Lender:
(a) QUARTERLY FINANCIAL STATEMENTS. Within 45 days after the close of the
first three quarterly accounting periods in each fiscal year of Holdings,
the consolidated balance sheet of Holdings and its Subsidiaries as at the
end of such quarterly accounting period and the related consolidated
statements of income, shareholders' equity and statement of cash flows for
such quarterly accounting period and for the elapsed portion of the fiscal
year ended with the last day of such quarterly accounting period, in each
case setting forth comparative figures for the related periods in the prior
fiscal year, all of which shall be certified by the Chief Financial Officer
of Holdings, subject to normal year-end audit adjustments and the absence of
footnotes.
(b) ANNUAL FINANCIAL STATEMENTS. Within 90 days after the close of each
fiscal year of Holdings, (i) the consolidated balance sheet of Holdings and
its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income, shareholders' equity and statement of
cash flows for such fiscal year setting forth comparative figures for the
preceding fiscal year and certified by Ernst & Young LLP or such other
independent certified public accountants of recognized national standing
reasonably acceptable to the Administrative Agent, together with (but only
to the extent being provided generally by such accountants to their clients)
a report of such accounting firm stating that in the course of its regular
audit of the financial statements of Holdings and its Subsidiaries, which
audit was conducted in accordance with generally accepted auditing
standards, such accounting firm obtained no knowledge of any Default or an
Event of Default relating to accounting matters which has occurred and is
continuing or,
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if in the opinion of such accounting firm such a Default or Event of Default
has occurred and is continuing, a statement as to the nature thereof and
(ii) management's discussion and analysis of the material operational and
financial developments during such fiscal year (it being understood that, to
the extent such management's discussion and analysis is included in any
report on Form 10-K that is filed with the SEC in respect of such fiscal
year and such report is delivered to the Lenders pursuant to this Agreement,
no separate management discussion and analysis shall be required to be
delivered in respect of such fiscal year).
(c) MANAGEMENT LETTERS. Promptly after Holdings' or any of its
Subsidiaries' receipt thereof, a copy of any "management letter" received
from its certified public accountants and management's response thereto.
(d) BUDGETS. No later than 30 days following the first day of each fiscal
year of Holdings, a budget in form reasonably satisfactory to the
Administrative Agent (including budgeted statements of income and sources
and uses of cash and balance sheets) prepared by Holdings for each of the
twelve months of such fiscal year prepared in substantially the same detail
as the Projections.
(e) OFFICER'S CERTIFICATES. At the time of the delivery of the
financial statements provided for in Sections 8.01(a) and (b), a
certificate of the Chief Financial Officer of Holdings to the effect
that, to the best of such officer's knowledge, no Default or Event of
Default has occurred and is continuing or, if any Default or Event of
Default has occurred and is continuing, specifying the nature and
extent thereof, which certificate shall set forth in reasonable detail
the calculations required to establish whether Holdings and its
Subsidiaries were in compliance with the provisions of Sections
3.03(c), 3.03(d), 9.04 and 9.07 through 9.09, inclusive, at the end of
such fiscal quarter or year, as the case may be.
(f) NOTICE OF DEFAULT OR LITIGATION. Promptly upon, and in any
event within five Business Days after, any senior or executive officer
of any Credit Party obtains knowledge thereof, notice of (i) the
occurrence of any event which constitutes a Default or an Event of
Default and (ii) any litigation or governmental investigation or
proceeding pending (x) against Holdings or any of its Subsidiaries
which could reasonably be expected to materially and adversely affect
the business, operations or financial condition of Holdings and its
Subsidiaries taken as a whole, (y) with respect to any material
Indebtedness of Holdings or any of its Subsidiaries or (z) with respect
to the Credit Documents.
(g) OTHER REPORTS AND FILINGS. Promptly after the filing or
delivery thereof, copies of all financial information, proxy materials
and reports, if any, which Holdings or any of its Subsidiaries shall
publicly file with the Securities and Exchange Commission or any
successor thereto (the "SEC") or deliver to holders of its material
Indebtedness pursuant to the terms of the documentation governing such
Indebtedness (or any trustee, agent or other representative therefor).
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(h) ENVIRONMENTAL MATTERS. Promptly after any senior or
executive officer of any Credit Party obtains knowledge thereof, notice
of one or more of the following environmental matters, unless such
environmental matters could not, individually or when aggregated with
all other such environmental matters, be reasonably expected to
materially and adversely affect the business, operations or financial
condition of Holdings and its Subsidiaries taken as a whole:
(i) any pending or threatened Environmental Claim against Holdings
or any of its Subsidiaries or any Real Property owned, leased or operated
by Holdings or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from any Real Property
owned, leased or operated by Holdings or any of its Subsidiaries that
(a) results in noncompliance by Holdings or any of its Subsidiaries with
any applicable Environmental Law or (b) could reasonably be expected to
form the basis of an Environmental Claim against Holdings or any of its
Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property owned, leased
or operated by Holdings or any of its Subsidiaries that could reasonably
be expected to cause such Real Property to be subject to any restrictions
on the ownership, occupancy, use or transferability by Holdings or any of
its Subsidiaries of such Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in response to the
actual or alleged presence of any Hazardous Material on any Real Property
owned, leased or operated by Holdings or any of its Subsidiaries as
required by any Environmental Law or any governmental or other
administrative agency; PROVIDED, that in any event Holdings shall deliver
to each Lender all notices received by Holdings or any of its Subsidiaries
from any government or governmental agency under, or pursuant to, CERCLA
which identify Holdings or any of its Subsidiaries as potentially
responsible parties for remediation costs or which otherwise notify
Holdings or any of its Subsidiaries of potential liability under CERCLA.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial
action and Holdings' or such Subsidiary's response thereto.
(i) OTHER INFORMATION. From time to time, such other information or
documents (financial or otherwise) with respect to Holdings or any of its
Subsidiaries as the Administrative Agent or any Lender may reasonably
request.
8.02 BOOKS, RECORDS, INSPECTIONS, AUDITS AND ANNUAL MEETINGS. (a)
Holdings will, and will cause each of its Subsidiaries to, keep proper books
of record and accounts in which full, true and correct entries in conformity
with generally accepted accounting principles
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and all requirements of law shall be made of all dealings and transactions in
relation to its business and activities. Holdings will, and will cause each
of its Subsidiaries to, permit officers and designated representatives of the
Administrative Agent or any Lender to visit and inspect, under guidance of
officers of Holdings or such Subsidiary, any of the properties of Holdings or
such Subsidiary, and to examine the books of account of Holdings or such
Subsidiary and discuss the affairs, finances and accounts of Holdings or such
Subsidiary with, and be advised as to the same by, its and their officers and
independent accountants, all upon reasonable prior notice and at such
reasonable times and intervals and to such reasonable extent as the
Administrative Agent or such Lender may reasonably request.
(b) At a date to be mutually agreed upon between the Administrative
Agent and Holdings occurring on or prior to the 120th day after the close of
each fiscal year of Holdings, Holdings shall, at the request of the
Administrative Agent, hold a meeting with all of the Lenders at which meeting
shall be reviewed the financial results of Holdings and its Subsidiaries for
the previous fiscal year and the budgets presented for the current fiscal
year of Holdings.
8.03 MAINTENANCE OF PROPERTY; INSURANCE. (a) Holdings will, and will
cause each of its Subsidiaries to, (i) keep all property necessary to the
business of Holdings and its Subsidiaries in reasonably good working order
and condition, ordinary wear and tear excepted, (ii) maintain insurance on
all such property in at least such amounts and against at least such risks as
is consistent and in accordance with industry practice for companies
similarly situated owning similar properties in the same general areas in
which Holdings or any of its Subsidiaries operates, PROVIDED that Holdings
and its Subsidiaries may implement programs of self insurance (other than
with respect to casualty insurance) in the ordinary course of business and in
accordance with the industry standards for similarly situated companies so
long as reserves are maintained in accordance with generally accepted
accounting principles for the liabilities associated therewith, and (iii)
furnish to the Administrative Agent, upon written request, full information
as to the insurance carried.
(b) Holdings will, and will cause each of its Subsidiaries to, at all
times keep its property insured in favor of the Collateral Agent, and all
policies or certificates (or certified copies thereof) with respect to such
insurance (and any other insurance maintained by Holdings and/or such
Subsidiaries) (i) shall name the Collateral Agent as loss payee as to
casualty insurance, (ii) shall state that such insurance policies shall not
be cancelled without at least 30 days' prior written notice thereof by the
respective insurer to the Collateral Agent (or such shorter period of time as
a particular insurance company policy generally provides), (iii) shall
provide that the respective insurers irrevocably waive any and all rights of
subrogation with respect to the Collateral Agent and the Secured Creditors,
(iv) shall contain the standard non-contributing mortgage clause endorsement
in favor of the Collateral Agent with respect to hazard or liability
insurance, (v) shall, except in the case of public liability insurance,
provide that any losses shall be payable notwithstanding any act or neglect
of Holdings or any of its Subsidiaries and (vi) shall be deposited with the
Collateral Agent.
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(c) If Holdings or any of its Subsidiaries shall fail to insure its
property in accordance with this Section 8.03, or if Holdings or any of its
Subsidiaries shall fail to so name and deposit all policies or certificates
with respect thereto, the Collateral Agent shall have the right (but shall be
under no obligation), upon 10 days prior notice to the Borrower (although no
such notice shall be required to the extent same is not permitted to be given
under applicable law), to procure such insurance and Holdings, WPIV and the
Borrower agree to reimburse the Collateral Agent for all reasonable costs and
expenses of procuring such insurance.
8.04 CORPORATE FRANCHISES. Holdings will, and will cause each of its
Subsidiaries to, do or cause to be done, all things necessary to preserve and
keep in full force and effect its existence and its material rights,
franchises, licenses and patents; PROVIDED, HOWEVER, that nothing in this
Section 8.04 shall prevent (i) sales of assets and other transactions by
Holdings or any of its Subsidiaries in accordance with Section 9.02, (ii) the
withdrawal by Holdings or any of its Subsidiaries of its qualification as a
foreign corporation in any jurisdiction where such withdrawal could not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations or financial condition of Holdings
and its Subsidiaries taken as a whole or (iii) any termination of any such
rights, franchises, licenses or patents that is determined by any senior
officer or the Board of Directors of the Borrower to be in the best interest
of the Credit Parties and not otherwise disadvantageous in any material
respect to either the business of the Credit Parties or the interests of the
Lenders.
8.05 COMPLIANCE WITH STATUTES, ETC. Holdings will, and will cause each
of its Subsidiaries to, comply with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and
the ownership of its property (including applicable statutes, regulations,
orders and restrictions relating to environmental standards and controls),
except such noncompliances as could not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the business,
operations or financial condition of Holdings and its Subsidiaries taken as a
whole.
8.06 COMPLIANCE WITH ENVIRONMENTAL LAWS. (a) Holdings will comply, and
will cause each of its Subsidiaries to comply, with all Environmental Laws
applicable to the ownership or use of its Real Property now or hereafter
owned, leased or operated by Holdings or any of its Subsidiaries, except such
noncompliances as could not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the business, operations or
financial condition of Holdings and its Subsidiaries taken as a whole, and,
subject to the right to contest such in good faith by appropriate
proceedings, will promptly pay or cause to be paid all costs and expenses
incurred in connection with such compliance, and will keep or cause to be
kept all such Real Property free and clear of any Liens imposed pursuant to
such Environmental Laws. Neither Holdings nor any of its Subsidiaries will
generate, use, treat, store, Release or dispose of, or permit the generation,
use, treatment, storage, Release or disposal of Hazardous Materials on any
Real Property now or hereafter owned, leased or operated by Holdings or any
of its Subsidiaries, or transport or permit the transportation of Hazardous
Materials to or from any such Real Property, except for Hazardous Materials
generated, used, treated, stored, Released, transported or disposed of at any
such Real Properties in compliance in all material respects with
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all applicable Environmental Laws and reasonably required in connection with
the operation, use and maintenance of the Real Property or the business or
operations of Holdings or any of its Subsidiaries.
(b) At any time that any Credit Party gives notice to the Lenders
pursuant to Section 8.01(h) or upon the exercise of any of the remedies
pursuant to the last paragraph of Section 10, then at the reasonable written
request of the Administrative Agent or the Required Lenders, Holdings, WPIV
and the Borrower will provide, at the sole expense of Holdings, WPIV and the
Borrower, an environmental site assessment report concerning any Real
Property owned, leased or operated by Holdings or any of its Subsidiaries,
prepared by an environmental consulting firm reasonably approved by the
Administrative Agent, indicating the presence or absence of Hazardous
Materials and the potential cost of any removal or remedial action in
connection with such Hazardous Materials on such Real Property. If Holdings,
WPIV or the Borrower fails to provide the same within 90 days after such
request was made, the Administrative Agent may order the same, the cost of
which shall be borne by Holdings, WPIV and the Borrower, and Holdings, WPIV
and the Borrower shall, to the extent within the powers of such Credit Party,
grant and hereby grant to the Administrative Agent and the Lenders and their
agents access to such Real Property and specifically grants the
Administrative Agent and the Lenders an irrevocable non-exclusive license,
subject to the rights of tenants, to undertake such an assessment of
reasonable scope at any reasonable time upon reasonable notice to Holdings,
all at the sole and reasonable expense of Holdings, WPIV and the Borrower.
8.07 ERISA. As soon as possible and, in any event, within twenty (20)
days after Holdings, any Subsidiary of Holdings or any ERISA Affiliate knows
or has reason to know of the occurrence of any of the following, Holdings
will deliver to each of the Lenders a certificate of the Chief Financial
Officer of Holdings setting forth the full details as to such occurrence and
the action, if any, that Holdings, such Subsidiary or such ERISA Affiliate is
required or proposes to take, together with any notices required or proposed
to be given to or filed with or by Holdings, any Subsidiary, any ERISA
Affiliate, the PBGC, a Plan participant or the Plan administrator with
respect thereto: that a Reportable Event has occurred (except to the extent
that Holdings has previously delivered to the Lenders a certificate and
notices (if any) concerning such event pursuant to the next clause hereof);
that a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a
Plan subject to Title IV of ERISA is subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to
subparagraph (b)(1) thereof), and an event described in subsection .62, .63,
.64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably
expected to occur with respect to such Plan within the following 30 days;
that an accumulated funding deficiency, within the meaning of Section 412 of
the Code or Section 302 of ERISA, has been incurred or an application may be
or has been made 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 or Section 303 or 304 of
ERISA with respect to a Plan; that any material contribution required to be
made with respect to a Plan has not been timely made; that a Plan has been or
may be terminated, reorganized, partitioned or declared insolvent under Title
IV of ERISA; that a Plan has an Unfunded Current Liability; that proceedings
may be or have been instituted to terminate or appoint a trustee to
administer a Plan which is subject to Title IV of ERISA; that a proceeding
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has been instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan; that Holdings, any Subsidiary of Holdings or any
ERISA Affiliate will or may incur any liability (including any indirect,
contingent, or secondary liability) to or on account of the termination of or
withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975
or 4980 of the Code or Section 409, 502(i) or 502(l) of ERISA or with respect
to a group health plan (as defined in Section 607(1) of ERISA or Section
4980B(g)(2) of the Code) under Section 4980B of the Code; or that Holdings or
any Subsidiary of Holdings may incur any material liability pursuant to any
employee welfare benefit plan (as defined in Section 3(1) of ERISA) that
provides benefits to retired employees or other former employees (other than
as required by Section 601 of ERISA) or any Plan. Holdings will deliver or
make available to each of the Lenders (i) a complete copy of the annual
report (on Internal Revenue Service Form 5500-series) of each Plan
(including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information) required to be filed with the Internal Revenue
Service and (ii) copies of any records, documents or other information that
must be furnished to the PBGC with respect to any Plan pursuant to Section
4010 of ERISA. In addition to any certificates or notices delivered to the
Lenders pursuant to the first sentence hereof, copies of annual reports and
any records, documents or other information required to be furnished to the
PBGC, and any material notices received by Holdings, any Subsidiary of
Holdings or any ERISA Affiliate with respect to any Plan shall be delivered
or made available to the Lenders no later than ten (10) days after the date
such annual report has been filed with the Internal Revenue Service or such
records, documents and/or information has been furnished to the PBGC or such
notice has been received by Holdings, any Subsidiary or any ERISA Affiliate,
as applicable.
8.08 END OF FISCAL YEARS; FISCAL QUARTERS. Holdings will cause (i) each
of its, and each of its Subsidiaries', fiscal years to end on December 31 of
each year and (ii) each of its, and each of its Subsidiaries', fiscal
quarters to end on March 31, June 30, September 30 and December 31.
8.09 PERFORMANCE OF OBLIGATIONS. Except to the extent that nonpayment of
obligations does not constitute a Default under Sections 10.04 or 10.09,
Holdings will, and will cause each of its Subsidiaries to, perform all of its
obligations under the terms of each mortgage, indenture, security agreement,
loan agreement or credit agreement and each other material agreement,
contract or instrument by which it is bound, except such non-performances as
could not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the business, operations, financial condition or
prospects of Holdings and its Subsidiaries taken as a whole.
8.10 PAYMENT OF TAXES. Holdings will pay and discharge, and will cause
each of its Subsidiaries to pay and discharge, all material federal, state
and other material taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits, or upon any properties
belonging to it, prior to the date on which penalties attach thereto, and all
material lawful claims for sums that have become due and payable which, if
unpaid, might become a Lien not otherwise permitted under Section 9.01(i);
PROVIDED, that neither Holdings nor
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any of its Subsidiaries shall be required to pay any such tax, assessment,
charge, levy or claim which is being contested in good faith and by proper
proceedings if it has maintained adequate reserves with respect thereto in
accordance with generally accepted accounting principles.
8.11 ADDITIONAL SECURITY; FURTHER ASSURANCES. (a) Holdings will, and
will cause each of its Subsidiaries to, within five days after the
acquisition by Holdings or any such Subsidiary of any Real Property with a
fair market value (net of the principal amount of any Indebtedness secured by
such Real Property) of $3,000,000 or more (each a "Mortgaged Property"), give
notice thereof to the Administrative Agent and thereafter deliver to the
Collateral Agent a mortgage or deed of trust (each, a "Mortgage") securing
the Obligations of Holdings or such Subsidiary, as the case may be, in form
and substance reasonably satisfactory to the Administrative Agent, each of
which Mortgages shall constitute valid and enforceable Mortgages on the
respective Mortgaged Properties subject to no other Liens except for
Permitted Liens. Each Mortgage or instruments related thereto shall have been
duly recorded or filed in such manner and in such places as are required by
law to establish, perfect, preserve and protect the Liens in favor of the
Collateral Agent pursuant to such Mortgage and all taxes, fees and other
charges payable in connection therewith shall have been paid in full.
(b) Holdings will, and will cause each of its Subsidiaries to, at the
expense of Holdings and the Borrower, make, execute, endorse, acknowledge,
file and/or deliver to the Collateral Agent from time to time such
confirmatory or additional conveyances, financing statements, real property
surveys and environmental reports on new Mortgaged Properties as the
Collateral Agent may reasonably require. Furthermore, Holdings, WPIV and the
Borrower will cause to be delivered to the Collateral Agent such opinions of
counsel, title insurance and other related documents as may be reasonably
requested by the Administrative Agent to assure itself that this Section 8.11
has been complied with.
(c) If the Administrative Agent or the Required Lenders reasonably
determine that they are required by law or regulation to have appraisals
prepared in respect of new Mortgaged Properties, the Borrower will provide,
at its own expense, to the Administrative Agent appraisals which satisfy the
applicable requirements of the Real Estate Appraisal Reform Amendments of the
Financial Institution Reform, Recovery and Enforcement Act of 1989, as
amended, and which otherwise shall be in form and substance reasonably
satisfactory to the Administrative Agent.
(d) Holdings, WPIV and the Borrower agree that each action required
above by this Section 8.11 (other than the giving of the notice referred to
in clause (a) above) shall be completed no later than 90 days after such
action is either requested to be taken by the Administrative Agent or
required to be taken by Holdings and/or its Subsidiaries pursuant to the
terms of this Section 8.11; PROVIDED that, in no event will Holdings or any
of its Subsidiaries be required to take any action, other than using
commercially reasonable efforts, to obtain consents from third parties with
respect to its compliance with this Section 8.11.
8.12 YEAR 2000 COMPLIANCE. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (i) the computer
systems of any of the Credit
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Parties and (ii) equipment containing embedded microchips (including systems
and equipment supplied by others or with which the systems of any of the
Credit Parties interface) and the testing of all such systems and equipment,
as so reprogrammed, will be completed by October 31, 1999. The cost to the
Credit Parties of such reprogramming and testing and of the reasonably
foreseeable consequences of year 2000 to the Credit Parties (including,
without limitation, reprogramming errors and the failure of others' systems
or equipment) will not result in a Default or a material adverse effect on
the operations, business or financial condition of Holdings or any of its
Subsidiaries, taken as a whole. Except for such of the reprogramming referred
to in the preceding sentence as may be necessary, the computer and management
information systems of the Credit Parties are and, with ordinary course
upgrading and maintenance, will continue for the term of this Agreement to
be, sufficient to permit the Credit Parties to conduct their business without
a material adverse effect resulting therefrom.
SECTION 9. NEGATIVE COVENANTS. Each Parent Guarantor and the Borrower
hereby covenants and agrees that on and after the Effective Date and until
the Total Revolving Loan Commitment and all Letters of Credit have terminated
and the Loans, Notes and Unpaid Drawings, together with interest, Fees and
all other Obligations (other than any indemnities described in Section 13.13
which are not then due and payable) incurred hereunder and thereunder, are
paid in full:
9.01 LIENS. Holdings will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or
with respect to any property or assets (real or personal, tangible or
intangible) of Holdings or any of its Subsidiaries, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable with recourse to
Holdings or any of its Subsidiaries), or assign any right to receive income
or consent to the filing of any financing statement under the UCC or any
other similar notice of Lien under any similar recording or notice statute;
PROVIDED that the provisions of this Section 9.01 shall not prevent the
creation, incurrence, assumption or existence of the following (Liens
described below are herein referred to as "Permitted Liens"):
(i) Liens for taxes, assessments or governmental charges or levies not
yet due or Liens for taxes, assessments or governmental charges or levies
being contested in good faith and by appropriate proceedings for which
adequate reserves have been established in accordance with generally
accepted accounting principles;
(ii) Liens in respect of property or assets of the Borrower or any of its
Subsidiaries imposed by law, which were incurred in the ordinary course of
business and do not secure Indebtedness for borrowed money, such as
carriers', warehousemen's, materialmen's and mechanics' liens and other
similar Liens arising in the ordinary course of business, and (x) which do
not in the aggregate materially detract from the value of the Borrower's or
such Subsidiary's property or assets or materially impair the use thereof
in the operation of the business of the Borrower or such Subsidiary or
(y) which are not yet due or which are being contested in good faith by
appropriate proceedings, which
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proceedings have the effect of preventing the forfeiture or sale of the
property or assets subject to any such Lien;
(iii) Liens in existence on the Effective Date which are listed, and the
property subject thereto described, in Schedule VIII, but only to the
respective date, if any, set forth in such Schedule VIII for the removal,
replacement and termination of any such Liens, plus renewals, replacements,
refinancings and extensions of such Liens to the extent set forth on
Schedule VIII, PROVIDED that (x) the aggregate principal amount of the
Indebtedness, if any, secured by such Liens does not increase from that
amount outstanding at the time of any such renewal, replacement, refinancing
or extension, plus any related ordinary course fees, prepayment premiums and
expenses, and (y) any such renewal, replacement, refinancing or extension
does not encumber any additional assets or properties of Holdings or any of
its Subsidiaries;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to the Security Documents;
(vi) leases or subleases granted to other Persons not materially
interfering with the conduct of the business of Holdings or any of its
Subsidiaries;
(vii) Liens upon assets of the Borrower or any of its Subsidiaries subject
to Capitalized Lease Obligations to the extent such Capitalized Lease
Obligations are permitted by Section 9.04(iv) or 9.04(vi), PROVIDED that
(x) such Liens only serve to secure the payment of Indebtedness arising
under such Capitalized Lease Obligation or any extension, renewal,
refinancing or replacement thereof for the same or a lesser amount to the
extent then permitted by Section 9.04(iv) and (y) the Lien encumbering the
asset giving rise to the Capitalized Lease Obligation does not encumber any
other asset of the Borrower or any Subsidiary of the Borrower, except in
favor of the same vendor or vendors;
(viii) Liens placed upon equipment, machinery and/or Real Property
(including any improvements, accessions, proceeds, products and ancillary
property relating to any of the foregoing property) acquired after the
Effective Date and used in the ordinary course of business of the Borrower
or any of its Subsidiaries at the time of the acquisition thereof by the
Borrower or any such Subsidiary or within 90 days thereafter to secure
Indebtedness incurred to pay all or a portion of the purchase price,
construction costs or improvements costs thereof or to secure Indebtedness
incurred solely for the purpose of financing (or, to the extent permitted
above, refinancing) the acquisition, construction or improvement of any
such equipment, machinery and/or Real Property or extensions, renewals,
refinancings or replacements of any of the foregoing for the same or a
lesser amount, PROVIDED that (x) the aggregate outstanding principal amount
of all Indebtedness secured by Liens permitted by this clause (viii) shall
not at any time exceed that amount permitted by Section 9.04(iv) and (y) in
all events, the Lien encumbering the equipment, machinery and/or Real
Property so acquired, constructed or improved (and any such
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related property (including any such ancillary property)) does not encumber
any other asset of the Borrower or such Subsidiary, except in favor of the
same vendor or vendors;
(ix) easements, rights-of-way, restrictions (including building, zoning
and similar restrictions), utility agreements, covenants, reservations,
encroachments and other similar charges or encumbrances, and minor title
deficiencies, in each case not securing Indebtedness and not materially
interfering with the conduct of the business of Holdings or any of its
Subsidiaries;
(x) Liens arising from precautionary UCC financing statement filings
regarding operating leases or with respect to any inventory held on
consignment in the ordinary course of business;
(xi) statutory and common law landlords' liens under leases to which
Holdings or any of its Subsidiaries is a party;
(xii) Liens (other than Liens imposed under ERISA) incurred in the
ordinary course of business in connection with workers compensation claims,
unemployment insurance and social security benefits and Liens securing the
performance of bids, tenders, leases and contracts in the ordinary course of
business, statutory obligations, surety bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for borrowed money);
(xiii) Liens on property or assets acquired pursuant to a Permitted
Acquisition, or on property or assets of a Subsidiary of the Borrower in
existence at the time such Subsidiary is acquired pursuant to a Permitted
Acquisition, PROVIDED that (x) any Indebtedness that is secured by such
Liens is permitted to exist under Section 9.04(vii), and (y) such Liens are
not incurred in connection with, or in contemplation or anticipation of,
such Permitted Acquisition and do not attach to any other asset of the
Borrower or any of its Subsidiaries; and
(xiv) other Liens incidental to the conduct of the business or the
ownership of the assets of the Borrower or any Subsidiary that (a) were not
incurred in connection with borrowed money, (b) do not in the aggregate
materially detract from the value of the assets subject thereto or
materially impair the use thereof in the operation of such business and
(c) do not secure obligations in excess of $1,000,000 in the aggregate for
all such Liens.
In connection with the granting of Liens of the type described in clauses
(vii) and (viii) of this Section 9.01 by the Borrower or any of its
Subsidiaries, the Administrative Agent and the Collateral Agent shall be
authorized to take any actions deemed appropriate by it in connection
therewith (including, without limitation, by executing appropriate lien
releases or lien subordination agreements in favor of the holder or holders
of such Liens, in either case solely with respect to the item or items of
equipment or other assets subject to such Liens).
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9.02 CONSOLIDATION, MERGER, PURCHASE OR SALE OF ASSETS,
ETC. Holdings will not, and will not permit any of its Subsidiaries to, wind
up, liquidate or dissolve its affairs or enter into any transaction of merger
or consolidation, or convey, sell, lease or otherwise dispose of all or any
part of its property or assets, or enter into any sale-leaseback
transactions, or purchase or otherwise acquire (in one or a series of related
transactions) all or any part of the property or assets (other than purchases
or other acquisitions of inventory, materials, supplies and equipment in the
ordinary course of business) of any Person (or agree to do any of the
foregoing at any future time), except that the following transactions (and
agreements related thereto) shall be permitted:
(i) Capital Expenditures by the Borrower and its Subsidiaries
shall be permitted (although any Capital Expenditures constituting a
Permitted Acquisition shall be governed by clause (xi) of this Section
9.02);
(ii) each of the Borrower and its Subsidiaries may make sales
of inventory in the ordinary course of business;
(iii) each of the Borrower and its Subsidiaries may sell
uneconomic, obsolete or worn-out equipment, materials or other assets
in the ordinary course of business, provided that the aggregate amount
of the proceeds received from all assets sold pursuant to this clause
(iii) shall not exceed $1,000,000 in any fiscal year of the Borrower;
(iv) each of the Borrower and its Subsidiaries may sell assets
(other than the capital stock of any Subsidiary Guarantor unless all of
the capital stock of such Subsidiary Guarantor is sold), so long as
(except in the case of asset swaps, which may be done in compliance
with clause (xviii) of this Section 9.02 and without regard to the
requirements set forth in this clause (iv)) (v) no Default or Event of
Default then exists or would result therefrom, (w) each such sale is in
an arm's-length transaction and the Borrower or the respective
Subsidiary receives at least fair market value (as determined in good
faith by the Borrower or such Subsidiary, as the case may be), (x) the
total consideration received by the Borrower or such Subsidiary is at
least 75% cash, which cash is paid at the time of the closing of such
sale, PROVIDED that the amount of any liabilities (as shown on the
Borrower's or such Subsidiary's most recent balance sheet) of the
Borrower or any Subsidiary (other than liabilities that are by their
terms subordinated to the Obligations) that are assumed by the
transferee of any such assets shall be deemed to be cash for purposes
of this clause (x), (y) the Net Sale Proceeds therefrom are applied
and/or reinvested as (and to the extent) required by Section 3.03(c)
and (z) the aggregate amount of the proceeds received from all assets
sold pursuant to this clause (iv) (including, for this purpose, the
amount of any assumed liabilities referred to in clause (x) above)
shall not exceed $5,000,000 in any fiscal year of the Borrower;
PROVIDED that notwithstanding anything to the contrary contained in
this clause (iv), with respect to any one asset sale during the term of
this Agreement, the aggregate amount of the proceeds received from such
asset sale may exceed $5,000,000 so long as they do not exceed
$20,000,000;
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(v) Investments may be made to the extent permitted by
Section 9.05;
(vi) each of the Borrower and its Subsidiaries may lease (as
lessee) real or personal property (so long as any such lease does not
create a Capitalized Lease Obligation except to the extent permitted by
Section 9.04(iv));
(vii) each of the Borrower and its Subsidiaries may sell or
discount, in each case without recourse and in the ordinary course of
business, accounts receivable arising in the ordinary course of
business, but only in connection with the compromise or collection
thereof;
(viii) each of the Borrower and its Subsidiaries may grant
leases or subleases to other Persons not materially interfering with
the conduct of the business of the Borrower or any of its Subsidiaries;
(ix) any Subsidiary of the Borrower (x) may be merged,
consolidated or liquidated with or into the Borrower so long as the
Borrower is the surviving corporation of such merger, consolidation or
liquidation and (y) may transfer all or any portion of its assets to
the Borrower;
(x) any Subsidiary of the Borrower (x) may be merged,
consolidated or liquidated with or into any other Subsidiary of the
Borrower so long as (i) in the case of any such merger, consolidation
or liquidation involving a Subsidiary Guarantor, the Subsidiary
Guarantor is the surviving corporation of such merger, consolidation or
liquidation and (ii) in addition to the requirements or preceding
clause (i), in the case of any such merger, consolidation or
liquidation involving a Wholly-Owned Subsidiary of the Borrower, the
Wholly-Owned Subsidiary is the surviving corporation of such merger,
consolidation or liquidation, and (y) may transfer all or any portion
of its assets to any Subsidiary Guarantor;
(xi) each of the Borrower and the Subsidiary Guarantors may
acquire all or substantially all of the assets of any Person (or all or
substantially all of the assets of a product line or division of any
Person) or at least 90% of the capital stock of any Person (any such
acquisition permitted by this clause (xi), a "Permitted Acquisition"),
so long as (i) no Default or Event of Default then exists or would
result therefrom, (ii) each of the representations and warranties
contained in Section 7 shall be true and correct in all material
respects both before and after giving effect to such Permitted
Acquisition, (iii) any Liens or Indebtedness assumed or issued in
connection with such acquisition are otherwise permitted under Section
9.01 or 9.04, as the case may be, (iv) the entity being acquired shall
be engaged in a similar or related business as the Borrower and its
Subsidiaries, (v) the only consideration paid by the Borrower or any
Subsidiary Guarantor in connection with any Permitted Acquisition
consists solely of cash, notes (to the extent permitted under Section
9.04(xi)), common stock of Holdings and/or preferred stock of Holdings
and (vi) at least 10 Business Days prior to the consummation of any
Permitted Acquisition, the Borrower shall have delivered to the
Administrative Agent and each of the Lenders a certificate of Holdings'
Chief Financial Officer certifying (and
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showing the calculations therefor in reasonable detail) that
Holdings and its Subsidiaries would have been in compliance with the
financial covenants set forth in Sections 9.07, 9.08 and 9.09 for
the Test Period then most recently ended prior to the date of the
consummation of such Permitted Acquisition, in each case with such
financial covenants to be determined on a PRO FORMA basis as if such
Permitted Acquisition had been consummated on the first day of such
Test Period (and assuming that any Indebtedness incurred, issued or
assumed in connection therewith had been incurred, issued or assumed
on the first day of, and had remained outstanding throughout, such
Test Period);
(xii) each of the Borrower and its Subsidiaries may, in the
ordinary course of business, license, as licensor or licensee, patents,
trademarks, copyrights and know-how to third Persons and to one
another, so long as any such license by the Borrower or its
Subsidiaries in its capacity as licensor does not prohibit the granting
of a Lien by the Borrower or any of its Subsidiaries pursuant to the
Security Agreement in such license or in the intellectual property
covered thereby;
(xiii) each of Holdings and its Subsidiaries may sell Cash
Equivalents permitted to be held by them pursuant to Section 9.05(ii)
so long as each such sale is for cash and at fair market value (as
determined in good faith by Holdings or such Subsidiary, as the case
may be);
(xiv) each of Holdings and its Subsidiaries may pay Dividends
to the extent permitted by Section 9.03;
(xv) Recovery Events shall be permitted;
(xvi) each of the Borrower and its Subsidiaries may enter into
sale and leaseback transactions with respect to their equipment and
Real Property acquired after the Effective Date, so long as (u) no
Default or Event of Default then exists or would result therefrom, (v)
each such sale and leaseback transaction is in an arm's-length
transaction and the Borrower or the respective Subsidiary receives at
least fair market value (as determined in good faith by the Borrower or
such Subsidiary, as the case may be), (w) the total consideration
received by the Borrower or such Subsidiary is cash and is paid at the
time of the closing of such sale, (x) the Net Sale Proceeds therefrom
are applied and/or reinvested as (and to the extent) required by
Section 3.03(c), (y) the aggregate amount of proceeds received from all
sale and leaseback transactions pursuant to this clause (xvi) shall not
exceed $1,000,000 in any fiscal year of the Borrower and (z) to the
extent that any such sale and leaseback transaction results in a
Capitalized Lease Obligation, such Capitalized Lease Obligation is
permitted under Section 9.04(iv);
(xvii) Holdings and its Subsidiaries, considered together, may
convey, sell, lease or otherwise dispose of its property or assets, to
the extent not otherwise permitted under this Section 9.02, in an
aggregate amount not to exceed $100,000;
(xviii) Holdings and its Subsidiaries may simultaneously
exchange its assets for assets of a similar nature and value so long as
(x) no Default or Event of Default then
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exists or would result therefrom, (y) each such asset swap is in an
arm's length transaction and (z) all actions are taken to create or
maintain the Liens and security interests purported to be granted
under the Security Documents; and
(xix) WPIV may be liquidated, dissolved, wound up or merged
with or into Holdings.
To the extent the Required Lenders waive the provisions of this Section 9.02
with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 9.02 (other than to Holdings or a Subsidiary thereof),
such Collateral shall be sold free and clear of the Liens created by the
Security Documents, and the Administrative Agent and the Collateral Agent shall
be authorized to take any actions deemed appropriate in order to effect the
release of such Collateral from the Liens created by the Security Documents.
9.03 DIVIDENDS. Holdings will not, and will not permit any of
its Subsidiaries to, authorize, declare or pay any Dividends with respect to
Holdings or any of its Subsidiaries, except that:
(i) any Subsidiary of the Borrower may pay cash Dividends to
the Borrower or to any Subsidiary of the Borrower, PROVIDED that in the
case of any Subsidiary which is not a Wholly-Owned Subsidiary, (x) such
cash Dividends shall be paid pro rata, and (y) if a Default or an Event
of Default is in existence, no such cash Dividends shall be paid to any
Subsidiary which is not a Wholly-Owned Subsidiary without the consent
of the Required Lenders;
(ii) so long as no Default or Event of Default then exists or
would result therefrom, (x) Holdings may repurchase outstanding shares
of its common stock (or options to purchase such common stock)
following the death, disability or termination of employment of
directors, officers or employees of Holdings or any of its
Subsidiaries, provided that the aggregate amount of Dividends paid by
Holdings pursuant to this clause (ii) in any fiscal year of Holdings
shall not exceed the sum of (1) $2,000,000, (2) the cash proceeds
received by Holdings after the Effective Date from the sale of its
common stock or options to purchase such common stock in each case to
directors, officers or employees of Holdings and its Subsidiaries that
occurs in such fiscal year and (3) amounts referred to in preceding
clauses (1) and (2) that remain unused from the immediately preceding
fiscal year, and (y) the Borrower may pay Dividends to Holdings or WPIV
to enable Holdings to pay the Dividends described in clause (x) above;
(iii) the Borrower may pay Dividends to Holdings for purposes
of paying operating and administrative expenses of Holdings, so long as
Holdings is in compliance with Section 9.13(b) and so long as payment
of such expenses is made within 10 days of any such Dividend payment;
and
(iv) the Borrower may pay to Holdings the amounts to be used
by Holdings to pay regularly accruing Dividends on Qualified Preferred
Stock at the rate provided in the agreements governing such Qualified
Preferred Stock so long as (x) no Event of Default
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then exists or would result therefrom and (y) the aggregate amount
paid pursuant to this clause (iv) does not exceed the net proceeds
received by the Borrower from Holdings in connection with the
issuance thereof.
9.04 INDEBTEDNESS. Holdings will not, and will not permit any
of its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and
the other Credit Documents;
(ii) Existing Indebtedness outstanding on the Effective Date
and listed on Schedule VI, without giving effect to any subsequent
extension, renewal or refinancing thereof, provided that the aggregate
principal amount of the Indebtedness to be extended, renewed or
refinanced does not increase from that amount outstanding at the time
of any such extension, renewal or refinancing, plus any related
ordinary course fees, prepayment premiums and expenses;
(iii) Indebtedness under Interest Rate Protection Agreements
entered into with respect to other Indebtedness permitted under this
Section 9.04;
(iv) Indebtedness of the Borrower and its Subsidiaries subject
to Liens permitted under Section 9.01(viii) or evidenced by Capitalized
Lease Obligations or any extension, renewal, refinancing or replacement
thereof for the same or a lesser amount, PROVIDED that in no event
shall the sum of the aggregate principal amount of all Capitalized
Lease Obligations plus the aggregate principal amount of all
Indebtedness secured by Liens permitted by Section 9.01(viii)
(including any such extensions, renewals, refinancings or replacements
of the foregoing) exceed at any time outstanding the sum of (I)
$6,000,000 plus (II) an amount, not to exceed $4,000,000, to the extent
that such amount has been incurred under clause (xi) of this Section
9.04;
(v) intercompany Indebtedness among Holdings and its
Subsidiaries to the extent permitted by Section 9.05(ix);
(vi) Indebtedness of a Subsidiary of the Borrower acquired
pursuant to a Permitted Acquisition (or Indebtedness assumed at the
time of a Permitted Acquisition of an asset securing such Indebtedness)
or any extension, renewal, refinancing or replacement thereof for the
same or lesser amount, plus any related ordinary course fees,
prepayment premiums and expenses, PROVIDED that (x) such Indebtedness
was not incurred in connection with, or in anticipation or
contemplation of, such Permitted Acquisition, and (y) such Indebtedness
does not constitute debt for borrowed money (other than debt for
borrowed money incurred in connection with industrial revenue or
industrial development or similar bond financings), it being understood
and agreed that Capitalized Lease Obligations and purchase money
Indebtedness shall not constitute debt for borrowed money for purposes
of this clause (y);
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(vii) Contingent Obligations of the Borrower and the
Subsidiary Guarantors of each other's Indebtedness to the extent that
such Indebtedness is otherwise permitted under this Section 9.04;
(viii) Indebtedness of the Borrower and its Subsidiaries
consisting of any guarantees, indemnities or obligations in respect of
purchase price adjustments in connection with the acquisition or
disposition of assets;
(ix) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business so long as such
Indebtedness is extinguished within two Business Days of the incurrence
thereof;
(x) Indebtedness in respect of Other Hedging Agreements to the
extent permitted by Section 9.05(xii); and
(xi) additional Indebtedness incurred by Holdings and its
Subsidiaries in an aggregate principal amount not to exceed $5,000,000
at any one time outstanding, of which no more than $4,000,000 may be
outstanding at any time as additional secured Indebtedness under clause
(iv) of this Section 9.04 and with all other Indebtedness incurred
under this clause (xi) to be unsecured.
9.05 ADVANCES, INVESTMENTS AND LOANS. Holdings will not, and
will not permit any of its Subsidiaries to, directly or indirectly, lend money
or credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents (each of the foregoing an "Investment" and,
collectively, "Investments"), except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold
accounts receivables owing to any of them, if created or acquired in
the ordinary course of business and payable or dischargeable in
accordance with customary trade terms of the Borrower or such
Subsidiary;
(ii) Holdings and its Subsidiaries may acquire and hold
cash and Cash Equivalents;
(iii) Holdings and its Subsidiaries may hold the Investments
held by them on the Effective Date and described on Schedule IX,
provided that any additional Investments made with respect thereto
shall be permitted only if independently justified under the other
provisions of this Section 9.05;
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(iv) the Borrower and its Subsidiaries may acquire and own
Investments (including, without limitation, debt obligations) received
in connection with the bankruptcy or reorganization of suppliers and
customers and in good faith settlement of delinquent obligations of,
and other disputes with, customers and suppliers arising in the
ordinary course of business;
(v) the Borrower and its Subsidiaries may (A) make loans and
advances in the ordinary course of business to their respective
officers and employees so long as the aggregate principal amount
thereof at any time outstanding (determined without regard to any
write-downs or write-offs of such loans and advances) shall not exceed
$250,000 and (B) make advances to their employees for moving,
relocation and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business so long as any such
advances made pursuant to this clause (B) are ultimately expected to be
treated as an expense which reduces Consolidated Net Income in
accordance with generally accepted accounting principles;
(vi) Holdings may acquire and hold obligations of one or more
officers or other employees of Holdings or any of its Subsidiaries in
connection with such officers' or employees' acquisition of shares of
common stock of Holdings so long as no cash is paid by Holdings or any
of its Subsidiaries to such officers or employees in connection with
the acquisition of any such obligations;
(vii) the Borrower may enter into Interest Protection
Agreements to the extent permitted by Section 9.04(iii);
(viii) (x) Holdings may make cash common equity contributions
to the capital of WPIV and the Borrower, (y) WPIV may make cash common
equity contributions to the capital of the Borrower and (z) the
Borrower and the Subsidiary Guarantors may make cash common equity
contributions to the capital of their respective Subsidiaries which are
Subsidiary Guarantors;
(ix) Holdings, WPIV, the Borrower and the Subsidiary
Guarantors may make intercompany loans and advances between or among
one another (collectively, "Intercompany Loans"), so long as no such
Intercompany Loan shall be evidenced by a promissory note or other
instrument except an Intercompany Note that is pledged to the
Collateral Agent pursuant to the Pledge Agreement;
(x) the Borrower and its Subsidiaries may acquire and hold
non-cash consideration issued by the purchaser of assets in connection
with a sale of such assets to the extent permitted by Section 9.02(iv);
(xi) Permitted Acquisitions shall be permitted in accordance
with Section 9.02(xi);
(xii) the Borrower and its Subsidiaries may enter into Other
Hedging Agreements in the ordinary course of business providing
protection against fluctuations
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in currency values in connection with the Borrower's or any of its
Subsidiaries' operations so long as management of the Borrower or
such Subsidiary, as the case may be, has determined in good faith
that the entering into of such Other Hedging Agreements are bona
fide hedging activities and are not for speculative purposes; and
(xiii) the Borrower and its Subsidiaries may make investments
(including investments in joint ventures) not otherwise permitted by
clauses (i) through (xii) of this Section 9.05 in an aggregate amount
not to exceed $5,000,000.
9.06 TRANSACTIONS WITH AFFILIATES. Holdings will not, and will
not permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of Holdings or any of its Subsidiaries, other than on terms and
conditions substantially as favorable to Holdings or such Subsidiary as would
reasonably be obtained by Holdings or such Subsidiary at that time in a
comparable arm's-length transaction with a Person other than an Affiliate,
except that the following in any event shall be permitted:
(i) Dividends may be paid to the extent provided in Section
9.03;
(ii) loans may be made and other transactions may be entered
into by Holdings and its Subsidiaries to the extent permitted by
Sections 9.02, 9.03, 9.04 and 9.05;
(iii) customary fees may be paid to directors of Holdings and
its Subsidiaries;
(iv) Holdings and its Subsidiaries may enter into, and may
make payments under, employment agreements, employee benefit plans,
indemnification provisions and other similar compensatory arrangements
with officers and directors of Holdings and its Subsidiaries in the
ordinary course of business; and
(v) the Borrower and the Subsidiary Guarantors may engage in
any transaction among themselves to the extent not prohibited under
this Agreement.
9.07 CONSOLIDATED FIXED CHARGE COVERAGE RATIO. Holdings will
not permit the Consolidated Fixed Charge Coverage Ratio for any Test Period
ending on the last day of any fiscal quarter to be less than 1.25:1.00.
9.08 MAXIMUM LEVERAGE RATIO. Holdings will not permit the
Leverage Ratio for any Test Period ending on the last day of any fiscal quarter
described below to be greater than the ratio set forth opposite such fiscal
quarter below:
<TABLE>
<CAPTION>
FISCAL QUARTER RATIO
-------------- -----
<S> <C>
September 30, 1999 4.00:1.00
December 31, 1999 4.00:1.00
March 31, 2000 4.00:1.00
June 30, 2000 4.00:1.00
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September 30, 2000 4.00:1.00
December 31, 2000 4.00:1.00
March 31, 2001 4.00:1.00
June 30, 2001 4.00:1.00
September 30, 2001 3.75.1.00
December 31, 2001 3.75.1.00
March 31, 2002 3.75.1.00
June 30, 2002 3.75.1.00
September 30, 2002 3.50:1.00
December 31, 2002 3.50:1.00
March 31, 2003 3.50:1.00
June 30, 2003 3.50:1.00
September 30, 2003 3.25:1.00
December 31, 2003 3.25:1.00
March 31, 2004 3.25:1.00
June 30, 2004 3.25:1.00
September 30, 2004 and thereafter 3.00:1.00
</TABLE>
9.09 CONSOLIDATED INTEREST COVERAGE RATIO. Holdings will not
permit the Consolidated Interest Coverage Ratio for any Test Period ending on
the last day of a fiscal quarter described below to be less than the amount set
forth opposite such fiscal quarter below:
<TABLE>
<CAPTION>
FISCAL QUARTER RATIO
-------------- -----
<S> <C>
September 30, 1999 2.25:1.00
December 31, 1999 2.25:1.00
March 31, 2000 2.25:1.00
June 30, 2000 2.25:1.00
September 30, 2000 2.25:1.00
December 31, 2000 2.25:1.00
March 31, 2001 2.25:1.00
June 30, 2001 2.25:1.00
September 30, 2001 2.50.1.00
December 31, 2001 2.50.1.00
March 31, 2002 2.50.1.00
June 30, 2002 2.50.1.00
September 30, 2002 2.75:1.00
December 31, 2002 2.75:1.00
March 31, 2003 2.75:1.00
June 30, 2003 2.75:1.00
September 30, 2003 and thereafter 3.00:1.00
</TABLE>
9.10 MODIFICATIONS OF CERTIFICATE OF INCORPORATION, BY-LAWS
AND CERTAIN OTHER AGREEMENTS; etc. Holdings will not, and will not permit any of
its Subsidiaries to amend, modify
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or change its certificate of incorporation (including, without limitation, by
the filing or modification of any certificate of designation) or by-laws (or
the equivalent organizational documents) or any agreement entered into by it
with respect to its capital stock (including any Shareholders' Agreement), or
enter into any new agreement with respect to its capital stock, unless such
amendment, modification, change or other action contemplated by this clause
would not violate the terms of this Agreement and could not reasonably be
expected to be adverse to the interests of the Lenders in any material
respect (as determined by the Board of Directors of the Borrower in good
faith).
9.11 LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES.
Holdings and WPIV will not, and will not permit the Borrower or any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
such Subsidiary to (a) pay dividends or make any other distributions on its
capital stock or any other interest or participation in its profits owned by the
Borrower or any Subsidiary of the Borrower, or pay any Indebtedness owed to the
Borrower or any Subsidiary of the Borrower, (b) make loans or advances to the
Borrower or any Subsidiary of the Borrower or (c) transfer any of its properties
or assets to the Borrower or any Subsidiary of the Borrower, except for such
encumbrances or restrictions existing under or by reason of (i) applicable law,
(ii) this Agreement and the other Credit Documents, (iii) customary provisions
restricting subletting or assignment of any lease or sublease governing a
leasehold interest of the Borrower or any Subsidiary of the Borrower, (iv)
customary provisions restricting assignment of any licensing agreement or other
contract entered into by the Borrower or any Subsidiary of the Borrower in the
ordinary course of business, (v) restrictions on the transfer of any asset
subject to a Lien permitted by Sections 9.01(iii), (iv), (vi), (vii), (viii),
(x), (xii), (xiii) and (xiv), (vi) restrictions under any contracts for the sale
of (or the granting of an option to buy) assets, including, without limitation,
any restriction with respect to a Subsidiary imposed pursuant to an agreement
entered into for the sale or disposition of all or substantially all of the
capital stock or assets of such Subsidiary, pending the closing of such sale or
disposition, PROVIDED that any such restriction relates solely to the assets
that are the subject of such contract (or such option) and such sale (or the
granting of such option assuming same is exercised) is otherwise permitted under
Section 9.02, (vii) restrictions under any agreement or instrument of a Person
existing at the time it becomes a Subsidiary of the Borrower provided that such
restriction was not entered into in contemplation of such Person becoming a
Subsidiary and (viii) restrictions under Indebtedness permitted under Section
9.04(xi) so long as such restrictions will not, in the good faith determination
of the Board of Directors of the Borrower, impair the ability of the Borrower to
repay the Obligations.
9.12 LIMITATION ON ISSUANCE OF CAPITAL STOCK. (a) Holdings
will not, and will not permit any of its Subsidiaries to, issue (i) any
preferred stock, other than Qualified Preferred Stock issued by Holdings or (ii)
any redeemable common stock (other than common stock that is redeemable at the
sole option of Holdings or such Subsidiary).
(b) Holdings will not permit any of its Subsidiaries to issue
any capital stock (including by way of sales of treasury stock) or any options
or warrants to purchase, or securities convertible into, capital stock, except
(i) for transfers and replacements of then outstanding
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shares of capital stock, (ii) for stock splits, stock dividends and issuances
which do not decrease the percentage ownership of Holdings or any of its
Subsidiaries in any class of the capital stock of such Subsidiary, (iii) to
qualify directors to the extent required by applicable law or (iv) for
issuances by newly created or acquired Subsidiaries in accordance with the
terms of this Agreement.
9.13 BUSINESS. (a) Holdings and its Subsidiaries will not
engage in any business other than the businesses engaged in by the Borrower and
its Subsidiaries as of the Effective Date and businesses similar, reasonably
related or complementary thereto.
(b) Notwithstanding the foregoing, Holdings and WPIV will not
engage in any business and will not own any significant assets or have any
material liabilities (other than Indebtedness permitted to be incurred by it
under Section 9.04) other than its ownership of the capital stock of the
Borrower, and having those liabilities which it is responsible for under this
Agreement and the other Credit Documents to which it is a party, PROVIDED that
Holdings and WPIV may engage in those activities that are incidental to (w) the
maintenance of its corporate existence in compliance with applicable law, (x)
legal, tax and accounting matters in connection with any of the foregoing
activities, (y) the entering into, and performing its obligations under, this
Agreement and the other Credit Documents to which it is a party, other
agreements and instruments in effect on the Effective Date to which it is a
party or any amendments or other modifications thereof not otherwise prohibited
hereby so long as any such amendments or other modifications do not increase, in
any material respect, the obligations or liabilities of Holdings or WPIV or (z)
the raising of capital in the form of equity or Indebtedness.
9.14 LIMITATION ON CREATION OF SUBSIDIARIES. Notwithstanding
anything to the contrary contained in this Agreement, Holdings will not, and
will not permit any of its Subsidiaries to, establish, create or acquire after
the Effective Date any Subsidiary, PROVIDED that the Borrower and its
Subsidiaries shall be permitted to establish, create or, to the extent permitted
by this Agreement, acquire Subsidiaries so long as (i) the capital stock or
other equity interests of each such new Subsidiary is pledged (to the extent
owned) pursuant to, and to the extent required by, the Pledge Agreement and the
certificates representing such stock or other equity interests, together with
stock or other powers duly executed in blank, are delivered to the Collateral
Agent for the benefit of the Secured Creditors, (ii) each such new Subsidiary
executes and delivers to the Administrative Agent a counterpart of the
Subsidiaries Guaranty, the Pledge Agreement and the Security Agreement, and
(iii) each such new Subsidiary takes all actions required pursuant to Section
8.11. In addition, each new Subsidiary shall execute and deliver, or cause to be
executed and delivered, to the Administrative Agent all other relevant
documentation of the type described in Sections 5.03, 5.04, 5.05, 5.10, 5.11 and
5.12 as such new Subsidiary would have had to deliver if such new Subsidiary
were a Credit Party on the Effective Date.
SECTION 10. EVENTS OF DEFAULT. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
10.01 PAYMENTS. The Borrower shall (i) default in the payment
when due of any principal of any Loan or any Note or (ii) default, and such
default shall continue unremedied for
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three or more Business Days, in the payment when due of any interest on any
Loan or Note, any Unpaid Drawing or any Fees or any other amounts owing
hereunder or thereunder; or
10.02 REPRESENTATIONS, ETC. Any representation, warranty or
statement made (or deemed made) by any Credit Party herein or in any other
Credit Document or in any certificate delivered to the Administrative Agent or
any Lender pursuant hereto or thereto shall prove to be untrue in any material
respect on the date as of which made or deemed made; or
10.03 COVENANTS. Any Credit Party shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 8.01(g)(i), 8.08, or Section 9 or (ii) default in the due performance or
observance by it of any other term, covenant or agreement contained in this
Agreement or any other Credit Document (other than those set forth in Sections
10.01, 10.02 and 10.03(i)) and such default shall continue unremedied for a
period of 30 days after written notice thereof to the defaulting party by the
Administrative Agent or the Required Lenders; or
10.04 DEFAULT UNDER OTHER AGREEMENTS. (i) Holdings or any of
its Subsidiaries shall (x) default in any payment of any Indebtedness (other
than the Obligations) beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created or (y) default
in the observance or performance of any agreement or condition relating to any
Indebtedness (other than the Obligations) 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 a trustee or agent on behalf of such holder or holders) to cause (determined
without regard to whether any notice is required), any such Indebtedness to
become due prior to its stated maturity, or (ii) any Indebtedness (other than
the Obligations) of Holdings or any of its Subsidiaries shall be declared to be
(or shall become) due and payable, or required to be prepaid other than by a
regularly scheduled required prepayment (or as a result of any sale of an asset
securing such Indebtedness in accordance with the terms thereof), prior to the
stated maturity thereof, PROVIDED that it shall not be a Default or an Event of
Default under this Section 10.04 unless the aggregate principal amount of all
Indebtedness as described in preceding clauses (i) and (ii) is at least
$1,000,000; or
10.05 BANKRUPTCY, ETC. Holdings or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against Holdings or any of its Subsidiaries, and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
Holdings or any of its Subsidiaries, or Holdings or any of its Subsidiaries
commences any other proceeding under any reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency or liquidation or similar
law of any jurisdiction whether now or hereafter in effect relating to Holdings
or any of its Subsidiaries, or there is commenced against Holdings or any of its
Subsidiaries any such proceeding which remains undismissed for a period of 60
days, or Holdings or any of its Subsidiaries is adjudicated
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insolvent or bankrupt; or any order of relief or other order approving any
such case or proceeding is entered; or Holdings or any of its Subsidiaries
suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or Holdings or any of its Subsidiaries makes a general
assignment for the benefit of creditors; or any corporate action is taken by
Holdings or any of its Subsidiaries for the purpose of effecting any of the
foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under Section 412 of
the Code or Section 302 of ERISA or a waiver of such standard or extension of
any amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made with respect to a Plan has not
been timely made, Holdings or any Subsidiary of Holdings or any ERISA Affiliate
has incurred or is likely to incur any liability to or on account of a Plan
under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or on account of a
group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2)
of the Code) under Section 4980B of the Code, or Holdings or any Subsidiary of
Holdings has incurred or is likely to incur liabilities pursuant to one or more
employee welfare benefit plans (as defined in Section 3(1) of ERISA) that
provide benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or Plans; (b) there shall result from any such
event or events the imposition of a lien, the granting of a security interest,
or a liability or a material risk of incurring a liability; and (c) such lien,
security interest or liability, individually, and/or in the aggregate, in the
reasonable opinion of the Required Lenders, has had, or could reasonably be
expected to have, a material adverse effect on the business, operations, or
financial condition of Holdings and its Subsidiaries taken as a whole; or
10.07 SECURITY DOCUMENTS. At any time after the execution and
delivery thereof, any of the Security Documents shall cease to be in full force
and effect, or shall cease to give the Collateral Agent for the benefit of the
Secured Creditors the Liens, rights, powers and privileges purported to be
created thereby (including, without limitation, to the extent required thereby,
a perfected security interest in, and Lien on, all of the Collateral (other than
an immaterial portion of the Security Agreement Collateral), in favor of the
Collateral Agent, superior to and prior to the rights of all third Persons
(except as permitted by Section 9.01), and subject to no other Liens (except as
permitted by Section 9.01); or
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10.08 GUARANTIES. At any time after the execution and delivery
thereof, any Guaranty or any provision thereof shall cease to be in full force
or effect as to any Guarantor, or any Guarantor or any Person acting by or on
behalf of such Guarantor shall deny or disaffirm such Guarantor's obligations
under its Guaranty or any Guarantor shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to its Guaranty, PROVIDED that if the default constitutes a
failure to perform or comply with any provision, covenant or agreement contained
in Section 8 of this Agreement (other than Section 8.01(g)(i) or 8.08), such
default shall continue unremedied for a period of at least 30 days after notice
to the defaulting Guarantor by the Administrative Agent or the Required Lenders;
or
10.09 JUDGMENTS. One or more judgments or decrees shall be
entered against Holdings or any Subsidiary of Holdings involving in the
aggregate for Holdings and its Subsidiaries a liability (not paid or fully
covered by a reputable and solvent insurance company) and such judgments and
decrees either shall be final and non-appealable or shall not be vacated,
discharged or stayed or bonded pending appeal for any period of 30 consecutive
days, and the aggregate amount of all such judgments equals or exceeds
$1,000,000 or any order or writ of attachment or similar process shall have been
issued with respect to property of Holdings or any of its Subsidiaries with a
value of a $1,000,000 or more in the aggregate for Holdings and its
Subsidiaries; or
10.10 CHANGE OF CONTROL. A Change of Control shall occur;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Lenders, shall by written notice to the Borrower, take any or all
of the following actions, without prejudice to the rights of any Administrative
Agent, any Lender or the holder of any Note to enforce its claims against any
Credit Party (PROVIDED, that, if an Event of Default specified in Section 10.05
shall occur with respect to the Borrower, the result which would occur upon the
giving of written notice by the Administrative Agent as specified in clauses (i)
and (ii) below shall occur automatically without the giving of any such notice):
(i) declare the Total Revolving Loan Commitment terminated, whereupon the
Revolving Loan Commitment of each Lender shall forthwith terminate immediately
and any Commitment Commission shall forthwith become due and payable without any
other notice of any kind; (ii) declare the principal of and any accrued interest
in respect of all Loans and the Notes and all Obligations owing hereunder and
thereunder to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by each Credit Party; (iii) terminate any Letter of Credit
which may be terminated in accordance with its terms; (iv) direct the Borrower
to pay (and the Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default specified in Section 10.05 with respect to the
Borrower, it will pay) to the Collateral Agent at the Payment Office such
additional amount of cash or Cash Equivalents, to be held as security by the
Collateral Agent, as is equal to the aggregate Stated Amount of all Letters of
Credit issued for the account of the Borrower and then outstanding; (v) enforce,
as Collateral Agent, all of the Liens and security interests created pursuant to
the
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Security Documents; and (vi) apply any cash collateral held by the
Administrative Agent pursuant to Section 4.02 to the repayment of the
Obligations.
SECTION 11. DEFINITIONS AND ACCOUNTING TERMS.
11.01 DEFINED TERMS. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"Administrative Agent" shall mean BTCo, in its capacity as
Administrative Agent for the Lenders hereunder, and shall include any successor
to the Administrative Agent appointed pursuant to Section 12.09.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling (including, but not limited to, all
directors and officers of such Person), controlled by, or under direct or
indirect common control with, such Person. A Person shall be deemed to control
another Person if such Person possesses, directly or indirectly, the power (i)
to vote 5% or more of the securities having ordinary voting power for the
election of directors of such corporation or (ii) to direct or cause the
direction of the management and policies of such other Person, whether through
the ownership of voting securities, by contract or otherwise.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated (including any amendment and restatement
hereof), extended, renewed, refinanced or replaced from time to time.
"Applicable Margin" initially shall mean a percentage per
annum equal to, in the case of (i) Base Rate Loans, 1.25%, (ii) Eurodollar
Loans, 2.25% and (iii) the Commitment Commission with respect to Revolving Loan
Commitments, .50%. From and after each day of delivery of any certificate
delivered in accordance with the first sentence of the following paragraph
indicating a different margin than that described in the immediately preceding
sentence (each, a "Start Date") to and including the applicable End Date
described below, the Applicable Margin shall (subject to any adjustment pursuant
to the immediately succeeding paragraph) be that set forth below opposite the
Leverage Ratio indicated to have been achieved in any certificate delivered in
accordance with the following sentence:
<TABLE>
<CAPTION>
APPLICABLE MARGIN APPLICABLE MARGIN APPLICABLE MARGIN
LEVERAGE RATIO EURODOLLAR LOANS BASE RATE LOANS REVOLVING LOAN COMMITMENT
- ----------------------------- ---------------------- ----------------------- ----------------------------
<S> <C> <C> <C>
greater than
3.50:1.00 2.25 % 1.25 % .50%
- ----------------------------- ---------------------- ----------------------- ----------------------------
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greater than
3.00:1.00 but 2.00 % 1.00 % .375%
less than or
equal to
3.50:1.00
- ----------------------------- ---------------------- ----------------------- ----------------------------
greater than or
equal to 1.75 % 0.75 % .375%
2.50:1.00 but
less than or
equal to
3.00:1.00
- ----------------------------- ---------------------- ----------------------- ----------------------------
less than 1.50 % 0.50 % .375%
2.50:1.00
- ----------------------------- ---------------------- ----------------------- ----------------------------
</TABLE>
The Leverage Ratio shall be determined based on the delivery
of a certificate of Holdings by a senior financial officer of Holdings to the
Administrative Agent and the Lenders, within 45 days of the last day of any
fiscal quarter of Holdings, which certificate shall set forth the calculation of
the Leverage Ratio as at the last day of the Test Period ended immediately prior
to the relevant Start Date (but determined on a Pro Forma Basis to give effect
to any Permitted Acquisition effected on or prior to the date of the delivery of
such certificate) and the Applicable Margins which shall be thereafter
applicable (until same are changed or cease to apply in accordance with the
following sentences); PROVIDED that at the time of the consummation of any
Permitted Acquisition, a senior financial officer of Holdings shall deliver to
the Administrative Agent a certificate setting forth the calculation of the
Leverage Ratio on a PRO FORMA Basis as of the last day of the last Test Period
ended prior to the date on which such Permitted Acquisition is consummated for
which financial statements have been made available (or were required to be made
available) pursuant to Section 8.01(b) or (c), as the case may be, and the date
of such consummation shall be deemed to be a Start Date and the Applicable
Margins which shall be thereafter applicable (until same are changed or cease to
apply in accordance with the following sentence) shall be based upon the
Leverage Ratio as so calculated. The Applicable Margins so determined shall
apply, except as set forth in the succeeding sentence, from the relevant Start
Date to the earliest of (x) the date on which the next certificate is delivered
to the Administrative Agent, (y) the date on which the next Permitted
Acquisition is consummated or (z) the date which is 45 days following the last
day of the Test Period in which the previous Start Date occurred (such earliest
date, the "End Date"), at which time, if no certificate has been delivered to
the Administrative Agent indicating an entitlement to new Applicable Margins
(and thus commencing a new Start Date), the Applicable Margins shall be those
set forth in the table above determined as if the Leverage Ratio were greater
than 3.50:1.00 (such Applicable Margins as so determined, the "Highest
Applicable Margins"). Notwithstanding anything to the contrary contained above
in this definition, (x) the Applicable Margins shall be the Highest Applicable
Margins (subject to further adjustment to the extent provided in Section
1.08(c)) at all times during which there shall exist any Default or Event of
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Default and (y) prior to the date of delivery of the financial statements
pursuant to Section 8.01(b) for the fiscal quarter ended March 31, 2000, in no
event shall the Applicable Margins be less than those described in the first
sentence of this definition.
"Asset Sale" shall mean any sale, transfer or other
disposition by Holdings or any of its Subsidiaries to any Person (including
by-way-of redemption by such Person) other than to Holdings or a Wholly-Owned
Subsidiary of Holdings of any asset (including, without limitation, any capital
stock or other securities of, or equity interests in, another Person) other than
sales of assets pursuant to Sections 9.02 (ii), (iii), (vii), (viii), (ix), (x),
(xii), (xiii), (xiv) and (xv).
"Assignment and Assumption Agreement" shall mean an Assignment
and Assumption Agreement substantially in the form of Exhibit K (appropriately
completed).
"Authorized Officer" of any Credit Party shall mean its chief
executive officer, chief financial officer or any other officer thereof
designated in writing to the Administrative Agent by any then existing
Authorized Officer.
"Bank of America" shall mean Bank of America, N.A., in its
individual capacity, and any successor corporation thereto by merger,
consolidation or otherwise.
"Bankruptcy Code" shall have the meaning provided in
Section 10.05.
"Base Rate" shall mean, at any time, the higher of (i)
the Prime Lending Rate and (ii) 1/2 of 1% in excess of the Federal Funds
Rate.
"Base Rate Loan" shall mean (i) each Swingline Loan and (ii)
each Revolving Loan designated or deemed designated as such by the Borrower at
the time of the incurrence thereof or conversion thereto.
"Borrower" shall have the meaning provided in the first
paragraph of this Agreement.
"Borrowing" shall mean (i) the borrowing of Swingline Loans
from the Swingline Lender on a given day and (ii) the borrowing of one Type of
Revolving Loan from all the Lenders on a given date (or resulting from a
conversion or conversions on such date) having in the case of Eurodollar Loans
the same Interest Period, PROVIDED that Base Rate Loans incurred pursuant to
Section 1.10(b) shall be considered part of the related Borrowing of Eurodollar
Loans.
"BTCo" shall mean Bankers Trust Company, in its individual
capacity, and any successor corporation thereto by merger, consolidation or
otherwise.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day except Saturday, Sunday and any day which
shall be in New York City, New York, a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close and (ii) with respect to all notices and determinations in con-
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nection with, and payments of principal and interest on, Eurodollar Loans,
any day which is a Business Day described in clause (i) above and which is
also a day for trading by and between banks in the New York interbank
Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person,
all expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles and, without duplication, the amount of
Capitalized Lease Obligations incurred by such Person.
"Capitalized Lease Obligations" shall mean, with respect to
any Person, all rental obligations of such Person which, under generally
accepted accounting principles, are or will be required to be capitalized on the
books of such Person, in each case taken at the amount thereof accounted for as
indebtedness in accordance with such principles.
"Cash Equivalents" shall mean, as to any Person, (i)
securities issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (PROVIDED that the full faith
and credit of the United States is pledged in support thereof) having maturities
of not more than one year from the date of acquisition, (ii) marketable direct
obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within one year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either
Standard & Poor's Ratings Services ("S&P") or Moody's Investors Service,
Inc.("Moody's"), (iii) commercial paper maturing no more than one year from the
date of creation thereof and, at the time of acquisition, having a rating of at
least A-1 from S&P or at least P-1 from Moody's, (iv) certificates of deposit,
Eurodollar deposits or bankers' acceptance maturing within one year from the
date of acquisition thereof issued by any bank organized under the laws of the
United States or any state thereof or the District of Columbia or any U.S.
branch of a foreign bank or any foreign branch of a U.S. bank, in each case
having at the date of acquisition thereof combined capital and surplus of not
less than $250,000,000, (v) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clause (i) above
entered into with any bank meeting the qualifications specified in clause (iv)
above and (vi) investments in money market funds with assets at least equal to
$500,000,000.
"CERCLA" shall mean the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as the same may be
amended from time to time, 42 U.S.C. Section 9601 ET seq.
"Change of Control" shall mean any of the following events:
(a)(i) any "person" or "group" (within the meaning of Section 13(d) or
14(d) of the Securities Act) (other than one or more of the Initial
Shareholders) has become, directly or indirectly, the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Securities Act, except that a Person
shall be deemed to have "beneficial ownership" of all shares that any such
Person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time), by way of merger, consolidation or
otherwise, of 35% or more of the voting power of the Voting Stock of Holdings on
a fully-diluted basis, after giving effect to the
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conversion and exercise of all outstanding warrants, options and other
securities of the Borrower convertible into or exercisable for Voting Stock
of the Borrower (whether or not such securities are then currently
convertible or exercisable), and (ii) such Person or group is or becomes,
directly or indirectly, the beneficial owner of a greater percentage of the
voting power of the Voting Stock of the Borrower calculated on such
fully-diluted basis, than the percentage beneficially owned by the Initial
Shareholders; or
(b) during any period of two consecutive calendar years, individuals
who at the beginning of such period constituted either the board or the board of
directors of Holdings together with any new members of such board or board of
directors (i) whose elections by such board or board of directors or whose
nomination for election by the stockholders of Holdings was approved by a vote
of a majority of the members of such board or board of directors than still in
office who either were directors at the beginning of such period or whose
election or nomination for election was previously so approved or (ii) elected
by the Initial Shareholders, cease for any reasons to constitute a majority of
the directors of Holdings then in office; or
(iii) Holdings shall cease to own directly or indirectly 100% of the
economic and voting interests in the Borrower's capital stock.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or
personal) with respect to which any security interests have been granted (or
purported to be granted) pursuant to any Security Document, including, without
limitation, all Pledge Agreement Collateral, all Security Agreement Collateral,
the Mortgaged Properties and all cash and Cash Equivalents delivered as
collateral pursuant to Section 4.02 or 10.
"Collateral Agent" shall mean the Administrative Agent acting
as collateral agent for the Secured Creditors pursuant to the Security
Documents.
"Collective Bargaining Agreements" shall have the meaning
provided in Section 5.05.
"Commitment Commission" shall have the meaning set forth in
Section 3.01.
"Company" shall mean any corporation, limited liability
company, partnership or other business entity (or the adjectival form thereof,
where appropriate).
"Consolidated EBIT" shall mean, for any period, Consolidated
Net Income for such period before consolidated interest expense of Holdings and
its Subsidiaries and provision for taxes for such period.
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"Consolidated EBITDA" shall mean, for any period, Consolidated
EBIT for such period, adjusted by (x) adding thereto (i) the amount of all
amortization, depreciation and other non-cash expenses or non-cash charges that
were deducted in arriving at Consolidated EBIT for such period (including
amortization of goodwill, amortization of plant costs, amortization of
intangible assets, the non-cash costs of agreements evidencing Interest Rate
Protection Agreements, Other Hedging Agreements, license agreements and
non-competition agreements, and the non-cash amortization of Capitalized Lease
Obligations, management fees and organization costs), and (ii) unrealized
non-cash gains and losses from hedging, foreign currency or commodities
translations and transactions that were deducted in arriving at Consolidated
EBIT for such period and (y) subtracting therefrom any cash expenses, cash
charges or cash payments arising from any non-cash expenses, non-cash charges or
unrealized non-cash gains or losses that were deducted in arriving at
Consolidated EBIT in a previous period.
"Consolidated Fixed Charge Coverage Ratio" shall mean, for any
period, the ratio of (x) the remainder of (I) Consolidated EBITDA for such
period minus (II) the amount of all Capital Expenditures made by Holdings and
its Subsidiaries for such period (other than Capital Expenditures (i) financed
with Asset Sale proceeds, equity proceeds, insurance proceeds or Indebtedness
(excluding any Loans) and (ii) constituting Permitted Acquisitions) to (y) the
sum of (I) Consolidated Interest Expense for such period, plus (II) Capital
Expenditures made during such period, (III) cash dividends on Qualified
Preferred Stock made during such period and (IV) scheduled repayments of Loans
to the extent such scheduled repayments are accompanied by a permanent reduction
of the Total Revolving Loan Commitment.
"Consolidated Indebtedness" shall mean, at any time, the
principal amount of all Indebtedness of Holdings and its Subsidiaries at such
time as determined on a consolidated basis.
"Consolidated Interest Coverage Ratio" shall mean, for any
period, the ratio of (i) Consolidated EBITDA for such period to (ii)
Consolidated Interest Expense for such period.
"Consolidated Interest Expense" shall mean, for any period,
the sum of (i) the total consolidated interest expense of Holdings and its
Subsidiaries for such period (calculated without regard to any limitations on
the payment thereof) plus, without duplication, that portion of Capitalized
Lease Obligations of Holdings and its Subsidiaries representing the interest
factor for such period plus (ii) the product of (A) the amount of all cash
dividend payments made on any class of preferred stock during such period and
(B) a fraction, the numerator of which is one and the denominator of which is
one minus the current effective consolidated federal, state and local income tax
rate of Holdings expressed as a decimal, PROVIDED that (x) the amortization or
write-off of debt issuance costs, commissions, fees and expenses and (y) the
amortization of original issue discount shall (in each case) be excluded from
Consolidated Interest Expense to the extent same would otherwise have been
included therein.
"Consolidated Net Income" shall mean, for any period, the net
income (or loss) of Holdings and its Subsidiaries for such period, determined on
a consolidated basis (after any deduction for minority interests), PROVIDED that
in determining Consolidated Net Income, (i) the net income of any other Person
which is not a Subsidiary of Holdings or is accounted for by
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Holdings by the equity method of accounting shall be included only to the
extent of the payment of cash dividends or distributions by such other Person
to Holdings or a Subsidiary thereof during such period, (ii) the net income
(or loss) of any other Person acquired by such specified Person or a
Subsidiary of such Person in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded, (iii) gains
or losses from Asset Sales or other sales of assets (in each case) outside
the ordinary course of business or abandonment or reserves relating thereto
shall be excluded, (iv) items classified as extraordinary gains or
extraordinary losses shall be excluded and (v) the net income of any
Subsidiary of the Borrower shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by that
Subsidiary of its income is not at the time permitted by operation of the
terms of its charter or any agreement, instrument or law applicable to such
Subsidiary; PROVIDED, HOWEVER, that Consolidated Net Income shall be deemed
to include any increase during such period to consolidated shareholder's
equity of Holdings attributable to tax benefits from net operating losses and
the exercise of stock options that are not otherwise included in Consolidated
Net Income for such period.
"Contingent Obligation" shall mean, as to any Person, any
obligation of such Person as a result of such Person being a general partner of
the other Person, unless the underlying obligation is expressly made
non-recourse as to such general partner, and any obligation of such Person
guaranteeing or intended to guarantee any Indebtedness, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (x) for the purchase
or payment of any such primary obligation or (y) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (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 holder of such
primary obligation against loss in respect thereof; PROVIDED, HOWEVER, that the
term Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Credit Documents" shall mean this Agreement and, after the
execution and delivery thereof pursuant to the terms of this Agreement, each
Note, the Subsidiaries Guaranty and each Security Document.
"Credit Event" shall mean (i) the occurrence of the Effective
Date and (ii) the making of any Loan or the issuance of any Letter of Credit.
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"Credit Party" shall mean the Parent Guarantors, the Borrower
and each Subsidiary Guarantor.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to
which a Lender Default is in effect.
"Dividend" shall mean, with respect to any Person, that such
Person has declared or paid a dividend or returned any equity capital to its
stockholders or other equity holders or authorized or made any other
distribution, payment or delivery of property (other than common stock of such
Person) or cash to its stockholders or other equity holders in their capacity as
stockholders or as other equity holders, or redeemed, retired, purchased or
otherwise acquired, directly or indirectly, for a consideration any shares of
any class of its capital stock or any other equity interests outstanding on or
after the Effective Date (or any options or warrants issued by such Person with
respect to its capital stock or other equity interests), or set aside any funds
for any of the foregoing purposes, or shall have permitted any of its
Subsidiaries to purchase or otherwise acquire for a consideration any shares of
any class of the capital stock or any other equity interests of such Person
outstanding on or after the Effective Date (or any options or warrants issued by
such Person with respect to its capital stock or other equity interests).
Without limiting the foregoing, "Dividends" with respect to any Person shall
also include all cash payments made or required to be made by such Person with
respect to any stock appreciation rights, plans, equity incentive or achievement
plans or any similar plans or setting aside of any funds for the foregoing
purposes.
"Documentation Agent" shall have the meaning provided in the
first paragraph of this Agreement.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Drawing" shall have the meaning provided in Section 2.05(b).
"Effective Date" shall have the meaning provided in Section
13.10.
"Eligible Transferee" shall mean and include a commercial
bank, financial institution, any fund that invests in loans or any other
institutional "accredited investor" (as defined in Regulation D of the
Securities Act).
"Employment Agreements" shall have the meaning provided in
Section 5.05.
"End Date" shall have the meaning provided in the definition
of Applicable Margin.
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"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environmental Law (hereafter, "Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief in connection
with alleged injury or threat of injury to health, safety or the environment due
to the presence of Hazardous Materials.
"Environmental Law" shall mean any Federal, state, foreign
or local statute, law, rule, regulation, ordinance, code, guideline, written
policy and rule of common law now or hereafter in effect and in each case as
amended, and any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent decree or judgment, relating to
the environment, employee health and safety or Hazardous Materials,
including, without limitation, CERCLA; RCRA; the Federal Water Pollution
Control Act, 33 U.S.C. Section 1251 ET SEQ.; the Toxic Substances Control
Act, 15 U.S.C. Section 2601 ET SEQ.; the Clean Air Act, 42 U.S.C. Section
7401 ET SEQ.; the Safe Drinking Water Act, 42 U.S.C. Section 3803 ET SEQ.;
the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 ET SEQ.; the Emergency
Planning and the Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001
ET SEQ.; the Hazardous Material Transportation Act, 49 U.S.C. Section 1801 ET
SEQ. and the Occupational Safety and Health Act, 29 U.S.C. Section 651 ET
SEQ.; and any state and local or foreign counterparts or equivalents, in each
case as amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with Holdings or a Subsidiary of Holdings
would be deemed to be a "single employer" (i) within the meaning of Section
414(b), (c), (m) or (o) of the Code or (ii) as a result of Holdings or a
Subsidiary of Holdings being or having been a general partner of such person.
"Eurodollar Loan" shall mean each Revolving Loan designated as
such by the Borrower at the time of the incurrence thereof or conversion
thereto.
"Eurodollar Rate" shall mean (a) the offered quotation to
first-class banks in the New York interbank Eurodollar market by BTCo for Dollar
deposits of amounts in immediately available funds comparable to the outstanding
principal amount of the Eurodollar Loan of BTCo with maturities comparable to
the Interest Period applicable to such Eurodollar Loan commencing two Business
Days thereafter as of 11:00 A.M. (New York time) on the date which is two
Business Days prior to the commencement of such Interest Period, divided (and
rounded upward to the nearest 1/100 of 1%) by (b) a percentage equal to 100%
minus the then stated
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maximum rate of all reserve requirements (including, without limitation, any
marginal, emergency, supplemental, special or other reserves required by
applicable law) applicable to any member bank of the Federal Reserve System
in respect of Eurocurrency funding or liabilities as defined in Regulation D
(or any successor category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in
Section 10.
"Existing Indebtedness" shall have the meaning provided in
Section 7.21.
"Existing Indebtedness Agreements" shall have the meaning
provided in Section 5.05.
"Facing Fee" shall have the meaning provided in Section
3.01(c).
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred
to in Section 3.01.
"Final Maturity Date" shall mean September 24, 2006.
"Guaranteed Creditors" shall mean and include each of the
Administrative Agent, the Documentation Agent, the Collateral Agent, the Issuing
Lender, the Lenders and each party (other than any Credit Party) party to an
Interest Rate Protection Agreement or Other Hedging Agreement to the extent such
party constitutes a Secured Creditor under the Security Documents.
"Guaranteed Obligations" shall mean (i) the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of the principal and interest on each Note issued by, and Loans made to, the
Borrower under this Agreement and all reimbursement obligations and Unpaid
Drawings with respect to Letters of Credit, together with all the other
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities
(including, without limitation, indemnities, fees and interest thereon) of the
Borrower to the Lenders, the Administrative Agent, the Issuing Lender and the
Collateral Agent now existing or hereafter incurred under, arising out of or in
connection with this Agreement or any other Credit Document and the due
performance and compliance by the Borrower with all the terms, conditions and
agreements contained in the Credit Documents and (ii) the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of all obligations (including obligations which, but for the automatic stay
under Section 362(a) of the Bankruptcy Code, would become due) of the Borrower
owing under any Interest Rate Protection Agreement or Other Hedging Agreement
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entered into by the Borrower with any Lender or any affiliate thereof (even if
such Lender subsequently ceases to be a Lender under this Agreement for any
reason) so long as such Lender or affiliate participates in such Interest Rate
Protection Agreement or Other Hedging Agreement, and their subsequent assigns,
if any, whether now in existence or hereafter arising, and the due performance
and compliance with all terms, conditions and agreements contained therein, but
not if such beneficiary (or representative thereof) of such Guaranteed
Obligations in writing expressly agrees that such Interest Rate Protection
Agreement or Other Hedging Agreement shall not be a Guaranteed Obligation.
"Guarantor" shall mean the Parent Guarantors and each
Subsidiary Guarantor.
"Guaranty" shall mean the Parent Guaranty and the Subsidiaries
Guaranty.
"Hazardous Materials" shall mean (a) any petroleum or
petroleum products, radioactive materials, asbestos in any form that is friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous substances," "restricted hazardous waste," "toxic
substances," "toxic pollutants," "contaminants," or "pollutants," or words of
similar import, under any applicable Environmental Law; and (c) any other
chemical, material or substance, the Release of which is prohibited, limited or
regulated by any governmental authority.
"Highest Applicable Margin" shall have the meaning provided in
the definition of Applicable Margin.
"Holdings" shall have the meaning provided in the first
paragraph of this Agreement.
"Indebtedness" shall mean, as to any Person, without
duplication, (i) all indebtedness (including principal, interest, fees and
charges) of such Person for borrowed money or for the deferred purchase price of
property or services, (ii) the maximum amount available to be drawn under all
letters of credit issued for the account of such Person and all unpaid drawings
in respect of such letters of credit, (iii) all Indebtedness of the types
described in clause (i), (ii), (iv), (v), (vi) or (vii) of this definition
secured by any Lien on any property owned by such Person, whether or not such
Indebtedness has been assumed by such Person (PROVIDED, that, if the Person has
not assumed or otherwise become liable in respect of such Indebtedness, such
Indebtedness shall be deemed to be in an amount equal to the fair market value
of the property to which such Lien relates as determined in good faith by such
Person), (iv) the aggregate amount required to be capitalized under leases under
which such Person is the lessee, (v) all obligations of such person to pay a
specified purchase price for goods or services, whether or not delivered or
accepted, I.E., take-or-pay and similar obligations, (vi) all Contingent
Obligations of such Person and (vii) all obligations under any Interest Rate
Protection Agreement, any Other Hedging Agreement or under any similar type of
agreement. Notwithstanding the foregoing, Indebtedness shall not include trade
payables (including obligations to refund advances) and
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accrued expenses incurred by any Person in accordance with customary
practices and in the ordinary course of business of such Person.
"Initial Shareholders" shall mean the persons listed on
Schedule XII.
"Intercompany Loan" shall have the meaning provided in Section
9.05(ix).
"Intercompany Note" shall mean a promissory note, in the form
of Exhibit L, evidencing Intercompany Loans.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan. "Interest Period" shall have
the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement, interest collar agreement,
interest rate hedging agreement or other similar agreement or arrangement.
"Investments" shall have the meaning provided in Section 9.05.
"Issuing Lender" shall mean BTCo.
"L/C Supportable Obligations" shall mean obligations of the
Borrower or any of its Subsidiaries permitted to exist pursuant to the terms of
this Agreement.
"Leaseholds" of any Person shall mean all the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Lender" shall mean each financial institution listed on
Schedule I, as well as any Person which becomes a "Lender" hereunder pursuant to
Section 1.13 or 13.04(b).
"Lender Default" shall mean (i) the refusal (which has not
been retracted) or the failure of a Lender to make available its portion of any
Borrowing (including any Mandatory Borrowing) or to fund its portion of any
unreimbursed payment under Section 2.04(c) or (ii) a Lender having notified in
writing the Borrower and/or the Administrative Agent that such Lender does not
intend to comply with its obligations under Section 1.01(a), 1.01(c) or 2.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in
Section 3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the
sum of (i) the aggregate Stated Amount of all outstanding Letters of Credit and
(ii) the amount of all Unpaid Drawings.
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"Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
"Leverage Ratio" shall mean, at any time, the ratio of
Consolidated Indebtedness (excluding forward foreign currency contracts of
Master Data Center) at such time to Consolidated EBITDA for the Test Period then
most recently ended.
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
the UCC or any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loan" shall mean each Revolving Loan and each Swingline Loan.
"Management Agreements" shall have the meaning provided in
Section 5.05.
"Mandatory Borrowing" shall have the meaning provided in
Section 1.01(c).
"Margin Stock" shall have the meaning provided in Regulation
U.
"Master Data Center" shall mean Master Data Center, Inc., a
Michigan corporation.
"Maximum Swingline Amount" shall mean $5,000,000.
"Minimum Borrowing Amount" shall mean (i) for Revolving Loans,
$1,000,000 and (ii) for Swingline Loans, $50,000.
"Moody's" shall have the meaning provided in the definition of
"Cash Equivalents".
"Mortgage" shall have the meaning provided in Section 8.11.
"Mortgaged Property" shall have the meaning provided in
Section 8.11.
"Net Debt Proceeds" shall mean, with respect to any incurrence
of Indebtedness for borrowed money, the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith)
received by the respective Person from the respective incurrence of such
Indebtedness for borrowed money.
"Net Insurance Proceeds" shall mean, with respect to any
Recovery Event, the cash proceeds (net of reasonable costs and taxes incurred in
connection with such Recovery Event) received by the respective Person in
connection with the respective Recovery Event.
"Net Sale Proceeds" shall mean, for any Asset Sale, the gross
cash proceeds (including any cash received by way of deferred payment pursuant
to a promissory note,
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receivable or otherwise, but only as and when received) received from such
sale of assets, net of the costs of such sale (including fees and
commissions, payments of unassumed liabilities relating to the assets sold
and required payments of any Indebtedness (other than Indebtedness secured
pursuant to the Security Documents) which is secured by the respective assets
which were sold), and the incremental taxes paid or payable as a result of
such Asset Sale and any reasonable reserves established in connection
therewith as determined in good faith by the Borrower.
"Non-Compete Agreements" shall have the meaning provided in
Section 5.05.
"Non-Defaulting Lender" shall mean and include each Lender
other than a Defaulting Lender.
"Note" shall mean each Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in
Section 1.03(a).
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean the office of the Administrative
Agent located at 130 Liberty Street, New York, New York 10006, or such other
office as the Administrative Agent may hereafter designate in writing as such to
the other parties hereto.
"Obligations" shall mean all amounts owing to the
Administrative Agent, the Collateral Agent, the Issuing Lender or any Lender
pursuant to the terms of this Agreement or any other Credit Document.
"Other Hedging Agreement" shall mean any foreign exchange
contracts, currency swap agreements, commodity agreements or other similar
agreements or arrangements designed to protect against the fluctuations in
currency values.
"Parent Guarantor" shall have the meaning provided in the
first paragraph of this Agreement.
"Parent Guaranty" shall mean the guaranty of each of Holdings
and WPIV pursuant to Section 14.
"Participant" shall have the meaning provided in Section
2.04(a).
"Payment Office" shall mean the office of the Administrative
Agent located at 130 Liberty Street, New York, New York 10006, or such other
office as the Administrative Agent may hereafter designate in writing as such to
the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisition" shall have the meaning provided in
Section 9.02(xi).
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"Permitted Encumbrance" shall mean, with respect to any
Mortgaged Property, such exceptions to title as are set forth in the mortgage
policy delivered with respect thereto, all of which exceptions must be
reasonably acceptable to the Administrative Agent in its reasonable discretion.
"Permitted Liens" shall have the meaning provided in Section
9.01.
"Person" shall mean any individual, partnership, joint
venture, firm, corporation, association, limited liability company, trust or
other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2)
of ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) Holdings or a Subsidiary of Holdings or an ERISA
Affiliate, and each such plan for the five year period immediately following the
latest date on which the Holdings, or a Subsidiary of Holdings or an ERISA
Affiliate maintained, contributed to or had an obligation to contribute to such
plan.
"Pledge Agreement" shall have the meaning provided in Section
5.10.
"Pledge Agreement Collateral" shall mean all "Collateral" as
defined in the Pledge Agreement.
"Pledged Securities" shall mean all "Pledged Securities" as
defined in the Pledge Agreement.
"Prime Lending Rate" shall mean the rate which BTCo announces
from time to time as its prime lending rate, the Prime Lending Rate to change
when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. BTCo may make commercial loans or other loans
at rates of interest at, above or below the Prime Lending Rate.
"Projections" shall mean the projections prepared by the
Borrower in connection with the entering into of the Credit Documents, dated on
or about August 2, 1999 and furnished to the Lenders prior to the Effective
Date.
"Qualified Preferred Stock" means any preferred stock of
Holdings, so long as (i) the express terms that are applicable thereto shall
provide that dividends thereon shall not be required to be paid at any time (and
to the extent) that such payment would be prohibited by the terms of this
Agreement or any other agreement of Holdings relating to outstanding
Indebtedness and (ii) such preferred stock, by the terms applicable thereto
(including the terms of any security into which it is convertible or for which
it is exchangeable) or upon the happening of any event, cannot mature and is not
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable, or required to be repurchased, at the sole option of the holder
thereof (including, without limitation, upon the occurrence of any Default or
Event of Default under Section 10.10), in whole or in part, on or prior to the
date occurring September 24, 2007; PROVIDED that any preferred stock that would
not constitute Qualified Preferred Stock as provided
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above solely because the holders thereof have the right to require Holdings
to repurchase such preferred stock upon the occurrence of a "change of
control" or an "asset sale" shall constitute Qualified Preferred Stock if the
terms applicable thereto provide that Holdings may not repurchase or redeem
any such preferred stock pursuant to the documentation governing same unless
such repurchase or redemption complies with the requirements of Section 9.03.
"Quarterly Payment Date" shall mean the last Business Day of
each October, January, April and July occurring after the Effective Date.
"RCRA" shall mean the Resource Conservation and Recovery Act,
as the same may be amended from time to time, 42 U.S.C.Section 6901 ET SEQ.
"Real Property" of any Person shall mean all the right, title
and interest of such Person in and to land, improvements and fixtures, including
Leaseholds (but only to the extent that (x) each such Leasehold has an annual
lease payment in excess of $1,000,000 and (y) the Required Lenders determine in
good faith that such Leasehold is material).
"Recovery Event" shall mean the receipt by Holdings or any of
its Subsidiaries of any cash insurance proceeds or condemnation awards payable
(i) by reason of theft, loss, physical destruction, damage, taking or any other
similar event with respect to any property or assets of Holdings or any of its
Subsidiaries and (ii) under any policy of insurance required to be maintained
under Section 8.03.
"Register" shall have the meaning provided in Section 13.15.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Release" shall mean the disposing, discharging, injecting,
spilling, pumping, leaking, leaching, dumping, emitting, escaping, emptying,
pouring or migrating, into or upon any land or water or air, or otherwise
entering into the environment.
"Replaced Lender" shall have the meaning provided in Section
1.13.
"Replacement Assets" shall have the meaning provided in
Section 3.03(c).
"Replacement Lender" shall have the meaning provided in
Section 1.13.
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"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan that is subject to Title IV of ERISA
other than those events as to which the 30-day notice period is waived under
subsection .22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required Lenders" shall mean Non-Defaulting Lenders the sum
of whose Revolving Loan Commitments (or after the termination thereof,
outstanding Revolving Loans and RL Percentages of outstanding Swingline Loans
and Letter of Credit Outstandings) represent an amount greater than 50% of the
sum of the Total Revolving Loan Commitment less the Revolving Loan Commitments
of all Defaulting Lenders (or after the termination thereof, the sum of the then
total outstanding Revolving Loans of Non-Defaulting Lenders and the aggregate RL
Percentages of all Non-Defaulting Lenders of the total outstanding Swingline
Loans and Letter of Credit Outstandings Swingline Loans at such time).
"Revolving Loan" shall have the meaning provided in Section
1.01(a).
"Revolving Loan Commitment" shall mean, for each Lender, the
amount set forth opposite such Lender's name in Schedule I directly below the
column entitled "Revolving Loan Commitment," as same may be (x) reduced from
time to time pursuant to Sections 3.02, 3.03 and/or 10 or (y) adjusted from time
to time as a result of assignments to or from such Lender pursuant to Section
1.13 or 13.04(b).
"Revolving Note" shall have the meaning provided in Section
1.05(a).
"RL Percentage" of any Lender at any time shall mean a
fraction (expressed as a percentage) the numerator of which is the Revolving
Loan Commitment of such Lender at such time and the denominator of which is the
Total Revolving Loan Commitment at such time, PROVIDED that if the RL Percentage
of any Lender is to be determined after the Total Revolving Loan Commitment has
been terminated, then the RL Percentages of the Lenders shall be determined
immediately prior (and without giving effect) to such termination.
"S&P" shall have the meaning provided in the definition of
"Cash Equivalents".
"SEC" shall have the meaning provided in Section 8.01(h).
"Section 4.04(b)(ii) Certificate" shall have the meaning
provided in Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning assigned that term
in the respective Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Securities Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder.
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"Security Agreement" shall have the meaning provided in
Section 5.11.
"Security Agreement Collateral" shall mean all
"Collateral" as defined in the Security Agreement.
"Security Document" shall mean and include each of the
Security Agreement, the Pledge Agreement and, after the execution and delivery
thereof, each Mortgage.
"Shareholders' Agreements" shall have the meaning provided
in Section 5.05.
"Solvency Certificate" shall have the meaning provided in
Section 5.14.
"Standby Letter of Credit" shall have the meaning provided
in Section 2.01(a).
"Start Date" shall have the meaning provided in the
definition of Applicable Margin.
"Stated Amount" of each Letter of Credit shall mean, at any
time, the maximum amount available to be drawn thereunder (in each case
determined without regard to whether any conditions to drawing could then be
met).
"Subsidiaries Guaranty" shall have the meaning provided in
Section 5.12.
"Subsidiary" shall mean, as to any Person, (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, limited liability
company, association, joint venture or other entity in which such Person and/or
one or more Subsidiaries of such Person has more than a 50% equity interest at
the time.
"Subsidiary Guarantor" shall mean each Subsidiary of the
Borrower.
"Swingline Lender" shall mean BTCo.
"Swingline Expiry Date" shall mean that date which is five
Business Days prior to the Final Maturity Date.
"Swingline Loan" shall have the meaning provided in Section
1.01(b).
"Swingline Note" shall have the meaning provided in Section
1.05(a).
"Tax Benefit" shall have the meaning provided in Section
4.04(c).
"Tax Sharing Agreements" shall have the meaning provided in
Section 5.05.
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"Taxes" shall have the meaning provided in Section 4.04(a).
"Test Period" shall mean the four consecutive fiscal quarters
of Holdings then last ended (in each case taken as one accounting period).
"Total Revolving Loan Commitment" shall mean, at any time, the
sum of the Revolving Loan Commitments of each of the Lenders.
"Total Unutilized Revolving Loan Commitment" shall mean, at
any time, an amount equal to the remainder of (x) the Total Revolving Loan
Commitment then in effect less (y) the sum of the aggregate principal amount of
all Revolving Loans and Swingline Loans then outstanding plus the then aggregate
amount of all Letter of Credit Outstandings.
"Trade Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Type" shall mean the type of Revolving Loan determined with
regard to the interest option applicable thereto, I.E., whether a Base Rate Loan
or a Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the
amount, if any, by which the actuarial present value of the accumulated plan
benefits under the Plan as of the close of its most recent plan year, determined
in accordance with actuarial assumptions at such time consistent with Statement
of Financial Accounting Standards No. 87, exceeds the market value of the assets
allocable thereto.
"United States" and "U.S." shall each mean the United
States of America.
"Unpaid Drawing" shall have the meaning provided for in
Section 2.05(a).
"Unutilized Revolving Loan Commitment" shall mean, with
respect to any Lender at any time, such Lender's Revolving Loan Commitment at
such time less the sum of (i) the aggregate outstanding principal amount of all
Revolving Loans made by such Lender at such time and (ii) such Lender's RL
Percentage of the Letter of Credit Outstandings at such time.
"Voting Stock" shall mean all classes of capital stock of the
Borrower then outstanding and normally entitled to vote in the election of
directors.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i)
any corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, limited liability company,
association, joint venture or other entity in which such Person and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.
"WPIV" shall have the meaning provided in the first
paragraph of this Agreement.
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SECTION 12. THE ADMINISTRATIVE AGENT.
12.01 APPOINTMENT. The Lenders hereby irrevocably designate
BTCo as Administrative Agent (for purposes of this Section 12, the term
"Administrative Agent" also shall include BTCo in its capacity as Collateral
Agent pursuant to the Security Documents) to act as specified herein and in the
other Credit Documents. Each Lender hereby irrevocably authorizes, and each
holder of any Note by the acceptance of such Note shall be deemed irrevocably to
authorize, the Administrative Agent to take such action on their behalf under
the provisions of this Agreement, the other Credit Documents and any other
instruments and agreements referred to herein or therein and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Administrative Agent by the terms hereof and
thereof and such other powers as are reasonably incidental thereto. The
Administrative Agent may perform any of its duties hereunder by or through its
officers, directors, agents, employees or affiliates.
12.02 NATURE OF DUTIES. The Administrative Agent shall not
have any duties or responsibilities except those expressly set forth in this
Agreement and in the other Credit Documents. Neither the Administrative Agent
nor any of its officers, directors, agents, employees or affiliates shall be
liable for any action taken or omitted by them hereunder or under any other
Credit Document or in connection herewith or therewith, unless caused by its or
their gross negligence or willful misconduct. The duties of the Administrative
Agent shall be mechanical and administrative in nature; the Administrative Agent
shall not have by reason of this Agreement or any other Credit Document a
fiduciary relationship in respect of any Lender or the holder of any Note; and
nothing in this Agreement or any other Credit Document, expressed or implied, is
intended to or shall be so construed as to impose upon the Administrative Agent
any obligations in respect of this Agreement or any other Credit Document except
as expressly set forth herein or therein. Notwithstanding the designation of
Bank of America as Documentation Agent, Bank of America shall not have any
obligations or duties under this Agreement or any other Credit Document beyond
that of a Lender.
12.03 LACK OF RELIANCE ON THE ADMINISTRATIVE AGENT.
Independently and without reliance upon the Administrative Agent, each Lender
and the holder of each Note, to the extent it deems appropriate, has made and
shall continue to make (i) its own independent investigation of the financial
condition and affairs of Holdings and its Subsidiaries in connection with the
making and the continuance of the Loans and the taking or not taking of any
action in connection herewith and (ii) its own appraisal of the creditworthiness
of Holdings and its Subsidiaries and, except as expressly provided in this
Agreement, the Administrative Agent shall not have any duty or responsibility,
either initially or on a continuing basis, to provide any Lender or the holder
of any Note with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter. The Administrative Agent shall not be responsible to any
Lender or the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectability, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of Holdings or any of its
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Subsidiaries or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of
this Agreement or any other Credit Document, or the financial condition of
Holdings or any of its Subsidiaries or the existence or possible existence of
any Default or Event of Default.
12.04 CERTAIN RIGHTS OF THE ADMINISTRATIVE AGENT. If the
Administrative Agent shall request instructions from the Required Lenders with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, the Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the Required Lenders;
and the Administrative Agent shall not incur liability to any Lender by reason
of so refraining. Without limiting the foregoing, no Lender or the holder of any
Note shall have any right of action whatsoever against the Administrative Agent
as a result of the Administrative Agent acting or refraining from acting
hereunder or under any other Credit Document in accordance with the instructions
of the Required Lenders.
12.05 RELIANCE. The Administrative Agent shall be entitled to
rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by any Person that the Administrative Agent believed to be
the proper Person, and, with respect to all legal matters pertaining to this
Agreement and any other Credit Document and its duties hereunder and thereunder,
upon advice of counsel selected by the Administrative Agent (which may be
counsel for the Borrower).
12.06 INDEMNIFICATION. To the extent the Administrative Agent
is not reimbursed and indemnified by the Credit Parties, the Lenders will
reimburse and indemnify the Administrative Agent in proportion to their
respective "percentage" as used in determining the Required Lenders (determined
as if there were no Defaulting Lenders) for and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, costs,
expenses or disbursements of whatsoever kind or nature which may be imposed on,
asserted against or incurred by the Administrative Agent in performing its
duties hereunder or under any other Credit Document or in any way relating to or
arising out of this Agreement or any other Credit Document; PROVIDED that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
to the extent resulting from the Administrative Agent's gross negligence or
willful misconduct (as finally determined by a court of competent jurisdiction.
12.07 THE ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
With respect to its obligation to make Loans, or issue or participate in Letters
of Credit, under this Agreement, the Administrative Agent shall have the rights
and powers specified herein for a "Lender" and may exercise the same rights and
powers as though it were not performing the duties specified herein; and the
term "Lenders," "Required Lenders," "holders of Notes" or any similar terms
shall, unless the context clearly otherwise indicates, include the
Administrative Agent in its respective individual capacities. The Administrative
Agent and its affiliates may accept deposits from, lend money to, and generally
engage in any kind of banking, investment banking, trust or other
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business with, or provide debt financing, equity capital or other services
(including financial advisory services) to, any Credit Party or any Affiliate
of any Credit Party (or any Person engaged in a similar business with any
Credit Party or any Affiliate thereof) as if they were not performing the
duties specified herein, and may accept fees and other consideration from any
Credit Party or any Affiliate of any Credit Party for services in connection
with this Agreement and otherwise without having to account for the same to
the Lenders.
12.08 HOLDERS. The Administrative Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
a written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
12.09 RESIGNATION BY THE ADMINISTRATIVE AGENT. (a) The
Administrative Agent may resign from the performance of all its respective
functions and duties hereunder and/or under the other Credit Documents at any
time by giving 15 Business Days' prior written notice to the Borrower and the
Lenders. Such resignation shall take effect upon the appointment of a successor
Administrative Agent pursuant to clauses (b) and (c) below or as otherwise
provided below.
(b) Upon any such notice of resignation by the Administrative
Agent, the Required Lenders shall appoint a successor Administrative Agent
hereunder or thereunder who shall be a commercial bank or trust company
reasonably acceptable to the Borrower.
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent with the
consent of the Borrower (which consent shall not be unreasonably withheld or
delayed), shall then appoint a successor Administrative Agent who shall serve as
Administrative Agent hereunder or thereunder until such time, if any, as the
Required Lenders appoint a successor Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed
pursuant to clause (b) or (c) above by the 20th Business Day after the date such
notice of resignation was given by the Administrative Agent, the Administrative
Agent's resignation shall become effective and the Required Lenders shall
thereafter perform all the duties of the Administrative Agent hereunder and/or
under any other Credit Document until such time, if any, as the Required Lenders
appoint a successor Administrative Agent as provided above.
SECTION 13. MISCELLANEOUS.
13.01 PAYMENT OF EXPENSES, ETC. The Borrower shall: (i)
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Administrative Agent and the
Documentation Agent (including, without limitation, the reasonable fees and
disbursements of White & Case LLP (or replacement counsel)
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and of the Administrative Agent's and the Documentation's Agent local counsel
and consultants, and no other counsel) in connection with the preparation,
execution and delivery of this Agreement and the other Credit Documents and
the documents and instruments referred to herein and therein and any
amendment, waiver or consent relating hereto or thereto, of the
Administrative Agent and the Documentation Agent in connection with their
syndication efforts with respect to this Agreement and of the Administrative
Agent and the Documentation Agent and, after the occurrence of an Event of
Default, each of the Lenders in connection with the enforcement of this
Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or pursuant to any insolvency or bankruptcy
proceedings (including, without limitation, in each case the reasonable fees
and disbursements of counsel for the Administrative Agent and the
Documentation Agent and, after the occurrence of an Event of Default, for
each of the Lenders); (ii) pay and hold each of the Lenders harmless from and
against any and all present and future stamp, excise and other similar
documentary taxes with respect to the foregoing matters and save each of the
Lenders harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable
to such Lender) to pay such taxes; and (iii) indemnify the Administrative
Agent, the Documentation Agent and each Lender, and each of their respective
officers, directors, employees, representatives, affiliates and agents from
and hold each of them harmless against any and all liabilities, obligations
(including removal or remedial actions), losses, damages, penalties, claims,
actions, judgments, suits, costs, expenses and disbursements (including
reasonable attorneys' and consultants' fees and disbursements) incurred by,
imposed on or assessed against any of them as a result of, or arising out of,
or in any way related to, or by reason of, (a) any investigation, litigation
or other proceeding (whether or not the Administrative Agent, the
Documentation Agent or any Lender is a party thereto and whether or not such
investigation, litigation or other proceeding is brought by or on behalf of
any Credit Party) related to the entering into and/or performance of this
Agreement or any other Credit Document or the use of any Letter of Credit or
the proceeds of any Loans hereunder or any other transactions contemplated
herein or in any other Credit Document or the exercise of any of their rights
or remedies provided herein or in the other Credit Documents, or (b) the
actual or alleged presence of Hazardous Materials in the air, surface water
or groundwater or on the surface or subsurface of any Real Property owned or
at any time operated by Holdings or any of its Subsidiaries, the generation,
storage, transportation, handling or disposal of Hazardous Materials by
Holdings or any of its Subsidiaries at any location, whether or not owned or
operated by Holdings or any of its Subsidiaries, the non-compliance of any
Real Property with any Environmental Law (including applicable permits
thereunder) applicable to any Real Property, or any Environmental Claim
asserted against Holdings, any of its Subsidiaries or any Real Property owned
or at any time operated by Holdings or any of its Subsidiaries, including, in
each case, without limitation, the reasonable fees and disbursements of
counsel and other consultants incurred in connection with any such
investigation, litigation or other proceeding (but excluding, in each case,
any losses, liabilities, claims, damages or expenses to the extent incurred
by reason of the gross negligence or willful misconduct of the Person to be
indemnified (as finally determined by a court of competent jurisdiction). To
the extent that the undertaking to indemnify, pay or hold harmless the
Administrative Agent, the Documentation Agent or any Lender set forth in the
preceding sentence may be unenforceable because it is
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violative of any law or public policy, the Borrower shall make the maximum
contribution to the payment and satisfaction of each of the indemnified
liabilities which is permissible under applicable law.
13.02 RIGHT OF SETOFF. (a) In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
an Event of Default, the Administrative Agent, the Documentation Agent and each
Lender is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to any Credit Party or
to any other Person, any such notice being hereby expressly waived, to set off
and to appropriate and apply any and all deposits (general or special) and any
other Indebtedness at any time held or owing by the Administrative Agent, the
Documentation Agent or such Lender (including, without limitation, by branches
and agencies of such Lender wherever located) to or for the credit or the
account of any Credit Party against and on account of the Obligations and
liabilities of the Credit Parties to the Administrative Agent, the Documentation
Agent or such Lender under this Agreement or under any of the other Credit
Documents, including, without limitation, all interests in Obligations purchased
by such Lender pursuant to Section 13.06(b), and all other claims of any nature
or description arising out of or connected with this Agreement or any other
Credit Document, irrespective of whether or not the Administrative Agent, the
Documentation Agent or such Lender shall have made any demand hereunder and
although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
(b) NOTWITHSTANDING THE FOREGOING SUBSECTION (a), AT ANY TIME
THAT THE LOANS OR ANY OTHER OBLIGATION SHALL BE SECURED BY REAL PROPERTY LOCATED
IN CALIFORNIA, NO LENDER SHALL EXERCISE A RIGHT OF SETOFF, BANKER'S LIEN OR
COUNTERCLAIM OR TAKE ANY COURT OR ADMINISTRATIVE ACTION OR INSTITUTE ANY
PROCEEDING TO ENFORCE ANY PROVISION OF THIS AGREEMENT OR ANY NOTE THAT IS NOT
TAKEN BY THE REQUIRED LENDERS OR APPROVED IN WRITING BY THE ADMINISTRATIVE AGENT
OR THE REQUIRED LENDERS IF SUCH SETOFF OR ACTION OR PROCEEDING WOULD OR MIGHT
(PURSUANT TO SECTIONS 580a, 580b, 580d AND 726 OF THE CALIFORNIA CODE OF CIVIL
PROCEDURE OR SECTION 2924 OF THE CALIFORNIA CIVIL CODE, IF APPLICABLE, OR
OTHERWISE) AFFECT OR IMPAIR THE VALIDITY, PRIORITY OR ENFORCEABILITY OF THE
LIENS GRANTED TO THE COLLATERAL AGENT PURSUANT TO THE SECURITY DOCUMENTS OR THE
ENFORCEABILITY OF THE NOTES AND OTHER OBLIGATIONS HEREUNDER, AND ANY ATTEMPTED
EXERCISE BY ANY LENDER OF ANY SUCH RIGHT WITHOUT OBTAINING SUCH CONSENT OF THE
REQUIRED LENDERS SHALL BE NULL AND VOID. THIS SUBSECTION (b) SHALL BE SOLELY FOR
THE BENEFIT OF EACH OF THE LENDERS HEREUNDER AND MAY BE AMENDED, MODIFIED OR
WAIVED IN ANY RESPECT BY THE REQUIRED LENDERS WITHOUT THE REQUIREMENT OF PRIOR
NOTICE TO OR CONSENT BY ANY CREDIT PARTY AND DOES NOT CONSTITUTE A WAIVER OF ANY
RIGHTS AGAINST ANY CREDIT PARTY OR AGAINST ANY COLLATERAL.
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13.03 NOTICES. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to any Credit Party,
at the address specified opposite its signature below or in the other relevant
Credit Documents; if to the Lender, at its address specified on Schedule II; and
if to the Administrative Agent, at the Notice Office; or, as to any Credit Party
or the Administrative Agent, at such other address as shall be designated by
such party in a written notice to the other parties hereto and, as to each
Lender, at such other address as shall be designated by such Lender in a written
notice to the Borrower and the Administrative Agent. All such notices and
communications shall, when mailed, telegraphed, telexed, telecopied, or cabled
or sent by overnight courier, be effective when deposited in the mails,
delivered to the telegraph company, cable company or overnight courier, as the
case may be, or sent by telex or telecopier, except that notices and
communications to the Administrative Agent and the Borrower shall not be
effective until received by the Administrative Agent or the Borrower, as the
case may be.
13.04 BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS. (a)
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto;
PROVIDED, HOWEVER, the Borrower may not assign or transfer any of its rights,
obligations or interest hereunder without the prior written consent of the
Lenders and, PROVIDED FURTHER, that, although any Lender may transfer, assign or
grant participations in its rights hereunder, such Lender shall remain a
"Lender" for all purposes hereunder (and may not transfer or assign all or any
portion of its Revolving Loan Commitment hereunder except as provided in
Sections 1.13 and 13.04(b)) and the transferee, assignee or participant, as the
case may be, shall not constitute a "Lender" hereunder and, PROVIDED FURTHER,
that no Lender shall transfer or grant any participation under which the
participant shall have rights to approve any amendment to or waiver of this
Agreement or any other Credit Document except to the extent such amendment or
waiver would (i) extend the final scheduled maturity of any Revolving Loan,
Revolving Note or Letter of Credit (unless such Letter of Credit is not extended
beyond the Final Maturity Date) in which such participant is participating, or
reduce the rate or extend the time of payment of interest or Fees thereon
(except in connection with a waiver of applicability of any post-default
increase in interest rates) or reduce the principal amount thereof, or increase
the amount of the participant's participation over the amount thereof then in
effect (it being understood that a waiver of any Default or Event of Default or
of a mandatory reduction in the Total Revolving Loan Commitment, shall not
constitute a change in the terms of such participation, and that an increase in
any Revolving Loan Commitment shall be permitted without the consent of any
participant if the participant's participation is not increased as a result
thereof), (ii) consent to the assignment or transfer by the Borrower of any of
its rights and obligations under this Agreement or (iii) release all or
substantially all of the Collateral under all of the Security Documents (except
as expressly provided in the Credit Documents) supporting the Loans hereunder in
which such participant is participating. In the case of any such participation,
the participant shall not have any rights under this Agreement or any of the
other Credit Documents (the participant's rights against such Lender in respect
of such participation to be those set forth in the agreement executed by such
Lender in favor of the participant relating thereto) and all amounts payable by
the Borrower hereunder shall be determined as if such Lender had not sold such
participation.
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(b) Notwithstanding the foregoing, any Lender (or any Lender
together with one or more other Lenders) may (x) assign all or a portion of its
Revolving Loan Commitment and related outstanding Obligations hereunder to (i)
its parent company and/or any affiliate of such Lender which is at least 50%
owned by such Lender or its parent company or to one or more Lenders or (ii) in
the case of any Lender that is a fund that invests in loans, any other fund that
invests in loans and is managed or advised by the same investment advisor of
such Lender or by an Affiliate of such investment advisor or (y) assign all or a
portion of such Revolving Loan Commitment and related outstanding Obligations
hereunder to one or more Eligible Transferees (treating any fund that invests in
loans and any other fund that invests in loans and is managed by the same
investment advisor of such fund or by an Affiliate of such investment advisor as
a single Eligible Transferee), each of which assignees shall become a party to
this Agreement as a Lender by execution of an Assignment and Assumption
Agreement, PROVIDED that, (i) at such time Schedule I shall be deemed modified
to reflect the Revolving Loan Commitment and/or outstanding Revolving Loans, as
the case may be, of such new Lender and of the existing Lenders, (ii) upon the
surrender of the relevant Revolving Note by the assigning Lender (or, upon such
assigning Lender's indemnifying the Borrower for any lost Revolving Note
pursuant to a customary indemnification agreement) new Revolving Notes will be
issued, at the Borrower's expense, to such new Lender and to the assigning
Lender upon the request of such new Lender or assigning Lender, such new
Revolving Notes to be in conformity with the requirements of Section 1.05 (with
appropriate modifications) to the extent needed to reflect the revised Revolving
Loan Commitment and/or outstanding Revolving Loans, as the case may be, (iii)
the consent of the Administrative Agent, the Documentation Agent and the
Borrower (the Borrower's consent to be required only so long as no Default under
Sections 10.01 and 10.05 exists and so long as no Event of Default exists) shall
be required in connection with any assignment to an Eligible Transferee pursuant
to clause (y) above (each of which consents shall not be unreasonably withheld
or delayed), (v) the Administrative Agent shall receive at the time of each such
assignment, from the assigning or assignee Lender, the payment of a
non-refundable assignment fee of $3,500 and (vi) no such transfer or assignment
will be effective until recorded by the Administrative Agent on the Register
pursuant to Section 13.15. To the extent of any assignment pursuant to this
Section 13.04(b), the assigning Lender shall be relieved of its obligations
hereunder with respect to its assigned Revolving Loan Commitment and outstanding
Revolving Loans.
(c) Nothing in this Agreement shall prevent or prohibit any
Lender from pledging its Revolving Loans and Revolving Notes hereunder to a
Federal Reserve Bank in support of borrowings made by such Lender from such
Federal Reserve Bank and, with the consent of the Administrative Agent, any
Lender which is a fund may pledge all or any portion of its Revolving Loans and
Revolving Notes to its trustee in support of its obligations to its trustee. No
pledge pursuant to this clause (c) shall release the transferor Lender from any
of its obligations hereunder.
13.05 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on
the part of the Administrative Agent, the Documentation Agent, the Collateral
Agent, the Issuing Lender or any Lender in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between the Borrower or any other Credit Party and the Administrative
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Agent, the Documentation Agent, the Collateral Agent, the Issuing Lender or
any Lender shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of
any other right, power or privilege hereunder or thereunder. The rights,
powers and remedies herein or in any other Credit Document expressly provided
are cumulative and not exclusive of any rights, powers or remedies which the
Administrative Agent, the Documentation Agent, the Collateral Agent, the
Issuing Lender or any Lender would otherwise have. No notice to or demand on
any Credit Party in any case shall entitle any Credit Party to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Administrative Agent, the Documentation Agent,
the Collateral Agent, the Issuing Lender or any Lender to any other or
further action in any circumstances without notice or demand.
13.06 PAYMENTS PRO RATA. (a) Except as otherwise provided in
this Agreement, the Administrative Agent agrees that promptly after its receipt
of each payment from or on behalf of the Borrower in respect of any Obligations
hereunder, it shall distribute such payment to the Lenders (other than any
Lender that has consented in writing to waive its PRO RATA share of any such
payment) PRO RATA based upon their respective shares, if any, of the Obligations
with respect to which such payment was received.
(b) Each of the Lenders agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security, by
the exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Commission or Letter of Credit Fees,
of a sum which with respect to the related sum or sums received by other Lenders
is in a greater proportion than the total of such Obligation then owed and due
to such Lender bears to the total of such Obligation then owed and due to all of
the Lenders immediately prior to such receipt, then such Lender receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Lenders an interest in the Obligations of the respective Credit Party to
such Lenders in such amount as shall result in a proportional participation by
all the Lenders in such amount; PROVIDED that if all or any portion of such
excess amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
(c) Notwithstanding anything to the contrary contained herein,
the provisions of the preceding Sections 13.06(a) and (b) shall be subject to
the express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders.
13.07 CALCULATIONS; COMPUTATIONS; ACCOUNTING TERMS. (a) The
financial statements to be furnished to the Lenders pursuant hereto shall be
made and prepared in accordance with generally accepted accounting principles in
the United States consistently applied throughout the periods involved (except
as set forth in the notes thereto or as otherwise disclosed in writing by the
Borrower to the Lenders); PROVIDED that, except as otherwise
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specifically provided herein, all computations and all definitions used in
determining compliance with Sections 9.07 through 9.09, inclusive, shall
utilize accounting principles and policies in conformity with those used to
prepare the historical financial statements of the Borrower referred to in
Section 7.05(a).
(b) All computations of interest, Commitment Commission and
other Fees hereunder shall be made on the basis of a year of 360 days (or, in
the case of Base Rate Loans, 365 days) for the actual number of days (including
the first day but excluding the last day; except that in the case of Letter of
Credit Fees, the last day shall be included) occurring in the period for which
such interest, Commitment Commission or Fees are payable.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER
OF JURY TRIAL. (A) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS
OTHERWISE PROVIDED IN THE MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT, EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH OF HOLDINGS AND
THE BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS
LACK PERSONAL JURISDICTION OVER SUCH CREDIT PARTY, AND AGREES NOT TO PLEAD OR
CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENTS BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH
COURTS LACK PERSONAL JURISDICTION OVER SUCH CREDIT PARTY. EACH OF HOLDINGS AND
THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY
OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH CREDIT
PARTY AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO
BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH OF HOLDINGS AND THE BORROWER
HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING
COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS
WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
THE ADMINISTRATIVE AGENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR TO
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COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST HOLDINGS OR THE
BORROWER IN ANY OTHER JURISDICTION.
(B) EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY
WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED
TO IN CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
(C) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.09 COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Administrative Agent.
13.10 EFFECTIVENESS. This Agreement shall become effective on
the date (the "Effective Date") on which (i) Holdings, WPIV, the Borrower, the
Administrative Agent and each of the Lenders shall have signed a counterpart
hereof (whether the same or different counterparts) and shall have delivered the
same to the Administrative Agent at the Notice Office or, in the case of the
Lenders, shall have given to the Administrative Agent telephonic (confirmed in
writing), written or telex notice (actually received) at such office that the
same has been signed and mailed to it and (ii) the conditions contained in
Section 5 are met to the satisfaction of the Administrative Agent, the
Documentation Agent and the Required Lenders. Unless the Administrative Agent
has received actual notice from any Lender that the conditions described in
clause (ii) of the preceding sentence have not been met to its satisfaction,
upon the satisfaction of the condition described in clause (i) of the
immediately preceding sentence and upon the Administrative Agent's good faith
determination that the conditions described in clause (ii) of the immediately
preceding sentence have been met, then the Effective Date shall have deemed to
have occurred, regardless of any subsequent determination that one or more of
the conditions thereto had not been met (although the occurrence of the
Effective Date shall not release the Borrower or any other Credit Party from any
liability for failure to satisfy one or more of the applicable conditions
contained in Section 5). The Administrative Agent will give Holdings, WPIV, the
Borrower and each Lender prompt written notice of the occurrence of the
Effective Date.
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13.11 HEADINGS DESCRIPTIVE. The headings of the several
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.
13.12 AMENDMENT OR WAIVER; ETC. (a) Neither this Agreement nor
any other Credit Document nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the respective Credit Parties party thereto
and the Required Lenders, PROVIDED that no such change, waiver, discharge or
termination shall, without the consent of each Lender (other than a Defaulting
Lender) (with Obligations being directly affected in the case of following
clause (i)), (i) extend the final scheduled maturity of any Loan or Note or
extend the stated expiration date of any Letter of Credit beyond the Final
Maturity Date, or reduce the rate or extend the time of payment of interest or
Fees thereon, or reduce the principal amount thereof (except to the extent
repaid in cash), (ii) release all or substantially all of the Collateral (except
as expressly provided in the Credit Documents) under all the Security Documents,
(iii) release all or substantially all of the Guarantors from their respective
obligations under the Guaranties, (iv) amend, modify or waive any provision of
this Section 13.12 (it being understood that, with the consent of the Required
Lenders, additional extensions of credit pursuant to this Agreement may afford
the holders thereof and/or the then existing Lenders additional rights of
consent), (v) reduce the percentage specified in the definition of Required
Lenders (it being understood that, with the consent of the Required Lenders,
additional extensions of credit pursuant to this Agreement may be included in
the determination of the Required Lenders on substantially the same basis as the
extensions of Revolving Loan Commitments are included on the Effective Date) or
(vi) consent to the assignment or transfer by the Borrower of any of its rights
and obligations under this Agreement; PROVIDED FURTHER, that no such change,
waiver, discharge or termination shall (v) increase the Revolving Loan
Commitment of any Lender over the amount thereof then in effect without the
consent of such Lender (it being understood that waivers or modifications of
conditions precedent, covenants, Defaults or Events of Default or of a mandatory
reduction in the Total Revolving Loan Commitment shall not constitute an
increase of the Revolving Loan Commitment of any Lender, and that an increase in
the available portion of the Revolving Loan Commitment of any Lender shall not
constitute an increase of the Revolving Loan Commitment of such Lender), (w)
without the consent of the Issuing Lender, amend, modify or waive any provision
of Section 2 or alter its rights or obligations with respect to Letters of
Credit, (x) without the consent of the Swingline Lender, alter the Swingline
Lender's rights or obligations with respect to Swingline Loans, (y) without the
consent of the Administrative Agent, amend, modify or waive any provision of
Section 12 or any other provision as same relates to the rights or obligations
of the Administrative Agent or (z) without the consent of the Collateral Agent,
amend, modify or waive any provision relating to the rights or obligations of
the Collateral Agent.
(b) If, in connection with any proposed change, waiver,
discharge or termination to any of the provisions of this Agreement as
contemplated by clauses (i) through (v), inclusive, of the first proviso to
Section 13.12(a), the consent of the Required Lenders is obtained but the
consent of one or more of such other Lenders whose consent is required is not
obtained, then the Borrower shall have the right, so long as all non-consenting
Lenders whose individual
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consent is required are treated as described in either clauses (A) or (B)
below, to either (A) replace each such non-consenting Lender or Lenders with
one or more Replacement Lenders pursuant to Section 1.13 so long as at the
time of such replacement, each such Replacement Lender consents to the
proposed change, waiver, discharge or termination or (B) terminate such
non-consenting Lender's Revolving Loan Commitment and/or repay the
outstanding Revolving Loans of such Lender in accordance with Sections
3.02(b) and/or 4.01(b), PROVIDED that, unless the Revolving Loan Commitment
that is terminated, and Revolving Loans repaid, pursuant to preceding clause
(B) are immediately replaced in full at such time through the addition of new
Lenders or the increase of the Revolving Loan Commitments and/or outstanding
Revolving Loans of existing Lenders (who in each case must specifically
consent thereto), then in the case of any action pursuant to preceding clause
(B) each Lender (determined after giving effect to the proposed action) shall
specifically consent thereto, PROVIDED FURTHER, that in any event the
Borrower shall not have the right to replace a Lender, terminate its
Revolving Loan Commitment or repay its Revolving Loans solely as a result of
the exercise of such Lender's rights (and the withholding of any required
consent by such Lender) pursuant to the second proviso to Section 13.12(a).
13.13 SURVIVAL. All indemnities set forth herein including,
without limitation, in Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01 shall
survive the execution, delivery and termination of this Agreement and the Notes
and the making and repayment of the Obligations.
13.14 DOMICILE OF LOANS. Each Lender may transfer and carry
its Loans at, to or for the account of any office, Subsidiary or Affiliate of
such Lender. Notwithstanding anything to the contrary contained herein, to the
extent that a transfer of Loans pursuant to this Section 13.14 would, at the
time of such transfer, result in increased costs under Section 1.10, 2.06 or
4.04 from those being charged by the respective Lender prior to such transfer,
then the Borrower shall not be obligated to pay such increased costs (although
the Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
13.15 REGISTER. The Borrower hereby designates the
Administrative Agent to serve as the Borrower's agent, solely for purposes of
this Section 13.15, to maintain a register (the "Register") on which it will
record the Revolving Loan Commitment from time to time of each of the Lenders,
the Revolving Loans made by each of the Lenders and each repayment in respect of
the principal amount of the Revolving Loans of each Lender. Failure to make any
such recordation, or any error in such recordation shall not affect the
Borrower's obligations in respect of such Revolving Loans. With respect to any
Lender, the transfer of the Revolving Loan Commitment of such Lender and the
rights to the principal of, and interest on, any Revolving Loan made pursuant to
such Revolving Loan Commitment shall not be effective until such transfer is
recorded on the Register maintained by the Administrative Agent with respect to
ownership of such Revolving Loan Commitment and Revolving Loans and prior to
such recordation all amounts owing to the transferor with respect to such
Revolving Loan Commitment and Revolving Loans shall remain owing to the
transferor. The registration of assignment or transfer of all or part of any
Revolving Loan Commitment and Revolving Loans shall be recorded by the
Administrative Agent on the Register only upon the acceptance by the
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Administrative Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to Section 13.04(b). Coincident with the delivery
of such an Assignment and Assumption Agreement to the Administrative Agent for
acceptance and registration of assignment or transfer of all or part of a
Revolving Loan, or as soon thereafter as practicable, the assigning or
transferor Lender shall surrender the Revolving Note evidencing such Revolving
Loan, and thereupon one or more new Revolving Notes in the same aggregate
principal amount shall be issued to the assigning or transferor Lender and/or
the new 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 Section 13.15.
13.16 CONFIDENTIALITY. (a) Subject to the provisions of clause
(b) of this Section 13.16, the Administrative Agent, the Documentation Agent,
the Collateral Agent and each Lender agrees that it will use its reasonable
efforts not to disclose without the prior consent of the Borrower (other than to
its employees, auditors, advisors or counsel or to another Lender if the Lender
or such Lender's holding or parent company in its sole discretion determines
that any such party should have access to such information, provided such
Persons shall be subject to the provisions of this Section 13.16 to the same
extent as such Lender) any information with respect to Holdings or any of its
Subsidiaries which is now or in the future furnished pursuant to this Agreement
or any other Credit Document and which is designated by the Borrower to the
Administrative Agent, the Documentation Agent, the Collateral Agent and the
Lenders in writing as confidential, PROVIDED that the Administrative Agent, the
Documentation Agent, the Collateral Agent and any Lender may disclose any such
information (i) as has become generally available to the public other than by
virtue of a breach of this Section 13.16(a) by the Administrative Agent, the
Documentation Agent, the Collateral Agent or respective Lender, (ii) as may be
required or appropriate in any report, statement or testimony submitted to any
municipal, state or Federal regulatory body having or claiming to have
jurisdiction over the Administrative Agent, the Documentation Agent, the
Collateral Agent or such Lender or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or similar organizations (whether in the United
States or elsewhere) or their successors, (iii) as may be required or
appropriate in respect to any summons or subpoena or in connection with any
litigation, (iv) in order to comply with any law, order, regulation or ruling
applicable to the Administrative Agent, the Documentation Agent, the Collateral
Agent or such Lender, (v) in the case of any Lender, to the Administrative Agent
or the Collateral Agent and (vi) to any prospective or actual transferee or
participant in connection with any contemplated transfer or participation of any
of the Revolving Notes or Revolving Loan Commitments or any interest therein by
such Lender, PROVIDED that such prospective transferee agrees to be bound by the
confidentiality provisions contained in this Section 13.16.
(b) Each Parent Guarantor and the Borrower hereby acknowledges
and agrees that the Administrative Agent, the Documentation Agent and each
Lender may share with any of its affiliates any information related to Holdings
or any of its Subsidiaries (including, without limitation, any nonpublic
customer information regarding the creditworthiness of Holdings and its
Subsidiaries), provided such Persons shall be subject to the provisions of this
Section 13.16 to the same extent as such Lender).
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13.17 LIMITATION ON ADDITIONAL AMOUNTS, ETC. Notwithstanding
anything to the contrary contained in Section 1.10, 1.11, 2.06 or 4.04 of this
Agreement, unless a Lender gives notice to the Borrower that it is obligated to
pay an amount under such Section within six months after the later of (x) the
date the Lender incurs the respective increased costs, Taxes, loss, expense or
liability, reduction in amounts received or receivable or reduction in return on
capital or (y) the date such Lender has actual knowledge of its incurrence of
the respective increased costs, Taxes, loss, expense or liability, reductions in
amounts received or receivable or reduction in return on capital, then such
Lender shall only be entitled to be compensated for such amount by the Borrower
pursuant to said Section 1.10, 1.11, 2.06 or 4.04, as the case may be, to the
extent of the costs, Taxes, loss, expense or liability, reduction in amounts
received or receivable or reduction in return on capital that are incurred or
suffered on or after the date which occurs six months prior to such Lender
giving notice to the Borrower that it is obligated to pay the respective amounts
pursuant to said Section 1.10, 1.11, 2.06 or 4.04, as the case may be. This
Section 13.17 shall have no applicability to any Section of this Agreement other
than said Sections 1.10, 1.11, 2.06 and 4.04.
SECTION 14. PARENT GUARANTY.
14.01 GUARANTY. In order to induce the Administrative Agent,
the Documentation Agent, the Collateral Agent, the Issuing Lender and the
Lenders to enter into this Agreement and to extend credit hereunder, and to
induce the other Guaranteed Creditors to enter into Interest Rate Protection
Agreements or Other Hedging Agreements, and in recognition of the direct
benefits to be received by each of the Parent Guarantors from the proceeds of
the Loans, the issuance of the Letters of Credit and the entering into of such
Interest Rate Protection Agreements or Other Hedging Agreements, each of the
Parent Guarantors hereby agrees with the Guaranteed Creditors as follows: Each
Parent Guarantor, jointly and severally, hereby unconditionally and irrevocably
guarantees as primary obligor and not merely as surety the full and prompt
payment when due, whether upon maturity, acceleration or otherwise, of any and
all of the Guaranteed Obligations of the Borrower to the Guaranteed Creditors.
If any or all of the Guaranteed Obligations of the Borrower to the Guaranteed
Creditors becomes due and payable hereunder, each of the Parent Guarantors,
jointly and severally, unconditionally and irrevocably promises to pay such
indebtedness to the Administrative Agent and/or the other Guaranteed Creditors,
or order, on demand, together with any and all expenses which may be incurred by
the Administrative Agent or the other Guaranteed Creditors in collecting any of
the Guaranteed Obligations. If claim is ever made upon any Guaranteed Creditor
for repayment or recovery of any amount or amounts received in payment or on
account of any of the Guaranteed Obligations and any of the aforesaid payees
repays all or part of said amount by reason of (i) any judgment, decree or order
of any court or administrative body having jurisdiction over such payee or any
of its property or (ii) any settlement or compromise of any such claim effected
by such payee with any such claimant (including the Borrower), then and in such
event each of the Parent Guarantors agrees that any such judgment, decree,
order, settlement or compromise shall be binding upon each of the Parent
Guarantors, notwithstanding any revocation of this Guaranty or other instrument
evidencing any liability of the Borrower, and each of the Parent Guarantors
shall be and remain liable to the aforesaid payees hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by any such payee.
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14.02 BANKRUPTCY. Additionally, each of the Parent Guarantors,
jointly and severally, unconditionally and irrevocably guarantees the payment of
any and all of the Guaranteed Obligations of the Borrower to the Guaranteed
Creditors whether or not due or payable by the Borrower upon the occurrence of
any of the events specified in Section 10.05, and irrevocably and
unconditionally promises to pay such indebtedness to the Guaranteed Creditors,
or order, on demand, in lawful money of the United States.
14.03 NATURE OF LIABILITY. The liability of each of the Parent
Guarantors hereunder is exclusive and independent of any security for or other
guaranty of the Guaranteed Obligations of the Borrower whether executed by each
of the Parent Guarantors, any other guarantor or by any other party, and the
liability of each of the Parent Guarantors hereunder is not affected or impaired
by (a) any direction as to application of payment by the Borrower or by any
other party, or (b) any other continuing or other guaranty, undertaking or
maximum liability of a guarantor or of any other party as to the Guaranteed
Obligations of the Borrower, or (c) any payment on or in reduction of any such
other guaranty or undertaking, or (d) any dissolution, termination or increase,
decrease or change in personnel by the Borrower, or (e) any payment made to any
Guaranteed Creditor on the Guaranteed Obligations which any such Guaranteed
Creditor repays to the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
each of the Parent Guarantors waives any right to the deferral or modification
of its obligations hereunder by reason of any such proceeding.
14.04 INDEPENDENT OBLIGATION. The obligations of each of the
Parent Guarantors hereunder are independent of the obligations of any other
guarantor, any other party or the Borrower, and a separate action or actions may
be brought and prosecuted against each of the Parent Guarantors whether or not
action is brought against any other guarantor, any other party or the Borrower
and whether or not any other guarantor, any other party or the Borrower be
joined in any such action or actions. Each of the Parent Guarantors waives, to
the fullest extent permitted by law, the benefit of any statute of limitations
affecting its liability hereunder or the enforcement thereof. Any payment by the
Borrower or other circumstance which operates to toll any statute of limitations
as to the Borrower shall operate to toll the statute of limitations as to each
of the Parent Guarantors.
14.05 AUTHORIZATION. Each Parent Guarantor authorizes the
Guaranteed Creditors without notice or demand (except as shall be required by
applicable statute and cannot be waived), and without affecting or impairing its
liability hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, increase, accelerate or
alter, any of the Guaranteed Obligations (including any increase or
decrease in the rate of interest or fees thereon), any security
therefor, or any liability incurred directly or indirectly in respect
thereof, and the Guaranty herein made shall apply to the Guaranteed
Obligations as so changed, extended, renewed or altered;
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(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, impair, surrender, realize
upon or otherwise deal with in any manner and in any order any property
by whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower, any other Credit Party or others or otherwise act or refrain
from acting;
(d) release or substitute any one or more endorsers,
guarantors, the Borrower, other Credit Parties or other obligors;
(e) settle or compromise any of the Guaranteed Obligations,
any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or
hereof, and may subordinate the payment of all or any part thereof to
the payment of any liability (whether due or not) of the Borrower to
its creditors other than the Guaranteed Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of the Borrower to the Guaranteed
Creditors regardless of what liability or liabilities of the Borrower
remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement, any other Credit Document or any of the
instruments or agreements referred to herein or therein, or otherwise
amend, modify or supplement this Agreement, any other Credit Document
or any of such other instruments or agreements; and/or
(h) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable
discharge of any of the Parent Guarantors from its liabilities under
this Guaranty.
14.06 RELIANCE. It is not necessary for any Guaranteed
Creditor to inquire into the capacity or powers of any of the Parent Guarantors
or any of its Subsidiaries or the officers, directors, partners or agents acting
or purporting to act on their behalf, and any Guaranteed Obligations made or
created in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.
14.07 SUBORDINATION. Any indebtedness of the Borrower now or
hereafter owing to any of the Parent Guarantors is hereby subordinated to the
Guaranteed Obligations of the Borrower owing to the Guaranteed Creditors; and if
the Administrative Agent so requests at a time when an Event of Default exists,
all such indebtedness of the Borrower to each of the Parent Guarantors shall be
collected, enforced and received by each of the Parent Guarantors for the
benefit of the Guaranteed Creditors and be paid over to the Administrative Agent
on behalf of the Guaranteed Creditors on account of the Guaranteed Obligations
of the Borrower to the Guaranteed Creditors, but without affecting or impairing
in any manner the liability of each of
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the Parent Guarantors under the other provisions of this Guaranty. Nothing
herein shall prevent the Borrower from making any payment with respect to any
such indebtedness to each of the Parent Guarantors unless an Event of Default
then exists. Prior to the transfer by any of the Parent Guarantors of any
note or negotiable instrument evidencing any such indebtedness of the
Borrower to such Parent Guarantor, such Parent Guarantor shall mark such note
or negotiable instrument with a legend that the same is subject to this
subordination. Without limiting the generality of the foregoing, each of the
Parent Guarantors hereby agrees with the Guaranteed Creditors that it will
not exercise any right of subrogation which it may at any time otherwise have
as a result of this Guaranty (whether contractual, under Section 509 of the
Bankruptcy Code or otherwise) until all Guaranteed Obligations have been
irrevocably paid in full in cash and the commitments with respect thereto
have been terminated.
14.08 WAIVER. (a) Each Parent Guarantor waives any right
(except as shall be required by applicable statute and cannot be waived) to
require any Guaranteed Creditor to (i) proceed against the Borrower, any other
guarantor or any other party, (ii) proceed against or exhaust any security held
from the Borrower, any other guarantor or any other party or (iii) pursue any
other remedy in any Guaranteed Creditor's power whatsoever. Each Parent
Guarantor waives any defense based on or arising out of any defense of the
Borrower, any other guarantor or any other party, other than payment of the
Guaranteed Obligations to the extent of such payment, based on or arising out of
the disability of the Borrower, any other guarantor or any other party, or the
validity, legality or unenforceability of the Guaranteed Obligations or any part
thereof from any cause, or the cessation from any cause of the liability of the
Borrower other than payment of the Guaranteed Obligations to the extent of such
payment. The Guaranteed Creditors may, at their election, foreclose on any
security held by the Administrative Agent, the Collateral Agent or any other
Guaranteed Creditor by one or more judicial or nonjudicial sales, whether or not
every aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or remedy the
Guaranteed Creditors may have against the Borrower or any other party, or any
security, without affecting or impairing in any way the liability of each of the
Parent Guarantors hereunder except to the extent the Guaranteed Obligations have
been paid. Each Parent Guarantor waives any defense arising out of any such
election by the Guaranteed Creditors, even though such election operates to
impair or extinguish any right of reimbursement or subrogation or other right or
remedy of each of the Parent Guarantors against the Borrower or any other party
or any security.
(b) Each Parent Guarantor waives all presentments, demands for
performance, protests and notices, including without limitation notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Guaranty, and notices of the existence, creation or incurring of new or
additional Guaranteed Obligations. Each Parent Guarantor assumes all
responsibility for being and keeping itself informed of the Borrower's financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope and extent of the
risks which each of the Parent Guarantors assumes and incurs hereunder, and
agrees that the Administrative Agent and the Lenders shall have no duty to
advise each of the Parent Guarantors of information known to them regarding such
circumstances or risks.
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(c) Each Parent Guarantor hereby acknowledges and affirms that
it understands that to the extent the Guaranteed Obligations are secured by Real
Property located in California, each of the Parent Guarantors shall be liable
for the full amount of the liability hereunder notwithstanding the foreclosure
on such Real Property by trustee sale or any other reason impairing any Parent
Guarantor's or any Guaranteed Creditor's right to proceed against the Borrower
or any other guarantor of the Guaranteed Obligations. In accordance with Section
2856 of the California Civil Code, each of the Parent Guarantors hereby waives:
(i) all rights of subrogation, reimbursement, indemnification,
and contribution and any other rights and defenses that are or may
become available to such Parent Guarantor by reason of Sections 2787 to
2855, inclusive, 2899 and 3433 of the California Civil Code;
(ii) all rights and defenses that such Parent Guarantor may
have because the Guaranteed Obligations are secured by Real Property
located in California. This means, among other things: (A) the
Guaranteed Creditors may collect from any of the Parent Guarantors
without first foreclosing on any real or personal property collateral
pledged by the Borrower or any other Credit Party; and (B) if the
Guaranteed Creditors foreclose on any Real Property collateral pledged
by the Borrower or any other Credit Party, (1) the amount of the
Guaranteed Obligations may be reduced only by the price for which that
collateral is sold at the foreclosure sale, even if the collateral is
worth more than the sale price, and (2) the Guaranteed Creditors may
collect from any of the Parent Guarantors even if the Guaranteed
Creditors, by foreclosing on the Real Property collateral, have
destroyed any right any of the Parent Guarantors may have to collect
from the Borrower. This is an unconditional and irrevocable waiver of
any rights and defenses each of the Parent Guarantors may have because
the Guaranteed Obligations are secured by Real Property. These rights
and defenses include, but are not limited to, any rights or defenses
based upon Section 580a, 580b, 580d or 726 of the California Code of
Civil Procedure; and
(iii) all rights and defenses arising out of an election of
remedies by the Guaranteed Creditors, even though that election of
remedies, such as a nonjudicial foreclosure with respect to security
for the Guaranteed Obligations, has destroyed such Parent Guarantor's
rights of subrogation and reimbursement against the Borrower by the
operation of Section 580d of the Code of Civil Procedure or otherwise.
Each Parent Guarantor warrants and agrees that each of the waivers set forth
above is made with full knowledge of its significance and consequences and that
if any of such waivers are determined to be contrary to any applicable law or
public policy, such waivers shall be effective only to the maximum extent
permitted by law.
14.09 NATURE OF LIABILITY. It is the desire and intent of each
of the Parent Guarantors and the Guaranteed Creditors that this Guaranty shall
be enforced against each of the Parent Guarantors to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. If, however, and to the extent that, the
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obligations of each of the Parent Guarantors under this Guaranty shall be
adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers), then the amount of each of the Parent
Guarantors obligations under this Guaranty shall be deemed to be reduced and
each of the Parent Guarantors shall pay the maximum amount of the Guaranteed
Obligations which would be permissible under applicable law.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
ADDRESS:
2777 Summer Street INFORMATION HOLDINGS, INC.
Suite 209
Stamford, CT 06905 By: /s/ VINCENT A. CHIPPARI
Attn: Vincent Chippari --------------------------
Telephone No.: (203) 961-9208 Title: Chief Financial Officer
Telecopier No.: (203) 961-1431
c/o Information Holdings, Inc. WARBURG, PINCUS INFORMATION
2777 Summer Street VENTURES, INC.
Suite 209
Stamford, CT 06905 By: /s/ VINCENT A.CHIPPARI
-------------------------
Attn: Vincent Chippari Title: Executive Vice President
Telephone No.: (203) 961-9208
Telecopier No.: (203) 961-1431
2777 Summer Street INFORMATION VENTURES L.L.C.
Suite 209
Stamford, CT 06905 By: /s/ VINCENT A. CHIPPARI
Attn: Vincent Chippari --------------------------
Telephone No.: (203) 961-9208 Title: Chief Financial Officer
Telecopier No.: (203) 961-1431
BANKERS TRUST COMPANY,
Individually and as
Administrative Agent
By: /s/ G. ANDREW KEITH
--------------------------
Title: Vice President
BANK OF AMERICA, N.A.,
Individually and as
Documentation Agent
By: /s/ HEIDI-ANNE SANDQUIST
--------------------------
Title: Vice President
<PAGE>
SCHEDULE I
REVOLVING LOAN COMMITMENTS
Revolving Loan
LENDER COMMITMENT
Bankers Trust Company $25,000,000.00
Bank of America, N.A. $25,000,000.00
TOTAL: $50,000,000.00
<PAGE>
SCHEDULE II
LENDER ADDRESSES
LENDER ADDRESS
Bankers Trust Company 130 Liberty Street
New York, New York 10006
Attn: Andrew Keith
Tel. No.: (212) 250-8617
Fax No.: (212) 250-7218
Bank of America, N.A. 9 West 57th Street
43rd Floor
New York, New York 10019
Attn: Heidi Sandquist
Tel. No.: (212) 583-8751
Fax No.: (212) 847-5035
<PAGE>
EXHIBIT 10.2
FORM OF PLEDGE AGREEMENT
PLEDGE AGREEMENT (as amended, modified or supplemented from
time to time, this "Agreement"), dated as of September 24, 1999, made by each of
the undersigned pledgors (each a "Pledgor" and, together with any other entity
that becomes a party hereto pursuant to Section 25 hereof, the "Pledgors") to
Bankers Trust Company, as Collateral Agent (the "Pledgee"), for the benefit of
the Secured Creditors (as defined below). Except as otherwise defined herein,
capitalized terms used herein and defined in the Credit Agreement (as defined
below) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, Information Holdings, Inc. ("Holdings"), Warburg,
Pincus Information Ventures, Inc. ("WPIV" and together with Holdings, the
"Parent Guarantors"), Information Ventures L.L.C. (the "Borrower"), the lenders
from time to time party thereto (the "Lenders"), Bank of America, N.A., as
Documentation Agent and Bankers Trust Company, as Administrative Agent (together
with any successor Administrative Agent, the "Administrative Agent"), have
entered into a Credit Agreement, dated as of September 24, 1999 (as amended,
modified or supplemented from time to time, the "Credit Agreement"), providing
for the making of Loans to, and the issuance of Letters of Credit for the
account of, the Borrower as contemplated therein (the Lenders, the
Administrative Agent, the Documentation Agent, each Issuing Lender and the
Pledgee are herein called the "Lender Creditors");
WHEREAS, the Borrower may at any time and from time to time
enter into one or more Interest Rate Protection Agreements or Other Hedging
Agreements with one or more Lenders or any affiliate thereof (each such Lender
or affiliate, even if the respective Lender subsequently ceases to be a Lender
under the Credit Agreement for any reason, together with such Lender's or
affiliate's successors and assigns, if any, collectively, the "Other Creditors,"
and together with the Lender Creditors, the "Secured Creditors");
WHEREAS, pursuant to, and after the execution and delivery of,
the Subsidiaries Guaranty, each Subsidiary Guarantor has jointly and severally
guarantied to the Secured Creditors the payment when due of all Guaranteed
Obligations as described therein;
WHEREAS, pursuant to the Parent Guaranty, the Parent
Guarantors have guaranteed to the Secured Creditors the payment when due of all
of the Guaranteed Obligations as described therein;
WHEREAS, it is a condition to the making of Loans to, and the
issuance of Letters of Credit for the account of, the Borrower under the Credit
Agreement that each Pledgor shall have executed and delivered to the Pledgee
this Agreement; and
WHEREAS, each Pledgor desires to enter into this Agreement in
order to satisfy the condition described in the preceding paragraph;
<PAGE>
NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to each Pledgor, the receipt and sufficiency of which are
hereby acknowledged, each Pledgor hereby makes the following representations and
warranties to the Pledgee for the benefit of the Secured Creditors and hereby
covenants and agrees with the Pledgee for the benefit of the Secured Creditors
as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by
each Pledgor for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and
indebtedness (including, without limitation, indemnities, Fees and
interest thereon) of such Pledgor to the Lender Creditors, whether now
existing or hereafter incurred under, arising out of, or in connection
with the Credit Agreement and the other Credit Documents to which such
Pledgor is a party and the due performance and compliance by such
Pledgor with all of the terms, conditions and agreements contained in
the Credit Agreement and in such other Credit Documents (all such
obligations and liabilities under this clause (i), except to the extent
consisting of obligations or indebtedness with respect to Interest Rate
Protection Agreements or Other Hedging Agreements, being herein
collectively called the "Credit Document Obligations");
(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and
liabilities owing by such Pledgor to the Other Creditors under, or with
respect to, any Interest Rate Protection Agreement or Other Hedging
Agreement, whether such Interest Rate Protection Agreement or Other
Hedging Agreement is now in existence or hereafter arising, and the due
performance and compliance by such Pledgor with all of the terms,
conditions and agreements contained therein, but only if such Interest
Rate Protection Agreement or Other Hedging Agreement constitutes a
Guaranteed Obligation of the Borrower (all such obligations and
liabilities described in this clause (ii) being herein collectively
called the "Other Obligations");
(iii) any and all sums advanced by the Pledgee in order to preserve
the Collateral (as hereinafter defined) or preserve its security
interest in the Collateral;
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations or liabilities of such
Pledgor referred to in clauses (i), (ii) and (iii) above, after an
Event of Default (which term to mean and include any Event of Default
under, and as defined in, the Credit Agreement or any payment default
by the Borrower under any Interest Rate Protection Agreement or Other
Hedging Agreement and shall, in any event, include, without limitation,
any payment default (after the expiration of any applicable grace
period) on any of the Obligations (as hereinafter defined)) shall have
occurred and be continuing, the reasonable expenses of retaking,
holding, preparing for sale or lease, selling or otherwise disposing of
or realizing on the Collateral, or of any exercise by the Pledgee of
its rights hereunder, together with reasonable attorneys' fees and
court costs; and
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(v) all amounts paid by any Secured Creditor as to which such
Secured Creditor has the right to reimbursement under Section 11 of
this Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations," it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the types described above, whether outstanding
on the date of this Agreement or extended from time to time after the date of
this Agreement.
2. DEFINITIONS. (a) Unless otherwise defined herein, all
capitalized terms used herein and defined in the Credit Agreement shall be used
herein as therein defined. Reference to singular terms shall include the plural
and vice versa.
(b) The following capitalized terms used herein shall have the
definitions specified below:
"ADMINISTRATIVE AGENT" has the meaning set forth in the
Recitals hereto.
"ADVERSE CLAIM" has the meaning given such term in Section
8-102(a)(1) of the UCC.
"AGREEMENT" has the meaning set forth in the first paragraph
hereof.
"CERTIFICATED SECURITY" has the meaning given such term in
Section 8-102(a)(4) of the UCC.
"CLEARING CORPORATION" has the meaning given such term in
Section 8-102(a)(5) of the UCC.
"COLLATERAL" has the meaning set forth in Section 3.1 hereof.
"COLLATERAL ACCOUNTS" means any and all accounts established
and maintained by the Pledgee in the name of any Pledgor to which Collateral may
be credited.
"CREDIT AGREEMENT" has the meaning set forth in the Recitals
hereto.
"CREDIT DOCUMENT OBLIGATIONS" has the meaning set forth in
Section 1 hereof.
"DOMESTIC CORPORATION" has the meaning set forth in the
definition of "Stock."
"EVENT OF DEFAULT" has the meaning set forth in Section 1
hereof.
"FINANCIAL ASSET" has the meaning given such term in Section
8-102(a)(9) of the UCC.
"FOREIGN CORPORATION" has the meaning set forth in the
definition of "Stock."
"INDEMNITEES" has the meaning set forth in Section 11 hereof.
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"INSTRUMENT" has the meaning given such term in Section
9-105(1)(i) of the UCC.
"INVESTMENT PROPERTY" has the meaning given such term in
Section 9-115(f) of the UCC.
"LENDER CREDITORS" has the meaning set forth in the Recitals
hereto.
"LENDERS" has the meaning set forth in the Recitals hereto.
"LIMITED LIABILITY COMPANY ASSETS" means all assets, whether
tangible or intangible and whether real, personal or mixed (including, without
limitation, all limited liability company capital and interest in other limited
liability companies), at any time owned or represented by any Limited Liability
Company Interest.
"LIMITED LIABILITY COMPANY INTERESTS" means the entire limited
liability company membership interest at any time owned by any Pledgor in any
limited liability company.
"NON-VOTING STOCK" means all capital stock which is not Voting
Stock.
"NOTES" means all intercompany notes among Holdings and its
Subsidiaries and all other promissory notes from time to time issued to, or held
by, any Pledgor.
"OBLIGATIONS" has the meaning set forth in Section 1 hereof.
"OTHER CREDITORS" has the meaning set forth in the Recitals
hereto.
"OTHER OBLIGATIONS" has the meaning set forth in Section 1
hereof.
"PARTNERSHIP ASSETS" means all assets, whether tangible or
intangible and whether real, personal or mixed (including, without limitation,
all partnership capital and interest in other partnerships), at any time owned
or represented by any Partnership Interest.
"PARTNERSHIP INTEREST" means the entire general partnership
interest or limited partnership interest at any time owned by any Pledgor in any
general partnership or limited partnership.
"PLEDGED NOTES" has the meaning set forth in Section 3.5
hereof.
"PLEDGEE" has the meaning set forth in the first paragraph
hereof.
"PLEDGOR" has the meaning set forth in the first paragraph
hereof.
"PROCEEDS" has the meaning given such term in Section 9-306(l)
of the UCC.
"REQUIRED LENDERS" has the meaning given such term in the
Credit Agreement.
"SECURED CREDITORS" has the meaning set forth in the Recitals
hereto.
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"SECURED DEBT AGREEMENTS" has the meaning set forth in Section
5 hereof.
"SECURITIES ACCOUNT" has the meaning given such term in
Section 8-501(a) of the UCC.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
as in effect from time to time.
"SECURITY" and "SECURITIES" has the meaning given such term in
Section 8-102(a)(15) of the UCC and shall in any event include all Stock and
Notes (to the extent same constitute "Securities" under Section 8-102(a)(15)).
"SECURITY ENTITLEMENT" has the meaning given such term in
Section 8-102(a)(17) of the UCC.
"STOCK" means (x) with respect to corporations incorporated
under the laws of the United States or any State or territory thereof (each a
"Domestic Corporation"), all of the issued and outstanding shares of capital
stock of any corporation at any time owned by any Pledgor of any Domestic
Corporation and (y) with respect to corporations not Domestic Corporations (each
a "Foreign Corporation"), all of the issued and outstanding shares of capital
stock at any time owned by any Pledgor of any Foreign Corporation.
"TERMINATION DATE" has the meaning set forth in Section 20
hereof.
"UCC" means the Uniform Commercial Code as in effect in the
State of New York from time to time; PROVIDED that all references herein to
specific sections or subsections of the UCC are references to such sections or
subsections, as the case may be, of the Uniform Commercial Code as in effect in
the State of New York on the date hereof.
"UNCERTIFICATED SECURITY" has the meaning given such term in
Section 8-102(a)(18) of the UCC.
"VOTING STOCK" means all classes of capital stock of any
Foreign Corporation entitled to vote.
3. PLEDGE OF SECURITIES, ETC.
3.1 PLEDGE. To secure the Obligations now or hereafter owed or
to be performed by such Pledgor, each Pledgor does hereby grant, pledge and
assign to the Pledgee for the benefit of the Secured Creditors, and does hereby
create a continuing security interest in favor of the Pledgee for the benefit of
the Secured Creditors in, all of the right, title and interest in and to the
following, whether now existing or hereafter from time to time acquired
(collectively, the "Collateral"):
(a) each of the Collateral Accounts, including any and all
assets of whatever type or kind deposited by such Pledgor in such
Collateral Account, whether now owned or hereafter acquired, existing
or arising, including, without limitation, all Financial
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Assets, Investment Property, moneys, checks, drafts, Instruments,
Securities or interests therein of any type or nature deposited or
required by the Credit Agreement or any other Secured Debt Agreement
to be deposited in such Collateral Account, and all investments and
all certificates and other Instruments (including depository receipts,
if any) from time to time representing or evidencing the same, and all
dividends, interest, distributions, cash and other property from time
to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the foregoing;
(b) all Securities of such Pledgor from time to time;
(c) all Limited Liability Company Interests of such Pledgor
from time to time and all of its right, title and interest in each
limited liability company to which each such interest relates, whether
now existing or hereafter acquired, including, without limitation:
(A) all the capital thereof and its interest in all
profits, losses, Limited Liability Company Assets and other
distributions to which such Pledgor shall at any time be
entitled in respect of such Limited Liability Company
Interests;
(B) all other payments due or to become due to such
Pledgor in respect of Limited Liability Company Interests,
whether under any limited liability company agreement,
operating agreement or otherwise, whether as contractual
obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if
any, under any limited liability company agreement or
operating agreement, or at law or otherwise in respect of such
Limited Liability Company Interests;
(D) all present and future claims, if any, of such
Pledgor against any such limited liability company for moneys
loaned or advanced, for services rendered or otherwise;
(E) all of such Pledgor's rights under any limited
liability company agreement or operating agreement or at law
to exercise and enforce every right, power, remedy, authority,
option and privilege of such Pledgor relating to such Limited
Liability Company Interests, including any power to terminate,
cancel or modify any limited liability company agreement or
operating agreement, to execute any instruments and to take
any and all other action on behalf of and in the name of any
of such Pledgor in respect of such Limited Liability Company
Interests and any such limited liability company, to make
determinations, to exercise any election (including, but not
limited to, election of remedies) or option or to give or
receive any notice, consent, amendment, waiver or approval,
together with full power and authority to demand, receive,
enforce, collect or receipt for any of the foregoing
or for any Limited Liability Company Asset, to enforce or
execute any checks, or other instruments or orders, to file
any claims and to take any action in connection with any of
the foregoing (with all of the foregoing rights only to be
exercisable upon the occurrence and during the continuation
of an Event of Default); and
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(F) all other property hereafter delivered in
substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such
other property and all cash, securities, interest, dividends,
rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or
in exchange for any or all thereof;
(d) all Partnership Interests of such Pledgor from time to
time and all of its right, title and interest in each partnership to
which each such interest relates, whether now existing or hereafter
acquired, including, without limitation:
(A) all the capital thereof and its interest in all
profits, losses, Partnership Assets and other distributions to
which such Pledgor shall at any time be entitled in respect of
such Partnership Interests;
(B) all other payments due or to become due to such
Pledgor in respect of Partnership Interests, whether under any
partnership agreement, operating agreement or otherwise,
whether as contractual obligations, damages, insurance
proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if
any, under any partnership agreement or operating agreement,
or at law or otherwise in respect of such Partnership
Interests;
(D) all present and future claims, if any, of such
Pledgor against any such partnership for moneys loaned or
advanced, for services rendered or otherwise;
(E) all of such Pledgor's rights under any
partnership agreement or operating agreement or at law to
exercise and enforce every right, power, remedy, authority,
option and privilege of such Pledgor relating to such
Partnership Interests, including any power to terminate,
cancel or modify any partnership agreement or operating
agreement, to execute any instruments and to take any and all
other action on behalf of and in the name of any of such
Pledgor in respect of such Partnership Interests and any such
partnership, to make determinations, to exercise any election
(including, but not limited to, election of remedies) or
option or to give or receive any notice, consent, amendment,
waiver or approval, together with full power and authority to
demand, receive, enforce, collect or receipt for any of the
foregoing or for any Partnership Asset, to enforce or execute
any checks, or other instruments or orders, to file any claims
and to take any action in connection with any of the foregoing
(with all of the foregoing rights only to be exercisable upon
the occurrence and during the continuation of an Event of
Default); and
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(F) all other property hereafter delivered in
substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such
other property and all cash, securities, interest, dividends,
rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or
in exchange for any or all thereof;
(e) all Security Entitlements of such Pledgor from
time to time in any and all of the foregoing;
(f) all Financial Assets and Investment Property of such
Pledgor from time to time; and
(g) all Proceeds of any and all of the foregoing.
Notwithstanding anything to the contrary contained in this
Section 3.1, (x) no Pledgor (to the extent that it is the Borrower or a Domestic
Subsidiary of the Borrower) shall be required at any time to pledge hereunder
more than 65% of the Voting Stock of any Foreign Corporation and (y) each
Pledgor shall be required to pledge hereunder 100% of any Non-Voting Stock at
any time and from time to time acquired by such Pledgor of any Foreign
Corporation.
3.2. PROCEDURES. (a) To the extent that any Pledgor at any
time or from time to time owns, acquires or obtains any right, title or interest
in any Collateral, such Collateral shall automatically (and without the taking
of any action by the respective Pledgor) be pledged pursuant to Section 3.1 of
this Agreement and, in addition thereto, such Pledgor shall (to the extent
provided below) take the following actions (to the greatest extent feasible in
the case of any Collateral constituting a partnership or membership interest in
any Person which is not a Subsidiary of any Pledgor) as set forth below (as
promptly as practicable and, in any event, within 10 days after it obtains such
Collateral) for the benefit of the Pledgee and the Secured Creditors:
(i) with respect to a Certificated Security (other than a
Certificated Security credited on the books of a Clearing Corporation),
the respective Pledgor shall physically deliver such Certificated
Security to the Pledgee, endorsed to the Pledgee or endorsed in blank;
(ii) with respect to an Uncertificated Security (other than an
Uncertificated Security credited on the books of a Clearing
Corporation), the respective Pledgor shall cause (or, in the case of an
Uncertificated Security issued by a Person which is not a Subsidiary of
such Pledgor, shall use its reasonable best efforts to cause) the
issuer of such Uncertificated Security to duly authorize and execute,
and deliver to the Pledgee, an agreement for the benefit of the Pledgee
and the Secured Creditors substantially in the form of Annex G hereto
(appropriately completed to the satisfaction of the Pledgee and with
such modifications, if any, as shall be satisfactory to the Pledgee)
pursuant to which such issuer agrees to comply with any and all
instructions originated by the Pledgee without further consent by the
registered owner and not to comply with instructions regarding such
Uncertificated Security (and any Partnership Interests and Limited
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Liability Company Interests issued by such issuer) originated by any
other Person other than a court of competent jurisdiction;
(iii) with respect to a Certificated Security, Uncertificated
Security, Partnership Interest or Limited Liability Company Interest
credited on the books of a Clearing Corporation (including a Federal
Reserve Bank, Participants Trust Company or The Depository Trust
Company), the respective Pledgor shall promptly notify the Pledgee
thereof and shall promptly take all actions required (i) to comply with
the applicable rules of such Clearing Corporation and (ii) to perfect
the security interest of the Pledgee under applicable law (including,
in any event, under Sections 9-115 (4)(a) and (b), 9-115 (1)(e) and
8-106 (d) of the UCC). The Pledgor further agrees to take such actions
as the Pledgee deems necessary or desirable to effect the foregoing;
(iv) with respect to a Partnership Interest or a Limited Liability
Company Interest (other than a Partnership Interest or Limited
Liability Interest credited on the books of a Clearing Corporation),
(1) if such Partnership Interest or Limited Liability Company Interest
is represented by a certificate, the procedure set forth in Section
3.2(a)(i) hereof, and (2) if such Partnership Interest or Limited
Liability Company Interest is not represented by a certificate, the
procedure set forth in Section 3.2(a)(ii) hereof;
(v) with respect to any Note, physical delivery of such Note to
the Pledgee, endorsed to the Pledgee or endorsed in blank; and
(vi) with respect to cash, (i) establishment by the Pledgee of a
cash account in the name of such Pledgor over which the Pledgee shall
have exclusive and absolute control and dominion (and no withdrawals or
transfers may be made therefrom by any Person except with the prior
written consent of the Pledgee) and (ii) deposit of such cash in such
cash account.
(b) In addition to the actions required to be taken pursuant
to proceeding Section 3.2(a) hereof, each Pledgor shall take the following
additional actions with respect to the Securities and Collateral (as defined
below):
(i) with respect to all Collateral of such Pledgor whereby or
with respect to which the Pledgee may obtain "control" thereof within
the meaning of Section 8-106 of the UCC (or under any provision of the
UCC as same may be amended or supplemented from time to time, or under
the laws of any relevant State other than the State of New York), the
respective Pledgor shall take all actions as may be requested from time
to time by the Pledgee so that "control" of such Collateral is obtained
(to the greatest extent feasible in the case of any Collateral
constituting a partnership or membership interest in any Person which
is not a Subsidiary of any Pledgor) and at all times held by the
Pledgee; and
(ii) each Pledgor shall from time to time cause appropriate
financing statements (on Form UCC-1 or other appropriate form) under
the Uniform Commercial Code as in effect in the various relevant
States, on form covering all Collateral hereunder (with the form of
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such financing statements to be satisfactory to the Pledgee), to be
filed in the relevant filing offices so that at all times the Pledgee
has a security interest in all Investment Property and other Collateral
which is perfected by the filing of such financing statements (in each
case to the maximum extent perfection by filing may be obtained under
the laws of the relevant States, including, without limitation, Section
9-115(4)(b) of the UCC).
3.3 SUBSEQUENTLY ACQUIRED COLLATERAL. If any Pledgor shall
acquire (by purchase, stock dividend or otherwise) any additional Collateral at
any time or from time to time after the date hereof, such Collateral shall
automatically (and without any further action being required to be taken) be
subject to the pledge and security interests created pursuant to Section 3.1
hereof and, furthermore, the Pledgor will promptly thereafter take (or cause to
be taken) all action with respect to such Collateral in accordance with the
procedures set forth in Section 3.2 hereof, and will promptly thereafter deliver
to the Pledgee (i) a certificate executed by a principal executive officer of
such Pledgor describing such Collateral and certifying that the same has been
duly pledged in favor of the Pledgee (for the benefit of the Secured Creditors)
hereunder and (ii) supplements to Annexes A through F hereto as are necessary to
cause such annexes to be complete and accurate at such time. Without limiting
the foregoing, each Pledgor shall be required to pledge hereunder any shares of
stock at any time and from time to time after the date hereof acquired by such
Pledgor of any Foreign Corporation, PROVIDED that (x) no Pledgor (to the extent
that it is the Borrower or a Domestic Subsidiary of the Borrower) shall be
required at any time to pledge hereunder more than 65% of the Voting Stock of
any Foreign Corporation and (y) each Pledgor shall be required to pledge
hereunder 100% of any Non-Voting Stock at any time and from time to time
acquired by such Pledgor of any Foreign Corporation.
3.4 TRANSFER TAXES. Each pledge of Collateral under Section
3.1 or Section 3.3 hereof shall be accompanied by any transfer tax stamps
required in connection with the pledge of such Collateral.
3.5 DEFINITION OF PLEDGED NOTES. All Notes at any time pledged
or required to be pledged hereunder are hereinafter called the "Pledged Notes".
3.6 CERTAIN REPRESENTATIONS AND WARRANTIES REGARDING THE
COLLATERAL. Each Pledgor represents and warrants that on the date hereof (i)
each Subsidiary of such Pledgor, and the direct ownership thereof, is listed in
Annex A hereto; (ii) the Stock held by such Pledgor consists of the number and
type of shares of the stock of the corporations as described in Annex B hereto;
(iii) such Stock constitutes that percentage of the issued and outstanding
capital stock of the issuing corporation as is set forth in Annex B hereto; (iv)
the Notes held by such Pledgor consist of the promissory notes described in
Annex C hereto where such Pledgor is listed as the lender; (v) the Limited
Liability Company Interests held by such Pledgor consist of the number and type
of interests of the Persons described in Annex D hereto; (vi) each such Limited
Liability Company Interest constitutes that percentage of the issued and
outstanding equity interest of the issuing Person as set forth in Annex D
hereto; (vii) the Partnership Interests held by such Pledgor consist of the
number and type of interests of the Persons described in Annex E hereto; (viii)
each such Partnership Interest constitutes that percentage or portion of the
entire partnership interest of the Partnership as set forth in Annex E hereto;
(ix) the Pledgor has complied with the respective procedure set forth in Section
3.2(a) hereof with respect to each item of Collateral
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described in Annexes A through E hereto; and (x) on the date hereof, such
Pledgor owns no other Securities, Limited Liability Company Interests or
Partnership Interests.
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. If and to the
extent necessary to enable the Pledgee to perfect its security interest in any
of the Collateral or to exercise any of its remedies hereunder, the Pledgee
shall have the right to appoint one or more sub-agents for the purpose of
retaining physical possession of the Collateral, which may be held (in the
discretion of the Pledgee) in the name of the relevant Pledgor, endorsed or
assigned in blank or in favor of the Pledgee or any nominee or nominees of the
Pledgee or a sub-agent appointed by the Pledgee.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until
there shall have occurred and be continuing an Event of Default, each Pledgor
shall be entitled to exercise any and all voting and other consensual rights
pertaining to the Collateral owned by it, and to give consents, waivers or
ratifications in respect thereof; PROVIDED, that, in each case, no vote shall be
cast or any consent, waiver or ratification given or any action taken or omitted
to be taken which would violate or be inconsistent with any of the terms of this
Agreement, the Credit Agreement, any other Credit Document or any Interest Rate
Protection Agreement or Other Hedging Agreement, if such Interest Rate
Protection Agreement or Other Hedging Agreement constitutes a Guaranteed
Obligation of the Borrower, (collectively, the "Secured Debt Agreements"), or
which would have the effect of materially or adversely impairing the value of
the Collateral or any part thereof or the position or interests of the Pledgee
or any other Secured Creditor in the Collateral. All such rights of each Pledgor
to vote and to give consents, waivers and ratifications shall cease in case an
Event of Default has occurred and is continuing, and Section 7 hereof shall
become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there
shall have occurred and be continuing an Event of Default, all cash dividends,
cash distributions, cash Proceeds and other cash amounts payable in respect of
the Collateral shall be paid to the respective Pledgor. The Pledgee shall be
entitled to receive directly, and to retain as part of the Collateral:
(i) all other or additional stock, notes, limited liability
company interests, partnership interests, instruments or other
securities or property (including cash dividends except as otherwise
provided above) paid or distributed by way of dividend or otherwise in
respect of the Collateral;
(ii) all other or additional stock, notes, limited liability
company interests, partnership interests, instruments or other
securities or property (including, but not limited to, cash) paid or
distributed in respect of the Collateral by way of stock-split,
spin-off, split-up, reclassification, combination of shares or similar
rearrangement; and
(iii) all other or additional stock, notes, limited liability
company interests, partnership interests, instruments or other
securities or property (including, but not limited to, cash) which may
be paid in respect of the Collateral by reason of any consolidation,
merger,
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exchange of stock, conveyance of assets, liquidation or similar
corporate reorganization.
Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive proceeds of the Collateral in any form in accordance
with Section 3 of this Agreement. All dividends, distributions or other payments
which are received by any Pledgor contrary to the provisions of this Section 6
and Section 7 hereof shall be received in trust for the benefit of the Pledgee,
shall be segregated from other property or funds of such Pledgor and shall be
forthwith paid over to the Pledgee as Collateral in the same form as so received
(with any necessary endorsement).
7. REMEDIES IN CASE OF EVENT OF DEFAULT. If there shall have
occurred and be continuing an Event of Default, then and in every such case, the
Pledgee shall be entitled to exercise all of the rights, powers and remedies
(whether vested in it by this Agreement, any other Secured Debt Agreement or by
law) for the protection and enforcement of its rights in respect of the
Collateral, and the Pledgee shall be entitled to exercise all the rights and
remedies of a secured party under the Uniform Commercial Code as in effect in
any relevant jurisdiction and also shall be entitled, without limitation, to
exercise the following rights, which each Pledgor hereby agrees to be
commercially reasonable:
(i) to receive all amounts payable in respect of the Collateral
otherwise payable under Section 6 hereof to the respective Pledgor;
(ii) to transfer all or any part of the Collateral into the
Pledgee's name or the name of its nominee or nominees;
(iii) to accelerate any Pledged Note which may be accelerated in
accordance with its terms, and take any other lawful action to collect
upon any Pledged Note (including, without limitation, to make any
demand for payment thereon);
(iv) to vote all or any part of the Collateral (whether or not
transferred into the name of the Pledgee) and give all consents,
waivers and ratifications in respect of the Collateral and otherwise
act with respect thereto as though it were the outright owner thereof
(each Pledgor hereby irrevocably constituting and appointing the
Pledgee the proxy and attorney-in-fact of such Pledgor, with full power
of substitution to do so);
(v) at any time and from time to time to sell, assign and
deliver, or grant options to purchase, all or any part of the
Collateral, or any interest therein, at any public or private sale,
without demand of performance, advertisement or notice of intention to
sell or of the time or place of sale or adjournment thereof or to
redeem or otherwise (all of which are hereby waived by each Pledgor),
for cash, on credit or for other property, for immediate or future
delivery without any assumption of credit risk, and for such price or
prices and on such terms as the Pledgee in its absolute discretion may
determine, PROVIDED that at least 10 days' written notice of the time
and place of any such sale shall be given to the respective Pledgor.
The Pledgee shall not be obligated to make any such sale of Collateral
regardless of whether any such notice of sale has theretofore been
given. Each
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Pledgor hereby waives and releases to the fullest extent permitted by
law any right or equity of redemption with respect to the Collateral,
whether before or after sale hereunder, and all rights, if any, of
marshalling the Collateral and any other security for the Obligations
or otherwise. At any such sale, unless prohibited by applicable law,
the Pledgee on behalf of the Secured Creditors may bid for and
purchase all or any part of the Collateral so sold free from any such
right or equity of redemption. Neither the Pledgee nor any other
Secured Creditor shall be liable for failure to collect or realize upon
any or all of the Collateral or for any delay in so doing nor shall any
of them be under any obligation to take any action whatsoever with
regard thereto; and
(vi) to set-off any and all Collateral against any and all
Obligations, and to withdraw any and all cash or other Collateral from
any and all Collateral Accounts and to apply such cash and other
Collateral to the payment of any and all Obligations.
8. REMEDIES, ETC., CUMULATIVE. Each and every right, power and
remedy of the Pledgee provided for in this Agreement or in any other Secured
Debt Agreement, or now or hereafter existing at law or in equity or by statute
shall be cumulative and concurrent and shall be in addition to every other such
right, power or remedy. The exercise or beginning of the exercise by the Pledgee
or any other Secured Creditor of any one or more of the rights, powers or
remedies provided for in this Agreement or any other Secured Debt Agreement or
now or hereafter existing at law or in equity or by statute or otherwise shall
not preclude the simultaneous or later exercise by the Pledgee or any other
Secured Creditor of all such other rights, powers or remedies, and no failure or
delay on the part of the Pledgee or any other Secured Creditor to exercise any
such right, power or remedy shall operate as a waiver thereof. No notice to or
demand on any Pledgor in any case shall entitle it to any other or further
notice or demand in similar or other circumstances or constitute a waiver of any
of the rights of the Pledgee or any other Secured Creditor to any other or
further action in any circumstances without notice or demand. The Secured
Creditors agree that this Agreement may be enforced only by the action of the
Administrative Agent or the Pledgee, in each case acting upon the instructions
of the Required Lenders (or, after the date on which all Credit Document
Obligations have been paid in full, the holders of at least the majority of the
outstanding Other Obligations) and that no other Secured Creditor shall have any
right individually to seek to enforce or to enforce this Agreement or to realize
upon the security to be granted hereby, it being understood and agreed that such
rights and remedies may be exercised by the Administrative Agent or the Pledgee
or the holders of at least a majority of the outstanding Other Obligations, as
the case may be, for the benefit of the Secured Creditors upon the terms of this
Agreement.
9. APPLICATION OF PROCEEDS. (a) All monies collected by the
Pledgee upon any sale or other disposition of the Collateral pursuant to the
terms of this Agreement, together with all other monies received by the Pledgee
hereunder, shall be applied in the manner provided in the Security Agreement.
(b) It is understood and agreed that the Pledgors shall remain
jointly and severally liable to the extent of any deficiency between the amount
of the proceeds of the Collateral hereunder and the aggregate amount of the
Obligations.
13
<PAGE>
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral
by the Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or pur-chasers shall
not be obligated to see to the application of any part of the purchase money
paid over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. Each Pledgor jointly and severally agrees (i)
to indemnify and hold harmless the Pledgee in such capacity and each other
Secured Creditor and their respective successors, assigns, employees, agents,
affiliates and servants (individually an "Indemnitee," and collectively the
"Indemnitees") from and against any and all claims, demands, losses, judgments
and liabilities (including liabilities for penalties) of whatsoever kind or
nature, and (ii) to reimburse each Indemnitee for all costs and expenses,
including reasonable attorneys' fees, in each case growing out of or resulting
from this Agreement or the exercise by any Indemnitee of any right or remedy
granted to it hereunder or under any other Secured Debt Agreement (but excluding
any claims, demands, losses, judgments and liabilities or expenses to the extent
incurred by reason of gross negligence or willful misconduct of such Indemnitee
as finally determined by a court of competent jurisdiction). In no event shall
the Pledgee be liable, in the absence of gross negligence or willful misconduct
on its part, for any matter or thing in connection with this Agreement other
than to account for monies actually received by it in accordance with the terms
hereof. If and to the extent that the obligations of any Pledgor under this
Section 11 are unenforceable for any reason, such Pledgor hereby agrees to make
the maximum contribution to the payment and satisfaction of such obligations
which is permissible under applicable law.
12. PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER.
(a) Nothing herein shall be construed to make the Pledgee or any other Secured
Creditor liable as a member of any limited liability company or as a partner of
any partnership and neither the Pledgee nor any other Secured Creditor by virtue
of this Agreement or otherwise (except as referred to in the following sentence)
shall have any of the duties, obligations or liabilities of a member of any
limited liability company or of a partner of any partnership. The parties hereto
expressly agree that, unless the Pledgee shall become the absolute owner of
Collateral consisting of a Limited Liability Company Interest or Partnership
Interest pursuant hereto, this Agreement shall not be construed as creating a
partnership or joint venture among the Pledgee, any other Secured Creditor
and/or any Pledgor.
(b) Except as provided in the last sentence of paragraph (a)
of this Section 12, the Pledgee, by accepting this Agreement, did not intend to
become a member of any limited liability company or a partner of any partnership
or otherwise be deemed to be a co-venturer with respect to any Pledgor or any
limited liability company or partnership either before or after an Event of
Default shall have occurred. The Pledgee shall have only those powers set forth
herein and the Secured Creditors shall assume none of the duties, obligations or
liabilities of a member of any limited liability company or of a partner of any
partnership or any Pledgor except as provided in the last sentence of paragraph
(a) of this Section 12.
14
<PAGE>
(c) The Pledgee and the other Secured Creditors shall not be
obligated to perform or discharge any obligation of any Pledgor as a result of
the pledge hereby effected.
(d) The acceptance by the Pledgee of this Agreement, with all
the rights, powers, privileges and authority so created, shall not at any time
or in any event obligate the Pledgee or any other Secured Creditor to appear in
or defend any action or proceeding relating to the Collateral to which it is not
a party, or to take any action hereunder or thereunder, or to expend any money
or incur any expenses or perform or discharge any obligation, duty or liability
under the Collateral.
13. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor
agrees that it will join with the Pledgee in executing and, at such Pledgor's
own expense, file and refile under the Uniform Commercial Code or other
applicable law such financing statements, continuation statements and other
documents in such offices as the Pledgee may deem necessary and wherever
required by law in order to perfect and preserve the Pledgee's security interest
in the Collateral and hereby authorizes the Pledgee to file financing statements
and amendments thereto relative to all or any part of the Collateral without the
signature of such Pledgor where permitted by law, and agrees to do such further
acts and things and to execute and deliver to the Pledgee such additional
conveyances, assignments, agreements and instruments as the Pledgee may
reasonably require or deem necessary to carry into effect the purposes of this
Agreement or to further assure and confirm unto the Pledgee its rights, powers
and remedies hereunder.
(b) Each Pledgor hereby appoints the Pledgee such Pledgor's
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor or otherwise, to act from time to time solely after
the occurrence and during the continuance of an Event of Default in the
Pledgee's reasonable discretion to take any action and to execute any instrument
which the Pledgee may deem necessary or advisable to accomplish the purposes of
this Agreement.
14. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance
with this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed by each Secured Creditor that
by accepting the benefits of this Agreement each such Secured Creditor
acknowledges and agrees that the obligations of the Pledgee as holder of the
Collateral and interests therein and with respect to the disposition thereof,
and otherwise under this Agreement, are only those expressly set forth in this
Agreement. The Pledgee shall act hereunder on the terms and conditions set forth
herein and in Section 12 of the Credit Agreement.
15. TRANSFER BY THE PLEDGORS. No Pledgor will sell or
otherwise dispose of, grant any option with respect to, or mortgage, pledge or
otherwise encumber any of the Collateral or any interest therein (except as may
be permitted in accordance with the terms of the Credit Agreement).
16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS.
(a) Each Pledgor represents, warrants and covenants that:
15
<PAGE>
(i) it is the legal, beneficial and record owner of, and has good
and marketable title to, all Collateral consisting of one or more
Securities and that it has sufficient interest in all Collateral in
which a security interest is purported to be created hereunder for such
security interest to attach (subject, in each case, to no pledge, lien,
mortgage, hypothecation, security interest, charge, option, Adverse
Claim or other encumbrance whatsoever, except the liens and security
interests created by this Agreement);
(ii) it has full power, authority and legal right to pledge all
the Collateral pledged by it pursuant to this Agreement;
(iii) this Agreement has been duly authorized, executed and
delivered by such Pledgor and constitutes a legal, valid and binding
obligation of such Pledgor enforceable against such Pledgor in
accordance with its terms, except to the extent that the enforceability
hereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting
creditors' rights and by equitable principles (regardless of whether
enforcement is sought in equity or at law);
(iv) except to the extent already obtained or made, no consent of
any other party (including, without limitation, any stockholder,
partner, member or creditor of such Pledgor or any of its Subsidiaries)
and no consent, license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or
declaration with, any governmental authority is required to be obtained
by such Pledgor in connection with (a) the execution, delivery or
performance of this Agreement, (b) the validity or enforceability of
this Agreement (except as set forth in clause (iii) above), (c) the
perfection or enforceability of the Pledgee's security interest in the
Collateral or (d) except for compliance with or as may be required by
applicable securities laws, the exercise by the Pledgee of any of its
rights or remedies provided herein;
(v) the execution, delivery and performance of this Agreement
will not violate any provision of any applicable law or regulation or
of any order, judgment, writ, award or decree of any court, arbitrator
or governmental authority, domestic or foreign, applicable to such
Pledgor, or of the certificate of incorporation, operating agreement,
limited liability company agreement, partnership agreement or by-laws
of such Pledgor or of any securities issued by such Pledgor or any of
its Subsidiaries, or of any mortgage, deed of trust, indenture, lease,
loan agreement, credit agreement or other material contract, agreement
or instrument or undertaking to which such Pledgor or any of its
Subsidiaries is a party or which purports to be binding upon such
Pledgor or any of its Subsidiaries or upon any of their respective
assets and will not result in the creation or imposition of (or the
obligation to create or impose) any lien or encumbrance on any of the
assets of such Pledgor or any of its Subsidiaries except as
contemplated by this Agreement;
(vi) all of the Collateral (consisting of Securities, Limited
Liability Company Interests or Partnership Interests) has been duly and
validly issued and acquired, is fully paid and non-assessable and is
subject to no options to purchase or similar rights;
16
<PAGE>
(vii) each of the Pledged Notes constitutes, or when executed by
the obligor thereof will constitute, the legal, valid and binding
obligation of such obligor, enforceable in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at
law);
(viii) the pledge, collateral assignment and delivery to the Pledgee
of the Collateral consisting of Certificated Securities pursuant to
this Agreement creates a valid and perfected first priority security
interest in such Certificated Securities, and the proceeds thereof,
subject to no prior Lien or encumbrance or to any agreement purporting
to grant to any third party a Lien or encumbrance on the property or
assets of such Pledgor which would include the Securities, and the
Pledgee is entitled to all the rights, priorities and benefits afforded
by the UCC or other relevant law as enacted in any relevant
jurisdiction to perfect security interests in respect of such
Collateral; and
(ix) "control" (as defined in Section 8-106 of the UCC) has been
obtained by the Pledgee over all Collateral consisting of Securities
(including Notes which are Securities) with respect to which such
"control" may be obtained pursuant to Section 8-106 of the UCC.
(b) Each Pledgor covenants and agrees that it will defend the
Pledgee's right, title and security interest in and to the Securities and the
proceeds thereof against the claims and demands of all persons whomsoever; and
each Pledgor covenants and agrees that it will have like title to and right to
pledge any other property at any time hereafter pledged to the Pledgee as
Collateral hereunder and will likewise defend the right thereto and security
interest therein of the Pledgee and the other Secured Creditors.
(c) Each Pledgor covenants and agrees that it will take no
action which would violate any of the terms of any Secured Debt Agreement.
17. CHIEF EXECUTIVE OFFICE; RECORDS. The chief executive
office of each Pledgor is located at the address specified in Annex F hereto for
such Pledgor. Each Pledgor will not move its chief executive office except to
such new location as such Pledgor may establish in accordance with the last
sentence of this Section 17. The originals of all documents in the possession of
such Pledgor evidencing all Collateral, including but not limited to all Limited
Liability Company Interests and Partnership Interests, and the only original
books of account and records of such Pledgor relating thereto are, and will
continue to be, kept at such chief executive office as specified in Annex F
hereto, or at such new locations as such Pledgor may establish in accordance
with the last sentence of this Section 17. All Limited Liability Company
Interests and Partnership Interests are, and will continue to be, maintained at,
and controlled and directed (including, without limitation, for general
accounting purposes) from, such chief executive office as specified in Annex F
hereto, or such new locations as such Pledgor may establish in accordance with
the last sentence of this Section 17. No Pledgor shall establish a new location
for such offices until (i) it shall have given to the Pledgee not less than 15
days' prior written notice of its intention so to do, clearly describing such
new location and providing
17
<PAGE>
such other information in connection therewith as the Pledgee may reasonably
request and (ii) with respect to such new location, it shall have taken all
action, satisfactory to the Pledgee, to maintain the security interest of the
Collateral Agent in the Collateral intended to be granted hereby at all times
fully perfected and in full force and effect. Promptly after establishing a
new location for such offices in accordance with the immediately preceding
sentence, the respective Pledgor shall deliver to the Pledgee a supplement to
Annex F hereto so as to cause such Annex F hereto to be complete and accurate.
18. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of
each Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (i) any renewal,
extension, amendment or modification of or addition or supplement to or deletion
from any Secured Debt Agreement or any other instrument or agreement referred to
therein, or any assignment or transfer of any thereof; (ii) any waiver, consent,
extension, indulgence or other action or inaction under or in respect of any
such agreement or instrument including, without limitation, this Agreement;
(iii) any furnishing of any additional security to the Pledgee or its assignee
or any acceptance thereof or any release of any security by the Pledgee or its
assignee; (iv) any limitation on any party's liability or obligations under any
such instrument or agreement or any invalidity or unenforceability, in whole or
in part, of any such instrument or agreement or any term thereof; or (v) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to any Pledgor or any Subsidiary
of any Pledgor, or any action taken with respect to this Agreement by any
trustee or receiver, or by any court, in any such proceeding, whether or not
such Pledgor shall have notice or knowledge of any of the foregoing.
19. REGISTRATION, ETC. If at any time when the Pledgee shall
determine to exercise its right to sell all or any part of the Collateral
consisting of Securities, Limited Liability Company Interests or Partnership
Interests pursuant to Section 7 hereof, and the Collateral or the part thereof
to be sold shall not, for any reason whatsoever, be effectively registered under
the Securities Act, as then in effect, the Pledgee may, in its sole and absolute
discretion, sell such Collateral, as the case may be, or part thereof by private
sale in such manner and under such circumstances as the Pledgee may deem
necessary or advisable in order that such sale may legally be effected without
such registration, PROVIDED that at least 10 days' written notice of the time
and place of any such sale shall be given to the respective Pledgor. Without
limiting the generality of the foregoing, in any such event the Pledgee, in its
sole and absolute discretion (i) may proceed to make such private sale
notwithstanding that a registration statement for the purpose of registering
such Collateral or part thereof shall have been filed under such Securities Act,
(ii) may approach and negotiate with a single possible purchaser to effect such
sale, and (iii) may restrict such sale to a purchaser who will represent and
agree that such purchaser is purchasing for its own account, for investment, and
not with a view to the distribution or sale of such Collateral or part thereof.
In the event of any such sale, the Pledgee shall incur no responsibility or
liability for selling all or any part of the Collateral at a price which the
Pledgee, in its sole and absolute discretion, in good faith deems reasonable
under the circum-
18
<PAGE>
stances, notwithstanding the possibility that a substantially higher price
might be realized if the sale were deferred until after registration as
aforesaid.
20. TERMINATION; RELEASE. (a) After the Termination Date, this
Agreement and the security interest created hereby shall terminate (provided
that all indemnities set forth herein including, without limitation, in Section
11 hereof shall survive any such termination), and the Pledgee, at the request
and expense of any Pledgor, will execute and deliver to such Pledgor a proper
instrument or instruments acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Pledgor (without
recourse and without any representation or warranty) such of the Collateral as
has not theretofore been sold or otherwise applied or released pursuant to this
Agreement, together with any monies at the time held by the Pledgee or any of
its sub-agents hereunder. As used in this Agreement, "Termination Date" shall
mean the date upon which the Total Revolving Loan Commitment and all Interest
Rate Protection Agreements and Other Hedging Agreements that constitute a
Guaranteed Obligation of the Borrower, have been terminated, no Note under the
Credit Agreement is outstanding (and all Loans have been repaid in full), all
Letters of Credit have been terminated and all Obligations then due and payable
have been paid in full.
(b) In the event that any part of the Collateral is sold in
connection with a sale permitted by Section 9.02 of the Credit Agreement (other
than a sale to any Pledgor or any Subsidiary thereof) or is otherwise released
at the direction of the Required Lenders (or all Lenders if required by Section
13.12 of the Credit Agreement) and the proceeds of such sale or sales or from
such release are applied in accordance with the provisions of the Credit
Agreement, to the extent required to be so applied, the Pledgee, at the request
and expense of any Pledgor, will duly assign, transfer and deliver to such
Pledgor (without recourse and without any representation or warranty) such of
the Collateral (and releases therefor) as is then being (or has been) so sold or
released and has not theretofore been released pursuant to this Agreement.
(c) At any time that a Pledgor desires that the Pledgee
assign, transfer and deliver Collateral (and releases therefor) as provided in
Section 20(a) or (b) hereof, it shall deliver to the Pledgee a certificate
signed by a principal executive officer of such Pledgor stating that the release
of the respective Collateral is permitted pursuant to such Section 20(a) or (b).
(d) The Pledgee shall have no liability whatsoever to any
other Secured Creditor as the result of any release of Collateral by it in
accordance with this Section 20.
21. NOTICES, ETC. All such notices and communications provided
for hereunder shall be in writing (including telegraphic, telex, telecopier or
cable communication) and mailed, telegraphed, telexed, telecopied, cabled or
delivered to the appropriate address set forth below. All such notices and
communications shall, when mailed, telegraphed, telexed, telecopied, or cabled
or sent by overnight courier, be effective when deposited in the mails,
delivered to the telegraph company, cable company or overnight courier, as the
case may be, or sent by telex or telecopier, except that notices and
communications to (x) the Pledgee shall not be effective until received by the
Pledgee and (y) any Pledgor shall not be effective until received by any such
Pledgor, as the case may be. All notices and other communications shall be in
writing and addressed as follows:
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<PAGE>
(a) if to any Pledgor, at the address set forth opposite
such Pledgor's signature below;
(b) if to the Pledgee, at:
Bankers Trust Company
130 Liberty Street
New York, NY 10006
Attention: Andrew Keith
Telephone No.: (212) 250-8617
Telecopier No.: (212) 250-7218
(c) if to any Lender Creditor, either (x) to the
Administrative Agent, at the address of the Administrative Agent
specified in the Credit Agreement or (y) at such address as such Lender
Creditor shall have specified in the Credit Agreement;
(d) if to any Other Creditor at such address as such Other
Creditor shall have specified in writing to the Pledgors and the
Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
22. WAIVER; AMENDMENT. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by each Pledgor directly affected
thereby and the Pledgee (with the written consent of either (x) the Required
Lenders (or all of the Lenders to the extent required by Section 13.12 of the
Credit Agreement) at all times prior to the time on which all Credit Document
Obligations have been paid in full or (y) the holders of at least a majority of
the outstanding Other Obligations at all times after the time on which all
Credit Document Obligations have been paid in full); PROVIDED that any change,
waiver, modification or variance affecting the rights and benefits of a single
Class (as defined below) of Secured Creditors (and not all Secured Creditors in
a like or similar manner) shall also require the written consent of the
Requisite Creditors (as defined below) of such affected Class. For the purpose
of this Agreement, the term "Class" shall mean each class of Secured Creditors,
I.E., whether (i) the Lender Creditors as holders of the Credit Document
Obligations or (ii) the Other Creditors as the holders of the Other Obligations.
For the purpose of this Agreement, the term "Requisite Creditors" of any Class
shall mean each of (i) with respect to the Credit Document Obligations, the
Required Lenders and (ii) with respect to the Other Obligations, the holders of
at least a majority of all obligations outstanding from time to time under the
Interest Rate Protection Agreements and Other Hedging Agreements.
23. MISCELLANEOUS. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of and be enforceable by each of the parties hereto and its
successors and assigns, PROVIDED that no Pledgor may assign any of its rights or
obligations under this Agreement without the prior consent of the Collateral
Agent. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
GOVERNED BY THE INTERNAL LAWS OF THE
20
<PAGE>
STATE OF NEW YORK. EACH PLEDGOR IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY
JURY IN ANY ACTION PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. The headings in this
Agreement are for purposes of reference only and shall not limit or define
the meaning hereof. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
constitute one instrument. In the event that any provision of this Agreement
shall prove to be invalid or unenforceable, such provision shall be deemed to
be severable from the other provisions of this Agreement which shall remain
binding on all parties hereto.
24. RECOURSE. This Agreement is made with full recourse to the
Pledgors and pursuant to and upon all the representations, warranties, covenants
and agreements on the part of the Pledgors contained herein and in the other
Secured Debt Agreements and otherwise in writing in connection herewith or
therewith.
25. ADDITIONAL PLEDGORS. It is understood and agreed that any
Subsidiary of Holdings that is required to execute a counterpart of this
Agreement after the date hereof pursuant to the Credit Agreement shall
automatically become a Pledgor hereunder by executing a counterpart hereof and
delivering the same to the Pledgee.
* * * *
21
<PAGE>
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused
this Agreement to be executed by their duly elected officers duly authorized as
of the date first above written.
<TABLE>
<S> <C>
ADDRESS:
2777 Summer Street INFORMATION HOLDINGS, INC.,
Suite 209 as a Pledgor
Stamford, CT 06905
Attention: Vincent Chippari
Telephone: (203) 961-9208 By
Telecopier: (203) 961-1431 ----------------------------
Title:
c/o Information Holdings, Inc. WARBURG, PINCUS INFORMATION
277 Summer Street, Suite 209 VENTURES, INC.,
Stamford, CT 06905 as a Pledgor
Attention: Vincent Chippari
Telephone: (203) 961-9208 By
Telecopier: (203) 961-1431 ----------------------------
Title:
2777 Summer Street INFORMATION VENTURES L.L.C.,
Suite 209 as a Pledgor
Stamford, CT 06905
Attention: Vincent Chippari
Telephone: (203) 961-9208 By
Telecopier: (203) 961-1431 ----------------------------
Title:
c/o Information Holdings, Inc. CRC PRESS, L.L.C.,
2777 Summer Street as a Pledgor
Suite 209
Stamford, CT 06905
Attention: Vincent Chippari By
Telephone: (203) 961-9208 ----------------------------
Title:
Telecopier: (203) 961-1431
</TABLE>
22
<PAGE>
<TABLE>
<S> <C>
c/o Information Holdings, Inc. MICROPATENT, L.L.C.,
2777 Summer Street as a Pledgor
Suite 209
Stamford, CT 06905
Attention: Vincent Chippari By
Telephone: (203) 961-9208 ----------------------------
Telecopier: (203) 961-1431 Title:
c/o Information Holdings, Inc. MASTER DATA CENTER, INC.,
2777 Summer Street as a Pledgor
Suite 209
Stamford, CT 06905
Attention: Vincent Chippari By
Telephone: (203) 961-9208 ----------------------------
Telecopier: (203) 961-1431 Title:
c/o Information Holdings, Inc. CRC PRESS UK, L.L.C.,
2777 Summer Street as a Pledgor
Suite 209
Stamford, CT 06905
Attention: Vincent Chippari By
Telephone: (203) 961-9208 ----------------------------
Telecopier: (203) 961-1431 Title:
c/o Information Holdings, Inc. OPTIPAT, INC.,
2777 Summer Street as a Pledgor
Suite 209
Stamford, CT 06905
Attention: Vincent Chippari By
Telephone: (203) 961-9208 ----------------------------
Telecopier: (203) 961-1431 Title:
c/o Information Holdings, Inc. MICROPATENT UK, L.L.C.,
2777 Summer Street as a Pledgor
Suite 209
Stamford, CT 06905
Attention: Vincent Chippari By
Telephone: (203) 961-9208 ----------------------------
Telecopier: (203) 961-1431 Title:
</TABLE>
23
<PAGE>
Accepted and Agreed to:
BANKERS TRUST COMPANY,
as Collateral Agent and
Pledgee
By
------------------------------
Title:
<PAGE>
ANNEX A
to
PLEDGE AGREEMENT
LIST OF SUBSIDIARIES
I. Information Holdings, Inc.
II. Warburg, Pincus Information Ventures, Inc.
III. Information Ventures L.L.C.
IV. CRC Press, L.L.C.
V. MicroPatent, L.L.C.
VI. Master Data Center, Inc.
VII. CRC Press UK, L.L.C.
VIII. OptiPat, Inc.
IX. MicroPatent UK, L.L.C.
<PAGE>
ANNEX B
to
PLEDGE AGREEMENT
LIST OF STOCK
I. INFORMATION HOLDINGS, INC.
<TABLE>
Percentage of Relevant Sub-Clause
Name of Issuing Certificate Type of Number of Outstanding Shares of Section 3.2(a)
Corporation Number Shares Shares of Capital Stock of Pledge Agreement
- --------------------------- ----------------------- ------------------ ------------ --------------------- ---------------------
<S> <C> <C> <C> <C> <C>
</TABLE>
II. WARBURG, PINCUS INFORMATION VENTURES, INC.
<TABLE>
Percentage of Relevant Sub-Clause
Name of Issuing Certificate Type of Number of Outstanding Shares of Section 3.2(a)
Corporation Number Shares Shares of Capital Stock of Pledge Agreement
- --------------------------- ----------------------- ------------------ ------------ --------------------- ---------------------
<S> <C> <C> <C> <C> <C>
</TABLE>
III. INFORMATION VENTURES L.L.C.
<TABLE>
Percentage of Relevant Sub-Clause
Name of Issuing Certificate Type of Number of Outstanding Shares of Section 3.2(a)
Corporation Number Shares Shares of Capital Stock of Pledge Agreement
- --------------------------- ----------------------- ------------------ ------------ --------------------- ---------------------
<S> <C> <C> <C> <C> <C>
</TABLE>
III. CRC PRESS, L.L.C.
IV. MICROPATENT, L.L.C.
V. MASTER DATA CENTER, INC.
<PAGE>
[ADD OTHERS]
<PAGE>
ANNEX C
to
PLEDGE AGREEMENT
LIST OF NOTES
I. Information Holdings, Inc.
<TABLE>
<CAPTION>
Relevant Sub-clause of
Section 3.2(a)
Amount Maturity Date Obligor of Pledge Agreement
- ------ ------------- ------- ----------------------
<S> <C> <C> <C>
</TABLE>
II. Warburg, Pincus Information Ventures, Inc.
<TABLE>
<CAPTION>
Sub-clause of Section 3.2(a)
Amount Maturity Date Obligor of Pledge Agreement
- ------ ------------- ------- ----------------------------
<S> <C> <C> <C>
</TABLE>
III. Information Ventures L.L.C.
<TABLE>
<CAPTION>
Sub-clause of Section 3.2(a)
Amount Maturity Date Obligor of Pledge Agreement
- ------ ------------- ------- ----------------------------
<S> <C> <C> <C>
</TABLE>
IV. CRC Press, L.L.C.
V. MicroPatent, L.L.C.
VI. Master Data Center, Inc.
[ADD OTHERS]
<PAGE>
ANNEX D
to
PLEDGE AGREEMENT
LIST OF LIMITED LIABILITY COMPANY INTERESTS
I. INFORMATION HOLDINGS, INC.
II. WARBURG, PINCUS INFORMATION VENTURES, INC.
III. INFORMATION VENTURES L.L.C.
IV. CRC PRESS, L.L.C.
V. MICROPATENT, L.L.C.
VI. MASTER DATA CENTER, INC.
[ADD OTHERS]
<PAGE>
ANNEX E
to
PLEDGE AGREEMENT
LIST OF PARTNERSHIP INTERESTS
I. INFORMATION HOLDINGS, INC.
II. WARBURG, PINCUS INFORMATION VENTURES, INC.
III. INFORMATION VENTURES L.L.C.
IV. CRC PRESS, L.L.C.
V. MICROPATENT, L.L.C.
VI. MASTER DATA CENTER, INC.
[ADD OTHERS]
<PAGE>
ANNEX F
to
PLEDGE AGREEMENT
LIST OF CHIEF EXECUTIVE OFFICES
I. INFORMATION HOLDINGS, INC.
II. WARBURG, PINCUS INFORMATION VENTURES, INC.
III. INFORMATION VENTURES L.L.C.
IV. CRC PRESS, L.L.C.
V. MICROPATENT, L.L.C.
VI. MASTER DATA CENTER, INC.
[ADD OTHERS]
<PAGE>
ANNEX G
to
PLEDGE AGREEMENT
FORM OF AGREEMENT REGARDING UNCERTIFICATED SECURITIES, LIMITED LIABILITY
COMPANY INTERESTS AND PARTNERSHIP INTERESTS
AGREEMENT (as amended, modified or supplemented from time to
time, this "Agreement"), dated as of _______ __, ____, among each of the
undersigned pledgors (each a "Pledgor" and, collectively, the "Pledgors"),
Bankers Trust Company, not in its individual capacity but solely as Collateral
Agent (the "Pledgee"), and __________, as the issuer of the Uncertificated
Securities, Limited Liability Company Interests and/or Partnership Interests
(each as defined below) (the "Issuer").
W I T N E S S E T H :
WHEREAS, each Pledgor and the Pledgee have entered into a
Pledge Agreement, dated as of September 24, 1999 (as amended, amended and
restated, modified or supplemented from time to time, the "Pledge Agreement"),
under which, among other things, in order to secure the payment of the
Obligations (as defined in the Pledge Agreement), each Pledgor will pledge to
the Pledgee for the benefit of the Secured Creditors (as defined in the Pledge
Agreement), and grant a security interest in favor of the Pledgee for the
benefit of the Secured Creditors in, all of the right, title and interest of
such Pledgor in and to any and all (1) "uncertificated securities" (as defined
in Section 8-102(a)(18) of the Uniform Commercial Code, as adopted in the State
of New York) ("Uncertificated Securities"), (2) Partnership Interests (as
defined in the Pledge Agreement) and (3) Limited Liability Company Interests (as
defined in the Pledge Agreement), in each case issued from time to time by the
Issuer, whether now existing or hereafter from time to time acquired by such
Pledgor (with all of such Uncertificated Securities, Partnership Interests and
Limited Liability Company Interests being herein collectively called the "Issuer
Pledged Interests"); and
WHEREAS, each Pledgor desires the Issuer to enter into this
Agreement in order to perfect the security interest of the Pledgee under the
Pledge Agreement in the Issuer Pledged Interests, to vest in the Pledgee control
of the Issuer Pledge Interests and to provide for the rights of the parties
under this Agreement;
NOW THEREFORE, in consideration of the premises and the mutual
promises and agreements contained herein, and for other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Each Pledgor hereby irrevocably authorizes and directs the
Issuer, and the Issuer hereby agrees, to comply with any and all instructions
and orders originated by the
G-1
<PAGE>
Pledgee (and its successors and assigns) regarding any and all of the Issuer
Pledged Interests without the further consent by the registered owner (including
the respective Pledgor), and not to comply with any instructions or orders
regarding any or all of the Issuer Pledged Interests originated by any person or
entity other than the Pledgee (and its successors and assigns) or a court of
competent jurisdiction.
2. The Issuer hereby certifies that on the date hereof (i) no
notice of any security interest, lien or other encumbrance or claim affecting
the Issuer Pledged Interests (other than the security interest of the Pledgee)
has been received by it, and (ii) the security interest of the Pledgee in the
Issuer Pledged Interests has been registered in the books and records of the
Issuer.
3. The Issuer hereby represents and warrants that (i) the
pledge by the Pledgors of, and the granting by the Pledgors of a security
interest in, the Issuer Pledged Interests to the Pledgee, for the benefit of the
Secured Creditors, does not violate the charter, by-laws, partnership agreement,
membership agreement or any other agreement governing the Issuer or the Issuer
Pledged Interests, and (ii) the Issuer Pledged Interests are fully paid and
nonassessable.
4. All notices, statements of accounts, reports, prospectuses,
financial statements and other communications to be sent to any Pledgor by the
Issuer in respect of the Issuer will also be sent to the Pledgee at the
following address:
Bankers Trust Company
130 Liberty Street
New York, NY 10006
Attention: Andrew Keith
Tel: (212) 250-8617
Fax: (212) 250-7218
5. Until the Pledgee shall have delivered written notice to
the Issuer that all of the Obligations have been paid in full and this Agreement
is terminated, the Issuer will send any and all redemptions, distributions,
interest or other payments in respect of the Issuer Pledged Interests from the
Issuer for the account of the Pledgor only by wire transfers to the following
address:
_____________________________
_____________________________
_____________________________
_____________________________
ABA No.: ____________________
Account in the Name of: ___________
Account No.: ____________________
6. Except as expressly provided otherwise in Sections 4 and 5
above, all notices, instructions, orders and communications hereunder shall be
sent or delivered by mail, telex, telecopy or overnight courier service and all
such notices and communications shall, when mailed, telexed, telecopied or sent
by overnight courier, be effective when deposited in the mails or delivered to
the overnight courier, prepaid and properly addressed for delivery on such or
the
G-2
<PAGE>
next Business Day, or sent by telex or telecopier, except that notices and
communications to the Pledgee shall not be effective until received by the
Pledgee. All notices and other communications shall be in writing and addressed
as follows:
(a) if to any Pledgor, at:
c/o Information Holdings, Inc.
2777 Summer Street, Suite 209
Stamford, CT 06905
Attention: Vincent Chippari
Tel.: (203) 961-9208
Fax: (203) 961-1431
(b) if to the Pledgee, at:
Bankers Trust Company
130 Liberty Street
New York, NY 10006
Attention: Andrew Keith
Tel: (212) 250-8617
Fax: (212) 250-7218
(c) if to the Issuer, at:
_______________________
_______________________
Attention: ______________
Telephone No.:___________
Telecopier No.:___________
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder. As used in this
Section 6, "Business Day" means any day other than a Saturday, Sunday, or other
day in which banks in New York are authorized to remain closed.
7. This Agreement shall be binding upon the successors and
assigns of each Pledgor and the Issuer and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns. This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which shall constitute one instrument. In the event that any provision of
this Agreement shall prove to be invalid or unenforceable, such provision shall
be deemed to be severable from the other provisions of this Agreement which
shall remain binding on all parties hereto. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever except in writing signed by the Pledgee, the Issuer and any Pledgor
which at such time owns any Issuer Pledged Interests.
G-3
<PAGE>
8. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its
principles of conflict of laws.
IN WITNESS WHEREOF, each Pledgor, the Pledgee and the Issuer
have caused this Agreement to be executed by their duly elected officers duly
authorized as of the date first above written.
[______________________],
as a Pledgor
By ______________________
Name:
Title:
BANKERS TRUST COMPANY,
not in its individual
capacity but solely as
Collateral Agent and Pledgee
By ______________________
Name:
Title:
[______________________],
the Issuer
By _______________________
Name:
Title:
G-4
<PAGE>
EXHIBIT 10.3
FORM OF SECURITY AGREEMENT
among
INFORMATION HOLDINGS, INC.,
WARBURG, PINCUS INFORMATION VENTURES, INC.,
INFORMATION VENTURES L.L.C.,
CERTAIN OF ITS SUBSIDIARIES
and
BANKERS TRUST COMPANY,
as Collateral Agent
Dated as of September 24, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I
SECURITY INTERESTS............................................................2
1.1. Grant of Security Interests....................................2
1.2. Power of Attorney..............................................2
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS.............................3
2.1. Necessary Filings..............................................3
2.2. No Liens.......................................................3
2.3. Other Financing Statements.....................................3
2.4. Chief Executive Office; Records................................3
2.5. Location of Inventory and Equipment............................4
2.6. Recourse.......................................................4
2.7. Trade Names; Change of Name....................................4
ARTICLE III
SPECIAL PROVISIONS CONCERNING RECEIVABLES;
CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER...................................4
3.1. Additional Representations and Warranties......................5
3.2. Maintenance of Records.........................................5
3.3. Direction to Account Debtors; Contracting Parties; etc.........5
3.4. Modification of Terms; etc.....................................5
3.5. Collection.....................................................6
3.6. Instruments....................................................6
3.7. Assignors Remain Liable Under Receivables......................6
3.8. Assignors Remain Liable Under Contracts........................7
3.9. Further Actions................................................7
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS......................................7
4.1. Additional Representations and Warranties.......................7
4.2. Licenses and Assignments........................................8
4.3. Infringements..................................................8
4.4. Preservation of Marks..........................................8
(i)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C>
4.5. Maintenance of Registration...................................8
4.6. Future Registered Marks.......................................8
4.7. Remedies......................................................9
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS........................................9
5.1. Additional Representations and Warranties.....................9
5.2. Licenses and Assignments......................................10
5.3. Infringements.................................................10
5.4. Maintenance of Patents or Copyright...........................10
5.5. Prosecution of Patent Applications............................10
5.6. Other Patents and Copyrights..................................10
5.7. Remedies......................................................10
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL.........................................11
6.1. Protection of Collateral Agent's Security.....................11
6.2. Warehouse Receipts Non-negotiable.............................11
6.3. Financing Statements..........................................11
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT.................................11
7.1. Remedies; Obtaining the Collateral Upon Default...............12
7.2. Remedies; Disposition of the Collateral.......................13
7.3. Waiver of Claims..............................................14
7.4. Application of Proceeds.......................................14
7.5. Remedies Cumulative...........................................16
7.6. Discontinuance of Proceedings.................................17
ARTICLE VIII
INDEMNITY....................................................................17
8.1. Indemnity.....................................................17
8.2. Indemnity Obligations Secured by Collateral; Survival.........18
ARTICLE IX
DEFINITIONS..................................................................18
ARTICLE X
</TABLE>
(ii)
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C>
MISCELLANEOUS................................................................23
10.1. Notices......................................................23
10.2. Waiver; Amendment............................................24
10.3. Obligations Absolute.........................................24
10.4. Successors and Assigns.......................................24
10.5. Headings Descriptive.........................................25
10.6. Governing Law................................................25
10.7. Assignor's Duties............................................25
10.8. Termination; Release.........................................25
10.9. Counterparts.................................................26
10.10. Severability................................................26
10.11. The Collateral Agent........................................26
10.12. Benefit of Agreement........................................26
10.13. Additional Assignors.......................................26
</TABLE>
ANNEX A Schedule of Chief Executive Offices/Record Locations
ANNEX B Schedule of Inventory and Equipment Locations
ANNEX C Schedule of Trade and Fictitious Names
ANNEX D Schedule of Marks
ANNEX E Schedule of Patents
ANNEX F Schedule of Copyrights
ANNEX G Form of Grant of Security Interest in
Certain United States Trademarks and Patents
ANNEX H Form of Grant of Security Interest in
United States Copyrights
(iii)
<PAGE>
FORM OF SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of September 24, 1999, made by
each of the undersigned assignors (each an "Assignor" and, together with any
other entity that becomes an assignor hereunder pursuant to Section 10.13
hereof, the "Assignors") in favor of Bankers Trust Company, as Collateral Agent
(the "Collateral Agent"), for the benefit of the Secured Creditors (as defined
below). Except as otherwise defined herein, capitalized terms used herein and
defined in the Credit Agreement (as defined below) shall be used herein as so
defined.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Information Holdings, Inc. ("Holdings"), Warburg,
Pincus Information Ventures, Inc. ("WPIV" and together with Holdings, the
"Parent Guarantors"), Information Ventures L.L.C. (the "Borrower"), the lenders
from time to time party thereto (the "Lenders"), Bank of America, N.A., as
Documentation Agent, and Bankers Trust Company, as Administrative Agent
(together with any successor agent, the "Administrative Agent"), have entered
into a Credit Agreement, dated as of September 24, 1999, providing for the
making of Loans to, and the issuance of Letters of Credit for the account of,
the Borrower as contemplated therein (as amended, modified or supplemented from
time to time, the "Credit Agreement") (the Lenders, the Documentation Agent, the
Administrative Agent and the Collateral Agent are herein called the "Lender
Creditors");
WHEREAS, the Borrower may at any time and from time to time
enter into one or more Interest Rate Protection Agreements or Other Hedging
Agreements with one or more Lenders or any affiliate thereof (each such Lender
or affiliate, even if the respective Lender subsequently ceases to be a Lender
under the Credit Agreement for any reason, together with such Lender's or
affiliate's successors and assigns, if any, collectively, the "Other Creditors,"
and together with the Lender Creditors, are herein called the "Secured
Creditors");
WHEREAS, pursuant to the Parent Guaranty, the Parent
Guarantors have guaranteed to the Secured Creditors the payment when due of all
of the Guaranteed Obligations as described therein;
WHEREAS, pursuant to, and after the execution and delivery of,
the Subsidiaries Guaranty, each Subsidiary Guarantor has jointly and severally
guarantied to the Secured Creditors the payment when due of all Guaranteed
Obligations as described therein;
WHEREAS, it is a condition precedent to the making of Loans
to, and the issuance of Letters of Credit for the account of, the Borrower under
the Credit Agreement that each Assignor shall have executed and delivered to the
Collateral Agent this Agreement; and
WHEREAS, each Assignor will obtain benefits from the
incurrence of Loans to, and the issuance of Letters of Credit for the account
of, the Borrower under the Credit Agreement and the entering into by the
Borrower of Interest Rate Protection Agreements or Other Hedging
<PAGE>
Agreements and, accordingly, each Assignor desires to enter into this
Agreement in order to satisfy the condition described in the preceding
paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to
each Assignor, the receipt and sufficiency of which are hereby acknowledged,
each Assignor hereby makes the following representations and warranties to the
Collateral Agent for the benefit of the Secured Creditors and hereby covenants
and agrees with the Collateral Agent for the benefit of the Secured Creditors as
follows:
ARTICLE I
SECURITY INTERESTS
1.1. GRANT OF SECURITY INTERESTS. (a) As security for the
prompt and complete payment and performance when due of all of its
Obligations, each Assignor does hereby assign and transfer unto the
Collateral Agent, and does hereby pledge and grant to the Collateral Agent
for the benefit of the Secured Creditors, a continuing security interest in,
all of the right, title and interest of such Assignor in, to and under all of
the following, whether now existing or hereafter from time to time acquired:
(i) each and every Receivable, (ii) all Contracts, together with all Contract
Rights arising thereunder, (iii) all Inventory, (iv) all Equipment, (v) all
Marks, together with the registrations and right to all renewals thereof, and
the goodwill of the business of such Assignor symbolized by the Marks, (vi)
all Patents and Copyrights, (vii) all computer programs of such Assignor and
all intellectual property rights therein and all other proprietary
information of such Assignor, including, but not limited to, Trade Secrets
Rights, (viii) all other Goods, General Intangibles, Permits, Chattel Paper,
Documents, Instruments, Investment Property (except to the extent pledged
under the Pledge Agreement) and other assets (including cash), (ix) the Cash
Collateral Account and all monies, securities, instruments and other
investments deposited or required to be deposited in such Cash Collateral
Account, (x) all other bank, demand, time savings, passbook, certificates of
deposit and similar accounts maintained by such Assignor and all monies,
securities, instruments and other investments deposited or required to be
deposited in any of the foregoing accounts, and (xi) all Proceeds and
products of any and all of the foregoing (all of the above, collectively, the
"Collateral").
(b) The security interest of the Collateral Agent under
this Agreement extends to all Collateral of the kind which is the subject of
this Agreement which any Assignor may acquire at any time during the term of
this Agreement.
1.2. POWER OF ATTORNEY. Each Assignor hereby constitutes and
appoints the Collateral Agent its true and lawful attorney, irrevocably, with
full power after the occurrence of and during the continuance of an Event of
Default (in the name of such Assignor or otherwise) to act, require, demand,
receive, compound and give acquittance for any and all moneys and claims for
moneys due or to become due to such Assignor under or arising out of the
Collateral, to endorse any checks or other instruments or orders in connection
therewith and to file any claims or take any action or institute any proceedings
which the Collateral Agent may deem to be necessary or advisable to protect the
interests of the Secured Creditors, which appointment as attorney is coupled
with an interest.
2
<PAGE>
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1. NECESSARY FILINGS. All filings, registrations and
recordings necessary or appropriate to create, preserve and perfect the
security interest granted by such Assignor to the Collateral Agent hereby in
respect of the Collateral have been executed by the appropriate Assignors and
delivered to the Collateral Agent for filing in the appropriate filing office
or filing offices in order to create a perfected security interest therein
prior to the rights of all other Persons therein and subject to no other
Liens (in each case other than Permitted Liens) and is entitled to all the
rights, priorities and benefits afforded by the Uniform Commercial Code or
other relevant law as enacted in any relevant jurisdiction to perfected
security interests, in each case to the extent that the Collateral consists
of the type of property in which a security interest may be perfected by
filing a financing statement under the Uniform Commercial Code as enacted in
any relevant jurisdiction or in the United States Patent and Trademark Office
or in the United States Copyright Office.
2.2. NO LIENS. Such Assignor is, and as to Collateral
acquired by it from time to time after the date hereof such Assignor will be,
the owner of all Collateral free from any Lien, security interest,
encumbrance or other right, title or interest of any Person (other than
Permitted Liens), and such Assignor shall defend the Collateral against all
claims and demands of all Persons at any time claiming the same or any
interest therein adverse to the Collateral Agent.
2.3. OTHER FINANCING STATEMENTS. As of the date hereof,
there is no financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) covering or purporting to
cover any interest of any kind in the Collateral (other than financing
statements filed in respect of Permitted Liens), and so long as the
Termination Date has not occurred, such Assignor will not execute or
authorize to be filed in any public office any financing statement (or
similar statement or instrument of registration under the law of any
jurisdiction) or statements relating to the Collateral, except financing
statements filed or to be filed in respect of and covering the security
interests granted hereby by such Assignor or in connection with Permitted
Liens.
2.4. CHIEF EXECUTIVE OFFICE; RECORDS. The chief executive
office of such Assignor is located at the address indicated on Annex A hereto
for such Assignor. Such Assignor will not move its chief executive office
except to such new location as such Assignor may establish in accordance with
the last sentence of this Section 2.4. The originals of all documents
evidencing all Receivables and Contract Rights of such Assignor and the only
original books of account and records of such Assignor relating thereto are,
and will continue to be, kept at such chief executive office, at one or more
of the other locations set forth on Annex A hereto or at such new locations
as such Assignor may establish in accordance with the last sentence of this
Section 2.4. All Receivables and Contract Rights of such Assignor are, and
will continue to be, maintained at, and controlled and directed (including,
without limitation, for
3
<PAGE>
general accounting purposes) from, the office locations described above or
such new location established in accordance with the last sentence of this
Section 2.4. No Assignor shall establish new locations for such offices until
(i) it shall have given to the Collateral Agent not less than 15 days' prior
written notice of its intention to do so, clearly describing such new
location and providing such other information in connection therewith as the
Collateral Agent may reasonably request, or (ii) with respect to such new
location, it shall have taken all action reasonably satisfactory to the
Collateral Agent to maintain the security interest of the Collateral Agent in
the Collateral intended to be granted hereby at all times fully perfected and
in full force and effect.
2.5. LOCATION OF INVENTORY AND EQUIPMENT. All Inventory and
Equipment held on the date hereof by each Assignor is located at one of the
locations shown on Annex B hereto for such Assignor. Each Assignor agrees that
all Inventory and Equipment now held or subsequently acquired by it shall be
kept at (or shall be in transport to) any one of the locations shown on Annex B
hereto, or such new location as such Assignor may establish in accordance with
the last sentence of this Section 2.5. Any Assignor may establish a new location
for Inventory and Equipment only if (i) it shall have given to the Collateral
Agent not less than 15 days' prior written notice of its intention so to do,
clearly describing such new location and providing such other information in
connection therewith as the Collateral Agent may request, and (ii) with respect
to such new location, it shall have taken all action reasonably satisfactory to
the Collateral Agent to maintain the security interest of the Collateral Agent
in the Collateral intended to be granted hereby at all times fully perfected and
in full force and effect.
2.6. RECOURSE. This Agreement is made with full recourse to
each Assignor (including, without limitation, with full recourse to all assets
of such Assignor) and pursuant to and upon all the warranties, representations,
covenants and agreements on the part of such Assignor contained herein, in the
other Secured Debt Agreements and otherwise in writing in connection herewith or
therewith.
2.7. TRADE NAMES; CHANGE OF NAME. No Assignor has or operates
in any jurisdiction under, or in the preceding five years has had or has
operated in any jurisdiction under, any trade names, fictitious names or other
names except its legal name and such other trade or fictitious names as are
listed on Annex C hereto for such Assignor. No Assignor shall change its legal
name or assume or operate in any jurisdiction under any trade, fictitious or
other name except those names listed on Annex C hereto for such Assignor and new
names established in accordance with the last sentence of this Section 2.7. No
Assignor shall assume or operate in any jurisdiction under any new trade,
fictitious or other name until (i) it shall have given to the Collateral Agent
not less than 15 days' prior written notice of its intention so to do, clearly
describing such new name and the jurisdictions in which such new name shall be
used and providing such other information in connection therewith as the
Collateral Agent may reasonably request, and (ii) with respect to such new name,
it shall have taken all action reasonably requested by the Collateral Agent to
maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby at all times fully perfected and in full force and
effect.
ARTICLE III
4
<PAGE>
SPECIAL PROVISIONS CONCERNING RECEIVABLES;
CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER
3.1. ADDITIONAL REPRESENTATIONS AND WARRANTIES. As of the time
when each of its Receivables arises, each Assignor shall be deemed to have
represented and warranted that such Receivable, and all records, papers and
documents relating thereto (if any) are what they purport to be, and such
Receivable will evidence true and valid obligations of the account debtor named
therein.
3.2. MAINTENANCE OF RECORDS. Each Assignor will keep and
maintain at its own cost and expense accurate records of its Receivables and
Contracts, including, but not limited to, originals of all documentation
(including each Contract) with respect thereto, records of all payments
received, all credits granted thereon, all merchandise returned and all other
dealings therewith, and such Assignor will make the same available on such
Assignor's premises to the Collateral Agent for inspection, at such
Assignor's own cost and expense, at any and all reasonable times upon two
days prior notice to such Assignor. Upon the occurrence and during the
continuance of an Event of Default and at the request of the Collateral
Agent, such Assignor shall, at its own cost and expense, deliver all tangible
evidence of its Receivables and Contract Rights (including, without
limitation, all documents evidencing the Receivables and all Contracts) and
such books and records to the Collateral Agent or to its representatives
(copies of which evidence and books and records may be retained by such
Assignor). Upon the occurrence and during the continuance of an Event of
Default and if the Collateral Agent so directs, such Assignor shall legend,
in form and manner reasonably satisfactory to the Collateral Agent, the
Receivables and the Contracts, as well as books, records and documents (if
any) of such Assignor evidencing or pertaining to such Receivables and
Contracts with an appropriate reference to the fact that such Receivables and
Contracts have been assigned to the Collateral Agent and that the Collateral
Agent has a security interest therein.
3.3. DIRECTION TO ACCOUNT DEBTORS; CONTRACTING PARTIES;
ETC. Upon the occurrence and during the continuance of an Event of Default,
and if the Collateral Agent so directs any Assignor, such Assignor agrees (x)
to cause all payments on account of the Receivables and Contracts to be made
directly to the Cash Collateral Account, (y) that the Collateral Agent may,
at its option, directly notify the obligors with respect to any Receivables
and/or under any Contracts to make payments with respect thereto as provided
in the preceding clause (x), and (z) that the Collateral Agent may enforce
collection of any such Receivables and Contracts and may adjust, settle or
compromise the amount of payment thereof, in the same manner and to the same
extent as such Assignor. Without notice to or assent by any Assignor, the
Collateral Agent may apply any or all amounts then in, or thereafter
deposited in, the Cash Collateral Account which application shall be effected
in the manner provided in Section 7.4 of this Agreement. The costs and
expenses (including reasonable attorneys' fees) of collection, whether
incurred by an Assignor or the Collateral Agent, shall be borne by the
relevant Assignor. The Collateral Agent shall deliver a copy of each notice
referred to in the preceding clause (y) to the relevant Assignor, PROVIDED,
that the failure by the Collateral Agent to so notify such Assignor shall not
affect the effectiveness of such notice or the other rights of the Collateral
Agent created by this Section 3.3.
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3.4. MODIFICATION OF TERMS; ETC. Except in accordance with
such Assignor's reasonable business judgment, no Assignor shall rescind or
cancel any indebtedness evidenced by any Receivable or under any Contract, or
modify any term thereof or make any adjustment with respect thereto, or
extend or renew the same, or compromise or settle any material dispute,
claim, suit or legal proceeding relating thereto, or sell any Receivable or
Contract, or interest therein, without the prior written consent of the
Collateral Agent (which consent shall not be unreasonably withheld). Each
Assignor will duly fulfill all obligations on its part to be fulfilled under
or in connection with the Receivables and Contracts and will do nothing to
impair the rights of the Collateral Agent in the Receivables or Contracts.
3.5. COLLECTION. Each Assignor shall endeavor in accordance
with reasonable business practices to cause to be collected from the account
debtor named in each of its material Receivables or obligor under any
material Contract, as and when due (including, without limitation, amounts
which are delinquent, such amounts, if desirable in such Assignor's
reasonable business judgment, to be collected in accordance with generally
accepted lawful collection procedures) any and all amounts owing under or on
account of such material Receivable or material Contract, and apply forthwith
upon receipt thereof all such amounts as are so collected to the outstanding
balance of such material Receivable or under such material Contract, except
that, prior to the occurrence of an Event of Default, any Assignor may allow
in the ordinary course of business as adjustments to amounts owing under its
Receivables and Contracts (i) an extension or renewal of the time or times of
payment, or settlement for less than the total unpaid balance, which such
Assignor finds appropriate in accordance with reasonable business judgment
and (ii) a refund or credit due as a result of returned or damaged
merchandise or improperly performed services or for other reasons which such
Assignor finds appropriate in accordance with reasonable business judgment.
The reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees) of collection, whether incurred by an Assignor or the
Collateral Agent, shall be borne by the relevant Assignor.
3.6. INSTRUMENTS. Subject to the final paragraph of Section
1.1(a) hereof, if any Assignor owns or acquires any Instrument constituting
Collateral, such Assignor will within 10 Business Days notify the Collateral
Agent thereof, and upon request by the Collateral Agent will promptly deliver
such Instrument to the Collateral Agent appropriately endorsed to the order
of the Collateral Agent as further security hereunder.
3.7. ASSIGNORS REMAIN LIABLE UNDER RECEIVABLES. Anything
herein to the contrary notwithstanding, the Assignors shall remain liable
under each of the Receivables to observe and perform all of the conditions
and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise to such Receivables.
Neither the Collateral Agent nor any other Secured Creditor shall have any
obligation or liability under any Receivable (or any agreement giving rise
thereto) by reason of or arising out of this Agreement or the receipt by the
Collateral Agent or any other Secured Creditor of any payment relating to
such Receivable pursuant hereto, nor shall the Collateral Agent or any other
Secured Creditor be obligated in any manner to perform any of the obligations
of any Assignor under or pursuant to any Receivable (or any agreement giving
rise thereto), to make any payment, to make any inquiry as to the nature or
the sufficiency of any payment received by them or as to the
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sufficiency of any performance by any party under any Receivable (or any
agreement giving rise thereto), to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts
which may have been assigned to them or to which they may be entitled at any
time or times.
3.8. ASSIGNORS REMAIN LIABLE UNDER CONTRACTS. Anything
herein to the contrary notwithstanding, the Assignors shall remain liable
under each of the Contracts to observe and perform all of the conditions and
obligations to be observed and performed by them thereunder, all in
accordance with and pursuant to the terms and provisions of each Contract.
Neither the Collateral Agent nor any other Secured Creditor shall have any
obligation or liability under any Contract by reason of or arising out of
this Agreement or the receipt by the Collateral Agent or any other Secured
Creditor of any payment relating to such contract pursuant hereto, nor shall
the Collateral Agent or any other Secured Creditor be obligated in any manner
to perform any of the obligations of any Assignor under or pursuant to any
Contract, to make any payment, to make any inquiry as to the nature or the
sufficiency of any performance by any party under any Contract, to present or
file any claim, to take any action to enforce any performance or to collect
the payment of any amounts which may have been assigned to them or to which
they may be entitled at any time or times.
3.9. FURTHER ACTIONS. Each Assignor will, at its own
expense, make, execute, endorse, acknowledge, file and/or deliver to the
Collateral Agent from time to time such vouchers, invoices, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, certificates, reports and other assurances or instruments and
take such further steps relating to its Receivables, Contracts, Instruments
and other property or rights covered by the security interest hereby granted,
as the Collateral Agent may reasonably require, provided that, so long as no
Event of Default then exists and is continuing, the foregoing shall be
limited to such steps as may be required to perfect such security interest
(i) by the filing of UCC financing statements, (ii) by the filing of
appropriate assignments in the United States Patent and Trademark Office or
in the United States Copyright Office or (iii) by possession by the
Collateral Agent of such Collateral.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS
4.1. ADDITIONAL REPRESENTATIONS AND WARRANTIES. Each
Assignor represents and warrants that it is the true and lawful owner of or
otherwise has the right to use the registered Marks listed in Annex D hereto
for such Assignor and that said Marks listed on Annex D include all
registered United States marks and applications for United States marks
registered in or filed with the United States Patent and Trademark Office
that such Assignor owns or uses in connection with its business as of the
date hereof. Each Assignor represents and warrants that it owns, is licensed
to use or otherwise has the right to use, all material Marks that it uses.
Each Assignor further warrants that it has no knowledge of any third-party
claim that any aspect of such Assignor's present or contemplated business
operations infringes or will infringe any trademark, service mark or trade
name except for any such infringements which, individually or
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in the aggregate, could not reasonably be expected to have a material adverse
effect on the business, operations, property, assets, liabilities or
condition (financial or otherwise) of Holdings and its Subsidiaries taken as
a whole. Each Assignor represents and warrants that it is the true and lawful
owner of or otherwise has the right to use all U.S. trademark registrations
and applications listed in Annex D hereto and that said registrations are
valid, subsisting, have not been cancelled and that such Assignor is not
aware of any material third-party claim that any of said registrations is
invalid or unenforceable, or is not aware that there is any reason that any
of said registrations is invalid or unenforceable. Each Assignor hereby
grants to the Collateral Agent an absolute power of attorney to sign, upon
the occurrence and during the continuance of an Event of Default, any
document which may be required by the United States Patent and Trademark
Office in order to effect an absolute assignment of all right, title and
interest in each Mark, and record the same.
4.2. LICENSES AND ASSIGNMENTS. Except as otherwise
permitted by the Secured Debt Agreements, and except where such divestiture
would not be reasonably likely to have a material adverse effect on the
business of Holdings and its Subsidiaries taken as a whole, each Assignor
hereby agrees not to divest itself of any right under any Mark absent prior
written approval of the Collateral Agent.
4.3. INFRINGEMENTS. Each Assignor agrees, promptly upon
learning thereof, to notify the Collateral Agent in writing of the name and
address of, and to furnish such pertinent information that may be available
with respect to, any party who such Assignor believes is infringing or
diluting or otherwise violating in any material respect any of such
Assignor's rights in and to any material Mark, or with respect to any party
claiming that such Assignor's use of any material Mark violates in any
material respect any property right of that party. Each Assignor further
agrees, to the extent Assignor, in the exercise of its reasonable business
judgment, deems necessary or desirable, to prosecute any Person so infringing
any material Mark in accordance with reasonable business practices.
4.4. PRESERVATION OF MARKS. Each Assignor agrees to the
extent Assignor, in the exercise of its reasonable business judgment, deems
necessary or desirable, to use its material Marks in interstate commerce
during the time in which this Agreement is in effect and to take all such
other actions as are necessary to preserve such Marks as trademarks or
service marks under the laws of the United States.
4.5. MAINTENANCE OF REGISTRATION. Each Assignor shall to
the extent Assignor, in the exercise of its reasonable business judgment,
deems necessary or desirable, at its own expense, diligently process all
documents required to maintain trademark registrations, including but not
limited to affidavits of use and applications for renewals of registration in
the United States Patent and Trademark Office for all of its registered
material Marks, and except where such nonpayment or abandonment would not be
reasonably likely to have a material adverse effect on the business of
Holdings and its Subsidiaries taken as a whole, shall pay all fees and
disbursements in connection therewith and shall not abandon any such filing
of affidavit of use or any such application of renewal prior to the
exhaustion of all administrative and judicial remedies without prior written
consent of the Collateral Agent.
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4.6. FUTURE REGISTERED MARKS. If any Mark registration is
issued hereafter to any Assignor as a result of any application now or
hereafter pending before the United States Patent and Trademark Office,
within 30 days of receipt of such certificate, such Assignor shall deliver to
the Collateral Agent a copy of such certificate, and an assignment for
security in such Mark, to the Collateral Agent and at the expense of such
Assignor, confirming the assignment for security in such Mark to the
Collateral Agent hereunder, the form of such security to be substantially the
same as the form hereof or in such other form as may be reasonably
satisfactory to the Collateral Agent.
4.7. REMEDIES. If an Event of Default shall occur and be
continuing, the Collateral Agent may, by written notice to the relevant
Assignor, take any or all of the following actions: (i) declare the entire
right, title and interest of such Assignor in and to each of the Marks,
together with all trademark rights and rights of protection to the same,
vested in the Collateral Agent for the benefit of the Secured Creditors, in
which event such rights, title and interest shall immediately vest, in the
Collateral Agent for the benefit of the Secured Creditors, and the Collateral
Agent shall be entitled to exercise the power of attorney referred to in
Section 4.1 hereof to execute, cause to be acknowledged and notarized and
record said absolute assignment with the applicable agency; (ii) take and use
or sell the Marks and the goodwill of such Assignor's business symbolized by
the Marks and the right to carry on the business and use the assets of such
Assignor in connection with which the Marks have been used; and (iii) direct
such Assignor to refrain, in which event such Assignor shall refrain, from
using the Marks in any manner whatsoever, directly or indirectly, and such
Assignor shall execute such further documents that the Collateral Agent may
reasonably request to further confirm this and to transfer ownership of the
Marks and registrations and any pending trademark application in the United
States Patent and Trademark Office to the Collateral Agent.
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1. ADDITIONAL REPRESENTATIONS AND WARRANTIES. Each
Assignor represents and warrants that it is the true and lawful owner of all
rights in or has a license to use (i) all United States trade secrets and
proprietary information necessary to operate the business of the Assignor
(the "Trade Secret Rights"), (ii) the Patents listed in Annex E hereto for
such Assignor and that said Patents listed on Annex E include all the United
States patents and applications for United States patents that such Assignor
owns as of the date hereof and (iii) the Copyrights listed in Annex F hereto
for such Assignor and that said Copyrights listed on Annex F constitute all
the United States copyrights registered with the United States Copyright
Office and applications for United States copyrights that such Assignor owns
as of the date hereof. Each Assignor further warrants that it has no
knowledge of any third-party claim that any aspect of such Assignor's present
or contemplated business operations infringes or will infringe any patent or
such Assignor has misappropriated any trade secret or proprietary information
except for any such infringements which, individually or in the aggregate,
could not reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities or condition
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(financial or otherwise) of Holdings and its Subsidiaries taken as a whole.
Each Assignor hereby grants to the Collateral Agent an absolute power of
attorney to sign, upon the occurrence and during the continuance of any Event
of Default, any document which may be required by the United States Patent
and Trademark Office in order to effect an absolute assignment of all right,
title and interest in each Patent, and to record the same.
5.2. LICENSES AND ASSIGNMENTS. Except as otherwise
permitted by the Secured Debt Agreements and except where such divestiture
would not be reasonably likely to have a material adverse effect on the
business of Holdings and its Subsidiaries taken as a whole, each Assignor
hereby agrees not to divest itself of any right under any Patent or Copyright
acquired after the date hereof absent prior written approval of the
Collateral Agent.
5.3. INFRINGEMENTS. Each Assignor agrees, promptly upon
learning thereof, to furnish the Collateral Agent in writing with all
pertinent information available to such Assignor with respect to any
infringement, contributing infringement or active inducement to infringe in
any material Patent or material Copyright or to any claim that the practice
of any material Patent or use of any material Copyright violates any property
right of a third party, or with respect to any misappropriation of any
material Trade Secret Right or any claim that practice of any material Trade
Secret Right violates any property right of a third party. Each Assignor
further agrees diligently to prosecute any Person infringing any material
Patent or material Copyright or any Person misappropriating any material
Trade Secret Right in accordance with, and to the extent deemed necessary or
desirable by Assignor in the exercise of Assignor's reasonable business
judgment.
5.4. MAINTENANCE OF PATENTS OR COPYRIGHT. At its own
expense, each Assignor shall to the extent Assignor, in the exercise of its
reasonable business judgment, deems ncecessary or desirable, make timely
payment of all post-issuance fees required pursuant to 35 U.S.C. ss. 41 to
maintain in force its rights under each material Patent or material
Copyright, absent prior written consent of the Collateral Agent.
5.5. PROSECUTION OF PATENT APPLICATIONS. At its own
expense, each Assignor shall to the extent Assignor, in the exercise of its
reasonable business judgment, deems necessary or desirable, diligently
prosecute all applications for (i) material United States Patents listed in
Annex E hereto and (ii) material Copyrights listed on Annex F hereto, in each
case for such Assignor and shall not abandon any such application prior to
exhaustion of all administrative and judicial remedies, absent written
consent of the Collateral Agent, except where such abandonment would not be
reasonably likely to have a material adverse effect on the business of
Holdings and its Subsidiaries taken as a whole.
5.6. OTHER PATENTS AND COPYRIGHTS. Within 30 days of the
acquisition or issuance of a United States Patent, registration of a
Copyright, or acquisition of a registered Copyright, or of filing of an
application for a United States Patent or Copyright, the relevant Assignor
shall deliver to the Collateral Agent a copy of said Copyright or certificate
or registration of, or application therefor, said Patents, as the case may
be, with an assignment for security as to such Patent or Copyright, as the
case may be, to the Collateral Agent and at the expense of such
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Assignor, confirming the assignment for security, the form of such assignment
for security to be substantially the same as the form hereof or in such other
form as may be reasonably satisfactory to the Collateral Agent.
5.7. REMEDIES. If an Event of Default shall occur and be
continuing, the Collateral Agent may by written notice to the relevant
Assignor, take any or all of the following actions: (i) declare the entire
right, title, and interest of such Assignor in each of the Patents and
Copyrights vested in the Collateral Agent for the benefit of the Secured
Creditors, in which event such right, title, and interest shall immediately
vest in the Collateral Agent for the benefit of the Secured Creditors, in
which case the Collateral Agent shall be entitled to exercise the power of
attorney referred to in Section 5.1 hereof to execute, cause to be
acknowledged and notarized and to record said absolute assignment with the
applicable agency; (ii) take and practice or sell the Patents and Copyrights;
and (iii) direct such Assignor to refrain, in which event such Assignor shall
refrain, from practicing the Patents and using the Copyrights directly or
indirectly, and such Assignor shall execute such further documents as the
Collateral Agent may reasonably request further to confirm this and to
transfer ownership of the Patents and Copyrights to the Collateral Agent for
the benefit of the Secured Creditors.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. PROTECTION OF COLLATERAL AGENT'S SECURITY. Each
Assignor will do nothing to impair the rights of the Collateral Agent in the
Collateral except as expressly permitted in the Credit Agreement. Each
Assignor will at all times keep its Inventory and Equipment insured in favor
of the Collateral Agent, at such Assignor's own expense to the extent and in
the manner provided in the Credit Agreement. Except to the extent otherwise
permitted to be retained by such Assignor or applied by such Assignor
pursuant to the terms of the Credit Agreement, the Collateral Agent shall, at
the time any proceeds of such insurance are distributed to the Secured
Creditors, apply such proceeds in accordance with Section 7.4 hereof. Each
Assignor assumes all liability and responsibility in connection with the
Collateral acquired by it and the liability of such Assignor to pay the
Obligations shall in no way be affected or diminished by reason of the fact
that such Collateral may be lost, destroyed, stolen, damaged or for any
reason whatsoever unavailable to such Assignor.
6.2. WAREHOUSE RECEIPTS NON-NEGOTIABLE. Each Assignor
agrees that if any warehouse receipt or receipt in the nature of a warehouse
receipt is issued with respect to any of its Inventory, such Assignor shall
request that such warehouse receipt or receipt in the nature thereof shall
not be "negotiable" (as such term is used in Section 7-104 of the Uniform
Commercial Code as in effect in any relevant jurisdiction or under other
relevant law).
6.3. FINANCING STATEMENTS. Each Assignor agrees to execute
and deliver to the Collateral Agent such financing statements, in form
reasonably acceptable to the Collateral Agent, as the Collateral Agent may
from time to time reasonably request or as are necessary or desirable in the
opinion of the Collateral Agent to establish and maintain a valid,
enforceable, first-priority perfected security interest in the Collateral as
provided herein (subject to Permitted
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Liens) and the other rights and security contemplated hereby all in
accordance with the UCC as enacted in any and all relevant jurisdictions or
any other relevant law. Each Assignor will pay any applicable filing fees,
recordation taxes and related expenses relating to its Collateral. Each
Assignor hereby authorizes the Collateral Agent to file any such financing
statements without the signature of such Assignor where permitted by law.
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
7.1. REMEDIES; OBTAINING THE COLLATERAL UPON DEFAULT. Each
Assignor agrees that, if any Event of Default shall have occurred and be
continuing, then and in every such case, the Collateral Agent, in addition to
any rights now or hereafter existing under applicable law, shall have all
rights as a secured creditor under any UCC, and such additional rights and
remedies to which a secured creditor is entitled under the laws in effect, in
all relevant jurisdictions and may:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from such Assignor or
any other Person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon
such Assignor's premises where any of the Collateral is located and
remove the same and use in connection with such removal any and all
services, supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement,
instrument or other obligation (including, without limitation, the
Receivables and the Contracts) constituting the Collateral to make any
payment required by the terms of such agreement, instrument or other
obligation directly to the Collateral Agent and may exercise any and
all remedies of such Assignor in respect of such Collateral;
(iii) withdraw all monies, securities and instruments in the
Cash Collateral Account for application to the Obligations in
accordance with Section 7.4 hereof;
(iv) sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof in accordance with Section 7.2 hereof,
or direct the relevant Assignor to sell, assign or otherwise liquidate
any or all of the Collateral or any part thereof, and, in each case,
take possession of the proceeds of any such sale or liquidation;
(v) take possession of the Collateral or any part thereof, by
directing the relevant Assignor in writing to deliver the same to the
Collateral Agent at any place or places reasonably designated by the
Collateral Agent, in which event such Assignor shall at its own
expense:
(x) forthwith cause the same to be moved to the place
or places so reasonably designated by the Collateral Agent and
there delivered to the Collateral Agent;
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(y) store and keep any Collateral so delivered to the
Collateral Agent at such place or places pending further
action by the Collateral Agent as provided in Section 7.2
hereof; and
(z) while the Collateral shall be so stored and kept,
provide such guards and maintenance services as shall be
necessary to protect the same and to preserve and maintain
them in good condition; and
(vi) license or sublicense, whether on an exclusive or
nonexclusive basis, any Marks, Patents or Copyrights included in the
Collateral for such term and on such conditions and in such manner as
the Collateral Agent shall in its sole judgment determine;
it being understood that each Assignor's obligation so to deliver the
Collateral is of the essence of this Agreement and that, accordingly, upon
application to a court of equity having jurisdiction, the Collateral Agent
shall be entitled to a decree requiring specific performance by such Assignor
of said obligation. By accepting the benefits of this Agreement, the Secured
Creditors agree that this Agreement may be enforced only by the action of the
Agent or the Collateral Agent acting upon the instructions of the Required
Secured Creditors and that no other Secured Creditor shall have any right
individually to seek to enforce this Agreement or to realize upon the
security to be granted hereby, it being understood and agreed that such
rights and remedies may be exercised by the Collateral Agent for the benefit
of the Secured Creditors upon the terms of this Agreement and the Credit
Agreement.
7.2. REMEDIES; DISPOSITION OF THE COLLATERAL. If any Event
of Default shall have occurred and be continuing, then any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof
and any other Collateral whether or not so repossessed by the Collateral
Agent, may be sold, assigned, leased or otherwise disposed of under one or
more contracts or as an entirety, and without the necessity of gathering at
the place of sale the property to be sold, and in general in such manner, at
such time or times, at such place or places and on such terms as the
Collateral Agent may, in compliance with any mandatory requirements of
applicable law, determine to be commercially reasonable. Any of the
Collateral may be sold, leased or otherwise disposed of, in the condition in
which the same existed when taken by the Collateral Agent or after any
overhaul or repair at the expense of the relevant Assignor which the
Collateral Agent shall determine to be commercially reasonable. Any such
disposition that shall be a private sale or other private proceedings
permitted by such requirements shall be made upon not less than 10 days'
prior written notice to the relevant Assignor specifying the time at which
such disposition is to be made and the intended sale price or other
consideration therefor, and shall be subject, for the 10 days after the
giving of such notice, to the right of the relevant Assignor or any nominee
of such Assignor to acquire the Collateral involved at a price or for such
other consideration at least equal to the intended sale price or other
consideration so specified. Any such disposition which shall be a public sale
permitted by such requirements shall be made upon not less than 10 days'
prior written notice to the relevant Assignor specifying the time and place
of such sale and, in the absence of applicable requirements of law, shall be
by public auction (which may, at the Collateral Agent's option, be subject to
reserve), after
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publication of notice of such auction (where required by applicable law) not
less than 10 days prior thereto. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
the sale, and such sale may be made at any time or place to which the sale
may be so adjourned. To the extent permitted by any such requirement of law,
the Collateral Agent may bid for and become the purchaser of the Collateral
or any item thereof, offered for sale in accordance with this Section without
accountability to the relevant Assignor. If, under mandatory requirements of
applicable law, the Collateral Agent shall be required to make disposition of
the Collateral within a period of time which does not permit the giving of
notice to the relevant Assignor as hereinabove specified, the Collateral
Agent need give such Assignor only such notice of disposition as shall be
reasonably practicable in view of such mandatory requirements of applicable
law. Each Assignor agrees to do or cause to be done all such other acts and
things as may be reasonably necessary to make such sale or sales of all or
any portion of the Collateral valid and binding and in compliance with any
and all applicable laws, regulations, orders, writs, injunctions, decrees or
awards of any and all courts, arbitrators or governmental instrumentalities,
domestic or foreign, having jurisdiction over any such sale or sales, all at
such Assignor's expense.
7.3. WAIVER OF CLAIMS. Except as otherwise provided in this
Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S
TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each Assignor hereby further waives,
to the extent permitted by law:
(i) all damages occasioned by such taking of possession except
any damages which are the direct result of the Collateral Agent's gross
negligence or willful misconduct;
(ii) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the
Collateral Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable
law in order to prevent or delay the enforcement of this Agreement or
the absolute sale of the Collateral or any portion thereof, and each
Assignor, for itself and all who may claim under it, insofar as it or
they now or hereafter lawfully may, hereby waives the benefit of all
such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the relevant Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Assignor and against any and all Persons claiming or attempting to claim the
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Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under such Assignor.
7.4. APPLICATION OF PROCEEDS. (a) All moneys collected by
the Collateral Agent (or, to the extent the Pledge Agreement, any Mortgage or
any Additional Security Document require proceeds of collateral under such
Security Document to be applied in accordance with the provisions of this
Agreement, the Pledgee or Mortgagee under such other Security Document) upon
any sale or other disposition of the Collateral, together with all other
moneys received by the Collateral Agent hereunder, shall be applied as
follows.
(i) first, to the payment of all amounts owing the Collateral
Agent of the type described in clauses (iii) and (iv) of the definition
of "Obligations";
(ii) second, to the extent proceeds remain after the
application pursuant to the preceding clause (i), an amount equal to
the outstanding Primary Obligations shall be paid to the Secured
Creditors as provided in Section 7.4(e) hereof, with each Secured
Creditor receiving an amount equal to such outstanding Primary
Obligations or, if the proceeds are insufficient to pay in full all
such Primary Obligations, its Pro Rata Share (as defined below) of the
amount remaining to be distributed;
(iii) third, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) and (ii), an amount
equal to the outstanding Secondary Obligations shall be paid to the
Secured Creditors as provided in Section 7.4(e) hereof, with each
Secured Creditor receiving an amount equal to its outstanding Secondary
Obligations or, if the proceeds are insufficient to pay in full all
such Secondary Obligations, its Pro Rata Share of the amount remaining
to be distributed; and
(iv) fourth, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) through (iii),
inclusive, and following the termination of this Agreement pursuant to
Section 10.8(a) hereof, to the relevant Assignor or to whomever may be
lawfully entitled to receive such surplus.
(b) For purposes of this Agreement (x) "Pro Rata Share" shall
mean, when calculating a Secured Creditor's portion of any distribution or
amount, that amount (expressed as a percentage) equal to a fraction the
numerator of which is the then unpaid amount of such Secured Creditor's Primary
Obligations or Secondary Obligations, as the case may be, and the denominator of
which is the then outstanding amount of all Primary Obligations or Secondary
Obligations, as the case may be, (y) "Primary Obligations" shall mean (i) in the
case of the Credit Document Obligations, all principal of, and interest on, all
Loans, all Unpaid Drawings and all Fees and (ii) in the case of the Other
Obligations, all amounts due under such Interest Rate Protection Agreements or
Other Hedging Agreements, but only if such Interest Rate Protection Agreements
or Other Hedging Agreements constitute Guaranteed Obligations of the Borrower
(other than indemnities, fees (including, without limitation, attorneys' fees)
and similar obligations and liabilities) and (z) "Secondary Obligations" shall
mean all Obligations other than Primary Obligations.
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(c) When payments to Secured Creditors are based upon their
respective Pro Rata Shares, the amounts received by such Secured Creditors
hereunder shall be applied (for purposes of making determinations under this
Section 7.4 only) (i) first, to their Primary Obligations and (ii) second, to
their Secondary Obligations. If any payment to any Secured Creditor of its
Pro Rata Share of any distribution would result in overpayment to such
Secured Creditor, such excess amount shall instead be distributed in respect
of the unpaid Primary Obligations or Secondary Obligations, as the case may
be, of the other Secured Creditors, with each Secured Creditor whose Primary
Obligations or Secondary Obligations, as the case may be, have not been paid
in full to receive an amount equal to such excess amount multiplied by a
fraction the numerator of which is the unpaid Primary Obligations or
Secondary Obligations, as the case may be, of such Secured Creditor and the
denominator of which is the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of all Secured Creditors entitled to such
distribution.
(d) Each of the Secured Creditors, by their acceptance of
the benefits hereof, agrees and acknowledges that if the Lender Creditors are
to receive a distribution on account of undrawn amounts with respect to
Letters of Credit issued under the Credit Agreement (which shall only occur
after all outstanding Loans and Unpaid Drawings with respect to such Letters
of Credit have been paid in full), such amounts shall be paid to the
Administrative Agent under the Credit Agreement and held by it, for the equal
and ratable benefit of the Lender Creditors, as cash security for the
repayment of Obligations owing to the Lender Creditors as such. If any
amounts are held as cash security pursuant to the immediately preceding
sentence, then upon the termination of all outstanding Letters of Credit, and
after the application of all such cash security to the repayment of all
Obligations owing to the Lender Creditors after giving effect to the
termination of all such Letters of Credit, if there remains any excess cash,
such excess cash shall be returned by the Administrative Agent to the
Collateral Agent for distribution in accordance with Section 7.4(a) hereof.
(e) All payments required to be made hereunder shall be
made (x) if to the Lender Creditors, to the Administrative Agent under the
Credit Agreement for the account of the Lender Creditors, and (y) if to the
Other Creditors, to the trustee, paying agent or other similar representative
(each a "Representative") for the Other Creditors or, in the absence of such
a Representative, directly to the Other Creditors.
(f) For purposes of applying payments received in
accordance with this Section 7.4, the Collateral Agent shall be entitled to
rely upon (i) the Administrative Agent under the Credit Agreement and (ii)
the Representative for the Other Creditors or, in the absence of such a
Representative, upon the Other Creditors for a determination (which the
Administrative Agent, each Representative for any Other Creditors and the
Secured Creditors agree (or shall agree) to provide upon request of the
Collateral Agent) of the outstanding Primary Obligations and Secondary
Obligations owed to the Lender Creditors or the Other Creditors, as the case
may be. Unless it
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has actual knowledge (including by way of written notice from a Lender
Creditor or an Other Creditor) to the contrary, the Administrative Agent and
each Representative, in furnishing information pursuant to the preceding
sentence, and the Collateral Agent, in acting hereunder, shall be entitled to
assume that no Secondary Obligations are outstanding. Unless it has actual
knowledge (including by way of written notice from an Other Creditor) to the
contrary, the Collateral Agent, in acting hereunder, shall be entitled to
assume that no Interest Rate Protection Agreements or Other Hedging
Agreements are in existence.
(g) It is understood that the Assignors shall remain jointly
and severally liable to the extent of any deficiency between the amount of the
proceeds of the Collateral and the aggregate amount of the Obligations.
7.5. REMEDIES CUMULATIVE. Each and every right, power and
remedy hereby specifically given to the Collateral Agent shall be in addition
to every other right, power and remedy specifically given under this
Agreement, under the other Secured Debt Agreements or now or hereafter
existing at law, in equity or by statute and each and every right, power and
remedy whether specifically herein given or otherwise existing may be
exercised from time to time or simultaneously and as often and in such order
as may be deemed expedient by the Collateral Agent. All such rights, powers
and remedies shall be cumulative and the exercise or the beginning of the
exercise of one shall not be deemed a waiver of the right to exercise any
other or others. No delay or omission of the Collateral Agent in the exercise
of any such right, power or remedy and no renewal or extension of any of the
Obligations shall impair any such right, power or remedy or shall be
construed to be a waiver of any Default or Event of Default or an
acquiescence therein. No notice to or demand on any Assignor in any case
shall entitle it to any other or further notice or demand in similar or other
circumstances or constitute a waiver of any of the rights of the Collateral
Agent to any other or further action in any circumstances without notice or
demand. In the event that the Collateral Agent shall bring any suit to
enforce any of its rights hereunder and shall be entitled to judgment, then
in such suit the Collateral Agent may recover reasonable expenses, including
reasonable attorneys' fees, and the amounts thereof shall be included in such
judgment.
7.6. DISCONTINUANCE OF PROCEEDINGS. In case the Collateral
Agent shall have instituted any proceeding to enforce any right, power or
remedy under this Agreement by foreclosure, sale, entry or otherwise, and
such proceeding shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Collateral Agent, then and in
every such case the relevant Assignor, the Collateral Agent and each holder
of any of the Obligations shall be restored to their former positions and
rights hereunder with respect to the Collateral subject to the security
interest created under this Agreement, and all rights, remedies and powers of
the Collateral Agent shall continue as if no such proceeding had been
instituted.
ARTICLE VIII
INDEMNITY
8.1. INDEMNITY. (a) Each Assignor jointly and severally agrees
to indemnify, reimburse and hold the Collateral Agent, each other Secured
Creditor and their respective successors, permitted assigns, employees, agents
and servants (hereinafter in this Section 8.1 referred to individually as
"Indemnitee," and collectively as "Indemnitees") harmless from any and all
liabilities, obligations, damages, injuries, penalties, claims, demands,
actions, suits, judgments and any and all costs, expenses or disbursements
(including reasonable attorneys' fees
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and expenses) (for the purposes of this Section 8.1 the foregoing are
collectively called "expenses") of whatsoever kind and nature imposed on,
asserted against or incurred by any of the Indemnitees in any way relating to
or arising out of this Agreement, any other Secured Debt Agreement or any
other document executed in connection herewith or therewith or in any other
way connected with the administration of the transactions contemplated hereby
or thereby or the enforcement of any of the terms of, or the preservation of
any rights under any thereof, or in any way relating to or arising out of the
manufacture, ownership, ordering, purchase, delivery, performance, control,
acceptance, lease, financing, possession, operation, condition, sale, return
or other disposition, or use of the Collateral (including, without
limitation, latent or other defects, whether or not discoverable), the
violation of the laws of any country, state or other governmental body or
unit, any tort (including, without limitation, claims arising or imposed
under the doctrine of strict liability, or for or on account of injury to or
the death of any Person (including any Indemnitee), or property damage), or
contract claim; provided that no Indemnitee shall be indemnified pursuant to
this Section 8.1(a) for losses, damages or liabilities to the extent caused
by the gross negligence or wilful misconduct of such Indemnitee (as finally
determined by a court of competent jurisdiction). Each Assignor agrees that
upon written notice by any Indemnitee of the assertion of such a liability,
obligation, damage, injury, penalty, claim, demand, action, suit or judgment,
the relevant Assignor shall assume full responsibility for the defense
thereof. Each Indemnitee agrees to use its best efforts to promptly notify
the relevant Assignor of any such assertion of which such Indemnitee has
knowledge.
(b) Without limiting the application of Section 8.1(a)
hereof, each Assignor agrees, jointly and severally, to pay, or reimburse the
Collateral Agent for any and all reasonable fees, costs and expenses of
whatever kind or nature incurred in connection with the creation,
preservation or protection of the Collateral Agent's Liens on, and security
interest in, the Collateral, including, without limitation, all fees and
taxes in connection with the recording or filing of instruments and documents
in public offices, payment or discharge of any taxes or Liens upon or in
respect of the Collateral, premiums for insurance with respect to the
Collateral and all other fees, costs and expenses in connection with
protecting, maintaining or preserving the Collateral and the Collateral
Agent's interest therein, whether through judicial proceedings or otherwise,
or in defending or prosecuting any actions, suits or proceedings arising out
of or relating to the Collateral.
(c) Without limiting the application of Section 8.1(a) or
(b) hereof, each Assignor agrees, jointly and severally, to pay, indemnify
and hold each Indemnitee harmless from and against any loss, costs, damages
and expenses which such Indemnitee may suffer, expend or incur in consequence
of or growing out of any misrepresentation by any Assignor in this Agreement,
in any other Secured Debt Agreement or in any writing contemplated by or made
or delivered pursuant to or in connection with this Agreement or any other
Secured Debt Agreement.
(d) If and to the extent that the obligations of any Assignor
under this Section 8.1 are unenforceable for any reason, such Assignor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations that is permissible under applicable law.
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8.2. INDEMNITY OBLIGATIONS SECURED BY COLLATERAL; SURVIVAL.
Any amounts paid by any Indemnitee as to which such Indemnitee has the right
to reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all of
the other Obligations and notwithstanding the full payment of all the Notes
issued under the Credit Agreement, the termination of all Interest Rate
Protection Agreements or Other Hedging Agreements and all Letters of Credit
and the payment of all other Obligations and notwithstanding the discharge
thereof.
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified.
Such definitions shall be equally applicable to the singular and plural forms of
the terms defined.
"Administrative Agent" shall have the meaning provided in the
recitals of this Agreement.
"Agreement" shall mean this Security Agreement as the same
may be modified, supplemented or amended from time to time in accordance with
its terms.
"Assignor" shall have the meaning provided in the first
paragraph of this Agreement.
"Lender Creditors" shall have the meaning provided in the
recitals of this Agreement.
"Lenders" shall have the meaning provided in the recitals
of this Agreement.
"Borrower" shall have the meaning provided in the recitals
of this Agreement.
"Cash Collateral Account" shall mean a cash collateral
account maintained with, and in the sole dominion and control of, the
Collateral Agent for the benefit of the Secured Creditors.
"Chattel Paper" shall have the meaning provided in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Class" shall have the meaning provided in Section 10.2 of
this Agreement.
"Collateral" shall have the meaning provided in Section
1.1(a) of this Agreement.
"Collateral Agent" shall have the meaning provided in the
first paragraph of this Agreement.
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"Contract Rights" shall mean all rights of any Assignor
under each Contract, including, without limitation, (i) any and all rights to
receive and demand payments under any or all Contracts, (ii) any and all
rights to receive and compel performance under any or all Contracts and (iii)
any and all other rights, interests and claims now existing or in the future
arising in connection with any or all Contracts.
"Contracts" shall mean all contracts between any Assignor
and one or more additional parties (including, without limitation, any
Interest Rate Protection Agreements or Other Hedging Agreements and any
partnership agreements), but excluding any contract to the extent that the
terms thereof prohibit (after giving effect to any approvals or waivers) the
assignment of, or granting a security interest in, such contract (it being
understood and agreed, however, that notwithstanding the foregoing, all
rights to payment for money due or to become due pursuant to any such
excluded contract shall be subject to the security interests created by this
Agreement).
"Copyrights" shall mean any copyright owned by any
Assignor, including any registrations of any copyrights, in the United States
Copyright Office or any foreign equivalent office, as well as any application
for a copyright registration now or hereafter made with the United States
Copyright Office or any foreign equivalent office by any Assignor.
"Credit Agreement" shall have the meaning provided in the
recitals of this Agreement.
"Credit Document Obligations" shall have the meaning
provided in the definition of "Obligations" in this Article IX.
"Default" shall mean any event which, with notice or lapse
of time, or both, would constitute an Event of Default.
"Documents" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Equipment" shall mean any "equipment," as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York, now or hereafter owned by any Assignor and, in any event,
shall include, but shall not be limited to, all machinery, equipment,
furnishings, fixtures and vehicles now or hereafter owned by any Assignor and
any and all additions, substitutions and replacements of any of the
foregoing, wherever located, together with all attachments, components,
parts, equipment and accessories installed thereon or affixed thereto.
"Event of Default" shall mean any Event of Default under,
and as defined in, the Credit Agreement and shall in any event include,
without limitation, any payment default on any of the Other Obligations after
the expiration of any applicable grace period.
"General Intangibles" shall have the meaning provided in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, provided that, in the
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case of General Intangibles which are Permits, the assignment thereof shall
be limited as specified in the definition of Permits.
"Goods" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Indemnitee" shall have the meaning provided in Section 8.1
of this Agreement.
"Instrument" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Inventory" shall mean merchandise, inventory and goods,
and all additions, substitutions and replacements thereof, wherever located,
together with all goods, supplies, incidentals, packaging materials, labels,
materials and any other items used or usable in manufacturing, processing,
packaging or shipping same, in all stages of production -- from raw materials
through work-in-process to finished goods -- and all products and proceeds of
whatever sort and wherever located and any portion thereof which may be
returned, rejected, reclaimed or repossessed by the Collateral Agent from any
Assignor's customers, and shall specifically include all "inventory" as such
term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York, now or hereafter owned by any Assignor.
"Investment Property" shall have the meaning provided in
the Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"Liens" shall mean any security interest, mortgage, pledge,
lien, claim, charge, encumbrance, title retention agreement, lessor's
interest in a financing lease or analogous instrument, in, of, or on any
Assignor's property.
"Marks" shall mean all right, title and interest in and to
any trademarks, service marks and trade names now held or hereafter acquired
by any Assignor, including any registration of any trademarks and service
marks in the United States Patent and Trademark Office or in any equivalent
foreign office and any trade dress including logos and/or designs used by any
Assignor.
"Obligations" shall mean (i) the full and prompt payment
when due (whether at the stated maturity, by acceleration or otherwise) of
all obligations and indebtedness (including, without limitation, indemnities,
Fees and interest thereon) of each Assignor to the Lender Creditors, whether
now existing or hereafter incurred under, arising out of, or in connection
with the Credit Agreement and the other Credit Documents to which such
Assignor is a party (including, in the case of each Guarantor, all such
obligations and indebtedness of such Guarantor under its Guaranty) and the
due performance and compliance by such Assignor with all of the terms,
conditions and agreements contained in the Credit Agreement and such other
Credit Documents (all such obligations and liabilities under this clause (i),
except to the extent consisting of obligations or indebtedness with respect
to Interest Rate Protection Agreements or Other Hedging Agreements, being
herein collectively called the "Credit Document Obligations"); (ii) the full
and prompt payment when due (whether at the stated maturity, by
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acceleration or otherwise) of all obligations and liabilities owing by such
Assignor to the Other Creditors under, or with respect to (including by
reason of any Guaranty to which such Assignor is a party), any Interest Rate
Protection Agreement or Other Hedging Agreement, whether such Interest Rate
Protection Agreement or Other Hedging Agreement is now in existence or
hereafter arising, and the due performance and compliance by such Assignor
with all of the terms, conditions and agreements contained therein, but not
if such Other Creditor in writing expressly agrees that such Interest Rate
Protection Agreement or Other Hedging Agreement shall not be an Other
Obligation (all such obligations and liabilities described in this clause
(ii) being herein collectively called the "Other Obligations"); (iii) any and
all sums reasonably advanced by the Assignee in order to preserve the
Collateral or preserve its security interest in the Collateral; (iv) in the
event of any proceeding for the collection or enforcement of any
indebtedness, obligations or liabilities of such Assignor referred to in
clauses (i) and (ii) above, after an Event of Default shall have occurred and
be continuing, the reasonable expenses of retaking, holding, preparing for
sale or lease, selling or otherwise disposing of or realizing on the
Collateral, or of any exercise by the Assignee of its rights hereunder,
together with reasonable attorneys' fees and court costs; and (v) all amounts
paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement under Section 8.1 of this Agreement; all such obligations,
liabilities, sums and expenses set forth in clauses (i) through (v) of this
Article IX being herein collectively called the "Obligations," it being
acknowledged and agreed that the "Obligations" shall include extensions of
credit of the types described above, whether outstanding on the date of this
Agreement or extended from time to time after the date of this Agreement.
"Other Creditors" shall have the meaning provided in the
recitals of this Agreement.
"Other Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Patents" shall mean any patent to which any Assignor now
or hereafter has title and any divisions or continuations thereof, as well as
any application for a patent now or hereafter made by any Assignor.
"Permits" shall mean, to the extent permitted to be
assigned by the terms thereof or by applicable law, all licenses, permits,
rights, orders, variances, franchises or authorizations of or from any
governmental authority or agency.
"Primary Obligations" shall have the meaning provided in
Section 7.4(b) of this Agreement.
"Pro Rata Share" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Proceeds" shall have the meaning provided in the Uniform
Commercial Code as in effect in the State of New York on the date hereof or
under other relevant law and, in any event, shall include, but not be limited
to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to the Collateral Agent or any Assignor from time to time with
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respect to any of the Collateral, (ii) any and all payments (in any form
whatsoever) made or due and payable to any Assignor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental authority
(or any person acting under color of governmental authority) and (iii) any
and all other amounts from time to time paid or payable under or in
connection with any of the Collateral.
"Receivables" shall mean any "account" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York, now or hereafter owned by any Assignor and, in any event,
shall include, but shall not be limited to, all of such Assignor's rights to
payment for goods sold or leased or services performed by such Assignor,
whether now in existence or arising from time to time hereafter, including,
without limitation, rights evidenced by an account, note, contract, security
agreement, chattel paper, or other evidence of indebtedness or security,
together with (a) all security pledged, assigned, hypothecated or granted to
or held by such Assignor to secure the foregoing, (b) all of any Assignor's
right, title and interest in and to any goods, the sale of which gave rise
thereto, (c) all guarantees, endorsements and indemnifications on, or of, any
of the foregoing, (d) all powers of attorney for the execution of any
evidence of indebtedness or security or other writing in connection
therewith, (e) all books, records, ledger cards, and invoices relating
thereto, (f) all evidences of the filing of financing statements and other
statements and the registration of other instruments in connection therewith
and amendments thereto, notices to other creditors or secured parties, and
certificates from filing or other registration officers, (g) all credit
information, reports and memoranda relating thereto and (h) all other
writings related in any way to the foregoing.
"Representative" shall have the meaning provided in Section
7.4(e) of this Agreement.
"Required Secured Creditors" shall mean (i) the Required
Lenders (or, to the extent required by Section 13.12 of the Credit Agreement,
each of the Lenders) under the Credit Agreement so long as any Credit
Document Obligations remain outstanding and (ii) in any situation not covered
by the preceding clause (i), the holders of a majority of the outstanding
principal amount of the Other Obligations.
"Requisite Creditors" shall have the meaning provided in
Section 10.2 of this Agreement.
"Secondary Obligations" shall have the meaning provided in
Section 7.4(b) of this Agreement.
"Secured Creditors" shall have the meaning provided in the
recitals of this Agreement.
"Secured Debt Agreements" shall mean and include this
Agreement, the other Credit Documents and the Interest Rate Protection
Agreements and Other Hedging Agreements.
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"Termination Date" shall have the meaning provided in Section
10.8 of this Agreement.
"Trade Secret Rights" shall have the meaning provided in
Section 5.1 of this Agreement.
"UCC" shall mean the Uniform Commercial Code as in effect
from time to time in the relevant jurisdiction.
ARTICLE X
MISCELLANEOUS
10.1. NOTICES. Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be deemed to have been duly given or made when delivered
to the party to which such notice, request, demand or other communication is
required or permitted to be given or made under this Agreement, addressed as
follows:
(a) if to any Assignor, at the address set forth
opposite such Assignor's signature below;
(b) if to the Collateral Agent, at:
Bankers Trust Company
130 Liberty Street
New York, New York 10006
Attention: Andrew Keith
Tel. No.: (212) 250-8617
Fax. No.: (212) 250-7218
(c) if to any Lender Creditor, at such address as such Lender
Creditor shall have specified in the Credit Agreement;
(d) if to any Other Creditor, at such address as such Other
Creditor shall have specified in writing to each Assignor and the Collateral
Agent;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
10.2. WAIVER; AMENDMENT. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by each Assignor directly effected
thereby and the Collateral Agent (with the written consent of the Required
Secured Creditors); PROVIDED, HOWEVER, that any change, waiver, modification or
variance affecting the rights and benefits of a single Class of Secured
Creditors (and not all Secured Creditors in a like or similar manner) shall
require the written consent of the Requisite Creditors of such affected Class.
For the purpose of this Agreement, the term "Class"
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shall mean each class of Secured Creditors, I.E., whether (x) the Lender
Creditors as holders of the Credit Document Obligations or (y) the Other
Creditors as the holders of the Other Obligations. For the purpose of this
Agreement, the term "Requisite Creditors" of any Class shall mean each of (x)
with respect to the Credit Document Obligations, the Required Lenders and (y)
with respect to the Other Obligations, the holders of at least a majority
amount of all obligations outstanding from time to time under the respective
Interest Rate Protection Agreements or Other Hedging Agreements.
10.3. OBLIGATIONS ABSOLUTE. The obligations of each
Assignor hereunder shall remain in full force and effect without regard to,
and shall not be impaired by, (a) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of such
Assignor; (b) any exercise or non-exercise, or any waiver of, any right,
remedy, power or privilege under or in respect of this Agreement or any other
Secured Debt Agreement; or (c) any amendment to or modification of any
Secured Debt Agreement or any security for any of the Obligations; whether or
not such Assignor shall have notice or knowledge of any of the foregoing.
10.4. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon each Assignor and its successors and assigns (although no
Assignor may assign its rights and obligations hereunder except in accordance
with the provisions of the Secured Debt Agreements) and shall inure to the
benefit of the Collateral Agent and the other Secured Creditors and their
respective successors and assigns. All agreements, statements,
representations and warranties made by each Assignor herein or in any
certificate or other instrument delivered by such Assignor or on its behalf
under this Agreement shall be considered to have been relied upon by the
Secured Creditors and shall survive the execution and delivery of this
Agreement and the other Secured Debt Agreements regardless of any
investigation made by the Secured Creditors or on their behalf.
10.5. HEADINGS DESCRIPTIVE. The headings of the several
sections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
10.6. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
10.7. ASSIGNOR'S DUTIES. It is expressly agreed, anything
herein contained to the contrary notwithstanding, that each Assignor shall
remain liable to perform all of the obligations, if any, assumed by it with
respect to the Collateral and the Collateral Agent shall not have any
obligations or liabilities with respect to any Collateral by reason of or
arising out of this Agreement, nor shall the Collateral Agent be required or
obligated in any manner to perform or fulfill any of the obligations of any
Assignor under or with respect to any Collateral.
10.8. TERMINATION; RELEASE. (a) After the Termination Date,
this Agreement shall terminate (provided that all indemnities set forth
herein including, without limitation, in
25
<PAGE>
Section 8.1 hereof shall survive such termination) and the Collateral Agent,
at the request and expense of the respective Assignor, will promptly execute
and deliver to such Assignor a proper instrument or instruments (including
Uniform Commercial Code termination statements on form UCC-3) acknowledging
the satisfaction and termination of this Agreement, and will duly assign,
transfer and deliver to such Assignor (without recourse and without any
representation or warranty) such of the Collateral as may be in the
possession of the Collateral Agent and as has not theretofore been sold or
otherwise applied or released pursuant to this Agreement. As used in this
Agreement, "Termination Date" shall mean the date upon which the Total
Revolving Loan Commitment and all Interest Rate Protection Agreements or
Other Hedging Agreements, that constitute Guaranteed Obligations of the
Borrower, have been terminated, all Loans have been repaid in full, all
Letters of Credit have been terminated and all Obligations then owing have
been paid in full.
(b) In the event that any part of the Collateral is sold in
connection with a sale permitted by Section 9.02 of the Credit Agreement
(other than a sale to any Assignor or a Subsidiary thereof) or otherwise
released at the direction of the Required Secured Creditors or any Equipment
is financed as permitted by Sections 9.01(vii) and (viii) of the Credit
Agreement (to the extent that the lender thereof does not permit the
Collateral Agent to retain a junior Lien on such Equipment), such Collateral
will be sold or financed, as the case may be, free and clear of the Liens
created by this Agreement (and such Collateral shall automatically be
released from the Liens created by this Agreement) and the Collateral Agent,
at the request and expense of the relevant Assignor, will duly assign,
transfer and deliver to such Assignor (without recourse and without any
representation or warranty) such of the Collateral as is then being (or has
been) so sold or released and as may be in the possession of the Collateral
Agent and has not theretofore been released pursuant to this Agreement.
(c) At any time that an Assignor desires that the
Collateral Agent take any action to acknowledge or give effect to any release
of Collateral pursuant to the foregoing Section 10.8(a) or (b), such Assignor
shall deliver to the Collateral Agent a certificate signed by a principal
executive officer of such Assignor stating that the release of the respective
Collateral is permitted pursuant to Section 10.8(a) or (b).
10.9. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall be
lodged with each Assignor and the Collateral Agent.
10.10. 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.
26
<PAGE>
10.11. THE COLLATERAL AGENT. The Collateral Agent will hold
in accordance with this Agreement all items of the Collateral at any time
received under this Agreement. It is expressly understood and agreed that the
obligations of the Collateral Agent as holder of the Collateral and interests
therein and with respect to the disposition thereof, and otherwise under this
Agreement, are only those expressly set forth in this Agreement and in
Section 12 of the Credit Agreement. The Collateral Agent shall act hereunder
and thereunder on the terms and conditions set forth herein and in Section 12
of the Credit Agreement.
10.12. BENEFIT OF AGREEMENT. This Agreement shall be
binding upon the parties hereto and their respective successors and assigns
and shall inure to the benefit of and be enforceable by each of the parties
hereto and its successors and assigns.
10.13. ADDITIONAL ASSIGNORS. It is understood and agreed that
any Subsidiary of Holdings that is required to execute a counterpart of this
Agreement after the date hereof pursuant to the Credit Agreement shall
automatically become an Assignor hereunder by executing a counterpart hereof and
delivering the same to the Collateral Agent, at which time the Annexes to this
Agreement will be appropriately modified to reflect the Collateral then owned by
such additional Assignor.
* * *
27
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date first above written.
<TABLE>
<S> <C>
ADDRESS:
2777 Summer Street INFORMATION HOLDINGS, INC.,
Suite 209 as an Assignor
Stamford, CT 06905
Attn: Vincent Chippari
Telephone No.: (203) 961-9208
Telecopier No.: (203) 961-1431 By
--------------------------
Title:
c/o Information Holdings, Inc. WARBURG, PINCUS INFORMATION
2777 Summer Street, Suite 209 VENTURES, INC.,
Stamford, CT 06905 as an Assignor
Attn: Vincent Chippari
Telephone No.: (203) 961-9208
Telecopier No.: (203) 961-1431 By
--------------------------
Title:
2777 Summer Street
Suite 209 INFORMATION VENTURES, L.L.C.,
Stamford, CT 06905 as an Assignor
Attn: Vincent Chippari
Telephone No.: (203) 961-9208
Telecopier No.: (203) 961-1431 By
--------------------------
Title:
c/o Information Holdings, Inc. CRC PRESS, L.L.C.,
2777 Summer Street as an Assignor
Suite 209
Stamford, CT 06905
Attn: Vincent Chippari By
--------------------------
Telephone No.: (203) 961-9208 Title:
Telecopier No.: (203) 961-1431
</TABLE>
28
<PAGE>
<TABLE>
<S> <C>
c/o Information Holdings, Inc. MICROPATENT, L.L.C.,
2777 Summer Street as an Assignor
Suite 209
Stamford, CT 06905
Attn: Vincent Chippari By
--------------------------
Telephone No.: (203) 961-9208 Title:
Telecopier No.: (203) 961-1431
c/o Information Holdings, Inc. MASTER DATA CENTER, INC.,
2777 Summer Street as an Assignor
Suite 209
Stamford, CT 06905
Attn: Vincent Chippari By
--------------------------
Telephone No.: (203) 961-9208 Title:
Telecopier No.: (203) 961-1431
c/o Information Holdings, Inc. CRC PRESS UK, L.L.C.,
2777 Summer Street as an Assignor
Suite 209
Stamford, CT 06905
Attn: Vincent Chippari By
--------------------------
Telephone No.: (203) 961-9208 Title:
Telecopier No.: (203) 961-1431
c/o Information Holdings, Inc. OPTIPAT, INC.,
2777 Summer Street as an Assignor
Suite 209
Stamford, CT 06905
Attn: Vincent Chippari By
--------------------------
Telephone No.: (203) 961-9208 Title:
Telecopier No.: (203) 961-1431
</TABLE>
29
<PAGE>
<TABLE>
<S> <C>
c/o Information Holdings, Inc. MICROPATENT UK L.L.C.,
2777 Summer Street as an Assignor
Suite 209
Stamford, CT 06905
Attn: Vincent Chippari By
--------------------------
Telephone No.: (203) 961-9208 Title:
Telecopier No.: (203) 961-1431
Accepted and Agreed to:
BANKERS TRUST COMPANY,
as Collateral Agent
By
-------------------
Title:
</TABLE>
30
<PAGE>
ANNEX A
to
SECURITY
AGREEMENT
SCHEDULE OF CHIEF EXECUTIVE OFFICES
AND OTHER RECORD LOCATIONS
I. Chief Executive Offices
II. Other Record Locations
<PAGE>
ANNEX B
to
SECURITY
AGREEMENT
SCHEDULE OF INVENTORY AND EQUIPMENT LOCATIONS
ASSIGNOR LOCATION
<PAGE>
ANNEX C
to
SECURITY
AGREEMENT
SCHEDULE OF TRADE AND FICTITIOUS NAMES
<PAGE>
ANNEX D
to
SECURITY
AGREEMENT
SCHEDULE OF MARKS
TRADEMARK SERIAL NO. FILE DATE
<PAGE>
ANNEX E
to
SECURITY
AGREEMENT
SCHEDULE OF PATENTS
<PAGE>
ANNEX F
to
SECURITY
AGREEMENT
SCHEDULE OF COPYRIGHTS
<PAGE>
ANNEX G
to
SECURITY
AGREEMENT
GRANT OF SECURITY INTEREST
IN UNITED STATES TRADEMARKS AND PATENTS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency
of which are hereby acknowledged, [Name of Grantor], a __________ corporation
(the "Grantor") with principal offices at ____________________________, hereby
assigns and grants to Bankers Trust Company, as Collateral Agent, with principal
offices at 130 Liberty Street, New York, New York 10006 (the "Grantee"), a
security interest in (i) all of the Grantor's right, title and interest in and
to the United States trademarks, trademark registrations and trademark
applications (except for "intent to use" applications for trademark or service
mark registration filed pursuant to Section 1(b) of the Lanham Act, unless and
until an Amendment to Allege Use or a Statement of Use under Sections 1(c) and
1(d) of said Act has been filed) (the "Marks") set forth on Schedule A attached
hereto, (ii) all of the Grantor's rights, title and interest in and to the
United States patents (the "Patents") set forth on Schedule B attached hereto,
in each case together with (iii) all Proceeds (as such term is defined in the
Security Agreement referred to below) and products of the Marks and Patents,
(iv) the goodwill of the businesses with which the Marks are associated and (v)
all causes of action arising prior to or after the date hereof for infringement
of any of the Marks and Patents or unfair competition regarding the same.
THIS GRANT is made to secure the satisfactory performance and
payment of all the Obligations of the Grantor, as such term is defined in the
Security Agreement among the Grantor, the other assignors from time to time
party thereto and the Grantee, dated as of September 24, 1999 (as amended from
time to time, the "Security Agreement"). Upon the occurrence of the Termination
Date (as defined in the Security Agreement), the Grantee shall,
<PAGE>
upon such satisfaction, execute, acknowledge, and deliver to the Grantor an
instrument in writing releasing the security interest in the Marks and Patents
acquired under this Grant.
This Grant has been granted in conjunction with the security
interest granted to the Grantee under the Security Agreement. The rights and
remedies of the Grantee with respect to the security interest granted herein are
without prejudice to, and are in addition to those set forth in the Security
Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provisions of this Grant are deemed to conflict
with the Security Agreement, the provisions of the Security Agreement shall
govern.
<PAGE>
ANNEX G
Page 3
IN WITNESS WHEREOF, the undersigned have executed this Grant as of the
____ day of _________, ____.
[NAME OF GRANTOR], Grantor
By:
-------------------------------
Name:
Title:
BANKERS TRUST COMPANY,
as Collateral Agent, Grantee
By:
-------------------------------
Name:
Title:
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of _________, ____, before me personally came
________ _________________ who, being by me duly sworn, did state as follows:
that [s]he is _______________ of [Name of Grantor], that [s]he is authorized to
execute the foregoing Grant on behalf of said corporation and that [s]he did so
by authority of the Board of Directors of said corporation.
-------------------------
Notary Public
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of _________, ____, before me personally came
________ _____________________ who, being by me duly sworn, did state as
follows: that [s]he is __________________ of Bankers Trust Company that [s]he is
authorized to execute the foregoing Grant on behalf of said corporation and that
[s]he did so by authority of the Board of Directors of said corporation.
----------------------------
Notary Public
<PAGE>
SCHEDULE A
MARK REG. NO. REG. DATE
<PAGE>
SCHEDULE B
PATENT PATENT NO. ISSUE DATE
<PAGE>
ANNEX H
to
SECURITY
AGREEMENT
GRANT OF SECURITY INTEREST
IN UNITED STATES COPYRIGHTS
WHEREAS, [Name of Grantor], a _______________ corporation (the
"Grantor"), having its chief executive office at ______________, _____________,
is the owner of all right, title and interest in and to the United States
copyrights and associated United States copyright registrations and
applications for registration set forth in Schedule A attached hereto;
WHEREAS, BANKERS TRUST COMPANY, as Collateral Agent, having its
principal offices at 130 Liberty Street, New York, New York 10006 (the
"Grantee"), desires to acquire a security interest in said copyrights and
copyright registrations and applications therefor; and
WHEREAS, the Grantor is willing to assign to the Grantee, and to
grant to the Grantee a security interest in and lien upon the copyrights and
copyright registrations and applications therefor described above.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and subject to the terms and conditions of the
Security Agreement, dated as of September 24, 1999, made by the Grantor, the
other assignors from time to time party thereto and the Grantee (as amended
from time to time, the "Security Agreement"), the Grantor hereby assigns and
grants to the Grantee a security interest in the copyrights and copyright
registrations and applications therefor set forth in Schedule A attached
hereto.
This Grant has been granted in conjunction with the security
interest granted to the Grantee under the Security Agreement. The rights and
remedies of the Grantee with respect to the security interest granted herein
are without prejudice to, and are in addition to those set forth in the
Security Agreement, all terms and provisions of which are incorporated herein
by reference. In the event that any provisions of this Grant are deemed to
conflict with the Security Agreement, the provisions of the Security
Agreement shall govern.
<PAGE>
ANNEX H
Page 2
Executed at New York, New York, the __ day of _________, ____.
[NAME OF GRANTOR], as Grantor
By:
---------------------------------
Name:
Title:
BANKERS TRUST COMANY,
as Collateral Agent, Grantee
By:
---------------------------------
Name:
Title:
<PAGE>
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On this __ day of _________, ____, before me personally came
___________ _______________, who being duly sworn, did depose and say that [s]he
is ___________________ of [Name of Grantor], that [s]he is authorized to execute
the foregoing Grant on behalf of said corporation and that [s]he did so by
authority of the Board of Directors of said corporation.
-------------------------
Notary Public
<PAGE>
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On this ____ day of _________, ____, before me personally came
________ _____________________ who, being by me duly sworn, did state as
follows: that [s]he is __________________ of Bankers Trust Company that [s]he is
authorized to execute the foregoing Grant on behalf of said corporation and that
[s]he did so by authority of the Board of Directors of said corporation.
----------------------------
Notary Public
<PAGE>
SCHEDULE A
U.S. COPYRIGHTS
REGISTRATION PUBLICATION
NUMBERS DATE COPYRIGHT TITLE
<PAGE>
EXHIBIT 10.4
FORM OF SUBSIDIARIES GUARANTY
SUBSIDIARIES GUARANTY, dated as of September 24, 1999 (as
amended, modified or supplemented from time to time, this "Guaranty"), made by
each of the undersigned guarantors (each a "Guarantor," and together with any
other entity that becomes a guarantor hereunder pursuant to Section 26 hereof,
the "Guarantors"). Except as otherwise defined herein, capitalized terms used
herein and defined in the Credit Agreement (as defined below) shall be used
herein as therein defined.
W I T N E S S E T H :
WHEREAS, Information Holdings, Inc. ("Holdings"), Warburg,
Pincus Information Ventures, Inc. ("WPIV" and together with Holdings, the
"Parent Guarantors"), Information Ventures L.L.C. (the "Borrower"), the lenders
from time to time party thereto (the "Lenders"), Bank of America, N.A., as
Documentation Agent, and Bankers Trust Company, as Administrative Agent
(together with any successor agent, the "Administrative Agent"), have entered
into a Credit Agreement, dated as of September 24, 1999, providing for the
making of Loans to, and the issuance of Letters of Credit for the account of,
the Borrower as contemplated therein (as amended, modified as supplemented from
time to time, the "Credit Agreement") (the Lenders, the Collateral Agent, the
Documentation Agent and the Administrative Agent are herein called the "Lender
Creditors");
WHEREAS, the Borrower may at any time and from time to time
enter into one or more Interest Rate Protection Agreements or Other Hedging
Agreements with one or more Lenders or any affiliate thereof, and provided that
such Interest Rate Protection Agreement or Other Hedging Agreement constitutes a
Guaranteed Obligation of the Borrower, (each such Lender or affiliate, even if
the respective Lender subsequently ceases to be a Lender under the Credit
Agreement for any reason, together with such Lender's or affiliate's successors
and assigns, if any, collectively, the "Other Creditors," and together with the
Lender Creditors, the "Secured Creditors");
WHEREAS, each Guarantor is a direct or indirect Subsidiary of
the Borrower;
WHEREAS, it is a condition to the making of Loans to, and the
issuance of Letters of Credit for the account of, the Borrower under the Credit
Agreement that each Guarantor shall have executed and delivered this Guaranty;
and
WHEREAS, each Guarantor will obtain benefits from the
incurrence of Loans to, and the issuance of Letters of Credit for the account
of, the Borrower under the Credit Agreement and the entering into by the
Borrower of Interest Rate Protection Agreements or Other Hedging Agreements and,
accordingly, desires to execute this Guaranty in order to satisfy the conditions
described in the preceding paragraph;
<PAGE>
NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to each Guarantor, the receipt and sufficiency of which are
hereby acknowledged, each Guarantor hereby makes the following representations
and warranties to the Secured Creditors and hereby covenants and agrees with
each Secured Creditor as follows:
1. Each Guarantor, jointly and severally, irrevocably,
absolutely and unconditionally guarantees: (i) to the Lender Creditors the full
and prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of (x) the principal of and interest on the Notes issued by, and the
Loans made to, the Borrower under the Credit Agreement, and all reimbursement
obligations and Unpaid Drawings with respect to Letters of Credit issued under
the Credit Agreement and (y) all other obligations (including obligations which,
but for the automatic stay under Section 362(a) of the Bankruptcy Code, would
become due), liabilities and indebtedness owing by the Borrower to the Lender
Creditors under the Credit Agreement or any other Credit Document to which the
Borrower is a party (including, without limitation, indemnities, Fees and
interest thereon), whether now existing or hereafter incurred under, arising out
of or in connection with the Credit Agreement or any such other Credit Document
and the due performance and compliance by the Borrower with all of the terms,
conditions and agreements contained in the Credit Agreement and such other
Credit Documents (all such principal, interest, liabilities, indebtedness and
obligations being herein collectively called the "Credit Document Obligations");
and (ii) to each Other Creditor the full and prompt payment when due (whether at
the stated maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due), liabilities and indebtedness owing by the
Borrower under any Interest Rate Protection Agreement or Other Hedging
Agreement, but only if such Interest Rate Protection Agreement or Other Hedging
Agreement constitutes a Guaranteed Obligation of the Borrower, whether now in
existence or hereafter arising, and the due performance and compliance by the
Borrower with all of the terms, conditions and agreements contained in the
Interest Rate Protection Agreements or Other Hedging Agreements, but only if
such Interest Rate Protection Agreement or Other Hedging Agreement constitutes a
Guaranteed Obligation of the Borrower, (all such obligations, liabilities and
indebtedness being herein collectively called the "Other Obligations," and
together with the Credit Document Obligations, the "Guaranteed Obligations").
Each Guarantor understands, agrees and confirms that the Secured Creditors may
enforce this Guaranty up to the full amount of the Guaranteed Obligations
against such Guarantor without proceeding against any other Guarantor, the
Borrower, against any security for the Guaranteed Obligations, or under any
other guaranty covering all or a portion of the Guaranteed Obligations.
2. Additionally, each Guarantor, jointly and severally,
unconditionally, absolutely and irrevocably, guarantees the payment of any and
all Guaranteed Obligations whether or not due or payable by the Borrower upon
the occurrence in respect of the Borrower of any of the events specified in
Section 10.05 of the Credit Agreement, and unconditionally, absolutely and
irrevocably, jointly and severally, promises to pay such Guaranteed Obligations
to the Secured Creditors, or order, on demand, in legal tender of the United
States. This Guaranty shall constitute a guaranty of payment, and not of
collection.
2
<PAGE>
3. The liability of each Guarantor hereunder is primary,
absolute and unconditional and is exclusive and independent of any security for
or other guaranty of the indebtedness of the Borrower whether executed by such
Guarantor, any other Guarantor, any other guarantor or by any other party, and
the liability of each Guarantor hereunder shall not be affected or impaired by
any circumstance or occurrence whatsoever, including, without limitation: (a)
any direction as to application of payment by the Borrower or by any other
party, (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the Guaranteed Obligations,
(c) any payment on or in reduction of any such other guaranty or undertaking
(other than a payment in full in cash of all Guaranteed Obligations), (d) any
dissolution, termination or increase, decrease or change in personnel by the
Borrower, (e) any payment made to any Secured Creditor on the indebtedness which
any Secured Creditor repays the Borrower pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and each Guarantor waives any right to the deferral or modification
of its obligations hereunder by reason of any such proceeding, (f) any action or
inaction by the Secured Creditors as contemplated in Section 6 hereof or (g) any
invalidity, irregularity or unenforceability of all or any part of the
Guaranteed Obligations or of any security therefor.
4. The obligations of each Guarantor hereunder are independent
of the obligations of any other Guarantor, any other guarantor or the Borrower,
and a separate action or actions may be brought and prosecuted against each
Guarantor whether or not action is brought against any other Guarantor, any
other guarantor or the Borrower and whether or not any other Guarantor, any
other guarantor or the Borrower be joined in any such action or actions. Each
Guarantor waives, to the fullest extent permitted by law, the benefits of any
statute of limitations affecting its liability hereunder or the enforcement
thereof. Any payment by the Borrower or other circumstance which operates to
toll any statute of limitations as to the Borrower shall operate to toll the
statute of limitations as to each Guarantor.
5. Each Guarantor hereby waives notice of acceptance of this
Guaranty and notice of any liability to which it may apply, and waives
promptness, diligence, presentment, demand of payment, protest, notice of
dishonor or nonpayment of any such liabilities, suit or taking of other action
by the Administrative Agent or any other Secured Creditor against, and any other
notice to, any party liable thereon (including such Guarantor, any other
Guarantor, any other guarantor, the Borrower).
6. Any Secured Creditor may at any time and from time to time
without the consent of, or notice to, any Guarantor, without incurring
responsibility to such Guarantor, without impairing or releasing the obligations
of such Guarantor hereunder, upon or without any terms or conditions and in
whole or in part:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, alter or increase, any
of the Guaranteed Obligations (including any increase or decrease in
the rate of interest thereon), any security therefor, or any liability
incurred directly or indirectly in respect thereof, and the guaranty
herein
3
<PAGE>
made shall apply to the Guaranteed Obligations as so changed,
extended, renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, impair, realize
upon or otherwise deal with in any manner and in any order any property
by whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower, any other Credit Party, any Subsidiary thereof or otherwise
act or refrain from acting;
(d) release or substitute any one or more endorsers,
Guarantors, other guarantors, the Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations,
any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or
hereof, and may subordinate the payment of all or any part thereof to
the payment of any liability (whether due or not) of the Borrower to
creditors of the Borrower other than the Secured Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of the Borrower to the Secured Creditors
regardless of what liabilities of the Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, any of the Interest Rate Protection Agreements or Other
Hedging Agreements, the Credit Documents or any of the instruments or
agreements referred to therein, or otherwise amend, modify or
supplement any of the Interest Rate Protection Agreements or Other
Hedging Agreements, the Credit Documents or any of such other
instruments or agreements;
(h) act or fail to act in any manner referred to in this
Guaranty which may deprive such Guarantor of its right to subrogation
against the Borrower to recover full indemnity for any payments made
pursuant to this Guaranty, to the extent permitted by applicable law;
and/or
(i) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable
discharge of such Guarantor from its liabilities under this Guaranty.
7. This Guaranty is a continuing one and all liabilities to
which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. No failure or delay on the
part of any Secured Creditor in exercising any right,
4
<PAGE>
power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein expressly specified
are cumulative and not exclusive of any rights or remedies which any Secured
Creditor would otherwise have. No notice to or demand on any Guarantor in any
case shall entitle such Guarantor to any other further notice or demand in
similar or other circumstances or constitute a waiver of the rights of any
Secured Creditor to any other or further action in any circumstances without
notice or demand. It is not necessary for any Secured Creditor to inquire
into the capacity or powers of the Borrower or the officers, directors,
partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
8. Any indebtedness of the Borrower now or hereafter held by
any Guarantor is hereby subordinated to the indebtedness of the Borrower or to
the Secured Creditors, and if the Administrative Agent or the Collateral Agent
so requests, after the occurrence and during the continuance of an Event of
Default, such indebtedness of the Borrower to any Guarantor shall be collected,
enforced and received by such Guarantor as trustee for the Secured Creditors and
be paid over to the Secured Creditors on account of the indebtedness of the
Borrower to the Secured Creditors, but without affecting or impairing in any
manner the liability of such Guarantor under the other provisions of this
Guaranty. Without limiting the generality of the foregoing, each Guarantor
hereby agrees with the Secured Creditors that it will not exercise any right of
subrogation which it may at any time otherwise have as a result of this Guaranty
(whether contractual, under Section 509 of the Bankruptcy Code or otherwise)
until all Guaranteed Obligations have been irrevocably paid in full in cash.
9. (a) Each Guarantor waives any right (except as shall be
required by applicable law and cannot be waived) to require the Secured
Creditors to: (i) proceed against the Borrower, any other Guarantor, any other
guarantor of the Guaranteed Obligations or any other party; (ii) proceed against
or exhaust any security held from the Borrower, any other Guarantor, any other
guarantor of the Guaranteed Obligations or any other party; or (iii) pursue any
other remedy in the Secured Creditors' power whatsoever. Each Guarantor waives
any defense based on or arising out of any defense of the Borrower, any other
Guarantor, any other guarantor of the Guaranteed Obligations or any other party
other than payment of the Guaranteed Obligations (but only to the extent of such
payment), including, without limitation, any defense based on or arising out of
the disability of the Borrower, any other Guarantor, any other guarantor of the
Guaranteed Obligations or any other party, or the unenforceability of the
Guaranteed Obligations or any part thereof from any cause, or the cessation from
any cause of the liability of the Borrower other than payment of the Guaranteed
Obligations. The Secured Creditors may, at their election and to the extent
permitted by applicable law, foreclose on any security held by the
Administrative Agent, the Collateral Agent or the other Secured Creditors by one
or more judicial or nonjudicial sales, whether or not every aspect of any such
sale is commercially reasonable, or exercise any other right or remedy the
Secured Creditors may have against the Borrower or any other party, or any
security, without affecting or impairing in any way the liability of any
Guarantor hereunder except to the extent the Guaranteed Obligations have been
5
<PAGE>
paid in full in cash. Each Guarantor waives any defense arising out of any such
election by the Secured Creditors, even though such election operates to impair
or extinguish any right of reimbursement or subrogation or other right or remedy
of such Guarantor against the Borrower or any other party or any security.
(b) Each Guarantor waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Guaranty, and notices of the existence, creation or incurring of new or
additional indebtedness. Each Guarantor assumes all responsibility for being and
keeping itself informed of the Borrower's financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that the Secured Creditors shall have
no duty to advise any Guarantor of information known to them regarding such
circumstances or risks.
(c) Each Guarantor hereby acknowledges and affirms that it
understands that to the extent the Guaranteed Obligations are secured by Real
Property located in the State of California, such Guarantor shall be liable for
the full amount of its liability hereunder notwithstanding foreclosure on such
Real Property by trustee sale or any other reason impairing such Guarantor's or
any Secured Creditors' right to proceed against the Borrower or any other
guarantor of the Guaranteed Obligations. In accordance with Section 2856 of the
California Civil Code, each Guarantor hereby waives:
(i) all rights of subrogation, reimbursement, indemnification,
and contribution and any other rights and defenses that are or may
become available to such Guarantor by reason of Sections 2787 to 2855,
inclusive, 2899 and 3433 of the California Civil Code;
(ii) all rights and defenses that such Guarantor may have
because the Guaranteed Obligations are secured by Real Property located
in the State of California. This means, among other things: (A) the
Secured Creditors may collect from such Guarantors without first
foreclosing on any real or personal property collateral pledged by the
Borrower or any other Credit Party; and (B) if the Secured Creditors
foreclose on any Real Property collateral pledged by the Borrower or
any other Credit Party, (1) the amount of the Guaranteed Obligations
may be reduced only by the price for which that collateral is sold at
the foreclosure sale, even if the collateral is worth more than the
sale price, and (2) the Secured Creditors may collect from such
Guarantor even if the Secured Creditors, by foreclosing on the Real
Property collateral, have destroyed any right such Guarantor may have
to collect from the Borrower. This is an unconditional and irrevocable
waiver of any rights and defenses such Guarantor may have because the
Guaranteed Obligations are secured by Real Property. These rights and
defenses include, but are not limited to, any rights or defenses based
upon Section 580a, 580b, 580d or 726 of the California Code of Civil
Procedure; and
6
<PAGE>
(iii) all rights and defenses arising out of an election of
remedies by the Secured Creditors, even though that election of
remedies, such as a nonjudicial foreclosure with respect to security
for the Guaranteed Obligations, has destroyed such Guarantor's rights
of subrogation and reimbursement against the Borrower by the operation
of Section 580d of California the Code of Civil Procedure or otherwise.
Each Guarantor warrants and agrees that each of the waivers
set forth above is made with full knowledge of its significance and consequences
and that if any of such waivers are determined to be contrary to any applicable
law or public policy, such waivers shall be effective only to the maximum extent
permitted by law.
10. The Secured Creditors agree that this Guaranty may be
enforced only by the action of the Administrative Agent or the Collateral Agent
and that no other Secured Creditors shall have any right individually to seek to
enforce or to enforce this Guaranty or to realize upon the security to be
granted by the Security Documents, it being understood and agreed that such
rights and remedies may be exercised by the Administrative Agent or the
Collateral Agent or, after all the Credit Document Obligations have been paid in
full, by the holders of at least a majority of the outstanding Other
Obligations, as the case may be, for the benefit of the Secured Creditors upon
the terms of this Guaranty and the Security Documents. The Secured Creditors
further agree that this Guaranty may not be enforced against any director,
officer, employee, partner or stockholder of any Guarantor (except to the extent
such partner or stockholder is also a Guarantor hereunder).
11. In order to induce the Lenders to make Loans to, and issue
Letters of Credit for the account of, the Borrower pursuant to the Credit
Agreement, and in order to induce the Other Creditors to execute, deliver and
perform the Interest Rate Protection Agreements or Other Hedging Agreements,
each Guarantor represents, warrants and covenants that:
(a) Such Guarantor (i) is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
organization, (ii) has the Company power and authority to own its
property and assets and to transact the business in which it is engaged
and presently proposes to engage and (iii) is duly qualified and is
authorized to do business and is in good standing in each jurisdiction
where the conduct of its business requires such qualification except
for failures to be so qualified which, individually or in the
aggregate, could not reasonably be expected to have a material adverse
effect on the business, operations, financial condition or prospects of
Holdings and its Subsidiaries taken as a whole.
(b) Such Guarantor has the Company power and authority to
execute, deliver and perform the terms and provisions of this Guaranty
and each other Credit Document to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and
performance by it of this Guaranty and each such other Credit Document.
Such Guarantor has duly executed and delivered this Guaranty and each
other Credit Document to which it is a party, and this Guaranty and
each such other Credit Document
7
<PAGE>
constitutes the legal, valid and binding obligation of such
Guarantor enforceable in accordance with its terms, except to the
extent that the enforceability hereof or thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or
at law).
(c) Neither the execution, delivery or performance by such
Guarantor of this Guaranty or any other Credit Document to which it is
a party, nor compliance by it with the terms and provisions hereof and
thereof, will materially or adversely (i) contravene any provision of
any applicable law, statute, rule or regulation or any applicable
order, writ, injunction or decree of any court or governmental
instrumentality, (ii) conflict with or result in any breach of any of
the terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the
Security Documents) upon any of the property or assets of such
Guarantor or any of its Subsidiaries pursuant to the terms of any
material indenture, mortgage, deed of trust, loan agreement, credit
agreement, or any other material agreement, contract or instrument to
which such Guarantor or any of its Subsidiaries is a party or by which
it or any of its property or assets is bound or to which it may be
subject or (iii) violate any provision of the certificate of
incorporation or by-laws (or equivalent organizational documents) of
such Guarantor or any of its Subsidiaries.
(d) No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except as
have been obtained or made), or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required to
authorize, or is required for, (i) the execution, delivery and
performance of this Guaranty by such Guarantor or any other Credit
Document to which such Guarantor is a party or (ii) the legality,
validity, binding effect or enforceability of this Guaranty or any
other Credit Document to which such Guarantor is a party.
(e) There are no actions, suits or proceedings pending or
threatened (i) with respect to this Guaranty or any other Credit
Document to which such Guarantor is a party or (ii) with respect to
such Guarantor that could reasonably be expected to materially and
adversely affect (a) the business, operations, financial condition or
prospects of Holdings and its Subsidiaries taken as a whole or (b) the
rights or remedies of the Secured Creditors hereunder or under the
other Credit Documents to which such Guarantor is a party or the
ability of such Guarantor to perform its respective obligations to the
Secured Creditors hereunder and under the other Credit Documents to
which it is a party.
12. Each Guarantor covenants and agrees that on and after the
Effective Date and until the termination of the Total Revolving Loan Commitment
and all Interest Rate Protection Agreements and Other Hedging Agreements
constituting a Guaranteed Obligation of the Borrower and when no Note or Letter
of Credit remains outstanding and all Guaranteed Obligations have been paid in
full, such Guarantor will comply, and will cause each of its
8
<PAGE>
Subsidiaries to comply, with all of the applicable provisions, covenants and
agreements contained in Sections 8 and 9 of the Credit Agreement, and will
take, or will refrain from taking, as the case may be, all actions that are
necessary to be taken or not taken so that it is not in violation of any
provision, covenant or agreement contained in Section 8 or 9 of the Credit
Agreement, and so that no Default or Event of Default, is caused by the
actions of such Guarantor or any of its Subsidiaries.
13. The Guarantors hereby jointly and severally agree to pay
all reasonable out-of-pocket costs and expenses of each Secured Creditor in
connection with the enforcement of this Guaranty and of the Administrative Agent
in connection with any amendment, waiver or consent relating hereto (including
in each case, without limitation, the reasonable fees and disbursements of
counsel employed by each Secured Creditor).
14. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Secured Creditors
and their successors and assigns.
15. Neither this Guaranty nor any provision hereof may be
changed, waived, discharged or terminated except with the written consent of
each Guarantor directly affected thereby and with the written consent of the
Required Secured Creditors (as defined in the Security Agreement); PROVIDED,
that any change, waiver, modification or variance affecting the rights and
benefits of a single Class (as defined below) of Secured Creditors (and not all
Secured Creditors in a like or similar manner) shall also require the written
consent of the Requisite Creditors (as defined below) of such Class of Secured
Creditors (it being understood that the addition or release of any Guarantor
hereunder shall not constitute a change, waiver, discharge or termination
affecting any Guarantor other than the Guarantor so added or released). For the
purpose of this Guaranty, the term "Class" shall mean each class of Secured
Creditors, I.E., whether (x) the Lender Creditors as holders of the Credit
Document Obligations or (y) the Other Creditors as the holders of the Other
Obligations. For the purpose of this Guaranty, the term "Requisite Creditors" of
any Class shall mean (x) with respect to the Credit Document Obligations, the
Required Lenders and (y) with respect to the Other Obligations, the holders of
at least a majority amount of all obligations outstanding from time to time
under the Interest Rate Protection or Other Hedging Agreements, but only if such
Interest Rate Protection Agreement or Other Hedging Agreement constitutes a
Guaranteed Obligation of the Borrower.
16. Each Guarantor acknowledges that an executed (or
conformed) copy of each of the Credit Documents and Interest Rate Protection
Agreements or Other Hedging Agreements has been made available to its principal
executive officers and such officers are familiar with the contents thereof.
17. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Secured Creditor Law) and not by way of limitation of any such
rights, upon the occurrence and during the continuance of an Event of Default
(such term to mean and include any "Event of Default" as defined in the
9
<PAGE>
Credit Agreement or any payment default under any Interest Rate Protection
Agreement or Other Hedging Agreement, but only if such Interest Rate
Protection Agreement or Other Hedging Agreement constitutes a Guaranteed
Obligation of the Borrower, continuing after any applicable grace period),
each Secured Creditor is hereby authorized, at any time or from time to time,
without notice to any Guarantor or to any other Person, any such notice being
expressly waived, to set off and to appropriate and apply any and all
deposits (general or special) and any other indebtedness at any time held or
owing by such Secured Creditor to or for the credit or the account of such
Guarantor, against and on account of the obligations and liabilities of such
Guarantor to such Secured Creditor under this Guaranty, irrespective of
whether or not such Secured Creditor shall have made any demand hereunder and
although said obligations, liabilities, deposits or claims, or any of them,
shall be contingent or unmatured. Notwithstanding anything to the contrary
contained in this Section 17, no Secured Creditor shall exercise any such
right of set-off without the prior consent of the Administrative Agent or the
Required Secured Creditors so long as the Guaranteed Obligations shall be
secured by any Real Property located in the State of California, it being
understood and agreed, however, that this sentence is for the sole benefit of
the Secured Creditors and may be amended, modified or waived in any respect
by the Required Secured Creditors without the requirements of prior notice to
or consent by any Credit Party and does not constitute a waiver of any rights
against any Credit party or against any Collateral.
18. All notices, requests, demands or other communications
pursuant hereto shall be deemed to have been duly given or made when delivered
to the Person to which such notice, request, demand or other communication is
required or permitted to be given or made under this Guaranty, addressed to such
party at (i) in the case of any Lender Creditor, as provided in the Credit
Agreement, (ii) in the case of any Guarantor, at the address set forth opposite
such Guarantor's signature below and (iii) in the case of any Other Creditor, at
such address as such Other Creditor shall have specified in writing to the
Guarantors; or in any case at such other address as any of the Persons listed
above may hereafter notify the others in writing.
19. If claim is ever made upon any Secured Creditor for
repayment or recovery of any amount or amounts received in payment or on account
of any of the Guaranteed Obligations and any of the aforesaid payees repays all
or part of said amount by reason of (i) any judgment, decree or order of any
court or administrative body having jurisdiction over such payee or any of its
property or (ii) any settlement or compromise of any such claim effected by such
payee with any such claimant (including the Borrower) then and in such event
each Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon such Guarantor, notwithstanding any revocation
hereof or other instrument evidencing any liability of the Borrower, and such
Guarantor shall be and remain liable to the aforesaid payees hereunder for the
amount so repaid or recovered to the same extent as if such amount had never
originally been received by any such payee.
20. (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
SECURED CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE
10
<PAGE>
OF NEW YORK. Any legal action or proceeding with respect to this Guaranty or
any other Credit Document to which any Guarantor is a party may be brought in
the courts of the State of New York or of the United States of America for
the Southern District of New York, and, by execution and delivery of this
Guaranty, each Guarantor hereby irrevocably accepts for itself and in respect
of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. Each Guarantor hereby further irrevocably waives any claim
that any such court lacks personal jurisdiction over such Guarantor, and
agrees not to plead or claim in any legal action or proceeding with respect
to this Guaranty or any other Credit Document to which such Guarantor is a
party brought in any of the aforesaid courts that any such court lacks
personal jurisdiction over such Guarantor. Each Guarantor further irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, to such Guarantor at its address set
forth opposite its signature below, such service to become effective 30 days
after such mailing. Each Guarantor hereby irrevocably waives any objection to
such service of process and further irrevocably waives and agrees not to
plead or claim in any action or proceeding commenced hereunder or under any
other Credit Document to which such Guarantor is a party that such service of
process was in any way invalid or ineffective. Nothing herein shall affect
the right of any of the Secured Creditors to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against each Guarantor in any other jurisdiction.
(b) Each Guarantor hereby irrevocably waives (to the fullest
extent permitted by applicable law) any objection which it may now or hereafter
have to the laying of venue of any of the aforesaid actions or proceedings
arising out of or in connection with this Guaranty or any other Credit Document
to which such Guarantor is a party brought in the courts referred to in clause
(a) above and hereby further irrevocably waives and agrees not to plead or claim
in any such court that such action or proceeding brought in any such court has
been brought in an inconvenient forum.
(c) EACH GUARANTOR AND EACH SECURED CREDITOR (BY ITS
ACCEPTANCE OF THE BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL
RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS GUARANTY, THE OTHER CREDIT DOCUMENTS TO WHICH SUCH
GUARANTOR IS A PARTY OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
21. In the event that all of the capital stock of one or more
Guarantors is sold or otherwise disposed of or liquidated in compliance with the
requirements of Section 9.02 of the Credit Agreement (or such sale or other
disposition has been approved in writing by the Required Secured Creditors) and
the proceeds of such sale, disposition or liquidation are applied in accordance
with the provisions of the Credit Agreement, to the extent applicable, such
Guarantor shall upon consummation of such sale or other disposition (except to
the extent that such sale or disposition is to the Borrower or another
Subsidiary thereof) be released from this Guaranty automatically and without
further action and this Guaranty shall, as to each such Guarantor or
11
<PAGE>
Guarantors, terminate, and have no further force or effect, and upon the
request of Borrower, the Administrative Agent, on behalf of the Secured
Creditors, shall acknowledge, in writing, the termination of this Guaranty
(it being understood and agreed that the sale of one or more Persons that
own, directly or indirectly, all of the capital stock of any Guarantor shall
be deemed to be a sale of such Guarantor for the purposes of this Section 21).
22. At any time a payment in respect of the Guaranteed
Obligations is made under this Guaranty, the right of contribution of each
Guarantor against each other Guarantor shall be determined as provided in the
immediately following sentence, with the right of contribution of each Guarantor
to be revised and restated as of each date on which a payment (a "Relevant
Payment") is made on the Guaranteed Obligations under this Guaranty. At any time
that a Relevant Payment is made by a Guarantor that results in the aggregate
payments made by such Guarantor in respect of the Guaranteed Obligations to and
including the date of the Relevant Payment exceeding such Guarantor's
Contribution Percentage (as defined below) of the aggregate payments made by all
Guarantors in respect of the Guaranteed Obligations to and including the date of
the Relevant Payment (such excess, the "Aggregate Excess Amount"), each such
Guarantor shall have a right of contribution against each other Guarantor who
has made payments, in respect of the Guaranteed Obligations to and including the
date of the Relevant Payment, in an aggregate amount less than such other
Guarantor's Contribution Percentage of the aggregate payments made to and
including the date of the Relevant Payment by all Guarantors in respect of the
Guaranteed Obligations (the aggregate amount of such deficit, the "Aggregate
Deficit Amount") in an amount equal to (x) a fraction the numerator of which is
the Aggregate Excess Amount of such Guarantor and the denominator of which is
the Aggregate Excess Amount of all Guarantors multiplied by (y) the Aggregate
Deficit Amount of such other Guarantor. A Guarantor's right of contribution
pursuant to the preceding sentences shall arise at the time of each computation,
subject to adjustment to the time of any subsequent computation; PROVIDED, that
no Guarantor may take any action to enforce such right until the Guaranteed
Obligations have been irrevocably paid in full in cash, it being expressly
recognized and agreed by all parties hereto that any Guarantor's right of
contribution arising pursuant to this Section 22 against any other Guarantor
shall be expressly junior and subordinate to such other Guarantor's obligations
and liabilities in respect of the Guaranteed Obligations and any other
obligations owing under this Guaranty. As used in this Section 22: (i) each
Guarantor's "Contribution Percentage" shall mean the percentage obtained by
dividing (x) the Adjusted Net Worth (as defined below) of such Guarantor by (y)
the aggregate Adjusted Net Worth of all Guarantors; (ii) the "Adjusted Net
Worth" of each Guarantor shall mean the greater of (x) the Net Worth (as defined
below) of such Guarantor and (y) zero; and (iii) the "Net Worth" of each
Guarantor shall mean the amount by which the fair salable value of such
Guarantor's assets on the date of any Relevant Payment exceeds its existing
debts and other liabilities (including contingent liabilities, but without
giving effect to any Guaranteed Obligations arising under this Guaranty) on such
date. All parties hereto recognize and agree that, except for any right of
contribution arising pursuant to this Section 22, each Guarantor who makes any
payment in respect of the Guaranteed Obligations shall have no right of
contribution or subrogation against any other Guarantor in respect of such
payment until all of the Guaranteed Obligations have been irrevocably paid in
full in cash. Each of the Guarantors recognizes and acknowledges that the rights
to contribution
12
<PAGE>
arising hereunder shall constitute an asset in favor of the party entitled to
such contribution. In this connection, each Guarantor has the right to waive
its contribution right against any Guarantor to the extent that after giving
effect to such waiver such Guarantor would remain solvent, in the
determination of the Required Lenders.
23. Each Guarantor and each Secured Creditor (by its
acceptance of the benefits of this Guaranty) hereby confirms that it is its
intention that this Guaranty not constitute fraudulent transfer or conveyance
for purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act of
any similar Federal or state law. To effectuate the foregoing intention, each
Guarantor and each Secured Creditor (by its acceptance of the benefits of this
Guaranty) hereby irrevocably agrees that the Guaranteed Obligations guaranteed
by such Guarantor shall be limited to such amount as will, after giving effect
to such maximum amount and all other (contingent or otherwise) liabilities of
such Guarantor that are relevant under such laws, and after giving effect to any
rights to contribution pursuant to any agreement providing for an equitable
contribution among such Guarantor and the other Guarantors, result in the
Guaranteed Obligations of such Guarantor in respect of such maximum amount not
constituting a fraudulent transfer or conveyance.
24. This Guaranty may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Guarantors and the
Administrative Agent.
25. All payments made by any Guarantor hereunder will be made
without setoff, counterclaim or other defense and on the same basis as payments
are made by the Borrower under Sections 4.03 and 4.04 of the Credit Agreement.
26. It is understood and agreed that any Subsidiary of
Holdings that is required to execute a counterpart of this Guaranty after the
date hereof pursuant to the Credit Agreement shall automatically become a
Guarantor hereunder by executing a counterpart hereof and delivering the same to
the Administrative Agent.
* * *
13
<PAGE>
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to
be executed and delivered as of the date first above written.
<TABLE>
<S> <C>
Address:
c/o Information Holdings, Inc. CRC PRESS, L.L.C.
2777 Summer Street as a Guarantor
Suite 209
Stamford, CT 06905
Attn: Vincent Chippari By:__________________________
Telephone No.: (203) 961-9208 Name:
Telecopier No.: (203) 961-1431 Title:
c/o Information Holdings, Inc. MICROPATENT, L.L.C.
2777 Summer Street as a Guarantor
Suite 209
Stamford, CT 06905
Attn: Vincent Chippari By:__________________________
Telephone No.: (203) 961-9208 Name:
Telecopier No.: (203) 961-1431 Title:
c/o Information Holdings, Inc. MASTER DATA CENTER, INC.
2777 Summer Street as a Guarantor
Suite 209
Stamford, CT 06905
Attn: Vincent Chippari By:__________________________
Telephone No.: (203) 961-9208 Name:
Telecopier No.: (203) 961-1431 Title:
c/o Information Holdings, Inc. CRC PRESS UK, L.L.C.
2777 Summer Street as a Guarantor
Suite 209
Stamford, CT 06905
Attn: Vincent Chippari By:__________________________
Telephone No.: (203) 961-9208 Name:
Telecopier No.: (203) 961-1431 Title:
14
<PAGE>
c/o Information Holdings, Inc. OPTIPAT, INC.
2777 Summer Street as a Guarantor
Suite 209
Stamford, CT 06905
Attn: Vincent Chippari By:__________________________
Telephone No.: (203) 961-9208 Name:
Telecopier No.: (203) 961-1431 Title:
<S> <C>
c/o Information Holdings, Inc. MICROPATENT UK, L.L.C.
2777 Summer Street as a Guarantor
Suite 209
Stamford, CT 06905
Attn: Vincent Chippari By:__________________________
Telephone No.: (203) 961-9208 Name:
Telecopier No.: (203) 961-1431 Title:
Accepted and Agreed to:
BANKERS TRUST COMPANY,
as Administrative Agent
By______________________
Name:
Title:
</TABLE>
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 2,890
<SECURITIES> 0
<RECEIVABLES> 20,760
<ALLOWANCES> 2,824
<INVENTORY> 5,240
<CURRENT-ASSETS> 29,822
<PP&E> 7,484
<DEPRECIATION> 3,045
<TOTAL-ASSETS> 134,799
<CURRENT-LIABILITIES> 27,642
<BONDS> 2,484
0
0
<COMMON> 169
<OTHER-SE> 88,188
<TOTAL-LIABILITY-AND-EQUITY> 134,799
<SALES> 39,865
<TOTAL-REVENUES> 39,865
<CGS> 10,590
<TOTAL-COSTS> 10,590
<OTHER-EXPENSES> 18
<LOSS-PROVISION> 1,477
<INTEREST-EXPENSE> 210
<INCOME-PRETAX> 5,955
<INCOME-TAX> 2,449
<INCOME-CONTINUING> 3,506
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,506
<EPS-BASIC> 0.21
<EPS-DILUTED> 0.20
</TABLE>
