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EXHIBIT 10.7
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CREDIT AGREEMENT
among
RC TRANSACTION CORP.,
RCLLC ACQUISITION CORP.,
RE:SOURCES CONNECTION LLC,
VARIOUS LENDERS,
BANKERS TRUST COMPANY,
as ADMINISTRATIVE AGENT and LEAD ARRANGER,
BANKBOSTON, N.A.,
as SYNDICATION AGENT,
and
U.S. BANK NATIONAL ASSOCIATION,
as DOCUMENTATION AGENT
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Dated as of April 1, 1999
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TABLE OF CONTENTS
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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....................................................................................... 5
1.06 Conversions................................................................................. 6
1.07 Pro Rata Borrowings......................................................................... 7
1.08 Interest.................................................................................... 7
1.09 Interest Periods............................................................................ 8
1.10 Increased Costs, Illegality, etc............................................................ 9
1.11 Compensation................................................................................ 11
1.12 Change of Lending Office.................................................................... 11
1.13 Replacement of Lenders...................................................................... 11
SECTION 2. Letters of Credit......................................................................... 12
2.01 Letters of Credit........................................................................... 12
2.02 Maximum Letter of Credit Outstandings; Final Maturities..................................... 13
2.03 Letter of Credit Requests; Minimum Stated Amount............................................ 13
2.04 Letter of Credit Participations............................................................. 14
2.05 Agreement to Repay Letter of Credit Drawings................................................ 16
2.06 Increased Costs............................................................................. 17
SECTION 3. Commitment Commission; Fees; Reductions of Commitment..................................... 17
3.01 Fees........................................................................................ 17
3.02 Voluntary Termination of Unutilized Revolving Loan Commitments.............................. 18
3.03 Mandatory Reduction of Commitments.......................................................... 19
SECTION 4. Prepayments; Payments; Taxes.............................................................. 20
4.01 Voluntary Prepayments....................................................................... 20
4.02 Mandatory Repayments and Commitment Reductions.............................................. 21
4.03 Method and Place of Payment................................................................. 24
4.04 Net Payments................................................................................ 25
SECTION 5. Conditions Precedent to Credit Events on the Initial Borrowing Date....................... 27
5.01 Execution of Agreement; Notes............................................................... 27
5.02 Officer's Certificate....................................................................... 27
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5.03 Opinions of Counsel......................................................................... 27
5.04 Corporate Documents; Proceedings; etc. ..................................................... 27
5.05 Plans; Shareholders' Agreements; Management Agreements; Employment
Agreements; Non-Compete Agreements; Collective Bargaining Agreements;
Tax Sharing Agreements; Existing Indebtedness Agreements.................................. 28
5.06 Consummation of the Transaction............................................................. 29
5.07 Adverse Change, etc. ....................................................................... 30
5.08 Litigation.................................................................................. 30
5.09 Pledge Agreement............................................................................ 30
5.10 Security Agreement.......................................................................... 30
5.11 Subsidiaries Guaranty....................................................................... 31
5.12 Financial Statements; Pro Forma Balance Sheet; Projections.................................. 31
5.13 Solvency Letter; Insurance Certificates..................................................... 31
5.14 Fees, etc. ................................................................................. 31
SECTION 6. Conditions Precedent to All Credit Events................................................. 31
6.01 No Default; Representations and Warranties.................................................. 32
6.02 Notice of Borrowing; Letter of Credit Request............................................... 32
SECTION 7. Representations, Warranties and Agreements................................................ 32
7.01 Organizational Status....................................................................... 32
7.02 Organizational and Other Power and Authority................................................ 33
7.03 No Violation................................................................................ 33
7.04 Approvals................................................................................... 33
7.05 Financial Statements; Financial Condition; Undisclosed Liabilities; Projections;
etc....................................................................................... 33
7.06 Litigation.................................................................................. 35
7.07 True and Complete Disclosure................................................................ 35
7.08 Use of Proceeds; Margin Regulations......................................................... 35
7.09 Tax Returns and Payments.................................................................... 36
7.10 Compliance with ERISA....................................................................... 36
7.11 The Security Documents...................................................................... 37
7.12 Representations and Warranties in the Documents............................................. 38
7.13 Capitalization.............................................................................. 38
7.14 Subsidiaries................................................................................ 39
7.15 Compliance with Statutes, etc. ............................................................. 39
7.16 Investment Company Act...................................................................... 39
7.17 Public Utility Holding Company Act.......................................................... 39
7.18 Environmental Matters....................................................................... 39
7.19 Labor Relations............................................................................. 40
7.20 Properties.................................................................................. 40
7.21 Patents, Licenses, Franchises and Formulas.................................................. 41
7.22 Indebtedness................................................................................ 41
7.23 Merger...................................................................................... 41
7.24 Insurance................................................................................... 41
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(ii)
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7.25 Year 2000.................................................................................. 41
7.26 Special Purpose Corporation................................................................ 42
7.27 Subordination.............................................................................. 42
SECTION 8. Affirmative Covenants.................................................................... 42
8.01 Information Covenants...................................................................... 42
(a) Monthly Reports...................................................................... 42
(b) Quarterly Financial Statements....................................................... 42
(c) Annual Financial Statements.......................................................... 43
(d) Management Letters................................................................... 43
(e) Budgets and Projections.............................................................. 43
(f) Officer's Certificates............................................................... 43
(g) Notice of Default or Litigation...................................................... 44
(h) Other Reports and Filings............................................................ 44
(i) Environmental Matters................................................................ 44
(j) Other Information.................................................................... 45
8.02 Books, Records and Inspections; Annual Meetings............................................ 45
8.03 Insurance; Good Repair..................................................................... 45
8.04 Organizational Franchises.................................................................. 46
8.05 Compliance with Statutes, etc.............................................................. 46
8.06 Compliance with Environmental Laws......................................................... 46
8.07 ERISA...................................................................................... 47
8.08 End of Fiscal Years; Fiscal Quarters....................................................... 48
8.09 Performance of Obligations................................................................. 48
8.10 Payment of Taxes........................................................................... 48
8.11 Interest Rate Protection................................................................... 48
8.12 Additional Security; Further Assurances.................................................... 48
8.13 Information Systems and Equipment.......................................................... 49
8.14 Merger..................................................................................... 49
8.15 Contributions.............................................................................. 49
8.16 Foreign Subsidiaries Security.............................................................. 50
8.17 Qualified Preferred Stock.................................................................. 50
8.18 Holdings Subordinated Notes................................................................ 50
SECTION 9. Negative Covenants....................................................................... 51
9.01 Liens...................................................................................... 51
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc..................................... 53
9.03 Dividends.................................................................................. 55
9.04 Indebtedness............................................................................... 56
9.05 Advances, Investments and Loans............................................................ 57
9.06 Transactions with Affiliates............................................................... 59
9.07 Capital Expenditures....................................................................... 60
9.08 Consolidated Interest Coverage Ratio....................................................... 61
9.09 Maximum Leverage Ratio .................................................................... 62
9.10 Minimum Consolidated EBITDA................................................................ 63
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(iii)
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9.11 Limitations on Payments and Modification of Certain Indebtedness;
Modifications of Certificate of Incorporation, By-Laws and Certain Other
Agreements; etc.......................................................................... 64
9.12 Limitation on Certain Restrictions on Subsidiaries......................................... 65
9.13 Limitation on Issuance of Capital Stock.................................................... 65
9.14 Business................................................................................... 65
9.15 Limitation on Creation of Subsidiaries..................................................... 66
SECTION 10. Events of Default........................................................................ 66
10.01 Payments................................................................................... 66
10.02 Representations, etc....................................................................... 66
10.03 Covenants.................................................................................. 66
10.04 Default Under Other Agreements............................................................. 66
10.05 Bankruptcy, etc............................................................................ 67
10.06 ERISA...................................................................................... 67
10.07 Security Documents......................................................................... 68
10.08 Guaranties................................................................................. 68
10.09 Judgments.................................................................................. 68
10.10 Change of Control.......................................................................... 68
10.11 Additional Financing....................................................................... 68
10.12 Transition Services Agreement.............................................................. 69
SECTION 11. Definitions and Accounting Terms......................................................... 69
11.01 Defined Terms.............................................................................. 69
SECTION 12. The Agents............................................................................... 90
12.01 Appointment................................................................................ 90
12.02 Nature of Duties........................................................................... 90
12.03 Lack of Reliance on the Agents............................................................. 91
12.04 Certain Rights of the Agents............................................................... 91
12.05 Reliance................................................................................... 91
12.06 Indemnification............................................................................ 91
12.07 Each Agent in its Individual Capacity...................................................... 92
12.08 Holders.................................................................................... 92
12.09 Resignation by the Administrative Agent or the Documentation Agent......................... 92
SECTION 13. Miscellaneous............................................................................ 93
13.01 Payment of Expenses, etc................................................................... 93
13.02 Right of Setoff............................................................................ 94
13.03 Notices.................................................................................... 94
13.04 Benefit of Agreement; Assignments; Participations.......................................... 94
13.05 No Waiver, Remedies Cumulative............................................................. 96
13.06 Payments Pro Rata.......................................................................... 97
13.07 Calculations; Computations; Accounting Terms............................................... 97
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(iv)
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13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL....................................................................... 98
13.09 Counterparts............................................................................... 99
13.10 Effectiveness.............................................................................. 99
13.11 Headings Descriptive....................................................................... 99
13.12 Amendment or Waiver; etc................................................................... 99
13.13 Survival................................................................................... 100
13.14 Domicile of Loans.......................................................................... 100
13.15 Register................................................................................... 101
13.16 Confidentiality............................................................................ 101
13.17 Acknowledgment............................................................................. 102
SECTION 14. Holdings Guaranty....................................................................... 102
14.01 Guaranty.................................................................................. 102
14.02 Bankruptcy................................................................................ 103
14.03 Nature of Liability....................................................................... 103
14.04 Independent Obligation.................................................................... 103
14.05 Authorization............................................................................. 103
14.06 Reliance.................................................................................. 104
14.07 Subordination............................................................................. 104
14.08 Waiver.................................................................................... 105
14.09 Nature of Liability....................................................................... 105
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SCHEDULE I Commitments
SCHEDULE II Lender Addresses
SCHEDULE III Existing Liens
SCHEDULE IV Subsidiaries
SCHEDULE V Existing Investments
SCHEDULE VI Existing Indebtedness
SCHEDULE VII Insurance
EXHIBIT A Notice of Borrowing
EXHIBIT B-I Term Note
EXHIBIT B-2 Revolving Note
EXHIBIT B-3 Swingline Note
EXHIBIT C Letter of Credit Request
EXHIBIT D Section 4.04(b)(ii) Certificate
EXHIBIT E-I Opinion of Simpson Thacher & Bartlett
EXHIBIT E-2 Opinion of O'Melveny & Meyers LLP
EXHIBIT F Officers' Certificate
EXHIBIT G Pledge Agreement
EXHIBIT H Security Agreement
EXHIBIT I Subsidiaries Guaranty
EXHIBIT J Solvency Certificate
(v)
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EXHIBIT K Assignment and Assumption Agreement
EXHIBIT L Intercompany Note
EXHIBIT M Evercore Letter Agreement
(vi)
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CREDIT AGREEMENT, dated as of April 1, 1999, among RC TRANSACTION
CORP., a Delaware corporation ("Holdings"), RCLLC ACQUISITION CORP., a Delaware
corporation ("Acquisition Corp."), RESOURCES CONNECTION LLC, a Delaware
limited liability company ("Resources"), the Lenders party hereto from time to
time, BANKERS TRUST COMPANY, as Administrative Agent and Lead Arranger (in such
capacity, the "Administrative Agent"), U.S. BANK NATIONAL ASSOCIATION, as
Documentation Agent (in such capacity, the "Documentation Agent"), and
BANKBOSTON, N.A., as Syndication Agent (in such capacity, the "Syndication
Agent") (all capitalized terms used herein and defined in Section 11 are used
herein as therein defined).
WITNESSETH:
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WHEREAS, subject to and upon the terms and conditions set forth
herein, the Lenders are willing to make available to the Borrower the respective
credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
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1.01 The Commitments. (a) Subject to and upon the terms and conditions
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set forth herein, each Lender with a Term Loan Commitment severally agrees to
make a term loan (each a "Term Loan" and, collectively, the "Term Loans") to the
Borrower, which Term Loans (i) only may be incurred by the Borrower on the
Initial Borrowing Date, (ii) 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
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Term Loans comprising the same Borrowing shall at all times be of the same Type,
and (iii) shall be made by each such Lender in that aggregate principal amount
which does not exceed the Term Loan Commitment of such Lender on the Initial
Borrowing Date (before giving effect to the termination thereof on such date
pursuant to Section 3.03(b)). Once repaid, Term Loans incurred hereunder may not
be reborrowed.
(b) Subject to and upon the terms and conditions set forth herein,
each Lender with a Revolving Loan Commitment severally agrees to make, at any
time and from time to time on or after the Initial Borrowing Date and prior to
the Revolving Loan 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
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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 such 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
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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 such Lenders at any time outstanding that
aggregate principal amount which, when added to the sum of (1) 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.
(c) 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 or after
the Initial Borrowing 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(c), (i) 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 (ii) the Swingline
Lender shall not make any Swingline Loan after it has received written notice
from the Borrower or the Required Lenders stating that a Default or an Event of
Default exists and is continuing until such time as the Swingline Lender have
received written notice (A) of rescission of all such notices from the party or
parties originally delivering such notice or notices or (B) of the waiver of
such Default or Event of Default by the Required Lenders.
(d) On any Business Day, the Swingline Lender may, in its sole
discretion, give notice to the RL 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
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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 RL
Lenders pro rata based on each such RL Lender's RL Percentage (determined before
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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
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Swingline Loans. Each RL 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 RL 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 RL Lenders to 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
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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 RL 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 for the
first three days and at the rate otherwise applicable to Revolving Loans
maintained as Base Rate Loans hereunder for each day thereafter.
1.02 Minimum Amount of Each Borrowing. The aggregate principal amount
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of each Borrowing of Loans under a respective Tranche shall not be less than the
Minimum Borrowing Amount applicable to such Tranche. More than one Borrowing may
occur on the same date, but at no time shall there be outstanding more than ten
Borrowings of Eurodollar Loans.
1.03 Notice, of Borrowing. (a) Whenever the Borrower desires to incur
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(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
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to have been given on a certain day only if given before 11:00 A.M. (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 Loans to be incurred pursuant to such Borrowing, the
date of such Borrowing (which shall be a Business Day), whether the Loans being
incurred pursuant to such Borrowing
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shall constitute Term Loans or Revolving Loans and whether the 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 which is required to make Loans of the
Tranche specified in the respective Notice of Borrowing, 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.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(d), 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(d).
(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 the Chairman of
the Board, the President, the Chief Financial Officer, the Vice President-
Finance or the Vice President-Administration of the Borrower, or from any other
authorized officer of the Borrower designated in writing by the Borrower to the
Administrative Agent as being authorized to give such notices, 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 12:00 Noon (New York time) on the
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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 1:00
P.M. (New York time) on the date specified in Section 1.01(d)), each Lender with
a Commitment of the respective Tranche will make available its pro rata portion
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(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 the Administrative Agent will, except in the case of Revolving Loans made
pursuant to a Mandatory Borrowing, make available to the Borrower at the Payment
Office (or such other account as directed by the Borrower in writing to the
Administrative Agent) 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
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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, the overnight Federal Funds
Rate for the first three days and at the interest rate otherwise applicable to
such Loans for each day thereafter 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.
1.05 Notes. (a) The Borrower's obligation to pay the principal of, and
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interest on, the Loans made by each Lender shall be evidenced in the Register
maintained by the Administrative Agent pursuant to Section 13.15 and shall, if
requested by such Lender, also be evidenced (i) if Term 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
"Term Note" and, collectively, the "Term Notes"), (ii) if Revolving Loans, by a
promissory note duly executed and delivered by the Borrower substantially in the
form of Exhibit B-2, with blanks appropriately completed in conformity herewith
(each a "Revolving Note" and, collectively, the "Revolving Notes"), and (iii) if
Swingline Loans, by a promissory note duly executed and delivered by the
Borrower substantially in the form Exhibit B-3, with blanks appropriately
completed in conformity herewith (the "Swingline Note").
(b) The Term Note issued to each Lender that has a Term Loan
Commitment or outstanding Term Loans shall (i) be executed by the Borrower, (ii)
be payable to such Lender or its registered assigns and be dated the Initial
Borrowing Date (or, if issued after the Initial Borrowing Date, be dated the
date of issuance thereof), (iii) be in a stated principal amount equal to the
Term Loans made by such Lender on the Initial Borrowing Date (or, if issued
after the Initial Borrowing Date, be in a stated principal amount equal to the
outstanding principal amount of Term Loans of such Lender at such time) and be
payable in the outstanding principal amount of Term Loans evidenced thereby,
(iv) mature on the Term Loan 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.
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(c) The Revolving Note issued to each Lender that has a Revolving
Loan Commitment or outstanding Revolving Loans shall (i) be executed by the
Borrower, (ii) be payable to such Lender or its registered assigns and be dated
the Initial Borrowing Date (or, if issued after the Initial Borrowing 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
Revolving Loan 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.
(d) 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 Initial Borrowing 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.
(e) 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 after the Initial Borrowing Date, all or a portion
equal to at least the Minimum Borrowing Amount of the outstanding principal
amount of Loans (other than Swingline Loans which may not be converted pursuant
to this Section 1.06) made pursuant to one or more Borrowings (so long as of the
same Tranche) of one or more Types of Loans into a Borrowing (of the same
Tranche) of another Type of 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 the Minimum Borrowing Amount applicable thereto, (ii) Base
Rate Loans may not be converted into Eurodollar Loans if a Default or an Event
of Default is in existence on the date of the conversion and either the
Administrative Agent or the Required Lenders, in its or their sole discretion,
shall have notified the Borrower that during such existence Base Rate Loan may
not be converted into Eurodollar Loans 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
11:00 A.M. (New York time) at
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<PAGE>
least three Business Days' prior notice (each a "Notice of Conversion")
specifying the Loans to be so converted, the Borrowing or Borrowings pursuant to
which such 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 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 Loans being converted.
1.07 Pro Rata Borrowings. All Borrowings of Term Loans and Revolving
-------------------
Loans under this Agreement shall be incurred from the Lenders pro rata on the
--- ----
basis of their Term Loan Commitments or Revolving Loan Commitments, as the case
may be. It is understood that no Lender shall be responsible for any default by
any other Lender of its obligation to make Loans hereunder and that each Lender
shall be obligated to make the Loans provided to be made by it hereunder,
regardless of the failure of any other Lender to make its 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 or 1.09, as applicable, at a rate per annum which
shall be equal to the sum of the Applicable Base Rate Margin 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 Eurodollar Rate Margin 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 shall, in each case, bear interest at a rate
per annum equal to the greater of (x) the rate which is 2% in excess of the rate
then borne by such Loans and (y) the rate which is 2% in excess of the rate
otherwise applicable to Base Rate Loans from time to time, and all other overdue
amounts payable hereunder shall bear interest at a rate per annum equal to the
rate which is 2% in excess of the rate otherwise applicable to Base Rate Loans
from time to time. Interest which accrues under 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 the first
day of such Interest Period (iii) in respect of each Loan, on any repayment or
prepayment (on the amount repaid or prepaid), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand; provided,
---------
however, that in the case of Base Rate Loans, interest shall not be payable
--------
pursuant to preceding clause (iii) at the time of any repayment or prepayment
thereof unless the respective repayment or prepayment is made either in
conjunction with a
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<PAGE>
permanent reduction of the Total Revolving Loan Commitment or with a repayment
or prepayment in full of all outstanding Loans of the respective Tranche.
(e) Upon each Interest Determination Date, the Administrative Agent
shall determine the Eurodollar Rate for each Interest Period applicable to the
respective 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, to the
extent available to all of the Lenders of a given Tranche, a nine or twelve-
month period, provided that (in each case):
--------
(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 a Default
or an Event of Default is then in existence if either the Administrative
Agent or the Required Lenders, in its or their sole discretion,shall have
notified the Borrower that Eurodollar Loans may not be incurred during such
existence;
(vi) no Interest Period in respect of any Borrowing of any Tranche
of Loans shall be selected which extends beyond the respective Maturity
Date for such Tranche of Loans; and
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<PAGE>
(vii) no Interest Period in respect of any Borrowing of Term Loans
shall be selected which extends beyond any date upon which a mandatory
repayment of Term Loans will be required to be made under Section 4.02(b)
if the aggregate principal amount of Term Loans which have Interest Periods
which will expire after such date Will be in excess of the aggregate
principal amount of Term Loans then outstanding less the aggregate amount
of such required repayment.
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 determinations 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 (other than with respect to Taxes to the extent covered
in Section 4.04) because of (x) any change since the Effective Date 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 Loans or 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 it is
organized or in which its principal office or applicable lending office is
located or any subdivision thereof or therein) 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 arising since the Effective
Date affecting the interbank Eurodollar 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 Effective
Date which materially and adversely affects the interbank Eurodollar
market;
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<PAGE>
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 pay to
such Lender, upon 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 sole 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, either (A) convert such
Borrowing from the affected Lender into a Borrowing of Base Rate Loans and with
the balance of such Borrowing to be made as Eurodollar Loans, or (B) cancel such
Borrowing, in either case, 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 Effective Date 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 the NAIC or 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 Commitments
hereunder or its obligations hereunder, then the Borrower shall pay to such
Lender, upon 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 (but without duplication of any amounts payable under Section 2.06). In
determining such additional amounts, each Lender will act reasonably and in good
faith and will use averaging and attribution methods which are
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<PAGE>
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.
1.11 Compensation. The Borrower shall compensate each Lender, upon its
------------
written request (which request shall set forth in reasonable detail the basis
for requesting such compensation), for all 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) 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 Eurodollar 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 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 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 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") each of whom shall be required to be
reasonably acceptable to the Administrative Agent, provided that (i)
---------
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<PAGE>
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 and/or the Replaced Lender)
pursuant to which the Replacement Lender shall acquire all of the Commitments
and outstanding 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 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 the 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 Note or Notes 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.
SECTION 2. Letters 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 Initial Borrowing Date
and prior to the 30th day prior to the Revolving Loan 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, and (y) for the account
of the Borrower and for the benefit of sellers of goods to the Borrower or any
of its Subsidiaries, an irrevocable trade letter of credit, in a form
customarily used by the Issuing Lender or in such other form as been approved by
such Issuing Lender (each such letter of credit, a "Letter of Credit" and,
collectively, the "Letters of Credit"). 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 Initial Borrowing Date and prior to the 30th day prior to the
Revolving Loan Maturity Date, following its receipt of
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the respective Letter of Credit Request, issue for the account of the Borrower,
one or more Letters of Credit, 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
hereunder) not in effect with respect to the Issuing Lender on the date
hereof, or any loss, cost or expense (for which the Issuing Lender is not
otherwise required to be reimbursed under this Agreement) 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; or
(ii) the Issuing Lender shall have received notice, from the
Borrower 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).
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 Oustandings (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) $1,000,000 or (y) when added to the sum of (I)
the aggregate principal amount of all Revolving Loans then outstanding and (II)
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 extendible for successive periods of up to 12 months, but, in each
case, not beyond the third Business Day prior to the Revolving Loan 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 (or such later date as may be agreed to by the Issuing Lender in its
sole discretion), (y) (A) in the case of standby Letters of Credit, three
Business Days prior to the Revolving Loan Maturity Date and (B) in the case of
trade Letters of Credit, 30 days prior to the Revolving Loan 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 two
Business Days' (or such shorter period as is acceptable to the Issuing Lender)
written notice thereof. Each notice be in the form of Exhibit C (each a "Letter
of Credit Request").
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<PAGE>
(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 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 shall, 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 the issuance of or
modification or amendment to any Letter of Credit, the Issuing Lender shall
promptly notify the Borrower, the Administrative Agent and each Participant of
such issuance, modification or amendment as the case may be. Notwithstanding
anything to the contrary contained in this Agreement, in the event that a Lender
Default exists, the Issuing Lender shall not be required to issue any Letter of
Credit 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
participation in Letters of Credit by the Defaulting Lender or Lenders,
including by cash collateralizing such Defaulting Lender's or Lenders' RL
Percentage of the Letter of Credit Outstandings.
(c) The initial Stated Amount of each Letter of Credit shall not be
less than $50,000 or such lesser amount as is 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 RL 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 with respect
thereto, 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
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 shall not create for the Issuing Lender any resulting
liability to the Borrower, any other Credit Party, any Lender or any other
Person unless such action is taken or omitted with gross negligence or willful
misconduct (as finally determined by a court of competent jurisdiction).
-14-
<PAGE>
(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 City 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 payment under any Letter of Credit on the date
required, as 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 such
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 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
Holdings 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
-15-
<PAGE>
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 Holdings or any Subsidiary of
Holdings 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 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 12:00
Noon (New York City 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 equal to the
Base Rate in effect from time to time plus the Applicable Base Rate Margin for
Revolving Loans; provided, however, to the extent such amounts are not
-------- -------
reimbursed prior to 12:00 Noon (New York City 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
equal to the Base Rate in effect from time to time plus the Applicable Base Rate
Margin for Revolving Loans plus 2%, 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 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 drawings under Letters of Credit
(each a "Drawing") (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 Holdings or any Subsidiary of
Holdings may have or have had against any Lender (including in its capacity as
the Issuing Lender or as a Participant), including, without limitation, any
defense based upon the failure of any drawing under a Letter of Credit to
conform to the terms of the Letter of Credit or
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<PAGE>
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 court of competent jurisdiction).
2.06 Increased Costs. If at any time after the Effective Date, 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 the NAIC or 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 or any Letter of Credit or such
Participant's participation therein; 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 Participant
hereunder or reduce the rate of return on its capital with respect to Letters of
Credit (except for Taxes to the extent covered by Section 4.04 and 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, upon 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 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 (but without duplication of any amounts payable under Section 1.10(c)).
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 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 RL Lender a commitment commission (the
"Commitment Commission") for the period from and including the Effective Date to
but excluding the Revolving Loan Maturity Date (or such earlier date on which
the Total Revolving Loan Commitment has been terminated) computed at a rate for
each day equal to 1/2 of 1% per annum on the daily average Unutilized Revolving
Loan Commitment of such Non-Defaulting Lender.
-17-
<PAGE>
Accrued Commitment Commission shall be due and payable quarterly in arrears on
each Quarterly Payment Date and on the date upon which the Total Revolving Loan
Commitment is terminated.
(b) The Borrower agrees to pay to the Administrative Agent for
distribution to each RL Lender (based on each such RL Lender's respective RL
Percentage) a fee in respect of each Letter of Credit (the "Letter of Credit
Fee") for the period from and including the date of issuance of such Letter of
Credit to and including the Expiration Date of such Letter of Credit, computed
at a rate per annum equal to the Applicable Eurodollar Rate Margin then in
effect with respect to Revolving Loans on the daily Stated Amount of each 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 on or
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 (the "Facing Fee") for
the period from and including the date of issuance of such Letter of Credit to
and including the Expiration Date of such Letter of Credit, computed at a rate
equal to 1/4 of 1% per annum on the daily 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 on or 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 each Agent, for its respective
account, such other fees as have been agreed to in writing by the Borrower, the
Administrative Agent and each such other Agent.
3.02 Voluntary Termination of Unutilized Revolving Loan 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
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<PAGE>
reduction shall apply proportionately to permanently reduce the Revolving Loan
Commitment of each RL 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 all of the Commitments of such Lender, so long as all 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 such Lender's RL Percentage of all
outstanding Letters of Credit is cash collateralized in a manner satisfactory to
the Administrative Agent and the Issuing Lender, 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.
3.03 Mandatory Reduction of Commitments. (a) The Total Commitment (and
----------------------------------
the Commitments of each Lender) shall terminate in its entirety on April 30,
1999 unless the Initial Borrowing Date has occurred on or before such date.
(b) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Term Loan Commitment (and the Term Loan
Commitment of each Lender) shall terminate in its entirety on the Initial
Borrowing Date (after giving effect to the incurrence of the Term Loans on such
date).
(c) 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 terminate in its entirety on the Revolving
Loan Maturity Date.
(d) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, on each date after the Initial Borrowing Date upon which a
mandatory repayment of Term Loans pursuant to any of Sections 4.02(c) through
(g), inclusive, is required (and exceeds in amount the aggregate principal
amount of Term Loans then outstanding) or would be required if Term Loans were
then outstanding, the Total Revolving Loan Commitment shall be permanently
reduced by the amount, if any, by which the amount required to be applied
pursuant to said Sections (determined as if an unlimited amount of Term Loans
were actually outstanding) exceeds the aggregate principal amount of Term Loans
then outstanding; provided that, notwithstanding the foregoing, once the Total
--------
Revolving Loan Commitment has been reduced to $5,000,000 or below, no further
reductions to the Total Revolving Loan Commitment pursuant to this Section
3.03(d) shall be required as a result of the event described in Section 4.02(f).
(e) Each reduction to the Total Term Loan Commitment and the Total
Revolving Loan Commitment shall be applied to proportionately reduce the Term
Loan
-19-
<PAGE>
Commitment and the Revolving Loan Commitment, as the case may be, of each Lender
with such a Commitment.
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 12:00 Noon (New York City 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, which
notice (in each case) shall specify whether Term Loans, Revolving Loans or
Swingline Loans shall be prepaid, 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, and which notice the Administrative Agent
shall, except in the case of Swingline Loans, promptly transmit to each of the
Lenders; (ii) (x) each partial prepayment of Term Loans pursuant to this Section
4.01(a) shall be in an aggregate principal amount of at least $100,000, (y) each
partial prepayment of Revolving Loans pursuant to this Section 4.01(a) shall be
in an aggregate principal amount of at least $100,000 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 Borrowing of Eurodollar Loans and any
election of an Interest Period with respect thereto given by the Borrower shall
have no force or effect; (iii) each prepayment pursuant to this Section 4.01(a)
in respect of any Loans made pursuant to a Borrowing shall be applied pro rata
--- ----
among such 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 as no Default or Event of Default then exists, be
applied to any Revolving Loan of a Defaulting Lender; and (iv) each voluntary
prepayment of principal of Term Loans pursuant to this Section 4.01 (a) shall be
applied to reduce the then remaining Scheduled Repayments on a pro rata basis
--- ----
(based upon the then remaining unpaid principal amounts of such Scheduled
Repayments after giving effect to all prior reductions thereto).
(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 Loans, together with accrued 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 (I) in the case of the repayment of Revolving
Loans of any Lender pursuant to this Section 4.01(b) the 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
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<PAGE>
deemed modified to reflect the changed Revolving Loan Commitments), (II) such
Lender's RL Percentage of all outstanding Letters of Credit is cash
collateralized in a manner satisfactory to the Administrative Agent and the
Issuing Lender and (III) 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 and Commitment Reductions. (a) On any day on
----------------------------------------------
which the sum of (I) the aggregate outstanding principal amount of all Revolving
Loans (after giving effect to all other repayments thereof on such date), (II)
the aggregate outstanding principal amount of all Swingline Loans (after giving
effect to all other repayments thereof on such date) and (III) the aggregate
amount of all Letter of Credit Outstandings exceeds the Total Revolving Loan
Commitment at such time, the Borrower shall prepay on such day the principal of
Swingline Loans and, after all Swingline Loans have been repaid in full or 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 at such time, 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) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each date set forth below, the Borrower shall be required to
repay that principal amount of the Term Loans, to the extent then outstanding,
as is set forth opposite such date below (each such repayment, as the same may
be reduced as provided in Sections 4.01(a) and 4.02(h), a "Scheduled
Repayment"):
<TABLE>
<CAPTION>
Scheduled Repayment Date Amount
------------------------ ------
<S> <C>
June 30, 1999 $ 375,000
September 30, 1999 $ 375,000
December 31, 1999 $ 375,000
March 31, 2000 $ 375,000
June 30, 2000 $1,000,000
September 30, 2000 $1,000,000
December 31, 2000 $1,000,000
March 31, 2001 $1,000,000
June 30, 2001 $1,187,500
September 30, 2001 $1,187,500
December 31, 2001 $1,187,500
March 31, 2002 $1,187,500
June 30, 2002 $1,312,500
September 30, 2002 $1,312,500
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C>
December 31, 2002 $1,312,500
March 31, 2003 $1,312,500
June 30, 2003 $1,250,000
Term Loan Maturity Date $1,250,000
</TABLE>
(c) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each date (or if not practicable to be accomplished on such
date, on the next succeeding Business Day) on or after the Initial Borrowing
Date upon which Holdings or any of its Subsidiaries receives any cash proceeds
from any capital contribution or any sale or issuance of its equity (other than
cash proceeds received (i) as part of the Equity Financing, (ii) from the
issuance by Holdings of shares of its common stock (including as a result of
the exercise of any options with regard thereto), or options to purchase shares
of its common stock, to officers, directors and employees of Holdings and its
Subsidiaries in an aggregate amount not to exceed $350,000 in any fiscal year of
Holdings, (iii) that are used to fund Capital Expenditures pursuant to Section
9.07(e) and/or Investments pursuant to Section 9.05(xii) in an aggregate amount
for all such cash proceeds not to exceed $500,000, (iv) that are used to fund
Capital Expenditures as, and to the extent, permitted by Section 9.07(f) or (v)
from equity contributions to, or purchases of capital stock from, any Subsidiary
of Holdings to the extent made by Holdings or another Subsidiary of Holdings),
an amount equal to 100% of the Net Equity Proceeds (or, if all outstanding Term
Loans have theretofore been repaid in full, 50% of the Net Equity Proceeds) of
such capital contribution or sale or issuance of equity shall be applied as a
mandatory repayment of principal of outstanding Term Loans in accordance with
the requirements of Sections 4.02(h) and (i).
(d) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each date on or after the Initial Borrowing 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), an
amount equal to 100% of the Net Debt Proceeds of the respective incurrence of
Indebtedness shall be applied as a mandatory repayment of principal of
outstanding Term Loans in accordance with the requirements of Sections 4.02(h)
and (i).
(e) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each date (or if not practicable to be accomplished on such
date, on the next succeeding Business Day) on or after the Initial Borrowing
Date upon which Holdings or any of its Subsidiaries receives any cash proceeds
from any Asset Sale, an amount equal to 100% of the Net Sale Proceeds therefrom
be applied as a mandatory repayment of principal of outstanding Term Loans in
accordance with the requirements of Sections 4.02(h) and (i); provided that with
--------
respect to no more $350,000 in the aggregate of Net Sale Proceeds from Asset
Sales in any fiscal year of Holdings, such Net Sale Proceeds shall not be
required to be so applied on such date so long as no Default or Event of Default
then exists and such Net Sale Proceeds shall be used to purchase assets used or
useful in the business of the Borrower and its Subsidiaries within 180 days
following the date of such Asset Sale, and provided further, that if all or any
----------------
portion of such Net Sale Proceeds not required to be applied to the repayment of
outstanding Term Loans are not so
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<PAGE>
reinvested in replacement assets within such 180-day period, such remaining
portion shall be applied on the last day of such period as a mandatory repayment
of principal of outstanding Term Loans as provided above in this Section 4.02(e)
without regard to this proviso.
(f) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each Excess Cash Payment Date, an amount equal to 75% of the
Excess Cash Flow (or, if all outstanding Term Loans have theretofore been repaid
in full, 50% of the Excess Cash Flow) for the relevant Excess Cash Payment
Period shall be applied as a mandatory repayment of principal of outstanding
Term Loans in accordance with the requirements of Sections 4.02(h) and (i).
(g) In addition to any other mandatory repayments pursuant to this
Section 4.02, within 10 days following each date on or after the Initial
Borrowing Date upon which Holdings or any of its Subsidiaries receives any cash
proceeds from any Recovery Event (other than a Recovery Event in which the cash
proceeds received therefrom are less than $100,000), an amount equal to 100% of
the Net Insurance Proceeds from such Recovery Event shall be applied as a
mandatory repayment of principal of outstanding Term Loans in accordance with
the requirements of Sections 4.02(h) and (i), provided that so long as no
--------
Default or Event of Default then exists, such Net Insurance Proceeds shall not
be required to be so applied on such date to the extent that Holdings or the
Borrower 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 180 days following the date of the receipt of such Net
Insurance Proceeds (which certificate shall set forth the estimates of the Net
Insurance Proceeds to be so expended), and provided further, that if all or any
----------------
portion of such Net Insurance Proceeds not required to be applied to the
repayment of outstanding Term Loans pursuant to the preceding proviso are not so
used within 180 days after the date of the receipt of such Net Insurance
Proceeds, such remaining portion shall be applied on the last day of such period
as a mandatory repayment of principal of outstanding Term Loans as provided
above in this Section 4.02(g) without regard to the preceding proviso.
(h) The amount of each principal repayment of Term Loans made as
required by Sections 4.02(c), (d), (e), (f) and (g) shall be applied to reduce
the then remaining Scheduled Repayments on a pro rata basis (based upon the then
--- ----
remaining unpaid principal amounts of such Scheduled Repayments after giving
effect to all prior reductions thereto).
(i) With respect to each repayment of Loans required by this Section
4.02, the Borrower may designate the Types of Loans of the respective Tranche
which are to be repaid and, in the case of Eurodollar Loans, the specific
Borrowing or Borrowings of the respective Tranche 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 of the respective Tranche with Interest Periods ending on
such date of required repayment and all Base Rate Loans of the respective
Tranche 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, 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
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Loans made pursuant to a Borrowing shall be applied pro rata among such Loans
--- ----
(based on the respective shares of the Lenders, if any, of the Loans with
respect to which such repayment is required pursuant to this Section 4.02). 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.
(j) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each date (or if not practicable to be accomplished on such
date, on the next succeeding Business Day) on which any cash proceeds are
received by Holdings as contemplated by Section 10.11, an amount equal to 100%
of such proceeds shall be applied on such date on a mandatory prepayment of any
outstanding Revolving Loans.
(k) Notwithstanding the foregoing provisions of this Section 4.02, if
at any time any repayment of the Loans pursuant to clause (c), (e) or (g) of
this Section 4.02 would result, after giving effect to the procedures set forth
in clause (i) of this Section 4.02, in the Borrower incurring breakage costs in
a material amount under Section 1.11 as a result of Eurodollar Loans being
prepaid other than on the last day of an Interest Period with respect thereto,
the Borrower may, so long as no Default or Event of Default shall have occurred
and be continuing, in its sole discretion, initially deposit a portion (up to
100%) of the amounts that otherwise would have been paid in respect of such
Eurodollar Loans with the Administrative Agent (which deposit must be equal in
amount to the amount of such Eurodollar Loans not immediately prepaid) to be
held as security for the Obligations of the Borrower pursuant to a cash
collateral agreement to be entered into on terms reasonably satisfactory to the
Administrative Agent, with such cash collateral to be directly applied upon the
occurrence of a Default or an Event of Default or the first occurrence
thereafter of the last day of an Interest Period with respect to such Eurodollar
Loans (or such earlier date or dates as shall be requested by the Borrower);
provided that (x) such unpaid Eurodollar Loans shall continue to bear interest
--------
in accordance with the applicable provisions hereof until such unpaid Eurodollar
Loans or the related portion of such Eurodollar Loans, as the case may be, have
or has been prepaid and (y) the provisions of this Section 4.02(k) shall not
apply to a mandatory repayment under clause (c) of this Section 4.02 if the
amount of such mandatory repayment equals or exceeds the lesser of (A) the
principal amount of all Loans then outstanding and (B) $5,000,000.
(l) Notwithstanding anything to the contrary contained in this
Agreement or in any other Credit Document, all then outstanding Loans of any
Tranche shall be repaid in full on the respective Maturity Date for such Tranche
of Loans.
4.03 Method and Place of Payment. Except as otherwise specifically
---------------------------
provided herein, all payments under 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 12:00 Noon (New York City 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.
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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 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 nonexcluded 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 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(b)
(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 as of such date to an exemption from or reduction in 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 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
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copies of Internal Revenue Service Form W-8 (or successor form) certifying to
such Lender's entitlement as of such date 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 Certificate,
in which case such Lender shall not be required to deliver any such Form or
Certificate pursuant to this Section 4.04(b). Notwithstanding anything to the
contrary contained in Section 4.04(a), but subject to Section 13.04(b) and 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) 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 Borrower the Internal Revenue Service Forms
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 and except
as set forth in Section 13.04(b), 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 as a result of any changes that are effective
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 amount 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 mount that the 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 consistent
-------
with the policies of such Lender, 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
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<PAGE>
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 such Lender to disclose any
confidential information to the Borrower (including, without limitation, such
Lender's tax returns).
SECTION 5. Conditions Precedent to Credit Events on the Initial
----------------------------------------------------
Borrowing Date. The obligation of each Lender to make Loans, and the obligation
--------------
of the Issuing Lender to issue Letters of Credit, on the Initial Borrowing Date,
is subject at the time of the making of such Loans or the issuance of such
Letters of Credit to the satisfaction of the following conditions:
5. 01 Execution of Agreement; Notes. On or prior to the Initial
-----------------------------
Borrowing Date, (i) the Effective Date shall have occurred and (ii) there shall
have been delivered to the Administrative Agent for the account of each of the
Lenders that has requested same the appropriate Term Note and/or Revolving Note
executed by the Borrower and to the extent requested by 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 Initial Borrowing Date, the
---------------------
Administrative Agent shall have received a certificate, dated the Initial
Borrowing Date and signed on behalf of the Borrower by the Chairman of the
Board, the President or any Vice President of the Borrower, certifying on behalf
of the Borrower that all of the conditions in Sections 5.06(a), 5.06(b), 5.07(b)
and 6.01 have been satisfied on such date.
5.03 Opinions of Counsel. On the Initial Borrowing Date, the
-------------------
Administrative Agent shall have received from (i) Simpson Thacher & Bartlett,
counsel to the Credit Parties, an opinion addressed to the Agents, the
Collateral Agent and each of the Lenders and dated the Initial Borrowing Date
covering the matters set forth in Exhibit E-1 and such other matters incident to
the transactions contemplated herein as the Agents may reasonably request and
(ii) O'Melveny & Myers LLP, an opinion addressed to the Agents, the Collateral
Agent and each of the Lenders and dated the Initial Borrowing Date covering the
matters set forth in Exhibit E-2 and such other matters incident to the
transactions contemplated herein as the Agents may reasonably request.
5.04 Corporate Documents; Proceedings; etc. (a) On the Initial
-------------------------------------
Borrowing Date, the Administrative Agent shall have received a certificate from
each Credit Party, dated the Initial Borrowing Date, signed by the Chairman of
the Board, the President or any Vice President of each 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 each of the foregoing shall be in form and substance
reasonably acceptable to the Agents.
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(b) All corporate, limited liability company and legal proceedings and
all instruments and agreements in connection with the transactions contemplated
by this Agreement and the other Documents shall be reasonably satisfactory in
form and substance to the Agents 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.
(c) On the Initial Borrowing Date, the corporate, ownership and
capital structure (including, without limitation, the terms of any capital
stock, options, warrants or other securities issued by Holdings or any of its
Subsidiaries) of Holdings and its Subsidiaries shall be in form and substance
reasonably satisfactory to the Agents and the Required Lenders.
5.05 Plans; Shareholders' Agreements; Management Agreements;
-------------------------------------------------------
Employment Agreements; Non-Compete Agreements; Collective Bargaining
---------------------------------------------------------------------
Agreements; Tax Sharing Agreements; Existing Indebtedness Agreements.
--------------------------------------------------------------------
(a) On or prior to the Initial Borrowing Date, there shall have been
delivered or made available to the Administrative Agent true and correct
copies of 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 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 Section
4001(a)(3) of ERISA, only to the extent that any document described therein
is in the possession of Holdings, any Subsidiary of Holdings or any ERISA
Affiliate or reasonably available thereto from the sponsor or trustee of
any such Plan).
(b) On or prior to the Initial Borrowing Date, there shall have been
delivered to the Administrative Agent true and correct copies of the
following documents:
(i) 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") ;
(ii) all material agreements with members of, or with respect to,
the management of Holdings or any of its Subsidiaries (collectively, the
"Management Agreements");
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(iii) all material employment agreements entered into by Holdings or
any of its Subsidiaries (collectively, the "Employment Agreements");
(iv) all non-compete agreements entered into by Holdings or any of
its Subsidiaries (collectively, the "Non-Compete Agreements");
(v) all collective bargaining agreements applying or relating to
any employee of Holdings or any of its Subsidiaries (collectively, the
"Collective Bargaining Agreements");
(vi) all tax sharing, tax allocation and other similar agreements
entered into by Holdings or any of its Subsidiaries (collectively, the "Tax
Sharing Agreements"); and
(vii) all agreements evidencing or relating to Indebtedness of
Holdings or any of its Subsidiaries which is to remain outstanding after
giving effect to the incurrence of Loans on the Initial Borrowing Date
(collectively, the "Existing Indebtedness Agreements");
all of which Shareholders' Agreements, Management Agreements, Employment
Agreements, Non-Compete Agreements, Collective Bargaining Agreements, Tax
Sharing Agreements and Existing Indebtedness Agreements shall be in form and
substance reasonably satisfactory to the Agents and the Required Lenders and
shall be in full force and effect on the Initial Borrowing Date.
5.06 Consummation of the Transaction. (a) On the Initial Borrowing
-------------------------------
Date, the Acquisition shall have been consummated in all material respects in
accordance with the Acquisition Documents and all applicable laws, and each of
the conditions precedent to the consummation of the Acquisition shall have been
satisfied in all material respects and no material condition thereto waived,
except with the consent of the Agents (which consent shall not be unreasonably
withheld), to the reasonable satisfaction of the Agents.
(b) On the Initial Borrowing Date, (i) Holdings shall have received
cash proceeds of at least $9,379,995 from the Equity Financing, (ii) Holdings
shall have received cash proceeds of at least $20,636,022 from the issuance of a
like principal amount of Holdings Subordinated Notes and (iii) Holdings shall
have used the full amount of such Equity Financing proceeds and Holdings
Subordinated Note proceeds to make payments owing in connection with the
Transaction prior to utilizing any proceeds of the Loans for such purpose.
(c) On or prior to the Initial Borrowing Date, there shall have been
delivered to the Agents and the Lenders true and correct copies of all Documents
entered into in connection with the Transaction (including, without limitation,
the Acquisition Documents, the Equity Financing Documents, the Holdings
Subordinated Notes and the Merger Documents), and all of the terms and
conditions of such Documents shall be in form and substance reasonably
satisfactory to the Agents and the Required Lenders.
(d) On the Initial Borrowing Date, the Administrative Agent and
certain affiliates of ECP which are shareholders of Holdings shall have entered
into a Letter Agreement in the form of Exhibit M.
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(e) The Administrative Agent shall have received evidence, in form and
substance reasonably satisfactory to it, that the matters set forth in Sections
5.06(a) and (b) have been satisfied as of the Initial Borrowing Date.
5.07 Adverse Change, etc. (a) Nothing shall have occurred (and no
--------------------
Agent nor any Lender shall have become aware of any facts or conditions not
previously known) which the Agents or the Required Lenders shall reasonably
determine has had, or could reasonably be expected to have, a Material Adverse
Effect.
(b) On or prior to the Initial Borrowing Date, all necessary
governmental (domestic and foreign) and third party approvals and/or consents in
connection with the Transaction and the other transactions contemplated by the
Documents and otherwise referred to herein or therein shall have been obtained
and remain in effect (other than immaterial approvals and/or consents relating
to the Acquisition and the Merger), 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 Transaction or the other transactions
contemplated by the 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 the Transaction or the other transactions contemplated by the
Documents or otherwise referred to herein or therein.
5.08 Litigation. On the Initial Borrowing Date, there shall be no
----------
actions, suits or proceedings pending or threatened which the Agents or the
Required Lenders shall reasonably determine could reasonably be expected to have
a Material Adverse Effect.
5.09 Pledge Agreement. On the Initial Borrowing 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 Pledge Agreement Collateral, if any, referred to
therein and owned by such Credit Party, (x) endorsed in blank in the case of
promissory notes constituting Pledge Agreement Collateral and (y) together with
executed and undated stock powers in the case of capital stock constituting
Pledge Agreement Collateral.
5.10 Security Agreement. On the Initial Borrowing 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
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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 any of 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 such other
termination statements as shall be required by local law fully executed for
filing); and
(iii) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect and protect the
security interests purported to be created by the Security Agreement have
been taken (or will be taken promptly following the Initial Borrowing
Date).
5.11 Subsidiaries Guaranty. On the Initial Borrowing 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").
5.12 Financial Statements; Pro Forma Balance Sheet; Projections. On
----------------------------------------------------------
or prior to the Initial Borrowing Date, the Administrative Agent shall have
received true and correct copies of the historical financial statements, the
pro forma balance sheet and the Projections referred to in Sections 7.05(a) and
--- -----
(d), which historical financial statements, pro forma balance sheet and
--- -----
Projections shall be in form and substance reasonably satisfactory to the Agents
and the Required Lenders.
5.13 Solvency Letter; Insurance Certificates. On the Initial Borrowing
---------------------------------------
Date, Holdings shall have delivered to the Administrative Agent:
(i) a solvency certificate from the chief financial officer of
Holdings in the form of Exhibit J; 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 Agents
and the Required Lenders and naming the Collateral Agent as an additional
insured and as loss payee, and stating that such insurance shall not be
canceled without at least 30 days prior written notice by the insurer to
the Collateral Agent (or at least 10 days' prior written notice in the case
of nonpayment of premiums).
5.14 Fees, etc. On the Initial Borrowing Date, the Borrower shall
----------
have paid to each Agent and each Lender all costs, fees and expenses (including,
without limitation, legal fees and expenses) payable to such Agent and such
Lender to the extent then due.
SECTION 6. Conditions Precedent to All Credit Events. The obligation
-----------------------------------------
of each Lender to make Loans (including Loans made on the Initial Borrowing
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:
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6.01 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).
6.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to the
---------------------------------------------
making of each Loan (other than a Swingline Loan or 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(a).
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by each of Holdings and the Borrower to the
Administrative Agent and each of the Lenders that all the conditions specified
in Section 5 (with respect to Credit Events on the Initial Borrowing Date) and
in this Section 6 (with respect to Credit Events on or after the Initial
Borrowing 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 (or, in the
case of Credit Events to occur on the Initial Borrowing Date, at the offices of
White & Case LLP, 1155 Avenue of the Americas, New York, New York) for the
account of each of the Lenders and, except for the Notes, in such number of
counterparts or copies as shall be specified by the Administrative Agent and
shall be in form and substance reasonably satisfactory to the Agents and the
Required Lenders.
SECTION 7. Representations, Warranties and Agreements. In order to
------------------------------------------
induce the Lenders to enter into Agreement to make the Loans, and issue (or
participate in) the Letters of Credit as provided herein, each of Holdings and
the Borrower makes the following representations, warranties and agreements,
in each case after giving effect to the Transaction, 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, with the occurrence of each Credit
Event on or after the Initial Borrowing Date being deemed to constitute a
representation and warranty that the matters specified in Section 7 are true and
correct in all material respects on and as of the Initial Borrowing 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 Organizational Status. Each Credit Party and each of its
---------------------
Subsidiaries (i) is a duly organized and validly existing corporation,
partnership or limited liability company, as the
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case may be, in good standing under the laws of the jurisdiction of its
organization, (ii) has the corporate, partnership or limited liability company
power and authority, as the case may be, 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.
7.02 Organizational and Other Power and Authority. Each Credit Party
--------------------------------------------
has the corporate, partnership or limited liability company power and authority,
as the case may be, to execute, deliver and perform the terms and provisions of
each of the Documents to which it is party and has taken all necessary action to
authorize the execution, delivery and performance by it of each of such
Documents. Each Credit Party has duly executed and delivered each of the
Documents to which it is party, and each of such 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 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 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, in each case 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 or articles of
incorporation or formation 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 (x) those
that have otherwise been obtained or made on or prior to the Initial Borrowing
Date and which remain in full force and effect on the Initial Borrowing Date,
(y) immaterial consents or approvals relating to the Acquisition or the Merger
or (z) those necessary to perfect the Liens created by the Security Documents)
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 Document or (ii) the
legality, validity, binding effect or enforceability of any such Document.
7.05 Financial Statements; Financial Condition; Undisclosed
--------------------------------------------------------
Liabilities; Projections; etc. (a) The consolidated balance sheet of Resources
-------------------------------
(i) for its fiscal year ended on
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May 31, 1998 and (ii) for the period from June 1, 1998 through December 12,
1998, and (in each case) the related consolidated statements of income, cash
flows and shareholders' equity of Resources for the fiscal year or other period
ended on such dates, as the case may be, copies of which have been furnished to
the Lenders prior to the Initial Borrowing Date, present fairly in all material
respects the financial position of Resources at the dates 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 financial statements have
been prepared in accordance with generally accepted accounting principles
consistently applied. The pro forma consolidated balance sheet of Holdings and
--- -----
its Subsidiaries as of February 6, 1999 and after giving effect to the
Transaction and the financing therefor, a copy of which has been furnished to
the Lenders prior to the Initial Borrowing Date, presents fairly in all material
respects the pro forma financial position of Holdings and its Subsidiaries as of
--- -----
February 6, 1999. After giving effect to the Transaction, since December 12,
1998, there has been no change in the business, operations, property, assets,
liabilities or condition (financial or otherwise) of Holdings or any of its
Subsidiaries that has had, or could reasonably be expected to have, a Material
Adverse Effect.
(b) On and as of the Initial Borrowing Date and after giving effect to
the Transaction and to all Indebtedness (including the Loans) being incurred or
assumed and Liens created by the Credit Parties in connection therewith (i) the
sum of the assets, at a fair valuation, of each of the Borrower on a stand-alone
basis and of Holdings and its Subsidiaries taken as a whole will exceed its
debts; (ii) each of the Borrower on a stand-alone basis and Holdings and its
Subsidiaries taken as a whole has not incurred and does not intend to incur, and
does not believe that it will incur, debts beyond its ability to pay such debts
as such debts mature; and (iii) each of the Borrower on a stand-alone basis and
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 (a) 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 (b) 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 disclosed in the financial statements delivered pursuant
to Section 7.05(a), there were as of the Initial Borrowing Date no liabilities
or obligations with respect to Holdings or any of its Subsidiaries of any nature
whatsoever (whether absolute, accrued, contingent or otherwise 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
Initial Borrowing Date, neither Holdings 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 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.
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(d) The Projections delivered to the Agents and the Lenders prior to
the Initial Borrowing 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 or the
Borrower to be misleading in any material respect or which fail to take into
account material information known to Holdings or the Borrower regarding the
matters reported therein. On the Initial Borrowing Date, Holdings and the
Borrower believe that the Projections are reasonable and attainable, 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 and the Borrower, threatened (i) with
respect to the Transaction or any Document or (ii) that are reasonably likely to
have a Material Adverse Effect.
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 any Agent
or any Lender (including, without limitation, all information contained in the
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 any Agent or any Lender will be, (x)
true and accurate in all material respects on the date as of which such
information is dated or certified and (y) to the best knowledge of Holdings and
the Borrower, 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 (it being understood and agreed that the financial statements delivered
pursuant to, and in accordance with the requirements of, Sections 8.01 (a), (b)
and (c) shall not be subject to the representations and warranties set forth in
preceding clause (y)).
7.08 Use of Proceeds; Margin Regulations. (a) All proceeds of the Term
-----------------------------------
Loans will be used by the Borrower (i) to effect the Acquisition and (ii) to pay
fees and expenses related to the Transaction.
(b) All proceeds of the Revolving Loans and the Swingline Loans shall
be used for the working capital general corporate, partnership or limited
liability company purposes, as the case may be, of the Borrower and its
Subsidiaries; it being understood and agreed, however, that up to, but not more
than, $7,000,000 of Revolving Loans and Swingline Loans in the aggregate may be
used to effect the Acquisition and to pay any fees and expenses in connection
therewith.
(c) 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.
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7.09 Tax Returns and Payments. Each of Holdings and each of its
------------------------
Subsidiaries has filed 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 taxes and assessments payable by it which have become due, except for
immaterial taxes and for those contested in good faith and adequately disclosed
and fully provided for on the financial statements of Holdings and its
Subsidiaries in accordance with generally accepted accounting principles. Each
of Holdings and each of its Subsidiaries has at all times paid, or has provided
adequate reserves (in the good faith judgment of the management of Holdings) for
the payment of, all federal, state, local and foreign income taxes (other than
immaterial taxes) applicable for all prior fiscal years and for the current
fiscal year to date. There is no material action, suit, proceeding,
investigation, audit, or claim now pending or, to the best knowledge of Holdings
or the Borrower threatened, by any authority regarding any taxes relating to
Holdings or any of its Subsidiaries which could reasonably be expected to result
in a material liability to Holdings and its Subsidiaries taken as a whole. As of
the Initial Borrowing 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. (a) Each Plan (and each related trust,
---------------------
insurance contract or fund) is in material 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 is so qualified or 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; no Reportable Event
has occurred (i) with respect to a Plan to which Holdings or any Subsidiary of
Holdings contributes which may reasonably be expected to result in a material
liability to Holdings or any Subsidiary of Holdings or (ii) with respect to any
other Plan which may reasonably be expected to result in a Material Adverse
Effect; to the knowledge of Holdings and the Borrower, 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 Current Liability which, when added
to the Unfunded Current Liabilities of all other Plans, could reasonably be
expected to result in a Material Adverse Effect; 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 which deficiency, waiver or extension is
reasonably likely to result in a material liability to Holdings or any
Subsidiary of Holdings; all contributions required to be made with respect to
a Plan have been timely made except to the extent that any such delinquency
could not reasonably be expected to have a Material Adverse Effect and will not
cause the imposition of a Lien; none of Holdings or any Subsidiary of Holdings
or, to the knowledge of Holdings the Borrower, any ERISA Affiliate has incurred
any liability (including any indirect, contingent or secondary liability) that
is reasonably likely to have a Material Adverse Effect to or on account of a
Plan pursuant to Section 409, 502(i), 502(1) or 515 of ERISA or Section
401(a)(29), 4971 or 4975 of the Code or is reasonably likely to incur any such
liability under any of the foregoing sections with respect to any
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<PAGE>
Plan; none of Holdings or any Subsidiary of Holdings, or to the knowledge of
Holdings, any ERISA Affiliate has incurred any unsatisfied material liability
(including any indirect, contingent or secondary liability) to or on account of
Section 4062, 4063, 4064, 4069, 4201, 4204, or 4212 of ERISA or is reasonably
likely to incur any 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
liability to or on account of a Plan pursuant to the foregoing provisions of
ERISA and the Code that is reasonably likely to have a Material Adverse Effect;
no proceedings have been instituted to terminate or appoint a trustee to
administer any Plan which is subject to Title IV of ERISA which is reasonably
likely to result in a material liability to Holdings or any of its Subsidiaries;
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, expected or threatened which is
reasonably likely to have a Material Adverse Effect; 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, could not reasonably be expected to have a
Material Adverse Effect; each Plan that is a group health plan (as defined in
Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) is in compliance
with the provisions of Part 6 of subtitle B of Title I of ERISA and Section
4980B of the Code except for such non-compliance that is not reasonably likely
to have a Material Adverse Effect; no lien imposed under the Code or ERISA in a
material amount on the assets of Holdings or any Subsidiary of Holdings or any
ERISA Affiliate exists or is reasonably 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.
(b) Except as is not reasonably likely to have a Material Adverse
Effect: (i) each Foreign Pension Plan has been maintained in material compliance
with its terms and with the requirements of any and all applicable laws,
statutes, rules, regulations and orders and has been maintained, where required,
in good standing with applicable regulatory authorities; (ii) all contributions
required to be made with respect to a Foreign Pension Plan have been timely
made; (iii) neither Holdings nor any of its Subsidiaries has incurred any
obligation in connection with the termination of or withdrawal from any Foreign
Pension Plan; and (iv) the present value of the accrued benefit liabilities
(whether or not vested) under each Foreign Pension Plan, determined as of the
end of the Holdings' recently ended fiscal year on the basis of actuarial
assumptions, each of which is reasonable, did not exceed the current value of
the assets of such Foreign Pension Plan allocable to such benefit liabilities.
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, and, when financing statements in proper
form have been filed in the proper filing offices and the recordation described
in the immediately succeeding sentence have been completed (which filings and
recordations have been made if this representation and warranty is made or
deemed made on or after the tenth day after the Initial
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<PAGE>
Borrowing Date), the Collateral Agent, for the benefit of the Secured Creditors,
will have, or has, as the case may be, a fully perfected first lien on, and
security interest in, all right, title and interest in all of the Security
Agreement Collateral described therein, subject to no other Liens other than
Permitted Liens. The recordation of (x) the Grant of Security Interest in U.S.
Patents and (y) the Grant of Security Interest in U.S. Trademarks in the
respective form attached to the Security Agreement, in each case 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
filings and recordation, a perfected security interest in the United States
trademarks and patents (if any) covered by the Security Agreement, 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 filings and recordation, a perfected
security interest in the United States copyrights (if any) covered by the
Security Agreement.
(b) The security interests created in favor of the Collateral Agent,
as Pledgee, for the benefit of the Secured Creditors, under the Pledge
Agreement, when financing statements in proper form have been filed in the
proper filing offices with respect to the portion of the Pledge Agreement
Collateral not constituting certificated securities or the relevant certificated
securities have been delivered to the Collateral Agent ( (x) which filings have
been made if this representation and warranty is made or deemed made on or after
the tenth day after the Initial Borrowing Date and (y) which deliveries have
been made) constitute first priority perfected security interests in the Pledge
Agreement Collateral described in the Pledge Agreement, subject to no security
interests of any other Person. No filings or recordings are required in order to
perfect (or maintain the perfection or priority of) the security interests
created in that portion of the Pledge Agreement Collateral that constitutes
certificated securities or notes in the possession of the Collateral Agent.
7.12 Representations and Warranties in the Documents. All
-----------------------------------------------
representations and warranties set forth in the other Documents were true and
correct in all material respects at the time as of which such representations
and warranties were made (or deemed made) and shall be true and correct in all
material respects as of the Initial Borrowing Date as if such representations
and warranties were made on and as of such date, unless stated to relate to a
specific earlier date, in which case such representations warranties shall be
true and correct in all material respects as of such earlier date; provided
--------
however, that insofar as the representations and warranties set forth in Section
-------
3.1 of the Acquisition Agreement which (i) relate to Deloitte & Touche LLP and
Deloitte & Touche Acquisition Company LLC or (ii) are not qualified to the
"Knowledge of Seller (as such expression is defined in the Acquisition
Agreement) are concerned, the representations and warranties set forth in
Section 7.12 are made only to the best knowledge of Holdings and the Borrower.
7.13 Capitalization. (a) On the Initial Borrowing Date and after
--------------
giving effect to the Transaction and the other transactions contemplated hereby,
the authorized capital stock of Holdings shall consist of (i) 3,500,000 shares
of common stock, $.01 par value per share, of which (x) 2,500,000 shares shall
consist of Class A common stock, (y) 300,000 shares shall consist of Class B
common stock and (z) 700,000 shares consist of Class C common stock, and (ii)
500,000 shares of preferred stock, $.01 par value per share, of which no shares
shall be
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<PAGE>
issued and outstanding. All outstanding shares of the capital stock of Holdings
have been duly and validly issued and are fully paid and non-assessable.
Holdings does not have outstanding any securities convertible into or
exchangeable for its capital stock 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 capital stock, except (i) as set forth in any
Shareholders' Agreement as in effect on the Initial Borrowing Date and (ii) for
options and warrants to purchase shares of Holdings' common stock or Qualified
Preferred Stock which may be issued from time to time.
(b) All outstanding membership interests of the Borrower have been
duly and validly issued and are fully paid and non-assessable and owned by
Holdings. 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.
7.14 Subsidiaries. As of the Initial Borrowing Date, the corporations,
------------
partnerships and limited liability companies listed on Schedule IV are all of
the Subsidiaries of Holdings. Schedule IV correctly sets forth, as of the
Initial Borrowing 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, without limitation, 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.
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) Each of Holdings and each of its
---------------------
Subsidiaries has complied with, and on the date of each Credit Event is 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
best knowledge of Holdings 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
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<PAGE>
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, to the best knowledge of Holdings and the Borrower, 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 best knowledge of Holdings and the Borrower, any
property adjoining or adjacent to any such Real Property that could be
reasonably 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, lease, occupancy or
transferability of such Real Property by Holdings or any of its Subsidiaries
under any applicable Environmental Law.
(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 could reasonably be
expected to violate any Environmental Law or give rise to an Environmental
Claim. Hazardous Materials have not at any time been Released on or from any
Real Property owned, leased or operated by Holdings or any of its Subsidiaries
where such Release has violated or could reasonably be expected to violate 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 conditions, violations, claims, restrictions,
failures and noncompliances of the types described above could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
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. There is (i) no unfair labor practice complaint pending
against Holdings or any of its Subsidiaries or, to the best knowledge of
Holdings and 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 best knowledge of Holdings 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 best
knowledge Holdings 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.
7.20 Properties. Each of Holdings and each of its Subsidiaries has
----------
good and marketable title to, or a validly subsisting leasehold interest in, all
material properties owned or leased by it, including all material property
reflected in the most recent historical balance sheet
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<PAGE>
referred to in Section 7.05(a) (except as sold or otherwise disposed of since
the date of such balance sheet as permitted by the terms of this Agreement),
free and clear of all Liens, other than Permitted Liens.
7.21 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.
7.22 Indebtedness. Schedule VI sets forth a true and complete list of
------------
all Indebtedness (including Contingent Obligations) of Holdings and its
Subsidiaries as of the Initial Borrowing Date and which is to remain outstanding
after giving effect to the Transaction (excluding the Loans, the Letters of
Credit and the Holdings Subordinated Notes, 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.
7.23 Merger. At the time of consummation thereof, the Merger shall
------
have been consummated in all material respects in accordance with the terms of
the Merger Documents and all applicable laws. At the time of consummation
thereof, all consents and approvals of, and filings and registrations with, and
all other actions in respect of, all governmental agencies, authorities or
instrumentalities required in order to consummate the Merger have been obtained,
given, filed or taken and are or will be in full force and effect (or effective
judicial relief with respect thereto has been obtained). All applicable waiting
periods with respect thereto have or, prior to the time when required, will
have, expired without, in all such cases, any action being taken by any
competent authority which restrains, prevents, or imposes material adverse
conditions upon the Merger. Additionally, there does not exist any judgment,
order or injunction prohibiting or imposing material adverse conditions upon the
Merger, or performance by any Credit Party of its obligations under the Merger
Documents to which it is party. All actions taken by each Credit Party pursuant
to or in furtherance of the Merger have been taken in all material respects in
compliance with the Merger Documents and all applicable laws.
7.24 Insurance. Schedule VII sets forth a true and complete listing of
---------
all insurance maintained by Holdings and its Subsidiaries as of the Initial
Borrowing Date, with the amounts insured (and any deductibles) set forth
therein.
7.25 Year 2000 All of Holdings' and its Subsidiaries' Information
---------
Systems and Equipment are either Year 2000 Compliant, or any reprogramming,
remediation or any other corrective action, including the internal testing of
all such Information Systems and Equipment, will be completed by November 1,
1999. Further, to the extent that any such reprogramming, remediation or other
corrective action is required, the cost thereof (as well as the cost of the
reasonably foreseeable consequences of the failure to become Year 2000
Compliant) to Holdings
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<PAGE>
and its Subsidiaries (including, without limitation, reprogramming errors and
the failure of other systems or equipment) will not (x) result in a Default or
an Event of Default or (y) have a Material Adverse Effect.
7.26 Special Purpose Corporation. Holdings and Acquisition Corp. were
---------------------------
formed to effect the Transaction. Prior to the consummation of the Transaction,
neither Holdings nor Acquisition Corp. had any significant assets or liabilities
(other than those liabilities under the Acquisition Documents and the Equity
Financing Documents).
7.27 Subordination. The subordination provisions contained in the
-------------
Holdings Subordinated Notes are enforceable against Holdings and the holders of
the Holdings Subordinated Notes, and all Guaranteed Obligations are within the
definition of "Senior Indebtedness" included in such subordination provisions.
SECTION 8. Affirmative Covenants. Each of Holdings and the Borrower
---------------------
hereby covenants and agrees that on and after the Effective Date and until the
Total Commitment and all Letters of Credit have terminated and the Loans, Notes
and Unpaid Drawings (in each case together with interest thereon), 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) Monthly Reports. Within 30 days after the end of each fiscal month
---------------
of Holdings (commencing with its fiscal month ending on February 28, 1999), the
consolidated balance sheet of Holdings and its Subsidiaries as at the end of
such fiscal month and the related consolidated statement of income for such
fiscal month and for the elapsed portion of the fiscal year ended with the last
day of such fiscal month, in each case setting forth comparative figures for the
corresponding fiscal month in the prior fiscal year, all of which shall be
certified by the chief financial officer of Holdings that they fairly present in
all material respects in accordance with generally accepted accounting
principles the financial condition of Holdings and its Subsidiaries as of the
dates indicated and the results of their operations for the periods indicated,
subject to normal year-end audit adjustments and the absence of footnotes; it
being understood and agreed that until the month ending August 31, 1999, each
fiscal month referred to above in this clause (a) shall instead refer to the end
of each four week fiscal period of Holdings.
(b) Quarterly Financial Statements. Within 45 days after the close of
------------------------------
the first three quarterly accounting periods in each fiscal year of Holdings
(commencing with its quarterly accounting period ending on August 31, 1999), (i)
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 and retained earnings 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 (but only
commencing with the financial statements delivered in respect of the quarterly
accounting period ending closest to February 28, 2000) and comparable budgeted
figures for such quarterly accounting period, all of which shall be certified by
the chief financial
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officer of Holdings that they fairly present in all material respects in
accordance with generally accepted accounting principles the financial condition
of Holdings and its Subsidiaries as of the dates indicated and the results of
their operations and changes in their cash flows for the periods indicated,
subject to normal year-end audit adjustments and the absence of footnotes, and
(ii) commencing with its quarterly accounting period ending closest to August
31, 2000, management's discussion and analysis of the important operational and
financial developments during such quarterly accounting period.
(c) 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 and retained earnings and statement of cash flows for such
fiscal year setting forth comparative figures for the preceding fiscal year and
certified by Pricewaterhouse Coopers or such other independent certified public
accountants of recognized national standing reasonably acceptable to the Agents,
together with 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 which has occurred and is continuing with respect to financial or
accounting matters or, 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) commencing with its fiscal year ending closest to May 31,
2001, management's discussion and analysis of the important operational and
financial developments during such fiscal year.
(d) 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.
(e) Budgets and Projections. No later than 30 days following the
-----------------------
first day of each fiscal year of Holdings, a budget in form reasonably
satisfactory to the Agents (including budgeted statements of income and balance
sheets) prepared by Holdings (i) for each of the four fiscal quarters of such
fiscal year prepared in detail, (ii) for each of the immediately two succeeding
fiscal years prepared in summary form and (iii) for any other period for which
Holdings may prepare budgets for its Board of Directors or shareholders, in each
case setting forth, with appropriate discussion, the principal assumptions upon
which such budgets are based.
(f) Officer's Certificates. At the time of the delivery of the
----------------------
financial statements provided for in Sections 8.01(b) and (c), a certificate of
the chief financial officer of Holdings certifying on behalf of Holdings 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 (i) set forth in reasonable detail the calculations required to establish
whether Holdings and its Subsidiaries were in compliance with the provisions of
Sections 4.02(e), 4.02(f) (to the extent delivered with the financial statements
required by Section 8.01(c)), 4.02(g), 9.02(ii), 9.03(ii), 9.03(v), 9.04, 9.05
and 9.07 through 9. 10, inclusive, at the end of such fiscal quarter or year, as
the case may be, and (ii) if delivered with the financial statements required by
Section 8.01(c), set forth in reasonable
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detail the amount of (and the calculations required to establish the amount of)
Excess Cash Flow for the respective Excess Cash Payment Period.
(g) Notice of Default or Litigation. Promptly, and in any event within
-------------------------------
five Business Days' after any 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 have a Material Adverse Effect or (y) with respect to
the Transaction or any Document.
(h) 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 (or any trustee, agent or other representative therefor) of
its material Indebtedness pursuant to the terms of the documentation governing
such Indebtedness.
(i) Environmental Matters. Promptly after any 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 have a Material Adverse Effect:
(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 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 be expected to
cause such Real Property to be subject to any restrictions on the ownership,
lease, 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 redemption
costs
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<PAGE>
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.
(j) Other Information. From time to time, such other information or
-----------------
documents (financial or otherwise) with respect to Holdings or any of its
Subsidiaries as any Agent or any Lender may reasonably request.
8.02 Books, Records and Inspections; 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 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 any 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 such
Agent or such Lender may reasonably request.
(b) At a date to be mutually agreed upon between the Agents and
Holdings occurring on or prior to the 120th day after the close of each fiscal
year of Holdings, Holdings shall, at the reasonable request of the Agents, hold
a meeting (or a conference call) with all of the Lenders at which meeting (or
conference call) 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 Insurance; Good Repair. (a) Holdings will, and will cause each
----------------------
of its Subsidiaries to, (i) maintain with financially sound and reputable
insurance companies 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 and (ii)
furnish to the Administrative Agent, together with each set of financial
statements delivered pursuant to Section 8.01(c), 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 (i) shall be endorsed to the Collateral Agent's satisfaction for the
benefit of the Collateral Agent (including, without limitation, by naming the
Collateral Agent as loss payee and/or additional insured), (ii) shall state that
such insurance policies shall not be canceled without at least 30 days' prior
written notice thereof by the respective insurer to the Collateral Agent, and
(iii) shall be deposited with the Collateral Agent.
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<PAGE>
(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 endorse and deposit all policies or certificates
with respect thereto, the Collateral Agent shall have the right (but shall be
under no obligation) to procure such insurance and Holdings and the Borrower
agree to reimburse the Collateral Agent for all reasonable costs and expenses of
procuring such insurance.
(d) Holdings will, and will cause each of its Subsidiaries to, ensure
that its material properties and equipment used in its business are kept in good
repair, working order and condition (ordinary wear and tear excepted), and that
from time to time there are made in such properties and equipment all needful
and proper repairs, renewals, replacements, extensions, additions, betterments
and improvements thereto, to the extent and in the manner useful or customary
for companies in similar businesses.
8.04 Organizational 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 or (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, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
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, either individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
8.06 Compliance with Environmental Laws. Holdings will comply, and
----------------------------------
will cause each of its Subsidiaries to comply, with all Environmental Laws and
permits applicable to, or required by, the ownership, lease 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, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect, and
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 or disposed of at any such Real Properties as could not, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
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<PAGE>
8.07 ERISA As soon as reasonably practicable and, in any event,
-----
within twelve (12) days after Holdings, any Subsidiary of Holdings or, to the
knowledge of Holdings or the Borrower, any ERISA Affiliate knows or has reason
to know of the occurrence of any of the following with respect to a Plan,
Holdings will deliver to the Administrative Agent a certificate of the chief
financial officer of Holdings setting forth in reasonable detail information as
to such occurrence and the action, if any, that Holdings, such Subsidiary or, to
the knowledge of Holdings or the Borrower, 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, the Subsidiary, to the knowledge of Holdings or
the Borrower, the ERISA Affiliate, the PBGC or any other governmental agency, 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 Administrative Agent a certificate and notices (if any)
concerning such event pursuant to the next clause hereof); that, to the
knowledge of Holdings or the Borrower, 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 likely 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 contribution required to be made with
respect to a Plan or Foreign Pension Plan has not been timely made which
delinquency is reasonably likely to have a Material Adverse Effect or has
resulted or is reasonably likely to result in the imposition of a Lien or the
posting of a bond or other security; that a Plan has been or is reasonably
likely to be terminated, reorganized, partitioned or declared insolvent under
Title IV of ERISA; that a Plan has an Unfunded Current Liability which is
reasonably likely to have a Material Adverse Effect; that proceedings may
reasonably be expected to be or have been instituted to terminate in a distress
termination or appoint a trustee to administer a Plan which is subject to Title
IV of ERISA; that a proceeding has been instituted pursuant to Section 515 of
ERISA to collect a delinquent contribution to a Plan which delinquency is
reasonably likely to have a Material Adverse Effect; that Holdings, any
Subsidiary of Holdings or any ERISA Affiliate will or is reasonably likely to
incur any material 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 or 502(i) or 502(l) of ERISA or with respect to a group health plan
(as defined in Section 607(l) of ERISA or Section 4980B(g)(2) of the Code) under
Section 4980B of the Code; or that Holdings or any Subsidiary of Holdings is
reasonably likely to incur any material liability pursuant to any employee
welfare benefit plan (as defined in Section 3(l) of ERISA) that provides
benefits to retired employees or other former employees (other as required by
Section 601 of ERISA) or any Plan or any Foreign Pension Plan. Holdings will
deliver to the Administrative Agent 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.
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<PAGE>
8.08 End of Fiscal Years; Fiscal Quarters. Holdings will cause (i)
------------------------------------
each of its, and each of its Subsidiaries', fiscal years to be based on a 52
week year ending at the end of May of each year and (ii) each of its, and each
of its Subsidiaries', fiscal quarters to be based on a 13 week period consistent
with a fiscal year end as provided in preceding clause (i).
8.09 Performance of Obligations. 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, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect (it being
understood and agreed, however, that no Event of Default shall arise under this
Section 8.09 with respect to any Indebtedness of Holdings or any of its
Subsidiaries unless an Event of Default also shall occur under Section 10.04).
8.10 Payment of Taxes. Holdings will pay and discharge, and will
----------------
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which penalties attach
thereto, and all lawful claims for sums that have become due and payable which,
if unpaid, might become a Lien not otherwise permitted under Section 9.01(i);
provided that neither Holdings nor any of its Subsidiaries shall be required to
--------
pay any such tax, assessment, charge, levy or claim which is immaterial or 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 Interest Rate Protection. No later than 90 days following the
------------------------
Initial Borrowing Date, the Borrower will enter into Interest Rate Protection
Agreements mutually agreeable to the Borrower and the Administrative Agent, with
a term of at least two years, establishing a fixed or maximum interest rate
reasonably acceptable to the Administrative Agent for an aggregate amount equal
to at least 50% of the aggregate principal amount of all Term Loans then
outstanding.
8.12 Additional Security; Further Assurances. (a) Holdings will, and
---------------------------------------
will cause each of its Wholly-Owned Domestic Subsidiaries and, to the extent
required by Section 8.16, each of its Wholly-Owned Foreign Subsidiaries to,
grant to the Collateral Agent security interests and mortgages in such assets
and properties of Holdings and such Subsidiaries as are not covered by the
original Security Documents, and as may be reasonably requested from time to
time by the Administrative Agent or the Required Lenders (collectively, the
"Additional Security Documents"). All such security interests and mortgages
shall be granted pursuant to documentation reasonably satisfactory in form and
substance to the Administrative Agent and Borrower and shall constitute valid
and enforceable perfected security interests and mortgages superior to and prior
to the rights of all third Persons and subject to no other Liens except for
Permitted Liens. The Additional Security Documents or instruments related
thereto shall be 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 required to be granted pursuant to the Additional
Security Documents and all taxes, fees and other charges payable in connection
therewith shall be paid in full.
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<PAGE>
(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 vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, real
property surveys, reports and other assurances or instruments and take such
further steps relating to the creation, perfection and priority of the Liens on
the Collateral covered by any of the Security Documents as the Collateral Agent
may reasonably require. Furthermore, Holdings and the Borrower will use their
reasonable best efforts to 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 8.12 has been complied with.
(c) Holdings and the Borrower agree that each action required above
by this Section 8.12 shall be completed as soon as possible, but in no event
later than 60 days after such action is either requested to be taken by the
Administrative Agent or the Required Lenders or required to be taken by Holdings
and/or its Subsidiaries pursuant to the terms of this Section 8.12; provided
--------
that, in no event will Holdings or any of its Subsidiaries be required to take
any action, (x) other than using its reasonable efforts, to obtain consents from
third parties with respect to its compliance with this Section 8.12 or (y) with
respect to any property to the extent that the taking of such action would
violate a contractual obligation applicable to such property (not created in
contemplation of this Section 8.12).
8.13 Information Systems and Equipment. Holdings will, and will cause
---------------------------------
each of its Subsidiaries to, (i) ensure that its Information Systems and
Equipment are at all times after November 1, 1999 Year 2000 Compliant, except
insofar as the failure to do so could not reasonably be expected to have a
Material Adverse Effect, and (ii) notify the Administrative Agent and each
Lender promptly upon detecting any such failure of its Information Systems and
Equipment to be Year 2000 Compliant. In addition, Holdings will, and will cause
each of its Subsidiaries to, provide the Administrative Agent and any Lender
with such information about Holdings' or such Subsidiaries' year 2000 computer
readiness (including, without limitation, information as to contingency plans,
budgets and testing results) as the Administrative Agent or any Lender shall
reasonably request.
8.14 Merger. Immediately after the Acquisition, but in any event on
------
the Initial Borrowing Date, Acquisition Corp. and Resources will consummate the
Merger in accordance with the Merger Documents and all applicable laws. After
giving effect to the Merger, Resources shall succeed to all rights and
obligations of Acquisition Corp. as were existing immediately prior to such
Merger (including, without limitation, all obligations under this Agreement and
the other Credit Documents to which Acquisition Corp. is a party). On the
Initial Borrowing Date, the Administrative Agent shall have received evidence,
in form and substance reasonably satisfactory to it, that the matters set forth
in this Section 8.14 have been satisfied.
8.15 Contributions. Holdings will contribute as a common equity
-------------
contribution to the capital of the Borrower upon its receipt thereof, any cash
proceeds received by Holdings from any asset sale, any incurrence of
Indebtedness, any Recovery Event, any sale or issuance of its equity, any cash
capital contributions or any tax refunds.
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8.16 Foreign Subsidiaries Security. If following a change in the
-----------------------------
relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, the Borrower
does not within 30 days after a request from the Administrative Agent or the
Required Lenders deliver evidence, in form and substance reasonably satisfactory
to the Administrative Agent, with respect to any Foreign Subsidiary of Holdings
which has not already had all of its stock pledged pursuant to the Pledge
Agreement that (i) a pledge of 66-2/3% or more of the total combined voting
power of all classes of capital stock of such Foreign Subsidiary entitled to
vote, (ii) the entering into by such Foreign Subsidiary of a security agreement
in substantially the form of the Security Agreement and (iii) the entering into
by such Foreign Subsidiary of a guaranty in substantially the form of the
Subsidiaries Guaranty, in any such case could reasonably be expected to cause
(I) any undistributed earnings of such Foreign Subsidiary as determined for
Federal income tax purposes to be treated as a deemed dividend to such Foreign
Subsidiary's United States parent for Federal income tax purposes or (II) other
Federal income tax consequences to the Credit Parties having a Material Adverse
Effect, then in the case of a failure to deliver the evidence described in
clause (i) above, that portion of such Foreign Subsidiary's outstanding capital
stock not theretofore pledged pursuant to the Pledge Agreement shall be pledged
to the Collateral Agent for the benefit of the Secured Creditors pursuant to the
Pledge Agreement (or another pledge agreement in substantially similar form, if
needed), and in the case of a failure to deliver the evidence described in
clause (ii) above, such Foreign Subsidiary (to the extent that same is a Wholly-
Owned Subsidiary) shall execute and deliver the Security Agreement and Pledge
Agreement (or another security agreement or pledge agreement in substantially
similar form, if needed), granting the Secured Creditors a security interest in
all of such Foreign Subsidiary's assets and securing the Obligations of the
Borrower under the Credit Documents and under any Interest Rate Protection
Agreement or Other Hedging Agreement and, in the event the Subsidiaries Guaranty
shall have been executed by such Foreign Subsidiary, the obligations of such
Foreign Subsidiary thereunder, and in the case of a failure to deliver the
evidence described in clause (iii) above, such Foreign Subsidiary (to the extent
that same is a Wholly-Owned Subsidiary) shall execute and deliver the
Subsidiaries Guaranty (or another guaranty in substantially similar form, if
needed), guaranteeing the Obligations of the Borrower under the Credit Documents
and under any Interest Rate Protection Agreement or Other Hedging Agreement, in
each case to the extent that the entering into such Security Agreement, Pledge
Agreement and/or Subsidiaries Guaranty is permitted by the laws of the
respective foreign jurisdiction and the contractual obligations of such Foreign
Subsidiary existing at such time with all documents delivered pursuant to this
Section 8.16 to be in form and substance reasonably satisfactory to the
Administrative Agent.
8.17 Qualified Preferred Stock. Holdings will pay all dividends on
-------------------------
all Qualified Preferred Stock solely through the issuance of additional shares
of Qualified Preferred Stock, rather than in cash.
8.18 Holdings Subordinated Notes. Holdings will pay all interest on
---------------------------
the Holdings Subordinated Notes solely by adding the amount of interest then due
to the unpaid principal amount of the Holdings Subordinated Notes in accordance
with the terms thereof, and such interest may not, in any event, be paid in
cash.
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SECTION 9. Negative Covenants. Each of Holdings and the Borrower
------------------
hereby covenants and agrees that on and after the Effective Date and until the
Total Commitment and all Letters of Credit have terminated and the Loans, Notes
and Unpaid Drawings (in each case, together with interest thereon), 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 (including any income or profits therefrom),
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); 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 Holdings 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 Holdings or such
Subsidiary's property or assets or materially impair the use thereof in the
operation of the business of Holdings or such Subsidiary or (y) which are
being contested in good faith by appropriate proceedings, which 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 Initial Borrowing Date which are
listed, and the property subject thereto described, in Schedule III, but
only to the respective date, if any, set forth in such Schedule III for the
removal, replacement and termination of any such Liens, plus renewals,
replacements and extensions of such Liens to the extent set forth on
Schedule III, provided that (x) the aggregate principal of the Indebtedness,
--------
if any, secured by such Liens does not increase from that outstanding at the
time of any such renewal, replacement or extension (except for interest,
premiums and fees added to principal at such time) and (y) any such renewal,
replacement or extension does not encumber any additional assets or
properties of Holdings or any of its Subsidiaries;
(iv) Liens created pursuant to the Security Documents;
(v) leases or subleases granted to other Persons not materially
interfering with the conduct of the business of Holdings or any of its
Subsidiaries;
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<PAGE>
(vi) 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), provided that (x) such
--------
Liens only serve to secure the payment of Indebtedness arising under such
Capitalized Lease Obligation 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 (other than proceeds and
products of such assets);
(vii) Liens placed upon equipment and other fixed or capital assets
acquired after the Initial Borrowing 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 thereof or to secure Indebtedness incurred solely for the
purpose of financing the acquisition of any such equipment or other fixed or
capital assets, provided that (x) the aggregate outstanding principal amount
--------
of all Indebtedness secured by Liens permitted by this clause (vii) shall
not at any time exceed that amount permitted by Section 9.04(iv) and (y) in
all events, the Lien encumbering the equipment or other fixed or capital
assets so acquired does not encumber any other asset of the Borrower or such
Subsidiary (other than proceeds and products of such equipment or other
fixed or capital assets);
(viii) easements, rights-of-way, restrictions, 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;
(ix) Liens arising from precautionary UCC financing statement
filings regarding operating leases;
(x) Liens arising out of the existence of judgments or awards not
constituting an Event of Default under Section 10.09, provided that the
--------
aggregate amount of all cash and the fair market value of all property
pledged or deposited to secure all such judgments and awards shall not
exceed $200,000 in the aggregate at any time outstanding;
(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 leases in the ordinary course of business, provided that the
--------
aggregate outstanding value of all cash and property encumbered by Liens
permitted pursuant to this clause (xii) shall not at any time exceed (i)
$175,000 in the case of Liens securing the performance of leases or (ii)
$250,000 in the case of all other such Liens;
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<PAGE>
(xiii) any Lien existing on any property or asset of the Borrower or
any Subsidiary of the Borrower prior to the acquisition of such property,
assets or Subsidiary by the Borrower or any Subsidiary of the Borrower in
accordance with the terms of this Agreement plus any renewal, replacement or
extension of any such Lien, provided that (i) such Lien was not created in
contemplation or anticipation of or in connection with such acquisition,
(ii) such Lien (or any replacement, renewal or extension thereof) does not
apply or attach to any other property or asset of the Borrower or any
Subsidiary of the Borrower and (iii) the aggregate principal amount of the
Indebtedness, if any, secured by such Lien does not increase from that
amount outstanding at the time of any such renewal, replacement or extension
(except for interest, premiums and fees added to principal at such time);
(xiv) Liens that are contractual rights of setoff; and
(xv) other Liens incidental to the conduct of the business or the
ownership of the assets of the Borrower or any Subsidiary of the Borrower
that (i) were not incurred in connection with borrowed money, (ii) do not
encumber any Collateral and 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 (iii) do not encumber cash and other
property with a value in excess of $50,000 in the aggregate for all such
Liens.
In connection with the granting of Liens of the type described in clauses (vi),
(vii) and (xiii) 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
property or assets subject to such Liens).
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) any part of the
property or assets (other than purchases or other acquisitions of inventory,
materials, equipment and intellectual property in the ordinary course of
business) of any Person (or agree to do any of the foregoing at any future time
(unless such agreement relates to an action otherwise permitted by this Section
9.02, or to the extent that the respective action is not otherwise permitted by
this Section 9.02 (and the Loans will not be repaid in full, and all Commitments
terminated, at the time of the consummation of the respective action), such
agreement provides that the consent of the requisite percentage of Lenders
hereunder is required to be obtained in connection therewith)), except that:
(i) Capital Expenditures by the Borrower and its Subsidiaries shall be
permitted to the extent not in violation of Section 9.07;
(ii) each of the Borrower and its Subsidiaries may sell assets
(other than the equity interests of any Subsidiary Guarantor), so long as
(v) no Default or Event of
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<PAGE>
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 80%
cash and is paid at the time of the closing of such sale, (y) the Net Sale
Proceeds therefrom are applied and/or reinvested as (and to the extent)
required by Section 4.02(e) and (z) the aggregate amount of the Net Sale
Proceeds received from all assets sold pursuant to this clause (ii) shall
not exceed $350,000 in any fiscal year of the Borrower;
(iii) Investments may be made to the extent permitted by Section
9.05;
(iv) 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));
(v) each of the Borrower and its Subsidiaries may make sales of
inventory and obsolete or worn-out equipment and materials in the ordinary
course of business;
(vi) 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 and not as part of any
financing transaction;
(vii) 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;
(viii) the Borrower may transfer assets to any Wholly-Owned Domestic
Subsidiary of the Borrower which is a Subsidiary Guarantor and any
Subsidiary of the Borrower may transfer assets to the Borrower or to any
Wholly-Owned Domestic Subsidiary of the Borrower which is a Subsidiary
Guarantor, so long as (x) the security interests granted to the Collateral
Agent for the benefit of the Secured Creditors pursuant to the Security
Documents in the assets so transferred shall remain in full force and effect
and perfected (to at least the same extent as in effect immediately prior to
such transfer) and (y) the aggregate book value of all assets transferred by
the Borrower to all of its Subsidiaries does not exceed $100,000;
(ix) any Subsidiary of the Borrower may merge with and into, or be
dissolved or liquidated into, the Borrower or any Wholly-Owned Domestic
Subsidiary of the Borrower which is a Subsidiary Guarantor, so long as (i)
in the case of any such merger, dissolution or liquidation involving the
Borrower, the Borrower is the surviving corporation of any such merger,
dissolution or liquidation, (ii) in all other cases, the Wholly-Owned
Domestic Subsidiary which is a Subsidiary Guarantor is the surviving
corporation of any such merger, dissolution or liquidation and (iii) in all
cases, the security interests granted to the Collateral Agent for the
benefit of the Secured Creditors pursuant to the Security Documents in the
assets of such Subsidiary are in full force and
-54-
<PAGE>
effect and perfected (to at least the same extent as in effect immediately
prior to such merger, dissolution or liquidation); and
(x) the Acquisition and the Merger shall be permitted.
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
foregoing.
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) (x) any Subsidiary of the Borrower may pay cash Dividends to
the Borrower or to any Wholly-Owned Subsidiary of the Borrower and (y) any
non-Wholly-Owned Subsidiary of the Borrower may pay cash Dividends to its
equityholders generally so long as the Borrower or its respective Subsidiary
which owns the equity interest in the Subsidiary paying such Dividends
receives at least its proportionate share thereof (based upon its relative
holding of the equity interest in the Subsidiary paying such Dividends and
taking into account the relative preferences, if any, of the various classes
of equity interests of such Subsidiary);
(ii) so long as there shall exist no Default or Event of Default (in
each case both before and after giving effect to the payment thereof),
Holdings may repurchase outstanding shares of its common stock (or options
to purchase such common stock) held by current or former officers, directors
or employees (or their estates or family transferees) of Holdings or any of
its Subsidiaries, provided that the aggregate amount of Dividends paid by
--------
Holdings pursuant to this clause (ii) shall not exceed the sum of (1)
$200,000 in any fiscal year of Holdings so long as any Term Loans are
outstanding or $600,000 in any fiscal year of Holdings after all outstanding
Term Loans have been repaid in full, provided that, if after all outstanding
--------
Term Loans have been repaid in full and the amount of such Dividends
permitted to be made in any fiscal year of Holdings is greater than the
amount of such Dividends actually made in such fiscal year, the lesser of
(x) such excess and (y) 50% of the applicable permitted Dividend amount may
be carried forward and utilized to make Dividends pursuant to this clause
(ii) in the immediately succeeding fiscal year of Holdings, and (2) the
amount received in cash by Holdings after the Initial Borrowing Date (other
than as part of the Equity Financing) from the issuance of its capital stock
to officers, directors and employers of Holdings or any of its Subsidiaries
to the extent that such proceeds are not required to repay outstanding Loans
pursuant to Section 4.02 or reduce the Total Revolving Loan Commitment
pursuant to Section 3.03(d);
-55-
<PAGE>
(iii) Holdings may pay regularly scheduled Dividends on any class of
Qualified Preferred Stock pursuant to the terms thereof solely through the
issuance of additional shares of such Qualified Preferred Stock, rather than
in cash;
(iv) so long as no Default or Event of Default then exists or would
result therefrom, the Borrower may pay cash Dividends to Holdings so long as
Holdings promptly uses such proceeds for the purposes described in clause
(ii) of this Section 9.03;
(v) the Borrower may pay cash Dividends to Holdings so long as the
proceeds thereof are promptly used by Holdings to pay operating expenses
(including, without limitation, professional fees and expenses) and other
similar corporate overhead costs and expenses, provided that the aggregate
--------
amount of cash Dividends paid pursuant to this clause (v) during any fiscal
year of the Borrower shall not exceed $50,000;
(vi) the Borrower may pay cash Dividends to Holdings in the amounts
and at the times of any payment by Holdings in respect of taxes, provided
--------
that (x) the amount of cash Dividends paid pursuant to this clause (vi) to
enable Holdings to pay Federal and state income taxes at any time shall not
exceed the amount of such Federal and state income taxes actually owing by
Holdings at such time for the respective period and (y) any cash refunds
received by Holdings shall promptly be returned by Holdings to the Borrower;
and
(vii) the Borrower may pay a cash Dividend to Holdings on the Initial
Borrowing Date with proceeds of Loans incurred on such date so long as such
proceeds are used to finance the Acquisition.
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 Initial Borrowing Date
and listed on Schedule VI, without giving effect to any subsequent
extension, renewal or refinancing thereof except to the extent set forth on
Schedule VI, 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 (except for interest, premiums and fees added to the principal
in connection therewith);
(iii) Indebtedness under Interest Rate Protection Agreements entered
into with respect to other Indebtedness permitted under this Section 9.04 so
long as all of the terms and conditions of such Interest Rate Protection
Agreements are reasonably satisfactory to the Administrative Agent;
(iv) Indebtedness of the Borrower and its Subsidiaries (x)
constituting Capitalized Lease Obligations to the extent permitted pursuant
to Sections 9.01 (vi) and
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<PAGE>
9.07 and (y) secured by Liens permitted under Section 9.01(vii), provided
that the aggregate principal amount of all Indebtedness incurred pursuant to
this clause (iv) does not exceed (I) $500,000 at any time outstanding plus
(II) up to an additional $900,000 of such Indebtedness in the aggregate that
is incurred solely to develop the Borrower's wide-area network;
(v) (x) intercompany Indebtedness among the Borrower and its
Subsidiaries to the extent permitted by Section 9.05(ix) and (y)
Indebtedness consisting of guaranties by the Borrower and its Wholly-Owned
Subsidiaries of each others Indebtedness and other obligations permitted to
be incurred under this Agreement;
(vi) Indebtedness of Holdings under the Holdings Subordinated Notes
in an aggregate principal amount not to exceed $22,000,000 (as such amount
may be (i) increased by the accrual of interest on the Holdings Subordinated
Notes in accordance with the terms thereof and (ii) reduced by any
repayments of principal thereof);
(vii) Indebtedness arising from agreements of the Borrower or a
Subsidiary of the Borrower providing for indemnification, adjustment of
purchase price or similar obligations, in each case incurred or assumed in
connection with the acquisition of any business, assets or a Subsidiary
permitted by this Agreement;
(viii) Indebtedness of a Subsidiary of the Borrower acquired after the
Initial Borrowing Date in accordance with the terms of this Agreement (or
Indebtedness assumed at the time of the acquisition of an asset securing
such Indebtedness) or any extension, renewal, refinancing or replacement
thereof for the same or lesser amount (plus interest, premiums and fees
added to the principal in connection therewith), provided that (x) such
Indebtedness was not incurred in connection with, or in anticipation or
contemplation of, such acquisition, and (y) such Indebtedness does not
constitute a revolving credit facility, a working capital facility or a
letter of credit or similar facility; and
(ix) additional unsecured Indebtedness incurred by the Borrower and
its Subsidiaries in an aggregate principal amount not to exceed $150,000 at
any one time outstanding.
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 equity 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, except for accounts receivables which either
individually or in the aggregate are not
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<PAGE>
material to the Borrower and its Subsidiaries taken as a whole, payable or
dischargeable in accordance with customary trade terms of the Borrower or
such Subsidiary;
(ii) the Borrower and its Subsidiaries may acquire and hold cash and
Cash Equivalents, provided that during any time when Revolving Loans or
--------
Swingline Loans are outstanding, the aggregate amount of cash and Cash
Equivalents permitted to be held by the Borrower and its Subsidiaries shall
not exceed $500,000 for any period of ten consecutive Business Days;
(iii) the Borrower and its Subsidiaries may hold the Investments held
by them on the Initial Borrowing Date and described on Schedule V, 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;
(iv) the Borrower and its Subsidiaries may acquire and own
investments (including 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;
(v) (x) the Borrower and its Subsidiaries may make loans and
advances to their respective employees and directors 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 $150,000, (y) within six months following the Initial
Borrowing Date, the Borrower may make an additional loan in an aggregate
amount not to exceed $200,000 to a specific employee to be identified by the
Borrower to the Agents and (z) the Borrower and its Subsidiaries may make
advances of payroll and expenses to their employees in the ordinary course
of business so long as such advances relate to an expense that when incurred
will reduce Consolidated Net Income in accordance with generally accepted
accounting principles;
(vi) Holdings may acquire and hold obligations of one or more
officers, employees or directors of Holdings or any of its Subsidiaries in
connection with such officers', employees' or directors' 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, employees or directors in
connection with the acquisition of any such obligations;
(vii) the Borrower may enter into Interest Rate Protection Agreements
to the extent permitted by Section 9.04 (iii);
(viii) Holdings may make cash common equity contributions to, or
purchase the common equity of, the Borrower and the Borrower and the
Subsidiary Guarantors may make cash common equity contributions to, or
purchase the common equity of, their respective Subsidiaries which are
Subsidiary Guarantors;
(ix) the Borrower and the Subsidiary Guarantors may make
intercompany loans and advances between or among one another (collectively,
"Intercompany Loans"),
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<PAGE>
provided that any Intercompany Loan that is evidenced by a promissory note
shall be in the form of an Intercompany Note that is pledged to the
Collateral Agent pursuant to the Pledge Agreement;
(x) the Acquisition shall be permitted;
(xi) 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(ii);
(xii) the Borrower and its Subsidiaries may make Investments solely
with the capital stock of Holdings and/or with Net Equity Proceeds
contributed to Holdings after the Initial Borrowing Date (other than as part
of the Equity Financing) which Net Equity Proceeds are, in turn, contributed
to the Borrower, provided that the aggregate amount of all Investments made
--------
pursuant to this clause (xii) shall not exceed $500,000 less the aggregate
amount of all Capital Expenditures made pursuant to Section 9.07(e)
utilizing Net Equity Proceeds received by Holdings after the Initial
Borrowing Date; and
(xiii) the Borrower and its Subsidiaries may make Investments not
otherwise permitted by clauses (i) through (xii) of this Section 9.05 in an
aggregate amount not to exceed $500,000.
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, 9.04
and 9.05;
(iii) customary fees may be paid to non-officer directors of Holdings
and its Subsidiaries;
(iv) the Borrower and its Subsidiaries may enter into, and may make
payments and perform its obligations under employment agreements, employee
benefit plans, indemnification provisions, equity incentive plans and other
similar compensatory arrangements with officers and directors of Holdings
and its Subsidiaries in the ordinary course of business, in each case to the
extent that such transactions are otherwise permitted by this Agreement;
(v) the Borrower may pay (x) a one-time transaction fee to ECP and
its Affiliates on the Initial Borrowing Date in an aggregate for all such
Persons taken
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<PAGE>
together not to exceed $750,000 and (y) the reasonable out-of-pocket
expenses of ECP and its Affiliates incurred in connection with the
Transaction;
(vi) Holdings and its Subsidiaries may perform their obligations
under the Documents to which they are a party;
(vii) transactions among Holdings and its Subsidiaries to the extent
otherwise expressly permitted by this Agreement; and
(viii) Holdings may enter into the Shareholders Agreements delivered
pursuant to Section 5.05 and perform its obligations thereunder so long as
the performance of such obligations are otherwise permitted by the terms of
this Agreement.
In no event shall any management, consulting or similar fee be paid or payable
by Holdings or any of its Subsidiaries to any Affiliate except as specifically
provided in clause (v) of this Section 9.06.
9.07 Capital Expenditures. (a) Holdings will not, and will not
--------------------
permit any of its Subsidiaries to, make any Capital Expenditures, except that
(i) during the period from the Initial Borrowing Date through and including the
last day of Holdings' fiscal year ending closest to May 31, 1999, the Borrower
and its Subsidiaries may make Capital Expenditures so long as the aggregate
amount of all such Capital Expenditures does not exceed $500,000 and (ii) during
each fiscal year of Holdings set forth below (taken as one accounting period),
the Borrower and its Subsidiaries may make Capital Expenditures so long as the
aggregate amount of all such Capital Expenditures does not exceed in any fiscal
year of Holdings set forth below the amount set forth opposite such fiscal year.
<TABLE>
<CAPTION>
Fiscal Year
Ending Closest to Amount
----------------- ------
<S> <C>
May 31, 2000 $2,000,000
May 31, 2001 $1,500,000
May 31, 2002 $1,000,000
May 31, 2003 $1,000,000
May 31, 2004 $1,000,000
</TABLE>
provided, however, in no event will more $1,000,000 in Capital Expenditures in
-------- -------
the aggregate be made in any fiscal year set forth above (whether pursuant to
this clause (a) or clause (b) below) with respect to the opening of new offices
(other than new offices opened to replace offices occupied by the Borrower
pursuant to the Transition Services Agreement).
(b) Notwithstanding the foregoing, in the event that the amount of
Capital Expenditures permitted to be made by the Borrower and its Subsidiaries
pursuant to clause (a) above in any fiscal year of the Borrower (before giving
effect to any increase in such permitted expenditure amount pursuant to this
clause (b)) is greater the amount of such Capital Expenditures actually made by
the Borrower and its Subsidiaries during such fiscal year, the lesser of (x)
such excess and (y) 50% of the applicable permitted scheduled Capital
Expenditure amount as set forth in such clause (a) may be carried forward and
utilized to make Capital Expenditures in
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the immediately succeeding fiscal year, provided that no amounts once carried
forward pursuant to this Section 9.07(b) may be carried forward to any fiscal
year thereafter and such amounts may only be utilized after the Borrower and its
Subsidiaries have utilized in full the permitted Capital Expenditure amount for
such fiscal year as set forth in clause (a) above (without giving effect to any
increase in such amount pursuant to this clause (b)).
(c) Notwithstanding the foregoing, the Borrower and its
Subsidiaries may make additional Capital Expenditures (which Capital
Expenditures will not be included in any determination under Section 9.07(a))
with the Net Sale Proceeds of Asset Sales to the extent such proceeds are not
required to be applied to repay Term Loans or reduce the Total Revolving Loan
Commitment pursuant to Section 4.02(e) or Section 3.03(d), as the case may be.
(d) Notwithstanding the foregoing, the Borrower and its
Subsidiaries may make additional Capital Expenditures (which Capital
Expenditures will not be included in any determination under Section 9.07(a))
with the Net Insurance Proceeds received by the Borrower or any of its
Subsidiaries from any Recovery Event so long as such Capital Expenditures are to
replace or restore any properties or assets in respect of which such proceeds
were paid within 180 days following the date of the receipt of such insurance
proceeds to the extent such insurance proceeds are not required to be applied to
repay Term Loans or reduce the Total Revolving Loan Commitment pursuant to
Section 4.02(g) or Section 3.03(d), as the case may be.
(e) Notwithstanding the foregoing, the Borrower and its
Subsidiaries may make additional Capital Expenditures (which Capital
Expenditures will not be included in any determination under Section 9.07(a))
utilizing Net Equity Proceeds received by Holdings after the Initial Borrowing
Date (other than as part of the Equity Financing) which are, in turn,
contributed to the Borrower, provided that the aggregate amount of all Capital
--------
Expenditures made pursuant to this clause (e) shall not exceed $500,000 less the
aggregate amount of Investments made pursuant to Section 9.05(xii).
(f) Notwithstanding the foregoing, in the event that Deloitte &
Touche LLP is permitted to require (and requires) the Borrower to vacate the
office space covered by the Transition Services Agreement pursuant to Section
10.2(a) thereof, the Borrower and its Subsidiaries may make additional Capital
Expenditures to open offices to replace those offices which must be vacated
(which Capital Expenditures will not be included in any determination under
Section 9.07(a)) utilizing Net Equity Proceeds received by Holdings after the
Initial Borrowing Date (other than as part of the Equity Financing) which are,
in turn, contributed to the Borrower and/or cash amounts received from Deloitte
& Touche LLP pursuant to Section 10.2(a) of the Transition Services Agreement.
9.08 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 of Holdings set forth below to be less than the ratio
set forth opposite such fiscal quarter below:
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<PAGE>
<TABLE>
<CAPTION>
Fiscal Quarter Ending Closest To Ratio
-------------------------------- -----
<S> <C>
May 31, 1999 3.75:1.00
August 31, 1999 3.75:1.00
November 30, 1999 3.75:1.00
February 28, 2000 3.75:1.00
May 31, 2000 5.00:1.00
August 31, 2000 5.00:1.00
November 30, 2000 5.00-1.00
February 28, 2001 5.00:1.00
May 31, 2001
and the last day of each fiscal
quarter of Holdings thereafter 6.00:1.00
</TABLE>
9.09 Maximum Leverage Ratio. Holdings will not permit the Leverage
----------------------
Ratio at any time during a period set forth below to be greater than the ratio
set forth opposite such period below:
<TABLE>
<CAPTION>
<S> <C>
Period Ratio
------ -----
Initial Borrowing Date through and
including the day before the last day of
Holdings' fiscal quarter ending closest
to August 31, 1999 3.35:1.00
The last day of Holdings' fiscal quarter
ending closest to August 31, 1999
through and including the day before
the last day of Holdings' fiscal quarter
ending closest to November 30, 1999 3.10:1.00
The last day of Holdings' fiscal quarter
ending closest to November 30, 1999
through and including the day before
the last day of Holdings' fiscal quarter
ending closest to February 28, 2000 2.75:1.00
</TABLE>
-62-
<PAGE>
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
The last day of Holdings' fiscal quarter
ending closest to February 28, 2000
through and including the day before
the last day of Holdings' fiscal quarter
ending closest to May 31, 2000 2.50:1.00
The last day of Holdings' fiscal quarter
ending closest to May 31, 2000 through
and including the day before the last day
of Holdings' fiscal quarter ending
closest to August 31, 2000 2.25:1.00
The last day of Holdings' fiscal quarter
ending closest to August 31, 2000
through and including the day before
the last day of Holdings' fiscal quarter
ending closest to November 30, 2000 2.00:1.00
The last day of Holdings' fiscal quarter
ending closest to November 30, 2000
through and including the day before
the last day of Holdings' fiscal quarter
ending closest to May 31, 2001 1.75:1.00
The last day of Holdings' fiscal quarter
ending closest to May 31, 2001 and
thereafter 1.50:1.00
</TABLE>
9.10 Minimum, Consolidated EBITDA. Holdings will not permit
----------------------------
Consolidated EBITDA for any Test Period ending on the last day of a fiscal
quarter of Holdings set forth below to be less than the amount set forth
opposite such fiscal quarter below:
<TABLE>
<CAPTION>
Fiscal Quarter Ending Closest To Amount
-------------------------------- ------
<S> <C>
May 31, 1999 $ 7,000,000
August 31, 1999 $ 7,000,000
November 30, 1999 $ 7,000,000
February 28, 2000 $ 7,000,000
May 31, 2000 $ 9,000,000
</TABLE>
-63-
<PAGE>
<TABLE>
<CAPTION>
Fiscal Quarter Ending Closest To Amount
-------------------------------- ------
<S> <C>
August 31, 2000 $ 9,000,000
November 30, 2000 $ 9,000,000
February 28, 2001 $ 9,000,000
May 31, 2001 $10,500,000
August 31, 2001 $10,500,000
November 30, 2001 $10,500,000
February 28, 2002 $10,500,000
May 31, 2002 $11,250,000
August 31, 2002 $11,250,000
November 30, 2002 $11,250,000
February 28, 2003 $11,250,000
May 31, 2003 and the last day of each
fiscal quarter of Holdings thereafter $13,250,000
</TABLE>
9.11 Limitations on Payments and Modification of Certain
---------------------------------------------------
Indebtedness, Modifications of Certificate of Incorporation, By-Laws and Certain
--------------------------------------------------------------------------------
Other Agreements; etc. Holdings will not, and will not permit any of its
---------------------
Subsidiaries to, (i) make (or give any notice in respect of) any payment or
prepayment on or redemption or acquisition for value of, or any prepayment or
redemption as a result of any asset sale, change of control or similar event
(including in each case, without limitation, by way of depositing with any
Person money or securities before due for the purpose of paying when due) of any
Holdings Subordinated Notes (whether in respect of principal, interest or any
other amount), (ii) amend or modify, or permit the amendment or modification of,
any provision of any Holdings Subordinated Note, except for any amendment or
modification which would reduce the principal amount of any Holdings
Subordinated Note or the rate of interest payable thereon or would extend the
date of any payment required thereon, in each case so long as no consideration
of any kind or character is given by Holdings or any of its Subsidiaries in
connection therewith other than the issuance of equity securities of Holdings
permitted to be issued under this Agreement, (iii) amend, modify or change its
certificate or articles of incorporation (including, without limitation, by the
filing or modification of any certificate or articles 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
(iii) could not reasonably be expected to be adverse to the interests of the
Lenders in any material respect (iv) amend or modify the Transition Services
Agreement in any material respect, or (v) amend, modify or change any provision
of any Tax Sharing Agreement or enter into any new tax sharing agreement tax
allocation agreement or similar agreement without the prior written consent of
the Administrative Agent, provided that Holdings and its Subsidiaries may
--------
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<PAGE>
enter into a tax sharing agreement among themselves allowing for Section
9.03(vi).
9.12 Limitation on Certain Restrictions on Subsidiaries. Holdings
--------------------------------------------------
will not, and will not permit 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 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 and (v)
restrictions on the transfer of any asset subject to a Lien permitted by Section
9.01 (vi), (vii), (xiii) or (xv).
9.13 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 or (ii) any redeemable common stock other
than common stock that is redeemable at the sole option of Holdings or such
Subsidiary, as the case may be.
(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 or other
equity interests, except (i) for transfers and replacements of then outstanding
shares of capital stock or other equity interests, (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.
9.14 Business. (a) Holdings and its Subsidiaries will not engage in
--------
any business other than the business engaged in by Resources and its
Subsidiaries as of the Initial Borrowing Date and reasonable extensions thereof
and activities incidental thereto.
(b) Notwithstanding the foregoing, Holdings will not engage in any
business and will not own any significant assets or have any material
liabilities other than its ownership of the equity interest of the Borrower and
having those liabilities which it is responsible for under this Agreement and
the other Documents to which it is a party, provided that Holdings may engage in
--------
those activities that are incidental to (x) the maintenance of its corporate
existence in compliance with applicable law, (y) legal, tax and accounting
matters in connection with any of the foregoing activities and (z) the entering
into, and performing its obligations under, this Agreement and the other
Documents to which it is a party.
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<PAGE>
9.15 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 Initial Borrowing Date any Subsidiary, provided that the Borrower and its
--------
Wholly-Owned Subsidiaries shall be permitted to establish, create and, to the
extent otherwise expressly permitted by this Agreement, acquire Wholly-Owned
Subsidiaries and, to the extent permitted by Sections 9.05(xii) and (xiii), non-
Wholly-Owned Subsidiaries, so long as (i) the equity interests of each such new
Subsidiary is pledged pursuant to, and to the extent required by, the Pledge
Agreement and the certificates (if any) representing such 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
Wholly-Owned Domestic Subsidiary and, to the extent required by Section 8.16,
each such new Wholly-Owned Foreign Subsidiary, executes a counterpart of the
Subsidiaries Guaranty, the Pledge Agreement and the Security Agreement, and
(iii) each such new Wholly-Owned Subsidiary, to the extent requested by the
Administrative Agent or the Required Lenders, takes all actions required
pursuant to Section 8.12. In addition, each new Wholly-Owned Subsidiary shall,
if requested by the Administrative Agent, execute and deliver, or cause to be
executed and delivered, all other relevant documentation of the type described
in Section 5 as such new Wholly-Owned Subsidiary would have had to deliver if
such new Wholly-Owned Subsidiary were a Credit Party on the Initial Borrowing
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 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 any 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, 8.14, 8.15, 8.17 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 and 10.02) and such default 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. 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,
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<PAGE>
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 (or be declared) due
prior to its stated maturity, 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 such Indebtedness is at least $200,000; 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
15 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 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 reasonably 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 reasonably 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 or a Foreign Pension Plan has not been timely made, Holdings or any
Subsidiary of Holdings or any ERISA Affiliate has incurred or is reasonably
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(l) 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
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<PAGE>
reasonably likely to incur liabilities pursuant to one or more employee welfare
benefit plans (as defined in Section 3(l) of ERISA) that provide benefits to
retired employees or other former employees (other than as required by Section
601 of ERISA) or Plans or Foreign Pension Plans, a "default" within the meaning
of Section 4219(c)(5) of ERISA shall occur with respect to any Plan, any
applicable law, rule or regulation is adopted, changed or interpreted, or the
interpretation or administration thereof is changed, in each case after the date
hereof, by any governmental authority or agency or by any court (a "Change of
Law"), or, as a result of a Change in Law, an event occurs following a Change in
Law, with respect to or otherwise affecting any Plan, (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, has had, or could reasonably be expected to have, a Material Adverse
Effect; or
10.07 Security Documents. Except in each case to the extent resulting
------------------
from failure of the Collateral Agent to retain possession of the Pledge
Agreement Collateral constituting certificated securities or notes, 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, a perfected security interest in, and Lien on, all of the
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
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
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 shall
not be vacated, discharged or stayed or bonded pending appeal for any period of
60 consecutive days, and the aggregate amount of all such judgments equals or
exceeds $200,000; or
10.10 Change of Control. A Change of Control shall occur; or
-----------------
10.11 Additional Financing. Holdings shall not have received and
--------------------
contributed to the Borrower by (i) April 15, 1999 (x) at least an additional
$526,240 of cash proceeds received after the Initial Borrowing Date as part of
the Equity Financing and (y) at least an additional $1,157,728 of cash proceeds
received after the Initial Borrowing Date from the issuance of a like principal
amount of additional Holdings Subordinated Notes and (ii) July 1, 1999 (x) an
additional $619,990 of cash proceeds received after the Initial Borrowing Date
as part of the Equity Financing (less any amounts received as contemplated by
preceding clause (i)(x)) and (y) at least an additional $1,363,978 of cash
proceeds received after the Initial Borrowing Date from the issuance of a like
principal amount of additional Holdings Subordinated Notes (less any amounts
received as contemplated by preceding clause (i)(y)); or
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<PAGE>
10.12 Transition Services Agreement. Except as a result of a
-----------------------------
termination pursuant to Section 10.2(a) of the Transition Services Agreement,
the Transition Services Agreement or any material provision thereof (other than
the provisions thereof relating to continuing professional education) shall
cease to be in full force and effect other than as a result of the passage of
time with respect to certain of the services provided thereunder in accordance
with the terms thereof; 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 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 Commitment terminated, whereupon all
Commitments 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 all 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 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):
"Acquired Entity or Business" shall have the meaning provided in the
definition of "Consolidated Net Income."
"Acquisition" shall mean the acquisition by Holdings of all of the
outstanding membership interests in Resources in accordance with the terms of
the Acquisition Agreement.
"Acquisition Agreement" shall mean the Purchase Agreement, dated as
of April 1, 1999, among Deloitte & Touche LLP, Deloitte & Touche Acquisition
Company LLC, Resources and Holdings.
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<PAGE>
"Acquisition Corp." shall have the meaning provided in the first
paragraph of this Agreement.
"Acquisition Documents" shall mean the Acquisition Agreement and all
other agreements and documents relating to the Acquisition.
"Additional Security Documents" shall have the meaning provided in
Section 8.12.
"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.
"Adjusted Consolidated Net Income" shall mean, for any period,
Consolidated Net Income for such period plus, without duplication, the sum of
the amount of all net non-cash charges (including, without limitation,
depreciation, amortization, deferred income tax expense and non-cash interest
expense) and net non-cash losses which were included in arriving at
Consolidated Net Income for such period, less the amount of all net non-cash
gains which were included in arriving at Consolidated Net Income for such
period.
"Adjusted Consolidated Working Capital" shall mean, at any time,
Consolidated Current Assets (but excluding therefrom all cash and Cash
Equivalents) less Consolidated Current Liabilities at such time.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, 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
10% or more of the securities having ordinary voting power for the election of
directors of such corporation or (ii) to direct or cause the direction of the
management and policies of such other Person, whether through the ownership of
voting securities, by contract or otherwise; provided that no Agent nor any
---------
Lender (nor any Affiliate thereof) shall be considered an Affiliate of Holdings
or any Subsidiary thereof.
"Agent" shall mean and include the Administrative Agent, the
Syndication Agent and the Documentation Agent.
"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 Base Rate Margin" shall mean a percentage per annum equal
to, in the case of Revolving Loans, Swingline Loans and Term Loans that are
maintained as Base Rate Loans, 2.00%.
"Applicable Eurodollar Rate Margin" shall mean a percentage per annum
equal to, in the case of Revolving Loans and Term Loans that are maintained as
Eurodollar Loans, 3.00%.
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<PAGE>
"Asset Sale" shall mean any sale, similar transfer or other similar
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 (v), (vi), (vii) and (viii).
"Assignment and Assumption Agreement" shall mean an Assignment and
Assumption Agreement substantially in the form of Exhibit K (appropriately
completed).
"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
other Loan designated or deemed designated as such by the Borrower at the time
of the incurrence thereof or conversion thereto.
"Borrower" shall mean (i) prior to the Merger, Acquisition Corp., and
(ii) from and after the consummation of the Merger, Resources.
"Borrowing" shall mean the borrowing of one Type of Loan of a single
Tranche from all the Lenders having Commitments of the respective Tranche (or
from the Swingline Lender in the case of Swingline Loans) 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, 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 connection 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
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<PAGE>
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 or
Moody's Investors Service, Inc., (iii) Dollar denominated time deposits and
certificates of deposit of any commercial bank having, or which is the principal
banking subsidiary of a bank holding company having, a long-term unsecured debt
rating of at least "A" or the equivalent thereof from Standard & Poor's Ratings
Services or "A2" or the equivalent thereof from Moody's Investors Service, Inc.
with maturities of not more than one year from the date of acquisition by such
Person, (iv) 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 (iii) above, (v)
commercial paper issued by any Person incorporated in the United States rated at
least A-I or the equivalent thereof by Standard & Poor's Ratings Services or at
least P-1 or the equivalent thereof by Moody's Investors Service, Inc. and in
each case maturing not more than one year after the date of acquisition by such
Person and (vi) investments in money market funds substantially all of whose
assets are comprised of securities of the types described in clauses (i) through
(v) above.
"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.(S) 9601 et seq.
-- ----
"Change of Control" shall mean (i) (A) at any time prior to the
consummation of a Qualified IPO, either of the following shall occur: (x) the
nominees designated by ECP and its Affiliates to serve as members of the Board
of Directors of Holdings shall cease to constitute at least one-half of the
total members of the Board of Directors of Holdings (it being understood that no
Change of Control shall occur under this clause (i)(A)(x) if any such nominee
ceases to serve as a member of the Board of Directors of Holdings for any reason
so long as such nominee is replaced within 15 days thereafter by another nominee
designated by ECP and its Affiliates), or (y) ECP and its Affiliates shall cease
to own (I) on a fully diluted basis in the aggregate at least 30% of the
economic interest in Holdings' capital stock and (II) at least 30% of the
aggregate principal amount of the outstanding Holdings Subordinated Notes, and
(B) at any time from and after the consummation of a Qualified IPO, either of
the following shall occur: (x) ECP and its Affiliates shall cease to own (I) a
fully diluted basis in the aggregate at least 50% of the economic and voting
interest in Holdings' capital stock that they own on the Initial Borrowing Date
and (II) at least 50% of the aggregate principal amount of the outstanding
Holdings Subordinated Notes that they own on the Initial Borrowing Date or (y) a
majority of the members of the Board of Directors of Holdings are not Continuing
Directors, (ii) Holdings shall cease to own 100% of the economic and voting
interest in the Borrower's equity interests or (iii) any Person or "group"
(within the meaning of Rules 13d-3 and 13d-5 under the Securities Exchange Act
of 1934, as in
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effect on the Effective Date) either (x) shall have acquired either a greater
beneficial ownership interest or voting interest (in either case, on a fully
diluted basis) in Holdings' capital stock than that owned by ECP and its
Affiliates or (y) shall have the ability to designate a greater number of the
directors of Holdings than that designated by ECP, its Affiliates and the other
shareholders of Holdings which are not management shareholders.
"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 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" shall mean any of the commitments of any Lender, i.e.,
----
whether the Term Loan Commitment or the Revolving Loan Commitment.
"Commitment Commission" shall have the meaning provided in Section
3.01(a).
"Consolidated Current Assets" shall mean, at any time, the
consolidated current assets of Holdings and its Subsidiaries at such time.
"Consolidated Current Liabilities" shall mean, at any time, the
consolidated current liabilities of Holdings and its Subsidiaries at such time,
but excluding the current portion of any Indebtedness under this Agreement and
the current portion of any other long-term Indebtedness which would otherwise be
included therein.
"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 and without giving effect
to (x) any extraordinary gains or losses and (y) any gains or losses from sales
of assets other from sales of inventory sold in the ordinary course of business.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT
for such period, adjusted by adding thereto the amount of all amortization and
depreciation that were deducted in arriving at Consolidated EBIT for such period
determined without giving effect to any expenses incurred in connection with the
Transaction in an aggregate amount not to exceed $2,400,000.
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"Consolidated Indebtedness" shall mean, at any time, the principal
amount of all Indebtedness of Holdings and its Subsidiaries at such time
determined on a consolidated basis to the extent that such Indebtedness should
be accounted for as debt on the liability side of a balance sheet in accordance
with generally accepted accounting principles plus, without duplication, (i) the
aggregate amount of all unreimbursed drawings or payments (and which remain
unpaid for two or more days) under all letters of credit (including any Letters
of Credit), bankers acceptances and similar obligations issued for the account
of Holdings and its Subsidiaries and (ii) the amount of all Contingent
Obligations of Holdings and its Subsidiaries determined on a consolidated basis
in respect of Indebtedness of other Persons of the type described above in this
definition; it being understood, however, that up to $1,984,000 of Revolving
Loans incurred on the Initial Borrowing Date shall be excluded from Consolidated
Indebtedness only through April 15, 1999.
"Consolidated Interest Coverage Ratio" shall mean, for any period, the
ratio of Consolidated EBITDA to Consolidated Interest Expense for such period.
"Consolidated Interest Expense" shall mean, for any period, 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, provided
--------
that the amortization of deferred financing, legal and accounting costs with
respect to the Transaction shall be excluded from Consolidated Interest Expense
to the extent same would otherwise have been included therein; and provided
--------
further, that for purposes of determining compliance with Section 9.08 for any
-------
period, Consolidated Interest Expense shall be determined on a pro forma basis
---------
to give effect both to any interest expense of any Acquired Entity or Business
acquired pursuant to an Investment made pursuant to Section 9.05(xii) or (xiii)
and to any interest expense associated with any incremental Indebtedness
(including Revolving Loans and Swingline Loans) incurred to finance such
Investment, in each case for the portion of such period prior to such
acquisition.
"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
--------
(i) in determining Consolidated Net Income, the net income of any other Person
which is not a Subsidiary of Holdings or is accounted for by 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 of any Subsidiary of
the Borrower shall be excluded to the extent that the declaration or payment of
cash dividends or similar distributions by that Subsidiary of that net income is
not at the date of determination permitted by operation of its charter or any
agreement, instrument or law applicable to such Subsidiary and (iii) 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; and provided further,
----------------
that for purposes of calculating the Consolidated Interest Coverage Ratio under
Section 9.08 and the Leverage Ratio under Section 9.09, there shall be included
(to the extent not already included) in determining Consolidated Net Income for
any period the net income (or loss) of any Person, business, property or asset
acquired during such period pursuant to an Investment under Section 9.05(xii) or
(xiii) and not subsequently sold or otherwise disposed of by the
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Borrower or one of its Subsidiaries during such period (each such Person,
business, property or asset acquired and not subsequently disposed of during
such period, an "Acquired Entity or Business"), in each case based on the actual
net income (or loss) of such Acquired Entity or Business for the entire period
(including the portion thereof occurring prior to such acquisition) (but after
any deductions for minority interests).
"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.
"Continuing Director" shall mean, as of any date of determination, any
member of the Board of Directors of Holdings who (i) was a member of such Board
of Directors on the Initial Borrowing Date or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board of Directors at the time of
such nomination or election.
"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 the making of any Loan or the issuance of
any Letter of Credit.
"Credit Party" shall mean Holdings, 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.
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"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, partners or members or authorized or made any other distribution,
payment or delivery of property (other than common stock or other common equity
interests of such Person) or cash to its stockholders, partners or members as
such, 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 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 mean U.S. Bank National Association, in
its capacity as a Documentation Agent for the Lenders hereunder.
"Documents" shall mean the Credit Documents, the Equity Financing
Documents, the Acquisition Documents, the Holdings Subordinated Notes and the
Merger Documents.
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of Holdings
incorporated or organized in the United States or any State thereof
"Drawing" shall have the meaning provided in Section 2.05(b).
"ECP" shall mean Evercore Capital Partners L.P.
"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 "accredited
investor" (as defined in Regulation D of the Securities Act), but in any event
excluding Holdings its Subsidiaries.
"Employment Agreements" shall have the meaning provided in Section
5.05.
"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
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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. (S)
1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. (S) 2601 et seq.; the
-- ---- -- ----
Clean Air Act, 42 U.S.C. (S) 7401 et seq.; the Safe Drinking Water Act, 42
-- ----
U.S.C. (S) 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. (S) 2701 et
-- ---- --
seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42
----
U.S.C. (S) 11001 et seq.; the Hazardous Material Transportation Act, 49
-- ----
U.S.C. (S) 1801 et seq. and the Occupational Safety and Health Act, 29 U.S.C.
-- ----
(S) 651 et seq.; and any state and local or foreign counterparts or equivalents,
-- ----
in each case as amended from time to time.
"Equity Financing" shall mean the issuance by Holdings of shares of
its common stock on the Initial Borrowing Date and within 90 days thereafter to
ECP and/or its Affiliates, management of Holdings and certain other investors
identified to the Agents in an aggregate amount of $10,000,000.
"Equity Financing Documents" shall mean each of the documents and
agreements entered into in connection with the consummation of the Equity
Financing.
"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 employee" (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 Loan (other than any Swingline 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
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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 1/16 of 1%) by (b) a
percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves 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.
"Excess Cash Flow" shall mean, for any period, the remainder of (a)
the sum of (i) Adjusted Consolidated Net Income for such period and (ii) the
decrease, if any, in Adjusted Consolidated Working Capital from the first day to
the last day of such period, minus (b) the sum of (i) the amount of all Capital
Expenditures made by Holdings and its Subsidiaries during such period (other
than Capital Expenditures to the extent financed with equity proceeds, Asset
Sale proceeds, insurance proceeds or Indebtedness), (ii) the aggregate amount of
permanent principal payments of Indebtedness of Holdings and its Subsidiaries
during such period (other than (A) repayments to the extent made with Asset Sale
proceeds, equity proceeds, insurance proceeds or Indebtedness and (B) repayments
of Loans, provided that repayments of Loans shall be deducted in determining
--------
Excess Cash Flow if such repayments were (x) required as a result of a Scheduled
Repayment under Section 4.02(b) or (y) made as a voluntary prepayment with
internally generated funds (but in the case of a voluntary prepayment of
Revolving Loans or Swingline Loans, only to the extent accompanied by a
voluntary reduction to the Total Revolving Loan Commitment)) and (iii) the
increase, if any, in Adjusted Consolidated Working Capital from the first day to
the last day of such period.
"Excess Cash Payment Date" shall mean the date occurring 91 days after
the last day of each fiscal year of Holdings (beginning with its fiscal year
ending closest to May 31, 2000).
"Excess Cash Payment Period" shall mean, with respect to the
repayment required on each Excess Cash Payment Date, the immediately preceding
fiscal year of Holdings.
"Existing Indebtedness" shall have the meaning provided in Section
7.22.
"Existing Indebtedness Agreements" shall have the meaning provided
in Section 5.05.
"Expiration Date" shall mean, with respect to each Letter of Credit,
the final stated expiration date thereof or such earlier date on which such
Letter of Credit was canceled and returned to the Issuing Lender.
"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
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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.
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States by Holdings or any one or more of its
Subsidiaries primarily for the benefit of employees of Holdings or such
Subsidiaries residing outside the United States, which plan, fund or other
similar program provides, or results in, retirement income, a deferral of income
in contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of Holdings other than
a Domestic Subsidiary.
"Guaranteed Creditors" shall man and include each 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, each Agent, the Issuing Lender and the Collateral Agent now existing or
hereafter incurred under, arising out of or in connection with this Agreement
and each other Credit Document to which the Borrower is a party and the due
performance and compliance by the Borrower with all the terms, conditions and
agreements contained in this Agreement and all such other 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 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 herein.
"Guarantor" shall mean and include Holdings and each Subsidiary
Guarantor.
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"Guaranty" shall mean and include the Holdings 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 contains
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.
"Holdings" shall have the meaning provided in the first paragraph of
this Agreement.
"Holdings Guaranty" shall mean the guaranty of Holdings pursuant to
Section 14.
"Holdings Subordinated Notes" shall mean the 12% Junior Subordinated
Promissory Notes of Holdings due 2004 in the form delivered pursuant to Section
5.06(c).
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness 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 net 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 and accrued expenses incurred by any Person in accordance with
customary practices and in the ordinary course of business of such Person.
"Information System and Equipment" of any Person shall mean all
computer hardware, firmware and software, as well as other information
processing systems, or any equipment containing embedded microchips, whether
directly owned, licensed, leased, operated or otherwise controlled by such
Person, including through third-party service providers, and which, in whole or
in part, are used, operated, relied upon, or integral to, such Person's conduct
of its business.
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"Initial Borrowing Date" shall mean the date occurring on or after the
Effective Date on which the initial Borrowing of Term Loans occurs.
"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 incurred in the ordinary course of business and such
other obligations of the Borrower or any of its Subsidiaries as are reasonably
acceptable to the Issuing Lender and the Administrative Agent, in either case to
the extent such obligations are otherwise 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 that 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(b), 1.01(d)
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).
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"Letter of Credit Outstandings" shall mean, at any time, the sum of
(i) the Stated Amount of all outstanding Letters of Credit and (ii) the
aggregate amount of all Unpaid Drawings in respect of all Letters of Credit.
"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 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 Term Loan, 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(d).
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean (i) a material adverse effect on
the business, operations, properties, assets, liabilities or condition
(financial or otherwise) of Holdings and its Subsidiaries taken as a whole or
(ii) a material adverse effect (x) on the rights or remedies of the Lenders or
the Administrative Agent hereunder or under any other Credit Document, (y) on
the ability of any Credit Party to perform its obligations to the Lenders or the
Administrative Agent hereunder or under any other Credit Document or (z) with
respect to the Credit Events to occur on the Initial Borrowing Date, on the
Transaction.
"Maturity Date" shall mean, with respect to any Tranche of Loans, the
Term Loan Maturity Date, the Revolving Loan Maturity Date or the Swingline
Expiry Date, as the case may be.
"Maximum Swingline Amount" shall mean $500,000.
"Merger" shall mean the merger of Acquisition Corp. with and into
Resources, with Resources being the surviving corporation of such merger.
"Merger Documents" shall mean the certificate of merger and all other
agreements and documents related to the Merger.
"Minimum Borrowing Amount" shall mean (i) for Term Loans, $1,000,000,
(ii) for Revolving Loans, $ 100,000 and (iii) for Swingline Loans, $50,000.
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"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 costs associated therewith) received by the
respective Person from the respective incurrence of such Indebtedness for
borrowed money.
"Net Equity Proceeds" shall mean, with respect to each issuance or
sale of any equity by any Person or any capital contribution to such Person, the
cash proceeds (net of underwriting discounts and commissions and other costs
associated therewith) received by such Person from the respective sale or
issuance of its equity or from the respective capital contribution.
"Net Insurance Proceeds" shall mean, with respect to any Recovery
Event, the cash proceeds (net of costs and taxes incurred in connection with
such Recovery Event) received by the respective Person in connection with such
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, 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 taxes paid or payable as a result of such Asset Sale.
"Non-Compete Agreements" shall have the meaning provided in Section
5.05.
"Non-Defaulting Lender" and "Non-Defaulting RL Lender" shall mean and
include each Lender or RL Lender, as the case may be, other than a Defaulting
Lender.
"Note" shall mean each Term Note, 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 One Bankers Trust Plaza, 130 Liberty Street, New York, New York
10006, Attention: Ariana Delucia or such other office as the Administrative
Agent may hereafter designate in writing as such to the other parties hereto.
"Obligations" mean all amounts owing to any 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.
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"Participant" shall have the meaning provided in Section 2.04(a).
"Payment Office" shall mean the office of the Administrative Agent
located at One Bankers Trust Plaza, 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 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 other than a Foreign Pension Plan, which is maintained or contributed to
by (or to which there is an obligation to contribute of) Holdings, a Subsidiary
of Holdings or an ERISA Affiliate, and each such plan for which Holdings, a
Subsidiary of Holdings or an ERISA Affiliate is reasonably expected to have
liability under Section 4069 or 4212(c) of ERISA.
"Pledge Agreement" shall have the meaning provided in Section 5.09.
"Pledge Agreement Collateral" shall mean all "Collateral" as defined
in the Pledge Agreement.
"Pledgee" shall have the meaning provided 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, dated March 9, 1999, which
were prepared by or on behalf of Holdings in connection with the Transaction and
delivered to each Agent and the Lenders prior to the Initial Borrowing Date.
"Qualified IPO" shall mean a bona fide underwritten sale to the public
of common stock of Holdings pursuant to a registration statement (other than on
Form S-8 or any other form relating to securities issuable under any benefit
plan of Holdings or any of its Subsidiaries, as the case may be) that is
declared effective by the SEC and such offering results in gross cash proceeds
to Holdings (exclusive of underwriter's discounts and commissions and other
expenses) of at least $15,000,000.
"Qualified Preferred Stock" shall mean any preferred stock of Holdings
so long as the terms of any such preferred stock (v) do not contain any
mandatory put, redemption,
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repayment, sinking fund or other similar provision, (w) do not require the cash
payment of dividends, (x) do not contain any covenants, (y) do not grant the
holders thereof any voting rights except for (I) voting rights required to be
granted to such holders under applicable law and (II) limited customary voting
rights on fundamental matters such as mergers, consolidations, sales of all or
substantially all of the assets of Holdings, or liquidations involving Holdings,
and (z) are otherwise reasonably satisfactory to the Administrative Agent.
"Quarterly Payment Date" shall mean the last Business Day of each
March, June, September and December occurring after the Initial Borrowing Date,
commencing on March 31, 1999.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. (S) 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.
"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 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
outstanding Term Loans and Revolving Loan Commitments (or after the termination
thereof, outstanding Revolving Loans and RL Percentages of (x) outstanding
Swingline Loans and (y) Letter of Credit Outstandings) represent at least 50.1
% of the sum of (i) all outstanding Term Loans of Non-Defaulting Lenders and
(ii) 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 (x) outstanding Swingline
Loans and (y) Letter of Credit Outstandings at such time).
"Revolving Loan" shall have the meaning provided in Section 1.01(b).
"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 Loan Maturity Date" shall mean October 1, 2003.
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"RL Lender" shall mean each Lender with a Revolving Loan Commitment or
with outstanding Revolving Loans.
"RL Percentage" of any RL Lender at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such RL 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 such RL Lender shall be determined
immediately prior (and without giving effect) to such termination.
"Scheduled Repayments" shall have the meaning provided in Section
4.02(b).
"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.
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"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Security Agreement" shall have the meaning provided in Section 5.10.
"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 Additional Security Document.
"Shareholders' Agreements" shall have the meaning provided in Section
5.05.
"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
5.11.
"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 Wholly-Owned Domestic
Subsidiary of the Borrower and, to the extent provided in Section 8.16, each
Wholly-Owned Foreign Subsidiary of the Borrower.
"Swingline Expiry Date" shall mean that date which is five Business
Days prior to the Revolving Loan Maturity Date.
"Swingline Lender" shall mean BTCo.
"Swingline Loan" shall have the meaning provided in Section 1.01(c).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Syndication Agent" shall mean BankBoston, N.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).
"Term Loan" shall have the meaning provided in Section 1.01(a).
"Term Loan Commitment" shall mean, for each Lender, the amount set
forth opposite such Lender's name in Schedule I directly below the column
entitled "Term Loan Commitment," as same may be terminated pursuant to Sections
3.03 and/or 10.
"Term Loan Maturity Date" shall mean October 1, 2003.
"Term Note" shall have the meaning provided in Section 1.05(a).
"Test Period" shall mean (i) for any determination made on or prior to
the last day of Holdings' fiscal quarter ending closest to May 31, 1999, the
period from the first day of Resources' fiscal quarter beginning closest to
September 1, 1998 through and including the last day of Holdings' fiscal quarter
ending closest to May 31, 1999 (taken as one accounting period) and (ii) for any
determination made thereafter, each period of four consecutive fiscal quarters
of Holdings then last ended (in each case taken as one accounting period);
provided, however, the following rules shall apply:
-----------------
(i) for purposes of determining compliance with Section 9.09 at any
time prior to the last day of Holdings' fiscal quarter ending closest to
May 31, 1999, Consolidated EBITDA shall be the actual Consolidated EBITDA
for the period from the first day of Resources' fiscal quarter beginning
closest to September 1, 1998 through and including the last day of
Resources' fiscal quarter ending closest to February 28, 1999 (which period
also shall be a Test Period for purposes of such Section 9.09) multiplied
by 2;
(ii) for purposes of determining compliance with Sections 9.08, 9.09
and 9.10 at any time on and after last day of Holdings' fiscal quarter
ending closest to May 31, 1999 and prior to the last day of Holdings'
fiscal quarter ending closest to August 31, 1999, Consolidated EBITDA
shall be the actual Consolidated EBITDA for the period from the first day
of Resources' fiscal quarter beginning closest to September 1, 1998 through
and including the last day of Holdings' fiscal quarter ending closest to
May 31, 1999 multiplied by 4/3; and
(iii) for purposes of determining compliance with Section 9.08 (x)
for any Test Period ending on or prior to the last day of Holdings' fiscal
quarter ending closest to February 28, 2000, Consolidated Interest Expense
for any portion of a Test Period ended prior to the Initial Borrowing Date
shall be calculated on a pro forma basis as if the Transaction had occurred
---------
on the first day of each such Test Period and (y) for the Test Period
ending closest to May 31, 1999, Consolidated Interest Expense shall be
determined as otherwise provided in this definition multiplied by 4/3.
"Total Commitment" shall mean, at any time, the sum of the Commitments
of each of the Lenders.
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"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.
"Tranche" shall mean the respective facility and commitments utilized
in making Loans hereunder, with there being three separate Tranches, i.e., Term
---
Loans, Revolving Loans and Swingline Loans.
"Transaction" shall mean, collectively, (i) the Acquisition, (ii) the
Equity Financing, (iii) the issuance of the Holdings Subordinated Notes, (iv)
the Merger, (v) the entering into of the Credit Documents and the incurrence of
Loans on the Initial Borrowing Date and (vi) the payment of all fees and
expenses in connection with the foregoing.
"Transition Services Agreement" shall mean the Transition Services
Agreement, dated as of April 1, 1999, among Holdings, Resources and Deloitte &
Touche LLP.
"Type" shall mean the type of 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 value of the accumulated plan benefits under the Plan
determined on a plan termination basis in accordance with actuarial assumptions
at such time consistent with those prescribed by the PBGC for purposes of
Section 4044 of ERISA, exceeds the fair market value of all plan assets
allocable to such liabilities under Title IV of ERISA (excluding any accrued but
unpaid contribution).
"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.
"Wholly-Owned Domestic Subsidiary" shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person which is a Domestic Subsidiary.
"Wholly-Owned Foreign Subsidiary" shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person which is a Foreign Subsidiary.
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"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.
"Year 2000 Compliant" shall mean that all of Holdings' and its
Subsidiaries' Information Systems and Equipment accurately process date data
(including, but not limited to, calculating, comparing and sequencing) before,
during and after the year 2000, as well as same and multi-century dates, or
between the years 1999 and 2000, taking into account all leap years, including
the fact that the year 2000 is a leap year, and further, that when used in
combination with, or interfacing with, Information Systems and Equipment of any
other Person, shall accurately accept, release and exchange date data, and shall
in all material respects continue to function in the same manner as it performs
today and shall not otherwise impair the accuracy or functionality of Holdings'
or any of its Subsidiaries' Information Systems and Equipment.
SECTION 12. The Agents.
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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 (x) Collateral Agent pursuant
to the Security Documents and (y) Lead Arranger hereunder) to act as specified
herein and in the other Credit Documents. The Lenders hereby irrevocably
designate U.S. Bank National Association as Documentation Agent and BankBoston,
N.A. as Syndication Agent 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,
each 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
such Agent by the terms hereof and thereof and such other powers as are
reasonably incidental thereto. Each Agent may perform any of its respective
duties hereunder by or through its officers, directors, agents, employees or
affiliates.
12.02 Nature of Duties. Neither the Administrative Agent, the
----------------
Syndication Agent nor the Documentation Agent shall have any duties or
responsibilities except those expressly set forth in this Agreement and in the
other Credit Documents. None of the Agents nor any of their respective officers,
directors, agents, employees or affiliates shall 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 (as finally determined by a court of competent jurisdiction). The
duties of the Agents shall be mechanical and administrative in nature; neither
the Administrative Agent, the Syndication Agent nor the Documentation Agent
shall 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 any Agent any obligations in
respect of Agreement or any other Credit Document except as expressly set forth
herein or therein.
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12.03 Lack of Reliance on the Agents. Independently and without
------------------------------
reliance upon the Administrative Agent, the Syndication Agent or the
Documentation 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, neither the Administrative Agent, the
Syndication Agent nor the Documentation Agent shall 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. None of the Agents shall 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, collectibility, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of Holdings or any of its 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 Agents. If any 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, such Agent shall be entitled to refrain from such act or taking such
action unless and until such Agent shall have received instructions from the
Required Lenders; and such 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 any Agent as a
result of such 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. Each 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 such 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 such
Agent.
12.06 Indemnification. To the extent any Agent is not reimbursed and
---------------
indemnified by Holdings or any of its Subsidiaries, the Lenders will reimburse
and indemnify such 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 such 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,
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penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from such Agent's gross negligence or willful misconduct (as finally determined
by a court of competent jurisdiction).
12.07 Each Agent in its Individual Capacity. With respect to its
-------------------------------------
obligation to make Loans, or issue or participate in Letters of Credit, under
this Agreement, each 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 "Lender," "Required
Lenders," "holders of Notes" or any similar terms shall, unless the context
clearly otherwise indicates, include such Agent in its respective individual
capacities. Each Agent and its affiliates may accept deposits from, lend money
to, and generally engage in any kind of banking, investment banking, trust or
other 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 Lender.
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 or the Documentation
------------------------------------------------------------
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
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. The Documentation Agent and Syndication Agent may resign from
the performance of its functions duties hereunder at any time by giving the
Administrative Agent notice thereof. Such resignation shall take effect upon the
giving of such notice.
(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.
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(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 (x) of each Agent (including, without limitation, the
reasonable fees and disbursements of White & Case LLP (but no other law firm not
approved by the Borrower) and of the Agents' consultants retained with the
Borrower's approval) 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, and of the Agents in connection with their
syndication efforts with respect to this Agreement and (y) of the Agents 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, in each case without limitation, the
reasonable fees and disbursements of counsel and consultants for the Agents and,
after the occurrence of an Event of Default, counsel 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 each Agent and each Lender, and each of their
respective officers, directors, employees, representatives, agents, trustees and
investment advisors 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 any 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 the
consummation of the Transaction 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, leased 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, leased or operated by
Holdings or any of its Subsidiaries, the non-compliance of any Real Property
with foreign, federal, state and
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local laws, regulations, and ordinances (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, leased 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 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
competent jurisdiction)). To the extent that the undertaking to indemnify, pay
or hold harmless each Agent or any Lender set forth in the preceding sentence
may be unenforceable because it is 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. 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 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 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 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 such Lender shall have made any demand hereunder
and although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
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 any 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
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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 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 Commitments hereunder except as provided in Sections 1.13
and 13.04(b)) and the participant shall not constitute a "Lender hereunder and,
provided further, that no Lender shall 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 Loan, Note or Letter
of Credit (unless such Letter of Credit is not extended beyond the Revolving
Loan 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 Commitment shall not constitute a change in the
terms of such participation, and that an increase in any Commitment or Loan
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 or Letters of Credit 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.
(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
Commitments and related outstanding Obligations (or, if the Commitments with
respect to the relevant Tranche have terminated, 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 if less than all, a portion equal to at least $2,000,000
in the aggregate for the assigning Lender or assigning Lenders, of such
Commitments and related outstanding Obligations (or, if the Commitments with
respect to the relevant Tranche have terminated, 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 or advised 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 Commitments and/or outstanding Loans, as the case may be, of such
new Lender and of the existing Lenders, (ii) upon the surrender of the relevant
Notes by the assigning Lender marked "canceled" (or, upon
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such assigning Lender's indemnifying the Borrower for any lost Note pursuant to
a customary indemnification agreement reasonably acceptable to the Borrower) new
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 Notes to be in conformity with the requirements of Section 1.05 (with
appropriate modifications) to the extent needed to reflect the revised
Commitments and/or outstanding Loans, as the case may be, (iii) the consent of
the Administrative Agent and, so long as no Default or Event of Default then
exists, the consent of the Borrower (each of which consents shall not be
unreasonably withheld or delayed) shall be required in connection with any
assignment to an Eligible Transferee pursuant to clause (y) above, (iv) 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 (v) 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
Commitments and outstanding Loans. At the time of each assignment pursuant to
this Section 13.04(b) to a Person which is not already a Lender hereunder and
which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for Federal income tax purposes, the respective
assignee Lender shall, to the extent legally entitled to do so, provide to the
Borrower the appropriate Internal Revenue Service Forms (and, if applicable, a
Section 4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent
that an assignment of all or any portion of a Lender's Commitments and related
outstanding Obligations pursuant to Section 1.13 or this Section 13.04(b)
would, at the time of such assignment, result in increased costs under Section
1.10, 2.06 or 4.04 from those being charged by the respective assigning Lender
prior to such assignment, then the Borrower shall not be obligated to pay such
increased costs (although the Borrower, in accordance with and pursuant to the
other provisions of this Agreement, shall be obligated to pay any other
increased costs of the type described above resulting from changes after the
date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Lender
from pledging its Loans and 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 and the Borrower, any Lender which is a fund
may pledge all or any portion of its Loans and 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 Syndication 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 no course of
dealing between the Borrower or any other Credit Party and the Administrative
Agent, the Syndication 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 Syndication Agent, the Documentation Agent,
the Collateral
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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 Syndication
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 owed such Obligations 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 such other Lenders participating in such Obligations 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 Lenders, 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) 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 Holdings
or the Borrower to the Lenders); provided that, except as otherwise specifically
--------
provided herein, all computations of Excess Cash Flow, and all computations
and all definitions used in determining compliance with Sections 9.07 through
9.10, inclusive, (x) shall utilize accounting principles and policies in
conformity with those used to prepare the historical financial statements of
Resources referred to in Section 7.05(a) and (y) shall be determined as if no
Holdings Subordinated Notes are outstanding.
(b) All computations of interest, Commitment Commission and other
Fees hereunder shall be made on the basis of a year of 360 days for the actual
number of days
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(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; provided
that Base Rate Loans the rate of interest on which is determined by reference to
the Prime Lending Rate shall be made on the basis of a year of 365 days for the
actual number of days occurring in the period for which such interest is
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 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 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
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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, the
Administrative Agent, the Syndication Agent and the Documentation Agent.
13.10 Effectiveness. This Agreement shall become effective on the date
-------------
(the "Effective Date") on which Holdings, Acquisition Corp., Resources, each
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. The Administrative Agent will give Holdings, the
Borrower and each Lender prompt written notice of the occurrence of the
Effective Date.
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 Revolving Loan Maturity Date,
or reduce the rate or extend the time of payment of interest or Fees thereon
(except in connection with the waiver of applicability of any post-default
increase in interest rates), or reduce the principal amount thereof, (ii)
release all or substantially all of the Collateral (except as expressly provided
in the Credit Documents) under all the Security Documents, (iii) amend, modify
or waive any provision of this Section 13.12 (except for technical amendments
with respect to additional extensions of credit pursuant to this Agreement which
afford the protections to such additional extensions of credit of the type
provided to the Term Loans and the Revolving Loan Commitments on the Effective
Date), (iv) reduce the percentage specified in the definition of Required
Lenders (it being understood that,
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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 Term Loans and
Revolving Loan Commitments are included on the Effective Date) or (v) 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 (1) increase the Commitments 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 Commitment shall not
constitute an increase of the Commitment of any Lender, and that an increase in
the available portion of any Commitment of any Lender shall not constitute an
increase of the Commitment of such Lender), (2) 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, (3) without the consent
of the Swingline Lender, alter the Swingline Lender's rights or obligations with
respect to Swingline Loans, (4) without the consent of each Agent, amend, modify
or waive any provision of Section 12 or any other provision as same relates to
the rights or obligations of such Agent, or (5) without the consent of
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 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 Lenders consents to the proposed
change, waiver, discharge or termination or (B) terminate such non-consenting
Lender's Commitments and/or repay each Tranche of outstanding Loans of such
Lender in accordance with Sections 3.02(b) and/or 4.01(b), provided that, unless
--------
the Commitments that are terminated, and 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 Commitments and/or outstanding Loans of
existing Lenders (who in each case must specifically consent thereto), then in
the case of any action pursuant to preceding clause (B) the Required Lenders
(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 Commitments or repay its 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
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would, at the time of such transfer, result in increased costs under Section
1.10, 1.11, 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
Commitments from time to time of each of the Lenders, the Loans made by each of
the Lenders and each repayment in respect of the principal amount of the Loans
of each Lender. Failure to make any such recordation, or any error in such
recordation, shall not affect the Borrower's obligations in respect of such
Loans. With respect to any Lender, the transfer of the Commitments of such
Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Commitments shall not be effective until such transfer is
recorded on the Register maintained by the Administrative Agent with respect to
ownership of such Commitments and Loans and prior to such recordation all
amounts owing to the transferor with respect to such Commitments and Loans shall
remain owing to the transferor. The registration of assignment or transfer of
all or part of any Commitments and Loans shall be recorded by the Administrative
Agent on the Register only upon the acceptance by the 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 Loan, the assigning or transferor
Lender shall surrender the Note (if any) evidencing such Loan marked "canceled",
and thereupon one or more new Notes in the same aggregate principal amount shall
be issued to the assigning or transferor Lender and/or the new Lender at the
request of any such 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, provided
that the Borrower shall not be liable for the payment of any portion of such
losses, claims, damages or liabilities resulting from the Administrative
Agent's gross negligence or willful misconduct (as finally determined by a court
of competent jurisdiction).
13.16 Confidentiality. (a) Subject to the provisions of clause (b) of
---------------
this Section 13.16, each Lender agrees it will not disclose without the prior
consent of the Borrower (other than to its employees, auditors, advisors or
counsel or to another Lender if such 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,
provided that 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 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
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
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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 such Lender, (v)
to the Administrative Agent, the Syndication Agent, the Documentation 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 Notes or 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 of Holdings and the Borrower hereby acknowledges and agrees
that each Lender may share with any of its affiliates, and such affiliates may
share with such Lender, any information related to Holdings or any of its
Subsidiaries (including, without limitation, any non-public 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.
13.17 Acknowledgement. Resources, as the surviving corporation of the
---------------
Merger, hereby (i) acknowledges that from and after the consummation of the
Merger, it shall assume (and hereby assumes) all rights, obligations, duties and
liabilities of Acquisition Corp. under this Agreement, any Notes issued
hereunder and the other Credit Documents to which Acquisition Corp. is a party
and shall be the "Borrower" for all purposes under this Agreement and the other
Credit Documents and all references in this Agreement and the other Credit
Documents to the "Borrower" shall be deemed to be references to Resources and
(ii) represents, warrants and agrees that from and after the consummation of the
Merger, Resources will fully and faithfully perform all obligations (including
payment obligations and compliance with all covenants) of the "Borrower" under
this Agreement, any Notes delivered pursuant hereto and the other Credit
Documents.
SECTION 14. Holdings Guaranty.
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14.01 Guaranty. In order to induce each 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 Holdings 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, Holdings
hereby agrees with the Guaranteed Creditors as follows: Holdings hereby
unconditionally and irrevocably guarantees as primary obligor 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, Holdings
unconditionally 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,
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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 Holdings agrees that any such judgment,
decree, order, settlement or compromise shall be binding upon Holdings,
notwithstanding any revocation of this Guaranty or other instrument evidencing
any liability of the Borrower, and Holdings 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.
This Guaranty is a guaranty of payment and not collection.
14.02 Bankruptcy. Additionally, Holdings 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 unconditionally, jointly and severally, promises to pay such indebtedness to
the Guaranteed Creditors, or order, on demand, in lawful currency of the United
States.
14.03 Nature of Liability. The liability of Holdings hereunder is
-------------------
exclusive and independent of any security for or other guaranty of the
Guaranteed Obligations of the Borrower whether executed by Holdings, any other
guarantor or by any other party, and the liability of Holdings 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 Holdings 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 Holdings 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 Holdings 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. Holdings
waives, to the full 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 Holdings.
14.05 Authorization. Holdings authorizes the Guaranteed Creditors
-------------
without notice or demand (except as 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 thereon), any security therefor, or any
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liability incurred directly or indirectly in respect thereof, and the Guaranty
herein made shall apply to the Guaranteed Obligations as so changed, extended,
renewed or altered;
(b) 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 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 Holdings or 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
Holdings 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 Holdings 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 be guaranteed hereunder.
14.07 Subordination. Any indebtedness of the Borrower now or
-------------
hereafter owing to Holdings 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 Holdings shall be collected, enforced and
received by Holdings 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
Holdings under the other provisions of this Guaranty. Prior to the
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transfer by Holdings of any note or negotiable instrument evidencing any such
indebtedness of the Borrower to Holdings, Holdings 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, Holdings 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 paid in full in cash.
14.08 Waiver. (a) Holdings 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. Holdings waives any defense based on or
arising out of any defense of the Borrower, any other guarantor or any other
party, other than payment in full of the Guaranteed Obligations, 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 in full of the Guaranteed
Obligations. 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 Holdings
hereunder except to the extent the Guaranteed Obligations have been paid.
Holdings 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 Holdings against the
Borrower or any other party or any security.
(b) Holdings 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. Holdings 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 Holdings assumes
and incurs hereunder, and agrees that neither the Agents nor the Banks shall
have any duty to advise Holdings of information known to them regarding such
circumstances or risks.
14.09 Nature of Liability. It is the desire and intent of Holdings and
-------------------
the Guaranteed Creditors that this Guaranty shall be enforced against Holdings
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 obligations of Holdings 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 Holdings obligations under this Guaranty shall be
deemed to be reduced and
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Holdings 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.
RC TRANSACTION CORP.
By: /s/ Stephen J. Giusto
--------------------------------------
Title: C.F.O. & Secretary
RCLLC ACQUISITION CORP.
By: /s/ Stephen J. Giusto
-------------------------------------
Title: C.F.O. & Secretary
RE:SOURCES CONNECTION LLC
By: /s/ Stephen J. Giusto
-------------------------------------
Title: C.F.O. & Secretary
BANKERS TRUST COMPANY, Individually, as
Administrative Agent and as Lead
Arranger
By: /s/ Mary Kay Coyle
-------------------------------------
Title: Managing Director
U.S. BANK NATIONAL ASSOCIATION,
Individually and as Documentation Agent
By: /s/ Kurt D. Egertson
-------------------------------------
Title: Vice President
BANKBOSTON, N.A., Individually and as
Syndication Agent
By: Cheryl J. Carangelo
-------------------------------------
Title: Vice President
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