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EXHIBIT 10.1
EXECUTION COPY
____________________________________________________________
____________________________________________________________
LOAN AGREEMENT
Dated as of October 31, 2000
among
KORN/FERRY INTERNATIONAL,
a Delaware corporation
The Lenders and the Issuing Lender referred to herein
and
BANK OF AMERICA, N.A.
as Administrative Agent for itself and for the other Lenders
____________________________________________________________
____________________________________________________________
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TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS...................................................................... 1
1.1 Defined Terms................................................................................... 1
1.2 Use of Defined Terms............................................................................ 20
1.3 Accounting Terms................................................................................ 20
1.4 Rounding........................................................................................ 20
1.5 Exhibits and Schedules.......................................................................... 20
1.6 Miscellaneous Terms............................................................................. 20
ARTICLE 2
LOANS AND LETTERS OF CREDIT........................................................................... 21
2.1 Loans-General................................................................................... 21
2.2 Base Rate Loans................................................................................. 22
2.3 Eurodollar Rate Loans........................................................................... 22
2.4 Redesignation of Loans.......................................................................... 22
2.5 Letters of Credit............................................................................... 22
2.6 Reductions of the Commitment.................................................................... 25
ARTICLE 3
PAYMENTS AND FEES..................................................................................... 26
3.1 Principal and Interest.......................................................................... 26
3.2 Commitment Fees................................................................................. 27
3.3 Letter of Credit Fees........................................................................... 27
3.4 Facility Fee.................................................................................... 27
3.5 Capital Adequacy................................................................................ 27
3.6 Eurodollar Fees and Costs....................................................................... 27
3.7 Post Default Interest and Late Payments......................................................... 30
3.8 Right to Assume Payments Will be Made by Borrower............................................... 30
3.9 Computation of Interest and Fees................................................................ 30
3.10 Non-Banking Days................................................................................ 30
3.11 Manner and Treatment of Payments................................................................ 30
3.12 Funding Sources................................................................................. 31
3.13 Failure to Charge Not Subsequent Waiver......................................................... 31
3.14 Authority to Charge Account..................................................................... 31
3.15 Survivability................................................................................... 32
ARTICLE 4
REPRESENTATIONS AND WARRANTIES........................................................................ 33
4.1 Existence and Qualification; Power; Compliance With Laws........................................ 33
4.2 Authority; Compliance With Other Agreements and Instruments and Government Regulations.......... 33
4.3 No Governmental Approvals Required.............................................................. 34
4.4 Subsidiaries.................................................................................... 34
4.5 Financial Statements............................................................................ 34
4.6 No Other Liabilities; No Material Adverse Effect................................................ 34
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4.7 Title to and Location of Property............................................................... 35
4.8 Intangible Assets............................................................................... 35
4.9 Governmental Regulation......................................................................... 35
4.10 Litigation....................................................................................... 35
4.11 Binding Obligations.............................................................................. 35
4.12 No Default....................................................................................... 35
4.13 ERISA............................................................................................ 35
4.14 Regulations T, U and X........................................................................... 37
4.15 Disclosure....................................................................................... 37
4.16 Tax Liability.................................................................................... 37
4.17 Budget........................................................................................... 37
4.18 Hazardous Materials.............................................................................. 37
ARTICLE 5
AFFIRMATIVE COVENANTS
(OTHER THAN INFORMATION AND
REPORTING REQUIREMENTS)................................................................................ 39
5.1 Payment of Taxes and Other Potential Liens....................................................... 39
5.2 Preservation of Existence........................................................................ 39
5.3 Maintenance of Properties........................................................................ 39
5.4 Maintenance of Insurance......................................................................... 39
5.5 Compliance With Laws............................................................................. 39
5.6 Inspection Rights................................................................................ 40
5.7 Keeping of Records and Books of Account.......................................................... 40
5.8 Compliance With Agreements....................................................................... 40
5.9 Use of Proceeds.................................................................................. 40
5.10 Hazardous Materials Laws......................................................................... 40
5.11 Future Guarantors................................................................................ 41
5.12 Acquisition Covenants............................................................................ 41
5.13 Further Assurances............................................................................... 41
5.14 Bank as Principal Depository. ................................................................... 41
ARTICLE 6
NEGATIVE COVENANTS..................................................................................... 42
6.1 Prepayment of Indebtedness....................................................................... 42
6.2 Disposition of Property.......................................................................... 42
6.3 Mergers.......................................................................................... 42
6.4 Acquisitions..................................................................................... 42
6.5 Distributions.................................................................................... 42
6.6 ERISA............................................................................................ 43
6.7 Change in Name; Nature of Business............................................................... 43
6.8 Indebtedness and Contingent Obligations.......................................................... 43
6.9 Liens; Negative Pledges; Sales and Leasebacks.................................................... 44
6.10 Transactions with Affiliates..................................................................... 44
6.11 Investments...................................................................................... 44
6.12 Fixed Charge Coverage Ratio...................................................................... 45
6.13 Leverage Ratio................................................................................... 45
6.14 Minimum Quick Ratio.............................................................................. 45
6.15 Foreign Subsidiaries. .......................................................................... 46
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6.16 Suspension of Business........................................................................... 46
ARTICLE 7
INFORMATION AND REPORTING REQUIREMENTS................................................................. 47
7.1 Financial and Business Information............................................................... 47
7.2 Compliance Certificates.......................................................................... 48
ARTICLE 8
CONDITIONS............................................................................................. 49
8.1 Conditions to the Initial Loans and Letters of Credit............................................ 49
8.2 Any Increasing Loan.............................................................................. 50
8.3 Post-Closing Conditions; Pledge Agreement........................................................ 50
ARTICLE 9
EVENTS OF DEFAULT AND REMEDIES......................................................................... 52
9.1 Events of Default................................................................................ 52
9.2 Remedies Upon Event of Default................................................................... 53
ARTICLE 10
THE ADMINISTRATIVE AGENT............................................................................... 56
10.1 Appointment and Authorization.................................................................... 56
10.2 Delegation of Duties............................................................................. 56
10.3 Liability of the Administrative Agent............................................................ 56
10.4 Reliance by Administrative Agent................................................................. 56
10.5 Notice of Default................................................................................ 57
10.6 Credit Decision.................................................................................. 57
10.7 Indemnification.................................................................................. 58
10.8 Bank of America in its Individual Capacity....................................................... 58
10.9 Successor Agents................................................................................. 58
10.10 No Obligations of Borrower....................................................................... 59
ARTICLE 11
MISCELLANEOUS.......................................................................................... 60
11.1 Cumulative Remedies; No Waiver................................................................... 60
11.2 Amendments; Consents............................................................................. 60
11.3 Costs, Expenses and Taxes........................................................................ 61
11.4 Nature of Lenders' Obligations................................................................... 61
11.5 Survival of Representations and Warranties....................................................... 61
11.6 Notices.......................................................................................... 61
11.7 Execution of Loan Documents...................................................................... 62
11.8 Binding Effect; Assignment....................................................................... 62
11.9 Foreign Lenders and Participants................................................................. 63
11.10 Right of Setoff.................................................................................. 64
11.11 Sharing of Setoff................................................................................ 64
11.12 Indemnity by Borrower............................................................................ 65
11.13 Nonliability of the Creditors.................................................................... 65
11.14 No Third Parties Benefited....................................................................... 66
11.15 Further Assurances............................................................................... 66
11.16 Confidentiality.................................................................................. 66
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11.17 Integration...................................................................................... 66
11.18 Severability of Provisions....................................................................... 66
11.19 Independent Covenants............................................................................ 67
11.20 Headings......................................................................................... 67
11.21 Arbitration Reference............................................................................ 67
11.22 Environmental Indemnity.......................................................................... 68
11.23 Jurisdiction and Venue........................................................................... 68
11.24 GOVERNING LAW.................................................................................... 69
11.25 PURPORTED ORAL AMENDMENTS........................................................................ 69
Exhibits
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A - Assignment Agreement
B - Compliance Certificate
C - Guaranty
D - [Reserved]
E - Request for Letter of Credit
F - Request for Loan
G - Request for Redesignation
H - Pricing Certificate
I - Pledge Agreement
J - Investment Policy
K - Permitted Stock Repurchase Certificate
Schedules
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1.1 - Pro Rata Shares/Commitment
4.4 - Subsidiaries
4.10 - Litigation
4.13 - Pension Plans
4.18 - Hazardous Materials
6.8(a) - Existing Indebtedness
6.8(d) - Permitted Seller Indebtedness
6.9 - Existing Liens
6.11 - Investments
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LOAN AGREEMENT
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Dated as of October 31, 2000
This LOAN AGREEMENT ("Agreement") is entered into by and among
KORN/FERRY INTERNATIONAL, a Delaware corporation (the "Borrower"), the lenders
named on the signature pages hereof or which hereafter become parties hereto in
accordance with Section 11.8 hereof, as the Lenders, and Bank of America, N.A.
as Administrative Agent for itself and for the other Lenders.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
--------------------------------
1.1 Defined Terms. As used in this Agreement, the following terms
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shall have the respective meanings set forth below:
"Acquisition" means any transaction, or any series of related
-----------
transactions, by which Borrower and/or any Subsidiary of Borrower directly
or indirectly (i) acquires any business or all or substantially all of the
assets of any firm, partnership, joint venture, corporation, limited
liability company or division thereof, whether through purchase of assets,
merger or otherwise, or (ii) acquires (in one transaction or as the most
recent transaction in a series of transactions) control of at least a
majority in ordinary voting power of the securities of a corporation which
have ordinary voting power for the election of directors, or (iii) acquires
control of a 50% or more ownership interest in any partnership or joint
venture.
"Administrative Agent" means Bank of America, when acting in its
--------------------
capacity as Administrative Agent under any of the Loan Documents, or any
successor Administrative Agent.
"Administrative Agent's Office" means the Administrative Agent's
-----------------------------
address as set forth on the signature pages of this Agreement, or such
other address as the Administrative Agent hereafter may designate by
written notice to Borrower and the Lenders.
"Affiliate" means, as to any Person, any other Person which
---------
directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (and the
correlative terms, "controlled by" and "under common control with") shall
mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of
Securities or partnership or other ownership interests, by contract or
otherwise); provided that, in any event, any Person that owns, directly or
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indirectly, 10% or more of the Securities having ordinary voting power
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for the election of directors or other governing body of a corporation
(other than Securities having such power only by reason of the happening of
a contingency), or 10% or more of the partnership or other ownership
interests of any other Person (other than as a limited partner of such
other Person), will be deemed to control such corporation or other Person.
"Agent Related Persons" means Bank of America and any successor
---------------------
Administrative Agent, together with their respective Affiliates, and the
officers, directors, employees, agents and attorneys-in-fact of such
Persons and Affiliates.
"Agreement" means this Loan Agreement, either as originally
---------
executed or as it may from time to time be supplemented, modified, amended,
restated or extended.
"Amortization Adjustment" means an amount for the fiscal period
-----------------------
of twelve months ending on the last day of any Fiscal Quarter, equal to 20%
of the average daily Commitment during such twelve month period (or, to the
extent that the Closing Date occurred during such twelve month period, in
the period since the Closing Date).
"Approved Swap Agreement" means each interest rate, currency or
-----------------------
other similar swap or hedging agreement between Borrower and Lender, either
as originally executed or as the same may from time to time be
supplemented, modified, amended, renewed, extended, replaced or supplanted.
"Assignment Agreement" means Assignment Agreement substantially
--------------------
in the form of Exhibit A.
"Bank of America" means Bank of America, N.A., and its
---------------
successors.
"Banking Day" means any Monday, Tuesday, Wednesday, Thursday or
-----------
Friday, other than a day on which banks are authorized or required to be
closed in California.
"Base Rate" means the greater of (a) the Prime Rate or (b) the
---------
Federal Funds Rate plus 0.50%.
"Base Rate Loan" means a Loan made hereunder and designated as a
--------------
Base Rate Loan in accordance with Article 2.
"Base Rate Margin" means, for each Pricing Period, the interest
----------------
rate margin set forth below (expressed in basis points per annum) opposite
the Pricing Level in effect during that Pricing Period:
Pricing Level Base Rate Margin
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I (25.0)
II -0-
III -0-
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"Borrower" means KORN/FERRY INTERNATIONAL, a Delaware
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corporation, and its successors and permitted assigns.
"Budget" means (a) the budgeted financial information prepared by
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Borrower and furnished to the Administrative Agent prior to the date
hereof; or (b) after delivery of the financial budget most recently
furnished by Borrower to Lender pursuant to Section 7.1(c), such financial
budget.
"Capital Expenditure" means any expenditure during any fiscal
-------------------
period that is considered a capital expenditure under Generally Accepted
Accounting Principles, consistently applied, including any amount that is
required to be treated as an asset subject to a Capital Lease.
"Capital Lease" means, as to any Person, a lease of any Property
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by that Person as lessee that is, or should be in accordance with Financing
Accounting Standards Board Statement No. 13, recorded as a "capital lease"
on the balance sheet of that Person prepared in accordance with Generally
Accepted Accounting Principles.
"Cash" means, when used in connection with any Person, all
----
monetary and non-monetary items owned by that Person that are treated as
cash in accordance with Generally Accepted Accounting Principles,
consistently applied.
"Cash Equivalents" means each of the Investments described in the
----------------
Borrower's Investment Policy as set forth on Exhibit J attached hereto.
"Cash Proceeds" means (a) the gross cash payments (including any
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cash received by way of deferred payment pursuant to a note receivable or
otherwise, but only as and when so received) received from any sale,
transfer, exchange or other disposition of assets and (b) the gross cash
consideration received from or upon the sale or other disposition of any
asset received, directly or indirectly, in exchange for the asset which is
the subject of that sale, transfer, exchange or disposition.
"Certificate of a Responsible Official" means a certificate
-------------------------------------
signed by a Responsible Official of the Person providing the certificate.
"Change in Control" means (a) any transaction or series of
-----------------
related transactions in which any Person or group of Persons (other than
Richard Ferry, either individually or as a trustee of any trust for which
he has sole power to direct and control investments) acquire beneficial
ownership (within the meaning of Rule 13d-3(a) under the Securities
Exchange Act of 1934, as amended), directly or indirectly, of 40% or more
of the Common Stock of Borrower, (b) during any period of 24 consecutive
months, individuals who at the beginning of such period constituted the
board of directors of Borrower (together with any new or replacement
directors whose election by the board of directors, or whose nomination for
election, was approved by a vote of at least a majority of the directors
then still in office who were either directors at the beginning of such
period or whose election or nomination for reelection was previously so
approved) cease for any reason to constitute a majority of the directors
then in office, (c) a "change in control" as defined in any document
governing Indebtedness of Borrower or any of the Subsidiaries in excess of
$3,000,000 occurs which gives the holders of such Indebtedness the right to
accelerate or otherwise require payment of
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such Indebtedness prior to the maturity date thereof, or (d) if either of
the individuals serving as chairman of the board or chief executive officer
of the Borrower, as of the Closing Date, no longer hold these positions and
their successors are not approved by a majority of the board of directors
of Borrower.
"Closing Date" means the time and Banking Day on which the
------------
consummation of all of the transactions contemplated in Section 8.1 occurs.
"Code" means the Internal Revenue Code of 1986, as amended or
----
replaced and as in effect from time to time.
"Commission" means the Securities and Exchange Commission.
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"Commitment" means the commitment by Lenders to make revolving
----------
Loans to Borrower in an aggregate principal amount, subject to Section 2.6,
not to exceed $100,000,000.
"Commitment Fee Rate" means, for each Pricing Period, the rate
-------------------
per annum set forth below (expressed in basis points per annum) opposite
the Pricing Level in effect during that Pricing Period:
Pricing Level Commitment Fee Rate
------------------------------------------------------
I 30.0
II 37.5
III 37.5
"Common Stock" means the common stock of Borrower or any of its
------------
Subsidiaries.
"Compliance Certificate" means a certificate in the form of
----------------------
Exhibit B, properly completed and signed by a Senior Officer of Borrower
and delivered to the Administrative Agent.
"Contingent Obligation" means, as to any Person, any (a) direct
---------------------
or indirect guarantee of Indebtedness of, or other obligation performable
by, any other Person, including any endorsement (other than for collection
or deposit in the ordinary course of business), co-making or sale with
recourse of the obligations of any other Person, (b) contingent
reimbursement obligations in respect of any letter of credit, including a
Letter of Credit, or (c) assurance given to an obligee with respect to the
performance of an obligation by, or the financial condition of, any other
Person, whether direct, indirect or contingent, including any purchase or
repurchase agreement covering such obligation or any collateral security
therefor, any agreement to provide funds (by means of loans, capital
contributions or otherwise) to such other Person, any agreement to support
the solvency or level of any balance sheet item to such other Person, or
any "keep-well", "take-or-pay", "through put" or other arrangement of
whatever nature having the effect of assuring or holding harmless any
obligee against loss with respect to any obligation of such other Person.
The amount of any Contingent Obligation shall be deemed to be an amount
equal to the stated or determinable amount of the related primary
obligation
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(unless the Contingent Obligation is limited by its terms to a lesser
amount, in which case to the extent of such amount) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect
thereof as determined in good faith by the Person so obligated.
"Contractual Obligation" means, as to any Person, any provision
----------------------
of any outstanding Securities issued by that Person or of any material
agreement, instrument or undertaking to which that Person is a party or by
which it or any of its Property is bound.
"Creditors" means, collectively, the Administrative Agent, the
---------
Issuing Lender, Bank of America, in its capacity as a party to the Approved
Swap Agreement, and the Lenders.
"Debtor Relief Laws" means the Bankruptcy Code of the United
------------------
States of America, as amended from time to time, and all other applicable
liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief Laws
from time to time in effect affecting the rights of creditors generally.
"Default" means any event that, which with the giving of any
-------
applicable notice or passage of time set forth in Section 9.1, or both,
would be an Event of Default.
"Default Rate" means the rate of interest specified in Section
------------
3.7.
"Designated Eurodollar Market" means, with respect to any
----------------------------
Eurodollar Rate Loan, (a) the London Eurodollar Market or (b) if prime
banks in the London Eurodollar Market are at the relevant time not
accepting deposits of Dollars or if the Administrative Agent determines
that the London Eurodollar Market does not represent at the relevant time
the effective pricing to the Lenders for deposits of Dollars in the London
Eurodollar Market, (i) the Cayman Islands Eurodollar Market or (ii) such
other Eurodollar Market as may from time to time be selected by
Administrative Agent with the approval of the Requisite Lenders, provided
--------
that the Designated Eurodollar Market shall not be changed (A) without
notice to Borrower from the Administrative Agent or (B) with respect to any
Eurodollar Rate Loan requested by Borrower, prior to the making of that
Eurodollar Rate Loan unless consented to by Borrower.
"Disposition" means the sale, transfer or other disposition in
-----------
any single transaction or series of related transactions (including by
---------
means of a sale-leaseback transaction) of any asset, or group of related
assets, of Borrower or of any Subsidiary of Borrower (a) which asset or
assets constitute a line of business or substantially all the assets of
Borrower or such Subsidiary or (b) the aggregate amount of the Net Cash
Proceeds of such assets is more than $2,000,000, other than (i) inventory
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or other assets sold or otherwise disposed of in the ordinary course of
business of Borrower or such Subsidiary, (ii) equipment sold or otherwise
disposed of where substantially similar equipment in replacement thereof
has theretofore been acquired, or thereafter within 90 days is acquired, by
Borrower or such Subsidiary and (iii) obsolete assets no longer useful in
the business of Borrower or such Subsidiary whose carrying value on the
books of Borrower or such Subsidiary is zero or de minimus.
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"Distribution" means, (i) with respect to any shares of capital
-------------------
stock or any warrant or right to acquire shares of capital stock or any
other equity security issued by a Person (other than pursuant to the terms
----- ----
of Indebtedness which is convertible into or exchangeable for capital stock
or any other equity security), (a) the retirement, redemption, purchase, or
other acquisition for value by such Person of any such security, (b) the
declaration
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or (without duplication) payment by such Person of any dividend in cash or
in Property (other than common stock or any other equity security of such
----------
Person) on or with respect to any such security, (c) any Investment by such
Person in the holder of any such security, and (d) any other payment by
such Person constituting a distribution under applicable Laws with respect
to such security, and (ii) any payment in respect of Indebtedness owed by
Borrower or any of its Subsidiaries to any Affiliate or shareholder (other
than an Affiliate or shareholder which is either the Borrower itself or one
of its Subsidiaries), or Person not dealing at arm's length with Borrower,
which is not expressly permitted by this Agreement.
"Dollars" or the symbol "$" means United States dollars.
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"Domestic Subsidiary" means all Subsidiaries of Borrower that are
-------------------
not Foreign Subsidiaries.
"EBITDA" means, for any fiscal period, determined on a
consolidated basis for Borrower and its Subsidiaries, (a) Net Income (or
net loss) for that period, plus (b) without duplication and to the
----
extent deducted from revenues in determining Net Income (or net loss), the
sum of (i) the aggregate amount of Interest Expense for that period, (ii)
---
the aggregate amount of income tax expense for that period, plus (iii) all
----
amounts attributable to amortization and depreciation for that period, plus
----
(iv) non-cash charges during that period which do not reflect cash
expenditures and which are not expected to result in cash expenditures
during the term of this Agreement, minus (c) the sum without duplication
----- ---
and to the extent added to revenues in determining Net Income for that
period, (i) non-cash gains during that period, plus (ii) gains (or minus
---- -----
losses) on sales of fixed assets during that period, in each case
determined in accordance with GAAP for that Person.
"Eligible Assignee" means (a) another Lender, (b) with respect to
-----------------
any Lender, any Affiliate of that Lender, (c) any commercial bank having a
combined capital and surplus of $100,000,000 or more, (d) any (i) savings
bank, savings and loan association or similar financial institution or (ii)
insurance company engaged in the business of writing insurance which, in
either case (A) has a net worth of $200,000,000 or more, (B) is engaged in
the business of lending money and extending credit under credit facilities
substantially similar to those extended under this Agreement and (C) is
operationally and procedurally able to meet the obligations of a Lender
hereunder to the same degree as a commercial bank and (e) any other
financial institution (including a mutual fund or other fund) having total
---------
assets of $250,000,000 or more which meets the requirements set forth in
subclauses (B) and (C) of clause (d) above; provided that each Eligible
--------
Assignee must either (a) be organized under the Laws of the United States
of America, any State thereof or the District of Columbia or (b) be
organized under the Laws of the Cayman Islands or any country which is a
member of the Organization for Economic Cooperation and Development, or a
political subdivision of such a country, and (i) act hereunder through a
branch, agency or funding office located in the United States of America
and (ii) be exempt from withholding of tax on interest and deliver the
documents related thereto pursuant to Section 11.9.
"Enforcement or Remedial Action" shall mean any step taken by any
------------------------------
Person to enforce compliance with or to collect or impose penalties, fines
or other sanctions provided by any Environmental Law.
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"Environmental Claims" means all claims, however asserted, by any
--------------------
Governmental Agency or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or any Enforcement
or Remedial Action or for release or injury to the environment or threat to
public health, personal injury (including sickness, disease or death),
property damage, natural resources damage, or otherwise alleging liability
or responsibility for damages (punitive or otherwise), cleanup, removal,
remedial or response costs, restitution, civil or criminal penalties,
injunctive relief, or other type of relief, resulting from or based upon
the presence, placement, discharge, emission or release (including
intentional and unintentional, negligent and non-negligent, sudden or non-
sudden, accidental or non-accidental, placement, spills, leaks, discharges,
emissions or releases) of any Hazardous Material at, in, or from Property,
whether or not owned by Borrower.
"Environmental Laws" means all federal, state or local laws,
------------------
statutes, common law duties, rules, regulations, ordinances and codes
together with all administrative orders, directed duties, policies,
notices, decrees, requests, licenses, authorizations and permits of, and
agreements with, any Governmental Agencies, in each case relating to,
regulating or imposing liability or standards of conduct regarding
environmental, health, safety, project liability and land use matters
(including matters related to air and water quality, the handling,
transportation, storage, treatment, usage or disposal of Hazardous
Materials, air emissions, noise control, industrial hygiene, zoning, and
land-use permits) including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), the Clean Air Act, the
------
Federal Water Pollution Control Act of 1972, the Solid Waste Disposal Act,
the Federal Resource Conservation and Recovery Act, the Toxic Substances
Control Act, the Emergency Planning and Community Right-to-Know Act, the
California Hazardous Waste Control Law, the California Solid Waste
Management, Resource, Recovery and Recycling Act, the California Water Code
and the California Health and Safety Code.
"ERISA" means the Employee Retirement Income Security Act of
-----
1974, and any regulations issued pursuant thereto, as amended or replaced
and as in effect from time to time.
"ERISA Affiliate" means, with respect to any Person, any Person
---------------
(or any trade or business, whether or not incorporated) that is under
common control with that Person within the meaning of Section 414 of the
Code.
"Eurodollar Banking Day" means any Banking Day on which dealings
----------------------
in Dollar deposits are conducted by and among banks in the Designated
Eurodollar Market.
"Eurodollar Base Rate" means, with respect to any Eurodollar Rate
--------------------
Loan, the average per annum interest rate at which Dollar deposits would be
offered for the applicable interest period by major banks in the London
Eurodollar Market, as shown on the Telerate Page 3750 (or such other page
as may replace it) at approximately 11:00 a.m. London time two Eurodollar
Banking Days before the commencement of the interest period. If such rate
does not appear on the Telerate Page 3750 (or such other page that may
replace it), the rate for that interest period will be determined in good
faith by such alternate method as reasonably selected by the Administrative
Agent. The Administrative Agent's determination of the Eurodollar Base Rate
shall be conclusive in the absence of manifest error.
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"Eurodollar Lending Office" means, as to each Lender, its office
-------------------------
or branch so designated by written notice to Borrower and the
Administrative Agent as its Eurodollar Lending Office. If no Eurodollar
Lending Office is designated by Lender, its Eurodollar Lending Office shall
be its office at its address for purposes of notices hereunder.
"Eurodollar Margin" means, for each Pricing Period, the interest
-----------------
rate margin set forth below (expressed in basis points per annum) opposite
the Pricing Level in effect during that Pricing Period:
Pricing Level Eurodollar Margin
----------------------------------------------------
I 125.0
II 150.0
III 200.0
"Eurodollar Market" means a regular, established market located
------------------
outside the United States of America by and among banks for the
solicitation, offer and acceptance of Dollar deposits in such banks.
"Eurodollar Period" means:
-----------------
(a) as to each Eurodollar Rate Loan, the period commencing on
the date specified by Borrower pursuant to Section 2.1(b) and ending one,
two, three or six months thereafter, as specified by Borrower in the
applicable Request for Loan; provided that:
(i) The first day of any Eurodollar Period shall be a
Eurodollar Banking Day;
(ii) Any Eurodollar Period that would otherwise end on a
day that is not a Eurodollar Banking Day shall be extended to the next
succeeding Euro dollar Banking Day unless such Eurodollar Banking Day
falls in another calendar month, in which case such Eurodollar Period
shall end on the next preceding Eurodollar Banking Day;
(iii) No Eurodollar Period shall extend beyond the Maturity
Date; and
(iv) No Eurodollar Period shall extend beyond the last day
of any Fiscal Quarter upon which any reduction to the Commitment is
required if, as a result of such required reduction, Borrower would be
required to prepay the related Eurodollar Loan.
"Eurodollar Rate" means, with respect to any Eurodollar Rate
---------------
Loan, the interest rate (rounded upward to the next 1/16 of 1%) determined
to be equal to the Eurodollar Base Rate divided by [1 minus the Eurodollar
------- -----
Reserve Percentage].
-8-
<PAGE>
"Eurodollar Rate Loan" means a Loan made hereunder and designated
--------------------
as a Eurodollar Rate Loan in accordance with Article 2.
"Eurodollar Reserve Percentage" means, with respect to any
-----------------------------
Eurodollar Rate Loan, as of the date of determination of the Eurodollar
Base Rate for that Eurodollar Rate Loan, the total of the maximum reserve
percentages for determining the reserves to be maintained, if any, by
member banks of the Federal Reserve System for Eurocurrency Liabilities, as
defined in Regulation D, rounded upward to the nearest 1/100 of 1%. The
percentage will be expressed as a decimal, and will include, but not be
limited to, marginal, emergency, supplemental, special, and other reserve
percentages. The determination by the Administrative Agent of any
applicable Eurodollar Reserve Percentage shall be made in good faith and
shall be conclusive in the absence of manifest error.
"Event of Default" shall have the meaning provided in Section
----------------
9.1.
"Existing Credit Agreement" means the Credit Agreement dated as
-------------------------
of February 8, 1999 by and among KORN/FERRY INTERNATIONAL, a California
corporation, the lenders parties thereto from time to time, the "Issuing
Bank" referred to therein and Mellon Bank, N.A., a national banking
association, as agent.
"Federal Funds Rate" means, as of any date of determination, a
------------------
fluctuating interest rate per annum equal to the federal funds effective
rate for the previous Banking Day as quoted by the Federal Reserve Bank of
New York or, if such rate is not so published for any day which is a
Banking 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.
"Fiscal Quarter" means the fiscal quarter of Borrower ending on
--------------
each July 31, October 31, January 31 and April 30.
"Fiscal Year" means the fiscal year of Borrower ending on each
-----------
April 30.
"Fixed Charge Coverage Ratio" means, as of the last day of each
---------------------------
Fiscal Quarter, the ratio of (a) the sum of (i) EBITDA for the four Fiscal
----- ---
Quarter period ending on such day, minus (ii) Capital Expenditures paid in
-----
cash during such period but excluding amounts financed by Capital Leases
and purchase money financing (provided, that for each Fiscal Quarter in the
--------
Fiscal Year ending April 30, 2001, this amount shall be fixed at $5,000,000
irrespective of actual Capital Expenditures, Capital Leases and purchase
money financing), minus (iii) income taxes payable for that period, to (b)
-----
the sum of (i) Interest Expense paid in cash during such fiscal period plus
------ ----
(ii) the Amortization Adjustment for such fiscal period, plus (iii) all
----
principal payments (including, without limitation, all scheduled payments
and any prepayments) on all Indebtedness of Borrower and its Subsidiaries
during such fiscal period, plus (iv) commencing with the Fiscal Quarter
----
ending July 31, 2001, the aggregate principal amount paid during such
fiscal period with respect to Permitted Stock Repurchases.
"Foreign Subsidiaries" means all Subsidiaries of Borrower
--------------------
organized under the Laws of a country other than the United States of
----- ----
America. For purposes of the Loan Documents, a Subsidiary organized under
the Laws of a territory (but not a State) of the United
-9-
<PAGE>
States of America (including Puerto Rico, Guam and the U.S. Virgin Islands)
---------
shall be a Foreign Subsidiary.
"Funding Account" means account no. 14593 07160 maintained by
---------------
Borrower with the Bank of America, or any other account designated by
Borrower and reasonably acceptable to the Administrative Agent.
"Generally Accepted Accounting Principles" means, as of any date
----------------------------------------
of determination, accounting principles (a) set forth as generally accepted
in then currently effective Opinions of the Accounting Principles Board of
the American Institute of Certified Public Accountants, (b) set forth as
generally accepted in then currently effective Statements of the Financial
Accounting Standards Board or (c) that are then approved by such other
entity as may be approved by a significant segment of the accounting
profession in the United States of America. The term "consistently
------------
applied," as used in connection therewith, means that the accounting
-------
principles applied are consistent in all material respects to those applied
at prior dates or for prior periods.
"Governmental Agency" means (a) any international, foreign,
-------------------
federal, state, county or municipal government, or political subdivision
thereof, (b) any governmental or quasi-governmental agency, authority,
board, bureau, commission, department, instrumentality or public body, or
(c) any court, administrative tribunal or public utility.
"Guarantors" means all Significant Subsidiaries of Borrower, now
----------
owned or owned in the future, which have become, or are required to become,
a party to the Guaranty pursuant to the terms of this Agreement. Each
Guarantor shall remain a Guarantor hereunder until the termination of the
Guaranty.
"Guaranty" means the continuing guaranty of the Obligations to be
--------
executed and delivered pursuant to Article 8 by each of the Guarantors, in
the form of Exhibit C, either as originally executed or as it may from time
to time be supplemented, modified, amended, extended or supplanted.
"Hazardous Materials" means all those substances which are
-------------------
regulated by, or which may form the basis of liability under, any
Environmental Law, including all substances identified under any
Environmental Law as a pollutant, contaminant, hazardous waste, hazardous
constituent, special waste, hazardous substance, hazardous material, or
toxic substance, or petroleum or petroleum derived substance or waste.
"Indebtedness" means, as to any Person, without duplication, (a)
------------
all indebtedness of such Person for borrowed money, (b) that portion of
the obligations of such Person under Capital Leases which is properly
recorded as a liability on a balance sheet of that Person prepared in
accordance with Generally Accepted Accounting Principles, (c) any
obligation of such Person that is evidenced by a promissory note or other
instrument representing an extension of credit to such Person, whether or
not for borrowed money, (d) any payment obligation of such Person for the
deferred purchase price of Property or services (other than trade or other
----- ----
accounts payable in the ordinary course of business in accordance with
customary industry terms), (e) any payment obligation of such Person that
is secured by a Lien on assets of such Person, whether or not that Person
has assumed such obligation or whether or not such obligation is non-
recourse to the credit of such Person, but only to the extent of the fair
market
-10-
<PAGE>
value of the assets so subject to the Lien, (f) payment obligations of such
Person arising under acceptance facilities or under facilities for the
discount of accounts receivable of such Person, (g) any direct or
contingent obligations of such Person under letters of credit issued for
the account of such Person and (h) any obligations of such Person under a
Swap Agreement.
"Intangible Assets" means, as of any date of determination, the
-----------------
intangible assets of Borrower and its Subsidiaries, including goodwill,
---------
patents, trademarks, trade names, organization expense, capitalized
acquisition expenses, deferred research and development costs and deferred
marketing expense, deferred tax assets and money due from Affiliates of
Borrower and its Subsidiaries.
"Interest Expense" means, for any fiscal period and for any
----------------
Person, the consolidated interest expense of that Person determined in
accordance with Generally Accepted Accounting Principles.
"Investment" means, when used in connection with any Person, any
----------
investment by or of that Person, whether by means of purchase or other
acquisition of capital stock or other Securities of any other Person or by
means of loan, advance, capital contribution, guaranty or other debt or
equity participation or interest, or otherwise, in any other Person,
including any partnership and joint venture interests of such Person in any
other Person. The amount of any Investment shall be the amount actually
invested, without adjustment for increases or decreases in the value of
such Investment.
"Issuing Lender" means Bank of America, when acting in its
--------------
capacity as issuer of any Letter of Credit hereunder.
"Laws" means, collectively, all international, foreign, federal,
----
state, and local statutes, treaties, rules, regulations, ordinances, codes
and administrative or judicial precedents.
"Lenders" means Bank of America and each other Lender which
-------
hereafter becomes a party hereto pursuant to Section 11.8.
"Letter of Credit" means a commercial letter of credit or standby
----------------
letter of credit issued by the Issuing Lender for the account of Borrower
in the ordinary course of its business.
"Letter of Credit Usage" means, at any date of determination, the
----------------------
sum of (i) the maximum aggregate amount that is or at any time thereafter
may become available for drawing or payment under issued and outstanding
Letters of Credit issued pursuant to the Commitment, plus (ii) the
aggregate amount of all drawings honoured or payments made by the Issuing
Lender under such Letters of Credit and not reimbursed by Borrower.
"Leverage Ratio" means, as of the last day of each Fiscal
--------------
Quarter, the ratio of (a) the Total Funded Debt of Borrower and its
Subsidiaries as of the last day of that Fiscal Quarter to (b) EBITDA of
Borrower and its Subsidiaries for the fiscal period consisting of that
Fiscal Quarter and the three immediately preceding Fiscal Quarters.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
----
assignment for security, security interest, encumbrance, lien or charge of
any kind, whether voluntarily
-11-
<PAGE>
incurred or arising by operation of Law or otherwise, affecting any
Property, including any agreement to grant any of the foregoing, any
---------
conditional sale or other title retention agreement, any lease in the
nature of a security interest, and/or the filing of or agreement to give
any financing statement (other than a precautionary financing statement
----------
with respect to a lease that is not in the nature of a security interest)
under the Uniform Commercial Code or comparable Law of any jurisdiction
with respect to any Property.
"Loan" means any Loan made at any one time under the Commitment
----
by the Lenders having Pro Rata Shares of the Commitment pursuant to Article
2.
"Loan Documents" means, collectively, this Agreement, the
--------------
Guaranty, each Request for Loan, each Request for Letter of Credit, each
Request for Redesignation, each Letter of Credit, each Compliance
Certificate, each Pricing Certificate, and each Approved Swap Agreement,
and any other certificates, documents or agreements to, with or for the
benefit of the Creditors, of any type or nature heretofore or hereafter
executed and delivered by Borrower or any of its Subsidiaries or Affiliates
to the Creditors in any way relating to or in furtherance of this
Agreement, including, without limitation, upon execution and delivery
thereof, the Pledge Agreement, in each case either as originally executed
or as the same may from time to time be supplemented, modified, amended,
restated, extended or supplanted.
"Material Adverse Effect" means any set of circumstances or
-----------------------
events which (a) has or may reasonably be expected to have any material
adverse effect whatsoever upon the validity or enforceability of any Loan
Document, (b) has or may reasonably be expected to have a materially
adverse effect on the condition (financial or otherwise) or business
operations of Borrower and its Subsidiaries, taken as a whole, (c)
materially impairs or may reasonably be expected to materially impair the
ability of Borrower and its Subsidiaries, to perform their Obligations or
(d) materially impairs or may reasonably be expected to materially impair
the ability of the Creditors to enforce their legal remedies pursuant to
the Loan Documents.
"Maturity Date" means November 2, 2002.
-------------
"Multiemployer Plan" means any employee benefit plan of the type
------------------
described in Section 4001(a)(3) of ERISA.
"Negative Pledge" means any covenant binding on Borrower or any
---------------
current or future guarantor of the Obligations that prohibits the creation
of Liens on any Property of Borrower or of any such guarantor to the
Creditors or prohibiting the granting of any such covenant to any of the
Creditors.
"Net Cash Proceeds" means, with respect to any Disposition, the
-----------------
Cash Proceeds received by Borrower or by any Subsidiary of Borrower upon
such Disposition minus, (a) the actual expenses of such sale paid or
-----
payable by Borrower or by any Subsidiary of Borrower in connection with
such Disposition, (b) any amount paid or payable by the transferor to
retire existing Liens on the assets sold to the extent that the transferor
is contractually obligated to do so, and (c) an amount representing the
taxes reasonably estimated by Borrower to be payable by Borrower with
respect to such Disposition.
-12-
<PAGE>
"Net Income" means, for any fiscal period, net income of Borrower
----------
and its Subsidiaries, determined in accordance with Generally Accepted
Accounting Principles, consistently applied, on a consolidated basis.
"Obligations" means all present and future obligations of every
-----------
kind or nature of Borrower or any Party at any time and from time to time
owed to any of the Creditors under any of the Loan Documents, whether due
or to become due, matured or unmatured, liquidated or unliquidated, or
contingent or noncontingent, including obligations of performance as well
as obligations of payment, and including interest that accrues after the
---------
commencement of any proceeding under any Debtor Relief Law by or against
Borrower or any Affiliate of Borrower.
"Ownership Group" means those natural persons directly or
---------------
indirectly owning interests in Borrower as of the Closing Date, their
spouses, and corporations or other business entities of which such natural
Persons are the sole shareholders, and trusts for their benefit.
"Party" means each party to the Loan Documents other than the
-----
Creditors.
"PBGC" means the Pension Benefit Guaranty Corporation or any
----
successor thereof established under ERISA.
"Pension Plan" means any "employee pension benefit plan" that is
------------
subject to Title IV of ERISA and which is maintained for employees of
Borrower or of any ERISA Affiliate of Borrower, other than a Multiemployer
----- ----
Plan.
"Permitted Acquisition" means an Acquisition by Borrower or any
---------------------
of its Subsidiaries (as applicable, the "acquiror") of another Person
engaged in the same or a similar line of business as that of the acquiror
(the "target") and which will thereupon become a Subsidiary or part of
Borrower or an existing Subsidiary, provided that: (i) such Acquisition
--------
shall have been approved by the board of directors of the target (i.e.,
----
such Acquisition shall not be "hostile"); and (ii) no Default or Event of
Default shall exist at the time of such Acquisition or after giving effect
thereto.
"Permitted Encumbrances" means:
----------------------
(a) Inchoate Liens incident to construction or maintenance of
real property, or Liens incident to construction or maintenance of real
property, now or hereafter filed of record for which adequate reserves have
been set aside and which are being or will be, within 30 days, contested in
good faith by appropriate proceedings diligently pursued and have not
proceeded to judgment, provided that, by reason of nonpayment of the
--------
obligations secured by such Liens, no such real property is subject to a
material risk of loss or forfeiture;
(b) Liens for taxes and assessments on real property which are
not yet past due, or Liens for taxes and assessments on real property for
which adequate reserves have been set aside and are being contested in good
faith by appropriate proceedings diligently pursued and have not proceeded
to judgment, provided that, by reason of non payment of the obligations
--------
secured by such Liens, no such real property is subject to a material risk
of loss or forfeiture;
(c) easements, exceptions, reservations, covenants, conditions,
restrictions, and assessment Liens arising thereunder, operating
agreements, or other agreements granted,
-13-
<PAGE>
reserved or entered into before or after the date hereof for the purpose of
ingress, egress, parking, encroaching, pipelines, conduits, cables, wire
communication lines, power lines and substations, streets, trails,
walkways, drainage, irrigation, water, and sewerage purposes, dikes,
canals, ditches, the removal of oil, gas, coal, or other minerals, use,
operation, repair, maintenance and reconstruction, and other like purposes
affecting real property which in the aggregate do not materially burden or
impair the fair market value or use of such real property for the purposes
for which it is or may reasonably be expected to be held;
(d) rights reserved to or vested in any Governmental Agency by
Law to control or regulate, or obligations or duties under Law to any
Governmental Agency with respect to, the use of any real property;
(e) statutory Liens, other than those described in clauses (a)
or (b) above, arising in the ordinary course of business with respect to
obligations which are not delinquent or are being contested in good faith
by appropriate proceedings diligently pursued, provided that, if
--------
delinquent, adequate reserves have been set aside with respect thereto and,
by reason of nonpayment, no Property is subject to a material risk of loss
or forfeiture;
(f) Liens consisting of pledges or deposits to secure
obligations under workers' compensation laws or similar legislation, that
do not exceed $100,000 in the aggregate at any time outstanding, including
---------
Liens of judgments thereunder which are not currently dischargeable;
(g) Liens consisting of deposits of Property to secure statutory
obligations of Borrower or of any Subsidiary of Borrower in the ordinary
course of its business; and
(h) Liens created by or resulting from any litigation or legal
proceeding involving Borrower or any Subsidiary of Borrower in the ordinary
course of its business which are currently being contested in good faith by
appropriate proceedings diligently pursued, provided that adequate reserves
--------
have been set aside, and such Liens are discharged or stayed within 30 days
of creation and no Property is subject to a material risk of loss or
forfeiture.
"Permitted Seller Indebtedness" means, collectively, (i) the
-----------------------------
Indebtedness described on Schedule 6.8(d), and (ii) other unsecured
Indebtedness owed to sellers in connection with Permitted Acquisitions and
any other Acquisitions, provided that (A) the representations, warranties,
--------
covenants and other provisions of such Indebtedness are satisfactory to the
Requisite Lenders (it being agreed by each of the parties hereto that each
of the promissory notes evidencing Permitted Seller Indebtedness delivered
to the Administrative Agent on or prior to the Closing Date are
satisfactory to the Requisite Lenders) and not more onerous to Borrower
than those contained in the Loan Documents; and (B) if, after giving effect
to all such Indebtedness incurred by Subsidiaries of Borrower, the
aggregate Permitted Seller Indebtedness incurred by Subsidiaries of
Borrower exceeds $25,000,000, Borrower shall have submitted to the
Administrative Agent, a Compliance Certificate, evidencing, as of the last
day of the full Fiscal Quarter immediately preceding the incurrence of the
subject Indebtedness, a Quick Ratio of not less than 0.85:1.00.
"Permitted Stock Repurchase" means any acquisition by Borrower of
--------------------------
shares of its common stock (other than the repurchase of common stock from
employees referred to in Section 6.5(b)); provided that prior to such
--------
acquisition, Borrower shall have provided to the
-14-
<PAGE>
Administrative Agent, not less than three Banking Days prior thereto, a
Permitted Stock Repurchase Certificate showing the appropriate calculations
and certifying (as applicable) that:
(a) for each Permitted Stock Repurchase occurring prior to April
30, 2001, EBITDA of the Borrower and its Subsidiaries, on a
consolidated basis, for the full four Fiscal Quarter period ending
immediately prior to such Permitted Stock Repurchase, was not less
than $90,000,000;
(b) for each Permitted Stock Repurchase occurring on or
subsequent to April 30, 2001, EBITDA of the Borrower and its
Subsidiaries, on a consolidated basis, for the full four Fiscal
Quarter period ending immediately prior to such Permitted Stock
Repurchase, was not less than $100,000,000;
(c) for each Permitted Stock Repurchase occurring prior to
receipt by the Administrative Agent of a true, complete, correct and
fully executed copy of Borrower's 10-Q for the fiscal period ended
July 31, 2001, as of the date of the Permitted Stock Repurchase
Certificate, the sum of (i) unrestricted Cash held by the Borrower and
---
its Subsidiaries on a consolidated basis, plus (ii) the Commitment,
----
minus (iii) the aggregate outstanding principal amount of all Loans,
-----
minus (iv) the Letter of Credit Usage, in each case after giving
-----
proforma effect to the proposed Permitted Stock Repurchase, is equal
to or greater than $120,000,000, all as determined in accordance with
GAAP;
(d) for each Permitted Stock Repurchase occurring subsequent to
receipt by the Administrative Agent of a true, complete, correct and
fully executed copy of Borrower's 10-Q for the fiscal period ended
July 31, 2001, as of the last day of the full Fiscal Quarter ending
immediately prior to the proposed Permitted Stock Repurchase, the
Fixed Charge Coverage Ratio, after giving proforma effect to the
proposed Permitted Stock Repurchase, was not less than 1.25:1.00; and
(e) since the last day of the full Fiscal Quarter ending
immediately prior to the proposed Permitted Stock Repurchase, no
Default or Event of Default has occurred or is continuing and no event
shall have occurred which constitutes a Material Adverse Effect or
which renders any of the calculations set forth above materially
misleading.
"Permitted Stock Repurchase Adjustment Amount" means, until such
--------------------------------------------
time as the Administrative Agent shall have received a true, complete,
correct and fully executed copy of Borrower's 10-Q for the fiscal period
ended July 31, 2001, an amount equal to, without duplication, the aggregate
consideration paid, whether in Cash or otherwise, with respect to all
Permitted Stock Repurchases prior to such time. Upon receipt of such 10-Q,
the Permitted Stock Repurchase Adjustment Amount shall be automatically and
permanently reduced to zero.
"Permitted Stock Repurchase Certificate" means a certificate in
--------------------------------------
the form of Exhibit K, properly completed and signed by a Senior Officer of
Borrower and delivered to the Administrative Agent.
"Person" means any entity, whether an individual, trustee,
------
corporation, general partnership, limited partnership, limited liability
company, joint stock company, trust, estate,
-15-
<PAGE>
unincorporated organization, business association, firm, joint venture,
Governmental Agency, or otherwise.
"Pledge Agreement" means the pledge agreement to be executed and
----------------
delivered by the Borrower pursuant to Section 8.3, substantially in the
form of Exhibit I hereto, either as originally executed or as it may be
amended, supplemented or otherwise modified from time to time.
"Pricing Certificate" means a Pricing Certificate substantially
-------------------
in the form of Exhibit H, properly completed and signed by a Senior Officer
of Borrower.
"Pricing Level" means, during each Pricing Period, the pricing
-------------
level set forth below opposite the Leverage Ratio as of the last day of the
Fiscal Quarter ending two months prior to the commencement of that Pricing
Period:
Pricing Level Leverage Ratio
------------- --------------
I Less than or equal to 1.00:1.00
II Less than or equal to 1.25:1.00 and
greater than 1.00:1.00
III Greater than 1.25:1.00
The Pricing Level shall change as of the first day of the calendar month
following the receipt of a Compliance Certificate indicating a change in
the Leverage Ratio. Notwithstanding the provisions of this definition, in
the event that Borrower fails to deliver a Compliance Certificate within
the time period specified by Section 7.2, the Pricing Level for shall
increase to the highest level set forth above until such time as Borrower
delivers a Compliance Certificate.
"Pricing Period" means each period of three months which
--------------
commences on the first day of each October, January, April and July and
ends of the last day of the succeeding December, March, June and September.
"Pro Rata Share" means, with respect to each Lender, the
--------------
percentage of the Commitment held by that Lender from time to time and set
forth on Schedule 1.1. As of the Closing Date, Bank of America's Pro Rata
------------
Share is 100%.
"Prime Rate" means the rate of interest publicly announced from
----------
time to time by Bank of America as its "Prime Rate." The Prime Rate is set
by Bank of America based on various factors, including Bank of America's
costs and desired returns, general economic conditions and other factors,
and is used as a reference point for pricing some loans. Bank of America
may price loans at, above or below its Prime Rate. Any change in the Prime
Rate shall take effect on the day specified in the public announcement of
such change.
"Property" means any interest in any kind of property or asset,
--------
whether real, personal or mixed, or tangible or intangible.
-16-
<PAGE>
"Quick Ratio" means, as of each date of determination thereof,
-----------
the ratio of (a) the sum of (i) Borrower's and its Subsidiaries current
-------
Cash and Cash Equivalents plus (ii) marketable securities plus trade
----
accounts receivable to (b) the sum of (i) the current liabilities of
-------
Borrower and its Subsidiaries and (ii) to the extent not included in
current liabilities, the aggregate outstanding principal amount under the
Loan Agreement, in each case determined in accordance with Generally
Accepted Accounting Principles, consistently applied.
"Regional Consolidated Financial Statements" means, with respect
------------------------------------------
to the consolidating financial statements and other information required
pursuant to Section 7.1(a) to be provided to the Administrative Agent
--------------
describing the Subsidiaries of Borrower located in Europe, Latin America
and Asia, financial statements prepared such that individual Subsidiaries
within the above-mentioned geographic areas are consolidated together and
presented as consolidated entities (e.g.: presented as "consolidated
European Subsidiaries", "consolidated Asian Subsidiaries" etc.), each in
form satisfactory to the Administrative Agent.
"Regulations D, T, U and X" means Regulations D, T, U and X, as
-------------------------
at any time amended, of the Board of Governors of the Federal Reserve
System, or any other regulations in substance substituted therefor.
"Request for Letter of Credit" means a written request for a
----------------------------
Letter of Credit, substantially in the form of Exhibit E, together with the
standard form of application for letters of credit used by the Issuing
Lender, signed by a Responsible Official of Borrower and properly completed
to provide all information to be included therein.
"Request for Loan" means a written request for a Loan,
----------------
substantially in the form of Exhibit F, signed by a Responsible Official of
Borrower and properly completed to provide all information required to be
included therein.
"Request for Redesignation" means a written request to continue
-------------------------
or redesignate a Loan substantially in the form of Exhibit G, signed by a
Responsible Official of Borrower and properly completed to provide all
information required to be included therein.
"Requirement of Law" means, as to any Person, the articles or
------------------
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any Law, or judgment, award,
decree, writ or determination of a Governmental Agency, in each case
applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"Requisite Lenders" means as of any date of determination,
-----------------
Lenders having in the aggregate 66-2/3% or more of the Commitment then in
effect.
"Responsible Official" means (a) when used with reference to a
--------------------
Person other than an individual, any corporate officer of such Person,
general partner of such Person, corporate officer of a corporate general
partner of such Person, or corporate officer of a corporate general partner
of a partnership that is a general partner of such Person, or any other
responsible official thereof duly acting on behalf thereof, and (b) when
used with reference to a Person who is an individual, such Person. Any
document or certificate hereunder that is signed or executed by a
Responsible Official of a Person shall be conclusively presumed to have
been authorized by all necessary corporate, partnership and/or other action
on the part of that Person.
-17-
<PAGE>
"Right of Others" means, as to any Property in which a Person has
---------------
an interest, (a) any legal or equitable right, title or other interest
(other than a Lien) held by any other Person in or with respect to that
----------
Property, and (b) any option or right held by any other Person to acquire
any right, title or other interest in or with respect to that Property,
including any option or right to acquire a Lien.
---------
"Securities" means any capital stock, share, voting trust
----------
certificate, bonds, debentures, notes or other evidences of indebtedness,
limited partnership interests, or any warrant, option or other right to
purchase or acquire any of the foregoing.
"Senior Officer" means the (a) President, (b) Vice President, (c)
--------------
Chief Financial Officer, (d) Treasurer or (e) General Counsel of a Person
or the persons performing the equivalent functions.
"Significant Subsidiary" means as of any date of determination,
----------------------
each Domestic Subsidiary of Borrower that had on the last day of the Fiscal
Quarter then most recently ended any of the following: (a) total assets
(excluding intercompany Indebtedness owing from Borrower or any of the
---------
Significant Subsidiaries) with a book value (determined in accordance with
Generally Accepted Accounting Principals) equal to five percent (5%) or
greater of the total assets (excluding intercompany Indebtedness) of
---------
Borrower and its Subsidiaries, on a consolidated basis, (b) net income
before Interest Expense and taxes equal to five percent (5%) or greater of
net income of Borrower and its Subsidiaries, before Interest Expense and
Taxes, on a consolidated basis, or (c) total revenue (excluding
intercompany revenue) equal to five percent (5%) or greater of the total
revenue (excluding intercompany revenue) of Borrower and its Subsidiaries,
on a consolidated basis, in each case as determined in accordance with
Generally Accepted Accounting Principles.
"Special Eurodollar Circumstance" means the application or
-------------------------------
adoption of any Law or interpretation, or any change therein or thereof, or
any change in the interpretation or administration thereof by any
Governmental Agency, central bank or comparable authority charged with the
interpretation or administration thereof, or compliance by any Lender or
its Eurodollar Lending Office with any request or directive (whether or not
having the force of Law) of any such Governmental Agency, central bank or
comparable authority, or the existence or occurrence of circumstances
affecting the Designated Eurodollar Market generally that are beyond the
reasonable control of that Lender.
"Subordinated Obligations" means Indebtedness of Borrower that is
------------------------
subordinated to the Obligations, all of the provisions of which (including
amount, maturity, amortization, interest rate, covenants, defaults,
remedies and subordination), have been approved in writing as to form and
substance by the Administrative Agent with the written consent of the
Requisite Lenders.
"Subsidiary" means, as of any date of determination and with
----------
respect to any Person, any corporation, partnership or joint venture,
whether now existing or hereafter organized or acquired: (a) in the case of
a corporation, of which a majority of the securities having ordinary voting
power for the election of directors or other governing body (other than
securities having such power only by reason of the happening of a
contingency) are at the time beneficially owned by such Person and/or one
or more Subsidiaries of such Person, or (b) in the case of a partnership or
joint venture, of which such Person or a Subsidiary of such Person is a
-18-
<PAGE>
general partner or joint venturer or of which a majority of the partnership
or other ownership interests are at the time beneficially owned by such
Person and/or one or more of their Subsidiaries.
"Swap Agreements" means one or more written agreements between
---------------
Borrower and one or more financial institutions providing for "swap",
"cap", "collar" or other interest rate or currency risk protection with
respect to any Indebtedness.
"Target EBITDA" means, with respect to (a) the target of a
-------------
Permitted Acquisition or (b) an Investment permitted by Section 6.11(e),
such target's (or the Borrower's proportionate share thereof with respect
to Investments under Section 6.11(e)) earnings before interest, taxes,
depreciation and amortization for the twelve-month period prior to such
Permitted Acquisition or Investment plus, if applicable, the positive
----
difference of (a) the sum of the selling manager's prior twelve month
-------------
aggregate cash compensation less (b) the sum of contractual cash
----
compensation for the remaining executives applicable for the first twelve
month period subsequent to the Permitted Acquisition or Investment.
"Termination Event" means (a) a "reportable event" as defined in
-----------------
Section 4043 of ERISA (other than a reportable event that is not subject to
----------
the provision for 30 day notice to the PBGC), (b) the withdrawal of
Borrower or any of its ERISA Affiliates from a Pension Plan during any plan
year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate a
Pension Plan or the treatment of an amendment to a Pension Plan as a
termination thereof pursuant to Section 4041 of ERISA, (d) the institution
of proceedings to terminate a Pension Plan by the PBGC or (e) any other
event or condition which, in any such case as aforesaid, might reasonably
be expected to constitute grounds under ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan.
"to the best knowledge of" means, when modifying a
------------------------
representation, warranty or other statement of any Person, that the fact or
situation described therein is known by the Person (or, in the case of a
Person other than a natural Person, known by a Senior Officer of that
Person) making the representation, warranty or other statement.
"Total Funded Debt" means, for any fiscal period, determined on a
-----------------
consolidated basis for Borrower and its Subsidiaries, without duplication,
the sum of (a) the outstanding principal Indebtedness of Borrower and its
Subsidiaries for borrowed money (including debt securities issued by
---------
Borrower or any of its Subsidiaries) on that date, plus (b) the aggregate
----
amount of all Capital Lease Obligations of Borrower and its Subsidiaries on
that date, plus (c) all obligations in respect of letters of credit or
----
other similar instruments for which Borrower or any of its Subsidiaries are
account parties or are otherwise obligated, plus (d) the aggregate amount
----
of all Contingent Obligations and other similar contingent obligations of
Borrower and its Subsidiaries with respect to any of the foregoing, and
plus (e) any obligations of Borrower or any of its Subsidiaries to the
----
extent that the same are secured by a Lien on any of the assets of Borrower
or its Subsidiaries, other than Permitted Encumbrances.
"Wholly-Owned Subsidiary" means a Subsidiary of Borrower, 100% of
-----------------------
the capital stock or other equity interest of which is owned, directly or
indirectly, by Borrower, except for director's qualifying shares required
by applicable Laws.
-19-
<PAGE>
1.2 Use of Defined Terms. Any defined term used in the plural
--------------------
shall refer to all members of the relevant class, and any defined term used
in the singular shall refer to any one or more of the members of the
relevant class.
1.3 Accounting Terms. All accounting terms not specifically
----------------
defined in this Agreement shall be construed in conformity with, and all
financial data required to be submitted by this Agreement shall be prepared
in conformity with, Generally Accepted Accounting Principles consistently
applied, except as otherwise specifically prescribed herein. In the event
------
that Generally Accepted Accounting Principles change during the term of
this Agreement such that the financial covenants contained in Sections 6.12
through 6.16 would then be calculated in a different manner or with
different components, Borrower and the Lenders agree to amend this
Agreement in such respects as are necessary to conform those covenants as
criteria for evaluating Borrower's financial condition to substantially the
same criteria as were effective prior to such change in Generally Accepted
Accounting Principles.
1.4 Rounding. Any financial ratios required to be maintained by
--------
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one
place more than the number of places by which such ratio is expressed in
this Agreement and rounding the result up or down to the nearest number
(with a round-up if there is no nearest number) to the number of places by
which such ratio is expressed in this Agreement.
1.5 Exhibits and Schedules. All Exhibits and Schedules to this
----------------------
Agreement, either as originally existing or as the same may from time to
time be supplemented, modified, amended, or supplanted are incorporated
herein by this reference.
1.6 Miscellaneous Terms. The term "or" is disjunctive; the term
-------------------
"and" is conjunctive. The term "shall" is mandatory; the term "may" is
permissive. Masculine terms also apply to females; feminine terms also
apply to males. The term "including" is by way of example and not
limitation.
-20-
<PAGE>
ARTICLE 2
LOANS AND LETTERS OF CREDIT
---------------------------
2.1 Loans-General.
-------------
(a) Subject to the terms and conditions set forth in this
Agreement, at any time and from time to time from the Closing Date through
the Maturity Date, each Lender shall, pro rata according to that Lender's
Pro Rata Share, make Loans to Borrower under the Commitment in such amounts
as Borrower may request that do not exceed in the aggregate at any one time
outstanding that Lender's Pro Rata Share; provided that, giving effect to
--------
the requested Loan, the aggregate outstanding principal balance of the
Loans plus the Letter of Credit Usage plus the Permitted Stock Repurchase
---- ----
Adjustment Amount shall not exceed the Commitment. Subject to the
limitations set forth herein (including, without limitation, the
requirements of Section 3.6(d)), Borrower may borrow, repay and reborrow
under the Commitment without premium or penalty. As of the Closing Date,
the Existing Credit Agreement is deemed terminated and the loans
outstanding thereunder refinanced by the initial Loans hereunder.
(b) Subject to the next sentence, each Loan shall be made
pursuant to a written Request for Loan which shall specify (i) the
requested date of such Loan, (ii) whether such Loan is to be a Base Rate
Loan or a Eurodollar Rate Loan, (iii) the amount of such Loan, and (iv) the
Eurodollar Period for such Loan if such Loan is to be a Eurodollar Rate
Loan.
(c) Promptly following receipt of a Request for Loan, the
Administrative Agent shall notify each Lender having a Pro Rata Share under
which such Loan is requested by telephone or telecopier of the date and
type of the Loan, the applicable Eurodollar Period, and that Lender's Pro
Rata Share of the Loan. Not later than 11:00 a.m., Los Angeles time, on the
date specified for any Loan, each Lender shall make its Pro Rata Share of
that Loan available to the Administrative Agent at the Administrative
Agent's Office in immediately available funds. Upon fulfilment of the
applicable conditions set forth in Article 8, the Loan shall be credited in
immediately available funds to the Funding Account.
(d) Unless the Requisite Lenders otherwise consent, (i) each
Base Rate Loan shall be in an integral multiple of $100,000 which is not
less than $500,000 and (ii) each Eurodollar Rate Loan shall be in an
integral multiple of $100,000 which is not less than $1,000,000.
(e) If no Request for Loan has been delivered within the
requisite notice periods set forth in Sections 2.2 or 2.3 in connection
with a Loan which, if made, would not increase the outstanding principal
amount of the Obligations, then Borrower shall be deemed to have requested,
as of the date upon which the related then outstanding Loan is due pursuant
to Section 3.1(d)(i) and not paid, a Base Rate Loan in an amount equal to
the amount necessary to cause the outstanding principal amount of the
Obligations to remain the same and the Lenders shall make the Loans
necessary to make such Loan notwithstanding Borrower's failure to deliver a
Request for Loan or other notice required by Sections 2.1(b), 2.2 and 2.3.
(f) Unless the Administrative Agent otherwise consents, no more
than eight Eurodollar Rate Loans shall be outstanding at any one time.
-21-
<PAGE>
(g) A Request for Loan shall be irrevocable upon the
Administrative Agent's first notification thereof.
2.2 Base Rate Loans. Each request by Borrower for a Base Rate Loan
---------------
shall be made pursuant to a Request for Loan received by the Administrative
Agent, at the Administrative Agent's Office, not later than 9:00 a.m., Los
Angeles time, on the Banking Day of the requested Base Rate Loan. All Loans
shall constitute Base Rate Loans unless properly designated as Eurodollar Rate
Loans pursuant to Section 2.3.
2.3 Eurodollar Rate Loans.
---------------------
(a) Each request by Borrower for a Eurodollar Rate Loan shall be
made pursuant to a Request for Loan received by the Administrative Agent,
at the Administrative Agent's Office, not later than 9:00 a.m., Los Angeles
time, at least three Eurodollar Banking Days before the first day of the
applicable Eurodollar Period.
(b) At or about 11:00 a.m., Los Angeles time, two Eurodollar
Banking Days before the first day of the applicable Eurodollar Period, the
Administrative Agent shall determine in good faith the applicable
Eurodollar Rate (which determination shall be conclusive in the absence of
manifest error) and promptly shall give notice of the same to Borrower and
the Lenders by telephone, telecopier or telex.
(c) No Eurodollar Rate Loan may be requested during the
continuance of a Default or Event of Default.
(d) Nothing contained herein shall require any Lender to fund
any Eurodollar Rate Loan in the Designated Eurodollar Market.
2.4 Redesignation of Loans. Borrower may redesignate a Base Rate
----------------------
Loan, or any portion thereof subject to Section 2.1(d), as a Eurodollar Rate
Loan by delivering a Request for Redesignation to the Administrative Agent at
the Administrative Agent's Office subject to the same time limitations and other
conditions set forth in Sections 2.3 and 3.1(e)(iv) in the case of a Request for
Loan. Borrower may redesignate a Eurodollar Rate Loan, or any portion thereof
subject to Sections 2.1(d) and 2.1(f), as a Base Rate Loan by delivering a
Request for Redesignation to the Administrative Agent at the Administrative
Agent's Office subject to the same time limitations and other conditions set
forth in Sections 2.2 and 3.1(e)(iv); provided that such redesignation shall not
--------
be effective prior to the end of the Eurodollar Period for that Eurodollar Rate
Loan. If no timely Request for Redesignation is delivered to the Administrative
Agent prior to the end of the Eurodollar Period for any Eurodollar Rate Loan, it
shall automatically be redesignated as a Base Rate Loan as of the end of such
Eurodollar Period.
2.5 Letters of Credit.
-----------------
(a) Subject to the terms and conditions hereof, at any time and
from time to time from the Closing Date through the day prior to the
Maturity Date, the Issuing Lender shall issue such Letters of Credit as
Borrower may request by a Request for Letter of Credit; provided that,
--------
giving effect to the issuance of such Letter of Credit, (i) in no event
shall the Letter of Credit Usage exceed $10,000,000 at any time, and (ii)
the Letter of Credit Usage plus
----
-22-
<PAGE>
the then aggregate outstanding principal amount of the Loans plus the
----
Permitted Stock Repurchase Adjustment Amount shall not exceed the
Commitment.
(b) Unless all the Lenders otherwise consent in writing
delivered to the Administrative Agent, the terms of Letters of Credit shall
not exceed one year and shall not extend beyond the Maturity Date.
(c) Each Request for Letter of Credit shall be submitted to the
Issuing Lender at least one Banking Day prior to the date when the issuance
of a Letter of Credit is requested. Upon issuance of a Letter of Credit,
the Issuing Lender shall promptly notify the Administrative Agent, and the
Administrative Agent shall thereafter promptly notify the Lenders, of the
amount and terms thereof
(d) Upon the issuance of a Letter of Credit, each Lender shall
be deemed to have purchased a pro rata participation from the Issuing
Lender, in an amount equal to that Lender's Pro Rata Share, of the Letter
of Credit. Without limiting the scope and nature of each such Lender's
participation in any Letter of Credit, to the extent that the Issuing
Lender has not been reimbursed by Borrower for any payment required to be
made by the Issuing Lender under any Letter of Credit, each such Lender
shall reimburse the Administrative Agent for the account of the Issuing
Lender, promptly upon demand for the amount of such payment in accordance
with its Pro Rata Share. The obligation of each such Lender to so reimburse
the Issuing Lender shall be absolute and unconditional and shall not be
affected by the occurrence of an Event of Default or any other occurrence
or event. Any such reimbursement shall not relieve or otherwise impair the
obligation of Borrower to reimburse the Issuing Lender for the amount of
any payment made by the Issuing Lender under any Letter of Credit together
with interest as hereinafter provided.
(e) After the making by the Issuing Lender of any payment with
respect to any Letter of Credit issued for the account of Borrower,
Borrower agrees to pay to the Issuing Lender, within one Banking Day after
demand therefor, a principal amount equal to any payment made by the
Issuing Lender under that Letter of Credit, together with interest at the
Default Rate on such amount from the date of such demand made by the
Issuing Lender through the date of payment by Borrower. The principal
amount of any such payment made to the Issuing Lender shall be used to
reimburse the Issuing Lender for the payment made by it under the Letter of
Credit. Each Lender that has reimbursed the Issuing Lender pursuant to
Section 2.5(d) for its Pro Rata Share of any payment made by the Issuing
Lender under a Letter of Credit shall thereupon acquire a participation, to
the extent of such reimbursement, in the claim of the Issuing Lender
against Borrower under this Section 2.5(e).
(f) If Borrower fails to make the payment required by Section
2.5(d), the Administrative Agent may but is not required to, without notice
to or the consent of Borrower, cause Loans to be made by the Lenders having
a Pro Rata Share in accordance with their respective Pro Rata Shares in an
aggregate amount equal to the amount paid by the Issuing Lender on that
Letter of Credit and, for this purpose, the conditions precedent set forth
in Article 8 shall not apply. The proceeds of such Loans shall be paid to
the Issuing Lender to reimburse it for the payment made by it under the
Letter of
(g) The issuance of any supplement, modification, amendment,
renewal, or extension to or of any Letter of Credit shall be treated in all
respects the same as the issuance of
-23-
<PAGE>
a new Letter of Credit, and shall require the submission of a new Request
for Letter of Credit; provided however that nothing contained in this
--------
clause (g) shall require the payment of any additional issuance fees in
respect thereof by Borrower other than with respect to any extension of the
----------
term thereof or renewal thereof or any increase in the amount of such
Letter of Credit.
(h) The obligation of Borrower to pay to the Issuing Lender the
amount of any payment made by the Issuing Lender under any Letter of Credit
issued to Borrower shall be absolute, unconditional, and irrevocable,
subject only to performance by the Issuing Lender of its obligations to
Borrower under California Commercial Code Section 5109. Without limiting
the foregoing, the obligations of Borrower shall not be affected by any of
the following circumstances:
(i) any lack of validity or enforceability of the Letter
of Credit, this Agreement, or any other agreement or instrument
relating thereto;
(ii) any amendment or waiver of or any consent to
departure from the Letter of Credit, this Agreement, or any other
agreement or instrument relating thereto;
(iii) the existence of any claim, setoff, defence, or other
rights which Borrower may have at any time against any Lender, any
beneficiary of the Letter of Credit (or any persons or entities for
whom any such beneficiary may be acting) or any other Person, whether
in connection with the Letter of Credit, this Agreement, or any other
agreement or instrument relating thereto, or any unrelated
transactions;
(iv) any demand, statement, or any other document
presented under the 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 whatsoever so long as any such
document reasonably appeared to comply with the terms of the Letter of
Credit;
(v) the solvency or financial responsibility of any party
issuing any documents in connection with a Letter of Credit;
(vi) any error in the transmission of any message relating
to a Letter of Credit not caused by the Issuing Lender, or any delay
or interruption in any such message;
(vii) any error, neglect or default of any correspondent of
the Issuing Lender in connection with a Letter of Credit;
(viii) any consequence arising from acts of God, war,
insurrection, disturbances, labor disputes, emergency conditions or
other causes beyond the control of the Issuing Lender;
(ix) so long as the Issuing Lender in good faith
determines that the draft, contract or document appears to comply with
the terms of the Letter of Credit, the form, accuracy, genuineness or
legal effect of any contract or document referred to
-24-
<PAGE>
in any document submitted to the Issuing Lender in connection with a
Letter of Credit; and
(x) where the Issuing Lender has acted in good faith and
without gross negligence, in any other circumstances whatsoever.
(xi) The Issuing Lender shall be entitled to the protection
accorded to the Administrative A gent pursuant to Article 10, mutatis
mutandis.
2.6 Reductions of the Commitment. (a) The Commitment shall
----------------------------
automatically, but not permanently, be reduced, as of the date any Permitted
Seller Indebtedness is incurred by any Subsidiary of Borrower, by an amount,
without duplication, equal to the amount by which the aggregate Permitted Seller
Indebtedness incurred by Subsidiaries of Borrower exceeds $25,000,000; provided,
--------
however, that once so reduced, the Commitment shall automatically be increased,
as of the date of delivery of any Compliance Certificate, by an amount (if
positive) equal to (i) the then current amount of reductions in the Commitment
--------
made pursuant to this Section 2.6(a) minus (ii) the amount by which the
-----
outstanding Permitted Seller Indebtedness of Subsidiaries of Borrower as set
forth in such Compliance Certificate exceeds $25,000,000.
(b) Borrower shall have the right, at any time and from time to time,
without penalty or charge, upon at least five Banking Days prior written notice
to the Administrative Agent, voluntarily to reduce, permanently and irrevocably,
in aggregate principal amounts in an integral multiple of $1,000,000, or to
terminate, all or any portion of the then undisbursed portion of the Commitment,
provided that any such reduction or termination shall be accompanied by payment
--------
of all accrued and unpaid commitment fees with respect to the portion of the
Commitment being reduced or terminated.
2.7 Rights to Assume Funds Available for Loans. Unless the
------------------------------------------
Administrative Agent shall have been notified by any Lender no later than 10:00
a.m. (Los Angeles time) no later than the Banking Day prior to the Banking Day
proposed for the funding by the Administrative Agent of any Loan that any such
Lender does not intend to make available to the Administrative Agent such
Lender's portion of the total amount of any such Loan, the Administrative Agent
may assume that such Lender has made such amount available to the Administrative
Agent on the date of the Loan and may, in reliance upon such assumption, make
available to Borrower a corresponding amount. If the Administrative Agent has
made funds available to Borrower based on such an assumption and 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 demand therefor, the Administrative
Agent promptly shall notify Borrower and Borrower shall pay such corresponding
amount to the Administrative Agent. The Administrative Agent also shall be
entitled to recover from such Lender interest on such corresponding amount in
respect of each day from the date such corresponding amount was made available
by the Administrative Agent to Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to the Federal
Funds Rate. Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Pro Rata Share or to prejudice any rights which the
Administrative Agent may have against any Lender as a result of any default by
such Lender hereunder.
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<PAGE>
ARTICLE 3
PAYMENTS AND FEES
-----------------
3.1 Principal and Interest.
----------------------
(a) Interest shall be payable on the outstanding daily unpaid
principal amount of each Loan from the date thereof until payment in full
is made and shall accrue and be payable at the rates set forth herein
before and after default, before and after maturity, before and after
judgment, and before and after the commencement of any proceeding under any
Debtor Relief Law, with interest on overdue interest to bear interest at
the Default Rate to the fullest extent permitted by applicable Laws.
(b) Interest accrued on each Base Rate Loan shall be due and
payable on the last day of each calendar month. Except as otherwise
------
provided in Section 3.7, the unpaid principal amount of each Base Rate Loan
shall bear interest at a fluctuating rate per annum equal to the Base Rate
plus the Base Rate Margin, if any. Each change in the interest rate
----
hereunder shall take effect simultaneously with the corresponding changes
in the Base Rate.
(c) Interest accrued on each Eurodollar Rate Loan shall be due
and payable on the earlier of (i) the last day of the related Eurodollar
Period or (ii) the last day of each calendar month. Except as otherwise
------
provided in Sections 3.6 and 3.7, the unpaid principal amount of any
Eurodollar Rate Loan shall bear interest at a rate per annum equal to the
Eurodollar Rate for that Eurodollar Rate Loan plus the Eurodollar Margin.
----
(d) If not sooner paid, the principal Indebtedness under this
Agreement shall be payable as follows:
(i) the principal amount of each Eurodollar Rate Loan
shall be immediately payable on the last day of the related Eurodollar
Period (which payment may be made subject to the terms and conditions
hereof by the making of another Loan).
(ii) the Loans shall be immediately payable in cash in the
amount by which the aggregate outstanding amount of the Loans plus the
----
Letter of Credit Usage plus the Permitted Stock Repurchase Adjustment
----
Amount at any time exceeds the Commitment.
(iii) the outstanding principal balance of all of the other
Loans shall, in any event, be payable on the Maturity Date.
(e) The Loans may, at any time and from time to time,
voluntarily be paid or prepaid in whole or in part without premium or
penalty and without prior notice, except that with respect to any voluntary
------
prepayment under this Section 3.1(e), (i) each prepayment shall be in an
integral multiple of $100,000, which is, in the case of any prepayment of
any Eurodollar Rate Loan, not less than $500,000, (ii) the Administrative
Agent shall have received written notice of any prepayment at least one
Banking Day, in the case of a Base Rate Loan, or three Banking Days, in the
case of a Eurodollar Rate Loan, before the date of prepayment, which notice
shall identify the date and amount of the prepayment and the Loan(s) being
prepaid,
-26-
<PAGE>
(iii) each prepayment of principal in respect of a Eurodollar Rate Loan
shall be accompanied by payment of interest accrued through the date of
payment on the amount of principal paid and (iv) in any event, any payment
or prepayment of all or any part of any Eurodollar Rate Loan on a day other
than the last day of the applicable Eurodollar Period shall be subject to
Section 3.6(d).
3.2 Commitment Fees. From and after the Closing Date, Borrower shall
---------------
pay commitment fees to the Administrative Agent for the ratable account of the
Lenders having a Pro Rata Share in an amount equal to the Commitment Fee Rate
applicable to each relevant Pricing Period times the actual daily difference
-----
between (a) the Commitment and (b) the aggregate outstanding principal amount of
the Loans plus the aggregate face amount of all outstanding Letters of Credit.
----
Commitment fees shall be payable quarterly in arrears on the last Banking Day of
each calendar quarter, and on the Maturity Date.
3.3 Letter of Credit Fees. With respect to each Letter of Credit
---------------------
issued by the Issuing Lender, Borrower shall pay to the Issuing Lender the
following fees on a non-refundable basis prior to the issuance of such Letter of
Credit:
(i) for the account of the Lenders in accordance with their
Pro Rata Shares, a letter of credit fee equal to Eurodollar Margin per
annum times the maximum face amount of each Letter of Credit, but not
less than $500, plus
----
(ii) such standard payment, negotiation, processing,
amendment and other similar charges as and when Issuing Lender may
from time to time advise Borrower are applicable to Letters of Credit.
3.4 Facility Fee. On the Closing Date, Borrower shall pay to the
------------
Administrative Agent a non-refundable fee of $50,000.
3.5 Capital Adequacy. If any Lender determines that either (i) the
----------------
introduction of or any change in any law, order or regulation or in the
interpretation or administration of any law, order or regulation by any
Governmental Agency charged with the interpretation thereof or (ii) compliance
with any guideline or request issued or made from the date hereof from any such
Governmental Agency (whether or not having the force of law) has or would have
the effect of reducing the rate of return on the capital of that Lender or any
corporation controlling that Lender as a consequence of that Lender's Pro Rata
Share or maintaining of Loans or Letters of Credit below the rate at which that
Lender or such other corporation could have achieved but for such introduction,
change or compliance (taking into account the policies of that Lender or
corporation with regard to capital), then Borrower shall from time to time, upon
demand by such Lender, pay to that Lender additional amounts sufficient to
compensate Lender or other corporation for such reduction. A certificate as to
such amounts, submitted to Borrower by the relevant Lender, shall be conclusive
and binding for all purposes, absent manifest error.
3.6 Eurodollar Fees and Costs.
-------------------------
(a) If, after the date hereof, the existence or occurrence of
any Special Eurodollar Circumstance:
(1) shall subject any Lender or its Eurodollar Lending
Office to any tax, duty or other charge or cost with respect to any
Eurodollar Rate Loan, or its
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<PAGE>
obligation to make Eurodollar Rate Loans, or shall change the basis of
taxation of payments to Lender of the principal of or interest on any
Eurodollar Rate Loan or any other amounts due under this Agreement in
respect of any Eurodollar Rate Loan or its obligation to make
Eurodollar Rate Loans (except for changes in any tax, duty or other
------
charge on the overall net income, gross income or gross receipts of
such Lender or its Eurodollar Lending Office);
(2) shall impose, modify or deem applicable any reserve
(including any reserve imposed by the Board of Governors of the
---------
Federal Reserve System), special deposit or similar requirements
against assets of, deposits with or for the account of, or credit
extended by, any Lender or its Eurodollar Lending Office; or
(3) shall impose on any Lender or its Eurodollar Lending
Office or the Designated Eurodollar Market any other condition
affecting any Eurodollar Rate Loan, its obligation to make Eurodollar
Rate Loans or this Agreement, or shall otherwise affect any of the
same;
and the result of any of the foregoing, as reasonably determined by such
Lender, increases the cost to such Lender or its Eurodollar Lending Office
of making or maintaining any Eurodollar Rate Loan or in respect of any
Eurodollar Rate Loan, its obligation to make Eurodollar Rate Loans or
reduces the amount of any sum received or receivable by such Lender or its
Eurodollar Lending Office with respect to any Eurodollar Rate Loan or its
obligation to make Eurodollar Rate Loans (assuming the Lender's Eurodollar
Lending Office had funded 100% of its Eurodollar Rate Loan in the
Designated Eurodollar Market), then, upon demand by such Lender (with a
copy to the Administrative Agent), Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such
increased cost or reduction (determined as though such Lender's Eurodollar
Lending Office had funded 100% of its Eurodollar Rate Loan in the
Designated Eurodollar Market). A statement of any Lender claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. Each Lender agrees to endeavour promptly to notify Borrower
of any event of which it has actual knowledge (and, in any event, within
one year from the date on which it obtained such know ledge), occurring
after the Closing Date, which will entitle such Lender to compensation
pursuant to this Section, and agrees to designate a different Eurodollar
Lending Office if such designation will avoid the need for or reduce the
amount of such compensation and will not, in the judgment of such Lender,
otherwise be disadvantageous to such Lender.
(b) If, after the date hereof, the existence or occurrence of
any Special Eurodollar Circumstance shall, in the reasonable opinion of any
Lender, make it unlawful, impossible or impracticable for such Lender or
its Eurodollar Lending Office to make, maintain or fund any Eurodollar Rate
Loan, or materially restrict the authority of such Lender to purchase or
sell, or to take deposits of, Dollars in the Designated Eurodollar Market,
or to determine or charge interest rates based upon the Eurodollar Rate,
and such Lender shall so notify the Administrative Agent and the Borrower,
then such Lender's obligation to make Eurodollar Rate Loans shall be
suspended for the duration of such illegality, impossibility or
impracticability and the Administrative Agent forthwith shall give notice
thereof to the other Lenders and Borrower. Upon receipt of such notice, the
outstanding principal amount of such Lender's Eurodollar Rate Loans,
together with accrued interest thereon, automatically shall be converted to
Base Rate Loans with Eurodollar Periods corresponding to the Eurodollar
Loans
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<PAGE>
of which such Eurodollar Rate Loans were a part on either (1) the last day
of the Eurodollar Period(s) applicable to such Eurodollar Rate Loans if
such Lender may lawfully continue to maintain and fund such Eurodollar Rate
Loans to such day(s) or (2) immediately if such Lender may not lawfully
continue to fund and maintain such Eurodollar Rate Loans to such day(s),
provided that in such event the conversion shall not be subject to payment
--------
of a prepayment fee under Section 3.6(d). In the event that such Lender is
unable, for the reasons set forth above, to make, maintain or fund any
Eurodollar Rate Loan, such Lender shall fund such amount as a Base Rate
Loan for the same period of time, and such amount shall be treated in all
respects as a Base Rate Loan.
(c) If, with respect to any proposed Eurodollar Rate Loan:
(1) the Administrative Agent reasonably determines that, by
reason of circumstances affecting the Designated Eurodollar Market
generally that are beyond the reasonable control of the Lenders,
deposits in Dollars (in the applicable amounts) are not being offered
to the Lenders in the Designated Eurodollar Market for the applicable
Eurodollar Period; or
(2) the Requisite Lenders advise the Administrative Agent
that the Eurodollar rate as previously determined by the
Administrative Agent (i) does not represent the effective pricing to
such Lenders for deposits in Dollars in the Designated Eurodollar
Market in the relevant amount for the applicable Eurodollar Period, or
(ii) will not adequately and fairly reflect the cost to such Lenders
of making the applicable Eurodollar Rate Loans;
then the Administrative Agent forthwith shall give notice thereof to
Borrower and the Lenders, whereupon until the Administrative Agent notifies
Borrower that the circumstances giving rise to such suspension no longer
exist, the obligation of the Lenders to make any future Eurodollar Rate
Loans shall be suspended. If at the time of such notice there is then
pending a Request for Loan that specifies a Eurodollar Rate Loan, such
Request for Loan shall be deemed to specify a Base Rate Loan.
(d) Upon payment or prepayment of any Eurodollar Rate Loan,
(other than as the result of a conversion required under Section 3.6(b)),
----------
on a day other than the last day in the applicable Eurodollar Period
(whether voluntarily, involuntarily, by reason of acceleration, or
otherwise), or upon the failure of Borrower to borrow on the date or in the
amount specified for a Eurodollar Rate Loan in any Request for Loan,
Borrower shall indemnify the Lenders against and reimburse each Lender on
demand for all costs, expenses, penalties, losses, legal fees and damages
incurred or sustained, or that would be incurred or sustained, by the
Lenders, including loss of interest, as reasonably determined by the
---------
Lenders, to the extent that the same are a direct result of such payment,
prepayment or failure to borrow. Each Lender's determination of the amount
payable under this Section 3.6(d) shall be conclusive in the absence of
manifest error. The loss of interest by Lender will be calculated as (i)
the principal amount of the subject Loan, times (ii) a fraction the
-----
numerator of which is the number of days between the date of payment and
the last day of the applicable Eurodollar Period, and the denominator of
which is 360, times (iii) the Eurodollar Rate for the subject Loan, minus
----- -----
the Eurodollar Rate that would be applicable to a Loan in the amount of the
subject Loan to be made on the date of prepayment or a period equal to the
number of days remaining in the applicable Eurodollar Period (to the extent
such difference is a positive number).
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<PAGE>
3.7 Post Default Interest and Late Payments. At the option of the
---------------------------------------
Requisite Lenders, so long as any Event of Default has occurred and is
continuing, the Loans shall thereafter bear interest, and if any installment of
principal or interest or any fee or cost or other amount payable under any Loan
Document to any Creditor is not paid when due, it shall thereafter bear interest
until paid in full, at a fluctuating interest rate per annum at all times equal
to the greater of (a) the Base Rate plus 2% per annum and (b) 2% per annum above
the rate of interest that would otherwise be applicable pursuant to this
Agreement (the "Default Rate"), to the fullest extent permitted by applicable
Laws. Accrued and unpaid interest on past due amounts (including interest on
---------
past due interest) shall be compounded quarterly, on the last day of each
calendar quarter, to the fullest extent permitted by applicable Laws.
3.8 Right to Assume Payments Will be Made by Borrower. Unless the
-------------------------------------------------
Administrative Agent shall have been notified by Borrower prior to the date on
which any payment to be made by Borrower hereunder is due that Borrower does not
intend to remit such payment, the Administrative Agent may, in its sole
discretion, assume that Borrower has remitted such payment when so due and may,
in its sole discretion and in reliance upon such assumption, make available to
each Lender on such payment date an amount equal to such Lender's share of such
assumed payment. If Borrower has not in fact remitted such payment to the
Administrative Agent each Lender shall forthwith on demand repay to the
Administrative Agent the amount of such assumed payment made available to such
Lender, together with interest thereon in respect of each day from and including
the date such amount was made available by the Administrative Agent to such
Lender to the date such amount is repaid to the Administrative Agent at the
Federal Funds Rate.
3.9 Computation of Interest and Fees. Other than calculations in
--------------------------------
respect of interest at the Bank of America prime rate (which shall be made on
the basis of actual number of days elapsed in a 365/366 day year), computation
of interest or fees under this Agreement shall be calculated on the basis of a
year of 360 days and the actual number of days elapsed. Borrower acknowledges
that such calculation method will result in a higher yield to the Lenders than a
method based on a year of 365 or 366 days.
3.10 Non-Banking Days. If any payment to be made by Borrower or any
----------------
other Party under any Loan Document shall come due on a day other than a Banking
Day, payment shall instead be considered due on the next succeeding Banking Day
and the extension of time shall be reflected in computing interest.
3.11 Manner and Treatment of Payments.
--------------------------------
(a) Each payment hereunder shall be made to the Administrative
Agent, at the Administrative Agent's Office, for the account of the
relevant Creditor in immediately available funds not later than 11:00 a.m.,
Los Angeles time, on the day of payment (which must be a Banking Day). All
payments received after these deadlines on any Banking Day, shall be deemed
received on the next succeeding Banking Day. The amount of all payments
received by the Administrative Agent for the account of any Lender shall be
promptly paid by the Administrative Agent to that Lender in immediately
available funds. All payments shall be made in lawful money of the United
States of America.
(b) Each Lender shall use its best efforts to keep a record of
Loans made by it and payments received by it with respect to each of the
Loans and such record shall, as
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<PAGE>
against Borrower, be presumptive evidence of the amounts owing.
Notwithstanding the foregoing sentence, no Lender shall be liable to any
Party for any failure to keep such a record.
(c) Each payment of any amount payable by Borrower or any other
Party under this Agreement or any other Loan Document shall be made free
and clear of, and without reduction by reason of, any taxes, assessments or
other charges imposed by any Governmental Agency, central bank or
comparable authority (other than taxes on overall net income, gross income
or gross receipts of a Lender or its Eurodollar Lending Office). To the
extent that Borrower is obligated by applicable Laws to make any deduction
or withholding on account of taxes, assessments or other charges imposed by
any Governmental Agency from any amount payable to any Lender under this
Agreement, Borrower shall (i) make such deduction or withholding and pay
the same to the relevant Governmental Agency and (ii) pay such additional
amount to that Lender as is necessary to result in that Lender's receiving
a net after-tax (or after-assessment or after-charge) amount equal to the
amount to which that Lender would have been entitled under this Agreement
absent such deduction or withholding.
3.12 Funding Sources. Nothing in this Agreement shall be deemed to
---------------
obligate any Lender to obtain the funds for any Loan in any particular place or
manner or to constitute a representation by any Lender that it has obtained or
will obtain the funds for any Loan in any particular place or manner.
3.13 Failure to Charge Not Subsequent Waiver. Any decision by any
---------------------------------------
Creditor not to require payment of any interest (including interest arising
---------
under Section 3.7), fee, cost or other amount payable under any Loan Document,
or to calculate any amount payable by a particular method, on any occasion shall
in no way limit or be deemed a waiver of that Creditor's right to require full
payment of any interest (including interest arising under Section 3.7), fee,
---------
cost or other amount payable under any Loan Document, or to calculate an amount
payable by another method, on any other or subsequent occasion.
3.14 Authority to Charge Account.
---------------------------
(a) Borrower hereby authorizes Bank of America upon notice from
the Administrative Agent to charge the Funding Account and thereafter to
remit to the Administrative Agent, in such amounts as may from time to time
be necessary to cause timely payment of principal, interest, fees and other
charges payable by Borrower under the Loan Documents.
(b) Approximately five days prior to the date any payment is due
from Borrower under any of the Loan Documents, the Administrative Agent
shall provide to Borrower a statement of the amounts that will be due on
such date (the "Billed Amount"). The calculation of the Billed Amount shall
be made on the assumption that no new Loans or payments will be made
between the date of the billing statement and the date the amounts are due,
and that there will be no changes in the applicable inter est rate.
(c) Bank of America, upon notice from the Administrative Agent
will charge the Funding Account for the Billed Amount regardless of the
actual amount of interest accrued (the "Accrued Amount"). If the Billed
Amount charged to the Funding Account differs from the Accrued Amount, the
discrepancy will be treated as follows: (i) if the Billed Amount is less
than the Accrued Amount, the Billed Amount for the following payment date
will be
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<PAGE>
increased by the amount of the discrepancy (and no Default or Event of
Default shall be deemed to have occurred solely as a result of such
discrepancy); and (ii) if the Billed Amount is more than the Accrued
Amount, the Billed Amount for the following payment date will be decreased
by the amount of the discrepancy. Regardless of any such discrepancy,
interest will continue to accrue based on the actual amount of principal
outstanding under the Loans, without compounding. The Administrative Agent
and the Lenders shall not pay to Borrower on the time value of any inter
est on any excess payment.
(d) Nothing herein shall obligate the Administrative Agent to
charge the Funding Account as provided above at a time when there are not
sufficient good funds in such account, and if there are insufficient funds
in the Funding Account on a date the Administrative Agent enters any debit
authorized hereby, the Administrative Agent shall reverse such debit to the
extent of such insufficiency.
3.15 Survivability. All of Borrower's obligations under Sections 3.5,
-------------
3.6 and 11.12 shall survive for one year following the date on which all Loans
hereunder are fully paid.
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<PAGE>
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower represents and warrants to the Creditors as follows:
4.1 Existence and Qualification; Power; Compliance With Laws. Borrower
--------------------------------------------------------
is a corporation duly formed, validly existing and in good standing under the
laws of the state of Delaware. Borrower is duly qualified to transact business,
is in good standing in its jurisdiction of incorporation and each other
jurisdiction, in which the conduct of its business or the ownership or leasing
of its properties makes such qualification or registration necessary, except
------
where the failure so to qualify or register and to be in good standing would not
constitute a Material Adverse Effect. The chief executive office and principal
place of business of Borrower are located at the addresses for notices set forth
for Borrower in the signature pages to this Agreement. Borrower has all
requisite corporate power and authority to conduct its business, and to own and
lease its properties (except to the extent the same would not have a Material
Adverse Effect) and to execute and deliver each Loan Document to which it is a
party and to perform the Obligations. All outstanding shares of capital stock of
Borrower are duly authorized, validly issued, fully paid, non-assessable and
issued in compliance with all applicable state and federal securities and other
Laws. Borrower is in compliance with all Laws and other legal requirements
applicable to its business, has obtained all authorizations, consents,
approvals, orders, licenses and permits from, and has accomplished all filings,
registrations and qualifications with, or obtained exemptions from any of the
foregoing from, any Governmental Agency that are necessary for the transaction
of its business, except where the failure so to comply, file, register, qualify
or obtain exemptions does not constitute a Material Adverse Effect.
4.2 Authority; Compliance With Other Agreements and Instruments and
---------------------------------------------------------------
Government Regulations. The execution, delivery and performance by Borrower and
----------------------
the Guarantors of each Loan Document to which it is a Party have been duly
authorized by all necessary corporate action, and do not:
(a) Require any consent or approval not heretofore obtained of
any partner, director, stockholder, security holder or creditor of such
Party, except as heretofore obtained;
(b) Violate or conflict with any provision of that such Party's
charter, certificate of incorporation or bylaws, as applicable;
(c) Result in or require the creation or imposition of any Lien
or right of others upon or with respect to any material Property now owned
or leased or hereafter acquired by that Party;
(d) Violate any Requirement of Law applicable to such Party in
any material respect;
(e) Result in a breach of or constitute a default under, or cause
or permit the acceleration of any obligation owed under, any indenture or
loan or credit agreement or any other Contractual Obligation to which such
Party is a party or by which such Party or any of its Property is bound or
affected;
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<PAGE>
and no Party is in violation of, or default under, any Requirement of Law or
Contractual Obligation, or any indenture, loan or credit agreement described in
Section 4.2(e), in any respect that constitutes a Material Adverse Effect.
4.3 No Governmental Approvals Required. No authorization, consent,
----------------------------------
approval, order, license or permit from, or filing, registration or
qualification with, any Governmental Agency is required to authorize or permit
under applicable Laws the execution, delivery and performance by Borrower and
the Guarantors of any of the Loan Documents to which it is a Party.
4.4 Subsidiaries.
------------
(a) As of the Closing Date, Schedule 4.4 hereto correctly sets
forth the names, the form of legal entity, and jurisdictions of organization of
all Subsidiaries of Borrower and indicates, as of the Closing Date, which
Subsidiaries are Significant Subsidiaries. Except as described in Schedule 4.4,
Borrower does not own as of the Closing Date any capital stock or equity
interest in any Person other than marketable securities. All of the outstanding
shares of capital stock, or all of the units of equity interest, as the case may
be, of each such Subsidiary are owned of record and beneficially as indicated on
Schedule 4.4, and all such shares or equity interests so owned are duly
authorized, validly issued, fully paid, nonassessable, and were issued in
compliance with all applicable state, federal and other Laws, and are free and
clear of all Liens.
(b) Each such Subsidiary is a legal entity of the form described
for that Subsidiary in Schedule 4.4, duly organized, validly existing, and in
good standing under the Laws of its jurisdiction of organization, is duly
qualified to do business as a foreign organization and is in good standing as
such, in each jurisdiction in which the conduct of its business or the ownership
or leasing of its properties makes such qualification necessary, and has all
requisite power and authority to conduct its business and to own and lease its
properties (except where the failure to have requisite power and authority and
------
be so duly qualified and in good standing do not constitute a Material Adverse
Effect).
(c) Each such Subsidiary is in compliance with all Laws and
other requirements applicable to its business and has obtained all
authorizations, consents, approvals, orders, licenses, and permits from, and
each such Subsidiary has accomplished all filings, registrations, and
qualifications with, or obtained exemptions from any of the foregoing from, any
Governmental Agency that are necessary for the transaction of its business,
except where the failure to be in such compliance, obtain such authorizations,
------
consents, approvals, orders, licenses, and permits, accomplish such filings,
registrations, and qualifications, or obtain such exemptions, does not
constitute a Material Adverse Effect.
4.5 Financial Statements. Borrower has furnished to the
--------------------
Administrative Agent the audited consolidated financial statements of Borrower
and its Subsidiaries for the Fiscal Year ended April 30, 2000. Such financial
statements fairly present in all material respects the financial condition,
results of operations and changes in financial position of Borrower and its
Subsidiaries as of such date and for such period in conformity with Generally
Accepted Accounting Principles consistently applied.
4.6 No Other Liabilities; No Material Adverse Effect. Borrower and
------------------------------------------------
its Subsidiaries do not have any material liability or material contingent
liability required under Generally Accepted Accounting Principles to be
reflected or disclosed, and not reflected or disclosed, in the
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<PAGE>
financial statements described in Section 4.5, other than liabilities and
contingent liabilities arising in the ordinary course of business since the date
of such financial statements. As of the Closing Date, no circumstance or event
has occurred that constitutes a Material Adverse Effect since April 30, 2000.
4.7 Title to and Location of Property. Borrower and its Subsidiaries
---------------------------------
have valid title to the Property (other than assets which are the subject of a
----- ----
Capital Lease) reflected in the financial statements described in Section 4.5,
other than items of Property or exceptions to title which are in each case
----- ----
immaterial and Property subsequently sold or disposed of in the ordinary course
of business. Such Property is free and clear of all Liens and Rights of Others,
other than those permitted under Section 6.9.
----------
4.8 Intangible Assets. Borrower and its Subsidiaries own, or possess
-----------------
the right to use to the extent necessary in their respective businesses, all
material trademarks, trade names, copy rights, patents, patent rights, computer
software, licenses and other intangible assets that are used in the conduct of
their businesses as now operated. None of the intangible assets described in the
first sentence of this Section, to the best knowledge of Borrower, conflicts
with the valid trademark, trade name, copyright, patent, patent right or
intangible asset of any other Person to the extent that such conflict
constitutes a Material Adverse Effect.
4.9 Governmental Regulation. Neither Borrower nor any Subsidiary of
-----------------------
Borrower is subject to regulation under the Public Utility Holding Company Act
of 1935, the Federal Power Act, the Interstate Commerce Act, the Investment
Company Act of 1940 or to any other Law limiting or regulating its ability to
incur Indebtedness for money borrowed.
4.10 Litigation. Except for (a) any matter fully covered (subject to
----------
applicable deductibles and retentions) by insurance for which the insurance
carrier has assumed full responsi bility, (b) any matter, or series of related
matters, involving a claim against Borrower or any of its Subsidiaries of less
than $2,500,000, and (c) matters set forth in Schedule 4.10, as of the Closing
Date, there are no actions, suits, proceedings or investigations pending as to
which Borrower or any Subsidiary of Borrower has been served or has received
written notice or, to the best knowledge of Borrower, threatened against or
affecting Borrower, any Subsidiary of Borrower or any Property of any of them
before any Governmental Agency. Except for matters set forth in Schedule 4.10,
------
there is no reasonable basis, to the best knowledge of Borrower, for any action,
suit, proceeding or investigation against or affecting Borrower, any Subsidiary
of Borrower or any Property of any of them before any Governmental Agency which
could not reasonably be expected to constitute a Material Adverse Effect.
4.11 Binding Obligations. Each of the Loan Documents to which Borrower
-------------------
and the Guarantors are a party will, when executed and delivered by such Party,
constitute the legal, valid and binding obligation of such Party, enforceable
against such Party in accordance with its terms, except as enforcement may be
limited by Debtor Relief Laws or equitable principles relating to the granting
of specific performance and other equitable remedies and/or defenses as a matter
of judicial discretion.
4.12 No Default. No event has occurred and is continuing that is a
----------
Default or Event of Default.
4.13 ERISA.
-----
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<PAGE>
(a) Except as disclosed in Schedule 4.13, as of the Closing
------
Date neither Borrower nor any ERISA Affiliate of Borrower maintains,
contributes to or is required to contribute to any "employee pension
benefit plan" that is subject to Title IV of ERISA.
(b) With respect to each Pension Plan disclosed in Schedule
4.13:
(i) such Pension Plan complies in all material respects
with ERISA and any other applicable Laws;
(ii) such Pension Plan has not incurred any material
"accumulated funding deficiency", as that term is defined in Section
302 of ERISA;
(iii) no "reportable event" (as defined in Section 4043 of
ERISA) has occurred that would subject Borrower or any Subsidiary of
Borrower to any liability with respect to such Pension Plan that would
constitute a Material Adverse Effect;
(iv) neither Borrower nor any Subsidiary of Borrower has
engaged in any non-exempt "prohibited transaction" (as defined in
Section 4975 of the Code) that would subject Borrower or any
Subsidiary of Borrower to any penalty that would constitute a Material
Adverse Effect;
(v) no Termination Event has occurred or may reasonably be
expected to occur; and
(vi) no material unfunded vested liabilities exist under
any Pension Plan and the present value of all benefit liabilities
under each Pension Plan and each Pension Plan of a Subsidiary and of
an ERISA Affiliate do not exceed by a material amount the value of the
assets of such Plan.
(c) As of the Closing Date, all contributions required to be
made by Borrower or any of its Subsidiaries to a Multiemployer Plan
described in Schedule 4.13 have been made except as may be described in
Schedule 4.13. Neither Borrower nor any Subsidiary of Borrower has incurred
any withdrawal liability under Section 4201 of ERISA that could have a
material adverse effect on Borrower or its Subsidiaries. Neither Borrower
nor any Subsidiary of Borrower has received any notification that any
Multiemployer Plan is in reorganization or has been terminated, within the
meaning of Title IV of ERISA, and no Multiemployer Plan is reasonably
expected to be in reorganization or to be terminated, where such
reorganization has resulted or can reasonably be expected to result in an
increase in the contributions required to be made to such Plan that could
have a material adverse effect on Borrower and its Subsidiaries taken as a
whole.
(d) Each of Borrower, its Subsidiaries and its ERISA Affiliates
are in compliance with those provisions of ERISA which are applicable to
Borrower, its Subsidiaries and its ERISA Affiliates, the non-compliance
with which would have a Material Adverse Effect on Borrower.
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<PAGE>
4.14 Regulations T, U and X. No part of the proceeds of any Loan
----------------------
hereunder will be used to purchase or carry, or to extend credit to others for
the purpose of purchasing or carrying, any "margin stock" (as such term is
defined in Regulation U) in violation of Regulations T, U or X.
4.15 Disclosure. No written statement made by a Responsible Official
----------
of Borrower or any Guarantor to any Creditor in connection with this Agreement,
or in connection with any Loan, contains any untrue statement of a material fact
or omits a material fact necessary to make the statement made not misleading in
light of all the circumstances existing at the date the statement was made.
There is no fact known to Borrower or any Guarantor (other than facts generally
----- ----
applicable to businesses of the types engaged in by Borrower) which would
constitute a Material Adverse Effect that has not been disclosed in writing to
the Lenders.
4.16 Tax Liability. Borrower and its Subsidiaries have filed all tax
-------------
returns which are required to be filed (subject to any applicable grace periods
or extensions), and have paid, withheld, collected or remitted, all taxes,
interest, penalties and installments of taxes due and payable by them with
respect to the periods, Property or transactions covered by such returns, or
pursuant to any assessment received by either Borrower or any Subsidiary of
Borrower, except (a) taxes for which Borrower or such Subsidiary has been fully
------
indemnified and (b) such taxes, if any, as are being contested in good faith by
appropriate proceedings diligently pursued and as to which adequate reserves
have been established and maintained. To the best knowledge of Borrower, there
is no tax assessment contemplated or proposed by any Governmental Agency against
Borrower or any Subsidiary of Borrower that would constitute a Material Adverse
Effect.
4.17 Budget. To the best knowledge of Borrower, the assumptions on
------
which Borrower has based the Budget are reasonable and consistent with each
other and with all material facts known to Borrower, and the Budget is
reasonably based on such assumptions. Nothing in this Section shall be construed
as a representation or covenant that the Budget in fact will be achieved.
4.18 Hazardous Materials.
-------------------
(a) Except as specifically disclosed in Schedule 4.18, the on-
going operations of Borrower and its Subsidiaries, and to the best knowledge of
Borrower, the on-going operations of all current tenants, subtenants or other
occupants of all or any part of the real property owned, leased or operated by
Borrower or any of its Subsidiaries, are conducted and comply in all respects
with all Environmental Laws, except such non-compliance which would not (if
enforced in accordance with applicable law) result in liability in excess of
$1,000,000 in any such case.
(b) Except as specifically disclosed in Schedule 4.18, Borrower
and each of its Subsidiaries have obtained all licenses, permits, authorizations
and registrations required under any Environmental Law ("Environmental Permits")
---------------------
and necessary for their respective ordinary course operations except where the
failure to obtain such Environmental Permits would not result in a Material
Adverse Effect, all such Environmental Permits are in good standing, and
Borrower and each of its Subsidiaries are in compliance with all material terms
and conditions of such Environmental Permits.
(c) Except as specifically disclosed in Schedule 4.18, neither
any of Borrower nor any Subsidiary of Borrower (nor to the best knowledge of
Borrower no current tenants, or other occupants of all or part of the Real
Property) or any of their respective present
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<PAGE>
Property or operations, is subject to any existing, pending, threatened or
outstanding written order, suit, claim, proceeding, investigation, order,
comment, injunction, writ, award, action or proceeding from or agreement with
any Governmental Agency or third party, nor subject to any judicial or docketed
administrative proceeding, respecting any Environmental Law, Environmental Claim
or Hazardous Material in each case which could reasonably be expected to have a
Material Adverse Effect.
(d) Except as specifically disclosed in Schedule 4.18, there are no
Hazardous Materials or other conditions or circumstances existing with respect
to any Property, or arising from operations prior to the Closing Date, of
Borrower or any of its Subsidiaries that could reasonably be expected to give
rise to Environmental Claims with a potential liability of Borrower and its
Subsidiaries in excess of $1,000,000 in any such case. In addition, (i) neither
Borrower nor any Subsidiary of Borrower has any underground storage tanks (x)
that are not properly registered or permitted under applicable Environmental
Laws, or (y) that are leaking or disposing of Hazardous Materials off-site, and
(ii) Borrower and its Subsidiaries are in material compliance with all laws
requiring notification of their employees of the existence, if any, of any
health hazard arising from the conditions of their employment.
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<PAGE>
ARTICLE 5
AFFIRMATIVE COVENANTS
---------------------
(OTHER THAN INFORMATION AND
--------------------------
REPORTING REQUIREMENTS)
----------------------
So long as any Loan remains unpaid, any Letter of Credit remains
outstanding, any other Obligation remains unpaid, or any portion of the
Commitment remains in force, Borrower shall, and shall cause each Subsidiary to,
unless the Requisite Lenders otherwise consent in writing:
5.1 Payment of Taxes and Other Potential Liens. Pay, collect,
------------------------------------------
withhold, remit and discharge promptly all taxes, assessments and governmental
charges or levies imposed upon any of them, upon their respective Property or
any part thereof, upon their respective income or profits or any part thereof or
upon any right or interest of the Creditors under any Loan Document, except that
------
Borrower and its Subsidiaries shall not be required to pay or cause to be paid
(a) any income or gross receipts tax or any other tax on or measured by income
generally applicable to banks or their corporate parents or (b) any tax,
assessment, charge or levy that is not yet past due, or is being contested in
good faith by appropriate proceedings diligently pursued, so long as the
relevant entity has established and maintains adequate reserves for the payment
of the same and by reason of such nonpayment and contest no material item or
portion of Property of Borrower or its Subsidiaries is in jeopardy of being
seized, levied upon or forfeited.
5.2 Preservation of Existence. Preserve and maintain, or cause to be
-------------------------
maintained and preserved, their respective existence in the jurisdictions of
their formation and all material authorizations, rights, franchises, privileges,
consents, approvals, orders, licenses, permits, or registrations from any
Governmental Agency that are necessary for the transaction of their respective
businesses, and qualify and remain qualified to transact business in each
jurisdiction in which such qualification is necessary in view of their
respective businesses or the ownership or leasing of their respective
properties.
5.3 Maintenance of Properties. Maintain, preserve and protect, or
-------------------------
cause to be maintained, preserved and protected, all of their respective
depreciable properties in good order and condition, subject to wear and tear in
the ordinary course of business, or damage or destruction from casualties which
are fully covered by insurance (subject to customary deductibles and
retentions), and not permit any waste of their respective properties, except
------
that the failure to maintain, preserve and protect a particular item of
depreciable Property that is not of significant value, either intrinsically or
to the operations of Borrower and its Subsidiaries, taken as a whole, shall not
constitute a violation of this covenant.
5.4 Maintenance of Insurance. Maintain, or cause to be maintained,
------------------------
liability, casualty and other insurance (subject to customary deductibles and
retentions) in such amounts and against such risks as are maintained by Borrower
as of the Closing Date. Such insurance shall be maintained with financially
sound and reputable insurance companies reasonably acceptable to the Requisite
Lenders. Borrower shall deliver to the Administrative Agent from time to time
upon reasonable request, an Accord Certificate (or its equivalent) evidencing
that insurance of the types required by this Section is in force.
5.5 Compliance With Laws. Comply with, or cause to be complied with,
--------------------
all Requirements of Law, the noncompliance with which would reasonably be
expected to have a Material Adverse Effect.
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<PAGE>
5.6 Inspection Rights. Upon reasonable notice and subject to
-----------------
Borrower's reasonable security requirements, at any time during regular business
hours and as often as requested (but not so as to unreasonably interfere with
the business of Borrower or any of its Subsidiaries), permit the Administrative
Agent, or any authorized employee, agent or representative thereof, (a) to
examine, audit and make copies and abstracts from the records and books of
account of, (b) to visit, and inspect the Properties of, Borrower and its
Subsidiaries, and (c) to discuss the affairs, finances and accounts of Borrower
and its Subsidiaries with any of their officers, key employees or accountants
(and Borrower shall promptly execute and deliver to the Administrative Agent any
waivers of confidentiality consistent with Section 11.16 required to permit such
discussions), and, upon request following any Event of Default, furnish promptly
to the Administrative Agent true copies of all financial information made
available to the senior management of Borrower. Audits of Borrower's books and
records may be conducted by the Administrative Agent or its employees, agents or
representatives from time to time and as often as the Administrative Agent may
reasonably request.
5.7 Keeping of Records and Books of Account. Keep adequate records
---------------------------------------
and books of account reflecting all financial transactions in conformity with
Generally Accepted Accounting Principles, consistently applied, and in material
conformity with all applicable requirements of any Governmental Agency having
regulatory jurisdiction over Borrower or any of its Subsidiaries.
5.8 Compliance With Agreements. Comply with all Contractual
--------------------------
Obligations under all material agreements, indentures, leases and/or instruments
to which any one or more of them is a party, whether such material agreements,
indentures, leases or instruments are with a Creditor or another Person, except
------
that Borrower and its Subsidiaries need not comply with Contractual Obligations
(other than under the Loan Documents) under any such agreements, indentures,
leases or instruments then being contested by any of them in good faith by
appropriate proceedings diligently pursued.
5.9 Use of Proceeds. All proceeds of the Loans during the term of
---------------
this Agreement shall be used (a) to consummate Permitted Acquisitions, (b) to
refinance existing Indebtedness of Borrower and (c) for working capital and
other general corporate purposes of Borrower and its Subsidiaries. In no event
shall Borrower and its Subsidiaries use the proceeds of the Loans to acquire any
marketable securities in any manner which would violate Regulations U, T or X of
the Board of Governors of the Federal Reserve System.
5.10 Hazardous Materials Laws.
------------------------
(a) Conduct their operations and keep and maintain their
Property in material compliance with all Environmental Laws.
(b) To the extent that the same have a potential impact upon
Borrower and its Subsidiaries which is in excess of $1,000,000, notify the
Administrative Agent in writing upon, but in no event later than 10 days after,
becoming aware of (i) any and all enforcement, cleanup, removal or other
governmental or regulatory actions instituted, completed or threatened against
Borrower or any Subsidiary of Borrower or any of their respective Properties
pursuant to any applicable Environmental Laws, (ii) all other Environmental
Claims, and (iii) any environmental or similar condition on any real property
adjoining or in the vicinity of the Property of Borrower or such Subsidiary that
could reasonably be anticipated to cause such Property or any part thereof to be
subject to any restrictions on the ownership, occupancy, transferability or use
of such Property under any Environmental Laws.
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<PAGE>
(c) Upon the written request of the Administrative Agent or the
Requisite Lenders, submit to the Administrative Agent with sufficient copies for
each Lender, at Borrower's sole cost and expense, at reasonable intervals, a
report providing an update of the status of any environmental, health or safety
compliance, hazard or liability issue identified in any notice or report
required pursuant to Section 5.10(b), that could, individually or in the
aggregate, result in liability in excess of $1,000,000.
5.11 Future Guarantors. In the event that Borrower hereafter forms or
-----------------
acquires any Significant Subsidiary, Borrower shall cause each such Significant
Subsidiary to promptly and in any event within ten Banking Days cause such
Subsidiary to execute joinders to the Guaranty.
5.12 Acquisition Covenants. Comply with each of the following
---------------------
covenants in connection with each Permitted Acquisition:
(a) Borrower or any of its Subsidiaries may complete Permitted
Acquisitions; provided that the aggregate consideration paid for (i)
-------------
Investments permitted by Section 6.11(e) where the Borrower's proportionate
share of Target EBITDA is less than zero and (ii) all Permitted
Acquisitions of targets with a Target EBITDA of less than zero, shall not
exceed in any Fiscal Year (A) $15,000,000 (excluding, for the Fiscal Year
ending April 30, 2001, any consideration paid for Permitted Acquisitions
and such Investments closed or made prior to the Closing Date) paid in cash
and (B)$10,000,000 (excluding, for the Fiscal Year ending April 30, 2001,
any consideration paid for Permitted Acquisitions and such Investments
closed or made prior to the Closing Date) in the form of equity securities
of Borrower or any of its Subsidiaries (provided that where such
--------
consideration is in the form of equity securities of a Subsidiary of
Borrower, Borrower shall at all times maintain a controlling voting
interest therein).
(b) Subject to Section 5.12(a) above, Borrower or any of its
Subsidiaries may complete Permitted Acquisitions where the aggregate
consideration for each such Permitted Acquisition is $10,000,000 or greater
provided that the applicable acquiror certifies to the Administrative Agent in
-------------
writing not later than 5 Banking Days prior to the consummation of the proposed
transaction that (i) the target had positive Target EBITDA for the twelve months
prior to the Acquisition (and the acquiror shall provide Administrative Agent
with supporting financial statements for the target for such prior twelve-month
period in connection with such certification) and (ii) after giving effect to
the Permitted Acquisition, Borrower and its Subsidiaries shall remain in
compliance with each of the covenants set forth in Articles 5 and 6 and no
Default or Event of Default exists or would result from such Permitted
Acquisition.
5.13 Further Assurances. Borrower shall provide all written
------------------
information, exhibits and reports furnished to any Creditor do not and will not
contain any untrue statement of a material fact and do not and will not omit to
state any material fact or any fact necessary to make the statements contained
therein not misleading in light of the circumstances existing as of the date
when made given the totality of the circumstances then existing.
5.14 Bank as Principal Depository. With respect to operations in the
----------------------------
United States, subject to agreement by the parties hereto as to reasonable terms
and conditions with respect thereto, to maintain Bank of America as its
principal depository bank, including for the maintenance of business, cash
management, operating and administrative deposit accounts.
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<PAGE>
ARTICLE 6
NEGATIVE COVENANTS
------------------
So long as any Loan remains unpaid, any Letter of Credit remains
outstanding, any other Obligation remains unpaid, or any portion of the
Commitment remains in force, Borrower shall not, and shall not permit any of its
Subsidiaries to, unless the Requisite Lenders otherwise consent in writing:
6.1 Prepayment of Indebtedness. (a) Prepay or repay any principal
--------------------------
(including sinking fund payments) in respect of any Subordinated Obligations, or
---------
(b) pay any principal, interest or other amounts in respect of any Subordinated
Obligations except in accordance with the definitive subordination agreement
between the Administrative Agent and the holder of such Subordinated
Obligations.
6.2 Disposition of Property. Make any Disposition of its Property,
-----------------------
whether now owned or hereafter acquired, except a Disposition by Borrower to a
------
Wholly-Owned Subsidiary, or by a Subsidiary to Borrower or a Wholly-Owned
Subsidiary, provided that this Section will not be construed to prohibit the
sale of assets in the ordinary course of business.
6.3 Mergers. Merge or consolidate with or into any Person, except (a)
------- ------
mergers and consolidations of a Subsidiary of Borrower into Borrower or a
Wholly-Owned Subsidiary or of Subsidiaries with each other and (b) a merger or
consolidation of a Person into Borrower or with or into a Wholly-Owned
Subsidiary of Borrower in connection with a Permitted Acquisition; provided that
--------
(i) Borrower or a Wholly-Owned Subsidiary is the surviving entity, (ii) no
Change in Control results therefrom, (iii) no Default or Event of Default then
exists or would result therefrom and (iv) Borrower and each of the Guarantors
execute such amendments to the Loan Documents as Lender may reasonably determine
are appropriate as a result of such merger.
6.4 Acquisitions. Make any Acquisition other than Permitted
------------
Acquisitions made when no Default or Event of Default exists or would result
therefrom.
6.5 Distributions. Make any Distribution, whether from capital,
-------------
income or otherwise, and whether in cash or other Property, except:
------
(a) Distributions by any Subsidiary of Borrower to Borrower or
to any Wholly-Owned Subsidiary of Borrower or to any other Subsidiary which
is a Guarantor;
(b) Distributions consisting of the acquisition by Borrower of
shares of its common stock from employees or dividends paid to such
employees in the form of shares of common stock, provided that, (i) the
--------
aggregate amount of any such Distributions does not exceed $500,000 in any
Fiscal Year and (b) in each case giving effect to the making of such
Distributions, no Default or Event of Default exists or would result
therefrom; and
(c) Distributions consisting of management stock options issued
in the ordinary course of business of Borrower and its Subsidiaries; and
(d) Distributions consisting of a Permitted Stock Repurchase;
provided that, (i) the aggregate amount of Permitted Stock Repurchases does
--------
not exceed $20,000,000 at
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any time, (ii) in each case, after giving effect to such Permitted Stock
Repurchase, no Default or Event of Default exists or would result
therefrom.
6.6 ERISA.
-----
(a) At any time, maintain, or be or become obligated to
contribute on behalf of its employees to, any "employee pension benefit
plan" that is subject to Title IV of ERISA other than those Pension Plans
disclosed in Schedule 4.13, Multiemployer Plans to which Borrower or any
Subsidiary of Borrower becomes obligated to contribute pursuant to the
terms of a collective bargaining agreement and other Pension Plans approved
by the Lenders, such approval not to be unreasonably withheld, delayed or
conditioned.
(b) At any time, permit any Pension Plan disclosed in Schedule
4.13, in such case if to do so would constitute a Material Adverse Effect,
to:
(i) engage in any non-exempt "prohibited transaction", as
such term is defined in Section 4975 of the Code;
(ii) incur any material "accumulated funding deficiency",
as that term is defined in Section 302 of ERISA; or
(iii) suffer a Termination Event to occur which may
reasonably be expected to result in liability of Borrower or any ERISA
Affiliate thereof to the Pension Plan or to the PBGC or the imposition
of a Lien on the Property of Borrower or any ERISA Affiliate thereof
pursuant to Section 4068 of ERISA.
(c) Fail, upon a Responsible Official of Borrower becoming aware
thereof, promptly to notify the Administrative Agent of the occurrence of
any "reportable event" (as defined in Section 4043 of ERISA) or of any non-
exempt "prohibited transaction" (as defined in Section 4975 of the Code),
in each case, that could reasonably be expected to have a Material Adverse
Effect, with respect to any Pension Plan described in Schedule 4.13 or any
trust created thereunder.
(d) At any time, permit any Pension Plan described in Schedule
4.13 to fail to comply with ERISA or other applicable Laws in any respect
that could result in a significant liability to Borrower or any Subsidiary
of Borrower.
6.7 Change in Name; Nature of Business. Change the legal name of
----------------------------------
Borrower or of any Significant Subsidiary of Borrower without prior notice to
the Administrative Agent or make any material change in the nature of the
business of Borrower and its Subsidiaries, taken as a whole, as at present
conducted.
6.8 Indebtedness and Contingent Obligations. Create, incur, assume
---------------------------------------
or suffer to exist any Indebtedness or Contingent Obligation, except:
------
(a) Existing Indebtedness and Contingent Obligations disclosed
on Schedule 6.8(a);
---------------
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<PAGE>
(b) Indebtedness and Contingent Obligations in favor of the
Creditors under the Loan Documents;
(c) Indebtedness and Contingent Obligations consisting of the
Approved Swap Agreement;
(d) Permitted Seller Indebtedness in an aggregate outstanding
principal amount not to exceed $75,000,000, as of any date of
determination;
(e) Contingent Obligations incurred by Borrower and its
Subsidiaries with respect to permitted obligations incurred by Borrower or
its Subsidiaries;
(f) Indebtedness incurred by Borrower secured by the cash
surrender value of life insurance policies in an amount not to exceed, at
any time, sixty-five percent (65%) of the aggregate cash surrender value of
such policies; and
(g) unsecured Indebtedness (including, without limitation,
Subordinated Obligations) other than that listed in clauses (a) - (f)
----------- ---
above, in an amount not to exceed $10,000,000 as of any date of
determination.
Notwithstanding any other provision of this Section 6.8 and subject to
-----------
Section 2.6(a), not more than $45,000,000, in the aggregate, of the
--------------
Indebtedness permitted by clauses (d) and (g) above, shall be incurred, as
----------- ---
of any date of determination, by Subsidiaries of Borrower.
6.9 Liens; Negative Pledges; Sales and Leasebacks. Create, incur,
---------------------------------------------
assume or suffer to exist any Lien or Right of Others of any nature upon or with
respect to any of its Property, whether now owned or hereafter acquired; or
suffer to exist any Negative Pledge with respect to any of its Property; or
engage in any sale and leaseback transaction with respect to any of its
Property; except:
------
(a) Permitted Encumbrances;
(b) Negative Pledges in favor of the Creditors under the Loan
Documents;
(c) Existing Liens disclosed in Schedule 6.9; provided that the
------------ --------
obligations secured thereby are not increased; and
(d) purchase money Liens securing Indebtedness permitted under
Section 6.8(g) in an amount not to exceed $5,000,000.
--------------
6.10 Transactions with Affiliates. Following the Closing Date, enter
----------------------------
into any transaction of any kind with any officer or Affiliate of Borrower,
other than (a) transactions (including real property lease transactions) on
---------- ---------
terms at least as favorable to Borrower or its Subsidiaries as would be the case
in an arm's-length transaction between unrelated parties of equal bargaining
power, (b) transactions having an aggregate value not in excess of $1,000,000
and (c) transactions relating to employment compensation.
6.11 Investments. Make or suffer to exist any Investment, other than:
----------- ----- ----
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(a) Investments in existence on the Closing Date and disclosed
on Schedule 6.11;
-------------
(b) Investments consisting of Cash Equivalents;
(c) Investments in a Person that is the subject of a Permitted
Acquisition;
(d) Investments received in connection with the settlement of a
bona fide dispute with another Person;
(e) Investments consisting of the acquisition of less than a
fifty-one percent (51%) voting interest in the target of such acquisition;
provided that (i) the aggregate consideration paid for all such
-------------
Investments does not exceed $15,000,000 in any Fiscal Year (excluding, for
the Fiscal Year ending April 30, 2001, any consideration paid for any such
Investment prior to the Closing Date), (ii) such Investment does not result
in a violation of Section 5.12(a), and (iii) for any single Investment of
$10,000,000 or greater which is otherwise permitted by this Section
5.12(e), Borrower or its Subsidiary, as applicable, shall have provided to
the Administrative Agent the certifications required by Section 5.12(b)
with each reference to "Permitted Acquisition" therein constituting a
reference to the "Investment" referred to in this Section 5.12(e); and
(f) Investments not described in clauses (a) - (e) above in an
-----------------
aggregate amount not to exceed $7,500,000.
6.12 Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage
---------------------------
Ratio as of the last day of any Fiscal Quarter described in the matrix below to
be less than the ratio set forth opposite the period in which that Fiscal
Quarter ends; provided, however, that if Borrower shall make any Permitted
--------
Stock Repurchase, the Fixed Charge Coverage Ratio for fiscal periods ending July
31, 2001 and thereafter shall be not less than 1.25:1.00:
Fiscal Quarters Ending During the Period Minimum Ratio
---------------------------------------- -------------
Closing Date through January 30, 2001 0.80:1.00
January 31, 2001 through April 29, 2001 0.90:1.00
April 30, 2001 through April 29, 2002 1.10:1.00
April 30, 2002 and thereafter 1.25:1.00
6.13 Leverage Ratio. Permit the Leverage Ratio as of the last day of
--------------
any Fiscal Quarter to be greater than 1.50:1.00.
6.14 Minimum Quick Ratio. Permit the Quick Ratio, (a) as of the last
-------------------
day of any Fiscal Quarter, to be less than 0.75:1.00; and (b) as of the last day
of any Fiscal Quarter where the aggregate Permitted Seller Indebtedness incurred
by Subsidiaries of Borrower exceeds $25,000,000 at any time during such Fiscal
Quarter, the Quick Ratio, to be less than 0.85:1.00. Compliance with
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clause (b) of this Section 6.14 shall be evidenced by a Compliance Certificate
delivered in accordance with Section 7.2(b).
6.15 Foreign Subsidiaries. So long as the conditions set forth in
--------------------
Section 8.3 shall not have been satisfied, for each time period set forth below,
permit the sum of Cash, Cash Equivalents and marketable securities held by the
Foreign Subsidiaries, on a cumulative basis, to exceed the amount set forth
opposite such time period:
Time Period Maximum Permitted
----------- -----------------
Closing Date through and
including January 30, 2001 $62,000,000
January 31, 2001 and thereafter $45,000,000
6.16 Suspension of Business. Voluntarily suspend its business for
----------------------
more than three Banking Days in period of seven consecutive Banking Days.
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ARTICLE 7
INFORMATION AND REPORTING REQUIREMENTS
--------------------------------------
7.1 Financial and Business Information. So long as any Loan remains
----------------------------------
unpaid, any Letter of Credit remains outstanding, any other Obligation remains
unpaid, or any portion of the Commitment remains in force, Borrower shall,
unless the Requisite Lenders otherwise consent in writing, deliver to the
Administrative Agent, at its sole expense:
(a) As soon as practicable, and in any event within 45 days
after the end of each calendar quarter (other than the fourth calendar
quarter of each Fiscal Year), (i) the consolidated balance sheets of
Borrower and its Subsidiaries as at the end of such calendar quarter and
(ii) consolidated statements of income of Borrower and its Subsidiaries,
all in reasonable detail. Such financial statements shall be certified by a
Senior Officer of Borrower as fairly presenting the financial condition and
results of operations of Borrower and its Subsidiaries, and shall be
prepared and presented in accordance with Generally Accepted Accounting
Principles (other than any requirement for footnote disclosures),
consistently applied, as at such date and for such periods, subject only to
normal year-end accruals and audit adjustments;
(b) As soon as practicable, and in any event within 120 days
after the end of each Fiscal Year, (i) the audited consolidated balance
sheet and statement of income and cash flows of Borrower and its
Subsidiaries prepared and presented in accordance with Generally Accepted
Accounting Principles, consistently applied, and accompanied by a report
and opinion of independent public accountants of recognized national
standing selected by Borrower and reasonably satisfactory to the Requisite
Lenders, which report and opinion shall be prepared in accordance with
generally accepted auditing standards as at such date, and shall not be
subject to any qualifications or exceptions as to the scope of the audit
nor to any other qualification or exception which the Requisite Lenders
determine is unacceptable, and (ii) the unaudited company-prepared
consolidating balance sheets and statements of income. For purposes of the
financial statements required by this Section 7.1(b), Borrower shall be
permitted, unless otherwise requested by the Administrative Agent, to
provide Regional Consolidated Financial Statements in lieu of consolidating
statements;
(c) As soon as practicable, and in any event no later than
forty-five days after the commencement of each Fiscal Year, a Budget and
financial forecast for that Fiscal Year and the next succeeding two Fiscal
Years, each in form and detail consistent with Borrower's past practices;
(d) Promptly and in any event within thirty Banking Days
following receipt thereof, copies of any management letters or
recommendations submitted to Borrower or any of its Subsidiaries by
independent accountants in connection with the accounts or books of
Borrower or any of its Subsidiaries, or any audit of any of them;
(e) Promptly after the same are available, copies of each annual
report, proxy or financial statement, and copies of all annual, regular,
periodic and special reports and registration statements which Borrower may
file or be required to file under Sections 13 or 15(d) of the Securities
Exchange Act of 1934;
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(f) Promptly upon a Responsible Official of Borrower becoming
aware, and in any event within ten Banking Days after becoming aware, of
the occurrence of any (i) "reportable event" (as such term is defined in
Section 4043 of ERISA) or (ii) "prohibited transaction" (as such term is
defined in Section 406 of ERISA or Section 4975 of the Code) in connection
with any Pension Plan or any trust created thereunder, written notice
specifying the nature thereof and specifying what action Borrower or any of
its Subsidiaries is taking or proposes to take with respect thereto, and,
when known, any action taken by the Internal Revenue Service with respect
thereto;
(g) Within five Banking Days after a Responsible Official of
Borrower becomes aware of the existence of (i) the commencement of any
material litigation against the Borrower or its Subsidiaries, (ii) the
commencement of any material proceeding with respect to the Borrower or any
of its Subsidiaries by any Governmental Agency, or (iii) any condition or
event which constitutes a Material Adverse Effect or a Default, notice
thereof, and as promptly as practical thereafter, a written summary thereof
specifying the nature and period of existence thereof and specifying what
action Borrower and its Subsidiaries are taking or propose to take with
respect thereto;
(h) Promptly upon a Responsible Official of Borrower becoming
aware that (i) any Person commenced a legal proceeding with respect to a
claim against Borrower or any of its Subsidiaries that is stated to be
$5,000,000 or more in excess of the amount thereof that is believed by such
Responsible Official to be fully covered by insurance (subject to
deductibles and retentions which are reasonably consistent with Borrower's
existing coverages), (ii) any creditor or lessor under a written material
credit agreement or material lease has asserted a default thereunder on the
part of Borrower or any of its Subsidiaries, and such default has not been
cured or rescinded within any applicable cure period under the credit
agreement or lease or applicable Laws, (iii) any Person commenced a legal
proceeding with respect to a claim against Borrower or any of its
Subsidiaries under a contract that is not a material credit agreement or
material lease stated to be in excess of $5,000,000, or (iv) any other
event or circumstance occurs or exists that would constitute a Material
Adverse Effect, in each case a written notice describing the pertinent
facts relating thereto and what action Borrower and its Subsidiaries are
taking or propose to take with respect thereto;
(i) Within 45 days after the end of each Pricing Period, a
completed Pricing Certificate; and
(j) Such other data and information as from time to time may be
reasonably requested by the Administrative Agent or any Lender.
7.2 Compliance Certificates. So long as any Loan remains unpaid, any
-----------------------
Letter of Credit remains outstanding, any other Obligation remains unpaid, or
any portion of the Commitment remains outstanding, Borrower shall, unless the
Requisite Lenders otherwise consent, deliver to the Administrative Agent as soon
as practicable and in any event within 45 days after the end of each calendar
quarter (except for the fourth Fiscal Quarter in each Fiscal Year, in which case
120 days shall be allowed), a Compliance Certificate signed by a Senior Officer
of Borrower setting forth Borrower's calculation of its compliance with the
covenants set forth therein.
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ARTICLE 8
CONDITIONS
----------
8.1 Conditions to the Initial Loans and Letters of Credit. The
-----------------------------------------------------
obligation of each Lender to make the initial Loan to be made by it, and the
obligation of Lender to issue the initial Letters of Credit, is subject to the
following conditions precedent, each of which shall be satisfied prior to the
making of the initial Loans (unless all of the Lenders, in their sole and
absolute discretion, shall agree otherwise):
(a) The Administrative Agent shall have received all of the
following, each of which shall be originals unless otherwise specified or,
where applicable, the context otherwise requires, each properly executed by
a Responsible Official of each party thereto, each dated as of the Closing
Date and each in form and substance reasonably satisfactory to the
Administrative Agent and its legal counsel (unless otherwise specified or,
in the case of the date of any of the following, unless the Administrative
Agent otherwise agrees or directs):
(1) executed counterparts of this Agreement;
(2) the Guaranty executed by each of the Guarantors;
(3) with respect to Borrower, the Guarantors and each of
their respective Subsidiaries, such documentation as the
Administrative Agent may reason ably require to establish the due
organization, valid existence and good standing of each of Borrower,
the Guarantors, and each such Subsidiary, its qualification to engage
in business in each jurisdiction in which it is engaged in business or
required to be so qualified, its authority to execute, deliver and
perform any Loan Documents to which it is a Party, and the identity,
authority and capacity of each Responsible Official thereof authorized
to act on its behalf;
(4) evidence of the insurance policies required by Section
5.4;
(5) a Certificate of a Responsible Official signed by a
Senior Officer of Borrower certifying that the conditions specified in
Sections 8.1(c) and 8.1(d), have been satisfied and a Pricing
Certificate;
(6) a Certificate of a Responsible Official signed by a
Senior Officer of Borrower certifying that attached thereto are true,
correct and complete fully executed copies of each of the documents,
including, without limitation, all applicable promissory notes,
evidencing, or executed in connection with, Permitted Seller
Indebtedness in existence as of the Closing Date;
(7) a Request for Loan and, if applicable, a Request for
Letter of Credit;
(8) the legal opinion of Sullivan & Cromwell, special
counsel to Borrower and the Guarantors; and
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(9) such other assurances, certificates, documents,
consents or opinions, consistent with the foregoing, as the
Administrative Agent or any Lender reasonably may require.
(b) the fees payable pursuant to Sections 3.2, 3.3 and 3.4 and
any amounts payable pursuant to clause (a) of Section 11.3 shall be paid
concurrently;
(c) the representations and warranties of Borrower contained in
Article 4 shall be true and correct; and
(d) Borrower shall be in compliance with all the terms and
provisions of the Loan Documents, no Default or Event of Default shall have
occurred and be continuing, and no event shall have occurred since April
30, 2000 which constitutes a Material Adverse Effect.
8.2 Any Increasing Loan. The obligation of each Lender to make any
-------------------
Loan which would increase the outstanding principal amount of the Loans, and the
obligation of the Issuing Lenders to issue any Letter of Credit, is subject to
the following conditions precedent, each of which shall be satisfied prior to
the making of such an Loan or the issuance of a Letter of Credit:
(a) except as disclosed by Borrower and approved in writing by
------
the Requisite Lenders, the representations and warranties contained in
Article 4 (other than Sections 4.6 and 4.10) shall be true and correct on
----- ----
and as of the date of the Loan or Letter of Credit as though made on that
date;
(b) other than matters described in Schedule 4.10, or matters
not required as of the Closing Date to be therein described, or matters
disclosed by Borrower and approved in writing by the Requisite Lenders,
there shall not be then pending or threatened in writing any action, suit,
proceeding or investigation against or affecting Borrower or any of its
Subsidiaries or any Property of any of them before any Governmental Agency
that constitutes a Material Adverse Effect;
(c) the Administrative Agent shall have received a timely
Request for Loan in compliance with Article 2 in compliance with Article 2,
or the Issuing Lender and the Administrative Agent shall have timely
received a Request for Letter of Credit in compliance with Article 2, as
applicable; and
(d) the Administrative Agent shall have received, in form and
substance reasonably satisfactory to the Administrative Agent, such other
assurances, certificates, documents or consents related to and consistent
with the foregoing as the Administrative Agent or the Requisite Lenders
reasonably may require.
8.3 Post-Closing Conditions; Pledge Agreement. As soon as reasonably
-----------------------------------------
practicable following the Closing Date, Borrower hereby agrees to deliver the
following documents, each duly authorized, executed and delivered by a
Responsible Official of each party thereto, each in form and substance
satisfactory to the Administrative Agent and its counsel:
(a) the Pledge Agreement duly executed by the Borrower together
with (i) the Pledged Securities (as defined in the Pledge Agreement) and
(ii) the related stock powers duly executed in blank; and
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(b) the legal opinion of such counsel for Borrower and/or its
Foreign Subsidiaries as the Administrative Agent shall reasonably request.
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ARTICLE 9
EVENTS OF DEFAULT AND REMEDIES
------------------------------
9.1 Events of Default. The existence or occurrence of any one or more of
-----------------
the following events shall constitute an Event of Default:
(a) Borrower fails to pay any principal or interest in respect of
the Loans or Letters of Credit hereunder when due; or
(b) Borrower fails to pay any commitment fee, letter of credit fee,
expense or other amount in respect of the Loans or Letters of Credit
hereunder, or any portion thereof, within five days of the date when due; or
(c) Any failure to comply with Section 7.1(g) or any covenant in
Article 6; or
(d) Borrower or any other Party fails to perform or observe any
other covenant or agreement contained herein on its part to be performed or
observed and fails to cure such Default within thirty days; or
(e) Borrower or any other Party fails to perform or observe any
other covenant or agreement contained in any Loan Document other than this
Agreement, giving effect to any grace period and/or notice requirements set
forth therein; or
(f) Any representation or warranty made in any Loan Document proves
to have been incorrect when made or reaffirmed; or
(g) Borrower or any of its Subsidiaries (i) fails to pay the
principal, or any principal installment, of any present or future
indebtedness for borrowed money or Capital Lease of $5,000,000 or more, or
any guaranty of present or future Indebtedness for borrowed money or Capital
Lease of $5,000,000 or more, on its part to be paid, when due (or within any
stated grace period), whether at the stated maturity, upon acceleration, by
reason of required prepayment or otherwise or (ii) fails to perform or
observe any other term, covenant or agreement on its part to be performed or
observed, or suffers any event to occur, in connection with any present or
future indebtedness for borrowed money or Capital Lease of $5,000,000 or
more, or of any guaranty of present or future indebtedness for borrowed money
or Capital Lease of $5,000,000 or more, if as a result of such failure or
sufferance any holder or holders thereof (or an agent or trustee on its or
their behalf) has the right to declare such Indebtedness due before the date
on which it otherwise would become due; or
(h) Any event occurs which gives the holder or holders of any
Subordinated Obligation (or an agent or trustee on its or their behalf) the
right to declare such Indebtedness due before the date on which it otherwise
would become due, or the right to require the issuer thereof to redeem or
purchase, or offer to redeem or purchase, all or any portion of any
Subordinated Obligation; or
(i) This Agreement or any other Loan Document at any time after its
execution and delivery and for any reason, other than the agreement of the
Lenders or satisfaction in full of all the Obligations, ceases to be in full
force and effect or is declared by a court of
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competent jurisdiction to be null and void, invalid or unenforceable in any
respect which, in any such event in the reasonable opinion of the Requisite
Lenders, is materially adverse to the interests of the Lenders; or any Party
thereto denies that it has any or further liability or obligation under any
Loan Document, or purports to revoke, terminate or rescind same (other than
in accordance with the terms and conditions of the Loan Documents); or
(j) Any judgments or arbitration awards are entered against
Borrower or any of its Subsidiaries, or Borrower or any of its Subsidiaries
enters into any settlement agreements with respect to any litigation or
arbitration, in an amount of $5,000,000 or more in excess of any insurance
coverage and in the case of any judgment, the same remains unstayed or
undismissed for more than thirty consecutive days; or
(k) Borrower or any of its Subsidiaries institutes or consents to
any proceeding under a Debtor Relief Law relating to it or to all or any part
of its Property, or is unable or admits in writing its inability to pay its
debts as they mature, or makes a general assignment for the benefit of
creditors; or applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer
for it or for all or any part of its Property; or any receiver, trustee,
custodian, conservator, liquidator, rehabilitator or similar officer is
appointed without the application or consent of that Person and the
appointment continues undischarged or unstayed for sixty consecutive calendar
days; or any proceeding under a Debtor Relief Law relating to any such Person
or to all or any part of its Property is instituted without the consent of
that Person and continues undismissed or unstayed for sixty consecutive
calendar days following the service of process; or any judgment, writ,
warrant of attachment or execution or similar process is issued or levied
against all or any material part of the Property of any such Person and is
not released, vacated or fully bonded within sixty consecutive calendar days
after its issue or levy; or
(l) The occurrence of a Termination Event with respect to any
Pension Plan if the estimated accrued liability of Borrower and its ERISA
Affiliates under ERISA as a result thereof exceeds $1,000,000; or the
complete or partial withdrawal by Borrower or any of its Subsidiaries or any
of their ERISA Affiliates from any Multiemployer Plan if the aggregate
liability of Borrower and its ERISA Affiliates as a result thereof exceeds
$1,000,000 (or, in the case of the Pension Plan described on Schedule 4.13,
the termination of such Pension Plan results in a liability to Borrower and
its Subsidiaries which is in excess of $1,000,000 greater than the $800,000
reserve established on Borrower's books as of the Closing Date in relation
thereto); or
(m) Any judgment, order or ruling, whether or not final, is made by
a court of competent jurisdiction that payment of principal or interest or
both shall be made to the holder of any Subordinated Obligation which would
not be permitted by Section 6.1 or that any Subordinated Obligation is not
subordinated in accordance with its terms to the Obligations; or
(n) The occurrence of a Change in Control.
9.2 Remedies Upon Event of Default. Without limiting any other
------------------------------
rights or remedies of the Creditors provided for elsewhere in this Agreement or
the Loan Documents, or by applicable Law, or in equity, or otherwise:
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(a) Upon the occurrence of any Event of Default other than an Event of
Default described in Section 9.1(l):
(1) the Commitment to make Loans and to issue Letters of Credit and
all other obligations of the Creditors and all rights of Borrower and any
other Party under the Loan Documents shall terminate without notice to or
demand upon Borrower, which are expressly waived by Borrower, except that the
------
Requisite Lenders (or, to the extent required by Section 11.2, all the
Lenders) may waive the Event of Default or, without waiving, determine, upon
terms and conditions satisfactory to the Requisite Lenders (or, to the extent
required by Section 11.2, all the Lenders), to make further Loans;
(2) the Requisite Lenders (or, to the extent required by Section
11.2, all of the Lenders) may request the Issuing Lender to, and the Issuing
Lender thereupon shall demand immediate payment by Borrower of an amount
equal to the aggregate effective face amount of all outstanding Letters of
Credit issued to Borrower as provided in Section 2.5 to be held as cash
collateral for the reimbursement obligations of Borrower under such Letter of
Credit; and
(3) the Requisite Lenders (or to the extent required by Section
11.2, all Lenders) may request the Administrative Agent to, and the
Administrative Agent thereupon shall, declare all or any part of the unpaid
principal of all Loans, all interest accrued and unpaid thereon and all other
amounts payable under the Loan Documents to be forthwith due and payable,
whereupon the same shall become and be forthwith due and payable, without
protest, presentment, notice of dishonour, demand or further notice of any
kind, all of which are expressly waived by Borrower.
(b) Upon the occurrence of any Event of Default described in
Section 9.1(l):
(1) the Commitment to make Loans and to issue Letters of Credit and
all other obligations of Creditors and all rights of Borrower and any other
Party under the Loan Documents shall terminate without notice to or demand
upon Borrower, which are expressly waived by Borrower, except that all the
------
Lenders may waive the Event of Default or, without waiving, determine, upon
terms and conditions satisfactory to all the Lenders, to make further Loans;
(2) an amount equal to the aggregate effective face amount of all
outstanding Letters of Credit issued to Borrower shall be forthwith due and
payable by Borrower to the Issuing Lender to be held by the Issuing Lender as
cash collateral for the reimbursement obligations of Borrower to the Issuing
Lender with respect to Letters of Credit issued by the Issuing Lender,
without protest, presentment, notice of dishonour, demand or further notice
of any kind, all of which are waived by Borrower; and
(3) the unpaid principal amount of all Loans, all interest accrued
and unpaid thereon and all other amounts payable under the Loan Documents
shall be forthwith due and payable, without protest, presentment, notice of
dishonour, demand or further notice of any kind, all of which are expressly
waived by Borrower.
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(c) Upon the occurrence of any Event of Default, the Lenders and
the Administrative Agent or any of them, without notice to or demand upon
Borrower, which are expressly waived by Borrower, may proceed (but only with
the consent of the consent of the Requisite Lender) to protect, exercise and
enforce their rights and remedies under the Loan Documents against Borrower
and such other rights and remedies as are provided by Law or equity.
(d) The order and manner in which the Lenders' rights and remedies
are to be exercised shall be determined by the Requisite Lenders in their
sole discretion, and all payments received by the Creditors, or any of them,
shall be applied first to the costs and expenses (including attorneys' fees
and disbursements) of the Administrative Agent, acting in such capacity,
second, to the principal amount of the Obligations and interest and credit
fees thereon, and thereafter paid pro rata to the Lenders in the same
proportions that the aggregate Obligations owed to each Lender under the Loan
Documents bear to the aggregate Obligations owed under the Loan Documents to
all the Lenders, without priority or preference among the Lenders for
application to Obligations. Regardless of how each Lender may treat payments
for the purpose of its own accounting, for the purpose of computing
Borrower's Obligations hereunder, payments shall be applied first, to the
-----
costs and expenses of the Creditors, as set forth above, second, to the
------
payment of accrued and unpaid interest due under any Loan Documents to and
including the date of such application (ratably, and without duplication,
according to the accrued and unpaid interest due under each of the Loan
Documents), and third, to the payment of all other amounts (including
principal and credit fees) then owing to the Creditors under the Loan
Documents. No application of payments will cure any Event of Default, or
prevent acceleration, or continued acceleration, of amounts payable under the
Loan Documents, or prevent the exercise, or continued exercise, of rights or
remedies of the Lenders hereunder or thereunder or at law or in equity.
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ARTICLE 10
THE ADMINISTRATIVE AGENT
------------------------
10.1 Appointment and Authorization. Each Lender hereby irrevocably
-----------------------------
appoints, designates and authorizes the Administrative Agent to take such
action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein,
nor shall the Administrative Agent have or be deemed to have any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
10.2 Delegation of Duties. The Administrative Agent may execute any
--------------------
of its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agent
or attorney-in-fact that they select with reasonable care.
10.3 Liability of the Administrative Agent. None of the Agent
-------------------------------------
Related Persons shall (i) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any other
Loan Document (except for its own gross negligence or willful misconduct), or
(ii) be responsible in any manner to any of the Creditors for any recital,
statement, representation or warranty made by Borrower or any Subsidiary or
Affiliate of Borrower, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative
Agent under or in connection with, this Agreement or any other Loan Document,
or for the value of any Collateral or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
Loan Document, or for any failure of Borrower or any other Party to any Loan
Document to perform its obligations hereunder or thereunder. No Agent Related
Person shall be under any obligation to the Creditors to ascertain or to
inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or
to inspect the Properties, books or records of Borrower or any of Borrower's
Subsidiaries or Affiliates.
10.4 Reliance by Administrative Agent.
--------------------------------
(a) The Administrative Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by
them to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons, and upon advice and statements of legal counsel
(including counsel to Borrower), independent accountants and other experts
selected by them. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other
Loan Document unless they shall first receive such advice or concurrence of
the Requisite Lenders (and, in a case covered by Section 11.2, of all the
Lenders) as they deem appropriate and, if they so request, they shall first
be indemnified to their satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of
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taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with
a request or consent of the Requisite Lenders (or, in a case covered by
Section 11.2, of all the Lenders) and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 8.1, each Lender that has executed this Agreement
shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter either sent by the
Administrative Agent to such Lender for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to or approved by or
acceptable or satisfactory to the Lender.
10.5 Notice of Default. The Administrative Agent shall not be deemed
-----------------
to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal,
interest and fees required to be paid to the Administrative Agent for the
account of the Lenders, unless the Administrative Agent shall have received
written notice from a Lender or Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Administrative Agent receives such
a notice, the Administrative Agent shall give notice thereof to the Lenders.
The Administrative Agent shall take such action with respect to such Default
or Event of Default as shall be requested by the Requisite Lenders in
accordance with Article 9; provided, however, that unless and until the
Administrative Agent shall have received any such request, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as each
shall deem advisable or in the best interest of the Lenders.
10.6 Credit Decision. Each other Creditor expressly acknowledges that
---------------
none of the Agent Related Persons has made any representation or warranty to
it and that no act by the Administrative Agent hereinafter taken, including
any review of the affairs of Borrower and its Subsidiaries shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
other Creditor. Each other Creditor represents to the Administrative Agent
that it has, independently and without reliance upon the Administrative Agent
and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, Property, financial and other condition and creditworthiness of
Borrower and its Subsidiaries, and all applicable bank regulatory laws
relating to the transactions contemplated thereby, and made its own decision
to enter into this Agreement and extend credit to Borrower hereunder. Each
other Creditor also represents that it will, independently and without
reliance upon the Administrative Agent and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, Property, financial and other condition and
creditworthiness of Borrower. Except for notices, reports and other documents
expressly herein required to be furnished to the other Creditors by the
Administrative Agent, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, Property, financial and other
condition or creditworthiness of Borrower or any of its Subsidiaries which
may come into the possession of any of the Agent Related Persons.
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10.7 Indemnification. Whether or not the transactions contemplated
---------------
hereby shall be consummated, the Lenders shall indemnify upon demand the
Agent Related Persons (to the extent not reimbursed by or on behalf of
Borrower and without limiting the obligation of Borrower to do so), ratably
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of
any kind whatsoever which may at any time (including at any time following
the repayment of the Loans and the termination or resignation of the
Administrative Agent) be imposed on, incurred by or asserted against any such
Person in any way relating to or arising out of this Agreement or any
document contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by any such
Person under or in connection with any of the foregoing; provided, however,
-------- -------
that no Lender shall be liable for the payment to the Agent Related Persons
of any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from such Person's gross negligence or willful misconduct. Without limitation
of the foregoing, each Lender shall reimburse the Administrative Agent upon
demand for its ratable share of any costs or out-of-pocket expenses
(including attorneys fees and expenses and the allocated fees and expenses of
any internal counsel to the Administrative Agent) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect
of rights or responsibilities under, this Agreement, any other Loan Document,
or any document contemplated by or referred to herein to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of
Borrower. Without limiting the generality of the foregoing, if the Internal
Revenue Service or any other Governmental Agency asserts a claim that the
Administrative Agent did not properly withhold tax from amounts paid to or
for the account of any Lender (because the appropriate form was not
delivered, was not properly executed, or because such Lender failed to notify
the Administrative Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any
other reason) such Lender shall indemnify the Administrative Agent fully for
all amounts paid, directly or indirectly, by the Administrative Agent as tax
or otherwise, including penalties and interest, and including any taxes
imposed by any jurisdiction on the amounts payable to the Administrative
Agent under this Section, together with all costs and expenses (including
attorneys fees and expenses and the allocated fees and expenses of any
internal counsel to the Administrative Agent). The obligation of the Lenders
in this Section shall survive the payment of all Obligations hereunder.
10.8 Bank of America in its Individual Capacity. Bank of America and
------------------------------------------
its Affiliates may make loans to, issue letters of credit for the account of,
accept deposits from, acquire equity interests in and generally engage in any
kind of banking, trust, financial advisory or other business with Borrower
and its Subsidiaries and Affiliates as though Bank of America were not the
Administrative Agent hereunder and without notice to or consent of the
Lenders. With respect to its Advances and its risk participation in Letters
of Credit, Bank of America shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the Administrative Agent, and the terms "Lender" and "Lenders" shall include
Bank of America in its individual capacity.
10.9 Successor Agents. The Administrative Agent may, and at the
----------------
request of the Requisite Lenders shall, resign upon 30 days' notice to the
Lenders. If the Administrative Agent so resigns, the Requisite Lenders shall
appoint from among the Lenders a successor Administrative Agent for the
Lenders. If no successor is appointed prior to the effective date of the
resignation, the Administrative Agent may appoint, after consulting with the
Lenders and Borrower, a successor Administrative Agent from among the
Lenders. Upon the acceptance of its appointment as successor agent hereunder,
such successor agent shall succeed to all the rights, powers and duties of
the retiring agent and the term "Administrative Agent" shall mean such
successor agent and the retiring agent's
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appointment, powers and duties as Administrative Agent shall be terminated.
After any retiring agent's resignation under this Section, the provisions of
this Article 10 and Sections 11.3, 11.12 and 11.22 shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. If no successor agent has accepted
appointment as Administrative Agent by the date which is 30 days following a
retiring agent's notice of resignation, the retiring agent's resignation
shall nevertheless thereupon become effective and the Lenders shall perform
all of the duties of the retiring agent hereunder until such time, if any, as
the Requisite Lenders appoint a successor agent as provided for above.
10.10 No Obligations of Borrower. Nothing contained in this Article 10
--------------------------
shall be deemed to impose upon Borrower any obligation in respect of the due
and punctual performance by the Administrative Agent of its obligations to
the Lenders under any provision of this Agreement, and Borrower shall have no
liability to any Creditor in respect of any failure by any other Creditor to
perform any of its obligations to any other Creditor under this Agreement.
Without limiting the generality of the foregoing, where any provision of this
Agreement relating to the payment of any amounts due and owing under the Loan
Documents provides that such payments shall be made by Borrower to the
Administrative Agent for the account of the Lenders, Borrower's obligations
to the Lenders in respect of such payments shall be deemed to be satisfied
upon the making of such payments to such Person in the manner provided by
this Agreement.
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ARTICLE 11
MISCELLANEOUS
-------------
11.1 Cumulative Remedies; No Waiver. The rights, powers, privileges
------------------------------
and remedies of the Creditors provided herein or in any Loan Document are
cumulative and not exclusive of any right, power, privilege or remedy provided
by Law or equity. No failure or delay on the part of the Administrative Agent or
any Lender in exercising any right, power, privilege or remedy may be, or may be
deemed to be, a waiver thereof; nor may any single or partial exercise of any
right, power, privilege or remedy preclude any other or further exercise of the
same or any other right, power, privilege or remedy. The terms and conditions
of Article 8 hereof are inserted for the sole benefit of the Administrative
Agent and the Lenders; the same may be waived in whole or in part, with or
without terms or conditions, in respect of any Loan without prejudicing the
Administrative Agent's or any Lender's rights to assert them in whole or in part
in respect of any other Loan.
11.2 Amendments; Consents. No amendment, modification, supplement,
--------------------
extension, termination or waiver of any provision of this Agreement or any other
Loan Document, no approval or consent thereunder, and no consent to any
departure by any Party therefrom, may in any event be effective unless in
writing signed by the Requisite Lenders (and, in the case of amendments,
modifications, supplements, extensions or terminations of or to any Loan
Document to which Borrower is a Party, the approval in writing of Borrower) and
then only in the specific instance and for the specific purpose given; and,
without the approval in writing of all the Lenders, no amendment, modification,
supplement, termination, waiver or consent may be effective:
(i) To amend or modify the principal of, or the amount of
principal, principal prepayments or the rate of interest payable on,
any Loan, or the amount of the Commitment or of any commitment fee or
any letter of credit fee payable to any Lender, or any other fee or
amount payable to any Lender under the Loan Documents or to waive an
Event of Default consisting of the failure of Borrower to pay when due
principal, interest, any commitment fee or any letter of credit fee;
(ii) To postpone any date fixed for any payment of
principal of, prepayment of principal of or any installment of
interest on, any Loan or any installment of any commitment fee or
letter of credit fee, or to extend the term of the Commitment.
(iii) To amend the provisions of the definition of
"Requisite Lenders", Articles 8 or 9, or this Section 11.2; or
-----------------
(iv) To amend any provision of this Agreement that
expressly requires the consent or approval of all the Lenders.
Any amendment, modification, supplement, termination, waiver or consent
pursuant to this Section 11.2 shall apply equally to, and shall be binding upon,
all the Lenders and the Administrative Agent. Without implying that the Lenders
are obligated to agree to any amendment, modification, supplement, extension,
termination or waiver requested by Borrower, the Lenders may impose such
additional conditions and such other fees and expenses (including pursuant to
---------
Section 11.3) as the Lenders may deem appropriate in connection with the
Lenders' approval thereof.
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11.3 Costs, Expenses and Taxes. Borrower shall pay the reasonable
-------------------------
out-of-pocket costs and expenses of (a) the Administrative Agent in connection
with the negotiation, preparation, execution and delivery of the Loan Documents
(including reasonable fees and out-of-pocket expenses of legal counsel to the
---------
Administrative Agent and, without duplication, the reasonable allocated costs of
internal counsel to the Administrative Agent), (b) of each Creditor in
connection with any amendment, modification, supplement, extension or waiver of
the Loan Documents in connection with any refinancing, restructuring,
reorganization (including a bankruptcy reorganization) and enforcement or
---------
attempted enforcement of the Loan Documents, and any matter related thereto, in
each case including filing fees, recording fees, title insurance fees, appraisal
---------
fees, search fees and other out-of-pocket expenses and the reasonable fees and
out-of-pocket expenses of any legal counsel (including the reasonable allocated
---------
cost of in-house counsel), independent public accountants and other outside
experts retained by the Administrative Agent, and including any costs, expenses
---------
or fees incurred or suffered by each Creditor in connection with or during the
course of any bankruptcy or insolvency proceedings of Borrower or any Subsidiary
thereof, and (c) the Administrative Agent incurred in connection with the
administration of the Loan Documents. Borrower shall pay any and all documentary
and other taxes (other than income or gross receipts taxes generally applicable
to banks) and all costs, expenses, fees and charges payable or determined to be
payable in connection with the filing or recording of any Loan Document or any
other instrument or writing to be delivered hereunder or thereunder, or in
connection with any transaction pursuant hereto or thereto, and shall reimburse,
hold harmless and indemnify each Creditor from and against any and all loss,
liability or legal or other expense with respect to or resulting from any delay
in paying or failure to pay any such tax, cost, expense, fee or charge that each
Creditor may suffer or incur by reason of the failure of any Party to perform
any of its Obligations. Any amount payable to each Creditor under this Section
shall bear interest from the second Banking Day following the date of demand for
payment at the Default Rate.
11.4 Nature of Lenders' Obligations. The obligations of the Lenders
------------------------------
hereunder are several and not joint or joint and several. Nothing contained in
this Agreement or any other Loan Document and no action taken by the Creditors
or any of them pursuant hereto or thereto may, or may be deemed to, make the
Creditors a partnership, an association, a joint venture or other entity, either
among themselves or with Borrower or any Affiliate of Borrower. Each Lender's
obligation to make any Loan pursuant hereto is several and not joint or joint
and several, and is conditioned upon the performance by all other Lenders of
their obligations to make Loans. A default by any Lender will not increase the
Pro Rata Share of any other Lender. Any Lender not in default may, if it
desires, assume in such proportion as the nondefaulting Lenders agree the
obligations of any Lender in default, but is not obligated to do so.
11.5 Survival of Representations and Warranties. All representations
------------------------------------------
and warranties contained herein or in any other Loan Document, or in any
certificate or other writing delivered by or on behalf of any one or more of the
Parties to any Loan Document, will survive the making of the Loans hereunder
(except to the extent the same relate solely to a specified earlier date and
------
only until the full repayment of the Obligations and the termination of the
Commitment), and have been or will be relied upon by the Administrative Agent,
notwithstanding any investigation made by the Administrative Agent or on its
behalf.
11.6 Notices. Except as otherwise expressly provided in the Loan
------- ------
Documents: (a) All notices, requests, demands, directions and other
communications provided for hereunder, telecopied, delivered by recognized
overnight delivery service or hand delivered to the appropriate party at the
address set forth on the signature pages of this Agreement or other applicable
Loan Document or, as to any party to any Loan
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Document, at any other address as may be designated by it in a written notice
sent to all other parties to such Loan Document in accordance with this Section;
and (b) Any notice, request, demand, direction or other communication given by
telecopier must be confirmed within two Banking Days by letter mailed or
delivered to the appropriate party at its respective address. Except as
------
otherwise expressly provided in any Loan Document, if any notice, request,
demand, direction or other communication required or permitted by any Loan
Document is given by mail it will be effective on the earlier of receipt or the
third Banking Day after deposit in the United States mail with first class or
airmail postage prepaid; if given by telecopier, when sent; or if given by
recognized overnight delivery service or personal delivery, when delivered.
Regardless of its initial manner of delivery under this Section, the
Administrative Agent shall provide a follow-up copy of any notice of default by
the Borrower hereunder by certified mail, return receipt requested.
11.7 Execution of Loan Documents. This Agreement and any other Loan
---------------------------
Document may be executed in any number of counterparts and any party hereto or
thereto may execute any counterpart, each of which when executed and delivered
will be deemed to be an original and all of which counterparts of this Agreement
or any other Loan Document, as the case may be, when taken together will be
deemed to be but one and the same instrument.
11.8 Binding Effect; Assignment.
--------------------------
(a) This Agreement and the other Loan Documents to which
Borrower is a Party will be binding upon and inure to the benefit of
Borrower, the Creditors, and their respective successors and assigns,
except that Borrower may not assign its rights hereunder or thereunder or
------
any interest herein or therein without the prior written consent of all the
Lenders. Each Lender represents that it is not acquiring its interest in
the Loans with a view to the distribution thereof within the meaning of the
Securities Act of 1933, as amended (subject to any requirement that
disposition of such interest must be within the control of such Lenders).
Any Lender may at any time pledge its interest in the Loans to a Federal
Reserve Bank, but no such pledge shall release that Lender from its
obligations hereunder or grant to such Federal Reserve Bank the rights of a
Lender hereunder absent foreclosure of such pledge.
(b) From time to time, each Lender may assign all or any portion
of its Pro Rata Share to any Eligible Assignee; provided that (i) the
--------
assignee, if not then a Lender or an Affiliate of the assigning Lender,
shall be approved by Borrower (which approval shall not be unreasonably
withheld or delayed), (ii) such assignment shall be evidenced by an
Assignment Agreement, a copy of which shall be furnished to the
Administrative Agent as hereinbelow provided, (iii) except in the case of
------
an assignment to an Affiliate of the assigning Lender, to another Lender or
of the entire remaining portion of the Pro Rata Share of the assigning
Lender, the assignment shall not assign a Pro Rata Share equivalent to less
than $5,000,000 and (iv) the effective date of any such assignment shall be
as specified in the Assignment Agreement, but not earlier than the date
which is five Banking Days after the date the Administrative Agent has
received the Assignment Agreement. Upon the effective date of such
Assignment Agreement, the assignee named therein shall be a Lender for all
purposes of this Agreement, with the Pro Rata Share therein set forth and,
to the extent of such Pro Rata Share, the assigning Lender shall be
released from its obligations under this Agreement.
(c) By executing and delivering an Assignment Agreement, the
assignee Lender thereunder acknowledges and agrees that: (i) other than the
representation and warranty that it is the legal and beneficial owner of
the Pro Rata Share being assigned thereby free and
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clear of any adverse claim, the assigning Lender has made no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement
or the execution, legality, validity, enforceability, genuineness or
sufficiency of this Agreement or any other Loan Document; (ii) the
assigning Lender has made no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower or the
performance by Borrower of the Obligations; (iii) it has received a copy of
this Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 7.1 and such other documents and
information as it has deemed appropriate to make its own credit analysis
and decision to enter into such Assignment Agreement; (iv) it will,
independently and without reliance upon the Administrative Agent or any
Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) it appoints and
authorizes the Administrative Agent to take such action and to exercise
such powers under this Agreement as are delegated to the Administrative
Agent by this Agreement; and (vi) it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at the
Administrative Agent's Office a copy of each Assignment Agreement delivered
to it. After receipt of a completed Assignment Agreement executed by any
Lender and an assignee, and receipt of an assignment fee of $3,500 from
such assignee, Administrative Agent shall, promptly following the effective
date thereof notify Borrower and each Lender of the identity of the new
Lender.
(e) Each Lender may from time to time grant participations to
one or more banks or other financial institutions in a portion of its Pro
Rata Share; provided, however, that (i) such Lender's obligations under
-------- -------
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) the participating banks or other financial institutions
shall not be a Lender hereunder for any purpose except, if the
------
participation agreement so provides, for the purposes of Sections 3.5, 3.6,
and 11.12 but only to the extent that the cost of such benefits to Borrower
does not exceed the cost which Borrower would have incurred in respect of
such Lender absent the participation, (iv) Borrower, the Administrative
Agent and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under
this Agreement, (v) the participation shall be of the same Pro Rata Share,
(vi) the participation interest shall be expressed as a percentage of the
assigning Lender's Pro Rata Share as it then exists and shall not restrict
an increase in the Commitment, or in the assigning Lender's Pro Rata Share,
so long as the amount of the participation interest is not affected thereby
and (vii) the consent of the holder of such participation interest shall
not be required for amendments or waivers of provisions of the Loan
Documents other than those which (A) extend the Maturity Date or any other
date upon which any payment of money is due to the Lenders or (B) reduce
the rate of interest on the Loans, any fee or any other monetary amount
payable to the Lenders.
11.9 Foreign Lenders and Participants. Each Lender, and each holder
--------------------------------
of a participation interest in the Loans that is incorporated under the Laws of
a jurisdiction other than the United States of America or any state thereof
shall deliver to Borrower (with a copy to the Administrative Agent), within
twenty days after accepting an assignment or receiving a participation interest
herein pursuant to Section 11.8, if applicable, two duly completed copies,
signed by a Responsible Official, of either Form 1001 (relating to such Person
and entitling it to a complete
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exemption from withholding on all payments to be made to such Person by Borrower
pursuant to this Agreement) or Form 4224 (relating to all payments to be made to
such Person by Borrower pursuant to this Agreement) of the United States
Internal Revenue Service or such other evidence satisfactory to Borrower and the
Administrative Agent that no withholding under the federal income tax laws is
required with respect to such Person. Thereafter and from time to time, each
such Person shall (a) promptly submit to Borrower (with a copy to the
Administrative Agent), such additional duly completed and signed copies of one
of such forms (or such successor forms as shall be adopted from time to time by
the relevant United States taxing authorities) as may then be available under
then current United States laws and regulations to avoid, or such evidence as is
satisfactory to Borrower and the Administrative Agent of any available exemption
from, United States withholding taxes in respect of all payments to be made to
such Person by Borrower pursuant to this Agreement and (b) take such steps as
shall not be disadvantageous to it, in the judgment of such Lender, and as may
be reasonably necessary (including the re-designation of its Eurodollar Lending
Office, if any) to avoid any requirement of applicable laws that Borrower make
any deduction or withholding for taxes from amounts payable to such Person.
11.10 Right of Setoff. If an Event of Default has occurred and is
---------------
continuing, the Administrative Agent or any Lender (but only with the consent of
the Requisite Lenders) may exercise its rights under Article 9 of the Uniform
Commercial Code and other applicable Laws and, to the extent permitted by
applicable Laws, apply any funds in any deposit account maintained with it by
Borrower and/or any Property of Borrower in its possession against the
Obligations.
11.11 Sharing of Setoff. Each Lender severally agrees that if it,
-----------------
through the exercise of any right of setoff, banker's lien or counterclaim
against Borrower, or otherwise, receives payment of the Obligations held by it
that is ratably more than any other Lender, through any means, receives in
payment of the Obligations held by that Lender, then, subject to applicable
Laws: (a) The Lender exercising the right of setoff, banker's lien or
counterclaim or otherwise receiving such pay ment shall purchase, and shall be
deemed to have simultaneously purchased, from the other Lender a participation
in the Obligations held by the other Lender and shall pay to the other Lender a
purchase price in an amount so that the share of the Obligations held by each
Lender after the exercise of the right of setoff, banker's lien or counterclaim
or receipt of payment shall be in the same proportion that existed prior to the
exercise of the right of setoff, banker's lien or counterclaim or receipt of
payment; and (b) Such other adjustments and purchases of participations shall be
made from time to time as shall be equitable to ensure that all of the Lenders
share any payment obtained in respect of the Obligations ratably in accordance
with each Lender's share of the Obligations immediately prior to, and without
taking into account, the payment; provided that, if all or any portion of a
--------
disproportionate payment obtained as a result of the exercise of the right of
setoff, banker's lien, counterclaim or other wise is thereafter recovered from
the purchasing Lender by Borrower or any Person claiming through or succeeding
to the rights of Borrower, the purchase of a participation shall be rescinded
and the purchase price thereof shall be restored to the extent of the recovery,
but without interest. Each Lender that purchases a participation in the
Obligations pursuant to this Section shall from and after the purchase have the
right to give all notices, requests, demands, directions and other
communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased. Borrower expressly consents to
the foregoing arrangements and agrees that any Lender holding a participation in
an Obligation so purchased may exercise any and all rights of setoff, banker's
lien or counterclaim with respect to the participation as fully as if that
Lender were the original owner of the Obligation purchased.
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11.12 Indemnity by Borrower. Borrower agrees to indemnify, save and
---------------------
hold harmless each Creditor and their respective parent corporations,
Subsidiaries, directors, officers, agents, attorneys and employees (collectively
the "Indemnitees") from and against: (a) Any and all claims, demands, actions or
-----------
causes of action that are asserted against any Indemnitee by any Person (other
-----
than any Indemnitee or any Party) if the claim, demand, action or cause of
----
action directly or indirectly relates to a claim, demand, action or cause of
action that such Person asserts or may assert against Borrower, any Affiliate of
Borrower or any officer, director or shareholder of Borrower, provided that the
--------
same relates to or arises from this Agreement, any other Loan Document, or any
transaction contemplated hereunder or thereunder; (b) Any and all claims,
demands, actions or causes of action that are asserted against any Indemnitee by
any Person (other than any Indemnitee or any Party) if the claim, demand, action
----- ----
or cause of action arises out of or relates to the Commitment, the use or
contemplated use of proceeds of any Loan or Letter of Credit, or the
relationship of Borrower and the Creditors under this Agreement; (c) Any
administrative or investigative proceeding by any Governmental Agency arising
out of or related to a claim, demand, action or cause of action described in
clauses (a) or (b) above; and (d) Any and all liabilities, losses, costs or
expenses (including reasonable attorneys' fees and out-of-pocket expenses of
---------
legal counsel to any Indemnitee including, without duplication, the allocated
cost of internal counsel for such Indemnitee) that any Indemnitee suffers or
incurs as a result of the assertion of any foregoing claim, demand, action or
cause of action; provided that no Indemnitee shall be entitled to
--------
indemnification for any loss caused by its own gross negligence or willful
misconduct. If any such claim, demand, action or cause of action is asserted
against any Indemnitee, such Indemnitee shall promptly notify Borrower in
writing, but the failure to so promptly notify Borrower shall not affect
Borrower's obligations under this Section. Any obligation or liability of
Borrower to any Indemnitee under this Section shall survive the expiration or
termination of this Agreement and the repayment of all Loans and the payment and
performance of all other Obligations.
11.13 Nonliability of the Creditors. Borrower acknowledges and agrees
-----------------------------
that:
(a) Any inspections or audits of any Property of Borrower made
by or through the Creditors are for purposes of administration of the Loan
Documents only and Borrower is not entitled to rely upon the same, nor is
any Creditor obligated to release to Borrower any information obtained as a
result of such inspection or audit;
(b) By accepting or approving anything required to be
observed, performed, fulfilled or given to any Creditor pursuant to the
Loan Documents, Lender shall not be deemed to have warranted or represented
the sufficiency, legality, effectiveness or legal effect of the same, or of
any term, provision or condition thereof, and such acceptance or approval
thereof shall not constitute a warranty or representation to anyone with
respect thereto by any Creditor; and
(c) The relationship among Borrower its Subsidiaries and the
Creditors is, and shall at all times remain, solely that of borrower,
guarantors and lenders; no Creditor shall under any circumstance be
construed to be a partner or joint venturer of Borrower or its Affiliates;
no Creditor shall not under any circumstance be deemed to be in a
relationship of confidence or trust or a fiduciary relationship with
Borrower or its Affiliates, or to owe any fiduciary duty to Borrower or its
Affiliates under this Agreement; the Creditors do not undertake or assume
any responsibility or duty to Borrower or its Affiliates to select, review,
inspect, supervise, pass judgment upon or inform Borrower or its Affiliates
of any matter in connection with their Property or the operations of
Borrower or its Affiliates; Borrower and its Affiliates shall rely entirely
upon its own judgment with respect to such matters; and any
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review, inspection, supervision, exercise of judgment or supply of
information undertaken or assumed by the Creditors in connection with such
matters is solely for the protection of the Creditors and neither Borrower
nor any other Person is entitled to rely thereon.
11.14 No Third Parties Benefited. This Agreement is made for the
--------------------------
purpose of defining and setting forth certain obligations, rights and duties of
Borrower and the Creditors in connection with the Loans and Letters of Credit,
and is made for the sole benefit of Borrower and the Creditors and the
successors and assigns of the Creditors. Except as provided in Section 11.8 no
other Person shall have any rights of any nature hereunder or by reason hereof.
11.15 Further Assurances. Borrower shall, and shall cause its
------------------
Subsidiaries to, at their expense and without expense to the Creditors, do,
execute and deliver such further acts and documents as the Administrative Agent
or the Requisite Lenders from time to time reasonably require for the assuring
and confirming unto the Creditors of the rights hereby created or intended now
or hereafter so to be, or for carrying out the intention or facilitating the
performance of the terms of any Loan Document.
11.16 Confidentiality. Each Lender agrees to hold any confidential
---------------
information that it may receive from Borrower pursuant to this Agreement in
confidence, except for disclosure: (a) To other Lenders; (b) To legal counsel
------
and accountants for Borrower, the Administrative Agent or any Lender; (c) To
other professional advisors to Borrower, the Administrative Agent or any Lender;
(d) To regulatory officials having jurisdiction over that Lender; (e) As
required by Law or legal process or in connection with any legal proceeding to
which that Lender is a party; and (f) To another financial institution in
connection with a disposition or proposed disposition to that financial
institution of all or part of that Lender's interests hereunder or a
participation interest in its Loans, provided that the recipient has accepted
--------
such information subject to a confidentiality agreement substantially similar to
this Section. For purposes of the foregoing, "confidential information" shall
mean any information respecting Borrower or its Subsidiaries reasonably
considered by Borrower to be confidential, other than (i) information previously
----------
filed with any Governmental Agency and available to the public, (ii) information
previously published in any public medium from a source other than, directly or
indirectly, that Lender, and (iii) information previously disclosed by Borrower
to any Person not an Affiliate, agent or employee of Borrower without a
confidentiality agreement substantially similar to this Section. Nothing in this
Section shall be construed to create or give rise to any fiduciary duty on the
part of any Creditor to Borrower or its Affiliates.
11.17 Integration. This Agreement, together with the other Loan
-----------
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and supersedes all prior agreements, written or oral, on
the subject matter hereof. In the event of any conflict between the provisions
of this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control and govern; provided that the inclusion of supplemental
--------
rights or remedies in favor of the Creditors in any other Loan Document shall
not be deemed a conflict with this Agreement. Each Loan Document was drafted
with the joint participation of the respective parties thereto and shall be
construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.
11.18 Severability of Provisions. Any provision in any Loan Document
--------------------------
that is held to be inoperative, unenforceable or invalid as to any party or in
any jurisdiction shall, as to that party or jurisdiction, be inoperative,
unenforceable or invalid without affecting the remaining provisions or the
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operation, enforceability or validity of that provision as to any other party or
in any other jurisdiction, and to this end the provisions of all Loan Documents
are declared to be severable.
11.19 Independent Covenants. Each covenant in Articles 5, 6 and 7 is
---------------------
independent of the other covenants in those Articles; the breach of any such
covenant shall not be excused by the fact that the circumstances underlying such
breach would be permitted by another such covenant.
11.20 Headings. Article and Section headings in this Agreement and
--------
the other Loan Documents are included for convenience of reference only and are
not part of this Agreement or the other Loan Documents for any other purpose.
11.21 Arbitration Reference.
---------------------
(a) Mandatory Arbitration. Any controversy or claim between or
---------------------
among the parties hereto arising out of or relating to this Agreement or any
agreements or instruments relating hereto or delivered in connection herewith,
shall at the request of any party be determined by arbitration. The arbitration
shall be conducted in accordance with the United States Arbitration Act (Title
9, U.S. Code), notwithstanding any choice of law provision in this Agreement,
and under the Commercial Rules of the American Arbitration Association ("AAA").
The arbitrators shall give effect to statutes of limitation in determining any
claim. Any controversy concerning whether an issue is arbitrable shall be
determined by the arbitrators. Judgment upon the arbitration award may be
entered in any court having jurisdiction. The institution and maintenance of an
action for judicial relief or pursuit of a provisional or ancillary remedy shall
not constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.
(b) Judicial Reference. A controversy or claim which is not
------------------
submitted to arbitration as provided and limited in subparagraph (a) shall, at
the request of any party, be determined by a reference in accordance with
California Code of Civil Procedure Sections 638 et seq. If such an election is
-- ---
made, the parties shall designate to the court a referee or referees selected
under the auspices of the AAA in the same manner as arbitrators are selected in
AAA-sponsored proceedings. The presiding referee of the panel, or the referee if
there is a single referee, shall be an active attorney or retired judge.
Judgment upon the award rendered by such referee or referees shall be entered in
the court in which such proceeding was commenced in accordance with California
Code of Civil Procedure Sections 644 and 645.
(c) Provisional Remedies, Self-Help and Foreclosure. No
-----------------------------------------------
provision of this section shall limit the right of any party to this Agreement
to exercise self-help remedies such as setoff, to foreclose against or sell any
real or personal property collateral or security or to obtain provisional or
ancillary remedies from a court of competent jurisdiction before, after, or
during the pendency of any arbitration or other proceeding. The exercise of a
remedy does not waive the right of either party to resort to arbitration or
reference. At the Requisite Lenders' option, foreclosure under a deed of trust
or mortgage may be accomplished either by exercise of power of sale under the
deed of trust or mortgage or by judicial foreclosure.
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11.22 Environmental Indemnity. Borrower hereby agrees to indemnify,
-----------------------
defend and hold harmless each Creditor and each of their respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person"), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, charges, expenses
or disbursements (including fees and out-of-pocket expenses of legal counsel to
---------
the Administrative Agent and the allocated costs of internal counsel to the
Administrative Agent and, following an Event of Default, the allocated cost of
internal environmental audit or review services), which may be incurred by or
asserted against such Indemnified Person in connection with or arising, directly
or indirectly out of any pending or threatened investigation, litigation or
proceeding, or any action taken by any Person, with respect to: (a) any
Environmental Claim arising out of or related to any Property subject to a Lien
in favor of the Administrative Agent or any Lender. Following any Event of
Default, no action taken by legal counsel chosen by the Administrative Agent or
any Lender in defending against any such investigation, litigation or proceeding
or requested remedial, removal or response action shall vitiate or any way
impair Borrower's obligation and duty hereunder to indemnify and hold harmless
each Creditor.
(a) In no event shall any site visit, observation, or testing
by the Administrative Agent or any Lender (or any contractee of the
Administrative Agent) be deemed a representation or warranty that Hazardous
Materials are or are not present in, on, or under, the site, or that there
has been or shall be compliance with any Environmental Law. Neither
Borrower nor any other Person is entitled to rely on any site visit,
observation, or testing by the Administrative Agent however the
Administrative Agent shall endeavor (without liability for failing to do
so) to inform Borrower of any material environmental liability disclosed to
it by any such site visit, observation or testing. Neither the
Administrative Agent nor any Lender owes any duty of care to protect
Borrower or any other Person against, or to inform Borrower or any other
party of, any Hazardous Materials or any other adverse condition affecting
any site or Property. Neither the Administrative Agent nor any Lender shall
be obligated to disclose to Borrower or any other Person any report or
findings made as a result of, or in connection with, any site visit,
observation, or testing by the Administrative Agent or any Lender.
(b) The obligations in this Section shall survive payment of
all other Obligations. At the election of any Indemnified Person, Borrower
shall defend such Indemnified Person using legal counsel reasonably
satisfactory to such Indemnified Person in such Person's sole discretion,
at the sole cost and expense of Borrower. All amounts owing under this
Section shall be paid within 30 days after demand.
11.23 Jurisdiction and Venue. Except as otherwise expressly provided
----------------------
in any Loan Document, the parties hereto and thereto agree and intend that the
proper and exclusive forum for any litigation of any disputes or controversies
arising out of or related to the Loan Documents shall be the Superior Court of
the State of California for the County of Los Angeles. Each party to any Loan
Document, to the extent permitted by applicable laws, hereby expressly waives
any defence or objection to jurisdiction or venue based on the doctrine of forum
-----
non conveniens, and stipulates that the Superior Court of the State of
--- ----------
California for the County of Los Angeles shall have in personam jurisdiction and
-- --------
venue over such party for the purpose of litigating any dispute or controversy
arising out of or related to the Loan Documents. In the event Borrower or any
Affiliate thereof should commence or maintain any action or proceeding arising
out of or related to the Loan Documents in a forum other than the Superior Court
of the State of California for the County of Los Angeles, Lender shall be
entitled to request the dismissal or stay of such action or proceeding, and
Borrower and its Affiliates stipulate that such action or proceeding shall be
dismissed or stayed.
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11.24 GOVERNING LAW. EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY
-------------
PROVIDED THEREIN, EACH LOAN DOCUMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF CALIFORNIA.
11.25 PURPORTED ORAL AMENDMENTS. THE PARTIES HERETO EXPRESSLY
-------------------------
ACKNOWLEDGE THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY BE AMENDED
OR MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR SUPPLEMENTED, BY AN
INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 11.2. THE PARTIES HERETO AGREE
THAT THEY WILL NOT RELY ON ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL
OR WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF THE ADMINISTRATIVE AGENT OR ANY
LENDER THAT DOES NOT COMPLY WITH SECTION 11.2 TO EFFECT AN AMENDMENT,
MODIFICATION, WAIVER OR SUPPLEMENT TO THE AGREEMENT OF THE OTHER LOAN DOCUMENTS.
[THIS SPACE INTENTIONALLY LEFT BLANK -
SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
Borrower:
KORN/FERRY INTERNATIONAL, INC.,
a Delaware corporation
By: /s/ Elizabeth Murray
-------------------------------------
Name: Elizabeth Murray
Title: Executive Vice President and
Chief Financial Officer
By: /s/ Peter L. Dunn
-------------------------------------
Name: Peter L. Dunn
Title: Vice Chairman
Address:
1800 Century Park East, Suite 900
Los Angeles, California 90067
Attn: Donna Ambrose, Assistant Treasurer
Email: [email protected]
---------------------------
Telephone: (310) 556-8523
Telecopier: (310) 286-2405
BANK OF AMERICA, N.A.
By: /s/ David J. Stassel
-------------------------------------
David J. Stassel, Vice President
Address:
Bank of America, N.A. #1459
Mail Code CA 9-156-MZ-07
525 South Flower, Mezzanine Level
Los Angeles, CA 90071-2202
Attn: David J. Stassel, Vice President
Email: [email protected]
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Telephone: (213) 345-6931
Telecopier: (213) 345-6982
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