<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
September 29, 1997
-------------------------------------------------
Date of report ((Date of earliest event reported)
ADVO, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-11720 06-0885252
- --------------------------------- ------------- --------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation or organization) file number) Identification No.)
One Univac Lane, P.O. Box 755, Windsor, Connecticut 06095-0755
--------------------------------------------------------------
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (860) 285-6120
--------------
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ITEM 5. OTHER EVENTS
On September 29, 1997, ADVO, Inc. (the "Company") announced it had increased
its previously announced stock repurchase authorization from 2 million shares
to 3.2 million shares. In connection with the increased authorization, the
Company purchased 1,936,098 shares of its common stock from Warburg, Pincus
Capital Partners L.P., at $ 18 per share. The closing price on September 29,
1997 was $18 3/8 per share.
After giving effect to the sale to the Company, Warburg, Pincus Capital
Partners owned 3,653,987 shares (16 % of the outstanding shares). Because
the Warburg, Pincus Capital Partners fund terminated on September 30, 1997,
the shares held by the fund were distributed to the partners of the fund. The
limited partners received 2,923,188 shares, all of which are fully tradable.
Warburg, Pincus & Co., the general partner, received 730,799 of the Company's
shares, which are subject to Rule 144 restrictions through February 1998.
Warburg partners Howard Newman and John Vogelstein will remain on the
Company's Board of Directors. Warburg, Pincus Capital Partners has agreed to
terminate its long-standing shareholder agreements with the Company, which
include registration rights, found in its June 20, 1986 Stock and Warrant
Purchase Agreement with the Company.
The Company had previously purchased approximately 200,000 shares of its
stock since its repurchase program was announced in April 1997, and it hopes
to repurchase the remaining authorized approximately one million shares for
cash from time to time within the next 12 months at prevailing market prices,
either in the open market, in private transactions, or otherwise.
The Company also announced that it had renegotiated its outstanding
indebtedness with a consortium of banks, led by Chase Manhattan Bank. The
most prominent features of the new agreement are a credit limit that has been
raised to $300 million (from $250 million); the interest rate has been
reduced by 165 basis points; and the limit on the Company's authorization to
buy back its stock has been expanded from $40 million to $100 million.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The following exhibits are filed herewith:
Exhibit Description
No.
99(a) Press release, dated September 29, 1997, Filed herewith.
issued by the Company.
99(b) Amended and Restated Credit Agreement Filed herewith.
dated September 29, 1997 between the
Company and a syndicate of lenders led by
Chase Manhattan Bank as Administrative
Agent.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ADVO, Inc.
Date : October 17, 1997
By /s/ DAVID M. STIGLER
--------------------------
David M. Stigler
Senior Vice President,
Legal and Public Affairs,
General Counsel and Secretary
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EXHIBIT INDEX
Incorporation by
Exhibit No. Description Reference
99 (a) Press release, dated September 29, Filed herewith.
1997, issued by the Company.
99 (b) Amended and Restated Credit Agreement Filed herewith.
dated September 29, 1997 between the
Company and a syndicate of lenders led
by Chase Manhattan Bank as Administrative Agent.
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<PAGE>
Exhibit 99(a)
ADVO ANNOUNCES STOCK
BUYBACK AND LOAN RENEGOTIATION
Windsor, CT -- September 29, 1997 -- ADVO, Inc. (NYSE: AD) announced today that
it has increased its previously announced stock repurchase authorization from 2
million shares to 3.2 million shares. In connection with the increased
authorization, ADVO purchased 1,936,098 shares of its common stock from Warburg,
Pincus Capital Partners L.P., at $ 18 per share. Today's closing price was $18
3/8 per share.
After giving effect to the sale to ADVO, Warburg, Pincus Capital Partners will
own 3,653,987 shares (16 % of the outstanding shares). Because Warburg, Pincus
Capital Partners fund terminates on September 30, 1997, the shares held by it
are being distributed to the partners of the fund. The limited partners will
receive 2,923,188 shares, all of which are fully tradable. Warburg, Pincus &
Co., the general partner, will receive 730,799 ADVO shares, which will be
subject to Rule 144 restrictions through February 1998. Warburg partners Howard
Newman and John Vogelstein will remain on ADVO's Board of Directors. Warburg,
Pincus has agreed to terminate its long-standing shareholder agreements with
ADVO, which include registration rights.
ADVO had previously purchased approximately 200,000 shares of its stock since
its repurchase program was announced in April 1997, and it hopes to repurchase
the remaining authorized approximately one million shares for cash from time to
time within the next 12 months at prevailing market prices, either in the open
market, in private transactions, or otherwise.
ADVO also announced that it has renegotiated its outstanding indebtedness with a
consortium of banks, led by Chase Manhattan Bank. The most prominent features
of the new agreement are a credit limit that has been raised to $300 million
(from $250 million); the interest rate has been reduced by 165 basis points; and
the limit on the Company's authorization to buy back its stock has been expanded
from $40 million to $100 million.
Howard Newman, a managing partner at Warburg, Pincus & Co., said, "Warburg
continues to be enthusiastic about ADVO's business. We have delivered a high
quality stock to our investors at the conclusion of our fund, and we continue to
hold a substantial quantity of ADVO stock."
Robert Kamerschen, Chairman and CEO of ADVO, stated, "We are pleased to be able
to obtain such a large amount of our stock at a reasonable price and we hope to
be able to buy more. We are very gratified by the greatly improved loan terms,
which reflect in large part the improved and consistently strong performance of
ADVO over recent periods. We are glad to continue in our successful
relationship with Warburg, Pincus. And, finally, we
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are very comfortable with the investment community's current expectations for
our recently concluded fiscal year."
ADVO is the nation's largest full-service targeted direct mail marketing
services company with annual revenues of almost $1 billion. ADVO specializes in
shared and solo direct mail services and provides customized
Microtargeting-Registered Trademark- solutions for its clients' needs. The
Company's Mailbox Values-Registered Trademark- branded shared mail program is
distributed nationally to over 61 million households weekly. An additional 16
million households can be reached on a shared mail basis through ADVO's National
Network Extension (ANNE). ADVO also offers transportation services. It has 19
mail processing facilities and 70 sales offices nationwide. ADVO's corporate
headquarters are located at One Univac Lane, Windsor, CT 06095. ADVO can now
be visited at its web site @ www.advo.com.
Contacts:
Donald McCombs
ADVO, Inc.
Vice President, Financial Planning
(860) 285-6391
David Stigler
ADVO, Inc.
Senior Vice President,
Legal and Public Affairs
(860) 285-6120
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CONFORMED COPY
33922-00000
Exhibit 99(b)
************************************************************
ADVO, INC.
and
SUBSIDIARY GUARANTORS
_____________________________
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of September 29, 1997
______________________________
THE CHASE MANHATTAN BANK,
as Administrative Agent
and
BANK OF NOVA SCOTIA,
BANK OF BOSTON and
CORESTATES BANK, N.A.,
as Co-Agents
************************************************************
<PAGE>
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is
attached but is inserted for convenience of reference only.
Page
Section 1. Definitions and Accounting Matters............................... 2
1.01 Certain Defined Terms............................................. 2
1.02 Accounting Terms and Determinations............................... 23
1.03 Classes and Types of Loans........................................ 24
Section 2. Commitments, Loans, Notes and Prepayments........................ 24
2.01 Loans............................................................. 24
2.02 Borrowings........................................................ 26
2.03 Letters of Credit................................................. 26
2.04 Changes of Commitments............................................ 31
2.05 Commitment Fee.................................................... 33
2.06 Lending Offices................................................... 33
2.07 Several Obligations; Remedies Independent......................... 33
2.08 Notes............................................................. 34
2.09 Optional Prepayments and Conversions or Continuations of Loans.... 35
2.10 Mandatory Prepayments and Reductions of Commitments............... 35
Section 3. Payments of Principal and Interest............................... 38
3.01 Repayment of Loans................................................ 38
3.02 Interest.......................................................... 39
Section 4. Payments; Pro Rata Treatment; Computations; Etc.................. 40
4.01 Payments.......................................................... 40
4.02 Pro Rata Treatment................................................ 41
4.03 Computations...................................................... 42
4.04 Minimum Amounts................................................... 42
4.05 Certain Notices................................................... 42
4.06 Non-Receipt of Funds by the Administrative Agent.................. 43
4.07 Sharing of Payments, Etc.......................................... 44
Section 5. Yield Protection, Etc............................................ 46
(i)
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Page
5.01 Additional Costs.................................................. 46
5.02 Limitation on Types of Loans...................................... 48
5.03 Illegality........................................................ 49
5.04 Treatment of Affected Loans....................................... 49
5.05 Compensation...................................................... 50
5.06 Additional Costs in Respect of Letters of Credit.................. 50
5.07 U.S. Taxes........................................................ 51
5.08 Compensation for Repurchases of Existing Loans.................... 53
Section 6. Guarantee........................................................ 53
6.01 The Guarantee..................................................... 53
6.02 Obligations Unconditional......................................... 54
6.03 Reinstatement..................................................... 55
6.04 Subrogation....................................................... 55
6.05 Remedies.......................................................... 55
6.06 Instrument for the Payment of Money............................... 56
6.07 Continuing Guarantee.............................................. 56
6.08 Rights of Contribution............................................ 56
6.09 General Limitation on Guarantee Obligations....................... 57
Section 7. Conditions Precedent............................................. 57
7.01 Initial Extension of Credit....................................... 57
7.02 Initial and Subsequent Extensions of Credit....................... 62
Section 8. Representations and Warranties................................... 63
8.01 Corporate Existence............................................... 63
8.02 Financial Condition............................................... 63
8.03 Litigation........................................................ 64
8.04 No Breach......................................................... 64
8.05 Action............................................................ 64
8.06 Approvals......................................................... 64
8.07 Use of Credit..................................................... 65
8.08 ERISA............................................................. 65
8.09 Taxes............................................................. 65
8.10 Investment Company Act............................................ 65
8.11 Public Utility Holding Company Act................................ 65
8.12 Material Agreements and Liens..................................... 66
8.13 Environmental Matters............................................. 66
8.14 Capitalization.................................................... 67
(ii)
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Page
8.15 Subsidiaries, Etc................................................. 68
8.16 Title to Assets................................................... 68
8.17 True and Complete Disclosure...................................... 69
8.18 Real Property..................................................... 69
Section 9. Covenants of the Company......................................... 69
9.01 Financial Statements Etc.......................................... 69
9.02 Litigation........................................................ 72
9.03 Existence, Etc.................................................... 73
9.04 Insurance......................................................... 74
9.05 Prohibition of Fundamental Changes................................ 74
9.06 Limitation on Liens............................................... 75
9.07 Indebtedness...................................................... 76
9.08 Investments....................................................... 77
9.09 Dividend Payments................................................. 78
9.10 Certain Financial Covenants....................................... 79
9.11 Interest Rate Protection Agreements............................... 80
9.12 Subordinated Indebtedness......................................... 80
9.13 Lines of Business................................................. 82
9.14 Transactions with Affiliates...................................... 82
9.15 Use of Proceeds................................................... 82
9.16 Certain Obligations Respecting Subsidiaries....................... 83
9.17 Modifications of Certain Documents................................ 84
9.18 Obligations relating to Collateral Security....................... 84
Section 10. Events of Default............................................... 84
Section 11. The Administrative Agent........................................ 89
11.01 Appointment, Powers and Immunities............................... 89
11.02 Reliance by Administrative Agent................................. 90
11.03 Defaults......................................................... 91
11.04 Rights as a Lender............................................... 91
11.05 Indemnification.................................................. 91
11.06 Non-Reliance on Administrative Agent and Other Lenders........... 92
11.07 Failure to Act................................................... 92
11.08 Resignation or Removal of Administrative Agent................... 93
11.09 Consents under Other Loan Documents.............................. 93
11.10 Collateral Sub-Agents............................................ 94
(iii)
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Page
Section 12. Miscellaneous................................................... 94
12.01 Waiver........................................................... 94
12.02 Notices.......................................................... 94
12.03 Expenses, Etc.................................................... 94
12.04 Amendments, Etc.................................................. 96
12.05 Successors and Assigns........................................... 97
12.06 Assignments and Participations................................... 97
12.07 Survival.........................................................100
12.08 Captions.........................................................100
12.09 Counterparts.....................................................100
12.10 Governing Law; Submission to Jurisdiction........................100
12.11 Waiver of Jury Trial.............................................101
12.12 Treatment of Certain Information; Confidentiality................101
12.12 Security Agreement...............................................102
12.13 Intercompany Subordination Agreements............................102
SCHEDULE I - Material Agreements and Liens
SCHEDULE II - Subsidiaries and Investments
SCHEDULE III - Real Property
SCHEDULE IV - Certain Matters Relating to Capitalization
SCHEDULE V - Certain Litigation
SCHEDULE VI - Certain Matters Relating to Taxes
SCHEDULE VII - Certain Environmental Matters
EXHIBIT A-1 - Form of Revolving Credit Note
EXHIBIT A-2 - Form of Term Loan Note
EXHIBIT B - Form of Mortgage
EXHIBIT C - Form of Guarantee Assumption Agreement
EXHIBIT D-1 - Form of Opinion of Special New York Counsel to the
Obligors
EXHIBIT D-2 - Form of Opinion of General Counsel to the
Obligors
EXHIBIT E - Form of Opinion of Special New York Counsel to
Chase
EXHIBIT F - Form of Confidentiality Agreement
EXHIBIT G - Form of Notice of Assignment
(iv)
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AMENDED AND RESTATED CREDIT AGREEMENT dated as of September 29,
1997, between: ADVO, INC., a corporation duly organized and validly existing
under the laws of the State of Delaware (the "Company"); each of the
Subsidiaries of the Company identified under the caption "SUBSIDIARY
GUARANTORS" on the signature pages hereto and each Subsidiary of the Company
that becomes a "Subsidiary Guarantor" after the date hereof pursuant to
Section 9.16(a) hereof (individually, a "Subsidiary Guarantor" and,
collectively, the "Subsidiary Guarantors" and, together with the Company, the
"Obligors"); each of the lenders that is a signatory hereto identified under
the caption "LENDERS" on the signature pages hereto and each lender that
becomes a "Lender" after the date hereof pursuant to Section 12.06(b) hereof
(individually, a "Lender" and, collectively, the "Lenders"); and THE CHASE
MANHATTAN BANK, a New York State banking corporation, as agent for the
Lenders (in such capacity, together with its successors in such capacity, the
"Administrative Agent").
The Company, certain of the Subsidiary Guarantors, certain of the
Lenders (the "Existing Lenders") and the Administrative Agent are party to a
Credit Agreement dated as of March 4, 1996 (as heretofore modified and
supplemented and in effect on the date hereof immediately before giving
effect to the amendment and restatement contemplated hereby, the "Existing
Credit Agreement"). Pursuant to the Existing Credit Agreement, certain of
the Existing Lenders committed to make revolving credit and term loans to the
Company in an original aggregate principal amount not exceeding $250,000,000
at any one time outstanding, with a portion of such commitments made
available for the issuance of letters of credit in an aggregate face amount
not exceeding $10,000,000 at any one time outstanding.
The Company has requested that the Lenders amend the Existing
Credit Agreement to provide (i) for the extension of credit to the Company,
under the guarantee of the Subsidiary Guarantors, in an aggregate principal
or face amount not to exceed $300,000,000 at any one time outstanding to
finance ongoing working capital and capital expenditures of the Company and
its Subsidiaries, to finance the purchase of shares of capital stock of the
Company and to provide financing for general corporate purposes (including
acquisitions) of the Company and its Subsidiaries and (ii) for certain other
amendments to the Existing Credit Agreement.
In that connection the parties wish to amend and restate the
Existing Credit Agreement and, accordingly, the parties hereto hereby agree
that the Existing Credit Agreement shall, as of the Effective Date (the
occurrence of which is subject to satisfaction of the conditions precedent
specified in Section 7.01 hereof), be amended and restated to read in its
entirety as follows:
Credit Agreement
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Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the following terms
shall have the following meanings (all terms defined in this Section 1.01 or
in other provisions of this Agreement in the singular to have the same
meanings when used in the plural and vice versa):
"Administrative Questionnaire" means, with respect to each Lender,
an administrative questionnaire in the form prepared by the Administrative
Agent and submitted to the Administrative Agent (with a copy to the Company)
duly completed by such Lender.
"ADVO Investment Company Subordination Agreement" means the
Subordination Agreement dated as of March 4, 1996 between ADVO Investment
Company, Inc., the Company and the Administrative Agent, as the same shall be
modified and supplemented and in effect from time to time, including pursuant
to Section 12.13 hereof.
"Affiliate" shall mean any Person that directly or indirectly
controls, or is under common control with, or is controlled by, the Company
and, if such Person is an individual, any member of the immediate family
(including parents, spouse, children and siblings) of such individual and any
trust whose principal beneficiary is such individual or one or more members
of such immediate family and any Person who is controlled by any such member
or trust. As used in this definition, "control" (including, with its
correlative meanings, "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 indirectly
securities having 5% or more of the voting power for the election of
directors or other governing body of a corporation or 5% 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. Notwithstanding the foregoing, (a) no
individual shall be an Affiliate solely by reason of his or her being a
director, officer or employee of the Company or any of its Subsidiaries and
(b) none of the Wholly Owned Subsidiaries of the Company shall be Affiliates.
"Applicable Lending Office" shall mean, for each Lender and for
each Type of Loan, the "Lending Office" of such Lender (or of an affiliate of
such Lender) designated for such Type of Loan in the Administrative
Questionnaire for such Lender or such other office of such Lender (or of an
affiliate of such Lender) as such Lender may from time to time specify to the
Credit Agreement
----------------
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Administrative Agent and the Company as the office by which its Loans of such
Type are to be made and maintained.
"Applicable Margin" shall mean, with respect to Revolving Credit
Loans and Term Loans of any Type and commitment fees (as such term is used in
Section 2.05 hereof) during any Interest Accrual Period (as defined below),
the respective rates indicated below for such Loans of such Type and such
fees opposite the applicable Total Debt Ratio indicated below for such
Interest Accrual Period:
Applicable Margin (% p.a.)
---------------------------
Range of Eurodollar Base Rate Commitment
Total Debt Ratio Loans Loans Fee
- ------------------ ---------- --------- ----------
Greater than 4.00 to 1 1.500% 0.25% 0.375%
Less than or equal to 4.00 to 1 1.250% 0% 0.350%
and greater than 3.50 to 1
Less than or equal to 3.50 to 1 1.125% 0% 0.300%
and greater than 3.00 to 1
Less than or equal to 3.00 to 1 1.000% 0% 0.250%
and greater than 2.50 to 1
Less than or equal to 2.50 to 1 0.750% 0% 0.250%
and greater than 2.00 to 1
Less than or equal to 2.00 to 1 0.625% 0% 0.200%
and greater than 1.50 to 1
Less than or equal to 1.50 to 1 0.500% 0% 0.175%
For purposes hereof, an "Interest Accrual Period" shall mean the period
commencing during any fiscal quarter on the date (the "Change Date") that is
the third Business Day following the receipt by the Administrative Agent of
the certificate referred to in the next following paragraph to but not
including the Change Date in the immediately following fiscal quarter.
Credit Agreement
----------------
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The Total Debt Ratio for the initial Interest Accrual Period shall
be determined on the basis of the certificate of a Senior Officer delivered
pursuant to Section 7.01(k) hereof. The Total Debt Ratio for any Interest
Accrual Period after the initial Interest Accrual Period shall be determined
on the basis of a certificate of a Senior Officer setting forth a calculation
of the Total Debt Ratio as at the last day of the fiscal quarter ending
immediately prior to the first day of such Interest Accrual Period, each of
which certificates shall be delivered together with the financial statements
for the fiscal quarter on which such calculation is based. Notwithstanding
anything herein to the contrary, Applicable Margin for the initial Interest
Accrual Period shall be calculated as if the Total Debt Ratio is less than or
equal to 3.00 to 1 and greater than 2.50 to 1
Anything in this Agreement to the contrary notwithstanding, the
Applicable Interest Margin for Revolving Credit Loans and Term Loans and in
respect of commitment fees shall be the highest rates provided for above
(i.e., 0.25% with respect to Base Rate Loans, 1.500% with respect to
Eurodollar Loans and 0.375% with respect to commitment fees) (i) during any
period when an Event of Default shall have occurred and be continuing, or
(ii) if the Company shall default in the delivery of any financial statements
pursuant to Section 9.01(a) or 9.01(b) hereof.
"Bankruptcy Code" shall mean the Federal Bankruptcy Code of 1978,
as amended from time to time.
"Base Rate" shall mean, for any day, a rate per annum equal to the
higher of (a) the Federal Funds Rate for such day plus 1/2 of 1% and (b) the
Prime Rate for such day. Each change in any interest rate provided for
herein based upon the Base Rate resulting from a change in the Base Rate
shall take effect at the time of such change in the Base Rate.
"Base Rate Loans" shall mean Loans that bear interest at rates
based upon the Base Rate.
"Basle Accord" shall mean the proposals for risk-based capital
framework described by the Basle Committee on Banking Regulations and
Supervisory Practices in its paper entitled "International Convergence of
Capital Measurement and Capital Standards" dated July 1988, as amended,
modified and supplemented and in effect from time to time or any replacement
thereof.
Credit Agreement
----------------
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"Business Day" shall mean any day (a) on which commercial banks are
not authorized or required to close in New York City and (b) if such day
relates to a borrowing of, a payment or prepayment of principal of or
interest on, a Conversion of or into, or a Continuation of an Interest Period
for, a Eurodollar Loan or a notice by the Company with respect to any such
borrowing, payment, prepayment, Conversion or a Continuation of an Interest
Period, that is also a day on which dealings in Dollar deposits are carried
out in the London interbank market.
"Capital Expenditures" shall mean, for any period, expenditures
(including, without limitation, the aggregate amount of Capital Lease
Obligations incurred during such period) made by the Company or any of its
Subsidiaries to acquire or construct fixed assets, plant and equipment
(including renewals, improvements and replacements, but excluding repairs)
during such period computed in accordance with GAAP.
"Capital Lease Obligations" shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital
lease on a balance sheet of such Person under GAAP, and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"Casualty Event" shall mean, with respect to any Property of any
Person, any loss of or damage to, or any condemnation or other taking of,
such Property for which such Person or any of its Subsidiaries receives
insurance proceeds, or proceeds of a condemnation award or other compensation.
"Chase" shall mean The Chase Manhattan Bank.
"Chief Financial Officer" shall mean, for any Person at any time,
the chief financial officer of such Person at such time, or, if there shall
be no chief financial officer at such time, the person acting as chief
financial officer at such time.
"Class" shall have the meaning assigned to such term in Section
1.03 hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
Credit Agreement
----------------
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"Collateral Account" shall have the meaning assigned to such term
in Section 4.01 of the Security Agreement.
"Commitments" shall mean, collectively, the Revolving Credit
Commitments and the Term Loan Commitments.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.09 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period for such Loan.
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.09 hereof of one Type of Loans into another Type of
Loans, which may be accompanied by the transfer by a Lender (at its sole
discretion) of a Loan from one Applicable Lending Office to another.
"Debt Issuance" shall mean any issuance or sale of Permitted
Additional Indebtedness.
"Debt Service" shall mean, for any period, the sum, for the Company
and its Subsidiaries (determined on a consolidated basis without duplication
in accordance with GAAP), of the following: (a) all regularly scheduled
payments or prepayments of principal of Indebtedness (including, without
limitation, the principal component of any payments in respect of Capital
Lease Obligations) made during such period plus (b) all Interest Expense for
such period.
"Default" shall mean an Event of Default or an event that with
notice or lapse of time or both would become an Event of Default.
"Disposition" shall mean any sale, assignment, transfer or other
disposition of any Property (whether now owned or hereafter acquired) by the
Company or any of its Subsidiaries to any other Person (including, without
limitation, the sale and leaseback of the Company's headquarters facility in
Windsor, Connecticut, but excluding any sale, assignment, transfer or other
disposition of any Property sold or disposed of in the ordinary course of
business and on ordinary business terms).
"Dividend Payment" shall mean dividends (in cash, Property or
obligations) on, or other payments or distributions on account of, or the
setting apart of money for a sinking or other
Credit Agreement
----------------
<PAGE>
-7-
analogous fund for, or the purchase, redemption, retirement or other
acquisition of, any shares of any class of stock of the Company or of any
warrants, options or other rights to acquire the same (or to make any
payments to any Person, such as "phantom stock" payments, where the amount
thereof is calculated with reference to the fair market or equity value of
the Company or any of its Subsidiaries), but excluding dividends payable
solely in shares of common stock of the Company.
"Dollars" and "$" shall mean lawful money of the United States of
America.
"EBITDA" shall mean, for any period, the sum, for the Company and
its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) net income for such period
(calculated after eliminating extraordinary gains and losses and unusual
items) plus (b) income and other taxes (to the extent deducted in determining
net income) for such period plus (c) depreciation and amortization and other
non-cash charges (to the extent deducted in determining net income) for such
period, plus (d) the aggregate amount of Interest Expense for such period
minus (e) the aggregate amount of interest income for such period plus (f)
the aggregate amount of upfront or one-time fees or expenses payable in
respect of Interest Rate Protection Agreements during such period (to the
extent deducted in determining net income for such period).
"Effective Date" shall mean the date upon which the conditions to
effectiveness set forth in Section 7.01 hereof shall have been satisfied or
waived.
"Environmental Laws" shall mean any and all present and future
Federal, state, local and foreign laws, rules or regulations, and any orders
or decrees, in each case as now or hereafter in effect, relating to the
regulation or protection of human health, safety or the environment or to
emissions, discharges, Releases or threatened Releases of pollutants,
contaminants, chemicals or toxic or hazardous substances or wastes into the
indoor or outdoor environment, including, without limitation, ambient air,
soil, surface water, ground water, wetlands, land or subsurface strata, or
otherwise relating to the manufacture, processing, distribution, generation,
recycling, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals or toxic or hazardous substances or
wastes (or the effect of the same on human health or safety).
"Equity Rights" shall mean, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or
agreements of any kind (including, without limitation, any stockholders' or
voting trust agreements) for the issuance, sale, registration or
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voting of, or securities convertible into, any additional shares of capital
stock of any class, or partnership or other ownership interests of any type
in, such Person.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or business
that is a member of any group of organizations (i) described in Section
414(b) or (c) of the Code of which the Company is a member and (ii) solely
for purposes of potential liability under Section 302(c)(11) of ERISA and
Section 412(c)(11) of the Code and the lien created under Section 302(f) of
ERISA and Section 412(n) of the Code, described in Section 414(m) or (o) of
the Code of which the Company is a member.
"Eurodollar Base Rate" shall mean, for any Interest Period for any
Eurodollar Loan, the rate appearing on Page 3750 of the Dow Jones Markets
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the rate
for dollar deposits with a maturity comparable to such Interest Period. In
the event that such rate is not available at such time for any reason, then
the Eurodollar Base Rate with respect to such Eurodollar Loan for such
Interest Period shall be the rate at which dollar deposits of $5,000,000 and
for a maturity comparable to such Interest Period are offered by the
principal London office of Chase in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Eurodollar Loans" shall mean Loans that bear interest at rates
based on rates referred to in the definition of "Eurodollar Base Rate" in
this Section 1.01.
"Eurodollar Rate" shall mean, for any Interest Period for any
Eurodollar Loan, a rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined by the Administrative Agent to be equal to
the Eurodollar Base Rate for such Interest Period divided by 1 minus the
Reserve Requirement (if any) for such Interest Period.
"Event of Default" shall have the meaning assigned to such term in
Section 10 hereof.
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"Excess Cash Flow" shall mean, for any period, the excess of (a)
EBITDA for such period over (b) the sum of (i) the aggregate amount of Debt
Service for such period plus (ii) Capital Expenditures made during such
period (except for any such Capital Expenditures to the extent financed with
the proceeds of Indebtedness, or Capital Lease Obligations, incurred pursuant
to Section 9.07(f) hereof during such period) plus (iii) any increase (or
minus any decrease) in Working Capital from the beginning of such period to
the end of such period plus (iv) income or other taxes payable in cash in
respect of such period plus (v) the aggregate amount of Dividend Payments
declared during such period (but only to the extent payable in cash within 60
days of such declaration) plus (vi) the aggregate amount of prepayments of
Term Loans made during such fiscal year pursuant to Section 2.09 hereof (and,
after the payment in full of the Term Loans, the aggregate amount of
voluntary reductions of the Revolving Credit Commitments made during such
fiscal year pursuant to Section 2.03(c) hereof).
"Existing Warrants" shall mean, collectively, the warrants and
other options heretofore issued by the Company with respect to shares of its
capital stock outstanding on the date hereof and listed in Schedule IV hereof.
"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day, provided that (a) if the day for which
such rate is to be determined is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day and (b) if
such rate is not so published for any Business Day, the Federal Funds Rate
for such Business Day shall be the average rate charged to Chase on such
Business Day on such transactions as determined by the Administrative Agent.
"Fiscal Date" shall mean the Saturday falling on, or immediately
preceding, December 31, March 31, June 30 and September 30 of each year,
respectively.
"Fixed Charges Ratio" shall mean, as at any date, the ratio of (a)
EBITDA for the period of four consecutive fiscal quarters ending on or most
recently ended prior to such date to (b) the sum of (i) Debt Service for such
period plus (ii) the lesser of (a) the aggregate amount of Capital
Expenditures made during such period (except for any such Capital
Expenditures to the extent financed with the proceeds of Indebtedness, or
Capital Lease Obligations, incurred
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pursuant to Section 9.07(f) hereof during such period) and (b) $15,000,000
plus (iii) income or other taxes payable in cash in respect of such period
plus (iv) the aggregate amount of Dividend Payments declared during such
period (but only to the extent payable in cash within 60 days of declaration).
"GAAP" shall mean generally accepted accounting principles applied
on a basis consistent with those that, in accordance with the last sentence
of Section 1.02(a) hereof, are to be used in making the calculations for
purposes of determining compliance with this Agreement.
"Guarantee" shall mean a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of,
or otherwise to be or become contingently liable under or with respect to,
the Indebtedness, other obligations, net worth, working capital or earnings
of any Person, or a guarantee of the payment of dividends or other
distributions upon the stock or equity interests of any Person, or an
agreement to purchase, sell or lease (as lessee or lessor) Property,
products, materials, supplies or services primarily for the purpose of
enabling a debtor to make payment of such debtor's obligations or an
agreement to assure a creditor against loss, and including, without
limitation, causing a bank or other financial institution to issue a letter
of credit or other similar instrument for the benefit of another Person, but
excluding endorsements for collection or deposit in the ordinary course of
business. The terms "Guarantee" and "Guaranteed" used as a verb shall have a
correlative meaning.
"Guarantee Assumption Agreement" shall mean a Guarantee Assumption
Agreement substantially in the form of Exhibit C hereto by an entity that,
pursuant to Section 9.16(a) hereof is required to become a "Subsidiary
Guarantor" hereunder in favor of the Administrative Agent.
"Hazardous Material" shall mean, collectively, (a) any petroleum or
petroleum products, flammable materials, explosives, radioactive materials,
asbestos, urea formaldehyde foam insulation, and transformers or other
equipment that contain polychlorinated biphenyls ("PCB's"), (b) any chemicals
or other materials or substances that are now or hereafter become defined as
or included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "extremely hazardous wastes", "restricted hazardous
wastes", "toxic substances", "toxic pollutants", "contaminants", "pollutants"
or words of similar import under any Environmental Law and (c) any other
chemical or other material or substance, exposure to which is now or
hereafter prohibited, limited or regulated under any Environmental Law.
Credit Agreement
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"Indebtedness" shall mean, for any Person: (a) obligations created,
issued or incurred by such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of Property to another
Person subject to an understanding or agreement, contingent or otherwise, to
repurchase such Property from such Person); (b) obligations of such Person to
pay the deferred purchase or acquisition price of Property or services
(including in respect of non-competition agreements), other than trade
accounts payable (other than for borrowed money) arising, and accrued
expenses incurred, in the ordinary course of business so long as such trade
accounts payable are payable within 90 days of the date the respective goods
are delivered or the respective services are rendered; (c) Indebtedness of
others secured by a Lien on the Property of such Person, whether or not the
respective indebtedness so secured has been assumed by such Person; (d)
obligations of such Person in respect of letters of credit or similar
instruments issued or accepted by banks and other financial institutions for
account of such Person; (e) Capital Lease Obligations of such Person; and (f)
Indebtedness of others Guaranteed by such Person.
"Information Memorandum" shall mean the Confidential Information
Memorandum dated September 1997 prepared in connection with the syndication
of the Commitments hereunder.
"Intercompany Subordination Agreements" shall mean the MBV
Subordination Agreement and the ADVO Investment Company Subordination
Agreement.
"Interest Coverage Ratio" shall mean, as at any date, the ratio of
(a) EBITDA for the period of four consecutive fiscal quarters ending on or
most recently ended prior to such date to (b) Interest Expense for such
period.
"Interest Expense" shall mean, for any period, the sum, for the
Company and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all interest in
respect of Indebtedness (including, without limitation, the interest
component of any payments in respect of Capital Lease Obligations but
excluding any capitalized financing costs) accrued or capitalized during such
period (whether or not actually paid during such period) plus (b) the net
amount payable (or minus the net amount receivable) under Interest Rate
Protection Agreements during such period (whether or not actually paid or
received during such period). For purposes hereof, the aggregate amount of
upfront or one-time fees or expenses payable in respect of Interest Rate
Protection Agreements shall be amortized over the life of the respective
Interest Rate Protection Agreements in equal installments, and only
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the portion thereof so amortized during any period shall be treated as
"Interest Expense" for such period.
"Interest Period" shall mean, for any Eurodollar Loan, each period
commencing on the date such Eurodollar Loan is made or Converted from a Base
Rate Loan or (in the event of a Continuation) the last day of the next
preceding Interest Period for such Loan and (subject to the provisions of
Section 2.01(c) hereof) ending on the numerically corresponding day in the
first, second, third or sixth (or, to the extent each Lender that is to
participate in such Loan shall determine that the same are available, ninth)
calendar month thereafter, as the Company may select as provided in Section
4.05 hereof, except that each Interest Period that commences on the last
Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar
month. Notwithstanding the foregoing:
(i) no Interest Period for any Revolving Credit Loan may commence
before and end after any Revolving Credit Commitment Reduction Date unless,
after giving effect thereto, the aggregate principal amount of the
Revolving Credit Loans having Interest Periods that end after such
Revolving Credit Commitment Reduction Date shall be equal to or less than
the aggregate amount of the Revolving Credit Commitments on such Commitment
Reduction Date;
(ii) no Interest Period for any Term Loan may commence before and
end after any Principal Payment Date unless, after giving effect thereto,
the aggregate principal amount of the Term Loans having Interest Periods
that end after such Principal Payment Date shall be equal to or less than
the aggregate principal amount of the Term Loans scheduled to be
outstanding after giving effect to the payments of principal required to be
made on such Principal Payment Date;
(iii) each Interest Period that would otherwise end on a day that is
not a Business Day shall end on the next succeeding Business Day (or, in
the case of an Interest Period for a Eurodollar Loan, if such next
succeeding Business Day falls in the next succeeding calendar month, on the
next preceding Business Day); and
(iv) notwithstanding clauses (i) and (ii) above, no Interest Period
shall have a duration of less than one month and, if the Interest Period
for any Eurodollar Loan would otherwise be a shorter period, such Loan
shall not be available hereunder for such period.
Credit Agreement
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"Interest Rate Protection Agreement" shall mean, for any Person, an
interest rate swap, cap or collar agreement or similar arrangement between
such Person and one or more financial institutions providing for the transfer
or mitigation of interest risks either generally or under specific
contingencies.
"Investment" shall mean, for any Person: (a) the acquisition
(whether for cash, Property, services or securities or otherwise) of capital
stock, bonds, notes, debentures, partnership or other ownership interests or
other securities of any other Person or any agreement to make any such
acquisition (including, without limitation, any "short sale" or any sale of
any securities at a time when such securities are not owned by the Person
entering into such sale); (b) the making of any deposit with, or advance,
loan or other extension of credit to, any other Person (including the
purchase of Property from another Person subject to an understanding or
agreement, contingent or otherwise, to resell such Property to such Person),
but excluding any such advance, loan or extension of credit having a term not
exceeding 90 days arising in connection with the sale of inventory or
supplies, or the provision of services, by such Person in the ordinary course
of business; (c) the entering into of any Guarantee of, or other contingent
obligation with respect to, Indebtedness or other liability of any other
Person and (without duplication) any amount committed to be advanced, lent or
extended to such Person; or (d) the entering into of any Interest Rate
Protection Agreement or any "swap agreement" (as defined in Section
101(53)(b) of the Bankruptcy Code).
"Issuing Lender" shall mean Chase, as the issuer of Letters of
Credit under Section 2.03 hereof, together with its successors and assigns in
such capacity.
"Letter of Credit" shall have the meaning assigned to such term in
Section 2.03 hereof.
"Letter of Credit Documents" shall mean, with respect to any Letter
of Credit, collectively, any application therefor and any other agreements,
instruments, guarantees or other documents (whether general in application or
applicable only to such Letter of Credit) governing or providing for (a) the
rights and obligations of the parties concerned or at risk with respect to
such Letter of Credit or (b) any collateral security for any of such
obligations, each as the same may be modified and supplemented and in effect
from time to time.
"Letter of Credit Interest" shall mean, for each Revolving Credit
Lender, such Lender's participation interest (or, in the case of the Issuing
Lender, the Issuing Lender's retained interest) in the Issuing Lender's
liability under Letters of Credit and such Lender's rights and
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interests in Reimbursement Obligations and fees, interest and other amounts
payable in connection with Letters of Credit and Reimbursement Obligations.
"Letter of Credit Liability" shall mean, without duplication, at
any time and in respect of any Letter of Credit, the sum of (a) the undrawn
face amount of such Letter of Credit plus (b) the aggregate unpaid principal
amount of all Reimbursement Obligations of the Company at such time due and
payable in respect of all drawings made under such Letter of Credit. For
purposes of this Agreement, a Revolving Credit Lender (other than the Issuing
Lender) shall be deemed to hold a Letter of Credit Liability in an amount
equal to its participation interest in the related Letter of Credit under
Section 2.03 hereof, and the Issuing Lender shall be deemed to hold a Letter
of Credit Liability in an amount equal to its retained interest in the
related Letter of Credit after giving effect to the acquisition by the
Revolving Credit Lenders other than the Issuing Lender of their participation
interests under said Section 2.03.
"Lien" shall mean, with respect to any Property, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in respect
of such Property. For purposes of this Agreement and the other Loan
Documents, a Person shall be deemed to own subject to a Lien any Property
that it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement (other than an operating lease) relating to such Property.
"Loan Documents" shall mean, collectively, this Agreement, the
Notes, the Letter of Credit Documents, the Security Documents and the
Intercompany Subordination Agreements.
"Loans" shall mean, collectively, the Revolving Credit Loans and
the Term Loans.
"Majority Lenders" shall mean the Majority Revolving Credit Lenders
and the Majority Term Loan Lenders.
"Majority Revolving Credit Lenders" shall mean Revolving Credit
Lenders having at least 51% of the aggregate amount of the Revolving Credit
Commitments or, if the Revolving Credit Commitments shall have terminated,
Lenders holding at least 51% of the sum of (a) the aggregate unpaid principal
amount of the Revolving Credit Loans plus (b) the aggregate amount of all
Letter of Credit Liabilities.
Credit Agreement
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"Majority Term Loan Lenders" shall mean Term Loan Lenders holding at
least 51% of the aggregate outstanding principal amount of the Term Loans or,
if the Term Loans shall not have been made, at least 51% of the Term Loan
Commitments.
"Margin Stock" shall mean "margin stock" within the meaning of
Regulations G, T, U and X.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the Property, business, operations, financial condition, prospects or
liabilities of the Company and its Subsidiaries taken as a whole, (b) the
ability of any Obligor to perform its obligations under any of the Loan
Documents to which it is a party, (c) the validity or enforceability of any
of the Loan Documents, (d) the rights and remedies of the Lenders and the
Administrative Agent under any of the Loan Documents or (e) the timely
payment of the principal of or interest on the Loans or the Reimbursement
Obligations or other amounts payable in connection therewith.
"MBV Subordination Agreement" means the Subordination Agreement
dated as of March 4, 1996 between MBV, Inc., the Company and the
Administrative Agent, as the same shall be modified and supplemented and in
effect from time to time, including pursuant to Section 12.13 hereof.
"Mortgages" shall mean, collectively, the respective Deeds of Trust
and Mortgages executed and delivered by the Borrowers and their Subsidiaries
pursuant to the Existing Credit Agreement, covering the properties and
leasehold interests of the respective Mortgagors identified therein, in each
case as such Deeds of Trust and Mortgages have been heretofore modified, as
such Deeds of Trust and Mortgages shall be modified pursuant to instruments
of Modification and Confirmation executed and delivered pursuant to Section
7.01(g) hereof, and as such Deeds of Trust and Mortgages shall be further
modified and supplemented and in effect from time to time and one or more
additional mortgages or deed of trust executed by the Company in favor of the
Administrative Agent (or, in the case of a deed of trust, in favor of a
trustee, for the benefit of the Administrative Agent and the Lenders),
covering the respective leasehold interests of the Company in each of its
mail processing facilities, in each case, as such mortgages and deeds of
Trust shall be modified and supplemented and in effect from time to time.
"Multiemployer Plan" shall mean a multiemployer plan defined as such
in Section 3(37) of ERISA to which contributions have been made by the
Company or any ERISA Affiliate and that is covered by Title IV of ERISA.
Credit Agreement
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"Net Available Proceeds" shall mean:
(i) in the case of any Disposition, the amount of Net Cash Payments
received in connection with such Disposition;
(ii) in the case of any Casualty Event, the aggregate amount of
proceeds of insurance, condemnation awards and other compensation received
by the Company and its Subsidiaries in respect of such Casualty Event net of
(A) reasonable expenses incurred by the Company and its Subsidiaries in
connection therewith and (B) contractually required repayments of
Indebtedness to the extent secured by a Lien on such Property and any income
and transfer taxes payable by the Company or any of its Subsidiaries in
respect of such Casualty Event; and
(iii) in the case of any Debt Issuance, the aggregate amount of all
cash received by the Company in respect of such Debt Issuance net of
reasonable expenses incurred by the Company in connection therewith.
"Net Cash Payments" shall mean, with respect to any Disposition, the
aggregate amount of all cash payments received by the Company and its
Subsidiaries directly or indirectly in connection with such Disposition;
provided that (a) Net Cash Payments shall be net of (i) the amount of any
legal, title and recording tax expenses, commissions and other fees and
expenses paid by the Company and its Subsidiaries in connection with such
Disposition and (ii) any Federal, state and local income or other taxes
estimated to be payable by the Company and its Subsidiaries as a result of
such Disposition (but only to the extent that such estimated taxes are in
fact paid to the relevant Federal, state or local governmental authority
within 120 days of the date of such Disposition) or, if such taxes are not so
paid within such 120 days, only if an amount equal to such taxes is deposited
with the Administrative Agent for credit to an escrow account to be held in
such account and used to pay such taxes when due, and (b) Net Cash Payments
shall be net of any repayments by the Company or any of its Subsidiaries of
Indebtedness to the extent that (i) such Indebtedness is secured by a Lien on
the Property that is the subject of such Disposition and (ii) the transferee
of (or holder of a Lien on) such Property requires that such Indebtedness be
repaid as a condition to the purchase of such Property.
"Notes" shall mean, collectively, the Revolving Credit Notes and the
Term Loan Notes.
Credit Agreement
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"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Additional Indebtedness" shall mean Indebtedness
permitted under Section 9.07(c) hereof.
"Permitted Investments" shall mean: (a) direct obligations of the
United States of America, or of any agency thereof, or obligations guaranteed
as to principal and interest by the United States of America, or of any
agency thereof, in either case maturing not more than 90 days from the date
of acquisition thereof; (b) certificates of deposit issued by any bank or
trust company organized under the laws of the United States of America or any
state thereof and having capital, surplus and undivided profits of at least
$500,000,000, maturing not more than 90 days from the date of acquisition
thereof; (c) repurchase obligations with respect to obligations of the type
(but not necessarily the maturity) described in clause (a) above issued by
any bank or trust company described in clause (b) above and maturing not more
than 90 days from the date of acquisition thereof by such Person; (d)
commercial paper rated A-1 or better or P-1 by Standard & Poor's Ratings
Group, a Division of McGraw Hill, Inc., or Moody's Investors Services, Inc.,
respectively, maturing not more than 90 days from the date of acquisition
thereof; (e) interests in any money market mutual fund registered under the
Investment Company Act of 1940, as amended, the portfolio of which is limited
to obligations described in the foregoing clauses (a), (b), (c) and (d), so
long as such fund has total assets of at least $1,000,000,000 and is rated
AAAm-G or better or AAA or better by Standard & Poor's Ratings Group or
Moody's Investors Services, Inc., respectively; and (f) the Warburg Pincus
Cash Reserve Fund, so long as substantially all of the investments in the
portfolio of such Fund consist of obligations (i) which are of the type
referred to in the foregoing clauses (a), (b), (c) and (d), and (ii) which
mature within one year of the date upon which they are acquired; in each case
so long as the same (x) provide for the payment of principal and interest
(and not principal alone or interest alone) and (y) are not subject to any
contingency regarding the payment of principal or interest.
"Person" shall mean any individual, corporation, company, voluntary
association, partnership, limited liability company, joint venture, trust,
unincorporated organization or government (or any agency, instrumentality or
political subdivision thereof).
"Plan" shall mean an employee benefit or other plan established or
maintained by the Company or any ERISA Affiliate and that is covered by Title
IV of ERISA, other than a Multiemployer Plan.
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"Post-Default Rate" shall mean a rate per annum equal to 2% plus the
Base Rate as in effect from time to time plus the Applicable Margin for Base
Rate Loans for the affected Class, provided that, with respect to principal
of a Eurodollar Loan, the "Post-Default Rate" shall be the greater of (i) 2%
plus the interest rate for such Loan as provided in Section 3.02 hereof and
(ii) the rate provided for above in this definition.
"Prime Rate" shall mean the rate of interest from time to time
announced by Chase at the Principal Office as its prime commercial lending
rate.
"Principal Office" shall mean the principal office of Chase, located
on the date hereof at 270 Park Avenue, New York, New York 10017.
"Principal Payment Dates" shall mean the Quarterly Dates falling in
December, March, June, and September of each year, commencing with such
Quarterly Date in December, 1997 through and including such Quarterly Date in
September, 2003.
"Property" shall mean any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Quarterly Dates" shall mean the Business Day immediately preceding
each Fiscal Date falling in December, March, June and September in each year,
the first of which shall be the first such day after the date hereof.
"Registered Holder" shall have the meaning assigned to such term in
Section 5.07(a)(ii) hereof.
"Registered Loan" shall have the meaning assigned to such term in
Section 2.08(e) hereof.
"Registered Note" shall have the meaning assigned to such term in
Section 2.08(e) hereof.
"Regulations A, D, G, T, U and X" shall mean, respectively,
Regulations A, D, G, T, U and X of the Board of Governors of the Federal
Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
Credit Agreement
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"Regulatory Change" shall mean, with respect to any Lender, any
change after the date hereof in Federal, state or foreign law or regulations
(including, without limitation, Regulation D) or the adoption or making after
such date of any interpretation, directive or request applying to a class of
banks or other financial institutions including such Lender of or under any
Federal, state or foreign law or regulations (whether or not having the force
of law and whether or not failure to comply therewith would be unlawful) by
any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"Reimbursement Obligations" shall mean, at any time, the obligations
of the Company then outstanding, or that may thereafter arise in respect of
all Letters of Credit then outstanding, to reimburse amounts paid by the
Issuing Lender in respect of any drawings under a Letter of Credit.
"Release" shall mean any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration
into the indoor or outdoor environment, including, without limitation, the
movement of Hazardous Materials through ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata.
"Reserve Requirement" shall mean, for any Interest Period for any
Eurodollar Loan, the average maximum rate at which reserves (including,
without limitation, any marginal, supplemental or emergency reserves) are
required to be maintained during such Interest Period under Regulation D by
member banks of the Federal Reserve System in New York City with deposits
exceeding one billion Dollars against "Eurocurrency liabilities" (as such
term is used in Regulation D). Without limiting the effect of the foregoing,
the Reserve Requirement shall include any other reserves required to be
maintained by such member banks by reason of any Regulatory Change with
respect to (i) any category of liabilities that includes deposits by
reference to which the Eurodollar Base Rate for any Interest Period for any
Eurodollar Loans is to be determined as provided in the definition of
"Eurodollar Base Rate" in this Section 1.01 or (ii) any category of
extensions of credit or other assets that includes Eurodollar Loans.
"Revolving Credit Lenders" shall mean (a) on the date hereof, the
Lenders having Revolving Credit Commitments on the signature pages hereof and
(b) thereafter, the Lenders from time to time holding Revolving Credit Loans
and Revolving Credit Commitments after giving effect to any assignments
thereof permitted by Section 12.06(b) hereof.
"Revolving Credit Commitment" shall mean, as to each Revolving
Credit Lender, the obligation of such Lender to make Revolving Credit Loans,
and to issue or participate in
Credit Agreement
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Letters of Credit pursuant to Section 2.03 hereof, in an aggregate principal
or face amount at any one time outstanding up to but not exceeding the amount
set opposite the name of such Lender on the signature pages hereof under the
caption "Revolving Credit Commitment" or, in the case of a Person that
becomes a Revolving Credit Lender pursuant to an assignment permitted under
Section 12.06(b) hereof, as specified in the respective instrument of
assignment pursuant to which such assignment is effected (as the same may be
reduced at any time or from time to time pursuant to Section 2.04 or 2.10
hereof). The original aggregate principal amount of the Revolving Credit
Commitments is $165,000,000.
"Revolving Credit Commitment Percentage" shall mean, with respect to
any Revolving Credit Lender, the ratio of (a) the amount of the Revolving
Credit Commitment of such Lender to (b) the aggregate amount of the Revolving
Credit Commitments of all of the Lenders.
"Revolving Credit Commitment Reduction Dates" shall mean,
collectively, the Quarterly Dates falling in December, March, June, and
September of each year, commencing with such Quarterly Date in December, 1999
through and including the Revolving Credit Commitment Termination Date.
"Revolving Credit Commitment Termination Date" shall mean the
Quarterly Date falling in September, 2003.
"Revolving Credit Loans" shall mean the loans provided for in
Section 2.01(a) hereof, which may be Base Rate Loans and/or Eurodollar Loans.
"Revolving Credit Notes" shall mean the promissory notes provided
for in Section 2.08(a) hereof and all promissory notes delivered in
substitution or exchange therefor, in each case as the same shall be modified
and supplemented and in effect from time to time. The term "Revolving Credit
Notes" shall include any Registered Notes evidencing Revolving Credit Loans
executed and delivered pursuant to Section 2.08(e) hereof.
"Security Agreement" shall mean the Security Agreement dated as of
March 4, 1996 between the Obligors and the Administrative Agent, as the same
shall be modified and supplemented and in effect from time to time, including
pursuant to Section 12.13 hereof.
"Security Documents" shall mean, collectively, the Security
Agreement, the Mortgages and all Uniform Commercial Code financing statements
required by the Security
Credit Agreement
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Agreement or the Mortgages to be filed with respect to the security interests
in personal Property and fixtures created pursuant to the Security Agreement
or the Mortgages.
"Specified Default" shall mean, collectively, (i) any Event of
Default under Section 10(a)(i), 10(f) or 10(g) hereof, (ii) any Event of
Default under Section 10(a)(ii) hereof that shall continue for three or more
Business Days or (iii) any Event of Default under Section 10(d)(i) hereof
that shall continue for ten or more days.
"Subordinated Indebtedness" shall mean Indebtedness of the Company
incurred in accordance with Section 9.12(a) hereof.
"Subsidiary" shall mean, with respect to any Person, any
corporation, partnership or other entity of which at least a majority of the
securities or other ownership interests having by the terms thereof ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, partnership or
other entity shall have or might have voting power by reason of the happening
of any contingency) is at the time directly or indirectly owned or controlled
by such Person or one or more Subsidiaries of such Person or by such Person
and one or more Subsidiaries of such Person.
"Term Loan Commitment" shall mean, for each Term Loan Lender, the
obligation of such Lender to make Term Loans in an amount up to but not
exceeding the amount set opposite the name of such Lender on the signature
pages hereof under the caption "Term Loan Commitment" or, in the case of any
Person that becomes a Term Loan Lender pursuant to an assignment permitted
under Section 12.06(b) hereof, as specified in the respective instrument of
assignment pursuant to which such assignment is effected (as the same may be
reduced or increased pursuant to an assignment permitted under Section
12.06(b) hereof). The original aggregate principal amount of the Term Loan
Commitments is $135,000,000.
"Term Loan Commitment Termination Date" shall mean October 15, 1997.
"Term Loan Lenders" shall mean (a) on the date hereof, the Lenders
having Term Loan Commitments on the signature pages hereof and (b)
thereafter, the Lenders from time to time holding Term Loans and Term Loan
Commitments after giving effect to any assignments thereof permitted by
Section 12.06(b) hereof.
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"Term Loan Notes" shall mean the promissory notes provided for by
Section 2.08(b) hereof and all promissory notes delivered in substitution or
exchange therefor, in each case as the same shall be modified and
supplemented and in effect from time to time. The term "Term Loan Notes"
shall include any Registered Notes evidencing Term Loans executed and
delivered pursuant to Section 2.08(e) hereof.
"Term Loans" shall mean the loans provided for by Section 2.01(b)
hereof, which may be Base Rate Loans and/or Eurodollar Loans.
"Total Debt Ratio" shall mean, as at any date, the ratio of (a) the
sum, for the Company and its Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP), of the aggregate amount of all
Indebtedness (including, without limitation, all Subordinated Indebtedness)
as at such date to (b) EBITDA for the period of four consecutive fiscal
quarters ending on, or most recently ended prior to such date.
"Type" shall have the meaning assigned to such term in Section 1.03
hereof.
"U.S. Person" shall mean a citizen or resident of the United States
of America, a corporation, partnership or other entity created or organized
in or under any laws of the United States of America or any State thereof, or
any estate or trust that is subject to Federal income taxation regardless of
the source of its income.
"U.S. Taxes" shall mean any present or future tax, assessment or
other charge or levy imposed by or on behalf of the United States of America
or any taxing authority thereof.
"Warburg Pincus" shall mean, collectively: (i) Warburg, Pincus
Capital Company, L.P., a Delaware limited partnership, (ii) Warburg, Pincus
Capital Partners, L.P., a Delaware limited partnership, (iii) Warburg, Pincus
Investors, L.P., a Delaware limited partnership, (iv) Warburg, Pincus & Co.,
L.L.C., a New York limited liability company, (v) Warburg Pincus Ventures,
L.P., a Delaware limited partnership or (vi) any other venture banking fund
in which Warburg, Pincus & Co., L.L.C. is the controlling general partner or
controlling member.
"Warburg Affiliate" shall mean any Subsidiary of any of the entities
listed in clauses (i) through (v), inclusive, of the definition of "Warburg
Pincus" in this Section 1.
"Wholly Owned Subsidiary" shall mean, with respect to any Person,
any corporation, partnership or other entity of which all of the equity
securities or other ownership
Credit Agreement
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interests (other than, in the case of a corporation, directors' qualifying
shares) are directly or indirectly owned or controlled by such Person or one
or more Wholly Owned Subsidiaries of such Person or by such Person and one or
more Wholly Owned Subsidiaries of such Person.
"Working Capital" shall mean, as at such date, the sum, for the
Company and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) current assets
(excluding cash and cash equivalents) as at such date minus (b) current
liabilities (excluding the current portion of any installments of principal
payable hereunder) as at such date.
1.02 Accounting Terms and Determinations.
(a) Except as otherwise expressly provided herein, all accounting
terms used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to
the Lenders hereunder shall (unless otherwise disclosed to the Lenders in
writing at the time of delivery thereof in the manner described in Section
1.02(b) hereof) be prepared, in accordance with generally accepted accounting
principles applied on a basis consistent with those used in the preparation
of the latest financial statements furnished to the Lenders hereunder (which,
prior to the delivery of the first financial statements under Section 9.01
hereof, shall mean the audited financial statements as at September 28, 1996
referred to in Section 8.02 hereof). All calculations made for the purposes
of determining compliance with this Agreement shall (except as otherwise
expressly provided herein) be made by application of generally accepted
accounting principles applied on a basis consistent with those used in the
preparation of the latest annual or quarterly financial statements furnished
to the Lenders pursuant to Section 9.01 hereof (or, prior to the delivery of
the first financial statements under Section 9.01 hereof, used in the
preparation of the audited financial statements as at September 28, 1996
referred to in Section 8.02 hereof) unless
(i) the Company shall have objected to determining such compliance
on such basis at the time of delivery of such financial statements or
(ii) the Majority Lenders shall so object in writing within 30 days
after delivery of such financial statements,
in either of which events such calculations shall be made on a basis consistent
with those used in the preparation of the latest financial statements as to
which such objection shall not have been made (which, if objection is made in
respect of the first financial statements delivered under
Credit Agreement
<PAGE>
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Section 9.01 hereof, shall mean the audited financial statements referred to
in Section 8.02 hereof).
(b) The Company shall deliver to the Lenders at the same time as
the delivery of any annual or quarterly financial statement under Section
9.01 hereof (i) a description in reasonable detail of any material variation
between the application of accounting principles employed in the preparation
of such statement and the application of accounting principles employed in
the preparation of the next preceding annual or quarterly financial
statements as to which no objection has been made in accordance with the last
sentence of Section 1.02(a) hereof and (ii) reasonable estimates of the
difference between such statements arising as a consequence thereof.
(c) To enable the ready and consistent determination of compliance
with the covenants set forth in Section 9 hereof, the Company will not change
(i) the last day of its fiscal year from the Saturday falling on, or
immediately preceding, September 30 of each year, or (ii) the last days of
the first three fiscal quarters in each of its fiscal years from the Saturday
falling on, or immediately preceding, December 31, March 31 and June 30 of
each year, respectively.
1.03 Classes and Types of Loans. Loans hereunder are distinguished
by "Class" and by "Type". The "Class" of a Loan (or of a Commitment to make
a Loan) refers to whether such Loan is a Revolving Credit Loan or a Term
Loan, each of which constitutes a Class. The "Type" of a Loan refers to
whether such Loan is a Base Rate Loan or a Eurodollar Loan, each of which
constitutes a Type. Loans may be identified by both Class and Type.
Credit Agreement
<PAGE>
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Section 2. Commitments, Loans, Notes and Prepayments.
2.01 Loans.
(a) Revolving Credit Loans. Each Revolving Credit Lender severally
agrees, on the terms and conditions of this Agreement, to make loans to the
Company in Dollars during the period from and including the Effective Date to
but not including the Revolving Credit Commitment Termination Date in an
aggregate principal amount at any one time outstanding up to but not
exceeding the amount of the Revolving Credit Commitment of such Lender as in
effect from time to time (such Loans being herein called "Revolving Credit
Loans"), provided that in no event shall the aggregate principal amount of
all Revolving Credit Loans, together with the aggregate amount of all Letter
of Credit Liabilities, exceed the aggregate amount of the Revolving Credit
Commitments as in effect from time to time. Subject to the terms and
conditions of this Agreement, during such period the Company may borrow,
repay and reborrow the amount of the Revolving Credit Commitments by means of
Base Rate Loans and Eurodollar Loans and may Convert Revolving Credit Loans
of one Type into Revolving Credit Loans of another Type (as provided in
Section 2.09 hereof) or Continue Revolving Credit Loans of one Type as
Revolving Credit Loans of the same Type (as provided in Section 2.09 hereof).
Anything herein to the contrary notwithstanding, Revolving Credit Loans
shall not be available hereunder until such time as the Term Loan Commitments
have been fully utilized in full.
(b) Term Loans. Each Term Loan Lender severally agrees, on the
terms and conditions of this Agreement, to make a term loan to the Company in
Dollars on the Effective Date (provided that the same shall occur no later
than the Term Loan Commitment Termination Date) in an aggregate principal
amount up to but not exceeding the amount of the Term Loan Commitment of such
Lender. Thereafter the Company may Convert Term Loans of one Type into Term
Loans of another Type (as provided in Section 2.09 hereof) or Continue Term
Loans of one Type as Term Loans of the same Type (as provided in Section 2.09
hereof).
(c) Limit on Eurodollar Loans. Notwithstanding the foregoing, (i)
no more than ten separate Interest Periods in respect of Eurodollar Loans of
all Classes from each Lender may be outstanding at any one time and (ii)
prior to October 31, 1997, all Eurodollar Loans of any Class must have an
Interest Period of one month's duration and be coterminous with the Interest
Periods of all other Eurodollar Loans of each other Class, and, to the extent
that prior to such date a Eurodollar Loan would not satisfy such conditions,
such Loan shall be made, or Continued as or Converted into, a Base Rate Loan.
Credit Agreement
<PAGE>
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(d) Treatment of Loans Outstanding under Existing Credit Agreement.
In the event that any loans under the Existing Credit Agreement shall remain
outstanding on the Effective Date, then such loans shall be continued as
Revolving Credit Loans or Term Loans hereunder and the Lenders hereunder
shall, on the Effective Date, take such actions, and make such adjustments
among themselves, as shall be necessary so that such loans are held hereunder
pro rata in accordance with their respective Revolving Credit Commitments and
Term Loan Commitments, including by purchasing the loans under the Existing
Credit Agreement of Existing Lenders that are not becoming Lenders hereunder.
On the Effective Date, the Company shall cause to be paid to each Lender
party to the Existing Credit Agreement, all amounts that would be owing to
such Lender under Section 5.05 of the Existing Credit Agreement as if the
"Loans" of such Lender under the Existing Credit Agreement were being repaid
on the Effective Date, whether or not any such loans are actually repaid on
the Effective Date.
2.02 Borrowings. The Company shall give the Administrative Agent
notice of each borrowing hereunder as provided in Section 4.05 hereof. Not
later than 1:00 p.m. New York time on the date specified for each borrowing
hereunder, each Lender shall make available the amount of the Loan or Loans
to be made by it on such date to the Administrative Agent, at an account
specified by the Administrative Agent and maintained at the Principal Office,
in immediately available funds, for account of the Company. The amount so
received by the Administrative Agent shall, subject to the terms and
conditions of this Agreement, be made available to the Company by depositing
the same, in immediately available funds, in an account of the Company
designated by the Company and maintained with Chase at the Principal Office.
2.03 Letters of Credit. Subject to the terms and conditions of
this Agreement, the Revolving Credit Commitments may be utilized, upon the
request of the Company, in addition to the Revolving Credit Loans provided
for by Section 2.01(a) hereof, by the issuance by the Issuing Lender of
letters of credit (collectively, "Letters of Credit") for account of the
Company or any of its Subsidiaries (as specified by the Company), provided
that in no event shall (i) the aggregate amount of all Letter of Credit
Liabilities, together with the aggregate principal amount of the Revolving
Credit Loans, exceed the aggregate amount of the Revolving Credit Commitments
as in effect from time to time, (ii) the outstanding aggregate amount of all
Letter of Credit Liabilities exceed $10,000,000 and (iii) the expiration date
(without giving effect to any extension thereof by reason of an interruption
of business) of any Letter of Credit extend beyond the earlier of the
Revolving Credit Commitment Termination Date and the date eighteen months
following the issuance of such Letter of Credit (provided that any such
Letter of Credit may provide for automatic extensions thereof to a date not
later than twelve months beyond the
Credit Agreement
<PAGE>
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current expiration date, so long as such extended expiration date is not
later than eighteen months after the date upon which such automatic extension
may no longer be canceled). The following additional provisions shall apply
to Letters of Credit:
(a) The Company shall give the Administrative Agent at least three
Business Days' irrevocable prior notice (effective upon receipt) specifying
the Business Day (which shall be no later than 30 days preceding the
Revolving Credit Commitment Termination Date) each Letter of Credit is to be
issued and the account party or parties therefor and describing in
reasonable detail the proposed terms of such Letter of Credit (including
the beneficiary thereof) and the nature of the transactions or obligations
proposed to be supported thereby (including whether such Letter of Credit
is to be a commercial letter of credit or a standby letter of credit).
Upon receipt of any such notice, the Administrative Agent shall advise each
Lender of the contents thereof.
(b) On each day during the period commencing with the issuance by the
Issuing Lender of any Letter of Credit and until such Letter of Credit shall
have expired or been terminated, the Revolving Credit Commitment of each
Revolving Credit Lender shall be deemed to be utilized for all purposes of
this Agreement in an amount equal to such Lender's Revolving Credit
Commitment Percentage of the then undrawn face amount of such Letter of
Credit. Each Revolving Credit Lender (other than the Issuing Lender) agrees
that, upon the issuance of any Letter of Credit hereunder, it shall
automatically acquire a participation in the Issuing Lender's liability
under such Letter of Credit in an amount equal to such Lender's Revolving
Credit Commitment Percentage of such liability, and each Revolving Credit
Lender (other than the Issuing Lender) thereby shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as
surety, and shall be unconditionally obligated to the Issuing Lender to pay
and discharge when due, its Revolving Credit Commitment Percentage of the
Issuing Lender's liability under such Letter of Credit.
(c) Upon receipt from the beneficiary of any Letter of Credit of any
demand for payment under such Letter of Credit, the Issuing Lender shall
promptly notify the Company (through the Administrative Agent) of the amount
to be paid by the Issuing Lender as a result of such demand and the date on
which payment is to be made by the Issuing Lender to such beneficiary in
respect of such demand. Notwithstanding the identity of the account party
of any Letter of Credit, the Company hereby unconditionally agrees to pay
and reimburse the Administrative Agent for account of the Issuing Lender for
the amount of each demand for payment under such Letter of Credit that is in
Credit Agreement
<PAGE>
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substantial compliance with the provisions of such Letter of Credit at or
prior to the date on which payment is to be made by the Issuing Lender to
the beneficiary thereunder, without presentment, demand, protest or other
formalities of any kind.
(d) Forthwith upon its receipt of a notice referred to in paragraph
(c) of this Section 2.03, the Company shall advise the Administrative Agent
whether or not the Company intends to borrow hereunder to finance its
obligation to reimburse the Issuing Lender for the amount of the related
demand for payment, provided that, unless the Company shall otherwise notify
the Administrative Agent within one Business Day of its receipt of such
notice, the Company shall be deemed to have requested a borrowing hereunder
in the lowest amount permitted under Section 4.04 which would enable the
Company to fulfill its payment obligation in respect of such demand for
payment. The proceeds of such borrowing will be applied automatically to
the payment of the Reimbursement Obligation arising in respect of such
demand for payment, with any remaining portion of such borrowing in excess
of the amount of such Reimbursement Obligation being made available to the
Company as provided in Section 2.02 hereof.
(e) Each Revolving Credit Lender (other than the Issuing Lender) shall
pay to the Administrative Agent for account of the Issuing Lender at the
Principal Office in Dollars and in immediately available funds, the amount
of such Lender's Revolving Credit Commitment Percentage of any payment
under a Letter of Credit upon notice by the Issuing Lender (through the
Administrative Agent) to such Revolving Credit Lender requesting such
payment and specifying such amount. Each such Revolving Credit Lender's
obligation to make such payment to the Administrative Agent for account of
the Issuing Lender under this paragraph (e), and the Issuing Lender's right
to receive the same, shall be absolute and unconditional and shall not be
affected by any circumstance whatsoever, including, without limitation, the
failure of any other Revolving Credit Lender to make its payment under this
paragraph (e), the financial condition of the Company (or any other account
party), the existence of any Default or the termination of the Commitments.
Each such payment to the Issuing Lender shall be made without any offset,
abatement, withholding or reduction whatsoever. If any Revolving Credit
Lender shall default in its obligation to make any such payment to the
Administrative Agent for account of the Issuing Lender, for so long as such
default shall continue the Administrative Agent may at the request of the
Issuing Lender withhold from any payments received by the Administrative
Agent under this Agreement or any Note for account of such Revolving Credit
Lender the amount so in default and, to the extent so withheld, pay the same
to the Issuing Lender in satisfaction of such defaulted obligation.
Credit Agreement
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(f) Upon the making of each payment by a Revolving Credit Lender to
the Issuing Lender pursuant to paragraph (e) above in respect of any Letter
of Credit, such Lender shall, automatically and without any further action
on the part of the Administrative Agent, the Issuing Lender or such Lender,
acquire (i) a participation in an amount equal to such payment in the
Reimbursement Obligation owing to the Issuing Lender by the Company
hereunder and under the Letter of Credit Documents relating to such Letter
of Credit and (ii) a participation in a percentage equal to such Lender's
Revolving Credit Commitment Percentage in any interest or other amounts
payable by the Company hereunder and under such Letter of Credit Documents
in respect of such Reimbursement Obligation (other than the commissions,
charges, costs and expenses payable to the Issuing Lender pursuant to
paragraph (g) of this Section 2.03). Upon receipt by the Issuing Lender
from or for account of the Company of any payment in respect of any
Reimbursement Obligation or any such interest or other amount (including
by way of setoff or application of proceeds of any collateral security) the
Issuing Lender shall promptly pay to the Administrative Agent for account of
each Revolving Credit Lender entitled thereto, such Revolving Credit
Lender's Revolving Credit Commitment Percentage of such payment, each
such payment by the Issuing Lender to be made in the same money and funds
in which received by the Issuing Lender. In the event any payment received
by the Issuing Lender and so paid to the Revolving Credit Lenders hereunder
is rescinded or must otherwise be returned by the Issuing Lender, each
Revolving Credit Lender shall, upon the request of the Issuing Lender
(through the Administrative Agent), repay to the Issuing Lender (through
the Administrative Agent) the amount of such payment paid to such Lender,
with interest at the rate specified in paragraph (j) of this Section 2.03.
(g) The Company shall pay to the Administrative Agent for account of
each Revolving Credit Lender (ratably in accordance with their respective
Commitment Percentages) a letter of credit fee in respect of each Letter of
Credit at a rate per annum equal to the Applicable Margin for Revolving
Credit Loans that are Eurodollar Loans, in respect of the daily average
undrawn face amount of such Letter of Credit for the period from and
including the date of issuance of such Letter of Credit (i) in the case of a
Letter of Credit that expires in accordance with its terms, to and including
such expiration date and (ii) in the case of a Letter of Credit that is
drawn in full or is otherwise terminated other than on the stated
expiration date of such Letter of Credit, to but excluding the date such
Letter of Credit is drawn in full or is terminated (such fee to be
non-refundable, to be paid in arrears on each Quarterly Date and on the
Revolving Credit Commitment
Credit Agreement
<PAGE>
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Termination Date and to be calculated for any day after giving effect to
any payments made under such Letter of Credit on such day). In addition,
the Company shall pay to the Administrative Agent for account of the
Issuing Lender a fronting fee in respect of each Letter of Credit in an
amount equal to 1/8 of 1% per annum of the daily average undrawn face amount
of such Letter of Credit for the period from and including the date of
issuance of such Letter of Credit (i) in the case of a Letter of Credit that
expires in accordance with its terms, to and including such expiration date
and (ii) in the case of a Letter of Credit that is drawn in full or is
otherwise terminated other than on the stated expiration date of such Letter
of Credit, to but excluding the date such Letter of Credit is drawn in full
or is terminated (such fee to be non-refundable, to be paid in arrears on
each Quarterly Date and on the Revolving Credit Commitment Termination Date
and to be calculated for any day after giving effect to any payments made
under such Letter of Credit on such day) plus all commissions, charges,
costs and expenses in the amounts customarily charged by the Issuing Lender
from time to time in like circumstances with respect to the issuance of
each Letter of Credit and drawings and other transactions relating thereto.
(h) Upon the request of any Revolving Credit Lender from time to
time, the Issuing Lender shall deliver any other information reasonably
requested by such Lender with respect to each Letter of Credit then
outstanding.
(i) The issuance by the Issuing Lender of each Letter of Credit
shall, in addition to the conditions precedent set forth in Section 7
hereof, be subject to the conditions precedent that (i) such Letter of
Credit shall be in such form, contain such terms and support such
transactions as shall be satisfactory to the Issuing Lender consistent with
its then current practices and procedures with respect to letters of credit
of the same type and (ii) the Company shall have executed and delivered
such applications, agreements and other instruments relating to such Letter
of Credit as the Issuing Lender shall have reasonably requested consistent
with its then current practices and procedures with respect to letters of
credit of the same type, provided that in the event of any conflict between
any such application, agreement or other instrument and the provisions of
this Agreement or any Security Document, the provisions of this Agreement
and the Security Documents shall control.
(j) To the extent that any Lender shall fail to pay any amount
required to be paid pursuant to paragraph (e) or (f) of this Section 2.03
on the due date therefor, such Lender shall pay interest to the Issuing
Lender (through the Administrative Agent) on such
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<PAGE>
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amount from and including such due date to but excluding the date such
payment is made at a rate per annum equal to the Federal Funds Rate,
provided that if such Lender shall fail to make such payment to the Issuing
Lender within three Business Days of such due date, then, retroactively
to the due date, such Lender shall be obligated to pay interest on such
amount at the Post-Default Rate.
(k) The issuance by the Issuing Lender of any modification or
supplement to any Letter of Credit hereunder shall be subject to the same
conditions applicable under this Section 2.03 to the issuance of new
Letters of Credit, and no such modification or supplement shall be issued
hereunder unless either (i) the respective Letter of Credit affected
thereby would have complied with such conditions had it originally been
issued hereunder in such modified or supplemented form or (ii) each
Revolving Credit Lender shall have consented thereto.
(l) On the Effective Date, any "Letters of Credit" outstanding under
the Existing Credit Agreements for account of the Company shall
automatically, and without any action on the part of any Person, become
Letters of Credit hereunder.
The Company hereby indemnifies and holds harmless each Revolving Credit Lender
and the Administrative Agent from and against any and all claims and damages,
losses, liabilities, costs or expenses that such Lender or the Administrative
Agent may incur (or that may be claimed against such Lender or the
Administrative Agent by any Person whatsoever) by reason of or in connection
with the execution and delivery or transfer of or payment or refusal to pay by
the Issuing Lender under any Letter of Credit; provided that the Company shall
not be required to indemnify any Lender or the Administrative Agent for any
claims, damages, losses, liabilities, costs or expenses to the extent, but only
to the extent, caused by (x) the willful misconduct or gross negligence of the
Issuing Lender in determining whether a request presented under any Letter of
Credit complied with the terms of such Letter of Credit or (y) in the case
of the Issuing Lender, such Lender's failure to pay under any Letter of Credit
after the presentation to it of a request strictly complying with the terms and
conditions of such Letter of Credit. Nothing in this Section 2.03 is intended
to limit the other obligations of the Company, any Lender or the Administrative
Agent under this Agreement.
Credit Agreement
<PAGE>
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2.04 Changes of Commitments.
(a) The aggregate amount of the Revolving Credit Commitments shall be
automatically reduced to zero on the Revolving Credit Commitment Termination
Date. In addition, the aggregate amount of the Revolving Credit Commitments
shall be automatically reduced on each Revolving Credit Commitment Reduction
Date set forth in column (A) below, (x) by an amount (subject to reduction
pursuant to paragraph (d) below) equal to the amount set forth in column
(B) below opposite such Revolving Credit Commitment Reduction Date, (y) to an
amount (subject to reduction pursuant to paragraph (d) below) equal to the
amount set forth in column (C) below opposite such Revolving Credit Commitment
Reduction Date:
(B) (C)
(A) Revolving Credit Revolving Credit
Revolving Credit Commitments Reduced Commitments
Commitment Reduction to the Following to the Following
Date Falling In: Amounts Amounts
- -------------------- -------------------- ----------------
Credit Agreement
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December, 1999 $ 6,250,000 $158,750,000
March, 2000 $ 6,250,000 $152,500,000
June, 2000 $ 6,250,000 $146,250,000
September, 2000 $ 6,250,000 $140,000,000
December, 2000 $ 6,250,000 $133,750,000
March, 2001 $ 6,250,000 $127,500,000
June, 2001 $ 6,250,000 $121,250,000
September, 2001 $ 6,250,000 $115,000,000
December, 2001 $ 6,250,000 $108,750,000
March, 2002 $ 6,250,000 $102,500,000
June, 2002 $ 6,250,000 $ 96,250,000
September, 2002 $ 6,250,000 $ 90,000,000
December, 2002 $22,500,000 $ 67,500,000
March, 2003 $22,500,000 $ 45,000,000
June, 2003 $22,500,000 $ 22,500,000
September, 2003 $22,500,000 $ 0
(b) Any portion of the Term Loan Commitments not used on the Effective
Date shall be automatically terminated.
(c) The Company shall have the right at any time or from time to time
(i) so long as no Revolving Credit Loans or Letter of Credit Liabilities are
outstanding, to terminate the Revolving Credit Commitments, (ii) to reduce the
aggregate unutilized amount of the Revolving Credit Commitments (for which
purpose use of the Revolving Credit Commitments shall be deemed to include the
aggregate amount of Letter of Credit Liabilities), and (iii) to terminate the
Term Loan Commitments; provided that (x) the Company shall give notice of each
such termination or reduction as provided in Section 4.05 hereof and (y) each
partial reduction of either the Revolving Credit Commitments or the Term Loan
Commitments shall be in an aggregate amount at least equal to $5,000,000 (or a
larger multiple of $1,000,000).
(d) Each reduction in the aggregate amount of the Revolving Credit
Commitments pursuant to Section 2.04(c) or 2.10 hereof on any date shall be
applied to the reductions set forth in the schedule in paragraph (a) above
ratably as follows: each such reduction shall result in an automatic and
simultaneous reduction (but not below zero) of the respective amounts set
forth in column (B) at the end of paragraph (a) above (ratably in accordance
with the respective remaining amounts thereof, after giving effect to any
prior reductions pursuant to this paragraph (d)), with appropriate reductions
(but not below zero) being
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made to the respective amounts set forth in column (C) of said paragraph (a)
after giving effect to such reduction of the amounts in said column (B).
(e) The Commitments once terminated or reduced may not be
reinstated.
2.05 Commitment Fee. The Company shall pay to the Administrative
Agent for account of each Lender a commitment fee on the daily average
unutilized amount of such Lender's Revolving Credit Commitment (for which
purpose the aggregate amount of any Letter of Credit Liabilities shall be
deemed to be a pro rata (based on the Revolving Credit Commitments) use of
each Lender's Revolving Credit Commitment), for the period from and including
the date hereof to but not including the earlier of the date such Revolving
Credit Commitment is terminated and the Revolving Credit Commitment
Termination Date, at a rate per annum equal to the relevant Applicable
Margin. Accrued commitment fee shall be payable on the Effective Date, on
each Quarterly Date and on the earlier of the date the relevant Commitments
are terminated and the Revolving Credit Commitment Termination Date or the
Term Loan Commitment Termination Date, as the case may be.
2.06 Lending Offices. The Loans of each Type made by each Lender
shall be made and maintained at such Lender's Applicable Lending Office for
Loans of such Type.
2.07 Several Obligations; Remedies Independent. The failure of any
Lender to make any Loan to be made by it on the date specified therefor shall
not relieve any other Lender of its obligation to make its Loan on such date,
but neither any Lender nor the Administrative Agent shall be responsible for
the failure of any other Lender to make a Loan to be made by such other
Lender, and (except as otherwise provided in Section 4.06 hereof) no Lender
shall have any obligation to the Administrative Agent or any other Lender for
the failure by such Lender to make any Loan required to be made by such
Lender. The amounts payable by the Company at any time hereunder and under
the Notes to each Lender shall be a separate and independent debt and each
Lender shall be entitled to protect and enforce its rights arising out of
this Agreement and the Notes, and it shall not be necessary for any other
Lender or the Administrative Agent to consent to, or be joined as an
additional party in, any proceedings for such purposes.
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2.08 Notes.
(a) The Revolving Credit Loans (other than Registered Loans) made
by each Lender shall be evidenced by a single promissory note of the Company
substantially in the form of Exhibit A-1 hereto, dated the date hereof,
payable to such Lender in a principal amount equal to the amount of its
Revolving Credit Commitment as originally in effect and otherwise duly
completed.
(b) The Term Loans (other than Registered Loans) made by each
Lender shall be evidenced by a single promissory note of the Company
substantially in the form of Exhibit A-2 hereto, dated the date hereof,
payable to such Lender in a principal amount equal to the amount of its Term
Loan Commitment as originally in effect and otherwise duly completed.
(c) The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of each Loan of each Class made by each Lender to the
Company, and each payment made on account of the principal thereof, shall be
recorded by such Lender on its books and, prior to any transfer of any Note
evidencing the Loans of such Class held by it, endorsed by such Lender on the
schedule attached to such Note or any continuation thereof; provided that the
failure of such Lender to make any such recordation or endorsement shall not
affect the obligations of the Company to make a payment when due of any
amount owing hereunder or under such Note in respect of such Loans.
(d) No Lender shall be entitled to have its Notes substituted or
exchanged for any reason, or subdivided for promissory notes of lesser
denominations, except in connection with a permitted assignment of all or any
portion of such Lender's relevant Commitment, Loans and Notes pursuant to
Section 12.06 hereof and except as provided in Section 2.08(e) hereof (and,
if requested by any Lender, the Company agrees to so exchange any Note).
(e) Notwithstanding the foregoing, any Lender that is not a U.S.
Person and is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code may request the Company (through the Administrative Agent), and the
Company agrees thereupon, to record on the Register referred to in Section
12.06(g) hereof any Loans of any Class held by such Lender under this
Agreement. Loans recorded on the Register ("Registered Loans") may not be
evidenced by promissory notes other than Registered Notes as defined below
and, upon the registration of any Loan, any promissory note (other than a
Registered Note) evidencing the same shall be null and void and shall be
returned to the Company. The Company agrees, at the request of any Lender
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that is the holder of Registered Loans, to execute and deliver to such Lender
a promissory note in registered form to evidence such Registered Loans (i.e.,
containing the optional registered note language as indicated in Exhibit A-1
or A-2 hereto, as the case may be) and registered as provided in Section
12.06(g) hereof (herein, a "Registered Note"), dated the date hereof, payable
to such Lender and otherwise duly completed. A Loan once recorded on the
Register may not be removed from the Register so long as it remains
outstanding and a Registered Note may not be exchanged for a promissory note
that is not a Registered Note.
2.09 Optional Prepayments and Conversions or Continuations of
Loans. Subject to Section 4.04 hereof, the Company shall have the right to
prepay Loans, to Convert Loans of one Type into Loans of another Type or to
Continue Eurodollar Loans from one Interest Period to another Interest
Period, at any time or from time to time, provided that: (a) the Company
shall give the Administrative Agent notice of each such prepayment,
Conversion or Continuation as provided in Section 4.05 hereof (and, upon the
date specified in any such notice of prepayment, the amount to be prepaid
shall become due and payable hereunder); (b) upon any prepayment or
Conversion of Eurodollar Loans other than on the last day of an Interest
Period for such Loans, the Company shall pay any amounts owing under Section
5.05 hereof as a result of such prepayment or Conversion; and (c) any
Conversion into or Continuation of Eurodollar Loans shall be subject to the
provisions of Section 2.01(c) hereof.
Notwithstanding the foregoing, and without limiting the rights and
remedies of the Lenders under Section 10 hereof, in the event that any Event
of Default shall have occurred and be continuing, the Administrative Agent
may (and at the request of the Majority Lenders shall) suspend the right of
the Company to Convert any Loan into a Eurodollar Loan, or to Continue any
Loan as a Eurodollar Loan, in which event all Loans shall be Converted (on
the last day(s) of the respective Interest Periods therefor) into, or
Continued as, as the case may be, Base Rate Loans.
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2.10 Mandatory Prepayments and Reductions of Commitments.
(a) Casualty Events. Upon the date 90 days following the receipt
by the Company or any of its Subsidiaries of the proceeds of insurance,
condemnation award or other compensation in respect of any Casualty Event
affecting any Property of the Company or any of its Subsidiaries (or upon
such earlier date as the Company or such Subsidiary, as the case may be,
shall have determined not to repair or replace the Property affected by such
Casualty Event), the Company shall prepay the Loans (and/or provide cover for
Letter of Credit Liabilities as specified in paragraph (e) below), and the
Commitments shall be subject to automatic reduction, in an aggregate amount,
if any, equal to 100% of the Net Available Proceeds of such Casualty Event
not theretofore applied (or committed to be applied pursuant to executed
construction contracts or equipment orders) to the repair or replacement of
such Property, such prepayment and reduction to be effected in each case in
the manner and to the extent specified in Section 2.10(d) hereof. Nothing in
this paragraph (a) shall be deemed to limit any obligation of the Company and
its Subsidiaries pursuant to the Security Agreement to remit to the
Collateral Account the proceeds of insurance, condemnation award or other
compensation received in respect of any Casualty Event, and the
Administrative Agent shall release such proceeds to the Company in the
manner, and to the extent provided in Section 4.01(d) of the Security
Agreement.
(b) Sale of Assets. Without limiting the obligation of the Company
to obtain the consent of the Majority Lenders pursuant to Section 9.05 hereof
to any Disposition not otherwise permitted hereunder, the Company agrees, on
or prior to the occurrence of any Disposition in which the fair market value
of the Property that is the subject of such Disposition is $250,000 or more
(herein, the "Current Disposition"), to deliver to the Administrative Agent
(which shall promptly forward a copy thereof to the Lenders) a statement,
certified by the Chief Financial Officer of the Company, in form and detail
reasonably satisfactory to the Administrative Agent, of the estimated amount
of the Net Available Proceeds of the Current Disposition that will (on the
date of the Current Disposition) be received in cash, in which event the
Company will prepay the Loans (and/or provide cover for Letter of Credit
Liabilities as specified in paragraph (e) below), and the Commitments shall
be subject to automatic reduction (in each case in the manner specified in
Section 2.10(d) hereof) as follows:
(i) upon the date of the Current Disposition, in an aggregate
amount equal to 100% of the Net Available Proceeds thereof to the extent
received in cash on the date of the Current Disposition; and
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(ii) thereafter, from time to time as the Company or any of its
Subsidiaries shall receive Net Available Proceeds during such quarterly
fiscal period in cash under deferred payment or escrow arrangements or
Investments entered into or received in connection with any Disposition, in
an amount equal to (A) 100% of the aggregate amount of such Net Available
Proceeds minus (B) any transaction expenses associated with Dispositions and
not previously deducted in the determination of Net Available Proceeds plus
(or minus, as the case may be) (C) any other adjustment received or paid by
the Company or such Subsidiary pursuant to the respective agreements giving
rise to Dispositions and not previously taken into account in the
determination of the Net Available Proceeds of Dispositions,
provided that, notwithstanding the foregoing, the Company shall not be
required to make any prepayment or reduce Commitments under this paragraph
(b) until such time as the aggregate amount of the required prepayments and
reductions of Commitments pursuant to the foregoing clauses (i) and (ii),
after deducting any such amounts previously applied to prepayments and
reductions of Commitments pursuant to this paragraph (b), shall be greater
than or equal to $2,000,000.
(c) Debt Issuance. Without limiting the obligation of the Company
to obtain the consent of the Majority Lenders pursuant to Section 9.07 hereof
to any Debt Issuance not otherwise permitted hereunder, upon any Debt
Issuance, the Company shall prepay the Loans (and/or provide cover for Letter
of Credit Liabilities as specified in paragraph (e) below), and the
Commitments shall be subject to automatic permanent reduction, in an
aggregate amount equal to 50% of the Net Available Proceeds thereof, such
prepayment and reduction to be effected in each case in the manner and to the
extent specified in paragraph (d) below.
(d) Application. Prepayments and reductions of Commitments
described in the above paragraphs of this Section 2.10 shall be effected as
follows:
(i) first, the amount of the prepayment specified in such paragraphs
shall be applied to the Term Loans then outstanding (allocated ratably to
the respective installments thereof), until the principal of the Term Loans
shall have been paid in full;
(ii) second, following the payment in full of the Term Loans, the
amount of such prepayment shall be applied to the Revolving Credit Loans
then outstanding (and, in the case of each such prepayment of the Revolving
Credit Loans, the aggregate principal
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amount of the Revolving Credit Commitments shall be concurrently reduced in
an amount equal to the amount of such required prepayment); and
(iii) third, to the extent that, after giving effect to any reduction
of Revolving Credit Commitments and prepayment of Revolving Credit Loans
provided for in clause (ii) above, the aggregate amount of all Letter of
Credit Liabilities would exceed the Revolving Credit Commitments, the
Company shall provide cover for Letter of Credit Liabilities as specified
in paragraph (e) below, in an aggregate amount equal to such excess.
(e) Cover for Letter of Credit Liabilities. In the event that the
Company shall be required pursuant to this Section 2.10, or pursuant to
Section 3.01(a) hereof, to provide cover for Letter of Credit Liabilities,
the Company shall effect the same by paying to the Administrative Agent
immediately available funds in an amount equal to the required amount, which
funds shall be retained by the Administrative Agent in the Collateral Account
(as provided therein as collateral security in the first instance for the
Letter of Credit Liabilities) until such time as the Letters of Credit shall
have been terminated and all of the Letter of Credit Liabilities paid in full.
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans.
(a) Revolving Credit Loans. The Company hereby promises to pay to
the Administrative Agent for account of each Lender the entire outstanding
principal amount of such Lender's Revolving Credit Loans, and each Revolving
Credit Loan shall mature, on the Revolving Credit Commitment Termination
Date. In addition, if following any Commitment Reduction Date the aggregate
principal amount of the Revolving Credit Loans, together with the aggregate
amount of all Letter of Credit Liabilities, shall exceed the Revolving Credit
Commitments, the Company shall, first, prepay Revolving Credit Loans, and,
second, provide cover for Letter of Credit Liabilities in an aggregate amount
equal to such excess (such cover for Letter of Credit Liabilities to be
effected in the manner provided in Section 2.10(e) hereof).
(b) Term Loans. The Company hereby promises to pay to the
Administrative Agent for account of the Term Loan Lenders the principal of
the Term Loans in twenty-four installments payable on the Principal Payment
Dates as follows:
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Principal Payment Date
Falling in: Amount of Installment ($)
---------------------- -------------------------
December, 1997 $2,531,250
March, 1998 $2,531,250
June, 1998 $2,531,250
September, 1998 $2,531,250
December, 1998 $4,050,000
March, 1999 $4,050,000
June, 1999 $4,050,000
September, 1999 $4,050,000
December, 1999 $5,062,500
March, 2000 $5,062,500
June, 2000 $5,062,500
September, 2000 $5,062,500
December, 2000 $5,737,500
March, 2001 $5,737,500
June, 2001 $5,737,500
September, 2001 $5,737,500
December, 2001 $6,750,000
March, 2002 $6,750,000
June, 2002 $6,750,000
September, 2002 $6,750,000
December, 2002 $9,618,750
March, 2003 $9,618,750
June, 2003 $9,618,750
September, 2003 $9,618,750
If the Company does not borrow the full amount of the aggregate Term Loan
Commitments on the Effective Date, the shortfall shall be applied to reduce
the foregoing installments ratably.
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3.02 Interest. The Company hereby promises to pay to the
Administrative Agent for account of each Lender interest on the unpaid
principal amount of each Loan made by such Lender for the period from and
including the date of such Loan to but excluding the date such Loan shall be
paid in full, at the following rates per annum:
(a) during such periods as such Loan is a Base Rate Loan, the Base
Rate (as in effect from time to time) plus the Applicable Margin; and
(b) during each Interest Period for such Loan during which such Loan
is a Eurodollar Loan, the Eurodollar Rate for such Interest Period plus the
Applicable Margin.
Notwithstanding the foregoing, the Company hereby promises to pay to the
Administrative Agent for account of each Lender interest on all of the Loans
or Reimbursement Obligations hereunder at the applicable Post-Default Rate
during any period when any Specified Default shall have occurred and for so
long as such Specified Default shall be continuing. Accrued interest on each
Loan shall be payable (i) in the case of a Base Rate Loan, quarterly on the
Quarterly Dates, (ii) in the case of a Eurodollar Loan, on the last day of
each Interest Period therefor and, if such Interest Period is longer than
three months, at three-month intervals following the first day of such
Interest Period, and (iii) in the case of any Loan, upon the payment or
prepayment thereof or the Conversion of such Loan to a Loan of another Type
(but only on the principal amount so paid, prepaid or Converted), except that
interest payable at the Post-Default Rate shall be payable from time to time
on demand. Promptly after the determination of any interest rate provided
for herein or any change therein, the Administrative Agent shall give notice
thereof to the Lenders to which such interest is payable and to the Company.
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Section 4. Payments; Pro Rata Treatment; Computations; Etc.
4.01 Payments.
(a) Except to the extent otherwise provided herein, all payments of
principal, interest, Reimbursement Obligations and other amounts to be made
by the Company under this Agreement and the Notes, and, except to the extent
otherwise provided therein, all payments to be made by the Obligors under any
other Loan Document, shall be made in Dollars, in immediately available
funds, without deduction, set-off or counterclaim, to the Administrative
Agent at an account specified by the Administrative Agent and maintained at
the Principal Office, not later than 1:00 p.m. New York time on the date on
which such payment shall become due (each such payment made after such time
on such due date to be deemed to have been made on the next succeeding
Business Day).
(b) Any Lender for whose account any such payment is to be made may
(but shall not be obligated to) debit the amount of any such payment that is
not made by such time to any ordinary deposit account of the Company with
such Lender (with notice to the Company and the Administrative Agent),
provided that such Lender's failure to give such notice shall not affect the
validity thereof.
(c) The Company shall, at the time of making each payment under
this Agreement or any Note for account of any Lender, specify to the
Administrative Agent (which shall so notify the intended recipient(s)
thereof) the Loans, Reimbursement Obligations or other amounts payable by the
Company hereunder to which such payment is to be applied (and in the event
that the Company fails to so specify, or if an Event of Default has occurred
and is continuing, the Administrative Agent may distribute such payment to
the Lenders for application in such manner as it or the Majority Lenders,
subject to Section 4.02 hereof, may determine to be appropriate).
(d) Except to the extent otherwise provided in the last sentence of
Section 2.03(e) hereof, each payment received by the Administrative Agent
under this Agreement or any Note for account of any Lender shall be paid by
the Administrative Agent promptly to such Lender, in immediately available
funds, for account of such Lender's Applicable Lending Office for the Loan or
other obligation in respect of which such payment is made.
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(e) If the due date of any payment under this Agreement or any Note
would otherwise fall on a day that is not a Business Day, such date shall be
extended to the next succeeding Business Day, and interest shall be payable
for any principal so extended for the period of such extension.
4.02 Pro Rata Treatment. Except to the extent otherwise provided
herein: (a) each borrowing of Loans of a particular Class from the Lenders
under Section 2.01 hereof shall be made from the relevant Lenders, each
payment of commitment fee under Section 2.05 hereof in respect of Commitments
of a particular Class shall be made for account of the relevant Lenders, and
each termination or reduction of the amount of the Commitments of a
particular Class under Section 2.03 hereof shall be applied to the respective
Commitments of such Class of the relevant Lenders, pro rata according to the
amounts of their respective Commitments of such Class; (b) except as
otherwise provided in Section 5.04 hereof, Eurodollar Loans of any Class
having the same Interest Period shall be allocated pro rata among the
relevant Lenders according to the amounts of their respective Revolving
Credit Commitments and Term Loan Commitments (in the case of the making of
Loans) or their respective Revolving Credit Loans and Term Loans (in the case
of Conversions and Continuations of Loans); (c) each payment or prepayment of
principal of Revolving Credit Loans or Term Loans by the Company shall be
made for account of the relevant Lenders pro rata in accordance with the
respective unpaid principal amounts of the Loans of such Class held by them;
and (d) each payment of interest on Revolving Credit Loans and Term Loans by
the Company shall be made for account of the relevant Lenders pro rata in
accordance with the amounts of interest on such Loans then due and payable to
the respective Lenders.
4.03 Computations. Interest on Eurodollar Loans and commitment fee
and letter of credit fees shall be computed on the basis of a year of 360
days and actual days elapsed (including the first day but, except as
otherwise provided in Section 2.03(g) hereof, excluding the last day)
occurring in the period for which payable and interest on Base Rate Loans and
Reimbursement Obligations shall be computed on the basis of a year of 365 or
366 days, as the case may be, and actual days elapsed (including the first
day but excluding the last day) occurring in the period for which payable.
Notwithstanding the foregoing, for each day that the Base Rate is calculated
by reference to the Federal Funds Rate, interest on Base Rate Loans and
Reimbursement Obligations shall be computed on the basis of a year of 360
days and actual days elapsed.
4.04 Minimum Amounts. Except for mandatory prepayments made
pursuant to Section 2.10 hereof and Conversions or prepayments made pursuant
to Section 5.04 hereof, (a)
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each borrowing, Conversion and partial prepayment of principal of Base Rate
Loans shall be in an aggregate amount at least equal to $1,000,000 or a
larger multiple of $100,000 and (b) each borrowing, Continuation, Conversion
or partial prepayment of principal of Eurodollar Loans shall be in an
aggregate amount at least equal to $5,000,000 or a larger multiple of
$1,000,000 (borrowings, Conversions or prepayments of or into Loans of
different Types or, in the case of Eurodollar Loans, having different
Interest Periods at the same time hereunder to be deemed separate borrowings,
Conversions and prepayments for purposes of the foregoing, one for each Type
or Interest Period), and if any Eurodollar Loans would otherwise be in a
lesser principal amount for any period, such Loans shall be Base Rate Loans
during such period.
4.05 Certain Notices. Notices by the Company to the Administrative
Agent of terminations or reductions of the Commitments, of borrowings,
Conversions, Continuations and optional prepayments of Loans, of Classes of
Loans, of Types of Loans and of the duration of Interest Periods shall be
irrevocable and shall be effective only if received by the Administrative
Agent not later than 10:00 a.m. New York time on the number of Business Days
prior to the date of the relevant termination, reduction, borrowing,
Conversion, Continuation or prepayment or the first day of such Interest
Period specified below:
Number of
Business
Notice Days Prior
Termination or reduction
of Commitments 5
Borrowing or prepayment of,
or Conversions into,
Base Rate Loans 1
Borrowing or prepayment of,
Conversions into, Continuations
as, or duration of Interest
Period for, Eurodollar Loans 3
Each such notice of termination or reduction shall specify the amount and the
Class of the Commitments to be terminated or reduced. Each such notice of
borrowing, Conversion,
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Continuation or optional prepayment shall specify the Class of Loans to be
borrowed, Converted, Continued or prepaid and the amount (subject to Section
4.04 hereof) and Type of each Loan to be borrowed, Converted, Continued or
prepaid and the date of borrowing, Conversion, Continuation or optional
prepayment (which shall be a Business Day). Each such notice of the duration
of an Interest Period shall specify the Loans to which such Interest Period
is to relate. The Administrative Agent shall promptly notify the Lenders of
the contents of each such notice. In the event that the Company fails to
select the Type of Loan, or the duration of any Interest Period for any
Eurodollar Loan, within the time period and otherwise as provided in this
Section 4.05, such Loan (if outstanding as a Eurodollar Loan) will be
automatically Converted into a Base Rate Loan on the last day of the then
current Interest Period for such Loan or (if outstanding as a Base Rate Loan)
will remain as, or (if not then outstanding) will be made as, a Base Rate
Loan.
4.06 Non-Receipt of Funds by the Administrative Agent. Unless the
Administrative Agent shall have been notified by a Lender or the Company (the
"Payor") prior to the date on which the Payor is to make payment to the
Administrative Agent of (in the case of a Lender) the proceeds of a Loan to
be made by such Lender hereunder or (in the case of the Company) a payment to
the Administrative Agent for account of one or more of the Lenders hereunder
(such payment being herein called the "Required Payment"), which notice shall
be effective upon receipt, that the Payor does not intend to make the
Required Payment to the Administrative Agent, the Administrative Agent may
assume that the Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available
to the intended recipient(s) on such date; and, if the Payor has not in fact
made the Required Payment to the Administrative Agent, the recipient(s) of
such payment shall, on demand, repay to the Administrative Agent the amount
so made available together with interest thereon in respect of each day
during the period commencing on the date (the "Advance Date") such amount was
so made available by the Administrative Agent until the date the
Administrative Agent recovers such amount at a rate per annum equal to the
Federal Funds Rate for such day and, if such recipient(s) shall fail promptly
to make such payment, the Administrative Agent shall be entitled to recover
such amount, on demand, from the Payor, together with interest as aforesaid,
provided that if neither the recipient(s) nor the Payor shall return the
Required Payment to the Administrative Agent within three Business Days of
the Advance Date, then, retroactively to the Advance Date, the Payor and the
recipient(s) shall each be obligated to pay interest on the Required Payment
as follows:
(i) if the Required Payment shall represent a payment to be made
by the Company to the Lenders, the Company and the recipient(s) shall
each be obligated
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retroactively to the Advance Date to pay interest in respect of the
Required Payment at the Post-Default Rate (without duplication of the
obligation of the Company under Section 3.02 hereof to pay interest on
the Required Payment at the Post-Default Rate), it being understood that
the return by the recipient(s) of the Required Payment to the
Administrative Agent shall not limit such obligation of the Company under
said Section 3.02 to pay interest at the Post-Default Rate in respect of
the Required Payment, and
(ii) if the Required Payment shall represent proceeds of a Loan
to be made by the Lenders to the Company, the Payor and the Company shall
each be obligated retroactively to the Advance Date to pay interest in
respect of the Required Payment pursuant to whichever of the rates
specified in Section 3.02 hereof is applicable to the Type of such Loan,
it being understood that the return by the Company of the Required
Payment to the Administrative Agent shall not limit any claim the Company
may have against the Payor in respect of such Required Payment.
4.07 Sharing of Payments, Etc.
(a) Each Obligor agrees that, in addition to (and without
limitation of) any right of set-off, banker's lien or counterclaim a Lender
may otherwise have, each Lender shall be entitled, at its option (to the
fullest extent permitted by law), to set off and apply any deposit (general
or special, time or demand, provisional or final), or other indebtedness,
held by it for the credit or account of such Obligor at any of its offices,
in Dollars or in any other currency, against any principal of or interest on
any of such Lender's Loans, Reimbursement Obligations or any other amount
payable to such Lender hereunder, that is not paid when due (regardless of
whether such deposit or other indebtedness is then due to such Obligor), in
which case it shall promptly notify such Obligor and the Administrative Agent
thereof, provided that such Lender's failure to give such notice shall not
affect the validity thereof.
(b) If any Lender shall obtain from any Obligor payment of any
principal of or interest on any Loan of any Class or Letter of Credit
Liability owing to it or payment of any other amount under this Agreement or
any other Loan Document through the exercise of any right of set-off,
banker's lien or counterclaim or similar right or otherwise (other than from
the Administrative Agent as provided herein), and, as a result of such
payment, such Lender shall have received a greater percentage of the
principal of or interest on the Loans of such Class or Letter of Credit
Liabilities or such other amounts then due hereunder or thereunder by such
Obligor to such Lender than the percentage received by any other Lender, it
shall promptly
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purchase from such other Lenders participations in (or, if and to the extent
specified by such Lender, direct interests in) the Loans of such Class or
Letter of Credit Liabilities or such other amounts, respectively, owing to
such other Lenders (or in interest due thereon, as the case may be) in such
amounts, and make such other adjustments from time to time as shall be
equitable, to the end that all the Lenders shall share the benefit of such
excess payment (net of any expenses that may be incurred by such Lender in
obtaining or preserving such excess payment) pro rata in accordance with the
unpaid principal of and/or interest on the Loans of such Class or Letter of
Credit Liabilities or such other amounts, respectively, owing to each of the
Lenders. To such end all the Lenders shall make appropriate adjustments
among themselves (by the resale of participations sold or otherwise) if such
payment is rescinded or must otherwise be restored.
(c) The Company agrees that any Lender so purchasing such a
participation (or direct interest) may exercise all rights of set-off,
banker's lien, counterclaim or similar rights with respect to such
participation as fully as if such Lender were a direct holder of Loans or
other amounts (as the case may be) owing to such Lender in the amount of such
participation.
(d) Nothing contained herein shall require any Lender to exercise
any such right or shall affect the right of any Lender to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of any Obligor. If, under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured
claim in lieu of a set-off to which this Section 4.07 applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders entitled
under this Section 4.07 to share in the benefits of any recovery on such
secured claim.
Section 5. Yield Protection, Etc.
5.01 Additional Costs.
(a) The Company shall pay directly to each Lender from time to time
such amounts as such Lender may determine to be necessary to compensate such
Lender for any costs that such Lender determines are attributable to its
making or maintaining of any Eurodollar Loans or its obligation to make any
Eurodollar Loans hereunder, or any reduction in any amount receivable by such
Lender hereunder in respect of any of such Loans or such obligation (such
increases in costs and reductions in amounts receivable being herein called
"Additional Costs"), resulting from any Regulatory Change that:
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(i) shall subject any Lender (or its Applicable Lending Office
for any of such Loans) to any tax, duty or other charge in respect of
such Loans or its Notes or changes the basis of taxation of any amounts
payable to such Lender under this Agreement or its Notes in respect of
any of such Loans (excluding changes in the rate of tax on the overall
net income of such Lender or of such Applicable Lending Office by the
jurisdiction in which such Lender has its principal office or such
Applicable Lending Office and excluding any U.S. Taxes that would not be
payable under the proviso in the first paragraph of Section 5.07(a)
hereof); or
(ii) imposes or modifies any reserve, special deposit or similar
requirements (other than the Reserve Requirement used in the
determination of the Eurodollar Rate for any Interest Period for such
Loan) relating to any extensions of credit or other assets of, or any
deposits with or other liabilities of, such Lender (including, without
limitation, any of such Loans or any deposits referred to in the
definition of "Eurodollar Base Rate" in Section 1.01 hereof), or any
commitment of such Lender (including, without limitation, the Commitments
of such Lender hereunder); or
(iii) imposes any other condition affecting this Agreement or its
Notes (or any of such extensions of credit or liabilities) or its
Commitments.
If any Lender requests compensation from the Company under this Section
5.01(a), the Company may, by notice to such Lender (with a copy to the
Administrative Agent), suspend the obligation of such Lender thereafter to
make or Continue Eurodollar Loans, or to Convert Loans of any other Type into
Eurodollar Loans, until the Regulatory Change giving rise to such request
ceases to be in effect (in which case the provisions of Section 5.04 hereof
shall be applicable), provided that such suspension shall not affect the
right of such Lender to receive the compensation so requested.
(b) Without limiting the effect of the foregoing provisions of this
Section 5.01 (but without duplication), the Company shall pay directly to
each Lender from time to time on request such amounts as such Lender may
determine to be necessary to compensate such Lender (or, without duplication,
the holding company of which such Lender is a subsidiary) for any costs that
it determines are attributable to the maintenance by such Lender (or any
Applicable Lending Office or such holding company), pursuant to any law or
regulation or any interpretation, directive or request (whether or not having
the force of law and whether or not failure to comply therewith would be
unlawful) of any court or governmental or monetary authority (i) following
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any Regulatory Change or (ii) implementing any risk-based capital guideline
or other requirement (whether or not having the force of law and whether or
not the failure to comply therewith would be unlawful) hereafter issued by
any government or governmental or supervisory authority implementing at the
national level the Basle Accord, of capital in respect of its Commitments or
Loans (such compensation to include, without limitation, an amount equal to
any reduction of the rate of return on assets or equity of such Lender (or
any Applicable Lending Office or such holding company) to a level below that
which such Lender (or any Applicable Lending Office or such holding company)
could have achieved but for such law, regulation, interpretation, directive
or request).
(c) Each Lender shall notify the Company of any event occurring
after the date hereof entitling such Lender to compensation under Section
5.01(a) or 5.01(b) hereof as promptly as practicable, but in any event within
45 days, after such Lender obtains actual knowledge thereof; provided that
(i) if any Lender fails to give such notice within 45 days after it obtains
actual knowledge of such an event, such Lender shall, with respect to
compensation payable pursuant to this Section 5.01 in respect of any costs
resulting from such event, only be entitled to payment under this Section
5.01 for costs incurred from and after the date 45 days prior to the date
that such Lender does give such notice and (ii) each Lender will designate a
different Applicable Lending Office for the Loans of such Lender affected by
such event if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the sole opinion of such Lender, be
disadvantageous to such Lender, except that such Lender shall have no
obligation to designate an Applicable Lending Office located in the United
States of America. Each Lender will furnish to the Company a certificate
setting forth the basis and amount of each request by such Lender for
compensation under Section 5.01(a) or 5.01(b) hereof. Determinations and
allocations by any Lender for purposes of this Section 5.01 of the effect of
any Regulatory Change pursuant to Section 5.01(a) hereof, or of the effect of
capital maintained pursuant to Section 5.01(b) hereof, on its costs or rate
of return of maintaining Loans or its obligation to make Loans, or on amounts
receivable by it in respect of Loans, and of the amounts required to
compensate such Lender under this Section 5.01, shall be conclusive, provided
that such determinations and allocations are made on a reasonable basis.
5.02 Limitation on Types of Loans. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of the Eurodollar Base
Rate under the second sentence of the definition of the term "Eurodollar Base
Rate" in Section 1.01 hereof for any Interest Period for any Eurodollar Loan;
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(a) the Administrative Agent determines, which determination shall
be conclusive, that quotations of interest rates for the relevant
deposits referred to in the second sentence of the definition of the term
"Eurodollar Base Rate" in Section 1.01 hereof are not being provided in
the relevant amounts or for the relevant maturities for purposes of
determining rates of interest for Eurodollar Loans as provided herein; or
(b) if the related Loans are Revolving Credit Loans, the Majority
Revolving Credit Lenders or, if the related Loans are Term Loans, the
Majority Term Loan Lenders, determine, which determination shall be
conclusive, and notify the Administrative Agent that the relevant rates
of interest referred to in the second sentence of the definition of the
term "Eurodollar Base Rate" in Section 1.01 hereof upon the basis of
which the rate of interest for Eurodollar Loans for such Interest Period
is to be determined are not likely adequately to cover the cost to such
Lenders of making or maintaining Eurodollar Loans for such Interest
Period;
then the Administrative Agent shall give the Company and each Lender prompt
notice thereof and, so long as such condition remains in effect, the Lenders
shall be under no obligation to make additional Eurodollar Loans, to Continue
Eurodollar Loans or to Convert Loans of any other Type into Eurodollar Loans,
and the Company shall, on the last day(s) of the then current Interest
Period(s) for the outstanding Eurodollar Loans, either prepay such Loans or
Convert such Loans into another Type of Loan in accordance with Section 2.09
hereof.
5.03 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful, or any central bank or
other governmental authority asserts that it is unlawful, for any Lender or
its Applicable Lending Office to honor its obligation to make or maintain
Eurodollar Loans hereunder (and, in the sole opinion of such Lender, the
designation of a different Applicable Lending Office would either not avoid
such unlawfulness or would be disadvantageous to such Lender), then such
Lender shall promptly notify the Company thereof (with a copy to the
Administrative Agent) and such Lender's obligation to make or Continue, or to
Convert Loans of any other Type into, Eurodollar Loans shall be suspended
until such time as such Lender may again make and maintain Eurodollar Loans
(in which case the provisions of Section 5.04 hereof shall be applicable).
5.04 Treatment of Affected Loans. If the obligation of any Lender
to make Eurodollar Loans or to Continue, or to Convert Base Rate Loans into,
Eurodollar Loans shall be suspended pursuant to Section 5.01 or 5.03 hereof,
such Lender's Eurodollar Loans shall be automatically Converted into Base
Rate Loans on the last day(s) of the then current Interest
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Period(s) for Eurodollar Loans (or, in the case of a Conversion resulting
from a circumstance described in Section 5.03 hereof, on such earlier date as
such Lender may specify to the Company with a copy to the Administrative
Agent) and, unless and until such Lender gives notice as provided below that
the circumstances specified in Section 5.01 or 5.03 hereof that gave rise to
such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Eurodollar Loans shall be applied instead to
its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such
Lender as Eurodollar Loans shall be made or Converted into Base Rate
Loans, and all Base Rate Loans of such Lender that would otherwise be
Converted into Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Company with a copy to the Administrative
Agent that the circumstances specified in Section 5.01 or 5.03 hereof that
gave rise to the Conversion of such Lender's Eurodollar Loans pursuant to
this Section 5.04 no longer exist (which such Lender agrees to do promptly
upon such circumstances ceasing to exist) at a time when Eurodollar Loans of
the same Class made by other Lenders are outstanding, such Lender's Base Rate
Loans of such Class shall be automatically Converted, on the first day(s) of
the next succeeding Interest Period(s) for such outstanding Eurodollar Loans,
to the extent necessary so that, after giving effect thereto, all Base Rate
Loans and Eurodollar Loans of such Class are allocated among the Lenders
ratably (as to principal amounts, Types and Interest Periods) in accordance
with their respective Commitments of such Class.
5.05 Compensation. The Company shall pay to the Administrative
Agent for account of each Lender, upon the request of such Lender through the
Administrative Agent, such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost or
expense that such Lender determines is attributable to:
(a) any payment, mandatory or optional prepayment or Conversion of
a Eurodollar Loan made by such Lender for any reason (including, without
limitation, the acceleration of the Loans pursuant to Section 10 hereof)
on a date other than the last day of the Interest Period for such Loan; or
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(b) any failure by the Company for any reason (including, without
limitation, the failure of any of the conditions precedent specified in
Section 7 hereof to be satisfied) to borrow a Eurodollar Loan from such
Lender on the date for such borrowing specified in the relevant notice of
borrowing given pursuant to Section 2.02 hereof.
Without limiting the effect of the preceding sentence, such compensation
shall include an amount equal to the excess, if any, of (i) the amount of
interest that otherwise would have accrued on the principal amount so paid,
prepaid, Converted or not borrowed for the period from the date of such
payment, prepayment, Conversion or failure to borrow to the last day of the
then current Interest Period for such Loan (or, in the case of a failure to
borrow, the Interest Period for such Loan that would have commenced on the
date specified for such borrowing) at the applicable rate of interest for
such Loan provided for herein over (ii) the amount of interest that otherwise
would have accrued on such principal amount at a rate per annum equal to the
interest component of the amount such Lender would have bid in the London
interbank market for Dollar deposits of leading banks in amounts comparable
to such principal amount and with maturities comparable to such period (as
reasonably determined by such Lender).
5.06 Additional Costs in Respect of Letters of Credit. Without
limiting the obligations of the Company under Section 5.01 hereof (but
without duplication), if as a result of any Regulatory Change or any
risk-based capital guideline or other requirement heretofore or hereafter
issued by any government or governmental or supervisory authority
implementing at the national level the Basle Accord there shall be imposed,
modified or deemed applicable any tax, reserve, special deposit, capital
adequacy or similar requirement against or with respect to or measured by
reference to Letters of Credit issued or to be issued hereunder and the
result shall be to increase the cost to any Lender or Lenders of issuing (or
purchasing participations in) or maintaining its obligation hereunder to
issue (or purchase participations in) any Letter of Credit hereunder or
reduce any amount receivable by any Lender hereunder in respect of any Letter
of Credit (which increases in cost, or reductions in amount receivable, shall
be the result of such Lender's or Lenders' reasonable allocation of the
aggregate of such increases or reductions resulting from such event), then,
upon demand by such Lender or Lenders (through the Administrative Agent), the
Company shall pay immediately to the Administrative Agent for account of such
Lender or Lenders, from time to time as specified by such Lender or Lenders
(through the Administrative Agent), such additional amounts as shall be
sufficient to compensate such Lender or Lenders (through the Administrative
Agent) for such increased costs or reductions in amount. A statement as to
such increased costs or reductions in amount incurred by any such Lender or
Lenders, submitted by such Lender or Lenders to the Company shall be
conclusive in the absence of manifest error as to the amount thereof.
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5.07 U.S. Taxes.
(a) The Company agrees to pay to each Lender that is not a U.S.
Person such additional amounts as are necessary in order that the net payment
of any amount due to such non-U.S. Person hereunder after deduction for or
withholding in respect of any U.S. Taxes imposed with respect to such payment
(or in lieu thereof, payment of such U.S. Taxes by such non-U.S. Person),
will not be less than the amount stated herein to be then due and payable,
provided that the foregoing obligation to pay such additional amounts shall
not apply:
(i) to any payment to any Lender hereunder (other than in
respect of any Registered Loan) unless such Lender is, on the date hereof
(or on the date it becomes a Lender hereunder as provided in Section
12.06(b) hereof) and on the date of any change in the Applicable Lending
Office of such Lender, either entitled to submit a Form 1001 (relating to
such Lender and entitling it to a complete exemption from withholding on
all interest to be received by it hereunder in respect of the Loans) or
Form 4224 (relating to all interest to be received by such Lender
hereunder in respect of the Loans),
(ii) to any payment to any Lender hereunder in respect of a
Registered Loan (a "Registered Holder"), unless such Registered Holder
(or, if such Registered Holder is not the beneficial owner of such
Registered Loan, the beneficial owner thereof) is, on the date hereof (or
on the date such Registered Holder becomes a Lender as provided in
Section 12.06(b) hereof) and on the date of any change in the Applicable
Lending Office of such Lender, entitled to submit a Form W-8, together
with an annual certificate stating that such Registered Holder (or
beneficial owner, as the case may be) (w) is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code, (x) is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of
the Company, (y) is not a controlled foreign corporation related to the
Company (within the meaning of Section 871(h)(4)(B) of the Code) and (z)
is not acting as a conduit entity (within the meaning of U.S. Treasury
Regulation Section 1.881-3), or
(iii) to any U.S. Taxes imposed solely by reason of the failure by
such non-U.S. Person (or, if such non-U.S. Person is not the beneficial
owner of the relevant Loan, such beneficial owner) to comply with
applicable certification, information, documentation or other reporting
requirements (including, without limitation, the failure to timely submit
a Form 1001, 4224 or W-8 (together with the annual certificate required
under clause (ii) above), as applicable) concerning the nationality,
residence, identity
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or connections with the United States of America of such non-U.S. Person
(or beneficial owner, as the case may be) if such compliance is required
by statute or regulation of the United States of America as a
precondition to relief or exemption from such U.S. Taxes.
For the purposes of this Section 5.07(a), (A) "Form 1001" shall mean Form
1001 (Ownership, Exemption, or Reduced Rate Certificate) of the Department of
the Treasury of the United States of America, (B) "Form 4224" shall mean Form
4224 (Exemption from Withholding of Tax on Income Effectively Connected with
the Conduct of a Trade or Business in the United States) of the Department of
the Treasury of the United States of America and (C) "Form W-8" shall mean
Form W-8 (Certificate of Foreign Status) of the Department of Treasury of the
United States of America. Each of the Forms referred to in the foregoing
clauses (A), (B) and (C) shall include such successor and related forms as
may from time to time be adopted by the relevant taxing authorities of the
United States of America to document a claim to which such Form relates.
(b) Within 30 days after paying any amount to the Administrative
Agent or any Lender from which it is required by law to make any deduction or
withholding, and within 30 days after it is required by law to remit such
deduction or withholding to any relevant taxing or other authority, the
Company shall deliver to the Administrative Agent for delivery to such
non-U.S. Person evidence satisfactory to such Person of such deduction,
withholding or payment (as the case may be).
5.08 Compensation for Repurchases of Existing Loans. Prior to the
execution and delivery of this Agreement Chase has purchased, at the request
of the Company, certain of the Loans outstanding under the Existing Credit
Agreement not already held by it from certain of the Existing Lenders. The
Company hereby agrees to pay to Chase in respect of the Eurodollar Loans so
purchased by it from such Existing Lenders an amount equal to the excess, if
any, of (i) the interest that Chase would have been entitled to receive
hereunder in respect of such Eurodollar Loans through the remaining portion
of the Interest Periods therefor continued hereunder pursuant to Section
2.01(d) hereof (assuming such Loans had been made hereunder by Chase to the
Company, on the date of such acquisition, as Eurodollar Loans having Interest
Periods equal in duration to the periods from and including the date such
Loans were so acquired by Chase to and including the date such continued
Interest Periods expire) over (ii) the interest Chase will in fact receive on
such Loans for such period pursuant to Section 3.02 hereof, such excess to be
payable on the last day of such continued Interest Period.
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Section 6. Guarantee.
6.01 The Guarantee. The Subsidiary Guarantors hereby jointly and
severally guarantee to each Lender and the Administrative Agent and their
respective successors and assigns the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of the principal
of and interest on the Loans made by the Lenders to, and the Notes held by
each Lender of, the Company and all other amounts from time to time owing to
the Lenders or the Administrative Agent by the Company under this Agreement
and under the Notes and by any Obligor under any of the other Loan Documents
(including, without limitation, all Reimbursement Obligations), and all
obligations of the Company or any of its Subsidiaries to any Lender or any
affiliate of a Lender in respect of any Interest Rate Protection Agreement,
in each case strictly in accordance with the terms thereof (such obligations
being herein collectively called the "Guaranteed Obligations"). The
Subsidiary Guarantors hereby further jointly and severally agree that if the
Company shall fail to pay in full when due (whether at stated maturity, by
acceleration or otherwise) any of the Guaranteed Obligations, the Subsidiary
Guarantors will promptly pay the same, without any demand or notice
whatsoever, and that in the case of any extension of time of payment or
renewal of any of the Guaranteed Obligations, the same will be promptly paid
in full when due (whether at extended maturity, by acceleration or otherwise)
in accordance with the terms of such extension or renewal.
6.02 Obligations Unconditional. The obligations of the Subsidiary
Guarantors under Section 6.01 hereof are absolute and unconditional, joint
and several, irrespective of the value, genuineness, validity, regularity or
enforceability of the obligations of the Company under this Agreement, the
Notes or any other agreement or instrument referred to herein or therein, or
any substitution, release or exchange of any other guarantee of or security
for any of the Guaranteed Obligations, and, to the fullest extent permitted
by applicable law, irrespective of any other circumstance whatsoever that
might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 6.02 that the
obligations of the Subsidiary Guarantors hereunder shall be absolute and
unconditional, joint and several, under any and all circumstances. Without
limiting the generality of the foregoing, it is agreed that the occurrence of
any one or more of the following shall not alter or impair the liability of
the Subsidiary Guarantors hereunder, which shall remain absolute and
unconditional as described above:
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(i) at any time or from time to time, without notice to the
Subsidiary Guarantors, the time for any performance of or compliance with
any of the Guaranteed Obligations shall be extended, or such performance
or compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of this
Agreement or the Notes or any other agreement or instrument referred to
herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this Agreement
or the Notes or any other agreement or instrument referred to herein or
therein shall be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of,
the Administrative Agent or any Lender or Lenders as security for any of
the Guaranteed Obligations shall fail to be perfected.
The Subsidiary Guarantors hereby expressly waive diligence, presentment,
demand of payment, protest and all notices whatsoever, and any requirement
that the Administrative Agent or any Lender exhaust any right, power or
remedy or proceed against the Company under this Agreement or the Notes or
any other agreement or instrument referred to herein or therein, or against
any other Person under any other guarantee of, or security for, any of the
Guaranteed Obligations.
6.03 Reinstatement. The obligations of the Subsidiary Guarantors
under this Section 6 shall be automatically reinstated if and to the extent
that for any reason any payment by or on behalf of the Company in respect of
the Guaranteed Obligations is rescinded or must be otherwise restored by any
holder of any of the Guaranteed Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, and the Subsidiary
Guarantors jointly and severally agree that they will indemnify the
Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, fees of counsel) incurred by the
Administrative Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending
against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.
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6.04 Subrogation. The Subsidiary Guarantors hereby jointly and
severally agree that until the payment and satisfaction in full of all
Guaranteed Obligations and the expiration and termination of the Commitments
of the Lenders under this Agreement they shall not exercise any right or
remedy arising by reason of any performance by them of their guarantee in
Section 6.01 hereof, whether by subrogation or otherwise, against the Company
or any other Subsidiary Guarantor of any of the Guaranteed Obligations or any
security for any of the Guaranteed Obligations.
6.05 Remedies. The Subsidiary Guarantors jointly and severally
agree that, as between the Subsidiary Guarantors and the Lenders, the
obligations of the Company under this Agreement and the Notes may be declared
to be forthwith due and payable as provided in Section 10 hereof (and shall
be deemed to have become automatically due and payable in the circumstances
provided in said Section 10) for purposes of Section 6.01 hereof
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable)
as against the Company and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the Company) shall forthwith
become due and payable by the Subsidiary Guarantors for purposes of said
Section 6.01.
6.06 Instrument for the Payment of Money. Each Subsidiary
Guarantor hereby acknowledges that the guarantee in this Section 6
constitutes an instrument for the payment of money, and consents and agrees
that any Lender or the Administrative Agent, at its sole option, in the event
of a dispute by such Subsidiary Guarantor in the payment of any moneys due
hereunder, shall have the right to bring motion-action under New York CPLR
Section 3213.
6.07 Continuing Guarantee. The guarantee in this Section 6 is a
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
6.08 Rights of Contribution. The Subsidiary Guarantors hereby
agree, as between themselves, that if any Subsidiary Guarantor shall become
an Excess Funding Guarantor (as defined below) by reason of the payment by
such Subsidiary Guarantor of any Guaranteed Obligations, each other
Subsidiary Guarantor shall, on demand of such Excess Funding Guarantor (but
subject to the next sentence), pay to such Excess Funding Guarantor an amount
equal to such Subsidiary Guarantor's Pro Rata Share (as defined below and
determined, for this purpose, without reference to the Properties, debts and
liabilities of such Excess Funding Guarantor) of the Excess Payment (as
defined below) in respect of such Guaranteed Obligations.
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The payment obligation of a Subsidiary Guarantor to any Excess Funding
Guarantor under this Section 6.08 shall be subordinate and subject in right
of payment to the prior payment in full of the obligations of such Subsidiary
Guarantor under the other provisions of this Section 6 and such Excess
Funding Guarantor shall not exercise any right or remedy with respect to such
excess until payment and satisfaction in full of all of such obligations.
For purposes of this Section 6.08, (i) "Excess Funding Guarantor"
shall mean, in respect of any Guaranteed Obligations, a Subsidiary Guarantor
that has paid an amount in excess of its Pro Rata Share of such Guaranteed
Obligations, (ii) "Excess Payment" shall mean, in respect of any Guaranteed
Obligations, the amount paid by an Excess Funding Guarantor in excess of its
Pro Rata Share of such Guaranteed Obligations and (iii) "Pro Rata Share"
shall mean, for any Subsidiary Guarantor, the ratio (expressed as a
percentage) of (x) the amount by which the aggregate present fair saleable
value of all Properties of such Subsidiary Guarantor (excluding any shares of
stock of any other Subsidiary Guarantor) exceeds the amount of all the debts
and liabilities of such Subsidiary Guarantor (including contingent,
subordinated, unmatured and unliquidated liabilities, but excluding the
obligations of such Subsidiary Guarantor hereunder and any obligations of any
other Subsidiary Guarantor that have been Guaranteed by such Subsidiary
Guarantor) to (y) the amount by which the aggregate fair saleable value of
all Properties of all of the Company and the Subsidiary Guarantors exceeds
the amount of all the debts and liabilities (including contingent,
subordinated, unmatured and unliquidated liabilities, but excluding the
obligations of the Company and the Subsidiary Guarantors hereunder and under
the other Loan Documents) of the Company and the Subsidiary Guarantors,
determined (A) with respect to any Subsidiary Guarantor that is a party
hereto on the Effective Date, as of the Effective Date, and (B) with respect
to any other Subsidiary Guarantor, as of the date such Subsidiary Guarantor
becomes a Subsidiary Guarantor hereunder.
6.09 General Limitation on Guarantee Obligations. In any action or
proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Subsidiary Guarantor under
Section 6.01 hereof would otherwise, taking into account the provisions of
Section 6.08 hereof, be held or determined to be void, invalid or
unenforceable, or subordinated to the claims of any other creditors, on
account of the amount of its liability under said Section 6.01, then,
notwithstanding any other provision hereof to the contrary, the amount of
such liability shall, without any further action by such Subsidiary
Guarantor, any Lender, the Administrative Agent or any other Person, be
automatically limited and reduced to the highest amount that is valid and
enforceable and not subordinated to the claims of other creditors as
determined in such action or proceeding.
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Section 7. Conditions Precedent.
7.01 Initial Extension of Credit. The effectiveness of this
Agreement (and the amendment and restatement of the Existing Credit Agreement
to be effected hereby) and the obligation of any Lender to make its initial
extension of credit hereunder (whether by making a Loan or issuing a Letter
of Credit) is subject to the conditions precedent that (i) such effectiveness
shall occur on or before the Term Loan Commitment Termination Date and (ii)
the Administrative Agent shall have received the following documents (with,
in the case of clauses (a), (b), (c), (d) and (e) below, sufficient copies
for each Lender), each of which shall be satisfactory to the Administrative
Agent (and to the extent specified below, to each Lender) in form and
substance:
(a) Corporate Documents. Certified copies of the charter and
by-laws (or equivalent documents) of each Obligor and of all corporate
authority for each Obligor (including, without limitation, board of
director resolutions and evidence of the incumbency, including specimen
signatures, of officers) with respect to the execution, delivery and
performance of such of the Loan Documents to which such Obligor is
intended to be a party and each other document to be delivered by such
Obligor from time to time in connection herewith and the extensions of
credit hereunder (and the Administrative Agent and each Lender may
conclusively rely on such certificate until it receives notice in writing
from such Obligor to the contrary).
(b) Officer's Certificate. A certificate of the Chief Financial
Officer of the Company, dated the Effective Date, to the effect (i) set
forth in the first sentence of Section 7.02 hereof and (ii) detailing
compliance by the Company with all covenants set forth in Section 9.10 as
of the Effective Date.
(c) Opinions of Counsel to the Obligors. Opinions, dated the
Effective Date, of (i) Wachtell, Lipton, Rosen & Katz, special New York
counsel to the Obligors, substantially in the form of Exhibit D-1 hereto
and (ii) David Stigler, Esq., General Counsel of the Obligors,
substantially in the form of Exhibit D-2 hereof, in each case covering
such other matters as the Administrative Agent or any Lender may
reasonably request (and each Obligor hereby instructs each such counsel
to deliver such opinion to the Lenders and the Administrative Agent).
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(d) Opinion of Special New York Counsel to Chase. An opinion,
dated the Effective Date, of Milbank, Tweed, Hadley & McCloy, special New
York counsel to Chase, substantially in the form of Exhibit E hereto (and
Chase hereby instructs such counsel to deliver such opinion to the
Lenders).
(e) Notes. The Notes, duly completed and executed for each Lender
(except that, in the case of a Registered Holder, Notes shall be required
only to the extent that such Registered Holder shall have requested the
execution and delivery of a Note pursuant to Section 2.08(e) hereof).
(f) Security Agreement. The Security Agreement, duly executed and
delivered by the Company, each of the Subsidiary Guarantors and the
Administrative Agent and the certificates identified under the name of
each such Obligor in Annex 1 thereto, in each case accompanied by undated
stock powers executed in blank. In addition, each Obligor shall have
taken such other action (including, without limitation, delivering to the
Administrative Agent, for filing, appropriately completed and duly
executed copies of Uniform Commercial Code financing statements) as the
Administrative Agent shall have requested in order to perfect the
security interests created pursuant to the Security Agreement.
(g) Mortgages and Title Insurance. The following documents, each
of which shall be executed (and, where appropriate, acknowledged) by
Persons satisfactory to the Administrative Agent:
(i) with respect to each Mortgage, an instrument of
Modification and Confirmation pursuant to which such Mortgage shall
have been amended in form and substance satisfactory to the
Administrative Agent (and in the case of the Mortgage relating to
the Company's headquarters site in Windsor, Connecticut, in the form
of Exhibit B hereto) to spread the Lien thereof to secure the
obligations under this Agreement, in each case duly executed,
acknowledged and delivered (in such number of copies as the
Administrative Agent shall have requested) by the respective parties
thereto, together with, in the case of any Mortgage covering a
leasehold interest, a consent of the respective landlord thereunder
(to the extent required under the respective lease); and
(ii) mortgagee down-date continuation reports for, and
modification/date-down endorsements to, existing title policies
issued pursuant to the Existing
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Credit Agreement, subject only to such exceptions as shall be
satisfactory to the Majority Lenders;
(iii) for filing in the appropriate county land offices,
Uniform Commercial Code financing statements covering fixtures, in
each case appropriately completed and duly executed; and
(iv) such other documents as may be reasonably requested by
the title companies to record the instruments of Modification and
Confirmation and to issue the modification/date-down endorsements.
In addition, the Company shall have paid to the Title Companies all
expenses and premiums of the Title Companies in connection with the
issuance of such policies and shall have paid to the Title Companies an
amount equal to the recording and stamp taxes payable in connection with
recording the Mortgages in the appropriate county land office(s).
(h) Insurance. Certificates of insurance evidencing the existence
of all insurance required to be maintained by the Company pursuant to
Section 9.04 hereof and the designation of the Administrative Agent as
the loss payee or additional named insured, as the case may be,
thereunder to the extent required by said Section 9.04, such certificates
to be in such form and contain such information as is specified in said
Section 9.04.
(i) Solvency Analysis. A certificate of the Chief Financial
Officer of the Company to the effect that, as of the Effective Date and
after giving effect to the initial extension of credit hereunder and to
the other transactions contemplated hereby, (i) the aggregate value of
all Properties of the Company and its Subsidiaries at their present fair
saleable value (i.e., the amount that may be realized within a reasonable
time, considered to be six months to one year, either through collection
or sale at the regular market value, conceiving the latter as the amount
that could be obtained for the Property in question within such period by
a capable and diligent businessman from an interested buyer who is
willing to purchase under ordinary selling conditions), exceed the amount
of all the debts and liabilities (including contingent, subordinated,
unmatured and unliquidated liabilities) of the Company and its
Subsidiaries, (ii) the Company and its Subsidiaries will not, on a
consolidated basis, have an unreasonably small capital with which to
conduct their business operations as heretofore conducted and (iii) the
Company and its Subsidiaries will have, on a consolidated basis,
sufficient cash flow to enable them to pay their debts
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as they mature. Such certificate shall also state that the financial
projections and underlying assumptions upon which such conclusions are
based are fair and reasonable and accurately computed.
(j) Payment of Certain Amounts; Additional Indebtedness. Evidence
that all amounts owing to the Existing Lenders under the Existing Credit
Agreement (including, without limitation, all amounts owing in respect of
principal and accrued and unpaid interest and fees and amounts owing
pursuant to Section 5.05 of the Existing Credit Agreement) shall have
been paid to such Existing Lenders in full in the manner contemplated by
Section 2.01(d) hereof. Evidence that as of the Effective Date no
Indebtedness exists of the Company or any of its Subsidiaries except for
Indebtedness permitted hereby.
(k) Certain Financial Matters. A certificate of the Chief
Financial Officer of the Company (i) to the effect that EBITDA for the
period of four fiscal quarters ended on June 28, 1997 shall be at least
equal to $73,000,000 and that the aggregate outstanding principal amount
of all Indebtedness (but excluding liabilities in respect of letters of
credit backing worker's compensation) of the Company and its Subsidiaries
hereunder as of the Effective Date (determined on a consolidated basis
without duplication in accordance with GAAP) shall not be in excess of
$220,000,000, reduced dollar for dollar by the amount by which Loans
hereunder made for repurchases of stock of the Company made on the
Effective Date are less than $60,000,000 (each of which conclusions shall
be supported by such evidence as any Lender shall have requested) and
(ii) setting forth the Total Debt Ratio as at the Effective Date
(determined so as to give effect to the aggregate amount of Loans to be
made on the Effective Date).
(l) Environmental Survey and Questionnaire. An environmental
survey and assessment prepared by a firm of licensed engineers (familiar
with the identification of toxic and hazardous substances) in form and
substance satisfactory to each Lender, such environmental survey and
assessment to be based upon physical on-site inspections by such firm of
each of the existing sites and facilities owned, operated or leased by
the Company and its Subsidiaries, as well as an historical review of the
uses of such sites and facilities and of the business and operations of
the Company and its Subsidiaries (including any former Subsidiaries or
divisions of the Company or any of its Subsidiaries that have been
disposed of prior to the date of such survey and assessment and with
respect to which the Company or any of its Subsidiaries may have retained
liability for claims in respect of environmental matters). In addition,
if requested by the Majority
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Lenders (through the Administrative Agent), the Company shall have
completed (and delivered to each Lender) an environmental risk
questionnaire in a form provided to the Company by the Administrative
Agent (and containing such inquiries with respect to environmental
matters as shall have been requested by any Lender, through the
Administrative Agent, to be included in such questionnaire), and the
responses to such questionnaire (and the underlying facts and
circumstances shown thereby) shall be in form and substance satisfactory
to each Lender. Additionally, where appropriate, materials updating any
of the environmental reviews discussed above.
(m) Financial Statements. To the extent not previously delivered,
(i) the financial statements as at September 28, 1996 and June 28, 1997
referred to in Section 8.02 hereof together with a certificate of the
Chief Financial Officer of the Company making the representations set out
in said Section 8.02 and (ii) a certificate of the Chief Financial
Officer of the Company calculating EBITDA for the four quarter period
ending on June 28, 1997 and for the fiscal year ending on September 28,
1997.
(n) Intercompany Subordination Agreements. The Intercompany
Subordination Agreements shall have been executed and delivered.
(o) Other Documents. Such other documents as the Administrative
Agent or any Lender or special New York counsel to Chase may reasonably
request.
The obligation of any Lender to make its initial extension of credit
hereunder is also subject to the payment by the Company of such fees as the
Company shall have agreed to pay to any Lender or the Administrative Agent in
connection herewith, including, without limitation, the reasonable fees and
expenses of Milbank, Tweed, Hadley & McCloy, special New York counsel to
Chase, in connection with the negotiation, preparation, execution and
delivery of this Agreement and the Notes and the other Loan Documents and the
extensions of credit hereunder (to the extent that statements for such fees
and expenses have been delivered to the Company).
7.02 Initial and Subsequent Extensions of Credit. The obligation
of the Lenders to make any Loan or otherwise extend credit to the Company
upon the occasion of each borrowing or other extension of credit hereunder
(including the initial borrowing) is subject to the further conditions
precedent that, both immediately prior to the making of such Loan or other
extension of credit and also after giving effect thereto and to the intended
use thereof:
(a) no Default shall have occurred and be continuing; and
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(b) the representations and warranties made by the Company in
Section 8 hereof, and by each Obligor in each of the other Loan Documents
to which it is a party, shall be true and complete on and as of the date
of the making of such Loan or other extension of credit with the same
force and effect as if made on and as of such date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date).
Each notice of borrowing or request for the issuance of a Letter of Credit by
the Company hereunder shall constitute a certification by the Company to the
effect set forth in the preceding sentence (both as of the date of such
notice or request and, unless the Company otherwise notifies the
Administrative Agent prior to the date of such borrowing or issuance, as of
the date of such borrowing or issuance).
Section 8. Representations and Warranties. The Company represents
and warrants to the Administrative Agent and the Lenders that:
8.01 Corporate Existence. Each of the Company and its
Subsidiaries: (a) is a corporation, partnership or other entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; (b) has all requisite corporate or other
power, and has all material governmental licenses, authorizations, consents
and approvals necessary to own its assets and carry on its business as now
being or as proposed to be conducted; and (c) is qualified to do business and
is in good standing in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary and where failure so to
qualify could (either individually or in the aggregate) have a Material
Adverse Effect.
8.02 Financial Condition. The Company has heretofore furnished to
each of the Lenders the following financial statements:
(i) consolidated balance sheets of the Company and its
Subsidiaries as at September 28, 1996 and the related consolidated
statements of income, retained earnings and cash flows of the Company and
its Subsidiaries for the fiscal year ended on said date, with the opinion
thereon of Ernst & Young LLP, and
(ii) the unaudited consolidated balance sheets of the Company and
its Subsidiaries as at June 28, 1997 and the related consolidated
statements of income,
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retained earnings and cash flows of the Company and its Subsidiaries for
the nine-month period ended on such date.
All such financial statements are complete and correct and fairly present the
consolidated financial condition of the Company and its Subsidiaries and the
consolidated results of their operations for the fiscal year and nine-month
period ended on said dates, all in accordance with generally accepted
accounting principles and practices applied on a consistent basis. None of
the Company and its Subsidiaries has on the date hereof any material
contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in said
balance sheets as at said dates. Since September 28, 1996, there has been no
material adverse change in the consolidated financial condition, operations,
business or prospects taken as a whole of the Company and its Subsidiaries
from that set forth in said financial statements as at said date.
8.03 Litigation. Except as set forth in Schedule V hereto, there
are no legal or arbitral proceedings, or any proceedings by or before any
governmental or regulatory authority or agency, now pending or (to the
knowledge of the Company) threatened against the Company or any of its
Subsidiaries that could reasonably be expected (either individually or in the
aggregate) to have a Material Adverse Effect, or that seek to enjoin or
otherwise challenge any of the transactions contemplated by this Agreement.
8.04 No Breach. None of the execution and delivery of this
Agreement and the Notes and the other Loan Documents, the consummation of the
transactions herein and therein contemplated or compliance with the terms and
provisions hereof and thereof will conflict with or result in a breach of, or
require any consent under, the charter or by-laws of any Obligor, or any
applicable law or regulation, or any order, writ, injunction or decree of any
court or governmental authority or agency, or any agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which any of
them or any of their Property is bound or to which any of them is subject, or
constitute a default under any such agreement or instrument, or (except for
the Liens created pursuant to the Security Documents) result in the creation
or imposition of any Lien upon any Property of the Company or any of its
Subsidiaries pursuant to the terms of any such agreement or instrument.
8.05 Action. Each Obligor has all necessary corporate power,
authority and legal right to execute, deliver and perform its obligations under
each of the Loan Documents to which it is a party; the execution, delivery and
performance by each Obligor of each of the Loan Documents to which it is a party
have been duly authorized by all necessary corporate action on
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its part (including, without limitation, any required shareholder approvals);
and this Agreement has been duly and validly executed and delivered by each
Obligor and constitutes, and each of the Notes and the other Loan Documents
to which it is a party when executed and delivered by such Obligor (in the
case of the Notes, for value) will constitute, its legal, valid and binding
obligation, enforceable against each Obligor in accordance with its terms,
except as such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability affecting
the enforcement of creditors' rights and (b) the application of general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
8.06 Approvals. No authorizations, approvals or consents of, and
no filings or registrations with, any governmental or regulatory authority or
agency, or any securities exchange, are necessary for the execution, delivery
or performance by any Obligor of this Agreement or any of the other Loan
Documents to which it is a party or for the legality, validity or
enforceability hereof or thereof, except for filings and recordings in
respect of the Liens created pursuant to the Security Documents.
8.07 Use of Credit. Neither the Company nor any of its
Subsidiaries is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose, whether immediate,
incidental or ultimate, of buying or carrying Margin Stock, and no part of
the proceeds of any Loan hereunder will be used to buy or carry any Margin
Stock.
8.08 ERISA. Each Plan, and, to the knowledge of the Company, each
Multiemployer Plan, is in compliance in all material respects with, and has
been administered in all material respects in compliance with, the applicable
provisions of ERISA, the Code and any other Federal or State law, and no
event or condition has occurred and is continuing as to which the Company
would be under an obligation to furnish a report to the Lenders under Section
9.01(e) hereof.
8.09 Taxes. The Company and its Subsidiaries are members of an
affiliated group of corporations filing consolidated returns for Federal
income tax purposes, of which the Company is the "common parent" (within the
meaning of Section 1504 of the Code) of such group. Except as set forth in
Schedule VI hereto, the Company and its Subsidiaries have filed all Federal
income tax returns and all other material tax returns that are required to be
filed by them and have paid all taxes due pursuant to such returns or
pursuant to any assessment received by the Company or any of its
Subsidiaries. The charges, accruals and reserves on the books of the Company
and its Subsidiaries in respect of taxes and other governmental charges are,
in the
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opinion of the Company, adequate. Except as set forth in Schedule VI hereto,
the Company has not given or been requested to give a waiver of the statute
of limitations relating to the payment of any Federal, state, local and
foreign taxes or other impositions.
8.10 Investment Company Act. Neither the Company nor any of its
Subsidiaries is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of
1940, as amended.
8.11 Public Utility Holding Company Act. Neither the Company nor
any of its Subsidiaries is a "holding company", or an "affiliate" of a
"holding company" or a "subsidiary company" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
8.12 Material Agreements and Liens.
(a) Part A of Schedule I hereto is a complete and correct list of
each credit agreement, loan agreement, indenture, agreement for purchase of
Property or services, guarantee, letter of credit or other arrangement
providing for or otherwise relating to any Indebtedness or any extension of
credit (or commitment for any extension of credit) to, or guarantee by, the
Company or any of its Subsidiaries outstanding on the date hereof as to which
(in the case of any such arrangement) the aggregate principal or face amount
equals or exceeds (or may equal or exceed) $500,000, and the aggregate
principal or face amount outstanding or that may become outstanding under
each such arrangement is correctly described in Part A of said Schedule I.
(b) Part B of Schedule I hereto is a complete and correct list of
each Lien securing Indebtedness of any Person outstanding on the date hereof
the aggregate principal or face amount of which equals or exceeds (or may
equal or exceed) $500,000 and covering any Property of the Company or any of
its Subsidiaries, and the aggregate Indebtedness secured (or that may be
secured) by each such Lien and the Property covered by each such Lien is
correctly described in Part B of said Schedule I.
8.13 Environmental Matters. Each of the Company and its
Subsidiaries has obtained all environmental, health and safety permits,
licenses and other authorizations required under all Environmental Laws to
carry on its business as now being or as proposed to be conducted, except to
the extent failure to have any such permit, license or authorization could
not reasonably be expected (either individually or in the aggregate) to have
a Material Adverse Effect. Each of such permits, licenses and authorizations
is in full force and effect and each of
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the Company and its Subsidiaries is in compliance with the terms and
conditions thereof, and is also in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in any applicable Environmental Law or in
any regulation, code, plan, order, decree, judgment, injunction, notice or
demand letter issued, entered, promulgated or approved thereunder, except to
the extent failure to comply therewith would not (either individually or in
the aggregate) have a Material Adverse Effect. Except as set forth on
Schedule VII hereto, no notice, notification, demand, request for
information, citation, summons or order has been issued, no complaint has
been filed, no penalty has been assessed and no investigation or review is
pending or (to the knowledge of the Company) threatened by any governmental
or other entity with respect to any alleged failure by the Company or any of
its Subsidiaries to have any environmental, health or safety permit, license
or other authorization required under any Environmental Law in connection
with the conduct of the business of the Company or any of its Subsidiaries or
with respect to any generation, treatment, storage, recycling,
transportation, discharge or disposal, or any Release of any Hazardous
Materials generated by the Company or any of its Subsidiaries. All
environmental investigations, studies, audits, tests, reviews or other
analyses conducted by or that are in the possession of the Company or any of
its Subsidiaries in relation to facts, circumstances or conditions at or
affecting any site or facility now or previously owned, operated or leased by
the Company or any of its Subsidiaries and that could result in a Material
Adverse Effect have been made available to the Lenders.
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8.14 Capitalization. The authorized capital stock of the Company
consists, on the date hereof, of an aggregate of 45,000,000 shares consisting
of (i) 40,000,000 shares of common stock, par value $.01 per share (of which
on August 23, 1997, 24,329,131 shares were duly and validly issued and
outstanding, excluding 4,077,371 shares which were held in treasury), each of
which shares is fully paid and nonassessable and (ii) 5,000,000 shares of
preferred stock, par value $.01 per share, none of which shares are
outstanding (or held in treasury). The Company has no shares reserved for
issuance except that, as of August 23, 1997, there were 2,268,896 shares of
common stock reserved for issuance pursuant to the existing employee option
plans and 500,000 shares of Series B Participating Preferred Stock, par value
$.01 per share ("Series B Preferred Shares") reserved for issuance upon
exercise of the Rights (the "Rights") to purchase Series B Preferred Shares,
issued pursuant to the Stockholder Protection Rights Agreement dated as of
February 5, 1993 by and between the Company and Mellon Securities Trust
Company, as Rights Agent (the "Rights Agreement"). As of the date hereof 23%
of such issued and outstanding shares of common stock are owned beneficially
and of record by Warburg Pincus and Warburg Affiliates. Set forth in
Schedule IV hereto is a complete and correct description of all warrants or
other options heretofore issued by the Company with respect to shares of its
capital stock outstanding on August 23, 1997.
As of the date hereof, except for the Rights and the Existing
Warrants, (x) there are no outstanding Equity Rights with respect to the
Company and (y) there are no outstanding obligations of the Company or any of
its Subsidiaries to repurchase, redeem, or otherwise acquire any shares of
capital stock of the Company nor are there any outstanding obligations of the
Company or any of its Subsidiaries to make payments to any Person, such as
"phantom stock" payments, where the amount thereof is calculated with
reference to the fair market value or equity value of the Company or any of
its Subsidiaries.
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8.15 Subsidiaries, Etc.
(a) Set forth in Part A of Schedule II hereto is a complete and
correct list of all of the Subsidiaries of the Company as of the date hereof,
together with, for each such Subsidiary, (i) the jurisdiction of organization
of such Subsidiary, (ii) each Person holding ownership interests in such
Subsidiary and (iii) the nature of the ownership interests held by each such
Person and the percentage of ownership of such Subsidiary represented by such
ownership interests. Except as disclosed in Part A of Schedule II hereto,
(x) each of the Company and its Subsidiaries owns, free and clear of Liens
(other than Liens created pursuant to the Security Documents), and has the
unencumbered right to vote, all outstanding ownership interests in each
Person shown to be held by it in Part A of Schedule II hereto, (y) all of the
issued and outstanding capital stock of each such Person organized as a
corporation is validly issued, fully paid and nonassessable and (z) there are
no outstanding Equity Rights with respect to such Person.
(b) Set forth in Part B of Schedule II hereto is a complete and
correct list of all Investments (other than Investments disclosed in Part A
of said Schedule II hereto and other than Investments of the type referred to
in clauses (b), (c), (d) or (e) of Section 9.08 hereof) held by the Company
or any of its Subsidiaries in any Person on the date hereof and, for each
such Investment, (x) the identity of the Person or Persons holding such
Investment and (y) the nature of such Investment. Except as disclosed in
Part B of Schedule II hereto, each of the Company and its Subsidiaries owns,
free and clear of all Liens (other than Liens created pursuant to the
Security Documents), all such Investments.
(c) None of the Subsidiaries of the Company is, on the date hereof,
subject to any indenture, agreement, instrument or other arrangement of the
type described in Section 9.16(c) hereof.
8.16 Title to Assets. The Company owns and has on the date hereof
good and marketable title (subject only to Liens permitted by Section 9.06
hereof) to the material Properties shown to be owned in the most recent
financial statements referred to in Section 8.02 hereof (other than
Properties disposed of in the ordinary course of business or otherwise
permitted to be disposed of pursuant to Section 9.05 hereof). The Company
owns and has on the date hereof good and marketable title to, and enjoys on
the date hereof peaceful and undisturbed possession of, all material
Properties (subject only to Liens permitted by Section 9.06 hereof) that are
necessary for the operation and conduct of its businesses.
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8.17 True and Complete Disclosure. The information, reports,
financial statements, exhibits and schedules furnished in writing by or on
behalf of the Obligors to the Administrative Agent or any Lender in
connection with the negotiation, preparation or delivery of this Agreement
and the other Loan Documents or included herein or therein or delivered
pursuant hereto or thereto, when taken as a whole (together with the
Information Memorandum) do not contain any untrue statement of material fact
or omit to state any material fact necessary to make the statements herein or
therein, in light of the circumstances under which they were made, not
misleading. All written information furnished after the date hereof by the
Company and its Subsidiaries to the Administrative Agent and the Lenders in
connection with this Agreement and the other Loan Documents and the
transactions contemplated hereby and thereby will be true, complete and
accurate in every material respect, or (in the case of projections) based on
reasonable estimates, on the date as of which such information is stated or
certified. There is no fact known to the Company that could have a Material
Adverse Effect that has not been disclosed herein, in the other Loan
Documents or in a report, financial statement, exhibit, schedule, disclosure
letter or other writing furnished to the Lenders for use in connection with
the transactions contemplated hereby or thereby.
8.18 Real Property. Set forth on Schedule III attached hereto is a
list, as of the date hereof, of all of the real property interests held by
the Company and its Subsidiaries, indicating in each case whether the
respective Property is owned or leased, the identity of the owner or lessee
and the location of the respective Property.
Section 9. Covenants of the Company. The Company covenants and
agrees with the Lenders and the Administrative Agent that, so long as any
Commitment, Loan or Letter of Credit Liability is outstanding and until
payment in full of all amounts payable by the Company hereunder:
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9.01 Financial Statements Etc. The Company shall deliver to the
Administrative Agent, together with copies for each of the Lenders (which copies
the Administrative Agent shall promptly forward to the Lenders):
(a) as soon as available and in any event within 45 days after the
end of each of the first three quarterly fiscal periods of each fiscal year
of the Company, consolidated statements of income, retained earnings and
cash flows of the Company and its Subsidiaries for such period and for the
period from the beginning of the respective fiscal year to the end of such
period, and the related consolidated balance sheets of the Company and its
Subsidiaries as at the end of such period, setting forth in each case in
comparative form the corresponding consolidated figures for the
corresponding periods in the preceding fiscal year (except that, in the
case of balance sheets, such comparison shall be to the last day of the
prior fiscal year), accompanied by a certificate of a senior financial
officer of the Company, which certificate shall state that said
consolidated financial statements fairly present the consolidated financial
condition and results of operations of the Company and its Subsidiaries in
accordance with generally accepted accounting principles, consistently
applied, as at the end of, and for, such period (subject to normal year-end
audit adjustments);
(b) as soon as available and in any event within 90 days after the
end of each fiscal year of the Company, consolidated statements of income,
retained earnings and cash flows of the Company and its Subsidiaries for
such fiscal year and the related consolidated balance sheets of the Company
and its Subsidiaries as at the end of such fiscal year, setting forth in
each case in comparative form the corresponding consolidated figures for
the preceding fiscal year, and accompanied by an opinion thereon of
independent certified public accountants of recognized national standing,
which opinion shall state that said consolidated financial statements
fairly present the consolidated financial condition and results of
operations of the Company and its Subsidiaries as at the end of, and for,
such fiscal year in accordance with generally accepted accounting
principles, and a statement of such accountants to the effect that, in
making the examination necessary for their opinion, nothing came to their
attention that caused them to believe that the Company was not in
compliance with Section 9.10 hereof, insofar as such Section relates to
accounting matters;
(c) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, that the
Company shall have filed with the Securities
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and Exchange Commission (or any governmental agency substituted therefor)
or any national securities exchange;
(d) promptly upon the mailing thereof to the shareholders of the
Company generally or to holders of Subordinated Indebtedness generally,
copies of all financial statements, reports and proxy statements so mailed,
and promptly following the receipt thereof by the Company, copies of any
notices or demands made by any holder (or a trustee for any holder) of any
Subordinated Indebtedness to or upon the Company;
(e) as soon as possible, and in any event within twenty Business Days
after the Company knows that any of the events or conditions specified
below with respect to any Plan or Multiemployer Plan has occurred or
exists, a statement signed by a senior financial officer of the Company
setting forth details respecting such event or condition and the action, if
any, that the Company or its ERISA Affiliate proposes to take with respect
thereto (and a copy of any report or notice required to be filed with or
given to the PBGC by the Company or an ERISA Affiliate with respect to such
event or condition):
(i) any reportable event, as defined in Section 4043(c) of
ERISA and the regulations issued thereunder, with respect to a Plan,
as to which the PBGC has not by regulation waived the notice
requirement of Section 4043(a) of ERISA (provided that a failure to
meet the minimum funding standard of Section 412 of the Code or
Section 302 of ERISA, including, without limitation, the failure to
make on or before its due date a required installment under
Section 412(m) of the Code or Section 302(e) of ERISA, shall be a
reportable event regardless of the issuance of any waivers in
accordance with Section 412(d) of the Code); and any request for a
waiver under Section 412(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of ERISA of a notice
of intent to terminate any Plan or any action taken by the Company or
an ERISA Affiliate to terminate any Plan;
(iii) the institution by the PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Company or any
ERISA Affiliate of a notice from a Multiemployer Plan that such action
has been taken by the PBGC with respect to such Multiemployer Plan;
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(iv) the complete or partial withdrawal from a Multiemployer
Plan by the Company or any ERISA Affiliate that results in liability
under Section 4201 or 4204 of ERISA (including the obligation to
satisfy secondary liability as a result of a purchaser default) or the
receipt by the Company or any ERISA Affiliate of notice from a
Multiemployer Plan that it is in reorganization or insolvency pursuant
to Section 4241 or 4245 of ERISA or that it intends to terminate or
has terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against the Company or any ERISA Affiliate to
enforce Section 515 of ERISA, which proceeding is not dismissed within
30 days;and
(vi) the adoption of an amendment to any Plan that, pursuant
to Section 401(a)(29) of the Code or Section 307 of ERISA, would
result in the loss of tax-exempt status of the trust of which such
Plan is a part if the Company or an ERISA Affiliate fails to timely
provide security to the Plan in accordance with the provisions of said
Sections;
(f) promptly after the Company knows or has reason to believe that
any Default has occurred, a notice of such Default describing the same in
reasonable detail and, together with such notice or as soon thereafter as
possible, a description of the action that the Company has taken or
proposes to take with respect thereto; and
(g) from time to time such other information regarding the financial
condition, operations, business or prospects of the Company or any of its
Subsidiaries (including, without limitation, any Plan or Multiemployer Plan
and any reports or other information required to be filed under ERISA) as
any Lender or the Administrative Agent may reasonably request.
The Company will furnish to the Administrative Agent, together with copies for
each of the Lenders (which copies the Administrative Agent shall promptly
forward to the Lenders), at the time it furnishes each set of financial
statements pursuant to Section 9.01(a) or 9.01(b) hereof, a certificate of a
senior financial officer of the Company (i) to the effect that no Default has
occurred and is continuing (or, if any Default has occurred and is continuing,
describing the same in reasonable detail and describing the action that the
Company has taken or proposes to take with respect thereto) and (ii) setting
forth in reasonable detail the computations necessary to determine whether the
Company is in compliance with Sections 9.07(f), 9.08(g), 9.09(b) and
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9.10 hereof as of the end of the respective monthly accounting period, quarterly
fiscal period or fiscal year. During the fourth fiscal quarter of each fiscal
year of the Company, the Company will furnish to the Administrative Agent,
together with copies for each of the Lenders (which copies the Administrative
Agent shall promptly forward to the Lenders) a copy of the Company's business
plan and projections for the upcoming fiscal year. During the first fiscal
quarter of each fiscal year of the Company, the Company will hold a meeting with
the Lenders at which time the Company will discuss its business and operations
and projections for such fiscal year.
9.02 Litigation. The Company will promptly give to the
Administrative Agent, together with copies for each of the Lenders (which copies
the Administrative Agent shall promptly forward to the Lenders), notice of all
legal or arbitral proceedings, and of all proceedings by or before any
governmental or regulatory authority or agency, and any material development in
respect of such legal or other proceedings, affecting the Company or any of its
Subsidiaries, except proceedings that, if adversely determined, would not
(either individually or in the aggregate) have a Material Adverse Effect.
Without limiting the generality of the foregoing, the Company will give to the
Administrative Agent, together with copies for each Lender (which copies the
Administrative Agent shall promptly forward to the Lenders), notice of the
assertion of any environmental matter by any Person against, or with respect to
the activities of, the Company or any of its Subsidiaries and notice of any
alleged violation of or non-compliance with any Environmental Laws or any
permits, licenses or authorizations, other than any environmental matter or
alleged violation that, if adversely determined, would not (either individually
or in the aggregate) have a Material Adverse Effect.
9.03 Existence, Etc. The Company will, and will cause each of its
Subsidiaries to:
(a) preserve and maintain its legal existence and all of its material
rights, privileges, licenses and franchises (provided that nothing in this
Section 9.03 shall prohibit any transaction expressly permitted under
Section 9.05 hereof);
(b) comply with the requirements of all applicable laws, rules,
regulations and orders of governmental or regulatory authorities if failure
to comply with such requirements could (either individually or in the
aggregate) have a Material Adverse Effect;
(c) pay and discharge all taxes, assessments and governmental charges
or levies imposed on it or on its income or profits or on any of its
Property prior to the date on
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which penalties attach thereto, except for any such tax, assessment,
charge or levy the payment of which is being contested in good faith and by
proper proceedings and against which adequate reserves are being
maintained;
(d) maintain all of its Properties used or useful in its business in
good working order and condition, ordinary wear and tear excepted;
(e) keep adequate records and books of account, in which complete
entries will be made in accordance with generally accepted accounting
principles consistently applied; and
(f) permit representatives of any Lender or the Administrative Agent,
during normal business hours and upon reasonable notice to the Company, to
examine, copy and make extracts from its books and records, to inspect any
of its Properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by such Lender or the
Administrative Agent (as the case may be).
9.04 Insurance. The Company will, and will cause each of its
Subsidiaries to, maintain insurance with financially sound and reputable
insurance companies, and with respect to Property and risks of a character
usually maintained by corporations engaged in the same or similar business
similarly situated, against loss, damage and liability of the kinds and in the
amounts customarily maintained by such corporations, provided that in any event
the Company will maintain property damage insurance with respect to the tangible
personal and real property subject to the Liens of the Security Documents in
such amounts, and subject to such deductibles, as shall be satisfactory to the
Administrative Agent, and shall name the Administrative Agent as loss payee
under each policy of such insurance.
9.05 Prohibition of Fundamental Changes.
(a) Mergers and Consolidations. The Company will not, nor will it
permit any of its Subsidiaries to, enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution).
(b) Acquisitions. The Company will not, nor will it permit any of
its Subsidiaries to, acquire any business or Property from, or capital stock of,
or be a party to any acquisition of, any Person except for purchases of
inventory and other Property to be sold or used in the
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ordinary course of business, Investments permitted under Sections 9.08(f) and
9.08(g) hereof, and Capital Expenditures.
(c) Dispositions. The Company will not, nor will it permit any of
its Subsidiaries to, convey, sell, lease, transfer or otherwise dispose of, in
one transaction or a series of transactions, any part of its business or
Property, whether now owned or hereafter acquired (including, without
limitation, receivables and leasehold interests, but excluding the sale of
(i) obsolete or worn-out Property, tools or equipment no longer used or useful
in its business, (ii) any inventory or other Property sold or disposed of in the
ordinary course of business and on ordinary business terms), (iii) after the
date hereof, Property with an aggregate value of $25,000,000, so long as any
such Disposition or Dispositions will not materially adversely affect EBITDA (as
determined by the Majority Lenders) and (iv) the sale (and simultaneous
lease-back) by the Company of its headquarters facility in Windsor, Connecticut
in connection with the incurrence of Indebtedness permitted under Section
9.07(e) hereof).
(d) Certain Exclusions. Notwithstanding the foregoing provisions of
this Section 9.05:
(i) any Wholly Owned Subsidiary of the Company may be merged or
consolidated with or into: (x) the Company if the Company shall be the
continuing or surviving corporation or (y) any other Wholly Owned
Subsidiary of the Company; and
(ii) any Wholly Owned Subsidiary of the Company may sell, lease,
transfer or otherwise dispose of any or all of its Property (upon voluntary
liquidation or otherwise) to the Company or another Wholly Owned Subsidiary
of the Company.
9.06 Limitation on Liens. The Company will not, nor will it permit
any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon any of its Property, whether now owned or hereafter acquired, except:
(a) Liens created pursuant to the Security Documents;
(b) Liens in existence on the date hereof and listed in Part B of
Schedule I hereto (excluding, however, following the making of the initial
Loans hereunder, Liens securing Indebtedness to be repaid with the proceeds
of such Loans, as indicated on said Schedule I);
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(c) Liens imposed by any governmental authority for taxes,
assessments or charges not yet due or that are being contested in good
faith and by appropriate proceedings if adequate reserves with respect
thereto are maintained on the books of the Company or the affected
Subsidiaries, as the case may be, in accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business that are not
overdue for a period of more than 30 days or that are being contested in
good faith and by appropriate proceedings and Liens securing judgments but
only to the extent for an amount and for a period not resulting in an Event
of Default under Section 10(h) hereof;
(e) pledges or deposits under worker's compensation, unemployment
insurance and other social security legislation;
(f) deposits to secure the performance of bids, trade contracts
(other than for Indebtedness), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and encumbrances
consisting of zoning restrictions, easements, licenses, restrictions on the
use of Property or minor imperfections in title thereto that, in the
aggregate, are not material in amount, and that do not in any case
materially detract from the value of the Property subject thereto or
interfere with the ordinary conduct of the business of the Company or any
of its Subsidiaries;
(h) Liens covering the headquarters facility of the Company in
Windsor, Connecticut arising as a result of the sale and leaseback of such
facility as permitted under Section 9.07(e) hereof; and
(i) Liens upon real and/or tangible personal Property acquired after
the date hereof (by purchase, construction or otherwise) by the Company or
any of its Subsidiaries, each of which Liens secures Indebtedness under
Section 9.07(f) hereof and which Liens either (A) existed on such Property
before the time of its acquisition and was not created in anticipation
thereof or (B) was created solely for the purpose of securing Indebtedness
representing, or incurred to finance, refinance or refund, the cost
(including the cost of construction) of such Property; provided that (i) no
such Lien shall extend to
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or cover any Property of the Company or such Subsidiary other than the
Property so acquired and improvements thereon and (ii) the principal amount
of Indebtedness secured by any such Lien shall at no time exceed the fair
market value (as determined in good faith by a senior financial officer of
the Company) of such Property at the time it was acquired (by purchase,
construction or otherwise).
9.07 Indebtedness. The Company will not, nor will it permit any of
its Subsidiaries to, create, incur or suffer to exist any Indebtedness except:
(a) Indebtedness to the Lenders hereunder;
(b) Indebtedness outstanding on the date hereof and listed in Part A
of Schedule I hereto (excluding, however, following the making of the
initial Loans hereunder, the Indebtedness to be repaid with the proceeds of
such Loans, as indicated on said Schedule I);
(c) Subordinated Indebtedness incurred after the Effective Date in
accordance with Section 9.12(a) hereof in an aggregate principal amount up
to but not exceeding $100,000,000, so long as (i) no Event of Default or
breach of any covenant hereunder is in existence at the time of any such
incurrence or would be created by such incurrence and (ii) the Company
complies with the requirements of Section 2.10 with respect to such
incurrence;
(d) Indebtedness of Subsidiaries of the Company to the Company or to
other Subsidiaries of the Company;
(e) Indebtedness of the Company arising in connection with a
sale and leaseback of the Company's headquarters facility in Windsor,
Connecticut, so long as the aggregate amount thereof shall not exceed
$15,000,000; and
(f) additional Indebtedness of the Company and its Subsidiaries
(including, without limitation, Capital Lease Obligations and other
Indebtedness secured by Liens permitted under Sections 9.06(i) hereof) up
to but not exceeding $3,500,000 at any one time outstanding.
9.08 Investments. The Company will not, nor will it permit any of
its Subsidiaries to, make or permit to remain outstanding any Investments
except:
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(a) Investments outstanding on the date hereof and identified in
Part B of Schedule II hereto;
(b) operating deposit accounts with banks;
(c) Permitted Investments;
(d) Investments by the Company and its Subsidiaries in the Company
and its Subsidiaries;
(e) Interest Rate Protection Agreement not entered into for
speculative purposes;
(f) Investments in respect of acquisitions up to but not exceeding
$25,000,000 during any fiscal year, provided that in no event shall the
aggregate amount of all such investments exceed $50,000,000; and
(g) additional Investments of up to but not exceeding $10,000,000 in
the aggregate during any fiscal year, provided that in no event shall the
aggregate amount of all such investments exceed $25,000,000.
9.09 Dividend Payments. The Company will not, nor will it permit any
of its Subsidiaries to, declare or make any Dividend Payment at any time;
provided that, so long as at the time thereof and after giving effect thereto no
Default shall have occurred and be continuing, the Company may:
(a) at any time after the Effective Date, declare and make Dividend
Payments in cash in an amount equal to 2.5 cents per share for each fiscal
quarter (appropriately adjusted to give effect to any stock splits, stock
dividends or other dilutive events, excluding, however, the exercise of any
of the Existing Warrants);
(b) at any time after the Effective Date, declare additional Dividend
Payments payable in cash within 60 days after the date of declaration
thereof, so long as, on the date of declaration of such Dividend Payment
(the "Current Dividend Payment") and after giving effect thereto:
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(i) the aggregate amount of the Current Dividend Payment, and
of all prior Dividend Payments declared under this clause (b) during
the period commencing on the Effective Date through and including the
date of the Current Dividend Payment shall not exceed 40% of Excess
Cash Flow for the period (treated for these purposes as a single
accounting period) commencing on the Effective Date through and
including the last day of the quarterly fiscal period of the Company
most recently ended prior to the date of declaration of the Current
Dividend Payment;
(ii) the Total Debt Ratio as at the date of declaration of the
Current Dividend Payment (and after giving effect thereto) shall be
less than 3.75 to 1 and the Company would have been in compliance with
Section 9.10(c) as at the last day of the most recently ended fiscal
quarter under the assumption that Fixed Charges for the period of four
consecutive fiscal quarters ended on such last day had been determined
on a pro forma basis to include such Dividend Payment and all other
Dividend Payments made under this clause (b) subsequent to such last
day; and
(iii) the Company shall have delivered to the Administrative
Agent, at least ten Business Days (but not more than twenty Business
Days) prior to the date of declaration of the Current Dividend
Payment, a certificate of a senior financial officer of the Company
setting forth computations in reasonable detail demonstrating
satisfaction of the foregoing conditions as at the date of such
certificate,
it being understood that Dividend Payments under the foregoing clause (a)
are neither subject to this clause (b) nor included in determining the
amount of Dividend Payments permitted to be made under this clause (b) and
that any Dividend Payment declared in accordance with the foregoing
provisions of this clause (b) shall not be subject to additional conditions
under this Agreement so long as the same is paid in cash within sixty days
of the date of such declaration;
(c) the Company may repurchase shares of its capital stock from the
holders thereof from the proceeds of Loans hereunder so long as the
aggregate amount of such repurchases shall not exceed $100,000,000 after
the date hereof.
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Nothing herein shall be deemed to prohibit the payment of dividends by
any Subsidiary of the Company to the Company or to any other Subsidiary of the
Company.
9.10 Certain Financial Covenants.
(a) Total Debt Ratio. The Company will not permit the Total Debt
Ratio to exceed the following respective ratios at any time during the following
respective periods:
Period Ratio
From the Effective Date
through March 27, 1998 4.25 to 1
From March 28, 1998
through September 24, 1999 4.00 to 1
From September 25, 1999
through September 29, 2000 3.50 to 1
From September 30, 2000
and thereafter 3.00 to 1
(b) Interest Coverage Ratio. The Company will cause the Interest
Coverage Ratio to exceed 2.50 to 1 on the Effective Date and at all times
thereafter.
(c) Fixed Charges Ratio. The Company will cause the Fixed Charges
Ratio to exceed 1.05 to 1 on the Effective Date and at all times thereafter.
9.11 Interest Rate Protection Agreements. The Company will within
120 days of the Effective Date enter into, and thereafter maintain in full force
and effect, one or more Interest Rate Protection Agreements with one or more of
the Lenders (and/or with a bank or other financial institution having capital,
surplus and undivided profits of at least $500,000,000), that effectively
enables the Company (in a manner satisfactory to the Majority Lenders) to
protect itself against three-month London interbank offered rates exceeding 8%
per annum as to a notional principal amount at least equal to the lesser of
$100,000,000 or 50% of the aggregate principal amount of the Loans made on the
Effective Date, for a period of at least 2 years measured from the Effective
Date.
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9.12 Subordinated Indebtedness.
(a) Incurrence. The Company may incur additional Indebtedness so long
as
(i) such additional Indebtedness is subordinated to the
obligations of the Company to pay principal of and interest on the Loans,
the Notes and the other obligations hereunder and under the Loan Documents
on terms of subordination, and pursuant to documentation containing other
terms (including, without limitation, interest, amortization, covenants and
events of default), in each case in form and substance reasonably
satisfactory to the Majority Lenders;
(ii) no principal payments with respect to such Indebtedness shall
be due prior to the date that is at least one year after the loans
hereunder have matured;
(iii) such Indebtedness is not secured by any Lien on property of
the Company or any Subsidiary; and
(iv) at the time of such incurrence, and after giving effect
thereto, no Default shall have occurred and be continuing and the Company
shall be in pro forma compliance with Section 9.10 hereof (the
determination of such pro forma compliance to be calculated, as at the end
of and for the period of four fiscal quarters most recently ended prior to
the date of such incurrence for which financial statements of the Company
and its Subsidiaries are available, under the assumption that such
incurrence shall have occurred at the beginning of the applicable period)
and the Company shall have delivered to the Administrative Agent a
certificate of a financial officer showing such calculation in reasonable
detail to demonstrate such compliance.
Any Subsidiary Guarantor may Guarantee such Indebtedness so long as such
Guarantee is similarly subordinated to the Guarantee of such Subsidiary
Guarantor hereunder upon terms (including, without limitation, terms of
subordination) in form and substance reasonably satisfactory to the Majority
Lenders.
(b) Payments and Prepayments. The Company will not, nor will it
permit any of its Subsidiaries to, purchase, redeem, retire or otherwise acquire
for value, or set apart any money for a sinking, defeasance or other analogous
fund for the purchase, redemption, retirement or other acquisition of, or make
any voluntary payment or prepayment of the principal of or interest
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on, or any other amount owing in respect of, any Subordinated Indebtedness,
except for regularly scheduled payments or prepayments of principal and interest
in respect thereof required pursuant to the instruments evidencing such
Subordinated Indebtedness.
9.13 Lines of Business. The Company will not, nor will it permit any
of its Subsidiaries to, engage to any substantial extent in any line or lines of
business activity other than lines of business substantially similar to that
conducted by the Company and its Subsidiaries on the date hereof.
9.14 Transactions with Affiliates. Except as expressly permitted by
this Agreement, the Company will not, nor will it permit any of its Subsidiaries
to, directly or indirectly: (a) make any Investment in an Affiliate;
(b) transfer, sell, lease, assign or otherwise dispose of any Property to an
Affiliate; (c) merge into or consolidate with or purchase or acquire Property
from an Affiliate; or (d) enter into any other transaction directly or
indirectly with or for the benefit of an Affiliate (including, without
limitation, Guarantees and assumptions of obligations of an Affiliate); provided
that, notwithstanding the foregoing:
(w) any Affiliate who is an individual may serve as a director,
officer or employee of the Company or any of its Subsidiaries and receive
reasonable compensation for his or her services in such capacity,
(x) the Company and its Subsidiaries may enter into transactions
(other than extensions of credit by the Company or any of its Subsidiaries
to an Affiliate) providing for the leasing of Property, the rendering or
receipt of services or the purchase or sale of inventory and other Property
in the ordinary course of business if the monetary or business
consideration arising therefrom would be substantially as advantageous to
the Company and its Subsidiaries as the monetary or business consideration
that would obtain in a comparable transaction with a Person not an
Affiliate,
(y) the Company and its Subsidiaries may make Permitted Investments
in the Warburg Pincus Cash Reserve Fund meeting the requirements of the
definition of "Permitted Investments" in Section 1.01 hereof, and
(z) the Company may repurchase shares of its capital stock from
Warburg Pincus and the Warburg Affiliates to the extent permitted under
Section 9.09(c) hereof.
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9.15 Use of Proceeds. The Company will use the proceeds of the Loans
hereunder to fund ongoing working capital and capital expenditures of the
Company and its Subsidiaries, to finance the repurchase of shares of its stock
as contemplated by Section 9.09(c), and to provide funds for the general
corporate purposes (including acquisitions) of the Company and its Subsidiaries
in each case in compliance with all applicable legal and regulatory
requirements, including, without limitation, Regulations G, T, U and X and the
Securities Act of 1933 and the Securities Exchange Act of 1934 and the
regulations thereunder; provided that neither the Administrative Agent nor any
Lender shall have any responsibility as to the use of any of such proceeds.
9.16 Certain Obligations Respecting Subsidiaries.
(a) Subsidiary Guarantors. The Company will take such action, and
will cause each of its Subsidiaries to take such action, from time to time as
shall be necessary to ensure that all Subsidiaries of the Company are
"Subsidiary Guarantors" hereunder. Without limiting the generality of the
foregoing, in the event that the Company or any of its Subsidiaries shall form
or acquire any new entity that shall constitute a Subsidiary hereunder, the
Company and its Subsidiaries will cause such new Subsidiary to
(i) become a "Subsidiary Guarantor" hereunder, and a "Securing
Party" under the Security Agreement, pursuant to a Guarantee Assumption
Agreement,
(ii) cause such Subsidiary to take such action (including, without
limitation, delivering such shares of stock, executing and delivering such
Uniform Commercial Code financing statements and executing and delivering
mortgages or deeds of trust covering the real Property and fixtures owned
or leased by such Subsidiary) as shall be necessary to create and perfect
valid and enforceable first priority Liens on substantially all of the
Property of such new Subsidiary as collateral security for the obligations
of such new Subsidiary hereunder and
(iii) deliver such proof of corporate action, incumbency of
officers, opinions of counsel and other documents as is consistent with
those delivered by each Obligor pursuant to Section 7.01 hereof on the
Effective Date or as the Administrative Agent shall have requested.
(b) Ownership of Subsidiaries. The Company will, and will cause each
of its Subsidiaries to, take such action from time to time as shall be necessary
to ensure that each of its
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Subsidiaries is a Wholly Owned Subsidiary. In the event that any additional
shares of stock shall be issued by any Subsidiary, the respective Obligor agrees
forthwith to deliver to the Administrative Agent pursuant to the Security
Agreement the certificates evidencing such shares of stock, accompanied by
undated stock powers executed in blank and to take such other action as the
Administrative Agent shall request to perfect the security interest created
therein pursuant to the Security Agreement.
(c) Certain Restrictions. The Company will not permit any of its
Subsidiaries to enter into, after the date hereof, any indenture, agreement,
instrument or other arrangement that, directly or indirectly, prohibits or
restrains, or has the effect of prohibiting or restraining, or imposes
materially adverse conditions upon, the incurrence or payment of Indebtedness,
the granting of Liens, the declaration or payment of dividends, the making of
loans, advances or Investments or the sale, assignment, transfer or other
disposition of Property.
9.17 Modifications of Certain Documents. The Company will not
consent to any modification, supplement or waiver of any of the provisions of
any agreement, instrument or other document evidencing or relating to
Subordinated Indebtedness without the prior consent of the Administrative Agent
(with the approval of the Majority Lenders).
9.18 Obligations relating to Collateral Security. The Company agrees
that in the event it shall, after the date hereof, enter into new lease with
respect to a mail processing facility (whether a new or an existing facility),
it will use its best efforts to obtain from the respective landlord a consent
for the execution and delivery by the Company of a Mortgage covering such
leasehold interest (in which event, upon obtaining such consent, it shall
immediately execute and deliver to the Administrative Agent an appropriate
Mortgage covering such leasehold interest).
Section 10. Events of Default. If one or more of the following
events (herein called "Events of Default") shall occur and be continuing:
(a) The Company shall default in the payment when due (whether at
stated maturity or at mandatory or optional prepayment) of (i) any
principal of any Loan or Reimbursement Obligation, (ii) any interest on any
Loan or Reimbursement Obligation or (iii) any fee or any other amount
payable by it hereunder or under any other Loan Document and, in the case
of any such default in the payment of any fee or other amount, such default
shall continue for two or more Business Days; or
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(b) The Company or any of its Subsidiaries shall default in the
payment when due of any principal of or interest on any of its other
Indebtedness aggregating $2,000,000 or more (excluding any Indebtedness
constituting "Subordinated Debt" under and as defined in the Intercompany
Subordination Agreements); or any event specified in any note, agreement,
indenture or other document evidencing or relating to any such Indebtedness
shall occur if the effect of such event is to cause, or (with the giving of
any notice or the lapse of time or both) to permit the holder or holders of
such Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause, such Indebtedness to become due, or to be prepaid in
full (whether by redemption, purchase, offer to purchase or otherwise),
prior to its stated maturity; or any event specified in any Interest Rate
Protection Agreement to which any Obligor is a party shall occur if the
effect of such event is to cause, or (with the giving of any notice or the
lapse of time or both) to permit, termination or liquidation payment or
payments aggregating $2,000,000 or more to become due; or
(c) Any representation, warranty or certification made or deemed made
herein or in any other Loan Document (or in any modification or supplement
hereto or thereto) by any Obligor, or any certificate furnished to any
Lender or the Administrative Agent pursuant to the provisions hereof or
thereof, shall prove to have been false or misleading as of the time made
or furnished in any material respect; or
(d) Any of the following shall occur and be continuing: (i) the
Company shall default in the performance of any of its obligations under
any of Sections 9.05, 9.06, 9.07, 9.08, 9.09, 9.10, 9.12, 9.16 or 9.17
hereof; (ii) any Obligor shall default in the performance of any of its
obligations under Section 5.02 of the Security Agreement; or (iii) any
Obligor shall default in the performance of any of its other obligations in
this Agreement or any other Loan Document and such default shall continue
unremedied for a period of thirty or more days after notice thereof to the
Company by the Administrative Agent or any Lender (through the
Administrative Agent); or
(e) The Company or any of its Subsidiaries shall admit in writing its
inability to, or be generally unable to, pay its debts as such debts become
due; or
(f) The Company or any of its Subsidiaries shall (i) apply for or
consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee, examiner or liquidator of itself or of all or a
substantial part of its Property, (ii) make a general assignment for the
benefit of its creditors, (iii) commence a voluntary case under the
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Bankruptcy Code, (iv) file a petition seeking to take advantage of any
other law relating to bankruptcy, insolvency, reorganization, liquidation,
dissolution, arrangement or winding-up, or composition or readjustment of
debts, (v) fail to controvert in a timely and appropriate manner, or
acquiesce in writing to, any petition filed against it in an involuntary
case under the Bankruptcy Code or (vi) take any corporate action for the
purpose of effecting any of the foregoing; or
(g) A proceeding or case shall be commenced, without the application
or consent of the Company or any of its Subsidiaries, in any court of
competent jurisdiction, seeking (i) its reorganization, liquidation,
dissolution, arrangement or winding-up, or the composition or readjustment
of its debts, (ii) the appointment of a receiver, custodian, trustee,
examiner, liquidator or the like of the Company or such Subsidiary or of
all or any substantial part of its Property, or (iii) similar relief in
respect of the Company or such Subsidiary under any law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts, and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or ordering any of
the foregoing shall be entered and continue unstayed and in effect, for a
period of 60 or more days; or an order for relief against the Company or
any of its Subsidiaries shall be entered in an involuntary case under the
Bankruptcy Code; or
(h) A final judgment or judgments for the payment of money of
$1,000,000 or more in the aggregate (exclusive of judgment amounts fully
covered by insurance where the insurer has admitted liability in respect of
such judgment) or of $10,000,000 or more in the aggregate (regardless of
insurance coverage) shall be rendered by one or more courts, administrative
tribunals or other bodies having jurisdiction against the Company or any of
its Subsidiaries and the same shall not be discharged (or provision shall
not be made for such discharge), or a stay of execution thereof shall not
be procured, within 45 days from the date of entry thereof and the Company
or the relevant Subsidiary shall not, within said period of 45 days, or
such longer period during which execution of the same shall have been
stayed, appeal therefrom and cause the execution thereof to be stayed
during such appeal; or
(i) An event or condition specified in Section 9.01(e) hereof shall
occur or exist with respect to any Plan or Multiemployer Plan and, as a
result of such event or condition, together with all other such events or
conditions, the Company or any ERISA Affiliate shall incur or in the
opinion of the Majority Lenders shall be reasonably likely to incur a
liability to a Plan, a Multiemployer Plan or the PBGC (or any combination
of the
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foregoing) that, in the determination of the Majority Lenders, would
(either individually or in the aggregate) have a Material Adverse Effect;
or
(j) There shall have been asserted against the Company or any of its
Subsidiaries, or any predecessor in interest of the Company or any of its
Subsidiaries or Affiliates, of (or there shall have been asserted against
the Company or any of its Subsidiaries) any claims or liabilities, whether
accrued, absolute or contingent, based on or arising from the generation,
storage, transport, handling or disposal of Hazardous Materials by the
Company or any of its Subsidiaries, Affiliates or predecessors that, in the
reasonable judgment of the Majority Lenders, are reasonably likely to be
determined adversely to the Company or any of its Subsidiaries, and the
amount thereof (either individually or in the aggregate) is reasonably
likely to have a Material Adverse Effect (insofar as such amount is payable
by the Company or any of its Subsidiaries but after deducting any portion
thereof that is reasonably expected to be paid by other creditworthy
Persons jointly and severally liable therefor); or
(k) Any of the following events shall occur and be continuing:
(i) any person or group (within the meaning of Rule 13d-5
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and Section 13(d) and 14(d) of the Exchange Act (other than
Warburg Pincus and the Warburg Affiliates) becomes, directly or
indirectly, in a single transaction or in a related series of
transactions by way of merger, consolidation or other business
combination or otherwise, the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act) of more than 30% of the capital stock of
the Company on a fully-diluted basis (in other words, giving effect to
the exercise of any warrants, options and conversion and other
rights);
(ii) a majority of the Board of Directors of the Company shall
no longer be composed of individuals (x) who are members of said Board
on the date hereof, (y) whose election or nomination to said Board has
been approved by individuals referred to in the foregoing clause (x)
constituting at the time of such election or nomination at least a
majority of said Board or (z) whose election or nomination to said
Board was approved by individuals referred to in the foregoing clauses
(x) and (y) constituting at the time of such election or nomination at
least a majority of said Board; or
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(iii) any "change of control" or similar event shall occur and
be continuing under any instrument or agreement governing Subordinated
Indebtedness if the effect thereof is to require any of such
Indebtedness to be prepaid, redeemed or repurchased (or to require the
Company to offer to prepay, redeem or repurchase any of such
Indebtedness); or
(l) The Liens created by the Security Documents shall at any time not
(other than by reason of the action of the Administrative Agent or any of
the Lenders) constitute a valid and perfected Lien on the collateral
intended to be covered thereby (to the extent perfection by filing,
registration, recordation or possession is required herein or therein) in
favor of the Administrative Agent, free and clear of all other Liens (other
than Liens permitted under Section 9.06 hereof or under the respective
Security Documents), or, except for expiration in accordance with its
terms, any of the Security Documents shall for whatever reason be
terminated or cease to be in full force and effect, or the enforceability
thereof shall be contested by any Obligor; or
(m) The holder of any Indebtedness constituting "Subordinated Debt"
under and as defined in the Intercompany Subordination Agreements shall
declare any such Indebtedness to be due and payable prior to the stated
maturity thereof or commence enforcement of any rights or remedies in
respect of such Indebtedness;
THEREUPON:
(1) in the case of an Event of Default other than one referred to in
clause (f) or (g) of this Section 10 with respect to any Obligor, the
Administrative Agent may, by notice to the Company, terminate the
Commitments and/or declare the principal amount then outstanding of, and
the accrued interest on, the Loans, the Reimbursement Obligations and all
other amounts payable by the Obligors hereunder and under the Notes
(including, without limitation, any amounts payable under Section 5.05 or
5.06 hereof) to be forthwith due and payable, provided that
(x) if so requested by the Majority Revolving Credit Lenders,
the Administrative Agent shall take such action with respect to the
Revolving Credit Commitments and/or the Revolving Credit Loans,
Reimbursement Obligations and such interest and other amounts to the
extent owed to the Revolving Credit Lenders, and
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(y) if so requested by the Majority Term Loan Lenders, the
Administrative Agent shall take such action with respect to the Term
Loan Commitments and the Term Loans and such interest and other
amounts to the extent owed to the Term Loan Lenders, and
whereupon such amounts shall be immediately due and payable without
presentment, demand, protest or other formalities of any kind, all of which
are hereby expressly waived by each Obligor; and
(2) in the case of the occurrence of an Event of Default referred to
in clause (f) or (g) of this Section 10 with respect to any Obligor, the
Commitments shall automatically be terminated and the principal amount then
outstanding of, and the accrued interest on, the Loans, the Reimbursement
Obligations and all other amounts payable by the Obligors hereunder and
under the Notes (including, without limitation, any amounts payable under
Section 5.05 or 5.06 hereof) shall automatically become immediately due and
payable without presentment, demand, protest or other formalities of any
kind, all of which are hereby expressly waived by each Obligor.
In addition, upon the occurrence and during the continuance of any
Event of Default (if the Administrative Agent has declared the principal amount
then outstanding of, and accrued interest on, the Revolving Credit Loans and all
other amounts payable by the Company hereunder and under the Notes to be due and
payable), the Company agrees that it shall, if requested by the Administrative
Agent or the Majority Revolving Credit Lenders through the Administrative Agent
(and, in the case of any Event of Default referred to in clause (f) or (g) of
this Section 10 with respect to the Company, forthwith, without any demand or
the taking of any other action by the Administrative Agent or such Lenders)
provide cover for the Letter of Credit Liabilities by paying to the
Administrative Agent immediately available funds in an amount equal to the then
aggregate undrawn face amount of all Letters of Credit, which funds shall be
held by the Administrative Agent in the Collateral Account as collateral
security in the first instance for the Letter of Credit Liabilities and be
subject to withdrawal only as therein provided.
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Section 11. The Administrative Agent.
11.01 Appointment, Powers and Immunities. Each Lender hereby
appoints and authorizes the Administrative Agent to act as its agent hereunder
and under the other Loan Documents with such powers as are specifically
delegated to the Administrative Agent by the terms of this Agreement and of the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. The Administrative Agent (which term as used in this
sentence and in Section 11.05 hereof and the first sentence of Section 11.06
hereof shall include reference to its affiliates and its own and its affiliates'
officers, directors, employees and agents):
(a) shall have no duties or responsibilities except those expressly
set forth in this Agreement and in the other Loan Documents, and shall not
by reason of this Agreement or any other Loan Document be a trustee for any
Lender;
(b) shall not be responsible to the Lenders for any recitals,
statements, representations or warranties contained in this Agreement or in
any other Loan Document, or in any certificate or other document referred
to or provided for in, or received by any of them under, this Agreement or
any other Loan Document, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement, any Note or
any other Loan Document or any other document referred to or provided for
herein or therein or for any failure by the Company or any other Person to
perform any of its obligations hereunder or thereunder;
(c) shall not, except to the extent expressly instructed by the
Majority Lenders with respect to collateral security under the Security
Documents, be required to initiate or conduct any litigation or collection
proceedings hereunder or under any other Loan Document; and
(d) shall not be responsible for any action taken or omitted to be
taken by it hereunder or under any other Loan Document or under any other
document or instrument referred to or provided for herein or therein or in
connection herewith or therewith, except for its own gross negligence or
willful misconduct.
The Administrative Agent may employ agents and attorneys-in-fact and shall not
be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith. The Administrative Agent may
deem and treat the payee (or Registered Holder, as the case
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may be) of a Note as the holder thereof for all purposes hereof unless and until
a notice of the assignment or transfer thereof shall have been filed with the
Administrative Agent, together with the consent of the Company to such
assignment or transfer (to the extent required by Section 12.06(b) hereof).
11.02 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely upon any certification, notice or other communication
(including, without limitation, any thereof by telephone, telecopy, telegram or
cable) reasonably believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel, independent accountants and other experts
selected by the Administrative Agent. As to any matters not expressly provided
for by this Agreement or any other Loan Document, the Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder or thereunder in accordance with instructions given by the Majority
Lenders or, if provided herein, in accordance with the instructions given by the
Majority Revolving Credit Lenders, Majority Term Loan Lenders or all of the
Lenders as is required in such circumstance, and such instructions of such
Lenders and any action taken or failure to act pursuant thereto shall be binding
on all of the Lenders.
11.03 Defaults. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default unless the Administrative
Agent has received notice from a Lender or the Company specifying such Default
and stating that such notice is a "Notice of Default". In the event that the
Administrative Agent receives such a notice of the occurrence of a Default, the
Administrative Agent shall give prompt notice thereof to the Lenders. The
Administrative Agent shall (subject to Section 11.07 hereof) take such action
with respect to such Default as shall be directed by the Majority Lenders or, if
provided herein, the Majority Revolving Credit Lenders or the Majority Term Loan
Lenders, provided that, unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default as it shall deem advisable in the best interest of the Lenders
except to the extent that this Agreement expressly requires that such action be
taken, or not be taken, only with the consent or upon the authorization of the
Majority Lenders, the Majority Revolving Credit Lenders, the Majority Term Loan
Lenders, or all of the Lenders.
11.04 Rights as a Lender. With respect to its Commitments and the
Loans made by it, Chase (and any successor acting as Administrative Agent) in
its capacity as a Lender hereunder shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it were not
acting as the Administrative Agent, and the term "Lender" or
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"Lenders" shall, unless the context otherwise indicates, include the
Administrative Agent in its individual capacity. Chase (and any successor
acting as Administrative Agent) and its affiliates may (without having to
account therefor to any Lender) accept deposits from, lend money to, make
investments in and generally engage in any kind of banking, trust or other
business with the Obligors (and any of their Subsidiaries or Affiliates) as if
it were not acting as the Administrative Agent, and Chase and its affiliates
(and any such successor) and its affiliates may accept fees and other
consideration from the Obligors for services in connection with this Agreement
or otherwise without having to account for the same to the Lenders.
11.05 Indemnification. The Lenders agree to indemnify the
Administrative Agent (to the extent not reimbursed under Section 12.03 hereof,
but without limiting the obligations of the Company under said Section 12.03)
ratably in accordance with the aggregate principal amount of the Loans and
Reimbursement Obligations held by the Lenders (or, if no Loans or Reimbursement
Obligations are at the time outstanding, ratably in accordance with their
respective Commitments), for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever that may be imposed on, incurred by or
asserted against the Administrative Agent (including by any Lender) arising out
of or by reason of any investigation in or in any way relating to or arising out
of this Agreement or any other Loan Document or any other documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby (including, without limitation, the costs and expenses that the Company
is obligated to pay under Section 12.03 hereof) or the enforcement of any of the
terms hereof or thereof or of any such other documents, provided that no Lender
shall be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified.
11.06 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender agrees that it has, independently and without reliance on the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Company and its Subsidiaries and decision to enter into this Agreement and that
it will, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or under any other Loan
Document. The Administrative Agent shall not be required to keep itself
informed as to the performance or observance by any Obligor of this Agreement or
any of the other Loan Documents or any other document referred to or provided
for herein or therein or to inspect the Properties or books of the Company or
any of its Subsidiaries. Except for notices, reports and other documents and
information expressly required to be furnished to
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the Lenders by the Administrative Agent hereunder or under the Security
Documents, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition or business of the Company or any of its Subsidiaries (or
any of their affiliates) that may come into the possession of the Administrative
Agent or any of its affiliates.
11.07 Failure to Act. Except for action expressly required of the
Administrative Agent hereunder and under the other Loan Documents, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction from the Lenders of their indemnification
obligations under Section 11.05 hereof against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such
action.
11.08 Resignation or Removal of Administrative Agent. Subject to the
appointment and acceptance of a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by giving notice thereof
to the Lenders and the Company, and the Administrative Agent may be removed at
any time with or without cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the right (following
consultation with the Company) to appoint a successor Administrative Agent. If
no successor Administrative Agent shall have been so appointed by the Majority
Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent's giving of notice of resignation or the Majority
Lenders' removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, that shall be a bank that has an office in New York, New
York with a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder. After any
retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Section 11 shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as the Administrative Agent.
11.09 Consents under Other Loan Documents. Except as otherwise
provided in Section 12.04 hereof with respect to this Agreement, the
Administrative Agent may, with the prior consent of the Majority Lenders (but
not otherwise), consent to any modification, supplement or waiver under any of
the Loan Documents, provided that, without the prior consent
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of each Lender, the Administrative Agent shall not (except as provided herein or
in the Security Documents) release any collateral or otherwise terminate any
Lien under any Security Document providing for collateral security, agree to
additional obligations being secured by such collateral security (unless the
Lien for such additional obligations shall be junior to the Lien in favor of the
other obligations secured by such Security Document, in which event the
Administrative Agent may consent to such junior Lien provided that it obtains
the consent of the Majority Lenders thereto), alter the relative priorities of
the obligations entitled to the benefits of the Liens created under the Security
Documents, except that no such consent shall be required, and the Administrative
Agent is hereby authorized, to release any Lien covering Property that is the
subject of either a disposition of Property permitted hereunder or a disposition
to which the Majority Lenders have consented.
11.10 Collateral Sub-Agents. Each Lender by its execution and
delivery of this Agreement agrees, as contemplated by Section 4.02 of the
Security Agreement, that, in the event it shall hold any Permitted Investments
referred to therein, such Permitted Investments shall be held in the name and
under the control of such Lender, and such Lender shall hold such Permitted
Investments as a collateral sub-agent for the Administrative Agent thereunder.
Each Obligor by its execution and delivery of this Agreement hereby consents to
the foregoing.
Section 12. Miscellaneous.
12.01 Waiver. No failure on the part of the Administrative Agent or
any Lender to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under this Agreement or any Note shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under this Agreement or any Note preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The remedies provided herein are cumulative and not exclusive of any
remedies provided by law.
12.02 Notices. All notices, requests and other communications
provided for herein and in the Security Documents (including, without
limitation, any modifications of, or waivers or consents under, this Agreement)
shall be given or made in writing (including, without limitation, by telecopy),
delivered to the intended recipient at the "Address for Notices" specified below
its name on the signature pages hereof (below the name of the Company, in the
case of any Subsidiary Guarantor) or in its Administrative Questionnaire; or, as
to any party, at such other address as shall be designated by such party in a
notice to each other party. Except as
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otherwise provided in this Agreement, all such communications shall be deemed to
have been duly given when transmitted by telecopier or personally delivered or,
in the case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
12.03 Expenses, Etc. The Company agrees to pay or reimburse each of
the Lenders and the Administrative Agent for: (a) all reasonable out-of-pocket
costs and expenses of the Administrative Agent (including, without limitation,
the reasonable fees and expenses of Milbank, Tweed, Hadley & McCloy, special New
York counsel to Chase) in connection with (i) the negotiation, preparation,
execution and delivery of this Agreement and the other Loan Documents and the
making of the extensions of credit hereunder and (ii) the negotiation or
preparation of any modification, supplement or waiver of any of the terms of
this Agreement or any of the other Loan Documents (whether or not consummated);
(b) all reasonable out-of-pocket costs and expenses of the Lenders and the
Administrative Agent (including, without limitation, the reasonable fees and
expenses of legal counsel) in connection with (i) any Default and any
enforcement or collection proceedings resulting therefrom, including, without
limitation, all manner of participation in or other involvement with (x)
bankruptcy, insolvency, receivership, foreclosure, winding up or liquidation
proceedings, (y) judicial or regulatory proceedings and (z) workout,
restructuring or other negotiations or proceedings (whether or not the workout,
restructuring or transaction contemplated thereby is consummated) and (ii) the
enforcement of this Section 12.03; (c) all transfer, stamp, documentary or other
similar taxes, assessments or charges levied by any governmental or revenue
authority in respect of this Agreement or any of the other Loan Documents or any
other document referred to herein or therein and all costs, expenses, taxes,
assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated by
any Security Document or any other document referred to therein; and (d) all
costs, expenses and other charges in respect of title insurance procured with
respect to the Liens created pursuant to the Mortgages.
The Company hereby agrees to indemnify the Administrative Agent and
each Lender and their respective directors, officers, trustees, employees,
attorneys and agents from, and hold each of them harmless against, any and all
losses, liabilities, claims, damages or expenses incurred by any of them
(including, without limitation, any and all losses, liabilities, claims, damages
or expenses incurred by the Administrative Agent to any Lender, whether or not
the Administrative Agent or any Lender is a party thereto) arising out of or by
reason of any investigation or litigation or other proceedings (including any
threatened investigation or litigation or other proceedings) relating to the
extensions of credit hereunder or any actual or proposed use by the Company or
any of its Subsidiaries of the proceeds of any of the extensions
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of credit hereunder, including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation or
litigation or other proceedings (but excluding any such losses, liabilities,
claims, damages or expenses incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified). Without limiting the
generality of the foregoing, the Company will indemnify the Administrative Agent
and each Lender from, and hold the Administrative Agent and each Lender harmless
against, any losses, liabilities, claims, damages or expenses described in the
preceding sentence (including any Lien filed against any Property covered by the
Mortgages or any part of the collateral thereunder in favor of any governmental
entity, but excluding, as provided in the preceding sentence, any loss,
liability, claim, damage or expense incurred by reason of the gross negligence
or willful misconduct of the Person to be indemnified) arising under any
Environmental Law as a result of the past, present or future operations of the
Company or any of its Subsidiaries (or any predecessor in interest to the
Company or any of its Subsidiaries), or the past, present or future condition of
any site or facility owned, operated or leased at any time by the Company or any
of its Subsidiaries (or any such predecessor in interest), or any Release or
threatened Release of any Hazardous Materials at or from any such site or
facility, excluding any such Release or threatened Release that shall occur
during any period when the Administrative Agent or any Lender shall be in
possession of any such site or facility following the exercise by the
Administrative Agent or any Lender of any of its rights and remedies hereunder
or under any of the Security Documents, but including any such Release or
threatened Release occurring during such period that is a continuation of
conditions previously in existence, or of practices employed by the Company and
its Subsidiaries, at such site or facility.
12.04 Amendments, Etc. Except as otherwise expressly provided in
this Agreement, any provision of this Agreement may be modified or supplemented
only by an instrument in writing signed by the Company and the Majority Lenders,
or by the Company and the Administrative Agent acting with the consent of the
Majority Lenders, and any provision of this Agreement may be waived by the
Majority Lenders or by the Administrative Agent acting with the consent of the
Majority Lenders; provided that: (a) no modification, supplement or waiver
shall, unless by an instrument signed by all of the Lenders or by the
Administrative Agent acting with the consent of all of the Lenders:
(i) increase, or extend the term of any of the Commitments, or extend the time
or waive any requirement for the reduction or termination of any of the
Commitments, (ii) extend the date fixed for any payment of principal of or
interest on any Loan, the Reimbursement Obligations or any fee hereunder,
(iii) reduce the amount of any such payment of principal, (iv) reduce the rate
at which interest is payable thereon or any fee is payable hereunder, (v) alter
the manner in which payments or prepayments of principal, interest or other
amounts hereunder shall be applied as between the Lenders or Types or Classes
of
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Loans, (vi) alter the terms of this Section 12.04, (vii) modify the definition
of the term "Majority Lenders", "Majority Revolving Credit Lenders", or
"Majority Term Loan Lenders", or modify in any other manner the number or
percentage of the Lenders required to make any determinations or waive any
rights hereunder or to modify any provision hereof, (viii) release any
Subsidiary Guarantor from any of its guarantee obligations under Section 6
hereof (except in connection with the disposition of such Subsidiary in a
transaction permitted hereunder or to which the Majority Lenders shall have
consented), or (ix) waive any of the conditions precedent set forth in
Section 7.01 hereof; (b) any modification or supplement of Section 11 hereof, or
of any of the rights or duties of the Administrative Agent hereunder, shall
require the consent of the Administrative Agent; and (c) any modification or
supplement of Section 6 hereof shall require the consent of each Subsidiary
Guarantor.
12.05 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
12.06 Assignments and Participations.
(a) No Obligor may assign any of its rights or obligations hereunder
or under the Notes without the prior consent of all of the Lenders and the
Administrative Agent.
(b) Each Lender may assign any of its Loans, its Notes, its
Commitments, and, if such Lender is a Revolving Credit Lender, its Letter of
Credit Interest (but only with the consent of, (x) in the case of its
outstanding Commitments, the Company and the Administrative Agent, which consent
in either case shall not be unreasonably withheld and, (y) in the case of the
Revolving Credit Commitment or a Letter of Credit Interest, the Issuing Lender),
provided that
(i) no such consent by the Company or the Administrative Agent or
the Issuing Lender shall be required in the case of any assignment to
another Lender;
(ii) except to the extent the Company and the Administrative Agent
shall otherwise consent, any such partial assignment (other than to another
Lender) shall be in an amount at least equal to $5,000,000;
(iii) each such assignment by a Lender of its Revolving Credit
Loans, Revolving Credit Note, Revolving Credit Commitment or Letter of
Credit Interest shall be made in such manner so that the same portion of
its Revolving Credit Loans, Revolving Credit
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Note, Revolving Credit Commitment and Letter of Credit Interest is assigned
to the respective assignee;
(iv) each such assignment by a Lender of its Term Loans or Term
Loan Commitment shall be made in such manner so that the same portion of
its Term Loans and Term Loan Commitment is assigned to the respective
assignee; and
(v) upon each such assignment, the assignor and assignee shall
deliver to the Company, the Administrative Agent and the Issuing Lender a
Notice of Assignment in the form of Exhibit G hereto.
Upon execution and delivery by the assignor and the assignee to the Company, the
Administrative Agent and the Issuing Lender of such Notice of Assignment, and
upon consent thereto by the Company, the Administrative Agent and the Issuing
Lender to the extent required above, the assignee shall have, to the extent of
such assignment (unless otherwise consented to by the Company, the
Administrative Agent and the Issuing Lender), the obligations, rights and
benefits of a Lender hereunder holding the Commitment(s), Loans and, if
applicable, Letter of Credit Interest (or portions thereof) assigned to it and
specified in such Notice of Assignment (in addition to the Commitment(s), Loans
and Letter of Credit Interest, if any, theretofore held by such assignee) and
the assigning Lender shall, to the extent of such assignment, be released from
the Commitment(s) (or portion(s) thereof) so assigned. Upon each such
assignment the assigning Lender shall pay the Administrative Agent an assignment
fee of $3,500.
(c) A Lender may sell or agree to sell to one or more other Persons
(each a "Participant") a participation in all or any part of any Loans or Letter
of credit Interest held by it, or in its Commitments, provided that such
Participant shall not have any rights or obligations under this Agreement or any
Note or any other Loan Document (the Participant's rights against such Lender in
respect of such participation to be those set forth in the agreements executed
by such Lender in favor of the Participant). All amounts payable by the Company
to any Lender under Section 5 hereof in respect of Loans, Letter of Credit
Interest held by it, and its Commitments, shall be determined as if such Lender
had not sold or agreed to sell any participations in such Loans, Letter of
Credit Interest and Commitments, and as if such Lender were funding each of such
Loans, Letter of Credit Interest and Commitments in the same way that it is
funding the portion of such Loans, Letter of Credit Interest and Commitments in
which no participations have been sold. In no event shall a Lender that sells a
participation agree with the Participant to take or refrain from taking any
action hereunder or under any other Loan Document except that such Lender may
agree with the Participant that it will not, without the
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consent of the Participant, agree to (i) extend the term of such Lender's
related Commitment or extend the amount or date of any scheduled reduction of
such Commitment pursuant to Section 2.04 hereof, (ii) extend the date fixed for
the payment of principal of or interest on the related Loan or Loans,
Reimbursement Obligations or any portion of any fee hereunder payable to the
Participant, (iii) reduce the amount of any such payment of principal,
(iv) reduce the rate at which interest is payable thereon, or any fee hereunder
payable to the Participant, to a level below the rate at which the Participant
is entitled to receive such interest or fee or (v) consent to any modification,
supplement or waiver hereof or of any of the other Loan Documents to the extent
that the same, under Section 11.09 or 12.04 hereof, requires the consent of each
Lender.
(d) In addition to the assignments and participations permitted under
the foregoing provisions of this Section 12.06, any Lender may (without notice
to the Company, the Administrative Agent or any other Lender and without payment
of any fee) (i) assign and pledge all or any portion of its Loans and its Notes
to any Federal Reserve Bank as collateral security pursuant to Regulation A and
any Operating Circular issued by such Federal Reserve Bank and (ii) assign all
or any portion of its rights under this Agreement and its Loans and its Notes to
an affiliate. No such assignment shall release the assigning Lender from its
obligations hereunder (except that such assignment shall release the assigning
Lender to the extent the same is effected in accordance with the provisions of
paragraph (b) above).
(e) A Lender may furnish any information concerning the Company or
any of its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject, however, to the provisions of Section 12.12(b) hereof.
(f) Anything in this Section 12.06 to the contrary notwithstanding,
no Lender may assign or participate any interest in any Loan or Reimbursement
Obligation held by it hereunder to the Company or any of its Affiliates or
Subsidiaries without the prior consent of each Lender, except that this
paragraph (f) shall not prohibit any such assignment or participation to any
Affiliate of the Company that is a bank or trust company organized under the
laws of the United States of America or a State thereof and that is supervised
by the Office of the Comptroller of the Currency or the Board of Governors of
the Federal Reserve.
(g) At the request of any Lender that is not a U.S. Person and is not
a "bank" within the meaning of Section 881(c)(3)(A) of the Code, the Company
shall maintain, or cause to be maintained, a register (the "Register") that, at
the request of the Company, shall be kept by the Administrative Agent on behalf
of the Company at no charge to the Company at the address to
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which notices to the Administrative Agent are to be sent hereunder, on which it
enters the name of such Lender as the registered owner of each Registered Loan
held by such Lender. A Registered Loan (and the Registered Note, if any,
evidencing the same) may be assigned or otherwise transferred in whole or in
part by registration of such assignment or transfer on the Register (and each
Registered Note shall expressly so provide). Any assignment or transfer of all
or part of such Loan (and the Registered Note, if any, evidencing the same) may
be effected by registration of such assignment or transfer on the Register,
together with the surrender of the Registered Note, if any, evidencing the same
duly endorsed by (or accompanied by a written instrument of assignment or
transfer duly executed by) the holder of such Registered Note, whereupon, at the
request of the designated assignee(s) or transferee(s), one or more new
Registered Notes in the same aggregate principal amount shall be issued to the
designated assignee(s) or transferee(s). Prior to the registration of
assignment or transfer of any Registered Loan (and the Registered Note, if any,
evidencing the same), the Company shall treat the Person in whose name such Loan
(and the Registered Note, if any, evidencing the same) is registered as the
owner thereof for the purpose of receiving all payments thereon and for all
other purposes, notwithstanding notice to the contrary.
(h) The Register shall be available for inspection by the Company and
any Lender that is a Registered Holder at any reasonable time upon reasonable
prior notice.
12.07 Survival. The obligations of the Company under Sections
5.01, 5.05, 5.06, 5.07 and 12.03 hereof, the obligations of each Subsidiary
Guarantor under Section 6.03 hereof, and the obligations of the Lenders under
Section 11.05 hereof, shall survive the repayment of the Loans and
Reimbursement Obligations and the termination of the Commitments and, in the
case of any Lender that may assign any interest in its Commitments, Loans or
Letter of Credit Interest hereunder, shall survive the making of such
assignment, notwithstanding that such assigning Lender may cease to be a
"Lender" hereunder. In addition, each representation and warranty made, or
deemed to be made by a notice of any extension of credit (whether by means of
a Loan or a Letter of Credit), herein or pursuant hereto shall survive the
making of such representation and warranty, and no Lender shall be deemed to
have waived, by reason of making any extension of credit hereunder (whether
by means of a Loan or Letter of Credit), any Default that may arise by reason
of such representation or warranty proving to have been false or misleading,
notwithstanding that such Lender or the Administrative Agent may have had
notice or knowledge or reason to believe that such representation or warranty
was false or misleading at the time such extension of credit was made.
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12.08 Captions. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.
12.09 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
12.10 Governing Law; Submission to Jurisdiction. This Agreement and
the Notes shall be governed by, and construed in accordance with, the law of the
State of New York. Each Obligor hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Southern District of New York and of
the Supreme Court of the State of New York sitting in New York County
(including, without limitation, its Appellate Division), and of any other
appellate court in the State of New York, for the purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. Each Obligor hereby irrevocably waives, to the fullest
extent permitted by applicable law, any objection that it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum.
12.11 Waiver of Jury Trial. EACH OF THE OBLIGORS, THE ADMINISTRATIVE
AGENT AND EACH LENDER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
Credit Agreement
<PAGE>
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12.12 Treatment of Certain Information; Confidentiality.
(a) The Company acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
the Company or one or more of its Subsidiaries (in connection with this
Agreement or otherwise) by any Lender or by one or more subsidiaries or
affiliates of such Lender and the Company hereby authorizes each Lender to
share any information delivered to such Lender by the Company and its
Subsidiaries pursuant to this Agreement, or in connection with the decision
of such Lender to enter into this Agreement, to any such subsidiary or
affiliate, it being understood that any such subsidiary or affiliate
receiving such information shall be bound by the provisions of Section
12.12(b) hereof as if it were a Lender hereunder. Such authorization shall
survive the repayment of the Loans and Reimbursement Obligations and the
termination of the Commitments.
(b) Each Lender and the Administrative Agent agrees (on behalf of
itself and each of its affiliates, directors, officers, employees and
representatives) to keep confidential, in accordance with their customary
procedures for handling confidential information of the same nature, any
non-public information supplied to it by the Company pursuant to this Agreement
that is identified by the Company as being confidential at the time the same is
delivered to the Lenders or the Administrative Agent, provided that nothing
herein shall limit the disclosure of any such information (i) after such
information shall have become public (other than through a violation of this
Section 12.12), (ii) to the extent required by statute, rule, regulation or
judicial process, (iii) to counsel for any of the Lenders or the Administrative
Agent, (iv) to bank examiners (or any other regulatory authority having
jurisdiction over any Lender or the Administrative Agent), or to auditors or
accountants, (v) to the Administrative Agent or any other Lender (or to Chase
Securities, Inc.), (vi) in connection with any litigation to which any one or
more of the Lenders or the Administrative Agent is a party, or in connection
with the enforcement of rights or remedies hereunder or under any other Loan
Document, (vii) to a subsidiary or affiliate of such Lender as provided in
Section 12.12(a) hereof or (viii) to any assignee or participant (or prospective
assignee or participant) so long as such assignee or participant (or prospective
assignee or participant) first executes and delivers to the respective Lender a
Confidentiality Agreement substantially in the form of Exhibit F hereto (or
executes and delivers to such Lender an acknowledgement to the effect that it is
bound by the provisions of this Section 12.12(b), which acknowledgement may be
included as part of the respective assignment or participation agreement
pursuant to which such assignee or participant acquires an interest in the Loans
or Letter of Credit Interest hereunder); provided, further, that in no event
shall any Lender or the Administrative Agent be obligated or required to return
any materials
Credit Agreement
<PAGE>
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furnished by the Company. The obligations of any assignee that has executed a
Confidentiality Agreement in the form of Exhibit F hereto shall be superseded by
this Section 12.12 upon the date upon which such assignee becomes a Lender
hereunder pursuant to Section 12.06(b) hereof.
12.12 Security Agreement. Each of the parties hereto understands and
acknowledges that the Security Agreement dated as of March 4, 1996 between each
of the Obligors and the Administrative Agent shall from and after the Effective
Date constitute the "Security Agreement" referred to herein and in the other
Loan Documents, as the same shall be modified and supplemented from time to
time, and that (a) the reference to the "Credit Agreement" in the Security
Agreement shall from and after the Effective Date be a reference to this
Agreement, as the same shall be amended and supplemented from time to time, (b)
the reference in the second paragraph of the Security Agreement to
"$250,000,000" shall from and after the Effective Date be a reference to
"$300,000,000", (c) the references in Section 4.01(d) of the Security Agreement
to "Section 2.09(e) of the Credit Agreement" shall from and after the Effective
Date be references to "Section 2.10(d) of the Credit Agreement", (d) the
reference in Section 4.03 of the Security Agreement to "Section 2.10(f)" shall
from and after the Effective Date be a reference to "Section 2.10(e)".
12.13 Intercompany Subordination Agreements. Each of the parties
hereto understands and acknowledges that the MBV Subordination Agreement and the
ADVO Investment Company Subordination Agreement shall from and after the
Effective Date constitute the "Intercompany Subordination Agreements" referred
to herein and in the other Loan Documents and that (a) the reference to the
"Credit Agreement" in the Intercompany Subordination Agreements shall from and
after the Effective Date be a reference to this Agreement, as the same shall be
amended and supplemented from time to time, and (b) the reference in the second
paragraph of the Intercompany Subordination Agreements to "$250,000,000" shall
from and after the Effective Date be a reference to "$300,000,000".
Credit Agreement
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
ADVO, INC.
By /s/ Sebastian J. Tarallo
Title: Vice President and Treasurer
Address for Notices:
ADVO, Inc.
One Univac Lane
P.O. Box 755
Windsor, CT 06095-0755
Attention: David M. Stigler
Telecopier No.: 860-285-6245
Telephone No.: 860-285-6241
Credit Agreement
<PAGE>
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SUBSIDIARY GUARANTORS
ADVO INVESTMENT COMPANY, INC. MBV, INC.
By /s/ Kenneth J. Kubacki By /s/ Kenneth J. Kubacki
Title: Vice President Title: Vice President
TRANS-ADVO, INC. ADVO CREATIVE SERVICES, INC.
By /s/ Barbara Tessia By /s/ Barbara Tessia
Title: Assistant Secretary Title: Assistant Secretary
VALUE FAIR, INC. STIGHEN, INC.
By /s/ Barbara Tessia By /s/ Sebastian J. Tarallo
Title: Assistant Secretary Title: Vice President and Treasurer
Credit Agreement
<PAGE>
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Lenders
Revolving Credit Commitment THE CHASE MANHATTAN BANK
$20,900,000
Term Loan Commitment By/s/ John J. Huber
$17,100,000 Title: Managing Director
Attention: John J. Huber
Telecopier No.: 212-270-4584
Telephone No.: 212-270-1402
Credit Agreement
<PAGE>
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Revolving Credit Commitment CORESTATES BANK, N.A.
$11,825,000
Term Loan Commitment By /s/ Edward L. Kittrell
$9,675,000 Title: Vice President
Attention: Edward L. Kittrell
Telecopier No.: (215) 786-7721
Telephone No.: (215) 786-4368
Credit Agreement
<PAGE>
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Revolving Credit Commitment BANK OF BOSTON
$11,825,000
Term Loan Commitment By /s/ David B. Herter
$9,675,000 Title: Managing Director
Attention: Tim Tobin
Telecopier No.: (617) 434-3401
Telephone No.: (617) 434-2147
Credit Agreement
<PAGE>
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Revolving Credit Commitment THE BANK OF NOVA SCOTIA
$11,825,000
Term Loan Commitment By /s/ Michael R. Bradley
$9,675,000 Title: Authorized Signatory
Attention: Paula McDonald
Telecopier No.: (617) 951-2177
Telephone No.: (617) 737-6316
Credit Agreement
<PAGE>
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Revolving Credit Commitment BANK OF MONTREAL, CHICAGO BRANCH
$9,625,000
Term Loan Commitment By /s/ Yvonne Bos
$7,875,000 Title: Senior Vice President
Attention: Christopher Young
Telecopier No.: (212) 605-1648
Telephone No.: (212) 605-1529
Credit Agreement
<PAGE>
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Revolving Credit Commitment THE FIRST NATIONAL BANK OF CHICAGO
$9,625,000
Term Loan Commitment By /s/ Juan J. Duarte
$7,875,000 Title: Assistant Vice President
Attention: Juan J. Duarte
Telecopier No.: (212) 373-1253
Telephone No.: (212) 373-1180
Credit Agreement
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Revolving Credit Commitment FLEET NATIONAL BANK
$9,625,000
Term Loan Commitment By /s/ David W. Parmalee
$7,875,000 Title: Executive Vice President
Attention: David W. Parmelee
Telecopier No.: (860) 986-5754
Telephone No.: (860) 986-5762
Credit Agreement
<PAGE>
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Revolving Credit Commitment CAISSE NATIONALE DE CREDIT AGRICOLE
$7,425,000
Term Loan Commitment By /s/ John McCloskey
$6,075,000 Title: Vice President
Attention: John Mc Closkey
Telecopier No.: (212) 418-2228
Telephone No.: (212) 418-2217
Credit Agreement
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Revolving Credit Commitment CITIBANK, N.A.
$7,425,000
Term Loan Commitment By /s/ Hans L. Christensen
$6,075,000 Title: Vice President
Attention: Hans Christensen
Telecopier No.: (212) 793-5300
Telephone No.: (212) 559-4786
Credit Agreement
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Revolving Credit Commitment DAI ICHI KANGYO BANK LTD.
$7,425,000
Term Loan Commitment By /s/ David J. McCann
$6,075,000 Title: Account Officer
Attention: David McCann
Telecopier No.: (212) 524-0579
Telephone No.: (212) 432-8882
Credit Agreement
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Revolving Credit Commitment THE FIRST NATIONAL BANK OF MARYLAND
$7,425,000
Term Loan Commitment By /s/ W. Blake Hampson
$6,075,000 Title: Vice President
Attention: W. Blake Hampson
Telecopier No.: (410) 244-4920
Telephone No.: (410) 244-4372
Credit Agreement
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Revolving Credit Commitment THE LONG-TERM CREDIT BANK OF JAPAN, LIMITED
$7,425,000 NEW YORK BRANCH
Term Loan Commitment By /s/ Shuichi Tajima
$6,075,000 Title: Deputy General Manager
Attention: Hisao Inagawa
Telecopier No.: (212) 608-2371
Telephone No.: (212) 335-4453
Credit Agreement
<PAGE>
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Revolving Credit Commitment MERITA BANK LTD - NEW YORK BRANCH
$7,425,000
Term Loan Commitment By /s/ Frank Maffei
$6,075,000 Title: Vice President
By /s/ Eric I. Mann
Title: Vice President
Attention: Frank Maffei
Telecopier No.: (212) 318-9318
Telephone No.: (212) 318-9561
Credit Agreement
<PAGE>
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Revolving Credit Commitment PNC BANK, NATIONAL ASSOCIATION
$7,425,000
Term Loan Commitment By /s/ Steffen W. Crowther
$6,075,000 Title: Vice President
Attention: Steffen W. Crowther
Telecopier No.: (215) 585-6680
Telephone No.: (215) 585-6376
Credit Agreement
<PAGE>
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Revolving Credit Commitment STATE STREET BANK AND TRUST COMPANY
$7,425,000
Term Loan Commitment By /s/ Monica M. Sheehan
$6,075,000 Title: Vice President
Attention: Monica Sheehan
Telecopier No.: (617) 664-3708
Telephone No.: (617) 664-4957
Credit Agreement
<PAGE>
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Revolving Credit Commitment THE SUMITOMO BANK, LIMITED
$7,425,000
Term Loan Commitment By /s/ John C. Kissinger
$6,075,000 Title: Joint General Manager
Attention: Greg Aptman
Telecopier No.: (212) 224-5188
Telephone No.: (212) 224-4131
Credit Agreement
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Revolving Credit Commitment SUNTRUST, CENTRAL FLORIDA, N.A.
$7,425,000
Term Loan Commitment By Janet P. Sammons
$6,075,000 Title: Vice President
Attention: David Miller
Telecopier No.: (407) 237-4253
Telephone No.: (407) 237-4299
Credit Agreement
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Revolving Credit Commitment SUMMIT BANK
$5,500,000
Term Loan Commitment By /s/ Henry G. Kush, Jr.
$4,500,000 Title: Vice President
Attention: Henry Kush
Telecopier No.: (609) 734-9125
Telephone No.: (609) 987-3497
Credit Agreement
<PAGE>
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THE CHASE MANHATTAN BANK,
as Administrative Agent
By /s/ John J. Huber
Title: Managing Director
Attention: John J. Huber
Telecopier No.: 212-270-4584
Telephone No.: 212-270-1402
Credit Agreement
<PAGE>
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SCHEDULE I
[Material Agreements and Liens]
Part A
[See Section 8.12(a)]
Part B
[See Section 8.12(b)]
Credit Agreement
<PAGE>
SCHEDULE II
[Subsidiaries and Investments]
Part A
[See Section 8.15(a)]
Part B
[See Section 8.15(b)]
Credit Agreement
<PAGE>
-1-
SCHEDULE III
[Real Property]
[See Section 8.18]
Credit Agreement
<PAGE>
SCHEDULE IV
[Capitalization]
[See Section 8.14]
<PAGE>
SCHEDULE V
[Litigation]
[See Section 8.03]
<PAGE>
SCHEDULE VI
[Taxes]
[See Section 8.09]
<PAGE>
SCHEDULE VII
[Environmental Matters]
[See Section 8.13]
