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
Date of Report (Date of earliest event reported): December 29, 1997
CEDAR FAIR, L.P.
(Exact name of Registrant as specified in its charter)
DELAWARE 1-9444 34-1560655
(State or other (Commission (I.R.S. Employer
jurisdiction File No.) Identification No.)
of incorporation)
P.O. Box 5006, Sandusky, Ohio 44871-5006
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (419) 626-0830
N.A.
(Former name or former address, if changed since last report)
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CEDAR FAIR, L.P.INDEX
Item 2. Acquisition or Disposition of 3
Assets
Item 7. Financial Statements and 4
Exhibits
Signatures 5
Exhibit Index 6
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On December 29, 1997, Cedar Fair, L.P. (the "Registrant")
completed the acquisition of Knott's Berry Farm, a privately held
partnership which owns and operates Knott's Berry Farm theme park
in Buena Park, California and manages Knott's Camp Snoopy at the
Mall of America in Bloomington, Minnesota. The transaction
consisted of the issuance of approximately 6.4 million
unregistered limited partnership units ("units") of the
Registrant and the payment of $94.5 million in cash borrowed by
the Registrant under an expanded revolving credit agreement with
KeyBank National Association, NBD Bank, National City Bank, First
Union National Bank and Mellon Bank, N.A.
Knott's Berry Farm is a family-oriented theme park with six
themed areas on more than 150 acres. The park serves
approximately 3.5 million guests per year, principally from the
Los Angeles and Southern California markets. Knott's Camp Snoopy
is a seven-acre indoor theme park set in the heart of the Mall of
America and is the nation's largest indoor theme park. Knott's
operations had revenues of approximately $125 million and
earnings before interest, taxes and depreciation of $24 million
in 1996. Cedar Fair's revenues and operating cash flow for 1996
were $251 million and $94 million, respectively.
Terry Hackett, a representative of the Knott family, has been
elected a member of the board of directors of Cedar Fair
Management Company, the General Partner of Cedar Fair, L.P.
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ITEM 7 - FINANCIAL STATEMENTS AND EXHIBITS.
(a)Financial Statements.
As of the date of filing of this Form 8-K, it is
impracticable for the Registrant to provide the financial
statements required by this Item 7(a). In accordance with
Item 7(a)(4) of Form 8-K, such financial statements will be
filed by amendment to this Form 8-K no later than 60 days
after January 12, 1998.
(b)Pro Forma Financial Information.
As of the date of filing of this Form 8-K, it is
impracticable for the Registrant to provide the pro forma
financial information required by this Item 7(b). In
accordance with Item 7(b) of Form 8-K, such financial
statements will be filed by amendment to this Form 8-K no
later than 60 days after January 12, 1998.
(c)Exhibits.
Exhibit (10) - Contribution Agreement by and among Cedar
Fair, L.P., Knott's Berry Farm and the Partners of
Knott's Berry Farm dated December 19, 1997.
(All exhibits described in the Agreement have been
omitted. Upon request, the Registrant will
furnish to the Commission a copy of any exhibit.)
Exhibit (10.1) -Credit Agreement dated as of December 19,
1997 among Cedar Fair, L.P., Cedar Fair, Magnum
Management Corporation and Knott's Berry Farm as
co-borrowers, and KeyBank National Association,
NBD Bank, National City Bank, First Union National
Bank and Mellon Bank, N.A. as lenders.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
CEDAR FAIR, L.P.
By: /s/ Bruce A. Jackson
Bruce A. Jackson
Corporate Vice President, Finance and
Chief Financial Officer
Date: January 12, 1998
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EXHIBIT INDEX
Exhibit Page
10 Contribution Agreement by and among Cedar Fair, 7
L.P., Knott's Berry Farm and the Partners of
Knott's Berry Farm dated December 19, 1997.
10.1 Credit Agreement dated as of December 19, 1997 49
among Cedar Fair, L.P., Cedar Fair, Magnum
Management Corporation and Knott's Berry Farm as co-
borrowers, and KeyBank National Association, NBD
Bank, National City Bank, First Union National Bank
and Mellon Bank, N.A. as lenders.
<PAGE>
CONTRIBUTION AGREEMENT
BY AND AMONG
CEDAR FAIR, L.P.,
KNOTT'S BERRY FARM
AND
THE PARTNERS OF KNOTT'S BERRY FARM
December 19, 1997
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CONTRIBUTION AGREEMENT
This CONTRIBUTION AGREEMENT (the "Agreement") is made this 19th
day of December, 1997, by and among Cedar Fair, L.P., a Delaware
limited partnership (the "Purchaser"), Knott's Berry Farm, a
California General Partnership (the "Company"), and holders of
the partnership and assignee interests in the Company identified
on Schedule 3.02 attached hereto (collectively, the "Partners").
Recitals
A. The Partners own 100% of the outstanding
partnership interests of the Company.
B. The Company owns and operates the Knott's Berry
Farm Theme Park and Knott's California Marketplace in Buena Park,
California, and manages Knott's Camp Snoopy at the Mall of
America in Bloomington, Minnesota pursuant to the MOA Agreement
(as defined in Section 2.07(b)).
C. On the terms and conditions set forth herein, the
parties hereto desire that all of the Partners contribute 99.9%
of their partnership and assignee interests of the Company to the
Purchaser and .1% of their partnership interests to Magnum
Management Corporation, a subsidiary of Purchaser ("Magnum").
NOW, THEREFORE, in consideration of the foregoing and
the representations, warranties and covenants, and subject to the
conditions, herein set forth, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.01 Defined Terms. The following words shall have the following
meanings when used in this Agreement:
"Adjusted Unit Value" shall have the meaning specified
in Section 2.07(d).
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"Authorized Representative" shall mean the person or
persons appointed by the Partners prior to the Closing to carry
out the duties and exercise the power and authority of the
Authorized Representative under the terms and provisions of this
Agreement. The initial Authorized Representative, whose
appointment is effective as of the date of this Agreement, is
Terry Hackett. Such party, or any successor thereto, may be
removed at any time and a successor therefore may be appointed
pursuant to a Written Action. Any party serving as Authorized
Representative may resign at any time by providing notice of such
resignation in writing to the Purchaser and the Partners,
whereupon the Partners shall appoint a successor by Written
Action. No resignation or removal of the Authorized
Representative is effective under this Agreement until notice
thereof is provided to Purchaser in accordance with Section 10.01
hereof and no such resignation or removal will affect any action
taken prior thereto by the Authorized Representative.
"Balance Sheet Date" shall mean September 28, 1997.
"BOA Debt Schedule" shall mean the schedule submitted
to Purchaser by the Authorized Representative at least three
(3) business days prior to the Closing, which schedule shall set
forth the principal amount of the Company's indebtedness to Bank
of America, plus accrued but unpaid interest thereon through to
and including the Closing Date, which indebtedness and accrued
interest shall be paid by Purchaser pursuant to Section 2.03(b)
hereof as of the Closing Date.
"Closing" shall have the meaning specified in
Section 2.05.
"Closing Date" shall have the meaning specified in
Section 2.05.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Crescent Avenue Land Acquisition" shall mean the
Company's acquisition of approximately 6.7 acres of land at
Western and Crescent Avenues in Buena Park, California, as more
particularly described in Exhibit A.
"Current Assets" shall consist of the current assets as
shown on the December 29, 1996 Balance Sheet, the
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September 28, 1997 Balance Sheet or the Final Balance Sheet, as
the case may be, which balance sheets shall each be prepared in
accordance with GAAP.
"Current Liabilities" shall consist of the current
liabilities as shown on the December 29, 1996 Balance Sheet, the
September 28, 1997 Balance Sheet or the Final Balance Sheet, as
the case may be, which balance sheets shall each be prepared in
accordance with GAAP.
"Current Value" on any given date shall mean a value
equal to the average daily closing price of a Unit on the New
York Stock Exchange Composite Tape for the ten (10) trading days
immediately preceding such date.
"Damages" shall have the meaning specified in Section
8.01.
"December 29, 1996 Balance Sheet" shall have the
meaning specified in Section 3.05.
"Environmental Laws" shall have the meaning specified
in Section 3.22.
"Expenditure Schedule" shall mean the schedule
submitted to Purchaser by the Authorized Representative at least
three (3) business days prior to the Closing, which schedule
shall set forth (i) the aggregate expenditures by the Company
made on or after January 1, 1997, in connection with or otherwise
relating to the Wooden Roller Coaster, currently being developed
by the Company, including but not limited to design, development,
site preparation and construction activities related thereto and
(ii) the aggregate capitalized expenditures made by the Company
on or before the Closing Date in connection with the Crescent
Avenue Land Acquisition and the La Palma Commercial Acquisition,
which expenditures shall be paid by Purchaser pursuant to
Section 2.03(e) hereof as of the Closing Date.
"Final Balance Sheet" shall mean a balance sheet of the
Company (including the assets and liabilities of Virginia's Gift
Shop and MOA Entertainment, L.P.) as of 11:59 p.m. on
December 28, 1997 in accordance with GAAP applied on a basis
consistent with the preparation of the 1996 Financial Statements.
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"Final Balance Sheet Date" shall mean December 28,
1997.
"Final Balance Sheet Tax Liabilities" shall mean all
Tax Liabilities for Pre-Acquisition Taxable
Periods and Straddle Periods reflected in the Final
Balance Sheet and thus taken into account in determining the
Final Working Capital.
"Final Working Capital" shall mean Working Capital as
reflected in the Final Balance Sheet.
"Financial Statements" shall have the meaning specified
in Section 3.05.
"Fiscal Close Date" shall mean December 28, 1997, the
date on which the Company's 1997 tax and fiscal year ends.
"GAAP" shall mean generally accepted accounting
principles as applied on a consistent basis throughout the three
year period ended December 29, 1996.
"Hazardous Materials" shall have the meaning specified
in Section 3.22.
"Indebtedness" shall mean (i) obligations for borrowed
money, (ii) reimbursement obligations in respect of any letter of
credit (whether secured or unsecured), (iii) obligations
representing the deferred purchase price of property other than
accounts payable arising in connection with purchases in the
ordinary course of business, and (iv) any guarantee in respect of
any obligations referred to in clauses (i), (ii) or (iii).
"Independent Accounting Firm" shall mean a nationally
recognized independent accounting firm jointly selected by the
Authorized Representative and Purchaser. If such parties cannot
agree on such accounting firm, the accounting firm will be
selected as follows: the Authorized Representative and Purchaser
shall each submit the name of a nationally recognized independent
accounting firm that has not provided, in the two years prior to
the date the name of such firm is submitted for selection
pursuant to the terms hereof, professional Tax-related services
worth more than $100,000 to any of the Company, the Partners or
Purchaser or their respective affiliates, and the "Independent
Accounting Firm" shall mean the firm selected by lot from these
two firms.
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"Intangible Personal Property" shall have the meaning
specified in Section 3.10.
"La Palma Commercial Acquisition" shall mean the
Company's acquisition of an approximate 20,300 square foot
commercial building located on La Palma Avenue in Buena Park,
California, as more particularly described in Exhibit A.
"Licenses" shall have the meaning specified in
Section 3.14.
"Long-Term Debt" shall mean the consolidated long-term
debt of the Company, determined in accordance with GAAP less
current installments of such long-term debt.
"Material Adverse Effect" shall mean changes,
developments or occurrences which, individually or in the
aggregate, have or reasonably can be expected to have a material
adverse effect on the assets, liabilities, business, operations
or financial condition or operating results of the Company.
"Partner Loan Account Schedule" shall mean the schedule
submitted to Purchaser by the
Authorized Representative at least three (3) business
days prior to the Closing, which schedule shall set forth the
principal amount of the Company's indebtedness to each Partner
(or affiliate thereof), plus accrued but unpaid interest thereon
through to and including the Closing Date, which indebtedness and
accrued interest shall be paid by Purchaser pursuant to
Section 2.03(a) hereof as of the Closing Date.
"Partners' Knowledge" shall mean that whenever a
representation or warranty is made herein as being "to the
Partners' knowledge" or "to the knowledge of the Partners" or
that the "Partners are aware" or "not aware" of a matter or words
of similar import, it shall mean that the Partners have made or
caused to be made (and the results thereof reported to them) a
reasonable inquiry to determine the accuracy of such
representation or warranty by officers of the Company whom the
Partners believe to be appropriate with respect to the subject
matter of the inquiry.
"Percentage Interests" shall mean the percentage
interests of the Partners in the Company as set forth in
Schedule 3.02.
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"Post-Acquisition Taxable Period" shall mean a taxable
period of the Company that begins on or after the Closing Date.
"Pre-Acquisition Tax Liability" shall mean a Tax
liability of the Company for or with respect to any
Pre-Acquisition Taxable Period or any Straddle Period to the
extent allocable to the period ending on the Closing Date, but
not including any Stub Period Tax Liabilities.
"Pre-Acquisition Taxable Period" shall mean a taxable
period of the Company that ends before the Closing Date.
"Proceeding" shall mean any audit or other examination,
or any judicial or administrative proceeding, relating to
liability for or refunds or adjustments with respect to Taxes.
"Purchase Price" shall have the meaning specified in
Section 2.02.
"Purchaser Tax Liabilities" shall mean without
duplication, each and all of (i) the Final Balance Sheet Tax
Liabilities, (ii) Stub Period Tax Liabilities, (iii) Tax
Liabilities attributable to that portion of a Straddle Period
following the Closing Date, and (iv) Tax Liabilities attributable
to Post-Acquisition Taxable Periods.
"Purchaser Termination" shall have the meaning
specified in Section 9.02.
"Real Property" shall have the meaning specified in
Section 3.12.
"Retiring Executives" shall mean Terry Van Gorder,
Gerald Elmer and Larry Frack.
"September 28, 1997 Balance Sheet" shall have the
meaning specified in Section 3.05.
"SERP Benefit" shall mean the supplemental employee
retirement benefit payable by the Company to Terry Van Gorder.
"Straddle Period" shall mean a taxable period of the
Company that includes but does not end on the Closing Date.
<PAGE>
"Stub Period" shall mean, in the sole case wherein the
Closing Date occurs following December 29, 1997, the period
commencing on December 29, 1997, and ending on the Closing Date.
If the Closing occurs on or before December 29, 1997, all
references in this Agreement to the Stub Period shall be deemed
nonoperative.
"Stub Period Tax Liabilities" shall mean all Tax
Liabilities of the Company attributable to the Company's
activities during the Stub Period as determined in accordance
with Section 5.02(a)(3).
"Tax" or "Taxes" shall mean all taxes, including,
without limitation, all net income, gross receipts, sales, use,
withholding, payroll, employment, social security, unemployment,
disability, excise, property, and estimated taxes, together with
any interest, penalties, or additions thereto imposed by any
governmental taxing authority.
"Tax Liabilities" shall mean all liabilities for Taxes.
"Tax Return" shall mean all federal, state, local and
foreign tax returns, declarations, statements, reports,
schedules, form and information returns and any amendments to any
of the foregoing.
"Transaction Fee Schedule" shall mean the schedule
submitted to Purchaser by the Authorized Representative three
(3) business days prior to the Closing reflecting the fees and
expenses of the Company and the Partners in connection with the
transactions contemplated by this Agreement, including but not
limited to legal, accounting and investment banking fees, the
Change in Control Payments described in Section 5.01(b), the cash
severance benefits payable to the Retiring Executives, and the
SERP Benefit.
"Units" shall mean units of limited partnership
interest of Purchaser. All references herein to numbers of Units
and the price of Units take into account the 2-for-1 Unit split
which occurred on November 17, 1997.
"Unit Value" shall mean $23.34.
"Wooden Roller Coaster" shall mean the major capital
improvement/attraction consisting of a wooden roller coaster
<PAGE>
being developed by the Company for opening in June, 1999. The
total cost of the project is currently estimated to be
approximately $24,000,000, with the Company anticipating 1997
expenditures of approximately $6,400,000.
"Working Capital" shall mean Current Assets less
Current Liabilities, exclusive of any indebtedness reflected in
the BOA Debt Schedule and fees and expenses reflected in the
Transaction Fee Schedule.
"Written Action" shall mean a written instrument
approved and executed by Partners holding more than sixty-six
percent (66%) of the Percentage Interests in the Company.
1.02 Additional Terms. In addition to the foregoing,
other capitalized terms used in this Agreement shall have the
meanings given to such terms where they first appear herein.
ARTICLE II
TRANSFER OF INTERESTS
2.01 Contribution of Interests. Subject to the terms
and conditions set forth herein, at the Closing, the Partners
shall contribute 99.9% and .1% of their partnership and assignee
interests in the Company to Purchaser and Magnum, respectively,
and Purchaser and Magnum shall acquire such partnership and
assignee interests. The partnership and assignee interests in
the Company shall be collectively referred to herein as the
"Interests."
2.02 Purchase Price for Interests. The aggregate
purchase price to be paid by Purchaser and Magnum for the
Interests (the "Purchase Price"), which shall be payable as set
forth in Section 2.03 hereof, shall be equal to the sum of the
following:
(a) Two Hundred Forty-Five Million Dollars
($245,000,000), subject to adjustment as set forth in
Section 2.05, Section 2.06 and Section 2.07;
(b) all expenditures by the Company made on or
after January 1, 1997, in connection with or otherwise relating
to the Wooden Roller Coaster currently being developed by the
Company, including but not limited to design, development, site
preparation and construction activities related thereto; and
<PAGE>
(c) all capitalized expenditures made by the
Company on or before the Closing Date in connection with the
Crescent Avenue Land Acquisition and the La Palma Commercial
Acquisition.
2.03 Payment of Purchase Price. The purchase price shall be paid
by Purchaser as follows:
(a) At the Closing, Purchaser shall pay the
aggregate amount of the indebtedness of the Company owed to
certain Partners or affiliates thereof, as reflected in the
Partner Loan Account Schedule and inclusive of principal and
interest accrued through the Closing Date, with such payment to
be made by wire transfer of immediately available funds to an
account specified by the Authorized Representative for
distribution to the respective Partners.
(b) At the Closing, Purchaser shall pay, by wire
transfer of immediately available funds, to Bank of America the
aggregate amount of indebtedness, inclusive of principal and
interest accrued through the Closing Date, as set forth in the
BOA Debt Schedule.
(c) At the Closing, or following the Closing in
the case of payments required pursuant to Section 5.01(b) hereof,
Purchaser shall pay the fees and expenses reflected in the
Transaction Fee Schedule, with Purchaser to make payment of such
fees and expenses by wire transfer of immediately available funds
or by check delivered at the Closing, whichever may be applicable
as specified in the Transaction Fee Schedule.
(d) At the Closing, as security for the Partners'
performance of their obligations set forth in Section 2.06,
Section 2.07 and Section 8.01 of this Agreement, the Partners
hereby direct and authorize Purchaser to deposit in escrow with
NBD Bank, N.A. as escrow agent ("Escrow Agent") certificates,
registered in the name of and issued to the Partners (in
accordance with their respective Percentage Interests),
representing One Million Seventy-One Thousand One Hundred Twenty-
Two (1,071,122) Units (the "Escrowed Units"). The Escrowed Units
shall be accompanied by assignment powers in blank, to be held
and distributed in accordance with the terms and conditions of
the Escrow Agreement attached hereto as Exhibit B ("Escrow
Agreement"). Notwithstanding such arrangement, the Partners
shall retain all voting rights and all rights to dividends and
other distributions with respect to the Escrowed Units.
Notwithstanding the foregoing, if any Partners elect to receive
all cash pursuant to Section 2.03(e) below, Purchaser shall
deposit cash rather than Escrowed Units with the
<PAGE>
Escrow Agent in an amount equal to the product of $25,000,000
multiplied by such Partners' respective Percentage Interests.
(e) At the Closing, Purchaser shall pay to an
account specified by the Authorized Representative for
distribution to the Partners, in accordance with their respective
Percentage Interests, by wire transfer of immediately available
funds or by delivery of Units, an amount in the aggregate sum
equal to the Purchase Price set forth in Section 2.02 less the
amounts set forth in subsections (a), (b) (c) and (d) above.
Each Partner may elect to have its pro rata share of the Purchase
Price paid to it in Units or in cash, or a combination of Units
and cash. For purposes of calculating the number of Units
payable to the Partners pursuant to this Section 2.03, Units
shall be valued at $23.34 (the "Unit Value"). Written notice of
each Partner's election must be delivered to Purchaser at least
twenty (20) days prior to the Closing Date. In the event written
notice of such election is not delivered at least twenty (20)
days prior to the Closing Date, Purchaser shall pay such
Partner's pro rata share in Units.
(f) Although Units will be issued on the Closing
Date, the parties agree that the holders of such Units will not
be deemed to have received any income with respect thereto in
1997 nor entitled to any distributions declared with respect to
1997.
2.04 The Partners to Deliver Title and Possession. At
the Closing, each of the Partners shall deliver to Purchaser
executed documents of transfer for each of their respective
Interests and other good and sufficient instruments of transfer
as Purchaser may reasonably require to vest effectively in
Purchaser good and valid title to the Interests, free and clear
of any claims, liens, pledges, options, security interests,
trusts, encumbrances or other rights or interests of any person,
in accordance with the terms hereof.
2.05 Date, Time and Place of Closing. The consummation
of the transactions contemplated by this Agreement (the
"Closing") shall take place effective as of 12:01 a.m., local
time, on December 29, 1997, or on the fifth business day
following the date on which all conditions precedent to the
obligations of the parties hereunder have been satisfied or
waived, whichever is the later to occur (the "Closing Date"), at
the offices of Gibson, Dunn & Crutcher LLP, 4 Park Plaza, Irvine,
California 92614 or at such other date, time and place as may be
mutually agreed upon in writing by the parties. Purchaser shall
be entitled to all revenues and profits generated on the Closing
Date and shall be responsible for any
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taxes, costs, losses or other expenses incurred on such date. If
the Closing Date occurs after December 29, 1997, however, all
profit, loss, revenues, costs and expenses incurred with respect
to the operation of the business of the Company from and after
12:01 a.m. December 29, 1997 shall be for the benefit of and
account of the Purchaser. Without limiting the generality of the
foregoing, any additional indebtedness incurred by the Company in
order to fund such operations from and after December 29, 1997
under its credit facility with Bank of America shall be added to
the Purchase Price. All proceedings to take place at the Closing
shall take place simultaneously, and no delivery shall be
considered to have been made until all such proceedings have been
completed.
2.06 Working Capital Adjustment.
(a) The Purchase Price for the Interests will be
adjusted, by increasing or decreasing the amount thereof,
pursuant to the following provisions of this Section 2.06 (the
"Working Capital Adjustment"). If the Final Working Capital is
less than one dollar, the Purchase Price shall be reduced by, and
the Partners shall return to Purchaser, that number of Units
(valued at the Unit Value) equal to the difference between one
dollar and the Final Working Capital. In the event that the
Final Working Capital is greater than one dollar, the Purchase
Price shall be increased by, and Purchaser shall issue to the
Partners, that number of Units (valued at the Unit Value) equal
to the difference between the Final Working Capital and one
dollar. The Working Capital Adjustment shall be payable after
the Closing Date as set forth below and shall be reduced by the
amount of the Pro Forma Working Capital Adjustment (as defined
below).
(b) In an effort to reduce the amount of the
Working Capital Adjustment after the Closing Date, a pro forma
Working Capital Adjustment shall initially be calculated at the
Closing (the "Pro Forma Working Capital Adjustment") based on the
most recently available balance sheet (the "Pre-Closing Balance
Sheet"). The Pro Forma Working Capital Adjustment shall be
determined as follows: the payment to be made by Purchaser at the
Closing pursuant to Section 2.02(a) shall be increased or
decreased, as applicable, to the extent that the Working Capital
as reflected in the Pre-Closing Balance Sheet is greater than or
less than, as the case may be, one dollar.
(c) No later than 60 days following the Closing
Date, Deloitte & Touche LLP shall prepare and deliver to the
Authorized Representative and Purchaser an audited Final Balance
Sheet. During the 30 days after delivery of the audited Final
Balance Sheet, the Authorized Representative and Purchaser and
<PAGE>
their respective representatives and accountants shall have the
right to review, audit and approve the appropriate entries on the
audited Final Balance Sheet concerning the Final Working Capital.
The Authorized Representative and Purchaser and their respective
representatives and accountants shall have the right to review
the workpapers of Deloitte & Touche LLP used in preparing the
audited Final Balance Sheet and the Authorized Representative and
his representatives and accountants shall have full access to the
books and records of the Company for the purpose of verifying the
accuracy and fairness of the audited Final Balance Sheet. If
neither party objects to the audited Final Balance Sheet within
such 30-day period, it shall be deemed acceptable to and binding
upon the parties.
(d) If either the Authorized Representative or
Purchaser has any objections to the audited Final Balance Sheet,
such party will deliver a detailed statement describing their
objections to the other party within 30 days after receiving the
audited Final Balance Sheet. Purchaser and the Authorized
Representative will use reasonable efforts to resolve any such
objections themselves. If the parties do not obtain a final
resolution within 30 days after a party has received the
statement of objections, however, Purchaser and the Authorized
Representative will select an accounting firm mutually acceptable
to them to resolve any remaining objections. The fees and
expenses incurred by the mutually acceptable accounting firm in
resolving any disputes shall be paid half by the Partners and
half by Purchaser.
2.07 Contract Adjustments.
(a) UFS Adjustment. In the event the "Peanuts"
License Agreement (the "Peanuts Agreement") between the Company
and the United Features Syndicate ("UFS") dated May 28, 1997
(effective June 1, 1998) is terminated by UFS within one year of
the Closing Date, the Purchase Price shall be reduced by, and the
Partners shall return to Purchaser, Units having an Adjusted Unit
Value equal to $5 million; provided, however, that such reduction
in Purchase Price shall not be payable if the termination results
from any action or inaction of Purchaser unrelated to the
acquisition by Purchaser of the Partners' interests in the
Company.
(b) MOA Adjustment. In the event that the
Design, Development and Management Services Agreement between MOA
Entertainment L.P., the Company and Minnertainment Company dated
July 10, 1990 (the "MOA Agreement") is terminated within one year
of the Closing Date, the Purchase Price shall be reduced by, and
the Partners shall return to Purchaser Units
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having an Adjusted Unit Value equal to $20 million, less any
amounts paid or payable to the Company or Purchaser pursuant to
the MOA Agreement after the Closing Date; provided, however, that
such reduction in purchase price shall not be payable if the
termination results from any action or inaction of Purchaser
unrelated to the acquisition by Purchaser of the Partners'
interests in the Company. In the event that the MOA Agreement is
amended (or it is terminated and an agreement providing for
substantially similar services is entered into) and such
agreement provides for average net annual compensation to the
Company or Purchaser in an amount less than $2.1 million, the
Purchase Price shall be reduced by, and the Partners shall return
to Purchaser Units having an Adjusted Unit Value equal to the
difference between (i) $20 million minus (ii) the product of the
net annual compensation payable under the amended or new
agreement (taking into account incentive, percentage, profit
participation or similar contingent payments) multiplied by
9.524.
(c) Termination Defined. For purposes of the
adjustments set forth in this Section 2.07, a termination of the
Peanuts Agreement or the MOA Agreement followed by the execution
of an agreement providing for substantially similar rights or
services shall not constitute a termination for purposes of
triggering an adjustment to the Purchase Price.
(d) Adjusted Unit Value Defined. For purposes of
calculating the number of Units to be returned to Purchaser in
the event of a Purchase Price adjustment pursuant to
subsection (a) or (b) of this Section 2.07, the Adjusted Unit
Value shall be the Unit Value, plus or minus, as the case may be,
the product of .5 multiplied by the difference between the
Current Value as of the date of the Final Determination (as
defined in Section 3.5 of the Escrow Agreement) and the Unit
Value.
(e) Partners Right to Bring Suit. In the event
that the Peanuts Agreement or the MOA Agreement are terminated
within one year of the Closing Date and the Purchase Price is
reduced as set forth in Sections 2.07(a) or (b), the Partners
shall have the right to bring suit against any of the parties to
such agreements (other than Purchaser, except as set forth in
Section 8.02 hereof) for breach of contract or other action.
Purchaser agrees to cooperate with and assist the Partners in any
such action.
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PARTNERS
The Partners, severally and not jointly, and the Company
represent and warrant to Purchaser that at the Closing:
3.01 Organization, Good Standing and Authority. The
Company is a general partnership duly formed and validly existing
under the laws of the State of California. The Company has full
partnership power and authority to carry on its business as it is
now conducted, and is entitled to own, lease or operate the
properties and assets it now owns, leases or operates. The
Company is qualified to do business and has all required and
appropriate licenses in each jurisdiction in which its failure to
obtain or maintain such qualification or licensing (i) would have
a Material Adverse Effect or (ii) would result in a material
breach of any of the other representations, warranties or
covenants set forth in this Agreement. Each of the Partners has
the requisite corporate or trustee power and authority, as the
case may be, to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly
executed and delivered by each of the Partners, has been
authorized by all necessary corporate or trustee action, as the
case may be, of the Partners and constitutes a legal, valid and
binding obligation of each Partner, enforceable against each of
them in accordance with its terms, except as enforcement may be
limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to creditors
rights generally. Except as described in Exhibit A, the Company
does not own, directly or indirectly, legally or beneficially, or
have any rights to acquire, any shares of capital stock or any
equity interest in, or otherwise control, any corporation,
company, partnership, joint venture or other entity or business.
3.02 Ownership of Interests and Power to Transfer. All
of the Interests are validly issued and outstanding, fully paid
and nonassessable. The Percentage Interests owned by each
Partner are set forth on Schedule 3.02 hereto. Neither the
Partners nor the Company have granted, issued or agreed to grant
or issue any other partnership interests in the Company (other
than the Interests), and there are no outstanding options,
subscription rights, securities that are convertible into or
exchangeable for, or any other commitments of any character
relating to, the Interests or any other partnership interests of
the Company. The Partners have good and valid title to, and
<PAGE>
sole record and beneficial ownership of, the Interests, free and
clear of any claims, liens, pledges, options, security interests,
trusts, encumbrances or other rights or interests of any person,
and the Partners have the absolute and unrestricted right, power,
authority and capacity to transfer the Interests to Purchaser at
the Closing.
3.03 Consents and Approvals of Governmental
Authorities. Except as set forth in Schedule 3.03 hereto, no
consent, approval or authorization of, or declaration, filing or
registration with, any governmental or regulatory authority by
the Partners or the Company is required in connection with the
execution, delivery and performance of this Agreement by the
Partners and the Company and the consummation by the Partners and
the Company of the transactions contemplated hereby.
3.04 Agreement not a Breach. Except as set forth on
Schedule 3.04 hereto, the execution of this Agreement by each of
the Partners and the fulfillment, performance and compliance with
the terms and provisions of this Agreement by each of the
Partners will not (i) conflict with or result in a breach of any
provision of the general partnership agreement of the Company;
(ii) conflict with, violate or result in a breach of the terms,
conditions or provisions of, or constitute (with or without
giving of notice or the lapse of time or both), a default (or
give rise to any right of termination, cancellation,
acceleration, suspension or revocation) or result in the
acceleration of any obligation under, or permit termination of,
any material agreement, lease, license, note, contract or
instrument to which any of the Partners or the Company, as the
case may be, is a party or by which any of them or their property
is bound; (iii) accelerate, or constitute (with or without giving
of notice or the lapse of time or both) an event entitling the
holder of any Indebtedness of the Company to accelerate the
maturity of any such Indebtedness, permit subordination of any
such Indebtedness of the Company to any other Indebtedness of the
Company to which the Company was not already subordinated; (iv)
conflict with or violate the provisions of any law or any
material judgment, decree, order, regulation or rule of any court
or governmental authority or any material covenant or restriction
binding upon the Company; (v) violate or result in the
modification, termination or loss of any material permit, license
or other authorization applicable to the Company; or (vi) result
in the creation of any material lien, charge or encumbrance upon
any partnership interest in or assets of the Company under any
agreement or instrument to which the Company is a party or by
which the Company is bound.
<PAGE>
3.05 Financial Statements. The Partners have delivered
to Purchaser the audited consolidated balance sheet of the
Company as of December 29, 1996 (the "December 29, 1996 Balance
Sheet") and related statements of income and cash flow for the
twelve month period then ended (the "1996 Financial Statements").
In addition, the Partners have delivered to Purchaser (a) the
unaudited consolidated balance sheet of the Company as of
September 28, 1997 (the "September 28, 1997 Balance Sheet") and
related statements of income and cash flow for the nine month
period then ended (the "Interim Financial Statements"), (b) the
unaudited balance sheet of Virginia's Gift Shop ("VGS") as of
September 28, 1997 and related statements of income and cash flow
for the nine month period then ended (the "VGS Financial
Statements") and (c) the unaudited balance sheet of MOA
Entertainment, L.P. ("MOA") as of September 28, 1997 and related
statements of income and cash flow for the nine month period then
ended (the "MOA Financial Statements"). The 1996 Financial
Statements, the Interim Financial Statements, the VGS Financial
Statements and the MOA Financial Statements are collectively
referred to herein as the "Financial Statements" and are attached
hereto as Schedule 3.05. Except as set forth in Schedule 3.05
hereto, the Financial Statements (i) were prepared in accordance
with the books and records of the Company, VGS or MOA, as
applicable; (ii) were prepared in accordance with such entity's
accounting policies and principles and are in accordance with
GAAP (except that the Interim Financial Statements, the VGS
Financial Statements and the MOA Financial Statements are
unaudited and therefore do not have certain notes otherwise
required by GAAP and may be subject to year-end audit
adjustments); and (iii) present fairly the financial condition
and results of operations of the Company, VGS or MOA, as
applicable, at the dates and for the periods covered thereby.
3.06 Absence of Certain Changes. Except as set forth
in Exhibit A and Schedule 3.06, since the Balance Sheet Date
there has not been:
(a) Any Material Adverse Effect, and the Company
has in all material respects conducted its business in the
ordinary course consistent with past practices;
(b) Any increase in the compensation paid or
payable by the Company, other than in the ordinary course of
business, to any of its officers or employees;
(c) Any recapitalization in respect of the
partnership interests in the Company or any direct or indirect
redemption, purchase or other acquisition of any such
<PAGE>
partnership interest or any agreement to do any of the foregoing;
(d) Any issuance, transfer, sale or pledge by the
Company of any partnership interest or of any commitments,
options, rights or privileges under which the Company is or may
become obligated to issue any partnership interests;
(e) Any Indebtedness incurred by the Company
(excluding intercompany transactions), except such as may have
been incurred or entered into in the ordinary course of business
and consistent with past practices;
(f) Any loan made or agreed to be made by the
Company (excluding intercompany transactions), nor has the
Company become liable or agreed to become liable as a guarantor
with respect to any loan;
(g) Any waiver by the Company of any right or
rights of material value or any payment, direct or indirect, of
any material debt, liability or other obligation before the same
became due in accordance with its terms;
(h) Any change in the accounting methods,
practices or policies followed by the Company from those in
effect during the past three fiscal years;
(i) Except for the purchase, replacement or
disposition of assets in the ordinary course of business, any
purchase or other acquisition of, or any sale, lease, disposition
of, mortgage, pledge or subjection to any lien or encumbrance on,
any material property or assets, tangible or intangible assets of
the Company or any agreement to do any of the foregoing; or
(j) Any materially adverse change in the
relationship of the Company or any of its affiliates with any
suppliers, customers, sponsors or other third parties having
business relationships with the Company.
3.07 Taxes. Except as set forth in Schedule 3.07
hereto, the Company has (a) timely filed or caused to be timely
filed all Tax Returns of the Company required to be filed as of
the date hereof (after giving effect to any valid extension of
time to file such Tax Returns) and (b) paid, when due (or made
provision in accordance with GAAP with respect thereto), all
taxes as shown to be due and payable on said Tax Returns. No Tax
Liabilities, disallowances, deficiencies or assessments relating
to the business, assets or employees of the Company have been
assessed on, asserted or proposed to the Company as of the date
hereof and all such Tax Returns are complete, accurate and in all
material respects and were prepared in accordance with all legal
requirements applicable thereto. No federal, state, local or
foreign audits, other administrative proceedings
<PAGE>
or court proceedings are presently pending with regard to any
Taxes or Tax Returns of the Company wherein an adverse
determination or ruling in any one such proceeding or in all such
proceedings in the aggregate would have (or reasonably be
expected to result in) a Material Adverse Effect.
3.08 Collective Bargaining Agreements and Employee
Benefits. Except as described in Schedule 3.08, the Company is
not involved in any labor discussion with any unit or group
seeking to become the bargaining unit for any of its employees,
nor has any such unit or group notified the Partners or the
Company of an intention to commence any organizational activities
among the employees of the Company. Schedule 3.08 contains a
listing of (a) each collective bargaining agreement and other
labor agreement to which the Company is a party or by which it is
bound, (b) each employment, consulting, severance, deferred
compensation, bonus, Interest purchase, Interest option, salary
continuation, incentive and any other employee benefit plan or
agreement providing for compensation or other benefits to
employees (including officers), or independent contractors,
individually or as a group, to which the Company is a party or by
which it is bound; (c) each "employee pension benefit plan" as
defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974 ("ERISA") and not exempted under Section
4(b) or 201 of ERISA maintained by the Company or to which the
Company is required to contribute, including any multi-employer
pension plan; and (d) each "employee welfare benefit plan" as
defined in Section 3(1) of ERISA maintained by the Company or to
which the Company contributes or is required to contribute,
including any multi-employer welfare plan, and each other plan
under which "fringe benefits" (including, without limitation,
vacation plans or programs, severance benefits, sick leave plans
or programs, dental or medical plans or programs, and related or
similar benefits) are afforded to employees of, or otherwise
required to be provided by, the Company. The Company has
complied in all material respects with all applicable laws, rules
and regulations relating to employment, including those relating
to wages, hours, collective bargaining and the payment and
withholding of taxes and other sums as required by appropriate
governmental authorities. Except as set forth in Schedule 3.08,
all employee benefit plans, as defined in Section 3(3) of ERISA,
of the Company in effect at any time since inception of the
Company are now, and have always been, established, maintained
and operated in accordance, in all material respects, with all
applicable laws (including, but not limited to, ERISA and the
Code) and all regulations and interpretations thereunder and in
<PAGE>
accordance with their plan documents. Except as set forth in
Schedule 3.08, there is no unfunded liability for vested or non-
vested benefits under any funded employee benefit plan, and all
contributions required to be made to or with respect to each
employee benefit plan and all costs of administering each
employee benefit plan have been completely and timely paid. With
respect to each benefit plan that is subject to Title IV of
ERISA, no liability or obligation to the PBGC has been incurred
or is expected except for insurance premiums under Section 4007
of ERISA, and all insurance premiums incurred or accrued up to
and including the Closing Date have been or will be timely paid
by the Company; and no amount is, and as of the Closing Date no
amount will be, due or owing from the Company to any
"multiemployer plan" (as defined in Section 3(37) of ERISA) on
account of any withdrawal therefrom. There has been no
prohibited transaction as described in Section 406 of ERISA and
Section 4975 of the Code with respect to any employee benefit
plan. No employee benefit plan provides medical benefits to any
former employees (including retirees) of the Company, other than
benefits required to be provided under Section 490B of the Code.
3.09 Litigation. Except as set forth in Schedule 3.09:
(a) Neither the Partners nor the Company is a
party to, or to their knowledge is affected by, any writ,
injunction or decree of any court or governmental instrumentality
which, individually or in the aggregate, could reasonably have a
Material Adverse Effect;
(b) The Company is not engaged in, or to the
knowledge of the Partners or the Company, threatened with, nor is
there pending, any legal action or other proceeding before any
court or administrative agency and no written claims have been
made against the Company, except any such action, proceeding or
claim which, if adversely decided, could not reasonably result in
a Material Adverse Effect; and
(c) No investigations of or claims against the
Company, or its officers have been made or, are, to the knowledge
of the Partners or the Company, pending or threatened by any
governmental body or agency.
3.10 Licenses of Intangible Personal Property. There
is listed in Schedule 3.10 all licenses or similar agreements or
arrangements that are material to the business of the Company and
to which the Company is a party either as licensee or licensor
for any item of intangible personal property ("Intangible
Personal Property") and except as set forth on Schedule 3.10:
<PAGE>
(a) No proceedings have been instituted or are
pending or, to the knowledge of the Partners and the Company,
threatened, nor have any claims or notices been received, that
challenge the rights of the Company in any material respect in
and to any of such Intangible Personal Property or any license
thereof;
(b) There are no pending or, to the knowledge of
the Partners and the Company, threatened claims, demands or
proceedings, restricting the right of the Company to use,
charging the Company with infringement of, or making any other
claim with respect to, any of such Intangible Personal Property
or any license thereof which, if adversely determined, could,
individually or in the aggregate, reasonably have a Material
Adverse Effect; and
(c) None of the rights of the Company in (as
transferred to Purchaser), to and under any Intangible Personal
Property will be materially adversely affected by the
consummation of the transactions contemplated hereby; and
(d) To the Partners' knowledge, the operations of
the business of the Company as presently conducted do not
infringe any rights of others to any intellectual property owned
by others.
3.11 Insurance. Schedule 3.11 sets forth a true,
correct and complete list of all insurance policies of any nature
whatsoever maintained by the Company pertaining to the business
of the Company. The Company maintains, with responsible
insurance carriers, property, auto liability, workers'
compensation and general liability insurance. Such policies and
binders are and shall remain in full force and effect through the
Closing Date and, except as otherwise set forth on Schedule 3.11,
such policies, or other policies covering the same risks, have
been in full force and effect, without gaps, continuously for the
past five (5) years. Copies of all such policies have been made
available to Purchaser for its inspection. The Company is not in
default under any of such policies or binders, and to the
knowledge of the Partners and the Company, has not failed to give
any notice or to present any claim under any such policy or
binder in a due and timely fashion.
3.12 Real Property. There is listed in Schedule 3.12:
(i) a description of each parcel of real property owned by the
Company and (ii) a listing of each lease of real property under
which the Company is a lessee, lessor, sublessee or sublessor, as
so designated therein ((i) and (ii), collectively, the "Real
Property"). Except as indicated in Schedule 3.12:
<PAGE>
(a) The Company has beneficial ownership of and
good and marketable title in fee simple to the Real Property
described in Schedule 3.12 as owned by the Company free and clear
of all mortgages, liens, encumbrances, leases, equities, security
interests, pledges conditional sale agreements, title retention
agreements, claims, charges, easements, licenses, rights-of-way,
covenants, conditions, restrictions, options and adverse or
equitable claims or rights and other title defects of any nature
whatsoever (collectively, "Liens"), except for liens, if any, for
property taxes not yet due and other items which do not and will
not impair, in any material respect, the usefulness to the
Company, or the value or the marketability, of any such Real
Properties;
(b) Each material lease, easement and other real
property interest held by the Company is valid, in full force and
effect, and the Company is not in material default thereunder;
(c) None of the Partners or the Company has
received any notice, or has any knowledge, that any of the
buildings, structures or other material improvements erected on
the Real Property owned or leased by the Company, or the present
use thereof, (i) do not conform in all material respects with all
applicable laws (or does not constitute a legal nonconforming
use), codes, ordinances, regulations or other laws and applicable
deed restrictions, (ii) materially encroach on property of
others, or (iii) have not been operated and/or maintained in
accordance with industry standards; and
(d) None of the Partners or the Company has
received notice from any municipal body or other public authority
requiring work to be done or improvements to be made upon any of
the Real Property and has no knowledge of the enactment or
adoption of any law, code, regulation, ordinance or resolution by
any such body or authority authorizing work or improvements for
which any of the Real Property may be assessed.
3.13 Material Contracts. Schedule 3.13 sets forth a
true, correct and complete list of:
(a) Each contract between the Company and any
party to whom the Company provides products or services which
involves more than $150,000 in consideration for any twelve month
period; and
(b) Each contract (except for real property
leases and insurance contracts) between the Company and any party
to whom the Company is obligated to pay more than $150,000 in
consideration for any twelve month period.
<PAGE>
The contracts and agreements which are required to be identified
in Schedule 3.13 pursuant to subsections (a) and (b) above are
hereinafter referred to as the "Material Contracts." True and
complete copies of each Material Contract have been delivered to
Purchaser by the Company. Except as set forth in Schedule 3.13:
(i) Each of the Material Contracts is a valid, binding
and enforceable agreement of the Company and, to the knowledge of
the Partners, the other parties thereto and, to the knowledge of
the Partners, will, subject to the satisfaction of the conditions
in Articles VI and VII, continue to be valid, binding and
enforceable immediately after the Closing, subject to equitable
defenses for specific performance and injunctive relief;
(ii) As of the date hereof, the Partners have no reason
to believe that the Company will not be able to fulfill in all
material respects all of its obligations under the Material
Contracts which remain to be performed after the date hereof; and
(iii) To the knowledge of the Partners, there has
not occurred any material default (or event which upon provision
of notice or lapse of time or both would become such a default)
under any of the Material Contracts on the part of the Company.
3.14 Governmental Permits and Licenses. Schedule 3.14
contains a true, correct and complete list of the governmental
permits, licenses, franchises and other certificates and
authorizations (the "Licenses") that are required for and are
material to the operation of the business conducted by the
Company as such business is now conducted. Except as set forth
on Schedule 3.14, all of such Licenses are, and as of the Closing
will be, in full force and effect and the continuing validity and
effectiveness of such Licenses will not be affected by the sale
and transfer of the Interests to Purchaser. The Company has
provided, or prior to the Closing Date will provide, Purchaser
with true, correct and complete copies of each License listed in
Schedule 3.14. Except as set forth on Schedule 3.14, the Company
is and has been in compliance in all material respects with all
material conditions or requirements of such Licenses, and neither
the Company nor any of the Partners has been notified by any
governmental or licensing authority that any governmental or
licensing authority intends to cancel, terminate or modify any of
such Licenses.
3.15 Management Personnel. Schedule 3.15 contains a
true and complete list of the names, current salaries and
incentive compensation arrangements of all management employees
of the Company who earned in excess of $75,000 in the calendar
<PAGE>
year ended December 31, 1996 or who will, at their present
salaries, earn in excess of $75,000 in the calendar year ending
December 31, 1997.
3.16 Banking Facilities. Schedule 3.16 contains a true
and complete list of:
(a) Each bank, savings and loan or other
institution in which the Company has a deposit, custodial, trust
or similar account or safety deposit or lock box account and the
numbers and types of the accounts or safety deposit boxes
maintained by the Company at such institutions; and
(b) The names of all persons authorized to draw
on each such account or to have access to any such safety deposit
or lock box facility, together with a description of any
limitations on such authority of each such person with respect
thereto.
3.17 Compliance with Law. Except as set forth on
Schedule 3.17 hereto, the conduct of business by the Company has
not violated or breached and does not violate or breach in any
material respect (and no event has occurred which with notice or
the lapse of time, or both, would constitute a violation or
breach of) any federal, state, local or foreign laws, statutes,
ordinances, rules, regulations, decrees, orders, permits,
licenses, governmental authorizations, consents or approvals
required for the Company to conduct its business as currently
conducted, or other similar items applicable to the Company or
any of its properties or assets in force on the date hereof
including, without limitation, federal, state and municipal (a)
laws and regulations affecting the protection of the health and
safety of employees, and (b) laws and regulations affecting equal
employment opportunity. There are no unresolved notices of
deficiency or charges of violation brought or, to the knowledge
of the Partners, threatened or pending against the Company,
including under any federal or state regulation or otherwise,
which individually or in the aggregate would have (or could
reasonably result in) a Material Adverse Effect, or interfere
with the maintenance or reissuance of any of the Licenses held by
the Company, and there are no facts or circumstances known to the
Partners that would constitute a reasonable basis on which any
such proceedings, notices or actions may be instituted, issued or
brought hereafter.
3.18 Consents of Non-Governmental Third Parties.
Except as set forth in Schedule 3.18 hereto, no material consent,
waiver, approval or authorization of any non-governmental third
party is necessary for the execution, delivery or consummation by
the Company and each of the Partners of the transactions
contemplated hereby.
<PAGE>
3.19 Broker's Commission or Finder's Fee. Neither the
Company nor the Partners have retained any broker or finder
(other than Goldman, Sachs & Co.) or agreed to become obligated
to pay any fee or commission to any broker or finder (other than
fees and commissions payable to Goldman, Sachs & Co.) for or on
account of the transactions contemplated by this Agreement. The
payment of fees and commissions to Goldman, Sachs & Co. will be
paid by Purchaser pursuant to Section 2.03(c) above.
3.20 No Undisclosed Liabilities. The Company does not
have, and as of the Closing Date will not have, any liabilities,
obligations or commitments (absolute, accrued or contingent)
matured or unmatured (herein "Liabilities") except
(i) Liabilities which are adequately reflected or fully reserved
against in the September 28, 1997 Balance Sheet, (ii) Liabilities
which have been incurred in the ordinary course of business and
consistent with past practice since the date of the September 28,
1997 Balance Sheet, (iii) Liabilities disclosed in Exhibit A or
in the Schedules hereto and (iv) Liabilities arising under
contracts or other agreements which because of the dollar amount
involved are not required to be listed in the Schedules hereto
(collectively, the "Known Liabilities").
3.21 Title to and Condition of Assets. The Company has
good and marketable title to all of its assets (real, personal or
mixed, tangible and intangible). Except as set forth on
Schedule 3.21, none of the Company's assets is subject to any
Liens except for (i) liens for taxes or other amounts not yet due
and payable, and (ii) liens and encumbrances which individually
or in the aggregate do not materially impair the usefulness or
value of such assets. All assets which are amusement rides
(including related equipment) (a) have been operated and
maintained in accordance with prudent practice in the amusement
park industry, including complying with manufacturers'
recommendations, (b) have been operated and maintained in
substantial compliance with all applicable regulations of the
State of California or any political subdivision thereof and (c)
are in good condition and repair, except for ordinary wear and
tear, and are usable and presently being used in the ordinary
course of business.
3.22 Environmental Matters.
(a) For the purposes of this Agreement, the term
"Environmental Laws" shall mean all federal, state and local
environmental protection, occupational, health and safety or
similar laws, ordinances, restrictions, licenses, rules,
regulations and permit conditions, including, but not limited to,
the Federal Water Pollution Control Act, Resource
<PAGE>
Conservation & Recovery Act, Clean Air Act, Comprehensive
Environmental Response, Compensation and Liability Act, Emergency
Planning and Community Right to Know, Occupational Safety and
Health Act and other federal, state or local laws of similar
effect, each as amended, and the term "Hazardous Materials" shall
mean any hazardous or toxic substances, wastes or materials,
defined as such or governed by any applicable Environmental Law.
(b) Except as disclosed on Schedule 3.22, (i) the
Company has not received any notices, directives, violation
reports, actions or claims from or by (1) any federal, state or
local governmental agency concerning the Company and any
Environmental Laws or (2) any person alleging that, in connection
with Hazardous Materials, conditions at the Real Properties of
the Company have resulted in or caused or threatened to result in
or cause injury or death to any person or damage to any property,
including without limitation, damage to natural resources, and to
the Partners' knowledge, no such notices, directives, violation
reports, actions, claims, assessments or allegations exist;
(ii) to the knowledge of the Partners, the Company does not
currently lease, operate or own any Real Properties that are
listed or are threatened to be listed on a "Superfund" List or
with respect to which, to the knowledge of the Partners, there is
any pending or threatened proceeding or investigation under any
Environmental Law; (iii) to the knowledge of the Partners,
throughout the period of ownership and/or operation of any of the
Real Properties by the Company, the Company has operated and
continues to operate the Real Properties in compliance with all
Environmental Laws; (iv) no underground storage tanks either are
or, to the Partners' knowledge, have been located at any of the
Real Properties; (v) to the knowledge of the Partners, there has
been no spill, discharge, release, contamination or cleanup of or
by any Hazardous Materials used, generated, treated, stored,
disposed of or handled by the Company at the Real Properties or
otherwise and to the Partners' knowledge, no spill, discharge or
release or contamination or cleanup of or by Hazardous Materials
has occurred on or to the Real Properties by any third party;
(vi) to the knowledge of the Partners, the Company has not used,
generated, treated, stored, disposed of, handled, transported or
released any Hazardous Material in a manner which would give rise
to any liability under any Environmental Laws; and (vii) to the
Partners' knowledge, the Company has not released any other
person from any claim under any Environmental Law nor waived any
rights or defenses concerning any environmental conditions at
<PAGE>
any Real Properties or in connection with the Company's use,
ownership and/or operation of its assets and properties.
(c) To the knowledge of the Partners, the
existing systems for delivering water to, and taking sewage from,
the Knott's Berry Farm Theme Park in Buena Park, California
comply with all applicable Environmental Laws, and are sufficient
to serve the Company's operations at such location as of the
Closing Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to the Partners as follows:
4.01 Organization and Corporate Authority; Binding
Obligation. Purchaser is a limited partnership duly formed,
validly existing and in good standing under the laws of the State
of Delaware, and Purchaser has full power and authority to carry
on its business as it is now conducted, and is entitled to own,
lease or operate the properties and assets it now owns, leases or
operates. Purchaser is qualified to do business, is in good
standing and has all required and appropriate licenses in each
jurisdiction in which its failure to obtain or maintain such
qualification, good standing or licensing (i) would have a
material adverse effect on the financial condition, earnings,
business or assets of Purchaser, or (ii) would result in a
material breach of any of the other representations, warranties
or covenants set forth in this Agreement. Purchaser has all
requisite partnership power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
This Agreement and all other agreements herein contemplated to be
executed by Purchaser have been duly authorized by all necessary
partnership action and constitute (or upon execution and delivery
will constitute) legal, valid and binding obligations of
Purchaser, enforceable against Purchaser in accordance with their
respective terms, except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to creditors'
rights generally.
4.02 Agreement not a Breach. Except as set forth on
Schedule 4.02 hereto, the execution of this Agreement by
Purchaser and the fulfillment, performance and compliance with
the terms and provisions of this Agreement by Purchaser will not
(i) conflict with or result in any breach of any provisions of
the Third Amended and Restated Agreement of Limited Partnership
of Purchaser or the certificate of limited partnership of
<PAGE>
Purchaser (collectively, "Purchaser's LP Agreements"); (ii)
conflict with, violate or result in a breach of the terms,
conditions or provisions of, or constitute (with or without the
giving of notice or the lapse of time, or both) a default (or
give rise to any right of termination, cancellation,
acceleration, suspension or revocation) or result in the
acceleration of any obligation under, or permit termination of,
any material agreement or instrument to which Purchaser is a
party or by which Purchaser is bound; (iii) accelerate, or
constitute an event entitling the holder of any Indebtedness of
Purchaser to accelerate the maturity of any such Indebtedness of
Purchaser, permit subordination of any Indebtedness of Purchaser
to any other Indebtedness of Purchaser to which it was not
already subordinated; (iv) conflict with or violate the
provisions of any law or any material judgment, decree, order,
regulation or rule of any court or governmental authority or any
material covenant or restriction binding upon Purchaser; (v)
violate any material permit, license or other authorization
applicable to Purchaser; or (vi) result in the creation of any
material lien, charge or encumbrance upon any assets of Purchaser
under any agreement or instrument to which Purchaser is a party
or by which Purchaser is bound.
4.03 Consents and Approvals of Governmental
Authorities. Except as set forth in Schedule 4.03 hereto, no
consent, approval or authorization of, or declaration, filing or
registration with, any governmental or regulatory authority is
required in connection with the execution, delivery and
performance of this Agreement by Purchaser and the consummation
by Purchaser of the transactions contemplated hereby.
4.04 Broker's Commission or Finder's Fee. Purchaser
has not retained any broker or finder or agreed to become
obligated to pay any fee or commission to any broker or finder
(other than the fees and expenses of Goldman, Sachs & Co. payable
pursuant to Section 2.03(c) hereof) for or on account of the
transactions contemplated by this Agreement which would result in
any obligation on the part of the Partners.
4.05 Litigation. There is no claim or legal action
pending or, to the knowledge of Purchaser, threatened against
Purchaser which might materially adversely affect the performance
by Purchaser of its obligations hereunder.
4.06 Consents of Non-Governmental Third Parties.
Except as set forth in Schedule 4.06 hereto, no material consent,
waiver, approval or authorization of any non-governmental third
party is necessary for the execution, delivery or consummation by
Purchaser of the transactions contemplated hereby.
<PAGE>
4.07 Accredited Investor. Purchaser represents and
warrants that it is an "Accredited Investor" as such term is
defined in Rule 501 under Regulation D of the 1933 Act (as
hereinafter defined).
4.08 Purchase for Investment. Purchaser acknowledges
that Purchaser is acquiring the Interests for its own account and
not with a view to, or present intention of, distribution thereof
in violation of the Securities Act of 1933, as amended (the "1933
Act") or any state securities laws, and the Interests will not be
disposed of in contravention of the 1933 Act or state securities
laws. Purchaser also acknowledges that no public market now
exists for the Interests and that it is unlikely that a public
market for the Interests will develop.
4.09 Interests Not Registered. Purchaser acknowledges
that the Interests have not been registered under the 1933 Act or
any state securities laws and, therefore, cannot be sold, and
must be held indefinitely, unless subsequently registered under
the 1933 Act and state securities laws or unless an exemption
from such registration is available.
4.10 Economic Risk. Purchaser acknowledges that its
investment in the Interests involves a high degree of risk and
represents that it is able to bear the economic risk of its
investment in the Interests for an indefinite period of time.
4.11 Financing. Purchaser has sufficient funds, or has
written commitments for such funds (true copies of which have
been delivered to the Partners), to deliver the Purchase Price
set forth in Section 2.02 at the Closing and to consummate the
transactions contemplated by this Agreement.
4.12 Status of Units. All of the Units issued to the
Partners pursuant to this Agreement shall be within the number of
such units which Purchaser is authorized to issue under the
Purchaser's LP Agreements and shall be valid and, subject to the
terms of this Agreement and Purchaser's LP Agreements and to the
statutory obligations under Delaware law, fully paid and
nonassessable, and Publicly Fungible, as that term is defined in
Section 5.09 hereof.
ARTICLE V
CERTAIN AGREEMENTS
5.01 Certain Employee Matters.
(a) General Employees. Purchaser agrees that
following the Closing all employees of the Company who are
employed immediately prior to the Closing will be given full
credit for all accrued vacation and holiday pay and all
accumulated sick pay of such employees, and Purchaser shall be
<PAGE>
responsible for any severance payments or similar benefits
payable to any such employees whose employment is terminated
following the Closing. Such employees are intended third party
beneficiaries of the provisions of this Section 5.01(a).
(b) Management Employees. Purchaser acknowledges
that certain management employees set forth on Schedule 5.01
(each, a "Management Employee") have each been granted certain
change in control payments payable in the amounts and on the
dates set forth opposite each such Management Employee's name on
Schedule 5.01 (the "Change in Control Payments"). The Purchaser
acknowledges and agrees that after the Closing, Purchaser shall
cause the Company to pay the Change in Control Payments on the
respective dates such amounts are to be paid pursuant to Schedule
5.01.
5.02 Tax Matters.
(a) Certain Operating Conventions and Procedures.
(1) The parties acknowledge and agree that,
for U.S. federal and California income Tax purposes, the 1997
taxable year of the Company shall end as of the close of business
on the Fiscal Close Date. The parties further agree that for all
Tax purposes the Closing shall be deemed to occur prior to the
Company's opening of business or accrual or receipt of any income
on the Closing Date, and that all of the Company's income, gains
and other Tax items attributable to the Closing Date shall be
included and reported by the Purchaser in Tax Returns for Post-
Acquisition Taxable Periods and that all Taxes attributable to
the Company's income, gains or other Tax items for the Closing
Date shall be paid by the Purchaser.
(2) The allocation of any Tax Liability
between the portion of any Straddle Period ending on the Closing
Date, and the portion of such Straddle Period after such date
shall be made by means of a closing of the books and records of
the Company as of the close of business on the Fiscal Close Date
as if a taxable period ended as of the close of such date;
provided, however, that exemptions, allowances or deductions that
are calculated on an annual basis (including, but not limited to,
depreciation and amortization deductions) shall be allocated
between the period ending on such date and the period after such
date in the proportion which the number of days in each such
period bears to the total number of days in the Straddle Period.
(3) The allocation of any Tax Liability to
the Stub Period (if any) shall be made by treating such Stub
Period as a separate taxable period for purposes of Taxes payable
by or assessable against the Company based on a closing
<PAGE>
of the Company's books and records as of the close of the Closing
Date and with exemptions, allowances or deductions which are
calculated on an annual basis being allocated to the Stub Period
in the proportion to which the number of days in the Stub Period
bear to the applicable annual taxable period.
(4) Except as provided otherwise in
Section 5.02(b)(3)(ii), for federal and state income tax purposes
the parties shall treat the exchange transaction contemplated
hereunder as a contribution by the Partners of property to
Purchaser in a transaction subject to Code Section 721(a) and, to
the extent of the cash payments made by Purchaser pursuant to
Section 2.03, Code Section 731(a). For all such purposes the
Partners shall be treated as receiving the Units and cash in the
capacity of partners making contributions to Purchaser.
(b) Filing of Tax Returns; Payment of Taxes.
(1) Tax Returns Required to Be Filed Prior
to the Closing Date. The Company shall prepare and file or cause
to be filed all Tax Returns of Company required to be filed
(after giving effect to any valid extension of time in which to
make such filings) prior to the Closing Date and shall pay or
cause to be paid all Taxes shown to be due and payable on such
Tax Returns, less the portion of such Taxes (if any) which are
Stub Period Tax Liabilities and thus constitute Purchaser Tax
Liabilities, which amount shall be paid by Purchaser.
(2) Tax Returns for Pre-Acquisition Taxable
Periods and Straddle Periods.
(i) The Authorized Representative shall
prepare or cause to be prepared, for Pre-Acquisition Taxable
Periods and for any Straddle Periods, all Tax Returns required to
be filed by the Company and which are not required to be (after
giving effect to any valid extensions) filed on or prior to the
Closing Date. The books and records of the Company will be
maintained, and the federal, state and other income Tax Returns
of the Company will be filed, so as to properly reflect the
operations of the Company through the end of the Closing Date.
<PAGE>
(ii) For income tax purposes, the
liabilities for the payments reflected in the Transaction Fee
Schedule, including, without limitation, any payments required
pursuant to Section 5.01(b), for the severance benefit payments
to the Retiring Executives and the SERP Benefit (collectively,
the " Transaction Liabilities") shall be treated and reported as
accrued as of the Fiscal Close Date, and such Transaction
Liabilities shall be reflected as accrued expense items on the
Company's Tax Returns for the Pre-Acquisition Taxable Period
ending on and including the Fiscal Close Date.
(iii) The Authorized Representative
shall (A) file or cause to be filed all Tax Returns to which
Section 5.02(b)(1) and this Section 5.02(b)(2) apply and
(B) shall pay or cause to be paid, on or before the applicable
due date(s) therefor, all Taxes shown on such Tax Returns to be
due and payable, less, in each case, the portion of such Taxes
which are Purchaser Tax Liabilities, which amount shall be paid
by Purchaser.
(iv) The Purchaser shall pay or cause to
be paid, on or before the applicable due date(s) therefor, all
Purchaser Tax Liabilities.
(3) Tax Returns for Post-Acquisition Taxable
Periods.
(i) Purchaser shall prepare or cause to
be prepared the Tax Returns for Post-Acquisition Taxable Periods
and shall pay or cause to be paid all Taxes shown on such Tax
Returns to be due and payable.
(ii) For purposes of applying the
provisions of Code Section 704(c), the regulations thereunder and
comparable provisions under applicable state income tax laws
(collectively the "Section 704(c) Rules"), the parties agree as
follows:
(A) The Section 704(c) Rules shall
be applied as if the contribution and exchange transaction
contemplated hereunder had been effected through a contribution
of the Company's assets (rather than the Partners' Interests) to
Purchaser in exchange for cash and Units and the Purchaser then
contributed the Company's assets to a lower-tier partnership,
resulting ultimately in the effect described in Treasury
Regulation Section 1.704-3(a)(9);
<PAGE>
(B) The real property consisting
of the approximately 150 acres (exclusive of any improvements
thereto and also exclusive of the real property being acquired in
the Crescent Avenue Land Acquisition and the La Palma Commercial
Acquisition) shall be deemed to have a fair market value of
Ninety Million Dollars as of the Closing Date; and
(C) Except as provided in
Section 5.02(b)(3)(ii)(D), in applying the Section 704(c) Rules
in Post-Acquisition Taxable Periods with respect to the
differences, respectively, in the tax basis and the fair market
value of the Company's assets and the Purchaser's assets as of
the Closing Date, Purchaser hereby covenants and represents that
(a) the "traditional method" subject to the "ceiling rule" of
Treasury Regulation Section 1.704-3(b) shall be used, (b) the
conventions and assumptions used in applying such traditional
method shall be such that, to the maximum extent possible, the
aggregate annual allocation of tax depreciation and tax
amortization to the Partners in Post-Acquisition Taxable Periods
will equal the aggregate tax depreciation and tax amortization
attributable to the tax basis of the Company's assets as of the
Closing Date, and (c) the Section 704(c) Rules and the covenants
and representations set forth in the foregoing clauses (a) and
(b) will be applied in a manner reflecting the conventions and
assumptions illustrated in Schedule I of Exhibit 5.02(b)(3)(ii),
provided, however, that the actual application of the
Section 704(c) Rules will be based on the actual valuations of
the Company's assets and the Purchaser's assets as of the Closing
Date (provided further, however, that for such purposes the
valuation for the Company's real property shall be as provided in
Section 5.02(b)(3)(ii)(B)).
(D) The parties acknowledge and
agree that, as of the date of this Agreement, there are Proposed
Treasury Regulations (the "Proposed Regulations") which, if made
effective, would operate to prohibit Purchaser from using the
"remedial method," as described in Treasury Regulation 1.704-3(d)
(the "Remedial Method"), in applying the Section 704(c) Rules in
Post-Acquisition Taxable Periods with respect to the differences
as of the Closing Date in the tax basis and fair market value of
the Company's and the Purchaser's goodwill, going concern value
and similar "Section 197" assets. In the event that such
Proposed Regulations are revised or withdrawn or other action is
taken by the U.S. Treasury so as to allow the use of the Remedial
Method for such purposes, then the parties agree that
Section 5.02(B)(3)(ii)(C) shall be deemed inoperative
<PAGE>
and, in lieu thereof, the parties agree that in applying the
Section 704(c) Rules in Post-Acquisition Taxable Periods with
respect to the differences, respectively, in the tax basis and
the fair market value of the Company's assets and the Purchaser's
assets as of the Closing Date, Purchaser hereby covenants and
represents that (a) the "remedial method" described in Treasury
Regulation Section 1.704-3(d) shall be used, (b) the conventions
and assumptions used in applying such remedial method shall be
such that, to the maximum extent possible, the aggregate annual
allocation of tax depreciation and tax amortization from the
Closing Date assets of the Purchaser to the Partners in Post-
Acquisition Taxable Periods will equal the aggregate tax
depreciation and tax amortization attributable to the Company's
assets as of the Closing Date that is allocable to the other
limited partners of Purchaser, and (c) the Section 704(c) Rules
and the covenants and representations set forth in the foregoing
clauses (a) and (b) will be applied in a manner reflecting the
conventions and assumptions illustrated in Schedule II of
Exhibit 5.02(b)(3)(ii), provided, however, that the actual
application of the Section 704(c) Rules will be based on the
actual valuations of the Company's assets and the Purchaser's
assets as of the Closing Date (provided further, however, that
for such purposes the valuation for the Company's real property
shall be as provided in Section 5.02(b)(3)(ii)(B)).
(iv) Purchaser agrees to take all actions,
including the making of applicable elections, necessary or
appropriate to allow the Company (or any successor thereto, or,
if the Company is merged or liquidated into Purchaser, the
division or business segment in which the Company's business is
thereafter conducted) to continue, following the Closing, to use
the last-in-first-out ("Lifo") tax accounting method for the
Company's inventories, provided, however, the Purchaser shall not
be obligated hereunder to cause the Company to continue to use
such Lifo method with respect to the Company's inventories if at
any time such use of such method is not permitted under
applicable law.
(c) Proceedings.
(1) Purchaser shall, promptly upon receipt
of notice thereof by Purchaser or Company, notify the Authorized
Representative in writing of any communication with respect to
any pending or threatened Proceeding in connection with a Pre-
Acquisition Tax Liability (or an issue related thereto).
Purchaser shall include with such notification a true, correct
<PAGE>
and complete copy of any written communication, and an accurate
and complete written summary of any oral communication, so
received by Purchaser or Company.
(2) The Authorized Representative shall have
responsibility and authority to represent the interests of the
Company and Partners in any Proceeding relating to
Pre-Acquisition Taxable Periods, Straddle Periods or otherwise
with respect to Pre-Acquisition Tax Liabilities and to employ
counsel of its choice at its expense; provided, however, that
Purchaser shall be permitted to participate (at its own expense)
in any such Proceedings and all hearings related thereto.
(3) The Purchaser and/or the Company, as
applicable, shall execute and deliver to the Authorized
Representative any power of attorney requested by the Authorized
Representative in connection with any Proceeding described in
this Section 5.02(c); provided, however, that such power of
attorney is necessary or appropriate to permit the Authorized
Representative to conduct such Proceeding.
(d) Cooperation; Maintenance and Retention of
Records. Purchaser shall, and shall cause the Company to,
provide the Authorized Representative with such assistance and
documents as may be reasonably requested by the Authorized
Representative in connection with (i) the preparation of any Tax
Return, (ii) the conduct of any Proceeding, (iii) any matter
relating to Pre-Acquisition Tax Liabilities and (iv) any other
matter that is a subject of this Section 5.02, and the Authorized
Representative shall pay any reasonable legal, accounting and
other fees and out-of-pocket expenses incurred by the Purchaser
and/or the Company in connection therewith. Purchaser and the
Company shall retain or cause to be retained all Tax Returns,
schedules and workpapers, and all material records or other
documents relating thereto, until the expiration of the statute
of limitations (including any waivers or extensions thereof) of
the taxable years to which such Tax Returns and other documents
relate or until the expiration of any additional period that the
Authorized Representative reasonably requests, in writing, with
respect to specific material records or documents. If Purchaser
or the Company intends to destroy any material records or
documents, it shall provide the Authorized Representative with
reasonable advance notice and the opportunity to copy or take
possession of such records and documents. The parties hereto
will notify each other party in writing of any waivers or
extensions of the
<PAGE>
applicable statute of limitations that may affect the period for
which the foregoing records or other documents must be retained.
(e) Disputes. If the parties disagree as to any
matter arising out of this Section 5.02, the parties shall
attempt in good faith to resolve such dispute. If such dispute
is not resolved within 15 days, the parties shall jointly retain
the Independent Accounting Firm to resolve the dispute. The fees
of the Independent Accounting Firm shall be borne equally by the
parties having the dispute, and the decision of such Independent
Accounting Firm shall be final and binding on all parties
involved. Following the decision of the Independent Accounting
Firm, the parties shall each take or cause to be taken any action
that is necessary or appropriate to implement such decision of
the Independent Accounting Firm, including, without limitation,
the prompt payment of Taxes as directed by the Independent
Accounting Firm.
5.03 Conduct of Business. From the date hereof until
the Closing Date and other than as set forth in Exhibit A, the
Partners shall cause the Company to conduct its business only in
the ordinary course of business and consistent with past
practices. Without limiting the generality of the foregoing,
except as otherwise expressly permitted by this Agreement, set
forth in Exhibit A or consented to or approved in writing and in
advance by an authorized officer of Purchaser, the Company, and
where appropriate the Partners, covenant as follows with respect
to the period between the date hereof and the Closing Date:
(a) The Company and the Partners will use all
reasonable efforts to substantially preserve intact the present
business organization of the Company and to preserve the
relationships with persons having business dealings with the
Company and to keep available the services of its present
officers and key employees, subject to the terms of this
Agreement;
(b) The Company will maintain its books, accounts
and records consistent with past practices and policies and in
accordance with GAAP;
(c) The Company will not make, adopt or propose
any change in its partnership agreement as in force and effect on
the date hereof that would have any adverse impact on the
transactions contemplated by this Agreement;
(d) The Company will not issue, set aside,
redeem, purchase or otherwise acquire any of its partnership
interests or issue any options or other rights to purchase any
<PAGE>
of its partnership interests, any securities convertible or
exchangeable for partnership interests or commit to do any of the
foregoing;
(e) Except as disclosed on Schedule 3.08, the
Company will not enter into any employment contract or agreement
with any existing or prospective employee which is not terminable
at will;
(f) The Company will not cancel, without full
payment, any note, loan or other obligation owing to the Company;
(g) The Company will not make any capital
expenditure (or series of related expenditures) involving more
than $150,000, except for expenditures set forth on
Schedule 3.13;
(h) Except in the ordinary course of business and
consistent with past practices, the Company will not increase the
compensation payable to or the benefits afforded any of its
officers, employees, consultants or agents of the Company nor
shall it adopt or amend any employee benefit plan or compensation
or commission arrangement, provided, however, the Company may, in
its discretion, amend any severance or incentive agreements with
its employees, including the SERP Benefit agreement, so as to
assure that the severance benefits payable to the Retiring
Executives, the SERP Benefit and the Change in Control Payments
payable upon a closing of the contribution and exchange
transaction contemplated hereunder shall be treated for income
tax purposes as accruable and deductible as of the Fiscal Close
Date and thus reported as an expense item on the Company's income
Tax Returns for the period ending on and including the Fiscal
Close Date;
(i) The Company will not sell or otherwise
dispose of, or enter into any agreement for the sale or
disposition of, or mortgage or encumber or permit to exist any
liens, claims or security interests on, any of its assets or
properties, except for sales of inventory and obsolete equipment
in the ordinary course of business consistent with past
practices;
(j) The Company shall maintain its existing
insurance policies covering it, unless comparable insurance is
substituted therefor, and shall not take any action to terminate
or modify those insurance policies;
(k) The Company shall observe and perform, and
remain in compliance with, its respective obligations in
agreements and contracts the breach or violation of which would
have, individually or in the aggregate, a Material Adverse Effect
and not enter into any agreements or contracts which
<PAGE>
would require payments by the Company of more than $150,000 over
any period of twelve months;
(l) The Company shall not merge or consolidate
with any other person or (except in the ordinary course) acquire
a material amount of assets of any other person;
(m) The Company shall not sell, lease, license or
otherwise surrender, relinquish or dispose of (i) any material
facility owned or leased by the Company or (ii) any assets or
property which are material to the Company taken as a whole,
except pursuant to existing contracts or commitments (the terms
of which have been disclosed to Purchaser prior to the date
hereof), or in the ordinary course of business consistent with
past practice;
(n) The Company shall not agree or commit to do
any of the foregoing; and
(o) Except to the extent necessary to comply with
the requirements of applicable laws and regulations, the Company
shall not (i) take, or agree or commit to take, any action that
would make any representation and warranty of the Company
hereunder inaccurate in any material respect at, or as of any
time prior to, the Closing, (ii) omit, or agree or commit to
omit, to take any action necessary to prevent any such
representation or warranty from being inaccurate in any material
respect at any such time, provided, however, that the Company
shall be permitted to take or omit to take such action which
(without any uncertainty) can be cured, and in fact is cured, at
or prior to the Closing or (iii) take, or agree to commit to
take, any action that would result in, or is reasonably likely to
result in, any conditions of this Agreement set forth in
Article VI and Article VII not being satisfied.
Notwithstanding anything contained in this Section 5.03 to the
contrary, the Company shall not have any restrictions upon
expenditures or acts related to the design, planning or
construction of the Wooden Roller Coaster currently being
developed at the Knott's Berry Farm Theme Park in Buena Park,
California scheduled to open June, 1999, provided, however, that
the Company shall consult with Purchaser through the Closing Date
on the status of this project and any significant modifications
from the plans and budgets presented to Purchaser in September
1997.
5.04 Access to Properties. Between the date hereof and
the Closing Date, with reasonable prior notice, the Partners will
give and will cause the Company to give to authorized
representatives of Purchaser full access, during normal business
hours, in such manner as not to unduly disrupt normal business
activities, to any and all premises, properties, contracts,
<PAGE>
commitments, books, records and affairs of the Company, and will
cause the officers of the Company to furnish any and all
financial, technical and operating data and other information as
Purchaser shall from time to time reasonably request.
5.05 Confidentiality and Nonsolicitation. Pending the
Closing, Purchaser will hold in confidence all information
obtained in connection with the transactions completed herein and
will use such information only for purposes related to the
transactions contemplated hereby. Purchaser further agrees that,
pending the Closing, it will not disclose any such information to
any third party except upon the prior written consent of the
Partners, or except as required by law or except to its advisors
who have agreed to maintain the confidentiality of such
information. If the transactions contemplated hereby are not
consummated, Purchaser will return all data to the Partners and
continue to honor the foregoing confidentiality and non-
disclosure covenants for a period of five years. Such obligation
of confidentiality shall not extend to any information (a) which
is shown to be or to have been generally known to others engaged
in the same trade or business as the Company, (b) previously
known to Purchaser prior to the start of discussions leading to
the execution of this Agreement, (c) obtained by Purchaser in
good faith from third parties who are not obligated to maintain
the information confidential or (d) that is or shall be public
knowledge through no act or omission by Purchaser or any of its
directors, officers, employees, professional advisors or other
representatives. Furthermore, if the transactions contemplated
hereby are not consummated, Purchaser agrees that for a period of
three years it will not, nor will it permit its officers,
directors, employees, agents or representatives to, directly or
indirectly solicit or attempt to solicit any of the employees of
the Company at the level of manager or above to leave the Company
or to become employees of or consultants to any other person or
entity.
5.06 Exclusive Nature of Agreement. Prior to the
Closing, or such earlier date on which this Agreement is
terminated in accordance with its terms, the Partners, the
Company and their officers, employees, agents and representatives
will not, directly or indirectly, solicit from any person, or
otherwise encourage any person to make, any inquiries or
proposals, or furnish information, relating to the acquisition,
in whole or in part, of the Company or the Interests or engage in
any negotiations or enter into any agreement or understanding
with any person (other than Purchaser) regarding the acquisition,
in whole or in part, of
<PAGE>
the Company or the Interests. The Partners will not furnish any
information concerning the Company to any person other than
Purchaser for the purpose of, or with the intent of, permitting
such person or entity to evaluate a possible acquisition, in
whole or in part, of the Company or the Interests.
Notwithstanding anything in this Agreement to the contrary, the
Partners and the Company, as the case may be, shall as promptly
as practicable advise Purchaser orally and in writing of the
receipt by it (or by any officer, director or employee of, or any
investment banker, attorney, accountant or other advisor or
representative of, the Company) after the date hereof of any
acquisition proposal, or any inquiry which could lead to any
acquisition proposal, the material terms and conditions of such
acquisition proposal or inquiry, and the identity of the person
making the acquisition proposal or inquiry. The Partners or the
Company, as the case may be, will keep Purchaser fully informed
of the status and details of any such acquisition proposal or
inquiry.
5.07 Consummation of Agreement; Cooperation. The
parties shall use their best efforts to perform and fulfill all
obligations on their respective parts to be performed and
fulfilled under this Agreement, and to cause all the conditions
precedent to the consummation of the transactions to be timely
satisfied, to the end that the transactions contemplated by this
Agreement shall be effected substantially in accordance with its
terms. The parties hereto shall cooperate with each other in
such actions and in securing requisite approvals and each party
shall deliver such further documents as the other party may
reasonably request as necessary to evidence such transactions.
In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of the Company and
Purchaser and the Authorized Representative shall take all such
necessary action. The Partners acknowledge that the Units will
not have been registered under either federal or state securities
laws and agree to provide Purchaser prior to the Closing Date
with reasonably appropriate investment representations in writing
in connection with a private offer of securities.
5.08 Redemption of Units. Until the first anniversary
of the Closing Date, at the request of the Authorized
Representative, during any period consisting of three full
calendar months, Purchaser shall be required to redeem from the
Partners, from any source of funds legally available therefor, up
to an aggregate of 500,000 Units at a price per Unit equal to the
closing price on the New York Stock Exchange on the date any
<PAGE>
such request is received by Purchaser in accordance with Section
10.01 hereof and upon surrender of the certificate(s)
representing the Units for which redemption is sought in
accordance with this Section 5.08. Purchaser shall effect such
redemptions by paying the aggregate redemption amount within 20
days of receipt of any such request.
5.09 Preservation of Fungibility of Units. Purchaser
will not take or cause to be taken, whether prior to or at any
time following the Closing, any action which will, or is
reasonably likely to, result in the Units issued to the Partners
pursuant to this Agreement (each a "KBF Unit" and collectively,
the "KBF Units") not being Publicly Fungible (as defined herein).
As used herein the term Publicly Fungible shall mean, with
respect to the KBF Units, their eligibility and qualification for
inclusion in, and, for public market trading purposes, for
treatment as pari passu with all other Units included in, the
class of Units which as of the Closing Date are listed on the New
York Stock Exchange as a single class of partnership securities
of Purchaser. For purposes of the foregoing, the Public
Fungibility of the KBF Units shall be determined without regard
to the fact that all or any portion of the KBF Units are not
registered under the 1933 Act or any state securities laws and,
therefore, may not be resold unless registered or unless an
exception for registration is available.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF PURCHASER
The obligation of Purchaser to consummate the transactions
contemplated hereby shall be subject to the satisfaction, on or
prior to the Closing Date, of each of the following conditions
any one or more of which may be waived by Purchaser.
6.01 Performance of Agreements. Each of the Partners
and the Company shall have performed in all material respects
their respective covenants, obligations and agreements contained
in this Agreement required to be performed prior to the Closing,
and the Authorized Representative and the Company shall have
delivered to Purchaser a certificate to such effect.
6.02 Representations and Warranties True. The
representations and warranties of the Partners and the Company
contained in this Agreement which are qualified with respect to
materiality shall be true and correct in all respects, and such
representations and warranties that are not so qualified shall
each be true and correct in all material respects in each case as
of the date hereof and on the Closing Date as if made again
<PAGE>
on such Date, and at the Closing the Authorized Representative
and the Company shall have delivered to Purchaser a certificate
to such effect.
6.03 No Pending or Threatened Claim. No condition or
restriction of any governmental or regulatory authority shall be
in effect and no claim, action, suit, investigation or other
proceeding shall be pending or threatened before any court or
governmental or regulatory authority that presents a substantial
risk of the restraint or prohibition of the transactions
contemplated by this Agreement or the obtaining of material
damages or other relief in connection therewith.
6.04 Opinion of the Partners' and Company's Counsel.
Purchaser shall have been furnished at the Closing with an
opinion of the Partners' and the Company's counsel, dated the
Closing Date, in form and substance reasonably satisfactory to
Purchaser, to the effect that:
(a) The Company is a general partnership and is
duly organized and validly existing under the laws of the State
of California.
(b) All corporate or trustee actions, as
applicable, required to be taken by or on the part of the
Partners and all partnership actions required to be taken by or
on the part of the Company to authorize the execution, delivery
and performance of this Agreement by each of the Partners and the
Company have been duly and properly taken.
(c) This Agreement has been duly authorized,
executed and delivered by each of the Partners and the Company,
and constitutes valid and binding obligations of each of the
Partners and the Company, enforceable against each of them, in
accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights generally and
general principles of equity.
(d) Except as set forth in Schedule 3.04 to the
Agreement, the execution and delivery of this Agreement by each
of the Partners and by the Company and the consummation of the
transactions contemplated hereby by each of the Partners and by
the Company do not (i) violate any constitutional or statutory
provision or requirement, or to such counsel's knowledge, violate
any judicial or administrative order, award, consent decree,
judgment or decree applicable to the Partners or the Company or
charter documents of each of the Partners; (ii) conflict with any
terms, conditions or provisions of the
<PAGE>
partnership agreement of the Company; or (iii) to such counsel's
knowledge, result in the creation of any lien, charge or
encumbrance upon any of the assets or property of the Company
under any Material Contract, other than such liens, charges or
encumbrances which would not have a Material Adverse Effect.
6.05 No Material Adverse Change. After the date hereof
and prior to the Closing Date, there shall not have occurred any
Material Adverse Effect. Purchaser shall have received a
certificate addressed to it from the Partners dated the Closing
Date to the foregoing effect.
6.06 Resignations. The Partners shall have delivered
to Purchaser the resignations of the officers or employees of the
Company whose names appear on Schedule 6.06, effective as of the
Closing Date.
6.07 Hart-Scott-Rodino. All applicable requirements
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976
and the rules promulgated thereunder shall have been met,
including the expiration of all applicable waiting periods, and
neither the Department of Justice nor the Federal Trade
Commission shall have raised objections to the transactions
contemplated hereby.
6.08 Agreement Not to Compete. Each of the Partners
shall have entered into an agreement not to compete substantially
in the form attached hereto as Exhibit C with the Company and
Purchaser.
6.09 Consents. All consents, approvals and waivers
from third parties and governmental authorities required to
consummate the transactions as contemplated hereby shall have
been obtained without the imposition on Purchaser or, the Company
of any materially burdensome conditions, restrictions or
obligations that were not applicable to the Partners or, the
Company during the year ending December 28, 1997.
6.10 Subscription Agreements. Each of the Partners
shall have entered into subscription agreements in the form
attached hereto as Exhibit D to evidence the private offer of
securities to each such Partner pursuant to Section 2.03(e)
hereof.
6.11 Escrow Agreement. Each of the Partners shall have
entered into the Escrow Agreement.
<PAGE>
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of the Partners and the Company to consummate the
transactions contemplated hereby shall be subject to the
satisfaction, on or prior to the Closing Date, of each of the
following conditions, any one or more of which may be waived by
the Authorized Representative:
7.01 Performance of Agreements. The Purchaser shall
have performed in all material respects its covenants,
obligations and agreements contained in this Agreement required
to be performed prior to the Closing, and Purchaser shall have
delivered to the Authorized Representative a certificate to such
effect.
7.02 Representations and Warranties True. The
representations and warranties of Purchaser contained in this
Agreement which are qualified with respect to materiality shall
be true and correct in all respects, and such representations and
warranties that are not so qualified shall be true and correct in
all material respects in each case as of the date hereof and on
the Closing Date, as if made again on such date, and at the
Closing Purchaser shall have delivered to the Authorized
Representative a certificate to such effect.
7.03 Opinion of Counsel. The Partners shall have been
furnished with an opinion of counsel to Purchaser, dated the
Closing Date, to the effect that:
(a) Purchaser is a limited partnership duly
formed, validly existing and in good standing under the laws of
the State of Delaware.
(b) All partnership actions required to be taken
by or on the part of Purchaser to authorize the execution,
delivery and performance of this Agreement by Purchaser have been
duly and properly taken.
(c) This Agreement has been duly authorized,
executed and delivered by Purchaser, and constitutes valid and
binding obligations of Purchaser, enforceable against it, in
accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights generally and
general principles of equity.
<PAGE>
(d) The execution and delivery of this Agreement
by Purchaser and the consummation of the transactions
contemplated hereby by Purchaser do not (i) violate any
constitutional or statutory provision or requirement, or to such
counsel's knowledge, violate any judicial or administrative
order, award, consent decree, judgment or decree applicable to
Purchaser; (ii) conflict with any terms, conditions or provisions
of the Purchaser's LP Agreements; or (iii) to such counsel's
knowledge, result in the creation of any lien, charge or
encumbrance upon any of the assets or property of Purchaser under
any such agreement or instrument, other than such liens, charges
or encumbrances which, separately or in the aggregate, would not
have a material adverse effect on Purchaser.
7.04 No Pending or Threatened Claim. No condition or
restriction of any governmental or regulatory authority shall be
in effect and no claim, action, suit, investigation or other
proceeding shall be pending or threatened before any court or
governmental or regulatory authority that presents a substantial
risk of the restraint or prohibition of the transactions
contemplated by this Agreement or the obtaining of material
damages or other relief in connection therewith.
7.05 Payment of Certain Obligations. Purchaser shall
have paid the Purchase Price in the manner set forth in
Section 2.03.
7.06 Hart-Scott-Rodino. All applicable requirements
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976
and the rules promulgated thereunder shall have been met,
including the expiration of all applicable waiting periods, and
neither the Department of Justice nor the Federal Trade
Commission shall have raised objection to the transactions
contemplated hereby.
7.07 Escrow Agreement. Purchaser shall have entered
into the Escrow Agreement.
ARTICLE VIII
INDEMNIFICATION
8.01 Indemnification by the Partners. The Partners
shall indemnify and hold harmless Purchaser and its respective
officers, directors, partners, employees, successors and assigns
in respect of any and all claims, actions, suits or other
proceedings and any and all losses, costs, expenses, liabilities,
fines, penalties, interest, and damages, whether or not arising
out of any claim, action, suit or other proceeding
<PAGE>
(and including reasonable counsel and accountants' fees and
expenses and all other reasonable costs and expenses of
investigation, defense or settlement of claims and amounts paid
in settlement) ("Damages") incurred by, imposed on or borne by
Purchaser or, the Company resulting from:
(a) The breach of any of the representations or
warranties made by the Partners or the Company in this Agreement;
or
(b) The breach or the failure of performance by
the Partners or the Company of any of the covenants, agreements
or obligations that they are to perform hereunder.
Damages shall exclude any amount with respect to which Purchaser
shall be entitled to receive and shall have received payment
under any insurance policy which provides coverage for the
liability to which such amount relates.
8.02 Indemnification by Purchaser. Purchaser shall
indemnify and hold harmless the Partners, in respect of any and
all Damages incurred by, imposed on or borne by the Partners
resulting from:
(a) The breach of any of the representations or
warranties made by Purchaser in this Agreement; or
(b) The breach or the failure of performance by
Purchaser of any of the covenants, agreements or obligations that
it is to perform hereunder.
8.03 Claims for Indemnification. Whenever any claim
shall arise for indemnification hereunder, the party entitled to
indemnification (the "indemnified party") shall promptly notify
the other party or parties (the "indemnifying party") of the
claim and, when known, the facts constituting the basis for such
claim; provided that the indemnified party's failure to give such
notice shall not affect any rights or remedies of an indemnified
party hereunder with respect to indemnification for damages
except to the extent that the indemnifying party is materially
prejudiced thereby. In the event of any claim for
indemnification hereunder resulting from or in connection with
any claim or legal proceedings by a third party, the notice to
the indemnifying party shall specify, if known, the amount or an
estimate of the amount of the liability arising therefrom. The
indemnified party shall promptly deliver to the indemnifying
party copies of all notices and documents (including court
papers) received by the indemnified party relating to the third
party claim. The indemnified party shall not settle or
compromise any claim by a third party for which it is entitled
<PAGE>
indemnification hereunder, without the prior written consent of
the indemnifying party (which shall not be unreasonably withheld)
unless suit shall have been instituted against it and the
indemnifying party shall not have taken control of such suit
after notification thereof as provided in Section 8.04 of this
Agreement.
8.04 Defense by Indemnifying Party. In connection with
any claim giving rise to indemnity hereunder or resulting from or
arising out of any claim or legal proceeding by a person who is
not a party to this Agreement, the indemnifying party at its sole
cost and expense may, upon written notice to the indemnified
party, assume the defense of any such claim or legal proceeding
if it acknowledges to the indemnified party in writing its
obligations to indemnify the indemnified party with respect to
all elements of such claim, and thereafter diligently conducts
the defense thereof with counsel reasonably acceptable to the
indemnified party. The indemnified party shall be entitled to
participate in (but not control) the defense of any such action,
with its counsel and at its own expense. If the indemnifying
party does not assume or fails to conduct in a diligent manner
the defense of any such claim or litigation resulting therefrom,
(a) the indemnified party may defend against such claim or
litigation, in such manner as it may deem appropriate, including,
but not limited to, settling such claim or litigation, after
giving notice of the same to the indemnifying party, on such
terms as the indemnified party may deem appropriate, and (b) the
indemnifying party shall be entitled to participate in (but not
control) the defense of such action, with its counsel and at its
own expense. If the indemnifying party thereafter seeks to
question the manner in which the indemnified party defended such
third party claim or the amount or nature of any such settlement,
the indemnifying party shall have the burden to prove by a
preponderance of the evidence that the indemnified party did not
defend or settle such third party claim in a reasonably prudent
manner. Each party agrees to cooperate fully with the other,
such cooperation to include, without limitation, attendance at
depositions and the provision of relevant documents as may be
reasonably requested by the indemnifying party, provided that the
indemnifying party will hold the indemnified party harmless from
all of its expenses, including reasonable attorney's fees,
incurred in connection with such cooperation by the indemnified
party.
8.05 Manner of Indemnification. All indemnification
hereunder shall be effected by payment of cash or delivery of a
certified or official bank check to the indemnified party or in
<PAGE>
the case of an indemnification by the Partners, by the payment of
cash or the return of Units having a Current Value equal to the
amount to be indemnified pursuant to the terms of the Escrow
Agreement.
8.06 Limitations on Indemnification. All
representations and warranties made by the parties herein or in
any instrument or document furnished in connection herewith shall
survive the Closing and any investigation at any time made by or
on behalf of the parties hereto and (a) the representations and
warranties set forth in Sections 3.02, 3.07 and 3.21 will survive
until the expiration of the respective statute of limitations
with respect to such matters and (b) all other representations
and warranties set forth herein or in any instrument or document
furnished in connection herewith will expire on the second
anniversary of the Closing Date, unless prior to such time a
claim specifying a breach of any such representation or warranty
is submitted in writing to the indemnifying party and identified
as a claim for indemnification pursuant to this Agreement. No
claim or action for indemnity pursuant to Sections 8.01 or 8.02
hereof for breach of any representation or warranty shall be
asserted or maintained by any party hereto after the expiration
of such representation or warranty pursuant to the provisions of
this Section except for claims made in writing prior to such
expiration and actions (whether instituted before or after such
expiration) based on any claim made in writing prior to such
expiration. Notwithstanding any provision of this Agreement to
the contrary, (i) the Partners shall have no obligation to
indemnify any person entitled to indemnity under Section 8.01
unless the persons so entitled to indemnity thereunder have
suffered Damages in an aggregate amount in excess of $1,000,000
and then only to the extent of such excess; (ii) the Partners'
aggregate liability under Section 8.01 shall in no event exceed
$50,000,000 and no Partner's individual liability shall exceed an
amount equal to the product of $50,000,000 multiplied by such
Partner's Percentage Interest.
8.07 Exclusivity of Indemnification. The parties
hereto agree that the indemnification provisions of this
Article VIII are intended to provide the exclusive remedy as to
all Damages they may incur arising from or relating to the
transactions contemplated hereby, and each party hereby waives,
to the extent it may do so, any other rights or remedies that may
arise under any applicable statute, rule or regulation; provided,
however, that the foregoing shall not be interpreted to limit the
types of remedies, including specific performance or other
equitable remedies, which may be sought by an
<PAGE>
indemnified person in connection with a breach of any covenant or
agreement contained herein.
8.08 Termination of Indemnification. The obligations
to indemnify and hold harmless a party hereto pursuant to this
Article VIII shall terminate when the applicable representation
or warranty terminates pursuant to Section 8.06; provided,
however, that such obligations to indemnify and hold harmless
shall not terminate with respect to any item as to which the
person to be indemnified shall have, before the expiration of the
applicable period, previously made a claim by delivering a notice
(stating in reasonable detail the basis of such claim) to the
indemnifying person.
ARTICLE IX
TERMINATION
9.01 Termination. This Agreement may be terminated
prior to the Closing (a) by the mutual written consent of the
parties hereto; (b) by either Purchaser or the Authorized
Representative, at any time after March 31, 1998 if for any
reason the purchase by Purchaser of the Interests shall not have
been consummated by such date; (c) by Purchaser if there has been
a material misrepresentation or material breach on the part of
the Partners in the representations, warranties and covenants of
the Partners set forth herein which, if curable, has not been
cured within 10 business days after notice thereof by Purchaser;
(d) by the Authorized Representative, if there has been a
material misrepresentation or material breach on the part of
Purchaser in the representations, warranties and covenants of
Purchaser set forth herein which, if curable, has not been cured
within 10 business days after notice thereof by the Authorized
Representative; (e) by Purchaser upon delivery to the Authorized
Representative, of a written notice if any event occurs which
renders impossible of satisfaction one or more of the conditions
to Purchaser's obligations contained in Article VI hereof and
noncompliance is not waived by Purchaser; and (f) by the
Authorized Representative, upon delivery to Purchaser of a
written notice if any event occurs which renders impossible of
satisfaction one or more conditions to the Partners' obligations
contained in Article VII hereof and noncompliance is not waived
by the Authorized Representative. The termination of this
Agreement, except pursuant to subsection (a), shall not affect
the right of any party to bring an action against another party
for breach of this Agreement.
<PAGE>
9.02 Liquidated Damages in the Event of Purchaser
Termination. The parties acknowledge and agree that as of the
time of the execution of this Agreement it is impractical, if not
impossible, to reasonably ascertain the extent of damages which
shall be incurred by the Partners as a result of a termination of
this Agreement pursuant to Section 9.01(b), (d) or (f), which
termination results from a willful or negligent act of Purchaser
(a "Purchaser Termination"). The factors relating to the
impracticability of ascertaining damages include, but are not
limited to, the fact that: (a) substantial damage results to the
Partners from delay and loss of opportunity with other potential
purchasers and (b) potential purchasers who were eliminated from
purchasing the Company due to the purchase price offered by the
Purchaser may not subsequently have the interest or resources to
make another offer to purchase the Company and the value of this
loss is impossible to calculate in precise monetary terms.
Accordingly, in the event of a Purchaser Termination, the
Purchaser shall be assessed liquidated damages in the amount of
Fifteen Million Dollars ($15,000,000) payable to the Company.
The parties acknowledge and agree that the above described
liquidated damages provisions represent a reasonable sum in light
of all the circumstances. The Purchaser shall pay any assessed
liquidated damages within ten (10) days after a Purchaser
Termination.
9.03 Liquidated Damages in the Event of Partner
Termination The parties acknowledge and agree that as of the
time of the execution of this Agreement it is impractical, if not
impossible, to reasonably ascertain the extent of damages which
shall be incurred by Purchaser as a result of a termination of
this Agreement pursuant to Section 9.01(b), (c) or (e), which
termination results from a willful or negligent act of the
Partners (a "Partner Termination"). The factors relating to the
impracticability of ascertaining damages include, but are not
limited to, the fact that (a) substantial damage results to
Purchaser from delay and loss of opportunity with respect to
other potential acquisitions it may be interested in and (b) the
Company represents a unique asset to Purchaser which cannot be
duplicated or replaced and the value of this loss is impossible
to calculate in precise monetary terms. Accordingly, in the
event of a Partner Termination, the Partners shall be assessed
liquidated damages in the amount of $15,000,000 payable to
Purchaser. The parties acknowledge and
<PAGE>
agree that the above described liquidated damages provisions
represent a reasonable sum in light of all the circumstances.
The Partners shall pay any assessed liquidated damages within ten
(10) days after a Partner Termination.
ARTICLE X
GENERAL PROVISIONS
10.01 Notices. All notices, requests and demands
to or upon the respective parties hereto to be effective shall be
in writing (including by facsimile) and, unless otherwise
expressly provided herein, shall be delivered during normal
business hours by hand, by Federal Express, United Parcel Service
or other reputable overnight commercial delivery service, or by
facsimile notice, confirmation of receipt received, addressed as
follows, or to such other address as may be hereafter notified by
the respective parties hereto:
(a) If to the Authorized Representative or the
Company, to:
Hackett Management Corporation
Three Upper Newport Plaza Drive
Newport Beach, CA 92660
Attn: Terry Hackett
Facsimile Number: (714) 851-5031
With a copy to:
Gibson, Dunn & Crutcher LLP
4 Park Plaza
Irvine, California 92614
Attn: Gerard J. Kenny, Esq.
Facsimile Number: (714) 451-4220
(b) If to Purchaser, to:
Cedar Fair, L.P.
P.O. Box 5006
One Causeway Drive
Sandusky, OH 44871
Attn: President
Facsimile Number: (419) 627-2234
<PAGE>
With a copy to:
Squire, Sanders & Dempsey L.L.P.
127 Public Square
Cleveland, OH 44114-1304
Attn: Gordon S. Kaiser, Jr., Esq.
Facsimile Number: (216) 479-8793
10.02 Entire Agreement. This Agreement constitutes
the entire understanding between the parties with respect to the
subject matter hereof, superseding all negotiations, prior
discussions and preliminary agreements.
10.03 Governing Law. This Agreement and the rights
and obligations of the parties under this Agreement shall be
governed by and construed in accordance with the laws of the
State of California, excluding its rules of conflicts of law.
10.04 Consent to Jurisdiction and Forum Selection.
The parties agree that all actions or proceedings arising in
connection with this Agreement shall be tried and litigated
exclusively in the State and Federal courts located in the County
of Orange, State of California. The aforementioned choice of
venue is intended by the parties to be mandatory and not
permissive in nature, thereby precluding the possibility of
litigation between the parties with respect to or arising out of
this Agreement in any jurisdiction other than that specified in
this paragraph. Each party hereby waives any right it may have
to assert the doctrine of forum non conveniens or similar
doctrine or to object to venue with respect to any proceeding
brought in accordance with this paragraph, and stipulates that
the State and Federal courts located in the County of Orange,
State of California shall have in personam jurisdiction and venue
over each of them for the purpose of litigating any dispute,
controversy or proceeding arising out of or related to this
Agreement. Each party hereby authorizes and accepts service of
process sufficient for personal jurisdiction in any action
against it as contemplated by this paragraph by registered or
certified mail, return receipt requested, postage prepaid, to its
address for the giving of notices as set forth in this Agreement,
or in the manner set forth in Section 10.01 of this Agreement for
the giving of notice. Any final judgment rendered against a
party in any action or proceeding shall be conclusive as to the
subject of such final judgment and may be enforced in other
jurisdictions in any manner provided by law.
10.05 Attorneys' Fees. If either party to this
Agreement shall bring any action, suit, counterclaim or appeal
for any relief against the other, declaratory or otherwise, to
enforce the terms hereof or to declare rights hereunder
<PAGE>
(collectively, an "Action"), the prevailing party shall be
entitled to recover as part of any such Action its reasonable
attorneys' fees and costs, including any fees and costs incurred
in bringing and prosecuting such Action and/or enforcing any
order, judgment, ruling or award granted as part of such Action.
"Prevailing party" within the meaning of this section includes,
without limitation, a party who agrees to dismiss an Action upon
the other party's payment of all or a portion of the sums
allegedly due or performance of the covenants allegedly breached,
or who obtains substantially the relief sought by it.
10.06 Amendment and Waiver. This Agreement may be
amended only by a written instrument signed by the parties
hereto. No failure to exercise and no delay in exercising, on
the part of any party, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law. The failure of
any party to insist upon a strict performance of any of the terms
or provisions of this Agreement, or to exercise any option, right
or remedy herein contained, shall not be construed as a waiver or
as a relinquishment for the future of such term, provision,
option, right or remedy, but the same shall continue and remain
in full force and effect. No waiver by any party of any term or
provision of this Agreement shall be deemed to have been made
unless expressed in writing and signed by such party.
10.07 Captions. The captions of the Sections of
this Agreement are for convenience only and shall not be
considered or referred to in resolving questions of construction.
10.08 Counterparts. This Agreement may be executed
by one or more of the parties hereto on any number of separate
counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
10.09 Assignment. Neither this Agreement nor any
of the rights or obligations hereunder shall be assignable by any
party without the written consent of the others.
10.10 Severability. Any portion or provision of
the Agreement which is invalid, illegal or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to
the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining portions or
<PAGE>
provisions hereof in such jurisdiction or, to the extent
permitted by law, rendering that or any other portion or
provision of the Agreement invalid, illegal or unenforceable in
any other jurisdiction.
10.11 Expenses. Except as otherwise expressly
provided herein, the parties shall, whether or not the
transactions contemplated hereby are consummated, each bear their
own legal, accounting, investment banking and other fees and
expenses in connection with this Agreement and the transactions
contemplated hereby.
10.12 Schedules. All schedules, exhibits,
appendices and documents referred to in or attached to this
Agreement are integral parts of this Agreement as if fully set
forth herein, and all statements appearing therein shall be
deemed disclosed for all purposes and not only in connection with
the specific representation to which they are explicitly
referenced.
10.13 Records. After the Closing, Purchaser shall
cause the Company to keep and preserve all books and records of
the Company existing as of the Closing for a period of at least
three years after the Closing. Purchaser will cause the Company
to afford to the representatives of the Partners, including its
counsel and accountants, reasonable access to, and, at the
Partners' expense, copies of, the records retained by the Company
during normal business hours after the Closing Date upon
reasonable notice for proper business purposes. Purchaser and
the Company shall also make their respective officers and
employees available to the Partners at reasonable times and
places after the Closing upon reasonable notice for proper
business purposes.
10.14 Further Assurances. From time to time after
the Closing Date, at Purchaser's request and without further
consideration, the Partners shall execute and deliver to
Purchaser such documents and take such other action as Purchaser
may reasonably request in order to consummate more effectively
the transactions contemplated hereby and to vest in Purchaser
good and valid title to the Interests and to carry out the intent
of this Agreement. From time to time after the Closing Date, at
the request of the Partners and without further consideration,
the Purchaser shall execute and deliver to the Partners such
documents and take such other action as the Partners may
reasonably request in order to consummate more effectively the
sale of the Interests and to carry out the intent of this
Agreement.
10.15 Publicity. The parties shall cooperate with
each other in the development and distribution of all news
<PAGE>
releases and other public disclosures relating to the
transactions contemplated hereby. None of the parties shall
issue or make, or cause to have issued or made, any press release
or announcement concerning the transactions contemplated hereby
without the advance approval in writing of the form and substance
thereof by the other party, unless otherwise required by
applicable law.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.
CEDAR FAIR, L.P. (the "Purchaser")
By: Cedar Fair Management Company
Its General Partner
By: /s/ Richard L. Kinzel
Richard L. Kinzel
President and Chief
Executive Officer
KNOTT'S BERRY FARM (the "Company")
By: /s/ Terry E. Van Gorder
Terry E. Van Gorder
President and Chief
Executive Officer
<PAGE>
THE PARTNERS
RUSSELL KNOTT, INC.,
a California corporation
By: /s/ Russel H. Knott
RUSSELL H. KNOTT
President
VMK ENTERPRISES, INC.,
a California corporation
By: /s/ Virginia K. Bender
VIRGINIA K. BENDER
President
THE M. KNOTT COMPANY,
a California corporation
By: /s/ Marion Knott
MARION KNOTT
President
M. KNOTT ENTERPRISES,
a California corporation
By: /s/ Marion Knott
MARION KNOTT
President
<PAGE>
KEN & TONI OLIPHANT ENTERPRISES,
INC., a California corporation
By: /s/ Ken B. Oliphant
KEN B. OLIPHANT
President
By: /s/ Marion Knott
MARION KNOTT
as Trustee of a Trust established
under the Will of Cordelia Knott,
deceased, for the benefit of Marion
Knott
By: /s/ Virginia K. Bender
VIRGINIA K. BENDER
as Trustee of a Trust established
under the Will of Cordelia Knott,
deceased, for the benefit of
Virginia K. Bender
DARREL D. ANDERSON & ASSOCIATES,
INC.,
a California corporation
By: /s/ Darrel D. Anderson
DARREL D. ANDERSON
President
D.W.O. ENTERPRISES, INC.,
a California corporation
By: /s/ Don W. Oliphant
DON W. OLIPHANT
President
<PAGE>
JANA O. HACKETT, INC.,
a California corporation
By: /s/ Jana O. Hackett
JANA O. HACKETT
President
KENNETH KNOTT, INC.,
a California corporation
By: /s/ Kenneth Knott
KENNETH KNOTT
President
STEPHEN KNOTT, INC.,
a California corporation
By: /s/ Stephen Knott
STEPHEN KNOTT
President
TRAVEL BY MIKE, INC.,
a California corporation
By: /s/ Michael Reafsnyder
MICHAEL REAFSNYDER
President
LAURA L. ANDERSON TRUST NO. 1
By: /s/ Laura L. Anderson Otto
Laura L. Anderson Otto
<PAGE> Trustee
CREDIT AGREEMENT
dated as of
December 19, 1997
Among
CEDAR FAIR, L. P.
CEDAR FAIR
MAGNUM MANAGEMENT CORPORATION
KNOTT'S BERRY FARM
as Co-Borrowers
MAGNUM MANAGEMENT CORPORATION
as Treasury Manager for the Co-Borrowers
THE LENDING INSTITUTIONS NAMED THEREIN
as Lenders
KEYBANK NATIONAL ASSOCIATION
as Administrative Agent
<PAGE>
CREDIT AGREEMENT, dated as of December 19, 1997, among the
following:
(i) CEDAR FAIR, L. P., a Delaware limited partnership
(herein, together with its successors and assigns, the
"Company" or a "Co-Borrower");
(ii) CEDAR FAIR, an Ohio general partnership (herein,
together with its successors and assigns, "Cedar Fair" or a
"Co-Borrower"), which is a Wholly-Owned Subsidiary of the
Company;
(iii) MAGNUM MANAGEMENT CORPORATION, an Ohio
corporation (herein, together with its successors and
assigns, "Magnum Management" or a "Co-Borrower"), which is a
Wholly-Owned Subsidiary of the Company, in (x) its
individual capacity, and (y) as treasury manager for the Co-
Borrowers (in such capacity, together with its successors
and assigns in such capacity, the "Treasury Manager");
(iv) KNOTT'S BERRY FARM, a California general
partnership (herein, together with its successors and
assigns, "Knott's Berry Farm", at such time as it becomes an
Additional Co-Borrower hereunder in accordance with section
8.13;
(v) each other Additional Co-Borrower which becomes a
party hereto pursuant to section 8.13;
(vi) the lending institutions listed in Annex I hereto
(each a "Lender" and collectively, the "Lenders"); and
(vii) KEYBANK NATIONAL ASSOCIATION, a national
banking association, as administrative agent (the
"Administrative Agent"):
PRELIMINARY STATEMENTS:
(1) Unless otherwise defined herein, all capitalized terms
used herein and defined in section 1 are used herein as so
defined.
(2) The Co-Borrowers have applied to the Lenders for credit
facilities in order to finance the Acquisition Transaction and in
order to provide working capital and funds for other lawful
purposes.
<PAGE>
(3) Subject to and upon the terms and conditions set forth
herein, the Lenders are willing to make available to the Co-
Borrowers the credit facilities provided for herein.
(4) The Co-Borrowers will be jointly and severally liable
for all Borrowings hereunder.
NOW, THEREFORE, it is agreed:
SECTION 1. DEFINITIONS AND TERMS.
1.1. Certain Defined Terms. As used herein, the following
terms shall have the meanings herein specified unless the context
otherwise requires:
"Acquisition Documents" shall mean the Contribution
Agreement among the Company, Knott's Berry Farm, a California
general partnership, and the partners of Knott's Berry Farm named
therein, all ancillary agreements between or among any of such
parties related thereto, including, without limitation, any "side
letters", and the "disclosure schedule" or similar document
furnished to the Company pursuant to such Contribution Agreement.
"Acquisition Transaction" shall mean the transaction
involving the acquisition of Knott's Berry Farm which is
contemplated by the Acquisition Documents.
"Additional Senior Notes" shall have the meaning provided in
section 8.14.
"Additional Co-Borrower" shall have the meaning provided in
section 8.13.
"Administrative Agent" shall have the meaning provided in
the first paragraph of this Agreement and shall include any
successor to the Administrative Agent appointed pursuant to
section 11.9.
"Affiliate" shall mean, with respect to any person, any
other person directly or indirectly controlling, controlled by,
or under direct or indirect common control with such person. A
person shall be deemed to control a second person if such first
person possesses, directly or indirectly, the power (i) to vote
10% or more of the securities having ordinary voting power for
the election of directors or managers of such second person or
(ii) to direct or cause the direction of the management and
<PAGE>
policies of such second person, whether through the ownership of
voting securities, by contract or otherwise. Notwithstanding the
foregoing, (x) a director, officer or employee of a person shall
not, solely by reason of such status, be considered an Affiliate
of such person; and (y) neither the Administrative Agent nor any
Lender shall in any event be considered an Affiliate of any Co-
Borrower or any other Credit Party or any of their respective
Subsidiaries.
"Agreement" shall mean this Credit Agreement, as the same
may be from time to time further modified, amended and/or
supplemented.
"Applicable Eurodollar Margin" shall have the meaning
provided in section 2.8(g).
"Applicable Facility Fee Rate" shall have the meaning
provided in section 3.1(c).
"Applicable Lending Office" shall mean, with respect to each
Lender, (i) such Lender's Domestic Lending Office in the case of
Borrowings consisting of Prime Rate Loans (or, in the case of any
Borrowings of Swing Line Revolving Loans consisting of Money
Market Rate Loans), and (ii) such Lender's Eurodollar Lending
Office in the case of Borrowings consisting of Eurodollar Loans.
"Asset Sale" shall mean the sale, transfer or other
disposition (including by means of Sale and Lease-Back
Transaction, and mergers, consolidations, and liquidations of a
corporation, partnership or limited liability company of the
interests therein of any Co-Borrower or any Subsidiary) by any Co-
Borrower or any Subsidiary of any Co-Borrower to any person other
than the Company or any of its Subsidiaries of any of their
respective assets (other than sales, transfers or other
dispositions of inventory and obsolete or excess furniture,
fixtures, equipment or other property, tangible or intangible, in
the ordinary course of business).
"Assignment Agreement" shall mean an Assignment Agreement
substantially in the form of Exhibit D hereto.
"Authorized Officer" shall mean any officer or employee of
any Credit Party designated as such in writing to the
Administrative Agent by such Credit Party.
<PAGE>
"Bankruptcy Code" shall have the meaning provided in section
10.1(h).
"Co-Borrower" shall include the Co-Borrowers named herein
who are original signatories hereto and each Additional Co-
Borrower.
"Borrowing" shall mean the incurrence of General Revolving
Loans or Swing Line Revolving Loans, as the case may be,
consisting of one Type of Loan, by the Co-Borrowers from all of
the Lenders having Commitments in respect thereof on a pro rata
basis on a given date (or resulting from conversions on a given
date), having in the case of Eurodollar Loans the same Interest
Period, and having in the case of any Money Market Rate Loans the
same Quoted Rate and maturity.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday
and any day which shall be in the city in which the Payment
Office is located a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions
to close; and (ii) with respect to all notices and determinations
in connection with, and payments of principal and interest on,
Eurodollar Loans, any day which is a Business Day described in
clause (i) and which is also a day for trading by and between
banks in U.S. dollar deposits in the interbank Eurodollar market.
"Capital Lease" as applied to any person shall mean any
lease of any property (whether real, personal or mixed) by that
person as lessee which, in conformity with GAAP, is accounted for
as a capital lease on the balance sheet of that person.
"Capitalized Lease Obligations" shall mean all obligations
under Capital Leases of the Company or any of its Subsidiaries in
each case taken at the amount thereof accounted for as
liabilities identified as "capital lease obligations" (or any
similar words) on a consolidated balance sheet of the Company and
its Subsidiaries prepared in accordance with GAAP.
"Cash Equivalents" shall mean:
(i) securities issued or directly and fully guaranteed
or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and
credit of the United States of America is
<PAGE>
pledged in support thereof) having maturities of not more
than one year from the date of acquisition;
(ii) U.S. dollar denominated time deposits,
certificates of deposit and bankers' acceptances of (x) any
Lender or (y) any bank whose short-term commercial paper
rating from S&P is at least A-1 or the equivalent thereof or
from Moody's is at least P-1 or the equivalent thereof (any
such bank, an "Approved Bank"), in each case with maturities
of not more than one year from the date of acquisition;
(iii) commercial paper issued by any Lender or
Approved Bank or by the parent company of any Lender or
Approved Bank and commercial paper issued by, or guaranteed
by, any industrial or financial company with a short- term
commercial paper rating of at least A-1 or the equivalent
thereof by S&P or at least P-1 or the equivalent thereof by
Moody's, or guaranteed by any industrial company with a long
term unsecured debt rating of at least A or A2, or the
equivalent of each thereof, from S&P or Moody's, as the case
may be, and in each case maturing within 270 days after the
date of acquisition;
(iv) investments in money market funds substantially
all the assets of which are comprised of securities of the
types described in clauses (i) through (iii) above; and
(v) investments in money market funds access to which
is provided as part of "sweep" accounts maintained with a
Lender or an Approved Bank.
"Cedar Fair" shall have the meaning provided in the
introductory paragraph hereof.
"CERCLA" shall mean the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as the same
may be amended from time to time, 42 U.S.C. 9601 et seq.
"Change of Control" shall mean and include any of the
following:
(i) during any period of two consecutive calendar
years, individuals who at the beginning of such period
constituted the Managing General Partner's Board of
Directors (together with any new directors whose election by
the Managing General Partner's Board of Directors or
<PAGE>
whose nomination for election by the Managing General
Partner's shareholders was approved by a vote of at least
two-thirds of the directors then still in office who either
were directors at the beginning of such period or whose
election or nomination for election was previously so
approved) cease for any reason to constitute a majority of
the directors then in office;
(ii) any person or group (as such term is defined in
section 13(d)(3) of the 1934 Act), other than the Company,
any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its
Subsidiaries and/or the Current Holder Group, shall acquire,
directly or indirectly, beneficial ownership (within the
meaning of Rule 13d-3 and 13d-5 of the 1934 Act) of more
than 40%, on a fully diluted basis, of the economic or
voting interest in the Company's partnership interests;
(iii) the Current Holder Group shall, for any
reason, cease to have, directly or indirectly, beneficial
ownership (within the meaning of Rule 13d-3 and 13d-5 of the
1934 Act) of at least 50%, on a fully diluted basis, of the
economic or voting interest in the Managing General
Partner's capital stock;
(iv) the holders of partnership interests in the
Company approve a merger or consolidation of the Company
with any other person, other than a merger or consolidation
which would result in the partnership interests of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being
converted or exchanged for voting securities of the
surviving or resulting entity or its parent corporation)
more than 51% of the combined voting power of the
partnership interests or other voting securities of the
Company or such surviving or resulting entity (or parent
corporation) outstanding after such merger or consolidation;
(v) the holders of partnership interests in the
Company approve the removal of Cedar Fair Management Company
as the managing general partner of the Company; and/or
(vi) the holders of partnership interests in the
Company approve a plan of complete liquidation of the
<PAGE>
Company or an agreement or agreements for the sale or
disposition by the Company of all or substantially all of
the Company's assets.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and
the rulings issued thereunder. Section references to the Code are
to the Code, as in effect at the Effective Date and any
subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Commitment" shall mean with respect to each Lender its
General Revolving Commitment or its Swing Line Revolving
Commitment, as the case may be.
"Company" shall have the meaning provided in the
introductory paragraph hereof.
"Consolidated Amortization Expense" shall mean, for any
period, all amortization expenses of the Company and its
Subsidiaries, all as determined for the Company and its
Subsidiaries on a consolidated basis in accordance with GAAP.
"Consolidated Capital Expenditures" shall mean, for any
period, the aggregate of all expenditures (whether paid in cash
or accrued as liabilities and including in all events amounts
expended or capitalized under Capital Leases but excluding any
amount representing capitalized interest) by the Company and its
Subsidiaries during that period that, in conformity with GAAP,
are or are required to be included in the property, plant or
equipment reflected in the consolidated balance sheet of the
Company and its Subsidiaries.
"Consolidated Debt" shall mean the total Indebtedness of the
Company and of each of its Subsidiaries, as determined on a
consolidated basis, which is of the nature described in clauses
(i); (ii); (iv), but only to the extent of outstanding drawings
under letters of credit which have not been reimbursed; (vi);
(vii); and/or (xi), of the definition of the term Indebtedness.
"Consolidated Depreciation Expense" shall mean, for any
period, all depreciation expenses of the Company and its
Subsidiaries, all as determined for the Company and its
Subsidiaries on a consolidated basis in accordance with GAAP.
"Consolidated EBIT" shall mean, for any period, Consolidated
Net Income for such period; plus (A) the sum of the
<PAGE>
amounts for such period included in determining such Consolidated
Net Income of (i) Consolidated Interest Expense, (ii)
Consolidated Income Tax Expense, (iii) amortization or write-off
of deferred financing costs, and (iv) extraordinary non-cash
losses and charges and other non-recurring non-cash losses and
charges; less (B) gains on sales of assets (excluding sales in
the ordinary course of business) and other extraordinary gains
and non-recurring non-cash gains; all as determined for the
Company and its Subsidiaries on a consolidated basis in
accordance with GAAP.
"Consolidated EBITDA" shall mean, for any period, the sum of
the amounts for such period of (i) Consolidated EBIT, (ii)
Consolidated Depreciation Expense, and (iii) Consolidated
Amortization Expense, all as determined for the Company and its
Subsidiaries on a consolidated basis in accordance with GAAP;
provided that Consolidated EBITDA for any period shall (x)
include the appropriate financial items for any person or
business unit which has been acquired by the Company for any
portion of such period prior to the date of acquisition, and (y)
exclude the appropriate financial items for any person or
business unit which has been disposed of by the Company, for the
portion of such period prior to the date of disposition.
"Consolidated EBITDA/Interest Ratio" shall mean, for any
Testing Period, the ratio of (i) Consolidated EBITDA (without
giving effect to the proviso to the definition of Consolidated
EBITDA) for such Testing Period, to (ii) Consolidated Interest
Expense for such Testing Period.
"Consolidated Income Tax Expense" shall mean, for any
period, all provisions for taxes based on the net income of the
Company or any of its Subsidiaries (including, without
limitation, any additions to such taxes, and any penalties and
interest with respect thereto), and all franchise taxes of the
Company and its Subsidiaries, all as determined for the Company
and its Subsidiaries on a consolidated basis in accordance with
GAAP.
"Consolidated Interest Expense" shall mean, for any period,
total interest expense (including that which is capitalized and
that which is attributable to Capital Leases, in accordance with
GAAP) of the Company and its Subsidiaries on a consolidated basis
with respect to all outstanding Indebtedness of the Company and
its Subsidiaries including, without limitation, all commissions,
discounts and other fees and charges owed with respect to letters
of credit and net costs under Hedge
<PAGE>
Agreements, but excluding, however, any amortization of deferred
financing costs, all as determined in accordance with GAAP.
"Consolidated Net Income" shall mean for any period, the
net income (or loss), without deduction for minority interests,
of the Company and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in
conformity with GAAP, provided that there shall be excluded
therefrom (i) the income, (or loss) of any entity (other than
Subsidiaries of the Company) in which the Company or any of its
Subsidiaries has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid to the
Company or any of its Subsidiaries during such period, (ii) the
income (or loss) of any entity accrued prior to the date it
becomes a Subsidiary of the Company or is merged into or
consolidated with the Company or any of its Subsidiaries or on
which its assets are acquired by the Company or any of its
Subsidiaries, and (iii) the income of any Subsidiary of the
Company to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that
income is not at the time permitted by operation of the terms of
its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to
that Subsidiary.
"Consolidated Net Worth" shall mean at any time for the
determination thereof all amounts which, in conformity with GAAP,
would be included under the caption "total partners' equity" (or
any like caption) on a consolidated balance sheet of the Company
and its Subsidiaries as at such date.
"Credit Documents" shall mean this Agreement, the Notes, the
Subsidiary Guaranty and any other agreement or instrument entered
into by any Credit Party with, or for the benefit of, the
Administrative Agent or the Lenders, pursuant to the requirements
of this Agreement.
"Credit Event" shall mean the making of any Loans.
"Credit Party" shall mean the Company, the Managing General
Partner and each of the Company's Subsidiaries which is a party
to any Credit Document.
"Current Holder Group" shall mean (i) those persons who are
officers and directors of the Company and/or the Managing General
Partner at the Effective Date; (ii) the spouses, heirs, legatees,
descendants and blood relatives to the third degree of
<PAGE>
consanguinity of any such person; (iii) the executors and
administrators of the estate of any such person, and any court
appointed guardian of any such person; and (iv) any trust for the
benefit of any such person referred to in the foregoing clauses
(i) and (ii) or any other persons, so long as one or more members
of the Current Holder Group has the exclusive right to control
the voting and disposition of securities held by such trust.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of
Default.
"Defaulting Lender" shall mean any Lender with, respect to
which a Lender Default is in effect.
"Determination of Taxability" shall mean any of the
following:
(i) the Company shall elect, for Federal income tax
purposes, to be treated as an association taxable as a
corporation under Subchapter C of the Code;
(ii) the Company shall have received from the Internal
Revenue Service any written notice or other communication
which questions the status or right of the Company to be
treated as a partnership under the Code, and not as an
association taxable as a corporation under Subchapter C of
the Code, and within 60 days following the receipt of any
such notice or other communication the Company has not
obtained, and provided to the Administrative Agent a copy
of, a written confirmation from the Internal Revenue Service
that such notice or other communication is withdrawn and
further confirming that the Internal Revenue Service
recognizes that the Company is entitled to be treated as a
partnership under the Code, and not as an association
taxable as a corporation under Subchapter C of the Code; or
(iii) any other event or circumstance shall occur
or exist which, in the reasonable opinion of the
Administrative Agent, draws into question the status or
right of the Company to be treated as a partnership under
the Code, and not as an association taxable as a corporation
under Subchapter C of the Code, and within 30 days following
the receipt by the Company of a written request therefor
from the Administrative Agent, the Company
<PAGE>
shall have failed to deliver to the Administrative Agent a
written opinion, reasonably satisfactory in form, scope and
substance to the Administrative Agent, of Squire Sanders &
Dempsey, or other nationally recognized independent tax
counsel, to the effect that in the opinion of such counsel
the Company should be treated for Federal income tax
purposes as a partnership, and not as an association taxable
as a corporation under Subchapter C of the Code, and
covering such other matters related thereto as the
Administrative Agent may reasonably request.
"Dollars", "U.S. dollars", "dollars" and the sign "$" each
means lawful money of the United States.
"Domestic Lending Office" shall mean, with respect to any
Lender, the office of such Lender specified as its Domestic
Lending Office in Annex I or in the Assignment Agreement pursuant
to which it became a Lender, or such other office of such Lender
as such Lender may from time to time specify to the Treasury
Manager and the Administrative Agent.
"Effective Date" shall have the meaning provided in section
14.10.
"Election to Participate" shall mean an Election to
Participate substantially in the form attached hereto as Exhibit
F.
"Election to Terminate" shall mean an Election to
Participate substantially in the form attached hereto as Exhibit
G.
"Eligible Transferee" shall mean and include a commercial
bank, financial institution or other "accredited investor" (as
defined in SEC Regulation D), in each case which (i) is not
disapproved in writing by the Treasury Manager in a notice given
to a requesting Lender and the Administrative Agent, specifying
the reasons for such disapproval, within five Business Days
following the giving of notice to the Treasury Manager of the
identity of any proposed transferee (any such disapproval by the
Treasury Manager must be reasonable), provided that the Treasury
Manager shall not be entitled to exercise the foregoing right of
disapproval if and so long as (x) any Event of Default shall have
occurred and be continuing, or (y) any of the financial covenants
contained in this Agreement shall have been waived or modified
following a deterioration in the financial condition or results
of operations of the Company and its Subsidiaries; and
<PAGE>
(ii) is not a direct competitor of the Company or engaged in the
same or similar business as the Company, or an Affiliate of any
such competitor.
"Environmental Claims" shall mean any and all
administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of non-compliance or
violation, investigations or proceedings relating in any way to
any Environmental Law or any permit issued under any such law
(hereafter "Claims"), including, without limitation, (a) any and
all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law,
and (b) any and all Claims by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the storage, treatment or
Release (as defined in CERCLA) of any Hazardous Materials or
arising from alleged injury or threat of injury to health, safety
or the environment.
"Environmental Law" shall mean any applicable Federal,
state, foreign or local statute, law, rule, regulation,
ordinance, code, binding and enforceable guideline, binding and
enforceable written policy and rule of common law now or
hereafter in effect and in each case as amended, and any binding
and enforceable judicial or administrative interpretation
thereof, including any judicial or administrative order, consent,
decree or judgment issued to or rendered against the Company or
any of its Subsidiaries relating to the environment, employee
health and safety or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control
Act, 33 U.S.C. 2601 et seq.; the Clean Air Act, 42 U.S.C.
7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. 3803 et
seq.; the Oil Pollution Act of 1990, 33 U.S.C. 2701 et seq.;
the Emergency Planning and the Community Right-to-Know Act of
1986, 42 U.S.C. 11001 et seq., the Hazardous Material
Transportation Act, 49 U.S.C. 1801 et seq. and the Occupational
Safety and Health Act, 29 U.S.C. 651 et seq. (to the extent it
regulates occupational exposure to Hazardous Materials); and any
state and local or foreign counterparts or equivalents, in each
case as amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder. Section references to
ERISA are to ERISA, as in effect at the Effective Date and any
<PAGE>
subsequent provisions of ERISA, amendatory thereof, supplemental
thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in
section 3(9) of ERISA) which together with the Company or a
Subsidiary of the Company would be deemed to be a "single
employer" (i) within the meaning of section 414(b),(c), (m) or
(o) of the Code or (ii) as a result of the Company or a
Subsidiary of the Company being or having been a general partner
of such person.
"Eurodollar Lending Office" shall mean, with respect to any
Lender, the office of such Lender specified as its Eurodollar
Lending Office in Annex I or in the Assignment Agreement pursuant
to which it became a Lender, or such other office or offices for
Eurodollar Loans of such Lender as such Lender may from time to
time specify to the Treasury Manager and the Administrative
Agent.
"Eurodollar Loans" shall mean each Loan bearing interest at
the rates provided in section 2.8(a)(ii).
"Eurodollar Rate" shall mean with respect to each Interest
Period for a Eurodollar Loan, (A) either (i) the rate per annum
for deposits in Dollars of amounts in same day funds comparable
to the outstanding principal amount of the Eurodollar Loan for
which an interest rate is then being determined for a maturity
most nearly comparable to such Interest Period which appears on
page 3750 of the Dow Jones Telerate Screen as of 11:00 A.M.
(local time at the Notice Office) on the date which is two
Business Days prior to the commencement of such Interest Period,
or (ii) if such a rate does not appear on such page, an interest
rate per annum equal to the average (rounded upward to the
nearest whole multiple of 1/16 of 1% per annum, if such average
is not such a multiple) of the rate per annum at which deposits
in Dollars are offered to each of the Reference Banks by prime
banks in the London interbank Eurodollar market for deposits of
amounts in Dollars in same day funds comparable to the
outstanding principal amount of the Eurodollar Loan for which an
interest rate is then being determined with maturities comparable
to the Interest Period to be applicable to such Eurodollar Loan,
determined as of 11:00 A.M. (London time) on the date which is
two Business Days prior to the commencement of such Interest
Period, in each case divided (and rounded upward to the nearest
whole multiple of 1/16th of 1%) by (B) a percentage equal to 100%
minus the then stated maximum rate of all reserve requirements
(including, without limitation, any marginal, emergency,
supplemental, special or other reserves and
<PAGE>
without benefit of credits for proration, exceptions or offsets
which may be available from time to time) applicable to any
member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or any
successor category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in
section 10.1.
"Existing Indebtedness" shall have the meaning provided in
section 7.18.
"Existing Indebtedness Agreements" shall have the meaning
provided in section 7.18.
"Facility" shall mean the General Revolving Facility or the
Swing Line Revolving Facility, as applicable.
"Facility Fee" shall have the meaning provided in section
3.1(a).
"Federal Funds Effective Rate" shall mean, for any period, a
fluctuating interest rate equal for each day during such period
to the weighted average of the rates on overnight Federal Funds
transactions with members of the Federal Reserve System arranged
by Federal Funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of
the quotations for such day on such transactions received by the
Administrative Agent from three Federal Funds brokers of
recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or
referred to in, section 3.
"Foreign Subsidiary" shall mean any Subsidiary (i) which is
not incorporated in the United States and substantially all of
whose assets and properties are located, or substantially all of
whose business is carried on, outside the United States, or (ii)
substantially all of whose assets consist of Subsidiaries that
are Foreign Subsidiaries as defined in clause (i) of this
definition.
"GAAP" shall mean generally accepted accounting principles
in the United States of America as in effect from time to time;
<PAGE>
it being understood and agreed that determinations in accordance
with GAAP for purposes of section 9, including defined terms as
used therein, are subject (to the extent provided therein) to
section 14.7(a).
"General Revolving Commitment" shall mean, with respect to
each Lender, the amount, if any, set forth opposite such Lender's
name in Annex I as its "General Revolving Commitment" as the same
may be reduced from time to time pursuant to section 4.1, 4.2,
4.3(c) and/or 10 or adjusted from time to time as a result of
assignments to or from such Lender pursuant to section 14.4.
"General Revolving Facility" shall mean the credit facility
evidenced by the Total General Revolving Commitment.
"General Revolving Facility Percentage" shall mean at any
time for any Lender with a General Revolving Commitment, the
percentage obtained by dividing such Lender's General Revolving
Commitment by the Total General Revolving Commitment, provided,
that if the Total General Revolving Commitment has been
terminated, the General Revolving Facility Percentage for each
Lender with a General Revolving Commitment shall be determined by
dividing such Lender's General Revolving Commitment immediately
prior to such termination by the Total General Revolving
Commitment immediately prior to such termination.
"General Revolving Loan" shall have the meaning provided in
section 2.1(a).
"General Revolving Note" shall have the meaning provided in
section 2.6(a)(i).
"Guaranty Obligations" shall mean as to any person (without
duplication) any obligation of such person guaranteeing any
Indebtedness ("primary Indebtedness") of any other person (the
"primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such person,
whether or not contingent, (a) to purchase any such primary
Indebtedness or any property constituting direct or indirect
security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary Indebtedness or (ii) to
maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary
obligor, (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such
primary Indebtedness of the ability of the
<PAGE>
primary obligor to make payment of such primary Indebtedness, or
(d) otherwise to assure or hold harmless the owner of such
primary Indebtedness against loss in respect thereof, provided,
however, that the term Guaranty Obligation shall not include
endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Guaranty
Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary Indebtedness in respect of
which such Guaranty Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such person is required to perform
thereunder) as determined by such person in good faith.
"Hedge Agreement" shall mean (i) any interest rate swap
agreement, any interest rate cap agreement, any interest rate
collar agreement or other similar agreement or arrangement
designed to protect against fluctuations in interest rates, and
(ii) any currency swap agreement, forward currency purchase
agreement or similar agreement or arrangement designed to protect
against fluctuations in currency exchange rates.
"Hazardous Materials" shall mean (i) any petrochemical or
petroleum products, radioactive materials, asbestos in any form
that is or could become friable, urea formaldehyde foam
insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls,
and radon gas; and (ii) any chemicals, materials or substances
defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials",
"restricted hazardous materials", "extremely hazardous wastes",
"restrictive hazardous wastes", "toxic substances", "toxic
pollutants", "contaminants" or "pollutants", or words of similar
meaning and regulatory effect, under any applicable Environmental
Law.
"Indebtedness" of any person shall mean without duplication:
(i) all indebtedness of such person for borrowed
money,
(ii) all bonds, notes, debentures and similar debt
securities of such person,
(iii) the deferred purchase price of capital assets
or services which in accordance with GAAP would be
<PAGE>
shown on the liability side of the balance sheet of such
person,
(iv) the face amount of all letters of credit issued
for the account of such person and, without duplication, all
drafts drawn thereunder,
(v) all Indebtedness of a second person secured by any
Lien on any property owned by such first person, whether or
not such indebtedness has been assumed,
(vi) all Capitalized Lease Obligations of such person,
(vii) the present value, determined on the basis of
the implicit interest rate, of all basic rental obligations
under all "synthetic" leases (i.e. leases accounted for by
the lessee as operating leases under which the lessee is the
"owner" of the leased property for Federal income tax
purposes,
(viii) all obligations of such person to pay a
specified purchase price for goods or services whether or
not delivered or accepted, i.e., take-or-pay and similar
obligations,
(ix) all net obligations of such person under Hedge
Agreements and
(x) the full outstanding balance of trade receivables,
notes or other instruments sold with full or limited
recourse, other than solely for purposes of collection of
delinquent accounts, and
(xi) all Guaranty Obligations of such person,
provided that neither trade payables and accrued expenses, in
each case arising in the ordinary course of business, nor
obligations in respect of insurance policies or performance or
surety bonds which themselves are not guarantees of Indebtedness
(nor drafts, acceptances or similar instruments evidencing the
same nor obligations in respect of letters of credit supporting
the payment of the same), shall constitute Indebtedness.
"Initial Borrowing Date" shall mean the date, on or after
the Effective Date, upon which the conditions specified in
section 6.1 are satisfied.
<PAGE>
"Interest Coverage Ratio" shall mean, for any Testing
Period, the ratio of (i) Consolidated EBIT to (ii) Consolidated
Interest Expense, in each case on a consolidated basis for the
Company and its Subsidiaries for such Testing Period.
"Interest Period" with respect to any Eurodollar Loan shall
mean the interest period applicable thereto, as determined
pursuant to section 2.9.
"KeyBank" shall mean KeyBank National Association, a
national banking association, together with its successors and
assigns.
"Knott's Berry Farm" shall have the meaning provided in the
introductory paragraph hereof.
"Leaseholds" of any person means all the right, title and
interest of such person as lessee or licensee in, to and under
leases or licenses of land, improvements and/or fixtures.
"Lender" shall have the meaning provided in the first
paragraph of this Agreement.
"Lender Default" shall mean (i) the refusal (which has not
been retracted) of a Lender in violation of the requirements of
this Agreement to make available its portion of any incurrence of
Loans or to fund its portion of any Swing Line Participation
Amount under section 2.5(b) or (ii) a Lender having notified the
Administrative Agent and/or the Treasury Manager that it does not
intend to comply with the obligations under section 2.1 and/or
section 2.5(b), in the case of either (i) or (ii) as a result of
the appointment of a receiver or conservator with respect to such
Lender at the direction or request of any regulatory agency or
authority.
"Lender Register" shall have the meaning provided in section
14.16.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement
to give any of the foregoing, any conditional sale or other title
retention agreement or any lease in the nature thereof).
"Loan" shall have the meaning provided in section 2.1 and
shall include any General Revolving Loan or Swing Line Revolving
Loan, as the case may be.
<PAGE>
"Managing General Partner" shall mean Cedar Fair Management
Company, an Ohio corporation, and its successors and assigns.
"Magnum Management" shall have the meaning provided in the
introductory paragraph hereof.
"Margin Stock" shall have the meaning provided in Regulation
U.
"Material Adverse Effect" shall mean a material adverse
effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of,
when used with reference to the Company or any of its
Subsidiaries, the Company and its Subsidiaries, taken as a whole,
or when used with reference to any other person, such person and
its Subsidiaries, taken as a whole, as the case may be.
"Material Subsidiary" shall mean, at any time, with
reference to any person, any Subsidiary of such person (i) that
has assets at such time comprising 5% or more of the consolidated
assets of such person and its Subsidiaries; or (ii) whose
operations in the current fiscal year are expected to, or whose
operations in the most recent fiscal year did, represent more
than 5% of Consolidated EBITDA of such person and its
Subsidiaries for such fiscal year.
"Maturity Date" shall mean April 30, 2002, unless earlier
terminated, or extended in accordance with section 4.4.
"Minimum Borrowing Amount" shall mean (i) for General
Revolving Loans which are (A) Prime Rate Loans, $500,000, with
minimum increments thereafter of $100,000, or (B) Eurodollar
Loans, $5,000,000, with minimum increments thereafter of
$1,000,000; and (ii) for Swing Line Revolving Loans, $100,000,
with minimum increments thereafter of $50,000.
"Minimum Consolidated Net Worth" shall mean, at any date of
determination, the amount determined in accordance with the
following provisions:
(i) 90% of the actual Consolidated Net Worth of the
Company, as reflected in its annual audited consolidated
financial statements for its fiscal year ended December 31,
1997, except that in the case of any date of determination
which is made with reference to the end of the Company's
<PAGE>
first or second fiscal quarter in any fiscal year, such
percentage shall be 60% and 70%, respectively;
(ii) plus an amount equal to 100% of the increase in
Consolidated Net Worth during the period from the date of
such financial statements to the date of determination which
is attributable to the issuance of equity by the Company or
any of its Subsidiaries to any person other than the Company
and its Wholly-Owned Subsidiaries, in connection with any
acquisition transaction or public or private offering, other
than any sale or issuance to management or employees
pursuant to employee benefit plans of general application;
(iii) plus an amount equal to 100% of the increase
in Consolidated Net Worth attributable to the exchange or
conversion of any Indebtedness of the Company for equity
interests in the Company or any of its Subsidiaries during
the period from the date of such financial statements to the
date of determination.
"Money Market Rate Loan" shall mean each Swing Line
Revolving Loan bearing interest at a rate provided in section
2.8(b)(ii).
"Moody's" shall mean Moody's Investors Service, Inc. and its
successors.
"Multiemployer Plan" shall mean a multiemployer plan, as
defined in section 4001(a)(3) of ERISA to which the Company or
any ERISA Affiliate is making or accruing an obligation to make
contributions or has within any of the preceding three plan years
made or accrued an obligation to make contributions.
"Multiple Employer Plan" shall mean an employee benefit
plan, other than a Multiemployer Plan, to which the Company or
any ERISA Affiliate, and one or more employers other than the
Company or an ERISA Affiliate, is making or accruing an
obligation to make contributions or, in the event that any such
plan has been terminated, to which the Company or an ERISA
Affiliate made or accrued an obligation to make contributions
during any of the five plan years preceding the date of
termination of such plan.
"1934 Act" shall mean the Securities Exchange Act of 1934,
as amended.
<PAGE>
"Non-Defaulting Lender" shall mean each Lender other than a
Defaulting Lender.
"Note" shall mean a General Revolving Note or a Swing Line
Revolving Note, as the case may be.
"Notice of Borrowing" shall have the meaning provided in
section 2.3(a).
"Notice of Conversion" shall have the meaning provided in
section 2.7.
"Notice Office" shall mean the office of the Administrative
Agent at Key Center, 127 Public Square, Cleveland, Ohio 44114,
Attention: Large Corporate Group (facsimile: (216) 689-4981), or
such other office, located in a city in the United States Eastern
Time Zone, as the Administrative Agent may designate to the
Treasury Manager from time to time.
"Notice of Swing Line Refunding" shall have the meaning
provided in section 2.5(a).
"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any
time existing, owing by any or all Co-Borrowers or any other
Credit Party to the Administrative Agent or any Lender pursuant
to the terms of this Agreement or any other Credit Document.
"Participant" shall have the meaning provided in section
3.4(a).
"Payment Office" shall mean the office of the Administrative
Agent at Key Center, 127 Public Square, Cleveland, Ohio 44114,
Attention: Large Corporate Group (telephone: (216) 689-4448;
facsimile: (216) 689-4981), or such other office, located in a
city in the United States Eastern Time Zone, as the
Administrative Agent may designate to the Treasury Manager from
time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor
thereto.
"Percentage" shall mean the General Revolving Facility
Percentage or the Swing Line Revolving Facility Percentage, as
applicable.
<PAGE>
"Permitted Acquisition" shall mean and include (i) any
acquisition on a going concern basis (whether by purchase, lease
or otherwise) of a facility and/or business operated by a person
who is not a Subsidiary of the Company, and (ii) acquisitions of
a majority (or more) of the outstanding equity or other similar
interests in any such person (whether by merger, stock purchase
or otherwise); provided, that no such transaction shall be
considered a Permitted Acquisition if:
(A) such transaction is actively opposed by the Board
of Directors (or similar governing body) of the selling
person or the person whose equity interests are to be
acquired, unless all of the Lenders consent to such
transaction;
(B) the aggregate consideration for such transaction
(including the principal amount of any assumed Indebtedness
and (without duplication) any Indebtedness of any acquired
person or persons) would exceed $30,000,000, unless the
Required Lenders consent to such transaction;
(C) the cumulative aggregate consideration for such
transaction and all other Permitted Acquisitions effected by
the Company and its Subsidiaries after the date of the most
recent financial statements of the Company furnished to the
Lenders prior to the Effective Date (including the principal
amount of any assumed Indebtedness and (without duplication)
any Indebtedness of any acquired person or persons),
exclusive of the consideration for the Acquisition
Transaction, would exceed $50,000,000, unless the Required
Lenders consent to such transaction; or
(D) such acquisition involves the Company and its
Subsidiaries in a business which is not similar or related
to the businesses engaged in by the Company and its
Subsidiaries on the Effective Date.
Notwithstanding the foregoing, the term Permitted Acquisition
does not include (x) the Acquisition Transaction; or (y) any
loans, advances or investments (including investments in joint
ventures) otherwise permitted pursuant to section 9.5.
"Permitted Liens" shall mean Liens permitted by section 9.3.
"person" shall mean any individual, partnership, joint
venture, firm, corporation, limited liability company,
<PAGE>
association, trust or other enterprise or any government or
political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan
as defined in section 4001 of ERISA, which is maintained or
contributed to by (or to which there is an obligation to
contribute by) the Company or a Subsidiary of the Company or an
ERISA Affiliate, and each such plan for the five year period
immediately following the latest date on which the Company, or a
Subsidiary of the Company or an ERISA Affiliate maintained,
contributed to or had an obligation to contribute to such plan.
"Prime Rate" shall mean, for any period, a fluctuating
interest rate per annum as shall be in effect from time to time
which rate per annum shall at all times be equal to the greater
of (i) the rate of interest established by the Administrative
Agent at its principal office, from time to time, as its prime
rate, whether or not publicly announced, which interest rate may
or may not be the lowest rate charged by it for commercial loans
or other extensions of credit; and (ii) the Federal Funds
Effective Rate in effect from time to time plus 1/2 of 1% per
annum.
"Prime Rate Loan" shall mean each Loan bearing interest at
the rate provided in section 2.8(a)(i) or 2.8(b)(i).
"Prohibited Transaction" shall mean a transaction with
respect to a Plan that is prohibited under section 4975 of the
Code or section 406 of ERISA and not exempt under section 4975 of
the Code or section 408 of ERISA.
"Quoted Rate" shall have the meaning provided in section
2.3(c).
"RCRA" shall mean the Resource Conservation and Recovery
Act, as the same may be amended from time to time, 42 U.S.C.
6901 et seq.
"Real Property" of any person shall mean all of the right,
title and interest of such person in and to land, improvements
and fixtures, including Leaseholds.
"Reference Banks" shall mean (i) KeyBank, National City
Bank, and NBD Bank, and (ii) any other Lender or Lenders selected
as a Reference Bank by the Administrative Agent and the Required
Lenders, provided, that if any of such Reference Banks
<PAGE>
is no longer a Lender, such other Lender or Lenders as may be
selected by the Administrative Agent acting on instructions from
the Required Lenders.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in
effect and any successor to all or a portion thereof establishing
reserve requirements.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in
effect and any successor to all or a portion thereof establishing
margin requirements.
"Reportable Event" shall mean an event described in section
4043(c) of ERISA with respect to a Plan other than those events
as to which the 30-day notice period is waived under subsection
.13, .14, .16, .18, .19 or .20 of PBGC Regulation section 2615.
"Required Lenders" shall mean Non-Defaulting Lenders whose
outstanding General Revolving Loans and Unutilized General
Revolving Commitments constitute at least 66+2/3% of the sum of
the total outstanding General Revolving Loans and Unutilized
General Revolving Commitments of Non-Defaulting Lenders (provided
that, for purposes hereof, neither the Company, nor any of its
Affiliates, shall be included in (i) the Lenders holding such
amount of the General Revolving Loans or having such amount of
the Unutilized General Revolving Commitments, or (ii) determining
the aggregate unpaid principal amount of the General Revolving
Loans or Unutilized General Revolving Commitments).
"Sale and Lease-Back Transaction" shall mean any arrangement
with any person providing for the leasing by the Company or any
Subsidiary of the Company of any property (except for temporary
leases for a term, including any renewal thereof, of not more
than one year and except for leases between the Company and a
Subsidiary or between Subsidiaries), which property has been or
is to be sold or transferred by the Company or such Subsidiary to
such person.
"S&P" shall mean Standard & Poor's Ratings Group, a division
of McGraw Hill, Inc., and its successors.
"SEC" shall mean the United States Securities and Exchange
Commission.
<PAGE>
"SEC Regulation D" shall mean Regulation D as promulgated
under the Securities Act of 1933, as amended, as the same may be
in effect from time to time.
"Section 5.4(b)(ii) Certificate" shall have the meaning
provided in section 5.4(b)(ii).
"Subsidiary" of any person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes
having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation (irrespective of
whether or not at the time stock of any class or classes of such
corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such
person directly or indirectly through Subsidiaries and (ii) any
partnership, association, joint venture or other entity in which
such person directly or indirectly through Subsidiaries, has more
than a 50% equity interest at the time. Unless otherwise
expressly provided, all references herein to "Subsidiary" shall
mean a Subsidiary of the Company.
"Subsidiary Guarantor" shall mean any Subsidiary which is a
party to the Subsidiary Guaranty.
"Subsidiary Guaranty" shall have the meaning provided in
section 6.1(c).
"Subordinated Indebtedness" shall mean any Indebtedness
which has been subordinated to the Obligations in such manner and
to such extent as the Administrative Agent (acting on
instructions from the Required Lenders) may require.
"Swing Line Participation Amount" shall have the meaning
provided in section 2.5(b).
"Swing Line Revolving Commitment" shall mean, with respect
to each Lender, the amount, if any, set forth opposite such
Lender's name in Annex I as its "Swing Line Revolving Commitment"
as the same may be reduced from time to time pursuant to section
4.1 and/or 10 or adjusted from time to time as a result of
assignments to or from such Lender pursuant to section 14.4.
"Swing Line Revolving Facility" shall mean the credit
facility evidenced by the Total Swing Line Revolving Commitment.
<PAGE>
"Swing Line Revolving Facility Percentage" shall mean at any
time for any Lender with a Swing Line Revolving Commitment, the
percentage obtained by dividing such Lender's Swing Line
Revolving Commitment by the Total Swing Line Revolving
Commitment, provided, that if the Total Swing Line Revolving
Commitment has been terminated, the Swing Line Revolving Facility
Percentage for each Lender with a Swing Line Revolving Commitment
shall be determined by dividing such Lender's Swing Line
Revolving Commitment immediately prior to such termination by the
Total Swing Line Revolving Commitment immediately prior to such
termination.
"Swing Line Revolving Loan" shall have the meaning provided
in section 2.1(b).
"Swing Line Revolving Note" shall have the meaning provided
in section 2.6(a)(ii).
"Taxes" shall have the meaning provided in section 5.4.
"Testing Period" shall mean for any determination a single
period consisting of the four consecutive fiscal quarters of the
Company then last ended (whether or not such quarters are all
within the same fiscal year).
"Total Commitment" shall mean the sum of the Commitments of
the Lenders.
"Total General Revolving Commitment" shall mean the sum of
the General Revolving Commitments of the Lenders.
"Total Swing Line Revolving Commitment" shall mean the sum
of the Swing Line Revolving Commitments of the Lenders.
"Treasury Manager" shall have the meaning provided in the
introductory paragraph hereof.
"Type" shall mean any type of Loan determined with respect
to the interest option applicable thereto, i.e., a Prime Rate
Loan, Eurodollar Loan or Money Market Rate Loan.
"UCC" shall mean the Uniform Commercial Code.
"Unfunded Current Liability" of any Plan shall mean the
amount, if any, by which the actuarial present value of the
accumulated plan benefits under the Plan as of the close of its
most recent plan year exceeds the fair market value of the
<PAGE>
assets allocable thereto, each determined in accordance with
Statement of Financial Accounting Standards No. 87, based upon
the actuarial assumptions used by the Plan's actuary in the most
recent annual valuation of the Plan.
"United States" and "U.S." each means United States of
America.
"Unutilized General Revolving Commitment" for any Lender at
any time shall mean the excess of (i) such Lender's General
Revolving Commitment at such time over (ii) the principal amount
of General Revolving Loans made by such Lender and outstanding at
such time.
"Unutilized Swing Line Revolving Commitment" for any Lender
at any time shall mean the excess of (i) such Lender's Swing Line
Revolving Commitment at such time over (ii) the principal amount
of Swing Line Revolving Loans made by such Lender and outstanding
at such time.
"Unutilized Total General Revolving Commitment" shall mean,
at any time, the excess of (i) the Total General Revolving
Commitment at such time over (ii) the aggregate principal amount
of all General Revolving Loans outstanding at such time.
"Unutilized Total Swing Line Revolving Commitment" shall
mean, at any time, the excess of (i) the Total Swing Line
Revolving Commitment at such time over (ii) the aggregate
principal amount of all Swing Line Revolving Loans outstanding at
such time.
"Value" shall mean, with respect to a Sale and Lease-Back
Transaction, as of any particular time, the amount equal to the
greater of (i) the net proceeds of the sale or transfer of the
property leased pursuant to such Sale and Lease-Back Transaction
or (ii) the fair value in the opinion of the Company, acting in
good faith, of such property at the time of entering into such
Sale and Lease-Back Transaction.
"Wholly-Owned Subsidiary" shall mean each Subsidiary of the
Company at least 95% of whose capital stock, equity interests and
partnership interests, other than director's qualifying shares or
similar interests, are owned directly or indirectly by the
Company.
<PAGE>
"Written", "written" or "in writing" shall mean any form of
written communication or a communication by means of telex,
facsimile transmission, telegraph or cable.
1.2. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including" and
the words "to" and "until" each means "to but excluding".
1.3. Accounting Terms. Except as otherwise specifically
provided herein, all terms of an accounting or financial nature
shall be construed in accordance with GAAP, as in effect from
time to time; provided that, if the Treasury Manager notifies the
Administrative Agent that the Treasury Manager requests an
amendment to any provision of section 8 or 9 hereof to eliminate
the effect of any change occurring after the Effective Date in
GAAP or in the application thereof to such provision (or if the
Administrative Agent notifies the Treasury Manager that the
Required Lenders request an amendment to any such provision
hereof for such purposes), regardless of whether any such notice
is given before or after such change in GAAP or in the
application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall
have been withdrawn or such provision amended in accordance with
the requirements of this Agreement.
1.4. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms.
The words "include", "includes" and "including" shall be deemed
to be followed by the phrase "without limitation". The word
"will" shall be construed to have the same meaning and effect as
the word "shall". Unless the context requires otherwise, (a) any
definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such
agreement, instrument or other document as from time to time
amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set
forth herein), (b) any reference herein to any person shall be
construed to include such person's successors and assigns, (c)
the words "herein", "hereof" and "hereunder", and words of
similar import, shall be construed to refer to this Agreement in
its entirety and not to any particular provision hereof, (d) all
references herein to sections, Annexes and Exhibits shall be
construed to refer to sections of, and Annexes
<PAGE>
and Exhibits to, this Agreement, and (e) the words "asset" and
"property" shall be construed to have the same meaning and effect
and to refer to any and all real property, tangible and
intangible assets and properties, including cash, securities,
accounts and contract rights, and interests in any of the
foregoing.
SECTION 2. AMOUNT AND TERMS OF LOANS.
2.1. Commitments for Loans. Subject to and upon the terms
and conditions herein set forth, each Lender severally agrees to
make a loan or loans (each a "Loan" and, collectively, the
"Loans") to the Co-Borrowers, which Loans shall be drawn, to the
extent such Lender has a Commitment under a Facility for the Co-
Borrowers, under the applicable Facility, as set forth below:
(a General Revolving Facility. Loans to the Co-
Borrowers under the General Revolving Facility (each a
"General Revolving Loan" and, collectively, the "General
Revolving Loans") (i) may be made at any time and from time
to time on and after the Initial Borrowing Date and prior to
the Maturity Date; (ii) shall be made only in U.S. Dollars;
(iii) except as otherwise provided, may, at the option of
the Treasury Manager (acting on behalf of all Co-Borrowers),
be incurred and maintained as, or converted into, General
Revolving Loans which are either Prime Rate Loans or
Eurodollar Loans, provided that all General Revolving Loans
made as part of the same Borrowing shall, unless otherwise
specifically provided herein, consist of General Revolving
Loans of the same Type; (iv) may only be made if after
giving effect thereto the aggregate outstanding Swing Line
Revolving Loans do not exceed the Unutilized Total General
Revolving Commitment; (v) may be repaid or prepaid and
reborrowed in accordance with the provisions hereof; and
(vi) shall not exceed for any Lender at any time outstanding
such Lender's General Revolving Commitment at such time.
.
(b Swing Line Revolving Facility. Loans to the Co-
Borrowers under the Swing Line Revolving Facility (each a
"Swing Line Revolving Loan" and, collectively, the "Swing
Line Revolving Loans") (i) may be made at any time and from
time to time on and after the Initial Borrowing Date and
prior to the Maturity Date; (ii) shall be made only in U.S.
Dollars; (iii) shall have a maturity of 30 days or less;
<PAGE>
(iv except as otherwise provided, may, at the option of the
Treasury Manager (acting on behalf of all Co-Borrowers), be
incurred as Swing Line Revolving Loans which are either
Prime Rate Loans or Money Market Rate Loans, provided that
all Swing Line Revolving Loans made as part of the same
Borrowing shall, unless otherwise specifically provided
herein, consist of Swing Line Revolving Loans of the same
Type; (v) may only be made if after giving effect thereto
the aggregate outstanding Swing Line Revolving Loans do not
exceed the Unutilized Total General Revolving Commitment;
(vi) may be repaid or prepaid and reborrowed in accordance
with the provisions hereof; and (vii) shall not exceed for
any Lender at any time outstanding such Lender's Swing Line
Revolving Commitment at such time.
2.2. Minimum Borrowing Amounts, etc.; Pro Rata Borrowings.
(a) The aggregate principal amount of each Borrowing by the Co-
Borrowers shall not be less than the Minimum Borrowing Amount.
More than one Borrowing may be incurred by the Co-Borrowers on
any day, provided that if there are two or more Borrowings on a
single day under the same Facility which consist of Eurodollar
Loans, each such Borrowing shall have a different initial
Interest Period.
(b All Borrowings under a Facility shall be made by the
Lenders having Commitments under such Facility pro rata on the
basis of their respective Commitments under such Facility. It is
understood that no Lender shall be responsible for any default by
any other Lender in its obligation to make Loans hereunder and
that each Lender shall be obligated to make the Loans provided to
be made by it hereunder, regardless of the failure of any other
Lender to fulfill its Commitment hereunder.
2.3. Notice of Borrowing. (a) Whenever the Co-Borrowers
desire to incur Loans, the Treasury Manager (acting on behalf of
all Co-Borrowers) shall give the Administrative Agent at its
Notice Office,
(A) Borrowings under the General Revolving Facility of
Eurodollar Loans: in the case of any Borrowing under the
General Revolving Facility of Eurodollar Loans to be made
hereunder, prior to 11:00 A.M. (local time at its Notice
Office), at least three Business Days' prior written or
telephonic notice thereof (in the case of telephonic notice,
promptly confirmed in writing if so requested by the
Administrative Agent),
<PAGE>
(B) Borrowings under any Facility of Prime Rate Loans:
in the case of any Borrowing under any Facility of Prime
Rate Loans to be made hereunder, prior to 11:00 A.M. (local
time at its Notice Office) on the proposed date thereof
written or telephonic notice thereof (in the case of
telephonic notice, promptly confirmed in writing if so
requested by the Administrative Agent), or
(C) Borrowings under the Swing Line Revolving Facility
of Money Market Rate Loans: in the case of any Borrowing
under the Swing Line Revolving Facility of Money Market Rate
Loans to be made hereunder, if the Administrative Agent
shall have furnished the Borrower with a Quoted Rate
therefor, prior to 1:00 P.M. (local time at its Notice
Office) on the proposed date thereof (which shall be within
such period as the Administrative Agent shall have specified
for such Quoted Rate) written or telephonic notice thereof
(in the case of telephonic notice, promptly confirmed in
writing if so requested by the Administrative Agent).
Each such notice (each such notice, a "Notice of Borrowing")
shall (if requested by the Administrative Agent to be confirmed
in writing), be substantially in the form of Exhibit B-1, and in
any event shall be irrevocable and shall specify: (i) the
Facility under which the Borrowing is to be incurred; (ii) the
aggregate principal amount of the Loans to be made pursuant to
such Borrowing; (iii) the date of the Borrowing (which shall be a
Business Day); (iv) whether the Borrowing shall consist of Prime
Rate Loans, Eurodollar Loans or Money Market Rate Loans; (v) if
the Borrowing consists of Swing Line Revolving Loans, the
maturity date thereof (which shall not be more than 30 days), and
if such Swing Line Revolving Loans are Money Market Rate Loans,
the Quoted Rate therefor; and (vi) if the requested Borrowing
consists of Eurodollar Loans, the Interest Period to be initially
applicable thereto. If the Borrower fails to specify in a Notice
of Borrowing the maturity date of any Swing Line Revolving Loans,
such maturity date shall be deemed to be 30 days. The
Administrative Agent shall promptly, and in any event on the same
day it receives any Notice of Borrowing, give each Lender which
has a Commitment under any applicable Facility written notice (or
telephonic notice promptly confirmed in writing) of each proposed
Borrowing under the applicable Facility, of such Lender's
proportionate share thereof and of the other matters covered by
the Notice of Borrowing relating thereto.
<PAGE>
(b Whenever the Treasury Manager (acting on behalf of all
Co-Borrowers) proposes to submit a Notice of Borrowing with
respect to Swing Line Revolving Loans which will be Money Market
Rate Loans, it will prior to submitting such Notice of Borrowing
notify the Administrative Agent of its intention and request the
Administrative Agent to quote a fixed or floating interest rate
(the "Quoted Rate") to be applicable thereto prior to the
proposed maturity thereof. The Administrative Agent will
immediately so notify the Lenders with Commitments under the
Swing Line Revolving Facility, and if all of such Lenders are
agreeable to a particular interest rate for the proposed maturity
of such Money Market Rate Loans if such Loans are made on or
prior to a specified date, the Administrative Agent shall quote
such interest rate to the Treasury Manager as the Quoted Rate
applicable to such proposed Money Market Rate Loans if made on or
before such specified date for a maturity as so proposed by the
Treasury Manager. The Lenders with Commitments under the Swing
Line Revolving Facility contemplate that any Quoted Rate will be
a rate of interest which reflects a margin corresponding to (or
greater than) the sum of (x) the Applicable Eurodollar Margin in
effect at the time of quotation of any Quoted Rate, plus (y) the
Applicable Facility Fee Rate at such time, over the then
prevailing Federal Funds Effective Rate, commercial paper, call
money, overnight repurchase or other commonly quoted interest
rate, in each case as selected by such Lenders. Nothing herein
shall be deemed to permit any Lender which does not have a Swing
Line Revolving Commitment any right of approval with respect to a
Quoted Rate.
(c Without in any way limiting the obligation of the
Treasury Manager to confirm in writing any telephonic notice
permitted to be given hereunder, the Administrative Agent may act
prior to receipt of written confirmation without liability upon
the basis of such telephonic notice believed by the
Administrative Agent in good faith to be from an Authorized
Officer of the Treasury Manager entitled to give telephonic
notices under this Agreement on behalf of the Co-Borrowers. In
each such case, the Administrative Agent's record of the terms of
such telephonic notice shall be conclusive absent manifest error.
2.4. Disbursement of Funds. (a) No later than 2:00 P.M.
(local time at the Payment Office) on the date specified in each
Notice of Borrowing, each Lender with a Commitment under the
Facility under which any Borrowing pursuant to such Notice of
Borrowing is to be made will make available its pro rata share,
if any, of each Borrowing under such Facility requested to be
<PAGE>
made on such date in the manner provided below. All amounts
shall be made available to the Administrative Agent in U.S.
dollars and immediately available funds at the Payment Office and
the Administrative Agent promptly will make available to the Co-
Borrowers by depositing to the account of the Treasury Manager 's
account at the Payment Office the aggregate of the amounts so
made available in the type of funds received. Unless the
Administrative Agent shall have been notified by any Lender prior
to the date of Borrowing that such Lender does not intend to make
available to the Administrative Agent its portion of the
Borrowing or Borrowings to be made on such date, the
Administrative Agent may assume that such Lender has made such
amount available to the Administrative Agent on such date of
Borrowing, and the Administrative Agent, in reliance upon such
assumption, may (in its sole discretion and without any
obligation to do so) make available to the Co-Borrowers a
corresponding amount. If such corresponding amount is not in
fact made available to the Administrative Agent by such Lender
and the Administrative Agent has made available same to the Co-
Borrowers, the Administrative Agent shall be entitled to recover
such corresponding amount from such Lender. If such Lender does
not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent
shall promptly notify the Treasury Manager, and the Co-Borrowers
shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be
entitled to recover from such Lender or the Co-Borrowers, as the
case may be, interest on such corresponding amount in respect of
each day from the date such corresponding amount was made
available by the Administrative Agent to the Co-Borrowers to the
date such corresponding amount is recovered by the Administrative
Agent, at a rate per annum equal to (x) if paid by such Lender,
the overnight Federal Funds Effective Rate or (y) if paid by the
Co-Borrowers, the then applicable rate of interest, calculated in
accordance with section 2.8, for the respective Loans (but
without any requirement to pay any amounts in respect thereof
pursuant to section 2.11).
(b Nothing herein and no subsequent termination of the
Commitments pursuant to section 4.2 or 4.3 shall be deemed to
relieve any Lender from its obligation to fulfill its commitments
hereunder and in existence from time to time or to prejudice any
rights which the Co-Borrowers may have against any Lender as a
result of any default by such Lender hereunder.
2.5. Refunding of, or Participation in, Swing Line Revolving
Loans. (a) If any Event of Default exists, any
<PAGE>
Lender which has any Swing Line Revolving Loans owing to it (a
"Swing Line Lender") may, in its sole and absolute discretion,
direct that the Swing Line Revolving Loans owing to it be
refunded by delivering a notice to such effect to the
Administrative Agent, specifying the aggregate principal amount
thereof (a "Notice of Swing Line Refunding"). Promptly upon
receipt of a Notice of Swing Line Refunding, the Administrative
Agent shall give notice of the contents thereof to the Lenders
with General Revolving Commitments and, unless an Event of
Default specified in section 10.1(h) in respect of any Co-
Borrower has occurred, the Treasury Manager. Each such Notice of
Swing Line Refunding shall be deemed to constitute delivery by
the Treasury Manager (on behalf of the Co-Borrowers) of a Notice
of Borrowing requesting General Revolving Loans consisting of
Prime Rate Loans in the amount of the Swing Line Revolving Loans
to which it relates. Each Lender with a General Revolving
Commitment (including the Swing Line Lender giving the Notice of
Swing Line Refunding) hereby unconditionally agrees
(notwithstanding that any of the conditions specified in section
6.2 hereof or elsewhere in this Agreement shall not have been
satisfied, but subject to the provisions of paragraphs (b) and
(d) below) to make a General Revolving Loan to the Co-Borrowers
in an amount equal to such Lender's General Revolving Facility
Percentage of the aggregate amount of the Swing Line Revolving
Loans to which such Notice of Swing Line Refunding relates. Each
such Lender shall make the amount of such General Revolving Loan
available to the Administrative Agent in immediately available
funds at the Payment Office not later than 2:00 P.M. (local time
at the Payment Office), if such notice is received by such Lender
prior to 11:00 A.M. (local time at its Domestic Lending Office),
or not later than 2:00 P.M. (local time at the Payment Office) on
the next Business Day, if such notice is received by such Lender
after such time. The proceeds of such General Revolving Loans
shall be made immediately available to the Swing Line Lender
giving such Notice of Swing Line Refunding and applied by it to
repay the principal amount of the Swing Line Revolving Loans to
which such Notice of Swing Line Refunding related. The Co-
Borrowers irrevocably and unconditionally agree that,
notwithstanding anything to the contrary contained in this
Agreement, General Revolving Loans made as herein provided in
response to a Notice of Swing Line Refunding shall constitute
General Revolving Loans hereunder consisting of Prime Rate Loans.
(b If prior to the time a General Revolving Loan would
otherwise have been made as provided above as a consequence of a
Notice of Swing Line Refunding, any of the events specified in
<PAGE>
section 10.1(h) shall have occurred in respect of any Co-Borrower
or one or more of the Lenders with General Revolving Commitments
shall determine that it is legally prohibited from making a
General Revolving Loan under such circumstances, each Lender
(other than the Swing Line Lender giving the Notice of Swing Line
Refunding), or each Lender (other than such Swing Line Lender) so
prohibited, as the case may be, shall, on the date such General
Revolving Loan would have been made by it (the "Purchase Date"),
purchase an undivided participating interest in the outstanding
Swing Line Revolving Loans to which such Notice of Swing Line
Refunding related, in an amount (the "Swing Line Participation
Amount") equal to such Lender's General Revolving Facility
Percentage of such Swing Line Revolving Loans. On the Purchase
Date, each such Lender or each such Lender so prohibited, as the
case may be, shall pay to the Swing Line Lender, in immediately
available funds, such Lender's Swing Line Participation Amount,
and promptly upon receipt thereof the Swing Line Lender shall, if
requested by such other Lender, deliver to such Lender a
participation certificate, dated the date of the Swing Line
Lender's receipt of the funds from, and evidencing such Lender's
participating interest in such Swing Line Revolving Loans and its
Swing Line Participation Amount in respect thereof. If any amount
required to be paid by a Lender to the Swing Line Lender pursuant
to the above provisions in respect of any Swing Line
Participation Amount is not paid on the date such payment is due,
such Lender shall pay to the Swing Line Lender on demand interest
on the amount not so paid at the overnight Federal Funds
Effective Rate from the due date until such amount is paid in
full.
(c Whenever, at any time after the Swing Line Lender has
received from any other Lender such Lender's Swing Line
Participation Amount, the Swing Line Lender receives any payment
from or on behalf of the Borrower on account of the related Swing
Line Revolving Loans, the Swing Line Lender will promptly
distribute to such Lender its General Revolving Facility
Percentage of such payment on account of its Swing Line
Participation Amount (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which
such Lender's participating interest was outstanding and funded);
provided, however, that in the event such payment received by the
Swing Line Lender is required to be returned, such Lender will
return to the Swing Line Lender any portion thereof previously
distributed to it by the Swing Line Lender.
(d Each Lender's obligation to make General Revolving
Loans and/or to purchase participations in connection with a
<PAGE>
Notice of Swing Line Refunding (which shall in all events be
within such Lender's Unutilized General Revolving Commitment,
taking into account all outstanding participations in connection
with Swing Line Refundings) shall be subject to the conditions
that
(i such Lender shall have received a Notice of Swing
Line Refunding complying with the provisions hereof; and
(ii at the time the Swing Line Revolving Loans which
are the subject of such Notice of Swing Line Refunding were
made, (x) the Swing Line Lender making the same had no
actual written notice from another Lender that an Event of
Default had occurred and was continuing, and (y) the Swing
Line Lender's actions in making such Swing Line Revolving
Loans did not constitute gross negligence or willful
misconduct;
but otherwise shall be absolute and unconditional, shall be
solely for the benefit of the Swing Line Lender which gives such
Notice of Swing Line Refunding, and shall not be affected by any
circumstance, including, without limitation, (A) any set-off,
counterclaim, recoupment, defense or other right which such
Lender may have against any other Lender, any Credit Party, or
any other person, or any Credit Party may have against any Lender
or other person, as the case may be, for any reason whatsoever;
(B) the occurrence or continuance of a Default or Event of
Default; (C) any event or circumstance involving a Material
Adverse Effect upon the Borrower; (D) any breach of any Credit
Document by any party thereto; or (E) any other circumstance,
happening or event, whether or not similar to any of the
foregoing.
2.6. Notes. (a) The Co-Borrowers' obligation to pay the
principal of, and interest on, the Loans made to the Co-Borrowers
by each Lender shall be evidenced (i) if General Revolving Loans,
by a promissory note substantially in the form of Exhibit A-1
with blanks appropriately completed in conformity herewith (each
a "General Revolving Note" and, collectively, the "General
Revolving Notes"), and (ii) if Swing Line Revolving Loans, by a
promissory note substantially in the form of Exhibit A-2 with
blanks appropriately completed in conformity herewith (each a
"Swing Line Revolving Note" and, collectively, the "Swing Line
Revolving Notes").
(b The General Revolving Note issued to a Lender with a
General Revolving Commitment shall: (i) be executed by the Co-
<PAGE>
Borrowers who are at such time parties to this Agreement; (ii) be
payable to the order of such Lender and be dated on or prior to
the date the first Loan evidenced thereby is made; (iii) be in a
stated principal amount equal to the General Revolving Commitment
of such Lender and be payable in the principal amount of General
Revolving Loans evidenced thereby; (iv) mature on the Maturity
Date; (v) bear interest as provided in section 2.8 in respect of
the Prime Rate Loans and Eurodollar Loans, as the case may be,
evidenced thereby; (vi) be subject to mandatory prepayment as
provided in section 5.2: and (vii) be entitled to the benefits of
this Agreement and the other Credit Documents.
(c The Swing Line Revolving Note issued to a Lender with a
Swing Line Revolving Commitment shall: (i) be executed by the Co-
Borrowers who are at such time parties to this Agreement; (ii) be
payable to the order of such Lender and be dated on or prior to
the date the first Loan evidenced thereby is made; (iii) be in a
stated principal amount equal to the Swing Line Revolving
Commitment of such Lender and be payable in the principal amount
of Swing Line Revolving Loans evidenced thereby; (iv) mature as
to any Swing Line Revolving Loan evidenced thereby on the
maturity date, not later than the 30th day following the date
such Swing Line Revolving Loan was made, specified in the
applicable Notice of Borrowing; (v) bear interest as provided in
section 2.8 in respect of the Prime Rate Loans or Money Market
Rate Loans, as the case may be, evidenced thereby; (vi) be
subject to mandatory prepayment as provided in section 5.2; and
(vii) be entitled to the benefits of this Agreement and the other
Credit Documents.
(d Each Lender will note on its internal records the
amount of each Loan made by it and each payment in respect
thereof and will, prior to any transfer of any Note, endorse on
the reverse side thereof or the grid attached thereto the
outstanding principal amount of Loans evidenced thereby. Failure
to make any such notation or any error in any such notation shall
not affect the any Co-Borrower's obligations in respect of such
Loans.
2.7. Conversions of General Revolving Loans. The Co-
Borrowers shall have the option to convert on any Business Day
all or a portion at least equal to the applicable Minimum
Borrowing Amount of the outstanding principal amount of the
outstanding Loans comprising a Borrowing under the General
Revolving Facility into a Borrowing or Borrowings under the same
Facility of the other Type of Loan which can be made pursuant to
such Facility, provided that: (i) no partial conversion of a
<PAGE>
Borrowing of Eurodollar Loans shall reduce the outstanding
principal amount of the Eurodollar Loans made pursuant to such
Borrowing to less than the Minimum Borrowing Amount applicable
thereto; (ii) any conversion of Eurodollar Loans into Prime Rate
Loans shall be made on, and only on, the last day of an Interest
Period for such Eurodollar Loans; (iii) Prime Rate Loans may only
be converted into Eurodollar Loans if no Default under section
10.1(a) or Event of Default is in existence on the date of the
conversion unless the Required Lenders otherwise agree; and (iv)
Borrowings of Eurodollar Loans resulting from this section 2.7
shall conform to the requirements of section 2.2. Each such
conversion shall be effected by the Treasury Manager (acting on
behalf of all Co-Borrowers) giving the Administrative Agent at
its Notice Office, prior to 11:00 A.M. (local time at such Notice
Office), at least three Business Days' (or prior to 11:00 A.M.
(local time at such Notice Office) same Business Day's, in the
case of a conversion into Prime Rate Loans) prior written notice
(or telephonic notice promptly confirmed in writing if so
requested by the Administrative Agent) (each a "Notice of
Conversion"), substantially in the form of Exhibit B-2,
specifying the Loans to be so converted, the Type of Loans to be
converted into and, if to be converted into a Borrowing of
Eurodollar Loans, the Interest Period to be initially applicable
thereto. The Administrative Agent shall give each Lender prompt
notice of any such proposed conversion affecting any of its
Loans. For the avoidance of doubt, the prepayment or repayment
of any Loans out of the proceeds of other Loans by the Co-
Borrowers is not considered a conversion of Loans into other
Loans.
2.8. Interest. (a) The unpaid principal amount of each
General Revolving Loan which is (i) a Prime Rate Loan shall bear
interest from the date of the Borrowing thereof until maturity
(whether by acceleration or otherwise) at a fluctuating rate per
annum which shall at all times be equal to the Prime Rate in
effect from time to time; or (ii) a Eurodollar Loan shall bear
interest from the date of the Borrowing thereof until maturity
(whether by acceleration or otherwise) at a rate per annum which
shall at all times be the Applicable Eurodollar Margin (as
defined below) for such General Revolving Loan plus the relevant
Eurodollar Rate.
(b The unpaid principal amount of each Swing Line
Revolving Loan which is (i) a Prime Rate Loan shall bear interest
from the date of the Borrowing thereof until maturity (whether by
acceleration or otherwise) at a fluctuating rate per annum which
shall at all times be equal to the Prime Rate in
<PAGE>
effect from time to time; or (ii) a Money Market Rate Loan shall
bear interest from the date of the Borrowing thereof until
maturity (whether by acceleration or otherwise) at a rate per
annum which shall be equal to the Quoted Rate therefor.
(c Notwithstanding the above provisions, if a Default
under section 10.1(a) or Event of Default is in existence, all
outstanding amounts of principal and, to the extent permitted by
law, all overdue interest, in respect of each Loan shall bear
interest, payable on demand, at a fluctuating rate per annum
equal to 2% per annum above the Prime Rate in effect from time to
time. If any amount (other than the principal of and interest on
the Loans) payable by any Co-Borrower under the Credit Documents
is not paid when due, such amount shall bear interest, payable on
demand, at a fluctuating rate per annum equal to 2% per annum
above the Prime Rate in effect from time to time.
(d Interest shall accrue from and including the date of
any Borrowing to but excluding the date of any prepayment or
repayment thereof and shall be payable:
(i in the case of any Swing Line Revolving Loan, on
any prepayment (on the amount prepaid), at the maturity date
thereof (whether by acceleration or otherwise) and, after
such maturity, on demand; and
(ii in the case of any General Revolving Loan, (A)
which is a Prime Rate Loan, quarterly in arrears on the last
Business Day of March, June, September and December, (B)
which is a Eurodollar Loan, on the last day of each Interest
Period applicable thereto and, in the case of an Interest
Period in excess of three months, on the dates which are
successively three months after the commencement of such
Interest Period, and (C) in respect of each Loan, on any
prepayment or conversion (on the amount prepaid or
converted), at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand.
(e All computations of interest hereunder shall be made in
accordance with section 14.7(b).
(f Each Reference Bank agrees to furnish the
Administrative Agent timely information for the purpose of
determining the Eurodollar Rate for any Borrowing consisting of
Eurodollar Loans. If any one or more of the Reference Banks shall
not timely furnish such information, the Administrative Agent
shall determine the Eurodollar Rate on the basis of timely
<PAGE>
information furnished by the remaining Reference Banks. The
Administrative Agent upon determining the interest rate for any
Borrowing shall promptly notify the Borrower and the Lenders
thereof.
(g As used herein, the term "Applicable Eurodollar
Margin", as applied to any Loan which is a Eurodollar Loan, means
the rate per annum determined by the Administrative Agent in
accordance with the Pricing Grid Table which appears below, based
on the Company's Consolidated EBITDA/Interest Ratio and the
following provisions. Initially, until changed hereunder in
accordance with the following provisions, the Applicable
Eurodollar Margin will be 25.00 basis points per annum. Changes
in the Applicable Eurodollar Margin, based upon changes in the
Company's Consolidated EBITDA/Interest Ratio as at the end of any
fiscal quarter ending on or after the fiscal quarter ended on or
nearest to December 31, 1998, shall become effective on the first
day of the month following the receipt by the Administrative
Agent pursuant to section 8.1(a) or (b) of the financial
statements of the Company, accompanied by the certificate
referred to in section 8.1(c), demonstrating the computation of
such ratio, based upon the ratio in effect at the end of the
applicable period covered (in whole or in part) by such financial
statements; provided that if any financial statements referred to
in section 8.1(a) or (b), or the related certificate referred to
in section 8.1(c), are not timely delivered, the Administrative
Agent may determine the Applicable Eurodollar Margin based upon a
good faith estimate by the Treasury Manager of such ratio as in
effect at the end of the applicable period to be covered (in
whole or in part) by such financial statements, provided,
further, that if upon delivery of such delinquent financial
statements and related certificate, such financial statements
indicate that such good faith estimate was incorrect and, as a
result thereof, the Applicable Eurodollar Margin for any Loans
was too low at such determination, the Applicable Eurodollar
Margin for such Loans shall be increased, as appropriate, with
retroactive effect to the date of the change made on the basis of
such determination, and the Co-Borrowers will immediately pay to
the Administrative Agent, for the account of the Lenders having
Commitments in respect of the Facility under which such Loans
were incurred all additional interest due by reason of such
increased Applicable Eurodollar Margin. Any changes in the
Applicable Eurodollar Margin shall be determined by the
Administrative Agent and the Administrative Agent will promptly
provide notice of such determinations to the Treasury Manager and
the Lenders. Any such determination by the Administrative Agent
pursuant to this
<PAGE>
section 2.8(g) shall be conclusive and binding absent manifest
error.
PRICING GRID TABLE
(Expressed in Basis Points)
Applicable Applicable
Consolidated EBITDA/Interest Rat Eurodollar Facility
io Margin Fee Rate
? 11.00 to 1.00 20.00 10.00
? 8.00 to 1.00 and < 11.00 to 22.50 12.50
1.00
? 6.00 to 1.00 and < 8.00 to 1.00 25.00 15.00
< 6.00 to 1.00 27.50 17.50
2.9. Interest Periods. (a) At the time the Treasury
Manager gives a Notice of Borrowing or Notice of Conversion in
respect of the making of, or conversion into, a Borrowing of
Eurodollar Loans (in the case of the initial Interest Period
applicable thereto) or prior to 11:00 A.M. (local time at the
applicable Notice Office) on the third Business Day prior to the
expiration of an Interest Period applicable to a Borrowing of
Eurodollar Loans, it shall have the right to elect by giving the
Administrative Agent written or telephonic notice (in the case of
telephonic notice, promptly confirmed in writing if so requested
by the Administrative Agent) of the Interest Period applicable to
such Borrowing, which Interest Period shall, at the option of the
Treasury Manager, be a one, two, three or six month period.
Notwithstanding anything to the contrary contained above:
(i the initial Interest Period for any Borrowing of
Eurodollar Loans shall commence on the date of such
<PAGE>
Borrowing (including the date of any conversion from a
Borrowing of Prime Rate Loans) and each Interest Period
occurring thereafter in respect of such Borrowing shall
commence on the day on which the next preceding Interest
Period expires;
(ii if any Interest Period begins on a day for which
there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar
month;
(iii if any Interest Period would otherwise expire
on a day which is not a Business Day, such Interest Period
shall expire on the next succeeding Business Day, provided
that if any Interest Period would otherwise expire on a day
which is not a Business Day but is a day of the month after
which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business
Day;
(iv no Interest Period for any Loan may be selected
which would end after the Maturity Date; and
(v no Interest Period may be elected at any time when
a Default under section 10.1(a) or an Event of Default is
then in existence unless the Required Lenders otherwise
agree.
(b If upon the expiration of any Interest Period the
Treasury Manager has failed to (or may not) elect a new Interest
Period to be applicable to the respective Borrowing of Eurodollar
Loans as provided above, the Treasury Manager shall be deemed to
have elected to convert such Borrowing to Prime Rate Loans
effective as of the expiration date of such current Interest
Period.
2.10. Increased Costs, Illegality, etc. (a) In the
event that (x) in the case of clause (i) below, the
Administrative Agent or (y) in the case of clauses (ii) and (iii)
below, any Lender, shall have determined on a reasonable basis
(which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto):
(i on any date for determining the Eurodollar Rate
for any Interest Period that, by reason of any changes
arising after the Effective Date affecting the interbank
Eurodollar market, adequate and fair means do not exist for
<PAGE>
ascertaining the applicable interest rate on the basis
provided for in the definition of Eurodollar Rate; or
(ii at any time, that such Lender shall incur
increased costs or reductions in the amounts received or
receivable hereunder in an amount which such Lender deems
material with respect to any Eurodollar Loans (other than
any increased cost or reduction in the amount received or
receivable resulting from the imposition of or a change in
the rate of taxes or similar charges) because of (x) any
change since the Effective Date in any applicable law,
governmental rule, regulation, guideline, order or request
(whether or not having the force of law), or in the
interpretation or administration thereof and including the
introduction of any new law or governmental rule,
regulation, guideline, order or request (such as, for
example, but not limited to, a change in official reserve
requirements, but, in all events, excluding reserves
includable in the Eurodollar Rate pursuant to the definition
thereof) and/or (y) other circumstances adversely affecting
the interbank Eurodollar market or the position of such
Lender in such market; or
(iii at any time, that the making or continuance
of any Eurodollar Loan has become unlawful by compliance by
such Lender in good faith with any change since the
Effective Date in any law, governmental rule, regulation,
guideline or order, or the interpretation or application
thereof, or would conflict with any thereof not having the
force of law but with which such Lender customarily complies
or has become impracticable as a result of a contingency
occurring after the Effective Date which materially
adversely affects the interbank Eurodollar market;
then, and in any such event, such Lender (or the Administrative
Agent in the case of clause (i) above) shall (x) on or promptly
following such date or time and (y) within 10 Business Days of
the date on which such event no longer exists give notice (by
telephone confirmed in writing) to the Treasury Manager and to
the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other
applicable Lenders). Thereafter (x) in the case of clause (i)
above, Eurodollar Loans shall no longer be available until such
time as the Administrative Agent notifies the Treasury Manager
and the Lenders that the circumstances giving rise to such notice
by the Administrative Agent no longer exist, and any
<PAGE>
Notice of Borrowing or Notice of Conversion given by the Treasury
Manager with respect to Eurodollar Loans which have not yet been
incurred or converted shall be deemed rescinded by the Treasury
Manager or, in the case of a Notice of Borrowing, shall, at the
option of the Treasury Manager, be deemed converted into a Notice
of Borrowing for Prime Rate Loans to be made on the date of
Borrowing contained in such Notice of Borrowing, (y) in the case
of clause (ii) above, the Co-Borrowers shall pay to such Lender,
upon written demand therefor, such additional amounts (in the
form of an increased rate of, or a different method of
calculating, interest or otherwise as such Lender shall
determine) as shall be required to compensate such Lender, for
such increased costs or reductions in amounts receivable
hereunder (a written notice as to the additional amounts owed to
such Lender, showing the basis for the calculation thereof, which
basis must be reasonable, submitted to the Borrower by such
Lender shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) and (z) in the case of clause
(iii) above, the Co-Borrowers shall take one of the actions
specified in section 2.10(b) as promptly as possible and, in any
event, within the time period required by law.
(b At any time that any Eurodollar Loan is affected by the
circumstances described in section 2.10(a)(ii) or (iii), the
Treasury Manager (on behalf of all Co-Borrowers) may (and in the
case of a Eurodollar Loan affected pursuant to section
2.10(a)(iii) the Treasury Manager shall) either (i) if the
affected Eurodollar Loan is then being made pursuant to a
Borrowing, by giving the Administrative Agent telephonic notice
(confirmed promptly in writing) thereof on the same date that the
Treasury Manager was notified by a Lender pursuant to section
2.10(a)(ii) or (iii), cancel said Borrowing, convert the related
Notice of Borrowing into one requesting a Borrowing of Prime Rate
Loans or require the affected Lender to make its requested Loan
as a Prime Rate Loan, or (ii) if the affected Eurodollar Loan is
then outstanding, upon at least one Business Day's notice to the
Administrative Agent, require the affected Lender to convert each
such Eurodollar Loan into a Prime Rate Loan, provided that if
more than one Lender is affected at any time, then all affected
Lenders must be treated the same pursuant to this section
2.10(b).
(c If any Lender shall have determined that after the
Effective Date, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or
any change in the interpretation or administration thereof by
<PAGE>
any governmental authority, central bank or comparable agency
charged by law with the interpretation or administration thereof,
or compliance by such Lender or its parent corporation with any
request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank, or
comparable agency, in each case made subsequent to the Effective
Date, has or would have the effect of reducing by an amount
reasonably deemed by such Lender to be material the rate of
return on such Lender's or its parent corporation's capital or
assets as a consequence of such Lender's commitments or
obligations hereunder to a level below that which such Lender or
its parent corporation could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration
such Lender's or its parent corporation's policies with respect
to capital adequacy), then from time to time, within 15 days
after demand by such Lender upon the Treasury Manager (with a
copy to the Administrative Agent), the Co-Borrowers shall pay to
such Lender such additional amount or amounts as will compensate
such Lender or its parent corporation for such reduction. Each
Lender, upon determining in good faith that any additional
amounts will be payable pursuant to this section 2.10(c), will
give prompt written notice thereof to the Treasury Manager, which
notice shall set forth, in reasonable detail, the basis of the
calculation of such additional amounts, which basis must be
reasonable, although the failure to give any such notice shall
not release or diminish any Co-Borrowers's obligations to pay
additional amounts pursuant to this section 2.10(c) upon the
subsequent receipt of such notice.
(d Notwithstanding anything in this Agreement to the
contrary, (i) no Lender shall be entitled to compensation or
payment or reimbursement of other amounts under section 2.10 or
5.4 for any amounts incurred or accruing more than 180 days prior
to the giving of notice to the Treasury Manager of additional
costs or other amounts of the nature described in such sections,
and (ii) no Lender shall demand compensation for any reduction
referred to in section 2.10(c) or payment or reimbursement of
other amounts under section 5.4 if it shall not at the time be
the general policy or practice of such Lender to demand such
compensation, payment or reimbursement in similar circumstances
under comparable provisions of other credit agreements.
2.11. Breakage Compensation. The Co-Borrowers shall
compensate each applicable Lender, upon its written request
(which request shall set forth the detailed basis for requesting
and the method of calculating such compensation), for all
<PAGE>
reasonable losses, expenses and liabilities (including, without
limitation, any loss, expense or liability incurred by reason of
the liquidation or reemployment of deposits or other funds
required by such Lender to fund its Eurodollar Loans or Money
Market Rate Loans) which such Lender may sustain: (i) if for any
reason (other than a default by such Lender or the Administrative
Agent), (A) a Borrowing of Eurodollar Loans does not occur on a
date specified therefor in a Notice of Borrowing or Notice of
Conversion (whether or not rescinded or withdrawn by the Treasury
Manager or deemed rescinded or withdrawn pursuant to section
2.10(a)), or (B) a Borrowing of Money Market Rate Loans does not
occur on a date specified therefor in a Notice of Borrowing; (ii)
if any repayment, prepayment or conversion of any of its
Eurodollar Loans occurs on a date which is not the last day of an
Interest Period applicable thereto; (iii) if any repayment or
prepayment of any of its Money Market Rate Loans occurs on a date
which is not the maturity date thereof; (iv) if any prepayment of
any of its Eurodollar Loans or Money Market Rate Loans, as the
case may be, is not made on any date specified in a notice of
prepayment given by the Treasury Manager; or (v) as a consequence
of (x) any other default by the Co-Borrowers (or any of them) to
repay their Eurodollar Loans or Money Market Rate Loans when
required by the terms of this Agreement or (y) an election made
pursuant to section 2.10(b).
2.12. Change of Lending Office; Replacement of Lenders.
(a) Each Lender agrees that, upon the occurrence of any event
giving rise to the operation of section 2.10(a)(ii) or (iii),
2.10(c) or 5.4 with respect to such Lender, it will, if requested
by the Treasury Manager, use reasonable efforts (subject to
overall policy considerations of such Lender) to designate
another Applicable Lending Office for any Loans or Commitment
affected by such event, provided that such designation is made on
such terms that such Lender and its Applicable Lending Office
suffer no economic, legal or regulatory disadvantage, with the
object of avoiding the consequence of the event giving rise to
the operation of any such section.
(b If any Lender requests any compensation, reimbursement
or other payment under section 2.10(a)(ii) or (iii) or 2.10(c)
with respect to such Lender, or if the Co-Borrowers are required
to pay any additional amount to any Lender or governmental
authority pursuant to section 5.4, or if any Lender is a
Defaulting Lender, then the Treasury Manager (on behalf of all Co-
Borrowers) may, at its and their sole expense and effort,
<PAGE>
upon notice to such Lender and the Administrative Agent, require
such Lender to assign and delegate, without recourse (in
accordance with the restrictions contained in section 14.4(b)),
all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment);
provided that (i) the Treasury Manager shall have received the
prior written consent of the Administrative Agent, which consent
shall not be unreasonably withheld, (ii) such Lender shall have
received payment of an amount equal to the outstanding principal
of its Loans, accrued interest thereon, accrued fees and all
other amounts payable to it hereunder, from the assignee (to the
extent of such outstanding principal and accrued interest and
fees) or the Co-Borrowers (in the case of all other amounts), and
(iii) in the case of any such assignment resulting from a claim
for compensation, reimbursement or other payments required to be
made under section 2.10(a)(ii) or (iii) or 2.10(c) with respect
to such Lender, or resulting from any required payments to any
Lender or governmental authority pursuant to section 5.4, such
assignment will result in a reduction in such compensation,
reimbursement or payments. A Lender shall not be required to make
any such assignment and delegation if, prior thereto, as a result
of a waiver by such Lender or otherwise, the circumstances
entitling the Treasury Manager to require such assignment and
delegation cease to apply.
(c Nothing in this section 2.12 shall affect or postpone
any of the obligations of the Co-Borrowers or the right of any
Lender provided in section 2.10 or 5.4.
<PAGE>
SECTION 3. FEES.
3.1. Facility Fee. (a) The Co-Borrowers agree to pay to
the Administrative Agent a Facility Fee ("Facility Fee"), for the
account of each Non-Defaulting Lender which has a General
Revolving Commitment, for the period from and including the
Effective Date to but not including the date the Total General
Revolving Commitment has been terminated. The Co-Borrowers will
pay the Facility Fee in advance, with the first such payment
being due on the Effective Date for the period through February
28, 1998, and succeeding quarterly payments being due on each
March 1, June 1, September 1 and December 1 thereafter for the
quarterly period commencing on such date, commencing March 1,
1998, until the Maturity Date. The Facility Fee payable on any
date shall be computed at the Applicable Facility Fee Rate then
in effect on the entire amount of the Total General Revolving
Commitment, whether used or unused, but taking into account any
temporary reductions or increases in the amount of the Total
General Revolving Commitment which are provided for in section
4.2 and scheduled to occur during any period to be covered by any
such payment.
(b If at any time the Co-Borrowers voluntarily reduces
the Total General Revolving Commitment in part pursuant to
section 4.1 or voluntarily terminates the Total General Revolving
Commitment in whole pursuant to section 4.1, each affected Lender
will, if no Default under section 10.1(a) or Event of Default
shall have occurred and be continuing, refund to the Treasury
Manager (for the account of the Co-Borrowers) such portion, if
any, of any Facility Fee previously received by such Lender as
relates to the amount by which its General Revolving Commitment
has been so reduced and covers any period following such
reduction, or as relates to its General Revolving Commitment and
covers any period following any such termination.
(c As used herein, the term "Applicable Facility Fee Rate"
means the rate per annum determined by the Administrative Agent
in accordance with the Pricing Grid Table which appears in
section 2.8(g), based on the Company's Consolidated
EBITDA/Interest Ratio and the following provisions; provided,
that notwithstanding any thing to the contrary contained herein,
if any Facility Fee is payable at a time when a Default under
section 10.1(a) or Event of Default shall have occurred and be
continuing, the Applicable Facility Fee Rate for such payment
will be the highest rate per annum indicated for the Applicable
Facility Fee Rate in such Pricing Grid Table. Initially, until
changed hereunder in accordance with the following provisions,
<PAGE>
the Applicable Facility Fee Rate will be 15.00 basis points per
annum. Changes in the Applicable Facility Fee Rate, based upon
changes in the Company's Consolidated EBITDA/Interest Ratio as at
the end of any fiscal quarter ending on or after the fiscal
quarter ended on or nearest to December 31, 1998, shall become
effective for any Facility Fee payable on or after the first day
of the month following the receipt by the Administrative Agent
pursuant to section 8.1(a) or (b) of the financial statements of
the Company, accompanied by the certificate referred to in
section 8.1(c), demonstrating the computation of such ratio,
based upon the ratio in effect at the end of the applicable
period covered (in whole or in part) by such financial
statements; provided that if any financial statements referred to
in section 8.1(a) or (b), or the related certificate referred to
in section 8.1(c), are not timely delivered or are not yet due to
be delivered with respect to any fiscal quarter or year which has
ended, the Administrative Agent may determine the Applicable
Facility Fee Rate based upon a good faith estimate by the
Treasury Manager of such ratio as in effect at the end of the
applicable period to be covered (in whole or in part) by such
financial statements, provided, further, that if upon delivery of
such delinquent financial statements and related certificate,
such financial statements indicate that such good faith estimate
was incorrect and, as a result thereof, the Applicable Facility
Fee Rate was too low at such determination, the Applicable
Facility Fee Rate shall be increased, as appropriate, with
retroactive effect to the date of the change made on the basis of
such determination, and the Co-Borrowers will immediately pay to
the Administrative Agent for the account of the Lenders all
additional Facility Fee due by reason of such increased
Applicable Facility Fee Rate. Any changes in the Applicable
Facility Fee Rate shall be determined by the Administrative Agent
and the Administrative Agent will promptly provide notice of such
determinations to the Treasury Manager and the Lenders. Any such
determination by the Administrative Agent pursuant to this
section 3.1(c) shall be conclusive and binding absent manifest
error.
3.2. Other Fees. The Co-Borrowers shall pay to the
Administrative Agent on the Effective Date and thereafter for its
own account and/or for distribution to the Lenders such fees as
heretofore agreed by the Treasury Manager (on behalf of the Co-
Borrowers) or by the Company and the Administrative Agent.
3.3. Computations of Fees. All computations of Fees shall
be made in accordance with section 14.7(b).
<PAGE>
SECTION 4. COMMITMENTS.
4.1. Voluntary Termination/Reduction of Commitments. Upon
at least three Business Days' prior written notice (or telephonic
notice confirmed in writing) to the Administrative Agent at its
Notice Office (which notice the Administrative Agent shall
promptly transmit to each of the Lenders), by the Treasury
Manager (on behalf of the Co-Borrowers), the Co-Borrowers shall
have the right, without premium or penalty, to:
(a) terminate the Total General Revolving Commitment,
provided that (i) the Total Swing Line Revolving Commitment
is simultaneously terminated; and (ii) all outstanding
General Revolving Loans and all outstanding Swing Line
Revolving Loans are contemporaneously prepaid in accordance
with section 5.1;
(b) terminate the Total Swing Line Revolving
Commitment, provided that all outstanding Swing Line
Revolving Loans are contemporaneously prepaid in accordance
with section 5.1; and/or
(c) partially and permanently reduce (x) the
Unutilized Total General Revolving Commitment, and/or (y)
the Unutilized Total Swing Line Revolving Commitment,
provided that:
(i) any such reduction shall apply to
proportionately and permanently reduce the applicable
Commitment of each of the affected Lenders;
(ii) any partial reduction of the Unutilized Total
General Revolving Commitment pursuant to this section
4.1 shall be in the amount of at least $5,000,000 (or,
if greater, in integral multiples of $1,000,000);
(iii) any partial reduction of the Unutilized
Total Swing Line Revolving Commitment pursuant to this
section 4.1 shall be in the amount of at least
$1,000,000 (or, if greater, in integral multiples of
$500,000);
(iv) in the case of any such partial reduction of
the Unutilized Total General Revolving Commitment,
after giving effect thereto the outstanding Swing Line
<PAGE>
Revolving Loans, if any, do not exceed the Unutilized
Total General Revolving Commitment as so reduced.
4.2. Seasonal Adjustment of Total General Revolving
Commitment, etc. During the consecutive calendar months of
August through October, if the Total General Revolving Commitment
then in effect is greater than $155,000,000, the Total General
Revolving Commitment shall be automatically and temporarily
reduced to $155,000,000. Upon any such reduction, the General
Revolving Commitment of each affected Lender shall also be
reduced, on a pro rata basis. Following the end of any such
period, the Total General Revolving Commitment (and each General
Revolving Commitment of each affected Lender) shall (if not
previously terminated) be automatically and temporarily restored
to the amount thereof at the beginning of such period, or if
less, the amount thereof as permanently reduced during such
period pursuant to section 4.1.
4.3. Mandatory Termination of Commitments, etc. (a) The
Total Commitment (and each Commitment of each Lender) shall
terminate on March 1, 1998, unless the Initial Borrowing Date has
occurred on or prior to such date.
(b) The Total Commitment (and each Commitment of each
Lender) shall terminate on the earlier of (x) the Maturity Date,
(y) the date on which a Change of Control occurs, and (z) the
date on which a Determination of Taxability occurs.
4.4. Extension of Maturity Date. At any time after March 1,
1999, and during the 30 day period following delivery by the
Company pursuant to section 8.1(a) of its consolidated financial
statements for its fiscal year then most recently ended, and
annually thereafter during the 30 day period following delivery
by the Company of its consolidated financial statements pursuant
to section 8.1(a), the Treasury Manager may request the
Administrative Agent to determine if all of the Lenders are then
willing to extend the Maturity Date for a single additional year.
If the Treasury Manager so requests, the Administrative Agent
will so advise the Lenders. If all of the Lenders in their sole
discretion are all willing to so extend the Maturity Date, after
taking into account such considerations as any Lender may deem
relevant, the Co-Borrowers, the Administrative Agent and all of
the Lenders shall execute and deliver a definitive written
instrument so extending the Maturity Date. No such extension of
the Maturity Date shall be valid or effective for any purpose
unless such definitive written instrument is so signed and
delivered within 60 days following the giving by the
<PAGE>
Administrative Agent of notice to the Lenders that the Treasury
Manager has requested such an extension.
SECTION 5. PAYMENTS.
5.1. Voluntary Prepayments. The Co-Borrowers shall have the
right to prepay any of its Loans, in whole or in part, without
premium or penalty, from time to time, but only on the following
terms and conditions:
(i) the Treasury Manager shall give the Administrative
Agent at the Notice Office written or telephonic notice (in
the case of telephonic notice, promptly confirmed in writing
if so requested by the Administrative Agent) of its intent
to prepay the Loans, the amount of such prepayment and (in
the case of Eurodollar Loans or Money Market Rate Loans) the
specific Borrowing(s) pursuant to which made, which notice
shall be received by the Administrative Agent by
(A) 11:00 A.M. (local time at the Notice Office)
three Business Days prior to the date of such
prepayment, in the case of any prepayment of Eurodollar
Loans, or
(B) 11:00 A.M. (local time at the Notice Office)
on the date of such prepayment, in the case of any
prepayment of Prime Rate Loans or Money Market Rate
Loans,
and which notice shall promptly be transmitted by the
Administrative Agent to each of the affected Lenders;
(ii) in the case of prepayment of any Borrowings under
the General Revolving Facility, each partial prepayment of
any such Borrowing shall be in an aggregate principal of at
least $500,000 or an integral multiple of $100,000 in excess
thereof, in the case of Prime Rate Loans and at least
$5,000,000 or an integral multiple of $1,000,000 in excess
thereof, in the case of Eurodollar Loans;
(iii) in the case of prepayment of any Borrowings
under the Swing Line Revolving Facility, each partial
prepayment of any such Borrowing shall be in an aggregate
principal of at least $100,000 or an integral multiple of
$50,000 in excess thereof;
<PAGE>
(iv) no partial prepayment of any Loans made pursuant
to a Borrowing shall reduce the aggregate principal amount
of such Loans outstanding pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount applicable
thereto;
(v) each prepayment in respect of any Loans made
pursuant to a Borrowing shall be applied pro rata among such
Loans; and
(vi) each prepayment of Eurodollar Loans or Money
Market Rate Loans pursuant to this section 5.1 on any date
other than the last day of the Interest Period applicable
thereto, in the case of Eurodollar Loans, or the maturity
date thereof, in the case of Money Market Rate Loans, as the
case may be, shall be accompanied by any amounts payable in
respect thereof under section 2.11.
5.2. Mandatory Prepayments. The Loans shall be subject to
mandatory prepayment in accordance with the following provisions:
(a) If Outstanding General Revolving Loans Exceed
Total General Revolving Commitment. If on any date (after
giving effect to any other payments on such date) the
aggregate outstanding principal amount of General Revolving
Loans exceeds the Total General Revolving Commitment as then
in effect, the Co-Borrowers shall prepay on such date
General Revolving Loans in an aggregate amount, conforming
to the requirements of section 5.1 as to the amount of
partial prepayments provided for therein, at least equal to
such excess.
(b) If Outstanding Swing Line Revolving Loans Exceed
the Unutilized Total General Revolving Commitment. If on
any date (after giving effect to any other payments on such
date) the aggregate outstanding principal amount of Swing
Line Revolving Loans exceeds the Unutilized Total General
Revolving Commitment as then in effect, the Co-Borrowers
shall prepay on such date Swing Line Revolving Loans in an
aggregate amount, conforming to the requirements of section
5.1 as to the amount of partial prepayments provided for
therein, at least equal to such excess.
(c) If Outstanding Swing Line Revolving Loans Exceed
Total Swing Line Revolving Commitment. If on any date
(after giving effect to any other payments on such
<PAGE>
date) the aggregate outstanding principal amount of Swing
Line Revolving Loans exceeds the Total Swing Line Revolving
Commitment as then in effect, the Co-Borrowers shall prepay
on such date Swing Line Revolving Loans in an aggregate
amount, conforming to the requirements of section 5.1 as to
the amount of partial prepayments provided for therein, at
least equal to such excess.
(d) Change of Control. On the date on which a Change
of Control occurs, notwithstanding anything to the contrary
contained in this Agreement, no further Borrowings shall be
made and the then outstanding principal amount of all Loans,
if any, shall become due and payable and shall be prepaid in
full.
(e) Determination of Taxability. On the date on which
a Determination of Taxability occurs, notwithstanding
anything to the contrary contained in this Agreement, no
further Borrowings shall be made and the then outstanding
principal amount of all Loans, if any, shall become due and
payable and shall be prepaid in full.
(f) Particular Loans to be Prepaid. With respect to
each prepayment of Loans required by this section 5.2, the
Treasury Manager shall designate the Types of Loans which
are to be prepaid and the specific Borrowing(s) pursuant to
which such prepayment is to be made, provided that (i) the
Treasury Manager shall first so designate all Loans that are
Prime Rate Loans and Eurodollar Loans with Interest Periods
ending on the date of prepayment prior to designating any
other Eurodollar Loans for prepayment, (ii) if the
outstanding principal amount of Eurodollar Loans made
pursuant to a Borrowing is reduced below the applicable
Minimum Borrowing Amount as a result of any such prepayment,
then all the Loans outstanding pursuant to such Borrowing
shall be converted into Prime Rate Loans, and (iii) each
prepayment of any Loans made pursuant to a Borrowing shall
be applied pro rata among such Loans. In the absence of a
designation by the Treasury Manager as described in the
preceding sentence, the Administrative Agent shall, subject
to the above, make such designation in its sole discretion
with a view, but no obligation, to minimize breakage costs
owing under section 2.11. Any prepayment of Eurodollar Loans
or Money Market Rate Loans pursuant to this section 5.2
shall in all events be accompanied by such compensation as
is required by section 2.11.
<PAGE>
5.3. Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement
shall be made to the Administrative Agent for the ratable (based
on its pro rata share) account of the Lenders entitled thereto,
not later than 11:00 A.M. (local time at the Payment Office) on
the date when due and shall be made in immediately available
funds and in lawful money of the United States of America at the
Payment Office, it being understood that written notice by any Co-
Borrower, or by the Treasury Manager (on behalf of any Co-
Borrower) to the Administrative Agent to make a payment from the
funds in such Co-Borrower's account, or the account of any Co-
Borrower so designated by the Treasury Manager, at the Payment
Office shall constitute the making of such payment to the extent
of such funds held in such account. Any payments under this
Agreement which are made later than 11:00 A.M. (local time at the
Payment Office) shall be deemed to have been made on the next
succeeding Business Day. Whenever any payment to be made
hereunder shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next
succeeding Business Day and, with respect to payments of
principal, interest shall be payable during such extension at the
applicable rate in effect immediately prior to such extension.
5.4. Net Payments. (a) All payments made by any Co-
Borrower hereunder, under any Note or any other Credit Document,
will be made without setoff, counterclaim or other defense.
Except as provided for in section 5.4(b), all such payments will
be made free and clear of, and without deduction or withholding
for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter
imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments
(but excluding, except as provided in the second succeeding
sentence, any tax, imposed on or measured by the net income or
net profits of a Lender pursuant to the laws of the jurisdiction
under which such Lender is organized or the jurisdiction in which
the principal office or Applicable Lending Office of such Lender
is located or any subdivision thereof or therein) and all
interest, penalties or similar liabilities with respect to such
non excluded taxes, levies imposts, duties, fees, assessments or
other charges (all such nonexcluded taxes levies, imposts,
duties, fees assessments or other charges being referred to
collectively as "Taxes"). If any Taxes are so levied or imposed,
the Co-Borrowers agree to pay the full amount of such Taxes and
such additional amounts as may be necessary so that every payment
by any Co-Borrower of all amounts due
<PAGE>
hereunder, under any Note or under any other Credit Document,
after withholding or deduction for or on account of any Taxes
will not be less than the amount provided for herein or in such
Note or in such other Credit Document. If any amounts are payable
in respect of Taxes pursuant to the preceding sentence, the Co-
Borrowers agree to reimburse each Lender, upon the written
request of such Lender for taxes imposed on or measured by the
net income or profits of such Lender pursuant to the laws of the
jurisdiction in which such Lender is organized or in which the
principal office or Applicable Lending Office of such Lender is
located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which the principal office
or Applicable Lending Office of such Lender is located and for
any withholding of income or similar taxes imposed by the United
States of America as such Lender shall determine are payable by,
or withheld from, such Lender in respect of such amounts so paid
to or on behalf of such Lender pursuant to the preceding sentence
and in respect of any amounts paid to or on behalf of such Lender
pursuant to this sentence, which request shall be accompanied by
a statement from such Lender setting forth, in reasonable detail,
the computations used in determining such amounts. Each Co-
Borrower will furnish to the Administrative Agent within 45 days
after the date the payment of any Taxes, or any withholding or
deduction on account thereof, is due pursuant to applicable law
certified copies of tax receipts, or other evidence satisfactory
to the Lender, evidencing such payment by such Co-Borrower. The
Co-Borrowers will indemnify and hold harmless the Administrative
Agent and each Lender, and reimburse the Administrative Agent or
such Lender upon its written request, for the amount of any Taxes
so levied or imposed and paid or withheld by such Lender.
(b) Each Lender that is not a United States person (as such
term is defined in section 7701(a)(30) of the Code) for Federal
income tax purposes agrees to provide to the Treasury Manager and
the Administrative Agent on or prior to the Effective Date, or in
the cases of a Lender that is an assignee or transferee of an
interest under this Agreement pursuant to section 14.4 (unless
the respective Lender was already a Lender hereunder immediately
prior to such assignment or transfer and such Lender is in
compliance with the provisions of this section 5.4(b)), on the
date of such assignment or transfer to such Lender, (i) two
accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001 (or successor forms) certifying to such
Lender's entitlement to a complete exemption from United States
withholding tax with respect to payments to be made under this
Agreement, any Note or any other Credit
<PAGE>
Document, or (ii) if the Lender is not a "bank" within the
meaning of section 881(c)(3)(A) of the Code and cannot deliver
either Internal Revenue Service Form 1001 or 4224 pursuant to
clause (i) above, (x) a certificate substantially in the form of
Exhibit E (any such certificate, a "Section 5.4(b)(ii)
Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Lender's entitlement to a complete exemption
from United States withholding tax with respect to payments of
interest to be made under this Agreement, any Note or any other
Credit Document. In addition, each Lender agrees that from time
to time after the Effective Date, when a lapse in time or change
in circumstances renders the previous certification obsolete or
inaccurate in any material respect, it will deliver to the
Treasury Manager and the Administrative Agent two new accurate
and complete original signed copies of Internal Revenue Service
Form 4224 or 1001, or Form W-8 and a Section 5.4(b)(ii)
Certificate, as the case may be, and such other forms as may be
required in order to confirm or establish the entitlement of such
Lender to a continued exemption from or reduction in United
States withholding tax with respect to payments under this
Agreement, any Note or any other Credit Document, or it shall
immediately notify the Treasury Manager and the Administrative
Agent of its inability to deliver any such Form or Certificate,
in which case such Lender shall not be required to deliver any
such Form or Certificate pursuant to this section 5.4(b).
Notwithstanding anything to the contrary contained in section
5.4(a), but subject to section 14.4(b) and the immediately
succeeding sentence, (x) each Co-Borrower shall be entitled, to
the extent it is required to do so by law, to deduct or withhold
income or other similar taxes imposed by the United States (or
any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the
account of any Lender which is not a United States person (as
such term is defined in section 7701(a)(30) of the Code) for
United States federal income tax purposes and which has not
provided to the Treasury Manager such forms that establish a
complete exemption from such deduction or withholding and (y) no
Co-Borrower shall be obligated pursuant to section 5.4(a) hereof
to gross-up payments to be made to a Lender in respect of income
or similar taxes imposed by the United States or any additional
amounts with respect thereto (I) if such Lender has not provided
to the Treasury Manager the Internal Revenue Service forms
required to be provided to the Treasury Manager pursuant to this
section 5.4(b) or (II) in the case of a payment other than
interest, to a Lender described in clause (ii) above, to the
extent that such forms do not <PAGE>
<PAGE>
establish a complete exemption from withholding of such taxes.
Notwithstanding anything to the contrary contained in the
preceding sentence or elsewhere in this section 5.4 and except as
specifically provided for in section 14.4(b), the Co-Borrowers
agree to pay additional amounts and indemnify each Lender in the
manner set forth in section 5.4(a) (without regard to the
identity of the jurisdiction requiring the deduction or
withholding) in respect of any Taxes deducted or withheld by it
as described in the previous sentence as a result of any changes
after the Effective Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding
of income or similar Taxes.
(c) If any Lender, in its sole opinion, determines that it
has finally and irrevocably received or been granted a refund in
respect of any Taxes paid as to which indemnification has been
paid by the Borrower pursuant to this section, it shall promptly
remit such refund (including any interest received in respect
thereof), net of all out-of-pocket costs and expenses; provided,
that the Co-Borrowers agree to promptly return any such refund
(plus interest) to such Lender in the event such Lender is
required to repay such refund to the relevant taxing authority.
Any such Lender shall provide the Treasury Manager with a copy of
any notice of assessment from the relevant taxing authority
(redacting any unrelated confidential information contained
therein) requiring repayment of such refund. Nothing contained
herein shall impose an obligation on any Lender to apply for any
such refund.
(d) Reference is hereby made to the provisions of section
2.10(d) for certain limitations upon the rights of a Lender under
this section.
SECTION 6. CONDITIONS PRECEDENT.
6.1. Conditions Precedent at Initial Borrowing Date. The
obligation of the Lenders to make Loans is subject to the
satisfaction of each of the following conditions on the Initial
Borrowing Date:
(a) Effectiveness; Notes. On or prior to the Initial
Borrowing Date, (i) the Effective Date shall have occurred
and (ii) there shall have been delivered to the
Administrative Agent for the account of each Lender the
appropriate Note or Notes executed by the Co-Borrowers, in
each case, in the amount, maturity and as otherwise provided
herein.
<PAGE>
(b) Fees, etc. The Co-Borrowers shall have paid or
caused to be paid all fees required to be paid by it on or
prior to such date pursuant to section 4 hereof and all
reasonable fees and expenses of the Administrative Agent and
of special counsel to the Administrative Agent which have
been invoiced on or prior to such date in connection with
the preparation, execution and delivery of this Agreement
and the other Credit Documents and the consummation of the
transactions contemplated hereby and thereby.
(c) Other Credit Documents. The Credit Parties named
therein shall have duly executed and delivered and there
shall be in full force and effect, and original counterparts
shall have been delivered to the Administrative Agent, in
sufficient quantities for the Administrative Agent and the
Lenders, of, the Subsidiary Guaranty (as modified, amended
or supplemented from time to time in accordance with the
terms thereof and hereof, the "Subsidiary Guaranty"),
substantially in the form attached hereto as Exhibit C-1.
(d) Corporate Resolutions and Approvals. The
Administrative Agent shall have received, in sufficient
quantity for the Administrative Agent and the Lenders,
certified copies of the resolutions of the Board of
Directors of each Co-Borrower and each other Credit Party
(or, as to any Credit Party which is a partnership, of the
Board of Directors of one of its general partners),
approving the Credit Documents to which any Co-Borrower or
any such other Credit Party, as the case may be, is or may
become a party, and of all documents evidencing other
necessary corporate or other organizational action and
governmental approvals, if any, with respect to the
execution, delivery and performance by any Co-Borrower or
any such other Credit Party of the Credit Documents to which
it is or may become a party.
(e) Incumbency Certificates. The Administrative Agent
shall have received, in sufficient quantity for the
Administrative Agent and the Lenders, a certificate of the
Secretary or an Assistant Secretary of each Co-Borrower and
other Credit Party (or as to any Credit Party which is a
partnership, of the Secretary or an Assistant Secretary of
one of its general partners), certifying the names and true
signatures of the officers of such Co-Borrower or such
<PAGE>
other Credit Party (or of any general partner, if such
Credit Party is a partnership), as the case may be,
authorized to sign the Credit Documents to which such Co-
Borrower or such other Credit Party is a party and any other
documents to which such Co-Borrower or any such other Credit
Party is a party which may be executed and delivered in
connection herewith.
(f) Opinion of Counsel. On the Initial Borrowing
Date, the Administrative Agent shall have received an
opinion, addressed to the Administrative Agent and each of
the Lenders and dated the Initial Borrowing Date, from
Squire Sanders & Dempsey, special counsel to the Company,
substantially in the form of Exhibit C-2 hereto and covering
such other matters incident to the transactions contemplated
hereby as the Administrative Agent may reasonably request,
such opinion to be in form and substance satisfactory to the
Administrative Agent.
(g) Existing Credit Agreement. Contemporaneously with
the initial Borrowing hereunder, or prior thereto, the
Company shall have terminated the commitments under its
existing Credit Agreement, dated as of October 6, 1994, with
the banks named therein, and KeyBank, as Agent, and prepaid
any and all borrowings thereunder.
(h) Modification of Restrictions Contained in Existing
Senior Notes. Contemporaneously with the initial Borrowing
hereunder, or immediately prior thereto, (i) the Company
shall have obtained and there shall be in full force and
effect such modifications, amendments, waivers or consents
from the holders of the Company's $50,000,000 aggregate
principal amount of Senior Notes due 2006, as may be
necessary under the restrictions contained in such Senior
Notes or the Private Shelf Agreement related thereto in
order to permit (A) the Co-Borrowers and other Credit
Parties to enter into the Credit Documents and to make the
Borrowings herein contemplated, and (B) the Company to
complete the Acquisition Transaction in accordance with the
Acquisition Documents; and (ii) all of the terms and
conditions of any such modifications, amendments, waivers or
consents shall be satisfactory in form and substance to each
of the Lenders.
(i) Completion of Acquisition Transaction. The
Company shall have delivered to the Administrative Agent, in
sufficient quantities for the Lenders, (x) all
<PAGE>
Acquisition Documents, certified as true and correct by an
Authorized Officer, all of which Acquisition Documents shall
be in the same form as they were in at the time they were
previously furnished to the Lenders not later than five days
prior to the Effective Date, or shall otherwise be
satisfactory to the Required Lenders; and (y) not later than
five days prior to the Effective Date, copies of all
financial statements and other material financial
information furnished to the Company pursuant to the
provisions of the Acquisition Documents.
Each of the conditions precedent to the obligations of
the Company to consummate the Acquisition Transaction which
is contained in any of the Acquisition Documents shall have
been fulfilled (without any waiver thereto not consented to
by the Required Lenders) to the satisfaction of the Required
Lenders.
Without limiting the generality of the foregoing, the
Acquisition Transaction shall have been consummated in
compliance with the terms of the Acquisition Documents and
all applicable laws, and all material governmental and third
party approvals in connection with the Acquisition
Transaction contemplated by the Acquisition Documents and
otherwise referred to herein or therein shall have been
obtained and remain in effect, and all applicable waiting
periods shall have expired without any action being taken by
any competent authority (including any court having
jurisdiction) which restrains or prevents such transactions
or imposes, in the judgment of the Required Lenders,
materially adverse conditions upon the consummation of the
Acquisition Transaction or the continued operation of the
Company's businesses or the business to be acquired by the
Company in the Acquisition Transaction.
As part of the consideration payable by the Company
pursuant to the Acquisition Documents, the Company shall
have issued additional Limited Partner Interests having an
aggregate value, based on the closing price of Limited
Partner Interests on the New York Stock Exchange on the last
trading day prior to the Initial Borrowing Date, of at least
$100 million, and such issuance shall be in compliance with
all applicable laws, rules and regulations.
(j) Proceedings and Documents. All partnership,
corporate and other proceedings and all documents incidental
to the transactions contemplated hereby shall be
<PAGE>
satisfactory in substance and form to the Administrative
Agent and the Lenders and the Administrative Agent and its
special counsel and the Lenders shall have received all such
counterpart originals or certified or other copies of such
documents as the Administrative Agent or its special counsel
or any Lender may reasonably request.
6.2. Conditions Precedent to All Credit Events. The
obligations of the Lenders to make each Loan, including Loans
made on the Initial Borrowing Date, is subject, at the time
thereof, to the satisfaction of the following conditions:
(a) Notice of Borrowing, etc. The Administrative
Agent shall have received a Notice of Borrowing meeting the
requirements of section 2.3 with respect to the incurrence
of Loans.
(b) No Default; Representations and Warranties. At
the time of each Credit Event and also after giving effect
thereto, (i) there shall exist no Default or Event of
Default and (ii) all representations and warranties of the
Credit Parties contained herein or in the other Credit
Documents shall be true and correct in all material respects
with the same effect as though such representations and
warranties had been made on and as of the date of such
Credit Event, except to the extent that such representations
and warranties expressly relate to an earlier specified
date, in which case such representations and warranties
shall have been true and correct in all material respects as
of the date when made.
The acceptance of the benefits of each Credit Event shall
constitute a representation and warranty by the Co-Borrowers to
each of the Lenders that all of the applicable conditions
specified in section 6.1 and/or 6.2, as the case may be, exist as
of that time. All of the certificates, legal opinions and other
documents and papers referred to in this section 6, unless
otherwise specified, shall be delivered to the Administrative
Agent for the account of each of the Lenders and, except for the
Notes, in sufficient counterparts for each of the Lenders, and
the Administrative Agent will promptly distribute to the Lenders
their respective Notes and the copies of such other certificates,
legal opinions and documents.
<PAGE>
SECTION 7. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lenders to enter into this Agreement
and to make the Loans provided for herein, the Co-Borrowers make
the following representations and warranties to, and agreements
with, the Lenders, all of which shall survive the execution and
delivery of this Agreement and each Credit Event:
7.1. Organizational Status, etc. Each of the Company and
its Subsidiaries (i) is a duly organized or formed and validly
existing corporation, partnership or limited liability company,
as the case may be, in good standing under the laws of the
jurisdiction of its formation and has the corporate, partnership
or limited liability company power and authority, as applicable,
to own its property and assets and to transact the business in
which it is engaged and presently proposes to engage, and (ii)
has duly qualified and is authorized to do business in all
jurisdictions where it is required to be so qualified except
where the failure to be so qualified would not have a Material
Adverse Effect.
7.2. Subsidiaries. Annex II hereto lists, as of the date
hereof, each Subsidiary of the Company (and the direct and
indirect ownership interest of the Company therein).
7.3. Organizational Power and Authority, etc. Each Credit
Party has the corporate or other organizational power and
authority to execute, deliver and carry out the terms and
provisions of the Credit Documents to which it is party and has
taken all necessary corporate or other organizational action to
authorize the execution, delivery and performance of the Credit
Documents to which it is party. Each Credit Party has duly
executed and delivered each Credit Document to which it is party
and each Credit Document to which it is party constitutes the
legal, valid and binding agreement or obligation of such Credit
Party enforceable in accordance with its terms, except to the
extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws generally affecting creditors' rights and by
equitable principles (regardless of whether enforcement is sought
in equity or at law).
7.4. No Violation. Neither the execution, delivery and
performance by any Credit Party of the Credit Documents to which
it is party nor compliance with the terms and provisions thereof
(i) will contravene any provision of any law, statute, rule,
regulation, order, writ, injunction or decree of any court or
<PAGE>
governmental instrumentality applicable to such Credit Party or
its properties and assets, (ii) will conflict with or result in
any breach of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose)
any Lien upon any of the property or assets of such Credit Party
pursuant to the terms of any promissory note, bond, debenture,
indenture, mortgage, deed of trust, credit or loan agreement, or
any other material agreement or other instrument, to which such
Credit Party is a party or by which it or any of its property or
assets are bound or to which it may be subject, or (iii) will
violate any provision of the certificate or articles of
incorporation, code of regulations or by-laws, or other charter
documents of such Credit Party.
7.5. Governmental Approvals. No order, consent, approval,
license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any foreign or domestic
governmental or public body or authority, or any subdivision
thereof, is required to authorize or is required as a condition
to (i) the execution, delivery and performance by any Credit
Party of any Credit Document to which it is a party, or (ii) the
legality, validity, binding effect or enforceability of any
Credit Document to which any Credit Party is a party.
7.6. Litigation. There are no actions, suits or proceedings
pending or, to, the knowledge of the Company, threatened with
respect to the Company or any of its Subsidiaries (i) that have,
or could reasonably be expected to have, a Material Adverse
Effect, or (ii) which question the validity or enforceability of
any of the Credit Documents, or of any action to be taken by any
Credit Party pursuant to any of the Credit Documents to which it
is a party.
7.7. Use of Proceeds; Margin Regulations. (a) The proceeds
of all Loans shall be utilized (i) to retire the Indebtedness
referred to in section 6.1(g), (ii) to pay the purchase price
payable under the Acquisition Documents referred to in section
6.1(i), and (iii) for other lawful purposes not inconsistent with
the requirements of this Agreement.
(b) No part of the proceeds of any Credit Event will be
used directly or indirectly to purchase or carry Margin Stock, or
to extend credit to others for the purpose of purchasing or
carrying any Margin Stock. Neither any Credit Event, nor the use
of the proceeds thereof, will violate or be inconsistent with the
provisions of Regulation G, T, U or X of the Board of
<PAGE>
Governors of the Federal Reserve System. No Co-Borrower is
engaged in the business of extending credit for the purpose of
purchasing or carrying any Margin Stock. At no time would more
than 25% of the value of the assets of any Co-Borrower or of any
Co-Borrower and its consolidated Subsidiaries that are subject to
any "arrangement" (as such term is used in section 221.2(g) of
such Regulation U) hereunder be represented by Margin Stock.
7.8. Financial Statements, etc. (a) The Company has
furnished to the Lenders and the Administrative Agent complete
and correct copies of (i) the audited consolidated balance sheets
of the Company and its consolidated subsidiaries as of December
31, 1996, and December 31, 1995, and the related audited
consolidated statements of income, partners' equity, and cash
flows for the fiscal years then ended, accompanied by the
unqualified report thereon of the Company's independent
accountants, as contained in the most recent Form 10-K Annual
Report of the Company filed with the SEC; and (ii) the unaudited
condensed consolidated balance sheets of the Company and its
consolidated subsidiaries as of its fiscal quarter ended on or
nearest to September 30, 1997, and the related unaudited
condensed consolidated statements of income and of cash flows of
the Company and its consolidated subsidiaries for the fiscal
quarter or quarters then ended, as contained in the most recent
Form 10-Q Quarterly Report of the Company filed with the SEC. All
such financial statements have been prepared in accordance with
GAAP, consistently applied (except as stated therein), and fairly
present the financial position of the Company and its
consolidated subsidiaries as of the respective dates indicated
and the consolidated results of their operations and cash flows
for the respective periods indicated, subject in the case of any
such financial statements which are unaudited, to normal audit
adjustments, none of which will involve a Material Adverse
Effect.
(b) Each Co-Borrower has received consideration which is
the reasonable equivalent value of the obligations and
liabilities that such Co-Borrower has incurred to the
Administrative Agent and the Lenders. Each Co-Borrower now has
capital sufficient to carry on its business and transactions and
all business and transactions in which it is about to engage and
is now solvent and able to pay its debts as they mature and each
Co-Borrower, as of the Initial Borrowing Date, or if later, as of
the date it became an Additional Co-Borrower hereunder, owns
property having a value, both at fair valuation and at present
fair salable value, greater than the amount required to pay such
Co-Borrower's debts; and no Co-Borrower is entering into or
<PAGE>
otherwise becoming a party to any of the Credit Documents with
the intent to hinder, delay or defraud its creditors.
(c) The Company has delivered or caused to be delivered to
the Lenders prior to the execution and delivery of this Agreement
a copy of the Company's Report on Form 10-K as filed (without
Exhibits) with the SEC for its fiscal year ended December 31,
1996, which contains a general description of the business and
affairs of the Company and its Subsidiaries.
7.9. No Material Adverse Change. Since December 31, 1996,
there has been no change in the condition, business or affairs of
the Company and its Subsidiaries taken as a whole, or their
properties and assets considered as an entirety, except for
changes, none of which, individually or in the aggregate, has had
or could reasonably be expected to have, a Material Adverse
Effect.
7.10. Tax Returns and Payments. Each of the Company and
each of its Subsidiaries has filed all federal income tax returns
and all other material tax returns, domestic and foreign,
required to be filed by it and has paid all material taxes and
assessments payable by it which have become due, other than those
not yet delinquent and except for those contested in good faith.
The Company and each of its Subsidiaries has established on its
books such charges, accruals and reserves in respect of taxes,
assessments, fees and other governmental charges for all fiscal
periods as are required by GAAP. The Company knows of no
proposed assessment for additional federal, foreign or state
taxes for any period, or of any basis therefor, which,
individually or in the aggregate, taking into account such
charges, accruals and reserves in respect thereof as the Company
and its Subsidiaries have made, could reasonably be expected to
have a Material Adverse Effect.
7.11. Title to Properties, etc. The Company and each of
its Subsidiaries has good and marketable title, in the case of
real property, and good title (or valid leasehold interests, in
the case of any leased property), in the case of all other
property, to all of its properties and assets free and clear of
Liens other than Liens permitted by section 9.3. The interests
of the Company and each of its Subsidiaries in the properties
reflected in the most recent balance sheet referred to in section
7.8, taken as a whole, were sufficient, in the judgment of the
Company, as of the date of such balance sheet for purposes of the
ownership and operation of the businesses conducted by the
Company and such Subsidiaries.
<PAGE>
7.12. Lawful Operations, etc. The Company and each of
its Subsidiaries (i) holds all necessary federal, state and local
governmental licenses, registrations, certifications, permits and
authorizations necessary to conduct its business, and (ii) is in
full compliance with all material requirements imposed by law,
regulation or rule, whether federal, state or local, which are
applicable to it, its operations, or its properties and assets,
including without limitation, applicable requirements of
Environmental Laws, except for any failure to obtain and maintain
in effect, or noncompliance, which, individually or in the
aggregate, could not reasonably be expected to have a Material
Adverse Effect.
7.13. Environmental Matters. (a) The Company and each
of its Subsidiaries is in compliance with all Environmental Laws
governing its business except to the extent that any such failure
to comply (together with any resulting penalties, fines or
forfeitures) would not reasonably be expected to have a Material
Adverse Effect. All licenses, permits, registrations or approvals
required for the business of the Company and each of its
Subsidiaries, as conducted as of the Initial Borrowing Date,
under any Environmental Law have been secured and the Company and
each of its Subsidiaries is in substantial compliance therewith,
except for such licenses, permits, registrations or approvals the
failure to secure or to comply therewith is not reasonably likely
to have a Material Adverse Effect. Neither the Company nor any of
its Subsidiaries has received written notice, or otherwise knows,
that it is in any respect in noncompliance with, breach of or
default under any applicable writ, order, judgment, injunction,
or decree to which the Company or such Subsidiary is a party or
which would affect the ability of the Company or such Subsidiary
to operate any real property and no event has occurred and is
continuing which, with the passage of time or the giving of
notice or both, would constitute noncompliance, breach of or
default thereunder, except in each such case, such noncompliance,
breaches or defaults as would not reasonably be expected to, in
the aggregate, have a Material Adverse Effect. There are as of
the Initial Borrowing Date no Environmental Claims pending or, to
the best knowledge of the Company, threatened wherein an
unfavorable decision, ruling or finding would reasonably be
expected to have a Material Adverse Effect. There are no facts,
circumstances, conditions or occurrences on any Real Property now
or at any time owned, leased or operated by the Company or any of
its Subsidiaries or on any property adjacent to any such Real
Property, which are known by the Company or as to which the
Company or any such Subsidiary has received written notice, that
could reasonably be
<PAGE>
expected (i) to form the basis of an Environmental Claim against
the Company or any of its Subsidiaries or any Real Property of
the Company or any of its Subsidiaries, or (ii) to cause such
Real Property to be subject to any restrictions on the ownership,
occupancy, use or transferability of such Real Property under any
Environmental Law, except in each such case, such Environmental
Claims or restrictions that individually or in the aggregate
would not reasonably be expected to have a Material Adverse
Effect.
(b) Hazardous Materials have not at any time been (i)
generated, used, treated or stored on, or transported to or from,
any Real Property of the Company or any of its Subsidiaries or
(ii) released on any such Real Property, in each case where such
occurrence or event is not in compliance with Environmental Laws
and is reasonably likely to have a Material Adverse Effect.
7.14. Compliance with ERISA. Compliance by the Company
with the provisions hereof and Credit Events contemplated hereby
will not involve any prohibited transaction within the meaning of
ERISA or section 4975 of the Code. The Company and each of its
Subsidiaries, (i) has fulfilled all obligations under minimum
funding standards of ERISA and the Code with respect to each Plan
that is not a Multiemployer Plan or a Multiple Employer Plan,
(ii) has satisfied all respective contribution obligations in
respect of each Multiemployer Plan and each Multiple Employer
Plan, (iii) is in compliance in all material respects with all
other applicable provisions of ERISA and the Code with respect to
each Plan, each Multiemployer Plan and each Multiple Employer
Plan, and (iv) has not incurred any liability under the Title IV
of ERISA to the PBGC with respect to any Plan, any Multiemployer
Plan, any Multiple Employer Plan, or any trust established
thereunder. No Plan or trust created thereunder has been
terminated, and there have been no Reportable Events, with
respect to any Plan or trust created thereunder or with respect
to any Multiemployer Plan or Multiple Employer Plan, which
termination or Reportable Event will or could result in the
termination of such Plan, Multiemployer Plan or Multiple Employer
Plan and give rise to a material liability of the Company or any
ERISA Affiliate in respect thereof. Neither the Company nor any
ERISA Affiliate is at the date hereof, or has been at any time
within the two years preceding the date hereof, an employer
required to contribute to any Multiemployer Plan or Multiple
Employer Plan, or a "contributing sponsor" (as such term is
defined in section 4001 of ERISA) in any Multiemployer Plan or
Multiple Employer Plan. Neither the
<PAGE>
Company nor any ERISA Affiliate has any contingent liability with
respect to any post-retirement "welfare benefit plan" (as such
term is defined in ERISA) except as has been disclosed to the
Lenders in writing.
7.15. Intellectual Property, etc. The Company and each
of its Subsidiaries has obtained or has the right to use all
material patents, trademarks, servicemarks, trade names,
copyrights, licenses and other rights with respect to the
foregoing necessary for the present and planned future conduct of
its business, without any known conflict with the rights of
others, except for such patents, trademarks, servicemarks, trade
names, copyrights, licenses and rights, the loss of which, and
such conflicts, which in any such case individually or in the
aggregate would not reasonably be expected to have a Material
Adverse Effect.
7.16. Investment Company Act, etc. Neither the Company
nor any of its Subsidiaries is subject to regulation with respect
to the creation or incurrence of Indebtedness under the
Investment Company Act of 1940, as amended, the Interstate
Commerce Act, as amended, the Federal Power Act, as amended, the
Public Utility Holding Company Act of 1935, as amended, or any
applicable state public utility law.
7.17. Burdensome Contracts; Labor Relations. Neither
the Company nor any of its Subsidiaries (i) is subject to any
burdensome contract, agreement, corporate restriction, judgment,
decree or order, (ii) is a party to any labor dispute affecting
any bargaining unit or other group of employees generally, (iii)
is subject to any material strike, slow down, workout or other
concerted interruptions of operations by employees of the Company
or any Subsidiary, whether or not relating to any labor
contracts, (iv) is subject to any significant pending or, to the
knowledge of the Company, threatened, unfair labor practice
complaint, before the National Labor Relations Board, and (v) is
subject to any significant pending or, to the knowledge of the
Company, threatened, grievance or significant arbitration
proceeding arising out of or under any collective bargaining
agreement, (vi) is subject to any significant pending or, to the
knowledge of the Company, threatened, significant strike, labor
dispute, slowdown or stoppage, or (vii) is, to the knowledge of
the Company, involved or subject to any union representation
organizing or certification matter with respect to the employees
of the Company or any of its Subsidiaries, except (with respect
to any matter specified in any of the above clauses), for such
<PAGE>
matters as, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
7.18. Existing Indebtedness. Annex III sets forth a
true and complete list, as of the date or dates set forth
therein, of all Indebtedness of the Company and each of its
Subsidiaries, on a consolidated basis, which (i) has an
outstanding principal amount of at least $5,000,000, or may be
incurred pursuant to existing commitments or lines of credit or
(ii) is secured by any Lien on any property of the Company or any
Subsidiary, and which will be outstanding on the Initial
Borrowing Date after giving effect to the initial Borrowing
hereunder, other than the Indebtedness created under the Credit
Documents (all such Indebtedness, whether or not in a principal
amount meeting such threshold and required to be so listed on
Annex III, herein the "Existing Indebtedness"). The Company has
provided to the Administrative Agent prior to the date of
execution hereof true and complete copies (or summary
descriptions) of all agreements and instruments governing the
Indebtedness listed on Annex III (the "Existing Indebtedness
Agreements").
7.19. Year 2000 Problem. The Co-Borrowers and their
respective Subsidiaries have reviewed the areas within their
business and operations which could be adversely affected by, and
have developed or are developing a program to address on a timely
basis the "Year 2000 Problem" (that is, the risk that computer
applications used by the Company and its Subsidiaries may be
unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date after December 31,
1999). Based on such review and program, the Co-Borrowers
reasonably believe that the "Year 2000 Problem" will not have a
Material Adverse Effect.
7.20. True and Complete Disclosure. All factual
information (taken as a whole) heretofore or contemporaneously
furnished by or on behalf of the Company or any of its
Subsidiaries in writing to the Administrative Agent or any Lender
for purposes of or in connection with this Agreement or any
transaction contemplated herein is, and all other such factual
information (taken as a whole) hereafter furnished by or on
behalf of such person in writing to any Lender will be, true and
accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting
to state any material fact necessary to make such information
(taken as a whole) not misleading at such time in light of the
circumstances under which such information was
<PAGE>
provided, except that any such future information consisting of
financial projections prepared by management of the Company is
only represented herein as being based on good faith estimates
and assumptions believed by such persons to be reasonable at the
time made, it being recognized by the Lenders that such
projections as to future events are not to be viewed as facts and
that actual results during the period or periods covered by any
such projections may differ materially from the projected
results. As of the Effective Date, there is no fact known to the
Company or any of its Subsidiaries which has, or could reasonably
be expected to have, a Material Adverse Effect which has not
theretofore been disclosed in writing to the Lenders.
SECTION 8. AFFIRMATIVE COVENANTS.
Each Co-Borrower hereby covenants and agrees that so long as
this Agreement is in effect and until such time as the Total
Commitment has been terminated, no Notes are outstanding and the
Loans, together with interest, Fees and all other Obligations
hereunder, have been paid in full:
8.1. Reporting Requirements. The Company will furnish to
each Lender and the Administrative Agent:
(a) Annual Financial Statements. As soon as available and in
any event within 100 days after the close of each fiscal year of
the Company, the consolidated balance sheets of the Company and
its consolidated Subsidiaries as at the end of such fiscal year
and the related consolidated statements of income, of partner's
equity and of cash flows for such fiscal year, in each case
setting forth comparative figures for the preceding fiscal year,
all in reasonable detail and accompanied by the opinion with
respect to such consolidated financial statements of independent
public accountants of recognized national standing selected by
the Company, which opinion shall be unqualified and shall (i)
state that such accountants audited such consolidated financial
statements in accordance with generally accepted auditing
standards, that such accountants believe that such audit provides
a reasonable basis for their opinion, and that in their opinion
such consolidated financial statements present fairly, in all
material respects, the consolidated financial position of the
Company and its consolidated subsidiaries as at the end of such
fiscal year and the consolidated results of their operations and
cash flows for <PAGE>
<PAGE>
such fiscal year in conformity with generally accepted
accounting principles, or (ii) contain such statements as
are customarily included in unqualified reports of
independent accountants in conformity with the
recommendations and requirements of the American Institute
of Certified Public Accountants (or any successor
organization).
(b) Quarterly Financial Statements. As soon as
available and in any event within 50 days after the close of
each of the first three quarterly accounting periods in each
fiscal year of the Company, the unaudited condensed
consolidated balance sheets of the Company and its
consolidated Subsidiaries as at the end of such quarterly
period and the related unaudited condensed consolidated
statements of income and of cash flows for such quarterly
period or for the portion of the fiscal year ended with such
quarterly period, and setting forth, in the case of such
unaudited consolidated statements of income and of cash
flows, comparative figures for the related periods in the
prior fiscal year, and which consolidated financial
statements shall be certified on behalf of the Company by
the Chief Financial Officer or other Authorized Officer of
the Company, subject to changes resulting from normal year-
end audit adjustments.
(c) Officer's Compliance Certificates. At the time of
the delivery of the financial statements provided for in
sections 8.1(a) and (b), a certificate on behalf of the
Company of the Chief Financial Officer or other Authorized
Officer of the Company to the effect that, to the best
knowledge of the Company, no Default or Event of Default
exists or, if any Default or Event of Default does exist,
specifying the nature and extent thereof, which certificate
shall set forth the calculations required to determine the
Consolidated EBITDA/Interest Ratio and establish compliance
with the provisions of sections 9.4(c), 9.5(p) and sections
9.6 through 9.8, inclusive, of this Agreement, including an
identification of the amounts of any financial items of
persons or business units acquired or disposed of by the
Company for any periods prior to the date of acquisition
which are used in making such calculations.
(d) Notice of Default. Promptly, and in any event within three
Business Days after the Company or any of its Subsidiaries
obtains knowledge thereof, notice of the occurrence of any
event which constitutes a Default or
<PAGE>
Event of Default, which notice shall specify the nature
thereof, the period of existence thereof and what action the
Company proposes to take with respect thereto.
(e) ERISA. Promptly, and in any event within 10 days
after the Company, any Subsidiary of the Company or any
ERISA Affiliate knows of the occurrence of any of the
following, the Company will deliver to each of the Lenders a
certificate on behalf of the Company of an Authorized
Officer of the Company setting forth the full details as to
such occurrence and the action, if any, that the Company,
such Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any notices required or
proposed to be given to or filed with or by the Company, the
Subsidiary, the ERISA Affiliate, the PBGC, a Plan
participant or the Plan administrator with respect thereto:
(i) that a Reportable Event has occurred with
respect to any Plan;
(ii) the institution of any steps by the Company,
any ERISA Affiliate, the PBGC or any other person to
terminate any Plan;
(iii) the institution of any steps by the
Company or any ERISA Affiliate to withdraw from any
Plan;
(iv) the institution of any steps by the Company
or any Subsidiary to withdraw from any Multiemployer
Plan or Multiple Employer Plan, if such withdrawal
could result in withdrawal liability (as described in
Part 1 of Subtitle E of Title IV of ERISA) in excess of
$1,000,000;
(v) a non-exempt "prohibited transaction" within
the meaning of section 406 of ERISA in connection with
any Plan;
(vi) that a Plan has an Unfunded Current Liability
exceeding $1,000,000;
(vii) any material increase in the contingent
liability of the Company or any Subsidiary with respect
to any post-retirement welfare liability; or
<PAGE>
(viii) the taking of any action by, or the
threatening of the taking of any action by, the
Internal Revenue Service, the Department of Labor or
the PBGC with respect to any of the foregoing.
(f) Environmental Matters. Promptly upon, and in any
event within 10 Business Days after, an officer of the
Company obtains actual knowledge thereof, notice of any of
the following:
(i) any pending, or threatened (in writing),
Environmental Claim against the Company or any of its
Subsidiaries or any Real Property at any time owned or
operated by the Company or any of its Subsidiaries,
which involves any reasonable likelihood (in the
Company's reasonable judgment) of resulting in a
Material Adverse Effect: or
(ii) any condition or occurrence on or arising
from any particular Real Property at any time owned or
operated by the Company or any of its Subsidiaries
that, in the Company's reasonable judgment, will
require clean-up, removal or other remediation
expenditures (including Consolidated Capital
Expenditures) by the Company and its Subsidiaries of
more than $1,000,000 to achieve substantial compliance
with Environmental Laws.
All such notices shall describe in reasonable detail the
nature of the Environmental Claim, condition or occurrence
and the Company's or such Subsidiary's proposed response
thereto.
(g) Determination of Taxability. Promptly upon any
election by the Company, or the receipt of any notice or
other communication from the Internal Revenue Service, which
constitutes, or might reasonably give rise to, a
Determination of Taxability, copies of all relevant
documentation related thereto, and a notice from the Company
which refers specifically to the prepayment obligations of
the Company under section 5.2(e) hereof.
(h) SEC Reports and Registration Statements. Promptly
upon transmission thereof or other filing with the SEC,
copies of all registration statements (other than the
exhibits thereto and any registration statement on Form S-8
or its equivalent) and annual, quarterly or current reports
<PAGE>
that the Company or any of its Subsidiaries files with the
SEC.
(i) Other Information. With reasonable promptness,
such other information or documents (financial or otherwise)
relating to the Company or any of its Subsidiaries as any
Lender may reasonably request from time to time.
8.2. Books, Records and Inspections. The Company will, and
will cause each of its Subsidiaries to, (i) keep proper books of
record and account, in which full and correct entries shall be
made of all financial transactions and the assets and business of
the Company or such Subsidiaries, as the case may be, in
accordance with GAAP, in the case of the Company, or which are
reconcilable to a GAAP presentation, in the case of any
Subsidiary; and (ii) permit, upon at least five Business Days'
notice to the Chief Financial Officer or any other Authorized
Officer of the Company, officers and designated representatives
of the Administrative Agent or any of the Lenders to visit and
inspect any of the properties or assets of the Company and any of
its Subsidiaries in whomsoever's possession (but only to the
extent the Company or such Subsidiary has the right to do so to
the extent in the possession of another person), and to examine
the books of account of the Company and any of its Subsidiaries
and discuss the affairs, finances and accounts of the Company and
of any of its Subsidiaries with, and be advised as to the same
by, its and their officers and independent accountants and
independent actuaries, if any, all at such reasonable times and
intervals and to such reasonable extent as the Administrative
Agent or any of the Lenders may request.
8.3. Insurance. The Company will, and will cause each of
its Subsidiaries to, (i) maintain insurance coverage by such
insurers and in such forms and amounts and against such risks as
are generally consistent with the insurance coverage maintained
by the Company and its Subsidiaries at the date hereof, and (ii)
forthwith upon any Lender's written request, furnish to such
Lender such information about such insurance as such Lender may
from time to time reasonably request, which information shall be
prepared in form and detail satisfactory to such Lender and
certified by an Authorized Officer of the Company.
8.4. Payment of Taxes and Claims. The Company will pay and
discharge, and will cause each of its Subsidiaries to pay and
discharge, all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits, or upon
<PAGE>
any properties belonging to it, prior to the date on which
penalties attach thereto, and all lawful claims which, if unpaid,
might become a Lien or charge upon any properties of the Company
or any of its Subsidiaries; provided that neither the Company nor
any of its Subsidiaries shall be required to pay any such tax,
assessment, charge, levy or claim which is being contested in
good faith and by proper proceedings if it has maintained
adequate reserves with respect thereto in accordance with GAAP.
8.5. Corporate Franchises. The Company will do, and will
cause each of its Subsidiaries to do, or cause to be done, all
things necessary to preserve and keep in full force and effect
its corporate or other organizational existence, rights,
authority and franchises, provided that nothing in this section
8.5 shall be deemed to prohibit (i) any transaction permitted by
section 9.2; (ii) the termination of existence of any Subsidiary
if (A) the Company determines that such termination is in its
best interest and (B) such termination is not adverse in any
material respect to the Lenders; or (iii) the loss of any rights,
authorities or franchises if the loss thereof, in the aggregate,
could not reasonably be expected to have a Material Adverse
Effect.
8.6. Good Repair. The Company will, and will cause each of
its Subsidiaries to, ensure that its material properties and
equipment used or useful in its business in whomsoever's
possession they may be, are kept in good repair, working order
and condition, normal wear and tear excepted, and that from time
to time there are made in such properties and equipment all
needful and proper repairs, renewals, replacements, extensions,
additions, betterments and improvements, thereto, to the extent
and in the manner customary for companies in similar businesses.
8.7. Compliance with Statutes, etc. The Company will, and
will cause each of its Subsidiaries to, comply, in all material
respects, with all applicable statutes, regulations and orders
of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, other than those (i)
being contested in good faith by appropriate proceedings, as to
which adequate reserves are established to the extent required
under GAAP, and (ii) the noncompliance with which would not have,
and which would not be reasonably expected to have, a Material
Adverse Effect or a material adverse effect on the ability of the
Company to perform its obligations under any Credit Document.
<PAGE>
8.8. Compliance with Environmental Laws. Without limitation
of the covenants contained in section 8.7 hereof:
(a) The Company will, and will cause each of its
Subsidiaries to, (i) comply, in all material respects, with
all Environmental Laws applicable to the ownership, lease or
use of all Real Property now or hereafter owned, leased or
operated by the Company or any of its Subsidiaries, and
promptly pay or cause to be paid all costs and expenses
incurred in connection with such compliance, except for such
noncompliance as would not have, and which would not be
reasonably expected to have, a Material Adverse Effect or a
material adverse effect on the ability of the Company to
perform its obligations under any Credit Document; and (ii)
keep or cause to be kept all such Real Property free and
clear of any Liens imposed pursuant to such Environmental
Laws which are not permitted under section 9.3.
(b) Without limitation of the foregoing, if the
Company or any of its Subsidiaries shall generate, use,
treat, store, release or dispose of, or permit the
generation, use, treatment, storage, release or disposal of,
Hazardous Materials on any Real Property now or hereafter
owned, leased or operated by the Company or any of its
Subsidiaries, or transport or permit the transportation of
Hazardous Materials to or from any such Real Property, any
such action shall be effected only in the ordinary course of
business and in any event in compliance, in all material
respects, with all Environmental Laws applicable thereto,
except for such noncompliance as would not have, and which
would not be reasonably expected to have, a Material Adverse
Effect or a material adverse effect on the ability of the
Company to perform its obligations under any Credit
Document.
(c) If required to do so under any applicable order of
any governmental agency, the Company will undertake, and
cause each of its Subsidiaries to undertake, any clean up,
removal, remedial or other action necessary to remove and
clean up any Hazardous Materials from any Real Property
owned, leased or operated by the Company or any of its
Subsidiaries in accordance with, in all material respects,
the requirements of all applicable Environmental Laws and in
accordance with, in all material respects, such orders of
all governmental authorities, except (i) to the extent that
the Company or such Subsidiary is contesting such
<PAGE>
order in good faith and by appropriate proceedings and for
which adequate reserves have been established to the extent
required by GAAP, or (ii) for such noncompliance as would
not have, and which would not be reasonably expected to
have, a Material Adverse Effect or a material adverse effect
on the ability of the Company to perform its obligations
under any Credit Document.
8.9. Fiscal Years, Fiscal Quarters. The Company will, for
consolidated financial reporting purposes, continue to use
December 31 as the end of its fiscal year and its current
methodology for determining the length of its fiscal quarters. If
the Company shall change any of its Subsidiaries' fiscal years or
fiscal quarters (other than the fiscal year or fiscal quarters of
a person which becomes a Subsidiary, made at the time such person
becomes a Subsidiary, to conform to the Company's fiscal year and
fiscal quarters or to conform to the fiscal year or fiscal
quarters which the Company generally utilizes for its
Subsidiaries), the Company will promptly, and in any event within
30 days following any such change, deliver a notice to the
Administrative Agent and the Lenders describing such change and
any material accounting entries made in connection therewith and
stating whether such change will have any impact upon any
financial computations to be made hereunder, and if any such
impact is foreseen, describing in reasonable detail the nature
and extent of such impact. If the Required Lenders determine that
any such change will have any impact upon any financial
computations to be made hereunder which is adverse to the
Lenders, the Company will, if so requested by the Administrative
Agent, enter into an amendment to this Agreement, in form and
substance satisfactory to the Administrative Agent and the
Required Lenders, modifying any of the financial covenants or
related provisions hereof in such manner as the Required Lenders
determine is necessary to eliminate such adverse effect.
8.10. Certain Subsidiaries to Enter into or Join in
Subsidiary Guaranty. (a) In the event that at any time after
the Initial Borrowing Date
(x) the Company has any Material Subsidiary (other
than a Foreign Subsidiary as to which section 8.10(b)
applies) which is not at the time a Co-Borrower or a party
to the Subsidiary Guaranty, or
(y) an Event of Default shall have occurred and be
continuing and the Borrower has any Subsidiary which is not
<PAGE>
at the time a Co-Borrower or a party to the Subsidiary
Guaranty,
the Company will notify the Administrative Agent in writing of
such event, identifying the Subsidiary in question and referring
specifically to the rights of the Administrative Agent and the
Lenders under this section. The Company will, within 30 days
following request therefor from the Administrative Agent (who may
give such request on its own initiative or upon request by the
Required Lenders), cause such Subsidiary to deliver to the
Administrative Agent, in sufficient quantities for the Lenders,
(i) counterparts of a joinder supplement, satisfactory in form
and substance to the Administrative Agent and the Required
Lenders, duly executed by such Subsidiary, pursuant to which such
Subsidiary joins in the Subsidiary Guaranty as a guarantor
thereunder, and (ii) if such Subsidiary is a corporation,
resolutions of the Board of Directors of such Subsidiary,
certified by the Secretary or an Assistant Secretary of such
Subsidiary as duly adopted and in full force and effect,
authorizing the execution and delivery of such joinder
supplement, or if such Subsidiary is not a corporation, such
other evidence of the authority of such Subsidiary to execute
such joinder supplement as the Administrative Agent may
reasonably request.
(b) Notwithstanding the foregoing provisions of this
section 8.10, the Company shall not, unless an Event of Default
shall have occurred and be continuing, be required to cause a
Foreign Subsidiary to join in the Subsidiary Guaranty if (i) to
do so would subject the Company or its partners to liability for
additional United States income taxes by virtue of section 956 of
the Code in an amount the Company considers material, and (ii)
the Company provides the Administrative Agent, within the 30-day
period referred to in section 8.10(a), with documentation,
including computations prepared by the Company's internal tax
officer, its independent accountants or tax counsel, acceptable
to the Required Lenders, in support thereof.
8.11. Hedge Agreements, etc. In the event the Company
or any of its Subsidiaries desires to enter into any Hedge
Agreement in order to provide protection to the Company or any
such Subsidiary from fluctuations and other changes in interest
rates and currency exchange rates, the Company or such Subsidiary
will be free to do so, provided that the Company will not, and
will not permit any Subsidiary to, enter into a Hedge Agreement
which exposes the Company or its Subsidiaries to predominantly
speculative risks unrelated to the amount of
<PAGE>
assets, Indebtedness or other liabilities intended to be subject
to coverage on a notional basis under all such Hedge Agreements.
8.12. Most Favored Covenant Status, etc. Should any Co-
Borrower at any time after the Effective Date, issue or guarantee
any unsecured Indebtedness denominated in U.S. dollars for money
borrowed or represented by bonds, notes, debentures or similar
securities in an aggregate amount exceeding $5,000,000, to any
lender or group of lenders acting in concert with one another, or
one or more institutional investors, pursuant to a loan
agreement, credit agreement, note purchase agreement, indenture,
guaranty or other similar instrument, which agreement, indenture,
guaranty or instrument, includes affirmative or negative business
or financial covenants (or any events of default or other type of
restriction which would have the practical effect of any
affirmative or negative business or financial covenant,
including, without limitation, any "put" or mandatory prepayment
or redemption of any such Indebtedness upon the occurrence of a
"change of control") which are applicable to any Co-Borrower,
other than those set forth herein or in any of the other Credit
Documents, the Company shall promptly so notify the
Administrative Agent and the Lenders and, if the Administrative
Agent shall so request by written notice to the Company (after a
determination has been made by the Required Lenders that any of
the above-referenced documents or instruments contain any such
provisions, which either individually or in the aggregate, are
more favorable to the holders of such unsecured Indebtedness than
any of the provisions set forth herein), the Co-Borrowers, the
Administrative Agent and the Lenders shall promptly amend this
Agreement to incorporate some or all of such provisions, in the
discretion of the Administrative Agent and the Required Lenders,
into this Agreement and, to the extent necessary and reasonably
desirable to the Administrative Agent and the Required Lenders,
into any of the other Credit Documents, all at the election of
the Administrative Agent and the Required Lenders.
8.13. Addition and Deletion of Co-Borrowers. Whenever
the Company determines that it desires for a Wholly-Owned
Subsidiary which is not already a Co-Borrower to become a party
hereto as a Co-Borrower, it will cause such Subsidiary to deliver
to the Administrative Agent an Election to Participate for such
Subsidiary and such other evidence of the authority of such
Subsidiary to become a Co-Borrower as the Administrative Agent
may reasonably request. Without limitation of the foregoing,
promptly after the initial Borrowing hereunder, the Company will
cause Knott's Berry Farm to sign counterparts of
<PAGE>
this Agreement pursuant to which it will become a party hereto as
a Co-Borrower and deliver to the Administrative Agent such other
evidence of the authority of such Subsidiary to become a Co-
Borrower as the Administrative Agent may reasonably request. The
addition of a Subsidiary as a Co-Borrower (an "Additional Co-
Borrower") shall, except in the case of Knott's Berry Farms, be
subject to the approval of the Administrative Agent and the
Required Lenders in their sole discretion, and such approval
shall be evidenced, so far as the Co-Borrowers are concerned,
only by the signed written acceptance by the Administrative Agent
of an Election to Participate in the space provided at the end of
the form of Election to Participate attached as an Exhibit
hereto. No Election to Participate shall be valid or effective
for any purpose until so accepted in writing by the
Administrative Agent. If requested by the Administrative Agent
(acting on instructions from the Required Lenders) at any time,
the Company will take such actions as may be necessary to add any
Wholly-Owned Subsidiary as an Additional Co-Borrower. If at any
time the Company determines that a Subsidiary should no longer be
a Co-Borrower, it may, with the prior written consent of the
Administrative Agent and all of the Lenders, cause such Co-
Borrower to deliver to the Administrative Agent an Election to
Terminate with respect to such Borrowing Subsidiary. No such
Election to Terminate shall be valid or effective for any purpose
until accepted by the Administrative Agent and such acceptance
evidenced by the signature of the the Administrative Agent in the
space provided at the end of the form of Election to Terminate
attached as an Exhibit hereto.
8.14. Company to Arrange Additional Senior Notes.
Promptly and in any event not later than January 31, 1998, the
Company shall arrange with The Prudential Insurance Company of
America (and/or any of its Affiliates) or other institutional
investors for the issuance by the Company and/or any of the other
Co-Borrowers, on or before January 31, 1998, of at least $50
million aggregate original principal amount of its and/or their
unsecured senior notes (the "Additional Senior Notes"), and shall
provide to the Lenders written evidence, satisfactory in form and
substance to the Required Lenders, that such issuance has been
arranged for on customary terms and conditions.
8.15. Senior Debt. The Co-Borrowers will at all times
ensure that (a) the claims of the Lenders in respect of the
Obligations of each Co-Borrower will not be subordinate to, and
will in all respects at least rank pari passu with, the claims
<PAGE>
of every other senior unsecured creditor of such Co-Borrower,
and (b) any Indebtedness subordinated in any manner to the claims
of any other senior unsecured creditor of any Co-Borrower will be
subordinated in like manner to such claims of the Lenders.
SECTION 9. NEGATIVE COVENANTS.
Each Co-Borrower hereby covenants and agrees that on the
Effective Date and thereafter for so long as this Agreement is in
effect and until such time as the Total Commitment has been
terminated, no Notes remain outstanding and the Loans, together
with interest, Fees and all other Obligations incurred hereunder
are paid in full:
9.1. Changes in Business. Neither the Company nor any of
its Subsidiaries will engage in any business if, as a result, the
general nature of the business, taken on a consolidated basis,
which would then be engaged in by the Company and its
Subsidiaries, would be substantially changed from the general
nature of the business engaged in by the Company and its
Subsidiaries on the date hereof, after giving effect to the
consummation of the Acquisition Transaction.
9.2. Consolidation, Merger, Acquisitions, Sale of Assets,
etc. The Company will not, and will not permit any Subsidiary
to, (1) wind up, liquidate or dissolve its affairs, (2) enter
into any transaction of merger or consolidation, (3) sell or
otherwise dispose of any of its property or assets (but excluding
any sale or disposition of inventory, or obsolete or excess
furniture, fixtures, equipment or other property, in the ordinary
course of business), (4) purchase, lease or otherwise acquire on
a going concern basis (in one transaction or a series of related
transactions) all or any part of the facilities and business
operated by any person which is not a Subsidiary of the Company
(excluding any purchases, leases or other acquisitions of
property or assets in, and for use in, the ordinary course of
business), (5) acquire any such person or any equity securities
of such person, or (6) agree to do any of the foregoing at any
future time, except that the following shall be permitted:
(a) Acquisition Transaction and Related
Reorganization: completion of the Acquisition Transaction
in accordance with the Acquisition Documents; and completion
of the reorganization transactions which have
<PAGE>
resulted in the organizational structure of the Company and
its Subsidiaries indicated in Annex II hereto;
(b) Permitted Investments, etc.: the loans, advances
and investments permitted pursuant to section 9.5;
(c) Certain Intercompany Mergers, etc.: if no Default
or Event of Default shall have occurred and be continuing or
would result therefrom, (i) the merger, consolidation or
amalgamation of any Wholly-Owned Subsidiary with or into the
Company or another Wholly-Owned Subsidiary, so long as in
any merger, consolidation or amalgamation involving the
Company it is the surviving or continuing or resulting
corporation, or the liquidation or dissolution of any
Subsidiary, or (ii) the transfer or other disposition of any
property by the Company to any Wholly-Owned Subsidiary or by
any Wholly-Owned Subsidiary to the Company or any other
Wholly-Owned Subsidiary of the Company;
(d) Permitted Acquisitions: if no Default or Event of
Default shall have occurred and be continuing or would
result therefrom, the Company or any Subsidiary may make
Permitted Acquisitions, provided that at least five Business
Days prior to the date of any such Permitted Acquisition
which involves consideration (including the amount of any
assumed Indebtedness and (without duplication) any
outstanding Indebtedness of any person which becomes a
Subsidiary as a result of such Permitted Acquisition) of
$10,000,000 or more, the Company shall have delivered to the
Administrative Agent an officer's certificate executed on
behalf of the Company by an Authorized Officer of the
Company, which certificate shall (A) contain the date such
Permitted Acquisition is scheduled to be consummated, (B)
contain the estimated purchase price of such Permitted
Acquisition, (C) contain a description of the property
and/or assets acquired in connection with such Permitted
Acquisition, (D) demonstrate that at the time of making any
such Permitted Acquisition the covenants contained in
sections 9.6 through 9.8 shall be complied with on a pro
forma basis as if the properties and/or assets so acquired
had been owned by the Company, and the Indebtedness assumed
and/or incurred to acquire and/or finance same has been
outstanding, for the four fiscal quarters month period
immediately preceding such acquisition for which financial
statements have been delivered to the Lenders (without
giving effect to any
<PAGE>
credit for unobtained or unrealized gains or any adjustments
to overhead in connection with any such Permitted
Acquisition), and (E) if requested by the Administrative
Agent, attach thereto a true and correct copy of the then
proposed purchase agreement, merger agreement or similar
agreement, partnership agreement and/or other contract
entered into in connection with such Permitted Acquisition;
(e) Permitted Dispositions: if no Default or Event of
Default shall have occurred and be continuing or would
result therefrom, the Company or any of its Subsidiaries may
(i) sell any land, building or other property (including any
related receivables or other intangible assets) to any
person which is not a Subsidiary of the Company, or (ii)
sell the entire capital stock (or other equity interests)
and Indebtedness of any Subsidiary owned by the Company or
any other Subsidiary to any person which is not a Subsidiary
of the Company, or (iii) permit any Subsidiary to be merged
or consolidated with a person which is not an Affiliate of
the Company, or (iv) consummate any other Asset Sale with a
person who is not a Subsidiary of the Company; provided that
(A) the consideration for such transaction represents fair
value (as determined by management of the Company), and at
least 90% of such consideration consists of cash, (B) the
cumulative aggregate consideration for all such transactions
completed in any fiscal year does not exceed $25,000,000,
and (C) in the case of any such transaction involving
consideration in excess of $10,000,000, at least five
Business Days prior to the date of completion of such
transaction the Company shall have delivered to the
Administrative Agent an officer's certificate executed on
behalf of the Company by an Authorized Officer of the
Company, which certificate shall contain a description of
the proposed transaction, the date such transaction is
scheduled to be consummated, the estimated purchase price or
other consideration for such transaction, financial
information pertaining to compliance with the preceding
clauses (A) and (B), and which shall (if requested by the
Administrative Agent) include a certified copy of the draft
or definitive documentation pertaining thereto; and
(f) Leases: the Company or any of its Subsidiaries
may enter into leases of property or assets not constituting
Permitted Acquisitions which are not otherwise in violation
of this Agreement.
<PAGE>
9.3. Liens. The Company will not, and will not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist
any Lien upon or with respect to any property or assets of any
kind (real or personal, tangible or intangible) of the Company or
any such Subsidiary whether now owned or hereafter acquired, or
sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable or notes with
or without recourse to the Company or any of its Subsidiaries,
other than for purposes of collection of delinquent accounts in
the ordinary course of business) or assign any right to receive
income, or file or permit the filing of any financing statement
under the UCC or any other similar notice of Lien under any
similar recording or notice statute, except that the foregoing
restrictions shall not apply to:
(a) Existing Liens, etc.: Liens (i) in existence on
the Initial Borrowing Date which are listed, and the
Indebtedness secured thereby and the property subject
thereto on the Initial Borrowing Date described, in Annex
IV, or (ii) arising out of the refinancing, extension,
renewal or refunding of any Indebtedness secured by any such
Liens, provided that the principal amount of such
Indebtedness is not increased and such Indebtedness is not
secured by any additional assets;
(b) Purchase Money Liens and Liens on Acquired
Properties: Liens which
(i) are placed upon equipment or machinery used
in the ordinary course of business of the Company or
any Subsidiary at the time of (or within 180 days
after) the acquisition thereof by the Company or any
such Subsidiary to secure Indebtedness incurred to pay
or finance all or a portion of the purchase price
thereof, provided that the Lien encumbering the
equipment or machinery so acquired does not encumber
any other asset of the Company or any such Subsidiary;
or
(ii) are existing on property or other assets at
the time acquired by the Company or any Subsidiary or
on assets of a person at the time such person first
becomes a Subsidiary of the Company; provided that (A)
any such Liens were not created at the time of or in
contemplation of the acquisition of such assets or
person by the Company or any of its Subsidiaries; (B)
in the case of any such acquisition of a person, any
<PAGE>
such Lien attaches only to the property and assets of
such person; and (C) in the case of any such
acquisition of property or assets by the Company or any
Subsidiary, any such Lien attaches only to the property
and assets so acquired and not to any other property or
assets of the Company or any Subsidiary;
provided that (1) the Indebtedness secured by any such Lien
does not exceed 100% of the fair market value of the
property and assets to which such Lien attaches, determined
at the time of the acquisition of such property or asset or
the time at which such person becomes a Subsidiary of the
Company (except in the circumstances described in clause
(ii) above to the extent such Liens constituted customary
purchase money Liens at the time of incurrence and were
entered into in the ordinary course of business), and (2)
the Indebtedness secured thereby is permitted by section
9.4(d);
(c) Certain Tax Liens: Liens for taxes not yet
delinquent or Liens for taxes being contested in good faith
and by appropriate proceedings for which adequate reserves
have been established in accordance with GAAP;
(d) Ordinary Course Liens, etc.: Liens (other than
any Lien imposed by ERISA) incurred or deposits made in the
ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of
social security; and mechanic's Liens, carrier's Liens, and
other Liens to secure the performance of tenders, statutory
obligations, contract bids, government contracts,
performance and return-of-money bonds and other similar
obligations, incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for
borrowed money), whether pursuant to statutory requirements,
common law or consensual arrangements; provided such Liens
do not in the aggregate materially detract from the value of
the property or assets subject thereto or materially impair
the use thereof in the operation of the business of the
Company or any Subsidiary;
(e) Credit Documents: Liens, if any, created by this
Agreement or the other Credit Documents;
(f) Judgment Liens: Liens arising from judgments,
decrees or attachments in circumstances not constituting an
Event of Default under section 10.1(g);
<PAGE>
(g) Leases: Leases or subleases granted to others not
interfering in any material respect with the business of the
Company or any of its Subsidiaries and any interest or title
of a lessor under any lease not in violation of this
Agreement;
(h) Leased Property: Liens arising from financing
statements regarding property subject to leases not in
violation of the requirements of this Agreement, provided
that such Liens are only in respect of the property subject
to, and secure only, the respective lease (and any other
lease with the same or an affiliated lessor); and
(i) Easements and other Encumbrances: easements,
rights-of-way, zoning or deed restrictions, minor
encroachments, defects or irregularities in title and other
similar charges or encumbrances not interfering in any
material respect with the ordinary conduct of the business
of the Company or any of its Subsidiaries considered as an
entirety.
9.4. Indebtedness. The Company will not, and will not
permit any of its Subsidiaries to, contract, create, incur,
assume or suffer to exist any Indebtedness of the Company or any
of its Subsidiaries, except:
(a) Credit Documents: Indebtedness incurred under
this Agreement and the other Credit Documents;
(b) Existing Indebtedness: the Existing Indebtedness
(including Indebtedness incurred pursuant to commitments and
lines of credit described on Annex III); and any
refinancing, extension, renewal or refunding of any such
Existing Indebtedness not involving an increase in the
principal amount thereof or a reduction of more than 10% in
the remaining weighted average life to maturity thereof
(computed in accordance with standard financial practice);
provided that the Existing Indebtedness identified in
section 6.1 hereof which is to be retired as of the Initial
Borrowing Date may not be refinanced except by Loans
incurred hereunder;
(c) Additional Senior Notes: the Additional Senior
Notes, if issued on or before January 31, 1998, as
contemplated by section 8.14, provided that
(i) each of the Lenders shall be satisfied that
the purchase price for, and interest rate borne by,
<PAGE>
the Additional Senior Notes reflect current market
conditions for issuers of similar credit quality, and
shall otherwise be satisfied with the stated maturity
and average life to maturity of the Additional Senior
Notes and the financial and business covenants
contained in the Additional Senior Notes or any related
note purchase agreement;
(ii) if necessary in order for the Company and/or
the other Co-Borrowers to successfully complete the
issuance and sale of the Additional Senior Notes, the
Lenders and the Administrative Agent shall have entered
into an intercreditor agreement with the holders of the
Additional Senior Notes (and the holders of the
Company's Senior Notes due 2006), substantially in the
form attached hereto as Exhibit C-3; and
(iii) if the Company is required to enter into
any amendment or other modification of its Private
Shelf Agreement, dated as of August 24, 1994, in order
to consummate the transactions contemplated by the
issuance of the Additional Senior Notes, such amendment
or modification shall be satisfactory in form and
substance to the Required Lenders;
(d) Priority Debt: the following Indebtedness
(collectively, "Priority Debt"):
(i) Indebtedness consisting of Capital Lease
Obligations of the Company and its Subsidiaries,
(ii) Indebtedness secured by a Lien on any
property of the Company or any Subsidiary, and
(iii) other Indebtedness of Subsidiaries of
the Company (exclusive of Indebtedness owed pursuant to
any of the Credit Documents or to the Company or a
Wholly-Owned Subsidiary of the Company);
provided that at the time of any incurrence thereof after
the date hereof, and after giving effect thereto, (A) no
Event of Default shall have occurred and be continuing or
would result therefrom, (B) the aggregate outstanding
principal amount of Priority Debt referred to in the
foregoing clause (iii) does not exceed $10,000,000, and (C)
the aggregate outstanding principal amount (using
<PAGE>
Capitalized Lease Obligations in lieu of principal amount,
in the case of any Capital Lease) of Priority Debt shall not
exceed an amount equal to 10% of the Company's Consolidated
Net Worth as of the end of its most recent fiscal year or
fiscal quarter for which financial statements have been
delivered to the Lenders hereunder;
(e) Hedge Agreements: Indebtedness of the Company or
any Subsidiary under Hedge Agreements;
(f) Intercompany Debt: Indebtedness of the Company to
any of its Subsidiaries, and Indebtedness of any of the
Company's Subsidiaries to the Company or to another
Subsidiary of the Company, in each case to the extent
permitted under section 9.5;
(g) Guaranty Obligations: Guaranty Obligations
permitted under section 9.5; and
(h) Additional Unsecured Debt: additional unsecured
Indebtedness of the Company, to the extent not otherwise
permitted pursuant to the foregoing clauses, provided that
at the time of incurrence thereof, and after giving effect
thereto, no Event of Default shall have occurred and be
continuing or would result therefrom.
9.5. Advances, Investments, Loans and Guaranty Obligations.
The Company will not, and will not permit any of its Subsidiaries
to, (1) lend money or credit or make advances to any person, (2)
purchase or acquire any stock, obligations or securities of, or
any other interest in, or make any capital contribution to, or
other investment in, any person, (3) create, acquire or hold any
Subsidiary, (4) be or become a party to any joint venture or
partnership, or (5) be or become obligated under any Guaranty
Obligations (other than those created in favor of the Lenders
pursuant to the Credit Documents), except:
(a) the Company or any of its Subsidiaries may invest
in cash and Cash Equivalents;
(b) any endorsement of a check or other medium of
payment for deposit or collection, or any similar
transaction in the normal course of business;
(c) the Company and its Subsidiaries may acquire and
hold receivables owing to them in the ordinary course of
<PAGE>
business and payable or dischargeable in accordance with
customary trade terms;
(d) investments acquired by the Company or any of its
Subsidiaries (i) in exchange for any other investment held
by the Company or any such Subsidiary in connection with or
as a result of a bankruptcy, workout, reorganization or
recapitalization of the issuer of such other investment, or
(ii) as a result of a foreclosure by the Company or any of
its Subsidiaries with respect to any secured investment or
other transfer of title with respect to any secured
investment in default;
(e) loans, advances and investments acquired by the
Company or any of its Subsidiaries in connection with (and
not arising in anticipation of) Permitted Acquisitions or
other transactions permitted by section 9.2;
(f) loans and advances to employees for business-
related travel expenses, moving expenses, costs of
replacement homes and other similar expenses, in each case
incurred in the ordinary course of business, shall be
permitted;
(g) investments in the capital of any Wholly-Owned
Subsidiary which is (i) a Wholly-Owned Subsidiary, and (ii)
not a Foreign Subsidiary;
(h) to the extent not permitted by the foregoing
clauses, existing investments in any Subsidiaries (and any
increases thereof attributable to increases in retained
earnings);
(i) to the extent not permitted by the foregoing
clauses, the existing loans, advances, investments and
guarantees described on Annex V hereto;
(j) any unsecured guaranty by the Company of any
Indebtedness of a Subsidiary permitted by section 9.4, and
any guaranty by any Subsidiary described in section 9.4;
(k) investments of the Company and its Subsidiaries in
Hedge Agreements;
(l) loans and advances by any Subsidiary of any Co-
Borrower to such Co-Borrower or any other Co-Borrower,
<PAGE>
provided that the Indebtedness represented thereby
constitutes Subordinated Indebtedness;
(m) loans and advances by the Company or by any
Subsidiary of the Company to, or other investments in, any
Subsidiary of the Company which is (i) a Subsidiary
Guarantor or a Co-Borrower, and (ii) not a Foreign
Subsidiary;
(n) loans and advances by any Subsidiary of the
Company which is not a Subsidiary Guarantor to, or other
investments by any such Subsidiary in, any other Subsidiary
of the Company which is a Wholly-Owned Subsidiary;
(o) Guaranty Obligations, not otherwise permitted by
the foregoing clauses, of (i) the Company or any Subsidiary
in respect of leases of the Company or any Subsidiary the
entry into which is not prohibited by this Agreement, (ii)
the Company or any Subsidiary in respect of any other person
(other than in respect of (x) Indebtedness for borrowed
money or represented by bonds, notes, debentures or similar
securities, or (y) Indebtedness constituting Capital Leases)
arising as a matter of applicable law because the Company or
such Subsidiary is or is deemed to be a general partner of
such other person, or (iii) the Company or any Subsidiary in
respect of any other person (other than in respect of (x)
Indebtedness for borrowed money or represented by bonds,
notes, debentures or similar securities, or (y) Indebtedness
constituting Capital Leases) arising in the ordinary course
of business;
(p) any other loans, advances, investments (whether in
the form of cash or contribution of property, and if in the
form of a contribution of property, such property shall be
valued for purposes of this clause (o) at the fair value
thereof as reasonably determined by the Company) and
Guaranty Obligations, including, without limitation, in or
to or for the benefit of, Subsidiaries, joint ventures, or
other persons, not otherwise permitted by the foregoing
clauses, made after the date of the most recent financial
statements of the Company furnished to the lenders prior to
the Effective Date (such loans, advances and investments,
collectively, "Basket Investments", and such Guaranty
Obligations, collectively "Basket Guarantees") described
below: (i) if no Event of Default shall have occurred and be
continuing, or would result therefrom, Basket Investments of
up to an aggregate of $30,000,000, taking
<PAGE>
into account the repayment of any loans or advances
comprising such Basket Investments, shall be permitted to be
made, and (ii) if no Event of Default shall have occurred
and be continuing, or would result therefrom, Basket
Guarantees covering up to $25,000,000 aggregate principal
amount of Indebtedness outstanding at any time, shall be
permitted to be incurred.
9.6. Consolidated Debt/Consolidated EBITDA Ratio. The
Company will not at any time permit the ratio of (i) the amount
of its Consolidated Debt at such time to (ii) its Consolidated
EBITDA for the Testing Period most recently ended, to exceed 3.00
to 1.00 at any time.
9.7. Interest Coverage Ratio. The Company will not permit
its Interest Coverage Ratio for any Testing Period ending on or
prior to December 31, 1998 to be less than 3.00 to 1.00, or for
any Testing Period thereafter to be less than 3.50 to 1.00.
9.8. Minimum Consolidated Net Worth. The Company will not
permit its Consolidated Net Worth as of the end of any fiscal
quarter ending after December 31, 1997 to be less than the
Minimum Consolidated Net Worth applicable at such time.
9.9. Transactions with Affiliates. The Company will not,
and will not permit any Subsidiary to, enter into any transaction
or series of transactions with any Affiliate (other than, in the
case of the Company, any Subsidiary, and in the case of a
Subsidiary, the Company or another Subsidiary) other than in the
ordinary course of business of and pursuant to the reasonable
requirements of the Company's or such Subsidiary's business and
upon fair and reasonable terms no less favorable to the Company
or such Subsidiary than would obtain in a comparable arm's-length
transaction with a person other than an Affiliate, except (i)
loans, advances and investments permitted by section 9.5, (ii)
sales of goods to an Affiliate for use or distribution outside
the United States which in the good faith judgment of the Company
complies with any applicable legal requirements of the Code, or
(iii) agreements and transactions with and payments to officers,
directors and equityholders which are either (A) entered into in
the ordinary course of business and not prohibited by any of the
provisions of this Agreement, or (B) entered into outside the
ordinary course of business, approved by the directors or
equityholders of the Company, and not prohibited by any of the
provisions of this Agreement.
<PAGE>
9.10. Limitation on Certain Restrictive Agreements. The
Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, enter into, incur or permit to exist or
become effective, any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the
ability of the Company or any Subsidiary to create, incur or
suffer to exist any Lien upon any of its property or assets as
security for Indebtedness, or (b) the ability of any such
Subsidiary to pay dividends or make any other distributions on
its capital stock or any other interest or participation in its
profits owned by the Company or any Subsidiary of the Company, or
pay any Indebtedness owed to the Company or a Subsidiary of the
Company, or to make loans or advances to the Company or any of
the Company's other Subsidiaries, or transfer any of its property
or assets to the Company or any of the Company's other
Subsidiaries, except for such restrictions existing under or by
reason of (i) applicable law, (ii) this Agreement and the other
Credit Documents, (iii) customary provisions restricting
subletting or assignment of any lease governing a leasehold
interest, (iv) customary provisions restricting assignment of any
licensing agreement entered into in the ordinary course of
business, (v) customary provisions restricting the transfer of
assets subject to Liens permitted under section 9.3(b), (vi)
restrictions which do not limit dividends or other distributions
by the Company or any of its Subsidiaries which are contained in
the Existing Indebtedness Agreements as in effect on the
Effective Date which relate to any Existing Indebtedness which
will continue outstanding following the Initial Borrowing Date,
(vii) any document relating to Indebtedness secured by a Lien
permitted by section 9.3, insofar as the provisions thereof limit
grants of junior liens on the assets securing such Indebtedness,
and (viii) any operating lease or Capital Lease, insofar as the
provisions thereof limit grants of a security interest in, or
other assignments of, the related leasehold interest to any other
person.
9.11. Plan Terminations, Minimum Funding, etc. The
Company will not, and will not permit any ERISA Affiliate to, (i)
terminate any Plan or plans so as to result in liability of the
Company or any ERISA Affiliate to the PBGC in excess of
$1,000,000 in the aggregate, (ii) permit to exist one or more
events or conditions which reasonably present a material risk of
the termination by the PBGC of any Plan or Plans with respect to
which the Company or any ERISA Affiliate would, in the event of
such termination, incur liability to the PBGC in excess of
$1,000,000 in the aggregate, or (iii) fail to comply with the
<PAGE>
minimum funding standards of ERISA and the Code with respect to
any Plan.
SECTION 10. EVENTS OF DEFAULT.
10.1. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
(a) Payments: any Co-Borrower shall (i) default in
the payment when due (whether at maturity, on a date for
prepayment, or otherwise) of any principal of any of the
Loans; or (ii) default, and such default shall continue for
five or more days, in the payment when due of any interest
on the Loans or any Fees or any other amounts owing
hereunder or under any other Credit Document; or
(b) Representations, etc.: any representation,
warranty or statement made by the Company or any other
Credit Party herein or in any other Credit Document or in
any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove to be
untrue in any material respect on the date as of which made
or deemed made; or
(c) Certain Covenants: the Co-Borrowers shall default
in the due performance or observance by it of any term,
covenant or agreement contained in section 8.14 or in
sections 9.1 through 9.8, inclusive, of this Agreement; or
(d) Other Covenants: the Co-Borrowers shall default
in the due performance or observance by it of any term,
covenant or agreement contained in this Agreement or any
other Credit Document, other than those referred to in
section 10.1(a) or (b) or (c) above, and such default is not
remedied within 30 days after the earlier of (i) an officer
of the any Co-Borrower obtaining actual knowledge of such
default and (ii) the Treasury Manager receiving written
notice of such default from the Administrative Agent or the
Required Lenders (any such notice to be identified as a
"notice of default " and to refer specifically to this
paragraph); or
(e) Cross Default Under Other Agreements: the Company
or any of its Subsidiaries shall (i) default in any payment
with respect to any Indebtedness (other than the
Obligations) owed to any Lender, or having an unpaid
<PAGE>
principal amount of $15,000,000 or greater, and such default
shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such
Indebtedness, or (ii) default in the observance or
performance of any agreement or condition relating to any
such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto (and all
grace periods applicable to such observance, performance or
condition shall have expired), or any other event shall
occur or condition exist, the effect of which default or
other event or condition is to cause, or to permit the
holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause any such
Indebtedness to become due prior to its stated maturity; or
any such Indebtedness of the Company or any of its
Subsidiaries shall be declared to be due and payable, or
shall be required to be prepaid (other than by a regularly
scheduled required prepayment or redemption, prior to the
stated maturity thereof); or
(f) Other Credit Documents: the Subsidiary Guaranty
(once executed and delivered) shall cease for any reason
(other than termination in accordance with its terms) to be
in full force and effect; or any Credit Party shall default
in any payment obligation thereunder; or any Credit Party
shall default in any material respect in the due performance
and observance of any other obligation thereunder and such
default shall continue unremedied for a period of at least
30 days after notice by the Administrative Agent or the
Required Lenders; or any Credit Party shall (or seek to)
disaffirm or otherwise limit its obligations thereunder
otherwise than in strict compliance with the terms thereof;
or
(g) Judgments: one or more judgments or decrees shall
be entered against the Company and/or any of its
Subsidiaries involving a liability (other than a liability
covered by insurance, as to which the carrier has adequate
claims paying ability and has not reserved its rights) of
$5,000,000 or more in the aggregate for all such judgments
and decrees for the Company and its Subsidiaries) and any
such judgments or decrees shall not have been vacated,
discharged or stayed or bonded pending appeal within 30 days
(or such longer period, not in excess of 60 days, during
which enforcement thereof, and the filing of any judgment
lien, is effectively stayed or prohibited) from the entry
thereof; or
<PAGE>(h) Bankruptcy, etc.: the Company, any other Co-Borrower,
any Subsidiary Guarantor, or any of their respective Material
Subsidiaries, or any general partner or member of any such person
which is a partnership or limited liability company (the Company
and each of such other persons, each a "Principal Entity") shall
commence a voluntary case concerning itself under Title 11 of the
United States Code entitled "Bankruptcy," as now or hereafter in
effect, or any successor thereto (the "Bankruptcy Code"); or an
involuntary case is commenced against the Company or any other
Principal Entity and the petition is not controverted within 10
days, or is not dismissed within 60 days, after commencement of
the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of
the property of the Company or any other Principal Entity; or the
Company or any other Principal Entity commences (including by way
of applying for or consenting to the appointment of, or the
taking of possession by, a rehabilitator, receiver, custodian,
trustee, conservator or liquidator (collectively, a
"conservator") of itself or all or any substantial portion of its
property) any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency, liquidation, rehabilitation, conservatorship or
similar law of any jurisdiction whether now or hereafter in
effect relating to the Company or any other Principal Party; or
any such proceeding is commenced against the Company or any other
Principal Party to the extent such proceeding is consented to by
such person or remains undismissed for a period of 60 days; or
the Company or any other Principal Party is adjudicated insolvent
or bankrupt; or any order of relief or other order approving any
such case or proceeding is entered; or the Company or any other
Principal Party suffers any appointment of any conservator or the
like for it or any substantial part of its property which
continues undischarged or unstayed for a period of 60 days; or
the Company or any other Principal Party makes a general
assignment for the benefit of creditors; or any corporate (or
similar organizational) action is taken by the Company or any
other Principal party for the purpose of effecting any of the
foregoing; or
(i) ERISA: (i) any of the events described in clauses
(i) through (viii) of section 8.1(e) shall have occurred; or
(ii) there shall result from any such event or
<PAGE>
events the imposition of a lien, the granting of a security
interest, or a liability or a material risk of incurring a
liability; and (iii) any such event or events or any such
lien, security interest or liability, individually, and/or
in the aggregate, in the opinion of the Required Lenders,
has had, or could reasonably be expected to have, a Material
Adverse Effect.
10.2. Acceleration, etc. Upon the occurrence of any
Event of Default, and at any time thereafter, if any Event of
Default shall then be continuing, the Administrative Agent shall,
upon the written request of the Required Lenders, by written
notice to the Treasury Manager, take any or all of the following
actions, without prejudice to the rights of the Administrative
Agent or any Lender to enforce its claims against any Co-Borrower
or some or all of the Co-Borrowers, except as otherwise
specifically provided for in this Agreement (provided that, if an
Event of Default specified in section 10.1(h) shall occur with
respect to the any Co-Borrower, the result which would occur upon
the giving of written notice by the Administrative Agent as
specified in clauses (i) and (ii) below shall occur automatically
without the giving of any such notice): (i) declare the Total
Commitment terminated, whereupon the Commitment of each Lender
shall forthwith terminate immediately without any other notice of
any kind; and (ii) declare the principal of and any accrued
interest in respect of all Loans, and all other Obligations owing
hereunder, to be, whereupon the same shall become, forthwith due
and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Co-Borrowers.
10.3. Application of Liquidation Proceeds. All monies
received by the Administrative Agent or any Lender from the
exercise of remedies hereunder or under the other Credit
Documents or under any other documents relating to this Agreement
shall, unless otherwise required by the terms of the other Credit
Documents or by applicable law, be applied as follows:
(i) first, to the payment of all expenses (to the
extent not paid by the Co-Borrowers) incurred by the
Administrative Agent and the Lenders in connection with the
exercise of such remedies, including, without limitation,
all reasonable costs and expenses of collection, attorneys'
fees, court costs and any foreclosure expenses;
<PAGE>
(ii) second, to the payment pro rata of interest then
accrued on the outstanding Loans;
(iii) third, to the payment pro rata of any fees
then accrued and payable to the Administrative Agent or any
Lender under this Agreement in respect of the Loans;
(iv) fourth, to the payment pro rata of the principal
balance then owing on the outstanding Loans;
(v) fifth, to the payment to the Lenders of any
amounts then accrued and unpaid under sections 2.10, 2.11,
3.5 and 5.4 hereof, and if such proceeds are insufficient to
pay such amounts in full, to the payment of such amounts pro
rata;
(vi) sixth, to the payment pro rata of all other
amounts owed by the Co-Borrowers to the Administrative Agent
or any Lender under this Agreement or any other Credit
Document; and
(vii) finally, any remaining surplus after all of
the Obligations have been paid in full, to the Co-Borrowers
or to whomsoever shall be lawfully entitled thereto.
<PAGE>
SECTION 11. THE ADMINISTRATIVE AGENT.
11.1. Appointment. Each Lender hereby irrevocably
designates and appoints KeyBank as Administrative Agent to act as
specified herein and in the other Credit Documents, and each such
Lender hereby irrevocably authorizes KeyBank as the
Administrative Agent for such Lender, to take such action on its
behalf under the provisions of this Agreement and the other
Credit Documents and to exercise such powers and perform such
duties as are expressly delegated to the Administrative Agent by
the terms of this Agreement and the other Credit Documents,
together with such other powers as are reasonably incidental
thereto. The Administrative Agent agrees to act as such upon the
express conditions contained in this section 11. Notwithstanding
any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein or in
the other Credit Documents, nor any fiduciary relationship with
any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be
read into this Agreement or otherwise exist against the
Administrative Agent. The provisions of this section 11 are
solely for the benefit of the Administrative Agent, and the
Lenders, and the Company and its Subsidiaries shall not have any
rights as a third party beneficiary of any of the provisions
hereof. In performing its functions and duties under this
Agreement, the Administrative Agent shall act solely as agent of
the Lenders and does not assume and shall not be deemed to have
assumed any obligation or relationship of agency or trust with or
for the Company or any of its Subsidiaries.
11.2. Delegation of Duties. The Administrative Agent
may execute any of its duties under this Agreement or any other
Credit Document by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters
pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care except to
the extent otherwise required by section 11.3.
11.3. Exculpatory Provisions. Neither the
Administrative Agent nor any of its respective officers,
directors, employees, agents, attorneys-in-fact or affiliates
shall be (i) liable for any action lawfully taken or omitted to
be taken by it or such person under or in connection with this
Agreement (except for its or such person's own gross negligence
or willful misconduct) or (ii) responsible in any manner to any
of the Lenders for any recitals, statements, representations or
warranties made by the Company or of its Subsidiaries or any of
<PAGE>
their respective officers contained in this Agreement, any other
Credit Document or in any certificate, report, statement or other
document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement
or any other Credit Document or for any failure of the Company or
any Subsidiary of the Company or any of their respective officers
to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions
of, this Agreement, or to inspect the properties, books or
records of the Company or any of its Subsidiaries. The
Administrative Agent shall not be responsible to any Lender for
the effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Agreement or any Credit
Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral
statement or in any financial or other statements, instruments,
reports, certificates or any other documents in connection
herewith or therewith furnished or made by the Administrative
Agent to the Lenders or by or on behalf of the Company or any of
its Subsidiaries to the Administrative Agent or any Lender or be
required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants
or agreements contained herein or therein or as to the use of the
proceeds of the Loans or of the existence or possible existence
of any Default or Event of Default.
11.4. Reliance by Administrative Agent. The
Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram,
telegram, facsimile transmission, telex or teletype message,
statement, order or other document or conversation reasonably
believed by it, in good faith, to be genuine and correct and to
have been signed, sent or made by the proper person or persons
and upon advice and statements of legal counsel (including,
without limitation, counsel to the Company or any of its
Subsidiaries with respect to matters of corporate or other
organizational existence, power or authority of any of the Credit
Parties), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent shall be
fully justified in failing or refusing to take any action under
this Agreement or any other Credit Document unless it shall first
receive such advice or concurrence of the Required Lenders as it
deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and
<PAGE>
all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and
the other Credit Documents in accordance with a request of the
Required Lenders (or all of the Lenders, as to any matter which,
pursuant to section 14.12, can only be effectuated with the
consent of all Lenders), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the
Lenders.
11.5. Notice of Default. The Administrative Agent shall
not be deemed to have knowledge or notice of the occurrence of
any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the
Treasury Manager referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give
prompt notice thereof to the Lenders. The Administrative Agent
shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Lenders,
provided that unless and until 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 or Event of
Default as it shall deem advisable in the best interests of the
Lenders.
11.6. Non-Reliance. Each Lender expressly acknowledges
that neither the Administrative Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates
have made any representations or warranties to it and that no act
by the Administrative Agent hereinafter taken, including any
review of the affairs of the Company or any of its Subsidiaries,
shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents
to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent, or any other
Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation
into the business, assets, operations, property, financial and
other conditions, prospects and creditworthiness of the Company
and its Subsidiaries and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon
the Administrative Agent, or any other Lender, and based on such
<PAGE>
documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform
itself as to the business, assets, operations, property,
financial and other conditions, prospects and creditworthiness of
the Company and its Subsidiaries. The Administrative Agent shall
not have any duty or responsibility to provide any Lender with
any credit or other information concerning the business,
operations, assets, property, financial and other conditions,
prospects or creditworthiness of the Company or any of its
Subsidiaries which may come into the possession of the
Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
11.7. Indemnification. The Lenders agree to indemnify
the Administrative Agent in its capacity as such ratably
according to their respective General Revolving Loans and
Unutilized General Revolving Commitments, from and against any
and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, reasonable expenses or
disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment
of the Obligations) be imposed on, incurred by or asserted
against the Administrative Agent in its capacity as such in any
way relating to or arising out of this Agreement or any other
Credit Document, or any documents contemplated by or referred to
herein or the transactions contemplated hereby or any action
taken or omitted to be taken by the Administrative Agent under or
in connection with any of the foregoing, but only to the extent
that any of the foregoing is not paid by the Co-Borrowers,
provided that no Lender shall be liable to the Administrative
Agent for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements to the extent resulting
solely from the Administrative Agent's gross negligence or
willful misconduct. If any indemnity furnished to the
Administrative Agent for any purpose shall, in the opinion of the
Administrative Agent, be insufficient or become impaired, the
Administrative Agent may call for additional indemnity and cease,
or not commence, to do the acts indemnified against until such
additional indemnity is furnished. The agreements in this
section 11.7 shall survive the payment of all Obligations.
11.8. The Administrative Agent in Individual Capacity.
The Administrative Agent and its Affiliates may make loans to,
accept deposits from and generally engage in any kind of
<PAGE>
business with the Company, its Subsidiaries and their Affiliates
as though not acting as Administrative Agent hereunder. With
respect to the Loans made by it and all Obligations owing to it,
the Administrative Agent shall have the same rights and powers
under this Agreement as any Lender and may exercise the same as
though it were not the Administrative Agent, and the terms
"Lender" and "Lenders" shall include the Administrative Agent in
its individual capacity.
11.9. Successor Administrative Agent. The
Administrative Agent may resign as the Administrative Agent upon
20 days' notice to the Lenders and the Treasury Manager. The
Treasury Manager shall appoint from among the Lenders a successor
Administrative Agent for the Lenders who is willing to so act,
whereupon such successor agent shall succeed to the rights,
powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall include such successor agent
effective upon its appointment, and the resigning Administrative
Agent's rights, powers and duties as the Administrative Agent
shall be terminated, without any other or further act or deed on
the part of such former Administrative Agent or any of the
parties to this Agreement. After the retiring Administrative
Agent's resignation hereunder as the Administrative Agent, the
provisions of this section 11 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
SECTION 12. THE TREASURY MANAGER.
(a) Appointment. (i) Each Co-Borrower hereby irrevocably
designates and appoints Magnum Management as Treasury Manager to
act as specified herein and in the other Credit Documents. Each
Co-Borrower hereby irrevocably authorizes Magnum Management as
the Treasury Manager for such Co-Borrower, to take such action on
its behalf under the provisions of this Agreement and the other
Credit Documents and to exercise such powers and perform such
duties as are expressly delegated to the Treasury Manager by the
terms of this Agreement and the other Credit Documents, together
with such other powers as are reasonably incidental thereto ,
with all such actions by the Treasury Manager which purport to be
on behalf of any Co-Borrower being sufficient, without any
further action or authorization by any Co-Borrower, to bind all
Co-Borrowers. The Treasury Manager agrees to act as such upon
the express conditions contained in this section 12.
<PAGE>
(ii) All actions of the Treasury Manager taken in connection
with the Credit Documents, whether so expressed or not, shall be
deemed to be on behalf of, and shall bind, all Co-Borrowers,
unless in taking any particular action the Treasury Manager
expressly indicates in writing that such action is intended to
bind only a particular specified Co-Borrower or Co-Borrowers, in
which case such action shall be deemed to be on behalf of, and
shall bind, only those Co-Borrowers so specified.
(iii) Solely as between the Treasury Manager and the Co-
Borrowers, the Treasury Manager shall have responsibility for
general cash management matters of all Co-Borrowers, including
the making of Borrowings, the making of all payments with
respect thereto, and the disbursement and allocation of portions
of the proceeds of Loans among the Co-Borrowers.
12.1. Reliance by Lenders and Administrative Agent upon
Statements, etc. of Treasury Manager. The Lenders and the
Administrative Agent shall be entitled to rely upon all
statements, certificates, notices, consents, certificates,
affidavits, letters, cablegrams, telegrams, facsimile
transmissions, telex or teletype messages, orders or other
documents or conversations furnished or made by the Treasury
Manager pursuant to any of the provisions of this Agreement or
any of the other Credit Documents, or otherwise in connection
with the transactions contemplated by the Credit Documents, as
being made or furnished on behalf of, and with the effect of
irrevocably binding, the Co-Borrowers, without any duty to
ascertain or to inquire as to the authority of the Treasury
Manager in so doing.
12.2. Successor Treasury Manager. The Treasury Manager
may resign as the Treasury Manager upon 20 days' notice to the Co-
Borrowers and the Administrative Agent. The Co-Borrowers shall
appoint from among themselves a successor Treasury Manager for
the Co-Borrowers who is willing to so act, whereupon such
successor manager shall upon notice to by the Co-Borrowers to the
Administrative Agent and the Lenders, succeed to the rights,
powers and duties of the Treasury Manager, and the term "Treasury
Manager" shall include such successor manager effective upon its
appointment, and the resigning Treasury Manager's rights, powers
and duties as the Treasury Manager Agent shall be terminated,
without any other or further act or deed on the part of such
former Treasury Manager or any of the parties to this Agreement.
After the retiring Treasury Manager's resignation hereunder as
the Treasury Manager Agent, the provisions of this section 12
shall inure to its benefit as to
<PAGE>
any actions taken or omitted to be taken by it while it was
Treasury Manager Agent under this Agreement.
SECTION 13. OBLIGATIONS OF CO-BORROWERS JOINT AND
SEVERAL.
13.1. Nature of Obligations. The obligations of the Co-
Borrowers hereunder and under all of the Credit Documents to
which any Co-Borrower is a party, including without limitation in
respect of the Obligations, and in respect of all
representations, warranties, covenants and agreements of any Co-
Borrower contained in this Agreement or any of the other Credit
Documents or any other agreement, instrument, notice, consent or
other document delivered in connection with the transactions
contemplated by the Credit Documents, whether in existence prior
to the time any Co-Borrower became a party hereto or arising
thereafter, are joint and several primary obligations, whether or
not so expressed in any Credit Document. It shall not be
necessary for any Co-Borrower to have expressly become a party to
any Credit Document executed and delivered prior to the time such
Co-Borrower became a party hereto as contemplated by section 8.13
in order for such Co-Borrower to be bound as a Co-Borrower
thereunder.
13.2. Failure of any Co-Borrower to Perform any
Obligations. In the event any Co-Borrower or Co-Borrowers fail
to make full and punctual payment of any Obligation, each other
Co-Borrower shall forthwith on demand by the Administrative Agent
pay the entire amount not so paid at the place and in the
currency and otherwise in the manner specified in this Agreement
or any other applicable agreement or instrument.
13.3. Additional Undertaking. As a separate, additional
and continuing obligation, each Co-Borrower unconditionally and
irrevocably undertakes and agrees, for the benefit of the
Administrative Agent and the Lenders that, should any amounts not
be recoverable from any other Co-Borrower under section 13.2 for
any reason whatsoever (including, without limitation, by reason
of any provision of any Credit Document or any other agreement or
instrument executed in connection therewith being or becoming
void, unenforceable, or otherwise invalid under any applicable
law) then, notwithstanding any notice or knowledge thereof by any
Lender, the Administrative Agent, any of their respective
Affiliates, or any other person, at any time, such Co-Borrower as
sole, original and independent obligor, upon demand by the
Administrative Agent, will make payment to the Administrative
Agent, for the account of the
<PAGE>
Lenders and the Administrative Agent, of all such obligations not
so recoverable by way of full indemnity, in such currency and
otherwise in such manner as is provided in the Credit Documents
or any other applicable agreement or instrument.
13.4. Joint and Several Obligations Unconditional, etc.
The obligations of each Co-Borrower under this section shall be
unconditional and absolute and, without limiting the generality
of the foregoing shall not be released, discharged or otherwise
affected by the occurrence, one or more times, of any of the
following:
(i) any extension, renewal, settlement, compromise,
waiver or release in respect to any Obligation under any
agreement or instrument, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to
this Agreement, any Note, any other Credit Document, or any
agreement or instrument evidencing or relating to any
Obligation;
(iii) any release, non-perfection or invalidity of
any direct or indirect security for any Obligation under any
agreement or instrument evidencing or relating to any
Obligation;
(iv) any change in the corporate existence, structure
or ownership of any Co-Borrower or other Subsidiary of the
Company or any insolvency, bankruptcy, reorganization or
other similar proceeding affecting any Co-Borrower or other
Subsidiary of the Company or its assets or any resulting
release or discharge of any obligation of any Co-Borrower or
other Subsidiary of the Company contained in any agreement
or instrument evidencing or relating to any Obligation;
(v) the existence of any claim, set-off or other
rights which such Co-Borrower may have at any time against
any other Co-Borrower or other Subsidiary of the Company,
the Administrative Agent, any Lender, any Affiliate of any
Lender, or any other person, whether in connection herewith
or any unrelated transactions;
(vi) any invalidity or unenforceability relating to or
against any other Co-Borrower or other Subsidiary of the
Company for any reason of any agreement or instrument
evidencing or relating to any Obligation, or any provision
<PAGE>
of applicable law or regulation purporting to prohibit the
payment by any other Co-Borrower or other Subsidiary of the
Company of any Obligations; or
(vii) any other act or omission to act or delay of
any kind by any other Co-Borrower or other Subsidiary of the
Company, the Administrative Agent, any Lender or any other
person or any other circumstance whatsoever which might, but
for the provisions of this section, constitute a legal or
equitable discharge of such Co-Borrower's obligations under
this section or the other provisions of any of the Credit
Documents.
13.5. Co-Borrower's Obligations to Remain in Effect;
Restoration. Each Co-Borrower's obligations under this section
and the other provisions of the Credit Documents shall remain in
full force and effect until the Commitments shall have
terminated, and the principal of and interest on the Notes and
other Obligations, and all other amounts payable by the Co-
Borrowers (or any of them), or other Subsidiary of the Company,
under the Credit Documents or any other agreement or instrument
evidencing or relating to any of the Obligations, shall have been
paid in full. If at any time any payment of any of the
Obligations of any other Co-Borrower or other Subsidiary of the
Company in respect of any Obligations is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of such other Co-Borrower or other Subsidiary of
the Company, such Co-Borrower's obligations under this section
and the other provisions of the Credit Documents with respect to
such payment shall be reinstated at such time as though such
payment had been due but not made at such time.
13.6. Waiver of Acceptance, etc. Each Co-Borrower
irrevocably waives acceptance hereof, presentment, demand,
protest and any notice not provided for herein, as well as any
requirement that at any time any action be taken by any person
against any other Co-Borrower, other Subsidiary of the Company or
any other person, or against any collateral or guaranty of any
other person.
13.7. Subrogation. Until the indefeasible payment in
full of all of the Obligations and the termination of the
Commitments of the Lenders hereunder, no Co-Borrower shall have
any rights, by operation of law or otherwise, upon making any
payment under this section or the other provisions of any of the
Credit Documents to be subrogated to the rights of the payee
against any other Co-Borrower or other Subsidiary of the Company
<PAGE>
with respect to such payment or otherwise to be reimbursed,
indemnified or exonerated by any other Co-Borrower or other
Subsidiary of the Company in respect thereof.
13.8. Effect of Stay. In the event that acceleration of
the time for payment of any amount payable by any Co-Borrower or
other Subsidiary of the Company under any Obligation is stayed
upon insolvency, bankruptcy or reorganization of such other Co-
Borrower or other Subsidiary, all such amounts otherwise subject
to acceleration under the terms of any applicable agreement or
instrument evidencing or relating to any Obligation shall
nonetheless be payable by such Co-Borrower under this section and
the other provisions of the Credit Documents forthwith on demand
by the Administrative Agent.
<PAGE>
SECTION 14. MISCELLANEOUS.
14.1. Payment of Expenses, etc. The Co-Borrowers agree
to: (i) whether or not the transactions herein contemplated are
consummated, pay all reasonable out-of-pocket costs and expenses
of the Administrative Agent in connection with the negotiation,
preparation, execution and delivery of the Credit Documents and
the documents and instruments referred to therein and any
amendment, waiver or consent relating thereto (including, without
limitation, the reasonable fees and disbursements of Jones, Day,
Reavis & Pogue, special counsel to the Administrative Agent), and
of the Administrative Agent and each of the Lenders in connection
with the enforcement of the Credit Documents and the documents
and instruments referred to therein (including, without
limitation, the reasonable fees and disbursements of counsel for
the Administrative Agent and for each of the Lenders and any
allocated costs of internal counsel for any of the Lenders); (ii)
in the event of the bankruptcy, insolvency, rehabilitation or
other similar proceeding in respect of the Company or any of its
Subsidiaries, pay all costs of collection and defense, including
reasonable attorneys' fees in connection therewith and in
connection with any appellate proceeding or post-judgment action
involved therein, which shall be due and payable together with
all required service or use taxes; (iii) pay and hold each of the
Lenders harmless from and against any and all present and future
stamp and other similar taxes with respect to the foregoing
matters and save each of the Lenders harmless from and against
any and all liabilities with respect to or resulting from any
delay or omission (other than to the extent attributable to such
Lender) to pay such taxes; and (iv) indemnify each Lender, its
officers, directors, employees, representatives and agents
(collectively, the "Indemnitees") from and hold each of them
harmless against any and all losses, liabilities, claims, damages
or expenses reasonably incurred by any of them as a result of, or
arising out of, or in any way related to, or by reason of (a) any
investigation, litigation or other proceeding (whether or not any
Lender is a party thereto) related to the entering into and/or
performance of any Credit Document or the use of the proceeds of
any Loans hereunder or the consummation of any transactions
contemplated in any Credit Document, other than any such
investigation, litigation or proceeding arising out of
transactions solely between any of the Lenders or the
Administrative Agent, transactions solely involving the
assignment by a Lender of all or a portion of its Loans and
Commitment, or the granting of participations therein, as
provided in this Agreement, or arising solely out of any
examination of a Lender by any regulatory authority having
jurisdiction over it, or (b) the actual or alleged presence of
Hazardous Materials in the air, surface water or groundwater or
<PAGE>
on the surface or subsurface of any Real Property owned, leased
or at any time operated by the Company or any of its
Subsidiaries, the release, generation, storage, transportation,
handling or disposal of Hazardous Materials at any location,
whether or not owned or operated by the Company or any of its
Subsidiaries, if the Company or any such Subsidiary could have or
is alleged to have any responsibility in respect thereof, the non-
compliance of any Real Property with foreign, federal, state and
local laws, regulations and ordinances (including applicable
permits thereunder) applicable to any Real Property, or any
Environmental Claim asserted against the Company or any of its
Subsidiaries, in respect of any Real Property owned, leased or at
any time operated by the Company or any of its Subsidiaries,
including, in each case, without limitation, the reasonable fees
and disbursements of counsel incurred in connection with any such
investigation, litigation or other proceeding (but excluding any
such losses, liabilities, claims, damages or expenses to the
extent incurred by reason of the gross negligence or willful
misconduct of the person to be indemnified or of any other
Indemnitee who is such person or an Affiliate of such person). To
the extent that the undertaking to indemnify, pay or hold
harmless any person set forth in the preceding sentence may be
unenforceable because it is violative of any law or public
policy, the Company shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities
which is permissible under applicable law.
14.2. Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by
way of limitation of any such rights, upon the occurrence of an
Event of Default, each Lender is hereby authorized at any time or
from time to time, without presentment, demand, protest or other
notice of any kind to any Co-Borrower or to any other person, any
such notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special)
and any other Indebtedness at any time held or owing by such
Lender (including, without limitation, by branches and agencies
of such Lender wherever located) to or for the credit or the
account of any Co-Borrower against and on account of the
Obligations and liabilities of the Co-Borrowers to such Lender
under this Agreement or under any of the other Credit Documents,
including, without limitation, all interests in Obligations the
Co-Borrowers purchased by such Lender pursuant to section
14.4(b), and all other claims of any nature or description
arising out of or connected with this Agreement or any other
Credit Document, irrespective of whether or not such Lender
<PAGE>
shall have made any demand hereunder and although said
Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
14.3. Notices. Except as otherwise expressly provided
herein, all notices and other communications provided for
hereunder shall be in writing (including telegraphic, telex,
facsimile transmission or cable communication) and mailed,
telegraphed, telexed, transmitted, cabled or delivered, (a) if to
any Co-Borrower, to it c/o the Treasury Manager at 1 Causeway
Drive, P. O. Box 5006, Sandusky, Ohio 44871-5006, attention:
Chief Financial Officer (facsimile: (419) 627-2260); (b) if to
any Lender at its address specified for such Lender on Annex I
hereto; (c) if to the Administrative Agent, at its Notice Office;
or (d) at such other address as shall be designated by any party
in a written notice to the other parties hereto. All such notices
and communications shall be mailed, telegraphed, telexed,
telecopied, or cabled or sent by overnight courier, and shall be
effective when received.
14.4. Benefit of Agreement. (a) This Agreement shall
be binding upon and inure to the benefit of and be enforceable by
the parties hereto and their respective successors and assigns,
provided that no Co-Borrower may assign or transfer any of its
rights or obligations hereunder without the prior written consent
of all the Lenders, and, provided, further, that any assignment
by a Lender of its rights and obligations hereunder shall be
effected in accordance with section 14.4(b). Notwithstanding the
foregoing, each Lender may at any time grant participations in
any of its rights hereunder or under any of the Notes to another
financial institution or to any other "accredited investor" (as
defined in SEC Regulation D), provided that in the case of any
such participation, (i) the participant shall not have any rights
under this Agreement or any of the other Credit Documents,
including rights of consent, approval or waiver (the
participant's rights against such Lender in respect of such
participation to be those set forth in the agreement executed by
such Lender in favor of the participant relating thereto), (ii)
such Lender's obligations under this Agreement (including,
without limitation, its Commitment hereunder) shall remain
unchanged, (iii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations,
(iv) such Lender shall remain the holder of any Note for all
purposes of this Agreement and (v) the Co-Borrowers, the
Administrative Agent, and the other Lenders shall continue to
deal solely and directly with the selling Lender in connection
with such Lender's rights and obligations under this
<PAGE>
Agreement, and all amounts payable by the Co-Borrowers hereunder
shall be determined as if such Lender had not sold such
participation, except that the participant shall be entitled to
the benefits of sections 2.10, 2.11 and 5.4 of this Agreement to
the extent that such Lender would be entitled to such benefits if
the participation had not been entered into or sold, and,
provided further, that no Lender shall transfer, grant or sell
any participation under which the participant shall have rights
to approve any amendment to or waiver of this Agreement or any
other Credit Document except to the extent such amendment or
waiver would (x) extend the final scheduled maturity of the Loans
in which such participant is participating (it being understood
that any waiver of the making of, or the application of any
mandatory prepayment of, the Loans, shall not constitute an
extension of the final scheduled maturity date thereof), or
reduce the rate or extend the time of payment of interest or Fees
thereon (except in connection with a waiver of the applicability
of any post-default increase in interest rates), or reduce the
principal amount thereof, or increase such participant's
participating interest in any Commitment over the amount thereof
then in effect (it being understood that a waiver of any Default
or Event of Default or of any mandatory prepayment or a mandatory
reduction in the Total Commitment (or any portion thereof), or a
mandatory prepayment, shall not constitute a change in the terms
of any participating interest in any Commitment), or (y) release
any Credit Party from its obligations under the Subsidiary
Guaranty except strictly in accordance with the terms hereof or
thereof, or (z) consent to the assignment or transfer by any Co-
Borrower of any of its rights and obligations under this
Agreement.
(b) Notwithstanding the foregoing, (x) any Lender may
assign all or a fixed portion of its Loans and/or Commitments,
which assignment does not have to be pro rata among the
Facilities, and its rights and obligations hereunder, to another
Lender that is not a Defaulting Lender, or to an Affiliate of any
Lender (including itself) and which is not a Defaulting Lender
and which is a commercial bank, financial institution or other
"accredited investor" (as defined in SEC Regulation D), and (y)
any Lender may assign all, or if less than all, a fixed portion,
equal to at least $10,000,000 in the aggregate for the assigning
Lender or assigning Lenders in the case of assignments of General
Revolving Loans and/or General Revolving Commitments, of its
Loans and/or Commitments and its rights and obligations
hereunder, which assignment does not have to be pro rata among
the Facilities, to one or more Eligible Transferees, each of
which assignees shall become a party to this Agreement as a
<PAGE>
Lender by execution of an Assignment Agreement, provided that,
(i) in the case of any assignment of a portion of the General
Revolving Loans and/or General Revolving Commitments of a Lender,
such Lender shall retain a minimum fixed portion thereof equal to
at least $10,000,000, (ii) at the time of any such assignment
Annex I shall be deemed modified to reflect the Commitments of
such new Lender and of the existing Lenders, (iii) upon surrender
of the old Notes, new Notes will be issued, at the Co-Borrowers'
expense, to such new Lender and to the assigning Lender, such new
Notes to be in conformity with the requirements of section 2.6
(with appropriate modifications) to the extent needed to reflect
the revised Commitments, (iv) in the case of clause (y) only, the
consent of the Administrative Agent shall be required in
connection with any such assignment (which consent shall not be
unreasonably withheld or delayed), and (v) the Administrative
Agent shall receive at the time of each such assignment, from the
assigning or assignee Lender, the payment of a non-refundable
assignment fee of $3,500 and, provided further, that such
transfer or assignment will not be effective until recorded by
the Administrative Agent on the Lender Register maintained by it
as provided herein. To the extent of any assignment pursuant to
this section 14.4(b) the assigning Lender shall be relieved of
its obligations hereunder with respect to its assigned
Commitments. At the time of each assignment pursuant to this
section 14.4(b) to a person which is not already a Lender
hereunder and which is not a United States person (as such term
is defined in section 7701(a)(30) of the Code) for Federal income
tax purposes, the respective assignee Lender shall provide to the
Treasury Manager and the Administrative Agent the appropriate
Internal Revenue Service Forms (and, if applicable a Section
5.4(b)(ii) Certificate) described in section 5.4(b). To the
extent that an assignment of all or any portion of a Lender's
Commitment and related outstanding Obligations pursuant to this
section 14.4(b) would, at the time of such assignment, result in
increased costs under section 2.11 from those being charged by
the respective assigning Lender prior to such assignment, then
the Co-Borrowers shall not be obligated to pay such increased
costs (although the Co-Borrowers shall be obligated to pay any
other increased costs of the type described above resulting from
changes after the date of the respective assignment). Nothing in
this section 14.4(b) shall prevent or prohibit any Lender from
pledging its Notes or Loans to a Federal Reserve Bank in support
of borrowings made by such Lender from such Federal Reserve Bank.
(c) Notwithstanding any other provisions of this section
14.4, no transfer or assignment of the interests or obligations
<PAGE>
of any Lender hereunder or any grant of participation therein
shall be permitted if such transfer, assignment or grant would
require the Co-Borrowers to file a registration statement with
the SEC or to qualify the Loans under the "Blue Sky" laws of any
State.
(d) Each Lender initially party to this Agreement hereby
represents, and each person that became a Lender pursuant to an
assignment permitted by this section 14.4 will, upon its becoming
party to this Agreement, represent that it is a commercial
lender, other financial institution or other "accredited"
investor (as defined in SEC Regulation D) which makes or acquires
loans in the ordinary course of its business and that it will
make or acquire Loans for its own account in the ordinary course
of such business, provided that subject to the preceding sections
14.4(a) and (b), the disposition of any promissory notes or other
evidences of or interests in Indebtedness held by such Lender
shall at all times be within its exclusive control.
14.5. No Waiver: Remedies Cumulative. No failure or
delay on the part of the Administrative Agent or any Lender in
exercising any right, power or privilege hereunder or under any
other Credit Document and no course of dealing between any Co-
Borrower and the Administrative Agent or any Lender shall operate
as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or
thereunder. The rights and remedies herein expressly provided
are cumulative and not exclusive of any rights or remedies which
the Administrative Agent or any Lender would otherwise have. No
notice to or demand on any Co-Borrower in any case shall entitle
such Co-Borrower or any other Co-Borrower to any other or further
notice or demand in similar or other circumstances or constitute
a waiver of the rights of the Administrative Agent or the Lenders
to any other or further action in any circumstances without
notice or demand.
14.6. Payments Pro Rata. (a) The Administrative Agent
agrees that promptly after its receipt of each payment from or on
behalf of the Co-Borrowers (or any of them) in respect of any
Obligations, it shall distribute such payment to the Lenders
(other than any Lender that has expressly waived in writing its
right to receive its pro rata share thereof) pro rata based upon
their respective shares, if any, of the Obligations with respect
to which such payment was received. As to any such payment
<PAGE>
received by the Administrative Agent prior to 1:00 P.M. (local
time at the Payment Office) in funds which are immediately
available on such day, the Administrative Agent will use all
reasonable efforts to distribute such payment in immediately
available funds on the same day to the Lenders as aforesaid.
(b) Each of the Lenders agrees that, if it should receive
any amount hereunder (whether by voluntary payment, by
realization upon security, by the exercise of the right of setoff
or banker's lien, by counterclaim or cross action, by the
enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal
of, or interest on, the Loans or Fees, of a sum which with
respect to the related sum or sums received by other Lenders is
in a greater proportion than the total of such Obligation then
owed and due to such Lender bears to the total of such Obligation
then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall
purchase for cash without recourse or warranty from the other
Lenders an interest in the Obligations to such Lenders in such
amount as shall result in a proportional participation by all of
the Lenders in such amount, provided that if all or any portion
of such excess amount is thereafter recovered from such Lender,
such purchase shall be rescinded and the purchase price restored
to the extent of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained
herein, the provisions of the preceding sections 14.6(a) and (b)
shall be subject to the express provisions of this Agreement
which require, or permit, differing payments to be made to
Lenders which are not Defaulting Lenders, as opposed to
Defaulting Lenders.
14.7. Financial Calculations; Computations of Interest
and Fees. (a) The financial statements to be furnished to the
Lenders pursuant hereto shall be made and prepared in accordance
with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise
disclosed in writing by any of the Co-Borrowers to the Lenders);
provided, that if at any time the computations determining
compliance with section 9 utilize accounting principles different
from those utilized in the financial statements furnished to the
Lenders, such computations shall set forth in reasonable detail a
description of the differences and the effect upon such
computations.
<PAGE>
(b) All computations of interest on Eurodollar Loans and
Money Market Rate Loans hereunder and all computations of
Facility Fee and other Fees hereunder shall be made on the actual
number of days elapsed over a year of 360 days, and all
computations of interest on Prime Rate Loans hereunder shall be
made on the actual number of days elapsed over a year of 365 or
366 days, as the case may be.
14.8. Governing Law; Submission to Jurisdiction; Venue;
Waiver of Jury Trial. (a) THIS AGREEMENT AND THE OTHER CREDIT
DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF OHIO. TO THE FULLEST EXTENT
PERMITTED BY LAW, EACH CO-BORROWER HEREBY UNCONDITIONALLY AND
IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY
JURISDICTION OTHER THAN THE STATE OF OHIO GOVERNS THIS AGREEMENT
OR ANY OF THE OTHER CREDIT DOCUMENTS. Any legal action or
proceeding with respect to this Agreement or any other Credit
Document may be brought in the Court of Common Pleas of Cuyahoga
County, Ohio, or of the United States for the Northern District
of Ohio, and, by execution and delivery of this Agreement, each
Co-Borrower hereby irrevocably accepts for itself and in respect
of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. Each Co-Borrower hereby further
irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail,
postage prepaid, to such Co-Borrower at its address for notices
pursuant to section 14.3, such service to become effective 30
days after such mailing or at such earlier time as may be
provided under applicable law. Nothing herein shall affect the
right of the Administrative Agent or any Lender to serve process
in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against any Co-Borrower in any
other jurisdiction.
(b) Each Co-Borrower hereby irrevocably waives any
objection which it may now or hereafter have to the laying of
venue of any of the aforesaid actions or proceedings arising out
of or in connection with this Agreement or any other Credit
Document brought in the courts referred to in section 14.8(a)
above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an
inconvenient forum.
<PAGE>
(c) Each of the parties to this Agreement hereby
irrevocably waives all right to a trial by jury in any action,
proceeding or counterclaim arising out of or relating to this
Agreement, the other Credit Documents or the transactions
contemplated hereby or thereby.
14.9. Counterparts. This Agreement may be executed in
any number of counterparts and by the different parties hereto on
separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together
constitute one and the same agreement. A set of counterparts
executed by all the parties hereto shall be lodged with the
Borrower and the Administrative Agent.
14.10. Effectiveness. This Agreement shall become
effective on the date (the "Effective Date") on which the Co-
Borrowers who are intended to be the initial Co-Borrowers
hereunder and each of the Lenders shall have signed a copy hereof
(whether the same or different copies) and shall have delivered
the same to the Administrative Agent at the Notice Office of the
Administrative Agent or, in the case of the Lenders, shall have
given to the Administrative Agent telephonic (confirmed in
writing), written telex or facsimile transmission notice
(actually received) at such office that the same has been signed
and mailed to it.
14.11. Headings Descriptive. The headings of the several
sections and other portions of this Agreement are inserted for
convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
14.12. Amendment or Waiver. Neither this Agreement nor
any terms hereof or thereof may be changed, waived, discharged or
terminated unless such change, waiver, discharge or termination
is in writing signed by the Co-Borrowers (or the Treasury Manager
on behalf of all Co-Borrowers) and the Required Lenders, provided
that no such change, waiver, discharge or termination shall,
without the consent of each Lender (other than a Defaulting
Lender) directly affected thereby,
(i) extend any maturity date provided for herein
(including any extension of any maturity date to be effected
in accordance with section 4.4 hereof) applicable to a Loan
or a Commitment under a Facility (it being understood that
any waiver of the making of, or application of, any
mandatory prepayment of the Loans shall not constitute an
extension of the maturity thereof);
<PAGE>
(ii) reduce the rate or extend the time of payment of
interest (other than as a result of waiving the
applicability of any post-default increase in interest
rates) or Fees thereon;
(iii) reduce the principal amount thereof, or
increase any Commitment of any Lender over the amount
thereof then in effect (it being understood that a waiver of
any Default or Event of Default or of any mandatory
prepayment or a mandatory reduction in the Total Commitment
(or any component thereof) shall not constitute a change in
the terms of any Commitment of any Lender);
(iv) release any Co-Borrower from its obligations as a
Co-Borrower hereunder, except with the consent of all
Lenders in accordance with section 8.13;
(v) release any Credit Party from the Subsidiary
Guaranty, except in connection with a transaction permitted
by section 9.2(e);
(vi) release all or any substantial portion of any
collateral which may have been provided by any Credit Party
to the Administrative Agent as security for the Obligations,
except as expressly provided in the Credit Documents;
(vii) change the definition of the term "Change of
Control" or any of the provisions of section 5.2(d) which
are applicable upon a Change of Control;
(viii) change the definition of the term
"Determination of Taxability" or any of the provisions of
section 5.2(e) which are applicable upon a Determination of
Taxability;
(ix) change the definition of the term "Permitted
Acquisition" or any of the provisions of section 9.2(d)
which are applicable to Permitted Acquisitions which would
have the effect of depriving such Lender of its rights with
respect to "hostile acquisitions" as contemplated by such
definition;
(x) reduce the percentage specified in, or otherwise
modify, the definition of Required Lenders;
<PAGE>
(xi) amend, modify or waive any provision of this
section 14.12, or section 11.7, 14.1, 14.4, 14.6 or 14.7(b);
(xii) amend, modify or waive any other provision of
any of the Credit Documents pursuant to which the consent or
approval of all Lenders is by the terms of such provision
explicitly required; or
(xiii) consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this
Agreement.
No provision of section 11 may be amended without the consent of
the Administrative Agent.
14.13. Survival of Indemnities. All indemnities set
forth herein including, without limitation, in section 2.10,
2.11, 5.4, 11.7 or 14.1 shall survive the execution and delivery
of this Agreement and the making and repayment of Loans.
14.14. Domicile of Loans. Each Lender may transfer and
carry its Loans at, to or for the account of any branch office,
subsidiary or affiliate of such Lender, provided that the Co-
Borrowers shall not be responsible for costs arising under
section 2.10 or 5.4 resulting from any such transfer (other than
a transfer pursuant to section 2.12) to the extent not otherwise
applicable to such Lender prior to such transfer.
14.15. Confidentiality. The Administrative Agent and
each Lender shall hold all non-public information obtained
pursuant to the requirements of this Agreement which has been
identified as such by the Treasury Manager in accordance with its
customary procedure for handling confidential information of this
nature and in accordance with safe and sound banking practices.
Notwithstanding the foregoing, the Administrative Agent and any
Lender may in any event may make disclosures of, and furnish
copies of such information:
(i) to another Lender or to the Administrative Agent;
(ii) when reasonably required by any bona fide
transferee or participant in connection with the
contemplated transfer of any Loans or Commitment or
participation therein (provided that each such prospective
transferee and/or participant shall execute an agreement for
the benefit of the Co-Borrowers with such prospective
<PAGE>
transferor Lender and/or participant containing provisions
substantially identical to those contained in this section
14.15);
(iii) to its parent corporation or corporations,
and to its and their auditors and attorneys; and
(iv) as required or requested by any governmental
agency or representative thereof, or pursuant to legal
process, provided that, unless specifically prohibited by
applicable law or court order, the Administrative Agent or
such Lender, as applicable, shall notify the Treasury
Manager of any request by any governmental agency or
representative thereof (other than any such request in
connection with an examination of the financial condition of
the Administrative Agent or such Lender, as applicable, by
such governmental agency), and of any other request pursuant
to legal process, for disclosure of any such non-public
information prior to disclosure of such information.
In no event shall the Administrative Agent or any Lender be
obligated or required to return any materials furnished by or on
behalf of the Company or any of its Subsidiaries. Each Co-
Borrower hereby agrees that the failure of the Administrative
Agent or a Lender to comply with the provisions of this section
14.15 shall not relieve any Co-Borrower of any of the obligations
to the Administrative Agent or any Lender under this Agreement
and the other Credit Documents.
14.16. Lender Register. The Borrower hereby designates
the Administrative Agent to serve as its agent, solely for
purposes of this section 14.16, to retain a copy of each
Assignment Agreement delivered to and accepted by it and to
maintain a register (the "Lender Register") on or in which it
will record the names and addresses of the Lenders, and the
Commitments from time to time of each of such Lenders, the Loans
made to the Co-Borrowers by each of such Lenders and each
repayment and prepayment in respect of the principal amount of
such Loans of each such Lender. Failure to make any such
recordation, or (absent manifest error) any error in such
recordation, shall not affect the Co-Borrowers' obligations in
respect of such Loans. With respect to any Lender, the transfer
of any Commitment of such Lender and the rights to the principal
of, and interest on, any Loan made pursuant to such Commitment
shall not be effective until such transfer is recorded on the
Lender Register maintained by the Administrative Agent with
respect to ownership of such Commitment and Loans and prior to
<PAGE>
such recordation all amounts owing to the transferor with respect
to such Commitment and Loans shall remain owing to the
transferor. The registration of assignment or transfer of all or
part of any Commitment and Loans shall be recorded by the
Administrative Agent on the Lender Register only upon the
acceptance by the Administrative Agent of a properly executed and
delivered Assignment Agreement pursuant to section 14.4(b). Each
Co-Borrower agrees to indemnify the Administrative Agent from and
against any and all losses, claims, damages and liabilities of
whatsoever nature which may be imposed on, asserted against or
incurred by the Administrative Agent in performing its duties
under this section 14.16. The Lender Register shall be available
for inspection by the Treasury Manager or any Lender at any
reasonable time and from time to time upon reasonable prior
notice.
14.17. General Limitation of Liability. No claim may be
made by any Co-Borrower, any Lender, the Administrative Agent, or
any other person against the Administrative Agent or any other
Lender or the Affiliates, directors, officers, employees,
attorneys or agents of any of them for any damages other than
actual compensatory damages in respect of any claim for breach of
contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement or any
of the other Credit Documents, or any act, omission or event
occurring in connection therewith; and each of the Co-Borrowers,
each Lender, and the Administrative Agent hereby, to the fullest
extent permitted under applicable law, waives, releases and
agrees not to sue or counterclaim upon any such claim for any
special, consequential or punitive damages, whether or not
accrued and whether or not known or suspected to exist in its
favor.
14.18. No Duty. All attorneys, accountants, appraisers,
consultants and other professional persons (including the firms
or other entities on behalf of which any such person may act)
retained by the Administrative Agent or any Lender with respect
to the transactions contemplated by the Credit Documents shall
have the right to act exclusively in the interest of the
Administrative Agent or such Lender, as the case may be, and
shall have no duty of disclosure, duty of loyalty, duty of care,
or other duty or obligation of any type or nature whatsoever to
any Co-Borrower, to any of its Subsidiaries, or to any other
person, with respect to any matters within the scope of such
representation or related to their activities in connection with
such representation.
<PAGE>
14.19. Lenders and Agent Not Fiduciary to Co-Borrowers,
etc. The relationship among the Company and its Subsidiaries, on
the one hand, and the Administrative Agent and the Lenders, on
the other hand, is solely that of debtor and creditor, and the
Administrative Agent and the Lenders have no fiduciary or other
special relationship with the Company and its Subsidiaries, and
no term or provision of any Credit Document, no course of
dealing, no written or oral communication, or other action, shall
be construed so as to deem such relationship to be other than
that of debtor and creditor.
14.20. Survival of Representations and Warranties. All
representations and warranties herein shall survive the making of
Loans hereunder, the execution and delivery of this Agreement,
the Notes and the other documents the forms of which are attached
as Exhibits hereto, the issue and delivery of the Notes, any
disposition thereof by any holder thereof, and any investigation
made by the Administrative Agent or any Lender or any other
holder of any of the Notes or on its behalf. All statements
contained in any certificate or other document delivered to the
Administrative Agent or any Lender or any holder of any Notes by
or on behalf of any Co-Borrower or of its Subsidiaries pursuant
hereto or otherwise specifically for use in connection with the
transactions contemplated hereby shall constitute representations
and warranties by the Co-Borrowers hereunder, made as of the
respective dates specified therein or, if no date is specified,
as of the respective dates furnished to the Administrative Agent
or any Lender.
14.21. Limited Liability of Limited Partners of the
Company; Liability of General Partners of the Company. (a)
Anything in this Agreement, the Notes or the other Credit
Documents to the contrary notwithstanding, the Lenders and the
Administrative Agent agree that no recourse under this Agreement,
the Notes or any other Credit Document shall be had against any
limited partner of the Company or any partner of a limited
partner of the Company, as such, whether based on agency,
deputization or otherwise (collectively, the "Exempted Persons"),
by the enforcement of any assessment or by legal or equitable
proceeding, by virtue of statute or otherwise, it being expressly
agreed that no personal liability whatsoever shall attach to or
be incurred by any limited partner of the Company or any partner
of a limited partner of the Company, as such, under this
Agreement, the Notes or any other Credit Document; provided, that
the foregoing limitation of liability shall in no way constitute
a limitation on the right of the Administrative Agent or any
Lender to enforce their remedies
<PAGE>
against the Company or any other Credit Party or their respective
properties and assets, or any other person (other than an
Exempted Person, as such), for the collection of amounts due and
owing under the Credit Documents or any other obligations under
any of the Credit Documents.
(b) Each general partner of the Company shall be jointly
and severally liable with the Company under this Agreement, the
Notes and the other Credit Documents to which the Company is or
becomes a party.
(c) Nothing in this section, or elsewhere in this Agreement
or any of the other Credit Documents, shall be deemed to limit
the liability of any general partner of the Company, as such,
except that, prior to the Administrative Agent or any Lender
enforcing any of the obligations of the Company under any Credit
Document against any general partner of the Company, as such, the
Administrative Agent or such Lender, as applicable, shall have
exhausted all of its remedies against the Company and its
properties and assets. Nothing in the preceding sentence shall
prevent the Agent or any Lender from sharing pari passu with any
other creditors of any general partner of the Company in any
recovery from any such general partner in respect of any
obligations of the Company.
(d) Each of the Notes shall contain a statement to the
effect that the obligations of the partners of the Company are
limited as provided in this section.
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IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered
as of the date first above written.
CEDAR FAIR, L. P.,
as a Co-Borrower
By: Cedar Fair Management Company,
its Managing General Partner
By: /s/ Bruce A. Jackson
Vice President & Chief
Financial Officer
CEDAR FAIR, an Ohio general partnership,
as a Co-Borrower
By: Magnum Management Corporation
one of its general partners
By: /s/ Bruce A. Jackson
Vice President & Chief
Financial Officer
MAGNUM MANAGEMENT CORPORATION,
as a Co-Borrower
By: /s/ Bruce A. Jackson
Vice President & Chief
Financial Officer
KNOTT'S BERRY FARM,
as a Co-Borrower
By: Magnum Management Corporation
one of its general partners
By: /s/ Bruce A. Jackson
Vice President & Chief
Financial Officer
KEYBANK NATIONAL ASSOCIATION,
individually and as Administrative Agent
By: /s/ Richard A/ Pohle
Vice President
NBD BANK
By: /s/ Paul DeMelo
Vice President
NATIONAL CITY BANK
By: /s/ Maureen M. Orsini
Vice President
FIRST UNION NATIONAL BANK
By: /s/ David J. Kepler
Vice President
MELLON BANK, N. A.
By: /s/ Henry W. Centa
Vice President
