<PAGE> 1
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) July 31, 1996
Transworld Home HealthCare, Inc.
(Exact name of Registrant as specified in its charter)
New York
(State or other jurisdiction of incorporation)
1-11570 13-3098275
(Commission File Number) (I.R.S. Employer Identification No.)
11 Skyline Drive, Hawthorne, New York 10532
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (914) 345-8880
Not Applicable
(Former name or former address, if changed since last report.)
<PAGE> 2
ITEM 5. OTHER EVENTS.
On July 31, 1996, Transworld Home HealthCare, Inc. (the "Company")
completed a new $100 million senior secured revolving credit facility,
underwritten by Bankers Trust who is also acting as Agent Bank (the "Credit
Facility"). This new facility replaces the Company's existing $35 million credit
facility. In connection with the repayment of the former credit facility, the
Company will record a one-time, non-cash, after-tax, extraordinary charge of
approximately $1.4 million, in the Company's fiscal third quarter, relating to
the write-off of the deferred financing costs associated with the former
facility.
Pursuant to the Credit Facility and subject to the terms thereof, up to
$85 million of the total facility may be used by the Company for the acquisition
of other alternate site health care providers with the balance of $15 million to
be used for working capital. The loans under the Credit Facility are secured by,
among other things, a lien on substantially all of the Company's and its
subsidiaries' assets, a pledge of the Company's ownership interest in its
subsidiaries and guaranties by the Company's subsidiaries. The loans mature on
July 31, 2001 with reductions in availability commencing July 31, 1998 through
final maturity. The Credit Facility provides that subject to the terms thereof,
the Company may make borrowings either at the Base Rate, plus 1% or the
Eurodollar Rate (adjusted for reserves), plus 2%. As of July 31, 1996, Base Rate
borrowings were at the rate of 9.25% per annum and Eurodollar Rate borrowings
were at rates of 7.44% to 7.88% per annum, depending on maturities. The
Company's initial borrowings on July 31, 1996 were Base Rate borrowings, and
commencing October 30, 1996, the Company may make Eurodollar Rate borrowings.
Subject to certain exceptions, the Credit Facility prohibits or
restricts, among other things, the incurrence of liens, the incurrence of
indebtedness, certain fundamental corporate changes, dividends, the making of
specified investments and certain transactions with affiliates. In addition, the
Credit Facility contains affirmative and negative financial covenants
customarily found in agreements of this kind including the maintenance of
certain financial ratios, such as interest coverage, debt to equity and debt to
earnings before interest, taxes, depreciation and amortization ("EBITDA").
The previously announced Unit Purchase Agreement with Hyperion Partners
II L.P. ("HPII") was completed concurrently with the closing of the Credit
Facility. HPII has now made a total equity investment in the Company of $39.6
million and presently owns 4.4 million restricted shares of the Company's common
stock and 3 million, five year, non-callable warrants, each of which is
convertible into one share of Company restricted common stock at an exercise
price of $12.45 per share. Pursuant to the Unit Purchase Agreement, two
additional directors designated by HPII, Mr. David Golush and Mr. Robert
Zalaznick were appointed to the Company's
<PAGE> 3
board of directors. Additionally, the Company has repaid the $10 million
subordinated loan made to it by HPII in January 1996.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
(1) Credit Agreement among Transworld Home HealthCare, Inc.,
Various Lending Institutions and Bankers Trust Company, as Agent dated as of
July 31, 1996
<PAGE> 4
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.
Transworld Home HealthCare, Inc.
(Registrant)
Date: August 12, 1996 By:/s/ Wayne A. Palladino
---------------------------
Wayne A. Palladino
Senior Vice President and
Chief Financial Officer
<PAGE> 5
EXHIBIT INDEX
Exhibit No. Description
1 Credit Agreement among Transworld Home
Healthcare, Inc., Various Lending
Institutions and Bankers Trust Company,
as Agent dated as of July 31, 1996
<PAGE> 1
CREDIT AGREEMENT
among
TRANSWORLD HOME HEALTHCARE, INC.,
VARIOUS LENDING INSTITUTIONS,
and
BANKERS TRUST COMPANY,
AS AGENT
--------------------------------
Dated as of July 31, 1996
--------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1. Amount and Terms of Credit............................................................... 1
1.01 Commitments........................................................................... 1
1.02 Minimum Borrowing Amounts, etc........................................................ 3
1.03 Notice of Borrowing................................................................... 3
1.04 Disbursement of Funds................................................................. 5
1.05 Notes................................................................................. 6
1.06 Conversions........................................................................... 7
1.07 Pro Rata Borrowings................................................................... 7
1.08 Interest.............................................................................. 7
1.09 Interest Periods...................................................................... 8
1.10 Increased Costs; Illegality; etc...................................................... 10
1.11 Compensation.......................................................................... 12
1.12 Change of Lending Office.............................................................. 12
1.13 Replacement of Banks.................................................................. 13
SECTION 2. Letters of Credit........................................................................ 14
2.01 Letters of Credit..................................................................... 14
2.02 Letter of Credit Requests; Notices of Issuance........................................ 15
2.03 Letter of Credit Participations....................................................... 16
2.04 Agreement to Repay Letter of Credit Drawings.......................................... 19
2.05 Increased Costs....................................................................... 19
SECTION 3. Fees; Commitments........................................................................ 20
3.01 Fees ................................................................................. 20
3.02 Voluntary Termination or Reduction of Total Unutilized Revolving
Loan Commitment.................................................................. 22
3.03 Mandatory Reduction of Revolving Loan Commitments..................................... 23
SECTION 4. Payments................................................................................. 26
4.01 Voluntary Prepayments................................................................. 26
4.02 Mandatory Prepayments................................................................. 28
4.03 Method and Place of Payment........................................................... 28
4.04 Net Payments.......................................................................... 29
SECTION 5. Conditions Precedent..................................................................... 31
5.01 Execution of Agreement; Notes......................................................... 31
</TABLE>
(i)
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
5.02 Officer's Certificate................................................................. 31
5.03 Opinions of Counsel................................................................... 31
5.04 Corporate Proceedings................................................................. 31
5.05 Adverse Change, etc................................................................... 32
5.06 Litigation............................................................................ 32
5.07 Approvals............................................................................. 32
5.08 Consummation of the Equity Financing.................................................. 33
5.09 Refinancing Transactions.............................................................. 33
5.10 Permitted Acquisitions................................................................ 34
5.11 Security Documents; Etc............................................................... 35
5.12 Subsidiaries Guaranty................................................................. 36
5.13 Mortgages; Title Insurance............................................................ 36
5.14 Employee Benefit Plans; Shareholders' Agreements; Management
Agreements; Employment Agreements; Collective Bargaining
Agreements; Existing Indebtedness Agreements; Material
Contracts; Tax Allocation Agreements; Transaction Documents...................... 37
5.15 Solvency Certificate; Insurance Certificates; Environmental
Assessments...................................................................... 38
5.16 Existing Indebtedness................................................................. 39
5.17 Pro Forma Balance Sheet; Financial Statements; Projections............................ 39
5.18 Payment of Fees....................................................................... 40
SECTION 6. Conditions Precedent to All Credit Events................................................ 40
6.01 No Default; Representations and Warranties............................................ 40
6.02 Adverse Change; etc................................................................... 40
6.03 Litigation............................................................................ 40
6.04 Notice of Borrowing; Letter of Credit Request......................................... 41
SECTION 7. Representations, Warranties and Agreements............................................... 41
7.01 Corporate Status...................................................................... 41
7.02 Corporate Power and Authority......................................................... 42
7.03 No Violation.......................................................................... 42
7.04 Litigation............................................................................ 42
7.05 Use of Proceeds; Margin Regulations................................................... 42
7.06 Governmental Approvals................................................................ 43
7.07 Investment Company Act................................................................ 43
7.08 Public Utility Holding Company Act.................................................... 43
7.09 True and Complete Disclosure.......................................................... 43
7.10 Financial Condition; Financial Statements............................................. 44
7.11 Security Interests.................................................................... 45
7.12 Transaction........................................................................... 45
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
7.13 Compliance with ERISA................................................................. 46
7.14 Capitalization........................................................................ 47
7.15 Subsidiaries.......................................................................... 47
7.16 Intellectual Property, etc............................................................ 48
7.17 Compliance with Statutes, etc......................................................... 48
7.18 Environmental Matters................................................................. 48
7.19 Properties............................................................................ 49
7.20 Labor Relations....................................................................... 49
7.21 Tax Returns and Payments.............................................................. 49
7.22 Existing Indebtedness................................................................. 50
7.23 Insurance............................................................................. 50
7.24 Representations and Warranties in Documents........................................... 50
SECTION 8. Affirmative Covenants.................................................................... 50
8.01 Information Covenants................................................................. 51
8.02 Books, Records and Inspections........................................................ 54
8.03 Insurance............................................................................. 55
8.04 Payment of Taxes...................................................................... 55
8.05 Corporate Franchises.................................................................. 56
8.06 Compliance with Statutes; etc......................................................... 56
8.07 Compliance with Environmental Laws.................................................... 56
8.08 ERISA................................................................................. 57
8.09 Good Repair........................................................................... 58
8.10 End of Fiscal Years; Fiscal Quarters.................................................. 58
8.11 Additional Security; Further Assurances............................................... 58
8.12 Foreign Subsidiaries Security......................................................... 59
8.13 Ownership of Subsidiaries............................................................. 60
8.14 Permitted Acquisitions................................................................ 60
8.15 Maintenance of Corporate Separateness................................................. 62
8.16 Performance of Obligations............................................................ 63
8.17 Use of Proceeds....................................................................... 63
SECTION 9. Negative Covenants....................................................................... 63
9.01 Changes in Business................................................................... 63
9.02 Consolidation; Merger; Sale or Purchase of Assets; etc................................ 63
9.03 Liens................................................................................. 65
9.04 Indebtedness.......................................................................... 67
9.05 Advances; Investments; Loans.......................................................... 68
9.06 Dividends; etc........................................................................ 70
9.07 Transactions with Affiliates.......................................................... 70
9.08 Capital Expenditures.................................................................. 71
</TABLE>
(iii)
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C>
9.09 Minimum Consolidated EBITDA........................................................... 72
9.10 Consolidated Interest Coverage Ratio.................................................. 72
9.11 Leverage Ratio........................................................................ 73
9.12 Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of Incorporation, By-
Laws and Certain Other Agreements; Issuances of Capital
Stock; etc....................................................................... 73
9.13 Limitation on Issuance of Capital Stock............................................... 74
9.14 Limitation on Certain Restrictions on Subsidiaries.................................... 74
9.15 Limitation on the Creation of Subsidiaries and Joint Ventures......................... 74
9.16 Account Receivable Days............................................................... 75
SECTION 10. Events of Default....................................................................... 75
10.01 Payments............................................................................. 75
10.02 Representations, etc................................................................. 75
10.03 Covenants............................................................................ 76
10.04 Default Under Other Agreements....................................................... 76
10.05 Bankruptcy, etc...................................................................... 76
10.06 ERISA................................................................................ 77
10.07 Security Documents................................................................... 77
10.08 Subsidiaries Guaranty................................................................ 78
10.09 Judgments............................................................................ 78
10.10 Ownership............................................................................ 78
SECTION 11. Definitions............................................................................. 79
SECTION 12. The Agent............................................................................... 105
12.01 Appointment.......................................................................... 105
12.02 Delegation of Duties................................................................. 105
12.03 Exculpatory Provisions............................................................... 106
12.04 Reliance by Agent.................................................................... 106
12.05 Notice of Default.................................................................... 107
12.06 Nonreliance on Agent and Other Banks................................................. 107
12.07 Indemnification...................................................................... 107
12.08 Agent in its Individual Capacity..................................................... 108
12.09 Holders.............................................................................. 108
12.10 Resignation of the Agent............................................................. 108
SECTION 13. Miscellaneous........................................................................... 109
13.01 Payment of Expenses, etc............................................................. 109
13.02 Right of Setoff...................................................................... 110
</TABLE>
(iv)
<PAGE> 6
<TABLE>
<CAPTION>
Page
----
<S> <C>
13.03 Notices.............................................................................. 110
13.04 Benefit of Agreement................................................................. 111
13.05 No Waiver; Remedies Cumulative....................................................... 113
13.06 Payments Pro Rata.................................................................... 113
13.07 Calculations; Computations........................................................... 113
13.08 Governing Law; Submission to Jurisdiction; Venue..................................... 114
13.09 Counterparts......................................................................... 115
13.10 Effectiveness........................................................................ 115
13.11 Headings Descriptive................................................................. 115
13.12 Amendment or Waiver; etc............................................................. 115
13.13 Survival............................................................................. 116
13.14 Domicile of Loans.................................................................... 117
13.15 Confidentiality...................................................................... 117
13.16 Waiver of Jury Trial................................................................. 117
13.17 Register............................................................................. 117
13.18 Post Closing Actions................................................................. 118
</TABLE>
ANNEX I List of Banks and Commitments
ANNEX II Bank Addresses
ANNEX III Real Properties
ANNEX IV Existing Indebtedness
ANNEX V Pension Plans
ANNEX VI Registration Rights Agreements
ANNEX VII Subsidiaries
ANNEX VIII Insurance
ANNEX IX Existing Liens
ANNEX X Existing Investments
ANNEX XI Investors
EXHIBIT A -- Form of Notice of Borrowing
EXHIBIT B-1 -- Form of Revolving Note
EXHIBIT B-2 -- Form of Swingline Note
EXHIBIT C -- Form of Letter of Credit Request
EXHIBIT D -- Form of Section 4.04(b)(ii) Certificate
EXHIBIT E -- Form of Opinion of Baer Marks & Upham LLP
EXHIBIT F -- Form of Officers' Certificate
EXHIBIT G -- Form of Pledge Agreement
EXHIBIT H -- Form of Security Agreement
EXHIBIT I -- Form of Subsidiaries Guaranty
EXHIBIT J -- Form of Solvency Certificate
EXHIBIT K -- Form of Subordination Provisions
(v)
<PAGE> 7
EXHIBIT L -- Form of Assignment and Assumption Agreement
EXHIBIT M -- Form of Intercompany Note
(vi)
<PAGE> 8
CREDIT AGREEMENT, dated as of July 31, 1996, among TRANSWORLD
HOME HEALTHCARE, INC., a New York corporation (the "Borrower"), the lenders from
time to time party hereto (each a "Bank" and, collectively, the "Banks"), and
BANKERS TRUST COMPANY, as Agent (in such capacity, the "Agent"). Unless
otherwise defined herein, all capitalized terms used herein and defined in
Section 11 are used herein as so defined.
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions herein
set forth, the Banks are willing to make available the credit facilities
provided for herein; and
WHEREAS, this Agreement refinances and replaces the Existing
Credit Agreement;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 Commitments. (a) Subject to and upon the terms and
conditions herein set forth, each Bank severally agrees, at any time and from
time to time on and after the Initial Borrowing Date and prior to the Final
Maturity Date, to make a revolving loan or loans (each a "Revolving Loan" and,
collectively, the "Revolving Loans") to the Borrower, which Revolving Loans (i)
shall be denominated in U.S. Dollars, (ii) except as hereinafter provided,
shall, at the option of the Borrower, be incurred and maintained as and/or
converted into Base Rate Loans or Eurodollar Loans, provided, that (x) all
Revolving Loans made as part of the same Borrowing shall, unless otherwise
specifically provided herein, consist of Revolving Loans of the same Type and
(y) unless the Agent has determined that the Syndication Date has occurred (at
which time this clause (y) shall no longer be applicable), no Borrowings of
Revolving Loans to be maintained as Eurodollar Loans may be incurred prior to
the 90th day after the Initial Borrowing Date, (iii) may be repaid and
reborrowed in accordance with the provisions hereof and (iv) shall not exceed
for any Bank at any time outstanding that aggregate principal amount which, when
combined with such Bank's Percentage of the Swingline Loans then outstanding and
the Letter of Credit Outstandings (exclusive of Unpaid Drawings relating to
Letters of Credit which are repaid with the proceeds of, and simultaneously with
the incurrence of, the respective incurrence
<PAGE> 9
of Revolving Loans) at such time, equals the Revolving Loan Commitment of such
Bank at such time.
(b) Subject to and upon the terms and conditions herein set
forth, BTCo in its individual capacity agrees to make at any time and from time
to time on and after the Initial Borrowing Date and prior to the Swingline
Expiry Date, a loan or loans to the Borrower (each a "Swingline Loan" and,
collectively, the "Swingline Loans"), which Swingline Loans (i) shall be made
and maintained as Base Rate Loans, (ii) shall be denominated in U.S. Dollars,
(iii) may be repaid and reborrowed in accordance with the provisions hereof,
(iv) shall not exceed in aggregate principal amount at any time outstanding,
when combined with the aggregate principal amount of all Revolving Loans then
outstanding and the Letter of Credit Outstandings (exclusive of Unpaid Drawings
relating to Letters of Credit which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans) at such time, an amount equal to the Total Revolving Loan Commitment then
in effect and (v) shall not exceed in aggregate principal amount at any time
outstanding the Maximum Swingline Amount. BTCo shall not be obligated to make
any Swingline Loans at a time when a Bank Default exists unless BTCo has entered
into arrangements satisfactory to it and the Borrower to eliminate BTCo's risk
with respect to the Defaulting Bank's or Banks' participation in such Swingline
Loans, including by cash collateralizing such Defaulting Bank's or Banks'
Percentage of the outstanding Swingline Loans. BTCo will not make a Swingline
Loan after it has received written notice from the Borrower or the Required
Banks stating that a Default or an Event of Default exists until such time as
BTCo shall have received a written notice of (i) rescission of such notice from
the party or parties originally delivering the same or (ii) a waiver of such
Default or Event of Default from the Required Banks.
(c) On any Business Day, BTCo may, in its sole discretion,
give notice to the Banks that its outstanding Swingline Loans shall be funded
with a Borrowing of Revolving Loans (provided that each such notice shall be
deemed to have been automatically given upon the occurrence of a Default or an
Event of Default under Section 10.05 or upon the exercise of any of the remedies
provided in the last paragraph of Section 10), in which case a Borrowing of
Revolving Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory
Borrowing") shall be made on the immediately succeeding Business Day by all
Banks pro rata based on each Bank's Percentage, and the proceeds thereof shall
be applied directly to repay BTCo for such outstanding Swingline Loans. Each
Bank hereby irrevocably agrees to make Base Rate Loans upon one Business Day's
notice pursuant to each Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the date specified in writing by BTCo
notwithstanding (i) that the amount of the Mandatory Borrowing may not comply
with the Minimum Borrowing Amount otherwise required hereunder, (ii) whether any
conditions specified in Section 5 or 6 are then satisfied, (iii) whether a
Default or an Event of Default has occurred and is continuing, (iv) the date of
such Mandatory Borrowing and (v) the amount of the Total
-2-
<PAGE> 10
Revolving Loan Commitment at such time. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code in respect of the Borrower), each Bank (other than
BTCo) hereby agrees that it shall forthwith purchase from BTCo (without recourse
or warranty) such assignment of the outstanding Swingline Loans as shall be
necessary to cause the Banks to share in such Swingline Loans ratably based upon
their respective Percentages (determined before giving effect to any termination
of the Revolving Loan Commitments pursuant to the last paragraph of Section 10),
provided that (x) all interest payable on the Swingline Loans shall be for the
account of BTCo until the date the respective assignment is purchased and, to
the extent attributable to the purchased assignment, shall be payable to the
Bank purchasing same from and after such date of purchase and (y) at the time
any purchase of assignments pursuant to this sentence is actually made, the
purchasing Bank shall be required to pay BTCo interest on the principal amount
of assignment purchased for each day from and including the day upon which the
Mandatory Borrowing would otherwise have occurred to but excluding the date of
payment for such assignment, at the rate otherwise applicable to Revolving Loans
maintained as Base Rate Loans hereunder for each day thereafter.
1.02 Minimum Borrowing Amounts, etc. The aggregate principal
amount of each Borrowing of Loans shall not be less than the Minimum Borrowing
Amount applicable to such Loans, provided that Mandatory Borrowings shall be
made in the amounts required by Section 1.01(c). More than one Borrowing may be
incurred on any day, provided, that at no time shall there be outstanding more
than six Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to
incur Revolving Loans hereunder (excluding Borrowings of Revolving Loans
incurred pursuant to Mandatory Borrowings), it shall give the Agent at its
Notice Office, prior to 11:00 A.M. (New York time), at least three Business
Days' prior written notice (or telephonic notice promptly confirmed in writing)
of each Borrowing of Eurodollar Loans and at least one Business Day's prior
written notice (or telephonic notice promptly confirmed in writing) of each
Borrowing of Base Rate Loans to be made hereunder. Each such notice (each a
"Notice of Borrowing") shall, except as otherwise expressly provided in Section
1.10, be irrevocable, and, in the case of each written notice and each
confirmation of telephonic notice, shall be in the form of Exhibit A,
appropriately completed to specify:
(i) the aggregate principal amount of the Revolving Loans to
be made pursuant to such Borrowing;
(ii) the date of such Borrowing (which shall be a Business
Day);
-3-
<PAGE> 11
(iii) whether the respective Borrowing shall consist of Base
Rate Loans or, to the extent permitted hereunder, Eurodollar Loans and,
if Eurodollar Loans, the Interest Period to be initially applicable
thereto. The Agent shall promptly give each Bank written notice (or
telephonic notice promptly confirmed in writing) of each proposed
Borrowing, of such Bank's proportionate share thereof and of the other
matters covered by the Notice of Borrowing; and
(iv) if such Borrowing of Revolving Loans is to be utilized
(x) in connection with a Permitted Acquisition, such Notice of
Borrowing shall include the information specified in Section 1.03(b) or
(y) for working capital purposes, such Notice of Borrowing shall
include the information specified in Section 1.03(c).
(b) Whenever the Borrower desires to make a Borrowing of
Revolving Loans the proceeds of which are to be utilized to finance, in whole or
in part, the purchase price of a Permitted Acquisition, the Notice of Borrowing
shall also include:
(i) a reference to the officer's certificate, if any,
delivered in accordance with Section 8.14;
(ii) the aggregate principal amount of such Revolving Loans to
be utilized in connection with such Permitted Acquisition; and
(iii) the aggregate principal amount of all Revolving Loans
relating to Permitted Acquisitions then outstanding after giving effect
to the incurrence of such Revolving Loans.
(c) Whenever the Borrower desires to make a Borrowing of
Revolving Loans the proceeds of which are to be utilized, in whole or
in part, for working capital purposes, the Notice of Borrowing shall
also include:
(i) the aggregate principal amount of such Revolving Loans to
be utilized for working capital purposes; and
(ii) the aggregate principal amount of all Revolving Loans
utilized for working capital purposes then outstanding after giving
effect to the incurrence of such Revolving Loans.
(d) (i) Whenever the Borrower desires to incur Swingline Loans
hereunder, it shall give BTCo not later than 12:00 Noon (New York time) on the
day such Swingline Loan is to be made, written notice (or telephonic notice
promptly confirmed in writing) of each Swingline Loan to be made hereunder. Each
such notice shall be irrevocable and shall specify in each case (x) the date of
such Borrowing (which shall be a Business Day) and
-4-
<PAGE> 12
(y) the aggregate principal amount of the Swingline Loan to be made pursuant to
such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(c), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of Mandatory Borrowings as set forth in such
Section 1.01(c).
(e) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Agent or BTCo (in the case of a Borrowing of Swingline Loans) or the Letter of
Credit Issuer (in the case of the issuance of Letters of Credit), as the case
may be, may prior to receipt of written confirmation act without liability upon
the basis of such telephonic notice, believed by the Agent, BTCo or the Letter
of Credit Issuer, as the case may be, in good faith to be from an Authorized
Officer of the Borrower. In each such case, the Borrower hereby waives the right
to dispute the Agent's, BTCo's or the Letter of Credit Issuer's record of the
terms of such telephonic notice.
1.04 Disbursement of Funds. (a) Not later than 1:00 P.M. (New York
time) on the date specified in each Notice of Borrowing (or (x) in the case of
Swingline Loans, not later than 2:00 P.M. (New York time) on the date specified
in Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, not later than
12:00 Noon (New York time) on the date specified in Section 1.01(c)), each Bank
will make available its pro rata share, if any, of each Borrowing requested to
be made on such date (or in the case of Swingline Loans, BTCo shall make
available the full amount thereof) in the manner provided below. All amounts
shall be made available to the Agent in U.S. Dollars and in immediately
available funds at the Payment Office and the Agent promptly will make available
to the Borrower by depositing to its account at the Payment Office the aggregate
of the amounts so made available in the type of funds received. Unless the Agent
shall have been notified by any Bank prior to the date of Borrowing that such
Bank does not intend to make available to the Agent its portion of the Borrowing
or Borrowings to be made on such date, the Agent may assume that such Bank has
made such amount available to the Agent on such date of Borrowing, and the
Agent, in reliance upon such assumption, may (in its sole discretion and without
any obligation to do so) make available to the Borrower a corresponding amount.
If such corresponding amount is not in fact made available to the Agent by such
Bank and the Agent has made available same to the Borrower, the Agent shall be
entitled to recover such corresponding amount from such Bank. If such Bank does
not pay such corresponding amount forthwith upon the Agent's demand therefor,
the Agent shall promptly notify the Borrower, and the Borrower shall immediately
pay such corresponding amount to the Agent. The Agent shall also be entitled to
recover on demand from the Bank or the Borrower, as the case may be, interest on
such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to the Borrower to the date
such corresponding amount is recovered by the Agent, at a rate per
-5-
<PAGE> 13
annum equal to (x) if paid by such Bank, the overnight Federal Funds Rate or (y)
if paid by the Borrower, the then applicable rate of interest, calculated in
accordance with Section 1.08.
(b) Nothing in this Agreement shall be deemed to relieve any Bank from
its obligation to fulfill its commitments hereunder or to prejudice any rights
which the Borrower may have against any Bank as a result of any default by such
Bank hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of, and
interest on, all the Loans made to it by each Bank shall be evidenced (i) if
Revolving Loans, by a promissory note substantially in the form of Exhibit B-1
with blanks appropriately completed in conformity herewith (each a "Revolving
Note" and, collectively, the "Revolving Notes") and (ii) if Swingline Loans, by
a promissory note substantially in the form of Exhibit B-2 with blanks
appropriately completed in conformity herewith (the "Swingline Note").
(b) The Revolving Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to such Bank or its registered assigns and be dated
the Initial Borrowing Date, (iii) be in a stated principal amount equal to the
Revolving Loan Commitment of such Bank and be payable in the principal amount of
the outstanding Revolving Loans evidenced thereby, (iv) mature on the Final
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided
in Section 4.01, and mandatory repayment as provided in Section 4.02, and (vii)
be entitled to the benefits of this Agreement and the other Credit Documents.
(c) The Swingline Note issued to BTCo shall (i) be executed by the
Borrower, (ii) be payable to BTCo or its registered assigns and be dated the
Initial Borrowing Date, (iii) be in a stated principal amount equal to the
Maximum Swingline Amount and be payable in the principal amount of the
outstanding Swingline Loans evidenced thereby, (iv) mature on the Swingline
Expiry Date, (v) bear interest as provided in Section 1.08 in respect of the
Base Rate Loans evidenced thereby, (vi) be subject to voluntary pre-payment as
provided in Section 4.01, and mandatory repayment as provided in Section 4.02,
and (vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(d) Each Bank will note on its internal records the amount of each Loan
made by it and each payment in respect thereof and will prior to any transfer of
any of its Notes endorse on the reverse side thereof the outstanding principal
amount of Loans evidenced thereby. Failure to make any such notation shall not
affect the Borrower's obligations in respect of such Loans.
-6-
<PAGE> 14
1.06 Conversions. The Borrower shall have the option to convert on any
Business Day occurring on or after the Initial Borrowing Date, all or a portion
at least equal to the applicable Minimum Borrowing Amount of the outstanding
principal amount of Revolving Loans made pursuant to one or more Borrowings of
one or more Types of Revolving Loans into a Borrowing or Borrowings of another
Type of Revolving Loan; provided, that (i) except as otherwise provided in
Section 1.10(b), Eurodollar Loans may be converted into Base Rate Loans only on
the last day of an Interest Period applicable to the Revolving Loans being
converted and no partial conversion of a 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) Base Rate Loans may only be converted into Eurodollar Loans if no Default,
or Event of Default is in existence on the date of the conversion, (iii) unless
the Agent has determined that the Syndication Date has occurred (at which time
this clause (iii) shall no longer be applicable), conversions of Base Rate Loans
into Eurodollar Loans may not be made prior to the 90th day after the Initial
Borrowing Date and (iv) Borrowings of Eurodollar Loans resulting from this
Section 1.06 shall be limited in number as provided in Section 1.02. Each such
conversion shall be effected by the Borrower by giving the Agent at its Notice
Office, prior to 11:00 A.M. (New York time), at least three Business Days' (or
one Business Day's in the case of a conversion into Base Rate Loans) prior
written notice (or telephonic notice promptly confirmed in writing) (each a
"Notice of Conversion") specifying the Revolving Loans to be so converted, the
Borrowing(s) pursuant to which the Revolving Loans were made and, if to be
converted into a Borrowing of Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Agent shall give each Bank prompt notice of
any such proposed conversion affecting any of its Revolving Loans. Upon any such
conversion, the proceeds thereof will be deemed to be applied directly on the
day of such conversion to prepay the outstanding principal amount of the
Revolving Loans being converted.
1.07 Pro Rata Borrowings. All Borrowings of Revolving Loans under this
Agreement shall be made by the Banks pro rata on the basis of their Revolving
Loan Commitments provided that all Borrowings of Revolving Loans made pursuant
to a Mandatory Borrowing shall be incurred from the Banks pro rata on the basis
on their Percentages. It is understood that no Bank shall be responsible for any
default by any other Bank of its obligation to make Revolving Loans hereunder
and that each Bank shall be obligated to make the Revolving Loans to be made by
it hereunder, regardless of the failure of any other Bank to fulfill its
commitments hereunder.
1.08 Interest. (a) The unpaid principal amount of each Base Rate Loan
shall bear interest from the date of the Borrowing thereof until the earlier of
(i) the maturity (whether by acceleration or otherwise) of such Base Rate Loan
and (ii) the conversion of such Base Rate Loan to a Eurodollar Loan pursuant to
Section 1.06, at a rate per annum
-7-
<PAGE> 15
which shall at all times be the Applicable Margin plus the Base Rate in effect
from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall bear
interest from the date of the Borrowing thereof until the earlier of (i) the
maturity (whether by acceleration or otherwise) of such Eurodollar Loan and (ii)
the conversion of such Eurodollar Loan to a Base Rate Loan pursuant to Section
1.06, 1.09 or 1.10(b), as applicable, at a rate per annum which shall at all
times be the Applicable Margin plus the Eurodollar Rate for such Interest
Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan shall bear interest at a rate per annum equal
to the greater of (x) the rate which is 2% in excess of the rate borne by the
respective such Loans immediately prior to the respective payment default and
(y) the rate which is 2% in excess of the rate otherwise applicable to Base Rate
Loans from time to time. Interest which accrues under this Section 1.08(c) shall
be payable on demand.
(d) Interest shall accrue from and including the date of any Borrowing
to but excluding the date of any repayment thereof and shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on each Quarterly Payment
Date, (ii) in respect of each Eurodollar Loan, on (x) the date of any prepayment
or repayment thereof (on the amount prepaid or repaid), (y) the date of any
conversion into a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10(b), as
applicable (on the amount converted) and (z) the last day of each Interest
Period applicable thereto and, in the case of an Interest Period in excess of
three months, on each date occurring at three month intervals after the first
day of such Interest Period and (iii) in respect of each Loan, 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 13.07(b).
(f) Upon each Interest Determination Date, the Agent shall determine
the Eurodollar Rate for the respective Interest Period or Interest Periods and
shall promptly notify the Borrower and the Banks thereof. Each such
determination shall, absent manifest error, be final and conclusive and binding
on all parties hereto.
1.09 Interest Periods. At the time the Borrower gives 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. (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans (in the case of any subsequent Interest Period),
the Borrower shall have the right to elect by giving the Agent notice
-8-
<PAGE> 16
thereof, the Interest Period applicable to such Borrowing, which Interest Period
shall, at the option of the Borrower (but otherwise subject to clause (y) of the
proviso to Section 1.01(a)(ii) and to clause (iii) of the proviso to Section
1.06), be a one, two, three or six month period or, to the extent approved by
all of the Banks, a nine or twelve month period. Notwithstanding anything to the
contrary contained above:
(i) all Eurodollar Loans comprising a Borrowing shall at all times have
the same Interest Period;
(ii) the initial Interest Period for any Borrowing of Eurodollar Loans
shall commence on the date of such Borrowing (including the date of any
conversion from a Borrowing of Base 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 applicable thereto expires;
(iii) if any Interest Period for any Borrowing of Eurodollar Loans
begins on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period, such Interest Period
shall end on the last Business Day of such calendar month;
(iv) if any Interest Period 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 for any
Borrowing of Eurodollar Loans would otherwise expire on a day which is not
a Business Day but is a day of the month after which no further Business
Day occurs in such month, such Interest Period shall expire on the next
preceding Business Day;
(v) no Interest Period shall be elected which extends beyond the Final
Maturity Date;
(vi) no Interest Period may be elected at any time when a Default, or
any Event of Default, is then in existence; and
(vii) no Interest Period in respect of any Borrowing of Eurodollar
Loans shall be elected which extends beyond any date upon which a mandatory
prepayment of Revolving Loans is required to be made under Section 4.02(a),
as a result of reductions to the Total Revolving Loan Commitment pursuant
to Section 3.03(b), unless the aggregate principal amount of Revolving
Loans which are maintained as Base Rate Loans or which have Interest
Periods which will expire on or before such date will be sufficient to make
such required payment.
-9-
<PAGE> 17
If upon the expiration of any Interest Period applicable to a Borrowing
of Eurodollar Loans, the Borrower has failed to elect, or is not permitted to
elect, a new Interest Period to be applicable to the respective Borrowing of
Eurodollar Loans as provided above, the Borrower shall be deemed to have elected
to convert such Borrowing into a Borrowing of Base Rate Loans effective as of
the expiration date of such current Interest Period.
1.10 Increased Costs; Illegality; etc. (a) In the event that (x) in the
case of clause (i) below, the Agent or (y) in the case of clauses (ii) and (iii)
below, any Bank, shall have determined (which determination made in good faith
shall, absent manifest error, be final and conclusive and binding upon all
parties hereto):
(i) on any Interest Determination Date, that, by reason of any changes
arising after the date of this Agreement affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of
Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loans because of (x) any change since the date of this
Agreement 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) a change in the basis of
taxation or payment to any Bank of the principal of or interest on the
Revolving Loans or any other amounts payable hereunder (except for changes
with respect to any tax imposed on, or determined by reference to, the net
income or net profits of such Bank pursuant to the laws of the jurisdiction
in which such Bank is organized, or in which such Bank's principal office
or applicable lending office is located or any subdivision thereof or
therein), or (B) a change in official reserve requirements, but, in all
events, excluding reserves required under Regulation D to the extent
included in the computation of the Eurodollar Rate and/or (y) other
circumstances affecting such Bank, the interbank Eurodollar market or the
position of such Bank in such market; or
(iii) at any time since the date of this Agreement, that the making or
continuance of any Eurodollar Loan has become unlawful by compliance by
such Bank with any law, governmental rule, regulation, guideline or order
(or would conflict with any governmental rule, regulation, guideline,
request or order not having the force of law but with which such Bank
customarily complies even though the failure to comply therewith would not
be unlawful), or has become impracticable as a
-10-
<PAGE> 18
result of a contingency occurring after the date of this Agreement
which materially and adversely affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Agent in the case of clause (i)
above) shall promptly give notice (by telephone confirmed in writing) to the
Borrower and (except in the case of clause (i)) to the Agent of such
determination (which notice the Agent shall promptly transmit to each of the
other Banks). Thereafter, (x) in the case of clause (i) above, Eurodollar Loans
shall no longer be available until such time as the Agent notifies the Borrower
and the Banks that the circumstances giving rise to such notice by the Agent no
longer exist, and any Notice of Borrowing or Notice of Conversion given by the
Borrower with respect to Eurodollar Loans which have not yet been incurred
(including by way of conversion) shall be deemed rescinded by the Borrower, (y)
in the case of clause (ii) above, the Borrower agrees to pay to such Bank, 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
Bank in its sole discretion shall determine) as shall be required to compensate
such Bank for such increased costs or reductions in amounts received or
receivable hereunder (a written notice as to the additional amounts owed to such
Bank, showing in reasonable detail the basis for the calculation thereof,
submitted to the Borrower by such Bank in good faith shall, absent manifest
error, be final and conclusive and binding upon all parties hereto, although the
failure to give any such notice shall not release or diminish any of the
Borrower's obligations to pay additional amounts pursuant to this Section
1.10(a) upon the subsequent receipt of such notice) and (z) in the case of
clause (iii) above, the Borrower shall take one of the actions specified in
Section 1.10(b) as promptly as possible and, in any event, within the time
period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii) the
Borrower shall) either (i) if the affected Eurodollar Loan is then being made
pursuant to a Borrowing, cancel said Borrowing by giving the Agent telephonic
notice (confirmed promptly in writing) thereof on the same date that the
Borrower was notified by a Bank pursuant to Section 1.10(a)(ii) or (iii)), or
(ii) if the affected Eurodollar Loan is then outstanding, upon at least three
Business Days' notice to the Agent, require the affected Bank to convert each
such Eurodollar Loan into a Base Rate Loan; provided, that if more than one Bank
is affected at any time, then all affected Banks must be treated the same
pursuant to this Section 1.10(b).
(c) If any Bank shall have determined that after the date hereof, the
adoption or effectiveness of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Bank or any corporation controlling such Bank with any request or
directive regarding capital adequacy (whether or not having the
-11-
<PAGE> 19
force of law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on such Bank's or such
other corporation's capital or assets as a consequence of such Bank's Revolving
Loan Commitment or obligations hereunder to a level below that which such Bank
or such other corporation could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Bank's or
such other corporation's policies with respect to capital adequacy), then from
time to time, upon written demand by such Bank (with a copy to the Agent),
accompanied by the notice referred to in the last sentence of this clause (c),
the Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank or such other corporation for such reduction. Each Bank,
upon determining in good faith that any additional amounts will be payable
pursuant to this Section 1.10(c), will give prompt written notice thereof to the
Borrower (a copy of which shall be sent by such Bank to the Agent), which notice
shall set forth in reasonable detail the basis of the calculation of such
additional amounts, although the failure to give any such notice shall not
release or diminish the Borrower's obligations to pay additional amounts
pursuant to this Section 1.10(c) upon the subsequent receipt of such notice. A
Bank's reasonable good faith determination of compensation owing under this
Section 1.10(c) shall, absent manifest error, be final and conclusive and
binding on all the parties hereto.
1.11 Compensation. The Borrower shall compensate each Bank, promptly
upon its written request (which request shall set forth in reasonable detail the
basis for requesting such compensation), for all losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Bank to fund its Eurodollar Loans) which such Bank may sustain:
(i) if for any reason (other than a default by such Bank or the Agent) 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 withdrawn by the
Borrower or deemed withdrawn pursuant to Section 1.10(a)); (ii) if any repayment
(including any repayment made pursuant to Section 4.01 or 4.02 or as a result of
an acceleration of the Loans pursuant to Section 9) or conversion of any
Eurodollar Loans occurs on a date which is not the last day of an Interest
Period applicable thereto; (iii) if any prepayment of any Eurodollar Loans is
not made on any date specified in a notice of prepayment given by the Borrower;
or (iv) as a consequence of (x) any other default by the Borrower to repay its
Eurodollar Loans when required by the terms of this Agreement or (y) an election
made pursuant to Section 1.10(b). A Bank's basis for requesting compensation
pursuant to this Section 1.11 and a Bank's calculation of the amount thereof in
reasonable detail, shall, absent manifest error, be final and conclusive and
binding on all parties hereto.
1.12 Change of Lending Office. Each Bank agrees that, upon the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), 1.10(c), 2.05 or 4.04 with respect to such Bank, it will, if requested by
the Borrower, use reasonable
-12-
<PAGE> 20
efforts (subject to overall policy considerations of such Bank) to designate
another lending office for any Loans or Letters of Credit affected by such
event; provided, that such designation is made on such terms that, in the sole
judgment of such Bank, such Bank and its lending office suffer no economic,
legal or regulatory disadvantage, with the object of avoiding the consequences
of the event giving rise to the operation of any such Section. Nothing in this
Section 1.12 shall affect or postpone any of the obligations of the Borrower or
the right of any Bank provided in Section 1.10, 2.05 or 4.04.
1.13 Replacement of Banks. (x) If any Bank becomes a Defaulting Bank,
(y) upon the occurrence of any event giving rise to the operation of Section
1.10(a)(ii) or (iii), Section 1.10(c), Section 2.05 or Section 4.04 with respect
to any Bank which results in such Bank charging to the Borrower increased costs
in a material amount in excess of those being generally charged by the other
Banks or (z) in the case of a refusal by a Bank to consent to a proposed change,
waiver, discharge or termination with respect to this Agreement which has been
approved by the Required Banks as provided in Section 13.12(b), the Borrower
shall have the right, in accordance with Section 13.04(b), if no Default or
Event of Default then exists or would exist after giving effect to such
replacement, to replace such Bank (the "Replaced Bank") with one or more other
Eligible Transferee or Transferees, none of whom shall constitute a Defaulting
Bank at the time of such replacement (collectively, the "Replacement Bank") and
each of whom shall be reasonably acceptable to the Agent, provided that:
(i) at the time of any replacement pursuant to this Section 1.13, the
Replacement Bank shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 13.04(b) (and with all fees payable pursuant
to said Section 13.04(b) to be paid by the Replacement Bank) pursuant to
which the Replacement Bank shall acquire the Revolving Loan Commitment and
outstanding Revolving Loans of, and in each case participations in Letters
of Credit by, the Replaced Bank and, in connection therewith, shall pay to
(x) the Replaced Bank in respect thereof an amount equal to the sum of (A)
an amount equal to the principal of, and all accrued interest on, all
outstanding Revolving Loans of the Replaced Bank, (B) an amount equal to
all Unpaid Drawings that have been funded by (and not reimbursed to) such
Replaced Bank, together with all then unpaid interest with respect thereto
at such time and (C) an amount equal to all accrued, but theretofore
unpaid, Fees owing to the Replaced Bank pursuant to Section 3.01, (y) each
Letter of Credit Issuer an amount equal to such Replaced Bank's Percentage
of any Unpaid Drawing relating to Letters of Credit issued by such Letter
of Credit Issuer (which at such time remains an Unpaid Drawing) to the
extent such amount was not theretofore funded by such Replaced Bank and
(z) BTCo an amount equal to such Replaced Bank's Percentage of any
Mandatory Borrowing to the extent such amount was not theretofore funded by
such Replaced Bank; and
-13-
<PAGE> 21
(ii) all obligations of the Borrower then owing to the Replaced Bank
(other than those specifically described in clause (i) above in respect of
which the assignment purchase price has been, or is concurrently being,
paid, but including all amounts, if any, owing under Section 1.11) shall be
paid in full to such Replaced Bank concurrently with such replacement. Upon
the execution of the respective Assignment and Assumption Agreements, the
payment of amounts referred to in clauses (i) and (ii) above, recordation
of the assignment on the Register by the Agent pursuant to Section 13.17
and, if so requested by the Replacement Bank, delivery to the Replacement
Bank of the appropriate Revolving Note or Revolving Notes executed by the
Borrower, the Replacement Bank shall become a Bank hereunder and the
Replaced Bank shall cease to constitute a Bank hereunder, except with
respect to indemnification provisions under this Agreement (including,
without limitation, Sections 1.10, 1.11, 2.05, 4.04, 13.01 and 13.06),
which shall survive as to such Replaced Bank.
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request a Letter of Credit Issuer
at any time and from time to time on or after the Initial Borrowing Date and
prior to the third Business Day (or the 30th day in the case of trade Letters of
Credit) preceding the Final Maturity Date to issue, for the account of the
Borrower and in support of (x) trade obligations of the Borrower or any of its
Subsidiaries that arise in the ordinary course of business and/or (y) on a
standby basis, L/C Supportable Indebtedness of the Borrower or any of its
Subsidiaries to any other Person, irrevocable sight letters of credit in such
form as may be approved by such Letter of Credit Issuer (each such letter of
credit, a "Letter of Credit" and, collectively, the "Letters of Credit").
Notwithstanding the foregoing, no Letter of Credit Issuer shall be under any
obligation to issue any Letter of Credit if at the time of such issuance:
(i) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to enjoin or
restrain such Letter of Credit Issuer from issuing such Letter of
Credit or any requirement of law applicable to such Letter of Credit
Issuer or any request or directive (whether or not having the force of
law) from any governmental authority with jurisdiction over such Letter
of Credit Issuer shall prohibit, or request that such Letter of Credit
Issuer refrain from, the issuance of letters of credit generally or
such Letter of Credit in particular or shall impose upon such Letter of
Credit Issuer with respect to such Letter of Credit any restriction or
reserve or capital requirement (for which such Letter of Credit Issuer
is not otherwise compensated) not in effect on the date hereof, or any
unreimbursed loss, cost or expense which was not applicable, in effect
or known to such Letter
-14-
<PAGE> 22
of Credit Issuer as of the date hereof and which such Letter of Credit
Issuer in good faith deems material to it;
(ii) such Letter of Credit Issuer shall have received notice
from the Borrower or the Required Banks prior to the issuance of such
Letter of Credit of the type described in clause (vi) of Section
2.01(b).
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time, would
exceed either (x) $3,000,000 or (y) when added to the aggregate principal amount
of all Revolving Loans and Swingline Loans then outstanding, the Total Revolving
Loan Commitment at such time; (ii) (x) each standby Letter of Credit shall have
an expiry date occurring not later than one year after such Letter of Credit's
date of issuance, provided, that any such Letter of Credit may be extendable for
successive periods of up to one year, but not beyond the third business day
preceding the Final Maturity Date, on terms acceptable to the Letter of Credit
Issuer and (y) each trade Letter of Credit shall have an expiry date occurring
not later than 180 days after such Letter of Credit's date of issuance; (iii)
(x) no standby Letter of Credit shall have an expiry date occurring later than
the third Business Day preceding the Final Maturity Date and (y) no trade Letter
of Credit shall have an expiry date occurring later than 30 days prior to the
Final Maturity Date; (iv) each Letter of Credit shall be denominated in U.S.
Dollars; (v) the Stated Amount of each Letter of Credit shall not be less than
$100,000 or such lesser amount as is acceptable to the respective Letter of
Credit Issuer; and (vi) no Letter of Credit Issuer will issue any Letter of
Credit after it has received written notice from the Borrower or the Required
Banks stating that a Default or an Event of Default exists until such time as
such Letter of Credit Issuer shall have received a written notice of (x)
rescission of such notice from the party or parties originally delivering the
same or (y) a waiver of such Default or Event of Default by the Required Banks.
(c) Notwithstanding the foregoing, in the event a Bank Default exists,
no Letter of Credit Issuer shall be required to issue any Letter of Credit
unless the respective Letter of Credit Issuer has entered into arrangements
satisfactory to it and the Borrower to eliminate such Letter of Credit Issuer's
risk with respect to the participation in Letters of Credit of the Defaulting
Bank or Banks, including by cash collateralizing such Defaulting Bank's or
Banks' Percentage of the Letter of Credit Outstandings, as the case may be.
2.02 Letter of Credit Requests; Notices of Issuance. (a) Whenever the
Borrower desires that a Letter of Credit be issued, the Borrower shall give the
Agent and the respective Letter of Credit Issuer written notice (or telephonic
notice confirmed in writing) thereof prior to 12:00 Noon (New York time) at
least five Business Days (or such shorter period as may be acceptable to the
respective Letter of Credit Issuer) prior to the
-15-
<PAGE> 23
proposed date of issuance (which shall be a Business Day) which written notice
shall be in the form of Exhibit C (each, a "Letter of Credit Request"). Each
Letter of Credit Request shall include any other documents as such Letter of
Credit Issuer customarily requires in connection therewith.
(b) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrower that such Letter of Credit may be
issued in accordance with, and it will not violate the requirements of, Section
2.01(a). Unless the respective Letter of Credit Issuer has received notice from
the Required Banks before it issues a Letter of Credit that one or more of the
applicable conditions specified in Section 5 or 6, as the case may be, are not
then satisfied, or that the issuance of such Letter of Credit would violate
Section 2.01(a), then such Letter of Credit Issuer may issue the requested
Letter of Credit for the account of the Borrower in accordance with such Letter
of Credit Issuer's usual and customary practice.
(c) Each Letter of Credit Issuer shall, promptly after each issuance
of, or amendment or modification to, a standby Letter of Credit issued by it,
give the Agent, each Bank and the Borrower written notice of the issuance of, or
amendment or modification to, such Letter of Credit, accompanied by a copy to
the Agent of the standby Letter of Credit or standby Letters of Credit issued by
it and each such amendment or modification thereto. In the event that the Letter
of Credit Issuer of trade Letters of Credit is other than the Agent, such Letter
of Credit Issuer will send by facsimile transmission to the Agent, promptly on
the first Business Day of each week, its daily Letter of Credit Outstandings for
trade Letters of Credit for the previous week.
2.03 Letter of Credit Participations. (a) Immediately upon the issuance
by a Letter of Credit Issuer of any Letter of Credit, such Letter of Credit
Issuer shall be deemed to have sold and transferred to each other Bank, and each
such Bank (each a "Participant") shall be deemed irrevocably and unconditionally
to have purchased and received from such Letter of Credit Issuer, without
recourse or warranty, an undivided interest and participation, to the extent of
such Participant's Percentage, in such Letter of Credit, each substitute Letter
of Credit, each drawing made thereunder and the obligations of the Borrower
under this Agreement with respect thereto (although Letter of Credit Fees shall
be payable directly to the Agent for the account of the Banks as provided in
Section 3.01(b) and the Participants shall have no right to receive any portion
of any Facing Fees with respect to such Letters of Credit) and any security
therefor or guaranty pertaining thereto. Upon any change in the Revolving Loan
Commitments of the Banks pursuant to Section 1.13 or 13.04(b), it is hereby
agreed that, with respect to all outstanding Letters of Credit and Unpaid
Drawings with respect thereto, there shall be an automatic adjustment to the
participations pursuant to this Section 2.03 to reflect the new Percentages of
the assigning and assignee Bank.
-16-
<PAGE> 24
(b) In determining whether to pay under any Letter of Credit, no Letter
of Credit Issuer shall have any obligation relative to the Participants other
than to determine that any documents required to be delivered under such Letter
of Credit have been delivered and that they appear to substantially comply on
their face with the requirements of such Letter of Credit. Any action taken or
omitted to be taken by any Letter of Credit Issuer under or in connection with
any Letter of Credit issued by it if taken or omitted in the absence of gross
negligence or willful misconduct, shall not create for such Letter of Credit
Issuer any resulting liability.
(c) In the event that any Letter of Credit Issuer makes any payment
under any Letter of Credit issued by it and the Borrower shall not have
reimbursed such amount in full to the Letter of Credit Issuer pursuant to
Section 2.04(a), such Letter of Credit Issuer shall promptly notify the Agent,
and the Agent shall promptly notify each Participant of such failure, and each
such Participant shall promptly and unconditionally pay to the Agent for the
account of such Letter of Credit Issuer, the amount of such Participant's
Percentage of such payment in U.S. Dollars and in same day funds. If the Agent
so notifies any Participant required to fund a payment under a Letter of Credit
prior to 11:00 A.M. (New York time) on any Business Day, such Participant shall
make available to the Agent at the Payment Office for the account of the
respective Letter of Credit Issuer such Participant's Percentage of the amount
of such payment on such Business Day in same day funds (and, to the extent such
notice is given after 11:00 A.M. (New York time) on any Business Day, such
Participant shall make such payment on the immediately following Business Day).
If and to the extent such Participant shall not have so made its Percentage of
the amount of such payment available to the Agent for the account of the
respective Letter of Credit Issuer, such Participant agrees to pay to the Agent
for the account of such Letter of Credit Issuer, forthwith on demand such
amount, together with interest thereon, for each day from such date until the
date such amount is paid to the Agent for the account of the Letter of Credit
Issuer at the overnight Federal Funds Rate. The failure of any Participant to
make available to the Agent for the account of the respective Letter of Credit
Issuer its Percentage of any payment under any Letter of Credit issued by it
shall not relieve any other Participant of its obligation hereunder to make
available to the Agent for the account of such Letter of Credit Issuer its
applicable Percentage of any payment under any such Letter of Credit on the date
required, as specified above, but no Participant shall be responsible for the
failure of any other Participant to make available to the Agent for the account
of such Letter of Credit Issuer such other Participant's Percentage of any such
payment.
(d) Whenever any Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Agent has received for the account of
such Letter of Credit Issuer any payments from the Participants pursuant to
clause (c) above, such Letter of Credit Issuer shall pay to the Agent and the
Agent shall promptly pay to each Participant which has paid its Percentage
thereof, in U.S. Dollars and in same day funds, an amount
-17-
<PAGE> 25
equal to such Participant's Percentage of the principal amount thereof and
interest thereon accruing after the purchase of the respective participations.
(e) Immediately after the issuance of, or amendment to, a Letter of
Credit, each Letter of Credit Issuer shall immediately notify the Agent of such
issuance or amendment, as the case may be, and such notice shall be accompanied
by a copy of the issued Letter of Credit or amendment, as the case may be.
(f) The Agent shall, within 10 days after the last Business Day of each
calendar month, deliver to each Participant in trade Letters of Credit a record
setting forth for such period the daily aggregate Stated Amount available to be
drawn under the trade Letters of Credit during the preceding calendar month.
(g) The obligations of the Participants to make payments to the Agent
for the account of the respective Letter of Credit Issuer with respect to
Letters of Credit issued by it shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other
right which the Borrower or any of its Subsidiaries may have at any
time against a beneficiary named in a Letter of Credit, any transferee
of any Letter of Credit (or any Person for whom any such transferee may
be acting), the Agent, any Letter of Credit Issuer, any Bank, or other
Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the Borrower
or any of its Subsidiaries and the beneficiary named in any such Letter
of Credit);
(iii) any draft, certificate or other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
-18-
<PAGE> 26
2.04 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
hereby agrees to reimburse each Letter of Credit Issuer, by making payment to
the Agent in immediately available funds at the Payment Office, for any payment
or disbursement made by such Letter of Credit Issuer under any Letter of Credit
issued by it (each such amount so paid or disbursed until reimbursed, an "Unpaid
Drawing") no later than one Business Day following the date of such payment or
disbursement, with interest on the amount so paid or disbursed by such Letter of
Credit Issuer, to the extent not reimbursed prior to 1:00 P.M. (New York time)
on the date of such payment or disbursement, from and including the date paid or
disbursed to but not including the date such Letter of Credit Issuer is
reimbursed therefor at a rate per annum which shall be the Applicable Margin for
Base Rate Loans as in effect from time to time (plus an additional 2% per annum
if not reimbursed by the third Business Day after the date of such payment or
disbursement), such interest also to be payable on demand; provided, that it is
understood and agreed, however, that the notices referred to above in this
clause (a) shall not be required to be given if a Default or an Event of Default
under such Section 10.05 shall have occurred and be continuing (in which case
the Unpaid Drawings shall be due and payable immediately without presentment,
demand, protest or notice of any kind (all of which are hereby waived by each
Credit Party) and shall bear interest at a rate per annum which shall be
Applicable Margin for Base Rate Loans plus 2% on and after the third Business
Day following the respective Drawing). Each Letter of Credit Issuer shall
provide the Borrower prompt notice of any payment or disbursement made by it
under any Letter of Credit issued by it, although the failure of, or delay in,
giving any such notice shall not release or diminish the obligations of the
Borrower under this Section 2.04(a) or under any other Section of this
Agreement.
(b) The Borrower's obligation under this Section 2.04 to reimburse the
respective Letter of Credit Issuer with respect to Unpaid Drawings (including,
in each case, interest thereon) shall be absolute and unconditional under any
and all circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower or any of its Subsidiaries may have or have had
against such Letter of Credit Issuer, the Agent or any Bank, including, without
limitation, any defense based upon the failure of any drawing under a Letter of
Credit issued by it to conform to the terms of the Letter of Credit or any
nonapplication or misapplication by the beneficiary of the proceeds of such
drawing; provided, however, that the Borrower shall not be obligated to
reimburse such Letter of Credit Issuer for any wrongful payment made by such
Letter of Credit Issuer under a Letter of Credit issued by it as a result of
acts or omissions constituting willful misconduct or gross negligence on the
part of such Letter of Credit Issuer. Any action taken or omitted to be taken by
any Letter of Credit Issuer under or in connection with any Letter of Credit if
taken or omitted in the absence of gross negligence or willful misconduct shall
not create for such Letter of Credit Issuer any resulting liability to the
Borrower.
2.05 Increased Costs. If after the date hereof, the adoption or
effectiveness of any applicable law, rule or regulation, order, guideline or
request or any change therein,
-19-
<PAGE> 27
or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Letter of Credit
Issuer or any Participant with any request or directive (whether or not having
the force of law) by any such authority, central bank or comparable agency shall
either (i) impose, modify or make applicable any reserve, deposit, capital
adequacy or similar requirement against Letters of Credit issued by such Letter
of Credit Issuer or such Participant's participation therein, or (ii) impose on
any Letter of Credit Issuer or any Participant any other conditions directly or
indirectly affecting this Agreement, any Letter of Credit or such Participant's
participation therein; and the result of any of the foregoing is to increase the
cost to such Letter of Credit Issuer or such Participant of issuing, maintaining
or participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by such Letter of Credit Issuer or such Participant
hereunder or reduce the rate of return on its capital with respect to Letters of
Credit, then, upon written demand to the Borrower by such Letter of Credit
Issuer or such Participant (a copy of which notice shall be sent by such Letter
of Credit Issuer or such Participant to the Agent), accompanied by the
certificate described in the last sentence of this Section 2.05, the Borrower
shall pay to such Letter of Credit Issuer or such Participant such additional
amount or amounts as will compensate such Letter of Credit Issuer or such
Participant for such increased cost or reduction. A certificate submitted to the
Borrower in good faith by such Letter of Credit Issuer or such Participant, as
the case may be (a copy of which certificate shall be sent by such Letter of
Credit Issuer or such Participant to the Agent), setting forth in reasonable
detail the basis for the determination of such additional amount or amounts
necessary to compensate such Letter of Credit Issuer or such Participant as
aforesaid shall be final and conclusive and binding on the Borrower absent
manifest error, although the failure to deliver any such certificate shall not
release or diminish the Borrower's obligations to pay additional amounts
pursuant to this Section 2.05 upon subsequent receipt of such certificate.
SECTION 3. Fees; Commitments.
3.01 Fees. (a) The Borrower shall pay to the Agent for distribution to
each Non-Defaulting Bank a commitment fee (the "Commitment Fee") for the period
from the Effective Date to but not including Final Maturity Date (or such
earlier date as the Total Revolving Loan Commitment shall have been terminated),
computed at a rate of 1/2 of 1% per annum on the daily average Unutilized
Revolving Loan Commitment of such Bank. Accrued Commitment Fees shall be due and
payable quarterly in arrears on each Quarterly Payment Date and the date upon
which the Total Revolving Loan Commitment is terminated.
(b) The Borrower shall pay to the Agent for distribution to the Non-
Defaulting Banks pro rata on the basis of their respective Percentages a fee in
respect of
-20-
<PAGE> 28
each Letter of Credit (the "Letter of Credit Fee") computed at a rate per annum
equal to the Applicable Margin for Eurodollar Loans then in effect on the daily
Stated Amount of such Letter of Credit. Accrued Letter of Credit Fees shall be
due and payable quarterly in arrears on each Quarterly Payment Date and upon the
first day on or after the termination of the Total Revolving Loan Commitment
upon which no Letters of Credit remain outstanding.
(c) The Borrower shall pay to the Agent for the account of each Letter
of Credit Issuer a fee in respect of each Letter of Credit issued by such Letter
of Credit Issuer (the "Facing Fee") computed at the rate of 1/4 of 1% per annum
on the daily Stated Amount of such Letter of Credit; provided, that in no event
shall the annual Facing Fee with respect to each Letter of Credit be less than
$500; it being agreed that (x) on the date of issuance of any Letter of Credit
and on each anniversary thereof prior to the termination of such Letter of
Credit, if $500 will exceed the amount of Facing Fees that will accrue with
respect to such Letter of Credit for the immediately succeeding 12-month period,
the full $500 shall be payable on the date of issuance of such Letter of Credit
and on each such anniversary thereof prior to the termination of such Letter of
Credit and (y) if on the date of the termination of any Letter of Credit, $500
actually exceeds the amount of Facing Fees paid or payable with respect to such
Letter of Credit for the period beginning on the date of the issuance thereof
(or if the respective Letter of Credit has been outstanding for more than one
year, the date of the last anniversary of the issuance thereof occurring prior
to the termination of such Letter of Credit) and ending on the date of the
termination thereof, an amount equal to such excess shall be paid as additional
Facing Fees with respect to such Letter of Credit on the next date upon which
Facing Fees are payable in accordance with the immediately succeeding sentence.
Except as provided in the immediately preceding sentence, accrued Facing Fees
shall be due and payable quarterly in arrears on each Quarterly Payment Date and
upon the first day on or after the termination of the Total Revolving Loan
Commitment upon which no Letters of Credit remain outstanding.
(d) The Borrower shall pay directly to each Letter of Credit Issuer
upon each issuance of, payment under, and/or amendment of, a Letter of Credit
issued by such Letter of Credit Issuer such amount as shall at the time of such
issuance, payment or amendment be the administrative charge which such Letter of
Credit Issuer is customarily charging for issuances of, payments under or
amendments of, letters of credit issued by it so long as such Letter of Credit
Issuer provides the Borrower with a bill setting forth in reasonable detail the
basis for such amount.
(e) The Borrower shall pay to the Agent, for its own account, such fees
as may be agreed to in writing from time to time between the Borrower and the
Agent, when and as due.
-21-
<PAGE> 29
(f) All computations of Fees shall be made in accordance with Section
13.07(b).
3.02 Voluntary Termination or Reduction of Total Unutilized Revolving
Loan Commitment. (a) Upon at least three Business Days' prior notice to the
Agent at its Notice Office (which notice the Agent shall promptly transmit to
each of the Banks), the Borrower shall have the right, without premium or
penalty, to terminate or partially reduce the Total Unutilized Revolving Loan
Commitment, provided that (w) any such termination or partial reduction shall
apply to proportionately and permanently reduce the Revolving Loan Commitment of
each of the Banks, (x) any reduction to the Total Unutilized Revolving Loan
Commitment prior to the Initial Borrowing Date may only be made in connection
with a termination in full of the Total Revolving Loan Commitment, (y) any
partial reduction pursuant to this Section 3.02(a) shall be in integral
multiples of $1,000,000 and (z) the reduction to the Total Unutilized Revolving
Loan Commitment shall in no case be in an amount which would cause the Revolving
Loan Commitment of any Bank to be reduced (as required by the preceding clause
(x)) by an amount which exceeds the remainder of (A) the Unutilized Revolving
Loan Commitment of such Bank as in effect immediately before giving effect to
such reduction minus (B) such Bank's Percentage of the aggregate principal
amount of Swingline Loans then outstanding.
(b) In the event of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in Section
13.12(b), the Borrower shall have the right, subject to obtaining the consents
required by Section 13.12(b), upon five Business Days' prior written notice to
the Agent at its Notice Office (which notice the Agent shall promptly transmit
to each of the Banks), to terminate the entire Revolving Loan Commitment of such
Bank, so long as all Revolving Loans, together with accrued and unpaid interest,
Fees and all other amounts, owing to such Bank (including all amounts, if any,
owing pursuant to Section 1.11) are repaid concurrently with the effectiveness
of such termination and so long as, immediately after giving effect to such
termination, the aggregate principal amount of outstanding Loans and the Letter
of Credit Outstandings would not exceed the Total Revolving Loan Commitment as
then in effect, and at such time such Bank shall no longer constitute a "Bank"
for purposes of this Agreement (and Annex I shall be deemed modified to reflect
the elimination of such Bank), except with respect to indemnifications under
this Agreement (including, without limitation, Sections 1.10, 1.11, 2.05, 4.04,
13.01 and 13.06), which shall survive as to such repaid Bank. Unless otherwise
specifically agreed in writing by the Required Banks, any reduction to the Total
Revolving Loan Commitment pursuant to this Section 3.02(b) shall apply to reduce
the remaining Scheduled Commitment Reductions on a pro rata basis (based upon
the then remaining amount of each such Scheduled Commitment Reduction).
-22-
<PAGE> 30
3.03 Mandatory Reduction of Revolving Loan Commitments. (a) The Total
Revolving Loan Commitment (and the Revolving Loan Commitment of each Bank) shall
terminate in its entirety on August 31, 1996 unless the Initial Borrowing Date
has occurred on or before such date.
(b) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Revolving Loan Commitment shall be permanently
reduced on the dates set forth below and by the amounts set forth opposite such
Scheduled Commitment Reduction Date below (each such reduction, as the same may
be reduced as provided in Section 3.02 and 3.03(h), a "Scheduled Commitment
Reduction"):
<TABLE>
<CAPTION>
Scheduled Commitment
Reduction Date Amount
-------------------- ------------
<S> <C>
July 31, 1998 $2.5 million
October 31, 1998 $2.5 million
January 31, 1999 $2.5 million
April 30, 1999 $2.5 million
July 31, 1999 $5.0 million
October 31, 1999 $5.0 million
January 31, 2000 $5.0 million
April 30, 2000 $5.0 million
July 31, 2000 $10.0 million
January 31, 2001 $10.0 million
Final Maturity Date $50.0 million
</TABLE>
(c) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, on the third Business Day after each date on or after the
Effective Date on which the Borrower or any of its Subsidiaries receives Net
Sale Proceeds from any Asset Sale, the Total Revolving Loan Commitment shall be
permanently reduced by an amount equal to 100% (or, if on the date of any Asset
Sale no Default or Event of Default then exists, or would result therefrom, 25%
to the extent (x) that the assets being sold were originally acquired in
exchange for Borrower Common Stock pursuant to a Permitted Acquisition and (y)
provided in the immediately succeeding sentence) of the Net Sale Proceeds from
such Asset Sale, provided that with respect to the first $20,000,000 in the
aggregate of such Net Sale Proceeds received by the Borrower or its Subsidiaries
on or after the Effective Date, such Net Sale Proceeds shall not give rise to a
reduction to the Total Revolving Loan Commitment on such date to the extent that
no Default or Event of Default then exists and the Borrower delivers a
certificate to the Agent on or prior to such date stating that such Net Sale
Proceeds shall be used to purchase assets used or to be used in the businesses
permitted pursuant to Section 9.01 (including, without limitation (but only
-23-
<PAGE> 31
to the extent permitted by Section 9.02), the purchase of the capital stock of a
Person engaged in such businesses) within one year following the date of receipt
of such Net Sale Proceeds from such Asset Sale (which certificate shall set
forth the estimates of the proceeds to be so expended), and provided further,
that (1) if all or any portion of such Net Sale Proceeds are not so used (or
contractually committed to be used) within such one year period, the Total
Revolving Loan Commitment shall be permanently reduced on the last day of such
period by an amount equal to such remaining portion and (2) if all or any
portion of such Net Sale Proceeds are not so used within such one year period
referred to in clause (1) above because such amount is contractually committed
to be used and subsequent to such date such contract is terminated or expires
without such portion being so used, the Total Revolving Loan Commitment shall be
permanently reduced on the date of such termination or expiration by an amount
equal to such remaining portion. With respect to any Asset Sale where the first
parenthetical contained in the immediately preceding sentence (without giving
effect to clause (y) thereof) is applicable, the Net Sale Proceeds thereof shall
be subject to recapture in an amount equal to such Net Cash Proceeds multiplied
by the sum of (i) 100% multiplied by the Cash Percentage and (ii) 25% multiplied
by the Equity Percentage.
(d) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, on each date on or after the Effective Date on which the
Borrower or any of its Subsidiaries receives any cash proceeds from any
incurrence of Indebtedness (other than Indebtedness permitted to be incurred
pursuant to Section 9.04 as in effect on the Effective Date) by the Borrower or
any of its Subsidiaries, the Total Revolving Loan Commitment shall be
permanently reduced by an amount equal to 100% of the cash proceeds (net of all
underwriting discounts, fees and commissions and other costs and expenses
associated therewith) of the respective incurrence of Indebtedness.
(e) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, on each date on or after the Effective Date on which the
Borrower or any of its Subsidiaries receives any cash proceeds from any sale or
issuance of preferred or common equity of (or cash capital contributions to) the
Borrower or any of its Subsidiaries (other than proceeds received from (v)
proceeds of issuances of the Borrower Common Stock (including as a result of the
exercise of any options or warrants with regard thereto) to employees,
consultants, officers and directors of the Borrower and its Subsidiaries to the
extent such proceeds do not exceed $250,000 in any fiscal year, (w) the Equity
Financing, (x) sales by the Borrower or any of its Subsidiaries of capital stock
owned by such Person of another Subsidiary of the Borrower (which sales shall be
subject to Section 3.03(d) to the extent constituting Asset Sales), (y) equity
contributions to any Subsidiary of the Borrower made by the Borrower or any
other Subsidiary of the Borrower, and (z) any equity of the Borrower directly
issued by it as consideration in connection with a Permitted Acquisition, where
no cash proceeds are received by the Borrower or any of its Subsidiaries from
such equity issuance) the Total Revolving Loan Commitment shall be permanently
-24-
<PAGE> 32
reduced by an amount equal to 100% (or, in the case of any sale or issuance of
preferred or common equity of (or cash capital contribution to) the Borrower,
25%) of such cash proceeds (net of all underwriting discounts, fees and
commissions and other costs and expenses associated therewith) of the respective
equity issuance or capital contribution.
(f) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, within 10 days following each date on or after the
Effective Date on which the Borrower or any of its Subsidiaries receives any
proceeds from any Recovery Event (other than proceeds from Recovery Events in an
amount less than $100,000 per Recovery Event), the Total Revolving Loan
Commitment shall be reduced by an amount equal to 100% of the proceeds of such
Recovery Event (net of reasonable costs including, without limitation, legal
costs and expenses, and taxes incurred in connection with such Recovery Event);
provided that (x) so long as no Default or Event of Default then exists and such
proceeds do not exceed $250,000 (or, in the case of a Recovery Event resulting
from loss or damage to a linear accelerator owned by Radamerica, Inc.,
$1,000,000), such proceeds shall not be required to be so applied on such date
to the extent that an Authorized Officer of the Borrower has delivered a
certificate to the Agent on or prior to such date stating that such proceeds
shall be used or shall be committed to be used to replace or restore any
properties or assets in respect of which such proceeds were paid within one year
following the date of such Recovery Event (which certificate shall set forth the
estimates of the proceeds to be so expended) and (y) so long as no Default or
Event of Default then exists and if (a) the amount of such proceeds exceeds
$250,000 (or, in the case of a Recovery Event resulting from loss or damage to a
linear accelerator owned by Radamerica, Inc., $1,000,000), (b) the amount of
such proceeds, together with other cash available to the Borrower and its
Subsidiaries and permitted to be spent by them on Capital Expenditures during
the relevant period pursuant to Section 9.08, equals at least 100% of the cost
of replacement or restoration of the properties or assets in respect of which
such proceeds were paid as determined by the Borrower and as supported by such
estimates or bids from contractors or subcontractors or such other supporting
information as the Agent may reasonably request, (c) an Authorized Officer of
the Borrower has delivered to the Agent a certificate on or prior to the date
the application would otherwise be required pursuant to this Section 3.03(f) in
the form described in clause (x) above and also certifying its determination as
required by preceding clause (b) and certifying the sufficiency of business
interruption insurance as required by succeeding clause (d), and (d) an
Authorized Officer of the Borrower has delivered to the Agent such evidence as
the Agent may reasonably request in form and substance reasonably satisfactory
to the Agent establishing that the Borrower has sufficient business interruption
insurance and that the Borrower will receive payment thereunder in such amounts
and at such times as are necessary to satisfy all obligations and expenses of
the Borrower (including, without limitation, all debt service requirements,
including pursuant to this Agreement), without any delay or extension thereof,
for the period from the date of the respective casualty, condemnation or other
event giving rise to the Recovery Event and continuing through the completion of
the replacement
-25-
<PAGE> 33
or restoration of respective properties or assets, then the entire amount of the
proceeds of such Recovery Event and not just the portion in excess of $250,000
shall be deposited with the Agent pursuant to a cash collateral arrangement
reasonably satisfactory to the Agent whereby such proceeds shall be disbursed to
the Borrower from time to time as needed to pay actual costs incurred by them in
connection with the replacement or restoration of the respective properties or
assets (pursuant to such certification requirements as may be reasonably
established by the Agent), provided further that at any time while an Event of
Default has occurred and is continuing, the Required Banks may direct the Agent
(in which case the Agent shall, and is hereby authorized by the Borrower to,
follow said directions) to apply any or all proceeds then on deposit in such
collateral account to the repayment of Obligations hereunder, and provided
further, that if all or any portion of such proceeds not required to be applied
to reduce the Total Revolving Loans Commitment pursuant to the second preceding
proviso (whether pursuant to clause (x) or (y) thereof) are either (A) not so
used or committed to be so used within one year after the date of the respective
Recovery Event or (B) if committed to be used within one year after the date of
receipt of such Net Sale Proceeds and not so used within 18 months after the
date of the respective Recovery Event then, in either such case, such remaining
portion not used or committed to be used in the case of preceding clause (A) and
not used in the case of preceding clause (B) shall be applied on the date which
is the first anniversary of the date of the respective Recovery Event in the
case of clause (A) above or the date occurring 18 months after the date of the
respective Recovery Event in the case of clause (B) above as a mandatory
reduction in the Total Revolving Loan Commitment.
(g) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Revolving Loan Commitment (and the Revolving
Loan Commitment of each Bank) shall terminate in its entirety on the earlier of
(i) the date on which a Change of Control Event occurs and (ii) the Final
Maturity Date.
(h) Any amount required to be applied to reduce the Total Revolving
Loan Commitment pursuant to this Section 3.03 shall be applied to reduce the
then remaining Scheduled Commitment Reductions in inverse order of maturity.
(i) Each reduction to the Total Revolving Loan Commitment pursuant to
this Section 3.03 shall apply proportionately to reduce the Revolving Loan
Commitment of each Bank.
SECTION 4. Payments.
4.01 Voluntary Prepayments. (a) The Borrower shall have the right to
prepay the Loans, in whole or in part, without premium or penalty except as
otherwise provided in this Agreement, from time to time on the following terms
and conditions:
-26-
<PAGE> 34
(i) the Borrower shall give the Agent at its Notice Office
written notice (or telephonic notice promptly confirmed in writing) of
its intent to prepay the Loans, whether such Loans are Revolving Loans
or Swingline Loans, the amount of such prepayment and (in the case of
Eurodollar Loans) the specific Borrowing(s) pursuant to which made,
which notice shall be given by the Borrower prior to 12:00 Noon (New
York time) (x) at least one Business Day prior to the date of such
pre-payment in the case of Revolving Loans maintained as Base Rate
Loans, (y) on the date of such prepayment in the case of Swingline
Loans and (z) at least three Business Days prior to the date of such
prepayment in the case of Eurodollar Loans, which notice shall, except
in the case of Swingline Loans, promptly be transmitted by the Agent to
each of the Banks;
(ii) each prepayment (other than prepayments in full of (x)
all outstanding Base Rate Loans or (y) any outstanding Borrowing of
Eurodollar Loans) shall be in an aggregate principal amount of at least
the Minimum Borrowing Amount applicable thereto and, if greater, in
integral multiples of $100,000, provided, that no partial prepayment of
Eurodollar Loans made pursuant to a Borrowing shall reduce the
aggregate principal amount of the Eurodollar Loans outstanding pursuant
to such Borrowing to an amount less than the Minimum Borrowing Amount
applicable thereto;
(iii) at the time of any prepayment of Eurodollar Loans
pursuant to this Section 4.01 on any date other than the last day of
the Interest Period applicable thereto, the Borrower shall pay the
amounts required pursuant to Section 1.11; and
(iv) each prepayment in respect of any Revolving Loans made
pursuant to a Borrowing shall be applied pro rata among such Revolving
Loans, provided, that at the Borrower's election in connection with any
prepayment of Revolving Loans pursuant to this Section 4.01(a), such
prepayment shall not be applied to any Revolving Loans of a Defaulting
Bank.
(b) In the event of certain refusals by a Bank to consent to
certain proposed changes, waivers, discharges or terminations with respect to
this Agreement which have been approved by the Required Banks as provided in
Section 13.12(b), the Borrower shall have the right, upon five Business Days'
prior written notice to the Agent at its Notice Office (which notice the Agent
shall promptly transmit to each of the Banks), to repay all Revolving Loans of
such Bank (including all amounts, if any, owing pursuant to Section 1.11),
together with accrued and unpaid interest, Fees and all other amounts then owing
to such Bank in accordance with said Section 13.12(b) so long as (A) the
Revolving Loan Commitment of such Bank is terminated concurrently with such
repayment pursuant to Section 3.02(b) (at which time Annex I shall be deemed
modified to reflect the changed Revolving Loan Commitments), (B) immediately
after giving effect to such termination the
-27-
<PAGE> 35
aggregate principal amount of outstanding Loans and the Letter of Credit
Outstandings would not exceed the Total Revolving Loan Commitment as then in
effect and (C) the consents required by Section 13.12(b) in connection with the
repayment pursuant to this clause (b) shall have been obtained.
4.02 Mandatory Prepayments. (a) If on any date the sum of (i) the
aggregate outstanding principal amount of Revolving Loans and Swingline Loans
(after giving effect to all other repayments thereof on such date) and (ii) the
Letter of Credit Outstandings on such date exceeds the Total Revolving Loan
Commitment as then in effect, the Borrower shall repay on such date the
principal of Swingline Loans, and if no Swingline Loans are or remain
outstanding, Revolving Loans in an aggregate amount equal to such excess. If,
after giving effect to the prepayment of all outstanding Swingline Loans and
Revolving Loans, the aggregate amount of Letter of Credit Outstandings exceeds
the Total Revolving Loan Commitment as then in effect, the Borrower shall pay to
the Agent on such date an amount in cash and/or Cash Equivalents equal to such
excess (up to the aggregate amount of Letter of Credit Outstandings at such
time) and the Agent shall hold such payment as security for the obligations of
the Borrower hereunder pursuant to a cash collateral agreement to be entered
into in form and substance reasonably satisfactory to the Agent.
(b) With respect to each repayment of Revolving Loans required by this
Section 4.02, the Borrower may designate the Types of Revolving Loans which are
to be repaid and, in the case of Eurodollar Loans, the specific Borrowing(s)
pursuant to which made; provided, that (i) Eurodollar Loans may be designated
for repayment pursuant to this Section 4.02 only on the last day of an Interest
Period applicable thereto unless all Eurodollar Loans with Interest Periods
ending on such date of required prepayment and all Base Rate Loans have been
paid in full; (ii) if any repayment of Eurodollar Loans made pursuant to a
single Borrowing shall reduce the outstanding Eurodollar Loans to an amount less
than the Minimum Borrowing Amount applicable thereto, such Borrowing shall be
immediately converted into Base Rate Loans; and (iii) each repayment of any
Revolving Loans made pursuant to a Borrowing shall be applied pro rata among
such Revolving Loans. In the absence of a designation by the Borrower as
described in the preceding sentence, the Agent shall, subject to the above, make
such designation in its sole discretion.
(c) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, (i) all then outstanding Swingline Loans shall be repaid in full
on the Swingline Expiry Date and (ii) all then outstanding Revolving Loans shall
be repaid in full on the Final Maturity Date.
4.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or any Note shall be made to
the Agent for the ratable account of the Bank or Banks entitled thereto not
later than 12:00 Noon (New York time) on the date when due and shall be made in
immediately available funds
-28-
<PAGE> 36
and in U.S. Dollars at the Payment Office. Any payments under this Agreement or
under any Note which are made later than 12:00 Noon (New York time) shall be
deemed to have been made on the next succeeding Business Day. Whenever any
payment to be made hereunder or under any Note shall be stated to be due on a
day which is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.
4.04 Net Payments. (a) All payments made by the Borrower hereunder or
under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income or net profits of a Bank pursuant to the laws
of the jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Bank is located or any
subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect to such non excluded taxes, levies, imposts, duties,
fees, assessments or other charges (all such nonexcluded taxes, levies, imposts,
duties, fees, assessments or other charges being referred to collectively as
"Taxes"). If any Taxes are so levied or imposed, the Borrower agrees to pay the
full amount of such Taxes, and such additional amounts as may be necessary so
that every payment of all amounts due under this Agreement or under any Note,
after withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein or in such Note. If any amounts are payable
in respect of Taxes pursuant to the preceding sentence, the Borrower agrees to
reimburse each Bank, upon the written request of such Bank, for taxes imposed on
or measured by the net income or net profits of such Bank pursuant to the laws
of the jurisdiction in which such Bank is organized or in which the principal
office or applicable lending office of such Bank is located or under the laws of
any political subdivision or taxing authority of any such jurisdiction in which
such Bank is organized or in which the principal office or applicable lending
office of such Bank is located and for any withholding of taxes as such Bank
shall determine are payable by, or withheld from, such Bank in respect of such
amounts so paid to or on behalf of such Bank pursuant to the preceding sentence
and in respect of any amounts paid to or on behalf of such Bank pursuant to this
sentence. The Borrower will furnish to the Agent within 45 days after the date
the payment of any Taxes is due pursuant to applicable law certified copies of
tax receipts evidencing such payment by the Borrower. The Borrower agrees to
indemnify and hold harmless each Bank, and reimburse such Bank upon its written
request, for the amount of any Taxes so levied or imposed and paid by such Bank.
-29-
<PAGE> 37
(b) Each Bank that is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes agrees to deliver to the Borrower and the Agent on or prior to the
Effective Date, or in the case of a Bank that is an assignee or transferee of an
interest under this Agreement pursuant to Section 1.13 or 13.04 (unless the
respective Bank was already a Bank hereunder immediately prior to such
assignment or transfer), on the date of such assignment or transfer to such
Bank, (i) two accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001 (or successor forms) certifying to such Bank's
entitlement to a complete exemption from United States withholding tax with
respect to payments to be made under this Agreement and under any Note, or (ii)
if the Bank is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (i) above, (x) a certificate substantially in the form of
Exhibit D (any such certificate, a "Section 4.04(b)(ii) Certificate") and (y)
two accurate and complete original signed copies of Internal Revenue Service
Form W-8 (or successor form) certifying to such Bank's entitlement to a complete
exemption from United States withholding tax with respect to payments of
interest to be made under this Agreement and under any Note. In addition, each
Bank 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 Borrower and the
Agent two new accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001, or Form W-8 and a Section 4.04(b)(ii) Certificate, as
the case may be, and such other forms as may be required in order to confirm or
establish the entitlement of such Bank to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Agreement and any Note, or it shall immediately notify the Borrower and the
Agent of its inability to deliver any such Form or Certificate in which case
such Bank shall not be required to deliver any such Form or Certificate pursuant
to this Section 4.04(b). Notwithstanding anything to the contrary contained in
Section 4.04(a), but subject to Section 13.04(b) and the immediately succeeding
sentence, (x) the Borrower shall be entitled, to the extent it is required to do
so by law, to deduct or withhold income or similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the account of any
Bank which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for U.S. Federal income tax purposes to the extent that
such Bank has not provided to the Borrower U.S. Internal Revenue Service Forms
that establish a complete exemption from such deduction or withholding and (y)
the Borrower shall not be obligated pursuant to Section 4.04(a) hereof to
gross-up payments to be made to a Bank in respect of income or similar taxes
imposed by the United States if (I) such Bank has not provided to the Borrower
the Internal Revenue Service Forms required to be provided to the Borrower
pursuant to this Section 4.04(b) or (II) in the case of a payment, other than
interest, to a Bank described in clause (ii) above, to the extent that such
Forms do not establish a complete exemption from withholding of such taxes.
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this Section 4.04 and
-30-
<PAGE> 38
except as set forth in Section 13.04(b), the Borrower agrees to pay additional
amounts and to indemnify each Bank in the manner set forth in Section 4.04(a)
(without regard to the identity of the jurisdiction requiring the deduction or
withholding) in respect of any Taxes deducted or withheld by it as described in
the immediately preceding sentence as a result of any changes after the
Effective Date in any applicable law, treaty, governmental rule, regulation,
guideline or order, or in the interpretation thereof, relating to the deducting
or withholding of such Taxes.
SECTION 5. Conditions Precedent. The obligation of each Bank
to make each Loan to the Borrower hereunder, and the obligation of the Letter of
Credit Issuer to issue each Letter of Credit hereunder, is subject, at the time
of the making of such Loans or the Issuance of such Letters of Credit to the
satisfaction of the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the Initial
Borrowing Date, (i) the Effective Date shall have occurred and (ii) there shall
have been delivered to the Agent for the account of each Bank the appropriate
Revolving Note and to BTCo the Swingline Note, in each case executed by the
Borrower and in the amount, maturity and as otherwise provided herein.
5.02 Officer's Certificate. On the Initial Borrowing Date, the
Agent shall have received a certificate dated such date signed by an appropriate
officer of the Borrower stating that all of the applicable conditions set forth
in Sections 5.04 through 5.10, 5.16, 6.01, 6.02 and 6.03 have been satisfied on
such date.
5.03 Opinions of Counsel. On the Initial Borrowing Date, the
Agent shall have received opinions, addressed to the Agent and each of the Banks
and dated the Initial Borrowing Date, from Baer Marks & Upham LLP, counsel to
the Credit Parties, which opinion shall cover the matters contained in Exhibit E
and such other matters incident to the transactions contemplated herein as the
Agent may reasonably request.
5.04 Corporate Proceedings. (a) On the Initial Borrowing Date,
the Agent shall have received from each Credit Party a certificate, dated the
Initial Borrowing Date, signed by the chairman, a vice chairman, the president
or any vice-president of such Credit Party, and attested to by the secretary or
any assistant secretary of such Credit Party, in the form of Exhibit F with
appropriate insertions, together with copies of the Certificate of Incorporation
and By-Laws of such Credit Party and the resolutions of such Credit Party
referred to in such certificate and all of the foregoing (including each such
Certificate of Incorporation and By-Laws) shall be reasonably satisfactory to
the Agent.
(b) On the Initial Borrowing Date, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this
-31-
<PAGE> 39
Agreement and the other Documents shall be reasonably satisfactory in form and
substance to the Agent, and the Agent shall have received all information and
copies of all certificates, documents and papers, including good standing
certificates, bring-down certificates and any other records of corporate
proceedings and governmental approvals, if any, which the Agent reasonably may
have requested in connection therewith, such documents and papers, where
appropriate, to be certified by proper corporate or governmental authorities.
(c) On the Initial Borrowing Date and after giving effect to
the Transaction, the capital structure (including, without limitation, the terms
of any capital stock, options, warrants or other securities issued by the
Borrower or any of its Subsidiaries), and management of the Borrower and its
Subsidiaries shall be in form and substance satisfactory to the Agent.
5.05 Adverse Change, etc. (a) On or prior to the Initial
Borrowing Date, nothing shall have occurred since October 31, 1995 (and neither
the Banks nor the Agent shall have become aware of any facts or conditions not
previously known) which the Required Banks or the Agent shall determine has, or
could reasonably be expected to have (i) a material adverse effect on the rights
or remedies of the Banks or the Agent, or on the ability of any Credit Party to
perform its obligations to them hereunder or under any other Credit Document,
(ii) a material adverse effect on the Transaction, or (iii) a Material Adverse
Effect.
(b) On the Initial Borrowing Day, there shall have been no
material adverse change after the Effective Date to the syndication market for
credit facilities similar in nature to this Agreement and there shall not have
occurred and be continuing a material disruption or a material adverse change in
financial, banking or capital markets that would have a material adverse effect
on the syndication, in each case as reasonably determined by the Agent.
5.06 Litigation. On the Initial Borrowing Date, there shall be
no actions, suits, proceedings or investigations pending or threatened (a) with
respect to this Agreement or any other Document or the Transaction or any
documentation executed in connection therewith or the transactions contemplated
thereby or with respect to any Existing Indebtedness or (b) which the Agent or
the Required Banks shall determine could reasonably be expected to (i) have a
Material Adverse Effect or (ii) have a material adverse effect on the
Transaction, the rights or remedies of the Banks or the Agent hereunder or under
any other Credit Document or on the ability of any Credit Party to perform its
respective obligations to the Banks or the Agent hereunder or under any other
Credit Document.
5.07 Approvals. On or prior to the Initial Borrowing Date, (i)
all necessary governmental (domestic and foreign), regulatory and third party
approvals in connection
-32-
<PAGE> 40
with the Credit Documents and otherwise referred to herein or therein shall have
been obtained and remain in full force and effect, (ii) all necessary material
governmental (domestic and foreign) and third party approvals in connection with
any Existing Indebtedness, the Transaction, the transactions contemplated by the
Transaction Documents and otherwise referred to therein shall have been obtained
and remain in full force and effect and evidence thereof shall have been
provided to the Agent, and (iii) all applicable waiting periods shall have
expired without any action being taken by any competent authority which
restrains, prevents or imposes materially adverse conditions upon the
consummation of the Transaction, the making of the Loans, the issuance of
Letters of Credit and the transactions contemplated by the Documents or
otherwise referred to herein or therein. Additionally, there shall not exist any
judgment, order, injunction or other restraint issued or filed or a hearing
seeking injunctive relief or other restraint pending or notified prohibiting or
imposing materially adverse conditions upon, or materially delaying, or making
economically unfeasible, the consummation of the Transaction or the making of
the Loans, the issuance of Letters of Credit or the transactions contemplated by
the Documents.
5.08 Consummation of the Equity Financing. On the Initial
Borrowing Date, (i) the Borrower shall have received gross cash proceeds of at
least $39,600,000 in connection with the issuance by the Borrower of Borrower
Common Stock and Borrower Warrants to HP II (the "Equity Financing"), (ii) the
Agent shall have received true and correct copies of all agreements governing,
or relating to, the Equity Financing (the "Equity Financing Documents") and
(iii) all terms and conditions of the Equity Financing Documents shall be
reasonably satisfactory to the Agent (with it being understood that the Equity
Financing Documents in the form furnished to the Agent prior to the date hereof
are satisfactory to the Agent). All conditions precedent to the consummation of
the Equity Financing as set forth in the Equity Financing Documents shall have
been satisfied, and not waived unless immaterial or consented to by the Agent,
to the reasonable satisfaction of the Agent. At the time of the initial Credit
Event and before the application of the proceeds of any Loans drawn hereunder,
the Borrower shall have utilized the full amount of such cash contribution to
make payments owing in connection with the Transaction. The Equity Financing
shall have occurred in accordance with the terms and conditions of the Equity
Financing Documents and all applicable law.
5.09 Refinancing Transactions. (a) (i) On the Initial
Borrowing Date and concurrently with the Credit Events then occurring, the
commitments under the Existing Credit Agreement shall have been terminated, all
loans thereunder shall have been repaid in full, together with all accrued and
unpaid interest thereon, all accrued and unpaid fees thereon shall have been
repaid in full, all letters of credit issued thereunder shall have been
terminated, and all other amounts then owing pursuant to the Existing Credit
Agreement shall have been repaid in full, and the Agent shall have received
evidence in form, scope
-33-
<PAGE> 41
and substance reasonably satisfactory to it that the matters set forth in this
Section 5.09(a)(i) have been satisfied at such time.
(ii) On the Initial Borrowing Date and concurrently with the
Credit Events then occurring, all security interests and Liens created under the
Existing Credit Agreement and the related security documents on the capital
stock of, and assets (including intercompany notes) owned by, the Borrower and
its Subsidiaries shall have been terminated and released, and the Agent shall
have received all such releases as may have been requested by the Agent, which
releases shall be in form and substance reasonably satisfactory to the Agent.
Without limiting the foregoing, there shall have been delivered (w) proper
termination statements (Form UCC-3 or the appropriate equivalent) for filing
under the UCC of each jurisdiction where a financing statement Form UCC-1 or the
appropriate equivalent was filed with respect to the Borrower or any of its
Subsidiaries in connection with the security interest created with respect to
the Existing Credit Agreement and the documentation related thereto, (x)
termination or reassignment of any security interest in, or Lien on, any
patents, trademarks, copyrights or similar interests of the Borrower or any of
its Subsidiaries on which filings have been made, (y) terminations of all
mortgages, leasehold mortgages and deeds of trusts created with respect to
property of the Borrower or any of its Subsidiaries, in each case, to secure the
obligations under the Existing Credit Agreement, all of which shall be in form
and substance satisfactory to the Agent and the Required Banks, and (z) all
collateral owned by the Borrower or any of its Subsidiaries in the possession of
Banque Paribas, in its capacity as agent under the Existing Credit Agreement or
collateral agent under any related security document or any other agent,
collateral agent, or trustee for the creditors under the Existing Credit
Agreement.
(b) On the Initial Borrowing Date and concurrently with the
Credit Events then occurring, the Borrower shall have repurchased, retired or
redeemed all of the notes outstanding under the Subordinated Note Purchase
Agreement in full in accordance with their terms, the terms of the Subordinated
Note Purchase Agreement, this Agreement and applicable law (the "Subordinated
Note Repurchase"); provided that in no event shall the amount used to effect the
foregoing exceed $10,500,000.
(c) All obligations of the Borrower and its Subsidiaries with
respect to the Indebtedness being repaid or satisfied in the Refinancing
Transactions shall be terminated to the satisfaction of the Agent. All terms and
conditions of the Refinancing Transactions and the documentation in connection
therewith, and the amount and type of consideration payable in connection
therewith, shall be satisfactory to the Agent.
5.10 Permitted Acquisitions. On or prior to the Initial
Borrowing Date the Agent shall have received true and correct copies of any
agreements governing, or relating to, any Permitted Acquisition to the extent
such agreements have been entered into on or
-34-
<PAGE> 42
before the Initial Borrowing Date (the "Acquisition Agreements"), which
Acquisition Agreements shall be in form and substance satisfactory to the Agent.
5.11 Security Documents; Etc. (a) On the Initial Borrowing
Date, each Credit Party shall have duly authorized, executed and delivered a
Pledge Agreement in the form of Exhibit G (as modified, amended or supplemented
from time to time in accordance with the terms thereof and hereof, the "Pledge
Agreement") and shall have delivered to the Collateral Agent, as pledgee
thereunder, all of the Pledged Securities referred to therein, endorsed in blank
in the case of promissory notes or accompanied by executed and undated stock
powers in the case of capital stock, along with evidence that all other actions
necessary or, in the reasonable opinion of the Collateral Agent, desirable, to
perfect the security interests purported to be created by the Pledge Agreement
have been taken and the Pledge Agreement shall be in full force and effect.
(b) On the Initial Borrowing Date, each Credit Party shall
have duly authorized, executed and delivered a Security Agreement in the form of
Exhibit H (as modified, amended or supplemented from time to time in accordance
with the terms thereof and hereof, the "Security Agreement") covering all of the
Security Agreement Collateral, together with:
(A) executed copies of Financing Statements (Form UCC-1) or
appropriate local equivalent in appropriate form for filing under the
UCC or appropriate local equivalent of each jurisdiction as may be
necessary to perfect the security interests purported to be created by
the Security Agreement;
(B) certified copies of Requests for Information or Copies
(Form UCC-11), or equivalent reports, each of a recent date listing all
effective financing statements that name the Borrower or any of its
Subsidiaries as debtor and that are filed in the jurisdictions referred
to in clause (A) above, together with copies of such financing
statements that name the Borrower or any of its Subsidiaries as debtor
(none of which shall cover the Collateral except (x) those with respect
to which appropriate termination statements executed by the secured
lender thereunder have been delivered to the Agent and (y) to the
extent evidencing Permitted Liens);
(C) evidence of the completion of all other recordings and
filings of, or with respect to, the Security Agreement as may be
necessary or, in the reasonable opinion of the Collateral Agent,
desirable, to perfect the security interests purported to be created by
the Security Agreement; and
(D) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable, to perfect the
security interests purported to be created by the Security Agreement
have been taken;
-35-
<PAGE> 43
and the Security Agreement shall be in full force and effect.
5.12 Subsidiaries Guaranty. On the Initial Borrowing Date,
each Subsidiary Guarantor shall have duly authorized, executed and delivered a
Subsidiaries Guaranty in the form of Exhibit I (as modified, amended or
supplemented from time to time in accordance with the terms thereof and hereof,
the "Subsidiaries Guaranty"), and the Subsidiaries Guaranty shall be in full
force and effect.
5.13 Mortgages; Title Insurance. (a) On the Initial Borrowing
Date, the Collateral Agent shall have received fully executed counterparts of
deeds of trust, mortgages and similar documents in each case in form and
substance satisfactory to the Collateral Agent (as amended, modified or
supplemented from time to time in accordance with the terms thereof and hereof,
each a "Mortgage" and, collectively, the "Mortgages") with respect to each of
the Mortgaged Properties, and arrangements reasonably satisfactory to the
Collateral Agent shall be in place to provide that counterparts of such
Mortgages shall be recorded on the Initial Borrowing Date in all places to the
extent necessary or desirable, in the judgment of the Collateral Agent,
effectively to create a valid and enforceable first priority mortgage Lien,
subject only to Permitted Encumbrances, on each such Mortgaged Property in favor
of the Collateral Agent (or such other trustee as may be required or desired
under local law) for the benefit of the Secured Creditors.
(b) On the Initial Borrowing Date, the Collateral Agent shall
have received mortgagee title insurance policies (or binding commitments to
issue such title insurance policies) issued by title insurers reasonably
satisfactory to the Collateral Agent (the "Mortgage Policies") in amounts
reasonably satisfactory to the Collateral Agent and assuring the Collateral
Agent that the Mortgages are valid and enforceable first priority mortgage Liens
on the respective Mortgaged Properties, free and clear of all defects and
encumbrances except Permitted Encumbrances. Such Mortgage Policies shall be in
form and substance reasonably satisfactory to the Collateral Agent and (i) shall
include (to the extent available in the respective jurisdiction of each
Mortgaged Property) an endorsement for future advances under this Agreement, the
Notes and the Mortgages, and for such other matters that the Collateral Agent in
its discretion may reasonably request, (ii) shall not include an exception for
mechanics' liens, and (iii) shall provide for affirmative insurance and such
reinsurance (including direct access agreements) as the Collateral Agent in its
discretion may reasonably request.
(c) On the Initial Borrowing Date, the Collateral Agent shall
have received surveys in form and substance satisfactory to the Collateral Agent
of each Mortgaged Property, if any, designated as "Owned" on Annex III hereto,
dated a recent date acceptable to the Collateral Agent and certified in a manner
satisfactory to the Collateral Agent by a licensed professional surveyor
satisfactory to the Agent.
-36-
<PAGE> 44
(d) On the Initial Borrowing Date, the Collateral Agent shall
have received duly authorized, fully executed, acknowledged and delivered
subordination, non-disturbance and attornment agreements, assignment of leases,
landlord consents, tenant estoppel certificates and such other documents
relating to the Mortgages that the Collateral Agent may request.
5.14 Employee Benefit Plans; Shareholders' Agreements;
Management Agreements; Employment Agreements; Collective Bargaining Agreements;
Existing Indebtedness Agreements; Material Contracts; Tax Allocation Agreements;
Transaction Documents. On or prior to the Initial Borrowing Date, there shall
have been delivered to the Agent true and correct copies, certified as true and
complete by an appropriate officer of the Borrower of:
(i) all Plans (and for each Plan that is required to file an
annual report on Internal Revenue Service Form 5500-series, a copy of
the most recent such report (including, to the extent required, the
related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information), and
for each Plan that is a "single-employer plan," as defined in Section
4001(a)(15) of ERISA, the most recently prepared actuarial valuation
therefor) and any other "employee benefit plans," as defined in Section
3(3) of ERISA, and any other material agreements, plans or
arrangements, with or for the benefit of current or former employees of
the Borrower or any of its Subsidiaries or any ERISA Affiliate
(provided that the foregoing shall apply in the case of any
multi-employer plan, as defined in 4001(a)(3) of ERISA, only to the
extent that any document described therein is in the possession of the
Borrower or any Subsidiary of the Borrower or any ERISA Affiliate or
reasonably available thereto from the sponsor or trustee of any such
plan) (collectively, the "Employee Benefit Plans");
(ii) all agreements (including, without limitation,
shareholders' agreements, subscription agreements and registration
rights agreements) entered into by the Borrower or any of its
Subsidiaries governing the terms and relative rights of its capital
stock and any agreements entered into by shareholders relating to any
such entity with respect to its capital stock (collectively, the
"Shareholders' Agreements");
(iii) all material agreements with members of, or with respect
to, the management of the Borrower or any of its Subsidiaries
(collectively, the "Management Agreements");
(iv) any material employment agreements entered into by the
Borrower or any of its Subsidiaries (collectively, the "Employment
Agreements");
-37-
<PAGE> 45
(v) all collective bargaining agreements applying or relating
to any employee of the Borrower or any of its Subsidiaries
(collectively, the "Collective Bargaining Agreements");
(vi) all agreements evidencing or relating to Indebtedness of
the Borrower or any of its Subsidiaries which is to remain outstanding
after giving effect to the incurrence of Loans on the Initial Borrowing
Date (collectively, the "Existing Indebtedness Agreements");
(vii) all other material contracts and licenses of the
Borrower and any of its Subsidiaries (collectively, the "Material
Contracts");
(viii) any tax sharing or tax allocation agreements entered
into by the Borrower or any of its Subsidiaries (collectively, the "Tax
Allocation Agreements"); and
(ix) all Transaction Documents;
all of which Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Employment Agreements, Collective Bargaining Agreements, Existing
Indebtedness Agreements, Material Contracts, Tax Allocation Agreements and
Transaction Documents shall be in form and substance satisfactory to the Agent
and the Required Banks and shall be in full force and effect on the Initial
Borrowing Date.
5.15 Solvency Certificate; Insurance Certificates;
Environmental Assessments. On or before the Initial Borrowing Date, the Agent
shall have received:
(a) a solvency certificate in the form of Exhibit J from the
chief financial officer of the Borrower and dated the Initial Borrowing
Date and supporting the conclusions, that, after giving effect to the
Transaction and the incurrence of all financings contemplated herein as
of the Initial Borrowing Date, the Borrower (on a stand-alone basis)
and the Borrower and its Subsidiaries (on a consolidated basis) are not
insolvent and will not be rendered insolvent by the indebtedness
incurred in connection herewith, will not be left with unreasonably
small capital with which to engage in their respective businesses and
will not have incurred debts beyond their ability to pay such debts as
they mature and become due; and
(b) evidence of insurance complying with the requirements of
Section 8.03 for the business and properties of the Borrower and its
Subsidiaries, in scope, form and substance reasonably satisfactory to
the Agent and the Required Banks and naming the Collateral Agent as an
additional insured and/or loss payee, and stating
-38-
<PAGE> 46
that such insurance shall not be cancelled or revised without at least
30 days' prior written notice by the insurer to the Collateral Agent.
5.16 Existing Indebtedness. On the Initial Borrowing Date and
after giving effect to the Loans incurred on the Initial Borrowing Date, neither
the Borrower nor any of its Subsidiaries shall have any preferred stock or
Indebtedness outstanding except for (i) the Loans and (ii) certain intercompany
indebtedness and other indebtedness as is listed on Annex IV (with the
Indebtedness described in this clause (ii) being herein called "Existing
Indebtedness"). On and as of the Initial Borrowing Date, all of the Existing
Indebtedness shall remain outstanding after giving effect to the Transaction and
the other transactions contemplated hereby without any default or events of
default existing thereunder or arising as a result of the Transaction and the
other transactions contemplated hereby (except to the extent amended or waived
by the parties thereto on terms and conditions reasonably satisfactory to the
Agent and the Required Banks), and there shall not be any amendments or
modifications to the Existing Indebtedness Agreements other than as requested or
approved by the Agent or the Required Banks. On and as of the Initial Borrowing
Date, the Agent and the Required Banks shall be satisfied with the terms and
conditions of all Existing Indebtedness.
5.17 Pro Forma Balance Sheet; Financial Statements;
Projections. On or prior to the Initial Borrowing Date, there shall have been
delivered to the Agent (a) an unaudited pro forma consolidated balance sheet of
the Borrower and its Subsidiaries as of April 30, 1996, and after giving effect
to the Transaction and the incurrence of all Indebtedness (including the Loans)
contemplated herein as of the Initial Borrowing Date, and prepared in accordance
with GAAP, together with a related funds flow statement, which pro forma balance
sheet and funds flow statement shall be reasonably satisfactory to the Agent and
the Required Banks;
(b) unaudited historical consolidated financial statements of
the Borrower and its Subsidiaries for the fiscal quarter ending April 30, 1996,
and audited for the two fiscal years preceding such fiscal quarter;
(c) the consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of each complete calendar month of the Borrower ended
after April 30, 1996, ended at least 20 days before the Initial Borrowing Date
and the related consolidated statement of income and statement of cash flows for
each such month, and for the elapsed portion of the calendar year ended with the
last day of each such month, in each case setting forth comparative figures for
the corresponding month in the prior calendar year and compared to the budget
delivered to the Banks for the then current calendar year, which financial
statements shall be prepared in accordance with GAAP and shall be in form and
substance satisfactory to the Agent and the Required Banks; and
-39-
<PAGE> 47
(d) on or prior to the Initial Borrowing Date there shall have
been delivered to the Agent detailed projected consolidated financial statements
of the Borrower and its Subsidiaries certified by the chief financial officer or
treasurer of the Borrower for the period from October 31, 1995 to October 31,
2001, (the "Projections"), which Projections (x) shall reflect the forecasted
consolidated financial conditions and income and expenses of the Borrower and
its Subsidiaries after giving affect to the Transaction and the related
financing thereof and the other transactions contemplated hereby and (y) shall
be satisfactory in form and substance to the Agent and the Required Banks.
5.18 Payment of Fees. On the Initial Borrowing Date, all
costs, fees and expenses, and all other compensation due to the Agent or the
Banks (including, without limitation, reasonable legal fees and expenses) shall
have been paid to the extent due.
SECTION 6. Conditions Precedent to All Credit Events. The
obligation of each Bank to make Loans (including Loans made on the Initial
Borrowing Date but excluding Mandatory Borrowings made thereafter, which shall
be made as provided in Section 1.01(c)), and the obligation of a Letter of
Credit Issuer to issue any Letter of Credit, is subject, at the time of each
such Credit Event (except as hereinafter indicated), to the satisfaction of the
following conditions:
6.01 No Default; Representations and Warranties. At the time
of each such Credit Event and also after giving effect thereto (i) there shall
exist no Default or Event of Default and (ii) all representations and warranties
contained herein or in any other Credit Document shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of the making of such Credit Event (it
being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct in
all material respects only as of such specified date).
6.02 Adverse Change; etc. At the time of each such Credit
Event and also after giving effect thereto, nothing shall have occurred (and the
Banks shall have become aware of no facts or conditions not previously known)
which the Agent or the Required Banks shall determine (i) has, or could
reasonably be expected to have, a material adverse effect on the rights or
remedies of the Banks or the Agent, or on the ability of the Borrower or any
other Credit Party to perform its obligations to the Agent or the Banks under
this Agreement or any other Credit Document or (ii) has, or could reasonably be
expected to have, a Material Adverse Effect.
6.03 Litigation. At the time of each such Credit Event and
also after giving effect thereto, no litigation or investigation by any entity
(private or governmental) shall be pending or threatened in writing with respect
to this Agreement, any other Document or
-40-
<PAGE> 48
any documentation executed in connection herewith or the transactions
contemplated hereby or thereby, or which the Agent or the Required Banks shall
determine could reasonably be expected to have a Material Adverse Effect.
6.04 Notice of Borrowing; Letter of Credit Request. (a) Prior
to the making of each Loan (excluding Swingline Loans and Mandatory Borrowings),
the Agent shall have received a Notice of Borrowing meeting the requirements of
Section 1.03(a). Prior to the making of any Swingline Loan, BTCo shall have
received the notice required by Section 1.03(d)(i).
(b) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the respective Issuing Bank shall have received a
Letter of Credit Request meeting the requirements of Section 2.02.
The occurrence of the Initial Borrowing Date and the
acceptance of the benefits or proceeds of each Credit Event shall constitute a
representation and warranty by the Borrower to the Agent and each of the Banks
that all the conditions specified in Section 5 and in this Section 6 and
applicable to such Credit Event exist as of that time. All of the Notes,
certificates, legal opinions and other documents and papers referred to in
Section 5 and in this Section 6, unless otherwise specified, shall be delivered
to the Agent at the Notice Office for the account of each of the Banks and,
except for the Notes, in sufficient counterparts or copies for each of the Banks
and shall be in form and substance reasonably satisfactory to the Banks.
SECTION 7. Representations, Warranties and Agreements. In
order to induce the Banks to enter into this Agreement and to make the Loans and
issue and/or participate in the Letters of Credit provided for herein, the
Borrower makes the following representations, warranties and agreements with the
Banks in each case after giving effect to the Transaction, all of which shall
survive the execution and delivery of this Agreement, the making of the Loans
and the issuance of the Letters of Credit (with the occurrence of each Credit
Event being deemed to constitute a representation and warranty that the matters
specified in this Section 7 are true and correct in all material respects on and
as of the date of each such Credit Event, unless stated to relate to a specific
earlier date in which case such representations and warranties shall be true and
correct in all material respects as of such earlier date):
7.01 Corporate Status. Each of the Borrower and each of its
Subsidiaries (i) is a duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its organization, (ii) has the
corporate power and authority to own its property and assets and to transact the
business in which it is engaged and presently proposes to engage and (iii) is
duly qualified and is authorized to do business and is in good
-41-
<PAGE> 49
standing in all jurisdictions where it is required to be so qualified and where
the failure to be so qualified would have a Material Adverse Effect.
7.02 Corporate Power and Authority. Each Credit Party has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Documents to which it is a party and has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Documents to which it is a party. Each Credit Party has duly executed and
delivered each Document to which it is a party and each such Document
constitutes the legal, valid and binding 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 similar laws generally affecting creditors' rights
and by equitable principles (regardless of whether enforcement is sought in
equity or at law).
7.03 No Violation. Neither the execution, delivery or
performance by any Credit Party of the Documents to which it is a party, nor
compliance by any Credit Party with the terms and provisions thereof, nor the
consummation of the transactions contemplated herein or therein, (i) will
contravene any applicable provision of any law, statute, rule or regulation, or
any order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict or be inconsistent with or result in any
breach of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, or (other than pursuant to the Security Documents)
result in the creation or imposition of (or the obligation to create or impose)
any Lien upon any of the property or assets of the Borrower or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust,
loan agreement, credit agreement or any other material agreement or instrument
to which the Borrower or any of its Subsidiaries is a party or by which it or
any of its property or assets are bound or to which it may be subject
(including, without limitation, the Existing Indebtedness) or (iii) will violate
any provision of the Certificate of Incorporation or ByLaws of the Borrower or
any of its Subsidiaries.
7.04 Litigation. There are no actions, suits, proceedings or
investigations pending or threatened, with respect to the Borrower or any of its
Subsidiaries (i) that are likely to have a Material Adverse Effect or (ii) that
could reasonably be expected to have a material adverse effect on the rights or
remedies of the Agent or the Banks or on the ability of any Credit Party to
perform its respective obligations to the Agent or the Banks hereunder and under
the other Credit Documents to which it is, or will be, a party. Additionally,
there does not exist any judgment, order or injunction prohibiting or imposing
material adverse conditions upon the occurrence of any Credit Event.
7.05 Use of Proceeds; Margin Regulations. (a) The proceeds of
the Loans shall be utilized to (i) provide for the general corporate and working
capital purposes of the Borrower and its Subsidiaries (including and to effect
acquisitions and make Capital
-42-
<PAGE> 50
Expenditures, in each case to the extent permitted by this Agreement), provided
that (x) the amount of outstanding Loans incurred to effect Permitted
Acquisitions shall not exceed $85,000,000 and (y) $15,000,000 of the revolving
credit facility made available pursuant to this Agreement shall at all times be
utilized only for working capital purposes.
(b) Neither the making of any Loan, nor the use of the
proceeds thereof, nor the occurrence of any other Credit Event, will violate or
be inconsistent with the provisions of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System and no part of any Credit Event (or the
proceeds thereof) will be used to purchase or carry any Margin Stock or to
extend credit for the purpose of purchasing or carrying any Margin Stock.
7.06 Governmental Approvals. (a) 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
in connection with (i) the execution, delivery and performance of any Credit
Document or (ii) the legality, validity, binding effect or enforceability of
any Credit Document.
(b) No material order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made prior to the date when required and which
remain in full force and effect), or exemption by, any governmental or public
body or authority, or any subdivision thereof, is required to authorize, or is
required in connection with, (i) the Transaction, (ii) the execution, delivery
and performance of any Transaction Document or (iii) the legality, validity,
binding effect or enforceability of any such Transaction Document.
7.07 Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.08 Public Utility Holding Company Act. Neither the Borrower
nor any of its Subsidiaries is a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
7.09 True and Complete Disclosure. All factual information
(taken as a whole) heretofore or contemporaneously furnished by or on behalf of
the Borrower or any of its Subsidiaries in writing to the Agent or any Bank
(including, without limitation, all information contained in the Documents) for
purposes of or in connection with this Agreement or any transaction contemplated
herein or therein is, and all other such factual
-43-
<PAGE> 51
information (taken as a whole) hereafter furnished by or on behalf of any such
Persons in writing to the Agent or any Bank 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 provided.
7.10 Financial Condition; Financial Statements. (a) On a pro
forma basis after giving effect to the Transaction and all other transactions
contemplated by the Documents and to all Indebtedness incurred, and to be
incurred, on each date on which this representation is being made and Liens
created, and to be created, by each Credit Party in connection therewith, with
respect to each of the Borrower and its Subsidiaries (on a consolidated basis)
and of the Borrower (on a stand-alone basis) (x) the sum of the assets, at a
fair valuation, of each of the Borrower and its Subsidiaries (on a consolidated
basis) and the Borrower (on a stand-alone basis) will exceed its debts, (y) it
has not incurred nor intended to, nor believes that it will, incur debts beyond
its ability to pay such debts as such debts mature and (z) it will have
sufficient capital with which to conduct its business. For purposes of this
Section 7.10(a), "debt" means any liability on a claim, and "claim" means (i)
right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured or (ii) right to an equitable
remedy for breach of performance if such breach gives rise to a payment, whether
or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured or unsecured.
(b) (i) The statements of financial condition of the Borrower
and its Subsidiaries at October 31, 1995, and April 30, 1996, and the related
statements of income and cash flows and changes in shareholders' equity of the
Borrower and its Subsidiaries for the fiscal year or six-month period, as the
case may be, ended as of said dates, copies of which have heretofore been
furnished to each Bank, and (ii) the consolidated balance sheet of the Borrower
and its Subsidiaries as of the end of each calendar month of the Borrower ended
after April 30, 1996 and the related consolidated statement of income and
statement of cash flows of the Borrower and its Subsidiaries for each such
month, and furnished to the Banks prior to the Effective Date, present fairly in
all material respects the consolidated financial condition of the Borrower and
its Subsidiaries at the dates of said statements and the results for the periods
covered thereby (subject, in the case of unaudited financial statements, to
normal year-end adjustments). All such financial statements have been prepared
in accordance with GAAP consistently applied except to the extent provided in
the notes to said financial statements and subject, in the case of the six-month
and monthly statements, to normal year-end audit adjustments and the absence of
footnotes (all of which are of a recurring nature and none of which,
individually or in the aggregate, would be material).
-44-
<PAGE> 52
(c) Since October 31, 1995, nothing has occurred that has had
or could reasonably be expected to have a Material Adverse Effect.
(d) Except as fully reflected in the financial statements
described in Section 7.10(b) and the Indebtedness incurred under this Agreement,
(i) there were as of the Initial Borrowing Date (and after giving effect to any
Loans made on such date), no liabilities or obligations (excluding current
obligations incurred in the ordinary course of business) with respect to the
Borrower or any of its Subsidiaries of any nature whatsoever (whether absolute,
accrued, contingent or otherwise and whether or not due), and (ii) the Borrower
does not know of any basis for the assertion against it or any of its
Subsidiaries of any such liability or obligation which, either individually or
in the aggregate, are or would be reasonably likely to have, a Material Adverse
Effect.
(e) The Projections have been prepared on a basis consistent
with the financial statements referred to in Section 7.10(b), and are based on
good faith estimates and assumptions made by the management of the Borrower. On
the Initial Borrowing Date such management believed that the Projections were
reasonable and attainable. There is no fact known to the Borrower or any of its
Subsidiaries which could have a Material Adverse Effect, which has not been
disclosed herein or in such other documents, certificates and statements
furnished to the Banks for use in connection with the transactions contemplated
hereby.
7.11 Security Interests. On and after the Initial Borrowing
Date, each of the Security Documents creates (or after the execution and
delivery thereof will create), as security for the Obligations, a valid and
enforceable perfected security interest in and Lien on all of the Collateral
subject thereto, superior to and prior to the rights of all third Persons, and
subject to no other Liens (except that (i) the Security Agreement Collateral,
the Mortgaged Properties and any additional Mortgaged Properties may be subject
to Permitted Liens relating thereto and (ii) the Pledge Agreement Collateral may
be subject to the Liens described in clauses (a) and (e) of Section 9.03), in
favor of the Collateral Agent. No filings or recordings are required in order to
perfect the security interests created under any Security Document except for
filings or recordings required in connection with any such Security Document
which shall have been made on or prior to the Initial Borrowing Date as
contemplated by Section 5.11 or 5.13 or on or prior to the execution and
delivery thereof as contemplated by Sections 8.11 and 9.15.
7.12 Transaction. At the time of consummation thereof, the
Transaction shall have been consummated in accordance with the terms of the
respective Documents and all applicable laws. At the time of consummation
thereof, all consents and approvals of, and filings and registrations with, and
all other actions in respect of, all governmental agencies, authorities or
instrumentalities required to make or consummate the Transaction have been
obtained, given, filed or taken or waived and are or will be in full force and
effect (or
-45-
<PAGE> 53
effective judicial relief with respect thereto has been obtained). All
applicable waiting periods with respect thereto have or, prior to the time when
required, will have, expired without, in all such cases, any action being taken
by any competent authority which restrains, prevents, or imposes material
adverse conditions upon the Transaction. Additionally, there does not exist any
judgment, order or injunction prohibiting or imposing material adverse
conditions upon the Transaction, or the occurrence of any Credit Event or the
performance by the Borrower and its Subsidiaries of their obligations under the
Documents and all applicable laws.
7.13 Compliance with ERISA. (i) Annex V sets forth each Plan;
each Plan (and each related trust, insurance contract or fund) is in substantial
compliance with its terms and with all applicable laws, including without
limitation ERISA and the Code; each Plan (and each related trust, if any) which
is intended to be qualified under Section 401(a) of the Code has received a
determination letter from the Internal Revenue Service to the effect that it
meets the requirements of Sections 401(a) and 501(a) of the Code; no Reportable
Event has occurred; no Plan which is a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) is insolvent or in reorganization; no Plan has an Unfunded
Current Liability; no Plan which is subject to Section 412 of the Code or
Section 302 of ERISA has an accumulated funding deficiency, within the meaning
of such sections of the Code or ERISA, or has applied for or received a waiver
of an accumulated funding deficiency or an extension of any amortization period,
within the meaning of Section 412 of the Code or Section 303 or 304 of ERISA;
all contributions required to be made with respect to a Plan have been timely
made; neither the Borrower nor any Subsidiary of the Borrower nor any ERISA
Affiliate has incurred any material liability (including any indirect,
contingent or secondary liability) to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or Section 401(a)(29), 4971 or 4975 of the Code or expects to incur any
such liability under any of the foregoing sections with respect to any Plan; no
condition exists which presents a material risk to the Borrower or any
Subsidiary of the Borrower or any ERISA Affiliate of incurring a liability to or
on account of a Plan pursuant to the foregoing provisions of ERISA and the Code;
no proceedings have been instituted to terminate or appoint a trustee to
administer any Plan which is subject to Title IV of ERISA; no action, suit,
proceeding, hearing, audit or investigation with respect to the administration,
operation or the investment of assets of any Plan (other than routine claims for
benefits) is pending, expected or threatened; using actuarial assumptions and
computation methods consistent with Part 1 of subtitle E of Title IV of ERISA,
the aggregate liabilities of the Borrower and its Subsidiaries and its ERISA
Affiliates to all Plans which are multiemployer plans (as defined in Section
4001(a)(3) of ERISA) in the event of a complete withdrawal therefrom, as of the
close of the most recent fiscal year of each such Plan ended prior to the date
of the most recent Credit Event, would not exceed $50,000; each group health
plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code)
which covers or has covered employees or former employees of the Borrower, any
Subsidiary of the Borrower, or any ERISA Affiliate has at all times
-46-
<PAGE> 54
been operated in compliance with the provisions of Part 6 of subtitle B of Title
I of ERISA and Section 4980B of the Code; no lien imposed under the Code or
ERISA on the assets of the Borrower or any Subsidiary of the Borrower or any
ERISA Affiliate exists or is likely to arise on account of any Plan; and the
Borrower and its Subsidiaries may cease contributions to or terminate any
employee benefit plan maintained by any of them without incurring any material
liability.
(ii) Each Foreign Pension Plan has been maintained in
substantial compliance with its terms and with the requirements of any and all
applicable laws, statutes, rules, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory
authorities. All contributions required to be made with respect to a Foreign
Pension Plan have been timely made. Neither the Borrower nor any of its
Subsidiaries has incurred any obligation in connection with the termination of
or withdrawal from any Foreign Pension Plan. The present value of the accrued
benefit liabilities (whether or not vested) under each Foreign Pension Plan,
determined as of the end of the Borrower's most recently ended fiscal year on
the basis of actuarial assumptions, each of which is reasonable, did not exceed
the current value of the assets of such Foreign Pension Plan allocable to such
benefit liabilities.
7.14 Capitalization. (a) On July 26, 1996, and after giving
effect to the Equity Financing, the authorized capital stock of the Borrower
consists of (i) 30,000,000 shares of common stock, $.01 par value per share (the
"Borrower Common Stock"), of which 9,931,668 shares are issued and outstanding,
(ii) 2,000,000 shares of preferred stock, $.01 par value per share, of which no
shares are issued and outstanding and (iii) 6,075,291 warrants or options each
to purchase one share of Borrower Common Stock (the "Borrower Warrants"), of
which 5,564,749 warrants or options are issued and outstanding. All such
outstanding shares, warrants and options have been duly and validly issued, are
fully paid and nonassessable and are free of preemptive rights.
(b) On the Initial Borrowing Date, the Borrower does not have
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock, except the Borrower Warrants and the Stock Option Plans. On
the Initial Borrowing Date, all agreements providing a Person with registration
rights with respect to the securities of the Borrower or any of its Subsidiaries
are described on Annex VI hereto as well as shares reserved for issuance.
7.15 Subsidiaries. On and as of the Initial Borrowing Date and
after giving effect to the consummation of the Transaction, the Borrower has no
Subsidiaries other than those Subsidiaries listed on Annex VII. Annex VII
correctly sets forth, as of the Initial Borrowing Date and after giving effect
to the Transaction, the percentage ownership (direct
-47-
<PAGE> 55
and indirect) of the Borrower in each class of capital stock of each of its
Subsidiaries and also identifies the direct owner thereof. All outstanding
shares of capital stock of each Subsidiary of the Borrower have been duly and
validly issued, are fully paid and non-assessable (other than pursuant to
Section 630 of the New York Business Corporation Law, in the case of shares of
capital stock of a Subsidiary that is a New York Corporation) and have been
issued free of preemptive rights. No Subsidiary of the Borrower has outstanding
any securities convertible into or exchangeable for its capital stock or
outstanding any right to subscribe for or to purchase, or any options or
warrants for the purchase of, or any agreement providing for the issuance
(contingent or otherwise) of or any calls, commitments or claims of any
character relating to, its capital stock or any stock appreciation or similar
rights.
7.16 Intellectual Property, etc. Each of the Borrower and its
Subsidiaries owns all patents, trademarks, permits, service marks, trade names,
technology copyrights, licenses, franchises and formulas, or other rights with
respect to the foregoing, and has obtained assignments of all leases and other
rights of whatever nature, and has in full force and effect all accreditations
and certifications, reasonably necessary for the conduct of its business,
without any known conflict with the rights of others which, or the failure to
obtain which, as the case may be, would result in a Material Adverse Effect.
7.17 Compliance with Statutes, etc. Each of the Borrower and
each of its Subsidiaries is in compliance with all applicable statutes,
regulations, rules and orders of, and all applicable restrictions imposed by,
all governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including compliance with all
Medicare, Medicaid and similar statutes, regulations, rules and orders), except
such non-compliance as is not likely to, individually or in the aggregate, have
a Material Adverse Effect.
7.18 Environmental Matters. (a) The Borrower and each of its
Subsidiaries has complied with, and on the date of each Credit Event is in
compliance with, all applicable Environmental Laws and the requirements of any
permits issued under such Environmental Laws and neither the Borrower nor any of
its Subsidiaries is liable for any material penalties, fines or forfeitures for
failure to comply with any of the foregoing. There are no pending or past or
threatened Environmental Claims against the Borrower or any of its Subsidiaries
or any Real Property owned or operated by the Borrower or any of its
Subsidiaries. There are no facts, circumstances, conditions or occurrences
relating to the Borrower or any of its Subsidiaries, the operations of the
Borrower or any of its Subsidiaries or any Real Property owned or operated by
the Borrower or any of its Subsidiaries or any property adjoining or in the
vicinity of any such Real Property that would reasonably be expected (i) to form
the basis of an Environmental Claim against the Borrower or any of its
Subsidiaries or any such Real Property or (ii) to cause any such Real Property
to be subject to any restrictions on the ownership, occupancy, use or
-48-
<PAGE> 56
transferability of such Real Property by the Borrower or any of its Subsidiaries
under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated,
used, treated or stored on, or transported to or from, any Real Property owned
or operated by the Borrower or any of its Subsidiaries. Hazardous Materials have
not at any time been Released on or from any Real Property owned or operated by
the Borrower or any of its Subsidiaries. There are not now any underground
storage tanks located on any Real Property owned or operated by the Borrower or
any of its Subsidiaries.
(c) Notwithstanding anything to the contrary in this Section
7.18, the representations made in this Section 7.18 shall only be untrue if the
aggregate effect of all conditions, failures, noncompliances, Environmental
Claims, Releases and presence of underground storage tanks, in each case of the
types described above, would reasonably be expected to have a Material Adverse
Effect.
7.19 Properties. All Real Property owned by the Borrower or
any of its Subsidiaries and all material Leaseholds leased by the Borrower or
any of its Subsidiaries, in each case as of the Initial Borrowing Date and after
giving effect to the Transaction, and the nature of the interest therein, is
correctly set forth in Annex III. Each of the Borrower and each of its
Subsidiaries has good and marketable title to, or a validly subsisting
lease-hold interest in, all material properties owned or leased by it, including
all Real Property reflected in Annex III or in the financial statements referred
to in Section 7.10(b) or in the pro forma balance sheet referred to in Section
5.17(a), free and clear of all Liens, other than Permitted Liens.
7.20 Labor Relations. Neither the Borrower nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. There is (i) no unfair labor
practice complaint pending against the Borrower or any of its Subsidiaries or
threatened against any of them, before the National Labor Relations Board, and
no grievance or arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Borrower or any of its
Subsidiaries or threatened against any of them, (ii) no strike, labor dispute,
slowdown or stoppage pending against the Borrower or any of its Subsidiaries or
threatened against the Borrower or any of its Subsidiaries and (iii) no union
representation question existing with respect to the employees of the Borrower
or any of its Subsidiaries and no union organizing activities are taking place,
except (with respect to any matter specified in clause (i), (ii) or (iii) above,
either individually or in the aggregate) such as is not reasonably likely to
have a Material Adverse Effect.
7.21 Tax Returns and Payments. Each of the Borrower and each
of its subsidiaries has filed all federal income tax returns and all other
material tax returns,
-49-
<PAGE> 57
domestic and foreign, required to be filed by it and has paid all material taxes
and assessments payable by it which have become due, except for those contested
in good faith and adequately disclosed and fully provided for on the financial
statements of the Borrower and its subsidiaries in accordance with generally
accepted accounting principles. The Borrower and each of its subsidiaries have
at all times paid, or have provided adequate reserves (in the good faith
judgment of the management of the Borrower) for the payment of, all federal,
state and foreign income taxes applicable for all prior fiscal years and for the
current fiscal year to date. There is no material action, suit, proceeding,
investigation, audit, or claim now pending or, to the knowledge of the Borrower
or any of its subsidiaries, threatened by any authority regarding any taxes
relating to the Borrower or any of its subsidiaries. Neither the Borrower nor
any of its subsidiaries has entered into an agreement or waiver or been
requested to enter into an agreement or waiver extending any statute of
limitations relating to the payment or collection of taxes of the Borrower or
any of its subsidiaries, or is aware of any circumstances that would cause the
taxable years or other taxable periods of the Borrower or any of its
subsidiaries not to be subject to the normally applicable statute of
limitations.
7.22 Existing Indebtedness. Annex IV sets forth a true and
complete list of all Indebtedness of the Borrower and its Subsidiaries as of the
Initial Borrowing Date and which is to remain outstanding after giving effect to
the Transaction and the incurrence of Loans on such date, in each case showing
the aggregate principal amount thereof and the name of the respective borrower
and any other entity which directly or indirectly guaranteed such debt.
7.23 Insurance. Set forth on Annex VIII hereto is a true,
correct and complete summary of all insurance carried by each Credit Party on
and as of the Initial Borrowing Date, with the amounts insured set forth
therein.
7.24 Representations and Warranties in Documents . All
representations and warranties set forth in the other Documents were true and
correct in all material respects at the time as of which such representations
and warranties were made (or deemed made) and shall be true and correct in all
material respects as of the Initial Borrowing Date as if such representations or
warranties were made on and as of such date, unless stated to relate to a
specific earlier date, in which case such representations or warranties shall be
true and correct in all material respects as of such earlier date.
SECTION 8. Affirmative Covenants. The Borrower hereby
covenants and agrees that as of the Effective Date and thereafter for so long as
this Agreement is in effect and until the Total Revolving Loan Commitment has
terminated, no Letters of Credit or Notes are outstanding and the Loans and
Unpaid Drawings, together with interest, Fees and
-50-
<PAGE> 58
all other Obligations (other than any indemnities described in Section 13.13
which are not then due and payable) incurred hereunder, are paid in full:
8.01 Information Covenants. The Borrower will furnish to each
Bank:
(a) Monthly Reports. Within 30 days after the end of each
fiscal month of the Borrower, the consolidated and consolidating
balance sheet of the Borrower and its Subsidiaries as at the end of
such fiscal month and the related consolidated and consolidating
statements of income and retained earnings and consolidated statements
of cash flows for such fiscal month and for the elapsed portion of the
fiscal year ended with the last day of such fiscal month, in each case
setting forth comparative figures for the corresponding fiscal month in
the prior fiscal year and comparable budgeted figures for such fiscal
month as set forth in the respective budget delivered pursuant to
Section 8.01(d), all of which shall be certified by the chief financial
officer or other Authorized Officer of the Borrower, subject to normal
year-end audit adjustments and the absence of footnotes.
(b) Quarterly Financial Statements. Within 45 days after the
close of the first three quarterly accounting periods in each fiscal
year of the Borrower, (i) the consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such quarterly
accounting period and the related consolidated statements of income and
retained earnings and of cash flows for such quarterly accounting
period and for the elapsed portion of the fiscal year ended with the
last day of such quarterly accounting period and the budgeted figures
for such quarterly period as set forth in the respective budget
delivered pursuant to Section 8.01(d) and (ii) management's discussion
and analysis of the most important operational and financial
developments during such quarterly period; all of which shall be in
reasonable detail and certified by the chief financial officer or other
Authorized Officer of the Borrower that they fairly present in all
material respects the financial condition of the Borrower and its
Subsidiaries as of the dates indicated and the results of their
operations and changes in their cash flows for the periods indicated,
subject to normal year-end audit adjustments and the absence of
footnotes.
(c) Annual Financial Statements. Within 90 days after the
close of each fiscal year of the Borrower, the consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal
year and the related consolidated statements of income and retained
earnings and of cash flows for such fiscal year and setting forth
comparative consolidated figures for the preceding fiscal year and
comparable budgeted figures for such fiscal year as set forth in the
respective budget delivered pursuant to Section 8.01(d) and (except for
such comparable budgeted figures) certified by Coopers & Lybrand L.L.P.
or such other independent certified public accountants of recognized
national standing as shall be reasonably acceptable to the
-51-
<PAGE> 59
Agent, in each case to the effect that such statements fairly present
in all material respects the financial condition of the Borrower and
its Subsidiaries as of the dates indicated and the results of their
operations and changes in its financial position for the periods
indicated in conformity with GAAP applied on a basis consistent with
prior years, together with a certificate of such accounting firm
stating that in the course of its regular audit of the business of the
Borrower and its Subsidiaries, which audit was conducted in accordance
with generally accepted auditing standards, no Default or Event of
Default which has occurred and is continuing has come to their
attention or, if such a Default or an Event of Default has come to
their attention a statement as to the nature thereof.
(d) Budgets, etc. Not more than 60 days after the commencement
of each fiscal year of the Borrower, budgets of the Borrower and its
Subsidiaries in reasonable detail for each of the twelve months of such
fiscal year as customarily prepared by management for its internal use
setting forth, with appropriate discussion, the principal assumptions
upon which such budgets are based. Together with each delivery of
financial statements pursuant to Sections 8.01(a), (b) and (c), a
comparison of the current year to date financial results (other than in
respect of the balance sheets included therein) against the budgets
required to be submitted pursuant to this clause (d) shall be
presented.
(e) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 8.01(a), (b) and (c), a
certificate of the chief financial officer or other Authorized Officer
of the Borrower to the effect that 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, if delivered in
connection with the financial statements in respect of a period ending
on the last day of a fiscal quarter or fiscal year of the Borrower, set
forth the calculations required to establish whether the Borrower and
its Subsidiaries were in compliance with the provisions of Sections
3.03, 8.14, 9.02, 9.04, 9.05, 9.08 through and including 9.12 and 9.16
as at the end of such fiscal quarter or year, as the case may be.
(f) Notice of Default or Litigation. Promptly, and in any
event within three Business Days after an officer of the Borrower or
any of its Subsidiaries obtains knowledge thereof, notice of (i) the
occurrence of any event which constitutes a Default or an Event of
Default, which notice shall specify the nature and period of existence
thereof and what action the Borrower proposes to take with respect
thereto, (ii) any litigation or proceeding pending or threatened (x)
against the Borrower or any of its Subsidiaries which could reasonably
be expected to have a Material Adverse Effect, (y) with respect to any
material Indebtedness of the Borrower or any of its Subsidiaries or (z)
with respect to any Document, (iii) any governmental investigation
pending or threatened against the Borrower or any of its Subsidiaries
-52-
<PAGE> 60
and (iv) any other event which could reasonably be expected to have a
Material Adverse Effect.
(g) Auditors' Reports. Promptly upon receipt thereof, a copy
of each report or "management letter" submitted to the Borrower or any
of its Subsidiaries by its independent accountants in connection with
any annual, interim or special audit made by them of the books of the
Borrower or any of its Subsidiaries and the management's non-privileged
responses thereto.
(h) Environmental Matters. Promptly after obtaining knowledge
of any of the following (but only to the extent that any of the
following, either individually or in the aggregate, could reasonably be
expected to (x) have a Material Adverse Effect) or (y) result in a
remedial cost to the Borrower or any of its Subsidiaries in excess of
$500,000, written notice of:
(i) any pending or threatened Environmental Claim
against the Borrower or any of its Subsidiaries or any Real
Property owned or operated by the Borrower or any of its
Subsidiaries;
(ii) any condition or occurrence on any Real Property
owned or operated by the Borrower or any of its Subsidiaries
that (x) results in noncompliance by the Borrower or any of
its Subsidiaries with any applicable Environmental Law or (y)
could reasonably be anticipated to form the basis of an
Environmental Claim against the Borrower or any of its
Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real
Property owned or operated by the Borrower or any of its
Subsidiaries that could reasonably be anticipated to cause
such Real Property to be subject to any restrictions on the
ownership, occupancy, use or transferability by the Borrower
or its Subsidiary, as the case may be, of its interest in such
Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in
response to the actual or alleged presence of any Hazardous
Material on any Real Property owned or operated by the
Borrower or any of its Subsidiaries.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial
action and the Borrower's response or proposed response thereto. In
addition, the Borrower agrees to provide the Banks with copies of all
material communications by the Borrower or any of its Subsidiaries with
any Person, government or governmental
-53-
<PAGE> 61
agency relating to Environmental Laws or to any of the matters set
forth in clauses (i)-(iv) above, and such detailed reports relating to
any of the matters set forth in clauses (i)-(iv) above as may
reasonably be requested by the Agent or the Required Banks.
(i) Annual Meetings with Banks. At the request of the Agent,
the Borrower shall within 120 days after the close of each of its
fiscal years, hold a meeting (at a mutually agreeable location and
time) with all of the Banks at which meeting shall be reviewed the
financial results of the previous fiscal year and the financial
condition of the Borrower and its Subsidiaries and the budgets
presented for the current fiscal year of the Borrower and its
Subsidiaries.
(j) Notice of Commitment Reductions. On or prior to the date
of any reduction to the Total Revolving Loan Commitment pursuant to any
of Sections 3.03(c) through (g), inclusive, the Borrower shall provide
written notice of the amount of the respective reduction to the Total
Revolving Loan Commitment and the calculation thereof (in reasonable
detail).
(k) Other Information. Promptly upon transmission thereof,
copies of any filings and registrations with, and reports to, the SEC
by the Borrower or any of its Subsidiaries and copies of all financial
statements, proxy statements, notices and reports as the Borrower or
any of its Subsidiaries shall send generally to analysts, the holders
of their capital stock in their capacity as such holders (to the extent
not theretofore delivered to the Banks pursuant to this Agreement) and,
with reasonable promptness, such other information or documents
(financial or otherwise) as the Agent on its own behalf or on behalf of
the Required Banks may reasonably request from time to time.
8.02 Books, Records and Inspections. The Borrower will, and
will cause each of its Subsidiaries to, keep proper books of record and account
in which full, true and correct entries in conformity with GAAP and all
requirements of law shall be made of all dealings and transactions in relation
to its business and activities. The Borrower will, and will cause each of its
Subsidiaries to, permit, upon notice to the chief financial officer or other
Authorized Officer of the Borrower, officers and designated representatives of
the Agent or the Required Banks to visit and inspect any of the properties or
assets of the Borrower and any of its Subsidiaries in whomsoever's possession,
and to examine the books of account of the Borrower and any of its Subsidiaries
and discuss the affairs, finances and accounts of the Borrower and of any of its
Subsidiaries with, and be advised as to the same by, their officers and
independent accountants, all at such reasonable times and intervals and to such
reasonable extent as the Agent or the Required Banks may desire.
-54-
<PAGE> 62
8.03 Insurance. (a) The Borrower will, and will cause each of
its Subsidiaries to (i) maintain, with financially sound and reputable insurance
companies, insurance on all its property in at least such amounts and against at
least such risks as is consistent and in accordance with industry practice and
(ii) furnish to the Agent and each Bank, upon written request, full information
as to the insurance carried. In addition to the requirements of the immediately
preceding sentence, the Borrower will at all times cause insurance of the types
described in Annex VIII to be maintained (with the same scope of coverage as
that described in Annex VIII ) at levels which are at least as great as the
respective amount described opposite the respective type of insurance on Annex
VIII. Such insurance shall include physical damage insurance on all real and
personal property (whether now owned or hereafter acquired) on an all risk
basis, covering the full repair and replacement costs of all such property and
business interruption insurance for the actual loss sustained. The provisions of
this Section 8.03 shall be deemed supplemental to, but not duplicative of, the
provisions of any Security Documents that require the maintenance of insurance.
(b) The Borrower will, and will cause each of its Subsidiaries
to, at all times keep the respective property of the Borrower and its
Subsidiaries insured in favor of the Collateral Agent, and all policies
(including Mortgage Policies) or certificates with respect to such insurance
(and any other insurance maintained by, or on behalf of, the Borrower or any
Subsidiary of the Borrower) (i) shall be endorsed to the Collateral Agent's
satisfaction for the benefit of the Collateral Agent (including, without
limitation, by naming the Collateral Agent as mortgagee/secured party and loss
payee in respect of casualty loss policies and naming the Collateral Agent, the
Agent and each Bank as an additional insured with respect to all liability
policies), (ii) shall state that such insurance policies shall not be cancelled
or materially changed without at least 30 days' prior written notice thereof by
the respective insurer to the Collateral Agent, and (iii) shall be deposited
with the Collateral Agent.
(c) If the Borrower or any of its Subsidiaries shall fail to
maintain all insurance in accordance with this Section 8.03, or if the Borrower
or any of its Subsidiaries shall fail to so name the Collateral Agent, the Agent
and/or each Bank as an additional insured or as a loss payee, as the case may
be, or so deposit all certificates with respect thereto, the Agent and/or the
Collateral Agent shall have the right (but shall be under no obligation) to
procure such insurance, and the Borrower agrees to reimburse the Agent or the
Collateral Agent, as the case may be, for all costs and expenses of procuring
such insurance.
8.04 Payment of Taxes. The Borrower will pay and discharge,
and will cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims for sums that have become
due and payable which, if unpaid, might become a Lien not
-55-
<PAGE> 63
otherwise permitted under Section 9.03(a); provided, that neither the Borrower
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 or other appropriate action if it has maintained adequate reserves
with respect thereto in accordance with GAAP.
8.05 Corporate Franchises. The Borrower 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 existence and its material
rights, franchises, authority to do business, licenses, certifications,
accreditations and patents; provided, however, that any transaction permitted by
Section 9.02 will not constitute a breach of this Section 8.05.
8.06 Compliance with Statutes; etc. The Borrower will, and
will cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to Medicare and Medicaid) except
for such noncompliance as would not have a Material Adverse Effect or a material
adverse effect on the ability of any Credit Party to perform its obligations
under any Credit Document to which it is a party.
8.07 Compliance with Environmental Laws. (a) (i) The Borrower
will comply, and will cause each of its Subsidiaries to comply, in all material
respects with all Environmental Laws applicable to the ownership or use of its
Real Property now or hereafter owned or operated by the Borrower or any of its
Subsidiaries, will promptly pay or cause to be paid all costs and expenses
incurred in connection with such compliance, and will keep or cause to be kept
all such Real Property free and clear of any Liens imposed pursuant to such
Environmental Laws and (ii) neither the Borrower nor any of its Subsidiaries
will generate, use, treat, store, Release or dispose of, or permit the
generation, use, treatment, storage, release or disposal of, Hazardous Materials
on any Real Property owned or operated by the Borrower or any of its
Subsidiaries, or transport or permit the transportation of Hazardous Materials
to or from any such Real Property, unless the failure to comply with the
requirements specified in clause (i) or (ii) above, either individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect. If the Borrower or any of its Subsidiaries, or any tenant or occupant of
any Real Property owned or operated by the Borrower or any of its Subsidiaries,
cause or permit any intentional or unintentional act or omission resulting in
the presence or Release of any Hazardous Material, the Borrower agrees to
undertake, and/or to cause any of its Subsidiaries, tenants or occupants to
undertake, at their sole expense, any clean up, removal, remedial or other
action required pursuant to Environmental Laws to remove and clean up any
Hazardous Materials from any Real Property except where the failure to do so
would not reasonably be expected to have a Material Adverse Effect; provided
that neither the Borrower nor any of its Subsidiaries shall be required to
comply with any such
-56-
<PAGE> 64
order or directive which is being contested in good faith and by proper
proceedings so long as it has maintained adequate reserves with respect to such
compliance to the extent required in accordance with GAAP.
(b) At the written request of the Agent or the Required Banks,
which request shall specify in reasonable detail the basis therefor, at any time
and from time to time, the Borrower will provide, at its sole cost and expense,
an environmental site assessment report concerning any Real Property now or
hereafter owned or operated by the Borrower or any of its Subsidiaries, prepared
by an environmental consulting firm approved by the Agent, addressing the
matters in clause (i), (ii) or (iii) below which gives rise to such request (or,
in the case of a request pursuant to following clause (i), addressing such
matter as may be requested by the Agent or the Required Banks) and estimating
the range of the potential costs of any removal, remedial or other corrective
action in connection with any such matter, provided that in no event shall such
request be made unless (i) an Event of Default has occurred and is continuing,
(ii) the Banks receive notice under Section 8.01(h) for any event for which
notice is required to be delivered for any such Real Property or (iii) the Agent
or the Required Banks reasonably believe that there was a breach of any
representation, warranty or covenant contained in Section 7.18 or 8.07(a). If
the Borrower fails to provide the same within 60 days after such request was
made, the Agent may order the same, and the Borrower shall grant and hereby
grants, to the Agent and the Banks and their agents access to such Real Property
and specifically grants, the Agent and the Banks and their agents an irrevocable
non-exclusive license, subject to the rights of tenants, to undertake such an
assessment, all at the Borrower's expense.
8.08 ERISA. As soon as possible and, in any event, within ten
days after the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate
knows or has reason to know of the occurrence of any of the following, the
Borrower will deliver to each of the Banks a certificate of the chief financial
officer of the Borrower setting forth the full details as to such occurrence and
the action, if any, that the Borrower, 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 Borrower, the Subsidiary, the ERISA
Affiliate, the PBGC, a Plan participant or the Plan administrator with respect
thereto: that a Reportable Event has occurred; that an accumulated funding
deficiency, within the meaning of Section 412 of the Code or Section 302 of
ERISA, has been incurred or an application may be or has been made for a waiver
or modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under Section
412 of the Code or Section 303 or 304 of ERISA with respect to a Plan; that any
contribution required to be made with respect to a Plan or Foreign Pension Plan
has not been timely made; that a Plan has been or may be terminated,
reorganized, partitioned or declared insolvent under Title IV of ERISA; that a
Plan has an Unfunded Current Liability; that proceedings may be or have been
instituted to terminate or appoint a trustee to administer a Plan which is
subject to Title IV of ERISA; that a proceeding has
-57-
<PAGE> 65
been instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan; that the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate will or may incur any liability (including any indirect,
contingent, or secondary liability) to or on account of the termination of or
withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212
of ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980
of the Code or Section 409 or 502(i) or 502(l) of ERISA or with respect to a
group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2)
of the Code) under Section 4980B of the Code; or that the Borrower or any
Subsidiary of the Borrower may incur any material liability pursuant to any
employee welfare benefit plan (as defined in Section 3(1) of ERISA) that
provides benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or any Plan or any Foreign Pension Plan. The
Borrower will deliver to each of the Banks a complete copy of the annual report
(on Internal Revenue Service Form 5500-series) of each Plan (including, to the
extent required, the related financial and actuarial statements and opinions and
other supporting statements, certifications, schedules and information) required
to be filed with the Internal Revenue Service. In addition to any certificates
or notices delivered to the Banks pursuant to the first sentence hereof, copies
of annual reports and any material notices received by the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate with respect to any Plan or
Foreign Pension Plan shall be delivered to the Banks no later than ten days
after the date such report has been filed with the Internal Revenue Service or
such notice has been received by the Borrower, the Subsidiary or the ERISA
Affiliate, as applicable.
8.09 Good Repair. The Borrower will, and will cause each of
its Subsidiaries to, ensure that its material properties and equipment used in
its business are kept in good repair, working order and condition, and that from
time to time there are made in such properties and equipment all needful and
proper repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto, to the extent and in the manner useful or customary for
companies in similar businesses.
8.10 End of Fiscal Years; Fiscal Quarters. The Borrower will,
for financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries', fiscal years to end on October 31 of each year and (ii) each of
its, and each of its Subsidiaries', fiscal quarters to end on January 31, April
30, July 31 and October 31 of each year.
8.11 Additional Security; Further Assurances. (a) The Borrower
will, and will cause each of its Domestic Subsidiaries (and to the extent
Section 8.12 is operative, each of its Foreign Subsidiaries) to, grant to the
Collateral Agent security interests and mortgages in such assets and real
property of the Borrower and its Subsidiaries as are not covered by the original
Security Documents, and as may be requested from time to time by the Agent or
the Required Banks (collectively, the "Additional Security Documents"). All such
security interests and mortgages shall be granted pursuant to documentation rea-
-58-
<PAGE> 66
sonably satisfactory in form and substance to the Agent and shall constitute
valid and enforceable perfected security interests and mortgages superior to and
prior to the rights of all third Persons and subject to no other Liens except
for Permitted Liens. The Additional Security Documents or instruments related
thereto shall have been duly recorded or filed in such manner and in such places
as are required by law to establish, perfect, preserve and protect the Liens in
favor of the Collateral Agent required to be granted pursuant to the Additional
Security Documents and all taxes, fees and other charges payable in connection
therewith shall have been paid in full.
(b) The Borrower will, and will cause each of its Subsidiaries
to, at the expense of the Borrower, make, execute, endorse, acknowledge, file
and/or deliver to the Collateral Agent from time to time such vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, real
property surveys, reports, notices, requests for acknowledgment and other
assurances or instruments and take such further steps relating to the Collateral
(including any steps necessary to comply with the Federal Assignment of Claims
Act of 1940, but only if so requested by the Agent or the Required Banks)
covered by any of the Security Documents as the Collateral Agent may reasonably
require. Furthermore, the Borrower shall cause to be delivered to the Collateral
Agent such opinions of counsel, title insurance and other related documents as
may be reasonably requested by the Agent to assure themselves that this Section
8.11 has been complied with. Notwithstanding the foregoing, so long as (x) no
Default or Event of Default then exists and (y) since October 31, 1995, nothing
has occurred that has had or could reasonably be expected to have a Material
Adverse Effect, neither the Agent nor the Required Banks shall be permitted to
require the Borrower or any of its Subsidiaries to give any notice of the Bank's
interest in any portion of the Collateral to any private insurer.
(c) If the Agent or the Required Banks determine that they are
required by law or regulation to have appraisals prepared in respect of the Real
Property of the Borrower and its Subsidiaries constituting Collateral, the
Borrower shall provide to the Agent appraisals which satisfy the applicable
requirements of the Real Estate Appraisal Reform Amendments of the Financial
Institution Reform, Recovery and Enforcement Act of 1989 and which shall be in
form and substance reasonably satisfactory to the Agent.
(d) The Borrower agrees that each action required above by
this Section 8.11 shall be completed as soon as possible, but in no event later
than 90 days after such action is either requested to be taken by the Agent or
the Required Banks or required to be taken by the Borrower and its Subsidiaries
pursuant to the terms of this Section 8.11.
8.12 Foreign Subsidiaries Security. If following a change in
the relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, counsel for
the Borrower reasonably acceptable
-59-
<PAGE> 67
to the Agent does not within 30 days after a request from the Agent or the
Required Banks deliver evidence, in form and substance mutually satisfactory to
the Agent and the Borrower, with respect to any Foreign Subsidiary of the
Borrower which has not already had all of its stock pledged pursuant to the
Pledge Agreement that (i) a pledge (x) of 66-2/3% or more of the total combined
voting power of all classes of capital stock of such Foreign Subsidiary entitled
to vote, and (y) of any promissory note issued by such Foreign Subsidiary to the
Borrower or any of its Domestic Subsidiaries, (ii) the entering into by such
Foreign Subsidiary of a security agreement in substantially the form of the
Security Agreement and (iii) the entering into by such Foreign Subsidiary of a
guaranty in substantially the form of the Subsidiaries Guaranty, in any such
case could reasonably be expected to cause (I) the undistributed earnings of
such Foreign Subsidiary as determined for Federal income tax purposes to be
treated as a deemed dividend to such Foreign Subsidiary's United States parent
for Federal income tax purposes or (II) other material adverse Federal income
tax consequences to the Credit Parties, then in the case of a failure to deliver
the evidence described in clause (i) above, that portion of such Foreign
Subsidiary's outstanding capital stock or any promissory notes so issued by such
Foreign Subsidiary, in each case not theretofore pledged pursuant to the
Pledge Agreement shall be pledged to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Pledge Agreement (or another pledge agreement
in substantially similar form, if needed), and in the case of a failure to
deliver the evidence described in clause (ii) above, such Foreign Subsidiary
shall execute and deliver the Security Agreement (or another security agreement
in substantially similar form, if needed), granting the Secured Creditors a
security interest in all of such Foreign Subsidiary's assets and securing the
Obligations of the Borrower under the Credit Documents and under any Interest
Rate Protection Agreement or Other Hedging Agreement and, in the event the
Subsidiaries Guaranty shall have been executed by such Foreign Subsidiary, the
obligations of such Foreign Subsidiary thereunder, and in the case of a failure
to deliver the evidence described in clause (iii) above, such Foreign Subsidiary
shall execute and deliver the Subsidiaries Guaranty (or another guaranty in
substantially similar form, if needed), guaranteeing the Obligations of the
Borrower under the Credit Documents and under any Interest Rate Protection
Agreement, in each case to the extent that the entering into such Security
Agreement or Subsidiaries Guaranty is permitted by the laws of the respective
foreign jurisdiction and with all documents delivered pursuant to this Section
8.12 to be in form and substance reasonably satisfactory to the Agent.
8.13 Ownership of Subsidiaries. Except to the extent otherwise
expressly consented in writing by the Required Banks, the Credit Parties shall
directly or indirectly own 100% of the capital stock or partnership interests of
each of their Subsidiaries (other than as permitted pursuant to the definition
of Permitted Acquisition).
8.14 Permitted Acquisitions. (a) Subject to the provisions of
this Section 8.14 and the requirements contained in the definition of Permitted
Acquisition, the Borrower may from time to time after the Initial Borrowing Date
effect Permitted
-60-
<PAGE> 68
Acquisitions, so long as (in each case except to the extent the Required Banks
otherwise specifically agree in writing in the case of a specific Permitted
Acquisition): (i) no Default or Event of Default shall be in existence at the
time of the consummation of the proposed Permitted Acquisition or immediately
after giving effect thereto; (ii) the Borrower shall have given the Agent and
the Banks at least 10 Business Days' prior written notice of any Permitted
Acquisition; (iii) calculations are made by the Borrower of compliance with the
covenants contained in Sections 9.09, 9.10, 9.11 and 9.16 for the period of four
consecutive fiscal quarters (taken as one accounting period) most recently ended
prior to the date of such Permitted Acquisition (each, a "Calculation Period"),
on a Pro Forma Basis as if the respective Permitted Acquisition (as well as all
other Permitted Acquisitions theretofore consummated after the first day of such
Calculation Period) had occurred on the first day of such Calculation Period,
and such recalculations shall show that such financial covenants would have been
complied with, assuming the applicable Pro Forma Covenant Level were in effect,
if the Permitted Acquisition had occurred on the first day of such Calculation
Period (for this purpose, if the first day of the respective Calculation Period
occurs prior to the Initial Borrowing Date, calculated as if the covenants
contained in said Sections 9.09, 9.10, 9.11 and 9.16 had been applicable from
the first day of the Calculation Period); (iv) based on good faith projections
prepared by the Borrower for the period from the date of the consummation of the
Permitted Acquisition to the date which is one year thereafter, the level of
financial performance measured by the covenants set forth in Sections 9.09,
9.10, 9.11 and 9.16 shall be better than or equal to the relevant Pro Forma
Covenant Level under the financial covenants contained in Sections 9.09, 9.10,
9.11 and 9.16 of this Agreement as compliance with such covenants (assuming Pro
Forma Covenant Levels apply) would be required through the date which is one
year from the date of the consummation of the respective Permitted Acquisition;
(v) the Borrower shall certify, and the Agent shall have been satisfied in its
reasonable discretion that the proposed Permitted Acquisition could not
reasonably be expected to result in materially increased tax, ERISA,
environmental or other contingent liabilities with respect to the Borrower or
any of its Subsidiaries; (vi) all representations and warranties contained
herein and in the other Credit Documents shall be true and correct in all
material respects with the same effect as though such representations and
warranties had been made on and as of the date of such Permitted Acquisition
(both before and after giving effect thereto), unless stated to relate to a
specific earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date; (vii) the
Borrower provides to the Agent and the Banks as soon as available but not later
than five Business Days after the execution thereof, a copy of any executed
purchase agreement or similar agreement with respect to such Permitted
Acquisition; (viii) the aggregate amount invested (including, without
limitation, the amount of all cash investments, the aggregate amount of
Indebtedness assumed or issued, the greater of the aggregate liquidation
preference and the fair market value (at the time of issuance) of all stock
directly issued as a component of the consideration, and the fair market value
of any other consideration paid or invested in connection with any such
Permitted Acquisition) in all such Permitted Acquisitions (but excluding
Permitted Acquisitions of the
-61-
<PAGE> 69
type described in the last sentence of the definition thereof) occurring on or
after the Initial Borrowing Date shall not exceed $25,000,000; (ix) the amount
invested (including, without limitation, the amount of all cash investments, the
aggregate amount of Indebtedness assumed or issued, the greater of the aggregate
liquidation preference and the fair market value (at the time of issuance) of
all stock directly issued as a component of the consideration, and the fair
market value of any other consideration paid or invested in connection with such
Permitted Acquisition) in such Permitted Acquisition shall not exceed
$5,000,000; (x) after giving effect to each Permitted Acquisition (and all
payments to be made in connection therewith), the Total Unutilized Revolving
Loan Commitment shall equal or exceed $10,000,000 and (xi) the Borrower shall
have delivered to the Agent an officer's certificate executed by an Authorized
Officer of the Borrower, certifying to the best of his knowledge, compliance
with the requirements of preceding clauses (i) through (vi), inclusive, (viii),
(ix) and (x) and containing the calculations required by the preceding clauses
(iii), (iv), (viii), (ix) and (x).
(b) At the time of each Permitted Acquisition involving the
creation or acquisition of a Subsidiary, or the acquisition of capital stock or
other equity interest of any Person, all capital stock or other equity interests
thereof created or acquired in connection with such Permitted Acquisition shall
be pledged for the benefit of the Secured Creditors pursuant to the Pledge
Agreement.
(c) The Borrower shall cause each Subsidiary which is formed
to effect, or is acquired pursuant to, a Permitted Acquisition to comply with,
and to execute and deliver, all of the documentation required by, Sections 8.11
and 9.15, to the satisfaction of the Agent.
(d) The consummation of each Permitted Acquisition shall be
deemed to be a representation and warranty by the Borrower that the
certifications by the Borrower (or by one or more of its Authorized Officers)
pursuant to Section 8.14(a) are true and correct and that all conditions thereto
have been satisfied and that same is permitted in accordance with the terms of
this Agreement, which representation and warranty shall be deemed to be a
representation and warranty for all purposes hereunder, including, without
limitation, Sections 6 and 10.
8.15 Maintenance of Corporate Separateness. The Borrower will,
and will cause each of its Subsidiaries to, satisfy customary corporate
formalities, including the holding of regular board of directors' and
shareholders' meetings or action by directors or shareholders without a meeting
and the maintenance of corporate offices and records. Neither the Borrower nor
any of its Subsidiaries shall take any action, or conduct its affairs in a
manner, which is likely to result in the corporate existence of the Borrower or
any of
-62-
<PAGE> 70
its Subsidiaries being ignored, or in the assets and liabilities of the Borrower
or any of its Subsidiaries being substantively consolidated with those of any
other such Person in a bankruptcy, reorganization or other insolvency
proceeding.
8.16 Performance of Obligations. The Borrower will, and will
cause each of its Subsidiaries to, perform all of its obligations under the
terms of each mortgage, deed of trust, indenture, loan agreement or credit
agreement and each other material agreement, contract or instrument by which it
is bound, except such non-performances as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
8.17 Use of Proceeds. All proceeds of the Loans shall be used
as provided in Section 7.05.
SECTION 9. Negative Covenants. The Borrower hereby covenants
and agrees that as of the Effective Date and thereafter for so long as this
Agreement is in effect and until the Total Revolving Loan Commitment has
terminated, no Letters of Credit or Notes are outstanding and the Loans,
together with interest, Fees and all other Obligations (other than any
indemnities described in Section 13.13 which are not then due and payable)
incurred hereunder, are paid in full:
9.01 Changes in Business. The Borrower and its Subsidiaries
will not engage in any business other than the businesses in which the Borrower
and its Subsidiaries are engaged in as of the Effective Date and activities
directly related thereto, and similar or related businesses.
9.02 Consolidation; Merger; Sale or Purchase of Assets; etc.
The Borrower will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of (or agree to do
any of the foregoing at any future time) all or any part of its property or
assets (other than inventory in the ordinary course of business), or enter into
any partnerships, joint ventures or sale-leaseback transactions, or purchase or
otherwise acquire (in one or a series of related transactions) any part of the
property or assets (other than purchases or other acquisitions of inventory,
materials and equipment in the ordinary course of business) of any Person,
except that the following shall be permitted:
(a) the Borrower and its Subsidiaries may, as lessee, enter
into operating leases in the ordinary course of business with respect
to real or personal property;
(b) Capital Expenditures by the Borrower and its Subsidiaries
to the extent not in violation of Section 9.08;
-63-
<PAGE> 71
(c) the advances, investments and loans permitted pursuant to
Section 9.05;
(d) the Borrower and any of its Subsidiaries may sell, lease
(as lessor) or otherwise dispose of assets (other than in a Permitted
Sale-Leaseback Transaction and excluding capital stock of Subsidiaries)
which, in the reasonable opinion of such Person, are obsolete,
uneconomic or no longer useful in the conduct of such Person's
business, provided that (w) each such sale or disposition shall be for
an amount at least equal to the fair market value thereof (as
determined in good faith by senior management of the Borrower), (x)
each such sale results in consideration at least 80% of which (taking
the amount of cash, the principal amount of any promissory notes and
the fair market value, as determined by the Borrower in good faith, of
any other consideration) shall be in the form of cash, (y) the
aggregate Net Sale Proceeds of all assets sold or otherwise disposed of
pursuant to this clause (d) shall not exceed $250,000 in the aggregate
in any fiscal year of the Borrower and (z) the Net Sale Proceeds
therefrom are either applied to reduce the Total Revolving Loan
Commitment as provided in Section 3.03(c) or reinvested in replacement
assets to the extent permitted by Section 3.03(c);
(e) any Domestic Subsidiary of the Borrower may transfer
assets (other than accounts receivable and inventory) to the Borrower
or to any other Wholly-Owned Domestic Subsidiary of the Borrower so
long as the security interests granted to the Collateral Agent for the
benefit of the Secured Creditors pursuant to the Security Documents in
the assets so transferred shall remain in full force and effect and
perfected (to at least the same extent as in effect immediately prior
to such transfer);
(f) any Domestic Subsidiary of the Borrower may merge with and
into, or be dissolved or liquidated into, the Borrower so long as (i)
the Borrower is the surviving corporation of any such merger,
dissolution or liquidation and (ii) the security interests granted to
the Collateral Agent for the benefit of the Secured Creditors pursuant
to the Security Documents in the assets of such Domestic Subsidiary
shall remain in full force and effect and perfected (to at least the
same extent as in effect immediately prior to such merger, dissolution
or liquidation);
(g) any Domestic Subsidiary of the Borrower may merge with and
into, or be dissolved or liquidated into, any Wholly-Owned Domestic
Subsidiary of the Borrower so long as (i) such Wholly-Owned Domestic
Subsidiary is the surviving corporation of any such merger, dissolution
or liquidation and (ii) the security interests granted to the
Collateral Agent for the benefit of the Secured Creditors pursuant to
the Security Documents in the assets of such Domestic Subsidiary shall
remain in full force and effect and perfected (to at least the same
extent as in effect immediately prior to such merger, dissolution or
liquidation);
-64-
<PAGE> 72
(h) the Borrower and its Subsidiaries may make Permitted
Acquisitions in accordance with the requirements of Section 8.14;
(i) Permitted Sale-Leaseback Transactions shall be permitted
so long as (i) the Net Cash Proceeds therefrom are either applied to
reduce the Total Revolving Loan Commitment as provided in Section
3.03(c) or reinvested in replacement assets to the extent permitted by
Section 3.03(c), (ii) the lease obligations created thereby are
otherwise permitted under this Agreement and (iii) the aggregate
proceeds received by the Borrower and its Subsidiaries from Permitted
Sale-Leaseback Transactions effected after the Effective Date do not
exceed $750,000; and
(j) the Radamerica Sale shall be permitted.
To the extent the Required Banks waive the provisions of this Section 9.02 with
respect to the sale or other disposition of any Collateral, or any Collateral is
sold or otherwise disposed of as permitted by this Section 9.02, such Collateral
(unless transferred to the Borrower or a Subsidiary thereof) shall be sold or
otherwise disposed of free and clear of the Liens created by the Security
Documents and the Agent shall take such actions (including, without limitation,
directing the Collateral Agent to take such actions) as are appropriate in
connection therewith.
9.03 Liens. The Borrower 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 Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable or notes with recourse to the
Borrower or any of its Subsidiaries) or assign any right to receive income,
except for the following (collectively, the "Permitted Liens"):
(a) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due and payable or Liens for taxes,
assessments or governmental charges or levies being contested in good
faith and by appropriate proceedings or other appropriate actions for
which adequate reserves have been established in accordance with GAAP;
(b) Liens in respect of property or assets of the Borrower or
any of its Subsidiaries imposed by law which were incurred in the
ordinary course of business and which have not arisen to secure
Indebtedness for borrowed money, such as carriers', warehousemen's and
mechanics' Liens, statutory landlord's Liens, and other similar Liens
arising in the ordinary course of business, and which either (x)
-65-
<PAGE> 73
do not in the aggregate materially detract from the value of such
property or assets or materially impair the use thereof in the
operation of the business of the Borrower or any of its Subsidiaries or
(y) are being contested in good faith by appropriate proceedings or
other appropriate actions, which proceedings or other appropriate
actions have the effect of preventing the forfeiture or sale of the
property or asset subject to such Lien;
(c) Liens created by or pursuant to this Agreement and the
Security Documents;
(d) Liens in existence on the Initial Borrowing Date which are
listed, and the property subject thereto described, in Annex IX,
without giving effect to any extensions or renewals thereof;
(e) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 10.09,
provided that no cash or other property shall be pledged by the
Borrower or any of its Subsidiaries as security therefor;
(f) Liens (other than any Lien imposed by ERISA) (x) incurred
or deposits made in the ordinary course of business of the Borrower and
its Subsidiaries in connection with workers' compensation, unemployment
insurance and other types of social security, (y) to secure the
performance by the Borrower and its Subsidiaries of tenders, statutory
obligations (other than excise taxes), surety, stay, customs and appeal
bonds, statutory bonds, bids, leases, government contracts, trade
contracts, performance and return of money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed
money) or (z) to secure the performance by the Borrower and its
Subsidiaries of leases of Real Property, to the extent incurred or made
in the ordinary course of business consistent with past practices,
provided that the aggregate amount of deposits at any time pursuant to
sub-clause (y) and sub-clause (z) shall not exceed $250,000 in the
aggregate;
(g) licenses, leases or subleases granted to third Persons in
the ordinary course of business not interfering in any material respect
with the business of the Borrower or any of its Subsidiaries;
(h) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances, in
each case not securing Indebtedness and not interfering in any material
respect with the ordinary conduct of the business of the Borrower or
any of its Subsidiaries;
-66-
<PAGE> 74
(i) Liens arising from precautionary UCC financing statements
regarding operating leases permitted by this Agreement;
(j) Liens created pursuant to Capital Leases permitted
pursuant to Section 9.04(d), provided that (x) such Liens only serve to
secure the payment of Indebtedness arising under such Capitalized Lease
Obligation and (y) the Lien encumbering the asset giving rise to the
Capitalized Lease Obligation does not encumber any other asset of the
Borrower or any of its Subsidiaries;
(k) Permitted Encumbrances;
(l) Liens arising pursuant to (A) Permitted Sale-Leaseback
Transactions, so long as such Liens apply only to the assets sold
pursuant to the respective transaction and (B) purchase money mortgages
or security interests securing Indebtedness representing the purchase
price (or financing of the purchase price within 30 days after the
respective purchase) of assets acquired after the Initial Borrowing
Date, provided that (i) any such Liens attach only to the assets so
purchased, (ii) the Indebtedness secured by any such Lien does not
exceed 100%, nor is less than 80%, of the lesser of the fair market
value or the purchase price of the property being purchased at the time
of the incurrence of such Indebtedness and (iii) the Indebtedness
secured thereby is permitted to be incurred pursuant to Section
9.04(d); and
(m) Liens on property or assets acquired pursuant to a
Permitted Acquisition, or on property or assets of a Subsidiary of the
Borrower in existence at the time such Subsidiary is acquired pursuant
to a Permitted Acquisition, provided that (i) any Indebtedness that is
secured by such Liens is permitted to exist under Section 9.04(f), and
(ii) such Liens are not incurred in connection with, or in
contemplation or anticipation of, such Permitted Acquisition and do not
attach to any other asset of the Borrower or any of its Subsidiaries.
9.04 Indebtedness. The Borrower will not, and will not permit
any of its Subsidiaries to, contract, create, incur, assume or suffer to exist
any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(b) Existing Indebtedness outstanding on the Initial Borrowing
Date and listed on Annex IV, without giving effect to any subsequent
extension, renewal or refinancing thereof other than extensions,
renewals or refinancing of Existing Indebtedness constituting
Intercompany Loans to the extent permitted by Section 9.05(f);
-67-
<PAGE> 75
(c) Indebtedness under Interest Rate Protection Agreements
entered into to protect the Borrower against fluctuations in interest
rates in respect of the Obligations on all terms acceptable to the
Agent;
(d) Capitalized Lease Obligations and Indebtedness of the
Borrower pursuant to Permitted Sale-Leaseback Transactions permitted
pursuant to Section 9.02(d) or representing purchase money Indebtedness
secured by Liens permitted pursuant to Section 9.03(l)(B), provided,
that (i) all such Capitalized Lease Obligations are permitted under
Section 9.08, and (ii) the sum of (x) the aggregate Capitalized Lease
Obligations outstanding at any time plus (y) the aggregate principal
amount of such purchase money Indebtedness outstanding at such time
plus (z) the aggregate amount of all Net Sale Proceeds received by the
Borrower and its Subsidiaries from all Permitted Sale-Leaseback
Transactions consummated after the Effective Date shall not exceed
$750,000;
(e) Indebtedness constituting Intercompany Loans to the extent
permitted by Section 9.05(f);
(f) Indebtedness of a Subsidiary acquired pursuant to a
Permitted Acquisition (or Indebtedness assumed at the time of a
Permitted Acquisition of an asset securing such Indebtedness)
("Permitted Acquired Debt"); provided that (i) such Indebtedness was
not incurred in connection with, or in anticipation or contemplation
of, such Permitted Acquisition, (ii) such Indebtedness does not
constitute debt for borrowed money (other than debt for borrowed money
incurred in connection with industrial revenue or industrial
development bond financings), it being understood and agreed that
Capitalized Lease Obligations and purchase money Indebtedness shall not
constitute debt for borrowed money for purposes of this clause (f), and
(iii) at the time of such Permitted Acquisition such Indebtedness does
not exceed 10% of the total value of the assets of the Subsidiary so
acquired, or of the asset so acquired, as the case may be;
(g) Indebtedness constituting Seller Subordinated Notes not
exceeding $8,500,000 in aggregate principal amount at any one time
outstanding; and
(h) additional Indebtedness of the Borrower and its
Subsidiaries not otherwise permitted hereunder not exceeding $1,000,000
in aggregate principal amount at any time outstanding.
9.05 Advances; Investments; Loans. The Borrower will not, and
will not permit any of its Subsidiaries to, lend money or credit or make
advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any Person, or purchase or own a futures contract or otherwise
-68-
<PAGE> 76
become liable for the purchase or sale of currency or other commodities at a
future date in the nature of a futures contract, or hold any cash or Cash
Equivalents, except:
(a) the Borrower and its Subsidiaries may invest in cash and
Cash Equivalents, provided that during any time that Revolving Loans or
Swingline Loans are outstanding the aggregate amount of cash and Cash
Equivalents held by the Borrower and its Subsidiaries shall not exceed
$3,500,000 for any period of three consecutive Business Days; provided
further, that the preceding proviso shall not apply during any time
that (and only for so long as) (x) no Default or Event of Default then
exists, (y) no Base Rate Loans are then outstanding and (z) the only
Eurodollar Loans then outstanding are those where a repayment of such
Eurodollar Loans at such time would result in the Borrower incurring a
liability pursuant to Section 1.11(ii);
(b) the Borrower and its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary course
of business and payable or dischargeable in accordance with customary
trade terms (including the dating of receivables) of the Borrower or
such Subsidiary;
(c) the Borrower and its Subsidiaries may acquire and own
investments (including debt obligations) received in connection with
the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(d) Interest Rate Protection Agreements entered into in
compliance with Section 9.04(c) shall be permitted;
(e) advances, loans and investments in existence on the
Initial Borrowing Date and listed on Annex X shall be permitted,
without giving effect to any additions thereto or replacements thereof;
(f) the Borrower may make intercompany loans and advances to
any of its Wholly-Owned Subsidiaries and any Subsidiary of the Borrower
may make intercompany loans and advances to the Borrower or any other
Wholly-Owned Subsidiary of the Borrower (collectively, "Intercompany
Loans"), provided, that (w) at no time shall the aggregate outstanding
principal amount of all Intercompany Loans made to Foreign Subsidiaries
of the Borrower pursuant to this clause (f) exceed $250,000 (determined
without regard to any write-downs or write-offs of such loans and
advances), (x) each Intercompany Loan made by any Subsidiary to the
Borrower or by a Foreign Subsidiary to the Borrower or a Wholly-Owned
Domestic Subsidiary of the Borrower shall contain the subordination
provisions set
-69-
<PAGE> 77
forth on Exhibit K, (y) each Intercompany Loan shall be evidenced by an
Intercompany Note and (z) each such Intercompany Note (other than (1)
Intercompany Notes issued by Foreign Subsidiaries of the Borrower to
the Borrower or any of its Domestic Subsidiaries and (2) Intercompany
Notes held by Foreign Subsidiaries of the Borrower, in each case except
to the extent provided in Section 8.12) shall be pledged to the
Collateral Agent pursuant to the Pledge Agreement;
(g) loans and advances by the Borrower and its Subsidiaries to
employees of the Borrower and its Subsidiaries for moving and travel
expenses and other similar expenses, in each case incurred in the
ordinary course of business, in an aggregate outstanding principal
amount not to exceed $75,000 at any time (determined without regard to
any write-downs or write-offs of such loans and advances), shall be
permitted;
(h) Permitted Acquisitions shall be permitted;
(i) the Borrower and its Subsidiaries may acquire and hold
promissory notes and/or equity securities issued by the purchaser or
purchasers in connection with sales of assets pursuant to, and to the
extent permitted under, Sections 9.02(d) and 9.02(j); and
(j) the Borrower and its Subsidiaries may make investments in
corporations, associations, partnerships, business trusts and other
business entities which would not, after the respective investment, be
a Subsidiary of the Borrower (each a "Joint Venture"), provided that
(i) neither the Borrower nor any of its Subsidiaries is liable for any
Indebtedness or other obligations of any nature whatsoever (whether
absolute, accrued, contingent or otherwise and whether or not due) of
any such Joint Venture and (ii) the aggregate amount of all such
investments in Joint Ventures shall at no time exceed $1,000,000.
9.06 Dividends; etc. The Borrower will not, and will not
permit any of its Subsidiaries to, declare or pay any Dividends with respect to
the Borrower or any of its Subsidiaries, except that any Subsidiary of the
Borrower may pay Dividends to the Borrower or any Wholly-Owned Subsidiary of the
Borrower.
9.07 Transactions with Affiliates. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into any transaction or series
of transactions with any Affiliate other than in the ordinary course of business
and on terms and conditions substantially as favorable to the Borrower or such
Subsidiary as would be reasonably expected to be obtainable by the Borrower or
such Subsidiary at the time in a comparable arm's-length transaction with a
Person other than an Affiliate; provided, that the following shall in any event
be permitted: (i) the Transaction; (including, without limitation, the matters
-70-
<PAGE> 78
contemplated by the Equity Financing Documents), (ii) the Borrower and its
Subsidiaries may enter into, and perform their respective obligations under, the
E/L Associates Management Agreement, provided, that the Borrower and its
Subsidiaries shall only be permitted to pay fees under the E/L Associates
Management Agreement during the fiscal years of the Borrower ending on October
31, 1996, 1997, 1998 and 1999 (A) in an amount not to exceed during (x) the
fiscal year of the Borrower ending October 31, 1996, $240,000, (y) the fiscal
year of the Borrower ending October 31, 1997, $390,000 and (z) the fiscal years
of the Borrower ending on October 31, 1998 and 1999, $490,000 plus (B) an
amount, if any, equal to the Incentive Fee (as such term is defined in the E/L
Associates Management Agreement) due under the E/L Associates Management
Agreement, in the event, and only in the event, that the Borrower shall have
delivered a certificate, signed by the chief financial officer of the Borrower,
setting forth calculations required to establish the Incentive Fee (as such term
is defined in the E/L Associates Management Agreement) for the period during
which such Incentive Fee is being paid, (iii) the Borrower and its Subsidiaries
may enter into, and perform their respective obligations under the Delaware
Valley Management Agreement, provided, that the Borrower and its Subsidiaries
shall only be permitted to pay fees under the Delaware Valley Management
Agreement in an amount not to exceed $150,000 during any fiscal year of the
Borrower and (iv) Borrower and/or its Subsidiaries may make payments to HPII for
consulting or other services provided by HPII to the Borrower or to reimburse
HPII for out of pocket expenses in connection therewith provided that the
aggregate amount of such payments by the Borrower pursuant to this clause (iv)
do not exceed $50,000 during any fiscal year of the Borrower. Other than
pursuant to clauses (ii), (iii) and (iv) of this Section 9.07, in no event may
management or similar fees be paid by the Borrower or by any of its Subsidiaries
to any Person except the Borrower.
9.08 Capital Expenditures. (a) The Borrower will not, and will
not permit any of its Subsidiaries to, make any Capital Expenditures, except
that (x) during the period (taken as one accounting period) commencing on the
Initial Borrowing Date and ending on October 31, 1996, the Borrower and its
Subsidiaries may make Capital Expenditures so long as the aggregate amount of
such Capital Expenditures does not exceed $1,250,000 during such period and (y)
during any fiscal year thereafter (taken as one accounting period), the Borrower
and its Subsidiaries may make Capital Expenditures so long as the aggregate
amount of such Capital Expenditures does not exceed $2,500,000 in any fiscal
year.
(b) The Borrower and its Subsidiaries may make additional
Capital Expenditures with the Net Sale Proceeds of Asset Sales to the extent
such proceeds are not required to be applied to reduce the Total Revolving Loan
Commitment pursuant to Section 3.03(c) and such proceeds are reinvested as
required by Section 3.03(c).
-71-
<PAGE> 79
(c) The Borrower and its Subsidiaries may make additional
Capital Expenditures with the insurance proceeds received by the Borrower or any
of its Subsidiaries from any Recovery Event so long as such Capital Expenditures
are to replace or restore any properties or assets in respect of which such
proceeds were paid to the extent such insurance proceeds are not required to be
applied to reduce the Total Revolving Loan Commitment pursuant to Section
3.03(f).
(d) The Borrower and its Wholly-Owned Subsidiaries may make
additional Capital Expenditures constituting Permitted Acquisitions.
9.09 Minimum Consolidated EBITDA. The Borrower will not permit
Consolidated EBITDA for any Test Period ending during a period specified below
to be less than the respective amount set forth opposite such period below:
<TABLE>
<CAPTION>
Period Amount
------ ------
<S> <C>
Effective Date to and $10,000,000
including July 31, 1997
August 1, 1997 to and $11,000,000
including July 31, 1998
August 1, 1998 to and $12,000,000
including July 31, 1999
August 1, 1999 to and $13,000,000
including July 31, 2000
August 1, 2000 and $14,000,000
thereafter
</TABLE>
9.10 Consolidated Interest Coverage Ratio. The Borrower will
not permit the Consolidated Interest Coverage Ratio for any Test Period ending
during a period specified below to be less than the ratio set forth opposite
such period below:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Effective Date to and 2.50 : 1.0
including July 31, 1998
August 1, 1998 to and 3.00 : 1.0
including July 31, 1999
</TABLE>
-72-
<PAGE> 80
<TABLE>
<S> <C>
August 1, 1999 and thereafter 3.25 : 1.0
</TABLE>
9.11 Leverage Ratio. The Borrower will not permit the Leverage
Ratio at any time during a period specified below to exceed the respective ratio
set forth opposite such period below:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Effective Date to and 3.50 : 1.0
including July 31, 1998
August 1, 1998 and thereafter 3.00 : 1.0
</TABLE>
9.12 Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain
Other Agreements; Issuances of Capital Stock; etc. (a) The Borrower will not,
and will not permit any of its Subsidiaries to:
(i) amend or modify, or permit the amendment or modification
of, any provision of the Existing Indebtedness or, after the incurrence
or issuance thereof, any Seller Subordinated Notes or of any agreement
(including, without limitation, any purchase agreement, indenture, loan
agreement, or security agreement) relating thereto;
(ii) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption, repurchase or
acquisition for value of any of the Existing Indebtedness (other than
Existing Indebtedness constituting Intercompany Loans to the extent
permitted by Section 9.05(f)) or, after the incurrence or issuance
thereof, any Seller Subordinated Notes; or
(iii) amend, modify or change its Certificate of Incorporation
(including, without limitation, by the filing or modification of any
certificate of designation), By-Laws, partnership agreement or
certificate of limited partnership, as the case may be, or any
agreement entered into by it, with respect to its capital stock
(including any Shareholders' Agreement), or enter into any new
agreement with respect to its capital stock, other than (x) those
changes to the Certificate of Incorporation and By-Laws of the Borrower
contained in the resolutions dated January 5, 1996 and January 30, 1996
approved by unanimous written consent of the directors of the Borrower
and (y) any amendments, modifications or changes pursuant to this
clause (iii) and any such new agreements pursuant to this clause (iii)
which do not in any way adversely affect the interests of the Banks .
-73-
<PAGE> 81
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, amend, modify or change any provision of or enter into any new
Tax Allocation Agreement or any Management Agreement other than any amendment,
modification or change deemed immaterial by the Agent or as otherwise consented
to by the Required Banks.
9.13 Limitation on Issuance of Capital Stock. (a) The Borrower
shall not issue (i) any preferred stock or (ii) any redeemable common stock
unless, in either case, the issuance thereof is, and all terms thereof are,
satisfactory to the Required Banks.
(b) No Subsidiary of the Borrower shall issue, or permit any
of their Subsidiaries to issue, any capital stock (including by way of sales of
treasury stock) or any options or warrants to purchase, or securities
convertible into, capital stock, except (i) for transfers and replacements of
then outstanding shares of capital stock, (ii) for stock splits, stock dividends
and additional issuances which do not decrease the percentage ownership of the
Borrower or any of its Subsidiaries in any class of the capital stock of such
Subsidiaries, (iii) to qualify directors to the extent required by applicable
law, and (iv) Subsidiaries formed after the Effective Date pursuant to Section
9.15 may issue capital stock to the Borrower or such Subsidiary of the Borrower
which is to own such stock in accordance with the requirements of Section 9.15.
All capital stock issued in accordance with this Section 9.13(b) shall, to the
extent required by the Pledge Agreement, be delivered to the Collateral Agent
for pledge pursuant to the Pledge Agreement.
9.14 Limitation on Certain Restrictions on Subsidiaries. The
Borrower will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective,
any encumbrance or restriction on the ability of any such Subsidiary to (x) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Borrower or any Subsidiary
of the Borrower, or pay any Indebtedness owed to the Borrower or a Subsidiary of
the Borrower, (y) make loans or advances to the Borrower or any of the
Borrower's Subsidiaries or (z) transfer any of its properties or assets to the
Borrower or any of the Borrower's Subsidiaries, except for such encumbrances or
restrictions existing under or by reason of (i) applicable law, (ii) this
Agreement and the other Credit Documents, (iii) the provisions contained in the
Existing Indebtedness, (iv) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of the Borrower or a
Subsidiary of the Borrower and (v) customary provisions restricting assignment
of any licensing agreement entered into by the Borrower or any Subsidiary of the
Borrower in the ordinary course of business.
9.15 Limitation on the Creation of Subsidiaries and Joint
Ventures. (a) Notwithstanding anything to the contrary contained in this
Agreement, the Borrower will not, and will not permit any of its Subsidiaries
to, establish, create or acquire after the Effective Date any Subsidiary;
provided that, the (A) Borrower and its Wholly-Owned
-74-
<PAGE> 82
Subsidiaries shall be permitted to establish or create Wholly-Owned Subsidiaries
so long as, in each case, (i) at least 15 days' prior written notice thereof is
given to the Agent (or such shorter period of time as is acceptable to the
Agent), (ii) the capital stock of such new Subsidiary is promptly pledged
pursuant to, and to the extent required by, this Agreement and the Pledge
Agreement and the certificates, if any, representing such stock, together with
stock powers duly executed in blank, are delivered to the Collateral Agent,
(iii) such new Subsidiary (other than a Foreign Subsidiary except to the extent
otherwise required pursuant to Section 8.12) promptly executes a counterpart of
the Subsidiaries Guaranty, the Pledge Agreement and the Security Agreement, and
(iv) to the extent requested by the Agent or the Required Banks, takes all
actions required pursuant to Section 8.11 and (B) Subsidiaries may be acquired
pursuant to Permitted Acquisitions so long as, in each such case (i) with
respect to each Wholly-Owned Subsidiary acquired pursuant to a Permitted
Acquisition, the actions specified in preceding clause (A) shall be taken and
(ii) with respect to each Subsidiary which is not a Wholly-Owned Subsidiary and
is acquired pursuant to a Permitted Acquisition, all capital stock thereof owned
by any Credit Party shall be pledged pursuant to the Pledge Agreement. In
addition, each new Subsidiary that is required to execute any Credit Document
shall execute and deliver, or cause to be executed and delivered, all other
relevant documentation of the type described in Section 5 as such new Subsidiary
would have had to deliver if such new Subsidiary were a Credit Party on the
Initial Borrowing Date.
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, enter into any partnerships or joint ventures, except to the
extent permitted under Section 9.05(j).
9.16 Account Receivable Days. The Borrower will not permit the
number of Account Receivable Days on the last day of any fiscal quarter to
exceed 150.
SECTION 10. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the payment
when due of any principal of the Loans or (ii) default, and such default shall
continue for three or more Business Days, in the payment when due of any Unpaid
Drawing, any interest on the Loans or any Fees or any other amounts owing
hereunder or under any other Credit Document;
10.02 Representations, etc. Any representation, warranty or
statement made by any Credit Party herein or in any other Credit Document or in
any statement or certificate 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
-75-
<PAGE> 83
10.03 Covenants. Any Credit Party shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in
Sections 8.01(f)(i), 8.10, 8.13, 8.14 or 9, or (b) default in the due
performance or observance by it of any term, covenant or agreement (other than
those referred to in Section 10.01, 10.02 or clause (a) of this Section 10.03)
contained in this Agreement and such default shall continue unremedied for a
period of at least 30 days after notice to the defaulting party by the Agent or
the Required Banks; or
10.04 Default Under Other Agreements. (a) The Borrower or any
of its Subsidiaries shall (i) default in any payment with respect to any
Indebtedness (other than the Obligations) beyond the period of grace, if any,
provided in the instrument or agreement under which Indebtedness was created 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, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause (determined without regard
to whether any notice is required), any such Indebtedness to become due prior to
its stated maturity; or (b) any Indebtedness (other than the Obligations) of the
Borrower 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 as a mandatory prepayment (unless such required prepayment or
mandatory prepayment results from a default thereunder or an event of the type
that constitutes an Event of Default), prior to the stated maturity thereof;
provided, that it shall not constitute an Event of Default pursuant to clause
(a) or (b) of this Section 10.04 unless the principal amount of any one issue of
such Indebtedness, or the aggregate amount of all such Indebtedness referred to
in clauses (a) and (b) above, exceeds $500,000 at any one time; or
10.05 Bankruptcy, etc. The Borrower or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against the Borrower or any of its Subsidiaries and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
the Borrower or any of its Subsidiaries; or the Borrower or any of its
Subsidiaries commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to the Borrower or any of its Subsidiaries; or there is
commenced against the Borrower or any of its Subsidiaries any such proceeding
which remains undismissed for a period of 60 days; or the Borrower or any of its
Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief or
other order approving any such
-76-
<PAGE> 84
case or proceeding is entered; or the Borrower or any of its Subsidiaries
suffers any appointment of any custodian or the like for it or any substantial
part of its property to continue undischarged or unstayed for a period of 60
days; or the Borrower or any of its Subsidiaries makes a general assignment for
the benefit of creditors; or any corporate action is taken by the Borrower or
any of its Subsidiaries for the purpose of effecting any of the foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under Section 412 of
the Code or Section 302 of ERISA or a waiver of such standard or extension of
any amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, any Plan
which is subject to Title IV of ERISA shall have had or is likely to have a
trustee appointed to administer such Plan, any Plan which is subject to Title IV
of ERISA is, shall have been or is likely to be terminated or to be the subject
of termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made with respect to a Plan or a
Foreign Pension Plan has not been timely made, the Borrower or any Subsidiary of
the Borrower or any ERISA Affiliate has incurred or is likely to incur any
liability to or on account of a Plan under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971
or 4975 of the Code or on account of a group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the
Code, or the Borrower or any Subsidiary of the Borrower has incurred or is
likely to incur liabilities pursuant to one or more employee welfare benefit
plans (as defined in Section 3(1) of ERISA) that provide benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) or Plans or Foreign Pension Plans; (b) there shall result from any such
event or events the imposition of a lien, the granting of a security interest,
or a liability or a material risk of incurring a liability; and (c) such lien,
security interest or liability, individually, and/or in the aggregate, in the
opinion of the Required Banks, has had, or could reasonably be expected to have,
a Material Adverse Effect; or
10.07 Security Documents. (a) Except in each case to the
extent resulting from the failure of the Collateral Agent to retain possession
of the applicable Pledged Securities, any Security Document shall cease to be in
full force and effect, or shall cease to give the Collateral Agent the Liens,
rights, powers and privileges purported to be created thereby in favor of the
Collateral Agent, superior to and prior to the rights of all third Persons
(except as permitted by Section 9.03), and subject to no other Liens (except as
permitted by Section 9.03), or (b) any Credit Party shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to any such Security Document and such default
shall continue beyond any cure or grace period specifically applicable thereto
pursuant to the terms of any such Security Document; or
-77-
<PAGE> 85
10.08 Subsidiaries Guaranty. The Subsidiaries Guaranty or any
provision thereof shall cease to be in full force and effect, or any Subsidiary
Guarantor or any Person acting by or on behalf of such Subsidiary Guarantor
shall deny or disaffirm such Subsidiary Guarantor's obligations under the
Subsidiaries Guaranty or any Subsidiary Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to the Subsidiaries Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be
entered against the Borrower or any of its Subsidiaries involving a liability
(to the extent not paid or not fully covered by insurance) in excess of $500,000
for all such judgments and decrees and all such judgments or decrees shall not
have been vacated, discharged or stayed or bonded pending appeal within 30 days
from the entry thereof; or
10.10 Ownership. A Change of Control Event shall have
occurred;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent shall, upon the written request of the
Required Banks, by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of the Agent or any Bank to
enforce its claims against any Guarantor or the Borrower, except as otherwise
specifically provided for in this Agreement (provided, that if an Event of
Default specified in Section 10.05 shall occur with respect to the Borrower, the
result which would occur upon the giving of written notice by the Agent as
specified in clauses (i) and (ii) below shall occur automatically without the
giving of any such notice): (i) declare the Total Revolving Loan Commitment
terminated, whereupon the Revolving Loan Commitment of each Bank shall forthwith
terminate immediately and any Commitment Fees shall forthwith become due and
payable without any other notice of any kind; (ii) declare the principal of and
any accrued interest in respect of all Loans and all Obligations owing hereunder
(including Unpaid Drawings) 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 Borrower; (iii) enforce, as
Collateral Agent (or direct the Collateral Agent to enforce), any or all of the
Liens and security interests created pursuant to the Security Documents; (iv)
terminate any Letter of Credit which may be terminated in accordance with its
terms; (v) direct the Borrower to pay (and the Borrower hereby agrees upon
receipt of such notice, or upon the occurrence of any Event of Default specified
in Section 10.05, to pay) to the Collateral Agent at the Payment Office such
additional amounts of cash, to be held as security for the Borrower's
reimbursement obligations in respect of Letters of Credit then outstanding,
equal to the aggregate Stated Amount of all Letters of Credit then outstanding;
and (vi) apply any cash collateral as provided in Section 4.02.
-78-
<PAGE> 86
SECTION 11. Definitions. As used herein, the following terms
shall have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Account Receivable Days" shall mean, as of the last day of
any fiscal quarter, the number of account receivable days determined by
multiplying (i) the quotient obtained by dividing (x) the total face amount of
the net account receivables balance of the Borrower and its Subsidiaries (on a
consolidated basis) as of such last day by (y) the net revenues of the Borrower
and its Subsidiaries (on a consolidated basis) for such quarter by (ii) 90 days.
"Accounts" of any Person shall mean all of such Person's
rights to payment for goods sold or leased or services performed by such Person,
whether presently existing or hereafter arising, including, without limitation,
rights evidenced by accounts, instruments, notes, drafts, documents, chattel
paper, and all other forms of obligations owing to such Person arising out of
the sale of goods or the rendition of services by such Person, whether or not
earned by performance, and any and all credit insurance, letters of credit,
guaranties and other security therefor, as well as all merchandise returned to
or reclaimed by such Person, and such Person's books and records (except minute
books) relating to any of the foregoing.
"Acquisition Agreements" shall have the meaning set forth in
Section 5.10.
"Additional Security Documents" shall have the meaning
provided in Section 8.11.
"Adjusted Certificate of Deposit Rate" shall mean, on any day,
the sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained by
dividing (x) the most recent weekly average dealer offering rate for negotiable
certificates of deposit with a three-month maturity in the secondary market as
published in the most recent Federal Reserve System publication entitled "Select
Interest Rates," published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
offering rate determined by the Agent on the basis of quotations for such
certificates received by it from three certificate of deposit dealers in New
York of recognized standing or, if such quotations are unavailable, then on the
basis of other sources reasonably selected by the Agent, by (y) a percentage
equal to 100% minus the stated maximum rate of all reserve requirements as
specified in Regulation D applicable on such day to a three-month certificate of
deposit of a member bank of the Federal Reserve System in excess of $100,000
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves), plus (2) the then daily net annual assessment rate as
estimated by the
-79-
<PAGE> 87
Agent for determining the current annual assessment payable by BTCo to the
Federal Deposit Insurance Corporation for insuring three month certificates of
deposit.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to all
directors and officers of such Person), controlled by, or under direct or
indirect common control with such Person; provided, however, that for purposes
of Section 9.07, an Affiliate of the Borrower shall include any Person that
directly or indirectly owns more than 5% of any class of the capital stock of
the Borrower and any officer or director of the Borrower or any such Person.
"Agent" shall have the meaning provided in the first paragraph
of this Agreement and shall include any successor to the Agent appointed
pursuant to Section 12.10.
"Agreement" shall mean this Credit Agreement, as the same may
be from time to time modified, amended and/or supplemented.
"Applicable Margin" shall mean a percentage per annum equal to
(i) in the case of Loans maintained as Base Rate Loans, 1.00% and (ii) in the
case of Loans maintained as Eurodollar Loans, 2.00%.
"Asset Sale" shall mean any sale, transfer or other
disposition by the Borrower or any of its Subsidiaries to any Person other than
the Borrower or any Wholly-Owned Subsidiary of the Borrower of any asset
(including, without limitation, any capital stock or other securities of another
Person, but excluding the sale by such Person of its own capital stock) of the
Borrower or such Subsidiary other than (i) sales, transfers or other
dispositions of inventory made in the ordinary course of business and (ii) sales
of assets pursuant to Section 9.02(j).
"Assignment and Assumption Agreement" shall mean the
Assignment and Assumption Agreement substantially in the form of Exhibit L
(appropriately completed).
"Authorized Officer" shall mean, with respect to (i)
delivering Notices of Borrowing, Notices of Conversion, Letter of Credit
Requests and similar notices, and delivering financial information and officer's
certificates pursuant to this Agreement, any treasurer or other financial
officer of the Borrower and (ii) any other matter in connection with this
Agreement or any other Credit Document, any officer (or a person or persons so
designated by any two officers) of the Borrower, in each case to the extent
reasonably acceptable to the Agent.
"Bank" shall have the meaning provided in the first paragraph
of this Agreement.
-80-
<PAGE> 88
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing (including
any Mandatory Borrowing) or to fund its portion of any unreimbursed payment
under Section 2.03 or (ii) a Bank having notified the Agent and/or the Borrower
that it does not intend to comply with the obligations under Section 1.01(a),
1.01(c) or 2.03, in the case of either clause (i) or (ii) above as a result of
the appointment of a receiver or conservator with respect to such Bank at the
direction or request of any regulatory agency or authority.
"Bankruptcy Code" shall have the meaning provided in Section
10.05.
"Banque Paribas" shall mean Banque Paribas, a French banking
organization acting through its New York Branch.
"Base Rate" at any time shall mean the highest of (x) the rate
which is 1/2 of 1% in excess of the Adjusted Certificate of Deposit Rate, (y)
the rate which is 1/2 of 1% in excess of the Federal Funds Rate and (z) the
Prime Lending Rate.
"Base Rate Loan" shall mean each Loan bearing interest at the
rates provided in Section 1.08(a).
"Borrower" shall have the meaning provided in the first
paragraph of this Agreement.
"Borrower Common Stock" shall have the meaning provided in
Section 7.14.
"Borrower Warrants" shall have the meaning provided in Section
7.14.
"Borrowing" shall mean and include (i) the borrowing of
Swingline Loans from BTCo on a given date and (ii) the borrowing of one Type of
Revolving Loan from all of the Banks on a given date (or resulting from
conversions on a given date), having in the case of Eurodollar Loans the same
Interest Period; provided, that Base Rate Loans incurred pursuant to Section
1.10(b) shall be considered part of any related Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company, in its individual
capacity, and any successor corporation thereto by merger, consolidation or
otherwise.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which shall be in the City of New York 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 determina-
-81-
<PAGE> 89
tions 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.
"Calculation Period" shall have the meaning provided in
Section 8.14.
"Capital Expenditures" shall mean, with respect to any Person,
all expenditures by such Person which should be capitalized in accordance with
GAAP, including all such expenditures with respect to fixed or capital assets
(including, without limitation, expenditures for maintenance and repairs which
should be capitalized in accordance with GAAP) and the amount of all Capitalized
Lease Obligations incurred by such Person.
"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 Borrower or any of its Subsidiaries in each case
taken at the amount thereof accounted for as liabilities in accordance with
GAAP.
"Cash Equivalents" shall mean, as to any Person, (i)
securities issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in support thereof) having maturities
of not more than six months from the date of acquisition, (ii) time deposits,
certificates of deposit and bankers' acceptances of any Bank or any commercial
bank having, or which is the principal banking subsidiary of a bank holding
company organized under the laws of the United States, any State thereof, the
District of Columbia or any foreign jurisdiction having capital, surplus and
undivided profits aggregating in excess of $500,000,000 and having a long-term
unsecured debt rating of at least "A" or the equivalent thereof from S&P's or
"A2" or the equivalent thereof from Moody's, with maturities of not more than
six months from the date of acquisition by such Person, (iii) repurchase
agreements with a term of not more than 30 days, involving securities of the
types described in preceding clause (i), and entered into with commercial banks
meeting the requirements of preceding clause (ii), (iv) commercial paper issued
by any Person incorporated in the United States rated at least A-1 or the
equivalent thereof by S&P's or at least P-1 or the equivalent thereof by Moody's
and in each case maturing not more than six months after the date of acquisition
by such Person, (v) investments in money market funds substantially all of whose
assets are comprised of securities of the types described in clauses (i) through
(iv) above and (vi) demand deposit accounts maintained in the ordinary course of
business.
-82-
<PAGE> 90
"Cash Percentage" shall mean, for any Asset Sale where the
first parenthetical contained in the first sentence of Section 3.03(c) is
applicable, a fraction the numerator of which is an amount equal to the sum of
any part of the purchase consideration for the assets subject to such Asset Sale
that was originally paid in cash or otherwise (with any non-cash consideration
to be valued at fair market value as reasonably determined by the Borrower) than
through the issuance of Borrower Common Stock pursuant to the respective
Permitted Acquisition and the denominator of which is an amount equal to the sum
of (a) the numerator and (b) the fair market value (as reasonably determined by
the Borrower in good faith) of the Borrower Common Stock issued as a component
of the purchase consideration for the Permitted Acquisition at the time of the
issuance thereof.
"Change of Control Event" shall mean, at any time and for any
reason whatsoever, (a) any Person or "group" (within the meaning of Rules 13d-3
and 13d-5 under the Securities Exchange Act of 1934, as in effect on the
Effective Date), other than the HPII Group, shall (A) have acquired beneficial
ownership of 30% or more on a fully diluted basis of the voting and/or economic
interest in the Borrower's capital stock or (B) obtained the power (whether or
not exercised) to elect a majority of the Borrower's directors, (b) the Board of
Directors of the Borrower shall cease to consist of a majority of Continuing
Directors, (c) at any time prior to the consummation of a Secondary Offering,
and for any reason whatsoever, the HPII Group shall own less than (x) 20% of the
outstanding Borrower Common Stock or (y) 51% of the number of shares (adjusted
for stock splits, stock dividends and other similar events on an equitable
basis) of outstanding Borrower Common Stock that the HPII Group owned on the
Initial Borrowing Date and after giving effect thereto, (d) the HPII Group
sells, transfers or assigns more than 33-1/3% of the number of shares (adjusted
for stock splits, stock dividends and other similar events on an equitable
basis) of outstanding Borrower Common Stock that the HPII Group owned on the
Initial Borrowing Date and after giving effect thereto to any Person or "group"
(within the meaning of Rules 13d-3 and 13d-5 under the Securities Act of 1934,
as in effect on the Effective Date) or (e) a "change of control" or similar
event shall occur as provided in any Existing Indebtedness.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to the Code are to the Code, as in effect at the
date of this Agreement and any subsequent provisions of the Code, amendatory
thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean all of the Collateral as defined in
each of the Security Documents.
"Collateral Agent" shall mean the Agent acting as collateral
agent for the Secured Creditors.
-83-
<PAGE> 91
"Collective Bargaining Agreements" shall have the meaning
provided in Section 5.14.
"Commitment Fee" shall have the meaning provided in Section
3.01(a).
"Consolidated Debt" shall mean, at any time, all Indebtedness
of the Borrower and its Subsidiaries determined on a consolidated basis;
provided, that for purposes of this definition, (i) the amount of Indebtedness
in respect of Interest Rate Protection Agreements shall be at any time the
unrealized net loss position, if any, of the Borrower and/or its Subsidiaries
thereunder on a marked to market basis determined no more than one month prior
to such time and (ii) any preferred stock of the Borrower or any of its
Subsidiaries shall be treated as Indebtedness, with an amount equal to the
greater of the liquidation preference or the maximum fixed repurchase price of
any such outstanding preferred stock deemed to be a component of Consolidated
Debt.
"Consolidated EBIT" shall mean, for any period, the
Consolidated Net Income of the Borrower and its Subsidiaries, determined on a
consolidated basis, before Consolidated Interest Expense (to the extent deducted
in arriving at Consolidated Net Income) and provision for taxes based on income
or gains or losses from sales of assets other than inventory sold in the
ordinary course of business, in each case that were included in arriving at
Consolidated Net Income.
"Consolidated EBITDA" shall mean, for any period, Consolidated
EBIT, adjusted by adding thereto (w) the amount of all amortization and
depreciation, in each case that were deducted in arriving at Consolidated EBIT
for such period, (x) to the extent Consolidated EBITDA is being determined for
any period that includes the fiscal quarter ended October 31, 1995, then to the
extent that Consolidated EBITDA (whether directly or through reductions to
Consolidated Net Income) has been reduced by not more than $3,898,000 of costs
of an abandoned public offering, abandoned acquisitions and consolidation of the
facilities of the Borrower's Subsidiaries incurred in the fiscal quarter ended
October 31, 1995, the amount of such reductions (but in no event to exceed
$3,898,000 for the fiscal quarter ended October 31, 1995), (y) to the extent
Consolidated EBITDA is being determined for any period that includes the fiscal
quarter ended July 31, 1996, then to the extent that Consolidated EBITDA
(whether directly or through reductions to Consolidated Net Income) has been
reduced by not more than $550,000 of payments to Joseph Raymond, expenses
associated with Joseph Raymond and search costs for a new Chief Executive
Officer of the Borrower incurred in the fiscal quarter ended July 31, 1996, the
amount of such reductions (but in no event to exceed $550,000 for the fiscal
quarter ended July 31, 1996) and (z) to the extent Consolidated EBITDA is being
determined for any period that includes the fiscal quarter ended October 31,
1996, then to the extent that (i) $550,000 exceeds the amount of the additions
to Consolidated EBITDA for the fiscal quarter ended July 31, 1996 pursuant to
preceding clause (y) and (ii) Consolidated EBITDA
-84-
<PAGE> 92
(whether directly or through reductions to Consolidated Net Income) has been
reduced by not more than $550,000 of payments to Joseph Raymond, expenses
associated with Joseph Raymond and search costs for a new Chief Executive
Officer of the Borrower incurred in the fiscal quarter ended October 31, 1996,
(but in no event shall the additions pursuant to this clause (z) for the fiscal
quarter ended October 31, 1996, exceed the remainder of $550,000 less the amount
of additions to Consolidated EBITDA pursuant to preceding clause (y) for the
fiscal quarter ended July 31, 1996).
"Consolidated Interest Coverage Ratio" for any period shall
mean the ratio of Consolidated EBITDA to Consolidated Interest Expense for such
period.
"Consolidated Interest Expense" shall mean, for any period,
the total consolidated interest expense of the Borrower and its Subsidiaries for
such period (calculated without regard to any limitations on the payment
thereof) plus, without duplication, that portion of Capitalized Lease
Obligations of the Borrower and its Subsidiaries representing the interest
factor for such period, and capitalized interest expense, plus the amount of all
cash Dividend requirements (whether or not declared or paid) on preferred stock
paid or accrued or scheduled to be paid or accrued during such period, but
excluding the amortization of any deferred financing costs or of any costs in
respect of any Interest Rate Protection Agreement. Notwithstanding anything to
the contrary contained above, to the extent Consolidated Net Interest Expense is
to be determined for any Test Period which ends prior to the first anniversary
of the Initial Borrowing Date, Consolidated Net Interest Expense for all
portions of such period occurring prior to the Initial Borrowing Date shall be
calculated in accordance with the definition of Test Period contained herein.
"Consolidated Net Income" shall mean, for any period, the net
after tax income of the Borrower and its Subsidiaries determined on a
consolidated basis, without giving effect to any extraordinary non-cash gains or
non-cash losses, any other non-cash expenses incurred or payments made in
connection with the Transaction, and without giving effect to gains and losses
from the sale or disposition of assets (other than sales or dispositions of
inventory, equipment, raw materials and supplies) by the Borrower and its
Subsidiaries.
"Contingent Obligations" shall mean as to any Person any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (x) for the purchase or payment of any such primary obligation or
(y) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the
-85-
<PAGE> 93
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (d) otherwise
to assure or hold harmless the owner of such primary obligation against loss in
respect thereof; provided, however, that the term Contingent Obligation shall
not include endorsements of instruments for deposit or collection or standard
contractual indemnities entered into, in each case in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Continuing Directors" shall mean the directors of the
Borrower on the Effective Date and each other director if such director's
nomination for the election to the Board of Directors of the Borrower is
recommended by a majority of the then Continuing Directors.
"Credit Documents" shall mean this Agreement, the Notes, the
Subsidiaries Guaranty and each Security Document.
"Credit Event" shall mean the making of a Loan (other than a
Revolving Loan made pursuant to a Mandatory Borrowing) or the issuance of a
Letter of Credit.
"Credit Party" shall mean the Borrower and each Subsidiary
Guarantor.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a
Bank Default is in effect.
"Delaware Valley Management Agreement" shall mean the
Management Agreement, dated as of January 3, 1995, between PromptCare and DVLC
Management Corporation, as in effect on the Effective Date.
"Dividend" with respect to any Person shall mean that such
Person has declared or paid a dividend or returned any equity capital to its
stockholders or authorized or made any other distribution, payment or delivery
of property (other than common stock of such Person) or cash to its stockholders
as such, or redeemed, retired, purchased or otherwise acquired, directly or
indirectly, for a consideration any shares of any class of its capital stock
outstanding on or after the Effective Date (or any options or warrants issued by
such Person with respect to its capital stock), or set aside any funds for any
of the foregoing purposes, or shall have permitted any of its Subsidiaries to
purchase or otherwise
-86-
<PAGE> 94
acquire for a consideration any shares of any class of the capital stock of such
Person outstanding on or after the Effective Date (or any options or warrants
issued by such Person with respect to its capital stock). Without limiting the
foregoing, "Dividends" with respect to any Person shall also include all
payments made or required to be made during any period by such Person with
respect to any stock appreciation rights, plans, equity incentive or achievement
plans or any similar plans or setting aside of any funds for the foregoing
purposes.
"Documents" shall mean the Credit Documents, any Acquisition
Agreements, the Refinancing Documents and the Equity Financing Documents.
"Domestic Subsidiary" shall mean each Subsidiary of the
Borrower incorporated or organized in the United States or any State or
territory thereof.
"Effective Date" shall have the meaning provided in Section
13.10.
"E/L Associates Management Agreement" shall mean the Amended
and Restated Management Agreement, dated as of November 1, 1994, among MK
Diabetic Support Services Inc., RespiFlow, Inc., DermaQuest, Inc. and E/L
Associates, as in effect on the Effective Date.
"Eligible Transferee" shall mean and include a commercial
bank, financial institution or other "accredited investor" (as defined in
Regulation D of the Securities Act).
"Employee Benefit Plans" shall have the meaning set forth in
Section 5.14.
"Employment Agreements" shall have the meaning set forth in
Section 5.14.
"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 (hereafter "Claims") or any permit issued to
the Borrower or any of its Subsidiaries under any such law, 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 Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.
"Environmental Law" shall mean any federal, state or local
policy, statute, law, rule, regulation, ordinance, code or rule of common law
now or hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including
-87-
<PAGE> 95
any judicial or administrative order, consent, decree or judgment (for purposes
of this definition (collectively, "Laws")), relating to the environment, or
Hazardous Materials or health and safety including without limitation the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended ("CERCLA"), 42 U.S.C. Section 9601 et seq.; the Hazardous Materials
Transportation Act, as amended, 49 U.S.C. Section 1801 et seq.; the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901 et seq.; the
Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.;
the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Clean Air
Act, 42 U.S.C. Section 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C.
Section 3808 et seq.; the Oil Pollution Act of 1990; the Occupational Safety &
Health Act, 29 U.S.C. Section 651 et seq.; and their counterparts or equivalent
under state or local law (including New Jersey's Industrial Site Recovery Act,
NJSA Section 13:1K-6 et seq.
"Equity Financing" shall have the meaning set forth in Section
5.08.
"Equity Financing Documents" shall have the meaning set forth
in Section 5.08.
"Equity Percentage" shall mean, for any Asset Sale where the
first parenthetical contained in the first sentence of Section 3.03(c) is
applicable, a fraction the numerator of which is an amount equal to the fair
market value (as reasonably determined by the Borrower in good faith) of the
Borrower Common Stock issued as a component of the purchase consideration for
the Permitted Acquisition at the time of the issuance thereof and the
denominator of which is an amount equal to the sum of (a) the numerator and (b)
any part of the purchase consideration for the assets subject to such Asset Sale
that was originally paid in cash or otherwise (with any non-cash consideration
to be valued at fair market value as reasonably determined by the Borrower) than
through the issuance of Borrower Common Stock pursuant to the respective
Permitted Acquisition.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with the Borrower or a Subsidiary of the
Borrower 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 Borrower
or a Subsidiary of the Borrower being or having been a general partner of such
person.
-88-
<PAGE> 96
"Eurodollar Loans" shall mean each Loan bearing interest at
the rates provided in Section 1.08(b).
"Eurodollar Rate" shall mean with respect to each Interest
Period for a Eurodollar Loan, (i) the arithmetic average (rounded to the nearest
1/100 of 1%) of the offered quotation to first-class banks in the interbank
Eurodollar market by BTCo for U.S. dollar deposits of amounts in same day funds
comparable to the outstanding principal amount of the Eurodollar Loan of BTCo
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 10:00 A.M. (New York time) on the date which is two Business Days prior to
the commencement of such Interest Period divided (and rounded upward to the next
whole multiple of 1/16 of 1%) by (ii) 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) 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.
"Existing Credit Agreement" shall mean the Credit Agreement,
dated as of March 1, 1995, by and among the Borrower, the lenders party thereto,
and Banque Paribas, as agent, together with all other agreements, instruments
and documents executed or delivered pursuant thereto or in connection therewith
(including, without limitation, all promissory notes, guarantees and security
documents).
"Existing Indebtedness" shall have the meaning provided in
Section 5.16.
"Existing Indebtedness Agreements" shall have the meaning
provided in Section 5.14.
"Facing Fee" shall have the meaning provided in Section
3.01(c).
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by the Agent.
-89-
<PAGE> 97
"Fees" shall mean all amounts payable pursuant to, or referred
to in, Section 3.01.
"Final Maturity Date" shall mean July 31, 2001.
"Foreign Pension Plan" shall mean any plan, fund (including,
without limitation, any superannuation fund) or other similar program
established or maintained outside the United States of America by the Borrower
or any one or more of its Subsidiaries primarily for the benefit of employees of
the Borrower or such Subsidiaries residing outside the United States of America,
which plan, fund or other similar program provides, or results in, retirement
income, a deferral of income in contemplation of retirement or payments to be
made upon termination of employment, and which plan is not subject to ERISA or
the Code.
"Foreign Subsidiary" shall mean each Subsidiary of the
Borrower other than a Domestic Subsidiary.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as in effect from time to time; 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 13.07(a).
"Hazardous Materials" shall mean (a) 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 (b) 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.
"HPII" shall mean Hyperion Partners II L.P., a Delaware
limited partnership.
"HPII Group" shall mean, collectively, (i) the Investors, (ii)
so long as an Investor possesses sole voting rights with respect to the capital
stock held by each such Person, the family members of such Investor or trusts
created for the sole benefit of such family members and (iii) so long as an
Investor possesses sole voting rights with respect to the capital stock held by
each such Person, any Person not otherwise described by clause (i) and (ii)
above, provided that the aggregate number of shares held by all such Persons in
accordance with this clause (iii) at any time shall not exceed 5.0% of the
aggregate number of shares held by the Persons described in clause (i) and (ii)
above at such time.
-90-
<PAGE> 98
"Indebtedness" of any Person shall mean, without duplication,
(i) all indebtedness of such Person for borrowed money, (ii) the deferred
purchase price of assets or services payable to the sellers thereof or any of
such seller's assignees which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person but excluding deferred rent
as determined in accordance with GAAP, (iii) the face amount of all letters of
credit issued for the account of such Person and, without duplication, all
drafts drawn thereunder, (iv) 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, (v) all Capitalized Lease Obligations of such
Person, (vi) 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, (vii) all obligations under Interest Rate Protection
Agreements and Other Hedging Agreements and (viii) all Contingent Obligations of
such Person, provided, that Indebtedness shall not include trade payables and
accrued expenses, in each case arising in the ordinary course of business.
"Initial Borrowing Date" shall mean the date upon which the
initial Borrowing of Loans occurs.
"Intercompany Loan" shall have the meaning provided in Section
9.05(f).
"Intercompany Notes" shall mean promissory notes, in the form
of Exhibit M, evidencing Intercompany Loans.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period," with respect to any Eurodollar Loan, shall
mean the interest period applicable thereto, as determined pursuant to Section
1.09.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedging agreement or other similar agreement or
arrangement.
"Investors" shall mean those Persons listed on Annex XI.
"Joint Venture" shall have the meaning provided in Section
9.05(j).
"L/C Supportable Indebtedness" shall mean (i) obligations of
the Borrower or its Wholly-Owned Subsidiaries incurred in the ordinary course of
business with respect to insurance obligations and workers' compensation, surety
bonds and other similar statutory obligations and (ii) such other obligations of
the Borrower or any of its Wholly-
-91-
<PAGE> 99
Owned Subsidiaries as are reasonably acceptable to the Agent and the Letter of
Credit Issuer and otherwise permitted to exist pursuant to the terms of this
Agreement.
"Leasehold" of any Person shall mean all of 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.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fees" shall have the meaning provided in
Section 3.01(b).
"Letter of Credit Issuer" shall mean BTCo and any other Bank
which, at the request of the Borrower and with the consent of the Agent, agrees
in such Bank's sole discretion to become a Letter of Credit Issuer for purposes
of issuing Letters of Credit pursuant to Section 2. The sole Letter of Credit
Issuer on the Initial Borrowing Date is BTCo.
"Letter of Credit Outstandings" shall mean, at any time, the
sum of, without duplication, (i) the aggregate Stated Amount of all outstanding
Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings in
respect of all Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in
Section 2.02(a).
"Leverage Ratio" shall mean on any date the ratio of (i)
Consolidated Debt on such date to (ii) Consolidated EBITDA for the period of
four consecutive fiscal quarters most recently ended on or prior to such date,
in each case taken as one accounting period; provided that for purposes of
determining compliance with Section 9.11 at any time after a Permitted
Acquisition is effected, Consolidated EBITDA shall, for the purposes of this
definition only, be calculated on a Pro Forma Basis (but only giving effect to
adjustments described in clause (iii) of the definition of Pro Forma Basis)
after giving effect to such Permitted Acquisition.
"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, any
financing or similar statement or notice filed under the UCC or any similar
recording or notice statute, and any lease having substantially the same effect
as the foregoing).
"Loan" shall mean each Revolving Loan and each Swingline Loan.
"Management Agreements" shall have the meaning provided in
Section 5.14.
-92-
<PAGE> 100
"Mandatory Borrowing" shall have the meaning provided in
Section 1.01(c).
"Margin Stock" shall have the meaning provided in Regulation
U.
"Material Adverse Effect" shall mean a material adverse effect
on the business, properties, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower or the Borrower and its Subsidiaries
taken as a whole.
"Material Contracts" shall have the meaning provided in
Section 5.14.
"Maximum Swingline Amount" shall mean $3,000,000.
"Minimum Borrowing Amount" shall mean (A) for Revolving Loans
(i) incurred or maintained as Eurodollar Loans, $500,000 and (ii) incurred or
maintained as Base Rate Loans, $250,000, and (B) for Swingline Loans, $100,000.
"Moody's" shall mean Moody's Investors Service, Inc.
"Mortgage" shall have the meaning provided in Section 5.13(a).
"Mortgage Policies" shall have the meaning provided in Section
5.13(b).
"Mortgaged Properties" shall mean and include the Real
Properties owned by the Borrower and its Domestic Subsidiaries to the extent
designated as such on Annex III. As of the Initial Borrowing Date neither the
Borrower nor any of its Subsidiaries own any Real Property.
"Net Cash Proceeds" shall mean for any event requiring a
commitment reduction pursuant to Section 3.03, the gross cash proceeds
(including any cash received by way of deferred payment pursuant to a promissory
note, receivable or otherwise, but only as and when received) received from such
event, net of reasonable transaction costs (including, as applicable, any
underwriting, brokerage or other customary commissions and reasonable legal,
advisory and other fees and expenses associated therewith) received from any
such event.
"Net Sale Proceeds" shall mean for any sale of assets, the
gross cash proceeds (including any cash received by way of deferred payment
pursuant to a promissory note, receivable or otherwise, but only as and when
received) received from any sale of assets, net of reasonable transaction costs
(including, without limitation, any underwriting, brokerage or other customary
selling commissions and reasonable legal, advisory and other fees and expenses,
including title and recording expenses, associated therewith) and payments of
unassumed liabilities relating to the assets sold at the time of, or within 30
days
-93-
<PAGE> 101
after, the date of such sale, the amount of such gross cash proceeds required to
be used to repay any Indebtedness (other than Indebtedness of the Banks pursuant
to this Agreement) which is secured by the respective assets which were sold,
and the estimated marginal increase in income taxes which will be payable by the
Borrower's consolidated group with respect to the fiscal year in which the sale
occurs as a result of such sale; but excluding any portion of any such gross
cash proceeds which the Borrower determines in good faith should be reserved for
post-closing adjustments (to the extent the Borrower delivers to the Banks a
certificate signed by its chief financial officer or treasurer, controller or
chief accounting officer as to such determination), it being understood and
agreed that on the day that all such post-closing adjustments have been
determined (which shall not be later than six months following the date of the
respective asset sale), the amount (if any) by which the reserved amount in
respect of such sale or disposition exceeds the actual post-closing adjustments
payable by the Borrower or any of its Subsidiaries shall constitute Net Sale
Proceeds on such date received by the Borrower and/or any of its Subsidiaries
from such sale, lease, transfer or other disposition.
"Non-Defaulting Bank" shall mean each Bank other than a
Defaulting Bank.
"Note" shall mean each Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in
Section 1.03(a).
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean the office of the Agent located at
One Bankers Trust Plaza, New York, New York 10006 or such other office as the
Agent may designate to the Borrower and the Banks from time to time.
"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time existing,
owing to the Agent, the Collateral Agent or any Bank pursuant to the terms of
this Agreement or any other Credit Document.
"Other Hedging Agreements" shall mean any foreign exchange
contracts, currency swap agreements or other similar agreements or arrangements
designed to protect against fluctuations in currency values.
"Participant" shall have the meaning provided in Section
2.03(a).
"Payment Office" shall mean the office of the Agent located at
One Bankers Trust Plaza, New York, New York 10006 or such other office as the
Agent may designate to the Borrower and the Banks from time to time.
-94-
<PAGE> 102
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" shall mean, at any time for each Bank, the
percentage obtained by dividing such Bank's Revolving Loan Commitment at such
time by the Total Revolving Loan Commitment then in effect, provided, that if
the Total Revolving Loan Commitment has been terminated, the Percentage of each
Bank shall be determined by dividing such Bank's Revolving Loan Commitment as in
effect immediately prior to such termination by the Total Revolving Loan
Commitment as in effect immediately prior to such termination.
"Permitted Acquired Debt" shall have the meaning set forth in
Section 9.04(f).
"Permitted Acquisition" shall mean the acquisition by the
Borrower of assets constituting a business, division or product line of any
Person not already a Subsidiary of the Borrower or of 100% of the capital stock
of any such Person, which Person shall, as a result of such acquisition, become
a Domestic Subsidiary of the Borrower, provided that (A) the consideration paid
by the Borrower consists solely of cash (including proceeds of Revolving Loans)
or Borrower Common Stock, the issuance of Indebtedness otherwise permitted in
Section 9.04 and the assumption/acquisition of any Permitted Acquired Debt
(calculated at face value) relating to such business, division, product line or
Person which is permitted to remain outstanding in accordance with the
requirements of Section 9.04, (B) in the case of the acquisition of 100% of the
capital stock of any Person, such Person shall own no capital stock of any other
Person unless either (x) such Person owns 100% of the capital stock of such
other Person or (y) (1) such Person and/or its Wholly-Owned Subsidiaries own at
least 80% of the consolidated assets of such Person and its Subsidiaries and (2)
any non-Wholly Owned Subsidiary of such Person was non-Wholly Owned prior to the
date of such Permitted Acquisition of such Person, (C) substantially all of the
business, division or product line acquired pursuant to the respective Permitted
Acquisition, or the business of the Person acquired pursuant to the respective
Permitted Acquisition and its Subsidiaries taken as a whole, is in the United
States and (D) all applicable requirements of Sections 8.14 and 9.02(h)
applicable to Permitted Acquisitions are satisfied. Notwithstanding anything to
the contrary contained in the immediately preceding sentence, an acquisition
which does not otherwise meet the requirements set forth above in the definition
of "Permitted Acquisition" shall constitute a Permitted Acquisition if, and to
the extent, the Required Banks agree in writing that such acquisition shall
constitute a Permitted Acquisition for purposes of this Agreement.
"Permitted Encumbrances" shall mean (i) those liens,
encumbrances and other matters affecting title to any Mortgaged Property listed
in the Mortgage Policies in respect thereof and found reasonably acceptable by
the Agent, (ii) as to any particular Mortgaged Property at any time, such
easements, encroachments, covenants, rights of way,
-95-
<PAGE> 103
minor defects, irregularities or encumbrances on title which do not, in the
reasonable opinion of the Agent, materially impair such Mortgaged Property for
the purpose for which it is held by the mortgagor thereof, or the lien held by
the Collateral Agent, (iii) zoning and other municipal ordinances which are not
violated in any material respect by the existing improvements and the present
use made by the mortgagor thereof of the Premises (as defined in the respective
Mortgage), (iv) general real estate taxes and assessments not yet delinquent,
and (v) such other similar items as the Agent may consent to (such consent not
to be unreasonably withheld).
"Permitted Liens" shall have the meaning provided in Section
9.03.
"Permitted Sale-Leaseback Transaction" shall mean any sale by
the Borrower or any of its Subsidiaries of equipment or machinery first acquired
by the Borrower or such Subsidiary after the Initial Borrowing Date which
equipment or machinery, as the case may be is then leased back to the respective
seller, provided that (i) the proceeds of the respective sale shall be entirely
cash and in an amount at least equal to 80% of the aggregate amount expended by
the Borrower and its Subsidiaries in so acquiring such equipment or machinery,
(ii) such sale and leaseback is effected within 180 days of the acquisition by
the Borrower or such Subsidiary of the Borrower of such equipment or machinery,
and (iii) the respective transaction is otherwise effected in accordance with
the applicable requirements of Section 9.02(i).
"Person" shall mean any individual, partnership, joint
venture, firm, corporation, limited liability company, association, trust or
other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2)
of ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) the Borrower or a Subsidiary of the Borrower or an
ERISA Affiliate, and each such plan for the five year period immediately
following the latest date on which the Borrower, or a Subsidiary of the Borrower
or an ERISA Affiliate maintained, contributed to or had an obligation to
contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section
5.11(a).
"Pledge Agreement Collateral" shall mean all "Collateral" as
defined in the Pledge Agreement.
"Pledged Securities" shall mean all the Pledged Securities as
defined in the Pledge Agreement.
-96-
<PAGE> 104
"Prime Lending Rate" shall mean the rate which BTCo announces
from time to time as its prime lending rate, the Prime Lending Rate to change
when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. BTCo may make commercial loans or other loans
at rates of interest at, above or below the Prime Lending Rate.
"Pro Forma Basis" shall mean, in connection with any
calculation of compliance with any financial covenant or financial term, the
calculation thereof after giving effect on a pro forma basis to (w) if the
relevant period to be tested includes any period occurring prior to the Initial
Borrowing Date, the consummation of the Transaction as if same had occurred on
the first day of such period, (x) the incurrence of any Indebtedness (other than
revolving Indebtedness, except to the extent same is incurred to finance the
Transaction, to refinance other outstanding Indebtedness or to finance Permitted
Acquisitions) after the first day of the relevant Calculation Period as if such
Indebtedness had been incurred (and the proceeds thereof applied) on the first
day of the relevant Calculation Period, (y) the permanent repayment of any
Indebtedness (other than revolving Indebtedness) after the first day of the
relevant Calculation Period as if such Indebtedness had been retired or redeemed
on the first day of the relevant Calculation Period and (z) the Permitted
Acquisition, if any, then being consummated as well as any other Permitted
Acquisition consummated after the first day of the relevant Calculation Period
and on or prior to the date of the respective Permitted Acquisition then being
effected, with the following rules to apply in connection therewith:
(i) all Indebtedness (x) (other than revolving Indebtedness,
except to the extent same is incurred to finance the Transaction, to
refinance other outstanding Indebtedness, or to finance Permitted
Acquisitions) incurred or issued after the first day of the relevant
Calculation Period (whether incurred to finance a Permitted
Acquisition, to refinance Indebtedness or otherwise) shall be deemed to
have been incurred or issued (and the proceeds thereof applied) on the
first day of the respective Calculation Period and remain outstanding
through the date of determination (and thereafter in the case of
projections pursuant to Section 8.14(a)(iv)) and (y) (other than
revolving Indebtedness) permanently retired or redeemed after the first
day of the relevant Calculation Period shall be deemed to have been
retired or redeemed on the first day of the respective Calculation
Period and remain retired through the date of determination (and
thereafter in the case of projections pursuant to Section 8.14(a)(iv));
(ii) all Indebtedness assumed to be outstanding pursuant to
preceding clause (i) shall be deemed to have borne interest at (x) the
rate applicable thereto, in the case of fixed rate indebtedness or (y)
the rates which would have been applicable thereto during the
respective period when same was deemed outstanding, in
-97-
<PAGE> 105
the case of floating rate Indebtedness (although interest expense with
respect to any Indebtedness for periods while same was actually
outstanding during the respective period shall be calculated using the
actual rates applicable thereto while same was actually outstanding);
provided that for purposes of calculations pursuant to Section
8.14(a)(iv), all Indebtedness (whether actually outstanding or deemed
outstanding) bearing interest at a floating rate of interest shall be
tested on the basis of the rates applicable at the time the
determination is made pursuant to said provisions; and
(iii) in making any determination of Consolidated EBITDA, pro
forma effect shall be given to the Transaction and any Permitted
Acquisition for the periods described above, taking into account, in
the case of any Permitted Acquisition, cost savings and expenses which
would otherwise be accounted for as an adjustment pursuant to Article
11 of Regulation S-X under the Securities Act, as if such cost savings
or expenses were realized on the first day of the respective period.
"Pro Forma Covenant Level" shall mean, for any period, (w) for
purposes of determining compliance with Section 9.09, taking each amount set
forth in the table therein and multiplying such amount by 1.15, (x) for purposes
of determining compliance with Section 9.10, taking each ratio set forth in the
table therein and multiplying the numerator thereof by 1.15, (y) for purposes of
determining compliance with Section 9.11, taking each ratio set forth in the
table therein and multiplying same by .87 and (z) for purposes of determining
compliance with Section 9.16, using the covenant set forth therein with no
modifications.
"Projections" shall have the meaning provided in Section 5.17.
"Quarterly Payment Date" shall mean the last Business Day of
each January, April, July and October.
"Radamerica Sale" shall mean the sale by the Borrower of all
of the capital stock of or all or substantially all of the assets of Radamerica,
Inc., in a transaction, and for consideration, in all respects reasonably
satisfactory to the Agent and the Required Banks provided, in any event, that
(x) each such sale or disposition shall be for an amount at least equal to the
fair market value thereof (as determined in good faith by senior management of
the Borrower) and (y) such sale results in consideration at least 75% of which
(taking the amount of cash, the principal amount of any promissory notes and the
fair market value, as determined by the Borrower in good faith, of any other
consideration) shall be in the form of cash.
"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.
-98-
<PAGE> 106
"Recovery Event" shall mean the receipt by the Borrower or any
of its Subsidiaries of any insurance or condemnation proceeds payable (i) by
reason of theft, physical destruction or damage or any other similar event with
respect to any properties or assets of the Borrower or any of its Subsidiaries,
(ii) by reason of any condemnation, taking, seizing or similar event with
respect to any properties or assets of the Borrower or any of its Subsidiaries
and (iii) under any policy of insurance required to be maintained under Section
8.03.
"Refinancing Documents" shall mean each of the agreements,
documents and instruments entered into in connection with the Refinancing
Transactions.
"Refinancing Transactions" shall mean (i) the refinancing of
the Existing Credit Agreement in accordance with Section 5.09(a) and (ii)
Subordinated Note Repurchase.
"Register" shall have the meaning provided in Section 13.17.
"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 G" shall mean Regulation G of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or any portion thereof.
"Regulation T" shall mean Regulation T of the Board of
Governors of the Federal Reserve System as from to time in effect and any
successor to all or any portion thereof.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or any portion thereof.
"Release" means the passive or active disposing, discharging,
injecting, spilling, pumping, leaking, leaching, dumping, emitting, escaping,
emptying, seeping, placing, pouring and the like, into or upon any land or water
or air, or otherwise entering into the environment.
-99-
<PAGE> 107
"Replaced Bank" shall have the meaning provided in Section
1.13.
"Replacement Bank" shall have the meaning provided in Section
1.13.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan that is subject to Title IV of ERISA
other than those events as to which the 30-day notice period is waived under
subsection .13, .14, .16, .18, .19 or .20 of PBGC Regulation Section 2615.
"Required Banks" shall mean collectively (and not
individually) Non-Defaulting Banks the sum of whose Revolving Loan Commitments
(or, if after the Total Revolving Loan Commitment has been terminated,
outstanding Revolving Loans and Percentages of outstanding Swingline Loans and
Letter of Credit Outstandings) constitute greater than 50% of the Total
Revolving Loan Commitment less the aggregate Revolving Loan Commitments of
Defaulting Banks (or, if after the Total Revolving Loan Commitment has been
terminated, the total outstanding Revolving Loans of Non-Defaulting Banks and
the aggregate Percentages of all Non-Defaulting Banks of the total outstanding
Swingline Loans and Letter of Credit Outstandings at such time).
"Returns" shall have the meaning provided in Section 7.21.
"Revolving Loan" shall have the meaning provided in Section
1.01.
"Revolving Loan Commitment" shall mean, with respect to each
Bank, the amount set forth opposite such Bank's name in Annex I directly below
the column entitled "Revolving Loan Commitment," as the same may be reduced from
time to time pursuant to Section 3.02, Section 3.03 and/or Section 10.
"Revolving Note" shall have the meaning provided in Section
1.05(a).
"S&P" shall mean Standard & Poor's Ratings Services, a
division of McGraw Hill, Inc.
"Scheduled Commitment Reduction" shall have the meaning
provided in Section 3.03(b).
"Scheduled Commitment Reduction Date" shall have the meaning
provided in Section 3.03(b).
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
-100-
<PAGE> 108
"Secondary Offering" shall mean an underwritten public
offering of Borrower Common Stock pursuant to a registration statement filed
with the Securities and Exchange Commission in accordance with the Securities
Act of 1933, as amended, which public equity offering results in gross proceeds
to the Borrower of not less than $25,000,000.
"Section 4.04(b)(ii) Certificate" shall have the meaning
provided in Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning provided in the
Security Documents.
"Security Agreement" shall have the meaning provided in
Section 5.11(b).
"Security Agreement Collateral" shall mean all "Collateral" as
defined in the Security Agreement.
"Security Documents" shall mean and include the Security
Agreement, the Pledge Agreement, each Mortgage and each Additional Security
Document, if any.
"Seller Subordinated Notes" shall mean subordinated notes
issued by the Borrower as part of the consideration paid to the seller in a
transaction otherwise constituting a Permitted Acquisition provided, that, (i)
no such Seller Subordinated Notes shall be an obligation of, or be guaranteed
by, any Person other than the Borrower, (ii) no such Seller Subordinated Notes
shall be secured by any asset, (iii) any such Seller Subordinated Notes shall
contain the subordination provisions substantially the same as those set forth
in Exhibit K, (iv) no such Seller Subordinated Notes shall require the cash
payment of interest (or any charge in the nature of interest), principal, fees,
premium or any other amounts in cash at any time prior to the first anniversary
of the Final Maturity Date as in effect at the time of the issuance of such
Seller Subordinated Notes, provided, that the Borrower may prior thereto pay (x)
interest on such Seller Subordinated Notes in cash in an amount not to exceed
12% per annum so long as no Default or Event of Default shall be in existence at
the time of any such payment or after giving effect thereto and (y) principal or
premium on such Seller Subordinated Notes in cash or Borrower Common Stock so
long as (1) no Default or Event of Default shall be in existence at the time of
any such payment or after giving effect thereto and (2) level of financial
performance measured by the covenant set forth in Section 9.11 shall be better
than or equal to the relevant Pro Forma Covenant Level both at the time of such
payment and after giving effect thereto and (v) all other terms and conditions
of such Seller Subordinated Notes are reasonably satisfactory to the Agent, and
the Seller Subordinated Notes shall be in form and substance (consistent with
the foregoing requirements) reasonably satisfactory to the Agent.
-101-
<PAGE> 109
"Shareholders' Agreements" shall have the meaning provided in
Section 5.14.
"Stated Amount" of each Letter of Credit shall mean the
maximum amount available to be drawn thereunder (regardless of whether any
conditions for drawing could then be met).
"Stock Option Plans" shall mean and include (i) the Borrower's
1987 Non- Qualified Stock Option Plan and (ii) the Borrower's 1992 Stock Option
Plan, as amended, in each case in the form delivered to the Agent on or before
the Initial Borrowing Date and not amended, supplemented or modified except by
such amendments, supplements or modifications which do not in any way adversely
affect the interests of the Banks.
"Subordinated Note Purchase Agreement" shall mean the
Subordinated Note Purchase Agreement, dated as of January 10, 1996, between the
Borrower and HPII.
"Subordinated Note Repurchase" shall have the meaning provided
in Section 5.09(b).
"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 (other than a corporation) in which such Person directly
or indirectly through Subsidiaries, has more than a 50% equity interest at the
time.
"Subsidiary Guarantor" shall mean each Subsidiary of the
Borrower that is or becomes a party to the Subsidiaries Guaranty.
"Subsidiaries Guaranty" shall have the meaning provided in
Section 5.12.
"Swingline Expiry Date" shall mean the date which is five
Business Days prior to the Final Maturity Date.
"Swingline Loan" shall have the meaning provided in Section
1.01(b).
"Swingline Note" shall have the meaning provided in Section
1.05(a).
-102-
<PAGE> 110
"Syndication Date" shall mean that date upon which the Agent
determines (and notifies the Borrower and the Banks) that the primary
syndication (and resultant addition of Persons as Banks pursuant to Section
13.04(b)) has been completed.
"Tax Allocation Agreements" shall have the meaning provided in
Section 5.14.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Test Period" shall mean each period of four consecutive
fiscal quarters then last ended, in each case taken as one accounting period,
with the first Test Period to end on the last day of the fiscal quarter ending
October 31, 1996 (except that, if any Permitted Acquisition is to be effected
prior to October 31, 1996, a Test Period shall be deemed to end on July 31,
1996, for purposes of determining compliance with the requirements of Section
8.14 and the financial covenants incorporated by reference therein).
Notwithstanding anything to the contrary contained above or in Section 13.07 or
otherwise required by GAAP, in the case of any Test Period ending prior to the
first anniversary of the Initial Borrowing Date, such period shall be a one-year
period ending on the last day of the fiscal quarter last ended, with any
calculations of Consolidated Interest Expense required in determining compliance
with Section 9.10 to be made on a Pro Forma Basis in accordance with the
immediately succeeding sentence. To the extent the respective Test Period (i)
includes the first fiscal quarter of the fiscal year of the Borrower ended
October 31, 1996 or any fiscal quarter ended prior thereto, Consolidated
Interest Expense for such fiscal quarter shall be deemed to be $300,000, (ii)
includes the second fiscal quarter of the fiscal year of the Borrower ended
closest to October 31, 1996, the Consolidated Interest Expense for such fiscal
quarter shall be deemed to be $300,000, (iii) includes the third fiscal quarter
of the fiscal year of the Borrower ended closest to October 31, 1996, the
Consolidated Interest Expense for such fiscal quarter shall be deemed to be
$300,000 and (iv) to the extent the Test Period includes the fourth fiscal
quarter of the fiscal year of the Borrower ended closest to October 31, 1996,
Consolidated Interest Expense shall be determined by (x) taking actual
Consolidated Interest Expense determined in accordance with the definition
thereof for any period beginning on, and ending after, the Initial Borrowing
Date and (y) for each day of such fiscal quarter occurring prior to the Initial
Borrowing Date, using a per-day Consolidated Interest Expense of $3,333.
"Total Revolving Loan Commitment" shall mean the sum of the
Revolving Loan Commitments of each of the Banks.
"Total Revolving Outstandings" shall mean, at any time, the
sum of (i) the aggregate principal amount of all Revolving Loans outstanding at
such time, (ii) the aggregate principal amount of all Swingline Loans
outstanding at such time and (iii) the aggregate amount of all Letter of Credit
Outstandings at such time.
-103-
<PAGE> 111
"Total Unutilized Revolving Loan Commitment" shall mean, at
any time, (i) the Total Revolving Loan Commitment at such time less (ii) the sum
of the aggregate principal amount of all Revolving Loans and Swingline Loans
outstanding at such time plus the Letter of Credit Outstandings at such time.
"Transaction" shall mean, collectively, (i) the consummation
of the Equity Financing, (ii) the consummation of the Refinancing Transactions,
(iii) the entering into of the Credit Documents and the incurrence of all Loans
and issuance of all Letters of Credit on the Initial Borrowing Date and (iv) the
payment of fees and expenses in connection with the foregoing.
"Transaction Documents" shall mean all documents (other than
the Credit Documents) and all agreements and instruments executed in connection
with the Transaction.
"Type" shall mean any type of Revolving Loan determined with
respect to the interest option applicable thereto, i.e., a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as in effect from
time to time in the relevant jurisdiction.
"Undelivered Notes" shall have the meaning provided in Section
13.18.
"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 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.
"Unpaid Drawing" shall have the meaning provided in Section
2.04(a).
"Unutilized Revolving Loan Commitment" with respect to any
Bank at any time shall mean such Bank's Revolving Loan Commitment at such time
less the sum of (i) the aggregate outstanding principal amount of all Revolving
Loans made by such Bank and (ii) such Bank's Percentage of the Letter of Credit
Outstandings at such time.
"U.S. Dollars" and the sign "$" shall each mean freely
transferable lawful money of the United States of America.
"Wholly-Owned Domestic Subsidiary" shall mean, as to any
Person, any Wholly-Owned Subsidiary of such Person which is a Domestic
Subsidiary.
-104-
<PAGE> 112
"Wholly-Owned Foreign Subsidiary" shall mean, as to any
Person, any Wholly-Owned Subsidiary of such Person which is a Foreign
Subsidiary.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i)
any corporation 100% of whose capital stock (other than director's qualifying
shares and/or other nominal amounts of shares required to be held other than by
such Person under applicable law) is at the time owned by such Person and/or one
or more Wholly-Owned Subsidiaries of such Person and (ii) any partnership,
association, joint venture or other entity in which such Person and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.
"Written" (whether lower or upper case) or "in writing" shall
mean any form of written communication or a communication by means of telex,
facsimile device, telegraph or cable.
SECTION 12. The Agent.
12.01 Appointment. Each Bank hereby irrevocably designates and
appoints BTCo as Agent of such Bank (such term to include for purposes of this
Section 12, BTCo acting as Collateral Agent) to act as specified herein and in
the other Credit Documents, and each such Bank hereby irrevocably authorizes
BTCo as the Agent 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 Agent by the terms of this
Agreement and the other Credit Documents, together with such other powers as are
reasonably incidental thereto. The Agent agrees to act as such upon the express
conditions contained in this Section 12. Notwithstanding any provision to the
contrary elsewhere in this Agreement or in any other Credit Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein or in the other Credit Documents, or any fiduciary relationship with any
Bank, and no implied covenants, functions, responsibilities, duties, obligations
or liabilities shall be read into this Agreement or otherwise exist against the
Agent. The provisions of this Section 12 are solely for the benefit of the Agent
and the Banks, and neither the Borrower nor any of its Subsidiaries shall have
any rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Banks and the Agent does not assume and shall not be
deemed to have assumed any obligation or relationship of agency or trust with or
for the Borrower or any of its Subsidiaries.
12.02 Delegation of Duties. The 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
-105-
<PAGE> 113
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
12.03 Exculpatory Provisions. Neither the Agent nor any of its
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 in its capacity as Agent under or in connection with this Agreement or
the other Credit Documents (except for its or such Person's own gross negligence
or willful misconduct) or (ii) responsible in any manner to any of the Banks for
any recitals, statements, representations or warranties made by the Borrower,
any of its Subsidiaries or any of their respective officers contained in this
Agreement or the other Credit Documents, any other Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Document or for any failure of the Borrower or any of its Subsidiaries or
any of their respective officers to perform its obligations hereunder or
thereunder. The Agent shall not be under any obligation to any Bank to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or the other Documents, or to
inspect the properties, books or records of the Borrower or any of its
Subsidiaries. The Agent shall not be responsible to any Bank for the
effectiveness, genuineness, validity, enforceability, collectability or
sufficiency of this Agreement or any other 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 Agent to the Banks or by or on behalf of the Borrower
or any of its Subsidiaries to the Agent or any Bank 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.
12.04 Reliance by Agent. The 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,
telex or teletype message, statement, order or other document or conversation
reasonably believed by it 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 Borrower or any of
its Subsidiaries), independent accountants and other experts selected by the
Agent. The 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 Banks as it deems appropriate
or it shall first be indemnified to its satisfaction by the Banks against any
and all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Credit
-106-
<PAGE> 114
Documents in accordance with a request of the Required Banks, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Banks.
12.05 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
the Agent has actually received notice from a Bank, or the Borrower referring to
this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default." In the event that the Agent receives such
a notice, the Agent shall give prompt notice thereof to the Banks. The Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Banks; provided, that, unless and until
the Agent shall have received such directions, the 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 Banks.
12.06 Nonreliance on Agent and Other Banks. Each Bank
expressly acknowledges that neither the Agent nor any of its respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by the Agent
hereinafter taken, including any review of the affairs of the Borrower or any of
its Subsidiaries, shall be deemed to constitute any representation or warranty
by the Agent to any Bank. Each Bank represents to the Agent that it has,
independently and without reliance upon the Agent or any other Bank, 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 condition, prospects and creditworthiness of the Borrower
and its Subsidiaries and made its own decision to make its Loans hereunder and
enter into this Agreement. Each Bank also represents that it will, independently
and without reliance upon the Agent or any other Bank, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, assets, operations, property,
financial and other condition, prospects and creditworthiness of the Borrower
and its Subsidiaries. The Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the business,
operations, assets, property, financial and other condition, prospects or
creditworthiness of the Borrower or any of its Subsidiaries which may come into
the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates.
12.07 Indemnification. The Banks agree to indemnify the Agent
in its capacity as such ratably according to their respective "percentages" as
used in determining the Required Banks at such time or, if the Commitments have
terminated and all Loans have been repaid in full, as determined immediately
prior to such termination and repayment (with such "percentages" to be
determined as if there are no Defaulting Banks),
-107-
<PAGE> 115
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 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 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 Borrower or any of its Subsidiaries;
provided, that no Bank shall be liable to the Agent for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
gross negligence or willful misconduct of the Agent. If any indemnity furnished
to the Agent for any purpose shall, in the opinion of the Agent be insufficient
or become impaired, the 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 12.07 shall survive the payment of
all Obligations.
12.08 Agent in its Individual Capacity. The Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower and its Subsidiaries as though the Agent were
not the Agent hereunder. With respect to the Loans made by it and all
Obligations owing to it, the Agent shall have the same rights and powers under
this Agreement as any Bank and may exercise the same as though it were not the
Agent and the terms "Bank" and "Banks" shall include the Agent in its individual
capacity.
12.09 Holders. The Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment, transfer or endorsement thereof, as the case may be,
shall have been filed with the Agent. Any request, authority or consent of any
Person or entity who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee, assignee or indorsee, as the case may be,
of such Note or of any Note or Notes issued in exchange therefor.
12.10 Resignation of the Agent. (a) The Agent may resign from
the performance of all its functions and duties hereunder and/or under the other
Credit Documents at any time by giving 30 Business Days' prior written notice to
the Borrower and the Banks. Such resignation shall take effect upon the
appointment of a successor Agent pursuant to clauses (b) and (c) below or as
otherwise provided below.
(b) Upon any such notice of resignation, the Required Banks
shall appoint a successor Agent hereunder or thereunder who shall be a
commercial bank or trust company reasonably acceptable to the Borrower.
-108-
<PAGE> 116
(c) If a successor Agent shall not have been so appointed
within such 30 Business Day period, the Agent, with the consent of the Borrower
(which consent shall not be unreasonably withheld or delayed), shall then
appoint a successor Agent who shall serve as Agent hereunder or thereunder until
such time, if any, as the Required Banks appoint a successor Agent as provided
above.
(d) If no successor Agent has been appointed pursuant to
clause (b) or (c) above by the 30th Business Day after the date such notice of
resignation was given by the Agent, the Agent's resignation shall become
effective and the Required Banks shall thereafter perform all the duties of the
Agent hereunder and/or under any other Credit Document until such time, if any,
as the Banks appoint a successor Agent as provided above.
SECTION 13. Miscellaneous.
13.01 Payment of Expenses, etc. The Borrower agrees to: (i)
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Agent (including, without
limitation, the reasonable fees and disbursements of White & Case and local
counsel) 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 and in connection with the
Agent's syndication efforts with respect to this Agreement; (ii) pay all
reasonable out-of-pocket costs and expenses of the Agent, each Letter of Credit
Issuer and each of the Banks in connection with the enforcement of the Credit
Documents and the documents and instruments referred to therein and, after an
Event of Default shall have occurred and be continuing, the protection of the
rights of the Agent, each Letter of Credit Issuer and each of the Banks
thereunder (including, without limitation, the reasonable fees and disbursements
of counsel (including in-house counsel) for the Agent, for each Letter of Credit
Issuer and for each of the Banks); (iii) pay and hold each of the Banks 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 Banks 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 Bank) to pay such
taxes; and (iv) indemnify the Agent, the Collateral Agent, each Letter of Credit
Issuer and each Bank, their respective officers, directors, employees,
representatives and agents from and hold each of them harmless against any and
all losses, liabilities, claims, damages or expenses 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 the Agent, the
Collateral Agent, any Letter of Credit Issuer or any Bank is a party thereto and
whether or not any such investigation, litigation or other proceeding is between
or among the Agent, the Collateral Agent, any Letter of Credit Issuer, any Bank,
any Credit Party or any third Person or otherwise) related to the
-109-
<PAGE> 117
entering into and/or performance of this Agreement or any other Document or the
use of the proceeds of any Loans hereunder or the Transaction or the
consummation of any other transactions contemplated in any Document (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 (b) the actual or alleged presence of Hazardous
Materials in the air, surface water or groundwater or on the surface or
subsurface of any Real Property or any Environmental Claim, in each case,
including, without limitation, the reasonable fees and disbursements of counsel
and independent consultants incurred in connection with any such investigation,
litigation or other proceeding.
13.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence of an Event of Default, the
Agent, each Letter of Credit Issuer and each Bank is hereby authorized at any
time or from time to time, without presentment, demand, protest or other notice
of any kind to the Borrower or any of its Subsidiaries or to any other Person,
any such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by the Agent, such Letter of Credit Issuer or such Bank
(including, without limitation, by branches and agencies of the Agent, such
Letter of Credit Issuer and such Bank wherever located) to or for the credit or
the account of the Borrower or any of its Subsidiaries against and on account of
the Obligations of the Borrower or any of its Subsidiaries to the Agent, such
Letter of Credit Issuer or such Bank under this Agreement or under any of the
other Credit Documents, including, without limitation, all interests in
Obligations of the Borrower or any of its Subsidiaries purchased by such Bank
pursuant to Section 13.06(b), and all other claims of any nature or description
arising out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not the Agent, such Letter of Credit Issuer or such
Bank shall have made any demand hereunder and although said Obligations shall be
contingent or unmatured. Notwithstanding anything to the contrary contained in
this Section 13.02, no Bank shall exercise any such right of set-off without the
prior consent of the Agent or the Required Banks so long as the Obligations
shall be secured by any Real Property located in the State of California, it
being understood and agreed, however, that this sentence is for the sole benefit
of the Letter of Credit Issuers and the Banks and may be amended, modified or
waived in any respect by the Required Banks without the requirement of prior
notice to or consent by any Credit Party and does not constitute a waiver of any
rights against any Credit Party or against any Collateral.
13.03 Notices. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered, if to any Credit Party,
at the address specified opposite its signature below or in the other relevant
Credit Documents, as the case may be; if to any Bank, at its
-110-
<PAGE> 118
address specified for such Bank on Annex II; or, at such other address as shall
be designated by any party in a written notice to the other parties hereto
provided that, any notice of Default or an Event of Default shall be telecopied,
delivered by hand or overnight courier or mailed by certified mail, return
receipt requested. All such notices and communications shall be mailed,
telegraphed, telexed, telecopied or cabled or sent by overnight courier, and
shall be effective when received.
13.04 Benefit of Agreement. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided, however, the Borrower
may not assign or transfer any of its rights, obligations or interest hereunder
or under any other Credit Document without the prior written consent of the
Banks and, provided further, that, although any Bank may transfer, assign or
grant participations in its rights hereunder, such Bank shall remain a "Bank"
for all purposes hereunder (and may not transfer or assign all or any portion of
its Revolving Loan Commitment hereunder except as provided in Section 13.04(b))
and the transferee, assignee or participant, as the case may be, shall not
constitute a "Bank" hereunder and, provided further, that no Bank shall transfer
or grant any participation under which the participant shall have rights to
approve any amendment to or waiver of this Agreement or any other Credit
Document except to the extent such amendment or waiver would (i) extend the
final scheduled maturity of any Loan, Note or Letter of Credit (unless such
Letter of Credit is not extended beyond the Final Maturity Date) in which such
participant is participating, or reduce the rate or extend the time of payment
of interest or Fees thereon (except in connection with a waiver of applicability
of any post-default increase in interest rates) or reduce the principal amount
thereof, or increase the amount of the participant's participation over the
amount thereof then in effect (it being understood that a waiver of any Default
or Event of Default or of a mandatory reduction in the Total Revolving Loan
Commitment shall not constitute a change in the terms of such participation, and
that an increase in any Revolving Loan Commitment or Loan shall be permitted
without the consent of any participant if the participant's participation is not
increased as a result thereof), (ii) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement or (iii)
release all or substantially all of the Collateral under all of the Security
Documents (except as expressly provided in the Credit Documents) supporting the
Loans hereunder in which such participant is participating. In the case of any
such participation, the participant shall not have any rights under this
Agreement or any of the other Credit Documents (the participant's rights against
such Bank in respect of such participation to be those set forth in the
agreement executed by such Bank in favor of the participant relating thereto)
and all amounts payable by the Borrower hereunder shall be determined as if such
Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank
together with one or more other Banks) may (x) assign all or a portion of its
Revolving Loan Commitment (and related outstanding Obligations hereunder) to its
parent company and/or
-111-
<PAGE> 119
any affiliate of such Bank which is at least 50% owned by such Bank or its
parent company or to one or more Banks or (y) assign all, or if less than all, a
portion equal to at least $5,000,000 in the aggregate for the assigning Bank or
assigning Banks, of such Revolving Loan Commitment (and related outstanding
Obligations hereunder) to one or more Eligible Transferees, each of which
assignees shall become a party to this Agreement as a Bank by execution of an
Assignment and Assumption Agreement, provided that (i) at such time Annex I
shall be deemed modified to reflect the Revolving Loan Commitments of such new
Bank and of the existing Banks, (ii) upon surrender of the old Revolving Notes
(or the furnishing of a standard indemnity letter from the respective assigning
Bank in respect of any lost Revolving Notes), new Revolving Notes will be
issued, at the Borrower's expense, to such new Bank and to the assigning Bank,
such new Revolving Notes to be in conformity with the requirements of Section
1.05 (with appropriate modifications) to the extent needed to reflect the
revised Revolving Loan Commitments, (iii) the consent of the Agent shall be
required in connection with any such assignment pursuant to clause (y) of this
Section 13.04(b) (which consent shall not be unreasonably withheld) and (v) the
Agent shall receive at the time of each assignment, from the assigning or
assignee Bank, 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 Agent on the Register pursuant to Section 13.17. To the extent
of any assignment pursuant to this Section 13.04(b), the assigning Bank shall be
relieved of its obligations hereunder with respect to its assigned Revolving
Loan Commitment. At the time of each assignment pursuant to this Section
13.04(b) to a Person which is not already a Bank 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 Bank shall
provide to the Borrower and the Agent the appropriate Internal Revenue Service
Forms (and, if applicable a Section 4.04(b)(ii) Certificate) described in
Section 4.04(b). To the extent that an assignment of all or any portion of a
Bank's Revolving Loan Commitment and related outstanding Obligations pursuant to
Section 1.13 or this Section 13.04(b) would, at the time of such assignment,
result in increased costs under Section 1.10, 1.11, 2.05 or 4.04 from those
being charged by the respective assigning Bank prior to such assignment, then
the Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
assignment). Notwithstanding anything to the contrary contained above, at any
time after the termination of the Total Revolving Loan Commitment, if any Loans
or Letters of Credit remain outstanding, assignments may be made as provided
above, except that the respective assignment shall be of a portion of the
outstanding Revolving Loans of the respective Bank and its participation in
Letters of Credit and its obligation to make Mandatory Borrowings.
(c) Nothing in this Agreement shall prevent or prohibit any
Bank from pledging its Loans and Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Bank from such Federal Reserve Bank.
-112-
<PAGE> 120
13.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Agent or any Bank in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
any Credit Party and the Agent or any Bank 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 Agent or any
Bank would otherwise have. No notice to or demand on any Credit Party in any
case shall entitle any Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the Agent
or the Banks to any other or further action in any circumstances without notice
or demand.
13.06 Payments Pro Rata. (a) The Agent agrees that promptly
after its receipt of each payment from or on behalf of any Credit Party in
respect of any Obligations of such Credit Party, it shall, except as otherwise
provided in this Agreement, distribute such payment to the Banks (other than any
Bank that has consented in writing to waive its pro rata share of such payment)
pro rata based upon their respective shares, if any, of the Obligations with
respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security, by
the exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings or Fees, of a sum which with respect to the
related sum or sums received by other Banks is in a greater proportion than the
total of such Obligation then owed and due to such Bank bears to the total of
such Obligation then owed and due to all of the Banks immediately prior to such
receipt, then such Bank receiving such excess payment shall purchase for cash
without recourse or warranty from the other Banks an interest in the Obligations
of the respective Credit Party to such Banks in such amount as shall result in a
proportional participation by all of the Banks in such amount; provided, that if
all or any portion of such excess amount is thereafter recovered from such Bank,
such purchase shall be rescinded and the purchase price restored to the extent
of such recovery, but without interest.
13.07 Calculations; Computations. (a) The financial statements
to be furnished to the Banks 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 the Borrower to the Banks); provided, that except as otherwise specifically
provided herein, all computations determining compliance with Sections 3.03,
8.14 and 9, including definitions used therein shall, in each case, utilize
accounting principles and policies in effect at the time of the preparation of,
and in
-113-
<PAGE> 121
conformity with those used to prepare, the October 31, 1995, financial
statements delivered to the Banks pursuant to Section 7.10(b); provided further,
that (i) to the extent expressly required pursuant to the provisions of this
Agreement, certain calculations shall be made on a Pro Forma Basis, (ii) to the
extent compliance with either of Sections 9.09, 9.10 or 9.11 would include
periods occurring prior to the Initial Borrowing Date, such calculation shall be
adjusted on a Pro Forma Basis to give effect to the Transaction as if same had
occurred on the first day of the respective period and (iii) in the case of any
determinations of Consolidated Interest Expense for any portion of any Test
Period which ends prior to the Initial Borrowing Date, all computations
determining compliance with Section 9.10 shall be calculated in accordance with
the definition of Test Period contained herein.
(b) All computations of interest and Fees hereunder shall be
made on the actual number of days elapsed over a year of 360 days.
13.08 Governing Law; Submission to Jurisdiction; Venue. (a)
THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Agreement or any other Credit Document may be brought in
the courts of the State of New York or of the United States for the Southern
District of New York, and, by execution and delivery of this Agreement, each
Credit Party hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Each Credit Party hereby further irrevocably waives any claim that any
such courts lack jurisdiction over such Credit Party, and agrees not to plead or
claim, in any legal action or proceeding with respect to this Agreement or any
other Credit Document brought in any of the aforesaid courts, that any such
court lacks jurisdiction over such Credit Party. Each Credit Party irrevocably
consents to the service of process in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
such Credit Party, at its address for notices pursuant to Section 13.03, such
service to become effective 30 days after such mailing. Each Credit Party hereby
irrevocably waives any objection to such service of process and further
irrevocably waives and agrees not to plead or claim in any action or proceeding
commenced hereunder or under any other Credit Document that service of process
was in any way invalid or ineffective. Nothing herein shall affect the right of
the Agent, any Bank or the holder of any Note to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against any Credit Party in any other jurisdiction.
(b) Each Credit Party hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Agreement or any other Credit Document brought in the courts referred to in
clause (a) above and hereby further irrevocably waives and
-114-
<PAGE> 122
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.
13.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A
complete set of counterparts executed by all the parties hereto shall be lodged
with the Borrower and the Agent.
13.10 Effectiveness. This Agreement shall become effective on
the date (the "Effective Date") on which the Borrower, the Agent and each of the
Banks shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered the same to the Agent at the Notice
Office or, in the case of the Banks, shall have given to the Agent telephonic
(confirmed in writing), written, telex or facsimile notice (actually received)
at such office that the same has been signed and mailed to it. The Agent will
give the Borrower and each Bank prompt written notice of the occurrence of the
Effective Date.
13.11 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.
13.12 Amendment or Waiver; etc. (a) Neither this Agreement nor
any other Credit Document nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the respective Credit Parties party thereto
and the Required Banks, provided that no such change, waiver, discharge or
termination shall, without the consent of each Bank (other than a Defaulting
Bank) (with Obligations being directly affected thereby in the case of the
following clause (i)), (i) extend the final scheduled maturity of any Loan or
Note or extend the stated maturity of any Letter of Credit beyond the Final
Maturity Date, or reduce the rate or extend the time of payment of interest or
Fees thereon, or reduce the principal amount thereof (it being understood that
any amendment or modification to the financial definitions in this Agreement
shall not constitute a reduction in any rate of interest or fees for purposes of
this clause (i)), (ii) release all or substantially all of the Collateral
(except as expressly provided in the Security Documents) under all the Security
Documents, (iii) amend, modify or waive any provision of this Section 13.12,
(iv) reduce the percentage specified in the definition of Required Banks (it
being understood that, with the consent of the Required Banks, additional
extensions of credit pursuant to this Agreement may be included in the
determination of the Required Banks on substantially the same basis as the
extensions of Revolving Loan Commitments are included on the Effective Date) or
(v) consent to the assignment or transfer by the Borrower of any of its rights
and obligations under this Agreement; provided further, that no such change,
waiver, discharge or termination
-115-
<PAGE> 123
shall (w) increase the Revolving Loan Commitment of any Bank over the amount
thereof then in effect without the consent of such Bank (it being understood
that waivers or modifications of conditions precedent, covenants, Defaults or
Events of Default or of a mandatory reduction in the Total Revolving Loan
Commitment shall not constitute an increase of the Revolving Loan Commitment of
any Bank, and that an increase in the available portion of any Revolving Loan
Commitment of any Bank shall not constitute an increase in the Revolving Loan
Commitment of such Bank), (x) without the consent of each Letter of Issuer,
amend, modify or waive any provision of Section 2 or alter its rights or
obligations with respect to Letters of Credit or Swingline Loans, (y) without
the consent of the Agent, amend, modify or waive any provision of Section 12 as
same applies to the Agent or any other provision as same relates to the rights
or obligations of the Agent and (z) without the consent of the Collateral Agent,
amend, modify or waive any provision relating to the rights or obligations of
the Collateral Agent.
(b) If, in connection with any proposed change, waiver,
discharge or termination to any of the provisions of this Agreement as
contemplated by clauses (i) through (v), inclusive, of the first proviso to
Section 13.12(a), the consent of the Required Banks is obtained but the consent
of one or more of such other Banks whose consent is required is not obtained,
then the Borrower shall have the right, so long as all nonconsenting Banks whose
individual consent is required are treated as described in either clause (A) or
(B) below, to either (A) replace each such non-consenting Bank or Banks with one
or more Replacement Banks pursuant to Section 1.13 so long as at the time of
such replacement, each such Replacement Bank consents to the proposed change,
waiver, discharge or termination or (B) terminate such non-consenting Bank's
Revolving Loan Commitment and repay in full its outstanding Revolving Loans and
cash collateralize its applicable Percentage of the Letter of Credit of
Outstandings in accordance with Sections 3.02(b) and/or 4.01(b), provided that,
unless the Revolving Loan Commitment which is terminated and Revolving Loans
which are repaid pursuant to preceding clause (B) are immediately replaced in
full at such time through the addition of new Banks or the increase of the
Revolving Loan Commitments and/or outstanding Revolving Loans of existing Banks
(who in each case must specifically consent thereto), then in the case of any
action pursuant to preceding clause (B) the Required Banks (determined after
giving effect to the proposed action) shall specifically consent thereto,
provided further, that the Borrower shall not have the right to replace a Bank
solely as a result of the exercise of such Bank's rights (and the withholding of
any required consent by such Bank) pursuant to the second proviso to Section
13.12(a).
13.13 Survival. All indemnities set forth herein including,
without limitation, in Section 1.10, 1.11, 2.05, 4.04, 12.07 or 13.01, shall
survive the execution and delivery of this Agreement and the making and
repayment of the Loans.
-116-
<PAGE> 124
13.14 Domicile of Loans. Each Bank may transfer and carry its
Loans at, to or for the account of any branch office, subsidiary or affiliate of
such Bank; provided, that the Borrower shall not be responsible for costs
arising under Section 1.10, 1.11, 2.05 or 4.04 resulting from any such transfer
(other than a transfer pursuant to Section 1.12) to the extent such costs would
not otherwise be applicable to such Bank in the absence of such transfer.
13.15 Confidentiality. (a) Each of the Banks agrees that it
will use its reasonable efforts not to disclose without the prior consent of the
Borrower (other than to its directors, employees, auditors, counsel or other
professional advisors, to affiliates or to another Bank if the Bank or such
Bank's holding or parent company in its sole discretion determines that any such
party should have access to such information) any information with respect to
the Borrower or any of its Subsidiaries which is furnished pursuant to this
Agreement; provided, that any Bank may disclose any such information (a) as has
become generally available to the public, (b) as may be required or appropriate
(x) in any report, statement or testimony submitted to any municipal, state or
Federal regulatory body having or claiming to have jurisdiction over such Bank
or to the Federal Reserve Board or the Federal Deposit Insurance Corporation or
similar organizations (whether in the United States or elsewhere) or their
successors or (y) in connection with any request or requirement of any such
regulatory body, (c) as may be required or appropriate in response to any
summons or subpoena or in connection with any litigation, (d) to comply with any
law, order, regulation or ruling applicable to such Bank, and (e) to any
prospective transferee in connection with any contemplated transfer of any of
the Notes or any interest therein by such Bank; provided, that such prospective
transferee agrees to be bound by this Section 13.15 to the same extent as such
Bank.
(b) The Borrower hereby acknowledges and agrees that each Bank
may share with any of its affiliates any information related to the Borrower or
any of its Subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of the Borrower and its
Subsidiaries), provided that such Persons shall be subject to the provisions of
this Section 13.15 to the same extent as such Bank.
13.16 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.17 Register. The Borrower hereby designates the Agent to
serve as the Borrower's agent, solely for purposes of this Section 13.17, to
maintain a register (the "Register") on which it will record the Revolving Loan
Commitment from time to time of each of the Banks, the Revolving Loans made by
each of the Banks and each repayment
-117-
<PAGE> 125
in respect of the principal amount of the Revolving Loans of each Bank. Failure
to make any such recordation, or any error in such recordation shall not affect
the Borrower's obligations in respect of such Revolving Loans. With respect to
any Bank, the transfer of the Revolving Loan Commitment of such Bank and the
rights to the principal of, and interest on, any Revolving Loan made pursuant to
such Revolving Loan Commitment shall not be effective until such transfer is
recorded on the Register maintained by the Agent with respect to ownership of
such Revolving Loan Commitment and Revolving Loans and prior to such recordation
all amounts owing to the transferor with respect to such Revolving Loan
Commitment and Revolving Loans shall remain owing to the transferor. The
registration of assignment or transfer of all or part of any Revolving Loan
Commitment and Revolving Loans shall be recorded by the Agent on the Register
only upon the acceptance by the Agent of a properly executed and delivered
Assignment and Assumption Agreement pursuant to Section 13.04(b). Coincident
with the delivery of such an Assignment and Assumption Agreement to the Agent
for acceptance and registration of assignment or transfer of all or part of a
Revolving Loan, or as soon thereafter as practicable, the assigning or
transferor Bank shall surrender the Revolving Note evidencing such Revolving
Loan, and thereupon one or more new Revolving Notes in the same aggregate
principal amount shall be issued to the assigning or transferor Bank and/or the
new Bank. The Borrower agrees to indemnify the 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 Agent in performing its duties
under this Section 13.17.
13.18 Post Closing Actions. Notwithstanding anything to the
contrary herein or in any other Credit Document, the parties hereto acknowledge
that the promissory note made by Marvin L. Jeffers to the order of the Borrower
in the principal sum of $642,049 and the promissory note made by Lawrence J.
Scharf to the order of the Borrower in the principal amount of $321,940 (each an
"Undelivered Note" and collectively the "Undelivered Notes") have not been
delivered on or prior to the Initial Borrowing Date and that such nondelivery
shall not (except as otherwise provided in the two succeeding sentences)
constitute a Default or Event of Default under the Credit Agreement or any other
Credit Document. On or before August 31, 1996, the Borrower shall deliver to the
Collateral Agent as pledgee under the Pledge Agreement (x) the Undelivered Notes
(if found) endorsed in blank or (y) duly executed replacements of each
Undelivered Note endorsed in blank. Any failure to comply with the requirements
of the immediately preceding sentence shall constitute a breach of covenant by
the Borrower (including without limitation for purposes of Section 10.03 of this
Agreement).
-118-
<PAGE> 126
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
TRANSWORLD HOME
11 Skyline Drive HEALTHCARE, INC.
Hawthorne, New York 10532
Telephone No.: (914) 345-8800
Facsimile No.: (914) 345-8935 By /s/ WAYNE A. PALADINO
Attention: Wayne A. Palladino --------------------------------
Title: Senior Vice President
With a copy to:
200 Schultz Drive
Red Bank, New Jersey 07701
Attention: Vincent J. Caruso
BANKERS TRUST COMPANY,
Individually and as Agent
By /s/ PATRICIA HOGAN
---------------------------------
Title: Vice President
