SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Filed Pursuant to Section 13 or 15 (d) of
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): MARCH 9, 1998
NFO WORLDWIDE, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-21460 06-1327424
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(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification
Number)
2 Pickwick Plaza
Greenwich, CT 06830
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Registrant's telephone number, including area code: (203) 629-8888
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NFO WORLDWIDE, INC.
INDEX
PAGE
NUMBER
ITEM 5 - OTHER EVENTS 3
ITEM 6 - SIGNATURE 4
EXHIBITS
Exhibit 1 - PRESS RELEASE DATED MARCH 12, 1998
ANNOUNCING NEW CREDIT FACILITIES. 5
Exhibit 2 - CREDIT AGREEMENT DATED AS OF MARCH 9,
1998 AMONG NFO WORLDWIDE, INC., THE BANKS
SIGNATORY HERETO, AND FLEET NATIONAL BANK
AND THE CHASE MANHATTAN BANK, AS CO-AGENTS
AND FLEET NATIONAL BANK AS ADMINISTRATIVE
AGENT. 7
Exhibit 3 - NFO WORLDWIDE, INC. NOTE PURCHASE
AGREEMENT DATED AS OF MARCH 9, 1998
$40,000,000 6.43% SENIOR NOTES DUE
MARCH 1, 2008. 55
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Item 5. OTHER EVENTS
On March 9, 1998 the Company entered into two financing agreements: a private
placement of $40 million of Senior Notes and a $75 million revolving credit
facility. Borrowings available under these combined agreements equal $115
million and are unsecured. Proceeds will be used to pay off the Company's
existing debt of approximately $32 million, finance acquisitions, capital
expenditures and working capital. The revolving credit facility replaces the
Company's existing $35 million revolving credit facility.
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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, thereunto duly authorized.
Date: March 24, 1998 NFO WORLDWIDE, INC.,
By: /s/ Patrick G. Healy
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Name: Patrick G. Healy
Title: President, Corporate
Product/Systems
Development and
Chief Financial Officer
CONTACT: Patrick G. Healy
President-CPSD & CFO
203-618-8502
e-mail: [email protected]
NFO COMPLETES $40 MILLION PRIVATE PLACEMENT OF
SENIOR NOTES AND FINALIZES $75 MILLION REVOLVING CREDIT FACILITY; PROVIDES
FINANCIAL RESOURCES TO
CONTINUE ITS AGGRESSIVE GROWTH
Greenwich, CT -- March 12, 1998 -- NFO Worldwide, Inc. (NYSE:NFO) today
announced it successfully concluded a private placement of $40 million in fixed
rate Senior Notes and entered into a $75 million revolving credit agreement with
four major U.S. banks. Borrowings under these combined $115 million credit
facilities will be unsecured, the proceeds of which will be used to refinance
the company's existing debt of approximately $32 million and to finance
acquisitions, capital expenditures and working capital. The $75 million
revolving credit replaces NFO's current bank line of $35 million.
The $40 million in senior notes, due March 1, 2008, were privately placed with
PPM America, Cigna Investments, the Mutual Group, and Berkshire Life. The notes
bear interest at the fixed annual rate of 6.43% and are to be repaid in equal
annual installments of approximately $5.7 million starting in the year 2002.
The $75 million unsecured revolving credit facility with an ultimate maturity
date of March 2003, will enable NFO to borrow in multiple currencies at interest
rates tied to LIBOR or the prime rate, at the company's option. The facility was
co-agented by Fleet National Bank and Chase Manhattan Bank. Also participating
were the Bank of New York and First Union Bank.
Patrick G. Healy, President, Corporate Product/Systems Development and Chief
Financial Officer, commented," We are pleased to have completed these new
borrowing arrangements. The senior notes will provide NFO with long-term fixed
rate debt at favorable interest rates, and the revolving credit facility will
give NFO access to flexible, short-term financing. These facilities, together
with NFO's already strong balance sheet and excellent cash flow, will provide
the financial resources necessary to continue executing our aggressive growth
strategies."
William E. Lipner, Chairman and Chief Executive said, "NFO today is the largest
U.S. based custom market research firm in the world and we intend to continue to
broaden and expand our services as we transform NFO into a worldwide marketing
information services company. Over the past four years, more than a dozen
outstanding companies have joined NFO as we have added vertical market expertise
and horizontal product and service capabilities, in our quest to become a
multi-national marketing information leader. These expanded credit facilities
announced today, provide NFO with additional financial flexibility as we move
forward to implement our exciting plans for future growth."
NFO Worldwide, Inc. is a leading provider of custom and syndicated marketing
information to America's largest companies as well as the international
business community. Through its pre-recruited consumer panel and other
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specialized databases, NFO offers access to more than 550,000 US households
(over 1.4 million people) and, through a joint venture, to over 100,000 European
households. The Company provides its services to over 2,000 clients in key
market segments such as packaged goods and foods, healthcare, financial
services, hi-tech/telecommunications and travel & leisure. NFO operates in 24
countries and has more than 6,000 full and part-time employees.
Statements in this press release relating to matters that are not historical
facts are forward- looking statements. Such forward-looking statements are based
on the Company's current forecasts and actual results may differ materially. To
understand the risks which may affect the Company's future performance, please
refer to Part I of NFO's 1996 Annual Report on Form 10- K and the "Risk Factors"
section in the Company's Form S-3 filed October 22, 1997.
CREDIT AGREEMENT
dated as of March 9, 1998
among
NFO WORLDWIDE, INC.,
the Banks signatory hereto,
and
FLEET NATIONAL BANK
and
THE CHASE MANHATTAN BANK, as Co-Agents
and
FLEET NATIONAL BANK,
as Administrative Agent
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CREDIT AGREEMENT, dated as of March 9, 1998, among NFO WORLDWIDE, INC.,
a corporation organized under the laws of the State of Delaware (the
"Borrower"), each of the banks which is a signatory hereto ( together with each
bank's successors and assigns, individually, a "Bank," and collectively the
"Banks"), FLEET NATIONAL BANK, a national banking association organized under
the laws of the United States of America ("Fleet"), and THE CHASE MANHATTAN
BANK, a New York banking corporation, together with Fleet, as co-agents for the
Banks (in such capacity, each a "Co-Agent" and collectively, the "Co-Agents"),
and Fleet, as administrative agent for the Banks (in such capacity together with
its successors and assigns, the "Administrative Agent").
W H E R E A S:
The Borrower desires that the Banks extend credit as provided herein
and the Banks are prepared to extend such credit;
NOW, THEREFORE, the Borrower, the Banks, the Co-Agents and the
Administrative Agent hereby agree as follows:
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.
Section 1.1. Definitions. As used in this Agreement, the following
terms have the following meanings (terms defined in the singular to have a
correlative meaning when used in the plural and vice versa, unless stated
otherwise):
"Acceptable Acquisition" has the meaning given such term in Section
7.11.
"Acquisition" has the meaning given such term in Section 7.11.
"Adjusted Leverage Ratio" means for any Person, as at any date, a ratio
on a consolidated basis in accordance with GAAP of (i) Funded Debt of such
Person to (ii) EBITDA of such Person.
"Affiliate" means any Person: (a) which directly or indirectly
controls, or is controlled by, or is under common control with, the Borrower or
any of its Subsidiaries; (b) which directly or indirectly beneficially owns or
holds 15% or more of any class of voting stock of the Borrower or any such
Subsidiary; (c) 5% or more of the voting stock of which is directly or
indirectly beneficially owned or held by the Bor rower or such Subsidiary; or
(d) which is a partnership in which the Borrower or any of its Subsidiaries is a
general partner. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise.
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"Agreement" means this Credit Agreement, as it may be amended or
supplemented from time to time. References to Articles, Sections, Exhibits,
Schedules and the like refer to the Articles, Sections, Exhibits, Schedules and
the like of this Agreement unless otherwise indicated.
"Alternative Currency" means British Pounds, French Francs, German
Deutschmarks, Japanese Yen, Hong Kong Dollars, Canadian Dollars, New Zealand
Dollars, Australian Dollars, Euro (or the applicable unit of combined currency
determined by the European economic community when available) or such other
currency other than Dollars that the Borrower may reasonably request from time
to time, which the Banks are able to reasonably accommodate.
"Alternative Currency Equivalent" means, with respect to an amount of
Dollars on any date in relation to any specified Alternative Currency, the
amount of such specified Alternative Currency that may be purchased with such
amount of Dollars at the Spot Exchange Rate with respect to Dollars on such
date.
"Alternative Currency Loan" means any Eurodollar Loan denominated in an
Alternative Currency.
"Authorization Letter" means the letter agreement executed by the
Borrower in the form of Exhibit E.
"Banking Day" means any day on which commercial banks are not
authorized or required by law to close in Providence, Rhode Island and whenever
such day relates to a LIBO Rate Loan or notice with respect to any LIBO Rate
Loan or Alternative Currency Loan, as the case may be, a day on which dealings
in Dollar or the applicable Alternative Currency deposits are also carried out
in the London interbank market.
"Borrowing" means a Loan or group of Loans of a single type as to which
a single Interest Period is in effect.
"Capital Base" means, at any date of determination thereof, the sum of
(a) Subordinated Debt of a Person, plus (b) such Person's shareholders' equity
(excluding the effect of extraordinary or unusual items).
"Capital Lease" means any lease which has been or should be capitalized
on the books of the lessee in accordance with GAAP.
"Cash and Cash Equivalents" means, with respect to any Person, the
aggregate amount of the following, to the extent owned by such Person or any of
its
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Subsidiaries: (i) cash on hand; (ii) Dollar or Alternative Currency demand
deposits maintained in the United States with any commercial bank and Dollar
time deposits maintained in the United States with, or certificates of deposit
having a maturity of one year or less from the date of acquisition issued by,
any commercial bank which has its head office in the United States and which has
a combined capital and surplus of at least $100,000,000; (iii) direct
obligations of, or unconditionally guaranteed or insured by, the United States
or any agency thereof and having a maturity of one year or less from the date of
acquisition; (iv) commercial paper having a maturity of one year or less from
the date of acquisition, issued by any corporation organized and existing under
the laws of the United States or any state thereof or the District of Columbia
and rated at least "A-1" by Standard & Poor's Corporation or "P-1" by Moody's
Investors Service, Inc. (or, if neither such organization shall rate such
commercial paper at any time, rated by any nationally recognized rating
organization in the United States with the highest rating assigned by such
organization); (v) repurchase obligations of any Bank or of any commercial bank
satisfying the requirement of clause (ii) having a term of not more than 30 days
with respect to securities issued or fully guaranteed or insured by the United
States or any agency thereof; (vi) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States or by any political subdivision
or taxing authority of any such state, commonwealth or territory or by any
foreign government, the securities of which state, commonwealth, territory,
political subdivision, taxing authority or foreign government (as the case may
be) are rated at least A by Standard & Poor's Corporation or A by Moody's
Investors Service, Inc.; (vii) securities with maturities of one year or less
from the date of acquisition backed by standby letters of credit issued by any
Bank or any commercial bank satisfying the requirements of clause (ii) of this
definition; and (viii) shares of money market mutual or similar funds sponsored
by any registered broker-dealer or mutual fund administrator.
"Closing Date" means the date this Agreement has been executed by the
Borrower, the Banks, the Co-Agents and the Administrative Agent.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment" means, with respect to each Bank, the obligation of such
Bank to make its Loans under this Agreement in the aggregate principal amount
corresponding to its name, as such amount may be reduced or otherwise modified
from time to time in accordance with the terms of this Agreement:
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TOTAL COMMITMENT $75,000,000
Fleet National Bank $25,000,000
The Chase Manhattan Bank $25,000,000
The Bank of New York $12,500,000
First Union National Bank $12,500,000
"Commitment Percentage" means, as to any Bank, the percentage
equivalent of a fraction, the numerator of which is the Commitment of such Bank
and the denominator of which is the aggregate Commitments of all Banks.
"Consolidated Capital Base" means the Capital Base of a Person and its
Consolidated Subsidiaries, as determined on a consolidated basis in accordance
with GAAP.
"Consolidated Net Income" means Net Income of a Person and its
Consolidated Subsidiaries, as determined on a consolidated basis in accordance
with GAAP; provided that, for purposes of Section 8.1, if such amount is
determined to be less than zero (0) during each quarter that the minimum Capital
Base is required to be measured pursuant to Section 8.1, then the Consolidated
Net Income shall be deemed to be 0 for such quarter.
"Consolidated Subsidiary" means any Subsidiary of a Person whose
accounts are or are required to be consolidated with the accounts of such Person
in accordance with GAAP.
"Debt" means, with respect to any Person: (a) indebtedness of such
Person for borrowed money; (b) indebtedness for the deferred purchase price of
property or services (except trade payables in the ordinary course of business);
(c) unpaid reimbursement obligations of such Person with respect to letters of
credit; (d) the undrawn face amount of any outstanding letters of credit issued
for the account of or upon the application of such Person; (e) obligations
arising under acceptance facilities; (f) guaranties, endorsements (other than
for collection in the ordinary course of business) and other contingent
obligations to purchase, to provide funds for payment, to supply funds to invest
in any Person, or otherwise to assure a creditor against loss, including any
contingent obligations under swaps, derivatives, currency exchanges and similar
transactions; (g) obligations secured by any Lien on property of such Person;
and (h) obligations of such Person as lessee under Capital Leases.
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"Default" means any event which with the giving of notice or lapse of
time, or both, would become an Event of Default.
"Default Rate" means, with respect to the principal of any Loan and, to
the extent permitted by law, any other amount payable by the Borrower under this
Agreement or any Note that is not paid when due (whether at stated maturity, by
acceleration or otherwise), a rate per annum during the period from and
including the due date, to, but excluding the date on which such amount is paid
in full equal to (a) in the case of any amount of principal due on the Loans
(other than the Revolving Loans), 2% above the interest rate applicable to such
amount immediately prior to the date on which such amount became due and payable
and (b) in the case of all other amounts, 2% above the interest rate payable
from time to time on Variable Rate Loans pursuant to Section 2.10(a)(i).
"Denomination Date" means, in relation to any Borrowing in an
Alternative Currency, the date that is three (3) Banking Days prior to the date
such Borrowing is made and in the case of a renewal of, or conversion to, such
Loan, the date that is three (3) Banking Days prior to the date of such renewal
or conversion.
"Dollar Equivalent" means, with respect to an amount of any Alternative
Currency on any date in relation to Dollars, the amount of Dollars that may be
purchased with such amount of such Alternative Currency at the Spot Exchange
Rate with respect to such Alternative Currency on such date.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"EBITDA" means, for any Person, for any period, on a consolidated
basis, earnings from continuing operations before Interest Expense, tax expense,
depreciation, amortization and other non-cash items for such Person determined
in accordance with GAAP; provided that to the extent the financial covenants set
forth in Article 8 are required to be measured for any rolling twelve month
period, any Subsidiary acquired or formed by the Borrower prior to the relevant
measurement date shall be treated as though that Subsidiary were a Subsidiary of
the Borrower for the immediately preceding rolling twelve month period.
"Environmental Indemnification" means the environmental indemnification
agreement of the Borrower in the form of Exhibit F hereto.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants,
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contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment including, without limitation, ambientair, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including any rules and regulations promulgated
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which the Borrower is a member, or (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of which the
Borrower is a member.
"Eurodollar Base Rate" means, with respect to any Interest Period for a
LIBO Rate Loan, the rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) appearing on Telerate Page 3750 (or any successor page) as
the London interbank offered rate for deposits in Dollars or deposits in an
Alternative Currency with respect to any Alternative Currency Loan, as
applicable, at approximately 11:00 a.m. London time two (2) Banking Days prior
to the first day of such Interest Period for a period comparable to such
Interest Period. If for any reason such rate is not available, the term
"Eurodollar Base Rate" shall mean, for any LIBO Rate Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars or deposits in an Alternative
Currency with respect to any Alternative Currency Loan, as applicable, at
approximately 11:00 a.m. (London time) two (2) Banking Days prior to the first
day of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such rates
(rounded upwards, if necessary, to the nearest 1/16 of 1%). If both the Telerate
and Reuters system are unavailable, then the term "Eurodollar Base Rate" shall
mean, for any LIBO Rate Loan for any Interest Period therefor, the rate offered
for deposits in Dollars or deposits in an Alternative Currency with respect to
any Alternative Currency Loan, as applicable, for a period of time comparable to
such LIBO Rate Loans which are offered by four major banks in the London
interbank market at approximately 11:00 a.m. London time two (2) Banking Days
prior to the first day of such Interest Period as selected by the Reference
Bank. The principal London office of each of the four major London banks will be
requested to provide a quotation of its rate for deposits in Dollars or deposits
in an Alternative Currency with respect to any Alternative Currency Loan, as
applicable. If at least two such quotations are provided, the applicable rate
shall be the arithmetic mean of such quotations (rounded upwards, if necessary,
to the nearest 1/16 of 1%). If fewer than two quotations are provided as
requested, the rate for that date will be determined on the basis of rates
quoted for such comparable Interest Period for deposits in Dollars or deposits
in an Alternative Currency with respect to any Alternative Currency Loan, as
applicable, by leading European banks for a period of time comparable to such
LIBO Rate Loan offered by major banks in New York City at approximately 11:00
a.m., New York City time, on the day that is two (2) Banking Days preceding the
first
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day of such LIBO Rate Loan. In the event that the Administrative Agent is unable
to obtain any such quotation as provided herein, it will be deemed that the
Eurodollar Base Rate cannot be determined.
"Eurodollar Loan" means any Revolving Loan when and to the extent the
interest rate therefor is determined on the basis of the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan or LIBOR Market Loan
for any Interest Period therefor, a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined by the Administrative Agent to
be equal to the quotient of (i) the Eurodollar Base Rate for such Loan for such
Interest Period, divided by (ii) one minus the Reserve Requirement for such Loan
for such Interest Period. The Eurodollar Rate shall be adjusted automatically on
and as of the effective date of any change in the Reserve Requirement.
"Event of Default" has the meaning given such term in Section 9.1.
"Facility Documents" means this Agreement, the Notes, the Authorization
Letter, the Environmental Indemnification and each of the documents,
certificates or other instruments referred to in Article 4 as well as any other
documents, instruments or certificates to be delivered by the Borrower in
connection with this Agreement or in connection with the documents, instruments
or certificates referred to in Article 4, including documents delivered in
connection with any Borrowing, as each such Facility Document may be amended and
restated from time to time.
"Federal Funds Rate" means, for any day, the rate per annum (expressed
on a 360 day basis of calculation) equal to the weighted average of the rates on
overnight federal funds transactions as published by the Federal Reserve Bank of
Boston for such day (or for any day that is not a Banking Day, for the
immediately preceding Banking Day).
"Forfeiture Proceeding" means any action, proceeding or investigation
affecting the Borrower or any of its Subsidiaries before any court, governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, or the receipt of notice by any such party that any of them is a
suspect in or a target of any governmental inquiry or investigation, which in
each case is reasonably expected to result in an indictment of any of them or
the seizure or forfeiture of any of their property.
"Funded Debt" means, with respect to any Person, all Debt of such
Person for money borrowed, including any such indebtedness incurred pursuant to
the provisions of any revolving credit agreement or other similar agreement.
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"GAAP" means generally accepted accounting principles in the United
States of America as in effect (i) with regard to the determination of
compliance with the covenants contained in Article 8, as such principles are in
effect on the date hereof applied on a consistent basis, and (ii) with regard to
the preparation of the financial statements referred to in Section 6.8 and the
preparation of any other financial statements to be delivered to the
Administrative Agent or any Bank in the future by the Borrower or any other
Person, as such principles are in effect from time to time applied on a
consistent basis.
"Governmental Authority" means any nation or government, any state or
other political subdivision or an agency, authority, bureau, central bank,
commission, department or instrumentality of either, or any court, tribunal,
grand jury or arbitrator, in each case whether foreign or domestic, and any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Interest Coverage Ratio" means, for any Person, as at any date, on a
consolidated basis, the ratio of (a) EBITDA of such Person to (b) Interest
Expense of such Person.
"Interest Expense" means, with respect to any Person, for any period,
the sum, for such Person in accordance with GAAP, of (a) all interest on Debt
that is accrued as an expense during such period (including, without limitation,
imputed interest on Capital Lease obligations), plus (b) all amounts paid,
accrued or amortized as an expense during such period in respect of interest
rate protection agreements, minus (c) all amounts received or accrued as income
during such period in respect of interest rate protection agreements.
"Interest Period" means:
(a) With respect to any Eurodollar Loan, the period
commencing on the date such Eurodollar Loan is made, converted from another type
of Loan or renewed, as the case may be, and ending, as the Borrower may select
pursuant to Section 2.6, on the numerically corresponding day in the first,
second, third, or sixth calendar month thereafter, provided that each such
Interest Period which commences on the last Banking Day of a calendar month
(or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Banking Day of the
appropriate subsequent calendar month.
(b) With respect to any Set Rate Loan, the period
commencing on the date such Set Rate Loan is made and ending on any Banking Day
up to 180 days thereafter, as the Borrower may select pursuant to Section
2.4(b).
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(c) With respect to any LIBOR Market Loan, the period
commencing on the date such LIBOR Market Loan is made and ending on the
numerically corresponding day in the first, second, third or sixth calendar
month thereafter, as mutually agreed by the Borrower and a Bank pursuant to
Section 2.4(b), provided that each such Interest Period which commences on the
last Banking Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Banking Day of the appropriate subsequent calendar month.
"Interest Rate Protection Agreement" means any interest rate protection
agreement entered into with any bank or other financial institution whereby the
Borrower obtains a hedge or cap for the interest rate that will be payable by
the Borrower on the Loans under this Agreement.
"Lending Office" means, for each Bank, each Co-Agent and the
Administrative Agent and for each type of Loan, the lending office of such Bank
(or of an affiliate of such Bank) or the Co-Agents and the Administrative Agent
designated as such for such type of Loan on its signature page hereof or such
other office of such Bank (or of an affiliate of such Bank) or such Co-Agent or
the Administrative Agent as such Bank, such Co-Agent or Administrative Agent may
from time to time specify to the Administrative Agent and the Borrower as the
office by which its Loans of such type are to be made and maintained.
"LIBO Rate Loan" means Eurodollar Loans and LIBOR Market Loans.
"LIBOR Auction" means a solicitation of Money Market Quotes setting
forth margins based on the Eurodollar Rate pursuant to Section 2.4 (b).
"LIBOR Market Loans" means Money Market Loans the interest rates on
which are determined on the basis of Eurodollar Rates pursuant to a LIBOR
Auction.
"Lien" means any lien (statutory or otherwise), security interest,
mortgage, deed of trust, priority, pledge, negative pledge, charge, conditional
sale, title retention agreement, financing lease or other encumbrance or similar
right of others, or any agreement to give or refrain from giving any of the
foregoing.
"Loan" or "Loans" means Revolving Loans and Money Market Loans
(including LIBOR Market Loans and Set Rate Loans).
"Margin" means, (a) for any Variable Rate Loan, 0 basis points; and (b)
for any Eurodollar Loan, the margin for such type of Loan that would apply as
set forth in Section 2.13.
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"Material Adverse Effect" means (a) a material adverse effect on the
condition (financial or otherwise), business, management, operations, properties
or prospects of the Borrower and its Subsidiaries, taken as a whole, (b) a
material adverse effect on the ability of the Borrower or any of its
Subsidiaries to perform or comply with any of the material terms and conditions
of this Agreement, any Note or any other Facility Document, or (c) a material
adverse effect on the legality, validity, binding effect, enforceability or
admissibility into evidence of this Agreement, any Note or any other Facility
Document, or the ability of the Administrative Agent, the Co-Agents or any Bank
to enforce its- rights or remedies under or in connection with this Agreement,
any Note or any other Facility Document.
"Money Market Borrowing" shall have the meaning given such term in
Section 2.4(b).
"Money Market Confirmation" means each confirmation by the Borrower of
its acceptance of a Money Market Quote, which Money Market Confirmation shall be
substantially in the form of Exhibit B and shall be delivered to the
Administrative Agent in writing or by facsimile transmission.
"Money Market Loan Limit" shall have the meaning given such term in
Section 2.4(b).
"Money Market Loans" shall have the meaning given such term in Section
2.1.
"Money Market Note" means a promissory note of the Borrower in the form
of Exhibit A-2 hereto evidencing Money Market Loans made by a Bank hereunder.
"Money Market Quote" means each offer by a Bank to make Money Market
Loans pursuant to a Money Market Quote Request, which Money Market Quote shall
contain the information specified in, as appropriate, Exhibit C-1 or Exhibit C-2
and shall be delivered to the Administrative Agent by telephone, immediately
confirmed by facsimile transmission.
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"Money Market Quote Request" means each request by the Borrower for
Banks to submit bids to make Money Market Loans, which shall contain the
information in respect of such requested Money Market Loans specified in, as
appropriate, Exhibit D-1 or Exhibit D-2 and shall be delivered to the
Administrative Agent in writing or by facsimile transmission, or by telephone,
immediately confirmed by facsimile transmission.
"Money Market Rate" shall have the meaning given such term in Section
2.4(b).
"Multiemployer Plan" means a Plan defined as such in Section 3(37) of
ERISA to which contributions have been made by the Borrower or any ERISA
Affiliate and which is covered by Title IV of ERISA.
"Net Cash Proceeds" means with respect to any transaction, Net Proceeds
in the form of Cash and Cash Equivalents.
"Net Income" of any Person for any period means the net income (loss)
of such Person for such period determined in accordance with GAAP.
"Net Proceeds" means, with respect to any transaction, cash or other
property or consideration received by any Person from such transaction after
deducting therefrom the following reasonable amounts (as applicable): (a)
income, title, recording or any other taxes measured by or resulting from such
transaction, (b) payment of all underwriting discounts and related fees,
brokerage commissions, investment banking, accounting and legal fees and other
fees and expenses related to such transaction, and (c) amounts paid to satisfy
Debt (other than the Loans) which is required to be repaid in connection with
any such transaction.
"Note" means each Revolving Note and each Money Market Note.
"Notice of Borrowing" means the notice of each borrowing required by
Section 4.2.
"Obligation Currency" shall have the meaning assigned to such term in
Section 11.19(a).
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Payment Default" means a Default involving the failure of the Borrower
to pay when due any principal, interest, fees or other amounts due hereunder or
under the Notes.
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"Person" means an individual, partnership, corporation, limited
liability company or partnership, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity of whatever nature.
"Plan" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by the Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA, other than a
Multiemployer Plan.
"Prime Rate" means the variable per annum rate of interest from time to
time designated by the Reference Bank at the Principal Office as its prime
commercial lending rate. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate being charged to any customer.
"Principal Office" means the principal office of the Administrative
Agent, presently located at 111 Westminster Street, Providence, Rhode Island
02903.
"Quotation Date" shall have the meaning given such term in Section
2.4(b).
"Reference Bank" means Fleet National Bank.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulatory Change" means, with respect to any Bank, any change after
the date of this Agreement in United States federal, state, municipal or foreign
laws or regulations (including without limitation Regulation D) or the adoption
or making after such date of any interpretations, directives or requests
applying to a class of banks including such Bank of or under any United States,
federal, state, municipal or foreign laws or regulations (whether or not having
the force of law) by any court or governmental or monetary authority charged
with the interpretation or administration thereof.
"Required Banks" means, at any time while no Loans are outstanding,
Banks having at least 67% of the aggregate amount of the Commitments and, at any
time after the Commitments shall have terminated, Banks holding at least 67% of
the aggregate principal amount of the Loans. For purposes of determining the
Required Banks, any amounts denominated in an Alternative Currency shall be
translated into Dollars at the Spot Exchange Rate in effect at such time.
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"Reserve Requirement" means, for any Interest Period for any LIBO Rate
Loan, the average maximum rate at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained during such
Interest Period under Regulation D by member banks of the Federal Reserve System
in Boston with deposits exceeding $1,000,000,000 against "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting the effect
of the foregoing, the Reserve Requirement shall reflect any other reserves
required to be maintained by such member banks by reason of any Regulatory
Change against (i) any category of liabilities which includes deposits by
reference to which the Eurodollar Base Rate for LIBO Rate Loans is to be
determined as provided in the definition of "Eurodollar Base Rate" in this
Section 1.1 or (ii) any category of extensions of credit or other assets which
include LIBO Rate Loans. The Eurodollar Rate shall be adjusted automatically on
and as o the effective date of any change in the Reserve Requirement.
"Revolving Loans" shall have the meaning given such term in Section
2.1.
"Revolving Note" means a promissory note of the Borrower in the form of
Exhibit A-1 hereto evidencing Revolving Loans made by a Bank hereunder.
"Set Rate Auction" means a solicitation of Money Market Quotes setting
forth Money Market Rates pursuant to Section 2.4(b).
"Set Rate Loans" means Money Market Loans the interest rates on which
are determined on the basis of Money Market Rates pursuant to a Set Rate
Auction, as quoted by the successful bidding Bank in substantially the same form
as Exhibit C-2 hereof.
"Spot Exchange Rate" means, on any date of determination thereof, (a)
with respect to any Alternative Currency, the spot rate at which Dollars are
offered for such Alternative Currency on such day by the principal branch of the
Reference Bank at approximately 11:00 a.m. (Boston, Massachusetts time), and (b)
with respect to Dollars in relation to any specified Alternative Currency, the
spot rate at which such specified Alternative Currency is offered on such date
by the principal branch of the Reference Bank for Dollars at approximately 11:00
a.m. (Boston, Massachusetts time). For purposes of determining the Spot Exchange
Rate in connection with any Alternative Currency Borrowing, such Spot Exchange
Rate shall be determined as of the Denomination Date for such Borrowing with
respect to transactions in the applicable Alternative Currency that will settle
on the date of such Borrowing.
"Subordinated Debt" means Funded Debt subordinated on terms reasonably
satisfactory to the Administrative Agent and the Banks to the Borrower's
obligations under this Agreement and the Notes.
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"Subsidiary" means, with respect to any Person, any corporation or
other entity of which at least a majority of the securities or other ownership
interests having ordinary voting power (absolutely or contingently) for the
election of directors or other persons performing similar functions are at the
time owned directly or indirectly by such Person. Unless otherwise specified,
the term "Subsidiary" or "Subsidiaries" contained herein means a Subsidiary of
the Borrower.
"Termination Date" means (i) March 31, 2003; provided that if such date
is not a Banking Day, the Termination Date shall be the next succeeding Banking
Day (or, if such next succeeding Banking Day falls in the next calendar month,
the next preceding Banking Day) or (ii) the earlier date of termination in whole
of the Commitments pursuant to Section 9.2 or otherwise.
"Unfunded Benefit Liabilities" means, with respect to any Plan, the
amount (if any) by which the present value of all benefit liabilities (within
the meaning of Section 4001(a)(16) of ERISA) under such Plan exceeds the fair
market value of all Plan assets allocable to such benefit liabilities, as
determined on the most recent valuation date of such Plan and in accordance with
the provisions of Financial and Accounting Standards Board 87.
"Variable Rate" means, for any day, the higher of (a) the Federal Funds
Rate for such day plus 1/2 of 1% and (b) the Prime Rate for such day.
"Variable Rate Loan" means any Loan when and to the extent the interest
rate for such Loan is determined in relation to the Variable Rate.
Section 1.2. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, and all financial
data required to be delivered hereunder shall be prepared in accordance with
GAAP.
Section 1.3. Rules of Interpretation.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Agreement.
(b) The singular includes the plural and the plural
includes the singular.
(c) A reference to any law includes any amendment or
modification to such law.
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(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) The words "include", "includes" and "including" are not
limiting.
(f) All terms not specifically defined herein or by GAAP,
which terms are defined in the Uniform Commercial Code as in effect in
Connecticut, have the meanings assigned to them therein.
(g) Reference to a particular "Section" refers to that
section of this Agreement unless otherwise indicated.
(h) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Agreement as a whole and not to any particular
section or subdivision of this Agreement.
ARTICLE 2. THE CREDIT.
Section 2.1. The Loans.
(a) Subject to the terms and conditions of this Agreement,
each of the Banks severally agrees to make revolving credit loans (the
"Revolving Loans") to the Borrower from time to time from and including the date
hereof to and including the Banking Day immediately prior to the Termination
Date, up to but not exceeding in the aggregate principal amount at any one time
outstanding, the amount of its Commitment, provided that the aggregate
outstanding principal amount of the Loans shall at no time exceed the aggregate
amount of the Commitments. At the Borrower's election, the Revolving Loans may
be outstanding as Variable Rate Loans or Eurodollar Loans (each a "type" of
Revolving Loans). Each type of Revolving Loans of each Bank shall be made and
maintained at such Bank's Lending Office for such type of Revolving Loans.
Eurodollar Loans will not be available for Interest Periods commencing at any
time that a Payment Default or Event of Default is in existence The Revolving
Loans shall be due and payable on the Termination Date. If the Borrower fails to
pay such amounts when due, in accordance with the terms contained herein, such
amounts shall bear interest at the applicable Default Rate for such Loans.
Eurodollar Loans may be denominated in Dollars or in one or more Alternative
Currencies, but Variable Rate Loans shall be denominated only in Dollars. Any
Eurodollar Loan may be made in the Alternative Currency specified in the notice
of each Borrowing pursuant to Section 2.8 in the Alternative Currency amount
specified in such notice, and the Administrative Agent shall determine the
Dollar Equivalent as of the Denomination Date for such Borrowing (which
determination shall be
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conclusive absent manifest error). For purposes of determining the amount
outstanding under any Bank's Commitment, each Eurodollar Loan denominated in an
Alternative Currency shall be the Dollar Equivalent for such Eurodollar Loan as
of the Denomination Date.
(b) The Borrower may request uncommitted competitive
auction facility advances (the "Money Market Loans") from time to time on any
Banking Day during the period from the date hereof to the date occurring 30 days
prior to the Termination Date in the manner set forth in Section 2.4(b) and in
amounts such that the aggregate amount of Loans outstanding at any time shall
not exceed the aggregate amount of the Commitments at such time. Each Money
Market Loan shall be due and payable on the last day of the Interest Period
therefor. If the Borrower fails to pay such amounts when due, in accordance with
the terms herein, such amounts shall bear interest at the applicable Default
Rate for such Loan.
Section 2.2. The Notes.
(a) The Revolving Loans of each Bank shall be evidenced by
a single Revolving Note in favor of such Bank in the form of Exhibit A-1, dated
the date of this Agreement, duly completed and executed by the Borrower. Each
Bank is hereby authorized by the Borrower to record the date, type, amount and
currency of each Revolving Loan made by such Bank to the Borrower evidenced by
such Revolving Note and the date, amount and currency of each payment of
principal thereof on the schedule annexed to and constituting part of its
Revolving Note from the Borrower, or to otherwise record in its internal
records, and any such recordation shall constitute prima facie evidence of the
accuracy of the information so recorded; provided, however, that the failure of
any Bank to make any such recordation (or any error therein) shall not affect
the obligations of the Borrower hereunder or under its Revolving Note. Each
Revolving Loan evidenced by each Revolving Note shall bear interest for the
period from and including the date of such Revolving Loan on the unpaid
principal amount thereof from time to time outstanding at the applicable rate
per annum determined as provided in, and such interest shall be payable as
specified in, Section 2.10.
(b) The Money Market Loans made by each Bank to the
Borrower shall be evidenced initially by a single Money Market Note of the
Borrower in favor of such Bank in the form of Exhibit A-2, dated the date of
this Agreement, duly completed and executed by the Borrower. Each Bank is hereby
authorized to record the date, amount, type and maturity date of each Money
Market Loan made by such Bank to the Borrower, the date and amount of each
payment of principal thereo and the interest rate with respect thereto on the
schedule annexed to and constituting part of its Money Market Note from the
Borrower, or to otherwise record in its internal records, and any such
recordation shall constitute prima facie evidence of the accuracy of the
information so
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recorded; provided, however, that the failure to make any such
recordation (or any error therein) shall not affect the obligations of the
Borrower hereunder or under its Money Market Note. Each Money Market Loan
evidenced by each Money Market Note shall bear interest for the period from and
including the date of such Money Market Loan on the unpaid principal amount
thereof from time to time outstanding at the applicable rate per annum
determined as provided in, and such interest shall be payable as specified in,
Section 2.10(d).
Section 2.3. Purpose. The Borrower shall use the proceeds of the Loans
to satisfy the Borrower's obligations under certain existing indebtedness to one
or more of the Banks, to repay the Borrower's remaining obligations relating to
that certain $2,500,000 Industrial Revenue Bond as set forth on Schedule 5.10
hereto, and to finance working capital and general corporate needs of the
Borrower, including permissible acquisitions in accordance with Article 7 and
improvements to the Borrower's real property in Toledo, Ohio. Such proceeds
shall not be used for the purpose, whether immediate, incidental or ultimate,
of buying or carrying "margin stock" within the meaning of Regulation U.
Section 2.4. Borrowing Procedures.
(a) The Borrower shall give the Administrative Agent notice
of each Revolving Loan to be made hereunder as provided in Section 2.8. Not
later than 2:00 p.m. Providence, Rhode Island time on the date of such Revolving
Loan, each Bank shall, through its Lending Office and subject to the conditions
of this Agreement, make the amount of the Revolving Loan to be made by it on
such day available to the Administrative Agent at the Administrative Agent's
Lending Office in the currency in which such Revolving Loan is to be made and in
immediately available funds in Dollars, or in the case of Alternative
Currencies, no later than three (3) Banking Days from the date of such notice,
for the account of the Borrower. The amount so received by the Administrative
Agent shall, subject to the conditions of this Agreement, be made available to
the Borrower, in immediately available funds in Dollars, or in the case of
Alternative Currencies, no later than three (3) Banking Days from the date of
such notice, by the Administrative Agent crediting an account of the Borrower
designated by the Borrower and maintained with the Administrative Agent at its
Lending Office. Not more than eight (8) Loans will be made available to the
Borrower in any calendar month.
(b) (i) In addition to Borrowings of Revolving Loans, at
any time at least 30 days prior to the Termination Date, the Borrower may, as
set forth herein, request the Banks to make offers to make Money Market Loans to
the Borrower in Dollars. The Banks may, but shall not have the obligation to,
make any such offers and the Borrower may, but shall have no obligation to,
accept any such offers in the manner set forth herein. Money Market Loans may be
LIBOR Market Loans or Set Rate Loans, provided that the aggregate unpaid
principal amount of all Money Market Loans, together
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with the aggregate unpaid principal amount of all Revolving Loans, at any one
time outstanding, shall not exceed the aggregate amount of the Commitments at
such time.
(ii) The Borrower shall request Money Market Loans by
delivering a Money Market Quote Request to the Administrative Agent, not later
than 10:00 a.m. Providence, Rhode Island time (x) four (4) Banking Days prior to
the date of the proposed Money Market Loan in the case of a LIBOR Auction or (y)
one (1) Banking Day prior to the date of the proposed Money Market Loan in the
case of a proposed Set Rate Auction (or, in any such case, such other time and
date as the Borrower and the Administrative Agent, with the consent of the
Required Banks, may agree). The Borrower may request offers to make both LIBOR
Market Loans and Set Rate Loans and an aggregate of up to four different
Interest Periods in a single notice (for which purpose Interest Periods in
different lettered clauses of the definition of the term "Interest Period" shall
be deemed to be different Interest Periods even if they are coterminous);
provided that the request for each separate Interest Period shal be deemed a
separate Money Market Quote Request for a separate Borrowing (a "Money Market
Borrowing"). Each such notice shall be substantially in the form of Exhibit D-1
or D-2 hereto (as applicable) and shall specify as to each Money Market
Borrowing:
(A) the proposed date of such Borrowing,
which shall be a Banking Day;
(B) the aggregate amount of such Money
Market Borrowing, which shall be at least $5,000,000 (or a higher integral
multiple of $1,000,000) but which shall not cause the limits in clause (b)(i)
above to be violated;
(C) the Interest Period applicable thereto;
(D) whether the Money Market Quote Request
requested for a particular Interest Period are seeking quotes for LIBOR Market
Loans or Set Rate Loans; and
(E) if the Money Market Quote Requests are
seeking quotes for Set Rate Loans, the date on which the Money Market Quotes are
to be submitted if it is before the proposed date of Borrowing (the date on
which such Money Market Quotes are to be submitted is called the "Quotation
Date").
Except as otherwise provided in this clause (b)(ii),
no Money Market Quote Request shall be given within five (5) Banking Days (or
such other number of days as the Borrower and the Administrative Agent, with the
consent of the Required Banks, may agree) of any other Money Market Quote
Request.
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(iii) (A) Any Bank that elects, in its sole discretion,
to do so shall irrevocably offer to make one or more Money Market Loans in
response to any Money Market Quote Request; provided that, if the Borrower's
request under clause (b)(ii) above specified more than one Interest Period, such
Bank may make a single submission containing one or more Money Market Quotes for
each such Interest Period. Each such Money Market Quote must be submitted to the
Administrative Agent, before (x) 2:00 p.m. Providence, Rhode Island time on the
fourth Banking Day prior to the proposed date of Borrowing, in the case of a
LIBOR Auction or (y) 10:00 a.m. Providence, Rhode Island time on the Quotation
Date, in the case of a Set Rate Auction (or, in any such case, such other time
and date as the Borrower and the Administrative Agent, with the consent of the
Required Banks, may agree); provided that any Money Market Quote may be
submitted by the Administrative Agent in its role as a Bank (or its applicable
Lending Office) only if the Administrative Agent (or such applicable Lending
Office) notifies the Borrower of the terms of the offer contained therein not
later than (x) 1:45 p.m. Providence, Rhode Island time on the fourth Banking Day
prior to the proposed date of the Borrowing, in the case of a LIBOR Market Loan
or (y) 9:45 a.m. Providence, Rhode Island time on the Quotation Date, in the
case of a Set Rate Loan. Subject to Sections 3.2(b), 3.3, 4.2 and 9.2, any Money
Market Quote so made shall be irrevocable except with the consent of the
Administrative Agent given on the instructions of the Borrower.
(B) Each Money Market Quote shall be
substantially in the form of Exhibit C-1 or C-2 hereto (as applicable) and shall
specify:
(1) the proposed date of the Borrowing and
the Interest Period therefor;
(2) the principal amount of the Money Market
Loan for which such quote is being made, which principal amount shall be at
least $5,000,000 (or a higher integral multiple of $1,000,000); provided, that
the aggregate principal amount of all Money Market Loans for which a Bank
submits Money Market Quotes (x) may not be greater than the Commitment of such
Bank and (y) may not exceed the principal amount of the Money Market Borrowing
for a particular Interest Period for which quotes were requested;
(3) in the case of a LIBOR Auction, the
margin above or below the applicable Eurodollar Rate (the "LIBO Margin") offered
for each such Money Market Loan, expressed as a percentage (quoted to the
nearest 1/10,000th of 1%) to be added to or subtracted from the applicable
Eurodollar Rate;
(4) in the case of a Set Rate Loan, the rate
of interest per annum (quoted to the nearest 1/10,000th of 1%) offered for each
such Money Market Loan (the "Money Market Rate"); and
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(5) the identity of the quoting Bank.
(C) No Money Market Quote shall contain
qualifying, conditional or similar language or propose terms other than or in
addition to those set forth in the applicable Money Market Quote Request and, in
particular, no Money Market Quote may be conditioned upon acceptance by the
Borrower of all (or some specified minimum) of the principal amount of the Money
Market Loan for which such Money Market Quote is being made, provided that the
submission by any Bank containing more than one Money Market Quote may be
conditioned on the Borrower not accepting offers contained in such submission
that would result in such Bank making Money Market Loans pursuant thereto in
excess of a specified aggregate amount (the "Money Market Loan Limit").
(iv) The Administrative Agent shall (x) in the case of
a Set Rate Auction, as promptly as practicable after a Money Market Quote is
submitted (but in any event not later than 10:15 a.m. Providence, Rhode Island
time on the Quotation Date) or (y) in the case of a LIBOR Auction, by 4:00 p.m.
Providence, Rhode Island time on the day a Money Market Quote is submitted,
notify the Borrower of the terms (A) of any Money Market Quote that is in
accordance wit clause (iii) above and (B) of any Money Market Quote that amends,
modifies or is otherwise inconsistent with a previous Money Market Quote
submitted by the same Bank with respect to the same Money Market Quote Request.
Any such subsequent Money Market Quote shall be disregarded unless such
subsequent Money Market Quote is submitted solely to correct a manifest error in
such former Money Market Quote. The Administrative Agent's notice to the
Borrower shall specify (A) the aggregate principal amount of th Money Market
Borrowing for which quotes have been received, (B) the respective principal
amounts and LIBO Margins or Money Market Rates, as the case may be, so offered
by each Bank (identifying the Bank that made each Money Market Quote) and (C)
such other terms as are required by clause (iii) (C) above.
(v) Not later than 11:00 a.m. Providence, Rhode Island
time on (x) the third Banking Day prior to the proposed date of Borrowing, in
the case of a LIBOR Auction or (y) the Quotation Date, in the case of a Set Rate
Auction (or, in any such case, such other time and date as the Borrower and the
Administrative Agent, with the consent of the Required Banks, may agree), the
Borrower shall notify the Administrative Agent of its acceptance or
nonacceptance of the offers so notified to it pursuant to clause (iv) above
pursuant to a Money Market Confirmation (which shall be substantially in the
form of Exhibit B and specify the aggregate principal amount of offers from each
Bank for each Interest Period that are accepted, it being understood that the
failure of the Borrower to give such notice by such time shall constitute
nonacceptance) and the Administrative Agent shall promptly notify each affected
Bank. The notice from the Administrative Agent
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shall also specify the aggregate principal amount of offers for each Interest
Period that were accepted and the lowest and highest LIBO Margins and Money
Market Rates that were accepted for each Interest Period. The Borrower may
accept any Money Market Quote in whole or in part (provided that any Money
Market Quote accepted in part from any Bank shall be in an integral multiple of
$1,000,000, subject to the provisions of clause (vi) below); provided that:
(A) the aggregate principal amount of each Money
Market Loan may not exceed the applicable amount set forth in the related Money
Market Quote Request;
(B) the aggregate principal amount of each Money
Market Loan shall be at least $5,000,000 (or a higher integral multiple of
$1,000,000) but shall not cause the limits specified in clause (i) above to be
violated;
(C) acceptance of offers may, subject to clause
(E) below, be made only in ascending order of LIBO Margins or Money Market
Rates, as the case may be, in each case beginning with the lowest rate so
offered;
(D) the Borrower may not accept any offer where
the Administrative Agent has advised the Borrower that the offer fails to comply
with clause (iii)(B) above or otherwise fails to comply with the terms of this
Agreement (including, without limitation, clause (i) above); and
(E) the aggregate principal amount of each Money
Market Borrowing from any Bank may not exceed any applicable Money Market Loan
Limit of such Bank and the aggregate principal amount of all outstanding Money
Market Loans of any Bank may not exceed at any time the Commitment of such Bank.
(vi) If offers are made by two or more Banks with the
same LIBO Margins or Money Market Rates, as the case may be, for a greater
aggregate principal amount than the amount in respect of which offers are
accepted for the related Interest Period, the principal amount of Money Market
Loans in respect of which such offers are accepted shall be allocated by the
Borrower among such Banks as nearly evenly as possible (in integral multiples of
$1,000,000) in proportion to the aggregate principal amount of such offers;
provided that, if such calculation would otherwise result in allocations to any
such Banks that would not be integral multiples of $1,000,000 and such
allocations are equidistant from the nearest integral multiple of $1,000,000,
the Borrower shall have the discretion to arbitrarily round up to the nearest
$1,000,000 for certain Bank(s) and round down to the nearest $1,000,000 for
certain other Bank(s). Determinations by the Borrower as to the amounts of Money
Market Loans shall be conclusive absent manifest error.
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(vii) Each Bank which is to make a Money Market Loan
shall, before 1:00 p.m. Providence, Rhode Island time on the date of the
proposed Money Market Loan specified in the Money Market Quote Request
applicable thereto, make available to the Administrative Agent at the Principal
Office the amount of Money Market Loans to be made by such Bank, in immediately
available funds. The Administrative Agent will make such funds available to the
Borrower as soon a practicable on such date at the Principal Office.
(viii) The aggregate principal amount of all
outstanding Money Market Loans of any Bank may not exceed at any time the
Commitment of such Bank, and each Bank shall remain responsible for its
respective Commitment Percentage of Revolving Loans; provided that, effect shall
be given to the principal amount of any Money Market Loans in determining the
availability to the Borrower of the aggregate principal Commitment amount for
Revolving Loans pursuant to Section 2.1(b).
Section 2.5. Prepayments and Conversions.
(a) Mandatory Prepayments and Conversions.
(i) Application of Net Cash Proceeds.
(A) If the Borrower, or any of its Subsidiaries, shall
receive any Net Cash Proceeds resulting from any sale or other disposition by
the Borrower or any Subsidiary of any assets (except as permitted by Sections
7.7 (a) - (d)), then the amount equal to 75% of the Net Cash Proceeds of such
sale; or
(B) if the Borrower, or any of its Subsidiaries, shall
receive any Net Cash Proceeds resulting from any private placement debt pursuant
to that certain Note Purchase Agreement, dated as of March 9, 1998, between the
Borrower and the Purchaser named therein, then the amount which equals 100% of
such Net Cash Proceeds ; or
(C) if the Borrower, or any of its Subsidiaries, shall
receive any Net Cash Proceeds obtained under any insurance policy covering any
property of the Borrower or any Subsidiary, to the extent that such proceeds are
not otherwise utilized by the Borrower (or the relevant Subsidiary) to replace,
repair, enhance or alter the damaged property covered by such insurance
proceeds, then an amount equal to 100% of such Net Cash
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shall be applied (1) first, to the then outstanding amount of any
Revolving Loans based on a Variable Rate payable within three (3)
days of receipt, (2) second, to any other outstanding amounts due
under the Revolving Loans, payable on the last day of any relevant
Interest Period, (3) third, to the then outstanding amounts due
under the Money Market Loans, on a pro rata basis to the extent that
more than one Money Market Loan remains outstanding, payable on the
last day of any relevant Interest Period, and (4) last, to any other
amounts which remain outstanding hereunder; provided, however, that
during the existence of a Payment Default or Event of Default, at
the request of the Administrative Agent as directed by the Required
Banks, 100% of any Net Cash Proceeds shall be due and payable in
accordance this Section 2.5 (a)(i).
(ii) Reduction or Termination Pursuant to Section 2.7.
At any time that the Borrower shall exercise its right to reduce or terminate
the unused portion of the aggregate Commitments under Section 2.7, and the
aggregate outstanding principal amount of Revolving Loans exceeds the proposed
aggregate Commitment amount after such reduction or termination (the "New
Commitment Amount"), then the Borrower shall prepay such amounts as necessary to
reduce the outstanding principal amount of the Revolving Loans to an amount
equal to the New Commitment Amount, as provided in and in the manner set forth
in Section 2.7, and the Borrower shall compensate the Banks as provided in
Section 3.5. All such prepayments shall be applied in the order set forth in
Section 2.5(a)(i).
(iii) Currency Fluctuation Prepayments. If at any time
that all or a portion of the Revolving Loans are denominated in an Alternative
Currency, the Dollar Equivalent of such Alternative Currency Loans, taken
together with any remaining outstanding principal amount of the Revolving Loans
denominated in Dollars, exceed the aggregate principal Commitment amount, then
the Borrower shall prepay, on the last day of the relevant Interest Period for
such Revolving Loans, the principal amount (in the relevant Alternative
Currency) necessary to cause the aggregate principal Revolving Loan amount
outstanding hereunder to be no greater than the aggregate Commitment amount
allowed under this Agreement in Dollars. Failure of the Borrower to prepay such
amounts when due shall result in a Payment Default and the outstanding principal
amounts due shall bear interest at the applicable Default Rate.
(iv) Conversion. At any time that the Default Rate
shall apply to outstanding amounts due under the Revolving Loans denominated in
an Alternative Currency and the Eurodollar Rate is unavailable hereunder, or any
Loans shall be determined to be "Affected Loans" pursuant to Section 3.4 and the
Eurodollar Rate is unavailable hereunder, then, on the last day of the
applicable Interest Period for such outstanding amounts due under any Revolving
Loan denominated in an Alternative Currency, such Loan shall be converted from
such Alternative Currency to Dollars based upon the Spot Exchange Rate for such
Alternative Currency, and such outstanding amount
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of the Revolving Loan shall be converted to a Variable Rate Loan bearing
interest at the applicable Default Rate; provided that an Affected Loan so
converted shall bear interest as provided in Section 3.4.
(b) Optional Prepayments and Conversions.
(i) The Borrower shall have the right to make
prepayments of principal, or to convert one type of Revolving Loan into another
type of Revolving Loan or to convert Eurodollar Loans denominated in one
currency to Eurodollar Loans denominated in another currency, at any time or
from time to time; provided that: (A) the Borrower shall give the Administrative
Agent notice of each such prepayment or conversion as provided in Section 2.8;
(B) unless the Borrower compensates the Banks as provided in Section 3.5,
Eurodollar Loans may be prepaid or converted only on the last day of an Interest
Period for such Loans; and (C) LIBO Rate Loans will not be available for
Interest Periods commencing at any time that a Payment Default or Event of
Default is in existence.
(ii) Notwithstanding any other provision of this
Agreement to the contrary, the Borrower shall not have the right to prepay the
principal amount of any Money Market Loan unless the Borrower compensates the
Bank making such Money Market Loan pursuant to Section 3.5.
Section 2.6. Interest Periods; Renewals.
(a) In the case of each Eurodollar Loan and each Money
Market Loan, the Borrower shall select an Interest Period of any duration in
accordance with the definition of Interest Period in Section 1.1, subject to the
following limitations: (i) no Interest Period may extend beyond the Termination
Date; (ii) notwithstanding clause (i) above, no Interest Period shall have a
duration less than one month (in the case of a LIBO Rate Loan) or seven (7) days
(in the case of a Set Rate Loan), and if any such proposed Interest Period would
otherwise be for a shorter period, such Interest Period shall not be available;
(iii) if an Interest Period would end on a day which is not a Banking Day, such
Interest Period shall be extended to the next Banking Day, unless such Banking
Day would fall in the next calendar month in which event such Interest Period
shall end on the immediately preceding Banking Day; (iv) no more than eight (8)
Interest Periods for both Revolving Loans and Money Market Loans may be
outstanding at any one time; and (v) Eurodollar Loans and Money Market Loans
will not be available for Interest Periods commencing at any time that a Payment
Default or Event of Default is in existence.
(b) Upon notice to the Administrative Agent as provided
in Section 2.8, the Borrower may renew any Eurodollar Loan on the last day of
the Interest Period therefor as the same type of Loans with an Interest Period
of the same or different
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duration in accordance with the limitations provided above. If the Borrower
shall fail to give notice to the Administrative Agent of such a renewal, (i) in
the case of a Eurodollar Loan denominated in Dollars, such Eurodollar Loan shall
automatically become a Variable Rate Loan on the last day of the current
Interest Period, and (ii) in the case of a Eurodollar Loan denominated in an
Alternative Currency, such Eurodollar Loan shall automatically become a
Eurodollar Loan denominated in the same Alternative Currency having an Interest
Period of one month; provided that the foregoing shall not prevent the
conversion of any type of Eurodollar Loan into another type of Loan in
accordance with Section 2.5.
Section 2.7. Changes of Commitments. The Borrower shall have the right
to reduce or terminate the amount of unused Commitments at any time or from time
to time, provided that: (a) the Borrower shall give notice of each such
reduction or termination to the Administrative Agent as provided in Section 2.8;
and (b) each partial reduction shall be in an aggregate amount at least equal to
$500,000 and integral multiples of $100,000 in excess thereof. The Commitments
once reduced or terminated may not be reinstated.
Section 2.8. Certain Notices. Notices by the Borrower to the
Administrative Agent of each Borrowing pursuant to Section 2.4(a), and each
prepayment or conversion pursuant to Section 2.5 and each renewal pursuant to
Section 2.6(b), and each reduction or termination of the Commitments pursuant to
Section 2.7 shall be irrevocable and shall be effective only if received by the
Administrative Agent not later than 12:00 noon Providence, Rhode Island time,
and (a) in the cas of Borrowings and prepayments of, conversions into and (in
the case of Eurodollar Loans) renewals of (i) Variable Rate Loans, given one (1)
Banking Day prior thereto; and (ii) Eurodollar Loans, given three (3) Banking
Days prior thereto; and (b) in the case of reductions or termination of the
Commitments, given three Banking Days prior thereto. Each such notice shall
specify the Loans to be borrowed, prepaid, converted or renewed and the amount
(subject to Sections 2.7 and 2.9) and type of the Loans to be borrowed, or
converted, or prepaid or renewed (and, in the case of a conversion, the type of
Loans to result from such conversion and, in the case of a Eurodollar Loan, the
Interest Period and currency therefor) and the date of the Borrowing or
prepayment, or conversion or renewal (which shall be a Banking Day). Each such
notice of reduction or termination shall specify the amount of the Commitments
to be reduced or terminated. The Administrative Agent shall promptly notify the
Banks of the contents of each such notice.
Section 2.9. Minimum Amounts. Except for Borrowings which exhaust the
full remaining amount of the Commitments, prepayments or conversions which
result in the prepayment or conversion of all Revolving Loans of a particular
type or conversions made pursuant to Section 3.4, each Borrowing, prepayment,
conversion and renewal of principal of Revolving Loans of a particular type and
of a particular currency, as applicable, shall be in an amount at least equal to
$500,000 (or the Dollar Equivalent in the
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case of Revolving Loans, as applicable) and integral multiples of $100,000 (or
the Dollar Equivalent in the case of Revolving Loans, as applicable) in excess
thereof in the aggregate for all Banks (Borrowings, prepayments, conversions or
renewals of or into Loans of different types or, in the case of Eurodollar
Loans, having different Interest Periods at the same time hereunder to be deemed
separate Borrowings, prepayments, conversions and renewals for the purposes of
the foregoing, one for each type of Interest Period). Anything in this Agreement
to the contrary notwithstanding, the aggregate principal amount of Eurodollar
Loans having concurrent Interest Periods shall be at least equal to $1,000,000
in the aggregate.
Section 2.10. Interest.
(a) Interest shall accrue on the outstanding and unpaid
principal amount of each Revolving Loan for the period from and including the
date of such Revolving Loan to but excluding the date such Loan is due at the
following rates per annum: (i) for a Variable Rate Loan, at a variable rate per
annum equal to the Variable Rate and (ii) for a Eurodollar Loan, at a fixed rate
equal to the Eurodollar Rate plus the applicable Margin. If the principal amount
of any Revolving Loan and any other amount payable by the Borrower hereunder or
under the Notes shall not be paid when due (at stated maturity, by acceleration
or otherwise), interest shall accrue on such amount to the fullest extent
permitted by law from and including such due date to but excluding the date such
amount is paid in full at the Default Rate.
(b) The interest rate on each Variable Rate Loan shall
change when the Variable Rate changes and interest on each such Loan shall be
calculated on the basis of a year of (i) 365 (or, in the case of a leap year,
366) days for the actual number of days elapsed if the Prime Rate is the index
actually utilized for such Loans and (ii) 360 days for the actual number of days
elapsed if the Federal Funds Rate is the index actually utilized for such Loans.
Interest on each Eurodollar Loan shall be calculated on the basis of a year of
360 days for the actual number of days elapsed. Promptly after the determination
of any interest rate provided for herein or any change therein, the
Administrative Agent shall notify the Borrower and the Banks thereof.
(c) Accrued interest shall be due and payable in
arrears in Dollars, or the relevant Alternative Currency, if applicable, upon
any payment of principal or conversion and (i) for each Variable Rate Loan, on
the last day of each March, June, September and December, commencing the first
such date after such Loan; and (ii) for each Eurodollar Loan, on the last day of
the Interest Period with respect thereto and, in the case of an Interest Period
greater than three months, at three-month intervals after the first day of such
Interest Period; provided that interest accruing at the Default Rate shall be
due and payable from time to time on demand of the Administrative Agent.
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(d) The Borrower shall pay interest on the unpaid
principal amount of each Money Market Loan made to the Borrower from the date of
such Money Market Loan to the stated maturity date thereof, at the rate of
interest determined pursuant to Section 2.4(b) (calculated on the basis of a
360-day year for actual days elapsed), payable on the last day of the Interest
Period with respect thereto and, in the case of an Interest Period greater than
three months, at three month intervals after the first day of such Interest
Period; provided that interest accruing at the Default Rate shall be due and
payable from time to time on demand of the Administrative Agent. If all or a
portion of the principal amount of any Money Market Loan shall not be paid when
due (whether at the stated maturity, by acceleration or otherwise), such overdue
principal amount shall, without limiting any rights of any Bank under this
Agreement, bear interest from the date on which such payment was due until paid
in full at the Default Rate.
Section 2.11. Fees.
(a) The Borrower shall pay to the Administrative Agent
for the account of each Bank a facility fee on the daily average Commitment
(used and unused) of such Bank for the period from and including the date hereof
to the earlier of the date the Commitments are terminated in full or the
Termination Date at a rate per annum equal to the applicable rate set forth in
Section 2.14, calculated on the basis of a year of 360 days for the actual
number of days elapsed. The accrued facility fee shall be due and payable, in
Dollars, in arrears upon any reduction or termination of the Commitments and on
the last day of each March, June, September and December, commencing on the
first such date after the Closing Date.
(b) The Borrower shall pay to the Administrative Agent
as compensation for its services hereunder an annual nonrefundable agency fee in
the amount of $10,000. The agency fee shall be due and payable on the Closing
Date and on each anniversary thereof during the term of this Agreement.
(c) The Borrower shall pay to the Administrative Agent
a fee of $250 each time the Borrower delivers a Money Market Quote Request to
the Administrative Agent.
Section 2.12. Payments Generally. All payments under this Agreement or
the Notes shall be made in Dollars (except that payments (including payments of
principal and interest) on Eurodollar Loans denominated in an Alternative
Currency shall be made in such Alternative Currency) in immediately available
funds not later than 1:00 p.m. Providence, Rhode Island time on the relevant
dates specified herein (each such payment made after such time on such due date
to be deemed to have been made on the next succeeding Banking Day) to the
Administrative Agent's account number 9361362358 maintained at its Lending
Office for the account of the applicable Lending Office of each
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Bank. The Administrative Agent may (but shall not be obligated to) debit the
amount of any such payment which is not made by such time to any ordinary
deposit account of the Borrower with the Administrative Agent. The Borrower
shall, at the time of making each payment under this Agreement or the Notes,
specify to the Administrative Agent the principal or other amount payable by the
Borrower under this Agreement or the Notes to which such payment is to be
applied (and in the event that it fails to so specify, or if a Default or Event
of Default has occurred and is continuing, the Administrative Agent may apply
such payment as it may elect in its sole discretion (subject to Section 10.16)).
If the due date of any payment under this Agreement or the Notes would otherwise
fall on a day which is not a Banking Day, such date shall be extended to the
next succeeding Banking Day and interest shall be payable for any principal so
extended for the period of such extension. Each payment received by the
Administrative Agent hereunder or under any Note for the account of a Bank shall
be paid promptly to such Bank, in immediately available funds, for the account
of such Bank's Lending Office.
Section 2.13. Margin. The Margin that will apply to each Eurodollar
Loan is set forth below and is based upon the Borrower's Adjusted Leverage Ratio
as at the end of the Borrower's most recent fiscal quarter, as calculated in
accordance with Section 8.2:
Margin
Eurodollar Loans
Adjusted Leverage Ratio (Basis Points)
----------------------- --------------
Greater than or equal to 2.50 45.0
Greater than or equal to 2.00, but less than 2.5 37.5
Greater than or equal to 1.50, but less than 2.00 30.0
Greater than or equal to 1.00, but less than 1.50 27.5
Less than 1.00 22.5
Margin adjustments resulting from such calculations shall become
effective on the Banking Day following the date that such calculations are
received by the Administrative Agent after delivery in accordance with Section
6.8. In the event that the Borrower fails to timely deliver such calculations in
accordance with Section 6.8, and no other Default or Event of Default shall have
occurred or be continuing, then the Margin for such Eurodollar Loan shall remain
at the rate existing on such Loan one Banking Day prior to the date such
calculations should have been delivered until such time (the "Interim Period")
as the Borrower delivers such calculations to the Administrative Agent. If,
however, upon receipt of the calculations due under Section 6.8, the
Administrative Agent, in its sole discretion, determines that the Margin during
the Interim Period should have been an amount greater than the existing Margin
during the Interim Period, then the Borrower shall pay to the Administrative
Agent for the account of the Banks (upon
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notification by the Administrative Agent of such error) the amount representing
the difference between the amount of interest on the outstanding principal
calculated at the Margin that should have been applied during the Interim Period
and the amount which represents the interest on the outstanding principal
calculated at the Margin actually applied during the Interim Period.
Notwithstanding the foregoing, the Borrower's failure to deliver the
calculations require hereunder shall continue to be a default under this
Agreement until cured and the Administrative Agent shall continue to have all of
its rights pursuant to Section 9.1(c), and the Banks shall continue to have all
of their respective rights pursuant to Section 9.2.
Section 2.14. Facility Fee Rate.
(a) The per annum facility fee rate that the Borrower
shall use to calculate the facility fee that is payable pursuant to Section
2.11(a) is set forth below and is based upon the Borrower's Adjusted Leverage
Ratio as at the end of the Borrower's most recent fiscal quarter, as calculated
in accordance with Section 8.2:
Facility Fee Rate
Adjusted Leverage Ratio (Basis Points)
----------------------- --------------
Greater than or equal to 2.5 30.0
Greater than or equal to 2.00, but less than 2.50 25.0
Greater than or equal to 1.50, but less than 2.00 20.0
Greater than or equal to 1.00, but less than 1.50 15.0
Less than 1.0 12.5
Facility fee rate adjustments resulting from such calculations shall
become effective on the Banking Day following the date that such calculations
are received by the Administrative Agent after delivery in accordance with
Section 6.8. In the event that the Borrower fails to timely deliver such
calculations in accordance with Section 6.8, and no other Default or Event of
Default shall have occurred or be continuing, then the facility fee rate shall
remain at the rate existing one Banking Day prior to the date the calculations
should have been delivered until such time (the "Interim Period") as the
Borrower delivers such calculations to the Administrative Agent. If, however,
upon receipt of the calculations due under Section 6.8, the Administrative
Agent, in its sole discretion, determines that the facility fee rate during the
Interim Period should have been an amount greater than the existing rate during
the Interim Period, then the Borrower shall pay to the Administrative Agent for
the account of the Banks (upon notification by the Administrative Agent of such
error) the amount representing the difference between the amount of the facility
fee calculated at the rate that should have been applied during the Interim
Period and amount which represents the facility fee calculated at the rate
actually applied during
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the Interim Period. Notwithstanding the foregoing, the Borrower's failure to
deliver the calculations required hereunder shall continue to be a default under
this Agreement until cured and the Administrative Agent shall continue to have
all of its rights pursuant to Section 9.1(c), and the Banks shall continue to
have all of their respective rights pursuant to Section 9.2 .
(b) The facility fee payable under Section 2.11(a)
shall be calculated by applying the average daily facility fee rate to the
average daily aggregate Commitments (used or unused).
Section 2.15. Interest Rate Protection. The Borrower may enter into
Interest Rate Protection Agreements with any of the Banks so long as no Default
or Event of Default would result therefrom, including any violation of any of
the covenants contained in Article 8 on a pro forma basis based upon the most
recent calculations delivered to the Agent and the Banks in accordance with
Section 6.8. The Borrower will provide the other Banks with certified
photocopies of the documents evidencing any Interest Rate Protection Agreement
entered into by the Borrower promptly following their execution. The obligations
of the Borrower to a Bank (but not to any other bank or other financial
institution that is not a "Bank" hereunder) under such Interest Rate Protection
Agreements will automatically constitute obligations of the Borrower under this
Agreement.
ARTICLE 3. YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.1. Additional Costs.
(a) The Borrower shall pay directly to each Bank from
time to time on demand such amounts as such Bank may determine to be necessary
to compensate it for any increased costs which such Bank determines are
attributable to its making or maintaining any Loans under this Agreement or its
Notes or its obligation to make any such Loans hereunder, or any reduction in
any amount receivable by such Bank hereunder in respect of any such Loans or
such obligation (such increases in costs and reductions in amounts receivable
being herein called "Additional Costs"), resulting from any Regulatory Change
which: (i) changes the basis of taxation of any amounts payable to such Bank
under this Agreement or its Notes in respect of any of such Loans (other than
(x) franchise taxes and taxes imposed on the overall income of such Bank or of
its Lending Office for any of such Loans by the jurisdiction in which such Bank
is organized, has its principal office or such Lending Office or any political
subdivision thereof or therein and (y) withholding taxes imposed by the United
States); or (ii) imposes or modifies any reserve, special deposit, deposit
insurance or assessment, minimum capital, capital ratio or similar requirements
relating to any extensions of credit or other assets of, or any deposits with or
other liabilities of, such Bank (including any of such Loans or any deposits
referred to in
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the definition of "Eurodollar Base Rate" in Section 1.1); or (iii) imposes any
other condition affecting this Agreement or its Notes (or any of such extensions
of credit or liabilities). Each Bank will notify the Borrower of any event
occurring after the date of this Agreement which will entitle such Bank to
compensation pursuant to this Section 3.1(a) as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, provided,
that, failure by any Bank or the Administrative Agent to give the Borrower such
notice (which notice shall be provided within 90 days after the repayment of the
Loans and the termination of the Commitments) shall not relieve the Borrower of
its obligation to compensate such Bank or the Administrative Agent hereunder. If
any Bank requests compensation from the Borrower under this Section 3.1(a) the
Borrower may, by notice to such Bank (with a copy to the Administrative Agent),
require that such Bank's Loans of the type with respect to which such
compensation is requested be converted in accordance with Section 3.4.
(b) Without limiting the effect of the foregoing
provisions of this Section 3.1, in the event that, by reason of any Regulatory
Change, any Bank either (i) incurs Additional Costs based on or measured by the
excess above a specified level of the amount of a category of deposits or other
liabilities of such Bank which includes deposits by reference to which the
interest rate on LIBO Rate Loans is determined as provided in this Agreement or
a category of extensions of credit or other assets of such Bank which includes
LIBO Rate Loans or (ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets which it may hold, then, if such Bank so
elects by notice to the Borrower (with a copy to the Administrative Agent), the
obligation of such Bank to make or renew, and to convert Loans of any other type
into, Loans of such type hereunder shall be suspended until the date such
Regulatory Change ceases to be in effect (and all Loans of such type held by
such Bank then outstanding shall be converted in accordance with Section 3.4).
(c) Without limiting the effect of the foregoing
provisions of this Section 3.1 (but without duplication), the Borrower shall pay
directly to each Bank from time to time on request such amounts as such Bank may
determine to be necessary to compensate such Bank for any costs which it
determines are attributable to the maintenance by it or any of its affiliates
pursuant to any law or regulation of any jurisdiction or any interpretation,
directive or request (whether or not having the force of law and whether in
effect on the date of this Agreement or thereafter) of any court or governmental
or monetary authority of capital in respect of its Loans hereunder or its
obligation to make Loans hereunder (such compensation to include, without
limitation, an amount equal to any reduction in return on assets or equity of
such Bank to a level below that which it could have achieved but for such law,
regulation, interpretation, directive or request). Each Bank will notify the
Borrower if it is entitled to compensation pursuant to this Section 3.1 as
promptly as practicable, or within 90 days after the repayment of the Loans and
the termination of the Commitments, after it determines to request such
compensation.
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(d) Determinations and allocations by a Bank for
purposes of this Section 3.1 of the effect of any Regulatory Change pursuant to
subsections (a) or (b), or of the effect of capital maintained pursuant to
subsection (c), on its costs of making or maintaining Loans or its obligation to
make Loans, or on amounts receivable by, or the rate of return to, it in respect
of Loans or such obligation, and of the additional amounts required to
compensate such Bank under this Section 3.1, shall be conclusive absent manifest
error, provided that such determinations and allocations are made on a
reasonable basis.
Section 3.2. Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if:
(a) the Administrative Agent determines (which
determination shall be conclusive) that quotations of interest rates for the
relevant deposits referred to in the definition of "Eurodollar Base Rate" in
Section 1.1 are not being provided in the relevant amounts or for the relevant
maturities for purposes of determining the rate of interest for any type of LIBO
Rate Loans as provided in this Agreement; or
(b) the Required Banks determine (or any Bank that has
outstanding a Money Market Quote with respect to a LIBOR Market Loan determines)
(which determination shall be conclusive) and notify (or notifies) the
Administrative Agent that the relevant rates of interest referred to in the
definition of "Eurodollar Base Rate" in Section 1.1 upon the basis of which the
rate of interest for any type of LIBO Rate Loans is to be determined do not
adequately cover the cost to the Banks (or to such Bank) of making or
maintaining such Loans; or
(c) in the case of Eurodollar Loans denominated in an
Alternative Currency, any Bank shall determine (which determination shall be
conclusive) and notify the Administrative Agent that the relevant Alternative
Currency is not available in the relevant amounts or for the relevant period, or
that a change in national or international controls or events has occurred which
would, in the opinion of such Bank, make it impracticable for such Bank to make,
fund or maintain its Eurodollar Loans to be made in such Alternative Currency or
for the Borrower to pay the principal of or interest on such Eurodollar Loans as
provided in this Agreement;
then the Administrative Agent shall give the Borrower and each Bank prompt
notice thereof, and so long as such condition remains in effect, the Banks shall
be under no obligation to make or renew Loans of such type or to convert Loans
of any other type into Loans of such type and the Borrower shall, on the last
day(s) of the then current Interest Period(s) for the outstanding Loans of the
affected type, either prepay such Loans or convert such Loans into another type
of Loans in accordance with Section 2.5.
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Section 3.3. Illegality. Notwithstanding any other provision in this
Agreement, in the event that it becomes unlawful for any Bank or its Lending
Office to (a) honor its obligation to make or renew LIBO Rate Loans hereunder or
convert Loans of any type into Loans of such type, or (b) maintain Eurodollar
Loans in any currency hereunder, or convert Eurodollar Loans in a different
currency to Eurodollar Loans in such currency, then such Bank shall promptly
notify the Borrower thereof (with a copy to the Administrative Agent) and such
Bank's obligation to make or renew Eurodollar Loans and to convert other types
of Revolving Loans into Revolving Loans of such type hereunder shall be
suspended until such time as such Bank may again make, renew, or convert and
maintain such affected Loans and such Bank's outstanding LIBO Rate Loans, as the
case may be, shall be converted in accordance with Section 3.4, and such Bank
shall no longer be obligated to make any LIBOR Market Loan that it has offered
to make.
Section 3.4. Certain Conversions Pursuant to Sections 3.1 and 3.3. If
the Loans of any Bank of a particular type (Loans of such type being herein
called "Affected Loans" and such type being herein called the "Affected Type")
are to be converted pursuant to Section 3.1 or 3.3, such Bank's Affected Loans
shall be automatically converted into Variable Rate Loans on the last day(s) of
the then current Interest Period(s) for the Affected Loans (or, in the case of a
conversion required by Section 3.1(b) or 3.3, on such earlier date as such Bank
may specify to the Borrower with a copy to the Agent) and, unless and until such
Bank gives notice as provided below that the circumstances specified in Section
3.1 or 3.3 which gave rise to such conversion no longer exist:
(a) to the extent that such Bank's Affected Loans have
been so converted, all payments and prepayments of principal which would
otherwise be applied to such Bank's Affected Loans shall be applied instead to
its Variable Rate Loans; and
(b) all Loans (other than Money Market Loans) which
would otherwise be made or renewed by such Bank as Loans of the Affected Type
shall be made instead as Variable Rate Loans and all Loans of such Bank which
would otherwise be converted into Loans of the Affected Type shall be converted
instead into (or shall remain as) Variable Rate Loans.
Notwithstanding any conversion pursuant to this Section 3.4, the
Borrower shall nevertheless be liable to pay to any Bank the compensation
requested under Section 3.1 for any such costs incurred up to the date of
conversion.
If any Bank gives notice to the Borrower (with a copy to
the Administrative Agent) that the circumstances specified in Section 3.1 or 3.3
which gave rise to the conversion of such Bank's Affected Loans pursuant to this
Section 3.4 no longer exist (which such Bank agrees to do promptly upon such
circumstances ceasing to exist) at a
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time when Loans of the Affected Type are outstanding, such Bank's Variable Rate
Loans shall be automatically converted, on the first day(s) of the next
succeeding Interest Period(s) for such outstanding Loans of the Affected Type to
the extent necessary so that, after giving effect thereto, all Loans held by the
Banks holding Loans of the Affected Type and by such Bank are held pro rata (as
to principal amounts, types and Interest Periods) in accordance with their
respective Commitments.
Section 3.5. Certain Compensation. The Borrower shall pay to the
Administrative Agent for the account of each Bank, upon the request of such Bank
through the Administrative Agent, such amount or amounts as shall be sufficient
(in the reasonable opinion of such Bank) to compensate it for any loss, cost or
expense which such Bank determines is attributable to:
(a) any payment, prepayment, conversion or renewal of a
LIBO Rate Loan or a Set Rate Loan made by such Bank on a date other than the
last day of an Interest Period for such Loan (whether by reason of a mandatory
reduction of the Commitments, acceleration or otherwise); or
(b) any failure by the Borrower to borrow, convert into
or renew a LIBO Rate Loan or a Set Rate Loan to be made, converted into or
renewed by such Bank on the date specified therefor in the relevant notice under
Section 2.4, 2.5 or 2.6, as the case may be.
Without limiting the foregoing, such compensation shall include an
amount equal to the excess, if any, of: (i) the amount of interest which
otherwise would have accrued on the principal amount so paid, prepaid, converted
or renewed or not borrowed, converted or renewed for the period from and
including the date of such payment, prepayment, renewal, or conversion or
failure to borrow, convert or renew to but excluding the last day of the then
current Interest Period for such Loan (or, in the case of a failure to borrow,
convert or renew, to but excluding the last day of the Interest Period for such
Loan which would have commenced on the date specified therefor in the relevant
notice) at the applicable rate of interest for such Loan provided for herein;
over (ii) with respect to a LIBO Rate Loan, the amount of interest (as
reasonably determined by such Bank) such Bank would have bid in the London
interbank market for deposits in the relevant currencies of leading banks for
amounts comparable to such principal amount and maturities comparable to such
period, and with respect to a Set Rate Loan, the rate determined by such Bank to
be its marginal cost of funds for commonly available liabilities issued by it on
the date of such Loan for a term comparable to such Interest Period. A
determination of any Bank as to the amounts payable pursuant to this Section 3.5
shall be conclusive absent manifest error.
ARTICLE 4. CONDITIONS PRECEDENT.
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Section 4.1. Documentary Conditions Precedent. The obligations of the
Banks to make the Loans constituting the initial Borrowing are subject to the
condition precedent that the Co-Agents and the Banks shall have received on or
before the date of such Loans each of the following, in form and substance
reasonably satisfactory to the Administrative Agent and its counsel:
(a) the Notes duly executed by the Borrower in the form
of Exhibits A-1 and A-2 hereto;
(b) the Authorization Letter duly executed by the
Borrower in the form of Exhibit E hereto;
(c) a favorable opinion of counsel for the Borrower,
dated the Closing Date, in substantially the form of Exhibit G;
(d) a certificate of the Secretary or Assistant
Secretary of the Borrower, dated the Closing Date, attesting to all corporate
action taken by the Borrower, including resolutions of its Board of Directors,
authorizing the execution, delivery and performance of the Facility Documents to
which it is a party and each other document to be delivered pursuant to this
Agreement and certifying true copies of the articles of incorporation (which
shall also be certified by the secretary of state of the jurisdiction of its
incorporation), by-laws and other organizational documents of the Borrower;
(e) a certificate of the Secretary or Assistant
Secretary of the Borrower, dated the Closing Date, certifying the names and true
signatures of the officers of the Borrower authorized to sign the Facility
Documents to which it is a party and the other documents to be delivered by the
Borrower under this Agreement, together with an updated chart setting forth the
corporate structure of the Borrower;
(f) a certificate of good standing for the Borrower
from the Secretary of State of each jurisdiction in which the Borrower is
qualified to do business, and a certificate of good standing for each Subsidiary
from the Secretary of State in each jurisdiction in which each Subsidiary is
incorporated, provided that, for those Subsidiaries incorporated in a
jurisdiction outside of the United States and qualified to do business outside
the United States, the Borrower shall provide the Administrative Agent with a
good standing certificate or a certificate or document from such foreign
jurisdiction comparable to a good standing certificate acceptable to the
Administrative Agent as soon as practicable after the Closing Date;
(g) a certificate of a duly authorized officer of the
Borrower, dated the Closing Date, stating that, to his or her knowledge, the
representations and
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warranties in this Agreement and the other Facility Documents to which it is a
party are true and correct in all material respects on such date as though made
on and as of such date;
(h) a certificate of a duly authorized officer of the
Borrower, dated the Closing Date, stating that, to the best of his or her
knowledge, no event has occurred and is continuing which constitutes a Default
or Event of Default;
(i) the Environmental Indemnification duly signed by
the Borrower in the form of Exhibit F hereto;
(j) payment by the Borrower to the Administrative Agent
of the agency fee and all other expenses and fees incurred by the Administrative
Agent under this Agreement, including the fees and expenses of the
Administrative Agent's counsel;
(k) copies of key employment contracts;
(l) true and complete copies of debt documents as to
credit arrangements listed on Schedule 5.10, including any Subordinated Debt, to
the extent not previously delivered to the Administrative Agent acting as Agent
under any previously existing credit arrangements, which shall be in form
reasonably satisfactory to the Banks;
(m) copies of hazard and liability insurance policies,
together with a certificate from a duly authorized officer certifying that
Schedule 5.22 sets forth currently existing insurance policies covering each
Subsidiary of the Borrower in compliance with this Agreement;
(n) a payoff letter and releases from Fleet National
Bank, as Agent, and the Banks that are parties to the Borrower's Credit
Agreement dated as of December 29, 1994, in form and substance satisfactory to
the Administrative Agent; and
(o) such other documents and instruments as the
Administrative Agent or its counsel may reasonably request in connection with
the execution of this Agreement and the other Facility Documents.
Section 4.2. Additional Conditions Precedent. The obligations of the
Banks to make any Revolving Loans pursuant to a Borrowing which increases the
amount outstanding hereunder (including the initial Borrowing or any Borrowings
made after prepayments of the Revolving Loans) and to make Borrowings to repay
Money Market Loans shall be subject to the further conditions precedent that on
the date of such Loans:
(a) the following statements shall be true:
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(i) the representations and warranties
contained in Article 5 herein and in any other Facility Document, are true and
correct in all material respects on and as of the date of such Loan as though
made on and as of such date; and
(ii) no Default or Event of Default has
occurred and is continuing, or would result from such Loan; and
(iii) there has been no change in the
business, management, operations, properties, prospects or condition (financial
or otherwise) of the Borrower or its Subsidiaries since the Closing Date which
has had, or is reasonably expected to have, a Material Adverse Effect;
(b) as to the initial advance only, the absence of any
change in market conditions which, in the Administrative Agent's opinion, would
materially impair a financial institution's ability to fund Loans of this type;
(c) either (i) the Borrower shall have delivered to the
Administrative Agent a Notice of Borrowing in substantially the form of Exhibit
H, or (ii) the Borrower shall have delivered to the Administrative Agent a Money
Market Quote Request substantially in the form of Exhibit C-1 or C-2, as
applicable; and
(d) the Administrative Agent shall have received such
approvals, opinions or documents as the Administrative Agent or any Bank may
reasonably request.
Section 4.3. Deemed Representations. Each Notice of Borrowing and Money
Market Quote Request hereunder and acceptance by the Borrower of the proceeds of
such Borrowing shall constitute a representation and warranty that the
statements contained in Section 4.2(a) are true and correct both on the date of
such notice and, unless the Borrower otherwise notifies the Administrative Agent
prior to such Borrowing, as of the date of such Borrowing.
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ARTICLE 5. REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants that:
Section 5.1. Incorporation, Good Standing and Due Qualification. Each
of the Borrower and its Subsidiaries is duly incorporated, validly existing and
in good standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own its assets and to transact the business
in which it is now engaged or proposed to be engaged, and is duly qualified as a
foreign corporation and in good standing under the laws of each other
jurisdiction in which such qualification is required, except where the failure
to so qualify has not had, and is not reasonably expected to have, a Material
Adverse Effect.
Section 5.2. Corporate Power and Authority; No Conflicts. The
execution, delivery and performance by the Borrower of the Facility Documents to
which it is a party have been duly authorized by all necessary corporate action
and do not and will not: (a) require any consent or approval of its
stockholders; (b) contravene its charter or by-laws; (c) violate any provision
of, or require any filing, registration, consent or approval under, any law,
rule, regulation (including, without limitation, Regulation U), order, writ,
judgment, injunction, decree, determination or award presently in effect having
applicability to the Borrower or any of its Subsidiaries; (d) result in a breach
of or constitute a default or require any consent under any indenture or loan or
credit agreement or any other agreement, lease or instrument to which the
Borrower is a party or by which it or its properties may be bound or affected;
(e) result in, or require, the creation or imposition o any Lien upon or with
respect to any of the properties now owned or hereafter acquired by the Borrower
or its Subsidiaries; or (f) cause the Borrower or any Subsidiary to be in
default under any such law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award or any such indenture, agreement, lease or
instrument, except where such contravention, violation, breach, default or Lien
is not reasonably expected to have a Material Adverse Effect.
Section 5.3. Legally Enforceable Agreements. Each Facility Document to
which the Borrower is a party is, or when delivered under this Agreement will
be, a legal, valid and binding obligation of the Borrower enforceable against
the Borrower in accordance with its terms, except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency and other
similar laws affecting creditors' rights generally and by equitable principles
relating to availability of equitable remedies.
Section 5.4. Litigation. There are no actions, suits or proceedings
pending or, to the knowledge of the Borrower, threatened against or affecting
the Borrower or any of its Subsidiaries before any court, Governmental Agency or
arbitrator, which, in any one case or in the aggregate, is reasonably expected
to have a Material Adverse Effect
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or to materially adversely affect the ability of the Borrower to perform its
obligations under the Facility Documents to which it is a party.
Section 5.5. Financial Statements. The consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as at December 31, 1996, as
supplemented by the Borrower's Form 8-K filed with the Securities and Exchange
Commission, dated October 22, 1997 (the "Form 8K"), and the related consolidated
income statement and statements of cash flows and changes in stockholders'
equity of the Borrower and its Consolidated Subsidiaries for the fiscal year
then ended, and the accompanying footnotes, together with the opinion thereon of
Arthur Andersen LLP, independent certified public accountants, and the unaudited
interim consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as at September 30, 1997, and the related unaudited consolidated
income statement and statements of cash flows and changes in stockholders'
equity for the nine month period then ended, copies of which have been furnished
to each of the Banks, fairly present the financial condition of the Borrower and
its Consolidated Subsidiaries as at such dates and the results of the operations
of the Borrower and its Consolidated Subsidiaries for the periods covered by
such statements, all in accordance with GAAP consistently applied (subject to
year end adjustments in the case of the interim financial statements). As of the
Closing Date, there are no liabilities of the Borrower or any of its
Consolidated Subsidiaries, fixed or contingent, which are material to the
Borrower and its Subsidiaries taken as a whole but are not reflected in the
financial statements or in the notes thereto, other than liabilities arising in
the ordinary course of business since December 31, 1996 (other than as set forth
on the Form 8K). No information, exhibit or report furnished by the Borrower to
the Banks in connection with the negotiation of this Agreement, as such
information, exhibit or report has been amended, supplemented or superseded,
contained any material misstatement of fact or omitted to state a material fact
or any fact necessary to make the statements contained therein, in light of the
circumstances when made, not materially misleading; provided, however, that in
the case of any information, exhibit or report made, delivered or prepared by
Persons other than the Borrower, its Subsidiaries or their agents, such
representation and warranty is subject to the qualification that it is true and
correct only to the knowledge of the Borrower or any of its Subsidiaries. Since
December 31, 1996 (other than as set forth on the Form 8K or as otherwise
disclosed by the Borrower in writing herein), there has been no material adverse
change in the condition (financial or otherwise), business, management,
operations, properties, or prospects of the Borrower and its Subsidiaries, taken
as a whole.
Section 5.6. Ownership and Liens. Except as otherwise provided in
Section 7.7, each of the Borrower and its Consolidated Subsidiaries has title
to, or valid leasehold interests in, all of its properties and assets, real and
personal, including the properties and assets, and leasehold interests,
reflected in the financial statements referred to in Section 5.5 or as set forth
in the most recent financial statements delivered to the Administrative Agent
and the Banks pursuant to Section 6.8 , as the case may be, and none
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of the properties and assets owned by the Borrower or any of its Subsidiaries
and none of its leasehold interests is subject to any Lien, except as disclosed
in Schedule 5.6 or in such financial statements or as may be permitted
hereunder.
Section 5.7. Taxes. To the best of the Borrower's knowledge, all
material tax and other information returns required to be filed by or on behalf
of the Borrower and its Subsidiaries have been properly prepared, executed and
filed. All material taxes, assessments, fees and other governmental charges upon
the Borrower or any of its Subsidiaries or upon any of their respective
properties, incomes, sales or franchises which are due and payable have been
paid except for those being actively contested in good faith by the Borrower (or
any such Subsidiary) by appropriate proceedings, and against which the Borrower
(or any such Subsidiary) has or shall establish, segregate and maintain adequate
reserve funds. None of the Borrower or its Subsidiaries knows of any proposed
additional material assessment or basis for any material assessment for
additional taxes (whether or not reserved against). None of the Borrower, its
Subsidiaries or any of their respective consolidated return groups has at any
time subsequent to such Person becoming a Subsidiary of the Borrower (or another
Subsidiary), filed a consolidated tax return with any Person other than the
Borrower and its Subsidiaries.
Section 5.8. ERISA. Each Plan, and, to the best knowledge of the
Borrower, each Multiemployer Plan, is in compliance in all material respects
with, and has been administered in all material respects in compliance with, the
applicable provision of ERISA, the Code and any other applicable Federal or
state law, and no event or condition is occurring or exists concerning which the
Borrower would be under an obligation to furnish a report to the Banks in
accordance with Section 6.8(j). As of the most recent annual valuation date
preceding the Closing Date for each Plan, the present value of the accrued
benefits of all participants in all Plans, computed on the basis of the
assumptions used in determining the net annual pension expense for each Plan for
the Plan year ending on such valuation date, as calculated in accordance with
Financial and Accounting Standards Board 87, does not exceed the fair market
value of the assets of all Plans by more than $1,500,000. As of the date these
representations are made, for any period beginning on or after January 1, 1994,
all required contributions under Section 412 of the Code or Section 302 of ERISA
have been made when due to each Plan.
Section 5.9. Subsidiaries and Ownership of Stock. Schedule 5.9 (as
amended and in effect from time to time) sets forth a complete and accurate list
of the Subsidiaries of the Borrower, showing the jurisdiction of incorporation
or organization of each Subsidiary and showing the percentage of the Borrower's
ownership of the outstanding stock or other interest of each such Subsidiary.
All of the outstanding capital stock or other similar interests of each such
Subsidiary has been validly issued, is fully paid and nonassessable and is owned
by the Borrower free and clear of all Liens.
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Section 5.10. Credit Arrangements. Schedule 5.10 is a complete and
correct list of all credit agreements, indentures, purchase agreements,
guaranties (other than guaranties executed in the ordinary course of business),
Capital Leases and other investments, agreements and arrangements in effect on
the Closing Date, and as supplemented by the financial statements delivered to
the Administrative Agent and the Banks, providing for or relating to extensions
of credit or Funded Debt in excess of $1,000,000 (including agreements and
arrangements for the issuance of letters of credit or for acceptance financing)
in respect of which the Borrower or any of its Subsidiaries is in any manner
directly or contingently obligated; and the maximum principal or face amounts of
the credit in question, outstanding and which can be outstanding, are correctly
stated, and all Liens of any nature given or agreed to be given as security
therefor are correctly described or indicated in such Schedule.
Section 5.11. Operation of Business. Each of the Borrower and its
Subsidiaries possesses all licenses, permits, franchises, patents, copyrights,
trademarks and trade names, or rights thereto, material to the conduct of their
businesses substantially as now conducted and as presently proposed to be
conducted, and neither the Borrower nor any of its Subsidiaries is in violation
of any valid rights of others with respect to any of the foregoing, except where
such violatio is not reasonably expected to have a Material Adverse Effect.
Section 5.12. Hazardous Materials. The Borrower and each of its
Subsidiaries have obtained all permits, licenses and other authorizations which
are required under all Environmental Laws, except to the extent failure to have
any such permit, license or authorization would not have a Material Adverse
Effect. The Borrower and each of its Subsidiaries are in compliance with the
terms and conditions of all such permits, licenses and authorizations, and are
also in compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in any applicable Environmental Law or in any regulation, code, plan,
order, decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder, except to the extent failure to comply would
not have a Material Adverse Effect.
In addition, except as set forth in Schedule 5.12 hereto (as the same
may be amended by the Borrower from time to time pursuant to Section 6.8(b)):
(a) No notice, notification, demand, request for
information, citation, summons or order has been issued, no complaint has been
filed, no penalty has been assessed and no investigation or review is pending
or, to the knowledge of the Borrower, threatened by any governmental or other
entity with respect to any alleged failure by the Borrower or any of its
Subsidiaries to have any permit, license or authorization required in connection
with the conduct of the business of the Borrower or any of its Sub-
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sidiaries or with respect to any generation, treatment, storage, recycling,
transportation, release or disposal, or any release as defined in 42 U.S.C.ss.
9601(22) ("Release"), of any substance regulated under Environmental Laws
("Hazardous Materials") generated by the Borrower or any of its Subsidiaries.
(b) Neither the Borrower nor any of its Subsidiaries
has handled any Hazardous Material, other than as a generator, on any property
now or previously owned or leased by the Borrower or any of its Subsidiaries to
an extent that it has, or may reasonably be expected to have, a Material Adverse
Effect; and
(i) no PCB is or, to the knowledge of the
Borrower, has been present at any property now or previously owned or leased by
the Borrower of any of its Subsidiaries;
(ii) no asbestos is or, to the knowledge of
the Borrower, has been present at any property now or previously owned or leased
by the Borrower of any of its Subsidiaries;
(iii) there are no underground storage tanks
for Hazardous Materials, active or abandoned, at any property now or, to the
knowledge of the Borrower, previously owned or leased by the Borrower of any of
its Subsidiaries; and
(iv) no Hazardous Materials have been
Released, in a reportable quantity, where such a quantity has been established
by statute, ordinance, rule, regulation or order, at, on or under any property
now or previously owned by the Borrower of any of its Subsidiaries at the time
of such ownership by the Borrower or such Subsidiary or, to the knowledge of the
Borrower, at any time prior to such ownership.
(c) Neither the Borrower nor any of its Subsidiaries
has transported or arranged for the transportation of any Hazardous Material to
any location which is listed on the National Priorities List under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), listed for possible inclusion on the National Priorities
List by the Environmental Protection Agency in the Comprehensive Environmental
Response and Liability Information System as provided by 40 C.F.R. 300.5
("CERCLIS") or on any similar state list or which is the subject of federal,
state or local enforcement actions or other investigations which may lead to
claims against the Borrower or any of its Subsidiaries for clean-up costs,
remedial work, damages to natural resources or personal injury claims,
including, but not limited to, claims under CERCLA.
(d) No Hazardous Material generated by the Borrower or
any of its Subsidiaries has been recycled, treated, stored, disposed of or
Released by the Borrower or any of its Subsidiaries at any location other than
those listed in Schedule 5.12 hereto.
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(e) No oral or written notification of a Release of a
Hazardous Material has been filed by or on behalf of the Borrower or any of its
Subsidiaries and no property now or previously owned or leased by the Borrower
or any of its Subsidiaries is listed or, to the knowledge of the Borrower,
proposed for listing on the National Priorities List promulgated pursuant to
CERCLA, on CERCLIS or on any similar state list of sites requiring investigation
or clean-up.
(f) There are no Liens arising under or pursuant to any
Environmental Laws on any of the real property or properties owned or leased by
the Borrower or any of its Subsidiaries, and no government actions have been
taken or are in process which could subject any of such properties to such Liens
and neither the Borrower nor any of its Subsidiaries would be required to place
any notice or restriction relating to the presence of Hazardous Materials at any
property owned by it in any deed to such property.
(g) There have been no environmental investigations,
studies, audits, tests, reviews or other analyses conducted by or which are in
the possession of the Borrower or any of its Subsidiaries in relation to any
property or facility now or previously owned or leased by the Borrower or any of
its Subsidiaries which have not been made available to the Banks.
Section 5.13. No Default on Outstanding Judgments or Orders. Each of
the Borrower and its Subsidiaries has satisfied all judgments and neither the
Borrower nor any of its Subsidiaries is in default with respect to any judgment,
writ, injunction, decree, rule or regulation of any court, arbitrator or
federal, state, municipal or other Governmental Authority, commission, board,
bureau, agency or instrumentality, domestic or foreign having jurisdiction over
the Borrower or its Subsidiaries, except as set forth on Schedule 5.13 (as the
same may be amended or supplemented by the Borrower from time to time), except
to the extent that such defaults are not reasonably expected to have a Material
Adverse Effect.
Section 5.14. No Defaults on Other Agreements. Neither the Borrower nor
any of its Subsidiaries is a party to any indenture, loan or credit agreement or
any lease or other agreement or instrument or subject to any charter or
corporate restriction which is reasonably expected to have a Material Adverse
Effect or to materially adversely affect the ability of the Borrower to carry
out its obligations under the Facility Documents to which it is a party. Neither
the Borrower nor any of its Subsidiaries is in default in any respect in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument to which it is a party,
except to the extent that such defaults are not reasonably expected to have a
Material Adverse Effect.
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Section 5.15. Labor Disputes and Acts of God. Neither the business nor
the properties of the Borrower or of any of its Subsidiaries are affected by any
fire, explosion, accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance), which is reasonably expected to
have a Material Adverse Effect.
Section 5.16. Governmental Regulation. Neither the Borrower nor any of
its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Investment Company Act of 1940, the Interstate Commerce
Act, the Federal Power Act or any statute or regulation limiting its ability to
incur indebtedness for money borrowed as contemplated hereby.
Section 5.17. Partnerships. As of the Closing Date, neither the
Borrower nor any of its Subsidiaries is a partner in any partnership, except as
set forth on Schedule 5.17 hereto.
Section 5.18. No Forfeiture. Neither the Borrower nor any of its
Subsidiaries is engaged in or proposes to be engaged in the conduct of any
business or activity which is reasonably expected to result in a Forfeiture
Proceeding and no Forfeiture Proceeding against any of them is pending or, to
the knowledge of the Borrower, threatened.
Section 5.19. Solvency.
(a) The present fair saleable value of the assets of
the Borrower after giving effect to all the transactions contemplated by the
Facility Documents and the funding of all Commitments and Loans hereunder
exceeds the amount that will be required to be paid on or in respect of the
existing debts and other liabilities (including contingent liabilities) of the
Borrower as they mature.
(b) The property of the Borrower does not constitute
unreasonably small capital for the Borrower to carry out its business as now
conducted and as proposed to be conducted, including the capital needs of the
Borrower.
(c) The Borrower does not intend to, nor does it
believe that it will, incur debts beyond its ability to pay such debts as they
mature (taking into account the timing and amounts of cash to be received by the
Borrower, and of amounts to be payable on or in respect of debt of the
Borrower).
Section 5.20. Subordinated Debt. As of the Closing Date, no
Subordinated Debt of the Borrower exists.
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Section 5.21. Full Disclosure. All information heretofore furnished by
the Borrower to the Administrative Agent or any Bank for purposes of or in
connection with this Agreement or the transactions contemplated hereby is, and
all such information hereafter furnished by the Borrower to the Administrative
Agent or any Bank will be, true and accurate in all material respects on the
date as of which such information is stated or certified. The Borrower has
disclosed to the Banks in writing any and all facts, other than general economic
conditions, which materially and adversely affect or may affect (to the extent
the Borrower can now reasonably foresee) the business, management, operations,
properties, prospects or condition (financial or otherwise) of the Borrower and
its Subsidiaries, taken as a whole, or the ability of the Borrower or any of its
Subsidiaries to perform their respective obligations under this Agreement or any
Note.
Section 5.22. Insurance. The Borrower maintains through financially
sound and reputable insurers not related to or affiliated with the Borrower
insurance with respect to its properties and business and against such
liabilities, casualties and contingencies and in such types and amounts as is
customary in the case of corporations engaged in the same or a similar business
or having similar properties similarly situated. Schedule 5.22 sets forth a
complete and correct list and brief description of all insurance currently
maintained by or in respect of the Borrower, setting forth the identity of the
insurance carrier, the type of coverage, the amount of coverage and the
deductible. To the best of the Borrower's knowledge, there are no claims,
actions, suits, or proceedings against, arising under or based upon any of such
insurance policies except as set forth in Schedule 5.22 which, if determined
adversely to the Borrower or any Subsidiaries, may be expected to have a
Material Adverse Effect. None of the insurance policies identified on Schedule
5.22 provide for a retrospective premium adjustment or other change in
compensation payable to the insurer on the basis of claim or loss experience
which may be expected to have a Material Adverse Effect.
Section 5.23. Intellectual Property. To the best of the Borrower's
knowledge, each of the Borrower and its Subsidiaries owns, or is licensed or
otherwise has the right to use, all the material patents, trademarks, service
marks, names (trade, service, fictitious or otherwise), copyrights, technology
(including but not limited to computer programs and software), processes, data
bases and other rights, free from burdensome restrictions, necessary to own and
operate its properties and carry on its business as presently conducted and
presently planned to be conducted without conflict with the rights of others.
Section 5.24. Millennium Dates. The computer systems of the Borrower
and its Subsidiaries will function with dates of January 1, 2000 and beyond
("Millennium Dates") in the same manner as such computer systems operate with
pre-Millennium Dates, including, without limitation, as relates to the input,
storage, calculation, transmission,
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display, retrieval, processing and printing of Millennium Dates, and the
computer systems will accurately and simultaneously process both pre-Millennium
and Millennium Dates.
ARTICLE 6. AFFIRMATIVE COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank shall have
any Commitment under this Agreement, the Borrower shall:
Section 6.1. Maintenance of Existence. Preserve and maintain, and cause
each of its Subsidiaries to preserve and maintain, its corporate existence and
good standing in the jurisdiction of its incorporation, and qualify and remain
qualified, and cause each of its Subsidiaries to qualify and remain qualified,
as a foreign corporation in each jurisdiction in which such qualification is
required, except where the failure to so qualify is not reasonably expected to
have a Material Adverse Effect.
Section 6.2. Conduct of Business. Continue, and cause each of its
Subsidiaries to continue, to engage in a business of the same general type as
conducted by it on the date of this Agreement.
Section 6.3. Maintenance of Properties. Maintain, keep and preserve,
and cause each of its Subsidiaries to maintain, keep and preserve, all of its
properties (tangible and intangible) necessary or useful in the proper conduct
of its business in good working order and condition, ordinary wear and tear
excepted, except where the failure to do so is not reasonably expected to have a
Material Adverse Effect.
Section 6.4. Maintenance of Records. Keep, and cause each of its
Subsidiaries to keep, adequate records and books of account in which complete
entries will be made, reflecting all financial transactions of the Borrower and
its Subsidiaries, and which will permit the preparation of financial statements
in accordance with GAAP.
Section 6.5. Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, with financially sound and reputable insurance
companies or associations, insurance with respect to its properties and business
and against such liabilities, casualties and contingencies and of such types and
in such amounts as is customary in the case of corporations engaged in the same
or similar businesses or having similar properties similarly situated, which
insurance shall in any event not provide for a materially lower level of
coverage than the insurance referred to in Section 5.22 in effect on the Closing
Date. Further, the Borrower shall furnish to the Administrative Agent from time
to time upon request, the policies under which such insurance is issued,
certificates of insurance and such other information relating to such insurance
as the Administrative Agent may reasonably request.
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Section 6.6. Compliance with Laws. Comply, and cause each of its
Subsidiaries to comply, in all respects with all applicable laws, rules,
regulations and orders, such compliance to include, without limitation, paying
before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property, except where the failure to comply
is not reasonably expected to have a Material Adverse Effect.
Section 6.7. Right of Inspection. At any reasonable time and from time
to time upon reasonable prior notice, permit the Administrative Agent or any
Bank or any Co-Agent or agent or representative thereof, to examine and make
copies and abstracts from the records and books of account of, and visit the
properties of, the Borrower and any of its Subsidiaries, and to discuss the
affairs, finances and accounts of the Borrower and any such Subsidiary with any
of their respective officers and directors and the Borrower's independent
accountants, and to conduct audits and appraisals of the Borrower; provided,
however, that if a Default or Event of Default does not then exist and is not
demonstrated by any such audit or appraisal, the Borrower will not be liable to
pay for any such audit or appraisal.
Section 6.8. Reporting Requirements. Furnish directly to the
Administrative Agent and each of the Banks:
(a) as soon as available and in any event within 120
days after the end of each fiscal year of the Borrower, a consolidated and
consolidating balance sheet of the Borrower and its Consolidated Subsidiaries as
of the end of such fiscal year and a consolidated and consolidating income
statement and statements of cash flows and changes in stockholders' equity of
the Borrower and its Consolidated Subsidiaries for such fiscal year, all in
reasonable detail and stating in comparative form the respective consolidated
figures for the corresponding date and period in the prior fiscal year and all
prepared in accordance with GAAP and accompanied by an opinion thereon
reasonably acceptable to the Administrative Agent by Arthur Andersen LLP or
other independent accountants of national standing selected by the Borrower;
(b) as soon as available and in any event within three
(3) Banking Days after filing the same with the Securities and Exchange
Commission, but in no event later than 60 days after the end of each fiscal
quarter of the Borrower, a true and complete copy of the Borrower's Form 10-Q,
together with any amendments and/or supplements to Schedules 5.6, 5.9, 5.10,
5.12, 5.13, 5.17 and 5.22, as applicable;
(c) promptly upon receipt thereof, copies of any
reports, inclusive of any management letters, submitted to the Borrower or any
of its Subsidiaries by independent certified public accountants in connection
with examination of the financial statements of the Borrower or any such
Subsidiary made by such accountants;
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(d) as soon as available and in any event within three
(3) Banking Days after filing the same with the Securities and Exchange
Commission, but in no event later than 120 days after the end of each fiscal
year of the Borrower, a true and complete copy of the Borrower's Form 10-K,
together with the auditor's management letter referred to in Section 6.8(c);
(e) as soon as available and in any event within 120
days after the end of each fiscal year of the Borrower, management's projected
financial statements inclusive of a balance sheet, an income statement and a
statement of cash flows (specifying key assumptions) for each upcoming fiscal
year;
(f) simultaneously with the delivery of the annual
financial statements and the quarterly delivery of the Form 10-Q referred to
Sections 6.8 (a) and (b), a certificate substantially in the form of Exhibit I
of the chairman, chief financial officer or controller of the Borrower (i)
certifying that to the best of his knowledge no Default or Event of Default has
occurred and is continuing or, if a Default or Event of Default has occurred and
is continuing, a statement as to the nature thereof and the action which is
proposed to be taken with respect thereto, and (ii) with computations
demonstrating compliance with the applicable covenants contained in Articles 7
and 8;
(g) simultaneously with the delivery of the annual
financial statements referred to in Section 6.8(a), a certificate of the
independent public accountants who audited such statements to the effect that,
in making the examination necessary for the audit of such statements, they have
obtained no knowledge of any condition or event which constitutes a Default or
Event of Default, or if such accountants shall have obtained knowledge of any
such condition or event, specifying in such certificate each such condition or
event of which they have knowledge and the nature and status thereof;
(h) promptly after the commencement thereof, notice of
all actions, suits, and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
affecting the Borrower or any of its Subsidiaries which, if determined adversely
to the Borrower or such Subsidiary, is reasonably expected to have a Material
Adverse Effect;
(i) as soon as possible and in any event within 10 days
after the occurrence of each Default or Event of Default a written notice
setting forth the details of such Default or Event of Default and the action
which is proposed to be taken by the Borrower with respect thereto;
(j) as soon as possible, and in any event within ten
days after the Borrower knows or has reason to know that any of the events or
conditions specified below
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with respect to any Plan or Multiemployer Plan has occurred or exists, a
statement signed by the chief financial officer, the controller or any other
senior financial officer of the Borrower setting forth details respecting such
event or condition and the action, if any, which the Borrower or its ERISA
Affiliate proposes to take with respect thereto (and a copy of any report or
notice required to be filed with or given to PBGC by the Borrower or an ERISA
Affiliate with respect to such event or condition):
(i) any reportable event, as defined in
Section 4043(b) of ERISA, with respect to a Plan, as to which PBGC has not by
regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event (provided that a failure
to meet the minimum funding standard of Section 412 of the Code or Section 302
of ERISA including, without limitation, the failure to make on or before its due
date a required installment under Section 412(m) of the Code or Section 302(e)
of ERISA, shall be a reportable event regardless of the issuance of any waivers
in accordance with Section 412(d) of the Code) and any request for a waiver
under Section 412(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of
ERISA of a notice of intent to terminate any Plan or any action taken by the
Borrower or an ERISA Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Borrower or any ERISA
Affiliate of a notice from a Multiemployer Plan that such action has been taken
by PBGC with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from
a Multiemployer Plan by the Borrower or any ERISA Affiliate that results in
liability under Section 4201 or 4204 of ERISA (including the obligation to
satisfy secondary liability as a result of a purchaser default) or the receipt
of the Borrower or any ERISA Affiliate of notice from a Multiemployer Plan that
it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA
or that it intends to terminate or has terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a
fiduciary or any Multiemployer Plan against the Borrower or any ERISA Affiliate
to enforce Section 515 of ERISA, which proceeding is not dismissed within 30
days;
(vi) the adoption of an amendment to any
Plan that pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA
would result in the loss of tax-exempt status of the trust of which such Plan is
a part if the Borrower or an
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ERISA Affiliate fails to timely provide security to such Plan in accordance with
the provisions of said Sections;
(vii) any event or circumstance exists which
may reasonably be expected to constitute grounds for the Borrower or any ERISA
Affiliate to incur liability under Title IV of ERISA or under Sections
412(c)(11) or 412(n) of the Code with respect to any Plan; and
(viii) the Unfunded Benefit Liabilities of
one or more Plans increase after the date of this Agreement in an amount which
is material in relation to the financial condition of the Borrower and its
Subsidiaries, on a consolidated basis; provided, however, that such increase
shall not be deemed to be material so long as it does not exceed $3,000,000.
(k) promptly after the request of any Bank, copies of
each annual report filed pursuant to Section 104 of ERISA with respect to each
Plan (including, to the extent required by Section 104 of ERISA, the related
financial and actuarial statements and opinions and other supporting statements,
certifications, schedules and information referred to in Section 103 of ERISA)
and each annual report filed with respect to each Plan under Section 4065 of
ERISA; provided, however, that in the case of a Multiemployer Plan, such annual
reports shall be furnished only if they are available to the Borrower or an
ERISA Affiliate;
(l) promptly after the furnishing thereof, copies of
any statement or report furnished to any other party pursuant to the terms of
any Interest Rate Protection Agreement or any indenture, loan or credit or
similar agreement and not otherwise required to be furnished to the Banks
pursuant to any other clause of this Section 6.8;
(m) promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports which the
Borrower or any of its Subsidiaries sends to its stockholders, and copies of all
regular, periodic and special reports, and all registration statements, which
the Borrower or any such Subsidiary files with the Securities and Exchange
Commission or any Governmental Authority which may be substituted therefor, or
with any national securities exchange;
(n) written notice of the details of any intended
Acceptable Acquisition promptly following the issuance of a press release for
any such Acceptable Acquisition or at any earlier time that any such intended
Acceptable Acquisition has become public knowledge or is no longer confidential
and written details of the terms of each consummated Acceptable Acquisition
promptly following its completion;
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(o) promptly after the Borrower knows of the
commencement or threat thereof, notice of any Forfeiture Proceeding;
(p) promptly following any reasonable request by any
Bank, specific financial information as to any of the Borrower's Subsidiaries,
divisions, product lines or other units; and
(q) such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any of its Subsidiaries
as the Administrative Agent or any Bank may from time to time reasonably
request.
ARTICLE 7. NEGATIVE COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank shall have
any Commitment under this Agreement, the Borrower shall not:
Section 7.1. Debt. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any Debt,
except:
(a) Debt of the Borrower under this Agreement or the
Notes;
(b) Existing Debt set forth in the financial statements
delivered to the Banks pursuant to Section 5.5, including Funded Debt described
in Schedule 5.10 hereto, of the Borrower and its Subsidiaries, or in the
financial statements delivered to the Administrative Agent and the Banks
pursuant to Section 5.5, including renewals, extensions or refinancings thereof,
provided that the principal amount of such Debt does not increase;
(c) Debt of the Borrower which is subordinated to the
Borrower's obligations under this Agreement and the Notes in a manner
satisfactory in all respects to the Administrative Agent and the Banks in their
sole and absolute discretion;
(d) Debt of the Borrower to any Subsidiary or of any
Subsidiary to the Borrower or another Subsidiary, provided, however, that the
outstanding principal amount of any such Debt owing from any Subsidiary to the
Borrower and/or another Subsidiary shall not exceed the aggregate of $7,500,000
(excluding management charges owed by any Subsidiary to the Borrower and
excluding Debt incurred by any Subsidiary to the Borrower or another Subsidiary
in connection with a Acceptable Acquisition) at any time, for each of the
Subsidiaries or the Borrower;
(e) Debt of the Borrower or any Subsidiary owing to any
of the Banks in connection with any obligations related to hedging foreign
currencies or other
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financial arrangements for the purpose of assuring against credit losses,
including any Interest Rate Protection Agreement described in Section 2.15 and
any contingent obligations, arising from swaps or swap agreements, derivatives,
currency exchanges or similar exchange agreements and similar risk hedging
agreements or transactions entered into by the Borrower or any of the
Subsidiaries with any of the Banks;
(f) Debt of the Borrower or any such Subsidiary secured
by purchase money Liens permitted by Section 7.3;
(g) Debt in respect of the undrawn portion of the face
amount of letters of credit issued for the account of the Borrower or any of its
Subsidiaries by any Bank, in an aggregate amount not exceeding $2,500,000 at
any time outstanding;
(h) Debt in the nature of guarantees which are
permitted by Section 7.2;
(i) Debt of any Person which becomes a Subsidiary of
the Borrower in connection with an Acceptable Acquisition permitted by Section
7.11 or Debt which is acquired and assumed by the Borrower or any of its
Subsidiaries in connection with an Acceptable Acquisition permitted by Section
7.11; provided that such Debt was in existence and outstanding prior to and on
the date that such Person became a Subsidiary or such Acceptable Acquisition was
consummated, and suc Debt was not created in contemplation of such Person
becoming a Subsidiary or such Acceptable Acquisition being consummated, and any
renewals, extensions or refinancings thereof, provided that the principal amount
thereof does not increase; and provided, however, that the Debt permitted by
this subclause (i) shall not include Funded Debt, together with commitments for
Funded Debt, in excess of $5,000,000 (excluding permitted Debt pursuant to
Section 7.1(a)) per Acceptable Acquisition or $10,000,000 (excluding permitted
Debt pursuant to Section 7.1(a)) in the aggregate at any time that, in either
case, (A) is in the nature of a line of credit, term loan facility, or other
revolving credit facility (whether advanced or unadvanced) or (B) is secured by
any type of blanket Lien on receivables, equipment, inventory, intellectual
property and/or general intangibles (unless otherwise permitted by Section
7.3(k));
(j) [intentionally omitted];
(k) Debt of the Borrower secured by Liens pursuant to
Sections 7.3 (b) - (g) and (l); and
(l) other Debt not in excess of $5,000,000 in the
aggregate at any one time.
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Section 7.2. Guaranties, Etc. Assume, guarantee, endorse or otherwise
be or become directly or contingently responsible or liable, or permit any of
its Subsidiaries to assume, guarantee, endorse or otherwise be or become
directly or indirectly responsible or liable (including, but not limited to, an
agreement to purchase any obligation, stock, assets, goods or services or to
supply or advance any funds, assets, goods or services, or an agreement to
maintain or cause such Person to maintain a minimum working capital or net worth
or otherwise to assure the creditors of any Person against loss) for the
obligations of any Person, except (a) guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business; (b) guaranties of Debt permitted by Section 7.1; and (c)
guarantees executed by the Borrower or any Subsidiary in the ordinary course of
business in respect of operating leases and other ordinary course operating
expenses of the Borrower or any of its Subsidiaries.
Section 7.3. Liens. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien
upon or with respect to any of its properties, now owned or hereafter acquired,
except:
(a) the negative pledge in favor of the Administrative
Agent, the Co-Agents and the Banks under this Agreement;
(b) Liens for taxes or assessments or other government
charges or levies if not yet due and payable or if due and payable if they are
being contested in good faith by appropriate proceedings and for which
appropriate reserves are maintained;
(c) Liens imposed by law, such as mechanic's,
materialmen's, landlord's, warehousemen's and carrier's Liens, and other similar
Liens, securing obligations incurred in the ordinary course of business which
are not past due for more than 30 days, or which are being contested in good
faith by appropriate proceedings and for which appropriate reserves have been
established;
(d) Liens under workmen's compensation, unemployment
insurance, social security or similar legislation (other than ERISA);
(e) Liens, deposits or pledges to secure the
performance of bids, tenders, contracts (other than contracts for the payment of
money), leases (permitted under the terms of this Agreement), public or
statutory obligations, surety, stay, appeal, indemnity, performance or other
similar bonds, or other similar obligations arising in the ordinary course of
business;
(f) attachment, judgment and other similar Liens
arising in connection with court or arbitration proceedings; provided that the
execution or other
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enforcement of such Liens is effectively stayed and the claims secured thereby
are being actively contested in good faith and by appropriate proceedings;
(g) easements, rights-of-way, restrictions and other
similar encumbrances which, in the aggregate, do not materially interfere with
the occupation, use and enjoyment by the Borrower or any such Subsidiary of the
property or assets encumbered thereby in the normal course of its business or
materially impair the value of the property subject thereto;
(h) Liens securing obligations of such a Subsidiary to
the Borrower or another such Subsidiary;
(i) Liens described in Schedules 5.6 and 5.10 and
existing Liens on the assets located outside the United States of any foreign
Subsidiary, and any replacement Liens on such property to secure the
corresponding Debt ("Corresponding Debt") described on such Schedules, including
renewals, extensions or refinancings thereof, provided that (x) the principal
amount thereof does not increase, and (y) no additional property shall be
encumbered to secure such Corresponding Debt;
(j) Liens incidental to the conduct of the business of
the Borrower and its Subsidiaries or the ownership of any of their assets not
incurred in connection with Debt, which Liens do not materially detract from the
value of the property subject thereto or interfere with the ordinary course of
business of the Borrower and its Subsidiaries;
(k) Liens securing Debt permitted under Section 7.1(i),
provided that such Liens only affect property acquired in connection with the
Acceptable Acquisition pursuant to which such Debt was incurred; and
(l) in addition to the Liens permitted by subsection
(k) of this Section 7.3, purchase money Liens on any property hereafter acquired
or the assumption of any Lien on property existing at the time of such
acquisition, or a Lien incurred in connection with any conditional sale or other
title retention agreement or a Capital Lease; provided that:
(i) any property subject to any of the
foregoing is acquired by the Borrower or any such Subsidiary in the ordinary
course of its business and the Lien on any such property is created
contemporaneously with such acquisition;
(ii) the obligation secured by any Lien so
created, assumed or existing shall not exceed 100% of the lesser of cost or fair
market value as of
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the time of acquisition of the property covered thereby to the Borrower or such
Subsidiary acquiring the same;
(iii) each such Lien shall attach only to
the property so acquired and fixed improvements thereon; and
(iv) the Debt secured by all such Liens
shall not exceed $5,000,000 at any time outstanding in the aggregate.
Section 7.4. Leases. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
obligation as lessee for the rental or hire of any real or personal property,
except: (a) leases existing on the date of this Agreement and any extensions or
renewals thereof; (b) leases (other than Capital Leases) which do not in the
aggregate require the Borrower and its Subsidiaries on a consolidated basis to
make payments (including taxes, insurance, maintenance and similar expenses
which the Borrower or any Subsidiary is required to pay under the terms of any
lease) in any fiscal year of the Borrower in excess of $5,000,000; (c) leases
between the Borrower and any such Subsidiary or between any such Subsidiaries;
(d) Capital Leases permitted by Section 7.3 or Section 7.1; and (e) leases of
equipment and other assets (including real property) used in the ordinary course
of business of the Borrower and its Subsidiaries.
Section 7.5. Investments. Make, or permit any of its Subsidiaries to
make, any loan or advance to any Person or purchase or otherwise acquire, or
permit any such Subsidiary to purchase or otherwise acquire, any capital stock,
assets, obligations or other securities of, make any capital contribution to, or
otherwise invest in, or acquire any interest in, any Person, except: (a) Cash
and Cash Equivalents; (b) stock, obligations or securities received in
settlement of debts (created in the ordinary course of business) owing to the
Borrower or any such Subsidiary; (c) any Acceptable Acquisition permitted by
Section 7.11; (d) advances to employees of the Borrower and its Subsidiaries in
the ordinary course of business, including for reasonable relocation expenses
and travel expenses and pursuant to company credit cards; (e) up to an aggregate
amount of $100,000 in equity securities of (i) clients of the Borrower, and (ii)
other companies; (f) Debt permitted by Section 7.1(d); (g) Interest Rate
Protection Agreements permitted by Section 2.15; (h) new Subsidiaries formed by
the Borrower after the Closing Date, (i) joint ventures and other existing
investments as set forth on Schedule 5.9 hereto and in the financial statements
delivered to the Banks pursuant to Section 5.5, and (j) other Investments not to
exceed $4,000,000 in the aggregate at any time], so long as the Borrower remains
in compliance of the other covenants contained in this Agreement.
Section 7.6. Dividends. Declare or pay any dividends, purchase, redeem,
retire or otherwise acquire for value any of its capital stock now or hereafter
outstanding, or
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make any distribution of assets to its stockholders as such whether in cash,
assets or obligations of the Borrower, or allocate or otherwise set apart any
sum for the payment of any dividend or distribution on, or for the purchase,
redemption or retirement of any shares of its capital stock, or make any other
distribution by reduction of capital or otherwise in respect of any shares of
its capital stock or permit any of its Subsidiaries to purchase or otherwise
acquire for value any stock of the Borrower or another such Subsidiary , or
enter into any agreement restricting the ability of any of its Subsidiaries to
declare or pay any dividends to the Borrower or any other Subsidiary, except
that: (a) the Borrower may declare and deliver dividends and make distributions
payable solely in common stock of the Borrower; (b) the Borrower may purchase or
otherwise acquire shares of its capital stock by exchange for or out of the
proceeds received from a substantially concurrent issue of new shares of its
capital stock; and (c) the Borrower or any Subsidiary may acquire for value any
of its capital stock now or hereafter outstanding provided that any such
acquisition is not reasonably expected to cause the Borrower to violate any of
the covenants contained in Article 8; provided, however, that if no Default or
Event of Default has occurred or is continuing, so long as the Borrower and its
Consolidated Subsidiaries maintain at any time (on a rolling twelve month
calculation basis) an Adjusted Leverage Ratio measured pursuant to Section 8.2
of less than 2.0 to 1.0, then the Borrower may declare dividend distributions of
Net Income, in an amount which represents, on an annual basis, the lesser of (x)
25% of the Net Income of the Borrower and its Consolidated Subsidiaries, and (y)
$12,000,000.
Section 7.7. Sale of Assets. Sell, lease, assign, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, assign, transfer
or otherwise dispose of, any of its now owned or hereafter acquired assets
(including, without limitation, shares of stock and indebtedness of such
Subsidiaries, receivables, leasehold interests and software, panel and subpanel
data, lists and information and customer lists); except: (a) for inventory
disposed of in th ordinary course of business; (b) the sale or other disposition
of assets no longer used or useful in the conduct of its business; (c) that any
such Subsidiary may sell, lease, assign, or otherwise transfer its assets to the
Borrower; (d) that the Borrower and any such Subsidiary may license or
sublicense software, knowhow and other intellectual properties to any Person so
long as the Borrower or such Subsidiary receives fair value consideration in
exchange for such license or sublicense; and (e) for other dispositions of
assets not exceeding in the aggregate in any fiscal year $3,000,000; provided,
however, that all such sales described in this clause (e) resulting in Net Cash
Proceeds shall be applied in accordance with Section 2.5(a)(i).
Section 7.8. Stock of Subsidiaries, Etc. Sell or otherwise dispose of
any shares of capital stock of any of its Subsidiaries (other than to the
Borrower or another Subsidiary as permitted hereunder), except in connection
with a transaction permitted under Sections 7.6, 7.7 or 7.10, or permit any such
Subsidiary to issue any additional shares of its capital stock, except
directors' qualifying shares.
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Section 7.9. Transactions with Affiliates. Except as set forth in
Schedule 7.9, enter into, or permit any of its Subsidiaries to enter into, any
transaction with any Affiliate, including, without limitation, the purchase,
sale or exchange of property or the rendering of any service, except in the
ordinary course of and pursuant to the reasonable requirements of the Borrower's
or such Subsidiary's business and upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary than it would obtain in a
comparable arm's length transaction with a Person not an Affiliate.
Section 7.10 Mergers, Etc. Merge or consolidate with, or sell, assign,
lease or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to, any Person, or acquire all or substantially all of the
assets or the business of any Person (or enter into any agreement to do any of
the foregoing), or permit any of its Subsidiaries to do so except that: (a) any
such Subsidiary may merge into or transfer assets to the Borrower; (b) any
Subsidiary may merge into or consolidate with or transfer assets to any other
Subsidiary; and (c) the Borrower or any of its Subsidiaries may effect any
Acceptable Acquisition permitted by Section 7.11.
Section 7.11. Acquisitions. Make, or permit any of its Subsidiaries to
make, any Acquisition other than an Acceptable Acquisition.
"Acceptable Acquisition" means any of the following types of
Acquisitions:
(a) an Acquisition in which the following conditions
are satisfied:
(i) no Default or Event of Default exists or
would result from such Acquisition;
(ii) the company or assets acquired involve
substantially the same or similar line of business as the Borrower and its
Subsidiaries; and
(iii) the Borrower demonstrates that, on a
consolidated basis with the acquired assets and/or company, in accordance with
GAAP, it would have been in compliance with the financial covenants contained in
Article 8 on a trailing four quarters pro forma basis as of the end of the
immediately preceding fiscal quarter; and
(b) any other Acquisition approved in writing by the
Required Banks;
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provided, however, that, in every case, approval by the Required Banks is
required for any hostile Acquisition where it can be demonstrated that a
significant business relationship exists between a Bank and the company to be
acquired or a company owning the assets to be acquired.
"Acquisition" means any transaction (including any merger or
consolidation, but not including the formation of new Subsidiaries permitted by
Section 7.5(h)) pursuant to which the Borrower or any of its Subsidiaries (a)
acquires equity securities (or warrants, options or other rights to acquire such
securities) of any corporation or any other entity other than the Borrower or
any corporation or any other entity which is not then a Subsidiary of the
Borrower, pursuant to a solicitation of tenders therefor, or in one or more
negotiated block, market or other transactions not involving a tender offer, or
a combination of any of the foregoing, or (b) makes any corporation or any other
entity a Subsidiary of the Borrower, or causes any such corporation or other
entity to be merged into the Borrower or any of its Subsidiaries, in any case
pursuant to a merger, a purchase of assets or any reorganization providing for
the delivery or issuance to the holders of such corporation's or other entity's
then outstanding securities, in exchange for such securities, of cash or
securities of the Borrower or any of its Subsidiaries, or a combination thereof,
or (c) purchases all or substantially all of the business or assets of any
corporation or any other entity.
Section 7.12. No Activities Leading to Forfeiture. Neither the Borrower
nor any of its Subsidiaries shall engage in or propose to be engaged in the
conduct of any business or activity which is reasonably expected to result in a
Forfeiture Proceeding.
ARTICLE 8. FINANCIAL COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank shall have
any Commitment under this Agreement:
Section 8.1. Minimum Capital Base. The Borrower shall maintain at all
times, measured at the end of each fiscal quarter, a Consolidated Capital Base
of not less than $62,500,000 plus (a) 50% of each quarterly Consolidated Net
Income gain since September 30, 1997, plus (b) 100% of Net Proceeds from any
issuance of equity securities by the Borrower since September 30, 1997, plus (c)
100% of the Net Proceeds from any issuance by the Borrower of Subordinated Debt.
Section 8.2. Adjusted Leverage Ratio. The Borrower and its Consolidated
Subsidiaries shall maintain at all times an Adjusted Leverage Ratio, measured
quarterly for the twelve month period then ended (a rolling twelve month
calculation measured as of the end of each successive quarter), of not greater
than 3.0 to 1.0.
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Section 8.3. Interest Coverage Ratio. The Borrower and its Consolidated
Subsidiaries shall maintain at all times an Interest Coverage Ratio, measured
quarterly for the twelve month period then ended (a rolling twelve month
calculation measured as of the end of each successive quarter), of not less than
3.5 to 1.0 at any time.
ARTICLE 9. EVENTS OF DEFAULT.
Section 9.1 Events of Default. Any of the following events shall be an
"Event of Default":
(a) the Borrower shall: (i) fail to pay the principal
of any Note as and when due and payable; or (ii) fail to pay interest on any
Note or any fee or other amount due hereunder as and when due and payable and
such failure shall continue for 5 days;
(b) any representation or warranty made or deemed made
by the Borrower in this Agreement or in any other Facility Document or which is
contained in any certificate, document, opinion, financial or other statement
furnished at any time under or in connection with any Facility Document shall
prove to have been false or misleading in any material respect on or as of the
date made or deemed made;
(c) the Borrower shall: (i) fail to perform or observe
any term, covenant or agreement contained in Section 2.3, subsections (g)
through (m) and (o) through (q) of Section 6.8, or Articles 7 or 8; or (ii) fail
to perform or observe any term, covenant or agreement on its part to be
performed or observed under subsections (a), (b), (d), (e), (f) or (n) of
Section 6.8 and such failure shall continue for 10 consecutive days after notice
from the Administrative Agent to the Borrower; or (iii) fail to perform or
observe any term, covenant or agreement on its part to be performed or observed
(other than the obligations specifically referred to in clause (i) or (ii) or
elsewhere in this Section 9.1) in any Facility Document and such failure shall
continue for 30 consecutive days after notice from the Administrative Agent to
the Borrower or from the Borrower to the Administrative Agent (as the case may
be);
(d) the Borrower or any of its Subsidiaries shall: (i)
fail to pay (after giving effect to any applicable grace periods or notice
requirements or any waivers or consents related thereto) any indebtedness under
any Interest Rate Protection Agreement or any other indebtedness in excess of
$500,000, including but not limited to indebtedness for borrowed money (other
than the payment obligations described in (a) above), of the Borrower or such
Subsidiary, as th case may be, or any interest or premium thereon, when due
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise); or (ii) fail to perform or observe any term, covenant or condition
on its part to be performed or observed under any agreement or instrument
relating to any such Interest
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Rate Protection Agreement or other indebtedness, when required to be performed
or observed (after giving effect to any applicable grace periods or notice
requirements or any waivers or consent related thereto), if the effect of such
failure to perform or observe is to accelerate, or to permit the acceleration
of, after the giving of notice or passage of time, or both, the maturity of such
indebtedness; or any such indebtedness shall be declared to be due and payable,
or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;
(e) the Borrower or any of its Subsidiaries: (i) shall
generally not, or be unable to, or shall admit in writing its inability to, pay
its debts as such debts become due; or (ii) shall make an assignment for the
benefit of creditors, petition or apply to any tribunal for the appointment of a
custodian, receiver or trustee for it or a substantial part of its assets; or
(iii) shall commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect; or (iv) shall have had any
such petition or application filed or any such proceeding shall have been
commenced, against it, in which an adjudication or appointment is made or order
for relief is entered, or which petition, application or proceeding remains
undismissed for a period of 60 days or more; or shall be the subject of any
proceeding under which its assets may be subject to seizure, forfeiture or
divestiture (other than a proceeding in respect of a Lien permitted under
Section 7.3 (b)); or (v) by any act or omission shall indicate its consent to,
approval of or acquiescence in any such petition, application or proceeding or
order for relief or the appointment of a custodian, receiver or trustee for all
or any substantial part of its property; or (vi) shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for a period
of 60 days or more;
(f) one or more judgments, decrees or orders for the
payment of money in excess of $500,000 in the aggregate (exclusive of insurance
coverage once such insurance company has delivered to the Administrative Agent
in writing its non-repudiation of its responsibilities for the payment and
satisfaction of the judgment, decree or order at issue) shall be rendered
against the Borrower, or any of its Subsidiaries and such judgments, decrees or
orders shall continue unsatisfied and in effect for a period of 30 consecutive
days without being vacated, discharged, satisfied or stayed or bonded pending
appeal;
(g) any event or condition shall occur or exist with
respect to any Plan or Multiemployer Plan concerning which the Borrower is under
an obligation to furnish a report to the Administrative Agent and the Banks in
accordance with Section 6.8(j) (other than Section 6.8(j)(viii)) and as a result
of such event or condition, together with all other such events or conditions,
the Borrower or any ERISA Affiliate has incurred or in the opinion of the
Administrative Agent is reasonably likely to incur a liability to a Plan, a
Multiemployer Plan, the PBGC, or a trustee under Section 4042 of ERISA (or any
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combination of the foregoing) which is material in relation to the financial
condition of the Borrower and its Subsidiaries, on a consolidated basis;
provided, however, that any such amount shall not be deemed to be material so
long as all such amounts do not exceed in the aggregate $2,500,000;
(h) the Unfunded Benefit Liabilities of one or more
Plans have increased after the date of this Agreement in an amount which is
material; provided, however, that any such amount shall not be deemed to be
material so long as such amount does not exceed $5,000,000; or
(i) (A) any Person or two or more Persons acting in
concert shall have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 40% or more of the outstanding shares of voting stock of the
Borrower; or (B) during any period of 12 consecutive months, commencing before
or after the date of this Agreement, individuals who at the beginning of such
12-month period were directors of the Borrower, together with any new directors
whose election by the board of directors of the Borrower or whose nomination for
election by stockholders of the Borrower was approved by a majority of the
directors then still in office and who are either directors at the beginning of
such period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority of the board of
directors of the Borrower; or
(j) an Event of Default shall have occurred and be
continuing under the Note Purchase Agreement, dated as of the date hereof,
entered into between the Borrower and the Purchaser identified therein.
Section 9.2. Remedies. If any Event of Default shall occur and be
continuing, the Administrative Agent shall, upon request of the Required Banks,
by notice to the Borrower, (a) declare the Commitments to be terminated,
whereupon the same shall forthwith terminate, and (b) declare the outstanding
principal of the Notes, all interest thereon and all other amounts payable under
this Agreement and the Notes to be forthwith due and payable, whereupon the
Notes, all such interest and all such amounts shall become and be forthwith due
and payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Borrower; provided that, in the
case of an Event of Default referred to in Section 9.1(e), the Commitments shall
be immediately terminated, and the Notes, all interest thereon and all other
amounts payable under this Agreement shall be immediately due and payable
without notice, presentment, demand, protest or other formalities of any kind,
all of which are hereby expressly waived by the Borrower.
ARTICLE 10. THE ADMINISTRATIVE AGENT; RELATIONS AMONG BANKS AND
BORROWER.
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Section 10.1. Appointment, Powers and Immunities of Agent. Each Bank
hereby irrevocably (but subject to removal by the Required Banks pursuant to
Section 10.9) appoints and authorizes the Administrative Agent to act as its
agent hereunder and under any other Facility Document with such powers as are
specifically delegated to the Administrative Agent by the terms of this
Agreement and any other Facility Document, together with such other powers as
are reasonably incidental thereto. The Administrative Agent shall have no duties
or responsibilities except those expressly set forth in this Agreement and any
other Facility Document, and shall not by reason of this Agreement be a trustee
for any Bank. The Administrative Agent shall not be responsible to the Banks for
any recitals, statements, representations or warranties made by the Borrower or
any officer or official of the Borrower or any other Person contained in this
Agreement or any other Facility Document, or in any certificate or other
document or instrument referred to or provided for in, or received by any of
them under, this Agreement or any other Facility Document, or for the value,
legality, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Facility Document or for any failure by the Borrower
to perform any of its obligations hereunder or thereunder. The Administrative
Agent may employ agents and attorneys-in-fact and shall not be responsible,
except as t money or securities received by it or its authorized agents, for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care. Neither the Administrative Agent nor any of its directors,
officers, employees or agents shall be liable or responsible for any action
taken or omitted to be taken by it or them hereunder or under any other Facility
Document or in connection herewith or therewith, except for its or their own
gross negligence or willful misconduct. The Borrower shall pay any fee agreed to
by the Borrower and the Administrative Agent with respect to the Administrative
Agent's services hereunder. The parties hereto agree that each of the Co-Agents
do not have any specific duties, rights or powers under this Agreement, but
shall be entitled, in their respective capacity as Co-Agent hereunder, to the
same protections afforded to the Administrative Agent, where practicable, under
this Agreement.
Section 10.2. Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex, telegram or cable)
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat each Bank as
the holder of the Loans made by it for all purposes hereof unless and until a
notice of the assignment or transfer thereof reasonably satisfactory to the
Administrative Agent signed by such Bank shall have been furnished to the
Administrative Agent but the Administrative Agent shall not be required to deal
with any Person who has acquired a participation in any Loan from a Bank. As to
any matters not expressly provided for by this Agreement or any other Facility
Document, the Administrative Agent
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shall in all cases be fully protected in acting, or in refraining from acting,
hereunder in accordance with instructions signed by the Required Banks, and such
instructions of the Required Banks and any action taken or failure to act
pursuant thereto shall be binding on all of the Banks and any other holder of
all or any portion of any Loan.
Section 10.3. Defaults. The Administrative Agent shall not be deemed to
have knowledge of the occurrence of a Default or Event of Default (other than
the non-payment of principal of, or interest on, the Loans or fees to the extent
the same is required to be paid to the Administrative Agent for the account of
the Banks) unless the Administrative Agent has received notice from a Bank or
the Borrower specifying such Default or Event of Default and stating that such
notice is a "Notice of Default." In the event that the Administrative Agent
receives such a notice of the occurrence of a Default or Event of Default, the
Administrative Agent shall give prompt notice thereof to the Banks (and shall
give each Bank prompt notice of each such non-payment). The Administrative Agent
shall (subject to Section 10.8) take such action with respect to such Default or
Event of Default which is continuing as shall be directed by the Required Banks
(subject to Section 11.1); provided that unless and until the Administrative
Agent shall have received such directions, the Administrative Agent may 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 interest of the Banks
(subject to Section 11.1); and provided further that the Administrative Agent
shall not be required to take any such action which it determines to be contrary
to law.
Section 10.4. Rights of Administrative Agent as a Bank. With respect to
its Commitment and the Loans made by it, the Administrative Agent in its
capacity as a Bank hereunder shall have the same rights and powers hereunder as
any other Bank and may exercise the same as though it were not acting as the
Administrative Agent, and the term "Bank" or "Banks" shall, unless the context
otherwise indicates, include the Administrative Agent in its capacity as a Bank.
The Administrative Agent and its affiliates may (without having to account
therefor to any Bank) accept deposits from, lend money to (on a secured or
unsecured basis), and generally engage in any kind of banking, trust or other
business with, the Borrower (and any of its affiliates) as if it were not acting
as the Administrative Agent, and the Administrative Agent may accept fees and
other consideration from the Borrower for services in connection with this
Agreement or otherwise without having to account for the same to the Banks.
Although the Administrative Agent and its affiliates may in the course of such
relationships and relationships with other Persons acquire information about the
Borrower, its Affiliates and such other Persons, the Administrative Agent shall
have no duty to disclose such information to the Banks.
Section 10.5. Indemnification of Administrative Agent. The Banks agree
to indemnify the Administrative Agent (to the extent not reimbursed under
Section 11.3 or
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under the applicable provisions of any other Facility Document, but without
limiting the obligations of the Borrower under Section 11.3 or such provisions),
ratably in accordance with the aggregate unpaid principal amount of the Loans
made by the Banks (without giving effect to any participations, in all or any
portion of such Loans, sold by them to any other Person) (or, if no Loans are at
the time outstanding, ratably in accordance with their respective Commitments),
for any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement,
any other Facility Document or any other documents contemplated by or referred
to herein or the transactions contemplated hereby or thereby (including, without
limitation, the costs and expenses which the Borrower is obligated to pay under
Section 11.3 or under the applicable provisions of any other Facility Document
but excluding, unless a Default or Event of Default has occurred, normal
administrative costs and expenses incident to the performance of its agency
duties hereunder) or the enforcement of any of the terms hereof or thereof or of
an such other documents or instruments; provided that no Bank shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified.
Section 10.6. Documents. The Administrative Agent will forward to each
Bank, promptly after the Administrative Agent's receipt thereof, a copy of each
report, notice or other document required by this Agreement or any other
Facility Document to be delivered to the Administrative Agent for such Bank.
Section 10.7. Non-Reliance on Administrative Agent and Other Banks.
Each Bank agrees that it has, independently and without reliance on the
Administrative Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Borrower and its Subsidiaries and decision to enter into this Agreement and that
it will, independently and without reliance upon the Administrative Agent or any
other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any other Facility Document.
The Administrative Agent shall not be required to keep itself informed as to the
performance or observance by the Borrower of this Agreement or any other
Facility Document or any other document referred to or provided for herein or
therein or to inspect the properties or books of the Borrower or any Subsidiary.
Except for notices, reports and other documents and information expressly
required to be furnished to the Banks by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the affairs, financial
condition or business of the Borrower or any Subsidiary (or any of their
Affiliates) which may come into the possession of the Administrative Agent or
any of its affiliates. The Administrative Agent shall not be required to file
this Agreement, any other Facility Document or any
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document or instrument referred to herein or therein for record or give notice
of this Agreement, any other Facility Document or any document or instrument
referred to herein or therein to anyone.
Section 10.8. Failure of Administrative Agent to Act. Except for action
expressly required of the Administrative Agent hereunder, the Administrative
Agent shall in all cases be fully justified in failing or refusing to act
hereunder unless it shall have received further assurances (which may include
cash collateral) of the indemnification obligations of the Banks under Section
10.5 in respect of any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action.
Section 10.9. Resignation or Removal of Administrative Agent. Subject
to the appointment and acceptance of a successor Administrative Agent as
provided below, the Administrative Agent may resign at any time by giving
written notice thereof to the Banks and the Borrower, and the Administrative
Agent may be removed at any time with or without cause by the Required Banks;
provided that the Borrower and the other Banks shall be promptly notified
thereof. Upon any such resignation or removal, the Required Banks shall have the
right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Required Banks and
shall have accepted such appointment within 30 days after the retiring
Administrative Agent's giving of notice of resignation or the Required Banks'
removal of the retiring Administrative Agent, then the retiring Administrative
Agent may, on behalf of the Banks, appoint a successor Administrative Agent,
which shall be a commercial bank which has an office in the New York, New York
or Providence, Rhode Island metropolitan area and which has a combined capital
and surplus of at least $100,000,000. The Required Banks or the retiring
Administrative Agent, as the case may be, shall upon the appointment of a
successor Administrative Agent promptly so notify the Borrower and the other
Banks. Upon the acceptance of any appointment as Administrative Agent hereunder
by a successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Article 10 shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while i was acting as the Administrative Agent.
Section 10.10. Amendments Concerning Agency Function. The
Administrative Agent shall not be bound by any waiver, amendment, supplement or
modification of this Agreement or any other Facility Document which affects its
duties hereunder or thereunder unless it shall have given its prior consent
thereto.
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Section 10.11. Liability of Administrative Agent. The Administrative
Agent shall not have any liabilities or responsibilities to the Borrower on
account of the failure of any Bank to perform its obligations hereunder or to
any Bank on account of the failure of the Borrower to perform its obligations
hereunder or under any other Facility Document.
Section 10.12. Transfer of Agency Function. Without the consent of the
Borrower or any Bank, the Administrative Agent may at any time or from time to
time transfer its functions as Administrative Agent hereunder to any of its
offices wherever located, provided that the Administrative Agent shall promptly
notify the Borrower and the Banks thereof.
Section 10.13. Non-Receipt of Funds by the Administrative Agent. Unless
the Administrative Agent shall have been notified by a Bank or the Borrower
(either one as appropriate being the "Payor") prior to the date on which such
Bank is to make payment hereunder to the Administrative Agent of the proceeds of
a Loan or the Borrower is to make payment to the Administrative Agent, as the
case may be (either such payment being a "Required Payment"), which notice shall
be effective upon receipt, that the Payor does not intend to make the Required
Payment to the Administrative Agent, the Administrative Agent may assume that
the Required Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount thereof available to the
intended recipient on such date and, if the Payor has not in fact made the
Required Payment to the Administrative Agent, the recipient of such payment
(and, if such recipient is the Borrower and the Payor Bank fails to pay the
amount thereof to the Administrative Agent forthwith upon demand, the Borrower)
shall, on demand, repay to the Administrative Agent the amount made available to
it together with interest thereon for the period from the date such amount was
so made available by the Administrative Agent until the date the Administrative
Agent recovers such amount at a rate per annum equal to the average daily
Federal Funds Rate for such period.
Section 10.14. Withholding Taxes. Each Bank represents that it is
entitled to receive any payments to be made to it hereunder without the
withholding of any tax and will furnish to the Administrative Agent such forms,
certifications, statements and other documents as the Administrative Agent may
request from time to time to evidence such Bank's exemption from the withholding
of any tax imposed by any jurisdiction or to enable the Administrative Agent to
comply with any applicable laws or regulations relating thereto. Without
limiting the effect of the foregoing, if any Bank is not created or organized
under the laws of the United States of America or any state thereof, in the
event that the payment of interest by the Borrower is treated for U.S. income
tax purposes as derived in whole or in part from sources from within the U.S.,
such Bank will furnish to the Administrative Agent Form 4224 or Form 1001 of the
Internal Revenue Service, or such other forms, certifications, statements or
documents, duly executed and completed by
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such Bank as evidence of such Bank's exemption from the withholding of U.S. tax
with respect thereto. The Administrative Agent shall not be obligated to make
any payments hereunder to such Bank in respect of any Loan or such Bank's
Commitment until such Bank shall have furnished to the Administrative Agent the
requested form, certification, statement or document.
Section 10.15. Several Obligations and Rights of Banks. The failure of
any Bank to make any Loan to be made by it on the date specified therefor shall
not relieve any other Bank of its obligation to make its Loan on such date, but
no Bank shall be responsible for the failure of any other Bank to make a Loan to
be made by such other Bank. The amounts payable at any time hereunder to each
Bank shall be a separate and independent debt, and each Bank shall be entitled
to protect and enforce its rights arising out of this Agreement, and it shall
not be necessary for any other Bank to be joined as an additional party in any
proceeding for such purpose.
Section 10.16. Pro Rata Treatment of Loans, Etc. Except to the extent
otherwise provided: (a) each Borrowing under Section 2.4(a) shall be made from
the Banks, each reduction or termination of the amount of the Commitments under
Section 2.7 shall be applied to the Commitments of the Banks, and each payment
of facility fee accruing under Section 2.11 shall be made for the account of the
Banks, pro rata according to the amounts of their respective unused Commitments;
(b) each conversion under Section 2.5 of Loans of a particular type (but not
conversions provided for by Section 3.4), shall be made pro rata among the Banks
holding Loans of such type according to the respective principal amounts of such
Loans by such Banks; (c) each prepayment and payment of principal of or interest
on Revolving Loans of a particular type and a particular Interest Period shall
be made to the Administrative Agent for the account of the Banks holding
Revolving Loans of such type and Interest Period pro rata in accordance with the
respective unpaid principal amounts of such Revolving Loans of such Interest
Period held by such Banks.
Section 10.17. Sharing of Payments Among Banks. If a Bank shall obtain
payment of any principal of or interest on or applicable fees related to any
Revolving Loan made by it through the exercise of any right of setoff, banker's
lien, counterclaim, or by any other means (including any payment obtained from
or charged against any third party), it shall promptly purchase from the other
Banks participations in (or, if and to the extent specified by such Bank, direct
interests in) the Revolving Loans made by the other Banks in such amounts, and
make such other adjustments from time to time as shall be equitable to the end
that all the Banks shall share the benefit of such payment (net of any expenses
which may be incurred by such Bank in obtaining or preserving such benefit) pro
rata in accordance with the unpaid principal and interest on the Revolving Loans
held by each of them. To such end the Banks shall make appropriate adjustments
among themselves (by the resale of participations sold or otherwise) if such
payment is rescinded or must
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otherwise be restored. The Borrower agrees that any Bank so purchasing a
participation (or direct interest) in the Revolving Loans made by other Banks
may exercise all rights of setoff, banker's lien, counterclaim or similar rights
with respect to such participation (or direct interest). Nothing contained
herein shall require any Bank to exercise any such right or shall affect the
right of any Bank to exercise, and retain the benefits of exercising, any such
right with respect to any other indebtedness of the Borrower.
ARTICLE 11. MISCELLANEOUS.
Section 11.1. Amendments and Waivers. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may be amended or
modified only by an instrument in writing signed by the Borrower, the
Administrative Agent and the Required Banks, or by the Borrower and the
Administrative Agent acting with the consent of the Required Banks and any
provision of this Agreement may be waived by the Required Banks or by the
Administrative Agent acting with the consent of the Required Banks; provided
that no amendment, modification or waiver shall, unless by an instrument signed
by all of the Banks or by the Administrative Agent acting with the consent of
all of the Banks: (a) increase or extend the term, or extend the time or waive
any requirement for the reduction or termination, of the Commitments, (b) extend
the date fixed for the payment of any fees or principal of or interest on any
Loan, (c) reduce the amount of any payment of principal thereof or the rate at
which interest is payable thereon or any fee is payable hereunder, (d) alter the
terms of this Section 11.1, or (e) amend the definition of the term "Required
Banks" or any provision of this Agreement requiring approval by all of the
Banks, and provided, further, that any amendment of Article 10 or any amendment
which increases the obligations of the Administrative Agent hereunder shall
require the consent of the Administrative Agent. No failure on the part of the
Administrative Agent or any Bank to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof or preclude any other or
further exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 11.2. Usury. Anything herein to the contrary notwithstanding,
the obligations of the Borrower under this Agreement and the Notes shall be
subject to the limitation that payments of interest shall not be required to the
extent that receipt thereof would be contrary to provisions of law applicable to
a Bank limiting rates of interest which may be charged or collected by such
Bank.
Section 11.3. Expenses. The Borrower shall reimburse the Administrative
Agent and the Banks on the Closing Date for all costs, expenses, and charges
(including, without limitation, reasonable fees and charges of external legal
counsel for the Administrative Agent and the Banks) incurred by the
Administrative Agent and the Banks in connection with the preparation of this
Agreement and the other Facility Documents.
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The Borrower shall reimburse the Administrative Agent and the Banks on demand
for all costs, expenses, and charges (including, without limitation, reasonable
fees and charges of external legal counsel for the Administrative Agent and each
Bank) incurred by the Administrative Agent or the Banks in connection with the
performance or enforcement (whether through negotiations, legal proceedings or
otherwise) of this Agreement or the other Facility Documents or any requested
amendments, modifications, supplements, waivers or consents (whether or not
ultimately entered into or granted). The Borrower agrees to indemnify the
Administrative Agent and each Bank and their respective directors, officers,
employees and agents from, and hold each of them harmless against, any and all
losses, liabilities, claims, damages or expenses incurred by any of them arising
out of or by reason of any investigation or litigation or other proceedings
(including any threatened investigation or litigation or other proceedings)
relating to any actual or proposed use by the Borrower or any Subsidiary of the
proceeds of the Loans, including without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation or
litigation or other proceedings (but excluding any such losses, liabilities,
claims, damages or expenses incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified).
Section 11.4. Survival. The obligations of the Borrower under Sections
3.1, 3.5, 10.5 11.3, and 11.19 shall survive the repayment of the Loans and the
termination of the Commitments.
Section 11.5. Assignment; Participations.
(a) This Agreement shall be binding upon, and shall
inure to the benefit of, the Borrower, the Administrative Agent, the Banks and
their respective successors and assigns, except that the Borrower may not assign
or transfer its rights or obligations hereunder without the consent of all of
the Banks. Each Bank may assign (with the Borrower's consent as set forth below)
or sell participations in, all or any part of its Loans or Commitments (pro
rata) to anothe bank or other entity, in which event (i) in the case of an
assignment, upon notice thereof by such Bank to the Borrower with a copy to the
Administrative Agent, the assignee shall have, to the extent of such assignment
(unless otherwise provided therein), the same rights, benefits and obligations
as it would have if it were a Bank hereunder; and (ii) in the case of a
participation, the participant shall have no rights under the Facility Documents
and all amounts payable by the Borrower under Article 3 shall be determined as
if such Bank had not sold such participation. Any assignment pursuant to this
Section 11.5 shall be in an amount not less than $5,000,000, shall leave any
assigning Bank that remains a "Bank" hereunder with a Commitment of at least
$2,000,000 and shall be subject to the prior consent of the Borrower (which
shall not be unreasonably withheld), except that (i) no such minimum amount will
be required to be transferred or retained and no such prior consent will be
required if such assignment is necessary or prudent for regulatory purposes,
(ii) no such minimum amount will be
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required to be transferred and no such prior consent will be required if the
transferee is already a "Bank" hereunder and (iii) no such prior consent will be
required if the transferee is a commercial bank that is an affiliate of the
assigning Bank. The agreement executed by any Bank in favor of a participant
shall not give the participant the right to require such Bank to take or omit to
take any action hereu der except action directly relating to (i) the extension
of a payment date (including the Termination Date) with respect to any portion
of the principal of or interest on any amount outstanding hereunder allocated to
such participant, (ii) the reduction of the principal amount outstanding
hereunder or (iii) the reduction of the rate of interest payable on such amount
or any amount of fees payable hereunder to a rate or amount, as the case may be,
below that which the participant is entitled to receive under its agreement with
such Bank. Such Bank may furnish any information concerning the Borrower in the
possession of such Bank from time to time to assignees and participants
(including prospective assignees and participants); provided that such Bank
shall require any such prospective assignee or such participant (prospective or
otherwise) to agree in writing to maintain the confidentiality of such
information. In connection with any assignment pursuant to this paragraph (a),
the assigning Bank shall pay the Administrative Agent an administrative fee for
processing such assignment in the amount of $3,500, except that such fee will
not be required if the assignee is already a "Bank" hereunder or if the assignee
is a commercial bank that is an affiliate of the assigning Bank.
(b) In addition to the assignments and participations
permitted under paragraph (a) above, any Bank may assign and pledge, without
meeting any of the requirements of paragraph (a) above, all or any portion of
its Loans and Notes to (i) any affiliate of such Bank or (ii) any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating Circular issued by
such Federal Reserve Bank. No such assignment shall release the assigning Bank
from its obligations hereunder.
Section 11.6. Notices. Unless the party to be notified otherwise
notifies the other party in writing as provided in this Section, and except as
otherwise provided in this Agreement, notices shall be delivered in person or
sent by overnight courier, facsimile, ordinary mail, cable or telex addressed to
such party at its "Address for Notices" on the signature page of this Agreement.
Notices shall be effective: (a) on the day on which delivered to such party in
person, (b) on the first Banking Day after the day on which sent to such party
by overnight courier, (c) if given by mail, 48 hours after deposit in the mails
with first-class postage prepaid, addressed as aforesaid, and (d) if given by
facsimile, cable or telex, when the facsimile, cable or telex is transmitted to
the facsimile, cable or telex number as aforesaid; provided that notices to the
Administrative Agent and the Banks shall be effective upon receipt.
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Section 11.7. Setoff. The Borrower agrees that, in addition to (and
without limitation of) any right of setoff, banker's lien or counterclaim a Bank
may otherwise have, each Bank shall be entitled, at its option, to offset
balances (general or special, time or demand, provisional or final) held by it
for the account of the Borrower at any of such Bank's offices, in Dollars or in
any other currency, against any amount payable by the Borrower to such Bank
under this Agreement or such Bank's Notes which is not paid when due (regardless
of whether such balances are then due to the Borrower), in which case it shall
promptly notify the Borrower and the Administrative Agent thereof; provided that
such Bank's failure to give such notice shall not affect the validity thereof.
Payments by the Borrower hereunder shall be made without setoff or counterclaim.
SECTION 11.8 JURISDICTION; IMMUNITIES.
(a) THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY CONNECTICUT STATE OR UNITED STATES FEDERAL COURT SITTING IN
CONNECTICUT OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE NOTES, AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
SUCH CONNECTICUT STATE OR FEDERAL COURT. THE BORROWER IRREVOCABLY CONSENTS TO
THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES OF SUCH PROCESS TO THE BORROWER AT ITS ADDRESS SPECIFIED IN
SECTION 11.6. THE BORROWER AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. THE BORROWER
FURTHER WAIVES ANY OBJECTION TO VENUE IN SUCH STATE AND ANY OBJECTION TO AN
ACTION OR PROCEEDING IN SUCH STATE ON THE BASIS OF FORUM NON CONVENIENS. THE
BORROWER FURTHER AGREES THAT ANY ACTION OR PROCEEDING BROUGHT AGAINST THE
ADMINISTRATIVE AGENT SHALL BE BROUGHT ONLY IN A CONNECTICUT STATE OR UNITED
STATES FEDERAL COURT SITTING IN CONNECTICUT. THE BORROWER, THE BANKS, THE
ADMINISTRATIVE AGENT, AND THE CO-AGENTS HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED
HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER
FACILITY DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR ANY
COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY
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PARTY. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE BANKS, THE
ADMINISTRATIVE AGENT AND THE CO-AGENTS TO ACCEPT AND MAKE THE LOANS CONTEMPLATED
HEREUNDER.
(b) Nothing in this Section 11.8 shall affect the right
of the Administrative Agent or any Bank to serve legal process in any other
manner permitted by law or affect the right of the Administrative Agent or any
Bank to bring any action or proceeding against the Borrower or its property in
the courts of any other jurisdictions.
(c) To the extent that the Borrower has or hereafter
may acquire any immunity from jurisdiction of any court or from any legal
process (whether from service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, the Borrower hereby irrevocably waives such immunity in respect
of its obligations under this Agreement and the Notes.
Section 11.9. Table of Contents; Headings. Any table of contents and
the headings and captions hereunder are for convenience only and shall not
affect the interpretation or construction of this Agreement.
Section 11.10. Severability. The provisions of this Agreement are
intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 11.11. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any party hereto may execute this Agreement by signing any
such counterpart.
Section 11.12. Integration. The Facility Documents set forth the entire
agreement among the parties hereto relating to the transactions contemplated
thereby and supersede any prior oral or written statements or agreements with
respect to such transactions.
SECTION 11.13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CONNECTICUT.
Section 11.14. Confidentiality. Each Bank, each Co-Agent, and the
Administrative Agent agrees (on behalf of itself and each of its affiliates,
directors,
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officers, employees and representatives) to use reasonable precautions to keep
confidential, in accordance with safe and sound banking practices, any
non-public information supplied to it by the Borrower pursuant to this Agreement
which is identified by the Borrower as being confidential at the time the same
is delivered to the Banks or the Administrative Agent, provided that nothing
herein shall limit the disclosure of any such information (i) to the extent
required by statute, rule, regulation or judicial process, (ii) to counsel for
any of the Banks or the Administrative Agent, (iii) to bank examiners, auditors
or accountants, (iv) in connection with any litigation to which any one or more
of the Banks is a party, (v) to the extent such information has been disclosed
to a third party or otherwise made public by a source (other than a source
identified by the Borrower to the Banks, the Co-Agents and the Administrative
Agent as subject to a confidentiality agreement) other than the Banks, the
Co-Agents or the Administrative Agent, or any party pursuant to clause (vi) of
this Section 11.14, or (vi) to any assignee or participant (or prospective
assignee or participant) so long as such assignee or participant (or prospective
assignee or participant) first executes and delivers to the respective Bank a
Confidentiality Agreement in substantially the form of Exhibit J hereto; and
provided finally that in no event shall any Bank or the Administrative Agent be
obligated or required to return any materials furnished by the Borrower.
Section 11.15. Treatment of Certain Information. The Borrower (a)
acknowledges that services may be offered or provided to it (in connection with
this Agreement or otherwise) by each Bank or by one or more of their respective
subsidiaries or affiliates and (b) acknowledges that information delivered to
each Bank by the Borrower may be provided to each such subsidiary and affiliate.
Section 11.16. Independence of Covenants. Unless otherwise expressly
provided or the context clearly indicates otherwise, all covenants hereunder
shall be given independent effect so that if a particular action or condition is
not permitted by any of such covenants, the fact that it would be permitted by
an exception to, or be otherwise within the limitations of, another covenant
shall not avoid the occurrence of a Default or Event of Default if such action
is taken or condition exists, to the extent practicable.
Section 11.17. Time of the Essence. Time and punctuality shall be of
the essence with respect to this instrument, but no delay or failure of the
Administrative Agent or any Bank to enforce any of the provisions herein
contained and no conduct or statement of the Administrative Agent or any Bank
shall waive or affect any of the Administrative Agent's or any Bank's rights
hereunder.
SECTION 11.18. COMMERCIAL WAIVER. THE BORROWER ACKNOWLEDGES THAT THE
LOANS EVIDENCED BY THE NOTES ARE FOR COMMERCIAL PURPOSES AND WAIVES ANY RIGHT TO
NOTICE AND HEARING UNDER SECTIONS 52-278A THROUGH 52-278N OF THE
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CONNECTICUT GENERAL STATUTES AS NOW OR HEREAFTER AMENDED AND AUTHORIZES THE
ATTORNEY OF THE ADMINISTRATIVE AGENT, OR ANY SUCCESSOR THERETO, TO ISSUE A WRIT
OF PREJUDGMENT REMEDY WITHOUT COURT ORDER. FURTHER, THE BORROWER HEREBY WAIVES,
TO THE EXTENT PERMITTED BY LAW, THE BENEFITS OF ALL VALUATION, APPRAISEMENTS,
HOMESTEAD, EXEMPTION, STAY, REDEMPTION AND MORATORIUM LAWS NOW IN FORCE OR WHICH
MAY HEREAFTER BECOME LAWS. THE BORROWER ACKNOWLEDGES THAT IT MAKES THESE WAIVERS
AND THE WAIVERS CONTAINED IN SECTION 11.8 KNOWINGLY AND VOLUNTARILY AND ONLY
AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THESE WAIVERS WITH ITS
ATTORNEYS.
Section 11.19. Judgment Currency.
(a) The obligations of the Borrower under this
Agreement and the other Facility Documents to make payments in Dollars or in any
Alternative Currency (the "Obligation Currency") shall not be discharged or
satisfied by any tender or recovery pursuant to any judgment expressed in or
converted into any currency other than the Obligation Currency, except to the
extent that such tender or recovery results in the effective receipt by the
Administrative Agent or a Ban of the full amount of the Obligation Currency
expressed to be payable to them under this Agreement, the Notes, and the other
Facility Documents. If for the purpose of obtaining or enforcing judgment
against the Borrower in any court or in any jurisdiction, it becomes necessary
to convert into or from any currency other than the Obligation Currency (such
other currency being hereinafter referred to as the "Judgment Currency") an
amount due in the Obligation Currency, the conversion shall be made, at the
Alternative Currency Equivalent or Dollar Equivalent, in the case of any
Alternative Currency or Dollars, and, in the case of other currencies, the rate
of exchange (as quoted by the Administrative Agent or if the Administrative
Agent does not quote a rate of exchange on such currency, by a known dealer in
such currency designated by the Administrative Agent) determined, in each case,
as on the day immediately preceding the day on which the judgment is given (such
Banking Day being hereinafter referred to as the "Judgment Currency Conversion
Date").
(b) If there is a change in the rate of exchange
prevailing between the Judgment Currency Conversion Date and the date of actual
payment of the amount due, the Borrower covenants and agrees to pay such
additional amounts, if any (but in any event not a lesser amount), as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate of exchange prevailing on the Judgment Currency Conversion
Date.
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(c) For purposes of determining the Alternative
Currency Equivalent or Dollar Equivalent or rate of exchange for this Section
11.19, such amount shall include any premium and costs payable in connection
with the purchase of the Obligation Currency.
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Section 11.20. Replacement Notes. Upon receipt of an affidavit (and a
standard bank lost note indemnity form) of an officer of any of the Banks as to
the loss, theft, destruction or mutilation of any of the Notes or any other
document which is not of public record, and, in the case of any such loss,
theft, destruction or mutilation, upon surrender and cancellation of such Note
or other document, the Borrower shall issue, in lieu thereof, a replacement Note
or Notes or such other documents in the same principal amount thereof and
otherwise of like terms and conditions as the existing Notes or other documents
in connection with this Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
THE BORROWER:
NFO WORLDWIDE, INC.
By.....................
David J. Gorman
Senior Vice President
Address for Notices:
Two Pickwick Plaza, Suite 400
Greenwich, Connecticut 06830
Attn: David J. Gorman and Patrick G. Healy
Telephone No.: (203) 666-8293
Facsimile No.: (203) 629-8880
with a copy to:
NFO Worldwide, Inc.
2700 Oregon Road
Toledo, Ohio 43697
Attn: David J. Gorman
Telephone No.: (419) 481-8561
Facsimile No.: (419) 481-8293
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attn: James M. Dubin, Esq.
Telephone No.: (212) 373-3000
Facsimile No.: (212) 757-3990
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CO-AGENT AND ADMINISTRATIVE AGENT:
FLEET NATIONAL BANK
By.....................
Frederick A. Meagher
Vice President
Lending Office and
Address for Notices:
One Landmark Square, 2nd Floor
Stamford, Connecticut 0690l
Attn: Frederick A. Meagher
Telephone No.: (203) 964-4884
Facsimile No.: (203) 964-4850
BANK:
FLEET NATIONAL BANK
By.....................
Frederick A. Meagher
Vice President
Lending Office and
Address for Notices:
One Landmark Square, 2nd Floor
Stamford, Connecticut 0690l
Attn: Frederick A. Meagher
Telephone No.: (203) 964-4884
Facsimile No.: (203) 964-4850
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BANK AND CO-AGENT:
THE CHASE MANHATTAN BANK
By.....................
Alan J. Aria
Vice President
Lending Office and Address for Notices:
999 Broad Street
Bridgeport, Connecticut 06604
Attn: Alan J. Aria
Telephone No.: (203) 382-5304
Facsimile No.: (203) 382-6573
BANK:
THE BANK OF NEW YORK
By.....................
Geraldine Turkington
Vice President
Lending Office and Address for Notices:
10 Mason Street, Third Floor
Greenwich, Connecticut 06830
Attn: Geraldine Turkington
Telephone No.: (203)863-2697
Facsimile No.: (203) 863-2610
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BANK:
FIRST UNION NATIONAL BANK
By.....................
Anne Wilson
Vice President
Lending Office and Address for Notices:
300 Main Street
Stamford, CT 06904
Telephone No.: (203) 406-6041
Facsimile No.: (203) 964-8239
80
EXHIBIT 1
================================================================================
NFO WORLDWIDE, INC.
-----------------------
NOTE PURCHASE AGREEMENT
-----------------------
DATED AS OF MARCH 9, 1998
$40,000,000 6.43% SENIOR NOTES DUE MARCH 1, 2008
================================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
----
1. AUTHORIZATION OF NOTES................................................... 1
2. SALE AND PURCHASE OF NOTES............................................... 1
3. THE CLOSINGS............................................................. 2
3.1 The First Closing............................................... 2
3.2 The Second Closing.............................................. 2
4. CONDITIONS TO CLOSING.................................................... 2
4.1 Representations and Warranties.................................. 2
4.2 Performance; No Default......................................... 3
4.3 Compliance Certificates......................................... 3
4.4 Opinions of Counsel............................................. 3
4.5 Purchase Permitted By Applicable Law, etc....................... 3
4.6 Sale of Other Notes............................................. 4
4.7 Payment of Special Counsel Fees................................. 4
4.8 Private Placement Number........................................ 4
4.9 Changes in Corporate Structure.................................. 4
4.10 Fleet/Chase Debt Facility....................................... 4
4.11 Proceedings and Documents....................................... 4
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................ 4
5.1 Organization; Power and Authority............................... 5
5.2 Authorization, etc.............................................. 5
5.3 Disclosure...................................................... 5
5.4 Organization and Ownership of Shares of Subsidiaries; Affiliates 6
5.5 Financial Statements............................................ 6
5.6 Compliance with Laws, Other Instruments, etc.................... 7
5.7 Governmental Authorizations, etc................................ 7
5.8 Litigation; Observance of Agreements, Statutes and Orders....... 7
5.9 Taxes........................................................... 7
5.10 Title to Property; Leases....................................... 8
5.11 Licenses, Permits, etc.......................................... 8
5.12 Compliance with ERISA........................................... 8
5.13 Private Offering by the Company................................. 9
5.14 Use of Proceeds; Margin Regulations............................. 10
5.15 Existing Debt; Future Liens..................................... 10
5.16 Foreign Assets Control Regulations, etc......................... 10
5.17 Status under Certain Statutes................................... 11
5.18 Environmental Matters........................................... 11
6. REPRESENTATIONS OF THE PURCHASER......................................... 11
6.1 Purchase for Investment......................................... 11
6.2 Source of Funds................................................. 12
i
<PAGE>
TABLE OF CONTENTS (CONT.)
PAGE
----
7. INFORMATION AS TO COMPANY................................................ 13
7.1 Financial and Business Information.............................. 13
7.2 Officer's Certificate........................................... 16
7.3 Inspection...................................................... 16
8. PAYMENT OF THE NOTES..................................................... 17
8.1 Required Prepayments; Payment at Maturity....................... 17
8.2 Optional Prepayments with Make-Whole Amount..................... 17
8.3 Allocation of Partial Prepayments............................... 18
8.4 Maturity; Surrender, etc........................................ 18
8.5 No Other Optional Prepayments or Purchase of Notes.............. 18
8.6 Make-Whole Amount............................................... 18
9. AFFIRMATIVE COVENANTS.................................................... 20
9.1 Compliance with Law............................................. 20
9.2 Insurance....................................................... 20
9.3 Maintenance of Properties....................................... 20
9.4 Payment of Taxes and Claims..................................... 20
9.5 Corporate Existence, etc........................................ 21
9.6 Line of Business................................................ 21
10.NEGATIVE COVENANTS....................................................... 21
10.1 Senior Funded Debt.............................................. 21
10.2 Subordinated Funded Debt........................................ 22
10.3 Current Debt.................................................... 23
10.4 Interest Coverage Ratio......................................... 23
10.5 Liens........................................................... 23
10.6 Restricted Subsidiary Debt...................................... 26
10.7 Consolidated Net Worth.......................................... 26
10.8 Sale-and-Leaseback Transactions................................. 26
10.9 Restricted Investments.......................................... 26
10.10 Merger, Consolidation, Etc...................................... 27
10.11 Sale of Assets, Etc............................................. 28
10.12 Limitation on Contribution to Company Financial Performance by
Unrestricted Subsidiaries....................................... 29
10.13 Transactions with Affiliates.................................... 29
11.EVENTS OF DEFAULT........................................................ 29
12.REMEDIES ON DEFAULT, ETC................................................. 32
12.1 Acceleration.................................................... 32
12.2 Other Remedies.................................................. 33
12.3 Rescission...................................................... 33
12.4 No Waivers or Election of Remedies, Expenses, etc............... 33
ii
<PAGE>
TABLE OF CONTENTS (CONT.)
PAGE
----
13.REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES............................ 34
13.1 Registration of Notes........................................... 34
13.2 Transfer and Exchange of Notes.................................. 34
13.3 Replacement of Notes............................................ 34
14.PAYMENTS ON NOTES........................................................ 35
14.1 Place of Payment................................................ 35
14.2 Home Office Payment............................................. 35
15.EXPENSES, ETC............................................................ 35
15.1 Transaction Expenses............................................ 35
15.2 Survival........................................................ 36
16.SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT................................................................ 36
17.AMENDMENT AND WAIVER..................................................... 36
17.1 Requirements.................................................... 36
17.2 Solicitation of Holders of Notes................................ 37
17.3 Binding Effect, etc............................................. 37
17.4 Notes held by Company, etc...................................... 37
18.NOTICES.................................................................. 37
19.REPRODUCTION OF DOCUMENTS................................................ 38
20.CONFIDENTIAL INFORMATION................................................. 38
21.SUBSTITUTION OF PURCHASER................................................ 40
22.MISCELLANEOUS............................................................ 40
22.1 Successors and Assigns.......................................... 40
22.2 Payments Due on Non-Business Days; When Payments Deemed
Received........................................................ 40
22.3 Severability.................................................... 40
22.4 Construction.................................................... 41
22.5 Counterparts.................................................... 41
22.6 Governing Law................................................... 41
iii
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SCHEDULE A -- Information Relating to Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE C -- Payment Instructions at Closings
SCHEDULE 4.9 -- Changes in Corporate Structure
SCHEDULE 5.3 -- Disclosure Materials
SCHEDULE 5.4 -- Subsidiaries of the Company and Ownership of
Subsidiary Stock
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.11 -- Patents, etc.
SCHEDULE 5.12 -- ERISA Affiliates
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Debt and Liens
EXHIBIT 1 -- Form of 6.43% Senior Note due March 1, 2008
EXHIBIT 4.4(a) -- Form of Opinion of Special Counsel for the
Company
EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel for the
Purchasers
iv
<PAGE>
NFO WORLDWIDE, INC.
2 PICKWICK PLAZA
GREENWICH, CT 06830
6.43% SENIOR NOTES DUE MARCH 1, 2008
Dated as of March 9, 1998
To the Purchaser Named on
the Signature Page Hereto
Ladies and Gentlemen:
NFO WORLDWIDE, INC., a Delaware corporation (together with its
successors and assigns, the "COMPANY"), agrees with you as follows:
1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of $40,000,000 aggregate
principal amount of its 6.43% Senior Notes due March 1, 2008 (the "NOTES", such
term to include any such notes issued in substitution therefor pursuant to
Section 13 of this Agreement or the Other Agreements (as hereinafter defined)).
The Notes shall be substantially in the form set out in Exhibit 1, with such
changes therefrom, if any, as may be approved by you and the Company. Certain
capitalized terms used in this Agreement are defined in Schedule B; references
to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule
or an Exhibit attached to this Agreement.
2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closings
provided for in Section 3, Notes in the principal amount specified below your
name in Schedule A at the purchase price of 100% of the principal amount
thereof. Contemporaneously with entering into this Agreement, the Company is
entering into separate Note Purchase Agreements (the "OTHER AGREEMENTS")
identical with this Agreement with each of the other purchasers named in
Schedule A (the "OTHER PURCHASERS"), providing for the sale at such Closings to
each of the Other Purchasers of Notes in the principal amount specified below
each such Other Purchaser's name in Schedule A. Your obligation hereunder and
the obligations of the Other Purchasers under the Other Agreements are several
and not joint obligations and you shall have no obligation under any Other
Agreement and no liability to any Person for the performance or non-performance
by any Other Purchaser thereunder.
<PAGE>
3. THE CLOSINGS.
3.1 THE FIRST CLOSING.
The closing of the sale and purchase of the first tranche of
$20,000,000 in aggregate principal amount of the Notes (the "FIRST CLOSING") to
be purchased by you and the Other Purchasers shall occur at the offices of
Cummings & Lockwood, 4 Stamford Plaza, Stamford, Connecticut 06904, at 12:00
p.m., local time, on March 9, 1998 (the "FIRST CLOSING DATE"). At the First
Closing, the Company will deliver to you the Notes to be purchased by you in the
form of a single Note (or such greater number of Notes in denominations of at
least $100,000 as you may request), dated the date of the First Closing and
registered in your name (or in the name of your nominee), as indicated in
Schedule A, against payment by federal funds wire transfer in immediately
available funds of the amount of the purchase price therefor as directed by the
Company in Schedule C. If at the First Closing the Company shall fail to tender
such Notes to you as provided above in this Section 3.1, or any of the
conditions specified in Section 4 shall not have been fulfilled to your
satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.
3.2 THE SECOND CLOSING.
The closing of the sale and purchase of the second tranche of
$20,000,000 in aggregate principal amount of the Notes (the "SECOND CLOSING") to
be purchased by you and the Other Purchasers shall occur at the offices of Hebb
& Gitlin, One State Street, Hartford, Connecticut 06103, at 10:00 a.m., local
time, on April 6, 1998 (the "SECOND CLOSING DATE"). At the Second Closing, the
Company will deliver to you the Notes to be purchased by you in the form of a
single Note (or such greater number of Notes in denominations of at least
$100,000 as you may request), dated the date of the Second Closing and
registered in your name (or in the name of your nominee), as indicated in
Schedule A, against payment by federal funds wire transfer in immediately
available funds of the amount of the purchase price therefor as directed by the
Company in Schedule C. If at the Second Closing the Company shall fail to tender
such Notes to you as provided above in this Section 3.2, or any of the
conditions specified in Section 4 shall not have been fulfilled to your
satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement in respect of the Second Closing, without
thereby waiving any rights you may have by reason of such failure or such
nonfulfillment.
4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold to you at
each Closing at which you are to purchase Notes is subject to the fulfillment to
your satisfaction, prior to or at such Closing, of the following conditions:
4.1 REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Company in this Agreement
shall be correct when made and at the time of such Closing.
2
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4.2 PERFORMANCE; NO DEFAULT.
The Company shall have performed and complied with all agreements and
conditions contained in this Agreement required to be performed or complied with
by it prior to or at such Closing and after giving effect to the issue and sale
of the Notes (and the application of the proceeds thereof as contemplated by
Schedule 5.14) no Default or Event of Default shall have occurred and be
continuing. Neither the Company nor any Subsidiary shall have entered into any
transaction since the date of the Memorandum that would have been prohibited by
any of Sections 10.1, 10.2, 10.3, 10.5, 10.8, 10.9 or 10.11 had such Sections
applied since such date.
4.3 COMPLIANCE CERTIFICATES.
(A) OFFICER'S CERTIFICATE. The Company shall have delivered to
you an Officer's Certificate, dated the date of such Closing,
certifying that the conditions specified in Sections 4.1, 4.2 and 4.9
have been fulfilled.
(B) SECRETARY'S CERTIFICATE. The Company shall have delivered
to you a certificate of its Secretary or one of its Assistant
Secretaries, dated the date of such Closing, certifying as to the
resolutions attached thereto and other corporate proceedings relating
to the authorization, execution and delivery of the Notes, this
Agreement and the Other Agreements.
4.4 OPINIONS OF COUNSEL.
You shall have received opinions in form and substance satisfactory to
you, each dated the applicable Closing Date, from
(a) Paul, Weiss, Rifkind, Wharton & Garrison, counsel for the
Company, substantially in the form set out in Exhibit 4.4(a) and
covering such other matters incident to the transactions contemplated
hereby as you or your counsel may reasonably request (and the Company
hereby instructs such counsel to deliver such opinion to you), and
(b) Hebb & Gitlin, your special counsel in connection with
such transactions, substantially in the form set out in Exhibit 4.4(b)
and covering such other matters incident to such transactions as you
may reasonably request.
4.5 PURCHASE PERMITTED BY APPLICABLE LAW, ETC.
On the date of such Closing your purchase of Notes shall (a) be
permitted by the laws and regulations of each jurisdiction to which you are
subject, without recourse to provisions (such as section 1405(a)(8) of the New
York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (b) not
violate any applicable law or regulation (including, without limitation,
Regulation G, T or X of the Board of Governors of the Federal Reserve System)
and (c) not subject you to any tax, penalty or liability under or pursuant to
any applicable law or regulation. If requested by you, you shall have received
an Officer's Certificate certifying as to such matters of fact as you may
reasonably specify to enable you to determine whether such purchase is so
permitted.
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4.6 SALE OF OTHER NOTES.
Contemporaneously with such Closing the Company shall sell to the Other
Purchasers and the Other Purchasers shall purchase the Notes to be purchased by
them at such Closing as specified in Schedule A.
4.7 PAYMENT OF SPECIAL COUNSEL FEES.
Without limiting the provisions of Section 15.1, the Company shall have
paid on or before such Closing the fees, charges and disbursements of your
special counsel referred to in Section 4.4(b) to the extent reflected in a
statement of such counsel rendered to the Company at least one Business Day
prior to the date of such Closing.
4.8 PRIVATE PLACEMENT NUMBER.
A Private Placement Number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained for the Notes.
4.9 CHANGES IN CORPORATE STRUCTURE.
Except as specified in Schedule 4.9, the Company shall not have changed
its jurisdiction of incorporation or been a party to any merger or consolidation
and shall not have succeeded to all or any substantial part of the liabilities
of any other entity, at any time following the date of the most recent financial
statements referred to in Schedule 5.5.
4.10 FLEET/CHASE DEBT FACILITY.
The Fleet/Chase Debt Facility shall be in full force and effect and the
Company shall have satisfied all conditions precedent to borrowing the full
amount available thereunder (whether or not such full amount or any portion
thereof shall actually be borrowed on such Closing Date).
4.11 PROCEEDINGS AND DOCUMENTS.
All corporate and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be satisfactory to you and your special counsel, and you
and your special counsel shall have received all such counterpart originals or
certified or other copies of such documents as you or they may reasonably
request.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you, as of the date of each
Closing, that:
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5.1 ORGANIZATION; POWER AND AUTHORITY.
The Company is a corporation duly organized, validly existing and in
good standing under the laws of Delaware, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and authority to own or hold under lease the properties
it purports to own or hold under lease, to transact the business it transacts
and proposes to transact, to execute and deliver this Agreement and the Other
Agreements and the Notes and to perform the provisions hereof and thereof.
5.2 AUTHORIZATION, ETC.
This Agreement, the Other Agreements and the Notes have been duly
authorized by all necessary corporate action on the part of the Company, and
this Agreement constitutes, and upon execution and delivery thereof each Note
will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (b) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
5.3 DISCLOSURE.
The Company, through its agent, William Blair & Company, has delivered
to you and each Other Purchaser a copy of a Private Placement Memorandum, dated
January, 1998 (the "MEMORANDUM"), relating to the transactions contemplated
hereby. The Memorandum fairly describes, in all material respects, the general
nature of the business and principal properties of the Company and its
Subsidiaries. Except as disclosed in Schedule 5.3, this Agreement, the
Memorandum, the documents, certificates or other writings delivered to you by or
on behalf of the Company in connection with the transactions contemplated hereby
and the financial statements listed in Schedule 5.5, taken as a whole, do not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading in light of the
circumstances under which they were made. Except as disclosed in the Memorandum
or as expressly described in Schedule 5.3, or in one of the documents,
certificates or other writings identified therein, or in the financial
statements listed in Schedule 5.5, since December 31, 1996, there has been no
change in the financial condition, operations, business, properties or prospects
of the Company or any Subsidiary except changes that individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
There is no fact known to the Company that could reasonably be expected to have
a Material Adverse Effect that has not been set forth herein or in the
Memorandum or in the other documents, certificates and other writings delivered
to you by or on behalf of the Company specifically for use in connection with
the transactions contemplated hereby.
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5.4 ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES;
AFFILIATES.
(a) Schedule 5.4 contains (except as noted therein) complete
and correct lists of (i) the Company's Subsidiaries, showing, as to
each Subsidiary, the correct name thereof, the jurisdiction of its
organization, and the percentage of shares of each class of its Capital
Stock or similar equity interests outstanding owned by the Company and
each other Subsidiary and (ii) the Company's Affiliates, other than
Subsidiaries.
(b) All of the outstanding shares of Capital Stock or similar
equity interests of each Subsidiary shown in Schedule 5.4 as being
owned by the Company and its Subsidiaries have been validly issued, are
fully paid and nonassessable and are owned by the Company or another
Subsidiary free and clear of any Lien (except as otherwise disclosed in
Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a
corporation or other legal entity duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization,
and is duly qualified as a foreign corporation or other legal entity
and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to
which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Subsidiary has the corporate or
other power and authority to own or hold under lease the properties it
purports to own or hold under lease and to transact the business it
transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to any
legal restriction or any agreement (other than this Agreement, the
agreements listed in Schedule 5.4 and customary limitations imposed by
corporate law statutes) restricting the ability of such Subsidiary to
pay dividends out of profits or make any other similar distributions of
profits to the Company or any of its Subsidiaries that owns outstanding
shares of Capital Stock or similar equity interests of such Subsidiary.
(e) There are no Unrestricted Subsidiaries.
5.5 FINANCIAL STATEMENTS.
The Company has delivered to you and each Other Purchaser copies of the
financial statements of the Company and its Subsidiaries listed in Schedule 5.5.
All of said financial statements (including in each case the related schedules
and notes) fairly present in all material respects the consolidated financial
position of the Company and its Subsidiaries as of the respective dates
specified in such Schedule and the consolidated results of their operations and
cash flows for the respective periods so specified and have been prepared in
accordance with GAAP consistently applied throughout the periods involved except
as set forth in the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments).
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5.6 COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.
The execution, delivery and performance by the Company of this
Agreement and the Notes will not
(a) contravene, result in any breach of, or constitute a
default under, or result in the creation of any Lien in respect of any
property of the Company or any Subsidiary under, any indenture,
mortgage, deed of trust, loan, purchase or credit agreement, lease,
corporate charter or by-laws, or any other agreement or instrument to
which the Company or any Subsidiary is bound or by which the Company or
any Subsidiary or any of their respective properties may be bound or
affected,
(b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of
any court, arbitrator or Governmental Authority applicable to the
Company or any Subsidiary, or
(c) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Company or
any Subsidiary.
5.7 GOVERNMENTAL AUTHORIZATIONS, ETC.
No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance by the Company of this Agreement or the
Notes.
5.8 LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS.
(a) There are no actions, suits or proceedings pending or, to
the knowledge of the Company, threatened against or affecting the
Company or any Subsidiary or any property of the Company or any
Subsidiary in any court or before any arbitrator of any kind or before
or by any Governmental Authority that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect.
(b) Neither the Company nor any Subsidiary is in default under
any term of any agreement or instrument to which it is a party or by
which it is bound, or any order, judgment, decree or ruling of any
court, arbitrator or Governmental Authority or is in violation of any
applicable law, ordinance, rule or regulation (including, without
limitation, Environmental Laws) of any Governmental Authority, which
default or violation, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
5.9 TAXES.
The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown
to be due and payable on such returns and all other taxes and assessments levied
upon them or their properties, assets, income or franchises, to the extent such
taxes and assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (a) the amount of which is not
individually or in the aggregate Material or (b) the amount, applicability or
validity of which
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is currently being contested in good faith by appropriate proceedings and with
respect to which the Company or a Subsidiary, as the case may be, has
established adequate reserves in accordance with GAAP. The Company knows of no
basis for any other tax or assessment that could reasonably be expected to have
a Material Adverse Effect. The charges, accruals and reserves on the books of
the Company and its Subsidiaries in respect of Federal, state or other taxes for
all fiscal periods are adequate. The Federal income tax liabilities of the
Company and its Subsidiaries have been determined by the Internal Revenue
Service and paid for all fiscal years up to and including the fiscal year ended
December 31, 1992.
5.10 TITLE TO PROPERTY; LEASES.
The Company and its Subsidiaries have good and sufficient title to
their respective properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited balance sheet
referred to in Section 5.5 or purported to have been acquired by the Company or
any Subsidiary after said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Liens prohibited by
this Agreement. All leases that individually or in the aggregate are Material
are valid and subsisting and are in full force and effect in all material
respects.
5.11 LICENSES, PERMITS, ETC.
Except as disclosed in Schedule 5.11,
(a) the Company and its Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents, copyrights,
service marks, trademarks and trade names, or rights thereto, that
individually or in the aggregate are Material, without known conflict
with the rights of others;
(b) to the best knowledge of the Company, no product or
practice of the Company or any Subsidiary infringes in any material
respect any license, permit, franchise, authorization, patent,
copyright, service mark, trademark, trade name or other right owned by
any other Person; and
(c) to the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its
Subsidiaries with respect to any patent, copyright, service mark,
trademark, trade name or other right owned or used by the Company or
any of its Subsidiaries.
5.12 COMPLIANCE WITH ERISA.
(a) The Company and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except
for such instances of noncompliance as have not resulted in and could
not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans (as defined
in section 3 of ERISA), and no event, transaction or condition has
occurred or exists that could reasonably be expected to result in the
incurrence of any such liability by the Company or any ERISA Affiliate,
or in
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the imposition of any Lien on any of the rights, properties or assets
of the Company or any ERISA Affiliate, in either case pursuant to Title
I or IV of ERISA or to such penalty or excise tax provisions or to
section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities
under each of the Plans (other than Multiemployer Plans), determined as
of the end of such Plan's most recently ended plan year on the basis of
the actuarial assumptions specified for funding purposes in such Plan's
most recent actuarial valuation report, did not exceed the aggregate
current value of the assets of such Plan allocable to such benefit
liabilities by more than $1,500,000. The term "BENEFIT LIABILITIES" has
the meaning specified in section 4001 of ERISA and the terms "CURRENT
VALUE" and "PRESENT VALUE" have the meaning specified in section 3 of
ERISA.
(c) The Company and the ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation (determined
as of the last day of the Company's most recently ended fiscal year in
accordance with Financial Accounting Standards Board Statement No. 106,
without regard to liabilities attributable to continuation coverage
mandated by section 4980B of the Code) of the Company and its
Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the
issuance and sale of the Notes hereunder will not involve any
transaction that is subject to the prohibitions of section 406 of ERISA
or in connection with which a tax could be imposed pursuant to section
4975(c)(1)(A)-(D) of the Code. The representation by the Company in the
first sentence of this Section 5.12(e) is made in reliance upon and
subject to the accuracy of your representation in Section 6.2 as to the
sources of the funds used to pay the purchase price of the Notes to be
purchased by you.
(f) Schedule 5.12 sets forth all ERISA Affiliates and all
"employee benefit plans" maintained by the Company (or any "affiliate"
thereof) or in respect of which the Notes could constitute an "employer
security" ("EMPLOYEE BENEFIT PLAN" has the meaning specified in section
3 of ERISA, "AFFILIATE" has the meaning specified in section 407(d) of
ERISA and section V of the Department of Labor Prohibited Transaction
Exemption 95-60 (60 FR 35925, July 12, 1995) and "EMPLOYER SECURITY"
has the meaning specified in section 407(d) of ERISA).
5.13 PRIVATE OFFERING BY THE COMPANY.
Neither the Company nor anyone acting on its behalf has offered the
Notes or any similar securities for sale to, or solicited any offer to buy any
of the same from, or otherwise approached or negotiated in respect thereof with,
any Person other than you, the Other Purchasers and not more than 70 other
Institutional Investors, each of which has been offered the Notes at a private
sale for investment. Neither the Company nor anyone acting on its behalf has
taken, or will take,
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any action that would subject the issuance or sale of the Notes to the
registration requirements of section 5 of the Securities Act.
5.14 USE OF PROCEEDS; MARGIN REGULATIONS.
The Company will apply the proceeds of the sale of the Notes as set
forth in Schedule 5.14. No part of the proceeds from the sale of the Notes
hereunder will be used, directly or indirectly, for the purpose of buying or
carrying any margin stock within the meaning of Regulation G of the Board of
Governors of the Federal Reserve System (12 CFR 207), or for the purpose of
buying or carrying or trading in any securities under such circumstances as to
involve the Company in a violation of Regulation X of said Board (12 CFR 224) or
to involve any broker or dealer in a violation of Regulation T of said Board (12
CFR 220). Margin stock does not constitute more than 1% of the value of the
consolidated assets of the Company and its Subsidiaries and the Company does not
have any present intention that margin stock will constitute more than 1% of the
value of such assets. As used in this Section, the terms "MARGIN STOCK" and
"PURPOSE OF BUYING OR CARRYING" shall have the meanings assigned to them in said
Regulation G.
5.15 EXISTING DEBT; FUTURE LIENS.
(a) Except as described therein, Schedule 5.15 sets forth a
complete and correct list of each issue of outstanding Debt of the
Company and its Subsidiaries with an outstanding principal amount of at
least $1,000,000 as of February 28, 1998 (and specifying, as to each
such Debt, the collateral, if any, securing such Debt), since which
date there has been no Material change in the amounts, interest rates,
sinking funds, instalment payments or maturities of the Debt of the
Company or its Subsidiaries. The aggregate amount of all Debt of the
Company and its Subsidiaries not listed on Schedule 5.15 is less than
$2,000,000. Neither the Company nor any Subsidiary is in default and no
waiver of default is currently in effect, in the payment of any
principal of or interest on any Debt of the Company or such Subsidiary
and no event or condition exists with respect to any Debt of the
Company or any Subsidiary that would permit (or that with notice or the
lapse of time, or both, would permit) one or more Persons to cause such
Debt to become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company
nor any Subsidiary has agreed or consented to cause or permit in the
future (upon the happening of a contingency or otherwise) any of its
property, whether now owned or hereafter acquired, to be subject to a
Lien not permitted by Section 10.5.
5.16 FOREIGN ASSETS CONTROL REGULATIONS, ETC.
Neither the sale of the Notes by the Company hereunder nor its use of
the proceeds thereof will violate the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
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5.17 STATUS UNDER CERTAIN STATUTES.
Neither the Company nor any Subsidiary is subject to regulation under
the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, the Transportation Acts (49 U.S.C.), as
amended, or the Federal Power Act, as amended.
5.18 ENVIRONMENTAL MATTERS.
Neither the Company nor any Subsidiary has knowledge of any claim or
has received any notice of any claim, and no proceeding has been instituted
raising any claim against the Company or any of its Subsidiaries or any of their
respective real properties now or formerly owned, leased or operated by any of
them or other assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect. Except as otherwise disclosed
to you in writing,
(a) neither the Company nor any Subsidiary has knowledge of
any facts which would give rise to any claim, public or private, of
violation of Environmental Laws or damage to the environment emanating
from, occurring on or in any way related to real properties now or
formerly owned, leased or operated by any of them or to other assets or
their use, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has stored
any Hazardous Materials on real properties now or formerly owned,
leased or operated by any of them and has not disposed of any Hazardous
Materials in a manner contrary to any Environmental Laws in each case
in any manner that could reasonably be expected to result in a Material
Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Subsidiaries are in compliance
with applicable Environmental Laws, except where failure to comply
could not reasonably be expected to result in a Material Adverse
Effect.
6. REPRESENTATIONS OF THE PURCHASER.
6.1 PURCHASE FOR INVESTMENT.
You represent that you are purchasing the Notes for your own account or
for one or more separate accounts maintained by you or for the account of one or
more pension or trust funds and not with a view to the distribution thereof,
PROVIDED that the disposition of your or their property shall at all times be
within your or their control. You understand that the Notes have not been
registered under the Securities Act and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Notes.
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6.2 SOURCE OF FUNDS.
You represent that at least one of the following statements is an
accurate representation as to each source of funds (a "SOURCE") to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:
(a) the Source is an "insurance company general account" as
defined in United States Department of Labor Prohibited Transaction
Exemption ("PTE") 95-60 (60 FR 35925, July 12, 1995) and in respect
thereof you represent that there is no "employee benefit plan" (as
defined in section 3(3) of ERISA and section 4975(e)(1) of the Code,
treating as a single plan all plans maintained by the same employer or
employee organization or affiliate thereof) with respect to which the
amount of the general account reserves and liabilities of all contracts
held by or on behalf of such plan exceeds 10% of the total reserves and
liabilities of such general account (exclusive of separate account
liabilities) PLUS surplus, as set forth in the National Association of
Insurance Commissioners' Annual Statement filed with your state of
domicile and that such acquisition is eligible for and satisfies the
other requirements of such exemption; or
(b) if you are an insurance company, the Source does not
include assets allocated to any separate account maintained by you in
which any employee benefit plan (or its related trust) has any
interest, other than a separate account that is maintained solely in
connection with your fixed contractual obligations under which the
amounts payable, or credited, to such plan and to any participant or
beneficiary of such plan (including any annuitant) are not affected in
any manner by the investment performance of the separate account; or
(c) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except as you have disclosed
to the Company in writing pursuant to this paragraph (c), no employee
benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment
fund; or
(d) the Source constitutes assets of an "investment fund"
(within the meaning of part V of PTE 84-14 (the "QPAM EXEMPTION"))
managed by a "qualified professional asset manager" or "QPAM" (within
the meaning of part V of the QPAM Exemption), no employee benefit
plan's assets that are included in such investment fund, when combined
with the assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within the meaning
of section V(c)(1) of the QPAM Exemption) of such employer or by the
same employee organization and managed by such QPAM, exceed 20% of the
total client assets managed by such QPAM, the conditions of part I(c)
and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a
person controlling or controlled by the QPAM (applying the definition
of "control" in section V(e) of the QPAM Exemption) owns a 5% or more
interest in the Company and
(i) the identity of such QPAM and
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(ii) the names of all employee benefit plans whose
assets are included in such investment fund
have been disclosed to the Company in writing pursuant to this
paragraph (d); or
(e) the Source is a governmental plan; or
(f) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph (f); or
(g) the Source does not include assets of any employee benefit
plan described in section 4975(e) of the Code, other than a plan exempt
from the coverage of ERISA and the provisions of section 4975 of the
Code.
As used in this Section 6.2, the terms "EMPLOYEE BENEFIT PLAN", "GOVERNMENTAL
PLAN" and "SEPARATE ACCOUNT" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
7. INFORMATION AS TO COMPANY.
7.1 FINANCIAL AND BUSINESS INFORMATION..
The Company shall deliver to each holder of Notes that is an
Institutional Investor:
(A) QUARTERLY STATEMENTS -- within 60 days after the end of
each quarterly fiscal period in each fiscal year of the Company (other
than the last quarterly fiscal period of each such fiscal year),
duplicate copies of,
(i) consolidated balance sheets of the Company and
its Subsidiaries, and of the Company and the Restricted
Subsidiaries, as at the end of such quarter, and
(ii) consolidated statements of income, shareholders'
equity and cash flows of the Company and its Subsidiaries, and
of the Company and the Restricted Subsidiaries, for such
quarter and (in the case of the second and third quarters) for
the portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the
consolidated financial position of the companies being reported on and
their consolidated results of operations and cash flows, subject to
changes resulting from year-end adjustments, PROVIDED that, so long as
no Unrestricted Subsidiaries existed at any time during the periods
covered by such financial statements, delivery within the time period
specified above of copies of the Company's Quarterly Report on Form
10-Q prepared in compliance with the requirements
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therefor and filed with the Securities and Exchange Commission shall be
deemed to satisfy the requirements of this Section 7.1(a);
(B) ANNUAL STATEMENTS -- within 120 days after the end of each
fiscal year of the Company, duplicate copies of,
(i) consolidated balance sheets of the Company and
its Subsidiaries, and of the Company and the Restricted
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, shareholders'
equity and cash flows of the Company and its Subsidiaries, and
of the Company and the Restricted Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied by
(A) an opinion thereon of independent
certified public accountants of recognized national
standing, which opinion shall state that such
financial statements present fairly, in all material
respects, the consolidated financial position of the
companies being reported upon and their consolidated
results of operations and cash flows and have been
prepared in conformity with GAAP, and that the
examination of such accountants in connection with
such financial statements has been made in accordance
with generally accepted auditing standards, and that
such audit provides a reasonable basis for such
opinion in the circumstances, and
(B) a certificate of such accountants
stating that they have reviewed this Agreement and
stating further whether, in making their audit, they
have become aware of any condition or event that then
constitutes a Default or an Event of Default, and, if
they are aware that any such condition or event then
exists, specifying the nature and period of the
existence thereof (it being understood that such
accountants shall not be liable, directly or
indirectly, for any failure to obtain knowledge of
any Default or Event of Default unless such
accountants should have obtained knowledge thereof in
making an audit in accordance with generally accepted
auditing standards or did not make such an audit),
PROVIDED that, so long as no Unrestricted Subsidiaries existed at any
time during the periods covered by such financial statements, the
delivery within the time period specified above of the Company's Annual
Report on Form 10-K for such fiscal year prepared in accordance with
the requirements therefor and filed with the Securities and Exchange
Commission, together with the accountant's certificate described in
clause (B) above, shall be deemed to satisfy the requirements of this
Section 7.1(b);
(C) SEC AND OTHER REPORTS -- promptly upon their becoming
available, one copy of (i) each financial statement, report (including,
without limitation, the Company's
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annual report to shareholders, if any, prepared pursuant to Rule 14a-3
under the Exchange Act), notice or proxy statement sent by the Company
or any Subsidiary to public securities holders generally, and (ii) each
regular or periodic report, each registration statement (without
exhibits except as expressly requested by such holder), and each
prospectus and all amendments thereto filed by the Company or any
Subsidiary with the Securities and Exchange Commission and of all press
releases and other statements made available generally by the Company
or any Subsidiary to the public concerning developments that are
Material;
(D) NOTICE OF DEFAULT OR EVENT OF DEFAULT -- promptly, and in
any event within five days after a Responsible Officer becoming aware
of the existence of any Default or Event of Default or that any Person
has given any notice or taken any action with respect to a claimed
default hereunder or that any Person has given any notice or taken any
action with respect to a claimed default of the type referred to in
Section 11(f), a written notice specifying the nature and period of
existence thereof and what action the Company is taking or proposes to
take with respect thereto;
(E) ERISA MATTERS -- promptly, and in any event within five
days after a Responsible Officer becoming aware of any of the
following, a written notice setting forth the nature thereof and the
action, if any, that the Company or an ERISA Affiliate proposes to take
with respect thereto:
(i) with respect to any Plan, any reportable event,
as defined in section 4043(b) of ERISA and the regulations
thereunder, for which notice thereof has not been waived
pursuant to such regulations as in effect on the First Closing
Date; or
(ii) the taking by the PBGC of steps to institute, or
the threatening by the PBGC of the institution of, proceedings
under section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from
a Multiemployer Plan that such action has been taken by the
PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could
result in the incurrence of any liability by the Company or
any ERISA Affiliate pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on
any of the rights, properties or assets of the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or such
penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material
Adverse Effect;
(F) NOTICES FROM GOVERNMENTAL AUTHORITY -- promptly, and in
any event within 30 days of receipt thereof, copies of any notice to
the Company or any Subsidiary from any Federal or state Governmental
Authority relating to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material Adverse
Effect;
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(G) ACTIONS, PROCEEDINGS -- promptly after a Responsible
Officer becomes aware of the commencement thereof, notice of any action
or proceeding relating to the Company or any Subsidiary in any court or
before any Governmental Authority or arbitration board or tribunal as
to which there is a reasonable possibility of an adverse determination
and that, if adversely determined, could reasonably be expected to have
a Material Adverse Effect; and
(H) REQUESTED INFORMATION -- with reasonable promptness, such
other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company or
any of its Subsidiaries or relating to the ability of the Company to
perform its obligations hereunder and under the Notes as from time to
time may be reasonably requested by any such holder of Notes, or such
information regarding the Company required to satisfy the requirements
of 17 C.F.R. ss.230.144A, as amended from time to time, in connection
with any contemplated transfer of the Notes.
7.2 OFFICER'S CERTIFICATE.
Each set of financial statements delivered to a holder of Notes
pursuant to Section 7.1(a) or Section 7.1(b) hereof shall be accompanied by a
certificate of a Senior Financial Officer setting forth:
(A) COVENANT COMPLIANCE -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Sections 10.1 through 10.12,
inclusive, other than Section 10.8, during the quarterly or annual
period covered by the statements then being furnished (including with
respect to each such Section, where applicable, the calculations of the
maximum or minimum amount, ratio or percentage, as the case may be,
permissible under the terms of such Sections, and the calculation of
the amount, ratio or percentage then in existence); and
(B) EVENT OF DEFAULT -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Company and its Subsidiaries from the beginning of
the quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review has not
disclosed the existence during such period of any condition or event
that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists (including, without limitation,
any such event or condition resulting from the failure of the Company
or any Subsidiary to comply with any Environmental Law), specifying the
nature and period of existence thereof and what action the Company
shall have taken or proposes to take with respect thereto.
7.3 INSPECTION.
The Company shall permit the representatives of each holder of Notes
that is an Institutional Investor:
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(A) NO DEFAULT -- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior notice
to the Company, to visit the principal executive office of the Company,
to discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and (with the consent of the
Company, which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the Company,
which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Subsidiary, all at such
reasonable times and as often as may be reasonably requested in
writing; and
(B) DEFAULT -- if a Default or Event of Default then exists,
at the expense of the Company, to visit and inspect any of the offices
or properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent
public accountants (and by this provision the Company authorizes said
accountants to discuss the affairs, finances and accounts of the
Company and its Subsidiaries), all at such times and as often as may be
requested.
8. PAYMENT OF THE NOTES.
8.1 REQUIRED PREPAYMENTS; PAYMENT AT MATURITY.
The Company will prepay $5,710,000 principal amount of the Notes on
March 1, 2002, and $5,715,000 principal amount of the Notes on March 1, 2003 and
on each March 1 thereafter to and including March 1, 2007, or, in each case,
such lesser principal amount as shall be outstanding on each such March 1, all
such prepayments to be made at par and without payment of the Make-Whole Amount.
The Company will pay all of the principal amount of the Notes remaining
outstanding, if any, on March 1, 2008. Each partial prepayment of the Notes
pursuant to Section 8.2 will be applied FIRST, to the amount due on the maturity
date of the Notes and SECOND, to the mandatory prepayments applicable to the
Notes, as set forth in this Section 8.1, in the inverse order of the maturity
thereof.
8.2 OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT.
The Company may, at its option, upon notice as provided below, prepay
at any time all, or from time to time any part of, the Notes (but if in part, in
an amount not less than $1,000,000 or such lesser amount as shall then be
outstanding), at 100% of the principal amount so prepaid, PLUS the Make-Whole
Amount determined for the prepayment date with respect to such principal amount.
The Company will give each holder of Notes written notice of each optional
prepayment under this Section 8.2 not less than 30 days and not more than 60
days prior to the date fixed for such prepayment. Each such notice shall specify
such prepayment date, the aggregate principal amount of the Notes to be prepaid
on such date, the principal amount of each Note held by such holder to be
prepaid (determined in accordance with Section 8.3), and the interest to be paid
on the prepayment date with respect to such principal amount being prepaid, and
shall be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make- Whole Amount due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation. Two Business
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Days prior to such prepayment, the Company shall deliver to each holder of Notes
a certificate of a Senior Financial Officer specifying the calculation of such
Make-Whole Amount as of the specified prepayment date.
8.3 ALLOCATION OF PARTIAL PREPAYMENTS.
In the case of each partial prepayment of the Notes, the principal
amount of the Notes to be prepaid shall be allocated among all of the Notes at
the time outstanding in proportion, as nearly as practicable, to the respective
unpaid principal amounts thereof not theretofore called for prepayment.
8.4 MATURITY; SURRENDER, ETC.
In the case of each prepayment of Notes pursuant to this Section 8, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and Make-
Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.
8.5 NO OTHER OPTIONAL PREPAYMENTS OR PURCHASE OF NOTES.
The Company will not prepay (whether directly or indirectly by
purchase, redemption or other acquisition) any of the outstanding Notes except
(a) upon the payment or prepayment of the Notes in accordance with the terms of
this Section 8 or upon an acceleration of the maturity of the Notes pursuant to
Section 12 or (b) pursuant to an offer to purchase made by the Company pro rata
to the holders of all Notes at the time outstanding upon the same terms and
conditions. Any such offer shall provide each holder with sufficient information
to enable it to make an informed decision with respect to such offer, and shall
remain open for at least 10 Business Days. The Company will promptly cancel all
Notes acquired by it or any Affiliate pursuant to any payment, prepayment or
purchase of Notes pursuant to any provision of this Section 8 and no Notes may
be issued in substitution or exchange for any such Notes.
8.6 MAKE-WHOLE AMOUNT.
The term "MAKE-WHOLE AMOUNT" means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of such Note over the amount of
such Called Principal, PROVIDED that the Make-Whole Amount may in no event be
less than zero. For the purposes of determining the Make-Whole Amount, the
following terms have the following meanings:
"CALLED PRINCIPAL" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to Section 8.2 or
has become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.
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"DISCOUNTED VALUE" means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called
Principal of any Note, 0.50% over the yield to maturity implied by (a)
the yields reported, as of 10:00 A.M. (New York City time) on the
second Business Day preceding the Settlement Date with respect to such
Called Principal, on the display designated as "Page UST" on the
Bloomberg Financial Market Service (or such other display as may
replace Page UST on the Bloomberg Financial Market Service) for
actively traded U.S. Treasury securities having a maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement
Date, or (b) if such yields are not reported as of such time or the
yields reported as of such time are not ascertainable, the Treasury
Constant Maturity Series Yields reported, for the latest day for which
such yields have been so reported as of the second Business Day
preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any comparable
successor publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date. Such implied yield will be
determined, if necessary, by (i) converting U.S. Treasury bill
quotations to bond-equivalent yields in accordance with accepted
financial practice and (ii) interpolating linearly between (1) the
actively traded U.S. Treasury security with the duration closest to and
greater than the Remaining Average Life and (2) the actively traded
U.S. Treasury security with the duration closest to and less than the
Remaining Average Life.
"REMAINING AVERAGE LIFE" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (a) such Called Principal into (b) the sum
of the products obtained by multiplying (i) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (ii) the number of years (calculated to the nearest one-twelfth
year) that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, PROVIDED that if such
Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Section 8.2 or 12.1.
"SETTLEMENT DATE" means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has
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become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.
9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
9.1 COMPLIANCE WITH LAW.
The Company will and will cause each of its Restricted Subsidiaries to
comply with all laws, ordinances or governmental rules or regulations to which
each of them is subject, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
9.2 INSURANCE.
The Company will and will cause each of the Restricted Subsidiaries to
maintain, with financially sound and reputable insurers, insurance with respect
to their respective properties and businesses against such casualties and
contingencies, of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance, if adequate reserves are
maintained with respect thereto) as is customary in the case of entities of
established reputations engaged in the same or a similar business and similarly
situated.
9.3 MAINTENANCE OF PROPERTIES.
The Company will and will cause each of the Restricted Subsidiaries to
maintain and keep, or cause to be maintained and kept, their respective
properties in good repair, working order and condition (other than ordinary wear
and tear), so that the business carried on in connection therewith may be
properly conducted at all times, PROVIDED that this Section shall not prevent
the Company or any Restricted Subsidiary from discontinuing the operation and
the maintenance of any of its properties if such discontinuance is desirable in
the conduct of its business and the Company has concluded that such
discontinuance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
9.4 PAYMENT OF TAXES AND CLAIMS.
The Company will and will cause each of the Restricted Subsidiaries to
file all tax returns required to be filed in any jurisdiction and to pay and
discharge all taxes shown to be due and payable on such returns and all other
taxes, assessments, governmental charges, or levies imposed on them or any of
their properties, assets, income or franchises, to the extent such taxes,
assessments, charges or levies have become due and payable and before they have
become delinquent and all claims for which sums have become due and payable that
have or might become a Lien on properties or assets of the Company or any
Restricted Subsidiary, PROVIDED that neither the Company nor any Restricted
Subsidiary need pay any such tax or
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assessment or claims if (a) the amount, applicability or validity thereof is
contested by the Company or such Restricted Subsidiary on a timely basis in good
faith and in appropriate proceedings, and the Company or a Restricted Subsidiary
has established adequate reserves therefor in accordance with GAAP on the books
of the Company or such Restricted Subsidiary or (b) the nonpayment of all such
taxes, assessments, charges and levies in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
9.5 CORPORATE EXISTENCE, ETC.
The Company will at all times preserve and keep in full force and
effect its corporate existence. Subject to Sections 10.10 and 10.11, the Company
will at all times preserve and keep in full force and effect the corporate
existence of each of the Restricted Subsidiaries (unless merged into the Company
or a Restricted Subsidiary) and all rights and franchises of the Company and the
Restricted Subsidiaries unless, in the good faith judgment of the Company, the
termination of or failure to preserve and keep in full force and effect such
corporate existence, right or franchise could not, individually or in the
aggregate, have a Material Adverse Effect.
9.6 LINE OF BUSINESS.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage in any business other than the businesses described in
the Memorandum and businesses reasonably related thereto.
10. NEGATIVE COVENANTS.
The Company covenants that, on and after the First Closing Date and so
long as any of the Notes are outstanding:
10.1 SENIOR FUNDED DEBT.
The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, assume, guarantee, or otherwise become
directly or indirectly liable with respect to, any Senior Funded Debt
(including, without limitation, Senior Funded Debt incurred under the
Fleet/Chase Debt Facility), other than Existing Senior Funded Debt, the Notes,
InterCompany Debt and Swaps, unless, immediately after giving effect thereto and
to the application of the proceeds thereof,
(a) no Default or Event of Default exists, and
(b) (i) the sum of
(A) Consolidated Senior Funded Debt PLUS
(B) the greater of
(1) zero, if there shall have been a
period of 30 consecutive days during the
period of four consecutive fiscal
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quarters of the Company then most recently
ended when Consolidated Current Debt was
zero, or
(2) the lowest average daily amount
of Consolidated Current Debt outstanding
during any period of 30 consecutive days
during the period of four consecutive fiscal
quarters of the Company then most recently
ended, if Consolidated Current Debt was not
zero during any such period of 30
consecutive days
to
(ii) Pro Forma EBITDA for such period of four
consecutive fiscal quarters,
does not exceed 3.0 to 1.0.
Any Person becoming a Restricted Subsidiary at any time shall be deemed
to have incurred at such time all of its Debt outstanding at such time.
10.2 SUBORDINATED FUNDED DEBT.
The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, assume, guarantee, or otherwise become
directly or indirectly liable with respect to, any Subordinated Funded Debt,
other than Existing Subordinated Funded Debt, InterCompany Debt and Swaps,
unless, immediately after giving effect thereto and to the application of the
proceeds thereof,
(a) no Default or Event of Default exists, and
(b) (i) the sum of
(A) Consolidated Funded Debt PLUS
(B) the greater of
(1) zero, if there shall have been a
period of 30 consecutive days during the
period of four consecutive fiscal quarters
of the Company then most recently ended when
Consolidated Current Debt was zero, or
(2) the lowest average daily amount
of Consolidated Current Debt outstanding
during any period of 30 consecutive days
during the period of four consecutive fiscal
quarters of the Company then most recently
ended, if Consolidated Current Debt was not
zero during any such period of 30
consecutive days
to
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(ii) Pro Forma EBITDA for such period of four
consecutive fiscal quarters
does not exceed 3.5 to 1.0.
Any Person becoming a Restricted Subsidiary at any time shall be deemed
to have incurred at such time all of its Debt outstanding at such time.
10.3 CURRENT DEBT.
The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, assume, guarantee, or otherwise become
directly or indirectly liable with respect to, any Current Debt, other than
Existing Current Debt, Inter-Company Debt and Swaps, unless, immediately after
giving effect thereto and to the application of the proceeds thereof,
(a) no Default or Event of Default exists, and
(b) there shall have been a period of 30 consecutive days
during the period of 12 consecutive months then most recently ended on
each day of which either
(i) no Consolidated Current Debt was outstanding, or
(ii) the Company or such Restricted Subsidiary could
have incurred (but did not incur) Senior Funded Debt pursuant
to Section 10.1 in an amount not less than the amount of
Consolidated Current Debt outstanding on such day.
Any Person becoming a Restricted Subsidiary at any time shall be deemed
to have incurred at such time all of its Debt outstanding at such time.
10.4 INTEREST COVERAGE RATIO.
The Company will not permit the ratio of (x) Pro Forma EBITDA for any
period of four consecutive fiscal quarters of the Company to (y) Pro Forma
Consolidated Interest Expense for such period to be less than 2.5 to 1.0
provided, however, that if the required level of such ratio, as set forth in the
Fleet/Chase Debt Facility, is reduced to less than 3.5 to 1.0 (by reduction in
the numerator), the ratio set forth in this Section 10.4 shall be deemed to have
been automatically adjusted, at the time of such reduction, so that the
numerator of the ratio set forth in this Section 10.4 is exactly 1.0 less than
the numerator of such ratio as set forth in the Fleet/Chase Debt Facility;
PROVIDED FURTHER, however, that in no event shall the ratio set forth in this
Section 10.4 be deemed to be less than 2.0 to 1.0 as the result of the operation
of the preceding proviso.
10.5 LIENS.
The Company will not, and will not permit any of the Restricted
Subsidiaries to, directly or indirectly create, incur, assume or permit to exist
(upon the happening of a contingency or otherwise) any Lien on or with respect
to any property or asset (including, without limitation, any document or
instrument in respect of goods or accounts receivable) of the Company or any
such Restricted Subsidiary, whether now owned or held or hereafter acquired, or
any income or profits therefrom (whether or not provision is made for the equal
and ratable securing of the Notes in
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accordance with the last paragraph of this Section 10.5), or assign or otherwise
convey any right to receive income or profits, except:
(a) Liens existing on the date of this Agreement which secure
Debt of the Company and the Restricted Subsidiaries outstanding on the
First Closing Date, which Liens, to the extent not described on
Schedule 5.15, secure an aggregate amount of such Debt not in excess of
$2,000,000;
(b) Liens renewing or replacing Liens then in existence and
permitted by paragraph (a) of this Section 10.5 to the extent that the
underlying obligations secured by such existing Liens are being
extended, renewed or refunded, PROVIDED that
(i) no such renewal or replacement Lien shall extend
to any property of the Company or any Restricted Subsidiary
other than property already encumbered by the existing Lien
being so renewed or replaced,
(ii) the principal amount of the underlying
obligation secured by such existing Lien which could have been
outstanding at the time of such renewal or replacement shall
not be increased in connection with such renewal or
replacement, and
(iii) immediately prior to, and immediately after
giving effect to, such renewal or replacement, no Default or
Event of Default exists or would exist;
(c) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business
(i) in connection with workers' compensation,
unemployment insurance and other types of social security or
retirement benefits, or
(ii) to secure (or to obtain letters of credit that
secure) the performance of tenders, statutory obligations,
surety bonds, bids, leases (other than Capital Leases),
performance bonds, purchase, construction or sales contracts
and other similar obligations, in each case not incurred or
made in connection with the borrowing of money, the obtaining
of advances or credit or the payment of the deferred purchase
price of property;
(d) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other similar Liens, in each
case incurred in the ordinary course of business for sums not yet due
and payable or the payment of which is not at the time required by
Section 9.4;
(e) Liens arising from judicial attachments or judgments, or
securing appeal bonds, and other similar Liens, PROVIDED that
(i) the execution or other enforcement of such Liens
is effectively stayed, and
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(ii) the claims secured thereby are being actively
contested in good faith and adequate reserves in respect
thereof have been established by the Company or such
Restricted Subsidiary in accordance with GAAP;
(f) leases or subleases granted to others, easements,
rights-of-way, restrictions and other similar charges or encumbrances,
in each case incidental to, and not interfering with, the ordinary
conduct of the business of the Company or any of the Restricted
Subsidiaries, PROVIDED that such Liens do not, in the aggregate,
materially impair the use of such property by the Company or such
Restricted Subsidiary;
(g) Liens for taxes, assessments or other governmental charges
which are not yet due and payable or the payment of which is not at the
time required by Section 9.4;
(h) any Lien existing on property of a Person immediately
prior to its being consolidated with or merged into the Company or a
Restricted Subsidiary, or any Lien existing on any property acquired by
the Company or any Restricted Subsidiary at the time such property is
so acquired (whether or not the Debt secured thereby shall have been
assumed), PROVIDED that (i) no such Lien shall have been created or
assumed in contemplation of such consolidation or merger or such
acquisition of property, and (ii) each such Lien shall extend solely to
the item or items of property so acquired;
(i) Liens on property of a Restricted Subsidiary, PROVIDED
that such Liens secure only Debt owing to the Company or a Restricted
Subsidiary; and
(j) other Liens not otherwise permitted by paragraphs (a)
through (i) of this Section 10.5, so long as the sum, without
duplication, of
(i) the aggregate amount of Indebtedness secured by
such Liens, PLUS
(ii) the aggregate amount of Debt of all Restricted
Subsidiaries (other than any such Debt owing to the Company or
other Restricted Subsidiaries),
shall not exceed 15% of Consolidated Total Capitalization.
If, notwithstanding the prohibition contained herein, the Company
shall, or shall permit any of the Restricted Subsidiaries to, directly or
indirectly create, incur, assume or permit to exist any Lien, other than those
Liens permitted by the provisions of paragraphs (a) through (j) of this Section
10.5, it will make or cause to be made effective provision whereby the Notes
will be secured equally and ratably with any and all other obligations thereby
secured, such security to be pursuant to agreements reasonably satisfactory to
the Required Holders and, in any such case, the Notes shall have the benefit, to
the fullest extent that, and with such priority as, the holders of the Notes may
be entitled under applicable law, of an equitable Lien on such property. Such
violation of this Section 10.5 will constitute an Event of Default, whether or
not provision is made for an equal and ratable Lien pursuant to this Section
10.5. The filing of a financing statement to evidence for information purposes a
lessor's interest in property leased to the Company or a Restricted Subsidiary
shall be deemed not to constitute the creation of a Lien.
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10.6 RESTRICTED SUBSIDIARY DEBT.
The Company will not at any time permit any Restricted Subsidiary to,
directly or indirectly, create, incur, assume, guarantee, or otherwise be or
become directly or indirectly liable with respect to, any Debt, other than Debt
owing to any other Restricted Subsidiary or to the Company (including any
Guaranty of any Debt of any Restricted Subsidiary), unless
(a) the aggregate amount of unsecured Debt of all Restricted
Subsidiaries (other than any such Debt owing to the Company or
Restricted Subsidiaries) outstanding at such time, PLUS
(b) the aggregate amount of obligations secured by Liens
permitted pursuant to Section 10.5(j) outstanding at such time,
does not exceed 15% of Consolidated Total Capitalization determined at such
time.
10.7 CONSOLIDATED NET WORTH.
The Company will not, at any time, permit Consolidated Net Worth to be
less than the sum of (a) $62,500,000 PLUS (b) an aggregate amount equal to 50%
of Consolidated Net Income (but only if a positive number) for each completed
fiscal quarter as of such time beginning with the fiscal quarter ended March 31,
1998.
10.8 SALE-AND-LEASEBACK TRANSACTIONS.
The Company will not, and will not permit any Restricted Subsidiary to,
enter into any Sale-and-Leaseback Transaction.
10.9 RESTRICTED INVESTMENTS.
The Company will not, and will not permit any of the Restricted
Subsidiaries to, declare, make or authorize any Restricted Investment UNLESS
immediately after giving effect to such action:
(a) the aggregate value of all Restricted Investments
of the Company and the Restricted Subsidiaries (valued
immediately after such action) would not exceed 10% of
Consolidated Total Capitalization; and
(b) no Default or Event of Default would exist.
Any designation of a Restricted Subsidiary as an Unrestricted Subsidiary shall
be deemed to be the making of a Restricted Investment by the owner of the
Capital Stock of such newly designated Unrestricted Subsidiary in an amount
equal to all the share capital and other Investments in such Unrestricted
Subsidiary held by the Company and each other Restricted Subsidiary. For the
avoidance of doubt, it is understood that any Restricted Investments outstanding
prior to the First Closing shall be deemed not to have been declared, made or
authorized at a time when this covenant was effective.
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10.10 MERGER, CONSOLIDATION, ETC.
The Company will not, and will not permit any Restricted Subsidiary to,
consolidate with or merge with any other corporation or convey, transfer or
lease substantially all of its assets in a single transaction or series of
transactions to any Person except that:
(a) the Company may consolidate with or merge with another
corporation or convey or transfer (except by lease) all or
substantially all of its assets in a single transaction or series of
transactions to another Person if:
(i) the successor formed by such consolidation or the
survivor of such merger or the Person that acquires by
conveyance or transfer all or substantially all of the assets
of the Company as an entirety, as the case may be (the
"SUCCESSOR CORPORATION"), shall be a solvent corporation
organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia;
(ii) if the Company is not the Successor Corporation,
such corporation shall have executed and delivered to each
holder of Notes its assumption of the due and punctual
performance and observance of each covenant and condition of
this Agreement and the Notes (pursuant to such agreements and
instruments as shall be reasonably satisfactory to the
Required Holders), and the Company shall have caused to be
delivered to each holder of Notes an opinion of nationally
recognized independent counsel, or other independent counsel
reasonably satisfactory to the Required Holders, to the effect
that all agreements or instruments effecting such assumption
are enforceable in accordance with their terms and comply with
the terms hereof; and
(iii) immediately after giving effect to such
transaction:
(A) no Default or Event of Default would
exist, and
(B) the Successor Corporation would be able
to incur $1 of Funded Debt pursuant to both Section
10.1 and Section 10.2;
(b) a Restricted Subsidiary may consolidate with or merge with
the Company (so long as the Company is the surviving corporation) or
another Restricted Subsidiary or convey, transfer or lease all or
substantially all of its assets in a single transaction or series of
transactions to the Company or another Restricted Subsidiary; and
(c) a Restricted Subsidiary may consolidate with or merge with
another corporation or convey, transfer or lease all or substantially
all of its assets in a single transaction or series of transactions to
another Person if:
(i) such transaction is in compliance with Section
10.11 hereof; or
(ii) immediately after giving effect to such
transaction:
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(A) no Default or Event of Default would
exist, and
(B) the Company would be able to incur $1 of
Funded Debt pursuant to both Section 10.1 and Section
10.2.
No such conveyance or transfer of all or substantially all of the assets of the
Company shall have the effect of releasing the Company or any Successor
Corporation from its liability under this Agreement or the Notes.
10.11 SALE OF ASSETS, ETC.
(A) SALE OF ASSETS. The Company will not, and will not permit
any Restricted Subsidiary to, make any Asset Disposition UNLESS:
(i) in the good faith opinion of the Company, the
Asset Disposition is in exchange for consideration having a
Fair Market Value at least equal to that of the property
exchanged and is in the best interest of the Company or such
Restricted Subsidiary;
(ii) immediately after giving effect to the Asset
Disposition, no Default or Event of Default would exist; and
(iii) immediately after giving effect to the Asset
Disposition, the sum of the Net Proceeds Amounts in respect of
all property that was the subject of any Asset Disposition
occurring in the period of 12 consecutive calendar months then
most recently ended, MINUS the aggregate cost of Capital
Assets acquired by the Company and the Restricted Subsidiaries
during such period, would not exceed 15% of Consolidated Total
Assets as of the end of the then most recently ended fiscal
year of the Company.
(B) DISPOSAL OF OWNERSHIP OF A RESTRICTED SUBSIDIARY. The
Company will not, and will not permit any of the Restricted
Subsidiaries to, sell or otherwise dispose of any shares of Restricted
Subsidiary Stock (including, without limitation, pursuant to any
merger, consolidation or other transaction specified in Section 10.10
hereof), nor will the Company permit any such Restricted Subsidiary to
issue, sell or otherwise dispose of any shares of its own Restricted
Subsidiary Stock, PROVIDED that the foregoing restrictions do not apply
to:
(i) the issue of directors' qualifying shares by any such
Subsidiary;
(ii) any such Transfer of Restricted Subsidiary Stock
constituting a Transfer described in clause (a) of the definition of
"Asset Disposition"; and
(iii) the Transfer of all of the Restricted Subsidiary Stock
of a Restricted Subsidiary owned by the Company and the other
Restricted Subsidiaries if:
(A) such Transfer satisfies the requirements of
Section 10.11(a) hereof,
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(B) in connection with such Transfer the entire
Investment (whether represented by stock, Debt, claims or
otherwise) of the Company and the other Restricted
Subsidiaries in such Restricted Subsidiary is sold,
transferred or otherwise disposed of to a Person other than
(1) the Company, (2) another Restricted Subsidiary not being
simultaneously disposed of, or (3) an Affiliate, and
(C) the Restricted Subsidiary being disposed of has
no continuing Investment in any other Restricted Subsidiary
not being simultaneously disposed of or in the Company.
Any designation of a Restricted Subsidiary as an Unrestricted
Subsidiary shall be deemed to be an Asset Disposition of all of the
Restricted Subsidiary Stock of such newly designated Unrestricted
Subsidiary.
10.12 LIMITATION ON CONTRIBUTION TO COMPANY FINANCIAL PERFORMANCE BY
UNRESTRICTED SUBSIDIARIES.
(a) The Company will not at any time permit Consolidated Total Assets
to be less than 80% of consolidated total assets of the Company and its
Subsidiaries as reflected on a consolidated balance sheet of such Persons
prepared in accordance with GAAP.
(b) The Company will not permit Pro Forma EBITDA for any period of four
consecutive fiscal quarters of the Company to be less than 80% of Pro Forma
EBITDA (determined as if each reference in such definition to "Restricted
Subsidiaries" were to "Subsidiaries") for such period.
10.13 TRANSACTIONS WITH AFFILIATES.
The Company will not, and will not permit any Restricted Subsidiary to,
enter into directly or indirectly any transaction or group of related
transactions (including, without limitation, the purchase, lease, sale or
exchange of properties of any kind or the rendering of any service) with any
Affiliate (other than the Company or another Restricted Subsidiary), except in
the ordinary course and pursuant to the reasonable requirements of the Company's
or such Restricted Subsidiary's business and upon fair and reasonable terms no
less favorable to the Company or such Restricted Subsidiary than would be
obtainable in a comparable arm's-length transaction with a Person not an
Affiliate.
11. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any
Note for more than five Business Days after the same becomes due and
payable; or
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(c) the Company defaults in the performance of or compliance
with any term contained in any of Sections 10.1 through 10.12,
inclusive, or Section 7.1(d); or
(d) the Company defaults in the performance of or compliance
with any term contained herein (other than those referred to in
paragraphs (a), (b) and (c) of this Section 11) and such default is not
remedied within 30 days after the earlier of (i) a Responsible Officer
obtaining actual knowledge of such default and (ii) the Company
receiving written notice of such default from any holder of a Note; or
(e) any representation or warranty made in writing by or on
behalf of the Company or by any officer of the Company in this
Agreement or in any writing furnished in connection with the
transactions contemplated hereby proves to have been false or incorrect
in any material respect on the date as of which made; or
(f) (i) the Company or any Restricted Subsidiary is in default
(as principal or as guarantor or other surety) in the payment
of any principal of or premium or make-whole amount or
interest on any Indebtedness (other than Indebtedness under
this Agreement and the Notes) beyond any period of grace
provided with respect thereto (after giving effect to any
consents or waivers in respect thereof), that individually or
together with such other Indebtedness as to which any such
failure exists has an aggregate outstanding principal amount
of at least $1,000,000, or
(ii) the Company or any Restricted Subsidiary is in
default in the performance of or compliance with any term of
any evidence of any Indebtedness (other than Indebtedness
under this Agreement and the Notes), that individually or
together with such other Indebtedness as to which any such
failure exists has an aggregate outstanding principal amount
of at least $1,000,000, or of any mortgage, indenture or other
agreement relating thereto or any other condition exists, and
as a consequence of such default or condition such
Indebtedness has become, or has been declared (or, after
giving effect to any consents or waivers in respect thereof,
one or more Persons are entitled to declare such Indebtedness
to be), due and payable before its stated maturity or before
its regularly scheduled dates of payment, or
(iii) as a consequence of the occurrence or
continuation of any event or condition (other than the passage
of time or the right of the holder of Indebtedness to convert
such Indebtedness into equity interests),
(A) the Company or any Subsidiary has become
obligated to purchase or repay Indebtedness before
its regular maturity or before its regularly
scheduled dates of payment in an aggregate
outstanding principal amount of at least $1,000,000,
or
(B) one or more Persons have the right to
require the Company or any Subsidiary so to purchase
or repay such Indebtedness; or
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(g) the Company or any Restricted Subsidiary (i) is generally
not paying, or admits in writing its inability to pay, its debts as
they become due, (ii) files, or consents by answer or otherwise to the
filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to
take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (iii) makes an
assignment for the benefit of its creditors, (iv) consents to the
appointment of a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial
part of its property, (v) is adjudicated as insolvent or to be
liquidated, or (vi) takes corporate action for the purpose of any of
the foregoing; or
(h) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the Company
or any Restricted Subsidiary, a custodian, receiver, trustee or other
officer with similar powers with respect to the Company or any
Restricted Subsidiary or with respect to any substantial part of the
property of the Company or any Restricted Subsidiary, or constituting
an order for relief or approving a petition for relief or
reorganization or any other petition in bankruptcy or for liquidation
or to take advantage of any bankruptcy or insolvency law of any
jurisdiction, or ordering the dissolution, winding-up or liquidation of
the Company or any Restricted Subsidiary, or any such petition shall be
filed against the Company or any Restricted Subsidiary and such
petition shall not be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $500,000 above the level of coverage provided
by any applicable insurance policy are rendered against one or more of
the Company and the Restricted Subsidiaries and which judgments are
not, within 30 days after entry thereof, bonded, discharged or stayed
pending appeal, or are not discharged within 30 days after the
expiration of such stay; or
(j) the Company shall not deliver the Notes to be sold to you
on the Second Closing Date (unless you shall not pay the purchase price
thereof) or the Company shall not have satisfied all of the conditions
to closing for the sale of such Notes, as set forth in Section 4; or
(k) if (i) any Plan shall fail to satisfy the minimum
funding standards of ERISA or the Code for any plan year or
part thereof or a waiver of such standards or extension of any
amortization period is sought or granted under section 412 of
the Code,
(ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC
or the PBGC shall have instituted proceedings under ERISA
section 4042 to terminate or appoint a trustee to administer
any Plan or the PBGC shall have notified the Company or any
ERISA Affiliate that a Plan may become a subject of any such
proceedings,
(iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section 4001(a)(18) of
ERISA) under all Plans, determined in accordance with Title IV
of ERISA, shall exceed $5,000,000,
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(iv) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability
pursuant to Title I or IV of ERISA or the penalty or excise
tax provisions of the Code relating to employee benefit plans,
(v) the Company or any ERISA Affiliate withdraws
from any Multiemployer Plan, or
(vi) the Company or any Subsidiary establishes or
amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that would
increase the liability of the Company or any Subsidiary
thereunder;
and any such event or events described in clauses (i) through (vi)
above, either individually or together with any other such event or
events, could reasonably be expected to have a Material Adverse Effect.
As used in Section 11(k), the terms "EMPLOYEE BENEFIT PLAN" and "EMPLOYEE
WELFARE BENEFIT PLAN" shall have the respective meanings assigned to such terms
in section 3 of ERISA.
12. REMEDIES ON DEFAULT, ETC.
12.1 ACCELERATION.
(a) If an Event of Default with respect to the Company
described in paragraph (g) or paragraph (h) of Section 11 (other than
an Event of Default described in clause (i) of paragraph (g) or
described in clause (vi) of paragraph (g) by virtue of the fact that
such clause encompasses clause (i) of paragraph (g)) has occurred, all
the Notes then outstanding shall automatically become immediately due
and payable.
(b) If any other Event of Default has occurred and is
continuing, any holder or holders of more than 66-2/3% in principal
amount of the Notes at the time outstanding may at any time at its or
their option, by notice or notices to the Company, declare all the
Notes then outstanding to be immediately due and payable.
(c) If any Event of Default described in paragraph (a) or (b)
of Section 11 has occurred and is continuing, any holder or holders of
Notes at the time outstanding affected by such Event of Default may at
any time, at its or their option, by notice or notices to the Company,
declare all the Notes held by it or them to be immediately due and
payable.
Upon any Notes becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, PLUS (x) all accrued and
unpaid interest thereon and (y) the Make-Whole Amount determined (except as
provided in the next succeeding sentence) in respect of such principal amount
(to the full extent permitted by applicable law), shall all be immediately due
and payable, in each and every case without presentment, demand, protest or
further notice, all of which are hereby waived. In addition, if the Event of
Default specified in Section 11(j) shall have occurred and be continuing and the
Notes shall have been declared to be due and payable, the
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Make-Whole Amount shall be computed as if the principal amount of Notes to be
advanced on the Second Closing Date had actually been advanced on such date. The
Company acknowledges, and the parties hereto agree, that each holder of a Note
has the right to maintain its investment in the Notes free from repayment by the
Company (except as herein specifically provided for) and that the provision for
payment of a Make-Whole Amount by the Company in the event that the Notes are
prepaid or are accelerated as a result of an Event of Default, is intended to
provide compensation for the deprivation of such right under such circumstances.
12.2 OTHER REMEDIES.
If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise.
12.3 RESCISSION.
At any time after any Notes have been declared due and payable pursuant
to clause (b) or clause (c) of Section 12.1, the holders of not less than
66-2/3% in principal amount of the Notes then outstanding, by written notice to
the Company, may rescind and annul any such declaration and its consequences if
(a) the Company has paid all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, due and payable on any Notes other than by reason of
such declaration, and all interest on such overdue principal and Make-Whole
Amount, if any, and (to the extent permitted by applicable law) any overdue
interest in respect of the Notes, at the Default Rate, (b) all Events of Default
and Defaults, other than non-payment of amounts that have become due solely by
reason of such declaration, have been cured or have been waived pursuant to
Section 17, and (c) no judgment or decree has been entered for the payment of
any monies due pursuant hereto or to the Notes. No rescission and annulment
under this Section 12.3 will extend to or affect any subsequent Event of Default
or Default or impair any right consequent thereon.
12.4 NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC.
No course of dealing and no delay on the part of any holder of any Note
in exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 15, the Company
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including, without limitation,
reasonable attorneys' fees, expenses and disbursements.
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13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1 REGISTRATION OF NOTES.
The Company shall keep at its principal executive office a register for
the registration and registration of transfers of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the name and address
of each transferee of one or more Notes shall be registered in such register.
Prior to due presentment for registration of transfer, the Person in whose name
any Note shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the Company shall not be affected by any
notice or knowledge to the contrary. The Company shall give to any holder of a
Note that is an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all registered holders
of Notes.
13.2 TRANSFER AND EXCHANGE OF NOTES.
Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
his attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such Note or part thereof), the Company shall
execute and deliver, at the Company's expense (except as provided below), one or
more new Notes (as requested by the holder thereof) in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of Exhibit 1. Each
such new Note shall be dated and bear interest from the date to which interest
shall have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon. The Company may
require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes. Notes shall not be
transferred in denominations of less than $100,000, PROVIDED that if necessary
to enable the registration of transfer by a holder of its entire holding of
Notes, one Note may be in a denomination of less than $100,000. Any transferee,
by its acceptance of a Note registered in its name (or the name of its nominee),
shall be deemed to have made the representations set forth in Section 6.2 and in
the second sentence of Section 6.1.
13.3 REPLACEMENT OF NOTES.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor of such ownership and such loss, theft, destruction
or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (PROVIDED that if the holder of such Note
is, or is a nominee for, an original purchaser or a Qualified
Institutional Buyer, such Person's own unsecured agreement of indemnity
shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
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the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
14. PAYMENTS ON NOTES.
14.1 PLACE OF PAYMENT.
Subject to Section 14.2, payments of principal, Make-Whole Amount, if
any, and interest becoming due and payable on the Notes shall be made in
Greenwich, Connecticut at the principal office of the Company in such
jurisdiction. The Company may at any time, by notice to each holder of a Note,
change the place of payment of the Notes so long as such place of payment shall
be either the principal office of the Company in such jurisdiction or the
principal office of a bank or trust company in such jurisdiction.
14.2 HOME OFFICE PAYMENT.
So long as you or your nominee shall be the holder of any Note, and
notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for principal,
Make-Whole Amount, if any, and interest by the method and at the address
specified for such purpose below your name in Schedule A, or by such other
method or at such other address as you shall have from time to time specified to
the Company in writing for such purpose, without the presentation or surrender
of such Note or the making of any notation thereon, except that upon written
request of the Company made concurrently with or reasonably promptly after
payment or prepayment in full of any Note, you shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most recently designated
by the Company pursuant to Section 14.1. Prior to any sale or other disposition
of any Note held by you or your nominee you will, at your election, either
endorse thereon the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the Company in exchange
for a new Note or Notes pursuant to Section 13.2. The Company will afford the
benefits of this Section 14.2 to any Institutional Investor that is the direct
or indirect transferee of any Note purchased by you under this Agreement and
that has made the same agreement relating to such Note as you have made in this
Section 14.2.
15. EXPENSES, ETC.
15.1 TRANSACTION EXPENSES.
The Company will pay all costs and expenses (including reasonable
attorneys' fees of a special counsel and, if reasonably required, local or other
counsel) incurred by you and each Other Purchaser or holder of a Note in
connection with the negotiation, execution and documentation of the transactions
contemplated hereby and in connection with any amendments, waivers or consents
under or in respect of this Agreement or the Notes (whether or not such
amendment, waiver or consent becomes effective), including, without limitation:
(a) the costs and expenses incurred in enforcing or defending (or determining
whether or how to enforce or defend) any rights under this Agreement or the
Notes or in responding to any subpoena or other
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legal process or informal investigative demand issued in connection with this
Agreement or the Notes, or by reason of being a holder of any Note, and (b) the
costs and expenses, including financial advisors' fees, incurred in connection
with the insolvency or bankruptcy of the Company or any Subsidiary or in
connection with any work-out or restructuring of the transactions contemplated
hereby and by the Notes. The Company will pay, and will save you and each other
holder of a Note harmless from, all claims in respect of any fees, costs or
expenses if any, of brokers and finders (other than those retained by you).
15.2 SURVIVAL.
The obligations of the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any other holder of
a Note. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant to this Agreement shall be
deemed representations and warranties of the Company under this Agreement.
Subject to the preceding sentence, this Agreement and the Notes embody the
entire agreement and understanding between you and the Company and supersede all
prior agreements and understandings relating to the subject matter hereof.
17. AMENDMENT AND WAIVER.
17.1 REQUIREMENTS.
This Agreement and the Notes may be amended, and the observance of any
term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and the
Required Holders, except that (a) no amendment or waiver of any of the
provisions of any of Sections 1, 2, 3, 4, 5, 6 and 21, or any defined term (as
it is used therein), will be effective as to you unless consented to by you in
writing, and (b) no such amendment or waiver may, without the written consent of
the holder of each Note at the time outstanding affected thereby, (i) subject to
the provisions of Section 12 relating to acceleration or rescission, change the
amount or time of any payment or prepayment of principal of, or reduce the rate
or change the time of payment or method of computation of interest or of the
Make-Whole Amount on, the Notes, (ii) change the percentage of the principal
amount of the Notes the holders of which are required to consent to any such
amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 and
20.
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17.2 SOLICITATION OF HOLDERS OF NOTES.
(A) SOLICITATION. The Company will provide each holder of the
Notes (irrespective of the amount of Notes then owned by it) with
sufficient information, sufficiently far in advance of the date a
decision is required, to enable such holder to make an informed and
considered decision with respect to any proposed amendment, waiver or
consent in respect of any of the provisions hereof or of the Notes. The
Company will deliver executed or true and correct copies of each
amendment, waiver or consent effected pursuant to the provisions of
this Section 17 to each holder of outstanding Notes promptly following
the date on which it is executed and delivered by, or receives the
consent or approval of, the requisite holders of Notes.
(B) PAYMENT. The Company will not directly or indirectly pay
or cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, or grant any security, to any
holder of Notes as consideration for or as an inducement to the
entering into by any holder of Notes of any waiver or amendment of any
of the terms and provisions hereof unless such remuneration is
concurrently paid, or security is concurrently granted, on the same
terms, ratably to each holder of Notes then outstanding even if such
holder did not consent to such waiver or amendment.
17.3 BINDING EFFECT, ETC.
Any amendment or waiver consented to as provided in this Section 17
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and the holder of any Note nor
any delay in exercising any rights hereunder or under any Note shall operate as
a waiver of any rights of any holder of such Note. As used herein, the term
"THIS AGREEMENT" and references thereto shall mean this Agreement as it may from
time to time be amended or supplemented.
17.4 NOTES HELD BY COMPANY, ETC.
Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.
18. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return
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receipt requested (postage prepaid), or (c) by a recognized overnight delivery
service (with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such other
address as you or it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the Company
in writing, or
(iii) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of Patrick G. Healy,
Executive Vice President, Finance & Chief Financial Officer,
telecopier: 203-629-8883, or at such other address as the Company shall
have specified to the holder of each Note in writing.
Notices under this Section 18 will be deemed given on the earlier of the date of
actual receipt thereof or the third Business Day after such notice shall have
been sent in the manner provided above.
19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating hereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at each Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 19
shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "CONFIDENTIAL INFORMATION" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified when received by you as being confidential
information of the Company or such Subsidiary, PROVIDED that such term does not
include information that
(a) was publicly known or otherwise known to you prior to the
time of such disclosure,
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(b) subsequently becomes publicly known through no act or
omission by you or any person acting on your behalf,
(c) otherwise becomes known to you other than through
disclosure by the Company or any Subsidiary or by any other holder of a
Note if the disclosure of such Confidential Information to such other
holder was made subject to this Section 20, or
(d) constitutes financial statements delivered to you under
Section 7.1 that are otherwise publicly available.
You will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by you in good faith to protect confidential
information of third parties delivered to you, PROVIDED that you may deliver or
disclose Confidential Information to
(i) your directors, officers, employees, agents, attorneys and
affiliates (to the extent such disclosure reasonably relates to the
administration of the investment represented by your Notes),
(ii) your financial advisors and other professional advisors
who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 20,
(iii) any other holder of any Note,
(iv) any Institutional Investor to which you sell or offer to
sell such Note or any part thereof or any participation therein (if
such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section
20),
(v) any Person from which you offer to purchase any Security
of the Company (if such Person has agreed in writing prior to its
receipt of such Confidential Information to be bound by the provisions
of this Section 20),
(vi) any federal or state regulatory authority having
jurisdiction over you,
(vii) the National Association of Insurance Commissioners or
any similar organization, or any nationally recognized rating agency
that requires access to information about your investment portfolio or
(viii) any other Person to which such delivery or disclosure
may be necessary or appropriate (w) to effect compliance with any law,
rule, regulation or order applicable to you, (x) in response to any
subpoena or other legal process, (y) in connection with any litigation
to which you are a party or (z) if an Event of Default has occurred and
is continuing, to the extent you may reasonably determine such delivery
and disclosure to be necessary or appropriate in the enforcement or for
the protection of the rights and remedies under your Notes and this
Agreement.
Each holder of a Note, by its acceptance of a Note, will be deemed to have
agreed to be bound by and to be entitled to the benefits of this Section 20 as
though it were a party to this
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Agreement. On reasonable request by the Company in connection with the delivery
to any holder of a Note of information required to be delivered to such holder
under this Agreement or requested by such holder (other than a holder that is a
party to this Agreement or its nominee), such holder will enter into an
agreement with the Company embodying the provisions of this Section 20.
21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Section 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this Section
21), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder of the
Notes under this Agreement.
22. MISCELLANEOUS.
22.1 SUCCESSORS AND ASSIGNS.
All covenants and other agreements contained in this Agreement by or on
behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent
holder of a Note) whether so expressed or not.
22.2 PAYMENTS DUE ON NON-BUSINESS DAYS; WHEN PAYMENTS DEEMED
RECEIVED.
(A) PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of
principal of or Make-Whole Amount or interest on any Note that is due
on a date other than a Business Day shall be made on the next
succeeding Business Day without including the additional days elapsed
in the computation of the interest payable on such next succeeding
Business Day.
(B) PAYMENTS, WHEN RECEIVED. Any payment to be made to the
holders of Notes hereunder or under the Notes shall be deemed to have
been made on the Business Day such payment actually becomes available
to such holder at such holder's bank prior to 12:00 noon (local time of
such bank).
22.3 SEVERABILITY.
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability
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in any jurisdiction shall (to the full extent permitted by law) not invalidate
or render unenforceable such provision in any other jurisdiction.
22.4 CONSTRUCTION.
Each covenant contained herein shall be construed (absent express
provision to the contrary or where the context clearly would indicate otherwise)
as being independent of each other covenant contained herein, so that compliance
with any one covenant shall not (absent such an express contrary provision or
where the context clearly would indicate otherwise) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
22.5 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
22.6 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE
THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
[Remainder of page intentionally blank. Next page is signature page.]
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If you are in agreement with the foregoing, please sign the
form of agreement on the accompanying counterpart of this Agreement and return
it to the Company, whereupon the foregoing shall become a binding agreement
between you and the Company.
Very truly yours,
NFO WORLDWIDE, INC.
By:
Name:
Title:
The foregoing is hereby
agreed to as of the
date thereof.
[PURCHASER]
By:
Name:
Title:
<PAGE>
If you are in agreement with the foregoing, please sign the
form of agreement on the accompanying counterpart of this Agreement and return
it to the Company, whereupon the foregoing shall become a binding agreement
between you and the Company.
Very truly yours,
NFO WORLDWIDE, INC.
By: /s/ David J. Gorman
-----------------------
Name: David J. Gorman
Title: Assistant Secretary
The foregoing is hereby
agreed to as of the
date thereof.
[SEPARATELY EXECUTED BY EACH
OF THE FOLLOWING PURCHASERS]
BY: PPM AMERICA, INC., AS ATTORNEY IN FACT,
ON BEHALF OF JACKSON NATIONAL LIFE INSURANCE COMPANY
By: /s/ James Young
- -------------------
Name: James Young
Title: Managing Director
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
BY CIGNA INVESTMENTS, INC.
By: /s/ James F. Coggins, Jr.
- -----------------------------
Name: James F. Coggins, Jr.
Title: Managing Director
CIGNA PROPERTY AND CASUALTY INSURANCE COMPANY
BY CIGNA INVESTMENTS, INC.
By: /s/ James F. Coggins, Jr.
- -----------------------------
Name: James F. Coggins, Jr.
Title: Managing Director
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<PAGE>
CONNECTICUT GENERAL LIFE INSURANCE COMPANY,
ON BEHALF OF ONE OR MORE SEPARATE ACCOUNTS
BY CIGNA INVESTMENTS, INC.
By: /s/ James F. Coggins, Jr.
- -----------------------------
Name: James F. Coggins, Jr.
Title: Managing Director
LIFE INSURANCE COMPANY OF NORTH AMERICA
BY CIGNA INVESTMENTS, INC.
By: /s/ James F. Coggins, Jr.
- -----------------------------
Name: James F. Coggins, Jr.
Title: Managing Director
TMG LIFE INSURANCE COMPANY
By: /s/ Michael J. Steppe
- -------------------------
Name: Michael J. Steppe
Title: Senior Vice President, Investments
By: /s/ James R. Smith
- ----------------------
Name: James R. Smith
Title: Senior Vice President, Actuarial/Reinsurance
BERKSHIRE LIFE INSURANCE COMPANY
By: /s/ Ellen I. Whittaker
- --------------------------
Name: Ellen I. Whittaker
Title: Senior Investment Officer
43
