<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of
1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
Commission File Number 0-29474
BIG FLOWER HOLDINGS, INC.
Commission File Number 1-14084
BIG FLOWER PRESS HOLDINGS, INC.
(Exact Names of Registrants as Specified in Their Charters)
<TABLE>
<S> <C>
DELAWARE 13-397-1556
DELAWARE 13-376-8322
(I.R.S. Employer
Identification
Nos.)
(State of
incorporation)
</TABLE>
3 East 54(th) Street
New York, New York 10022
(212) 521-1600
(Address and telephone number of Registrants' Principal Executive Offices)
Indicate by check mark whether the Registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. Yes (X) No ( )
As of July 31, 1998, there were approximately 19,800,000 shares of Big Flower
Holdings, Inc.'s common stock, par value $0.01 per share, outstanding. There is
no market for the common stock of Big Flower Press Holdings, Inc., all
outstanding shares of which are owned by Big Flower Holdings, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART I--FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BIG FLOWER HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
------------ ------------
<S> <C> <C>
(UNAUDITED)
ASSETS
Current Assets:
Cash and cash equivalents.......................................................... $ 4,761 $ 5,307
Accounts receivable, net of allowance for doubtful accounts of $10,605 and
$12,342.......................................................................... 157,347 140,112
Inventories........................................................................ 53,779 46,510
Deferred income taxes and income tax receivable.................................... 19,805 19,827
Prepaid expenses and other current assets.......................................... 8,041 4,625
------------ ------------
Total current assets........................................................... 243,733 216,381
Property, plant and equipment, net................................................... 425,778 384,848
Goodwill, net........................................................................ 465,187 415,601
Intangibles and other assets, net.................................................... 70,482 42,217
------------ ------------
Total Assets................................................................... $ 1,205,180 $1,059,047
------------ ------------
------------ ------------
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable................................................................... $ 122,305 $ 133,648
Compensation and benefits payable.................................................. 42,837 45,281
Accrued interest................................................................... 16,035 13,775
Other current liabilities.......................................................... 50,255 41,145
------------ ------------
Total current liabilities...................................................... 231,432 233,849
Long-term debt, net of current portion............................................... 717,238 590,045
Deferred income taxes................................................................ 33,823 27,811
Other long-term liabilities.......................................................... 20,555 20,804
------------ ------------
Total liabilities.............................................................. 1,003,048 872,509
------------ ------------
Company obligated mandatorily redeemable convertible preferred securities of a
subsidiary trust whose sole assets are the convertible subordinated debentures of
Big Flower Holdings, Inc........................................................... 115,000 115,000
------------ ------------
Stockholders' equity:
Preferred stock....................................................................
Common stock....................................................................... 197 195
Additional paid-in capital......................................................... 146,982 140,798
Accumulated deficit................................................................ (59,157) (68,548)
Other.............................................................................. (890) (907)
------------ ------------
Total stockholders' equity..................................................... 87,132 71,538
------------ ------------
Total Liabilities and Equity................................................... $ 1,205,180 $1,059,047
------------ ------------
------------ ------------
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE>
BIG FLOWER HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
----------------------
1998 1997
---------- ----------
<S> <C> <C>
Net sales................................................................................. $ 412,870 $ 316,838
---------- ----------
Operating expenses:
Costs of production..................................................................... 309,813 248,909
Selling, general and administrative..................................................... 49,616 31,952
Depreciation............................................................................ 15,499 11,571
Amortization of intangibles............................................................. 6,175 4,187
---------- ----------
381,103 296,619
---------- ----------
Operating income.......................................................................... 31,767 20,219
---------- ----------
Other expenses (income):
Interest expense........................................................................ 13,518 9,794
Amortization of deferred financing costs................................................ 426 417
Interest income......................................................................... (80) (102)
Preferred dividends of a subsidiary trust............................................... 1,725
Other, net.............................................................................. 798 1,726
---------- ----------
16,387 11,835
---------- ----------
Income before income taxes................................................................ 15,380 8,384
Income tax expense........................................................................ 7,074 3,991
---------- ----------
Income before extraordinary item.......................................................... 8,306 4,393
Extraordinary item, net................................................................... (2,959)
---------- ----------
Net income................................................................................ $ 8,306 $ 1,434
---------- ----------
---------- ----------
Earnings per share:
Basic:
Income before extraordinary item...................................................... $ 0.42 $ 0.24
Extraordinary item, net............................................................... (0.16)
---------- ----------
Net income............................................................................ $ 0.42 $ 0.08
---------- ----------
---------- ----------
Diluted:
Income before extraordinary item...................................................... $ 0.38 $ 0.23
Extraordinary item, net............................................................... (0.16)
---------- ----------
Net income............................................................................ $ 0.38 $ 0.07
---------- ----------
---------- ----------
Weighted average shares outstanding:
Basic................................................................................... 19,643 18,529
---------- ----------
---------- ----------
Diluted................................................................................. 24,843 19,296
---------- ----------
---------- ----------
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
BIG FLOWER HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
----------------------
1998 1997
---------- ----------
<S> <C> <C>
Net sales................................................................................. $ 796,772 $ 614,339
---------- ----------
Operating expenses:
Costs of production..................................................................... 605,001 484,154
Selling, general and administrative..................................................... 98,053 63,102
Depreciation............................................................................ 30,388 23,000
Amortization of intangibles............................................................. 12,043 8,288
---------- ----------
745,485 578,544
---------- ----------
Operating income.......................................................................... 51,287 35,795
---------- ----------
Other expenses (income):
Interest expense........................................................................ 26,547 19,504
Amortization of deferred financing costs................................................ 855 972
Interest income......................................................................... (200) (222)
Preferred dividends of a subsidiary trust............................................... 3,450
Other, net.............................................................................. 3,245 3,861
---------- ----------
33,897 24,115
---------- ----------
Income before income taxes................................................................ 17,390 11,680
Income tax expense........................................................................ 7,999 5,606
---------- ----------
Income before extraordinary item.......................................................... 9,391 6,074
Extraordinary item, net................................................................... (2,959)
---------- ----------
Net income................................................................................ $ 9,391 $ 3,115
---------- ----------
---------- ----------
Earnings per share:
Basic:
Income before extraordinary item...................................................... $ 0.48 $ 0.33
Extraordinary item, net............................................................... (0.16)
---------- ----------
Net income............................................................................ $ 0.48 $ 0.17
---------- ----------
---------- ----------
Diluted:
Income before extraordinary item...................................................... $ 0.46 $ 0.32
Extraordinary item, net............................................................... (0.16)
---------- ----------
Net income............................................................................ $ 0.46 $ 0.16
---------- ----------
---------- ----------
Weighted average shares outstanding:
Basic................................................................................... 19,549 18,557
---------- ----------
---------- ----------
Diluted................................................................................. 24,698 19,296
---------- ----------
---------- ----------
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
BIG FLOWER HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
----------------------
1998 1997
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income.............................................................................. $ 9,391 $ 3,115
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization......................................................... 42,431 31,288
Deferred income taxes................................................................. (386) (1,401)
Other................................................................................. 5,670 9,173
Changes in operating assets and liabilities (excluding effect of acquisitions):
(Increase) decrease in accounts receivable.......................................... (2,242) 10,316
Increase in inventories............................................................. (3,768) (5,978)
Increase in prepaid expenses and other assets....................................... (3,850) (31)
Decrease in accounts payable and other liabilities.................................. (21,626) (4,388)
---------- ----------
Net cash provided by operating activities................................................. 25,620 42,094
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures.................................................................... (44,766) (35,088)
Acquisition of businesses, net of cash acquired......................................... (41,838)
Investment in equity instruments and leveraged lease transaction........................ (28,159)
Other investing activities.............................................................. (2,037) (1,090)
---------- ----------
Net cash used in investing activities..................................................... (116,800) (36,178)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings (repayments) under lines of credit....................................... 107,299 (153,032)
Repayments of long-term debt............................................................ (25,651) (74,596)
Issuance of long-term debt.............................................................. 17,500 250,000
Decrease in outstanding checks drawn on controlled disbursement accounts................ (4,080) (16,531)
Repurchase of common stock.............................................................. (4,114) (2,959)
Deferred financing costs................................................................ (1,300) (8,703)
Other................................................................................... 980 403
---------- ----------
Net cash provided by (used in) financing activities....................................... 90,634 (5,418)
---------- ----------
Net (Decrease) Increase in Cash and Cash Equivalents...................................... (546) 498
Cash and Cash Equivalents at Beginning of Year............................................ 5,307 4,200
---------- ----------
Cash and Cash Equivalents at End of Period................................................ $ 4,761 $ 4,698
---------- ----------
---------- ----------
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE>
THE FOLLOWING FINANCIAL STATEMENTS PRESENT THE CONSOLIDATED FINANCIAL
POSITION AND RESULTS OF OPERATIONS OF BIG FLOWER PRESS HOLDINGS, INC., AS ISSUER
OF 8 7/8% SENIOR SUBORDINATED NOTES DUE 2007, AND ITS SUBSIDIARIES.
BIG FLOWER PRESS HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
------------ ------------
<S> <C> <C>
(UNAUDITED)
ASSETS
Current Assets:
Cash and cash equivalents.......................................................... $ 4,754 $ 5,307
Accounts receivable, net of allowance for doubtful accounts of $10,605 and
$12,342.......................................................................... 157,335 140,112
Inventories........................................................................ 53,779 46,510
Deferred income taxes and income tax receivable.................................... 19,805 19,827
Prepaid expenses and other current assets.......................................... 7,922 4,625
------------ ------------
Total current assets........................................................... 243,595 216,381
Property, plant and equipment, net................................................... 421,929 384,848
Goodwill, net........................................................................ 465,187 415,601
Intangibles and other assets, net.................................................... 64,083 37,438
------------ ------------
Total Assets................................................................... $ 1,194,794 $1,054,268
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Accounts payable................................................................... $ 122,053 $ 133,648
Compensation and benefits payable.................................................. 41,621 45,281
Accrued interest................................................................... 16,035 13,775
Other current liabilities.......................................................... 51,201 40,196
------------ ------------
Total current liabilities...................................................... 230,910 232,900
Due to parent........................................................................ 4,117 3,466
Long-term debt, net of current portion............................................... 717,238 590,045
Deferred income taxes................................................................ 33,823 27,811
Other long-term liabilities.......................................................... 20,280 20,804
------------ ------------
Total liabilities.............................................................. 1,006,368 875,026
------------ ------------
Stockholder's equity:
Accumulated deficit................................................................ (60,396) (67,643)
Other.............................................................................. 248,822 246,885
------------ ------------
Total stockholder's equity..................................................... 188,426 179,242
------------ ------------
Total Liabilities and Stockholder's Equity..................................... $ 1,194,794 $1,054,268
------------ ------------
------------ ------------
</TABLE>
See notes to condensed consolidated financial statements.
6
<PAGE>
BIG FLOWER PRESS HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, 1998 JUNE 30, 1998
------------- -------------
<S> <C> <C>
Net sales........................................................................... $ 412,870 $ 796,772
------------- -------------
Operating expenses:
Costs of production............................................................... 309,813 605,001
Selling, general and administrative............................................... 53,817 98,993
Depreciation...................................................................... 15,426 30,246
Amortization of intangibles....................................................... 6,020 11,733
------------- -------------
385,076 745,973
------------- -------------
Operating income.................................................................... 27,794 50,799
------------- -------------
Other expenses (income):
Interest expense.................................................................. 13,639 26,791
Amortization of deferred financing costs.......................................... 384 771
Interest income................................................................... (80) (200)
Other, net........................................................................ 798 3,245
------------- -------------
14,741 30,607
------------- -------------
Income before income taxes.......................................................... 13,053 20,192
Income tax expense.................................................................. 6,005 9,289
------------- -------------
Net income.......................................................................... $ 7,048 $ 10,903
------------- -------------
------------- -------------
</TABLE>
See notes to condensed consolidated financial statements.
7
<PAGE>
BIG FLOWER PRESS HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1998
-----------------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income................................................................................... $ 10,903
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization.............................................................. 41,979
Deferred income taxes...................................................................... (386)
Other...................................................................................... 2,524
Changes in operating assets and liabilities (excluding effect of acquisitions):
Increase in accounts receivable.......................................................... (2,255)
Increase in inventories.................................................................. (3,768)
Increase in prepaid expenses and other assets............................................ (2,526)
Decrease in accounts payable and other liabilities....................................... (21,096)
-----------------
Net cash provided by operating activities...................................................... 25,375
-----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures......................................................................... (44,637)
Acquisition of businesses, net of cash acquired.............................................. (41,838)
Investments in equity instruments and leveraged lease transaction............................ (28,159)
Other investing activities................................................................... (2,037)
-----------------
Net cash used in investing activities.......................................................... (116,671)
-----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings under lines of credit......................................................... 107,299
Repayments of long-term debt................................................................. (25,651)
Issuance of long-term debt................................................................... 17,500
Decrease in outstanding checks drawn on controlled disbursement
accounts................................................................................... (4,079)
Dividends paid to parent..................................................................... (3,404)
Other........................................................................................ (922)
-----------------
Net cash provided by financing activities...................................................... 90,743
-----------------
Net Decrease in Cash and Cash Equivalents...................................................... (553)
Cash and Cash Equivalents at Beginning of Year................................................. 5,307
-----------------
Cash and Cash Equivalents at End of Period..................................................... $ 4,754
-----------------
-----------------
</TABLE>
See notes to condensed consolidated financial statements.
8
<PAGE>
BIG FLOWER HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL
Big Flower Holdings, Inc. ("Holdings" and, together with its subsidiaries,
the "Company") is the parent of Big Flower Press Holdings, Inc. ("Press"). The
Company's operations are conducted through Press which, in turn, conducts its
operations through its operating subsidiaries. On October 17, 1997, the Company
reorganized its legal structure and the common shares of Press, the previous
parent company, were automatically exchanged for common shares of Holdings. As a
result of this reorganization, Press became a wholly-owned subsidiary of
Holdings. Prior to the formation of Holdings, the consolidated financial
statements of the Company represented the accounts of Press and its
subsidiaries. Separate footnote information is not presented for the financial
statements of Press and its subsidiaries as that information is substantially
equivalent to that presented below. Earnings per share data is not provided for
the operating results of Press and its subsidiaries as they are wholly-owned
subsidiaries of Holdings.
The Company is responsible for the unaudited financial statements included
in this document. The financial statements have been prepared in accordance with
generally accepted accounting principles ("GAAP") and include all normal and
recurring adjustments that the Company considers necessary for the fair
presentation of its financial position and operating results. The Company
prepared the condensed financial statements following the requirements of the
Securities and Exchange Commission for interim reporting. As permitted under
those rules, the Company condensed or omitted certain footnotes or other
financial information that are normally required by GAAP. As these are condensed
financial statements, one should also read the financial statements and notes in
the Company's latest Form 10-K.
Revenues, expenses, assets and liabilities can vary during each quarter of
the year. Therefore, the results and trends in these interim financial
statements may not be the same as those for the full year.
Certain amounts for prior periods have been reclassified to conform to the
current period presentation.
2. ACQUISITIONS
The Company completed six acquisitions in the fall of 1997 and five in the
first half of 1998. The timing of these acquisitions affects the comparability
of the Company's financial statements.
Between September and November 1997, the Company acquired Olwen Direct Mail,
Ltd. ("Olwen"), the assets of companies operating as Riverside County Publishing
Company ("RCPC"), Columbine JDS Systems, Inc. ("Columbine"), the assets of Gamma
One, Inc. ("Gamma One"), the assets of IMPCO Enterprises, Inc. ("IMPCO") and
Broadcast Systems Software Limited ("BSS").
In the first quarter of 1998, the Company acquired Troypeak Limited and
Pismo Limited (together, the "Fusion Group"). During the second quarter of 1998,
the Company acquired Reach America, Inc. ("Reach America"), Enteron Group, Inc.
("Enteron"), ColorStream Technologies L.L.C. ("ColorStream"), and Adtraq Data
Systems and KTS Automation (together, "KTS"). Aggregate consideration for the
businesses acquired in 1998 was approximately $83 million, including the
issuance of approximately 295,000 shares of common stock and debt retired.
Goodwill arising in connection with these acquisitions was approximately $55
million. The amounts and allocations of costs recorded may require adjustment
based upon information that is not currently available to the Company.
9
<PAGE>
BIG FLOWER HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. ACQUISITIONS (CONTINUED)
The following unaudited pro forma information reflects the Company's results
adjusted to include the results of the acquired businesses as though all the
acquisitions and related financing transactions had occurred at the beginning of
1997:
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE
30,
----------------------
1998 1997
---------- ----------
<S> <C> <C>
(IN THOUSANDS, EXCEPT
PER SHARE AMOUNTS)
Net sales.......................................................... $ 825,058 $ 790,978
Net income......................................................... 9,165 8,113(1)
Earnings per share:
Basic............................................................ 0.46 0.41(1)
Diluted.......................................................... 0.45 0.39(1)(2)
</TABLE>
- ------------------------
(1) Excludes non-recurring costs related to the Company's secondary offering and
an extraordinary loss related to the early termination of a credit facility.
(2) Excludes the effect of the potential conversion of redeemable convertible
preferred securities assumed to have been outstanding for the period because
the effect of conversion would be anti-dilutive.
3. INVENTORIES
Inventories as of June 30, 1998, and December 31, 1997, are summarized as
follows:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
----------- ------------
<S> <C> <C>
(UNAUDITED)
<CAPTION>
(IN THOUSANDS)
<S> <C> <C>
Paper............................................................. $ 38,558 $ 34,324
Ink and chemicals................................................. 4,536 5,447
Other............................................................. 10,685 6,739
----------- ------------
$ 53,779 $ 46,510
----------- ------------
----------- ------------
</TABLE>
4. SEGMENT INFORMATION
The Company operates in four business segments. Each segment offers
different products or services requiring different production and marketing
strategies. The four segments are:
- Insert Advertising & Newspaper Services, including advertising inserts and
circulation-building newspaper products such as Sunday comics, TV listing
guides, Sunday magazine sections and special supplements.
- Direct Marketing Services, including highly customized direct mail
products and direct marketing services such as database management and
response fulfillment services.
- Digital Services, including outsourced digital premedia, image content
management and broadcast management services.
10
<PAGE>
BIG FLOWER HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. SEGMENT INFORMATION (CONTINUED)
- Specialty Products & Commercial Printing, including fragrance samplers,
coatings and chemical production, and commercial printing.
Following is unaudited information regarding the Company's segments:
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
---------------------- ----------------------
<S> <C> <C> <C> <C> <C>
1998 1997 1998 1997
---------- ---------- ---------- ----------
<CAPTION>
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Net sales Insert Advertising & Newspaper Services $ 266,610 $ 227,465 $ 517,637 $ 430,207
Direct Marketing Services 66,336 45,607 129,130 89,954
Digital Services 65,235 22,206 112,836 42,085
Specialty Products & Commercial Printing 17,330 22,778 41,560 54,504
Elimination of intersegment sales (2,641) (1,218) (4,391) (2,411)
---------- ---------- ---------- ----------
Consolidated $ 412,870 $ 316,838 $ 796,772 $ 614,339
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Operating Income Insert Advertising & Newspaper Services $ 21,583 $ 17,001 $ 32,406 $ 25,751
Direct Marketing Services 8,692 5,921 14,796 10,642
Digital Services 6,434 2,031 11,166 3,577
Specialty Products & Commercial Printing (1,019) (817) 769 3,125
General Corporate (3,923) (3,917) (7,850) (7,300)
---------- ---------- ---------- ----------
Consolidated $ 31,767 $ 20,219 $ 51,287 $ 35,795
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Depreciation Insert Advertising & Newspaper Services $ 7,591 $ 6,325 $ 15,716 $ 12,783
Direct Marketing Services 3,181 2,650 6,255 5,200
Digital Services 3,852 1,478 6,674 2,850
Specialty Products & Commercial Printing 728 944 1,453 1,881
General Corporate 147 174 290 286
---------- ---------- ---------- ----------
Consolidated $ 15,499 $ 11,571 $ 30,388 $ 23,000
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Amortization of Insert Advertising & Newspaper Services
Intangibles $ 3,888 $ 3,464 $ 7,776 $ 6,906
Direct Marketing Services 476 212 977 418
Digital Services 1,526 319 2,695 637
Specialty Products & Commercial Printing 160 192 345 327
General Corporate 125 250
---------- ---------- ---------- ----------
Consolidated $ 6,175 $ 4,187 $ 12,043 $ 8,288
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
11
<PAGE>
BIG FLOWER HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. COMPREHENSIVE INCOME
During the first quarter of 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS No. 130").
SFAS No. 130 establishes standards for reporting and displaying comprehensive
income and its components in a set of financial statements. Comprehensive income
is defined as net income plus other changes in equity from non-stockholder
sources. At present, the only components of comprehensive income for the Company
other than net income are foreign currency translation adjustments. Such
adjustments were immaterial for the periods ended June 30, 1998, and
non-existent for the periods ended June 30, 1997. Therefore, no separate
presentation of comprehensive income has been made.
12
<PAGE>
BIG FLOWER HOLDINGS, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS" CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION
27A OF THE SECURITIES ACT OF 1933. IN ADDITION, WHEN USED IN THIS REPORT, THE
WORDS "BELIEVES," "ANTICIPATES," "EXPECTS" AND SIMILAR EXPRESSIONS ARE INTENDED
TO IDENTIFY FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS ARE SUBJECT TO A NUMBER
OF RISKS AND UNCERTAINTIES. ACTUAL RESULTS IN THE FUTURE COULD DIFFER MATERIALLY
FROM THOSE DESCRIBED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF MANY
FACTORS OUTSIDE THE CONTROL OF BIG FLOWER HOLDINGS, INC., INCLUDING FLUCTUATIONS
IN THE COST OF RAW MATERIALS USED BY THE COMPANY, CHANGES IN THE ADVERTISING,
MARKETING AND INFORMATION SERVICES MARKETS, THE FINANCIAL CONDITION OF THE
COMPANY'S CUSTOMERS, THE GENERAL CONDITION OF THE UNITED STATES AND OTHER
ECONOMIES AND MATTERS SET FORTH IN THIS DOCUMENT GENERALLY. CONSEQUENTLY, SUCH
FORWARD-LOOKING STATEMENTS SHOULD BE REGARDED SOLELY AS THE COMPANY'S CURRENT
PLANS, ESTIMATES AND BELIEFS. THE COMPANY DOES NOT UNDERTAKE AND SPECIFICALLY
DECLINES ANY OBLIGATION TO PUBLICLY RELEASE THE RESULTS OF ANY REVISIONS TO
THESE FORWARD-LOOKING STATEMENTS THAT MAY BE MADE TO REFLECT ANY FUTURE EVENTS
OR CIRCUMSTANCES AFTER THE DATE OF SUCH STATEMENTS OR TO REFLECT THE OCCURRENCE
OF ANTICIPATED OR UNANTICIPATED EVENTS.
RESULTS OF OPERATIONS
The Company is a leading advertising, marketing and information services
company with four business segments: Insert Advertising & Newspaper Services,
Direct Marketing Services, Digital Services and Specialty Products & Commercial
Printing. The following table presents the major components from the Condensed
Consolidated Statements of Operations and Cash Flows for the three-month and
six-month periods ended June 30, 1998 and 1997:
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
-------------------- --------------------
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
(PERCENTAGES OF NET SALES)
Net sales............................................................. 100.0% 100.0% 100.0% 100.0%
--------- --------- --------- ---------
Operating expenses:
Costs of production................................................. 75.0 78.6 75.9 78.8
Selling, general and administrative................................. 12.0 10.0 12.3 10.3
Depreciation........................................................ 3.8 3.7 3.8 3.7
Amortization of intangibles......................................... 1.5 1.3 1.5 1.3
--------- --------- --------- ---------
92.3 93.6 93.5 94.1
--------- --------- --------- ---------
Operating income...................................................... 7.7% 6.4% 6.5% 5.9%
--------- --------- --------- ---------
--------- --------- --------- ---------
EBITDA................................................................ 13.0% 11.4% 11.8% 10.9%
--------- --------- --------- ---------
--------- --------- --------- ---------
<CAPTION>
(IN THOUSANDS)
<S> <C> <C> <C> <C>
EBITDA................................................................ $ 53,441 $ 35,977 $ 93,718 $ 67,083
--------- --------- --------- ---------
--------- --------- --------- ---------
Net cash provided by operating activities............................. $ 10,542 $ 23,411 $ 25,620 $ 42,094
Net cash used in investing activities................................. 68,826 20,439 116,800 36,178
Net cash provided by (used in) financing activities................... 59,270 2,914 90,634 (5,418)
</TABLE>
"EBITDA" represents the sum of operating income, depreciation and
amortization of intangibles. EBITDA is presented here to provide additional
information regarding the Company's ability to meet its future debt service,
capital expenditures and working capital requirements. EBITDA is not a measure
of financial performance in accordance with GAAP and should not be considered an
alternative to net income as a measure of operating performance or to cash flows
from operating activities as a measure of liquidity.
13
<PAGE>
CONSOLIDATED RESULTS
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
---------------------- ----------------------
1998 1997 CHANGE 1998 1997 CHANGE
---------- ---------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Net sales.................................. $ 412,870 $ 316,838 30.3% $ 796,772 $ 614,339 29.7%
Operating income........................... 31,767 20,219 57.1% 51,287 35,795 43.3%
Net income................................. 8,306 1,434 479.2% 9,391 3,115 201.5%
Diluted earnings per share................. 0.38 0.07 442.9% 0.46 0.16 187.5%
</TABLE>
Revenue increases in 1998 were due largely to acquisitions completed between
September 1997 and June 1998. Adjusting to include the operations of businesses
acquired for the entire comparable periods, net sales increased slightly for the
second quarter of 1998 and rose approximately 5% for the first half of 1998.
The sales results also reflect positive growth trends in the Company's
principal business segments, particularly Direct Marketing Services and Digital
Services, offset by continued softness in fragrance and catalog insert printing
jobs in the Specialty Products & Commercial Printing segment.
The components of operating expenses reflect the changing mix of the
Company's business as it acquires more companies to expand the Digital Services
and Direct Marketing Services segments, where paper is a smaller component of
costs and a higher proportion of the cost structure is related to selling than
to production. Additionally, rapid growth of business in those segments and
increased demand for higher margin products in the Insert Advertising &
Newspaper Services segment has impacted the ratios of operating expenses to net
sales.
Costs of production as a percentage of net sales decreased to 75.0% for the
current quarter from 78.6% last year, with paper costs accounting for 32.7% of
net sales in the 1998 period as compared to 36.2% in the 1997 period. Selling,
general and administrative expenses increased to 12.0% of net sales in 1998 from
10.0% in 1997.
For the first half of 1998, costs of production as a percentage of net sales
decreased to 75.9% from 78.8% for the same period last year with paper costs
representing 33.6% of net sales in 1998 and 36.0% in 1997. Selling, general and
administrative expenses for the first six months of 1998 increased to 12.3% of
net sales from 10.3% in the comparable 1997 period.
Selling, general and administrative expenses in the 1997 periods include
$0.6 million of non-recurring costs related to the Company's secondary stock
offering. Excluding these costs, the ratio of selling, general and
administrative expenses to net sales was 9.9% for the second quarter and 10.2%
for the six-month period.
Operating income for the second quarter of 1998 increased 57.1% over the
prior year period and increased to 7.7% of net sales from 6.4% last year (6.6%
in 1997 excluding non-recurring costs). For the six-month periods, 1998
operating income increased 43.3% over the prior year and increased to 6.5% of
net sales from 5.9% last year. Adjusted to exclude the non-recurring costs in
1997 and to include businesses acquired in 1997 and 1998 for the entire
comparable periods, operating income increased approximately 5% for both the
three-month and six-month periods when compared to the prior year, which
reflected pro forma growth of approximately 40% in the second quarter and
approximately 50% for the first half.
The increases in net income and diluted earnings per share in 1998 reflect,
in part, the extraordinary loss of $3.0 million (net of tax benefit), or 16
cents per share, recorded in the second quarter of 1997 related to the early
termination of a revolving credit facility. The year-over-year increases in
weighted average shares are due to the assumed conversion of redeemable
convertible preferred securities that the Company issued in October 1997.
14
<PAGE>
RESULTS BY SEGMENT
INSERT ADVERTISING & NEWSPAPER SERVICES
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
---------------------- ----------------------
1998 1997 CHANGE 1998 1997 CHANGE
---------- ---------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)
Net sales................................... $ 266,610 $ 227,465 17.2% $ 517,637 $ 430,207 20.3%
Operating income............................ 21,583 17,001 27.0% 32,406 25,751 25.8%
</TABLE>
The increases in net sales and operating income are mostly the result of the
acquisition of RCPC in October 1997. Adjusted to include RCPC for the comparable
periods in 1997, net sales increased slightly for the second quarter of 1998 and
approximately 5% for the six-month period. Operating income, on the same basis
of comparison, increased approximately 10% for both the quarterly and the
six-month periods.
The sales results for the quarter reflect strategic curtailments of insert
page counts by certain retail customers' for their summer advertising programs,
causing a less-than-optimal work mix for TC Advertising's production network.
The sales results for the first half of 1998 reflect the overall growth of
TC Advertising's customer base in the categories of advertising inserts for
specialty, grocery, drug, furniture and home improvement stores, as well as
television listings magazines.
The higher rate of operating income growth in both the three-month and
six-month periods also stemmed from operating synergies with RCPC that yielded
more efficient production for the combined business, as well as a continued
focus on productivity and expense control.
DIRECT MARKETING SERVICES
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
-------------------- ---------------------
1998 1997 CHANGE 1998 1997 CHANGE
--------- --------- ----------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)
Net sales....................................... $ 66,336 $ 45,607 45.5% $ 129,130 $ 89,954 43.6%
Operating income................................ 8,692 5,921 46.8% 14,796 10,642 39.0%
</TABLE>
Net sales and operating income increases in this segment over the prior year
reflect, in part, the impact of acquisitions in 1997 and 1998. Adjusting to
include acquired businesses for the full comparable periods, sales increased
approximately 15% in the second quarter and approximately 10% for the six-month
period. Operating income on the same basis of comparison increased approximately
15% for the quarter and approximately 10% for the first half of 1998.
The net sales results for the quarter reflect increased demand for
customized direct mail, principally from customers in the publishing and
financial services categories, while the six-month period also benefited from
first quarter 1998 increases for customers in retail, non-profit fund-raising
and telecommunications categories.
The operating income results reflect the effective management of expenses,
while the growth rate for the six-month period reflects the impact of costs
associated with the recent acquisitions and the comparison to very favorable
results in the first half of 1997.
15
<PAGE>
DIGITAL SERVICES
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
-------------------- ---------------------
1998 1997 CHANGE 1998 1997 CHANGE
--------- --------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)
Net sales...................................... $ 65,235 $ 22,206 193.8% $ 112,836 $ 42,085 168.1%
Operating income............................... 6,434 2,031 216.8% 11,166 3,577 212.2%
</TABLE>
Increases in sales and operating income for this segment are principally
attributable to the acquisitions of Columbine and Gamma One in October 1997 as
well as the additions of the Fusion Group, Enteron, Reach America and KTS in
1998. Adjusting to include these businesses in all periods, net sales increased
approximately 10% for both the second quarter and first half of 1998 as compared
to the same periods in 1997. Operating income for the six-month period on the
same basis of comparison increased approximately 15% over the first half of
1997, although the second quarter operating income, on the same basis, decreased
approximately 10% when compared with the prior year quarter, which reflected pro
forma growth of approximately 90%.
The increases in net sales were primarily due to increased demand in the
packaging, commercial and retail premedia service lines. The increase for the
six-month period was also due to first-quarter growth in fee and consulting
revenues related to large software contracts in both domestic and international
markets.
The higher level of profitability as compared to sales increases in the
first half of 1998 reflects the flowthrough effect of sales gains and the
expansion of higher margin product lines. The second quarter, however, was
adversely impacted by staffing investments in the component businesses to
accommodate business expansion in marketing and service support expected in the
second half of 1998.
SPECIALTY PRODUCTS & COMMERCIAL PRINTING
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
-------------------- --------------------
1998 1997 CHANGE 1998 1997 CHANGE
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)
Net sales...................................... $ 17,330 $ 22,778 (23.9)% $ 41,560 $ 54,504 (23.7)%
Operating income............................... (1,019) (817) (24.7)% 769 3,125 (75.4)%
</TABLE>
The decreases from the prior year in net sales and operating income were the
result of the continued softness in the fragrance sampler product line and
catalog insert printing. Additionally, the second quarter sales results were
impacted by the divestiture of a minority interest in a commercial printing
venture at the end of the first quarter of 1998 as part of management's strategy
to de-emphasize and re-deploy the assets associated with commercial printing.
This joint venture had yielded approximately $20 million of break-even revenue
annually.
INTEREST EXPENSE
Interest expense in 1998 increased over the 1997 periods due to higher debt
levels related primarily to acquisitions, although the average rate of interest
declined as compared to the 1997 periods. The average rate of interest was 8.31%
for the second quarter of 1998 versus 8.80% in the second quarter of 1997. For
the first half of 1998, the average rate was also 8.31% compared to 8.70% for
the same period in 1997. Including the effect of redeemable convertible
preferred securities issued in October 1997, the average cost of funds was an
annualized rate of 7.97% in the second quarter of 1998 and 7.96% for the first
six months of 1998.
16
<PAGE>
OTHER EXPENSES, NET
Other expenses, net, consist primarily of costs associated with the
Company's accounts receivable securitization facility. These costs amounted to
$1.5 million in the second quarter of 1998 compared to $1.4 million in the 1997
quarter. For the first half of the year, these cost totaled $3.1 million in 1998
and $2.9 million in 1997. The three-month and six-month periods ended June 30,
1998, also include $1.4 million of income earned on a tax-advantaged investment
accounted for as a leveraged lease in accordance with Statement of Financial
Accounting Standards No. 13, "Accounting for Leases". The amount of investment
income excludes interest costs incurred on borrowings used to finance the
investment.
INCOME TAXES
The Company's effective income tax rate for the second quarter of 1998 was
46.0% as compared to 47.6% in the same period last year. For the six-month
period, the rate was also 46.0% compared to 48.0% in the first half of 1997. The
effective rates exceeded the federal statutory rate due primarily to state
income taxes and amortization of certain goodwill that is not deductible for
income tax purposes.
The lower effective tax rates in 1998 reflect the proportionally lower level
of non-deductible goodwill expense in relation to expected taxable income for
the year.
LIQUIDITY AND CAPITAL RESOURCES
The operations of the Company historically have been funded with internally
generated funds, term loans, borrowings under revolving credit facilities and
utilization of an accounts receivable securitization facility. At June 30, 1998,
the Company had available borrowings of approximately $120.7 million under its
revolving credit facilities. Management believes that the facilities in place
will be sufficient to meet the Company's operational needs for the near future.
At June 30, 1998, the Company's current assets exceeded current liabilities
by $12.3 million. At December 31, 1997, the Company's current liabilities
exceeded current assets by $17.5 million. Adjusting for assets removed from the
balance sheet in connection with the accounts receivable securitization
facility, net working capital was $100.6 million at June 30, 1998 (a current
ratio of 1.43 to 1) compared to $83.6 million at December 31, 1997 (a current
ratio of 1.36 to 1).
Cash flows provided by operating activities for the first half of 1998 were
$25.6 million, compared to $42.1 million in the first half of 1997. Although net
earnings before depreciation and amortization in the 1998 period increased in
comparison to the prior year period, the cash flows from operations were lower
due to the timing of payments for current liabilities and lower proportionate
utilization of the accounts receivable securitization facility.
Cash from operations and borrowings under existing credit facilities funded
capital expenditures of $44.8 million and $35.1 million for the six months ended
June 30, 1998 and 1997, respectively. Investments and acquisitions of $70.0
million during the first half of 1998 were funded by borrowings under credit
facilities and the issuance of debt.
Big Flower has grown through acquisitions and continues to seek similar or
complementary businesses. Such acquisitions are likely to require the incurrence
and/or assumption of indebtedness and other obligations, the issuance of equity
securities or some combination thereof. In addition, Big Flower may from time to
time determine to sell or otherwise dispose of certain of its existing
businesses. However, Big Flower cannot predict if any such transactions will be
consummated, or the terms or forms of consideration required in such
transactions.
17
<PAGE>
SEASONALITY AND OTHER FACTORS
While the insert advertising portion of the Company's Insert Advertising &
Newspaper Services segment is somewhat seasonal in nature, the growth of other
segments has reduced the overall seasonality of the Company's revenues. On a pro
forma basis, assuming all businesses owned at June 30, 1998 had been owned for
all of 1997, the net sales percentages for the Company for the year ended
December 31, 1997 would have been 23% in the first quarter, 24% in the second,
26% in the third and 27% in the fourth. Profitability, however, continues to
follow a more seasonal pattern for all segments and lower margins in the first
quarter must absorb fixed depreciation, amortization, interest and preferred
dividend costs that are incurred evenly throughout the year. Based on its
historical experience and projected operations, the Company expects its
operating results in the near future to be highest in the fourth quarter and
lowest in the first.
The cost of paper is a principal factor in pricing to customers of the
Insert Advertising & Newspaper Services segment. As this is the Company's
largest segment, fluctuations in the cost of paper significantly affect the
Company's consolidated net sales. The Company is generally able to pass
increases in the cost of paper to that segment's customers, while decreases in
paper costs generally result in lower prices to customers. Volatility in paper
costs results in a corresponding volatility in the Company's net sales, but
generally has not affected volume or profits to any significant extent.
18
<PAGE>
PART II--OTHER INFORMATION
BIG FLOWER HOLDINGS, INC. AND SUBSIDIARIES
ITEM 1. LEGAL PROCEEDINGS--
No reportable developments occurred with respect to legal proceedings during
the quarter ended June 30, 1998.
ITEM 2. CHANGES IN SECURITIES--
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES--
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS--
On June 23, 1998, the Company held its Annual Meeting of Stockholders and
the following proposals were submitted for vote:
PROPOSAL 1 -- R. Theodore Ammon and Edward T. Reilly were reelected as
Directors to hold office for three years until their respective successors are
elected and qualified. The following individuals continue to serve on the
Company's Board of Directors: Peter G. Diamandis, Robert M. Kimmitt, Joan D.
Manley and Newton N. Minow.
PROPOSAL 2 -- The appointment of Deloitte & Touche LLP as the Company's
independent certified accountants was ratified.
Results of the votes were as follows:
<TABLE>
<CAPTION>
VOTES VOTES
FOR WITHHELD ABSTENTIONS
------------ ----------- -----------
<S> <C> <C> <C>
Proposal 1.............................................. 18,429,147 12,586
Proposal 2.............................................. 18,396,832 26,141 18,760
</TABLE>
ITEM 5. OTHER INFORMATION--
None.
<TABLE>
<S> <C>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K--
(a) Exhibits
Amended and Restated Credit Agreement, dated as of June 22, 1998, among Big Flower
Holdings, Inc., certain subsidiaries of Big Flower Holdings, Inc., the banks from
time to time party thereto, Bank of America NT & SA and the Industrial Bank of
Japan, Limited as Co-Agents, Credit Suisse First Boston as Documentation Agent and
Bankers Trust Company as Administrative Agent.
10.1
27.1-2 Financial Data Schedules.
(b) Reports on Form 8-K
During the three months ended June 30, 1998, the Registrant filed the following
report on Form 8-K:
(i) Current Report on Form 8-K/A, filed May 26, 1998, amending the Current Report on
Form 8-K filed March 27, 1998, to include certain financial statements and pro forma
financial information not included in such Form 8-K.
</TABLE>
19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<S> <C> <C>
BIG FLOWER HOLDINGS, INC.
BY: /S/ RICHARD L. RITCHIE
-----------------------------------------
Richard L. Ritchie
EXECUTIVE VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER (PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER)
</TABLE>
DATE: August 14, 1998
<TABLE>
<S> <C> <C>
BIG FLOWER PRESS HOLDINGS, INC.
BY: /S/ RICHARD L. RITCHIE
-----------------------------------------
Richard L. Ritchie
EXECUTIVE VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER (PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER)
</TABLE>
DATE: August 14, 1998
20
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO.
- -----------------------------------------------------------------------------------------------------------------
<S> <C>
10.1 Amended and Restated Credit Agreement, dated as of June 22, 1998, among Big Flower Holdings, Inc.,
certain subsidiaries of Big Flower Holdings, Inc., the banks from time to time party thereto, Bank of
America NT & SA and the Industrial Bank of Japan, Limited as Co-Agents, Credit Suisse First Boston as
Documentation Agent and Bankers Trust Company as Administrative Agent.
27.1-2 Financial Data Schedules.
</TABLE>
21
<PAGE>
Exhibit 10.1
AMENDED AND RESTATED CREDIT AGREEMENT
among
BIG FLOWER HOLDINGS, INC.,
as a GUARANTOR,
BIG FLOWER PRESS HOLDINGS, INC.,
as a GUARANTOR,
VARIOUS SUBSIDIARIES OF
BIG FLOWER PRESS HOLDINGS, INC.,
as BORROWERS,
VARIOUS BANKS,
BANK OF AMERICA NT & SA AND
THE INDUSTRIAL BANK
OF JAPAN, LIMITED,
as CO-AGENTS,
CREDIT SUISSE FIRST BOSTON,
as DOCUMENTATION AGENT,
and
BANKERS TRUST COMPANY,
as ADMINISTRATIVE AGENT
-------------------------------------------
Dated as of June 12, 1997
and
Amended and Restated as of June 22, 1998
-------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
SECTION 1. Amount and Terms of Credit . . . . . . . . . . . . . . . . . . . 1
1.01 The Commitments. . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Minimum Amount of Each Borrowing . . . . . . . . . . . . . . 5
1.03 Notice of Borrowing. . . . . . . . . . . . . . . . . . . . . 5
1.04 Disbursement of Funds. . . . . . . . . . . . . . . . . . . . 6
1.05 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.06 Conversions. . . . . . . . . . . . . . . . . . . . . . . . . 9
1.07 Pro Rata Borrowings. . . . . . . . . . . . . . . . . . . . . 10
1.08 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.09 Interest Periods . . . . . . . . . . . . . . . . . . . . . . 11
1.10 Increased Costs, Illegality, etc . . . . . . . . . . . . . . 12
1.11 Compensation . . . . . . . . . . . . . . . . . . . . . . . . 15
1.12 Change of Lending Office . . . . . . . . . . . . . . . . . . 16
1.13 Replacement of Banks . . . . . . . . . . . . . . . . . . . . 16
1.14 European Monetary Union. . . . . . . . . . . . . . . . . . . 18
SECTION 2. Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . . 21
2.01 Letters of Credit. . . . . . . . . . . . . . . . . . . . . . 21
2.02 Minimum Stated Amount. . . . . . . . . . . . . . . . . . . . 23
2.03 Letter of Credit Requests. . . . . . . . . . . . . . . . . . 23
2.04 Letter of Credit Participations. . . . . . . . . . . . . . . 23
2.05 Agreement to Repay Letter of Credit Drawings . . . . . . . . 26
2.06 Increased Costs. . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3. Commitment Commission; Fees; Reductions of Commitment. . . . . . 28
3.01 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.02 Voluntary Termination of Unutilized Commitments. . . . . . . 30
3.03 Mandatory Reduction of Commitments . . . . . . . . . . . . . 30
SECTION 4. Prepayments; Payments; Taxes . . . . . . . . . . . . . . . . . . 31
4.01 Voluntary Prepayments. . . . . . . . . . . . . . . . . . . . 31
4.02 Mandatory Repayments and Cash Collateralizations . . . . . . 32
4.03 Method and Place of Payment. . . . . . . . . . . . . . . . . 34
4.04 Net Payments; Taxes. . . . . . . . . . . . . . . . . . . . . 34
SECTION 5. Conditions Precedent to Restatement Effective Date and Credit
Events.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.01 Conditions Precedent to Restatement Effective Date and
Initial Credit Events . . . . . . . . . . . . . . . . . . . . 37
<PAGE>
5.02 Conditions Precedent to All Credit Events. . . . . . . . . . 41
SECTION 6. Conditions Precedent to Designation of Borrowers . . . . . . . . 42
SECTION 7. Representations and Warranties . . . . . . . . . . . . . . . . . 43
7.01 Company Status . . . . . . . . . . . . . . . . . . . . . . . 43
7.02 Company Power and Authority. . . . . . . . . . . . . . . . . 43
7.03 No Violation . . . . . . . . . . . . . . . . . . . . . . . . 44
7.04 Governmental Approvals . . . . . . . . . . . . . . . . . . . 44
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc . . . . . . . . . . . . . . . . 44
7.06 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.07 True and Complete Disclosure . . . . . . . . . . . . . . . . 45
7.08 Use of Proceeds; Margin Regulations. . . . . . . . . . . . . 46
7.09 Tax Returns and Payments . . . . . . . . . . . . . . . . . . 46
7.10 Compliance with ERISA. . . . . . . . . . . . . . . . . . . . 47
7.11 Pledge and Security Agreement. . . . . . . . . . . . . . . . 48
7.12 Representations and Warranties in Documents. . . . . . . . . 48
7.13 Properties . . . . . . . . . . . . . . . . . . . . . . . . . 48
7.14 Capitalization . . . . . . . . . . . . . . . . . . . . . . . 48
7.15 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . 49
7.16 Compliance with Statutes, etc. . . . . . . . . . . . . . . . 49
7.17 Investment Company Act . . . . . . . . . . . . . . . . . . . 49
7.18 Public Utility Holding Company Act . . . . . . . . . . . . . 49
7.19 Environmental Matters. . . . . . . . . . . . . . . . . . . . 49
7.20 Labor Relations. . . . . . . . . . . . . . . . . . . . . . . 50
7.21 Patents, Licenses, Franchises and Formulas . . . . . . . . . 50
7.22 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 51
7.23 Transaction. . . . . . . . . . . . . . . . . . . . . . . . . 51
7.24 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.25 Treatment of Certain Extensions of Credit Under Indentures . 51
7.26 Special Purpose Corporation. . . . . . . . . . . . . . . . . 51
SECTION 8. Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . . 52
8.01 Information Covenants. . . . . . . . . . . . . . . . . . . . 52
8.02 Books, Records and Inspections . . . . . . . . . . . . . . . 55
8.03 Maintenance of Property; Insurance . . . . . . . . . . . . . 55
8.04 Corporate Franchises . . . . . . . . . . . . . . . . . . . . 56
8.05 Compliance with Statutes, etc. . . . . . . . . . . . . . . . 56
8.06 Compliance with Environmental Laws . . . . . . . . . . . . . 56
8.07 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.08 End of Fiscal Years; Fiscal Quarters . . . . . . . . . . . . 58
8.09 Performance of Obligations . . . . . . . . . . . . . . . . . 58
8.10 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . 58
8.11 Additional Security; Further Assurances. . . . . . . . . . . 58
8.12 Ownership of Subsidiaries. . . . . . . . . . . . . . . . . . 59
8.13 Permitted Acquisitions . . . . . . . . . . . . . . . . . . . 59
8.14 Maintenance of Corporate Separateness. . . . . . . . . . . . 61
<PAGE>
8.15 Foreign Subsidiaries Security. . . . . . . . . . . . . . . . 61
8.16 Certain Provisions with Respect to Receivables Facility. . . 62
8.17 Margin Stock . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 9. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . 63
9.01 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc . . . 66
9.03 Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . 68
9.04 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 71
9.05 Investments; etc . . . . . . . . . . . . . . . . . . . . . . 73
9.06 Transactions with Affiliates and Unrestricted Subsidiaries . 76
9.07 Capital Expenditures . . . . . . . . . . . . . . . . . . . . 78
9.08 Consolidated Net Interest Coverage Ratio . . . . . . . . . . 78
9.09 Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . 78
9.10 Limitation on Modifications of and Payments on Indebtedness
and Preferred Stock; Modifications of Certificate of
Incorporation, By-Laws and Certain Other Agreements . . . . . 78
9.11 Limitation on Creation or Acquisition of Subsidiaries and
Unrestricted Subsidiaries . . . . . . . . . . . . . . . . . . 79
9.12 Limitation on Issuance of Capital Stock. . . . . . . . . . . 80
9.13 Business . . . . . . . . . . . . . . . . . . . . . . . . . . 81
9.14 Limitation on Certain Restrictions on Subsidiaries . . . . . 82
9.15 Limitation on Receivables Subsidiary and Receivables
Facility. . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 10. Events of Default . . . . . . . . . . . . . . . . . . . . . . . 83
10.01 Payments. . . . . . . . . . . . . . . . . . . . . . . . . . 83
10.02 Representations, etc. . . . . . . . . . . . . . . . . . . . 83
10.03 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 83
10.04 Default Under Other Agreements. . . . . . . . . . . . . . . 83
10.05 Bankruptcy, etc . . . . . . . . . . . . . . . . . . . . . . 84
10.06 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
10.07 Security Documents. . . . . . . . . . . . . . . . . . . . . 84
10.08 Guarantees. . . . . . . . . . . . . . . . . . . . . . . . . 85
10.09 Judgments . . . . . . . . . . . . . . . . . . . . . . . . . 85
10.10 Change of Control . . . . . . . . . . . . . . . . . . . . . 85
10.11 Receivables Facility. . . . . . . . . . . . . . . . . . . . 85
10.12 Operations of BF Trust. . . . . . . . . . . . . . . . . . . 85
SECTION 11. Definitions and Accounting Terms . . . . . . . . . . . . . . . . 86
11.01 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 12. The Agents. . . . . . . . . . . . . . . . . . . . . . . . . . . 131
12.01 Appointment . . . . . . . . . . . . . . . . . . . . . . . . 131
12.02 Nature of Duties. . . . . . . . . . . . . . . . . . . . . . 131
12.03 Lack of Reliance on the Agent, the Documentation Agent and
the Co-Agents . . . . . . . . . . . . . . . . . . . . . . . . 131
<PAGE>
12.04 Certain Rights of the Agent, the Documentation Agent and
the Co-Agents . . . . . . . . . . . . . . . . . . . . . . . . 132
12.05 Reliance. . . . . . . . . . . . . . . . . . . . . . . . . . 132
12.06 Indemnification . . . . . . . . . . . . . . . . . . . . . . 132
12.07 The Agent, Documentation Agent and the Co-Agents in their
Individual Capacities . . . . . . . . . . . . . . . . . . . . 133
12.08 Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 133
12.09 Resignation by the Agent, Documentation Agent and the
Co-Agents . . . . . . . . . . . . . . . . . . . . . . . . . . 133
SECTION 13. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . 134
13.01 Payment of Expenses, etc. . . . . . . . . . . . . . . . . . 134
13.02 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . 135
13.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 135
13.04 Benefit of Agreement. . . . . . . . . . . . . . . . . . . . 136
13.05 No Waiver Remedies Cumulative . . . . . . . . . . . . . . . 138
13.06 Payments Pro Rata . . . . . . . . . . . . . . . . . . . . . 138
13.07 Calculations; Computations. . . . . . . . . . . . . . . . . 139
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER
OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . 140
13.09 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 140
13.10 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . 141
13.11 Headings Descriptive. . . . . . . . . . . . . . . . . . . . 141
13.12 Amendment or Waiver; etc. . . . . . . . . . . . . . . . . . 141
13.13 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . 142
13.14 Domicile of Loans and Commitments . . . . . . . . . . . . . 143
13.15 Confidentiality . . . . . . . . . . . . . . . . . . . . . . 143
13.16 Register. . . . . . . . . . . . . . . . . . . . . . . . . . 143
13.17 Powers-of Attorney; etc . . . . . . . . . . . . . . . . . . 144
13.18 Limitation on Additional Amounts, etc . . . . . . . . . . . 145
13.19 Judgment Currency . . . . . . . . . . . . . . . . . . . . . 145
13.20 Additions of New Banks; Termination of Commitments of
Non-Continuing Banks, etc . . . . . . . . . . . . . . . . . . 145
SECTION 14. Parent Guaranty . . . . . . . . . . . . . . . . . . . . . . . . 146
14.01 The Parent Guaranty . . . . . . . . . . . . . . . . . . . . 146
14.02 Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . 147
14.03 Nature of Liability . . . . . . . . . . . . . . . . . . . . 147
14.04 Independent Obligation. . . . . . . . . . . . . . . . . . . 147
14.05 Authorization . . . . . . . . . . . . . . . . . . . . . . . 148
14.06 Reliance. . . . . . . . . . . . . . . . . . . . . . . . . . 148
14.07 Subordination . . . . . . . . . . . . . . . . . . . . . . . 149
14.08 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . 149
14.09 Nature of Liability . . . . . . . . . . . . . . . . . . . . 150
SECTION 15. Non-U.K. U.S. Borrowers Guaranty. . . . . . . . . . . . . . . . 150
15.01 The Non-U.K. U.S. Borrowers Guaranty. . . . . . . . . . . . 150
15.02 Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . 151
15.03 Nature of Liability . . . . . . . . . . . . . . . . . . . . 151
<PAGE>
15.04 Independent Obligation. . . . . . . . . . . . . . . . . . . 151
15.05 Authorization . . . . . . . . . . . . . . . . . . . . . . . 151
15.06 Reliance. . . . . . . . . . . . . . . . . . . . . . . . . . 152
15.07 Subordination . . . . . . . . . . . . . . . . . . . . . . . 152
15.08 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . 153
15.09 Nature of Liability . . . . . . . . . . . . . . . . . . . . 154
SECTION 16. Domestic U.K. Borrowers Guaranty. . . . . . . . . . . . . . . . 154
16.01 The Domestic U.K. Borrowers Guaranty. . . . . . . . . . . . 154
16.02 Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . 155
16.03 Nature of Liability . . . . . . . . . . . . . . . . . . . . 155
16.04 Independent Obligation. . . . . . . . . . . . . . . . . . . 155
16.05 Authorization . . . . . . . . . . . . . . . . . . . . . . . 155
16.06 Reliance. . . . . . . . . . . . . . . . . . . . . . . . . . 156
16.07 Subordination . . . . . . . . . . . . . . . . . . . . . . . 156
16.08 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . 157
16.09 Nature of Liability . . . . . . . . . . . . . . . . . . . . 158
<PAGE>
SCHEDULES AND EXHIBITS
SCHEDULE I-A Commitments
SCHEDULE I-B U.K. Sub-Commitments
SCHEDULE II Bank Addresses and Applicable Lending Offices
SCHEDULE III Originial Letters of Credit
SCHEDULE IV Projections
SCHEDULE V Subsidiaries
SCHEDULE VI Scheduled Existing Indebtedness
SCHEDULE VII Insurance
SCHEDULE VIII Existing Liens
SCHEDULE IX Existing Investments
SCHEDULE X Certain Restrictions on Subsidiaries
SCHEDULE XI Calculation of the MLA Cost
SCHEDULE XII Existing Transactions
SCHEDULE XIII ERISA
EXHIBIT A Form of Notice of Borrowing
EXHIBIT B-1 Form of U.S. Borrowers' Revolving Note
EXHIBIT B-2 Form of U.K. Borrowers' Revolving Note
EXHIBIT B-3 Form of U.S. Borrowers' Swingline Note
EXHIBIT B-4 Form of U.K. Borrowers' Swingline Note
EXHIBIT C Form of Letter of Credit Request
EXHIBIT D Form of Section 4.04(b)(ii) Certificate
EXHIBIT E-1 Form of Opinion of Sullivan & Cromwell, Special
Counsel to Credit Parties
EXHIBIT E-2 Form of Opinion of Associate General Counsel of
Holdings
EXHIBIT E-3 Form of Opinion of Ashurst Morris Crisp, Special
United Kingdom Counsel to the Credit Parties
EXHIBIT F Form of Officers' Certificate
EXHIBIT G Form of Solvency Certificate
EXHIBIT H-1 Form of Non-Borrower U.S. Subsidiaries Guaranty
EXHIBIT H-2 Form of Non-Borrower U.K. Subsidiaries Guaranty
EXHIBIT I-1 Form of U.S. Pledge and Security Agreement
EXHIBIT I-2 Form of U.S. Charge Over Shares and Notes
EXHIBIT I-3 Form of U.K. Charge Over Shares and Notes
EXHIBIT J Form of Election to Become a Borrower
EXHIBIT K Form of Assignment and Assumption Agreement
EXHIBIT L Form of Intercompany Note
EXHIBIT M Form of New Borrower Consent
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 22, 1998 among
BIG FLOWER HOLDINGS, INC., a Delaware corporation ("Holdings"), BIG FLOWER PRESS
HOLDINGS, INC., a Delaware corporation ("BFPH"), TREASURE CHEST ADVERTISING
COMPANY, INC., a Delaware corporation and a Wholly-Owned Subsidiary of BFPH
("Treasure Chest"), WEBCRAFT, INC., a Delaware corporation and a Wholly-Owned
Subsidiary of BFPH ("Webcraft"), BIG FLOWER DIGITAL SERVICES, INC., a Delaware
corporation and a Wholly-Owned Subsidiary of BFPH ("BF Digital"), BIG FLOWER
LIMITED, a Wholly-Owned Subsidiary of BFPH and a limited company organized under
the laws of England ("BFL"), OLWEN DIRECT MAIL LIMITED, a Wholly-Owned
Subsidiary of BFL and a limited company organized under the laws of England
("Olwen"), BIG FLOWER DIGITAL SERVICES LIMITED, an indirect Wholly-Owned
Subsidiary of BF Digital and a limited company organized under the laws of
England ("BFDSL"), TROYPEAK LIMITED, an indirect Wholly-Owned Subsidiary of BF
Digital and a limited company organized under the laws of England ("Troypeak"),
PISMO LIMITED, an indirect Wholly-Owned Subsidiary of BF Digital and a limited
company organized under the laws of England ("Pismo"), and BROADCAST SYSTEMS
SOFTWARE LIMITED, an indirect Wholly-Owned Subsidiary of BF Digital and a
limited company organized under the laws of England ("Broadcast", and together
with Treasure Chest, Webcraft, BF Digital, BFL, Olwen, BFDSL, Troypeak, Pismo
and each other entity that may become a party hereto as a Borrower in accordance
with the provisions of Section 6, the "Borrowers", and each, a "Borrower"), the
Banks from time to time party hereto, BANK OF AMERICA NT & SA and THE INDUSTRIAL
BANK OF JAPAN, LIMITED, as Co-Agents (collectively, the "Co-Agents," and each, a
"Co-Agent"), CREDIT SUISSE FIRST BOSTON, as Documentation Agent, and BANKERS
TRUST COMPANY, as Administrative Agent (all capitalized terms used herein and
defined in Section 11 are used herein as therein defined).
W I T N E S S E T H :
WHEREAS, BFPH, the Original Banks, the Co-Agents, the Documentation
Agent and the Administrative Agent are parties to a Credit Agreement, dated as
of June 12, 1997 (as the same has been amended, modified or supplemented to, but
not including, the Restatement Effective Date, the "Original Credit Agreement");
and
WHEREAS, the parties hereto wish to amend and restate the Original
Credit Agreement in the form of this Agreement;
NOW, THEREFORE, the parties hereto agree that the Original Credit A
SECTION 1. AMOUNT AND TERMS OF CREDIT.
1.01 THE COMMITMENTS. (a) Subject to and upon the terms and
conditions set forth herein, each Bank severally agrees, at any time and from
time to time on and after the Restatement Effective Date and prior to the Final
Maturity Date, to make a revolving loan or revolving loans to the U.S. Borrowers
(on a joint and several basis), and each U.K. Bank
<PAGE>
severally agrees, at any time and from time to time on and after the Restatement
Effective Date and prior to the Final Maturity Date, to make a revolving loan or
revolving loans to the U.K. Borrowers (on a joint and several basis) (with the
revolving loans made to the U.S. Borrowers or the U.K. Borrowers pursuant to
this Section 1.01(a) being each called a "Revolving Loan" and, collectively, the
"Revolving Loans"), which Revolving Loans (i) shall, in the case of Revolving
Loans made to the U.S. Borrowers, be made and maintained in Dollars (each, a
"Dollar Revolving Loan" and, collectively, the "Dollar Revolving Loans"), which
Dollar Revolving Loans shall, at the option of the U.S. Borrowers, be incurred
and maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans,
PROVIDED that except as otherwise specifically provided in Section 1.10(b), all
Dollar Revolving Loans comprising the same Borrowing shall at all times be of
the same Type, (ii) shall, in the case of Revolving Loans made to the U.K.
Borrowers, be made and maintained in Pounds Sterling (each, a "Sterling
Revolving Loan" and, collectively, the "Sterling Revolving Loans"), (iii) may be
repaid and reborrowed in accordance with the provisions hereof, (iv) shall not
be made (and shall not be required to be made) by any Bank in any instance where
the incurrence thereof (after giving effect to the use of the proceeds thereof
on the date of the incurrence thereof to repay any amounts theretofore
outstanding pursuant to this Agreement) would cause the Individual Exposure of
such Bank to exceed the amount of its Commitment at such time, (v) shall not, in
the case of Sterling Revolving Loans, be made (and shall not be required to be
made) by any Bank if the making of same (after giving effect to the use of the
proceeds thereof on the date of the respective Borrowing) would cause the
Individual Sterling Exposure of such Bank to exceed the U.K. Sub-Commitment of
such Bank at such time and (vi) shall not be made (and shall not be required to
be made) by any Bank if the making of same would cause the Aggregate Exposure
(after giving effect to the use of the proceeds thereof to pay existing
extensions of credit pursuant to this Agreement on such date) to exceed the
Total Commitment as then in effect. The proceeds of each Dollar Revolving Loan
shall be made available to the U.S. Borrowers as directed by any one of them
(with the proceeds to be used by one or more the U.S. Borrowers as they may
determine), it being understood and agreed that the U.S. Borrowers shall be
jointly and severally obligated with respect to each U.S. Borrowers' Revolving
Loan for the repayment thereof and all amounts owing with respect thereto. The
proceeds of each Sterling Revolving Loan shall be made available to the U.K.
Borrowers as directed by any one of them (with the proceeds to be used by one or
more of the U.K. Borrowers as they may determine), it being understood and
agreed that U.K. Borrowers shall be jointly and severally obligated with respect
to each U.K. Borrowers' Revolving Loan for the repayment thereof and all amounts
owing with respect thereto. The U.K. Borrowers shall have no liability with
respect to any U.S. Borrowers' Revolving Loans which may be extended to, and
which shall constitute obligations of, the U.S. Borrowers.
(b) Subject to and upon the terms and conditions herein set forth,
BTCo in its individual capacity agrees to make at any time and from time to time
on and after the Restatement Effective Date and prior to the Swingline Expiry
Date, a revolving loan or revolving loans to the U.S. Borrowers (on a joint and
several basis) and to the U.K. Borrowers (on a joint and several basis) (with
the revolving loans made to the U.S. Borrowers or the U.K. Borrowers pursuant to
this Section 1.01(b) being each called a "Swingline Loan" and, collectively, the
"Swingline Loans"), which Swingline Loans (i) shall, in the case of Swingline
Loans made to the U.S. Borrowers,
2
<PAGE>
be made and maintained in Dollars (each, a "Dollar Swingline Loan" and,
collectively, the "Dollar Swingline Loans"), which Dollar Swingline Loans shall
be made and maintained as Base Rate Loans, (ii) shall, in the case of Swingline
Loans made to the U.K. Borrowers, be made and maintained in Pounds Sterling
(each, a "Sterling Swingline Loan" and, collectively, the "Sterling Swingline
Loans"), which Sterling Swingline Loans shall bear interest as provided in
Section 1.08(d), (iii) may be repaid and reborrowed in accordance with the
provisions hereof, (iv) shall not exceed in aggregate principal amount (for this
purpose, using the Dollar Equivalent of each outstanding Sterling Swingline
Loan) at any time outstanding, when combined with the aggregate principal amount
of all Revolving Loans (for this purpose, using the Dollar Equivalent of each
outstanding Sterling Revolving Loan) then outstanding and the Letter of Credit
Outstandings at such time, an amount equal to the Total Commitment at such time
(after giving effect to any reductions to the Total Commitment on such date),
(v) shall not, in the case of Sterling Swingline Loans, be made (and shall not
be required to be made) if, after the making thereof (and the application of the
proceeds thereof on the date of the respective incurrence of such Sterling
Swingline Loans to repay any theretofore outstanding extensions of credit
pursuant to this Agreement), the Aggregate U.K. Exposure would exceed the Total
U.K. Sub-Commitment at such time and (vi) shall not exceed at any time
outstanding the Maximum Swingline Amount applicable thereto. BTCo shall not be
obligated to make any Swingline Loans at a time when a Bank Default exists
unless BTCo has entered into arrangements satisfactory to BTCo to eliminate
BTCo's risk with respect to the Defaulting Bank's or Banks' participation in
such Swingline Loans, including by cash collateralizing such Defaulting Bank's
or Banks' Dollar Percentage of the outstanding Dollar Swingline Loans (other
than Excess Dollar Swingline Loans) or such Defaulting Bank's or Banks' U.K.
Percentage of the outstanding Sterling Swingline Loan or Excess Dollar Swingline
Loans, as the case may be. The proceeds of each Dollar Swingline Loan shall be
made available to the U.S. Borrowers as directed by any one of them (with the
proceeds to be used by one or more of the U.S. Borrowers as they may determine),
it being understood and agreed that the U.S. Borrowers shall be jointly and
severally obligated with respect to each U.S. Borrowers' Swingline Loan for the
repayment thereof and all amounts owing with respect thereto. The proceeds of
each Sterling Swingline Loan shall be made available to the U.K. Borrowers as
directed by any one of them (with the proceeds to be used by one or more of the
U.K. Borrowers as they may determine), it being understood and agreed that the
U.K. Borrowers shall be jointly and severally obligated with respect to each
U.K. Borrowers' Swingline Loan for the repayment thereof and all amounts owing
with respect thereto. The U.K. Borrowers shall have no liability with respect
to any U.S. Borrowers' Swingline Loans which may be extended to, and which shall
constitute obligations of, the U.S. Borrowers.
(c) On any Business Day, BTCo may, in its sole discretion, give
notice to the Banks that its outstanding Dollar Swingline Loans (including,
without limitation, Dollar Swingline Loans resulting from conversions pursuant
to Section 1.15(b)) shall be funded with a Borrowing of Dollar Revolving Loans
(PROVIDED that such notice shall be deemed to have been automatically given upon
the occurrence of a Default or an Event of Default under Section 10.05 or upon
the exercise of any of the remedies provided in the last paragraph of Section
10), in which case a Borrowing of Dollar Revolving Loans constituting Base Rate
Loans (each such Borrowing, a "Mandatory Dollar Borrowing") shall be made on the
immediately succeeding Business Day by
3
<PAGE>
all Banks with a Commitment (without giving effect to any reductions thereto
pursuant to the last paragraph of Section 10) PRO RATA based on each Bank's
Dollar Percentage, PROVIDED that (i) to the extent any Mandatory Dollar
Borrowing is required to be made in respect of any Excess Dollar Swingline
Loans, such Mandatory Dollar Borrowing shall instead be made by the Banks PRO
RATA based on each Bank's U.K. Percentage and (ii) if a Sharing Event then
exists, such portion of the Mandatory Dollar Borrowing shall instead be made by
the Banks PRO RATA based on each Bank's RL Percentage, and the proceeds of each
Mandatory Dollar Borrowing shall be applied directly to BTCo to repay BTCo for
such outstanding Dollar Swingline Loans. All Dollar Revolving Loans made
pursuant to each Mandatory Dollar Borrowing shall constitute joint and several
obligations of the U.S. Borrowers, and shall not constitute obligations of the
U.K. Borrowers; PROVIDED that to the extent that any Mandatory Dollar Borrowing
is made in respect of U.K. Borrowers' Swingline Loans which have been converted
into Dollar Swingline Loans, pursuant to Section 1.15(b), the Dollar Revolving
Loans made pursuant to such Mandatory Dollar Borrowing shall instead constitute
joint and several obligations of the U.K. Borrowers. Each such Bank hereby
irrevocably agrees to make Dollar Revolving Loans upon one Business Day's notice
pursuant to each Mandatory Dollar Borrowing in the amount and in the manner
specified in the preceding sentence and on the date specified in writing by BTCo
notwithstanding (i) that the amount of the Mandatory Dollar Borrowing may not
comply with the minimum amount for Borrowings otherwise required hereunder, (ii)
whether any conditions specified in Section 5.02 are then satisfied, (iii)
whether a Default or an Event of Default then exists, (iv) the date of such
Mandatory Dollar Borrowing and (v) the amount of the Total Commitment or such
Bank's Commitment at such time. In the event that any Mandatory Dollar
Borrowing cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code or any other bankruptcy, reorganization, dissolution,
insolvency, receivership, liquidation or similar law with respect to any
Borrower), then each such Bank hereby agrees that it shall forthwith purchase
(as of the date the Mandatory Dollar Borrowing would otherwise have occurred,
but adjusted for any payments received from any Borrower on or after such date
and prior to such purchase) from BTCo such participations in the outstanding
Dollar Swingline Loans as shall be necessary to cause such Banks to share in
such Dollar Swingline Loans ratably based upon their respective Dollar
Percentages (or in the circumstances contemplated by clause (i) of the last
proviso to the first sentence hereof, their respective U.K. Percentages or by
clause (ii) of the last proviso to the first sentence hereof, their respective
RL Percentages), PROVIDED that (x) all interest payable on the Dollar Swingline
Loans shall be for the account of BTCo until the date as of which the respective
participation is required to be purchased and, to the extent attributable to the
purchased participation, shall be payable to the participant from and after such
date and (y) at the time any purchase of participations pursuant to this
sentence is actually made, the purchasing Bank shall be required to pay BTCo
interest on the principal amount of the participation purchased for each day
from and including the day upon which the Mandatory Dollar Borrowing would
otherwise have occurred to but excluding the date of payment for such
participation, at the overnight Federal Funds Rate for the first three days and
at the rate otherwise applicable to Dollar Revolving Loans maintained as Base
Rate Loans hereunder for each day thereafter.
4
<PAGE>
(d) On any Business Day, BTCo may, in its sole discretion, give
notice to the U.K. Banks that its outstanding Sterling Swingline Loans shall be
funded with a Borrowing of Sterling Revolving Loans (PROVIDED that such notice
shall be deemed to have been automatically given upon the occurrence of a
Default or an Event of Default under Section 10.05 or upon the exercise of any
of the remedies provided in the last paragraph of Section 10), in which case a
Borrowing of Sterling Revolving Loans (each such Borrowing, a "Mandatory
Sterling Borrowing") shall be made on the immediately succeeding Business Day by
all Banks with a U.K. Sub-Commitment (without giving effect to any reductions
thereto pursuant to the last paragraph of Section 10) PRO RATA based on each
U.K. Bank's U.K. Percentage, and the proceeds thereof shall be applied directly
to BTCo to repay BTCo for such outstanding Sterling Swingline Loans. All
Sterling Revolving Loans made pursuant to each Mandatory Sterling Borrowing
shall constitute joint and several obligations of the U.K. Borrowers. Each such
U.K. Bank hereby irrevocably agrees to make Sterling Revolving Loans upon one
Business Day's notice pursuant to each Mandatory Sterling Borrowing in the
amount and in the manner specified in the preceding sentence and on the date
specified in writing by BTCo notwithstanding (i) that the amount of the
Mandatory Sterling Borrowing may not comply with the minimum amount for
Borrowings otherwise required hereunder, (ii) whether any conditions specified
in Section 5.02 are then satisfied, (iii) whether a Default or an Event of
Default then exists, (iv) the date of such Mandatory Sterling Borrowing and (v)
the amount of the Total Commitment, the Total U.K. Sub-Commitment and such U.K.
Bank's U.K. Sub-Commitment at such time. In the event that any Mandatory
Sterling Borrowing cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the commencement of a
proceeding under any bankruptcy, reorganization, dissolution, insolvency,
receivership, administration or liquidation or similar law with respect to any
Borrower), then each such U.K. Bank hereby agrees that it shall forthwith
purchase (as of the date the Mandatory Sterling Borrowing would otherwise have
occurred, but adjusted for any payments received from any U.K. Borrower on or
after such date and prior to such purchase) from BTCo such participations in the
outstanding Sterling Swingline Loans as shall be necessary to cause such U.K.
Banks to share in such Sterling Swingline Loans ratably based upon their
respective U.K. Percentages, PROVIDED that (x) all interest payable on the
Sterling Swingline Loans shall be for the account of BTCo until the date as of
which the respective participation is required to be purchased and, to the
extent attributable to the purchased participation, shall be payable to the
participant from and after such date and (y) at the time any purchase of
participations pursuant to this sentence is actually made, the purchasing U.K.
Bank shall be required to pay BTCo interest on the principal amount of the
participation purchased for each day from and including the day upon which the
Mandatory Sterling Borrowing would otherwise have occurred to but excluding the
date of payment for such participation, at the rate otherwise applicable to
Sterling Swingline Loans. Notwithstanding anything to the contrary contained
above in this clause (d), upon the occurrence of a Sharing Event, all
outstanding Sterling Swingline Loans shall, as provided in Section 1.15(b), be
automatically converted into Dollar Swingline Loans and, to the extent the
respective Mandatory Sterling Borrowing has not already occurred in respect of
such Sterling Swingline Loans, a Mandatory Dollar Borrowing shall be effected
with respect thereto in accordance with the provisions of preceding Section
1.01(c).
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1.02 MINIMUM AMOUNT OF EACH BORROWING. The aggregate principal
amount of each Borrowing shall not be less than the Minimum Borrowing Amount
applicable thereto, PROVIDED that Mandatory Dollar Borrowings and Mandatory
Sterling Borrowings shall be made in the amounts required by Section 1.01(c) or
1.01(d), as the case may be. More than one Borrowing may occur on the same
date, but at no time shall there be outstanding more than 24 Borrowings of Euro
Rate Loans.
1.03 NOTICE OF BORROWING. (a) Whenever any Borrower desires to make
a Borrowing hereunder (excluding Borrowings of Swingline Loans and Mandatory
Borrowings), an Authorized Representative of such Borrower shall give the
Administrative Agent at its Notice Office at least one Business Day's prior
written (or telephonic notice promptly confirmed in writing) notice of each Base
Rate Loan and at least three Business Days' prior written (or telephonic notice
promptly confirmed in writing) notice of each Euro Rate Loan to be made
hereunder, PROVIDED that any such notice shall be deemed to have been given on a
certain day only if given before (x) 2:00 P.M. (New York time) on such day (in
the case of Dollar Revolving Loans) and (y) 1:00 P.M. (London time) on such day
(in the case of Sterling Revolving Loans). Each such written notice or written
confirmation of telephonic notice (each, a "Notice of Borrowing"), except as
otherwise expressly provided in Section 1.10, shall be irrevocable and shall be
given by or on behalf of the respective Borrower in the form of Exhibit A,
appropriately completed to specify the aggregate principal amount of the
Revolving Loans to be made pursuant to such Borrowing (stated in the Applicable
Currency), the date of such Borrowing (which shall be a Business Day), in the
case of Dollar Revolving Loans, whether the Dollar Revolving Loans being made
pursuant to such Borrowing are to be initially maintained as Base Rate Loans or
Eurodollar Loans and, if Euro Rate Loans, the initial Interest Period to be
applicable thereto. The Administrative Agent shall promptly give each Bank
notice of such proposed Borrowing, of such Bank's proportionate share thereof
and of the other matters required by the immediately preceding sentence to be
specified in the Notice of Borrowing.
(b) (i) Whenever any Borrower desires to make a Borrowing of
Swingline Loans hereunder, an Authorized Representative of such Borrower shall
give BTCo not later than (x) in the case of Dollar Swingline Loans, 3:00 P.M.
(New York time) and (y) in the case of Sterling Swingline Loans, 12:00 noon
(London time), on the date that a Swingline Loan is to be made, written notice
or telephonic notice promptly confirmed in writing of each Swingline Loan to be
made hereunder. Each such notice shall be irrevocable and specify (A) the date
of Borrowing (which shall be a Business Day) and (B) the aggregate principal
amount of the Swingline Loans to be made pursuant to such Borrowing (stated in
the Applicable Currency).
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(c) or (d), as the case may be, with each Borrower irrevocably
agreeing, by its incurrence of any Swingline Loan, to the making of the
Mandatory Borrowings as set forth in Section 1.01(c) or (d), as applicable.
(c) Without in any way limiting the obligation of any Borrower to
confirm in writing any telephonic notice of any Borrowing, the Administrative
Agent or BTCo, as the case may be, may act without liability upon the basis of
telephonic notice of such Borrowing, believed by the
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Administrative Agent or BTCo, as the case may be, in good faith to be from an
Authorized Representative of such Borrower prior to receipt of written
confirmation.
1.04 DISBURSEMENT OF FUNDS. Not later than 11:00 A.M. (New York time
or, in the case of any Sterling Revolving Loan, 11:00 A.M. (London time)), on
the date specified in each notice of Borrowing (or (w) in the case of Dollar
Swingline Loans, not later than 3:00 P.M. (New York time) (or, if later, one
hour after the receipt of the related Notice of Borrowing) on the date specified
pursuant to Section 1.03(b)(i), (x) in the case of Sterling Swingline Loans, not
later than 1:00 P.M. (London time) on the date specified pursuant to Section
1.03(b)(i), (y) in the case of Mandatory Dollar Borrowings, not later than 11:00
A.M. (New York time) on the date specified in Section 1.01(c) or (z) in the case
of Mandatory Sterling Borrowings, not later than 11:00 A.M. (London time) on the
date specified in Section 1.01(d)), each Bank will make available its PRO RATA
portion (determined in accordance with Section 1.07) of each such Borrowing
requested to be made on such date (or in the case of Swingline Loans, BTCo shall
make available the full amount thereof). All such amounts shall be made
available in Dollars (in the case of Dollar Loans) or Pounds Sterling (in the
case of Sterling Loans), as the case may be, and in immediately available funds
at the Payment Office of the Administrative Agent, and the Administrative Agent
will make available to the respective Borrower at the Payment Office (or to BTCo
in the case of a Mandatory Borrowing) the aggregate of the amounts so made
available by the Banks prior to (w) 12:00 Noon (New York time) on such day, in
the case of any Dollar Revolving Loan, (x) 12:00 Noon (London time) on such day,
in the case of any Sterling Revolving Loan, (y) 4:00 P.M. (New York time) on
such day, in the case of any Dollar Swingline Loan and (z) 1:00 P.M. (London
time) on such day, in the case of any Sterling Swingline Loan, in each case to
the extent of funds actually received by the Administrative Agent prior to such
times on such day. Unless the Administrative Agent shall have been notified by
any Bank prior to the date of Borrowing that such Bank does not intend to make
available to the Administrative Agent such Bank's portion of any Borrowing to be
made on such date, the Administrative Agent may assume that such Bank has made
such amount available to the Administrative Agent on such date of Borrowing and
the Administrative Agent may, in reliance upon such assumption, make available
to the relevant Borrower a corresponding amount. If such corresponding amount
is not in fact made available to the Administrative Agent by such Bank, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Bank. If such Bank does not pay such corresponding amount
forthwith upon the Administrative Agent's demand therefor, the Administrative
Agent shall promptly notify the relevant Borrower to pay immediately such
corresponding amount to the Administrative Agent and such Borrower shall
immediately pay such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover on demand from such Bank
or the U.S. Borrowers or the U.K. Borrowers, as the case may be, interest on
such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to the
respective Borrower or Borrowers until the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to (i) if
recovered from such Bank, the overnight Federal Funds Rate and (ii) if recovered
from the respective Borrower or Borrowers, the rate of interest applicable to
the respective Borrowing, as determined pursuant to Section 1.08. Nothing in
this Section 1.04 shall be deemed to relieve
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any Bank from its obligation to make Revolving Loans hereunder or to prejudice
any rights which the relevant Borrower or Borrowers may have against any Bank as
a result of any failure by such Bank to make Revolving Loans hereunder.
1.05 NOTES. (a) Subject to the provisions of Section 1.05(g), the
U.S. Borrowers' (in the case of U.S. Borrowers' Loans) and the U.K. Borrowers'
(in the case of U.K. Borrowers' Loans) obligation to pay the principal of, and
interest on, the Loans made by each Bank shall be evidenced (i) if U.S.
Borrowers' Revolving Loans, by a promissory note duly executed and delivered by
the U.S. Borrowers substantially in the form of Exhibit B-1, with blanks
appropriately completed in conformity herewith (each, a "U.S. Borrowers'
Revolving Note" and, collectively, the "U.S. Borrowers' Revolving Notes"), (ii)
if U.K. Borrowers' Revolving Loans, by a promissory note duly executed and
delivered by the U.K. Borrowers substantially in the form of Exhibit B-2, with
blanks appropriately completed in conformity herewith (each, a "U.K. Borrowers'
Revolving Note" and, collectively, the "U.K. Borrowers' Revolving Notes"), (iii)
if U.S. Borrowers' Swingline Loans, by a promissory note duly executed and
delivered by the U.S. Borrowers substantially in the form of Exhibit B-3, with
blanks appropriately completed in conformity herewith (the "U.S. Borrowers'
Swingline Note") and (iv) if U.K. Borrowers' Swingline Loans, by a promissory
note duly executed and delivered by the U.K. Borrowers substantially in the form
of Exhibit B-4, with blanks appropriately completed in conformity herewith (the
"U.K. Borrowers' Swingline Note").
(b) The U.S. Borrowers' Revolving Note issued to each Bank shall (i)
be executed by the U.S. Borrowers on a joint and several basis (with each of the
U.S. Borrowers being jointly and severally liable for all amounts owing under,
or evidenced by, each U.S. Borrowers' Revolving Note), (ii) be payable to the
order of such Bank or its registered assigns and be dated the Restatement
Effective Date (or, if issued thereafter, the date of issuance thereof), (iii)
be in a stated principal amount equal to the Commitment of such Bank on the date
of issuance thereof and be payable in Dollars in the outstanding principal
amount of Dollar Revolving Loans evidenced thereby, (iv) mature on the Final
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of Base Rate Loans and Eurodollar Loans, as the case may
be, evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01 and mandatory repayment as provided in Section 4.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(c) The U.K. Borrowers' Revolving Note issued to each Bank that has a
U.K Sub-Commitment or outstanding U.K. Borrowers' Revolving Loans shall (i) be
executed by the U.K. Borrowers on a joint and several basis (with each of the
U.K. Borrowers being jointly and severally liable for all amounts owing under,
or evidenced by, each U.K. Borrowers' Revolving Note), (ii) be payable to the
order of such Bank or its registered assigns and be dated the Restatement
Effective Date (or, if issued thereafter, the date of issuance thereof), (iii)
be in a stated principal amount (expressed in Pounds Sterling) equal to the
Sterling Equivalent (as of the date of issuance) of the U.K. Sub-Commitment of
such Bank; PROVIDED that if, because of fluctuations in exchange rates after the
Restatement Effective Date, the U.K. Borrowers' Revolving Note of any Bank would
not be at least as great as the outstanding principal amount of U.K. Borrowers'
Revolving Loans made by such Bank at any time outstanding, the respective
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Bank may request (and in such case the U.K. Borrowers shall promptly execute and
deliver) a new U.K. Borrowers' Revolving Note in an amount equal to the Sterling
Equivalent of such Bank's U.K. Sub-Commitment on the date of the issuance of
such new U.K. Borrowers' Revolving Note, (iv) be payable in Pounds Sterling in
the outstanding principal amount of the U.K. Borrowers' Revolving Loans
evidenced thereby; PROVIDED that the obligations evidenced by each U.K.
Borrowers' Revolving Note shall be subject to conversion as provided in (and in
the circumstances contemplated by) Section 1.15, (v) mature on the Final
Maturity Date, (vi) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Revolving Loans evidenced thereby from time to
time, (vii) be subject to voluntary prepayment as provided in Section 4.01 and
mandatory repayment as provided in Section 4.02 and (viii) be entitled to the
benefits of this Agreement and the other Credit Documents.
(d) The U.S. Borrowers' Swingline Note issued to BTCo shall (i) be
executed by the U.S. Borrowers on a joint and several basis (with each of the
U.S. Borrowers being jointly and severally liable for all amounts owing under,
or evidenced by, the U.S. Borrowers' Swingline Note), (ii) be payable to the
order of BTCo or its registered assigns and be dated the Restatement Effective
Date, (iii) be in a stated principal amount equal to the Maximum Swingline
Amount for Dollar Swingline Loans and be payable in Dollars in the principal
amount of the outstanding U.S. Borrowers' Swingline Loans evidenced thereby from
time to time, (iv) mature on the Swingline Expiry Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the Base Rate
Loans evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01 and mandatory repayment as provided in Section 4.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(e) The U.K. Borrowers' Swingline Note issued to BTCo shall (i) be
executed by the U.K. Borrowers on a joint and several basis (with each of the
U.K. Borrowers being jointly and severally liable for all amounts owing under,
or evidenced by, the U.K. Borrowers' Swingline Note), (ii) be payable to the
order of BTCo and be dated the Restatement Effective Date, (iii) be in a stated
principal amount (expressed in Pounds Sterling) equal to the Maximum Swingline
Amount for Sterling Swingline Loans, (iv) be payable in Pounds Sterling in the
principal amount of the outstanding U.K. Borrowers' Swingline Loans evidenced
thereby from time to time; PROVIDED that the obligations evidenced by the U.K.
Borrowers' Swingline Note shall be subject to conversion as provided in (and in
the circumstances contemplated by) Section 1.15(b), (v) mature on the Swingline
Expiry Date, (vi) bear interest as provided in the appropriate clause of Section
1.08 in respect of the U.K. Borrowers' Swingline Loans evidenced thereby from
time to time, (vii) be subject to voluntary prepayment as provided in Section
4.01 and mandatory repayment as provided in Section 4.02 and (viii) be entitled
to the benefits of this Agreement and the other Credit Documents.
(f) Each Bank will note on its internal records the amount of each
Revolving Loan made by it and each payment in respect thereof and will prior to
any transfer of any of its Revolving Notes endorse on the reverse side thereof
the outstanding principal amount of Revolving Loans evidenced thereby. Failure
to make any such notation or any error in any such notation or endorsement shall
not affect any U.S. Borrower's or, in the case of U.K. Borrowers' Revolving
Loans, any U.K. Borrower's obligations in respect of such Revolving Loans.
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(g) Notwithstanding anything to the contrary contained above or
elsewhere in this Agreement, U.S. Borrowers' Revolving Notes, U.K. Borrowers'
Revolving Notes, the U.S. Borrowers' Swingline Note and the U.K. Borrowers'
Swingline Note shall only be delivered to Banks which at any time specifically
request the delivery of such Notes (including any request for Notes from a new
Borrower pursuant to Section 6). No failure of any Bank to request or obtain a
Note evidencing its Loans to any existing Borrower (or any new Borrower pursuant
to Section 6) shall affect or in any manner impair the obligations of the
respective Borrower or Borrowers to pay the Loans (and all related Obligations)
which would otherwise be evidenced thereby in accordance with the requirements
of this Agreement, and shall not in any way affect the security or guaranties
therefor provided pursuant to the various Credit Documents. Any Bank which does
not have a Note evidencing its outstanding Loans shall in no event be required
to make the notations otherwise described in preceding clause (f). At any time
when any Bank requests the delivery of a Note to evidence any of its Loans, the
respective Borrower or Borrowers shall promptly execute and deliver to the
respective Bank the requested Note or Notes in the appropriate amount or amounts
to evidence such Loans.
1.06 CONVERSIONS. The U.S. Borrowers shall have the option to
convert, on any Business Day occurring after the Restatement Effective Date, all
or a portion equal to at least $1,000,000 (and, if greater, in an integral
multiple of $500,000) of the outstanding principal amount of Dollar Revolving
Loans made pursuant to one or more Borrowings of one or more Types of Dollar
Revolving Loans into a Borrowing or Borrowings of another Type of Dollar
Revolving Loan, PROVIDED that (i) except as otherwise provided in Section
1.10(b) or unless the U.S. Borrowers pay all amounts owing pursuant to Section
1.11 concurrently with any such conversion, Eurodollar Loans may be converted
into Base Rate Loans only on the last day of an Interest Period applicable to
the Eurodollar Loans being converted and no such partial conversion of
Eurodollar Loans shall reduce the outstanding principal amount of such
Eurodollar Loans made pursuant to a single Borrowing to less than $1,000,000 and
(ii) no conversion pursuant to this Section 1.06 shall result in a greater
number of Borrowings of Euro Rate Loans than is permitted under Section 1.02.
Each such conversion shall be effected by any U.S. Borrower by giving the
Administrative Agent at its Notice Office prior to 2:00 P.M. (New York time) at
least three Business Days' prior notice (each, a "Notice of Conversion")
specifying the Dollar Revolving Loans to be so converted, the Borrowing or
Borrowings pursuant to which such Dollar Revolving Loans were made and, if to be
converted into Eurodollar Loans, the Interest Period to be initially applicable
thereto. The Administrative Agent shall give each Bank prompt notice of any such
proposed conversion affecting any of its Dollar Revolving Loans.
1.07 PRO RATA BORROWINGS. All Borrowings of Dollar Revolving Loans
under this Agreement (including Mandatory Dollar Borrowings) shall be incurred
from the Banks PRO RATA on the basis of their Dollar Percentages; PROVIDED that
(x) to the extent any Dollar Revolving Loans (excluding pursuant to Mandatory
Dollar Borrowings) are made at any time when (or if the incurrence of the
respective Dollar Revolving Loans would cause) the Aggregate Non-U.K. Exposure
at such time to exceed the Total Non-U.K. Sub-Commitment at such time, then such
Dollar Revolving Loans (or the portion thereof which causes such excess to
occur) shall be incurred from the Banks PRO RATA on the basis of their U.K.
Percentages and (y) Mandatory Dollar Borrowings shall be subject to the last
proviso to the first sentence of Section 1.01(c). All
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Borrowings of Sterling Revolving Loans under this Agreement (including Mandatory
Sterling Borrowings) shall be incurred from the U.K. Banks PRO RATA on the basis
of their U.K. Percentages. It is understood that no Bank shall be responsible
for any default by any other Bank of its obligation to make Revolving Loans
hereunder and that each Bank shall be obligated to make the Revolving Loans
provided to be made by it hereunder, regardless of the failure of any other Bank
to make its Revolving Loans hereunder.
1.08 INTEREST. (a) The U.S. Borrowers (and, with respect to any
Sterling Revolving Loan or Sterling Swingline Loan converted into a Dollar
Revolving Loan or Dollar Swingline Loan, as the case may be, pursuant to Section
1.15, the U.K. Borrowers) hereby jointly and severally agree to pay interest in
respect of the unpaid principal amount of each Base Rate Loan from the date the
proceeds thereof are made available to any U.S. Borrower (or, in the
circumstances described in the immediately preceding parenthetical, from the
date of the conversion of the respective Loans pursuant to Section 1.15) until
the earlier of (i) the maturity (whether by acceleration or otherwise) of such
Base Rate Loan and (ii) the conversion of such Base Rate Loan to a Eurodollar
Loan pursuant to Section 1.06, at a rate per annum which shall be equal to the
sum of the Base Rate in effect from time to time during the period such Base
Rate Loan is outstanding PLUS the relevant Applicable Margin as in effect from
time to time.
(b) The U.S. Borrowers hereby jointly and severally agree to pay
interest in respect of the unpaid principal amount of each Eurodollar Loan from
the date the proceeds thereof are made available to any U.S. Borrower until the
earlier of (i) the maturity (whether by acceleration or otherwise) of such
Eurodollar Loan and (ii) the conversion of such Eurodollar Loan to a Base Rate
Loan pursuant to Section 1.06, 1.09 or 1.10, as applicable, at a rate per annum
which shall, during each Interest Period applicable thereto, be equal to the sum
of the Eurodollar Rate for such Interest Period PLUS the relevant Applicable
Margin as in effect from time to time.
(c) The U.K. Borrowers hereby jointly and severally agree to pay
interest in respect of the unpaid principal amount of each Sterling Revolving
Loan from the date the proceeds thereof are made available to any U.K. Borrower
until the maturity thereof (whether by acceleration, prepayment or otherwise) at
a rate per annum which shall, during each Interest Period applicable thereto, be
equal to the sum of the relevant Applicable Margin as in effect from time to
time plus the Sterling Euro Rate for such Interest Period plus the MLA Cost.
(d) The U.K. Borrowers hereby jointly and severally agree to pay
interest in respect of the unpaid principal amount of each Sterling Swingline
Loan from the date the proceeds thereof are made available to any U.K. Borrower
until the maturity thereof (whether by acceleration, prepayment or otherwise) at
a rate per annum which shall be equal to the sum of the Applicable Margin for
Sterling Loans as in effect from time to time plus the Overnight LIBOR Rate in
effect from time to time during the period such Sterling Swingline Loan is
outstanding plus the MLA Cost.
(e) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum (1) in the case of
overdue principal of, and interest or other overdue amounts
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owing with respect to, Sterling Revolving Loans and overdue amounts owing with
respect to U.K. Letter of Credit Outstandings, equal to 2% per annum in excess
of the relevant Applicable Margin as in effect from time to time plus the
Sterling Euro Rate for such successive periods not exceeding three months as the
Administrative Agent may determine from time to time in respect of amounts
comparable to the amount not paid plus the MLA Cost, (2) in the case of overdue
principal of, and interest or other amounts owing with respect to, Sterling
Swingline Loans, equal to 2% per annum in excess of the Applicable Margin for
Sterling Loans as in effect from time to time plus the Overnight LIBOR Rate as
in effect from time to time plus the MLA Cost and (3) in all other cases, equal
to the greater of (x) 2% per annum in excess of the rate otherwise applicable to
Base Rate Loans from time to time and (y) the rate which is 2% in excess of the
rate then borne by such Loans, in each case with such interest to be payable on
demand.
(f) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan and each Sterling Swingline Loan, quarterly in
arrears on each Quarterly Payment Date, (ii) in respect of each Euro Rate Loan
(other than a Sterling Swingline Loan), on the last day of each Interest Period
applicable thereto and, in the case of an Interest Period in excess of three
months, on each date occurring at three month intervals after the first day of
such Interest Period and (iii) in respect of each Loan, on any repayment or
prepayment (on the amount repaid or prepaid), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(g) Upon each Interest Determination Date, the Administrative Agent
shall determine the Euro Rate for the respective Interest Period or Interest
Periods and shall promptly notify the respective Borrower and the Banks thereof.
Each such determination shall, absent demonstrable error, be final and
conclusive and binding on all parties hereto.
1.09 INTEREST PERIODS. At the time any Borrower gives any Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, any Euro Rate Loan (other than a Sterling Swingline Loan) (in the case of
the initial Interest Period applicable thereto) or on the third Business Day
prior to the expiration of an Interest Period applicable to such Euro Rate Loan
(in the case of any subsequent Interest Period), the respective Borrower shall
have the right to elect, by having an Authorized Representative of such Borrower
give the Administrative Agent notice thereof, the interest period (each, an
"Interest Period") applicable to such Euro Rate Loan, which Interest Period
shall, at the option of such Borrower, be (x) a one, two, three or six-month
period or (y) in the case of Eurodollar Loans, to the extent available to all
Banks, a nine or twelve-month period or (z) in the case of Sterling Revolving
Loans, a one-week period; PROVIDED that:
(i) all Euro Rate Loans comprising the same Borrowing shall at all
times have the same Interest Period;
(ii) the initial Interest Period for any Euro Rate Loan shall
commence on the date of Borrowing of such Euro Rate Loan (including, in the
case of Dollar Revolving Loans, the date of any conversion thereto from a
Dollar Revolving Loan of a different Type) and each Interest Period
occurring thereafter in respect of such Euro
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Rate Loan shall commence on the day on which the next preceding Interest
Period applicable thereto expires;
(iii) if any Interest Period relating to a Euro Rate Loan begins on
a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest Period shall end on
the last Business Day of such calendar month;
(iv) if any Interest Period for a Euro Rate Loan would otherwise
expire on a day which is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day; PROVIDED, HOWEVER, that if any
Interest Period for a Euro Rate Loan would otherwise expire on a day which
is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on the
next preceding Business Day; and
(v) no Interest Period in respect of any Borrowing of Euro Rate
Loans shall be selected which extends beyond the Final Maturity Date.
If upon the expiration of any Interest Period applicable to a
Borrowing of Euro Rate Loans, the respective Borrower has failed to elect, or is
not permitted to elect, a new Interest Period to be applicable to such Euro Rate
Loans as provided above, such Borrower shall be deemed to have elected (x) if
Eurodollar Loans, to convert such Eurodollar Loans into Base Rate Loans and (y)
if Sterling Revolving Loans, to select a one-week Interest Period for such
Sterling Revolving Loans, in any such case effective as of the expiration date
of such current Interest Period.
1.10 INCREASED COSTS, ILLEGALITY, ETC. (a) In the event that any
Bank shall have reasonably determined (which determination shall, absent
demonstrable error, be final and conclusive and binding upon all parties hereto
but, with respect to clauses (i) and (iv) below, may be made only by the
Administrative Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the Restatement Effective Date affecting the
applicable interbank market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in the
definition of the respective Euro Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Euro Rate Loan because of any change since the Restatement Effective
Date in any applicable law or governmental rule, regulation, order,
guideline or request (whether or not having the force of law) or in the
interpretation or administration thereof and including the introduction of
any new law or governmental rule, regulation, order, guideline or request,
such as, for example, but not limited to: (A) a change in the basis of
taxation of payment to any Bank of the principal of or interest on such
Eurodollar Loan or any other amounts payable hereunder (except for changes
in the rate of tax on, or determined by reference to, the net income or net
profits of such Bank, or any franchise tax based on the net
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income or net profits of such Bank, in either case pursuant to the laws of
the United States of America, the jurisdiction in which it is organized or
in which its principal office or applicable lending office is located or
any subdivision thereof or therein), but without duplication of any amounts
payable in respect of Taxes pursuant to Section 4.04(a), or (B) a change in
official reserve requirements, but, in all events, excluding reserves
required under Regulation D to the extent included in the computation of
the Eurodollar Rate; or
(iii) at any time, that the making or continuance of any Euro Rate
Loan has been made (x) unlawful by any law or governmental rule, regulation
or order, (y) impossible by compliance by any Bank in good faith with any
governmental request (whether or not having force of law) or (z)
impracticable as a result of a contingency occurring after the Restatement
Effective Date which materially and adversely affects the applicable
interbank market; or
(iv) at any time that Pounds Sterling are not available in
sufficient amounts, as determined in good faith by the Administrative
Agent, to fund any Borrowing of Sterling Loans requested pursuant to
Section 1.01;
then, and in any such event, such Bank (or the Administrative Agent, in the case
of clauses (i) or (iv) above) shall promptly give notice (by telephone confirmed
in writing) to Holdings and any affected Borrower and, except in the case of
clauses (i) and (iv) above, to the Administrative Agent of such determination
(which notice the Administrative Agent shall promptly transmit to each of the
other Banks). Thereafter (w) in the case of clause (i) above, (A) in the event
Eurodollar Loans are so affected, Eurodollar Loans shall no longer be available
until such time as the Administrative Agent notifies Holdings, any affected U.S.
Borrower and the Banks that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion given by any U.S. Borrower with respect to Eurodollar Loans which
have not yet been incurred (including by way of conversion) shall be deemed
rescinded by such U.S. Borrower, (B) in the event that any Sterling Revolving
Loan is so affected, the Sterling Euro Rate shall be determined on the basis
provided in the proviso to the definition of Sterling Euro Rate and (C) in the
event that any Sterling Swingline Loan is so affected, the Overnight LIBOR Rate
shall be determined on the basis provided in the proviso to the definition of
Overnight LIBOR Rate, (x) in the case of clause (ii) above, the respective
Borrower or Borrowers agrees to pay to such Bank, upon written demand therefor,
such additional amounts (in the form of an increased rate of, or a different
method of calculating, interest or otherwise as such Bank shall reasonably
determine) as shall be required to compensate such Bank for such increased costs
or reductions in amounts received or receivable hereunder (a written notice as
to the additional amounts owed to such Bank, showing the basis for the
calculation thereof, submitted to the respective Borrower or Borrowers by such
Bank in good faith shall, absent demonstrable error, be final and conclusive and
binding on all the parties hereto, although the failure to give any such notice
shall not release or diminish any of the respective Borrower's or Borrowers'
obligations to pay additional amounts pursuant to this Section 1.10(a) upon the
subsequent receipt of such notice), (y) in the case of clause (iii) above, the
respective Borrower or Borrowers shall take one of the actions specified in
Section 1.10(b) as promptly as possible and, in any event, within the time
period required by law and (z) in the
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case of clause (iv) above, Sterling Loans (exclusive of Sterling Loans which
have theretofore been funded) shall no longer be available until such time as
the Administrative Agent notifies the U.K. Borrowers and the Banks that the
circumstances giving rise to such notice by the Administrative Agent no longer
exist, and any Notice of Borrowing or notice pursuant to Section 1.03(b)(i)
given by the U.K. Borrowers with respect to such Sterling Loans which have not
been incurred shall be deemed rescinded by the U.K. Borrowers. Each of the
Administrative Agent and each Bank agrees that if it gives notice to any
Borrower of any of the events described in clause (i), (ii), (iii) or (iv)
above, it shall promptly notify such Borrower and, in the case of any such Bank,
the Administrative Agent, if such event ceases to exist. If any such event
described in clause (iii) above ceases to exist as to a Bank, the obligations of
such Bank to make Euro Rate Loans and to convert Base Rate Loans into Eurodollar
Loans on the terms and conditions contained herein shall be reinstated
immediately upon such cessation.
(b) At any time that any Euro Rate Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the affected Borrower
or Borrowers may (and in the case of a Euro Rate Loan affected by the
circumstances described in Section 1.10(a)(iii) shall) either (x) if the
affected Euro Rate Loan is then being made initially or pursuant to a
conversion, cancel the respective Borrowing by giving the Administrative Agent
telephonic notice (confirmed in writing) on the same date that such Borrower was
notified by the affected Bank or the Administrative Agent pursuant to Section
1.10(a)(ii) or (iii) or (y) if the affected Euro Rate Loan is then outstanding,
upon at least three Business Days' written notice to the Administrative Agent,
(A) in the case of a Eurodollar Loan, require the affected Bank to convert such
Eurodollar Loan into a Base Rate Loan and (B) in the case of a Sterling Loan,
repay such Sterling Loan in full, PROVIDED that, (i) any unaffected Bank shall
continue to be obligated to extend its portion of the respective Borrowing as
Euro Rate Loans (unless the respective Borrowing is canceled or, in the case of
Dollar Revolving Loans, the affected Borrower elects to convert same into Base
Rate Loans), (ii) if the circumstances described in Section 1.10(a)(iii) apply
to any Sterling Loan, the U.K. Borrowers may, in lieu of taking the actions
described above, maintain such Sterling Loan outstanding, in which case (x) in
the case of Sterling Revolving Loans, the Sterling Euro Rate shall be determined
on the basis provided in the proviso to the definition of Sterling Euro Rate and
(y) in the case of Sterling Swingline Loans, the Overnight LIBOR Rate shall be
determined on the basis provided in the proviso to the definition of Overnight
LIBOR Rate, unless the maintenance of such Sterling Loan outstanding on such
basis would not stop the conditions described in Section 1.10(a)(iii) from
existing (in which case the actions described above, without giving effect to
the proviso, shall be required to be taken) and (iii) if more than one Bank is
affected at any time, then all affected Banks must be treated the same pursuant
to this Section 1.10(b).
(c) If at any time after the Restatement Effective Date any Bank
reasonably determines that the introduction of or any change in any applicable
law or governmental rule, regulation, order, guideline, directive or request
(whether or not having the force of law) concerning capital adequacy, or any
change in interpretation or administration thereof by any governmental
authority, central bank or comparable agency, will have the effect of increasing
the amount of capital required or expected to be maintained by such Bank or any
corporation controlling such Bank based on the existence of such Bank's
Commitment or Commitments hereunder or its
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obligations hereunder, then the Borrowers jointly and severally agree to pay to
such Bank, upon its written demand therefor, such additional amounts as shall be
required to compensate such Bank or such other corporation for the increased
cost to such Bank or such other corporation or the reduction in the rate of
return to such Bank or such other corporation as a result of such increase of
capital. In determining such additional amounts, each Bank will act reasonably
and in good faith and will use averaging and attribution methods which are
reasonable, PROVIDED that such Bank's reasonable good faith determination of
compensation owing under this Section 1.10(c) shall, absent demonstrable error,
be final and conclusive and binding on all the parties hereto. Each Bank, upon
determining that any additional amounts will be payable pursuant to this Section
1.10(c), will give written notice thereof to the Borrowers (a copy of which
shall be sent by such Bank to the Administrative Agent), which notice shall show
the basis for calculation of such additional amounts, although the failure to
give any such notice shall not release or diminish any of the Borrowers'
obligations to pay additional amounts pursuant to this Section 1.10(c) upon the
subsequent receipt of such notice. For the avoidance of doubt, nothing in this
Section 1.10(c) shall require any U.K. Borrower or any Parent to pay to any Bank
any amount for which such Bank is compensated by way of payment of the MLA
Costs.
(d) In the event that any Bank shall in good faith determine (which
determination shall, absent manifest error, be final and conclusive and binding
on all parties hereto) at any time that such Bank is required to maintain
reserves (including, without limitation, any marginal, emergency, supplemental,
special or other reserves required by applicable law) which have been
established by any Federal, state, local or foreign court or governmental
agency, authority, instrumentality or regulatory body with jurisdiction over
such Bank (including any branch, Affiliate or funding office thereof) in respect
of any Sterling Loans or any category of liabilities which includes deposits by
reference to which the interest rate on any Sterling Loan is determined or any
category of extensions of credit or other assets which includes loans by a
non-United States office of any Bank to non-United States residents, then,
unless such reserves are included in the calculation of the interest rate
applicable to such Sterling Loans or in Section 1.10(a)(ii), such Bank shall
promptly notify Holdings and/or the U.K. Borrowers in writing specifying the
additional amounts required to indemnify such Bank against the cost of
maintaining such reserves (such written notice to provide in reasonable detail a
computation of such additional amounts) and the U.K. Borrowers shall, and shall
be jointly and severally obligated to, pay to such Bank such specified amounts
as additional interest at the time that the U.K. Borrowers are otherwise
required to pay interest in respect of such Sterling Loan or, if later, on
written demand therefor by such Bank.
1.11 COMPENSATION. The Borrowers jointly and severally agree,
subject to the provisions of Section 13.17 (to the extent applicable), to
compensate each Bank, upon its written request (which request shall set forth in
reasonable detail the basis for requesting such compensation), for all
reasonable losses, expenses and liabilities (including, without limitation, any
loss, expense or liability incurred by reason of the liquidation or reemployment
of deposits or other funds required by such Bank to fund its Euro Rate Loans but
excluding any loss of anticipated profit) which such Bank may sustain: (i) if
for any reason (other than a default by such Bank or the Administrative Agent) a
Borrowing of, or conversion from or into, Euro Rate Loans does not occur on a
date specified therefor in a Notice of Borrowing or Notice of
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Conversion (whether or not withdrawn by the respective Borrower or Borrowers or
deemed withdrawn pursuant to Section 1.10(a)); (ii) if any repayment (including
any repayment made pursuant to Section 4.02 or as a result of an acceleration of
the Loans pursuant to Section 10 or as a result of the replacement of a Bank
pursuant to Section 1.13, 4.01 or 13.12(b)) or conversion of any of its Euro
Rate Loans occurs on a date which is not the last day of an Interest Period with
respect thereto; (iii) if any prepayment of any of its Euro Rate Loans is not
made on any date specified in a notice of prepayment given by the respective
Borrower or Borrowers; or (iv) as a consequence of (x) any other default by the
respective Borrower or Borrowers to repay its Loans when required by the terms
of this Agreement or any Note held by such Bank or (y) any election made
pursuant to Section 1.10(b). A Bank's basis for requesting compensation
pursuant to this Section 1.11 and a Bank's calculation of the amount thereof,
shall, absent demonstrable error, be final and conclusive and binding on all
parties hereto.
1.12 CHANGE OF LENDING OFFICE. (a) Each Bank may at any time or
from time to time designate, by written notice to the Administrative Agent to
the extent not already reflected on Schedule II, one or more lending offices
(which, for this purpose, may include Affiliates of the respective Bank) for the
various Revolving Loans made, and Letters of Credit participated in, by such
Bank (including by designating a separate lending office (or Affiliate) to act
as such with respect to Dollar Revolving Loans and U.S. Letter of Credit
Outstandings versus Sterling Revolving Loans and U.K. Letter of Credit
Outstandings); PROVIDED that, for designations made after the Restatement
Effective Date, to the extent such designation shall result in increased costs
under Section 1.10, 2.06 or 4.04 in excess of those which would be charged in
the absence of the designation of a different lending office (including a
different Affiliate of the respective Bank), then the Borrowers shall not be
obligated to pay such excess increased costs (although if such designation
results in increased costs, the Borrowers shall be obligated to pay the costs
which would have applied in the absence of such designation and any subsequent
increased costs of the type described above resulting from changes after the
date of the respective designation which would have been payable had such
designation not been made). Except as provided in the immediately preceding
sentence, each lending office and Affiliate of any Bank designated as provided
above shall, for all purposes of this Agreement, be treated in the same manner
as the respective Bank (and shall be entitled to all indemnities and similar
provisions in respect of its acting as such hereunder).
(b) Each Bank agrees that upon the occurrence of any event giving
rise to the operation of Section 1.10(a)(ii) or (iii), Section 1.10(c) or (d),
Section 2.06 or Section 4.04 with respect to such Bank, it will, if requested by
the applicable Borrower or Borrowers, use reasonable efforts (subject to overall
policy considerations of such Bank) to designate another lending office for any
Revolving Loans or Letters of Credit affected by such event, PROVIDED that such
designation is made on such terms that such Bank and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of such Section. Nothing
in this Section 1.12 shall affect or postpone any of the obligations of any
Borrower or the rights of any Bank provided in Sections 1.10, 2.06 and 4.04.
1.13 REPLACEMENT OF BANKS. If any Bank (x) becomes a Defaulting
Bank, (y) refuses to consent to certain proposed changes, waivers, discharges or
terminations with respect to this
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Agreement which have been approved by the Required Banks as provided in Section
4.01 or 13.12(b), or (z) is owed increased costs under any event giving rise to
the operation of Section 1.10(a)(ii) or (iii), Section 1.10(c) or (d), Section
2.06 or Section 4.04 in a material amount in excess of those being generally
charged by the other Banks, Holdings shall have the right, in accordance with
the requirements of Section 13.04(b), to replace such Bank (the "Replaced Bank")
with one or more Eligible Transferee or Eligible Transferees (collectively, the
"Replacement Bank"), none of whom shall constitute a Defaulting Bank at the time
of such replacement and each of whom shall be reasonably acceptable to the
Administrative Agent; PROVIDED that:
(i) at the time of any replacement pursuant to this Section 1.13,
the Replacement Bank shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 13.04(b) (and with all fees payable pursuant
to said Section 13.04(b) to be paid by the Replacement Bank) pursuant to
which the Replacement Bank shall acquire all of the Commitment (and related
Sub-Commitments) and all then outstanding Revolving Loans of, and
participations in all then outstanding Letters of Credit by, the Replaced
Bank and, in connection therewith, shall pay to (x) the Replaced Bank in
respect thereof an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued interest on, all then outstanding Revolving
Loans of the Replaced Bank, (B) an amount equal to all Unpaid Drawings
(unless there are no Unpaid Drawings) that have been funded by (and not
reimbursed to) such Replaced Bank at such time, together with all then
unpaid interest with respect thereto at such time and (C) an amount equal
to all accrued, but theretofore unpaid, Fees owing to the Replaced Bank
pursuant to Section 3.01, (y) the respective Issuing Bank an amount equal
to such Replaced Bank's L/C Participation Percentage (in each case for this
purpose, determined as if the adjustment described in clause (y) of the
immediately succeeding sentence had been made with respect to such Replaced
Bank), of any Unpaid Drawing (which at such time remains an Unpaid Drawing)
with respect to Letters of Credit issued by such Issuing Bank to the extent
such amount was not theretofore funded by such Replaced Bank and (z) BTCo
an amount equal to such Replaced Bank's Dollar Percentage or U.K.
Percentage, as the case may be, (in each case for this purpose, determined
as if the adjustment described in clause (y) of the immediately succeeding
sentence had been made with respect to such Replaced Bank) of any Mandatory
Borrowing (determined in accordance with Section 1.07), to the extent such
amount was not theretofore funded by such Replaced Bank, without
duplication; and
(ii) all obligations of the Borrowers owing to the Replaced Bank
(other than those specifically described in clause (i) above in respect of
which the assignment purchase price has been, or is concurrently being,
paid) shall be paid in full to such Replaced Bank concurrently with such
replacement.
Upon the execution of the respective Assignment and Assumption
Agreement, the payment of amounts referred to in clauses (i) and (ii) above,
recordation of the assignment on the Register by the Administrative Agent
pursuant to Section 13.16 and, if so requested by the Replacement Bank, delivery
to the Replacement Bank of the appropriate Revolving Note or Revolving Notes
executed by the respective Borrowers, (x) the Replacement Bank shall become
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a Bank hereunder and the Replaced Bank shall cease to constitute a Bank
hereunder, except with respect to indemnification provisions under this
Agreement (including, without limitation, Sections 1.10, 1.11, 2.06, 4.04, 13.01
and 13.06), which shall survive as to such Replaced Bank and (y) the Percentages
of the Banks shall be automatically adjusted at such time to give effect to such
replacement. Upon the replacement of a Replaced Bank pursuant to this Section
1.13, the Revolving Note(s) of such Replaced Bank shall be deemed canceled, and
such Replaced Bank shall use reasonable efforts to return such Revolving Note(s)
to the relevant Borrower or, if such Revolving Note(s) are lost or destroyed,
such Replaced Bank shall, at the relevant Borrower's request, certify to such
Borrower the loss or destruction of such Revolving Note(s). In connection with
any replacement of Banks pursuant to, and as contemplated by, this Section 1.13,
each U.S. Borrower and each U.K. Borrower hereby irrevocably authorizes Holdings
to take all necessary action, in the name of such U.S. Borrower or such U.K.
Borrower, as the case may be, as described above in this Section 1.13 in order
to effect the replacement of the respective Bank or Banks in accordance with the
preceding provisions of this Section 1.13.
1.14 EUROPEAN MONETARY UNION. If, as a result of the implementation
of European monetary union, (i) Pounds Sterling ceases to be lawful currency of
the United Kingdom and is replaced by a European single currency or (ii) Pounds
Sterling and a European single currency are at the same time recognized by the
central bank or comparable authority of the United Kingdom as lawful currency of
the United Kingdom and the Administrative Agent or the Majority U.K. Banks shall
so request in a notice delivered to Holdings, then any amount payable hereunder
by the U.K. Banks to any U.K. Borrower, or by any U.K. Borrower to the U.K.
Banks, in Pounds Sterling shall instead be payable in the European single
currency and the amount so payable shall be determined by translating the amount
payable in Pounds Sterling to such European single currency at the exchange rate
recognized by the European Central Bank for the purpose of implementing European
monetary union.
1.15 SPECIAL PROVISIONS REGARDING STERLING LOANS. (a) On the date
of the occurrence of a Sharing Event, automatically (and without the taking of
any action) (x) all then outstanding Sterling Revolving Loans shall be
automatically converted into Dollar Revolving Loans (in an amount equal to the
Dollar Equivalent of the aggregate principal amount of the Sterling Revolving
Loans on the date such Sharing Event first occurred, which Dollar Revolving
Loans (i) shall be owed by the U.K. Borrowers on a joint and several basis, (ii)
shall thereafter be deemed to be Base Rate Loans and (iii) shall be immediately
due and payable on the date such Sharing Event has occurred) and (y) all
principal, accrued and unpaid interest and other amounts owing with respect to
such Sterling Revolving Loans shall be immediately due and payable in Dollars,
taking the Dollar Equivalent of such principal, accrued and unpaid interest and
other amounts. The occurrence of any conversion as provided above in this
Section 1.15(a) shall be deemed to constitute, for purposes of Section 1.11, a
prepayment of the respective Sterling Revolving Loans before the last day of any
Interest Period relating thereto. Notwithstanding anything to the contrary
contained above or elsewhere in this Agreement, all Sterling Revolving Loans
converted into Dollar Revolving Loans as provided above in this Section 1.15(a)
shall remain the joint and several obligations of the U.K. Borrowers.
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(b) Upon the occurrence of a Sharing Event, automatically (and
without the taking of any action) (x) all then outstanding Sterling Swingline
Loans shall be automatically converted into Dollar Swingline Loans (in an amount
equal to the Dollar Equivalent of the aggregate principal amount of the Sterling
Swingline Loans on the date such Sharing Event first occurred, which Dollar
Swingline Loans (i) shall be owed by the U.K. Borrowers on a joint and several
basis, (ii) shall thereafter be deemed to be Base Rate Loans and (iii) shall be
immediately due and payable on the date such Sharing Event has occurred) and (y)
all accrued and unpaid interest and other amounts owing with respect to such
Sterling Swingline Loans shall be immediately due and payable in Dollars, taking
the Dollar Equivalent of such accrued and unpaid interest and other amounts.
Notwithstanding anything to the contrary contained above or elsewhere in this
Agreement, all Sterling Swingline Loans converted into Dollar Swingline Loans as
provided above in this Section 1.15(b) shall remain the joint and several
obligations of the U.K. Borrowers.
(c) Upon the occurrence of a Sharing Event, each Bank shall (and
hereby unconditionally and irrevocably agrees to) purchase and sell (in each
case in Dollars) undivided participating interests in the Revolving Loans
outstanding to, and any Unpaid Drawings owing by, the U.S. Borrowers, on the one
hand, and the U.K. Borrowers, on the other hand, in such amounts so that each
Bank shall have a share of each of the outstanding Revolving Loans and Unpaid
Drawings then owing by the U.S. Borrowers, on the one hand, and the U.K.
Borrowers, on the other hand, equal to its RL Percentage thereof. Upon any such
occurrence the Administrative Agent shall notify each Bank and shall specify the
amount of Dollars required from such Bank in order to effect the purchases and
sales by the various Banks of participating interests in the amounts required
above (together with accrued interest with respect to the period for the last
interest payment date through the date of the Sharing Event plus any additional
amounts payable by any respective Borrower pursuant to Section 4.04 in respect
of such accrued but unpaid interest); PROVIDED, in the event that a Sharing
Event shall have occurred, each Bank shall be deemed to have purchased,
automatically and without request, such participating interests. Promptly upon
receipt of such request, each Bank shall deliver to the Administrative Agent (in
immediately available funds in Dollars) the net amounts as specified by the
Administrative Agent. The Administrative Agent shall promptly deliver the
amounts so received to the various Banks in such amounts as are needed to effect
the purchases and sales of participations as provided above. Promptly following
receipt thereof, each Bank which has sold participations in any of its Revolving
Loans (through the Administrative Agent) will deliver to each Bank (through the
Administrative Agent) which has so purchased a participating interest a
participation certificate dated the date of receipt of such funds and in such
amount. It is understood that the amount of funds delivered by each Bank shall
be calculated on a net basis, giving effect to both the sales and purchases of
participations by the various Banks as required above.
(d) Upon, and after, the occurrence of a Sharing Event (i) no further
Loans shall be made to any Borrower, (ii) all amounts from time to time accruing
with respect to, and all amounts from time to time payable on account of,
Sterling Loans (including, without limitation, any interest and other amounts
which were accrued but unpaid on the date of such purchase) shall be payable in
Dollars as if such Sterling Loan had originally been made in Dollars and shall
be
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distributed by the relevant Banks (or their Affiliates) to the Administrative
Agent for the account of the Banks which made such Loans or are participating
therein and (iii) the Commitments (and all Sub-Commitments) of the Banks shall
be automatically terminated. Notwithstanding anything to the contrary contained
above, the failure of any Bank to purchase its participating interest in any
Revolving Loans and Unpaid Drawings upon the occurrence of a Sharing Event shall
not relieve any other Bank of its obligation hereunder to purchase its
participating interests in a timely manner, but no Bank shall be responsible for
the failure of any other Bank to purchase the participating interest to be
purchased by such other Bank on any date.
(e) If any amount required to be paid by any Bank pursuant to Section
1.15(c) is not paid to the Administrative Agent within two Business Days
following the date upon which such Bank receives notice from the Administrative
Agent of the amount of its participations required to be purchased pursuant to
said Section 1.15(c), such Bank shall also pay to the Administrative Agent on
demand an amount equal to the product of (i) the amount so required to be paid
by such Bank for the purchase of its participations times (ii) the daily average
Federal Funds Rate, during the period from and including the date of request for
payment to the date on which such payment is immediately available to the
Administrative Agent times (iii) a fraction the numerator of which is the number
of days that elapsed during such period and the denominator of which is 360. If
any such amount required to be paid by any Bank pursuant to Section 1.15(c) is
not in fact made available to the Administrative Agent within two Business Days
following the date upon which such Bank receives notice from the Administrative
Agent as to the amount of participations required to be purchased by it, the
Administrative Agent shall be entitled to recover from such Bank on demand, such
amount with interest thereon calculated from such request date at the rate per
annum applicable to Dollar Revolving Loans maintained as Base Rate Loans
hereunder. A certificate of the Administrative Agent submitted to any Bank with
respect to any amounts payable under this Section 1.15 shall be conclusive in
the absence of manifest error. Amounts payable by any Bank pursuant to this
Section 1.15 shall be paid to the Administrative Agent for the account of the
relevant Banks; PROVIDED that, if the Administrative Agent (in its sole
discretion) has elected to fund on behalf of such Bank the amounts owing to such
Banks, then the amounts shall be paid to the Administrative Agent for its own
account.
(f) Whenever, at any time after the relevant Banks have received from
any Banks purchases of participations in any Revolving Loans pursuant to this
Section 1.15, the Banks receive any payment on account thereof, such Banks will
distribute to the Administrative Agent, for the account of the various Banks
participating therein, such Banks' participating interests in such amounts
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such participations were outstanding) in like funds as
received; PROVIDED, HOWEVER, that in the event that such payment received by any
Banks is required to be returned, the Banks who received previous distributions
in respect of their participating interests therein will return to the
respective Banks any portion thereof previously so distributed to them in like
funds as such payment is required to be returned by the respective Banks.
(g) Each Bank's obligation to purchase participating interests
pursuant to this Section 1.15 shall be absolute and unconditional and shall not
be affected by any circumstance including, without limitation, (a) any setoff,
counterclaim, recoupment, defense or other right which such
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Bank may have against any other Bank, the relevant Borrower or any other Person
for any reason whatsoever, (b) the occurrence or continuance of an Event of
Default, (c) any adverse change in the condition (financial or otherwise) of any
Borrower or any other Person, (d) any breach of this Agreement by any Borrower
or any Bank or any other Person, or (e) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.
(h) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, upon any purchase of participations as required above, each Bank
which has purchased such participations shall be entitled to receive from the
relevant Borrowers any increased costs and indemnities (including, without
limitation, pursuant to Sections 1.11, 1.12, 2.05 and 4.04) directly from the
Borrowers to the same extent as if it were the direct Bank as opposed to a
participant therein, which increased costs shall be calculated without regard to
Section 1.13, Section 13.04(a) or the last sentence of Section 13.04(b). The
Borrowers acknowledge and agree that, upon the occurrence of a Sharing Event and
after giving effect to the requirements of this Section 1.15, increased Taxes
may be owing by them pursuant to Section 4.04, which Taxes shall be paid (to the
extent provided in Section 4.04) by the respective Borrowers, without any claim
that the increased Taxes are not payable because same resulted from the
participations effected as otherwise required by this Section 1.15.
(i) On any date a U.K. Borrower may, at its option, permanently
reduce or terminate the U.K. Sub-Commitments by written notice to the
Administrative Agent to such effect (specifying the aggregate amount of
reductions to the U.K. Sub-Commitments); PROVIDED that (i) no such reduction
shall be made in an amount which would cause the Dollar Equivalent of the then
outstanding aggregate principal amount of the Sterling Revolving Loans to exceed
the U.K. Sub-Commitments of the U.K. Banks after giving effect to the respective
reduction pursuant to this Section 1.15(i), (ii) each reduction pursuant to this
clause (i) shall apply pro rata to reduce the U.K. Sub-Commitments of the U.K.
Banks (based upon the relative amounts of such U.K. Sub-Commitments), (iii)
except to the extent the reduction to the U.K. Sub-Commitments pursuant to this
Section 1.15(i) is accompanied by a like reduction to the amount of the Total
Commitment pursuant to Section 3.02, the amount of each U.K. Bank's reduction to
its U.K. Sub-Commitment pursuant to this clause (i) shall result in a like
increase to its Non-U.K. Sub-Commitment.
SECTION 2. Letters of Credit.
2.01 LETTERS OF CREDIT. (a) Subject to and upon the terms and
conditions herein set forth, any Borrower may request an Issuing Bank, at any
time and from time to time on and after the Restatement Effective Date and prior
to the tenth Business Day (or the 30th day in the case of Trade Letters of
Credit) preceding the Final Maturity Date, to issue, (x) for the joint and
several account of the U.S. Borrowers (in the case of requests made by any one
of them) or the joint and several account of the U.K. Borrowers (in the case of
requests made by any one of them) and for the benefit of any holder (or any
trustee, agent or other similar representative for any such holders) of L/C
Supportable Indebtedness of the respective Account Party or any of its or their
Subsidiaries, irrevocable standby letters of credit in a form customarily used
by such Issuing Bank or in such other form as has been approved by such Issuing
Bank (each such
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standby letter of credit, a "Standby Letter of Credit") in support of such L/C
Supportable Indebtedness and (y) for the account of the respective Account Party
and for the benefit of sellers of goods to the respective Account Party (or any
entity which is jointly and severally obligated as an Account Party with respect
to such Letter of Credit) or any of its or their Subsidiaries in the ordinary
course of business, irrevocable sight trade letters of credit in a form
customarily used by such Issuing Bank or in such other form as has been approved
by such Issuing Bank (each such trade letter of credit, a "Trade Letter of
Credit", and each such Standby Letter of Credit and Trade Letter of Credit, a
"Letter of Credit" and collectively, the "Letters of Credit").
(b) Subject to and upon the terms and conditions set forth herein,
each Issuing Bank hereby agrees that it will, at any time and from time to time
on and after the Restatement Effective Date and prior to the tenth Business Day
(or the 30th day in the case of Trade Letters of Credit) preceding the Final
Maturity Date, following its receipt of the respective Letter of Credit Request,
issue for the account of the respective Account Party one or more Letters of
Credit, (x) in the case of Trade Letters of Credit, in support of trade
obligations of the respective Account Party (or any entity which is jointly and
severally obligated as an Account Party with respect to such Letter of Credit)
or any of its or their Subsidiaries that arise in the ordinary course of
business or (y) in the case of Standby Letters of Credit, in support of such L/C
Supportable Indebtedness as is permitted to remain outstanding without giving
rise to a Default or Event of Default hereunder; PROVIDED that the respective
Issuing Bank shall be under no obligation to issue any Letter of Credit if at
the time of such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuing
Bank from issuing such Letter of Credit or any requirement of law
applicable to such Issuing Bank or any request or directive (whether or not
having the force of law) from any governmental authority with jurisdiction
over such Issuing Bank shall prohibit, or request that such Issuing Bank
refrain from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon such Issuing Bank with respect to
such Letter of Credit any restriction or reserve or capital requirement
(for which such Issuing Bank is not otherwise compensated) not in effect on
the date hereof, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to such Issuing Bank as of the date hereof
and which such Issuing Bank in good faith deems material to it;
(ii) such Issuing Bank shall have received written notice from the
Required Banks prior to the issuance of such Letter of Credit of the type
described in the last sentence of Section 2.03(b); or
(iii) a Bank Default exists, unless such Issuing Bank has entered
into arrangements satisfactory to it and the respective Account Party to
eliminate such Issuing Bank's risk with respect to the Bank which is the
subject of the Bank Default, including by cash collateralizing (in Dollars
or Pounds Sterling, as appropriate) such Bank's relevant Percentage of the
Letter of Credit Outstandings.
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(c) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time, would
exceed either (x) $45,000,000 or (y) when added to the aggregate principal
amount of all Revolving Loans (for this purpose, using the Dollar Equivalent of
each outstanding Sterling Revolving Loan) then outstanding and all Swingline
Loans (for this purpose, using the Dollar Equivalent of each outstanding
Sterling Swingline Loan) then outstanding, an amount equal to the Total
Commitment then in effect, (ii) no U.K. Letter of Credit shall be issued at any
time when the Aggregate U.K. Exposure exceeds (or would after giving effect to
such issuance exceed) the Total U.K. Sub-Commitment at such time, (iii) (x) each
Standby Letter of Credit shall by its terms terminate on or before the date
which occurs 12 months after the date of the issuance thereof (although any such
Standby Letter of Credit may be extendable for successive periods of up to 12
months, but not beyond the tenth Business Day preceding the Final Maturity Date,
on terms acceptable to the Issuing Bank thereof) and (y) each Trade Letter of
Credit shall by its terms terminate on or before the date occurring not later
than 360 days after such Trade Letter of Credit's date of issuance and (iv) (x)
no Standby Letter of Credit shall have an expiry date occurring later than the
tenth Business Day preceding the Final Maturity Date and (y) no Trade Letter of
Credit shall have an expiry date occurring later than 30 days prior to the Final
Maturity Date.
(d) Schedule III hereto contains a description of all letters of
credit issued pursuant to the Original Credit Agreement and outstanding on the
Restatement Effective Date. Each such letter of credit, including any extension
or renewal thereof (each, as amended from time to time in accordance with the
terms thereof and hereof, an "Original Letter of Credit") shall constitute a
"Letter of Credit" and a "U.S. Letter of Credit" for all purposes of this
Agreement, issued, for purposes of Section 2.04(a), on the Restatement Effective
Date. Any Bank hereunder to the extent it has issued an Original Letter of
Credit shall constitute the "Issuing Bank" with respect to such Letter of Credit
for all purposes of this Agreement.
2.02 MINIMUM STATED AMOUNT. The Stated Amount of each Letter of
Credit upon issuance shall be not less than (x) in the case of U.S. Letters of
Credit, $50,000 and (y) in the case of U.K. Letters of Credit, L15,000, or in
each case such lesser amount as is acceptable to the respective Issuing Bank.
2.03 LETTER OF CREDIT REQUESTS. (a) Whenever an Account Party
desires that a Letter of Credit be issued for its account, the respective such
Account Party (and each other Account Party which is jointly and severally
obligated with respect to such requested Letter of Credit) shall give the
Administrative Agent (at the appropriate Notice Office) and the respective
Issuing Bank at least 3 days' (or such shorter period as is acceptable to such
Issuing Bank in any given case) written notice prior to the proposed date of
issuance (which shall be a Business Day). Each notice shall be in the form of
Exhibit C (each, a "Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be deemed to be
a representation and warranty by the U.S. Borrowers or the U.K. Borrowers, as
the case may be, that such Letter of Credit may be issued in accordance with,
and will not violate the requirements of, Section
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2.01(c). Unless the respective Issuing Bank has received notice from the
Required Banks before it issues a Letter of Credit that one or more of the
applicable conditions specified in Section 5 or 6, as the case may be, are not
then satisfied, or that the issuance of such Letter of Credit would violate
Section 2.01(c), then such Issuing Bank may issue the requested Letter of Credit
for the account of the respective Account Party in accordance with such Issuing
Bank's usual and customary practices.
2.04 LETTER OF CREDIT PARTICIPATIONS. (a) Immediately upon the
issuance by any Issuing Bank of any Letter of Credit, such Issuing Bank shall be
deemed to have sold and transferred to (i) in the case of a U.S. Letter of
Credit, each Bank, and (ii) in the case of a U.K. Letter of Credit, each Bank
with a U.K. Sub-Commitment (each such Bank with respect to any Letter of Credit,
in its capacity under this Section 2.04, a "Participant"), and each such
Participant shall be deemed irrevocably and unconditionally to have purchased
and received from such Issuing Bank, without recourse or warranty, an undivided
interest and participation, in a percentage equal to (x) in the case of a U.S.
Letter of Credit, such Participant's Dollar Percentage; PROVIDED that if any
U.S. Letter of Credit is issued at a time when (or if such issuance would cause)
the Aggregate Non-U.K. Exposure to exceed the Total Non-U.K. Sub-Commitment,
then the various Banks shall participate in such U.S. Letter of Credit (or in
the case of such an issuance which causes the Aggregate Non-U.K. Exposure to
exceed the Total Non-U.K. Sub-Commitment, the portion thereof which causes the
Total Non-U.K. Sub-Commitment to be so exceeded) in accordance with the U.K.
Percentages of the various Banks; PROVIDED FURTHER, that at such time or times
as the Aggregate Non-U.K. Exposure is less than the Total Non-U.K.
Sub-Commitment, and so long as no Default or Event of Default is then in
existence, the percentage participations of the Banks in any U.S. Letter of
Credit issued as described in the immediately preceding proviso shall be
readjusted so that, with respect to each outstanding U.S. Letter of Credit, the
Banks shall, to the maximum extent otherwise provided in this Section 2.04(a),
subject to continued compliance with the immediately preceding proviso,
participate in each U.S. Letter of Credit in accordance with their respective
Dollar Percentages (in cases where the adjustment pursuant to this proviso will
not be sufficient to allow all U.S. Letters of Credit to be participated in full
by the Banks in accordance with their Dollar Percentages, with the
Administrative Agent to designate from time to time the various outstanding U.S.
Letters of Credit where the adjustments pursuant to this proviso shall apply and
the amounts thereof, which records shall be conclusive absent manifest error)
and (y) in the case of each U.K. Letter of Credit, such Participant's U.K.
Percentage, in such Letter of Credit, each substitute letter of credit, each
drawing made thereunder and the obligations of the respective Account Party
under this Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto; PROVIDED HOWEVER, that notwithstanding anything to the
contrary contained above, upon the occurrence of a Sharing Event, the
participations described above shall be automatically adjusted so that each Bank
shall have a participation in all then outstanding Letters of Credit, and
related obligations as described above, in a percentage equal to its RL
Percentage (which adjustments shall occur concurrently with the adjustments
described in Section 1.15). Upon any change in the Commitments or the
respective Percentages of the Banks pursuant to Section 1.13 or 13.04, it is
hereby agreed that, with respect to all outstanding Letters of Credit and Unpaid
Drawings, there shall be an automatic adjustment to the participations pursuant
to this Section 2.04 to reflect
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the new Percentages of the assignor and assignee Bank or of all Banks, as the
case may be. With respect to each Letter of Credit from time to time
outstanding, the percentage participations therein of the various Banks
calculated as provided above in this Section 2.04(a) (including pursuant to the
proviso in the second preceding sentence) are herein called the "L/C
Participation Percentages" of the various Banks in such Letters of Credit.
(b) In determining whether to pay under any Letter of Credit, such
Issuing Bank shall have no obligation relative to the other Banks other than to
confirm that any documents required to be delivered under such Letter of Credit
appear to have been delivered and that they appear to substantially comply on
their face with the requirements of such Letter of Credit. Any action taken or
omitted to be taken by any Issuing Bank under or in connection with any Letter
of Credit issued by it if taken or omitted in the absence of gross negligence or
willful misconduct, shall not create for such Issuing Bank any resulting
liability to any Account Party or any Bank.
(c) In the event that any Issuing Bank makes any payment under any
Letter of Credit issued by it and the respective Account Party shall not have
reimbursed such amount in full to such Issuing Bank pursuant to Section 2.05(a),
such Issuing Bank shall promptly notify the Administrative Agent, which shall
promptly notify each Participant of such failure, and each Participant shall
promptly and unconditionally pay to the Administrative Agent for the account of
such Issuing Bank the amount of such Participant's L/C Participation Percentage
(as relates to the respective Letter of Credit) of such unreimbursed payment in
Dollars (in the case of a U.S. Letter of Credit or, upon a Sharing Event, any
Letter of Credit) or Pounds Sterling (in the case of a U.K. Letter of Credit at
any time prior to a Sharing Event) and in same day funds. If the Administrative
Agent so notifies, prior to 11:00 A.M. (New York time or, in the case of U.K.
Letters of Credit, London time) on any Business Day, any Participant required to
fund a payment under a Letter of Credit, such Participant shall make available
to the Administrative Agent at the Payment Office of the Administrative Agent
for the account of the respective Issuing Bank, in Dollars (in the case of a
U.S. Letter of Credit or, after a Sharing Event, any Letter of Credit) or Pounds
Sterling (in the case of a U.K. Letter of Credit at any time prior to a Sharing
Event), such Participant's L/C Participation Percentage (as relates to the
respective Letter of Credit) of the amount of such payment on such Business Day
in same day funds. If and to the extent such Participant shall not have so made
its L/C Participation Percentage of the amount of such payment available to the
Administrative Agent for the account of the respective Issuing Bank, such
Participant agrees to pay to the Administrative Agent for the account of such
Issuing Bank, forthwith on demand such amount, together with interest thereon,
for each day from such date until the date such amount is paid to the
Administrative Agent for the account of such Issuing Bank at the overnight
Federal Funds Rate. The failure of any Participant to make available to the
Administrative Agent for the account of the respective Issuing Bank its relevant
L/C Participation Percentage of any payment under any Letter of Credit issued by
it shall not relieve any other Participant of its obligation hereunder to make
available to the Administrative Agent for the account of such Issuing Bank its
relevant L/C Participation Percentage of any such Letter of Credit on the date
required, as specified above, but no Participant shall be responsible for the
failure of any other Participant to make available to the Administrative Agent
for the account of such Issuing Bank such other Participant's relevant L/C
Participation Percentage of any such payment.
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(d) Whenever any Issuing Bank receives a payment of a reimbursement
obligation as to which the Administrative Agent has received for the account of
such Issuing Bank any payments from the Participants pursuant to clause (c)
above, such Issuing Bank shall pay to the Administrative Agent and the
Administrative Agent shall promptly pay each Participant which has paid its
relevant L/C Participation Percentage thereof, in Dollars (in the case of a U.S.
Letter of Credit or, after a Sharing Event, any Letter of Credit) or Pounds
Sterling (in the case of a U.K. Letter of Credit at any time prior to a Sharing
Event) and in same day funds, an amount equal to such Participant's share (based
on the proportionate aggregate amount funded by such Participant to the
aggregate amount funded by all Participants) of the principal amount of such
reimbursement obligation and interest thereon accruing after the purchase of the
respective participations.
(e) Each Issuing Bank shall, promptly after the issuance of, or
amendment to, a Standby Letter of Credit, give the Administrative Agent, each
Participant and the respective Account Party written notice of such issuance or
amendment, as the case may be, and such notice shall be accompanied by a copy of
the issued Standby Letter of Credit or amendment, as the case may be.
(f) Each Issuing Bank (other than BTCo) shall deliver to the
Administrative Agent, promptly on the first Business Day of each week, by
facsimile transmission, the aggregate daily Stated Amount available to be drawn
under the outstanding Trade Letters of Credit issued by such Issuing Bank for
the previous week. The Administrative Agent shall, within 10 days after the
last Business Day of each calendar month, deliver to each Participant a report
setting forth for such preceding calendar month the aggregate daily Stated
Amount available to be drawn under all outstanding Trade Letters of Credit
during such calendar month.
(g) The obligations of the Participants to make payments to the
Administrative Agent for the account of the respective Issuing Bank with respect
to Letters of Credit issued by it shall be irrevocable and not subject to any
qualification or exception whatsoever and shall be made in accordance with the
terms and conditions of this Agreement under all circumstances, including,
without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the Credit Documents;
(ii) the existence of any claim, setoff, defense or other right
which any Credit Party or any of its Subsidiaries may have at any time
against a beneficiary named in a Letter of Credit, any transferee of any
Letter of Credit (or any Person for whom any such transferee may be
acting), the Administrative Agent, any Bank, any Issuing Bank, any
Participant, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or
any unrelated transactions (including any underlying transaction between
any Credit Party or any of its Subsidiaries and the beneficiary named in
any such Letter of Credit);
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(iii) any draft, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default;
PROVIDED, that the Participants shall not be obligated to reimburse such Issuing
Bank for any wrongful payment made by such Issuing Bank under a Letter of Credit
issued by it as a result of acts or omissions constituting willful misconduct or
gross negligence on the part of such Issuing Bank. Any action taken or omitted
to be taken by any Issuing Bank under or in connection with any Letter of Credit
if taken or omitted in the absence of gross negligence or willful misconduct
shall not create for such Issuing Bank any resulting liability to the
Participant.
2.05 AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS. (a) The U.S.
Borrowers hereby jointly and severally agree, in the case of all U.S. Letters of
Credit, and the U.K. Borrowers hereby jointly and severally agree, in the case
of all U.K. Letters of Credit, to reimburse the respective Issuing Bank, by
making payment in Dollars (in the case of U.S. Letters of Credit or, after a
Sharing Event, all Letters of Credit) or Pounds Sterling (in the case of U.K.
Letters of Credit at any time prior to a Sharing Event) to the Administrative
Agent in immediately available funds at the Payment Office (or by making the
payment directly to such Issuing Bank at such location as may otherwise have
been agreed upon by the respective Account Party and such Issuing Bank), for any
payment or disbursement (in the case of any such payment or disbursement under
one or more U.K. Letters of Credit which are unpaid on the date of the
occurrence of a Sharing Event, or which payments or disbursements are made
thereafter, taking the Dollar Equivalent of the amount of the respective payment
or disbursement made in Pounds Sterling as such Dollar Equivalent is determined
on the first date upon which the respective Sharing Event occurs or, if later,
the date upon which the respective payment or disbursement is made) made by such
Issuing Bank under any Letter of Credit issued by it (each such amount so paid
until reimbursed, an "Unpaid Drawing"), not later than the third Business Day
after the Administrative Agent or the Issuing Bank notifies such Account Party
of such payment or disbursement, with interest on the amount so paid or
disbursed by such Issuing Bank, to the extent not reimbursed prior to 1:00 P.M.
(New York time or, in the case of U.K. Letters of Credit, London time), on the
date of such payment or disbursement, from and including the date paid or
disbursed to but excluding the date such Issuing Bank is reimbursed by the
respective U.S. Borrower or U.K. Borrower, as the case may be, therefor at a
rate per annum which shall be (x) in the case of U.S. Letters of Credit and
other amounts owing in Dollars after the occurrence of a Sharing Event, the Base
Rate in effect from time to time PLUS the Applicable Margin for Base Rate Loans
as in effect from time to time and (y) in the case of U.K. Letters of Credit for
periods occurring prior to the occurrence of a Sharing Event, the Overnight
LIBOR Rate in effect from time to time PLUS the Applicable Margin for Sterling
Loans as in effect from time to time PLUS the MLA Cost; PROVIDED, HOWEVER, to
the extent such amounts are not reimbursed prior to 1:00 P.M. (New York time or,
in the case of U.K. Letters of Credit, London
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time) on the third Business Day following notice to the respective Account Party
by the Administrative Agent or the respective Issuing Bank of such payment or
disbursement, interest shall thereafter accrue on the amounts so paid or
disbursed by such Issuing Bank (and until reimbursed by the respective Account
Party) at a rate per annum which shall be (x) in the case of U.S. Letters of
Credit and other amounts owing in Dollars after the occurrence of a Sharing
Event, the Base Rate in effect from time to time PLUS the Applicable Margin for
Base Rate Loans as in effect from time to time PLUS 2% and (y) in the case of
U.K. Letters of Credit for periods occurring prior to the occurrence of a
Sharing Event, the Overnight LIBOR Rate in effect from time to time PLUS the
Applicable Margin for Sterling Loans as in effect from time to time PLUS the MLA
Cost PLUS 2%, in each such case, with interest to be payable on demand; PROVIDED
FURTHER, that it is understood and agreed, however, that the notices referred to
above in this clause (a) and in the immediately preceding proviso shall not be
required to be given if a Default or an Event of Default under Section 10.05
shall have occurred and be continuing (in which case the Unpaid Drawings shall
be due and payable immediately without presentment, demand, protest or notice of
any kind (all of which are hereby waived by each Credit Party) and shall bear
interest at the rate provided in the foregoing proviso on and after the third
Business Day following the respective Drawing). The respective Issuing Bank
shall give the respective Account Party prompt notice of each Drawing under any
Letter of Credit, PROVIDED that the failure to give any such notice shall in no
way affect, impair or diminish the respective Account Party's obligations
hereunder.
(b) The joint and several obligations of the U.S. Borrowers (with
respect to the U.S. Letters of Credit) and the joint and several obligations of
the U.K. Borrowers (with respect to U.K. Letters of Credit) under this Section
2.05 to reimburse the respective Issuing Bank with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the respective Account Party may have or have had
against any Bank (including in its capacity as Issuing Bank or as Participant),
including, without limitation, any defense based upon the failure of any drawing
under a Letter of Credit (each, a "Drawing") to conform to the terms of such
Letter of Credit or any nonapplication or misapplication by the beneficiary of
the proceeds of such Drawing, the respective Issuing Bank's only obligation to
the respective Account Party being to confirm that any documents required to be
delivered under such Letter of Credit appear to have been delivered and that
they appear to substantially comply on their face with requirements of such
Letter of Credit; PROVIDED, HOWEVER, that no Account Party shall be obligated to
reimburse any Issuing Bank for any wrongful payment made by such Issuing Bank
under a Letter of Credit issued by it as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of such Issuing
Bank. Any action taken or omitted to be taken by any Issuing Bank under or in
connection with any Letter of Credit if taken or omitted in the absence of gross
negligence or willful misconduct shall not create for such Issuing Bank any
resulting liability to any Account Party.
2.06 INCREASED COSTS. If at any time after the Restatement Effective
Date any Issuing Bank or any Participant determines that the introduction of or
any change in any applicable law, rule, regulation, order, guideline or request
or in the interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof, or
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compliance by any Issuing Bank or any Participant with any request or directive
by any such authority (whether or not having the force of law) shall either (i)
impose, modify or make applicable any reserve, deposit, capital adequacy or
similar requirement against Letters of Credit issued by any Issuing Bank or
participated in by any Participant, or (ii) impose on any Issuing Bank or any
Participant any other conditions relating, directly or indirectly, to this
Agreement or any Letter of Credit, and the result of any of the foregoing is to
increase the cost to any Issuing Bank or any Participant of issuing, maintaining
or participating in any Letter of Credit, or reduce the amount of any sum
received or receivable by any Issuing Bank or any Participant hereunder or
reduce the rate of return on its capital with respect to Letters of Credit,
then, upon demand to the U.S. Borrowers or the U.K. Borrowers, as the case may
be, by any Issuing Bank or any Participant (a copy of which demand shall be sent
by such Issuing Bank or such Participant to the Administrative Agent), the U.S.
Borrowers or the U.K. Borrowers, as the case may be, shall pay to such Issuing
Bank or such Participant such additional amount or amounts as will compensate
such Bank for such increased cost or reduction in the amount receivable or
reduction on the rate of return on its capital. Any Issuing Bank or any
Participant, upon determining that any additional amounts will be payable
pursuant to this Section 2.06, will give prompt written notice thereof to the
U.S. Borrowers or the U.K. Borrowers, as the case may be, which notice shall
include a certificate submitted to the U.S. Borrowers or the U.K. Borrowers, as
the case may be, by such Issuing Bank or such Participant (a copy of which
certificate shall be sent by such Issuing Bank or such Participant to the
Administrative Agent), setting forth the basis for the calculation of such
additional amount or amounts necessary to compensate such Issuing Bank or such
Participant, although failure to give any such notice shall not release or
diminish the U.S. Borrowers' or the U.K. Borrowers', as the case may be,
obligations to pay additional amounts pursuant to this Section 2.06. The
certificate required to be delivered pursuant to this Section 2.06 shall, absent
demonstrable error, be final, conclusive and binding on the U.S. Borrowers or
the U.K. Borrowers, as the case may be.
SECTION 3. Commitment Commission; Fees; Reductions of Commitment.
3.01 FEES. (a) The Borrowers jointly and severally agree to pay to
the Administrative Agent in Dollars for distribution to each Non-Defaulting Bank
a commitment commission (the "Commitment Commission") for the period from the
Restatement Effective Date to but excluding the Final Maturity Date (or such
earlier date as the Total Commitment shall have been terminated), computed at a
rate for each day equal to the relevant Applicable Margin on the daily average
Unutilized Commitment of such Non-Defaulting Bank as in effect from time to
time. Accrued Commitment Commission shall be due and payable quarterly in
arrears on each Quarterly Payment Date and on the Final Maturity Date or such
earlier date upon which the Total Commitment is terminated.
(b) The U.S. Borrowers jointly and severally agrees to pay to the
Administrative Agent for PRO RATA distribution to each Non-Defaulting Bank
(based on their respective L/C Participation Percentages as from time to time in
effect in the various outstanding U.S. Letters of Credit) in Dollars a fee in
respect of each U.S. Letter of Credit issued hereunder, and the U.K. Borrowers
jointly and severally agree to pay to the Administrative Agent for PRO RATA
distribution to each Non-Defaulting Bank (based on their respective L/C
Participation Percentages in the various
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outstanding U.K. Letters of Credit) in Pounds Sterling (or after a Sharing
Event, in Dollars) a fee in respect of each U.K. Letter of Credit issued
hereunder (with all fees payable as described in this clause (b) being herein
referred to as "Letter of Credit Fees"), in each case, for the period from and
including the date of issuance of such Letter of Credit through the termination
of such Letter of Credit, computed at a rate per annum equal to the relevant
Applicable Margin, as in effect from time to time, on (x) the daily Stated
Amount of such Letter of Credit (in the case of a U.S. Letter of Credit and,
after a Sharing Event, a U.K. Letter of Credit) or (y) the daily U.K. L/C Stated
Amount of such Letter of Credit (in the case of a U.K. Letter of Credit at any
time prior to a Sharing Event). Accrued Letter of Credit Fees shall be due and
payable quarterly in arrears on each Quarterly Payment Date and upon the first
day on or after the termination of the Total Commitment upon which no Letters of
Credit remain outstanding.
(c) Each Account Party agrees to pay to the respective Issuing Bank,
for its own account, in Dollars (in the case of a U.S. Letter of Credit and,
after a Sharing Event, a U.K. Letter of Credit) or in Pounds Sterling (in the
case of a U.K. Letter of Credit at any time prior to a Sharing Event), a facing
fee in respect of each Letter of Credit issued for its own account hereunder
(the "Facing Fee") for the period from and including the date of issuance of
such Letter of Credit to and including the termination or expiration of such
Letter of Credit, computed at a rate equal to 1/4 of 1% per annum of (x) the
daily Stated Amount of such Letter of Credit (in the case of a U.S. Letter of
Credit and, after a Sharing Event, a U.K. Letter of Credit) or (y) the daily
U.K. L/C Stated Amount of such Letter of Credit (in the case of a U.K. Letter of
Credit at any time prior to a Sharing Event); PROVIDED, that in no event shall
the annual Facing Fee with respect to any Letter of Credit be less than the
Minimum Applicable Facing Fee; it being agreed that (i) on the date of issuance
of any Letter of Credit and on each anniversary thereof prior to the termination
of such Letter of Credit, if the Minimum Applicable Facing Fee will exceed the
amount of Facing Fees that will accrue with respect to such Letter of Credit for
the immediately succeeding 12-month period, the full Minimum Applicable Facing
Fee shall be payable on the date of issuance of such Letter of Credit and on
each such anniversary thereof prior to the termination of such Letter of Credit
and (ii) if on the date of the termination of any Letter of Credit, the Minimum
Applicable Facing Fee actually exceeds the amount of Facing Fees paid or payable
with respect to such Letter of Credit for the period beginning on the date of
the issuance thereof (or if the respective Letter of Credit has been outstanding
for more than one year, the date of the last anniversary of the issuance thereof
occurring prior to the termination of such Letter of Credit) and ending on the
date of the termination thereof, an amount equal to such excess shall be paid
as additional Facing Fees with respect to such Letter of Credit on the next date
upon which Facing Fees are payable in accordance with the immediately succeeding
sentence. Except as provided in the immediately preceding sentence, accrued
Facing Fees shall be due and payable quarterly in arrears on each Quarterly
Payment Date and upon the first day on or after the termination of the Total
Commitment upon which no Letters of Credit remain outstanding.
(d) The respective Account Party agrees to pay to the respective
Issuing Bank, for its own account, upon each payment under, issuance of, or
amendment to, any Letter of Credit, such amount as shall at the time of such
event be the reasonable administrative charge (including
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reasonable expenses) which such Issuing Bank is generally imposing in connection
with such occurrence with respect to letters of credit denominated in the
respective Applicable Currency.
(e) Each Borrower agrees to pay to each Agent, for its own account,
such other fees as have been agreed to in writing by such Borrower and the
Agents.
3.02 VOLUNTARY TERMINATION OF UNUTILIZED COMMITMENTS. (a) Upon at
least three Business Days' prior notice from an Authorized Representative of
Holdings to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Banks), Holdings
shall have the right, at any time or from time to time, without premium or
penalty, to terminate the Total Unutilized Commitment at such time, in whole or
in part, in integral multiples of $1,000,000 in the case of partial reductions.
Each reduction to the Total Unutilized Commitment pursuant to this Section 3.02
shall apply (i) first, in an amount equal to the lesser of (x) the reduction to
the Total Unutilized Commitment then being effected or (y) the Total Non-U.K.
Sub-Commitment then in effect, to reduce the Commitment (and the Non-U.K.
Sub-Commitment) of each Bank, PRO RATA based on the relative Non-U.K.
Sub-Commitments of the various Banks (or their respective Affiliates) and (ii)
to the extent in excess of the amount to be applied pursuant to preceding clause
(i), to reduce the remaining Commitments (and the U.K. Sub-Commitments) of the
various Banks PRO RATA based on the U.K. Sub-Commitments of the various Banks
(or their respective Affiliates). Notwithstanding anything to the contrary
contained in the immediately preceding sentence, at the time of any reduction to
the Total Unutilized Commitment pursuant to this Section 3.02, Holdings may, but
shall not be required to, elect that all or a portion of such reduction first be
applied as provided in clause (ii) of the immediately preceding sentence, with
any excess over the amount of the Total U.K. Sub-Commitment as then in effect to
be applied as provided in clause (i) of the immediately preceding sentence.
(b) In the event of certain refusals by a Bank as provided in Section
4.01 or 13.12(b) to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Banks, Holdings may, subject to the applicable requirements of said
Sections 4.01 and/or 13.12(b), upon five Business Days' written notice to the
Administrative Agent at its Notice Office (which notice the Administrative Agent
shall promptly transmit to each of the Banks) terminate the Commitment (and the
related U.K. Sub-Commitment, if any) of such Bank, so long as all Revolving
Loans, together with accrued and unpaid interest, Fees and all other amounts,
owing to such Bank are repaid concurrently with the effectiveness of such
termination (at which time Schedules I-A and I-B shall be deemed modified to
reflect such changed amounts), and at such time, such Bank shall no longer
constitute a "Bank" for purposes of this Agreement, except with respect to
indemnifications under this Agreement (including, without limitation, Sections
1.10, 1.11, 2.06, 4.04, 13.01 and 13.06), which shall survive as to such repaid
Bank.
(c) In connection with any reduction or termination of the Total
Unutilized Commitment and/or the Commitment (and related Sub-Commitments) of any
Bank pursuant to this Section 3.02 and Section 3.03, as the case may be, each
U.S. Borrower and each U.K. Borrower hereby irrevocably authorizes Holdings to
take all necessary action, in the name of such U.S. Borrower or such U.K.
Borrower, as the case may be, as described in this Section 3.02 or Section 3.03
in
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order to effect the reduction or termination of the Total Unutilized Commitment
and/or the Commitment (and related Sub-Commitment) of such Bank in accordance
with the provisions of this Section 3.02 or Section 3.03, as the case may be.
3.03 MANDATORY REDUCTION OF COMMITMENTS. (a) The Total Commitment
(and the Commitment, the U.K. Sub-Commitment and the Non U.K. Sub-Commitment of
each Bank) shall terminate in its entirety on the Final Maturity Date.
(b) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, on each date after the Restatement Effective Date upon
which Holdings or any of its Subsidiaries receives any proceeds from any
incurrence by Holdings or any of its Subsidiaries of Indebtedness for borrowed
money (including Attributed Receivable Facility Indebtedness incurred at any
time pursuant to the Receivables Facility which in aggregate principal amount
exceeds the Receivables Facility Threshold Amount as then in effect, but
excluding other Attributed Receivables Facility Indebtedness and Indebtedness
for borrowed money permitted to be incurred pursuant to Sections 9.04(i) through
(xi), inclusive, and (xiii) through (xvii), inclusive) or from any issuance by
Holdings or any of its Subsidiaries of any Preferred Stock (other than Qualified
Preferred Stock), the Total Commitment shall be reduced by an amount equal to
100% of the Net Cash Proceeds of the respective incurrence of Indebtedness or
issuance of Preferred Stock.
(c) Each reduction to the Total Commitment pursuant to this Section
3.03 shall apply to proportionally and permanently reduce the Commitment of each
Bank (based on their RL Percentages). At the time of each reduction to the
Commitment of any Bank pursuant to this Section 3.03, Holdings shall specify the
amount of such reduction to apply to the U.K. Sub-Commitment of such Bank and to
the Non-U.K. Sub-Commitment of such Bank (the sum of which must equal the
reduction to the Commitment of such Bank); PROVIDED that all Banks with U.K.
Sub-Commitments shall be treated in a consistent fashion (I.E., with no
reductions, or with proportionate reductions, to their respective U.K.
Sub-Commitments) at the time of any reduction to the Total Commitment pursuant
to this Section 3.03. In the absence of a designation by Holdings pursuant to
this Section 3.03, the amount of any reduction to the Commitment of any Bank
pursuant to this Section 3.03 shall apply (i) first, to reduce the Non-U.K.
Sub-Commitment of the respective Bank and (ii) second, to the extent in excess
thereof, to reduce the U.K. Sub-Commitments of such Bank.
SECTION 4. Prepayments; Payments; Taxes.
4.01 VOLUNTARY PREPAYMENTS. Each Borrower shall have the right to
prepay the Loans made to such Borrower, without premium or penalty, in whole or
in part at any time and from time to time on the following terms and conditions:
(i) an Authorized Representative of such Borrower shall give the
Administrative Agent prior to 2:00 P.M. (New York time) at its Notice
Office (x) at least one Business Day's prior written notice (or telephonic
notice promptly confirmed in writing) of such Borrower's intent to prepay
Base Rate Loans (or same day notice in the case of Swingline Loans provided
such notice is given prior to (I) 3:00 P.M. (New York
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time), in the case of Dollar Swingline Loans and (II) 10:00 A.M. (London
time), in the case of Sterling Swingline Loans) and (y) at least three
Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) of its intent to prepay Euro Rate Loans, whether
Dollar Revolving Loans, Sterling Revolving Loans, Dollar Swingline Loans or
Sterling Swingline Loans shall be prepaid, the amount of such prepayment
and the Types of Revolving Loans to be prepaid and, in the case of Euro
Rate Loans, the specific Borrowing or Borrowings pursuant to which made,
which notice the Administrative Agent shall promptly transmit to each of
the Banks;
(ii) each prepayment shall be in an aggregate principal amount of
at least (w) $1,000,000, in the case of Dollar Revolving Loans, (x)
L100,000, in the case of Sterling Revolving Loans, (y) $500,000, in the
case of Dollar Swingline Loans and (z) L15,000, in the case of Sterling
Swingline Loans, PROVIDED that if any partial prepayment of Euro Rate Loans
(other than Sterling Swingline Loans) made pursuant to any Borrowing shall
reduce the outstanding Euro Rate Loans made pursuant to such Borrowing to
an amount less than the minimum borrowing amount applicable to each
Borrowing of Euro Rate Loans as provided in Section 1.02, then such
Borrowing may not be continued as a Borrowing of Euro Rate Loans beyond the
Interest Period applicable thereto and any election of an Interest Period
with respect thereto given by such Borrower shall have no force or effect;
(iii) at the time of any prepayment of Euro Rate Loans (other than
Sterling Swingline Loans) pursuant to this Section 4.01 on any date other
than the last day of the Interest Period applicable thereto, such Borrower
shall pay the amounts required pursuant to Section 1.11;
(iv) each prepayment in respect of any Revolving Loans made
pursuant to a Borrowing shall, except as provided in clauses (v) and (vi)
below, be applied PRO RATA among such Revolving Loans;
(v) in the event of certain refusals by a Bank as provided in
Section 13.12(b) to consent to certain proposed changes, waivers,
discharges or terminations with respect to this Agreement which have been
approved by the Required Banks, such Borrower may, upon five Business Days'
written notice by an Authorized Representative of such Borrower to the
Administrative Agent at its Notice Office (which notice the Administrative
Agent shall promptly transmit to each of the Banks) repay all Revolving
Loans, together with accrued and unpaid interest, Fees, and other amounts
owing to such Bank in accordance with, and subject to the requirements of,
said Section 13.12(b) so long as (A) the Commitment (and the related U.K.
Sub-Commitment, if any) of such Bank is terminated concurrently with such
repayment (at which time Schedules I-A and I-B shall be deemed modified to
reflect the changed Commitments and U.K. Sub-Commitments, if any) and (B)
the consents required by Section 13.12(b) in connection with the repayment
pursuant to this clause (v) have been obtained;
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(vi) at such Borrower's election in connection with any prepayment
of Revolving Loans pursuant to this Section 4.01, such prepayment shall not
be applied to the prepayment of Revolving Loans of a Defaulting Bank; and
(vii) at the time of any repayment of Swingline Loans pursuant to
this Section 4.01, the respective Borrower repaying same shall designate
the various Swingline Loans of such Borrower which are being repaid;
PROVIDED that in the absence of a contrary designation by the U.S.
Borrowers, repayments of Dollar Swingline Loans shall first be applied to
any then outstanding Excess Dollar Swingline Loans and, to the extent in
excess thereof, to any other Dollar Swingline Loans then outstanding.
4.02 MANDATORY REPAYMENTS AND CASH COLLATERALIZATIONS. (a) (i) On
the fifth Business Day following any date on which the sum of the aggregate
outstanding principal amount of the Swingline Loans (for this purpose, using the
Dollar Equivalent thereof in the case of outstanding Sterling Swingline Loans),
the Revolving Loans (for this purpose, using the Dollar Equivalent thereof in
the case of outstanding Sterling Revolving Loans) and the Letter of Credit
Outstandings, in each case as of such date, exceeds the Total Commitment as then
in effect, the U.S. Borrowers shall prepay on such fifth Business Day the
principal of outstanding Dollar Swingline Loans and/or the U.K. Borrowers shall
prepay on such fifth Business Day the principal of outstanding Sterling
Swingline Loans (with such repayment of Swingline Loans to be allocated between
Dollar Swingline Loans and Sterling Swingline Loans as the Borrowers may elect,
PROVIDED that in the absence of a contrary designation by the U.S. Borrowers,
repayments of Dollar Swingline Loans shall first be applied to any then
outstanding Excess Dollar Swingline Loans and, to the extent in excess thereof,
to any other Dollar Swingline Loans then outstanding), and after the Swingline
Loans have been repaid in full, the U.S. Borrowers shall repay the principal of
outstanding Dollar Revolving Loans and/or the U.K. Borrowers shall repay the
principal of outstanding Sterling Revolving Loans (with such repayment of
Revolving Loans to be allocated between Dollar Revolving Loans and Sterling
Revolving Loans as the Borrowers may elect) in an amount equal to such excess.
If, after giving effect to the prepayment of all outstanding Swingline Loans and
Revolving Loans, the aggregate amount of the Letter of Credit Outstandings
exceeds the Total Commitment as then in effect, the respective Account Parties
agree to pay to the Administrative Agent at the appropriate Payment Office on
such date an amount of cash or Cash Equivalents equal to the amount of such
excess (up to a maximum amount equal to the Letter of Credit Outstandings at
such time), such cash or Cash Equivalents to be held as security for all
obligations of the respective Account Parties hereunder in a cash collateral
account to be established by the Administrative Agent.
(ii) On the fifth Business Day following any date on which the
Individual Exposure of any Bank exceeds the Commitment of such Bank as then in
effect, the U.S. Borrowers shall prepay on such fifth Business Day the principal
of outstanding Dollar Swingline Loans (which, in the absence of a contrary
designation, shall first be applied to Excess Dollar Swingline Loans and, to the
extent in excess thereof, to any other Dollar Swingline Loans then outstanding)
and/or the U.K. Borrowers shall prepay on such fifth Business Day the principal
of outstanding Sterling Swingline Loans (with such repayment of Swingline Loans
to be allocated between Dollar Swingline Loans and Sterling Swingline Loans as
the Borrowers may elect), and after the
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Swingline Loans have been repaid in full, the U.S. Borrowers shall repay the
principal of outstanding Dollar Revolving Loans and/or the U.K. Borrowers shall
prepay the principal of outstanding Sterling Revolving Loans (with such
repayment of Revolving Loans to be allocated between Dollar Revolving Loans and
Sterling Revolving Loans as the Borrowers may elect) in such amounts as shall be
required so that, after giving effect to the payments pursuant to this clause
(ii), the Individual Exposure of such Bank shall no longer exceed the amount of
its Commitment. If, after giving effect to the prepayment in full of all
outstanding Swingline Loans and Revolving Loans, the sum of any Bank's L/C
Participation Percentages of the various outstanding Letters of Credit and
Unpaid Drawings relating thereto exceeds the Commitment of such Bank, such
Unpaid Drawings shall be repaid in full and the respective Account Parties shall
pay (and shall be jointly and severally obligated to pay) to the Administrative
Agent at the appropriate Payment Office on such day an amount of cash or Cash
Equivalents as shall be required to ensure that, to the extent the sum of the
L/C Participation Percentages of such Bank in the various outstanding Letters of
Credit exceeds the amount of its Commitment, such amounts are fully
collateralized by cash and Cash Equivalents, with such cash or Cash Equivalents
to be held as security for the obligations of the U.K. Borrowers or the U.S.
Borrowers, as the case may be, hereunder in a cash collateral account to be
established by the Administrative Agent.
(b) With respect to each repayment of Loans required by this Section
4.02, the respective Borrower may (subject to the requirements of preceding
clause (a)) designate the Types of Loans which are to be repaid and, in the case
of Euro Rate Loans, the specific Borrowing or Borrowings pursuant to which made,
PROVIDED that: (i) in the case of repayments of Dollar Revolving Loans
maintained as Eurodollar Loans and Sterling Revolving Loans, repayments of such
Loans pursuant to this Section 4.02 on any day other than the last day of an
Interest Period applicable thereto shall be accompanied by payment by the
respective Borrower of all amounts owing in connection therewith pursuant to
Section 1.11; (ii) if any repayment of Euro Rate Loans (other than Sterling
Swingline Loans) made pursuant to a single Borrowing shall reduce the
outstanding Euro Rate Loans made pursuant to such Borrowing to an amount less
than the Minimum Borrowing Amount applicable to the respective Euro Rate Loans,
such Borrowing (x) in the case of Dollar Revolving Loans maintained as
Eurodollar Loans, shall be converted at the end of the then current Interest
Period into a Borrowing of Base Rate Loans and (y) in the case of Sterling
Revolving Loans, shall be repaid in full at the end of the then current Interest
Period; and (iii) each repayment of any Revolving Loans made pursuant to a
Borrowing shall, except as set forth in Section 4.02(a), be applied PRO RATA
among such Revolving Loans. In the absence of a designation by the respective
Borrower as described in the preceding sentence, the Administrative Agent shall,
subject to the above, make such designation in its sole discretion.
(c) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, (i) all then outstanding Swingline Loans shall be repaid in full
on the Swingline Expiry Date and (ii) all Revolving Loans then outstanding shall
be repaid in full on the Final Maturity Date.
4.03 METHOD AND PLACE OF PAYMENT. Except as otherwise specifically
provided herein, all payments under this Agreement or any Note shall be made to
the Administrative Agent for the account of the Bank or Banks entitled thereto
not later than 1:00 P.M. (local time in the city in which the Payment Office for
the respective payments is located) on the date when due and
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shall be made in (x) Dollars in immediately available funds at the appropriate
Payment Office of the Administrative Agent in respect of any obligation of the
Borrowers under this Agreement except as otherwise provided in the immediately
following clause (y) and (y) Pounds Sterling in immediately available funds at
the appropriate Payment Office of the Administrative Agent, if such payment is
made in respect of (i) principal of or interest on Sterling Loans, (ii) Letter
of Credit Fees, Facing Fees and Unpaid Drawings (and interest thereon) in
respect of U.K. Letters of Credit at any time prior to a Sharing Event or (iii)
any increased costs, indemnities or other amounts owing with respect to Sterling
Loans (or Commitments relating thereto) or U.K. Letters of Credit (at any time
prior to a Sharing Event). The Administrative Agent will thereafter cause to be
distributed on the same day (if payment was actually received by the
Administrative Agent prior to 1:00 P.M. local time in the city in which such
payments are to be made) like funds relating to the payment of principal,
interest or Fees ratably to the Banks entitled thereto. Any payments under this
Agreement which are made later than 1:00 P.M. (local time in the city in which
such payments are to be made) shall be deemed to have been made on the next
succeeding Business Day. Whenever any payment to be made hereunder or under any
Note shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.
4.04 NET PAYMENTS; TAXES. (a) All payments made by any Credit
Agreement Party hereunder (including, in the case of any Parent, any U.S.
Borrower or any Domestic U.K. Borrower, in its capacity as a guarantor pursuant
to Section 14, 15 or 16, as the case may be) or under any Note will be made
without setoff, counterclaim or other defense. Except as provided in Section
4.04(b), all such payments will be made free and clear of, and without deduction
or withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding, except as provided in the
second succeeding sentence, any tax imposed on or measured by the net income or
net profits of a Bank pursuant to the laws of the jurisdiction in which it is
organized or the jurisdiction in which the principal office or applicable
lending office of such Bank is located or any subdivision thereof or therein)
and all interest, penalties or similar liabilities with respect to such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
(all such non-excluded taxes, levies, imposts, duties, fees, assessments or
other charges being referred to collectively as "Taxes"). If any Taxes are so
levied or imposed, the respective Borrower agrees (and (x) if such Borrower is a
U.S. Borrower, each other U.S. Borrower (y) and if such Borrower is a U.K.
Borrower, each other U.K. Borrower, agrees jointly and severally) to pay the
full amount of such Taxes, and such additional amounts as may be necessary so
that every payment of all amounts due under this Agreement or under any Note,
after withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein or in such Note. If any amounts are payable
in respect of Taxes pursuant to the preceding sentence, the respective Borrower
agrees (and (x) if such Borrower is a U.S. Borrower, each other U.S. Borrower
(y) and if such Borrower is a U.K. Borrower, each other U.K. Borrower, agrees
jointly and severally) to reimburse each Bank, upon the written request of such
Bank, for taxes imposed on or measured by the net income or net profits of such
Bank
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pursuant to the laws of the jurisdiction in which such bank is organized or in
which the principal office or applicable lending office of such Bank is located
or under the laws of any political subdivision or taxing authority of any such
jurisdiction in which such bank is organized or in which the principal office or
applicable lending office of such Bank is located and for any withholding of
income or similar taxes as such Bank shall determine are payable by, or withheld
from, such Bank in respect of such amounts so paid to or on behalf of such Bank
pursuant to the preceding sentence and in respect of any amounts paid to or on
behalf of such Bank pursuant to this sentence. The respective Borrower will
furnish to the Administrative Agent within 45 days after the date the payment of
any Taxes is due pursuant to applicable law certified copies of tax receipts
evidencing such payment by such Borrower. Each Borrower agrees to indemnify and
hold harmless each Bank, and reimburse such Bank upon its written request, for
the amount of any Taxes so levied or imposed and paid by such Bank.
(b) Each U.S. Bank that is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for U.S. Federal Income Tax
purposes agrees to deliver to each U.S. Borrower and the Administrative Agent on
or prior to the Restatement Effective Date, or in the case of any such U.S. Bank
that is an assignee or transferee of an interest under this Agreement pursuant
to Section 1.13 or 13.04 (unless the respective U.S. Bank was already a U.S.
Bank hereunder immediately prior to such assignment or transfer), on the date of
such assignment or transfer to such U.S. Bank, (i) two accurate and complete
original signed copies of Internal Revenue Service Form 4224 or 1001 (or
successor forms) certifying such U.S. Bank's entitlement to a complete exemption
from United States withholding tax with respect to payments to be made under
this Agreement and under any Note, or (ii) if the U.S. Bank is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either
Internal Revenue Service Form 1001 or 4224 pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit D (any such certificate, a
"Section 4.04(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying such U.S. Bank's entitlement to a complete exemption from United
States withholding tax with respect to payments of interest to be made under
this Agreement and under any Note. In addition, each U.S. Bank agrees that from
time to time after the Restatement Effective Date, when a lapse in time or
change in circumstances renders the previous certification obsolete or
inaccurate in any material respect, it will deliver to each U.S. Borrower and
the Administrative Agent two new accurate and complete original signed copies of
Internal Revenue Service Form 4224 or 1001, or Form W-8 and a Section
4.04(b)(ii) Certificate, as the case may be, and such other forms as may be
required in order to confirm or establish the entitlement of such U.S. Bank to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note, or it shall immediately
notify each U.S. Borrower and the Administrative Agent of its inability to
deliver any such Form or Certificate, in which case such U.S. Bank shall not be
required to deliver any such Form or Certificate pursuant to this Section
4.04(b). Notwithstanding anything to the contrary contained in Section 4.04(a),
but subject to Section 13.04(b) and the immediately succeeding sentence, (x)
each U.S. Borrower shall be entitled, to the extent it is required to do so by
law, to deduct or withhold income or similar taxes imposed by the United States
(or any political subdivision or taxing authority thereof or therein) from
interest, Fees or other amounts payable by the U.S. Borrowers
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hereunder for the account of any U.S. Bank which is not a United States person
(as such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal
income tax purposes to the extent that such U.S. Bank has not provided to each
U.S. Borrower U.S. Internal Revenue Service Forms that establish a complete
exemption from such deduction or withholding and (y) no U.S. Borrower shall be
obligated pursuant to Section 4.04(a) to gross-up payments to be made to a U.S.
Bank in respect of income or similar taxes imposed by the United States (I) if
such U.S. Bank has not provided to such U.S. Borrower the Internal Revenue
Service Forms required to be provided to such U.S. Borrower pursuant to this
Section 4.04(b) or (II) in the case of a payment, other than interest, to a U.S.
Bank described in clause (ii) above, to the extent that such Forms do not
establish a complete exemption from withholding of such taxes. Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere in
this Section 4.04 and except as set forth in Section 13.04(b), each U.S.
Borrower jointly and severally agrees to pay additional amounts and to indemnify
each U.S. Bank in the manner set forth in Section 4.04(a) (without regard to the
identity of the jurisdiction requiring the deduction or withholding) in respect
of any Taxes deducted or withheld by it as described in the immediately
preceding sentence (x) as a result of any changes after the Restatement
Effective Date (or, if later, the date such U.S. Bank became party to this
Agreement) in any applicable law, treaty, governmental rule, regulation,
guideline or order, or in the interpretation thereof, relating to the deducting
or withholding of such Taxes or (y) as a result of the purchase of a
participation as required by Section 1.15 following the occurrence of a Sharing
Event.
(c) Each U.K. Bank that is not a resident of the United Kingdom for
United Kingdom tax purposes agrees to (i) deliver to each U.K. Borrower and the
Administrative Agent such declaration of non-residence or other similar claim as
shall be requested by each U.K. Borrower (giving the U.K. Bank sufficient time
to satisfy such requirement), as is required by statute, treaty or regulation of
the United Kingdom existing on the date hereof or which are not substantially
more onerous than those existing on the date hereof and which do not impose an
unreasonable burden (in time, resources or otherwise) on the U.K. Bank, or (ii)
within 45 days after the date hereof, make the requisite filing with the U.K.
Inspector of Foreign Dividends (and/or the taxing authority of the jurisdiction
in which such U.K. Bank's principal office is located) as required to establish
its entitlement to an exemption from U.K. withholding under the double tax
treaty currently in force between the United States (or the jurisdiction in
which such U.K. Bank's principal office is located) and the United Kingdom.
Notwithstanding anything to the contrary contained in Section 4.04(a), but
subject to Section 13.04(b) and the immediately succeeding sentence, (x) each
U.K. Borrower shall be entitled, to the extent it is required to do so by law,
to deduct and withhold income or similar taxes imposed by the United Kingdom on
interest, Fees or other amounts payable hereunder for the account of any U.K.
Bank which is not a resident of the United Kingdom for U.K. tax purposes to the
extent that such U.K. Bank has not provided forms, declarations or other
certification required to establish a complete exemption from such deduction or
withholding and (y) each U.K. Borrower shall not be obligated pursuant to
Section 4.04(a) hereof to gross-up payments to be made to a U.K. Bank in respect
of income or similar taxes imposed by the United Kingdom if such U.K. Bank has
not provided to such U.K. Borrower the forms and declaration required to be
provided by such U.K. Bank pursuant to the preceding sentence. Notwithstanding
anything to the contrary contained in the preceding
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sentence or elsewhere in this Section 4.04, and except as set forth in Section
13.04(b), each U.K. Borrower jointly and severally agrees to pay any additional
amounts and to indemnify each U.K. Bank in the manner set forth in Section
4.04(a) (without regard to the identity of the jurisdiction requiring the
deduction or withholding) in respect of any Taxes deducted or withheld by it as
described in the immediately preceding sentence (x) as a result of any changes
after the Restatement Effective Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating
to the deducting or withholding of such Taxes or (y) as a result of the purchase
of a participation as required by Section 1.15 following the occurrence of a
Sharing Event. For the avoidance of doubt, nothing herein shall require any
U.K. Bank to disclose any information regarding its tax affairs or computations
to the U.K. Borrowers or any of their respective Affiliates and no U.K. Bank
shall be obligated to disclose any of its tax returns to the U.K. Borrowers or
any of their respective Affiliates or any agent of the foregoing.
(d) If any Borrower pays any additional amount under this Section
4.04 to a Bank and such Bank determines in its sole discretion that it has
actually received or realized in connection therewith any refund or any
reduction of, or credit against, its Tax liabilities in or with respect to the
taxable year in which the additional amount is paid, such Bank shall pay to such
Borrower an amount that the Bank shall, in its sole discretion, determine is
equal to the net benefit, after tax, which was obtained by the Bank in such year
as a consequence of such refund, reduction or credit.
SECTION 5. Conditions Precedent to Restatement Effective Date and
Credit Events.
5.01 CONDITIONS PRECEDENT TO RESTATEMENT EFFECTIVE DATE AND INITIAL
CREDIT EVENTS. The occurrence of the Restatement Effective Date pursuant to
Section 13.10, and the obligation of each Bank to make Loans, and the obligation
of each Issuing Bank to issue Letters of Credit, in each case on the Restatement
Effective Date, are subject at the time of the making of such Loans or the
issuance of such Letters of Credit to the satisfaction of the following
conditions:
(a) EXECUTION OF AGREEMENT; NOTES. On or prior to the Restatement
Effective Date (i) this Agreement shall have been executed and delivered as
provided in Section 13.10 and (ii) there shall have been delivered to the
Administrative Agent for the account of each of the Banks the appropriate U.S.
Borrowers' Revolving Note and/or U.K. Borrowers' Revolving Note executed by the
appropriate Borrower or Borrowers, and to BTCo the U.S. Borrowers' Swingline
Note and the U.K. Borrowers' Swingline Note executed by the appropriate
Borrowers, in each case in the amount, maturity and as otherwise provided
herein.
(b) OFFICER'S CERTIFICATE. On the Restatement Effective Date, the
Administrative Agent shall have received from Holdings a certificate, dated such
date and signed on behalf of Holdings by the President or any Vice President of
Holdings, stating all of the conditions in Sections 5.01(g), (j), (k) and (m)
and 5.02 have been satisfied on such date.
(c) FEES, ETC. On the Restatement Effective Date, each Borrower
shall have paid to the Administrative Agent, the Documentation Agent and the
Banks all costs, fees and expenses
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(including, without limitation, reasonable legal fees and expenses) payable to
the Administrative Agent, the Documentation Agent and the Banks to the extent
then due.
(d) OPINIONS OF COUNSEL. On the Restatement Effective Date, the
Administrative Agent shall have received (i) from Sullivan & Cromwell, special
counsel to the Credit Parties, an opinion addressed to the Administrative Agent,
the Collateral Agent and each of the Banks and dated the Restatement Effective
Date in the form of Exhibit E-1, (ii) from the Associate General Counsel of
Holdings, an opinion addressed to the Administrative Agent, the Collateral Agent
and each of the Banks and dated the Restatement Effective Date in the form of
Exhibit E-2 and (iii) from Ashurst Morris Crisp, special United Kingdom counsel
to the Credit Parties, an opinion addressed to the Administrative Agent, the
Collateral Agent and each of the Banks and dated the Restatement Effective Date
in the form of Exhibit E-3.
(e) CORPORATE DOCUMENTS; PROCEEDINGS; ETC. (i) On the Restatement
Effective Date, the Administrative Agent shall have received a certificate,
dated the Restatement Effective Date, signed by an authorized officer of each
New Credit Party and attested to by the Secretary or any Assistant Secretary of
such New Credit Party, in the form of Exhibit F with appropriate insertions,
together with copies of the certificate of incorporation and by-laws of such New
Credit Party, and the resolutions of such New Credit Party referred to in such
certificate, and the foregoing shall be reasonably acceptable to the Agents.
(ii) On the Restatement Effective Date, the Administrative Agent
shall have received bring-down certificates of all Credit Parties (other than
the New Credit Parties) (x) certifying that there were no changes, or providing
the text of any changes, to the certificate of incorporation and by-laws of such
Credit Parties as delivered pursuant to Section 5.05 of the Original Credit
Agreement, (y) to the effect that each such Credit Party is in good standing in
its respective state of incorporation and in those states where each such Credit
Party conducts business and (z) providing the resolutions adopted by such Credit
Party with respect to the actions contemplated in this Agreement (including,
without limitation, with respect to the amendment and restatement of this
Agreement).
(iii) All corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this Agreement
and the other Documents shall be reasonably satisfactory in form and substance
to the Agents, and the Administrative Agent shall have received all information
and copies of all documents and papers, including records of corporate
proceedings, governmental approvals, good standing certificates and bring-down
telegrams or facsimiles, if any, which either Agent reasonably may have
requested in connection therewith, such documents and papers where appropriate
to be certified by proper corporate or governmental authorities.
(f) SOLVENCY CERTIFICATE. On or before the Restatement Effective
Date, Holdings shall cause to be delivered to the Administrative Agent a
solvency certificate addressed to the Agents and each of the Banks and dated the
Restatement Effective Date from the Chief Financial Officer of Holdings, which
solvency certificate shall be in the form of Exhibit G (appropriately completed)
expressing opinions of value and other appropriate factual information regarding
the
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solvency of Holdings and its Subsidiaries (on a consolidated basis), after
giving effect to the Transaction and the incurrence of all financings
contemplated herein.
(g) REFINANCING. On the Restatement Effective Date and concurrently
with the Credit Events then occurring, (i) the total commitments under the
Existing U.K. Facility shall have been terminated and all loans thereunder shall
have been repaid in full, together with interest thereon, (ii) all fees and
other amounts owing pursuant to the Existing U.K. Facility shall have been
repaid in full, (iii) the Existing U.K. Facility and all guarantees and pledge
agreements with respect thereto shall have been terminated and of no further
force or effect except for continuing indemnification obligations provided
therein, (iv) the creditors under the Existing U.K. Facility shall have
terminated and released all security interests and Liens on the capital stock of
any U.K. Borrower granted in connection with the Existing U.K. Facility, and (v)
the Administrative Agent shall have received evidence in form, scope and
substance reasonably satisfactory to the Agents that the matters set forth in
this Section 5.01(g) have been satisfied on such date.
(h) NON-BORROWER U.S. SUBSIDIARIES GUARANTY. On the Restatement
Effective Date, each Non-Borrower U.S. Subsidiary Guarantor shall have duly
authorized, executed and delivered the Amended and Restated Subsidiaries
Guaranty in the form of Exhibit H-1 (as amended, modified, restated or
supplemented from time to time, the "Non-Borrower U.S. Subsidiaries Guaranty"),
guaranteeing all of the obligations of each of the Borrowers as more fully
provided therein, and the Non-Borrower U.S. Subsidiaries Guaranty shall be in
full force and effect.
(i) PLEDGE AGREEMENTS. (i) On the Restatement Effective Date,
Holdings, BFPH, each U.S. Borrower and each Non-Borrower U.S. Subsidiary
Guarantor shall have duly authorized, executed and delivered an Amended and
Restated Pledge and Security Agreement in the form of Exhibit I-1 (as amended,
modified, restated or supplemented from time to time, the "U.S. Pledge and
Security Agreement") and shall have delivered to the Collateral Agent, as
Pledgee thereunder, all of the Pledged Securities referred to therein then owned
by Holdings, BFPH, each U.S. Borrower and each Non-Borrower U.S. Subsidiary
Guarantor, (x) endorsed in blank in the case of intercompany promissory notes,
if any, constituting Pledged Securities thereunder and (y) together with
executed and undated stock powers, in the case of capital stock constituting
Pledged Securities.
(ii) On the Initial Borrowing Date, each of BFPH, Laser Tech and
Columbine shall have duly authorized, executed and delivered a Charge Over
Shares and Promissory Notes in the form of Exhibit I-2 (as amended, modified or
supplemented from time to time in accordance with the terms thereof and hereof,
the "U.S. Charge Over Shares and Notes") and shall have delivered to the
Collateral Agent, as pledgee thereunder, all of the Pledged Securities referred
to therein then owned by such U.S. Credit Parties and required to be pledged
pursuant to the terms thereof, endorsed in blank in the case of intercompany
promissory notes, if any, constituting Pledged Securities thereunder and (y)
accompanied by executed and undated stock powers in the case of shares
constituting Pledged Securities, along with evidence that all other actions
necessary or, in the reasonable opinion of the Collateral Agent, desirable, to
perfect the security interests purported to be created by the U.S. Charge Over
Shares and Notes have been taken, and the U.S. Charge Over Shares and Notes
shall be in full force and effect.
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(iii) On the Initial Borrowing Date, each of the U.K. Credit Parties
shall have duly authorized, executed and delivered a Charge Over Shares and
Promissory Notes in the form of Exhibit I-3 (as amended, modified or
supplemented from time to time in accordance with the terms thereof and hereof,
the "U.K. Charge Over Shares and Notes") and shall have delivered to the
Collateral Agent, as pledgee thereunder, all of the Pledged Securities referred
to therein then owned by such U.K. Credit Parties and required to be pledged
pursuant to the terms thereof, endorsed in blank in the case of intercompany
promissory notes, if any, constituting Pledged Securities thereunder and (y)
accompanied by executed and undated stock powers in the case of shares
constituting Pledged Securities, along with evidence that all other actions
necessary or, in the reasonable opinion of the Collateral Agent, desirable, to
perfect the security interests purported to be created by the U.K. Charge Over
Shares and Notes have been taken, and the U.K. Charge Over Shares and Notes
shall be in full force and effect.
(j) ADVERSE CHANGE; GOVERNMENTAL APPROVALS; ETC. (i) On the
Restatement Effective Date, nothing shall have occurred (and the Agents shall
have become aware of no facts, conditions or other information not previously
known) which either Agent shall reasonably determine would reasonably be likely
to have (A) a material adverse effect on the Transaction or the rights or
remedies of the Agents or the Banks, or the ability of the Credit Parties to
perform their respective obligations to the Agents and the Banks or (B) a
Material Adverse Effect.
(ii) On or prior to the Restatement Effective Date, (A) all necessary
governmental (domestic and foreign), regulatory and third party approvals in
connection with the Credit Documents and otherwise referred to herein or therein
shall have been obtained and remain in full force and effect and evidence
thereof shall have been provided to the Administrative Agent and (B) all
necessary material governmental (domestic and foreign) and third party approvals
in connection with any Existing Indebtedness which is to remain outstanding
after the Restatement Effective Date and the consummation of the Transaction
shall have been obtained and remain in full force and effect and evidence
thereof shall have been provided to the Administrative Agent. Additionally,
there shall not exist any judgment, order, injunction or other restraint issued
or filed or a hearing seeking injunctive relief or other restraint pending or
notified prohibiting or imposing materially adverse conditions upon, or
materially delaying, or making economically unfeasible, the consummation of the
Transaction or the making of the Loans, the issuance of Letters of Credit or the
transactions contemplated by the Documents.
(k) LITIGATION. On the Restatement Effective Date, no litigation by
any entity (private or governmental) shall be pending or threatened in writing
with respect to (i) the Transaction or any documentation executed in connection
therewith (including any Credit Document) or the transactions contemplated
thereby or with respect to any Existing Indebtedness or (ii) which either Agent
shall reasonably determine would reasonably be likely to have (x) a materially
adverse effect on the Transaction or on the rights or remedies of either Agent
or the Banks, or on the ability of the Credit Parties to perform their
respective obligations hereunder to the Agents and the Banks or (y) a Material
Adverse Effect.
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(l) EXISTING INDEBTEDNESS. On the Restatement Effective Date and
after giving effect to the Transaction, neither Holdings nor any of its
Subsidiaries shall have any Preferred Stock or Indebtedness outstanding except
for (i) the Loans and Letters of Credit, (ii) Indebtedness of BFPH in an
aggregate principal amount not to exceed $350,000,000 represented by the 8-7/8%
Senior Subordinated Notes, (iii) Attributable Receivables Facility Indebtedness,
(iv) Indebtedness of Holdings represented by the Convertible Subordinated
Debentures and (v) certain intercompany indebtedness and other indebtedness as
is listed on Schedule VI (with the Indebtedness described in this clause (v)
being herein called "Scheduled Existing Indebtedness" and, together with the
Indebtedness described in clauses (ii), (iii) and (iv) above being herein called
the "Existing Indebtedness"). On and as of the Restatement Effective Date, all
of the Existing Indebtedness shall be outstanding after giving effect to the
Transaction and the other transactions contemplated hereby without any default
or event of default existing thereunder or arising as a result of the
Transaction and the other transactions contemplated hereby (except to the extent
amended or waived by the parties thereto on terms and conditions reasonably
satisfactory to the Agents and the Required Banks), and there shall not be any
amendments or modifications to the Debt Agreements other than as requested or
approved by the Agents or the Required Banks.
(m) ORIGINAL CREDIT AGREEMENT. On the Restatement Effective Date
concurrently with the incurrence of Loans hereunder, (i) BFPH shall have repaid
in full all Original Loans and shall have paid in full all accrued but unpaid
interest fees and other amounts owing pursuant to the Original Credit Agreement
through the Restatement Effective Date, (iii) all letters of credit issued under
the Original Credit Agreement shall have been incorporated hereunder as Original
Letters of Credit and (iv) all outstanding Notes (as defined in the Original
Credit Agreement) issued by BFPH to BTCo and the Original Banks shall be deemed
canceled (it being understood that BTCo and the Original Banks will use
reasonable efforts to return such Notes to BFPH for cancellation prior to the
Restatement Effective Date).
(n) PROJECTIONS, ETC.. (i) On or prior to the Restatement Effective
Date, there shall have been delivered to the Agents and the Banks detailed
projected consolidated financial statements of Holdings and its Subsidiaries
after giving effect to the Transaction, as set forth in the Confidential
Memorandum dated May 1998, for the period from April 1, 1998 to December 31,
2002 (the "Projections"), which Projections (x) shall reflect the forecasted
financial conditions and income and expenses of Holdings and its Subsidiaries
after giving effect to the Transaction and (y) shall be reasonably satisfactory
in form and substance to the Agents.
(ii) The Administrative Agent and the Banks shall have received such
other calculations and PRO FORMA financial data as shall be reasonably required
by the Agents in order for them to determine compliance with any applicable
covenants contained in the 8-7/8% Senior Subordinated Notes Indenture, all of
which shall be in form and substance reasonably satisfactory to the Agents and
the Required Banks.
5.02 CONDITIONS PRECEDENT TO ALL CREDIT EVENTS. The occurrence of
the Restatement Effective Date pursuant to Section 13.10, and the obligation of
each Bank to make Loans (including Loans made on the Restatement Effective Date
but excluding Mandatory Borrowings
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made thereafter, which shall be made as provided in Sections 1.01(c) and (d)),
and the obligation of an Issuing Bank to issue any Letter of Credit is subject,
at the time of each such Credit Event (except as hereinafter indicated), to the
satisfaction of the following conditions:
(a) NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of each
such Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein or in any other Credit Document shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of the making of such Credit Event (it
being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct in
all material respects only as of such specified date).
(b) ADVERSE CHANGE, ETC. At the time of each such Credit Event and
also after giving effect thereto, nothing shall have occurred (and neither the
Agents nor the Banks shall have become aware of any facts or conditions not
previously known) which either Agent or the Required Banks shall determine (i)
has, or would reasonably be expected to have, a material adverse effect on the
rights or remedies of the Banks or either Agent, or on the ability of Holdings,
BFPH, any Borrower or any other Credit Party to perform its obligations to
either Agent or the Banks under this Agreement or any other Credit Document or
(ii) has, or would reasonably be expected to have, a Material Adverse Effect.
(c) LITIGATION. At the time of each such Credit Event and also after
giving effect thereto, no litigation by any entity (private or governmental)
shall be pending or threatened in writing with respect to this Agreement, any
other Document or any documentation executed in connection herewith or the
transactions contemplated hereby or thereby, or which the Administrative Agent
or the Required Banks shall reasonably determine would reasonably be expected to
have a Material Adverse Effect.
(d) NOTICE OF BORROWING; LETTER OF CREDIT REQUEST. (i) Prior to the
making of each Revolving Loan, the Administrative Agent shall have received a
Notice of Borrowing meeting the requirements of Section 1.03(a). Prior to the
making of any Swingline Loan, BTCo shall have received the notice required by
Section 1.03(b)(i).
(ii) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the respective Issuing Bank shall have received a
Letter of Credit Request meeting the requirements of Section 2.03(a).
(e) REGULATION U. If at any time any Margin Stock is pledged or
required to be pledged pursuant to the Pledge and Security Agreement, all
actions required to be taken pursuant to Section 8.17 shall have been taken to
the reasonable satisfaction of the Agents.
The occurrence of the Restatement Effective Date and the acceptance of
the benefits or proceeds of each Credit Event shall constitute a representation
and warranty by each Credit Agreement Party to each Agent and each of the Banks
that all the conditions specified in Sections 5.01 (with respect to Credit
Events on the Restatement Effective Date) and 6 (with respect to Credit Events
after the Restatement Effective Date) and in this Section 5.02 (with respect to
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Credit Events on and after the Restatement Effective Date) and applicable to
such Credit Event exist as of that time. All of the Notes, certificates, legal
opinions and other documents and papers referred to in Sections 5.01 and 6 and
in this Section 5.02, unless otherwise specified, shall be delivered to the
Administrative Agent at the Notice Office for the account of each of the Banks
and, except for the Notes, in sufficient counterparts or copies for each of the
Banks and shall be in form and substance reasonably satisfactory to the Required
Banks.
SECTION 6. CONDITIONS PRECEDENT TO DESIGNATION OF BORROWERS. At any
time that Holdings desires that an additional Wholly-Owned Subsidiary of
Holdings become a Borrower hereunder, the following conditions shall be
satisfied at the time such Subsidiary becomes a Borrower:
(i) the consent of the Administrative Agent shall have been
obtained (which consent shall not be unreasonably withheld or delayed);
(ii) such Subsidiary shall have executed and delivered an Election
to Become a Borrower in the form of Exhibit J, which election shall specify
whether the respective Borrower shall be a U.S. Borrower or a U.K. Borrower
and be in full force and effect;
(iii) to the extent any of the documents, writings, records,
instruments and consents that would have been required by Section 5.01(e)
if such Subsidiary had been subject thereto on the Restatement Effective
Date have not been heretofore delivered, such items shall have been
delivered to, and shall be reasonably satisfactory to, the Administrative
Agent;
(iv) to the extent such Subsidiary elects to become a U.K. Borrower
pursuant to its Election to Become a Borrower, (x) each other Credit Party
shall have executed and delivered to the Administrative Agent a New
Borrower Consent, consenting to such Subsidiary becoming a U.K. Borrower
and acknowledging that such Subsidiary may incur Obligations pursuant to
this Agreement (for which, in the case of a U.K. Borrower, it shall be
jointly and severally liable with the other U.K. Borrowers or, in the case
of any other Credit Party, it shall be liable pursuant to the respective
Guarantee to which it is a party) in accordance with the terms hereof, (y)
subject to the provisions of Section 1.05(g), the U.K. Borrowers (including
the Subsidiary electing to become a U.K. Borrower) shall have executed and
delivered new U.K. Borrowers' Revolving Notes and a U.K. Borrowers'
Swingline Note to each U.K. Bank or BTCo, as the case may be, which at such
time is a holder of such Notes and (z) such Subsidiary shall have complied
with the requirements of Section 9.11;
(v) to the extent such Subsidiary elects to become a U.S. Borrower
pursuant to its Election to Become a Borrower, (x) each other Credit Party
(excluding any U.K. Borrowers which are not otherwise Credit Parties) shall
have executed and delivered to the Administrative Agent a New Borrower
Consent, consenting to such Subsidiary becoming a U.S. Borrower and
acknowledging that such Subsidiary may incur Obligations pursuant to this
Agreement (for which, in the case of
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a U.S. Borrower, it shall be jointly and severally liable with the other
U.S. Borrowers or, in the case of any other Credit Party, it shall be
liable pursuant to the respective Guarantee to which it is a party) in
accordance with the terms hereof, (y) subject to the provisions of Section
1.05(g), the U.S. Borrowers (including the Subsidiary electing to become a
U.S. Borrower) shall have executed and delivered new U.S. Borrowers'
Revolving Notes and a U.S. Borrowers' Swingline Note to each Bank or BTCo,
as the case may be, which at such time is a holder of such Notes and (z)
such Subsidiary shall have complied with the requirements of Section 9.11;
(vi) in the event such Subsidiary elects to become a U.K. Borrower,
such Subsidiary shall have caused to be delivered to the Administrative
Agent and the Banks such opinions of counsel and other related documents as
may be reasonably requested by the Administrative Agent or the Required
Banks to assure themselves that the joint and several nature of the
obligations of such Subsidiary and the other U.K. Borrowers is in
compliance with the laws of England and Wales (including, without
limitation, Section 151 of the Companies Act (1985), as amended); and
(vii) in any case, such Subsidiary shall have caused to be delivered
to the Administrative Agent and the Banks such officers' certificates and
opinions of counsel as may be reasonably requested by the Administrative
Agent or the Required Banks.
Notwithstanding anything to the contrary contained above or elsewhere in this
Agreement, no Foreign Subsidiary may become a U.S. Borrower pursuant to this
Section 6.
SECTION 7. REPRESENTATIONS AND WARRANTIES. In order to induce the
Banks to enter into this Agreement and to make the Loans, and issue (or
participate in) the Letters of Credit as provided herein, each Credit Agreement
Party makes the following representations, warranties and agreements, in each
case after giving effect to the Transaction, all of which shall survive the
execution and delivery of this Agreement and the Notes and the making of the
Loans and issuance of the Letters of Credit, with the occurrence of the
Restatement Effective Date and each Credit Event on or after the Restatement
Effective Date being deemed to constitute a representation and warranty that the
matters specified in this Section 7 are true and correct in all material
respects on and as of the Restatement Effective Date and on the date of each
such Credit Event (it being understood and agreed that any representation or
warranty which by its terms is made as of a specified date shall be required to
be true and correct in all material respects only as of such specified date).
7.01 COMPANY STATUS. Each of Holdings and each of its Subsidiaries
(i) is a duly organized and validly existing Company in good standing under the
laws of the jurisdiction of its organization, (ii) has the Company power and
authority to own its property and assets and to transact the business in which
it is engaged and presently proposes to engage and (iii) is duly qualified and
is authorized to do business and is in good standing in each jurisdiction where
the
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conduct of its business requires such qualifications except for failures to be
so qualified which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
7.02 COMPANY POWER AND AUTHORITY. Each Credit Party has the power
and authority to execute, deliver and perform the terms and provisions of each
of the Documents to which it is a party and has taken all necessary Company
action to authorize the execution, delivery and performance by it of each of
such Documents. Each Credit Party has duly executed and delivered each of the
Documents to which it is a party, and each of such Documents constitutes the
legal, valid and binding obligation of such Credit Party enforceable in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law).
7.03 NO VIOLATION. Neither the execution, delivery or performance by
any Credit Party of the Documents to which it is a party, nor compliance by it
with the terms and provisions thereof, nor consummation of the transactions
contemplated therein (i) will contravene any material provision of any
applicable law, statute, rule or regulation or of any applicable order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will
conflict or be inconsistent with or result in any breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien (except pursuant to the Credit Documents) upon any of the material
properties or assets of Holdings or any of its Subsidiaries pursuant to the
terms of any indenture, mortgage, deed of trust, credit agreement or loan
agreement, or any other material agreement, contract or instrument, to which
Holdings or any of its Subsidiaries is a party or by which it or any of its
material property or assets is bound or to which it may be subject (including,
without limitation, the 8-7/8% Senior Subordinated Note Indenture and the
Convertible Subordinated Debenture Indenture), PROVIDED that no representation
or warranty is made hereunder in respect of such agreements referred to in this
clause (ii) relating to Indebtedness in an aggregate amount not to exceed
$10,000,000 for all such agreements, or (iii) will violate any provision of the
certificate of incorporation or by-laws (or equivalent organizational documents)
of Holdings or any of its Subsidiaries.
7.04 GOVERNMENTAL APPROVALS. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made prior to the date when required and which
remain in full force and effect), or exemption by, any governmental or public
body or authority, or any subdivision thereof, is required to authorize, or is
required in connection with, (i) the Transaction, (ii) the execution, delivery
and performance of any Document or (iii) the legality, validity, binding effect
or enforceability of any such Document.
7.05 FINANCIAL STATEMENTS; FINANCIAL CONDITION; UNDISCLOSED
LIABILITIES; PROJECTIONS; ETC. (a) (i) The consolidated statements of
financial condition of Holdings and its Subsidiaries at December 31, 1997 and
the related consolidated statements of income and cash flow and
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changes in shareholders' equity of Holdings and its Subsidiaries for the fiscal
year ended on such date, and furnished to the Banks prior to the Restatement
Effective Date, and (ii) the consolidated balance sheet of Holdings and its
Subsidiaries as of the end of the fiscal quarter of Holdings ended March 31,
1998, and the related consolidated statements of earnings, shareholder's equity
and cash flows of Holdings and its Subsidiaries for such quarterly period, and
furnished to the Banks prior to the Restatement Effective Date, in each case
present fairly in all material respects the financial condition of Holdings and
its Subsidiaries at the date of such statements of financial condition and the
results of the operations of Holdings and its Subsidiaries for the respective
fiscal year or fiscal quarter, as the case may be (subject, in the case of
unaudited financial statements, to normal year-end adjustments). All such
financial statements have been prepared in accordance with GAAP and practices
consistently applied, except, in the case of the quarterly and monthly
statements, for the omission of footnotes, and certain reclassifications and
ordinary end of period adjustments and accruals (all of which are of a recurring
nature and none of which individually, or in the aggregate, would be material).
(b) After giving effect to the Transaction, since December 31, 1997,
there has been no material adverse change in the business, operations, property,
assets, liabilities, condition (financial or otherwise) or prospects of Holdings
and its Subsidiaries taken as a whole.
(c) On and as of the Restatement Effective Date, after giving effect
to the Original Transaction and the Transaction and to all Indebtedness
(including the Loans) being incurred or assumed, and Liens created by each
Credit Party in connection therewith, (x) the sum of the assets, at a fair
valuation, of each Borrower, individually, the U.S. Borrowers taken as a whole,
the U.K. Borrowers taken as a whole and Holdings and its Subsidiaries (on a
consolidated basis) (each of the foregoing, as to itself, as to itself and the
other relevant Borrowers or as to itself and its Subsidiaries, a "Solvent
Entity") will exceed its debts; (y) each Solvent Entity has not incurred and
does not intend to incur, nor believes that it will incur, debts beyond its
ability to pay such debts as such debts mature; and (z) each Solvent Entity will
have sufficient capital with which to conduct its business. For purposes of
this Section 7.05(c), "debt" means any liability on a claim, and "claim" means
(i) right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, legal,
equitable, secured, or unsecured or (ii) right to an equitable remedy for breach
of performance if such breach gives rise to a payment, whether or not such right
to an equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, secured or unsecured.
(d) On and as of the Restatement Effective Date, the Projections set
forth on Schedule IV hereto, which have been delivered to the Agents and the
Banks prior to the Restatement Effective Date, are based on good faith estimates
and assumptions made by management of Holdings and there are no statements or
conclusions in any of the Projections which are based upon or include
information known to the executive officers of Holdings to be misleading or
which fail to take into account material information regarding the matters
reported therein.
7.06 LITIGATION. There are no actions, suits or proceedings pending
or threatened in writing (excluding actions, suits or proceedings under
Environmental Laws, which matters are
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covered in Section 7.19) (i) with respect to any Credit Document or (ii) that
would reasonably be expected to have a Material Adverse Effect.
7.07 TRUE AND COMPLETE DISCLOSURE. All factual information (taken as
a whole) furnished by or on behalf of Holdings or any of its Subsidiaries in
writing to the Agents or any Bank (including, without limitation, all
information contained in the Documents) for purposes of or in connection with
this Agreement, the other Documents or any transaction contemplated herein or
therein is, and all other such information (taken as a whole) hereafter
furnished by or on behalf of any such Person in writing to the Agents or any
Bank will be, true and accurate in all material respects on the date as of which
such information is dated or certified and not incomplete by omitting to state
any material fact necessary to make such information (taken as a whole) not
misleading at such time in light of the circumstances under which such
information was provided.
7.08 USE OF PROCEEDS; MARGIN REGULATIONS. (a) Proceeds of Revolving
Loans shall be used on the Restatement Effective Date by (i) one or more U.S.
Borrowers to make intercompany loans and/or to pay Dividends to BFPH to enable
BFPH to repay amounts owing pursuant to the Original Credit Agreement and (ii)
BFL to effect the Refinancing and to pay fees and expenses relating to the
Transaction. All other proceeds of Loans incurred on and after the Restatement
Effective Date pursuant to this Agreement shall be used for the Borrowers' and
their respective Subsidiaries' ongoing working capital requirements and general
corporate purposes (including, to effect Permitted Acquisitions and to make
investments in Unrestricted Subsidiaries, in each case to the extent permitted
by this Agreement).
(b) The value of the Margin Stock at any time owned by Holdings and
its Domestic Subsidiaries (excluding any Margin Stock acquired pursuant to a
Two-Step Permitted Acquisition which, at the time this representation is made,
continues to constitute Margin Stock that is pledged at such time pursuant to
the Pledge and Security Agreement) does not exceed 25% of the value of the
assets of Holdings and its Subsidiaries taken as a whole. Neither the making of
any Loan nor the use of the proceeds thereof nor the occurrence of any other
Credit Event will violate or be inconsistent with the provisions of Regulation
T, U or X of the Board of Governors of the Federal Reserve System.
7.09 TAX RETURNS AND PAYMENTS. (a) Each of Holdings and its
Subsidiaries has timely filed or caused to be timely filed, on the due dates
thereof or within applicable grace periods (inclusive of any permitted
extensions), with the appropriate taxing authority, all Federal, material state
and other material returns, statements, forms and reports for taxes (the
"Returns") required to be filed by or with respect to the income, properties or
operations of Holdings and/or any of its Subsidiaries. The Returns accurately
reflect all material liability for taxes of Holdings and its Subsidiaries for
the periods covered thereby. Holdings and each of its Subsidiaries have paid
all material taxes payable by them other than taxes which are not due and
payable, and other than those contested in good faith by appropriate proceedings
and for which adequate reserves have been established in accordance with GAAP.
As of the Restatement Effective Date, there is no action, suit, proceeding,
investigation, audit, or claim now pending or, to the knowledge of Holdings or
BFPH, threatened by any authority regarding any material taxes relating to
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Holdings or any of its Subsidiaries. As of the Restatement Effective Date,
neither Holdings nor any of its Subsidiaries has entered into an agreement or
waiver or been requested to enter into an agreement or waiver extending any
statute of limitations relating to the payment or collection of taxes of
Holdings or its Subsidiaries, or is aware of any circumstances that would cause
the taxable years or other taxable periods of Holdings or any of its
Subsidiaries not to be subject to the normally applicable statute of
limitations. Neither Holdings nor any of its Subsidiaries has provided, with
respect to themselves or property held by them, any consent under Section 341 of
the Code. Neither Holdings nor any of its Subsidiaries has incurred, or will
incur, any material tax liability in connection with the Transaction.
Additionally, all of the foregoing representations are true and correct as to
all Unrestricted Subsidiaries (to the same extent they were to Restricted
Subsidiaries) except to the extent any and all failures to be true and correct
would not reasonably be expected to have a Material Adverse Effect.
7.10 COMPLIANCE WITH ERISA. Except to the extent that any breach,
noncompliance, failure or inaccuracy, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect:
(a) Except as set forth on Schedule XIII, each Plan is in substantial
compliance with the applicable provisions of ERISA and the Code; no
Reportable Event has occurred with respect to a Plan; no Plan or
Multiemployer Plan is insolvent or in reorganization. Except as discussed
on Schedule XIII hereto, no Plan has an Unfunded Current Liability; no Plan
has an accumulated or waived funding deficiency or has applied for an
extension of any amortization period within the meaning of Section 412 of
the Code; all contributions required to be made by Holdings or any
Subsidiary or any ERISA Affiliate with respect to each Plan, each
Multiemployer Plan and each Foreign Pension Plan have been timely made or
accrued or otherwise properly reserved on Holdings' or such Subsidiary's
balance sheet; neither Holdings nor any of its Subsidiaries nor any ERISA
Affiliate has incurred any liability to or on account of any Plan or
Multiemployer Plan pursuant to Section 409, 502(i), 502(l), 515, 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971,
4975 or 4980 of the Code or reasonably expects to incur any liability
(including any indirect, contingent, or secondary liability) under any of
the foregoing Sections with respect to any Plan or Multiemployer Plan; no
proceedings have been instituted to terminate or appoint a trustee to
administer any Plan under Section 4042 of ERISA; no condition exists which
presents a material risk to Holdings or any of its Subsidiaries or any
ERISA Affiliate of liability to or on account of any Plan or, to the best
knowledge of Holdings or BFPH, any Multiemployer Plan pursuant to the
foregoing provisions of ERISA and the Code; no lien imposed under the Code
or ERISA on the assets of Holdings or any of its Subsidiaries or, to the
best knowledge of Holdings or BFPH, any ERISA Affiliate exists or is
reasonably likely to arise on account of any Plan or Multiemployer Plan;
and Holdings and its Subsidiaries do not maintain or contribute to any
employee welfare benefit plan (as defined in Section 3(1) of ERISA) which
provides benefits to retired employees or other former employees (other
than as required by Section 601 of ERISA) or any Plan the obligations with
respect to which would reasonably be expected to have a Material Adverse
Effect on the ability of any Credit Agreement Party to perform its
obligations under this Agreement.
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(b) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all
applicable laws, statutes, rules, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory
authorities. Neither Holdings nor any of its Subsidiaries has incurred any
liability in connection with the termination of or withdrawal from any
Foreign Pension Plan that has not been accrued or otherwise properly
reserved on Holdings' or such Subsidiary's balance sheet. With respect to
each Foreign Pension Plan that is required by applicable local law or by
its terms to be funded through a separate funding vehicle, the present
value of the accrued benefit liabilities (whether or not vested) under each
such Foreign Pension Plan, determined as of the latest valuation date for
such Foreign Pension Plan on the basis of actuarial assumptions, each of
which is reasonable, did not exceed the current value of the assets of such
Foreign Pension Plan allocable to such benefit liabilities by an amount
which, when added to the aggregate amount of the accrued benefit
liabilities with respect to all other foreign pension plans, is in excess
of $5,000,000.
7.11 PLEDGE AGREEMENTS. The security interests created in favor of
the Collateral Agent, as Pledgee, for the benefit of the Secured Creditors under
each Pledge Agreement constitute first priority perfected security interests in
the Pledged Securities described in such Pledge Agreement, subject to no
security interests of any other Person. No filings or recordings are required
in order to perfect (or maintain the perfection or priority of) the security
interests created in the Pledged Securities or the proceeds thereof under any
Pledge Agreement.
7.12 REPRESENTATIONS AND WARRANTIES IN DOCUMENTS. All
representations and warranties by Holdings and its Subsidiaries set forth in the
other Documents were true and correct in all material respects at the time as of
which such representations and warranties were made (or deemed made) and shall
be true and correct in all material respects as of the Restatement Effective
Date as if such representations or warranties were made on and as of such date,
unless stated to relate to a specific earlier date, in which case such
representations or warranties shall be true and correct in all material respects
as of such earlier date.
7.13 PROPERTIES. Each Credit Agreement Party and each of its
respective Subsidiaries have good and marketable title to, or a validly
subsisting leasehold interest in, all material properties owned or leased by
them, including all property reflected in the balance sheets referred to in
Section 7.05(a) and in the PRO FORMA balance sheet referred to in Section 5.13
of the Original Credit Agreement (except as sold or otherwise disposed of since
the respective dates of such balance sheets in the ordinary course of business
or as otherwise permitted by this Agreement), free and clear of all Liens, other
than (i) as referred to in the balance sheets or in the notes thereto or (ii)
Permitted Liens.
7.14 CAPITALIZATION. (a) As of the close of business on June 19,
1998, the authorized capital stock of Holdings consisted of (i) 50,000,000
shares of common stock, $.01 par value per share (such authorized shares of
common stock, together with any subsequently authorized shares of common stock
of Holdings, the "Holdings Common Stock"), of which 19,748,147 shares were
issued and outstanding and (ii) 10,000,000 shares of preferred stock (250,000
shares of which are designated Series A Junior Preferred Stock), none of which
were issued and
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outstanding (such authorized shares of preferred stock, the "Holdings Preferred
Stock"). All such outstanding shares have been duly and validly issued, are
fully paid and nonassessable and free of preemptive rights. As of the
Restatement Effective Date, Holdings does not have outstanding any securities
convertible into or exchangeable for its capital stock or outstanding any rights
to subscribe for or to purchase, or any options for the purchase of, or any
agreement providing for the issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating to, its capital stock, except
for the Convertible Subordinated Debentures.
(b) On the Restatement Effective Date, the authorized capital stock
of BFPH consisted of 3,000 shares of common stock, $.01 par value per share
(such authorized shares of common stock, together with any subsequently
authorized shares of common stock of BFPH, the "BFPH Common Stock"), of which
1,000 shares were issued and outstanding and owned by Holdings. All such
outstanding shares have been duly and validly issued, are fully paid and
nonassessable and free of preemptive rights. As of the Restatement Effective
Date, BFPH does not have outstanding any securities convertible into or
exchangeable for its capital stock or outstanding any rights to subscribe for or
to purchase, or any options for the purchase of, or any agreement providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to, its capital stock.
7.15 SUBSIDIARIES. On and as of the Restatement Effective Date,
Holdings has no Subsidiaries other than those Subsidiaries listed on Schedule V.
Schedule V correctly sets forth, as of the Restatement Effective Date, the
percentage ownership (direct and indirect) of Holdings in each class of capital
stock or other equity interests of each of its Subsidiaries and also identifies
the direct owner thereof. All outstanding shares of capital stock of each
Subsidiary of Holdings have been duly and validly issued, are fully paid and
nonassessable and have been issued free of preemptive rights. Except as set
forth on Schedule V, no Subsidiary of Holdings has outstanding any securities
convertible into or exchangeable for its capital stock or outstanding any right
to subscribe for or to purchase, or any options or warrants for the purchase of,
or any agreement providing for the issuance (contingent or otherwise) of or any
calls, commitments or claims of any character relating to, its capital stock or
any stock appreciation or similar rights.
7.16 COMPLIANCE WITH STATUTES, ETC. Each of the Credit Agreement
Parties and each of their respective Subsidiaries is in compliance with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property (excluding applicable
statutes, regulations, orders and restrictions relating to environmental
standards and controls, which matters are covered under Section 7.19), except
such noncompliances as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
7.17 INVESTMENT COMPANY ACT. Neither Holdings nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.18 PUBLIC UTILITY HOLDING COMPANY ACT. Neither Holdings nor any of
its Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate"
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of a "holding company" or of a "subsidiary company" of a "holding company"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
7.19 ENVIRONMENTAL MATTERS. Except for such failures and
noncompliances of the types described herein, which individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect:
(a) Holdings and each of its Subsidiaries is in compliance with all
applicable Environmental Laws and neither Holdings nor any of its
Subsidiaries is liable for any material penalties, fines, or forfeitures
for failure to comply with any of the foregoing, and the requirements of
any permits issued under such Environmental Laws; there are no pending or,
to the knowledge of Holdings or BFPH, threatened Environmental Claims
against Holdings or any of its Subsidiaries or any Real Property owned or
operated by Holdings or any of its Subsidiaries; and there are no facts,
circumstances, conditions or occurrences on any Real Property at any time
owned or operated by Holdings or any of its Subsidiaries or, to the
knowledge of Holdings or BFPH, on any property adjoining or in the vicinity
of any such Real Property that would reasonably be expected (i) to form the
basis of an Environmental Claim against Holdings or any of its Subsidiaries
or any Real Property currently owned or operated by Holdings or any of its
Subsidiaries, or (ii) to cause any such currently owned Real Property to be
subject to any restrictions on the ownership, occupancy, use or
transferability of such Real Property by Holdings or any of its
Subsidiaries under any applicable Environmental Law; and
(b) Holdings and its Subsidiaries have not at any time generated,
used, treated or stored Hazardous Materials on, or transported Hazardous
Materials to or from, or Released Hazardous Materials on or from any Real
Property owned or operated by Holdings or any of its Subsidiaries except in
compliance with all applicable Environmental Laws and in connection with
the operation, use or maintenance of any such Real Property by Holdings' or
such Subsidiary's business. Notwithstanding anything to the contrary
contained above, to the extent the representation and warranty contained in
this Section 7.19 relates to any Subsidiary of Holdings for any period
prior to the acquisition thereof by Holdings or any of its Subsidiaries
pursuant to a Permitted Acquisition, such representation and warranty is
made to the best knowledge of Holdings.
The Banks acknowledge that Holdings has disclosed certain material environmental
matters relating to Holdings and its Subsidiaries in reports filed with the SEC
under the Securities Act and/or the Exchange Act (including, without limitation,
the Registration Statement).
7.20 LABOR RELATIONS. Neither Holdings nor any of its Subsidiaries
is engaged in any unfair labor practice that would reasonably be expected to
have a Material Adverse Effect. There is (i) no unfair labor practice complaint
pending or, to the knowledge of Holdings or BFPH, threatened against Holdings or
any of its Subsidiaries before the National Labor Relations Board and no
material grievance or material arbitration proceeding arising out of or under
any collective bargaining agreement is so pending or, to the knowledge of
Holdings or BFPH, threatened against Holdings or any of its Subsidiaries, (ii)
no strike, labor dispute, slowdown or stoppage
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is pending or, to the knowledge of Holdings or BFPH, threatened against Holdings
or any of its Subsidiaries and (iii) no union representation question exists
with respect to the employees of Holdings or any of its Subsidiaries, except
(with respect to any matter specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate) such as would not reasonably be expected to
have a Material Adverse Effect.
7.21 PATENTS, LICENSES, FRANCHISES AND FORMULAS. Each of Holdings
and each of its Subsidiaries owns all patents, trademarks, permits, service
marks, trade names, copyrights, licenses, franchises and formulas, or rights
with respect to the foregoing, and has obtained assignments of all leases and
other rights of whatever nature, reasonably necessary for the present conduct of
its business, without any known conflict with the rights of others which, or the
failure to own or obtain which, as the case may be, would be reasonably likely
to result in a Material Adverse Effect.
7.22 INDEBTEDNESS. Schedule VI sets forth a true and complete list
of all Indebtedness (exclusive of (w) Indebtedness pursuant to this Agreement,
(x) the 8-7/8% Senior Subordinated Notes, (y) the Convertible Subordinated
Debentures and (z) Attributable Receivables Facility Indebtedness) of Holdings
and its Subsidiaries as of the Restatement Effective Date and which is to remain
outstanding after giving effect to the Transaction and the incurrence of Loans
on such date, in each case showing the aggregate principal amount thereof (and
the aggregate amount of any undrawn commitments with respect thereto) and the
name of the respective borrower and any other entity which directly or
indirectly guaranteed such debt.
7.23 TRANSACTION. At the time of consummation thereof, the
Transaction shall have been consummated in accordance with the terms of the
Documents and all applicable laws. At the time of consummation thereof, all
consents and approvals of, and filings and registrations with, and all other
actions in respect of, all governmental agencies, authorities or
instrumentalities required in order to make or consummate the Transaction in
accordance with the terms of the Documents and all applicable laws have been
obtained, given, filed or taken and are or will be in full force and effect (or
effective judicial relief with respect thereto has been obtained).
Additionally, there does not exist any judgment, order or injunction prohibiting
or imposing material adverse conditions upon the consummation of the
Transaction, the occurrence of any Credit Event, or the performance by any
Credit Party of its obligations under the Documents and all applicable laws.
7.24 INSURANCE. Set forth on Schedule VII hereto is a true, correct
and complete summary of all material insurance carried by each Credit Party on
and as of the Restatement Effective Date, with the amounts insured set forth
therein.
7.25 TREATMENT OF CERTAIN EXTENSIONS OF CREDIT UNDER INDENTURES. (a)
From and after the Restatement Effective Date, this Agreement (as same may be
amended, modified or supplemented from time to time) constitutes (x) the "Credit
Agreement" under, and as defined in, the 8-7/8% Senior Subordinated Note
Indenture and (y) the "Bank Credit Agreement" under, and is defined in, the
Convertible Subordinated Debenture Indenture. All Obligations pursuant to this
Agreement constitute (x) "Senior Indebtedness" and "Designated Senior
Indebtedness" under, and as defined in, the 8-7/8% Senior Subordinated Note
Indenture and (y) "Secured Indebtedness" and "Designated Senior Indebtedness"
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under, and as defined in, the Convertible Subordinated Debenture Indenture, and
are entitled to the benefits of the subordination provisions contained in
Article X of the 8-7/8% Senior Subordinated Note Indenture and Article 12 of the
Convertible Subordinated Debenture Indenture.
(b) BFPH represents and warrants to the Banks that (x) on the date of
each Credit Event (after giving effect to the extension of credit to occur on
such date), if the aggregate principal amount of outstanding Loans and Letter of
Credit Outstandings (for this purpose using the Dollar Equivalent of each
outstanding Sterling Loan) would exceed $475,000,000, then, after giving effect
to the respective Credit Event, such Credit Event would be permitted pursuant to
the first paragraph of Section 4.9 of the 8-7/8% Senior Subordinated Notes
Indenture (and that BFPH's Fixed Charge Coverage Ratio referred to therein would
be at least equal to 2.25 to 1 after giving effect thereto) and (y) each
incurrence of Loans and issuance of any Letter of Credit is permitted pursuant
to the terms of the 8-7/8% Senior Subordinated Notes Indenture. This Section
7.25(b) shall cease to be of further force or effect at such time as all 8-7/8%
Senior Subordinated Notes have been repaid in full (or fully defeased) and the
provisions of Section 4.9 of the 8-7/8% Senior Subordinated Notes Indenture are
no longer effective.
(c) On and after the execution and delivery thereof, the subordination
provisions contained in any agreement or instrument relating to Permitted
Refinancing Indebtedness and Permitted Subordinated Indebtedness will be
enforceable against the debtor thereunder and the holders of such Indebtednesss.
7.26 SPECIAL PURPOSE CORPORATION. The Receivables Subsidiary was
formed for the purpose of purchasing, and receiving contributions of,
receivables from any Subsidiary Guarantor, and selling such receivables to, or
obtaining secured loans from, the Receivables Purchasers (or to the Master Trust
created pursuant to the Receivables Facility), pursuant to the Receivables
Facility and except in connection with the foregoing (and activities reasonably
incidental thereto), the Receivables Subsidiary engages in no business
activities and has no significant assets or liabilities and shall in no event
purchase receivables from any Unrestricted Subsidiary.
7.27 YEAR 2000 REPRESENTATION. To the best knowledge and belief of
each Credit Agreement Party, the cost to Holdings and its Subsidiaries of
reprogramming and testing its computer systems and equipment to accommodate year
2000 compliance and of the reasonably foreseeable consequences of year 2000 to
Holdings and its Subsidiaries could not reasonably be expected to result in an
Event of Default.
SECTION 8. AFFIRMATIVE COVENANTS. Each Credit Agreement Party hereby
covenants and agrees that on and after the Restatement Effective Date and until
the Total Commitment and all Letters of Credit have terminated and the Loans,
Notes and Unpaid Drawings, together with interest, Fees and all other
Obligations incurred hereunder and thereunder, are paid in full:
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8.01 INFORMATION COVENANTS. The Credit Agreement Parties will
furnish to the Administrative Agent (with sufficient copies for all the Banks),
and the Administrative Agent will promptly forward to each Bank:
(a) MONTHLY REPORTS. Within 35 days after the end of each calendar
month of Holdings (or within 45 days after the end of the last month of
each fiscal year), the consolidated balance sheet of Holdings and its
Subsidiaries as at the end of such month and the related consolidated
statement of income for such calendar month and the elapsed portion of the
calendar year ended with the last day of such month, in each case setting
forth comparative figures for the corresponding month in the prior calendar
year, subject to normal year-end audit adjustments and the absence of
footnotes.
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available and in any
event within 50 days after the close of each of the first three quarterly
accounting periods in each fiscal year, the consolidated balance sheet of
Holdings and its Subsidiaries as at the end of such quarterly period and
the related consolidated statements of income and retained earnings and
cash flows for such quarterly period and for the elapsed portion of the
fiscal year ended with the last day of such quarterly period and setting
forth comparative figures for the related periods in the prior fiscal year
and the budgeted figures for such quarterly period as set forth in the
respective budget delivered pursuant to Section 8.01(e) and (iii)
management's discussion and analysis of the important operational and
financial developments during such quarterly period; PROVIDED that for any
quarterly accounting period during which Holdings is a Reporting Company
under the Exchange Act, the furnishing of (x) Holdings' Form 10-Q Report
filed with the SEC for such quarterly accounting period and (y) a
comparison of actual results to budgeted figures as required above, shall
satisfy the requirements of this Section 8.01(b) for the respective fiscal
quarter, all of which shall be certified by an Authorized Representative of
Holdings, subject to normal year-end audit adjustments and the absence of
footnotes.
(c) ANNUAL FINANCIAL STATEMENTS. Within 95 days after the close of
each fiscal year, (I) the consolidated balance sheet of each of Holdings
and its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and of cash flows
(and a statement of net sales, EBITDA and operating income for each
business segment of Holdings and its Subsidiaries (I.E., insert advertising
and newspaper services, direct marketing services, digital services and
specialty products and commercial printing) and the combined international
operations of Holdings and its Subsidiaries, setting forth, as appropriate,
eliminations for intercompany sales and corporate expenses) for such fiscal
year setting forth comparative figures for the preceding fiscal year and
certified, in the case of the consolidated statements, by Deloitte & Touche
LLP or such other independent certified public accountants of recognized
national standing reasonably acceptable to the Administrative Agent,
together with a report of such accounting firm stating that in the course
of its regular audits of the financial statements of Holdings and its
Subsidiaries, which audits were conducted in accordance with generally
accepted auditing standards, such accounting firm obtained no knowledge of
any Default or Event of Default which has occurred and is continuing or, if
in the opinion of such
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accounting firm such a Default or Event of Default with respect to the
covenants set forth in Sections 9.02 through 9.15, inclusive, has occurred
and is continuing, a statement as to the nature thereof and (II)
management's discussion and analysis of the important operational and
financial developments during such fiscal year; PROVIDED that for any
fiscal year for which Holdings is a Reporting Company under the Exchange
Act, the furnishing of (x) Holdings' Form 10-K Report filed with the SEC
for such annual accounting period, and (y) the statements of net sales,
EBITDA and operating income as required above, shall satisfy the
requirements of this Section 8.01(c) for the respective fiscal year.
(d) MANAGEMENT LETTERS. Promptly after the receipt thereof by
Holdings or any of its Subsidiaries, a copy of any "management letter"
received by such Person from their certified public accountants and the
management's non-privileged responses thereto.
(e) BUDGETS. No later than 90 days (or earlier, if available)
following the commencement of the first day of each fiscal year, a budget
in form satisfactory to the Administrative Agent (including budgeted
statements of income and sources and uses of cash and balance sheets)
prepared by Holdings for (x) each of the four fiscal quarters of such
fiscal year prepared in reasonable detail and (y) each of the four fiscal
years immediately following such fiscal year prepared in summary form, in
each case, on a consolidated basis, for Holdings and its Subsidiaries (and
on a business segment and combined international operational basis as
described in Section 8.01(c) above).
(f) OFFICER'S CERTIFICATES. At the time of the delivery of the
financial statements provided for in Section 8.01(a), (b) and (c), a
certificate of an Authorized Representative of Holdings to the effect that,
to the best of such Authorized Representative's knowledge, no Default or
Event of Default has occurred and is continuing or, if any Default or Event
of Default has occurred and is continuing, specifying the nature and extent
thereof, which certificate shall, in the case of any such financial
statements delivered in respect of a period ending on the last day of a
fiscal quarter or year of Holdings, (x) set forth the calculations required
to establish whether the Credit Parties were in compliance with the
provisions of Sections 3.03, 4.02, 9.02, 9.03, 9.04, 9.05 and 9.07 through
9.09, inclusive, at the end of such fiscal quarter or year, as the case may
be, and (y) set forth the calculation of the Leverage Ratio, the amount of
the Available Basket Amount at the end of the period covered by such
financial statements, and all sources and uses of proceeds relating to the
calculations thereof changing during the period covered by such statements.
(g) NOTICE OF DEFAULT OR LITIGATION. As soon as practicable, and in
any event within five Business Days after an executive officer of any
Credit Agreement Party obtains actual knowledge thereof, notice of (i) the
occurrence of any event which constitutes a Default or an Event of Default,
(ii) any litigation or governmental investigation or proceeding pending or
threatened in writing (x) against Holdings or any of its Subsidiaries which
would reasonably be expected to have a Material Adverse Effect, or (y) with
respect to any material Indebtedness of Holdings or any of its Subsidiaries
taken as a whole and (iii) any other event which would reasonably be
expected to have a Material Adverse Effect.
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(h) OTHER REPORTS AND FILINGS. As soon as practicable, and in any
event within 10 Business Days after the filing or delivery thereof, as the
case may be, copies of all financial information, proxy materials and other
information and reports, if any, which Holdings or any of its Subsidiaries
shall file with the Securities and Exchange Commission or any successor
thereto (the "SEC") or the Registrar of Companies in England and Wales and
copies of all notices and reports which Holdings or any of its Subsidiaries
shall deliver to holders of its Indebtedness (including the 8-7/8% Senior
Subordinated Notes and the Convertible Subordinated Debentures) pursuant to
the terms of the documentation governing such Indebtedness (or any trustee,
agent or other representative therefor) or deliver to holders of
Convertible QUIPS pursuant to the terms of the documentation relating
thereto (or any trustee, agent or other representative therefor).
(i) ENVIRONMENTAL MATTERS. As soon as practicable, and in any event
within 20 Business Days after an executive officer of Holdings or BFPH
obtains actual knowledge thereof, notice of any of the following
environmental matters, unless such environmental matters would not,
individually or when aggregated with all other such environmental matters,
be reasonably expected to (x) have a Material Adverse Effect or (y) result
in a remedial cost to Holdings or any of its Subsidiaries in excess of
$5,000,000:
(i) any pending or threatened Environmental Claim against
Holdings or any of its Subsidiaries or any Real Property owned or
operated by Holdings or any of its Subsidiaries;
(ii) any condition or occurrence after the Restatement
Effective Date on or arising from any Real Property owned or operated
by Holdings or any of its Subsidiaries that (a) results in
noncompliance by Holdings or any of its Subsidiaries with any
applicable Environmental Law or (b) would reasonably be expected to
form the basis of an Environmental Claim against Holdings or any of
its Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property owned
or operated by Holdings or any of its Subsidiaries that would
reasonably be expected to cause such Real Property to be subject to
any restrictions on the ownership, occupancy, use or transferability
by Holdings or any of its Subsidiaries of such Real Property under any
Environmental Law; and
(iv) the taking of any removal or remedial action in
response to the actual or alleged presence of any Hazardous Material
on any Real Property owned or operated by Holdings or any of its
Subsidiaries as required by any Environmental Law or any governmental
or other administrative agency.
All such notices shall describe in reasonable detail, to the extent known
at such time upon diligent inquiry, the nature of the claim, investigation,
condition, occurrence or removal or remedial action, and Holdings' or such
Subsidiary's response or proposed response thereto. In addition, each
Credit Agreement Party will provide the Administrative Agent with copies of
all material communications regarding matters reasonably likely to result
in environmental liabilities in excess of $5,000,000 between Holdings or
any of its Subsidiaries and any government or governmental agency relating
to Environmental Laws, all communications regarding matters reasonably
likely to result
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in environmental liabilities in excess of $5,000,000 between Holdings or
any of its Subsidiaries and any Person (other than its attorneys) relating
to Environmental Claims, and such non-privileged detailed reports of any
Environmental Claim as may be requested by the Administrative Agent or the
Required Banks.
(j) ANNUAL MEETINGS WITH BANKS. At the request of the Administrative
Agent, Holdings shall within 120 days after the close of each fiscal year
of Holdings hold a meeting (at a mutually agreeable location and time) with
all of the Banks at which meeting shall be reviewed the financial results
of the previous fiscal year and the financial condition of Holdings and its
Subsidiaries and the budgets presented for the current fiscal year of
Holdings and its Subsidiaries.
(k) INDENTURE CALCULATIONS. So long as any 8-7/8% Senior
Subordinated Notes are outstanding, at the time of the delivery of the
financial statements provided for in Section 8.01(b) or (c), a certificate
of the chief financial officer or treasurer of Holdings containing
calculations required to establish the Fixed Charge Coverage Ratio (as such
term is defined in the 8-7/8% Senior Subordinated Notes Indenture) and
showing the maximum amount of Loans which may be incurred by the Borrowers
under this Agreement during the following fiscal quarter while remaining in
compliance with the first paragraph of Section 4.9 of the 8-7/8% Senior
Subordinated Notes Indenture, in each case as determined on the last day of
the immediately preceding fiscal quarter (and on a PRO FORMA basis, in
accordance with the relevant requirements of the 8-7/8% Senior Subordinated
Notes Indenture).
(l) OTHER INFORMATION. From time to time, such other information or
documents (financial or otherwise) with respect to Holdings or its
Subsidiaries as the Administrative Agent or any Bank (through the
Administrative Agent) may reasonably request.
8.02 BOOKS, RECORDS AND INSPECTIONS. Holdings will, and will cause
each of its Subsidiaries to, keep proper books of record and account in which
full, true and correct entries in conformity with GAAP in all material respects
and all requirements of law shall be made of all dealings and transactions in
relation to its business and activities. Holdings will, and will cause each of
its Subsidiaries to, permit officers and designated representatives of the
Administrative Agent or any Bank to visit and inspect, at the Administrative
Agent's or such other Bank's own expense, as the case may be (or, if a Default
or Event of Default is in existence, at Holdings' expense), during regular
business hours, upon reasonable advance notice and under guidance of officers of
Holdings or such Subsidiary, any of the properties of Holdings and any of its
Subsidiaries, and to examine the books of account of Holdings and any of its
Subsidiaries and discuss the affairs, finances and accounts of Holdings and any
of its Subsidiaries with, and be advised as to the same by, its and their
officers and independent accountants, all at such reasonable times and intervals
and to any reasonable extent as the Administrative Agent or any Bank may
reasonably request.
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8.03 MAINTENANCE OF PROPERTY; INSURANCE. (a) Holdings will, and
will cause each of its Subsidiaries to (i) keep all property necessary in its
business in good working order and condition (ordinary wear and tear excepted),
(ii) maintain, with financially sound and reputable insurance companies,
insurance on all its property in at least such amounts and against at least such
risks as is consistent and in accordance with industry practice or past
practices of BFPH and its Subsidiaries as in effect as on the Restatement
Effective Date and (iii) furnish to the Administrative Agent and each Bank, upon
written request, full information as to the insurance carried. In addition to
the requirements of the immediately preceding sentence, Holdings will at all
times cause insurance of the types described in Schedule VII to be maintained
(with the same scope of coverage as that described in Schedule VII) at levels
which are at least as great as the respective amount described opposite the
respective type of insurance on Schedule VII under the column headed "Minimum
Amount Required to be Maintained." Such insurance shall include physical damage
insurance on all real and personal property (whether now owned or hereafter
acquired) on an all risk basis, covering the full repair and replacement costs
of all such property and business interruption insurance for the actual loss
sustained.
(b) If Holdings or any of its Subsidiaries shall fail to maintain all
insurance in accordance with this Section 8.03, the Administrative Agent shall
have the right (but shall be under no obligation) after giving notice to
Holdings (but not requiring any consent from Holdings) to procure such insurance
and the Credit Parties agree to jointly and severally reimburse the
Administrative Agent for all reasonable costs and expenses of procuring such
insurance.
8.04 CORPORATE FRANCHISES. Holdings will, and will cause each of its
Subsidiaries to, do or cause to be done, all things necessary to preserve and
keep in full force and effect its existence and its material rights, franchises,
licenses and patents; PROVIDED, however, that nothing in this Section 8.04 shall
prevent (i) transactions permitted in accordance with the applicable
requirements of Section 9.02 or (ii) the withdrawal by Holdings or any of its
Subsidiaries of its qualification as a foreign corporation in any jurisdiction
where such withdrawal would not reasonably be expected to have a Material
Adverse Effect.
8.05 COMPLIANCE WITH STATUTES, ETC. Holdings will, and will cause
each of its Subsidiaries to, comply with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and the
ownership of its property, except such noncompliances as would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
8.06 COMPLIANCE WITH ENVIRONMENTAL LAWS. Holdings will comply, and
will cause each of its Subsidiaries to comply, in all material respects with all
Environmental Laws applicable to the ownership or use of its Real Property now
or hereafter owned or operated by Holdings or any of its Subsidiaries, will pay
or cause to be paid all costs and expenses incurred in connection with such
compliance, and will keep or cause to be kept all such Real Property free and
clear of any Liens imposed pursuant to such Environmental Laws. Neither
Holdings nor any of its Subsidiaries will generate, use, treat, store, Release
or dispose of, or permit the generation, use, treatment, storage, Release or
disposal of Hazardous Materials on any Real Property now or
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hereafter owned or operated by Holdings or any of its Subsidiaries, or transport
or permit the transportation of Hazardous Materials to or from any such Real
Property except for Hazardous Materials used or stored at any such Real
Properties in compliance (excluding non-compliance which, individually and in
the aggregate would not reasonably be expected to have a Material Adverse
Effect) with all applicable Environmental Laws and reasonably required in
connection with the business of Holdings and its Subsidiaries or the operation,
use and maintenance of any such Real Property.
8.07 ERISA. As soon as possible and, in any event, within 15 days
after Holdings, any Subsidiary of Holdings or any ERISA Affiliate knows or has
reason to know of the occurrence of any of the following, Holdings will deliver
to the Administrative Agent a certificate of the chief financial officer or
treasurer of Holdings setting forth details as to such occurrence and the
action, if any, that Holdings, such Subsidiary or such ERISA Affiliate is
required or proposes to take, together with any notices required or proposed to
be given to or filed with or by Holdings, such Subsidiary, such ERISA Affiliate,
the PBGC, a Plan or Multiemployer Plan participant or the Plan administrator
with respect thereto, that a Reportable Event has occurred; that an accumulated
funding deficiency has been incurred or an application may be reasonably
expected to be or has been made to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard (including any required installment
payments) or an extension of any amortization period under Section 412 of the
Code with respect to a Plan or Multiemployer Plan; that a contribution required
to be made by Holdings or a Subsidiary or an ERISA Affiliate to a Plan or
Multiemployer Plan or Foreign Pension Plan has not been timely made; that a Plan
or Multiemployer Plan has been or may be reasonably expected to be terminated,
reorganized, partitioned or declared insolvent under Title IV of ERISA; that a
Plan or Multiemployer Plan has an Unfunded Current Liability giving rise to a
lien under ERISA or the Code; that proceedings may be reasonably expected to be
or have been instituted to terminate or appoint a trustee to administer a Plan;
that a proceeding has been instituted pursuant to Section 515 of ERISA to
collect a delinquent contribution to a Plan; that Holdings, any Subsidiary of
Holdings or any ERISA Affiliate will or may reasonably be expected to incur any
material liability (including any indirect, contingent, or secondary liability)
to or on account of the termination of or withdrawal from a Plan or
Multiemployer Plan or otherwise under Section 4062, 4063, 4064, 4069, 4201, 4204
or 4212 of ERISA or with respect to a Plan or otherwise under Section
401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(l) of
ERISA; or that Holdings or any Subsidiary of Holdings may reasonably be expected
to incur any material liability pursuant to any employee welfare benefit plan
(as defined in Section 3(1) of ERISA) that provides benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) or pursuant to any employee pension benefit plan (as defined in Section
3(2) of ERISA) in addition to any liability existing on the Original Effective
Date pursuant to any such welfare or pension plan or plans. If requested by any
Agent or the Required Banks in writing, Holdings will deliver to the
Administrative Agent or the requesting Banks, as the case may be, a complete
copy of the annual report (Form 5500) of each Plan (including, to the extent
required, the related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information) required to be
filed with the Internal Revenue Service. In addition to any certificates or
notices delivered to the
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Administrative Agent pursuant to the first sentence hereof, copies of any
material notices received by Holdings, any Subsidiary of Holdings or any ERISA
Affiliate (i) from any government agency with respect to any Plan or Foreign
Pension Plan or (ii) received from any government agency or plan administrator
or sponsor or trustee with respect to any Multiemployer Plan, shall be delivered
to the Administrative Agent no later than 15 days after the date such notice has
been received by Holdings, such Subsidiary or such ERISA Affiliate, as
applicable.
8.08 END OF FISCAL YEARS; FISCAL QUARTERS. Each Credit Agreement
Party shall cause (i) each of its, and each of its Subsidiaries', fiscal years
(for accounting and SEC disclosure purposes) to end on December 31, and (ii)
itself, and each of its Subsidiaries, to maintain fiscal quarters consistent
therewith.
8.09 PERFORMANCE OF OBLIGATIONS. Holdings will, and will cause each
of its Subsidiaries to, perform all of its obligations under the terms of each
mortgage, deed of trust, indenture, loan agreement or credit agreement and each
other material agreement, contract or instrument, by which it is bound, except
such non-performances as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
8.10 PAYMENT OF TAXES. Holdings will pay and discharge or cause to
be paid and discharged, and will cause each of its Subsidiaries to pay and
discharge, all material taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits, or upon any properties belonging
to it, in each case on a timely basis, and all lawful claims for material sums
that have become due and payable which, if unpaid, might become a lien or charge
upon any properties of Holdings or any of its Subsidiaries; PROVIDED that
neither Holdings nor any of its Subsidiaries shall be required to pay any such
tax, assessment, charge, levy or claim which is being contested in good faith
and by proper proceedings if it maintains adequate reserves with respect thereto
in accordance with GAAP.
8.11 ADDITIONAL SECURITY; FURTHER ASSURANCES. (a) Holdings agrees
to cause (x) each Domestic Subsidiary established or created in accordance with
Section 9.11 (i) that does not become a U.S. Borrower pursuant to Section 6, to
execute and deliver a guaranty of all Obligations and all obligations under
Interest Rate Protection Agreements in substantially the form of the
Non-Borrower U.S. Subsidiaries Guaranty, or to become a party to the
Non-Borrower U.S. Subsidiaries Guaranty or (ii) to execute and deliver an
Election to Become a Borrower and to comply (and to cause all other U.S.
Borrowers to comply) with the requirements of Section 6 and (y) each U.K.
Subsidiary established or created in accordance with Section 9.11 (i) that does
not become a U.K. Borrower pursuant to Section 6, to execute and deliver a
guaranty of all Obligations and all obligations under Interest Rate Protection
Agreements in substantially the form of the Non-Borrower U.K. Subsidiaries
Guaranty, or to become a party to the Non-Borrower U.K. Subsidiaries Guaranty or
(ii) to execute and deliver an Election to Become a Borrower and to comply (and
to cause all other U.K. Borrowers to comply) with the requirements of Section 6.
Notwithstanding anything to the contrary contained above or elsewhere in this
Agreement, the Receivables Subsidiary shall not be required to become a
Non-Borrower U.S. Subsidiary Guarantor, although 100% of the capital stock of
the Receivables Subsidiary shall be pledged pursuant to the U.S. Pledge and
Security Agreement.
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(b) Holdings agrees to pledge, and to cause BFPH, each Borrower and
each Subsidiary Guarantor to pledge, the capital stock of each new Subsidiary
and Unrestricted Subsidiary (except to the extent the capital stock of any such
Subsidiary or Unrestricted Subsidiary is not owned by a Credit Party)
established or created in accordance with Section 9.11 to the Collateral Agent
for the benefit of the Secured Creditors pursuant to the relevant Pledge
Agreement.
(c) Holdings will, and will cause each of its Subsidiaries to, at the
expense of the Borrowers, make, execute, endorse, acknowledge, file and/or
deliver to the Collateral Agent from time to time such vouchers, schedules,
confirmatory assignments, conveyances, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Collateral covered by the Pledge and Security
Agreement as the Collateral Agent may reasonably require pursuant to this
Section 8.11. Furthermore, each Credit Agreement Party shall cause to be
delivered to the Collateral Agent such opinions of counsel and other related
documents as may be reasonably requested by the Collateral Agent to assure
itself that this Section 8.11 has been complied with.
(d) Except as otherwise provided in the relevant Pledge Agreement,
each of the Credit Agreement Parties agrees that each action required above by
Section 8.11(a) or (b) shall be completed contemporaneously with the creation of
the respective new Subsidiary or Unrestricted Subsidiary, as applicable.
Furthermore, each of the Credit Agreement Parties further agrees that each
action required by Section 8.11(c) shall be completed as soon as reasonably
practicable, but in no event later than 30 days after such action is requested
to be taken by the Administrative Agent or the Required Banks.
(e) At such time as the assets of all corporations owned by Holdings
and its Subsidiaries which theretofore constitute Shell Corporations exceed
$100,000 in the aggregate, Holdings shall notify the Administrative Agent as to
which corporations shall cease to constitute Shell Corporations or, in the
absence of such designation, all such corporations shall at such time cease to
be Shell Corporations.
8.12 OWNERSHIP OF SUBSIDIARIES. (a) Notwithstanding anything to the
contrary contained in this Agreement, Holdings shall at all times own directly
100% of the capital stock of BFPH.
(b) Holdings and BFPH shall at all times own, directly or indirectly,
100% of the capital stock or other equity interests of each of their respective
Subsidiaries (except to the extent (x) 100% of the capital stock of any such
Subsidiary is sold, transferred or otherwise disposed of pursuant to a
transaction permitted by Section 9.02(viii) or (xiv), (y) such capital stock is
acquired pursuant to an acquisition permitted by Section 9.02(vii) or an
Investment permitted by Section 9.05(vii) or (z) set forth on Schedule V);
PROVIDED that, (x) Permitted Acquired Subsidiary Preferred Stock may be assumed
in connection with one or more Permitted Acquisitions in accordance with the
requirements of Section 9.12(d) and (y) in the case of any Two-Step Permitted
Acquisition, during the period from the consummation of the tender offer portion
thereof until the earlier to occur of (i) the consummation of the subsequent
merger or compulsory share acquisition constituting a portion thereof or (ii)
the date occurring 135 days after the consummation of the tender portion
thereof, the respective Target of such Two-Step
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Permitted Acquisition may be a Subsidiary of Holdings which is not a
Wholly-Owned Subsidiary thereof.
(c) Treasure Chest shall at all times directly own 100% of the
outstanding capital stock of the Receivables Subsidiary.
8.13 PERMITTED ACQUISITIONS. (a) Subject to the provisions of this
Section 8.13 and the requirements contained in the definition of Permitted
Acquisition, each of Holdings, BFPH and their respective Wholly-Owned
Subsidiaries, may from time to time after the Restatement Effective Date effect
Permitted Acquisitions, so long as: (i) no Default or Event of Default shall be
in existence at the time of the consummation of the proposed Permitted
Acquisition or immediately after giving effect thereto; (ii) Holdings or BFPH
shall have given the Administrative Agent and the Banks at least 3 Business
Days' prior written notice of any Permitted Acquisition, PROVIDED that in the
case of a Permitted Acquisition for aggregate consideration of $25,000,000 (or
the Sterling Equivalent thereof in the case of a Permitted Acquisition to be
effected with consideration denominated in Pounds Sterling) or less, no such
notice shall be required unless a Borrowing of Revolving Loans shall be used to
effect such Permitted Acquisition, in which case written notice of such
Permitted Acquisition shall be given at the time of the delivery of a Notice of
Borrowing in respect of such Borrowing of Revolving Loans; (iii) calculations
are made by Holdings or BFPH of compliance with the covenants contained in
Sections 9.08 and 9.09 for the period of four consecutive fiscal quarters (taken
as one accounting period) most recently ended, PROVIDED that if financial
statements for the last month of the fiscal quarter most recently ended have not
yet been delivered (and were not required to be delivered) pursuant to Section
8.01(a), then compliance with the covenants described above shall instead be
tested for the period of four consecutive fiscal quarters (taken as one
accounting period) most recently ended for which financial statements have been
delivered (or were required to be delivered) pursuant to Section 8.01(b) or (c),
as the case may be, prior to the date of such Permitted Acquisition (each, a
"Calculation Period"), on a PRO FORMA Basis as if the respective Permitted
Acquisition (as well as all other Permitted Acquisitions theretofore consummated
after the first day of such Calculation Period) had occurred on the first day of
such Calculation Period, and such recalculations shall show that such financial
covenants would have been complied with if the Permitted Acquisition had
occurred on the first day of such Calculation Period (for this purpose, if the
first day of the respective Calculation Period occurs prior to the Restatement
Effective Date, calculated as if the covenants contained in said Sections 9.08
and 9.09 had been applicable from the first day of the Calculation Period);
PROVIDED that if the respective Permitted Acquisition is a Two-Step Permitted
Acquisition, the calculations required pursuant to this clause (iii) shall be
required to be made on a PRO FORMA BASIS as otherwise required above, but both
after giving effect to (x) FIRST, the acquisition of shares of the Target
actually acquired pursuant to the respective tender offer (but not giving effect
to any subsequent merger or compulsory share acquisition to be effected as part
of the Two-Step Permitted Acquisition) and (y) SECOND, to the actions described
in preceding clause (x) and the subsequent merger or compulsory share
acquisition which will conclude the respective Two-Step Permitted Acquisition,
and both sets of calculations shall show that the financial covenants referenced
above
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would have been complied with in both scenarios described in preceding clauses
(x) and (y) of this proviso (I.E., whether or not the subsequent merger or
compulsory share acquisition is ever effected); (iv) Holdings or BFPH shall have
examined the tax, ERISA, environmental and other contingent liabilities to be
assumed in connection with, or acquired or incurred as a result of, the proposed
Permitted Acquisition and shall have determined that the assumption of such
contingent liabilities (x) would not reasonably be likely to result in a
Material Adverse Effect and (y) will not, on a prospective basis, impair
Holdings' ability to comply with the financial covenants contained in Sections
9.08 and 9.09; (v) all representations and warranties contained herein and in
the other Credit Documents shall be true and correct in all material respects
with the same effect as though such representations and warranties had been made
on and as of the date of such Permitted Acquisition (both before and after
giving effect thereto), unless stated to relate to a specific earlier date, in
which case such representations and warranties shall be true and correct in all
material respects as of such earlier date; (vi) Holdings or BFPH provides to the
Administrative Agent and the Banks as soon as available but not later than 5
Business Days after the execution thereof, a copy of any executed purchase
agreement or similar agreement with respect to such Permitted Acquisition; and
(vii) immediately prior to the consummation of the proposed Permitted
Acquisition, Holdings or BFPH shall have delivered to the Administrative Agent
an officer's certificate executed by an Authorized Representative of Holdings or
BFPH certifying, to his knowledge, compliance with the requirements of preceding
clauses (i), (iv) and (v) and, in the case of a Permitted Acquisition for
aggregate consideration of more than $25,000,000 (or the Sterling Equivalent
thereof), clause (iii) and containing the calculations required by said clause
(iii).
(b) At the time of each Permitted Acquisition involving the creation
or acquisition of a Subsidiary, or the acquisition of capital stock or other
equity interest of any Person, the capital stock or other equity interests
thereof created or acquired in connection with such Permitted Acquisition shall
be pledged for the benefit of the Secured Creditors pursuant to the relevant
Pledge Agreement in accordance with the requirements of Section 9.11.
(c) At the time of each Permitted Acquisition involving the creation
or acquisition of a Wholly-Owned Subsidiary of Holdings or BFPH (or, in the case
of a Two-Step Permitted Acquisition involving the acquisition of a Wholly-Owned
Subsidiary of Holdings or BFPH, upon the consummation of the subsequent merger
or compulsory share acquisition which concludes the respective Two-Step
Permitted Acquisition), Holdings shall, upon the request of the Administrative
Agent or the Required Banks, cause such Wholly-Owned Subsidiary to execute and
deliver an Election to Become a Borrower and all other documentation required by
Section 6.
(d) Holdings shall cause each Subsidiary which is formed to effect,
or is acquired pursuant to, a Permitted Acquisition to comply with, and to
execute and deliver, all of the documentation required by, Sections 8.11 and
9.11, to the reasonable satisfaction of the Administrative Agent.
(e) The consummation of each Permitted Acquisition shall be deemed to
be a representation and warranty by each Credit Agreement Party that the
certifications by Holdings
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or BFPH (or by one or more of its Authorized Representatives) pursuant to
Section 8.13(a) are true and correct in all material respects and that all
conditions thereto have been satisfied and that same is permitted in accordance
with the terms of this Agreement, which representation and warranty shall be
deemed to be a representation and warranty for all purposes hereunder,
including, without limitation, Sections 7 and 10.
8.14 MAINTENANCE OF CORPORATE SEPARATENESS. Each Credit Agreement
Party will, and will cause each of its Subsidiaries and Unrestricted
Subsidiaries to, satisfy customary corporate formalities, including the holding
of regular board of directors' and shareholders' meetings or action by directors
or shareholders without a meeting and the maintenance of corporate records.
None of Holdings, BFPH, BF Trust or any of their Subsidiaries shall conduct its
or their affairs in a manner which is reasonably likely to result in the
corporate or other existence of any Credit Agreement Party, BF Trust or any of
their respective Subsidiaries or Unrestricted Subsidiaries being ignored, or in
the assets and liabilities of Holdings or any of its Subsidiaries being
substantively consolidated with those of any other such Person or any
Unrestricted Subsidiary in a bankruptcy, reorganization or other insolvency
proceeding.
8.15 FOREIGN SUBSIDIARIES SECURITY. If following a change in the
relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, counsel for
Holdings reasonably acceptable to the Administrative Agent and the Required
Banks (including Sullivan & Cromwell and/or in-house counsel of Holdings) does
not within 30 days after a request from the Administrative Agent or the Required
Banks deliver evidence, in form and substance reasonably satisfactory to the
Administrative Agent and the Required Banks, with respect to any Foreign
Subsidiary (and in the case of clause (i) below, any Foreign Unrestricted
Subsidiary) which has not already had all of its stock pledged pursuant to the
U.S. Pledge and Security Agreement or the U.S. Charge Over Shares and Notes, as
applicable, to secure all of the Obligations (as defined in the respective
Pledge Agreement) that (i) a pledge (x) of 66-2/3% or more of the total combined
voting power of all classes of capital stock of such Foreign Subsidiary entitled
to vote or (y) of any promissory note issued by such Foreign Subsidiary to
Holdings or any of its Domestic Subsidiaries, (ii) the entering into by such
Foreign Subsidiary of a U.S. Pledge and Security Agreement in substantially the
form of the U.S. Pledge and Security Agreement and (iii) the entering into by
such Foreign Subsidiary of a guaranty in substantially the form of the
Non-Borrower U.S. Subsidiaries Guaranty, in any such case would cause the
undistributed earnings of such Foreign Subsidiary as determined for Federal
income tax purposes to be treated as a deemed dividend to such Foreign
Subsidiary's United States parent for Federal income tax purposes, then in the
case of a failure to deliver the evidence described in clause (i) above, that
portion of such Foreign Subsidiary's (or Foreign Unrestricted Subsidiary's, as
the case may be) outstanding capital stock or any promissory notes so issued by
such Foreign Subsidiary, in each case to the extent owned by a Credit Party and
not theretofore pledged pursuant to the U.S. Pledge and Security Agreement or
the U.S. Charge Over Shares and Notes, as applicable, to secure all of the
Obligations (as defined in the respective Pledge Agreement), shall be pledged to
the Collateral Agent for the benefit of the Secured Creditors pursuant to the
U.S. Pledge and Security Agreement or the U.S. Charge Over Shares and Notes
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(or another pledge agreement in substantially similar form, if needed), and in
the case of a failure to deliver the evidence described in clause (ii) above,
such Foreign Subsidiary (to the extent same is a Wholly-Owned Foreign
Subsidiary) shall execute and deliver the U.S. Pledge and Security Agreement (or
another security agreement in substantially similar form, if needed), granting
to the Collateral Agent for the benefit of the Secured Creditors a security
interest in all of such Foreign Subsidiary's assets or the capital stock and
promissory notes owned by such Foreign Subsidiary, as the case may be, and
securing the Obligations of the U.S. Borrowers under the Credit Documents and
under any Interest Rate Protection Agreement or Other Hedging Agreement and, in
the event the Non-Borrower U.S. Subsidiaries Guaranty shall have been executed
by such Foreign Subsidiary, the obligations of such Foreign Subsidiary
thereunder, and in the case of a failure to deliver the evidence described in
clause (iii) above, such Foreign Subsidiary (to the extent same is a
Wholly-Owned Foreign Subsidiary) shall execute and deliver the Non-Borrower U.S.
Subsidiaries Guaranty (or another guaranty in substantially similar form, if
needed), guaranteeing the Obligations of the U.S. Borrowers under the Credit
Documents and under any Interest Rate Protection Agreement or Other Hedging
Agreement, in each case to the extent that the entering into of such U.S. Pledge
and Security Agreement or Non-Borrower U.S. Subsidiaries Guaranty is permitted
by the laws of the respective foreign jurisdiction and with all documents
delivered pursuant to this Section 8.15 to be in form and substance reasonably
satisfactory to the Administrative Agent and/or the Required Banks.
8.16 CERTAIN PROVISIONS WITH RESPECT TO RECEIVABLES FACILITY. The
Receivables Sellers shall be permitted to transfer Receivable Facility Assets to
the Receivables Subsidiary from time to time in accordance with the requirements
of Section 9.02(x), and in connection therewith may make the Investments as
contemplated by Section 9.05(xii). It is acknowledged and agreed that, at any
time when additional capital contributions are required to be made to the
Receivables Subsidiary, such contributions may be made through the transfer by
Treasure Chest of additional Receivables Facility Assets to the Receivables
Subsidiary, through the contribution of promissory notes in accordance with
Section 9.05(xv) or through a reduction in the principal amount of any
intercompany note then payable to Treasure Chest by the Receivables Subsidiary.
In addition, intercompany loans may be made by the Receivables Sellers as a
result of the transfer of their Receivables Facility Assets to the Receivables
Subsidiary in accordance with the provisions of Section 9.05(xii).
8.17 MARGIN STOCK. Holdings will, and will cause each of its
Subsidiaries to, take any and all actions as may be required to ensure that no
capital stock pledged, or required to be pledged, pursuant to the Pledge and
Security Agreement shall constitute Margin Stock; PROVIDED that, in the case of
a Two-Step Permitted Acquisition where the consummation of the tender offer
portion thereof results in the acquisition of Margin Stock, the Margin Stock so
acquired shall be pledged pursuant to the Pledge and Security Agreement and (x)
at the time of the consummation of any such tender offer and upon the occurrence
of each Credit Event during any period that Loans are secured by Margin Stock,
(i) Holdings will, and will cause its Subsidiaries to, take any and all actions
as may be required, or as may be reasonably requested by any Agent, to establish
compliance with Regulation U, (ii) the relevant U.S. Borrower shall deliver to
each Bank a duly completed Form U-1 referred to in Regulation U and (iii) each
Bank shall be able in good faith to complete said Form U-1, showing that the
Loans and other extensions of credit by the Banks
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pursuant to this Agreement comply with Regulation U, including with respect to
the collateral valuation requirements thereof and (y) as promptly as practicable
after the consummation of the back-end merger in respect of such Two-Step
Permitted Acquisition and in any event within 30 days thereafter (or, if
earlier, 30 days after the respective Target becomes a Wholly-Owned Subsidiary
of Holdings), Holdings will, and will cause its Subsidiaries to, take any and
all actions as may be required to ensure that no capital stock acquired pursuant
to such Two-Step Permitted Acquisition shall continue to, or at any time
thereafter, constitute Margin Stock.
SECTION 9. NEGATIVE COVENANTS. Each Credit Agreement Party hereby
covenants and agrees that on and after the Restatement Effective Date and until
the Total Commitment and all Letters of Credit have terminated and the Loans,
Notes and Unpaid Drawings, together with interest, Fees and all other
Obligations incurred hereunder and thereunder, are paid in full:
9.01 LIENS. No Credit Agreement Party will, or will permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or
with respect to any property or assets (real or personal, tangible or
intangible) of such Credit Agreement Party or any of its Subsidiaries, whether
now owned or hereafter acquired, or sell any such property or assets subject to
an understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable with recourse to such
Credit Agreement Party or any of its Subsidiaries), or assign any right to
receive income or permit the filing of any financing statement under the UCC or
any other similar notice of Lien under any similar recording or notice statute
(except in connection with a Permitted Lien); PROVIDED, that the provisions of
this Section 9.01 shall not prevent the creation, incurrence, filing, assumption
or existence of the following (Liens described below are herein referred to as
"Permitted Liens"):
(i) inchoate Liens for taxes, assessments or governmental charges
or levies not yet due and payable or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been established
in accordance with GAAP;
(ii) Liens in respect of property or assets of Holdings or any of
its Subsidiaries imposed by law, which were incurred in the ordinary course
of business and do not secure Indebtedness for borrowed money, such as
carriers', warehousemen's, materialmen's and mechanics' liens and other
similar Liens arising in the ordinary course of business, and (x) which do
not in the aggregate materially detract from the value of Holdings' or such
Subsidiary's property or assets or materially impair the use thereof in the
operation of the business of Holdings or such Subsidiary or (y) which are
being contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing the forfeiture or sale of the property or
assets subject to any such Lien;
(iii) Liens in existence on the Original Effective Date which are
listed, and the property subject thereto described, in Schedule VIII, but
only to the respective date, if any, set forth in such Schedule VIII for
the removal and termination of any such Liens, plus renewals and extensions
of such Liens, PROVIDED that (x) the aggregate principal amount of the
Indebtedness, if any, secured by such Liens does not
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increase from that amount outstanding at the time of any such renewal or
extension and (y) any such renewal or extension does not encumber any
additional assets or properties of Holdings or any of its Subsidiaries;
(iv) Liens created pursuant to the Security Documents;
(v) licenses, leases or subleases granted to other Persons in the
ordinary course of business not materially interfering with the conduct of
the business of Holdings and its Subsidiaries taken as a whole;
(vi) Liens upon assets subject to Capitalized Lease Obligations of
Holdings and its Subsidiaries to the extent permitted by Section 9.04(vii),
PROVIDED that (x) such Liens only serve to secure the payment of
Indebtedness arising under such Capitalized Lease Obligation and (y) the
Lien encumbering the asset giving rise to the Capitalized Lease Obligation
does not encumber any other asset of Holdings or any Subsidiary of Holdings
(other than such other assets subject to Capitalized Lease Obligations
owing to the same Person or group of Persons as such Capitalized Lease
Obligation);
(vii) Liens placed upon assets used in the ordinary course of
business of Holdings or any of its Subsidiaries at the time of acquisition
thereof by Holdings or any such Subsidiary or within 360 days thereafter to
secure Indebtedness incurred to pay all or a portion of the purchase price
thereof, or Liens securing Permitted Acquired Debt, PROVIDED that (x) the
aggregate outstanding principal amount of all Indebtedness secured by Liens
permitted by this clause (vii) shall not at any time exceed the amount
permitted by Section 9.04(vii) and (y) in all events, the Lien encumbering
the assets so acquired does not encumber any other asset of Holdings or
such Subsidiary, except that the Indebtedness (other than Permitted
Acquired Debt) secured by Liens permitted by this clause (vii) may be
cross-collateralized with other Indebtedness (other than Permitted Acquired
Debt) incurred pursuant to this clause (vii) by Holdings or such Subsidiary
from the same Person or group of Persons;
(viii) easements, rights-of-way, restrictions (including zoning
restrictions), encroachments, protrusions and other similar charges or
encumbrances, and minor title deficiencies, in each case whether now or
hereafter in existence, not securing Indebtedness and not materially
interfering with the conduct of the business of Holdings or any of its
Subsidiaries;
(ix) Liens arising from UCC financing statement filings regarding
operating leases entered into by Holdings or any of its Subsidiaries in the
ordinary course of business;
(x) Liens arising out of the existence of judgments or awards not
constituting an Event of Default under Section 10.09, PROVIDED that the
amount of cash and property (determined on a fair market value basis)
deposited or delivered to secure the respective judgment or award shall not
exceed $20,000,000 at any time;
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(xi) statutory and contractual landlords' liens under leases to
which Holdings or any of its Subsidiaries are a party;
(xii) Liens (other than any Lien imposed by ERISA) (x) incurred or
deposits made in the ordinary course of business of Holdings and its
Subsidiaries in connection with workers' compensation, unemployment
insurance and other types of social security, (y) to secure the performance
by Holdings and its Subsidiaries of tenders, statutory obligations (other
than excise taxes), surety, stay, customs and appeal bonds, statutory
bonds, bids, leases, government contracts, trade contracts, performance and
return of money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money) or (z) to secure the
performance by Holdings and its Subsidiaries of leases of Real Property, to
the extent incurred or made in the ordinary course of business consistent
with past practices, PROVIDED that the aggregate amount of deposits at any
time pursuant to subclauses (y) and (z) shall not exceed $15,000,000 in the
aggregate;
(xiii) any interest or title of a lessor, sublessor, licensee or
licensor under any lease or license agreement permitted by this Agreement;
(xiv) Liens in favor of customs and revenue authorities arising as a
matter of law or regulation to secure the payment of customs duties in
connection with the importation of goods and deposits made to secure
statutory obligations in the form of excise taxes;
(xv) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by
Holdings or any of its Subsidiaries in the ordinary course of business
(excluding any general inventory financing);
(xvi) Liens (which in no event shall be permitted to apply to any
Collateral) created, incurred, assumed or suffered to exist by Holdings and
its Subsidiaries, PROVIDED that (i) neither the fair market value of the
assets subject to such Liens at any time, nor the aggregate amount of
Indebtedness and other obligations secured thereby, shall exceed
$50,000,000 in the aggregate at any time and (ii) Liens permitted pursuant
to this clause (xvi) shall be permitted to be incurred and remain in
existence only so long as BFPH at such time has long-term senior unsecured
debt outstanding which, at such time, has a rating which constitutes a
Required Investment Grade Rating;
(xvii) Liens on (x) Receivables Facility Assets transferred (A) by
the Receivables Sellers to the Receivables Subsidiary or (B) by the
Receivables Subsidiary to the Receivables Purchasers (or to the Master
Trust created pursuant to the Receivables Facility), and the filing of
financing statements in connection therewith, created by, and as set forth
in, the Receivables Documents and (y) any amounts representing proceeds of
securities issued in connection with the Receivables Facility which are on
deposit in any account established under the Receivables Facility to the
extent the funds from time to time
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on deposit in such account are included within the definition of
Transferred Assets (as defined in Section 2.1 of the Receivables Pooling
Agreement as originally in effect); and
(xviii) Liens securing Permitted Basket Indebtedness to the extent
provided in the definition thereof.
9.02 CONSOLIDATION, MERGER, PURCHASE OR SALE OF ASSETS, ETC. No
Credit Agreement Party will, or will permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of all or any part of
its property or assets (other than the liquidation of Cash Equivalents in the
ordinary course of business), or enter into any sale-leaseback transactions, or
purchase or otherwise acquire (in one or a series of related transactions) any
part of the property or assets (other than purchases or other acquisitions of
inventory, materials, equipment, furniture, fixtures, and intangible assets in
the ordinary course of business) of any Person (or agree to do any of the
foregoing at any future time), except that:
(i) Capital Expenditures by Holdings and its Subsidiaries shall be
permitted to the extent not in violation of Section 9.07;
(ii) Holdings and each of its Subsidiaries may (x) in the ordinary
course of business, sell, lease or otherwise dispose of any assets which,
in the reasonable judgment of such Person, are obsolete, worn out or
otherwise no longer useful in the conduct of such Person's business and (y)
enter into transactions permitted under Section 9.01(v);
(iii) Investments may be made to the extent permitted by Section
9.05;
(iv) Holdings and each of its Subsidiaries may lease (as lessee)
real or personal property (so long as any such lease does not create a
Capitalized Lease Obligation except to the extent permitted by Section
9.04);
(v) each Subsidiary of Holdings may make sales or transfers of
inventory in the ordinary course of business;
(vi) Holdings and its Wholly-Owned Subsidiaries shall be permitted
to make Permitted Acquisitions so long as same are effected in accordance
with the requirements of Section 8.13;
(vii) (x) Holdings may acquire the capital stock of any Person and
(y) BFPH, any Holdings Acquired Subsidiary and any of their respective
Subsidiaries may acquire the capital stock of, or all or substantially all
of the assets of, any Person (or any product line or division of such
Person) or merge, consolidate or otherwise combine with another Person
(other than a Credit Party), in each case so long as (i) no Default or
Event of Default exists or would exist immediately after giving effect
thereto, (ii) BFPH, in the case of any merger or consolidation involving
BFPH, or such Subsidiary, in other cases,
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is the surviving corporation and (iii) the aggregate consideration
(including the amount of any liabilities assumed) paid in connection with
any transaction pursuant to this Section 9.02(vii) does not exceed the then
Available Basket Amount on such date (after giving effect to all prior and
contemporaneous adjustments thereto, except as a result of such
transaction);
(viii) Holdings and its Subsidiaries may sell or otherwise dispose of
(x) any shares of capital stock of any Unrestricted Subsidiaries owned by
them and (y) any capital stock or other equity interests of any Person that
is not a Subsidiary of Holdings or such Subsidiary which were acquired by
Holdings or such Subsidiary pursuant to an Investment permitted by Sections
9.05(vii), (x) or (xi), so long as (in the case of clause (y)), (A) no
Default or Event of Default is in existence at the time of the respective
sale or disposition or would exist immediately after giving effect thereto
and (B) 100% of the consideration therefor shall be in the form of cash;
(ix) so long as no Default or Event of Default then exists or would
exist immediately after giving effect thereto, (v) any Non-Borrower U.S.
Subsidiary Guarantor may be merged into or consolidated with any other
Non-Borrower U.S. Subsidiary Guarantor or any U.S. Borrower (so long as in
the case of any merger or consolidation involving a U.S. Borrower, a U.S.
Borrower is the surviving corporation of such merger or consolidation), (w)
any U.S. Borrower may be merged into or consolidated with any other U.S.
Borrower, (x) any U.K. Subsidiary Guarantor may be merged into or
consolidated with any other U.K. Subsidiary Guarantor or any Foreign U.K.
Borrower (so long as in the case of any merger or consolidation involving a
Foreign U.K. Borrower, a Foreign U.K. Borrower is the surviving corporation
of such merger or consolidation), (y) any Foreign U.K. Borrower may be
merged into or consolidated with any other Foreign U.K. Borrower and (z)
any Insignificant Subsidiary may be merged with or liquidated into any U.S.
Borrower or any U.S. Subsidiary Guarantor (so long as such U.S. Borrower or
such U.S. Subsidiary Guarantor is the surviving corporation of such merger
or liquidation);
(x) sales, contributions and other transfers by the Receivables
Sellers of Receivables Facility Assets to the Receivables Subsidiary and
sales and other transfers of Receivables Facility Assets by the Receivables
Subsidiary to the Receivables Purchasers (or to the Master Trust created
pursuant to the Receivables Facility), and purchases and acquisitions of
Receivables Facility Assets by the Receivables Subsidiary, in each case
pursuant to the Receivables Facility shall be permitted;
(xi) transfers of assets (x) between BFPH, any U.S. Borrower and
any U.S. Subsidiary Guarantor or between the U.S. Borrowers or the U.S.
Subsidiary Guarantors and (y) between any Foreign U.K. Borrower and any
U.K. Subsidiary Guarantor or between the Foreign U.K. Borrowers or the U.K.
Subsidiary Guarantors;
(xii) the Subsidiaries of Holdings (other than BFPH) may sell or
otherwise transfer and rent or lease back property if the fair market value
of all such
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property so sold or transferred and rented or leased back pursuant to this
clause (xii) in any fiscal year does not exceed $30,000,000 in the
aggregate;
(xiii) Holdings and its Subsidiaries may enter into agreements to
effect acquisitions and dispositions of stock or assets so long as the
respective transaction is permitted pursuant to the provisions of this
Section 9.02; PROVIDED that Holdings and its Subsidiaries may enter into
agreements to effect acquisitions and dispositions of capital stock or
assets in transactions not permitted by the provisions of this Section 9.02
at the time the respective agreement is entered into, so long as in the
case of each such agreement, such agreement shall be expressly conditioned
upon obtaining the requisite consent of the Required Banks under this
Agreement as a condition precedent to the consummation of the respective
transaction and, if for any reason the transaction is not consummated
because of a failure to obtain such consent, the aggregate liability of
Holdings and its Subsidiaries under any such agreement shall not exceed
$5,000,000; and
(xiv) Holdings and its Subsidiaries may sell or otherwise dispose of
additional assets (excluding, assets sold, transferred or disposed of
pursuant to the Receivables Facility) so long as (i) no Default or Event of
Default is in existence at the time of the respective sale or disposition
or would exist immediately after giving effect thereto, (ii) the Net Sale
Proceeds from any single asset subject to sale or disposition under this
clause (xiv) do not exceed $40,000,000, (iii) the aggregate Net Sale
Proceeds from all assets subject to sales or dispositions under this clause
(xiv) after the Original Effective Date shall not exceed $100,000,000, (iv)
each such sale or disposition shall be for fair market value (as determined
in the good faith judgment of management of Holdings other than with
respect to sales or dispositions in an aggregate amount not to exceed
$500,000 per calendar year) and at least 75% of the consideration therefor
shall be in the form of cash and (v) with respect to any asset sale or
disposition pursuant to this clause (xiv), the Net Sale Proceeds of which
exceed $12,000,000 (each, a "Tested Asset Sale"), (x) calculations are made
by Holdings of compliance with the covenants contained in Section 9.09 for
the Calculation Period most recently ended prior to the date of the
respective Tested Asset Sale, on a PRO FORMA Basis after giving effect to
the respective Tested Asset Sale, (y) such calculations show that such
financial covenants would have been complied with if such Tested Asset Sale
had been consummated on the first day of the respective Calculation Period
and (z) Holdings furnishes to the Administrative Agent an officer's
certificate by the chief financial officer of Holdings certifying to the
best of his knowledge as to compliance with the requirements of this
Section 9.02(xiv) and containing the calculations required by subclauses
(x) and (y) above.
To the extent the Required Banks waive the provisions of this Section 9.02 with
respect to the sale of any Collateral, or any Collateral is sold as permitted by
this Section 9.02, such Collateral (unless sold to Holdings or any of its
Subsidiaries) shall be sold free and clear of the Liens created by the Security
Documents, and the Administrative Agent and Collateral Agent shall be authorized
to take any actions deemed appropriate in order to effect the foregoing.
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9.03 DIVIDENDS. No Credit Agreement Party shall, or shall permit any
of its Subsidiaries to, authorize, declare or pay any Dividends with respect to
Holdings or any of its Subsidiaries, except that the following shall be
permitted (subject to adjustment as provided in Section 9.05):
(i) (w) any Subsidiary of BFPH may pay Dividends to BFPH, any U.S.
Borrower or any U.S. Subsidiary Guarantor, (x) any Holdings Acquired
Subsidiary may pay Dividends to any Holdings Acquired Subsidiary that is a
U.S. Subsidiary Guarantor, (y) any U.K. Subsidiary Guarantor may pay
Dividends to any Foreign U.K. Borrower or any other U.K. Subsidiary
Guarantor and (z) any Foreign U.K. Borrower may pay Dividends to any other
Foreign U.K. Borrower;
(ii) in addition to Dividends otherwise permitted for such purpose
by clause (iv) of this Section 9.03, Holdings may repurchase Holdings
Common Stock and/or options to purchase Holdings Common Stock held by
directors, executive officers, members of management or employees of
Holdings or any of its Affiliates or any family members of any such
individuals, so long as (x) no Default or Event of Default then exists or
would exist immediately after giving effect thereto and (y) the aggregate
amount of cash expended by Holdings pursuant to this clause (ii) in any
calendar year shall not exceed $10,000,000; PROVIDED that, in addition to
amounts available pursuant to preceding clause (y) (but subject to the
requirements of preceding clause (x)), Holdings may make additional cash
purchases in respect of Holdings Common Stock and/or options to purchase
Holdings Common Stock previously held by any person listed above, after the
death of such person, with proceeds of key-man life insurance maintained by
any Credit Party on such person;
(iii) so long as no Default or Event of Default then exists or would
exist immediately after giving effect thereto, BFPH and any Holdings
Acquired Subsidiary may pay cash Dividends to Holdings so long as the cash
proceeds thereof are used by Holdings, as soon as reasonably practicable,
for the purposes described in clause (ii) of this Section 9.03;
(iv) Holdings may make Dividends in the form of the issuance of
additional capital stock to effectuate the Holdings Rights Plan;
(v) so long as no Default or Event of Default is in existence or
would exist immediately after giving effect to the respective Dividend,
Holdings shall be permitted to pay cash Dividends in an amount not to
exceed the Available Basket Amount on such date (after giving effect to all
prior and contemporaneous adjustments thereto, except as a result of such
Dividend), and BFPH and any Holdings Acquired Subsidiary shall be permitted
to pay Dividends to Holdings so long as Holdings, as soon as reasonably
practicable, uses such amounts to pay Dividends as contemplated above
pursuant to this clause (v);
(vi) so long as no Default or Event of Default is in existence or
would exist immediately after giving effect to the respective payment, (x)
the respective
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Subsidiary which is the issuer thereof may pay regularly accruing cash
dividends on any outstanding Permitted Acquired Subsidiary Preferred Stock
and (y) Holdings and/or its Subsidiaries may acquire, redeem or retire any
outstanding Permitted Acquired Subsidiary Preferred Stock;
(vii) so long as there shall exist no Default or Event of Default
(both before and immediately after giving effect to the payment thereof),
BFPH and any Holdings Acquired Subsidiary may pay cash Dividends to
Holdings, so long as the proceeds thereof are used by Holdings (as soon as
reasonably practicable) to pay taxes then due and payable, operating
expenses and payables owing by Holdings in the ordinary course of its
business, other similar corporate overhead costs and expenses and expenses
(other than principal, liquidation preference, interest or dividends) in
respect of the Convertible QUIPS and/or Convertible Subordinated
Debentures;
(viii) BFPH and any Holdings Acquired Subsidiary may pay cash
Dividends to Holdings, which in turn shall utilize the full amount of such
cash Dividends for the purpose of paying (and so long as Holdings, by the
immediately succeeding Business Day, utilizes the full amount of such cash
Dividends to pay) interest as and when due on the Convertible Subordinated
Debentures then outstanding to BF Trust, which in turn shall utilize the
full amount of such interest payments on the day of its receipt thereof to
pay accrued dividends then owing with respect to Convertible QUIPS then
outstanding, PROVIDED that (x) the amount of cash Dividends payable by BFPH
and any such Holdings Acquired Subsidiary pursuant to this clause (viii)
shall not exceed the amounts necessary to make such dividend payments owing
with respect to the Convertible QUIPS, (y) no such Dividend shall be paid
at any time when the payment of cash interest on the Convertible
Subordinated Debentures is not permitted to be made pursuant to the
subordination provisions applicable thereto and (z) no such Dividend may be
paid at any time following the occurrence and during the continuance of any
Default or Event of Default or if a Default or Event of Default would exist
immediately after giving effect to the payment of such Dividend;
(ix) at any time after the third anniversary of Convertible QUIPS
Issuance Date, the Convertible QUIPS may be optionally redeemed by BF Trust
in accordance with their terms, so long as (x) no Default or Event of
Default exists at the time of such redemption or immediately after giving
effect thereto (and to the payments of any Dividends pursuant to this
clause (ix)) and (y) at the time notice of redemption is given, the market
price of the common stock of Holdings (as reasonably determined in good
faith by Holdings) exceeds the conversion price then applicable in
connection with a conversion of the Convertible QUIPS into common stock of
Holdings; and in the event such an optional redemption occurs, any shares
of Convertible QUIPS which are in fact optionally redeemed (and which are
not, in accordance with the terms of the Convertible QUIPS, converted into
shares of common stock of Holdings) may be redeemed by BF Trust, and in
such case cash Dividends may be paid by BFPH and any Holdings Acquired
Subsidiary to Holdings, and used by Holdings, to repay principal then
outstanding pursuant to the Convertible Subordinated Debentures, at such
times and in such amounts as are
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needed to make such payments in respect of the optional redemption of the
Convertible QUIPS (and in each case so long as no Default or Event of
Default exists at the time of any such payment or would exist immediately
after giving effect thereto); and
(x) so long as no Default or Event of Default is in existence or
would exist immediately after giving effect to the payment thereof, BFPH
and any Holdings Acquired Subsidiary may pay cash Dividends to Holdings, so
long as the proceeds thereof are used by Holdings (as soon as reasonably
practicable) to effect a Permitted Transaction.
9.04 INDEBTEDNESS. No Credit Agreement Party shall, or shall permit
any of its Subsidiaries to, contract, create, incur, assume or suffer to exist
any Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(ii) unsecured Indebtedness of BFPH pursuant to the 8-7/8% Senior
Subordinated Notes, so long as the aggregate principal amount thereof at
any time outstanding does not exceed $350,000,000 LESS the amount of any
repayments of principal thereof after the Restatement Effective Date;
(iii) Indebtedness of the Borrowers consisting of Non-Facility
Letters of Credit and reimbursement obligations with respect thereto,
including renewals or extensions thereof, so long as the aggregate stated
amount of such Non-Facility Letters of Credit at any time outstanding does
not exceed $20,000,000;
(iv) Scheduled Existing Indebtedness shall be permitted to the
extent the same is listed on Schedule VI, but no refinancings or renewals
thereof, except as expressly permitted on such Schedule VI (or as otherwise
permitted by Section 9.04(xi));
(v) accrued expenses and current trade accounts payable incurred
in the ordinary course of business;
(vi) Indebtedness under Interest Rate Protection Agreements
reasonably related to outstanding floating rate debt permitted under this
Agreement;
(vii) Indebtedness of Holdings and its Subsidiaries evidenced by
Capitalized Lease Obligations to the extent permitted pursuant to Section
9.01(vi), Indebtedness secured by Liens permitted under Section 9.01(vii)
and Indebtedness constituting Permitted Acquired Debt, PROVIDED that in no
event shall the aggregate principal amount of Capitalized Lease Obligations
and Indebtedness permitted by this clause (vii) exceed $40,000,000 at any
time outstanding (subject to adjustment as provided in the last sentence of
this Section 9.04);
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(viii) Guaranties of Holdings or any of its Subsidiaries as a
guarantor of the lessee under any lease pursuant to which Holdings or any
of its Subsidiaries is the lessee so long as such lease is otherwise
permitted hereunder;
(ix) Guaranties of Holdings or any of its Subsidiaries pursuant to
any Tax Sharing Agreement;
(x) Indebtedness among (x) Treasure Chest and the other
Receivables Sellers to the extent resulting from intercompany loans made in
accordance with the requirements of Section 8.16 and (y) Holdings, BFPH and
its Wholly-Owned Subsidiaries to the extent permitted pursuant to Section
9.05(v);
(xi) additional Permitted Refinancing Indebtedness, so long as no
Default or Event of Default is in existence at the time of the incurrence
of such Permitted Refinancing Indebtedness and immediately after giving
effect thereto;
(xii) Indebtedness which may be deemed to exist pursuant to the
Receivables Facility so long as, if the Attributed Receivables Facility
Indebtedness ever exceeds the Receivables Facility Threshold Amount as then
in effect, any commitment reductions required as a result thereof pursuant
to Section 3.03(b) shall have been made in accordance with the terms
thereof;
(xiii) Permitted Secured Indebtedness for borrowed money so long as
(x) the proceeds of such Indebtedness are not used to refinance Existing
Indebtedness, (y) the aggregate principal amount of Permitted Secured
Indebtedness incurred after the Restatement Effective Date pursuant to this
clause (xiii) shall in no event exceed $50,000,000 and (z) Permitted
Secured Indebtedness shall be permitted to be incurred and remain in
existence only so long as BFPH at such time has long-term senior unsecured
debt outstanding which, at such time, has a rating which constitutes a
Required Investment Grade Rating;
(xiv) unsecured Indebtedness of Holdings pursuant to (x) the
Convertible Subordinated Debentures, so long as the aggregate principal
amount thereof at any time outstanding does not exceed $118,600,000 LESS
the sum of (I) amount of any repayments of principal thereof after the
Restatement Effective Date and (II) the aggregate liquidation value of all
Convertible QUIPS exchanged for Holdings Common Stock in connection with a
Permitted Conversion, (y) the Holdings QUIPS Guaranty and (z) the Holdings
BFT Common Securities Guaranty;
(xv) obligations of any Subsidiary of Holdings incurred with
respect to performance bonds and/or fidelity bonds required to be furnished
by such Subsidiary in connection with contracts entered into by such
Subsidiary in the ordinary course of its business, so long as the aggregate
amount of outstanding obligations at any time pursuant to this clause (xv)
does not exceed $25,000,000;
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(xvi) Indebtedness of any Borrower and/or its Subsidiaries under
Currency Agreements, in each case so long as the respective Currency
Agreement is reasonably related to revenues or payments of any Borrower
and/or its Subsidiaries in the respective currency subject to the Currency
Agreement and is entered into for non-speculative purposes;
(xvii) Permitted Subordinated Indebtedness, so long as (x) no Default
or Event of Default shall exist at the time of the incurrence of such
Permitted Subordinated Indebtedness and immediately after giving effect
thereto, and (y) the proceeds of such Permitted Subordinated Indebtedness
are used for the general corporate purposes of Holdings and its
Subsidiaries, including, without limitation, for Permitted Acquisitions and
the repayment of Revolving Loans and other Indebtedness in accordance with
the terms of this Agreement;
(xviii) so long as no Default or Event of Default is then in
existence or would exist immediately after giving effect to the respective
incurrence of Indebtedness, additional Permitted Basket Indebtedness in an
aggregate principal amount not to exceed $50,000,000 (subject to adjustment
as provided in the last sentence of this Section 9.04) at any time
outstanding; and
(xix) Guaranties of Holdings and/or any of its Subsidiaries of the
payment of principal, interest and all other amounts owing by the Special
Unrestricted Leasing Subsidiary pursuant to the SULS Loan Agreement.
In furtherance of the foregoing and in no way in limitation thereof,
and except as permitted pursuant to preceding clause (xix) and Section 9.05(xx),
Holdings shall not permit any Unrestricted Subsidiary to incur any Indebtedness
or any other obligation having any element of recourse to Holdings or any of its
Subsidiaries or to any of its assets or property. Notwithstanding anything to
the contrary contained above, at any time while any Permitted Acquired
Subsidiary Preferred Stock is outstanding, the aggregate amounts set forth in
clauses (vii) and (xviii) above (I.E., $90,000,000) shall be reduced by the
liquidation preference of all outstanding Permitted Acquired Subsidiary
Preferred Stock then outstanding, with the total reduction described above in
this Section to be allocated between the amounts provided in clauses (vii) and
(xviii) above as may be determined from time to time by Holdings or BFPH.
9.05 INVESTMENTS; ETC. No Credit Agreement Party shall, or shall
permit any of its Subsidiaries to, directly or indirectly, lend money or credit
or make advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any other Person, or purchase or own a futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract, or hold any cash or Cash Equivalents
(any of the foregoing, an "Investment"), except that the following shall be
permitted:
(i) each of the Subsidiaries of Holdings may acquire and hold
accounts receivables owing to any of them, if created or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary terms;
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(ii) Holdings and its Subsidiaries may acquire and hold cash and
Cash Equivalents;
(iii) Holdings Acquired Subsidiaries and BFPH and its Subsidiaries
may make loans and advances to their respective employees, officers and
directors in connection with relocations, purchases by such persons of the
capital stock of Holdings or warrants, options or similar rights to
purchase the capital stock of Holdings and other ordinary course of
business purposes, so long as the aggregate principal amount thereof at any
time outstanding (determined without regard to any write-downs or
write-offs of such loans and advances) shall not exceed $10,000,000;
(iv) any Borrower may enter into Interest Rate Protection
Agreements to the extent permitted in Section 9.04(vi);
(v) (v) BFPH, the U.S. Borrowers and the U.S. Subsidiary
Guarantors may make intercompany loans to each other, (w) the Foreign U.K.
Borrowers and the U.K. Subsidiary Guarantors may make intercompany loans to
each other (x) the Foreign U.K. Borrowers and the U.K. Subsidiary
Guarantors may make intercompany loans to U.K. Subsidiaries that are
Wholly-Owned Subsidiaries of Holdings but are not U.K. Subsidiary
Guarantors, so long as (i) the aggregate outstanding principal amount of
all intercompany loans made pursuant to this clause (x) do not exceed
$10,000,000 at any time and (ii) any such intercompany loan made pursuant
to this clause (x) is evidenced by an Intercompany Note, (y) BFPH, the U.S.
Borrowers and the U.S. Subsidiary Guarantors may make intercompany loans to
any Wholly-Owned Foreign Subsidiary of Holdings, so long as (i) such
Wholly-Owned Foreign Subsidiary promptly uses the proceeds thereof to
effect Permitted Transactions and (ii) any such intercompany loan shall be
evidenced by an Intercompany Note and (z) BFPH, the Borrowers and the
Subsidiary Guarantors may make intercompany loans to Holdings, so long as
(i) Holdings promptly uses the proceeds thereof to effect Permitted
Transactions and (ii) in the case of any intercompany loan by a Foreign
U.K. Borrower to Holdings, such loan shall be evidenced by an Intercompany
Note containing the subordination provisions attached as Annex I thereto;
(vi) Holdings and its Subsidiaries may (x) establish Subsidiaries
in compliance with Section 9.11 and (y) make Investments therein as
otherwise provided in this Section 9.05;
(vii) so long as no Default or Event of Default exists or would
exist immediately after giving effect to the respective Investment,
Holdings and its Wholly-Owned Subsidiaries shall be permitted to make
Investments (in addition to those otherwise provided in this Section 9.05)
on any date in an amount not to exceed the Available Basket Amount on such
date (after giving effect to all prior and contemporaneous adjustments
thereto, except as a result of such Investment), it being understood and
agreed that (x) in the case of Investments made in any Person which is
thereafter acquired pursuant to a Permitted Acquisition, then upon the
consummation of the respective Permitted Acquisition the amount previously
invested in such Person pursuant to this clause (vii) shall be treated
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as if said amount were instead used to effect a Permitted Acquisition and
the Available Basket Amount shall be increased by the amount of Investments
in such Person theretofore made pursuant to this clause (vii), (y) in the
case of Investments in entities which do not become Credit Parties, then to
the extent Holdings or one or more other Credit Parties (after the
respective Investment has been made) receives a return of capital
previously invested pursuant to this clause (vii) (including, without
limitation, the proceeds of any sale of capital stock permitted by Section
9.02(viii)(y)), then the amount of such return of capital shall, upon the
Administrative Agent's receipt of a certification of the amount of the
return of capital from an Authorized Representative, apply to increase the
Available Basket Amount, PROVIDED that the aggregate amount of increases to
the Available Basket Amount described above shall not exceed the amount of
returned capital and, in no event, shall the amount of the increases made
to the Available Basket Amount in respect of any Investment exceed the
amount previously invested pursuant to this clause (vii) and (z) the
acquisition of a Person which has ownership interests in one or more
entities which are not Wholly-Owned Subsidiaries of such Person pursuant to
a Permitted Acquisition effected in accordance with relevant requirements
of this Agreement shall not be deemed to constitute an Investment pursuant
to this clause (vii) and the Available Basket Amount shall not be reduced
as a result of the payment of consideration owing in connection with such
Permitted Acquisition (although the Available Basket Amount would be
affected to the extent additional Investments are made in the respective
non-wholly-owned entity pursuant to this clause (vii));
(viii) Holdings and its Wholly-Owned Subsidiaries may make Permitted
Acquisitions in accordance with the relevant requirements of Section 8.13
and the component definitions as used therein;
(ix) Holdings and its Subsidiaries may retain cash consideration
PLUS purchase money notes derived from asset sales permitted pursuant to
Section 9.02(ii) and (xiv);
(x) existing Investments by BFPH and its Subsidiaries shall be
permitted to the extent listed on Schedule IX;
(xi) Holdings and each of its Subsidiaries may acquire and own
Investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and/or in
settlement of delinquent obligations of, and other disputes with, customers
and suppliers arising in the ordinary course of business;
(xii) as a result of sales, contributions and other transfers of
Receivable Facility Assets to the Receivables Subsidiary in accordance with
Section 9.02(x), Investments may exist from time to time consisting of (x)
contributions by Treasure Chest to the capital of the Receivables
Subsidiary and (y) intercompany loans being made (or deemed made) by the
Receivables Sellers as a result of the transfer of such Receivables
Facility Assets, in each case so long as all capital stock of the
Receivables
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Subsidiary is pledged pursuant to the U.S. Pledge and Security Agreement
and all such intercompany loans are evidenced by one or more promissory
notes which are pledged pursuant to the U.S. Pledge and Security Agreement;
(xiii) BFPH may guarantee obligations of its Subsidiaries as sellers
pursuant to the Receivables Documents, so long as no such guaranty shall
give rise to recourse liability (other than in connection with Standard
Securitization Undertakings) for the payment of any Receivables Facility
Assets or the principal of, or interest on, any Purchased Interest or
Investor Certificate;
(xiv) the Receivables Sellers may make intercompany loans in
accordance with the requirements of Section 8.16;
(xv) to the extent necessary to maintain the net worth of the
Receivables Subsidiary in accordance with the requirements of the
Receivables Facility, BFPH may at any time contribute one or more
promissory notes to the capital of Treasure Chest, which shall in turn
contribute such promissory notes to the capital of the Receivables
Subsidiary; PROVIDED that (x) at no time shall the aggregate principal
amount of such outstanding promissory notes exceed the remainder of (A) $5
million LESS (B) the sum of (I) the amount of all write-downs and
write-offs of such principal amount PLUS (II) the aggregate amount of all
principal payments in respect of such promissory notes made after October
4, 1996 and (y) the interest rate payable pursuant to such promissory notes
shall not be greater than the short-term "Applicable Federal Rate" (as such
term is defined in Section 1274(d) of the Code);
(xvi) Holdings and its Subsidiaries may make capital contributions
to any of their respective Subsidiaries (excluding the Receivables
Subsidiary) which is a Credit Party;
(xvii) Investments made in accordance with the relevant requirements
of Section 9.02(xi);
(xviii) any Borrower and/or its Subsidiaries may enter into Currency
Agreements in accordance with the requirements contained in Section
9.04(xvi);
(xix) additional Investments may exist from time to time consisting
of capital contributions to the Receivables Subsidiary made solely through
a reduction in the principal amount of any intercompany note then payable
to Treasure Chest by the Receivables Subsidiary, so long as (x) all capital
stock of the Receivables Subsidiary is pledged pursuant to the U.S. Pledge
and Security Agreement, (y) any such intercompany note (to the extent same
is not reduced to $0) is pledged pursuant to the Pledge and Security
Agreement and (z) the aggregate amount of all such capital contributions
shall not exceed $15 million;
(xx) Treasure Chest, Webcraft, BF Digital and any other Credit
Party may make Investments in the Special Unrestricted Leasing Subsidiary
pursuant to
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any Tax Sharing Agreement or any other Guaranty referred to in Section
9.04(xix) in such amounts as may be required to enable the Special
Unrestricted Leasing Subsidiary to pay principal, interest and other
amounts owing pursuant to the SULS Loan Agreement when and as due;
(xxi) (x) each of Holdings and BFPH may make cash equity
contributions to any direct Wholly-Owned Subsidiary of the Person making
such contribution that is a U.S. Borrower or a U.S. Subsidiary Guarantor,
(y) any U.S. Borrower and any U.S. Subsidiary Guarantor may make cash
equity contributions to any direct Wholly-Owned Subsidiary of the Person
making such contribution that is a U.S. Borrower or a U.S. Subsidiary
Guarantor and (z) any Foreign U.K. Borrower and any U.K. Subsidiary
Guarantor may make cash equity contributions to any direct Wholly-Owned
Subsidiary of the Person making such contribution that is a Foreign U.K.
Borrower or a U.K. Subsidiary Guarantor; and
(xxii) BFPH, the U.S. Borrowers and the U.S. Subsidiary Guarantors may
make cash equity contributions in any of their respective direct
Wholly-Owned Foreign Subsidiaries, so long as such Wholly-Owned Foreign
Subsidiary promptly uses the proceeds of any such cash equity contribution
to effect Permitted Transactions.
9.06 TRANSACTIONS WITH AFFILIATES AND UNRESTRICTED SUBSIDIARIES. No
Credit Agreement Party shall, or shall permit any of its Subsidiaries to, enter
into any transaction or series of related transactions with any Affiliate of
such Credit Agreement Party or any of its Subsidiaries or any of its
Unrestricted Subsidiaries, other than in the ordinary course of business and on
terms and conditions substantially as favorable to such Credit Agreement Party
or such Subsidiary as would reasonably be obtained by such Credit Agreement
Party or such Subsidiary at that time in a comparable arm's-length transaction
with a Person other than an Affiliate, except that:
(i) Dividends may be paid to the extent provided in Section 9.03
or, at any time and to the extent that any Dividend is permitted to be paid
by BFPH or any Holdings Acquired Subsidiary to Holdings pursuant Section
9.03(iii) or (vii), BFPH, Treasure Chest, Webcraft, BF Digital and/or any
other Credit Party may, in lieu of BFPH or any Holdings Acquired Subsidiary
paying the amounts permitted to be paid as a Dividend pursuant to such
Sections, pay management fees to Holdings so long as all proceeds of the
respective management fees are used by Holdings to make the payments which
would be required to be made by it if such amount had been paid as a
Dividend pursuant to, and in accordance with the requirements of, Section
9.03(iii) or (vii), as the case may be; PROVIDED that such management fees
shall be alternative to and not duplicative of any Dividends paid (and
permitted to be paid) pursuant to said subsections;
(ii) Investments may be made to the extent permitted by Section
9.05;
(iii) the transactions entered into between Holdings and its
Subsidiaries, or between such Subsidiaries, shall be permitted to the
extent expressly permitted by Section 9.02;
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(iv) customary fees may be paid to non-officer directors of
Holdings and its Subsidiaries;
(v) Holdings and its Subsidiaries may (x) enter into employment
arrangements with respect to the procurement of services with their
respective officers and employees in the ordinary course of business, (y)
suffer to exist employment agreements in existence on the Original
Effective Date and (z) pay relocation expenses to their respective officers
and employees in accordance with the past practices of BFPH and its
Subsidiaries as in effect on the Original Effective Date;
(vi) BFPH and its Subsidiaries may enter into the transactions
contemplated by the Receivables Documents;
(vii) existing transactions between Holdings, BFPH and their
respective Subsidiaries and their Affiliates shall be permitted to the
extent listed on Schedule XII;
(viii) Holdings may sell or issue Holdings Common Stock and Qualified
Preferred Stock to its Affiliates (other than its Subsidiaries) and options
and warrants exercisable therefor;
(ix) the Subsidiaries of Holdings may make payments owing by them
to Holdings in accordance with the provisions of any Tax Sharing Agreement;
and
(x) any Borrower and any of its Subsidiaries may pay fees
(including management, acquisition and other consulting fees) to any U.S.
Borrower or any U.S. Subsidiary Guarantor;
PROVIDED that, any transaction (other than as described in clauses (i), (ii),
(iii) and (vi) above) between and among the aforementioned parties with a value
in excess of (A) $2,500,000 shall only be permitted if a majority of the
disinterested directors of Holdings approve the transaction and (B) $30,000,000
shall only be permitted if the parties thereto provide a fairness opinion from a
Person, and in form and substance, satisfactory to the Administrative Agent.
Except as otherwise permitted by this Section 9.06, in no event shall any
management or similar fees be paid or payable by Holdings or any of its
Subsidiaries to any Affiliate (other than BFPH, any U.S. Borrower or any U.S.
Subsidiary Guarantor).
9.07 CAPITAL EXPENDITURES. (a) Holdings will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures, except that
during any calendar year, (i) Holdings may make Capital Expenditures in
connection with a Permitted Transaction and (ii) the Holdings Acquired
Subsidiaries and BFPH and its Subsidiaries may make Capital Expenditures, so
long as the aggregate amount of such Capital Expenditures by all such Persons in
such calendar year pursuant to preceding clauses (i) and (ii) does not exceed
the sum (such sum, the "Permitted CapEx Amount") of (x) $110,000,000 PLUS (y)
for each Acquired Business acquired after the Restatement Effective Date and
prior to the first day of such calendar year, 50% of the Acquired EBITDA of such
Acquired Business for the trailing four fiscal quarters of such
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Acquired Business immediately preceding its acquisition PLUS (z) for each
Acquired Business acquired during such fiscal year, the amount for such Acquired
Business specified in preceding clause (y) multiplied by a percentage, the
numerator of which is the number of days in such fiscal year after the date of
the respective acquisition and the denominator of which is 365 or 366, as the
case may be; PROVIDED, that notwithstanding the foregoing, in no event shall the
amount of Capital Expenditures permitted to be expended in any fiscal year
exceed $150,000,000.
(b) To the extent that the amount of Capital Expenditures made by
Holdings and its Subsidiaries during any calendar year is less than the
Permitted CapEx Amount PLUS any increase in such amount for such calendar year
as provided below in this clause (b), the lesser of (x) such unused amount and
(y) $50,000,000 may be carried forward and utilized by Holdings to make
additional Capital Expenditures constituting Permitted Transactions and the
Holdings Acquired Subsidiaries and BFPH and its Subsidiaries to make additional
Capital Expenditures, in any such case, in the immediately succeeding calendar
year.
(c) Notwithstanding the foregoing, Holdings and its Subsidiaries may
effect Permitted Transactions in accordance with the relevant requirements of
this Agreement and any part of such Permitted Transactions that would constitute
a Capital Expenditure shall be permitted and shall not be included in the
determining compliance with the provisions of this Section 9.07.
9.08 CONSOLIDATED NET INTEREST COVERAGE RATIO. Holdings will not
permit the Consolidated Net Interest Coverage Ratio for any Test Period ended
after the Restatement Effective Date to be less than 2.25:1.0.
9.09 LEVERAGE RATIO. Holdings will not permit the Leverage Ratio at
any time after the Restatement Effective Date to be greater than 4.25 to 1.0
through and including December 31, 1999 and 4.00 to 1.0 thereafter.
9.10 LIMITATION ON MODIFICATIONS OF AND PAYMENTS ON INDEBTEDNESS AND
PREFERRED STOCK; MODIFICATIONS OF CERTIFICATE OF INCORPORATION, BY-LAWS AND
CERTAIN OTHER AGREEMENTS. Holdings will not, and will not permit any of its
Subsidiaries to, (i) amend or modify, or permit the amendment or modification
of, any provision of any Existing Indebtedness, any Leverage Lease Document, any
Convertible QUIPS or, after the incurrence or issuance thereof, any Permitted
Debt, Qualified Preferred Stock or Permitted Acquired Subsidiary Preferred
Stock, or of any agreement (including, without limitation, any purchase
agreement, indenture, loan agreement, or security agreement or certificate of
designation) relating thereto, other than any amendments or modifications to the
Existing Indebtedness, any Convertible QUIPS, any Permitted Debt, Qualified
Preferred Stock or Permitted Acquired Subsidiary Preferred Stock which (A) do
not make any material term or condition thereof more restrictive than the
previously existing terms and conditions with respect thereto, (B) do not in any
way adversely affect the interests of the Banks, (C) do not increase the
interest or dividend rates applicable thereunder, reduce the maturity date
thereunder or change any pay-in-kind mechanics or requirements or any
subordination provision thereof from those in effect immediately prior to such
amendment or modification, (ii) make (or give any notice in respect of) any
voluntary or optional payment or
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make (or permit or give (or permit to be given) any notice in respect of) any
prepayment on or redemption, repurchase or acquisition for value of any of the
Existing Indebtedness, any Convertible QUIPS (excluding any redemption expressly
permitted by Section 9.03(ix) and any exchange of Convertible QUIPS for
Convertible Subordinated Debentures or Holdings Common Stock, in each case in
accordance with the terms applicable to the Convertible QUIPS), or, after the
incurrence or issuance thereof, any Permitted Debt or Qualified Preferred Stock,
(iii) amend or modify, or permit the amendment or modification of, any provision
(including without limitation for purposes of this clause (iii) as a
modification, any reduction to the amount available pursuant to the Receivables
Maximum Funding Amount) of the documentation with respect to the Receivables
Facility, except for amendments and modifications where the Receivables
Amendment Conditions are satisfied, or (iv) amend, modify or change its
certificate of incorporation (including, without limitation, by the filing or
modification of any certificate of designation other than any certificate of
designation relating to Qualified Preferred Stock), by-laws, partnership
agreement or certificate of limited partnership, as the case may be, or any
agreement entered into by it, with respect to its capital stock, or enter into
any new agreement with respect to its capital stock, other than any amendments,
modifications or changes pursuant to this clause (iv) and any such new
agreements pursuant to this clause (iv) which do not in any way adversely affect
the interests of the Banks.
9.11 LIMITATION ON CREATION OR ACQUISITION OF SUBSIDIARIES AND
UNRESTRICTED SUBSIDIARIES. Holdings will not, and will not permit any of its
Subsidiaries to, establish, create or acquire after the Restatement Effective
Date any Subsidiary (other than a Shell Corporation, so long as it remains a
Shell Corporation) or Unrestricted Subsidiary, unless (x) in the case of an
Unrestricted Subsidiary (i) it is established, created or acquired by Holdings,
BFPH or another Unrestricted Subsidiary, (ii) if a Domestic Unrestricted
Subsidiary of Holdings or BFPH, all of the capital stock of such new Domestic
Unrestricted Subsidiary owned by Holdings or BFPH shall be pledged pursuant to
the U.S. Pledge and Security Agreement and the certificates representing such
stock, together with stock powers duly executed in blank, shall be delivered to
the Collateral Agent, (iii) if a Foreign Unrestricted Subsidiary of Holdings or
BFPH, all of the capital stock of such new Foreign Unrestricted Subsidiary owned
by Holdings or BFPH (except that not more than 65% of the outstanding voting
stock of any Foreign Unrestricted Subsidiary need be so pledged, except in the
circumstances contemplated by Section 8.15) shall be pledged pursuant to the
U.S. Pledge and Security Agreement and the certificates representing such stock,
together with stock powers duly executed in blank, shall be delivered to the
Collateral Agent, and (iv) such Unrestricted Subsidiary shall, at the request of
the Administrative Agent, become a party to any Tax Sharing Agreement then in
effect, or (y) in the case of a Subsidiary, it shall be a Wholly-Owned
Subsidiary of Holdings and (i) at least 5 Business Days' prior written notice
thereof is given to the Administrative Agent and the Banks (or such lesser
notice as may be required by the Administrative Agent or Section 8.13 in the
event such Subsidiary is acquired pursuant to a Permitted Acquisition), (ii) if
a Domestic Subsidiary, all of the capital stock of such new Domestic Subsidiary
owned by any U.S. Credit Party is pledged pursuant to the U.S. Pledge and
Security Agreement and the certificates representing such stock, together with
stock powers duly executed in blank, are delivered to the Collateral Agent,
(iii) if a U.K. Subsidiary, all of the capital stock of such new U.K. Subsidiary
owned by any U.K. Credit Party is pledged pursuant
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to the U.K. Charge Over Shares and Notes and the certificates representing such
stock, together with stock powers duly executed in blank, are delivered to the
Collateral Agent, (iv) if a Foreign Subsidiary other than a U.K. Subsidiary, all
of the capital stock of such new Foreign Subsidiary owned by any Credit Party
(except that not more than 65% of the outstanding voting stock of any Foreign
Subsidiary need be so pledged pursuant to the U.S. Pledge and Security
Agreement, except in the circumstances contemplated by Section 8.15) is pledged
pursuant to the relevant Pledge Agreement and the certificates representing such
stock, together with stock powers duly executed in blank, are delivered to the
Collateral Agent, (v) in the case of a new Domestic Subsidiary, such new
Domestic Subsidiary executes a counterpart of the Non-Borrower U.S. Subsidiaries
Guaranty (in the event such Domestic Subsidiary does not become a U.S. Borrower
pursuant to Section 6) or complies with the requirements of Section 6 and
becomes a U.S. Borrower hereunder and (in all cases) executes a counterpart of
the U.S. Pledge and Security Agreement and (vi) in the case of a U.K.
Subsidiary, such new U.K. Subsidiary executes a counterpart of the Non-Borrower
U.K. Subsidiaries Guaranty (in the event such U.K. Subsidiary does not become a
U.K. Borrower pursuant to Section 6) or complies with the requirements of
Section 6 and becomes a U.K. Borrower hereunder and (in all cases) executes a
counterpart of the U.K. Charge Over Shares and Notes and, to the extent required
pursuant to Section 8.15, executes a counterpart of the Non-Borrower U.S.
Subsidiaries Guaranty and the U.S. Pledge Agreement, and (v) in the case of any
Foreign Subsidiary other than a U.K. Subsidiary, such new Foreign Subsidiary as
soon as reasonably practicable executes a counterpart of the Non-Borrower U.S.
Subsidiaries Guaranty and the U.S. Pledge Agreement to the extent required
pursuant to Section 8.15. In addition, each new Wholly-Owned Subsidiary created
or acquired after the Restatement Effective Date shall execute and deliver, or
cause to be executed and delivered, all other relevant documentation of the type
described in Section 5.01 as such new Wholly-Owned Subsidiary would have had to
deliver if such new Wholly-Owned Subsidiary were a U.S. Borrower, Non-Borrower
U.S. Subsidiary Guarantor, U.K. Borrower or U.K. Subsidiary Guarantor, as the
case may be, on the Restatement Effective Date. Notwithstanding anything to the
contrary contained above, Two-Step Permitted Acquisitions may be effected in
accordance with the definition thereof and the provisions of Section 8.13, in
which event upon the consummation of the first step of the respective Two-Step
Permitted Acquisition, all actions required by clauses (y)(i) and (ii) or (iii),
as applicable, of the second preceding sentence shall be taken, with the
remaining actions required to be taken as described above to be taken at such
time as the respective Target becomes a Wholly-Owned Subsidiary of Holdings.
Notwithstanding anything to the contrary contained in this Section 9.11 or
elsewhere in this Agreement, the Master Trust may, at any time or from time to
time, in accordance with the operation of the provisions of the Receivables
Facility, be or become (or thereafter cease to be) a Subsidiary of the
Receivables Subsidiary (and, therefore, of BFPH), and any such occurrence shall
not constitute a violation of any covenant contained in this Agreement
(including, without limitation, this Section 9.11) and in no event shall the
Master Trust be required to become a Subsidiary Guarantor or a Credit Party.
If, as contemplated by the immediately preceding sentence, the Master Trust is
at any time a Subsidiary of the Receivables Subsidiary, the actions taken by the
Master Trust in accordance with the requirements of the Receivables Facility
shall likewise not constitute a violation of any covenant contained in this
Agreement.
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9.12 LIMITATION ON ISSUANCE OF CAPITAL STOCK. (a) Holdings shall
not issue (i) any Preferred Stock (other than Qualified Preferred Stock issued
pursuant to clause (c) below and any Preferred Stock issued pursuant to the
Holdings Rights Plan) or (ii) any redeemable common stock unless, in either
case, all terms thereof are satisfactory to the Required Banks in their sole
discretion.
(b) No Subsidiary of Holdings shall issue, or permit any of its
Subsidiaries to issue, any capital stock (including by way of sales of treasury
stock) or any options or warrants to purchase, or securities convertible into,
capital stock, except (i) for transfers and replacements of then outstanding
shares of capital stock, (ii) for stock splits, stock dividends and additional
issuances which do not decrease the percentage ownership of Holdings or any of
its Subsidiaries in any class of the capital stock of such Subsidiaries, (iii)
to qualify directors to the extent required by applicable law, (iv) Subsidiaries
formed after the Restatement Effective Date pursuant to Section 9.11 may issue
capital stock to Holdings, or such Subsidiary of Holdings which is to own such
stock in accordance with the requirements of Section 9.11 and (v) BFPH may issue
common stock to Holdings, to the extent same is pledged (and delivered for
pledge) pursuant to the U.S. Pledge and Security Agreement.
(c) Holdings may issue Qualified Preferred Stock so long as (v) no
Default or Event of Default shall exist at the time of any such issuance or
immediately after giving effect thereto, (w) with respect to each issue of
Qualified Preferred Stock, the gross cash proceeds therefrom (or in the case of
Qualified Preferred Stock directly issued as consideration for a Permitted
Acquisition, the fair market value thereof (as determined in good faith by
Holdings or BFPH) of the assets received therefor) shall be at least equal to
the liquidation preference thereof at the time of issuance, (x) the aggregate
liquidation preference of all Qualified Preferred Stock issued pursuant to this
Section 9.12(c) shall not exceed $100,000,000, (y) calculations are made by
Holdings of compliance with the covenants contained in Sections 9.08 an 9.09 for
the Calculation Period most recently ended prior to the date of the respective
issuance of Qualified Preferred Stock, on a PRO FORMA Basis after giving effect
to the respective issuance of Qualified Preferred Stock, and such calculations
shall show that such financial covenants would have been complied with if such
issuance of Qualified Preferred Stock had been consummated on the first day of
the respective Calculation Period and (z) Holdings furnishes to the
Administrative Agent for distribution to each of the Banks an officer's
certificate by the chief financial officer of Holdings certifying to the best of
his knowledge as to compliance with the requirements of this Section 9.12(c) and
containing the calculations required by the preceding clause (y).
(d) Any Subsidiary of Holdings acquired pursuant to a Permitted
Acquisition may have, and continue to have, outstanding Permitted Acquired
Subsidiary Preferred Stock, so long as the aggregate amount (determined on the
basis of the liquidation preference of each issue of outstanding Permitted
Acquired Subsidiary Preferred Stock) of all outstanding Permitted Acquired
Subsidiary Preferred Stock at any time outstanding does not exceed $75,000,000,
and so long as (x) the requirements of Section 8.13 are met with respect to such
Permitted Acquisition and (y) no violation of Section 9.04 occurs, in each case,
as a result of the assumption of any Permitted Acquired Subsidiary Preferred
Stock.
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9.13 BUSINESS. (a) Holdings will not, and will not permit any of
Subsidiaries (other than the Receivables Subsidiary) to, engage (directly or
indirectly) in any business other than a Permitted Business. Holdings will not
permit any of its Subsidiaries (other than BFPH) to create or own any
Unrestricted Subsidiaries. No Unrestricted Subsidiary shall engage (directly or
indirectly) in any business other than the Media Business.
(b) Holdings shall cause each of Treasure Chest of Nevada and RGP to
engage in no significant business and at no time to have assets with an
aggregate value in excess of $50,000.
(c) Holdings shall cause the Receivables Subsidiary to comply with
the requirements of Section 9.15(a).
(d) Notwithstanding anything to the contrary contained in Section
9.13(a), (x)(i) Treasure Chest, Webcraft and BF Digital shall be permitted to
own the Special Unrestricted Leasing Subsidiary and (ii) the Special
Unrestricted Leasing Subsidiary shall not be required to engage in a Media
Business, so long as the Special Unrestricted Leasing Subsidiary does not engage
(directly or indirectly) in any business other than (1) the ownership of all of
the equity interests in the Special Purpose Leasing Trusts, (2) entering into
and performing its obligations under the Leverage Lease Documents and (3)
activities incidental thereto and to (I) the maintenance of its existence in
compliance with applicable law and (II) related legal, tax and accounting
matters and (y) no Special Purpose Leasing Trust shall be required to engage in
a Media Business, so long as such Special Purpose Leasing Trust does not engage
(directly or indirectly) in any business other than the entering into, and
performance of its obligations under, the Leverage Lease Documents, and
activities incidental thereto and to (I) the maintenance of its existence in
compliance with applicable law and (II) related legal, tax and accounting
matters.
9.14 LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES. (a)
Holdings will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective,
except as set forth on Schedule X, any encumbrance or restriction on the ability
of any such Subsidiary to (x) pay Dividends or make any other distributions on
its capital stock or any other interest or participation in its profits owned by
Holdings or any of its Subsidiaries or pay any Indebtedness owed to Holdings or
any of its Subsidiaries, (y) make loans or advances to Holdings or any of its
Subsidiaries or (z) transfer any of its properties or assets to Holdings or any
of its Subsidiaries, except for such encumbrances or restrictions existing under
or by reason of (i) applicable law, (ii) this Agreement and the other Credit
Documents, (iii) the provisions contained in the Existing Indebtedness, (iv)
restrictions existing under Permitted Debt hereafter incurred or issued in
accordance with the relevant definitions contained herein, (v) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of Holdings or any of its Subsidiaries, (vi) customary
provisions restricting assignment of any licensing agreement entered into by
Holdings or any of its Subsidiaries in the ordinary course of business, (vii)
restrictions imposed by any holder of a Permitted Lien on the transferability of
any asset subject to such Permitted Lien, (viii) restrictions on the Receivables
Subsidiary, and with respect to the Receivables Facility Assets, set forth in
the Receivables Documents and (ix) any Subsidiary which is the issuer of
Permitted Acquired Debt or Permitted Acquired Subsidiary Preferred Stock may be
subject to the restrictions contained therein (so long
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as same were not made worse, from the perspective of Holdings, than the
restrictions as in effect immediately prior to the acquisition of the respective
Subsidiary pursuant to a Permitted Acquisition).
(b) Holdings will not permit any Unrestricted Subsidiary to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any restriction whatsoever on the operations of Holdings and/or its
Subsidiaries.
9.15 LIMITATION ON RECEIVABLES SUBSIDIARY AND RECEIVABLES FACILITY.
The Receivables Subsidiary shall engage in no business activities other than the
purchase, acquisition, sale and pledge of receivables (or interests therein)
pursuant to the Receivables Facility and borrowings thereunder and any business
activities reasonably incidental thereto, all in accordance with the Receivables
Facility, and shall have no assets or liabilities, other than promissory notes
contributed by Treasure Chest in accordance with Section 9.05(xv) and
receivables purchased from or contributed by the Receivables Sellers from time
to time, cash collections therefrom, any investments of such cash collections
and other assets and liabilities reasonably incidental to the foregoing
activities, and shall in no event purchase any receivables from an Unrestricted
Subsidiary.
9.15 DESIGNATED SENIOR DEBT. Neither Holdings nor BFPH shall
designate any Indebtedness (except Indebtedness pursuant to this Agreement) as
Designated Senior Debt (as defined in the 8-7/8% Senior Subordinated Notes
Indenture, in the Convertible Subordianted Debenture Indenture or, on and after
the execution and delivery thereof, in any agreement relating to Permitted
Subordinated Indebtedness and Permitted Refinancing Indebtedness).
SECTION 10. EVENTS OF DEFAULT. Upon the occurrence of any of the
following specified events (each, an "Event of Default"):
10.01 PAYMENTS. Any Borrower shall (i) default in the payment when
due of any principal of any Loan or any Note, (ii) default in the payment of any
Unpaid Drawing for three or more Business Days after the date the respective
Drawing was made or, if no Default or Event of Default exists pursuant to
Section 10.05, for three or more Business Days after the receipt by such
Borrower of notice of the respective Drawing by the Administrative Agent or the
Issuing Bank or (iii) default, and such default shall continue unremedied for
three or more Business Days (or five or more Business Days, in the case of the
payment of Fees), in the payment when due of any interest on any Loan or Note or
Unpaid Drawing, or any Fees or any other amounts owing hereunder or under any
other Credit Document; or
10.02 REPRESENTATIONS, ETC. Any representation, warranty or
statement made by any Credit Party herein or in any other Credit Document or in
any certificate delivered pursuant hereto or thereto shall prove to be untrue in
any material respect on the date as of which made or deemed made; or
10.03 COVENANTS. Any Credit Agreement Party shall (i) default in the
due performance or observance by it of any term, covenant or agreement contained
in Section 8.01(g)(i), 8.08, 8.12, 8.13 or 9 or (ii) default in the due
performance or observance by it of any other term,
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covenant or agreement contained in this Agreement and such default shall
continue unremedied for a period of 30 days after written notice to Holdings by
the Administrative Agent or any Bank; or
10.04 DEFAULT UNDER OTHER AGREEMENTS. (i) Holdings or any of its
Subsidiaries shall (x) default in any payment of any Indebtedness (other than
the Obligations) beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created or (y) default in the
observance or performance of any agreement or condition relating to any
Indebtedness (other than the Obligations) or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause (determined
without regard to whether any notice is required), any such Indebtedness to
become due prior to its stated maturity, or (ii) any Indebtedness (other than
the Obligations) of Holdings or any of its Subsidiaries 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, PROVIDED that it
shall not be a Default or Event of Default under this Section 10.04 unless the
aggregate principal amount of all Indebtedness as described in preceding clauses
(i) and (ii) is at least $7,500,000; or
10.05 BANKRUPTCY, ETC. Holdings or any of its Subsidiaries
(excluding Insignificant Subsidiaries) shall commence a voluntary case
concerning itself under Title 11 of the United States Code entitled
"Bankruptcy," as now or hereafter in effect, or any successor thereto (the
"Bankruptcy Code") or shall consent to the filing of any petition against it
under any such law; or an involuntary case is commenced against Holdings or any
of its Subsidiaries (excluding Insignificant Subsidiaries) and the petition is
not controverted within 15 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
Holdings or any of its Subsidiaries (excluding Insignificant Subsidiaries), or
Holdings or any of its Subsidiaries (excluding Insignificant Subsidiaries)
commences any other proceeding under any reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency or liquidation or similar
law of any jurisdiction whether now or hereafter in effect relating to Holdings
or any of its Subsidiaries (excluding Insignificant Subsidiaries), or there is
commenced against Holdings or any of its Subsidiaries (excluding Insignificant
Subsidiaries) any such proceeding which remains undismissed for a period of 60
days, or Holdings or any of its Subsidiaries (excluding Insignificant
Subsidiaries) is adjudicated insolvent or bankrupt; or any order of relief or
other order approving any such case or proceeding is entered; or Holdings or any
of its Subsidiaries (excluding Insignificant Subsidiaries) suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or
Holdings or any of its Subsidiaries (excluding Insignificant Subsidiaries) makes
a general assignment for the benefit of creditors; or any corporate action is
taken by Holdings or any of its Subsidiaries (excluding Insignificant
Subsidiaries) for the purpose of effecting any of the foregoing; or
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10.06 ERISA. (a) Any Plan or Multiemployer Plan shall fail to
satisfy the minimum funding standard required for any plan year or part thereof
or a waiver of such standard or extension of any amortization period is sought
or granted under Section 412 of the Code, any Plan shall have had or is likely
to have a trustee appointed to administer such Plan under Section 4042 of ERISA,
any Plan or Multiemployer Plan is, shall have been or is likely to be terminated
or to be the subject of termination proceedings under ERISA, any Plan shall have
an Unfunded Current Liability, a contribution required to be made by Holdings or
a Subsidiary or an ERISA Affiliate to a Plan or Multiemployer Plan or a Foreign
Pension Plan has not been timely made, Holdings or any Subsidiary of Holdings or
any ERISA Affiliate has incurred or is likely to incur a liability to or on
account of a Plan or Multiemployer Plan under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971,
4975 or 4980 of the Code, or Holdings or any Subsidiary of Holdings has incurred
or is likely to incur liabilities pursuant to one or more employee welfare
benefit plans (as defined in Section 3(1) of ERISA) that provide benefits to
retired employees or other former employees (other than as required by Section
601 of ERISA) or pursuant to any employee pension benefit plan (as defined in
Section 3(2) of ERISA) or Foreign Pension Plan; (b) there shall result from any
such event or events the imposition of a lien, the granting of a security
interest, or a liability or a material risk of incurring a liability; and (c)
which lien, security interest or liability, individually, and/or in the
aggregate, in the reasonable opinion of the Required Banks, will have a Material
Adverse Effect.
10.07 SECURITY DOCUMENTS. At any time after the execution and
delivery thereof, any of the Security Documents shall cease to be in full force
and effect, or shall cease to give the Collateral Agent for the benefit of the
Secured Creditors the Liens, rights, powers and privileges purported to be
created thereby (including, without limitation, a perfected security interest
in, and Lien on, all of the Collateral), in favor of the Collateral Agent,
superior to and prior to the rights of all third Persons (except as permitted by
Section 9.01), and subject to no other Liens (except as permitted by Section
9.01), or any Credit Party shall default in the due performance or observance of
any term, covenant or agreement on its part to be performed or observed pursuant
to any of the Security Documents and such default shall continue beyond any
grace period specifically applicable thereto pursuant to the terms of such
Security Document; or
10.08 GUARANTEES. Any Guarantee or any material provision thereof
shall cease to be in full force or effect as to the relevant Guarantor, or any
Guarantor or Person acting by or on behalf of such Guarantor shall deny or
disaffirm such Guarantor's obligations under the relevant Guarantee, or any
Guarantor shall default in the due performance or observance of any material
term, covenant or agreement on its part to be performed or observed pursuant to
the relevant Guarantee; or
10.09 JUDGMENTS. One or more judgments or decrees shall be entered
against Holdings or any of its Subsidiaries involving in the aggregate for
Holdings and its Subsidiaries a liability (not paid or to the extent not covered
by a reputable and solvent insurance company or not paid) and such judgments and
decrees either shall be final and non-appealable or shall not be vacated,
discharged or stayed or bonded pending appeal for any period of 60 consecutive
days, and the aggregate amount of all such judgments exceeds $7,500,000; or
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10.10 CHANGE OF CONTROL. A Change of Control shall occur; or
10.11 RECEIVABLES FACILITY. Any early amortization event or any
event permitting any Receivables Purchaser or Receivables Purchasers to effect
an early termination of the Receivables Facility (or a portion thereof) shall
have occurred and be continuing (after giving effect to any legally valid
written waivers of such events adopted by the relevant Receivables Purchasers);
or
10.12 OPERATIONS OF BF TRUST. BF Trust shall engage in any business
other than its holding and servicing of Convertible Subordinated Debentures and
its issuance and servicing of Convertible QUIPS, or engage in any activities
other than those that are incidental or related to the foregoing;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Banks, shall by written notice to Holdings, take any or all of the
following actions, without prejudice to the rights of the Administrative Agent,
any Bank or the holder of any Note to enforce its claims against any Credit
Party (PROVIDED that, if an Event of Default specified in Section 10.05 shall
occur with respect to any Parent or any Borrower, the result of which would
occur upon the giving of written notice by the Administrative Agent to the
Borrowers as specified in clauses (i) and (ii) below shall occur automatically
without the giving of any such notice): (i) declare the Total Commitment
terminated, whereupon the Commitment of each Bank shall forthwith terminate
immediately and any Commitment Commission and other Fees shall forthwith become
due and payable without any other notice of any kind; (ii) declare the principal
of and any accrued interest in respect of all Loans and the Notes and all
Obligations owing hereunder and thereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each Credit Party; (iii)
terminate any Letter of Credit, which may be terminated, in accordance with its
terms; (iv) direct the U.S. Borrowers to pay (and the U.S. Borrowers jointly and
severally agree that upon receipt of such notice, or upon the occurrence of an
Event of Default specified in Section 10.05 with respect to any Borrower, they
will pay) to the Administrative Agent at the appropriate Payment Office such
additional amount of cash, to be held as security by the Administrative Agent,
as is equal to the aggregate Stated Amount of all U.S. Letters of Credit issued
for the account of the U.S. Borrowers and then outstanding; (v) direct the U.K.
Borrowers to pay (and the U.K. Borrowers jointly and severally agree that upon
receipt of such notice, or upon the occurrence of an Event of Default specified
in Section 10.05 with respect to any Borrower, they will pay) to the
Administrative Agent at the appropriate Payment Office such additional amount of
cash, to be held as security by the Administrative Agent, as is equal to the
aggregate Stated Amount of all U.K. Letters of Credit issued for the account of
the U.K. Borrowers and then outstanding; (vi) enforce, as Collateral Agent, all
of the Liens and security interests created pursuant to the Security Documents;
and (vii) apply any cash collateral held for the benefit of the Banks pursuant
to Section 4.02 to repay outstanding Obligations of the U.S. Borrowers or the
U.K. Borrowers, as the case may be.
SECTION 11. Definitions and Accounting Terms.
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11.01 DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Account Party" shall mean (x) in the case of each U.S. Letter of
Credit, all of the U.S. Borrowers, as joint and several account parties with
respect to such U.S. Letter of Credit and (y) in the case of each U.K. Letter of
Credit, all of the U.K. Borrowers, as joint and several account parties with
respect to such U.K. Letter of Credit.
"Acquired Business" shall mean any Person or business, division or
product line acquired pursuant to a Permitted Acquisition.
"Acquired EBITDA" shall mean, for any Acquired Business for any
period, the Consolidated EBITDA as determined for such Acquired Business on a
basis substantially the same (with necessary reference changes) as provided in
the definition of Consolidated EBITDA contained herein, except that (i) all
references therein and in the component definitions used in determining
Consolidated EBITDA to "Holdings and its Subsidiaries" shall be deemed to be
references to the respective Acquired Business and (ii) the adjustments
contained in clauses (x), (y) and (z) of the definition of Consolidated EBITDA
shall not be made.
"Administrative Agent" shall mean Bankers Trust Company, in its
capacity as Administrative Agent for the Banks hereunder, and shall include any
successor to the Administrative Agent appointed pursuant to Section 12.09.
"Affiliate" shall mean, with respect to any Person, any other Person
(including, for purposes of Section 9.06 only, all directors, officers and
partners of such Person) directly or indirectly controlling, controlled by, or
under direct or indirect common control with, such Person; PROVIDED, HOWEVER,
that for purposes of Section 9.06, (x) subject to following clause (y), an
Affiliate of Holdings shall include any Person that directly or indirectly owns
more than 10% of any class of the capital stock of Holdings and any officer or
director of Holdings or any such Person and (y) any commercial bank, investment
bank, investment company or similar financial institution holding capital stock
of Holdings for the account of its customers shall not constitute an Affiliate
of Holdings or its Subsidiaries as a result of such holdings for the account of
its customers. A Person shall be deemed to control another Person if such
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such other Person, whether through
the ownership of voting securities, by contract or otherwise.
"Agent" shall mean, except as otherwise provided in Section 12, either
or both of the Administrative Agent and Documentation Agent.
"Aggregate Exposure" at any time shall mean the sum of (i) the
aggregate principal amount of all Revolving Loans then outstanding from the
Banks (for this purpose (x) at all times prior to the occurrence of a Sharing
Event and the automatic conversion of Sterling Revolving Loans pursuant to
Section 1.15, using the Dollar Equivalent of each Sterling Revolving Loan then
outstanding and (y) at all times after the occurrence of any Sharing Event,
giving effect to the
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conversions of Dollar obligations rquired by Section 1.15), (ii) the aggregate
amount of all Letter of Credit Outstandings at such time and (iii) the aggregate
principal amount of all Swingline Loans then outstanding (for this purpose (x)
at all times prior to the occurrence of a Sharing Event and the automatic
conversion of Sterling Swingline Loans pursuant to Section 1.15, using the
Dollar Equivalent of each Sterling Swingline Loan then outstanding and (y) at
all times after the occurrence of any Sharing Event, giving effect to the
conversions of Dollar obligations rquired by Section 1.15).
"Aggregate Non-U.K. Exposure" at any time shall mean the aggregate
principal amount of all Dollar Loans (excluding any then outstanding Excess
Dollar Swingline Loans) then outstanding and the aggregate amount of all U.S.
Letter of Credit Outstandings (exclusive of that portion of the U.S. Letter of
Credit Outstandings included as part of the Aggregate U.K. Exposure pursuant to
change (iv) of the definition thereof) at such time.
"Aggregate U.K. Exposure" at any time shall mean the sum of (i) the
aggregate principal amount of all Sterling Revolving Loans then outstanding (for
this purpose, using the Dollar Equivalent thereof), (ii) the aggregate amount of
all U.K. Letter of Credit Outstandings at such time, (iii) the aggregate
principal amount of all Sterling Swingline Loans (for this purpose, using the
Dollar Equivalent of each Sterling Swingline Loan then outstanding), (iv) the
aggregate amount of U.S. Letter of Credit Outstandings with respect to which the
L/C Participation Percentages of the various Banks have been determined based on
their U.K. Percentages in accordance with the first proviso to clause (x) of
Section 2.04(a) and (v) the aggregate principal amount of all then outstanding
Excess Dollar Swingline Loans.
"Agreement" shall mean this Amended and Restated Credit Agreement, as
modified, supplemented, amended, restated, extended, renewed or replaced from
time to time.
"Applicable Currency" shall mean Dollars or Pounds Sterling, as the
case may be.
"Applicable Margin" initially shall mean (subject to any qualification
for different rates pursuant to the immediately succeeding sentence on the
Restatement Effective Date) a percentage equal to (i) in the case of Base Rate
Loans, 0.750%, (ii) in the case of Eurodollar Loans, 1.750%, (iii) in the case
of the Commitment Commission, 0.375%, (iv) in the case of Letter of Credit Fees,
1.750% and (v) in the case of Sterling Loans, 1.750%. From and after each day
of delivery (including the Restatement Effective Date) of any certificate
delivered in accordance with the following sentence indicating an entitlement to
a different margin than that described in the immediately preceding sentence
(each, a "Start Date") to and including the applicable End Date described below,
the Applicable Margin shall be that set forth below opposite the Leverage Ratio
indicated to have been achieved in any certificate delivered in accordance with
the following sentence:
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<TABLE>
<CAPTION>
Eurodollar Base Rate Commitment
Leverage Loan Loan Sterling Commission Letter of Credit
Ratio Margin Margin Loan Margin Fee Fee
- -------- ---------- --------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
Greater than 3.75:1
but less than or equal to 4.00:1 1.500% 0.500% 1.500% 0.375% 1.500%
Greater than 3.25:1
but less than or equal to 3.75:1 1.250% 0.250% 1.250% 0.375% 1.250%
Greater than 2.75:1
but less than or equal to 3.25:1 1.000% 0.000% 1.000% 0.250% 1.000%
Greater than 2.25:1
but less than or equal to 2.75:1 0.750% 0.000% 0.750% 0.250% 0.750%
Less than or equal to 2.25:1 0.500% 0.000% 0.500% 0.200% 0.500%
</TABLE>
The Leverage Ratio shall be determined based on the delivery of a certificate of
Holdings by an Authorized Representative of Holdings to the Administrative Agent
(with a copy to be sent by the Administrative Agent to each Bank), within 50
days of the last day of any fiscal quarter of Holdings (or a certificate of
Holding or BFPH on or prior to the Restatement Effective Date in the case of the
Applicable Margin initially established), which certificate shall set forth the
calculation of the Leverage Ratio as at the last day of the Test Period ended
immediately prior to the relevant Start Date and the Applicable Margins which
shall be thereafter applicable (until same is changed or ceases to apply in
accordance with the following sentences); PROVIDED that at the time of the
consummation of any Permitted Acquisition (including at the time of each step
thereof in the case of a Two-Step Permitted Acquisition) or any Tested Asset
Sale or any issuance of Permitted Debt or Qualified Preferred Stock, an
Authorized Representative of Holdings shall deliver to the Administrative Agent
a certificate setting forth the calculation of the Leverage Ratio on a PRO FORMA
Basis as of the last day of the last Calculation Period ended prior to the date
on which such Permitted Acquisition or Tested Asset Sale is consummated or such
Permitted Debt or Qualified Preferred Stock is issued for which financial
statements have been made available (or were required to be made available)
pursuant to Section 8.01(b) or (c), as the case may be, and the date of such
consummation shall be deemed to be a Start Date and the Applicable Margins which
shall be thereafter applicable (until same are changed or cease to apply in
accordance with the following sentence) shall be based upon the Leverage Ratio
as so calculated. The Applicable Margins so determined shall apply, except as
set forth in the succeeding sentence, from the Start Date to the earlier of (x)
the date on which the next certificate is delivered to the Administrative Agent,
(y) the date on which the next Permitted Acquisition (or next step of a Two-Step
Permitted Acquisition) or Tested Asset Sale is consummated or Permitted Debt or
Qualified Preferred Stock is issued or (z) the date which is 50 days following
the last day of the Test Period in which the previous Start Date occurred (the
"End Date"), at which time, if no certificate has been delivered to the
Administrative Agent indicating an entitlement to
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Applicable Margins other than those described in the first sentence of this
definition (and thus commencing a new Start Date), the Applicable Margins shall
be those described in the first sentence of this definition. Notwithstanding
anything to the contrary contained above in this definition, the Applicable
Margins shall be those described in the first sentence of this definition at all
times during which there shall exist any Event of Default.
"Asset Sale" shall mean any sale, transfer or other disposition by any
Parent, any Holdings Acquired Subsidiary, any Borrower, any Subsidiary Guarantor
or any of their respective Subsidiaries to any Person other than any Parent, any
Borrower, any Holdings Acquired Subsidiary or any Subsidiary Guarantor of any
asset, the Net Sale Proceeds of which exceeds $10,000,000.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit K (appropriately
completed).
"Attributed Receivables Facility Indebtedness" at any time shall mean
the principal amount of Indebtedness which would be outstanding at such time
under the Receivables Facility if same were structured as a secured lending
agreement rather than a purchase agreement; PROVIDED that such principal amount
shall be net of amounts of cash and Cash Equivalents on deposit in any principal
funding or equalization account established pursuant to the Receivables Facility
which, if the Receivables Facility were structured as a secured lending
arrangement rather than as a facility for the sale of Receivables Facility
Assets, would collateralize the Indebtedness issued thereunder.
"Authorized Representative" shall mean, with respect to (i) delivering
Notices of Borrowing, Notices of Conversion, Letter of Credit Requests and
similar notices, any person or persons that has or have been authorized by the
board of directors of any Borrower to deliver such notices pursuant to this
Agreement and that has or have appropriate signature cards on file with the
Administrative Agent, BTCo and each Issuing Bank; (ii) delivering financial
information and officer's certificates pursuant to this Agreement, the chief
financial officer, any treasurer or other financial officer of Holdings or BFPH
or any financial officer of Treasure Chest, Webcraft, BF Digital, BFL, Olwen,
Troypeak, Pismo, Broadcast or BFDSL designated by the chief financial officer of
Holdings and (iii) any other matter in connection with this Agreement or any
other Credit Document, any officer (or a person or persons so designated by any
two officers) of Holdings.
"Available Basket Amount" shall mean, on any date of determination, an
amount equal to the sum of (i) 50% of all net proceeds (taking the amount of
cash and the fair market value of any non-cash assets, net of costs incurred in
connection therewith) received by Holdings from issuances of Holdings Common
Stock by Holdings after the Restatement Effective Date, PLUS (ii) $25,000,000,
PLUS or MINUS (iii) an amount equal to the Consolidated Cumulative 25% Net
Income Amount on such date MINUS (iv) the aggregate amount of consideration paid
by Holdings and its Subsidiaries (including the amount of any Indebtedness
assumed) in connection with acquisitions effected pursuant to Section 9.02(vii)
after the Original Effective Date, MINUS (v) the aggregate amount of Investments
made pursuant to Section 9.05(vii) after the Original
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Effective Date, MINUS (vi) any Dividend payments made by BFPH and any Holdings
Acquired Subsidiary pursuant to Section 9.03(v) after the Restatement Effective
Date PLUS (vii) the amount of any increase to the Available Basket Amount made
after the Original Effective Date in accordance with the provisions of Section
9.05(vii). In connection with the foregoing, it is understood that the
Available Basket Amount shall not be reduced as a result of the payment of
consideration owing in connection with the acquisition of a Person which has
ownership interests in one or more entities which are not Wholly-Owned
Subsidiaries of such Person pursuant to a Permitted Acquisition effected in
accordance with relevant requirements of this Agreement (although the Available
Basket Amount would be affected to the extent additional Investments are made in
the respective non-wholly-owned entity pursuant to Section 9.05(vii)).
"Bank" shall mean each financial institution with a Commitment listed
on Schedule I-A (as amended from time to time), as well as any Person which
becomes a "Bank" hereunder pursuant to Section 1.13 and/or 13.04(b). Unless the
context otherwise requires, each reference in this Agreement to a Bank includes
each U.K. Bank and, if the reference is to a specific Bank which has a
Commitment hereunder, shall include references to any Affiliate of any such Bank
which is acting as a U.K. Bank.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing (including
any Mandatory Borrowing) required to be made available by it in accordance with
the terms of this Agreement or to fund its portion of any unreimbursed payment
under Section 2.03 or (ii) a Bank having notified in writing Holdings, any
Borrower and/or the Administrative Agent that it does not intend to comply with
its obligations under Section 1.01(a) or Section 2 in circumstances which would
be contrary to the terms of this Agreement.
"Bankruptcy Code" shall have the meaning provided in Section 10.05.
"Base Rate" at any time shall mean the higher of (i) 1/2 of 1% in
excess of the Federal Funds Rate and (ii) the Prime Lending Rate at such time.
"Base Rate Loan" shall mean (i) each Dollar Swingline Loan, (ii) each
Dollar Revolving Loan designated or deemed designated as such by any U.S.
Borrower at the time of the incurrence thereof or conversion thereto and (iii)
each outstanding Loan after the conversion thereof pursuant to Section 1.15.
"Benefitted Bank" shall have the meaning provided in Section 13.06(b).
"BFDSL" shall have the meaning provided in the first paragraph of this
Agreement.
"BF Digital" shall have the meaning provided in the first paragraph of
this Agreement.
"BF Trust" shall mean Big Flower Trust I, a statutory business trust
formed under the laws of Delaware.
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"BFL" shall have the meaning provided in the first paragraph of this
Agreement.
"BFPH" shall have the meaning provided in the first paragraph of this
Agreement.
"BFPH Common Stock" shall have the meaning provided in Section
7.14(b).
"Borrowers" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean the borrowing of one Type of Loan from all the
Banks (or from BTCo, in the case of Swingline Loans) on a given date (or
resulting from a conversion or conversions on such date) having in the case of
Euro Rate Loans the same Interest Period, PROVIDED that Base Rate Loans incurred
pursuant to Section 1.10(b) shall be considered part of the related Borrowing of
Eurodollar Loans.
"Broadcast" shall have the meaning provided in the first paragraph of
this Agreement.
"BTCo" shall mean Bankers Trust Company in its individual capacity.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day except Saturday, Sunday and any day which shall be
in New York City a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Euro Rate Loans and U.K Letters of Credit, any day
which is a Business Day described in clause (i) above and which is also a day
for trading by and between banks in the London interbank market and which shall
not be a legal holiday or a day on which banking institutions are authorized or
required by law or other government action to close in the city where the
applicable Payment Office of the Administrative Agent is located in respect of
Euro Rate Loans or U.K. Letters of Credit, as the case may be.
"Calculation Period" shall have the meaning provided in Section 8.13.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which are required to be capitalized in accordance
with GAAP.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations which, under GAAP, are required to be capitalized on the books of
such Person, in each case taken at the amount thereof accounted for as
indebtedness in accordance with GAAP.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued
or directly and fully guaranteed or insured by the United States or any agency
or instrumentality thereof (PROVIDED that the full faith and credit of the
United States is pledged in support thereof) having maturities of not more than
one year from the date of acquisition, (ii) time deposits and certificates of
deposit of any commercial bank having, or which is the principal banking
subsidiary of a bank holding company organized under the laws of the United
States, any State
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thereof, the District of Columbia or any foreign jurisdiction having capital,
surplus and undivided profits aggregating in excess of $200,000,000, with
maturities of not more than one year from the date of acquisition by such
Person, (iii) repurchase obligations with a term of not more than 90 days for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in clause (ii) above, (iv)
commercial paper issued by any Person incorporated in the United States rated at
least A-1 or the equivalent thereof by S&P's or at least P-1 or the equivalent
thereof by Moody's and in each case maturing not more than one year after the
date of acquisition by such Person, (v) investments in money market funds
substantially all of whose assets are comprised of securities of the types
described in clauses (i) through (iv) above and (vi) demand deposit accounts
maintained in the ordinary course of business.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. Section 9601 ET SEQ.
"Change of Control" shall mean (i) at any time a "Change of Control"
under, and as defined in, the Convertible Subordinated Debenture Indenture, the
Convertible QUIPS Documents, any Existing Indebtedness, any Permitted
Refinancing Indebtedness, any Permitted Subordinated Debt or Qualified Preferred
Stock, in each case to the extent then outstanding, shall have occurred; or (ii)
at any time and for any reason whatsoever (a) any "Person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act), excluding the
Permitted Holders, is or becomes the "beneficial owner" (as defined in Rules
13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of 30% or
more of the outstanding Voting Stock of Holdings (or 40% or more of the
outstanding Voting Stock of Holdings, to the extent (and only to the extent)
such "Person" or "group" "beneficially owning" 30% or more of such Voting Stock
received all (to the extent in excess of 5% of the outstanding Voting Stock of
Holdings) of the Voting Stock so owned by such "Person" or "group" in connection
with an acquisition approved by Continuing Directors in advance thereof) or (b)
the Board of Directors of Holdings shall cease to consist of a majority of
Continuing Directors or (c) Holdings shall cease to own 100% on a fully diluted
basis of the shares of outstanding capital stock of BFPH or (d) Holdings shall
at any time cease to own, directly or indirectly, 100% of the capital stock of
each Borrower or (e) at any time prior to a termination of BF Trust and the
distribution of Convertible Subordinated Debentures as contemplated by the
Convertible QUIPS Private Placement Memorandum, Holdings shall cease to own 100%
of the outstanding common securities of BF Trust.
"Co-Agents" shall have the meaning provided in the first paragraph of
this Agreement.
"Co-Borrower" shall have the meaning provided in Section 17.01.
"Co-Borrower Obligations" shall have the meaning provided in Section
17.01.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and the rulings issued thereunder.
Section references
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to the Code are to the Code, as in effect at the date of this Agreement, and to
any subsequent provision of the Code, amendatory thereof, supplemental thereto
or substituted therefor.
"Collateral" shall mean and include all the capital stock, shares and
other equity interests, all of the intercompany notes and all other collateral
(including proceeds of the foregoing) pledged pursuant to the Pledge Agreements.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors pursuant to the Security Documents.
"Columbine" shall mean Columbine JDS Systems, Inc., a Delaware
corporation and a Wholly-Owned Subsidiary of Holdings.
"Commitment" shall mean, for each Bank, the amount set forth opposite
such Bank's name in Schedule I-A hereto directly below the column entitled
"Commitment," as same may be (x) reduced from time to time pursuant to Section
3.02, 3.03, 4.02 and/or 10 or (y) adjusted from time to time as a result of
assignments to or from such Bank pursuant to Section 1.13 or 13.04(b).
"Commitment Commission" shall have the meaning provided in Section
3.01(a).
"Committed Financing" shall mean and include, at any time, (i) the
Total Unutilized Commitment under this Agreement at such time and (ii) other
financings (including debt, Qualified Preferred Stock and common stock issuances
by Holdings) permitted under this Agreement, as then in effect, for which a
binding commitment to provide same, extending for at least 135 days, is then in
place, which commitment, and the terms and conditions and issuer thereof, shall
be reasonably satisfactory to the Administrative Agent.
"Company" shall mean any corporation, limited company, limited
liability company, partnership or other business entity (or the adjectival form
thereof, where appropriate).
"Consolidated Cumulative Net Income Period" shall mean each period
consisting of a fiscal quarter of BFPH (or, for periods after the QUIPS Issuance
Date, Holdings) ending after the Original Effective Date and for which the
related financial statements required to be delivered pursuant to Section
8.01(b) or (c), as the case may be, of this Agreement or the Original Credit
Agreement have theretofore been delivered.
"Consolidated Cumulative 25% Net Income Amount" shall mean, at any
date, an amount determined on a cumulative basis equal to the sum of (i) 25% of
Consolidated Net Income for all Consolidated Cumulative Net Income Periods
ending after the Original Effective Date and prior to such date of determination
for which Consolidated Net Income was a positive number, MINUS (ii) 100% of
Consolidated Net Income (expressed as a positive number) for all Consolidated
Cumulative Net Income Periods ending after the last day of the Original
Effective Date and prior to such date of determination for which Consolidated
Net Income was a negative number.
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"Consolidated Debt" shall mean all Indebtedness of Holdings and its
Subsidiaries determined on a consolidated basis, with respect to borrowed money
or other obligations of such Persons which would appear on the balance sheet of
such Persons as indebtedness (including unreimbursed drawings under Letters of
Credit, but excluding consolidated current liabilities, deferred tax and pension
liabilities, the amount available to be drawn under letters of credit issued for
the account of such Persons (other than unreimbursed drawings) and any Guaranty
by BFPH, Treasure Chest, Webcraft, BF Digital and any other Credit Party of any
amounts owing by the Special Unrestricted Leasing Subsidiary pursuant to the
SULS Loan Agreement as provided in any Tax Sharing Agreement or any other
Guaranty of the SULS Loan Agreement referred to in Section 9.04(xix)) plus,
without duplication, the amount of all Attributed Receivables Facility
Indebtedness at such time, PROVIDED that in determining Consolidated Debt, any
Preferred Stock of Holdings or any of its Subsidiaries (including, without
limitation, any Qualified Preferred Stock and any Permitted Acquired Subsidiary
Preferred Stock) then outstanding) shall be treated as Indebtedness, with an
amount equal to the greater of the liquidation preference or the maximum fixed
repurchase price of any such outstanding Preferred Stock deemed to be a
component of Consolidated Debt. Notwithstanding anything to the contrary
contained in the immediately preceding sentence, neither the Convertible QUIPS
nor the Convertible Subordinated Debentures issued by Holdings to BF Trust in
connection with the issuance of the Convertible QUIPS shall be included as a
component of Consolidated Debt (and to the extent same would otherwise be
reflected therein, Consolidated Debt shall be reduced by the amount attributable
thereto which would otherwise be so reflected).
"Consolidated EBIT" shall mean, for any period, the Consolidated Net
Income of BFPH (or, for periods after the QUIPS Issuance Date, Holdings) and its
Subsidiaries, determined on a consolidated basis, before Consolidated Net
Interest Expense (to the extent amounts included in Consolidated Net Interest
Expense have been deducted in arriving at Consolidated Net Income) and provision
for taxes or gains or losses from sales of assets other than inventory sold in
the ordinary course of business, in each case that were included in arriving at
Consolidated Net Income.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT,
adjusted by adding thereto (x) the amount of all amortization and depreciation
and, without duplication, other non-cash expenses, in each case that were
deducted in arriving at Consolidated EBIT for such period, (y) to the extent
deducted in determining Consolidated Net Income for such period, one-time
payments made in respect of Incentive Arrangements entered into in connection
with any Permitted Acquisition and (z) cash Dividends paid to Holdings or BFPH
by each Unrestricted Subsidiary more than 50% of the capital stock of which is
directly owned by Holdings or BFPH (together with any cash Dividends paid
directly to Holdings or BFPH by any subsidiaries of the respective such
Unrestricted Subsidiary) during the respective Test Period, to the extent such
cash Dividends do not exceed the EBITDA of such Unrestricted Subsidiary.
"Consolidated Net Income" shall mean, for any period, the net after
tax income of BFPH (or, for periods after the QUIPS Issuance Date, Holdings) and
its Subsidiaries determined on a consolidated basis, without giving effect to
any extraordinary non-cash gains or non-cash losses, any deferred financing
costs, any costs in respect of the Existing Interest Rate
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Swap, any non-recurring non-operational charges or gains, any non-cash expenses
incurred or payments made in connection with the Original Transaction or the
Transaction and purchase accounting adjustments, and without giving effect to
gains and losses from the sale or disposition of assets (other than sales or
dispositions of inventory, equipment, raw materials and supplies) by Holdings
and its Subsidiaries after the Original Effective Date; PROVIDED that the
following items shall be excluded in computing Consolidated Net Income (without
duplication): (i) the net income of any Person in which any Person or Persons
other than Holdings and its Wholly-Owned Subsidiaries has an equity interest or
interests, to the extent of such equity interests held by Persons other than
Holdings and its Wholly-Owned Subsidiaries in such Person, (ii) except for
determinations expressly required to be made on a PRO FORMA Basis, the net
income (or loss) of any Person accrued prior to the date it becomes a
Wholly-Owned Subsidiary or all or substantially all of the property or assets of
such Person are acquired by a Wholly-Owned Subsidiary and (iii) the net income
of any Subsidiary to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary of such net income is not at the time
permitted by the operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to such Subsidiary; and PROVIDED further that (x) for all purposes of
calculating Consolidated Net Income, Consolidated Net Income shall be reduced
(to the extent same has not already been reduced thereby) by the amount of all
cash Dividend payments made with respect to the Convertible QUIPS or, to the
extent same have been exchanged for Convertible Subordinated Debentures, all
cash interest payments made with respect to such Convertible Subordinated
Debentures, and Consolidated Net Income shall not be otherwise reduced by
interest expense with respect to the Convertible Subordinated Debentures or the
accrual of Dividends with respect to the Convertible QUIPS and (y) in
calculating Consolidated Net Income for the purposes of the definition of
Consolidated Cumulative 25% Net Income Amount, Consolidated Net Income shall
mean the amount determined as otherwise provided above less (to the extent not
already reduced thereby) the amount of all cash Dividend requirements (whether
or not declared or paid) on Preferred Stock other than the Convertible QUIPS
(including, without limitation, any Qualified Preferred Stock and Permitted
Acquired Subsidiary Preferred Stock) then outstanding paid, accrued or scheduled
to be paid or accrued during such period.
"Consolidated Net Interest Coverage Ratio" for any period shall mean
the ratio of Consolidated EBITDA to Consolidated Net Interest Expense for such
period.
"Consolidated Net Interest Expense" shall mean, for any period, the
total consolidated interest expense of BFPH (or, for periods after the QUIPS
Issuance Date, Holdings) and its Subsidiaries for such period (calculated
without regard to any limitations on the payment thereof) plus, without
duplication, (i) that portion of Capitalized Lease Obligations of Holdings and
its Subsidiaries representing the interest factor for such period, and
capitalized interest expense, (ii) all Receivables Facility Financing Costs for
such period, and (iii) the product of (x) the amount of all Dividend
requirements (whether or not declared or paid) on Preferred Stock (including
Qualified Preferred Stock and Permitted Acquired Subsidiary Preferred Stock) of
BFPH or Holdings, as the case may be, and its Subsidiaries paid, accrued or
scheduled to paid or accrued during such period multiplied by (y) a fraction,
the numerator of which is one and the denominator of which is one minus the then
current effective consolidated Federal, state, local
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and foreign tax rate (expressed as a decimal number between one and zero) of
BFPH or Holdings, as the case may be, as reflected in the audited consolidated
financial statements of BFPH or Holdings, as the case may be, for its most
recently completed fiscal year, which amounts described in preceding clause
(iii) shall be treated as interest expense of BFPH or Holdings, as the case may
be, and its Subsidiaries for purposes of this definition regardless of the
treatment of such amounts under GAAP, in each case net of the total consolidated
cash interest income of BFPH or Holdings, as the case may be, and its
Subsidiaries for such period, but excluding the amortization of any deferred
financing costs or of any costs in respect of the Existing Interest Rate Swap.
Notwithstanding anything to the contrary contained above, Consolidated Net
Interest Expense shall not include for period (i) any amounts paid by any U.K.
Borrower as additional interest to any Bank pursuant to Section 1.10(a) during
such period, (ii) the MLA Costs incurred by the U.K. Borrowers during such
period and (iii) any amounts relating to interest or dividends accruing on the
Convertible Subordinated Debentures or the Convertible QUIPS during such period,
except that an amount equal to all cash payments (excluding cash payments made
in respect of the liquidation preference thereof in accordance with Section
9.03(vii)) made to holders of Convertible QUIPS or, after any exchange of same
for Convertible Subordinated Debentures, in respect of Convertible Subordinated
Debentures, shall be treated as a component of Consolidated Net Interest
Expense, with the amount of any Dividends paid in respect of the Convertible
QUIPS not to be grossed up as contemplated by clause (iii) of the immediately
preceding sentence unless the correlating payments of interest on the
Convertible Subordinated Debentures may not be deducted by Holdings for its tax
purposes (in which case such payments shall be so grossed-up). Notwithstanding
anything to the contrary contained above, to the extent any amounts are paid to,
or invested in, the Special Unrestricted Leasing Subsidiary as contemplated by
Section 9.05(xx), such amounts shall not be included as a component of
Consolidated Net Interest Expense and, to the extent such amounts would
otherwise be so included therein, such amounts shall be excluded therefrom.
"Continuing Bank" shall mean each Original Bank with a Commitment
under this Agreement (immediately upon giving effect to the Restatement
Effective Date).
"Continuing Directors" shall mean the directors of Holdings on the
Restatement Effective Date and each other director, if such director's
nomination for election to the Board of Directors of Holdings is recommended by
a majority of the then Continuing Directors.
"Convertible QUIPS" shall mean BF Trust's Convertible Quarterly Income
Preferred Securities, liquidation preference of $50 per security, which
preferred securities are exchangeable, in certain circumstances, for a portion
(equal to the aggregate liquidation preference of the Convertible QUIPS so
exchanged) of the Convertible Subordinated Debentures held by BF Trust.
"Convertible QUIPS Documents" shall mean and include (i) the
Convertible QUIPS, (ii) the Holdings QUIPS Guaranty, (iii) the Holdings BFT
Common Securities Guaranty and (iv) the Trust Agreement.
"Convertible QUIPS Issuance Date" shall mean the date of initial
issuance of Convertible QUIPS.
"Convertible QUIPS Private Placement Memorandum" shall mean the
Offering Memorandum in respect of the Convertible QUIPS, dated as of October 27,
1997.
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"Convertible Subordinated Debentures" shall mean Holdings' 6%
Convertible Subordinated Debentures due October 15, 2027, issued to BF Trust,
and convertible into Holdings Common Stock pursuant to a Permitted Conversion,
in an aggregate principal amount not to exceed at any time outstanding (x)
$118,600,000 less (y) the aggregate liquidation value of all Convertible QUIPS
exchanged for Holdings Common Stock in connection with a Permitted Conversion.
"Convertible Subordinated Debenture Documents" shall mean the
Convertible Subordinated Debenture Indenture and all other agreements and
documents entered into in connection with the issuance of the Convertible
Subordinated Debentures.
"Convertible Subordinated Debenture Indenture" shall mean the
indenture entered into between Holdings, BF Trust and The Bank of New York, as
trustee thereunder, as the same may be amended, modified or supplemented from
time to time in accordance with the terms hereof and thereof.
"Credit Agreement Party" shall mean each Parent and each Borrower.
"Credit Documents" shall mean this Agreement and, after the execution
and delivery thereof pursuant to the terms of this Agreement, each Note, each
Security Document and the Non-Borrower U.S. Subsidiaries Guaranty and, after the
execution and delivery thereof, the Non-Borrower U.K. Subsidiaries Guaranty and
each additional guaranty or security document executed pursuant to Section 8.11.
"Credit Event" shall mean the making of any Loan or the issuance of
any Letter of Credit.
"Credit Party" shall mean each Parent, each Borrower and each
Subsidiary Guarantor.
"Currency Agreement" shall mean any obligations of any Person pursuant
to any foreign exchange contract, currency swap agreement or other similar
agreement or arrangement designed to protect such Person or any of its
Subsidiaries or Affiliates against fluctuations in currency values.
"Debt Agreements" shall mean all agreements evidencing or relating to
Indebtedness of Holdings or any of its Subsidiaries which is to remain
outstanding after giving effect to the incurrence of Revolving Loans on the
Restatement Effective Date.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
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"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
"Dividend" with respect to any Person shall mean that such Person has
declared or paid a dividend or returned any equity capital to its stockholders
or partners or authorized or made any other distribution, payment or delivery of
property (other than distributions or dividends of common stock of such Person)
or cash to its stockholders or partners as such, or redeemed, retired, purchased
or otherwise acquired, directly or indirectly, for a consideration any shares of
any class of its capital stock or any partnership interests outstanding on or
after the Original Effective Date (or any options or warrants issued by such
Person with respect to its capital stock or any partnership interests), or set
aside any funds for any of the foregoing purposes, or shall have permitted any
of its Subsidiaries to purchase or otherwise acquire for a consideration any
shares of any class of the capital stock or any partnership interests of such
Person outstanding on or after the Original Effective Date (or any options or
warrants issued by such Person with respect to its capital stock or any
partnership interests). Without limiting the foregoing, "Dividends" with
respect to any Person shall also include all payments made or required to be
made during any period by such Person with respect to any stock appreciation
rights, plans, equity incentive or achievement plans or any similar plans, or
the Holdings Rights Plan, or setting aside of any funds for the foregoing
purposes, except to the extent such payments have reduced Consolidated EBITDA
during the respective period.
"Documentation Agent" shall mean Credit Suisse First Boston, in its
capacity as Documentation Agent for the Banks hereunder.
"Documents" shall mean the Credit Documents and the Refinancing
Documents.
"Dollar Equivalent" of an amount denominated in Pounds Sterling shall
mean, at any time for the determination thereof, the amount of Dollars which
could be purchased with the amount of Pounds Sterling involved in such
computation at the spot exchange rate therefor as quoted by the Administrative
Agent as of 11:00 A.M. (London time) on the date two Business Days prior to the
date of any determination thereof for purchase on such date (or, in the case of
any determination pursuant to Section 1.15 or 13.19 or Section 26 of any
Subsidiaries Guaranty, on the date of determination); PROVIDED that the Dollar
Equivalent of any Unpaid Drawing in Pounds Sterling shall be determined at the
time the drawing under the related Letter of Credit was paid or disbursed by the
Issuing Bank; PROVIDED FURTHER, that for purposes of (x) determining compliance
with Sections 1.01(a), 1.01(b), 2.01(c) and 4.01(a) and (y) calculating Fees
pursuant to Section 3.01, the Dollar Equivalent of any amounts denominated in
Pounds Sterling shall be revalued on a quarterly basis using the spot exchange
rate therefor quoted in the Wall Street Journal on the last Business Day of each
calendar quarter, PROVIDED, HOWEVER, that at any time during a calendar quarter,
if the Aggregate U.K. Exposure (for the purposes of the determination thereof,
using the Dollar Equivalent as recalculated based on the exchange rate therefor
quoted in the Wall Street Journal on the respective date of determination
pursuant to this exception) would exceed the Aggregate U.K. Exposure (for the
purposes of the determination thereof, using the Dollar Equivalent as then in
effect) (the Aggregate U.K Exposure as so calculated, the "Existing Aggregate
U.K. Exposure") by 10% or more of the then Existing Aggregate U.K.
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Exposure, then at the discretion of the Administrative Agent or at the request
of the Required Banks, the Dollar Equivalent shall be reset based upon the
exchange rates on such date in the Wall Street Journal, which rates shall remain
in effect until the last Business Day of such calendar quarter or such earlier
date, if any, as the rate is reset pursuant to this proviso. Notwithstanding
anything to the contrary contained in this definition, at any time that a
Default or an Event of Default then exists, the Administrative Agent may revalue
the Dollar Equivalent of any amounts outstanding under the Credit Documents in
Pounds Sterling in its sole discretion.
"Dollar Loan" shall mean each Dollar Revolving Loan and each Dollar
Swingline Loan.
"Dollar Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Non-U.K.
Sub-Commitment of such Bank at such time and the denominator of which is the
aggregate amount of Non-U.K. Sub-Commitments of all Banks at such time.
Notwithstanding anything to the contrary contained above, if the Dollar
Percentage of any Bank is to be determined after the Total Commitment has been
terminated, then the Dollar Percentages of the Banks shall be determined
immediately prior (and without giving effect) to such termination.
"Dollar Revolving Loan" shall have the meaning provided in Section
1.01(a).
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"Dollar Swingline Loan" shall have the meaning provided in Section
1.01(b).
"Domestic U.K. Borrower Guaranty" shall mean, on after the execution
and delivery of an Election to Become a Borrower by any Domestic U.K. Borrower,
the guaranty of such Domestic U.K. Borrower pursuant to Section 16.
"Domestic U.K. Borrower" shall mean any Wholly-Owned Domestic
Subsidiary of Holdings created after the Restatement Effective Date pursuant to
Section 9.11 that becomes a U.K. Borrower (but not a U.S. Borrower) hereunder
pursuant to Section 6.
"Domestic Subsidiary" shall mean a Subsidiary which is not a Foreign
Subsidiary.
"Domestic Unrestricted Subsidiary" shall mean any Unrestricted
Subsidiary which is not a Foreign Unrestricted Subsidiary.
"Drawing" shall have the meaning provided in Section 2.05(b).
"EBITDA" shall mean, for any Unrestricted Subsidiary for any period,
the Consolidated EBITDA as determined for such Unrestricted Subsidiary and its
subsidiaries on a basis substantially the same (with necessary reference
changes) as provided in the definition of Consolidated EBITDA contained herein,
except that (i) all references therein and in the component definitions used in
determining Consolidated EBITDA to "Holdings and its
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Subsidiaries" shall be deemed to be references to the respective Unrestricted
Subsidiary and its subsidiaries and (ii) the adjustments contained in clauses
(x) and (z) of the definition of Consolidated EBITDA shall not be made.
"8-7/8% Senior Subordinated Note Indenture" shall mean the Indenture,
dated as of June 20, 1997, entered into by and between BFPH and Fleet National
Bank, as trustee thereunder, as in effect on the Restatement Effective Date and
as the same may be modified, amended or supplemented from time to time to the
extent permitted in accordance with the terms hereof and thereof.
"8-7/8% Senior Subordinated Notes" shall mean BFPH's 8-7/8% Senior
Subordinated Notes due 2007 issued pursuant to the 8-7/8% Senior Subordinated
Note Indenture, as in effect on the Restatement Effective Date and as the same
may be modified, supplemented or amended from time to time to the extent
permitted pursuant to the terms hereof and thereof.
"Election to Become a Borrower" shall mean an Election to Become a
Borrower in the form of Exhibit J, which shall be executed by each new Borrower
in accordance with Section 6.
"Eligible Transferee" shall mean and include a commercial bank, mutual
fund, financial institution, a "qualified institutional buyer" (as defined in
Rule 144A of the Securities Act), any fund that invests in bank loans or any
other "accredited investor" (as defined in Regulation D of the Securities Act).
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, directives, claims, liens,
notices of noncompliance or violation, investigations or proceedings pursuant to
or under any Environmental Law or any permit issued, or any approval given,
under any such Environmental Law (hereafter, for the purposes of this
definition, "Claims"), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief in connection with alleged injury or threat of injury to
health, safety or the environment due to the presence of Hazardous Materials.
"Environmental Law" means any applicable Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, binding and enforceable
guidance and rule of common law, now or hereafter in effect and in each case as
amended, and any binding judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree or judgment, to
the extent binding on Holdings or any of its Subsidiaries, relating to the
environment, employee health and safety (as it relates to Hazardous Materials)
or Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal
Water Pollution Control Act, 33 U.S.C. Section 1251 ET SEQ.; the Toxic
Substances Control Act, 15 U.S.C. Section 2601 ET SEQ.; the Clean Air Act, 42
U.S.C. Section 7401 ET SEQ.; the Safe Drinking Water Act, 42 U.S.C. Section
3803 ET SEQ.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 ET SEQ.;
the Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C.
Section 11001 ET SEQ., the Hazardous Material
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Transportation Act, 49 U.S.C. Section 1801 ET SEQ. and the Occupational Safety
and Health Act, 29 U.S.C. Section 651 ET SEQ. (to the extent it regulates
occupational exposure to Hazardous Materials); ISRA and any state and local or
foreign counterparts or equivalents, in each case as amended from time to time.
Notwithstanding the foregoing definition of "Environmental Law", for purposes of
the representations and warranties contained in Section 7.19, "Environmental
Law" shall only mean any Environmental Law in effect as of the date such
representations and warranties are made or are deemed to be made.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at
the date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with Holdings or any Subsidiary of Holdings would be
deemed to be a "single employer" within the meaning of Section 414(b), (c) (or
solely for purposes of Section 412 of the Code) (m) of the Code.
"Eurodollar Loan" shall mean each Dollar Revolving Loan designated as
such by any U.S. Borrower at the time of the incurrence thereof or conversion
thereto.
"Eurodollar Rate" shall mean (a) the offered quotation to first-class
banks in the New York interbank Eurodollar market by BTCo for Dollar deposits of
amounts in immediately available funds comparable to the outstanding principal
amount of the Eurodollar Loan of BTCo with maturities comparable to the Interest
Period applicable to such Eurodollar Loan commencing two Business Days
thereafter as of 10:00 A.M. (New York time) on the date which is two Business
Days prior to the commencement of such Interest Period, divided (and rounded off
to the nearest 1/16 of 1%) by (b) a percentage equal to 100% minus the then
stated maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves required by
applicable law) applicable to any member bank of the Federal Reserve System in
respect of Eurocurrency funding or liabilities as defined in Regulation D (or
any successor category of liabilities under Regulation D).
"Euro Rate" shall mean and include each of the Eurodollar Rate, the
Sterling Euro Rate and the Overnight LIBOR Rate.
"Euro Rate Loan" shall mean each Eurodollar Loan and each Sterling
Loan.
"Event of Default" shall have the meaning provided in Section 10.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Excess Dollar Swingline Loans" shall mean the principal amount of any
Dollar Swingline Loan incurred at any time when, and only when, the addition of
an amount equal to the principal amount of such Dollar Swingline Loan to the
Aggregate Non-U.K. Exposure as then
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in effect would result in a sum which exceeds the Total Non-U.K. Sub-Commitment
as then in effect; PROVIDED that in any case where the amount of the excess
referenced above is less than the aggregate principal amount of the Dollar
Swingline Loan then being incurred, only the portion of the principal amount
thereof which is equal to the amount by which such sum exceeds the Total
Non-U.K. Sub-Commitment shall constitute Excess Dollar Swingline Loans.
"Existing Indebtedness" shall have the meaning provided in Section
5.01(l).
"Existing Interest Rate Swap" shall mean the Interest Rate Swap
Agreement of Treasure Chest, dated as of January 19, 1994.
"Existing U.K. Facility" shall mean the Facility Letter, dated as of
September 18, 1997, by and between BFL and Bankers Trust Company, as in effect
on the Restatement Effective Date.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Rate" shall mean for any period, a fluctuating interest
rate equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 3.01.
"Final Maturity Date" shall mean June 12, 2002.
"Foreign Pension Plan" means any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by Holdings or any one or more
of its Subsidiaries primarily for the benefit of employees of Holdings or any of
its Subsidiaries residing outside the United States of America, which plan, fund
or other similar program provides, or results in, retirement income, a deferral
of income in contemplation of retirement or payments to be made upon termination
of employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of Holdings that is
incorporated under the laws of any jurisdiction other than the United States of
America, any State thereof, the United States Virgin Islands or Puerto Rico.
"Foreign U.K. Borrower" shall mean and include BFL, Olwen, Troypeak,
Pismo, Broadcast, BFDSL and each other Subsidiary of Holdings that (x) becomes a
party to this
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Agreement after the Restatement Effective Date pursuant to Section 6 and (y) is
organized under the laws of England or Wales.
"Foreign Unrestricted Subsidiary" shall mean each Unrestricted
Subsidiary that is incorporated under the laws of any jurisdiction other than
the United States of America, any State thereof, the United States Virgin
Islands or Puerto Rico.
"GAAP" or "Generally Accepted Accounting Principles" shall have the
meaning provided for GAAP in Section 13.07(a).
"Guarantees" shall mean and include each of (i) the Parent Guaranty,
(ii) the Non-U.K. U.S. Borrowers Guaranty, (iii) the Non-Borrower U.S.
Subsidiaries Guaranty, (iv) on and after the date any Domestic U.K. Borrower
becomes a party hereto, the Domestic U.K. Borrower Guaranty and (v) on and after
the execution and delivery thereof, the Non-Borrower U.K. Subsidiaries Guaranty.
"Guaranteed Creditors" shall mean and include each of the Agents, the
Collateral Agent, the Banks and each party (other than any Credit Party) party
to an Interest Rate Protection Agreement to the extent that such party
constitutes a Secured Creditor under the Security Documents.
"Guaranteed Obligations" shall mean (i) the principal and interest on
each Note issued to each Bank, and all Loans made, under this Agreement and all
reimbursement obligations and Unpaid Drawings with respect to Letters of Credit,
together with all the other obligations (including obligations which, but for
the automatic stay under Section 362(a) of the Bankruptcy Code, would become
due) and liabilities (including, without limitation, indemnities, fees and
interest thereon) of the Borrowers (or any of them) to each Bank, the Agents and
the Collateral Agent now existing or hereafter incurred under, arising out of or
in connection with this Agreement or any other Credit Document and the due
performance and compliance with all the terms, conditions and agreements
contained in the Credit Documents by the Borrowers and (ii) all obligations
(including obligations which, but for the automatic stay under Section 362(a) of
the Bankruptcy Code, would become due) and liabilities of either Parent, the
Borrowers (or any of them) or any of their respective Subsidiaries owing under
any Interest Rate Protection Agreement entered into by the Borrowers (or any of
them) or any of their respective Subsidiaries with any Bank or any affiliate
thereof (even if such Bank subsequently ceases to be a Bank under this Agreement
for any reason) so long as such Bank or affiliate participate in such Interest
Rate Protection Agreement, and their subsequent assigns, if any, whether now in
existence or hereafter arising, and the due performance and compliance with all
terms, conditions and agreements contained therein.
"Guarantors" shall mean and include each Parent and each Subsidiary
Guarantor.
"Guaranty" shall mean, as to any Person, any obligation of such Person
guaranteeing or intended to guarantee any Indebtedness, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether
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directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (x) for the purchase or payment of any such primary
obligation or (y) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the holder of such primary obligation against loss in
respect thereof; PROVIDED, HOWEVER, that the term Guaranty shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guaranty shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Guaranty is made (or, if less, the maximum amount of such primary
obligation for which such Person may be liable pursuant to the terms of the
instrument evidencing such Guaranty) or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in good
faith.
"Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable and
require abatement, transformers or other equipment that contain dielectric fluid
containing polychlorinated biphenyls, and radon gas; (b) any chemicals,
materials or substances included as "hazardous substances," "hazardous waste,"
"hazardous materials," "extremely hazardous substances," "restricted hazardous
waste," "toxic substances," "toxic pollutants," "contaminants," or "pollutants,"
or words of similar import, under any applicable Environmental Law; and (c) any
other chemical, material or substance, to the extent exposure is prohibited,
limited or regulated under Environmental Laws.
"Holdings" shall have the meaning provided in the first paragraph of
this Agreement.
"Holdings Acquired Subsidiary" shall mean any Subsidiary of Holdings
created or acquired in connection with (or pursuant to) a Permitted Acquisition.
"Holdings BFT Common Securities Guaranty" shall mean the Guaranty
Agreement, dated as of October 20, 1997, executed and delivered by Holdings in
favor of the holders of the common securities of BF Trust, as the same may be
amended, modified or supplemented from time to time in accordance with the terms
hereof and thereof.
"Holdings Common Stock" shall have the meaning provided in Section
7.14(a).
"Holdings Preferred Stock" have the meaning provided in Section
7.14(a).
"Holdings QUIPS Guaranty" shall mean the Guaranty Agreement, dated as
of October 20, 1997, between Holdings and The Bank of New York, as trustee
thereunder, executed and delivered by Holdings in favor of the holders of the
Convertible QUIPS, as the same may
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be amended, modified or supplemented from time to time in accordance with the
terms hereof and thereof.
"Holdings Rights Plan" shall mean the Rights Agreement between Holdings and
The Bank of New York, as Rights Agent, dated as of November 28, 1995, as the
same may be amended, modified or supplemented from time to time pursuant to the
terms hereof and thereof.
"Incentive Arrangements" shall mean any equity incentive or other
bonus arrangement made by any Borrower or any Guarantor in connection with (and
concurrently with the consummation of) a Permitted Acquisition with any
employee, executive or officer of the Person or Persons so acquired pursuant to
the respective Permitted Acquisition.
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services, (ii) the maximum amount available to be drawn under all letters of
credit issued for the account of such Person and all unpaid drawings in respect
of such letters of credit, (iii) all Indebtedness of the types described in
clause (i), (ii), (iv), (v), (vi) or (vii) of this definition secured by any
Lien on any property owned by such Person, whether or not such Indebtedness has
been assumed by such Person (to the extent of the value of the respective
property), (iv) the aggregate amount required by GAAP to be capitalized under
leases under which such Person is the lessee, (v) all obligations of such Person
to pay a specified purchase price for goods or services, whether or not
delivered or accepted, I.E., take-or-pay and similar obligations, (vi) all
Guaranties of such Person and (vii) all obligations under any Interest Rate
Protection Agreement, any Currency Agreement or under any similar type of
agreement. In addition to the foregoing, all Attributed Receivables Facility
Indebtedness shall constitute Indebtedness.
"Individual Exposure" of any Bank shall mean (x) at any time prior to
the occurrence of a Sharing Event, the sum of (I) the aggregate principal amount
of all Revolving Loans then outstanding from such Bank (for this purpose, using
the Dollar Equivalent of each Sterling Revolving Loan then outstanding from such
Bank or any Affiliate thereof acting as a U.K. Bank), (II) the sum of such
Bank's (and its respective Affiliates') L/C Participation Percentage in each
then outstanding Letter of Credit and any Unpaid Drawings relating thereto (for
this purpose using, the Dollar Equivalent of any amounts expressed in Pounds
Sterling), (III) such Bank's Dollar Percentage of the aggregate principal amount
of all Dollar Swingline Loans (other than Excess Dollar Swingline Loans) and
(IV) such Bank's (or its respective Affiliate's) U.K. Percentage of the
aggregate principal amount of all Sterling Swingline Loans (for this purpose,
using the Dollar Equivalent of each Sterling Swingline Loan then outstanding)
and all Excess Dollar Swingline Loans then outstanding and (y) at any time after
the occurrence of a Sharing Event, the sum of (I) the aggregate principal amount
of all Revolving Loans then outstanding from such Bank (for this purpose, giving
effect to the conversions to Dollar obligations required by Section 1.15), (II)
the sum of such Bank's (and its respective Affiliates') L/C Participation
Percentage in each then outstanding Letter of
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Credit and any Unpaid Drawings relating thereto (for this purpose using, the
Dollar Equivalent of any amounts expressed in Pounds Sterling), (III) such
Bank's RL Percentage of the aggregate principal amount of all Swingline Loans
(for this purpose, giving effect to the conversions to Dollar obligations
required by Section 1.15).
"Individual Sterling Exposure" for any Bank shall mean (x) at any time
prior to the occurrence of a Sharing Event, the sum of (i) the aggregate
principal amount of all Sterling Revolving Loans made by such Bank and then
outstanding (for this purpose, using the Dollar Equivalent thereof), (ii) such
Bank's U.K. Percentage of all U.K. Letter of Credit Outstandings at such time,
(iii) such Bank's U.K. Percentage of the aggregate principal amount of all
Sterling Swingline Loans then outstanding (for this purpose, using the Dollar
Equivalent of each Sterling Swingline Loan then outstanding), (iv) such Bank's
U.K. Percentage of all U.S. Letter of Credit Outstandings included as a
component of the Aggregate U.K. Exposure at such time pursuant to clause (iv) of
the definition thereof and (v) such Bank's U.K. Percentage of the aggregate
principal amount of all then outstanding Excess Dollar Swingline Loans and (y)
at any time after the occurrence of a Sharing Event, the sum of such Bank's (and
its respective Affiliates') RL Percentage in each then outstanding U.K. Letter
of Credit and any Unpaid Drawings relating thereto (for this purpose using, the
Dollar Equivalent of any amounts expressed in Pounds Sterling).
"Insignificant Subsidiary" shall mean any Subsidiary of Holdings
(excluding BFPH and the Borrowers) which has assets of not greater than
$10,000,000 in the aggregate and which, if aggregated with all other
Subsidiaries of Holdings with respect to which an event described under Section
10.05 has occurred and is continuing, would have assets of not greater than
$10,000,000.
"Intercompany Note" shall mean promissory notes, in the form of
Exhibit L, evidencing Intercompany Loans.
"Interest Determination Date" shall mean, with respect to any Euro
Rate Loan (other than a Sterling Swingline Loan), the second Business Day prior
to the commencement of any Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement, interest rate floor agreement or other similar agreement or
arrangement.
"Investments" shall have the meaning provided in Section 9.05.
"Investor Certificates" shall have the meaning provided in the
Receivables Pooling Agreement.
"ISRA" shall mean the New Jersey Industrial Site Recovery Act.
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"Issuing Bank" shall mean BTCo and any Bank which at the request of
the Account Parties (or the respective Account Party) and with the consent of
the Administrative Agent agrees, in such Bank's sole discretion, to become an
Issuing Bank for the purpose of issuing Letters of Credit pursuant to Section 2.
The sole Issuing Bank on the Restatement Effective Date is BTCo.
"Judgment Currency" shall have the meaning provided in Section
13.19(a).
"Judgment Currency Conversion Date" shall have the meaning provided in
Section 13.19(a).
"Laser Tech" shall mean Laser Tech Color, Inc., a Delaware corporation
and a Wholly-Owned Subsidiary of Holdings.
"L/C Participation Percentages" shall have the meaning provided in
Section 2.04(a).
"L/C Supportable Indebtedness" shall mean (i) obligations of each
Account Party (or any entity which is jointly and severally obligated as an
Account Party with respect to such Letter of Credit) or any of its Subsidiaries
incurred in the ordinary course of business with respect to contractual
obligations (including with respect to lottery contracts), environmental
responsibilities, employee benefit obligations, insurance obligations and
workers' compensation, surety bonds and other similar statutory obligations and
(ii) such other obligations of such Account Party (or any entity which is
jointly and severally obligated as an Account Party with respect to such Letter
of Credit) or any of its Subsidiaries as are permitted to remain outstanding
hereunder without giving rise to any violation of this Agreement.
"Leaseholds" of any Person means all the right, title and interest of
such Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the sum of
(i) the aggregate Stated Amount of all outstanding Letters of Credit which have
not terminated at such time and (ii) the amount of all Unpaid Drawings at such
time.
"Letter of Credit Request" shall have the meaning provided in 2.03(a).
"Leverage Lease Documents" shall mean the Operative Documents as
defined in Appendix A to (i) the Participation Agreement (1998-A), dated as of
April 1, 1998, (ii) the Participation Agreement (1998-B), dated as of April 1,
1998, and (iii) the Participation Agreement (1998-C), dated as of April 1, 1998,
in each case among Bauteile C+D Errichtungsgesellschaft mbH, Wilmington Trust
Company, the Special Unrestricted Leasing Subsidiary, AIG-FP Funding (Cayman)
Limited and Raiffeisen Zentralbank Osterreich Aktiengesellschaft, as such
documents may be amended, restated, modified, supplemented,
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extended, renewed or replaced from time to time in accordance with the terms
hereof and thereof.
"Leverage Ratio" shall mean on any date the ratio of (i) Consolidated
Debt on such date to (ii) Consolidated EBITDA for the period of four consecutive
fiscal quarters most recently ended on or prior to such date, in each case taken
as one accounting period; PROVIDED that (x) if one or more Permitted
Acquisitions is effected during the respective Test Period, Consolidated EBITDA
shall, for the purposes of this definition only, be calculated on a PRO FORMA
Basis (but only giving effect to adjustments described in clause (iii) of the
definition of PRO FORMA Basis) after giving effect to such Permitted Acquisition
and (y) if one or more Asset Sales is effected during the respective Test
Period, Consolidated EBITDA shall, for purposes of this definition only, be
calculated on a PRO FORMA Basis after giving effect to such Asset Sale.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loan" shall mean each Revolving Loan and each Swingline Loan.
"Mandatory Borrowing" shall mean and include any Mandatory Dollar
Borrowing and any Mandatory Sterling Borrowing.
"Mandatory Dollar Borrowing" shall have the meaning provided in
Section 1.01(c).
"Mandatory Sterling Borrowing" shall have the meaning provided in
Section 1.01(d).
"Majority U.K. Banks" at any time shall mean those U.K. Banks which at
such time hold a majority of the then outstanding U.K. Sub-Commitments or, after
such U.K. Sub-Commitments have been terminated, U.K. Banks holding a majority of
the Aggregate U.K. Exposure from time to time outstanding.
"Margin Stock" shall have the meaning provided in Regulation U.
"Master Trust" shall mean the trust created pursuant to the
Receivables Facility, and any successor or similar trust created pursuant to any
subsequent Receivables Facility.
"Material Adverse Effect" shall mean a material adverse effect on the
business, operations, properties, assets, liabilities, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a whole.
"Maximum Swingline Amount" shall mean (x) $30,000,000 in the case of
Dollar Swingline Loans and (y) L20,000,000 in the case of Sterling Swingline
Loans.
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"Media Business" shall mean any Permitted Business and any business
that creates, communicates, licenses, markets, leases or disseminates ideas,
information or entertainment, together with all businesses related thereto, and
any business that generates a significant portion of its revenues from marketing
or advertising services.
"Minimum Applicable Facing Fee" shall mean (x) in the case of U.S.
Letters of Credit (and after a Sharing Event, all Letters of Credit), $500 and
(y) in the case of U.K. Letters of Credit at any time prior to a Sharing Event,
L300.
"Minimum Borrowing Amount" shall mean (i) in the case of Dollar
Revolving Loans, $1,000,000, (ii) in the case of Sterling Revolving Loans,
L250,000, (iii) in the case of Dollar Swingline Loans, $500,000 and (iv) in the
case of Sterling Swingline Loans, L125,000.
"MLA Cost" shall mean, for any period of determination, the cost
imputed to a Bank for such period in complying with the Mandatory Liquid Assets
requirements of the Bank of England during the period in which a Sterling Loan
is outstanding determined in accordance with Schedule XI.
"Moody's" shall mean Moody's Investors Service, Inc.
"Multiemployer Plan" shall mean (i) any plan, as defined in Section
4001(a)(3) of ERISA, which is maintained or contributed to (or to which there is
an obligation to contribute to) by Holdings or a Subsidiary of Holdings or an
ERISA Affiliate and that is subject to Title IV of ERISA, and (ii) each such
plan for the five year period immediately following the latest date on which
Holdings, a Subsidiary of Holdings or an ERISA Affiliate maintained, contributed
to or had an obligation to contribute to such plan if, for purposes of this
clause (ii), Holdings, any Subsidiary of Holdings or any ERISA Affiliate could
currently incur any liability under such plan.
"Net Cash Proceeds" shall mean for any event requiring a commitment
reduction pursuant to Section 3.03, the gross cash proceeds (including any cash
received by way of deferred payment pursuant to a promissory note, receivable or
otherwise, but only as, when and to the extent actually received) received from
such event, net of reasonable transaction costs (including, as applicable, any
underwriting, brokerage or other customary commissions and reasonable legal,
advisory, accounting, investment banking and other fees and expenses associated
therewith) received from any such event.
"Net Sale Proceeds" shall mean for any sale of assets, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as, when and to the extent
actually received) received from any sale of assets, net of reasonable
transaction costs (including, without limitation, any underwriting, brokerage or
other customary selling commissions and reasonable legal, advisory, accounting,
investment banking and other fees and expenses, including title and recording
expenses, associated therewith) and payments of unassumed liabilities relating
to the assets sold at the time of, or within 90 days after, the date of such
sale, the amount of such gross cash proceeds required to be used to repay any
Indebtedness which is secured by the respective assets which
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were sold, and the estimated marginal increase in income taxes which will be
payable by Holdings' consolidated group with respect to the fiscal year (for
U.S. federal income tax purposes) in which the sale occurs as a result of such
sale; but excluding any portion of any such gross cash proceeds which Holdings
determines in good faith should be reserved for post-closing adjustments (to the
extent Holdings delivers to the Banks a certificate signed by its chief
financial officer or treasurer, controller or chief accounting officer as to
such determination), it being understood and agreed that on the day that all
such post-closing adjustments have been determined, (which shall not be later
than one year following the date of the respective asset sale), the amount (if
any) by which the reserved amount in respect of such sale or disposition exceeds
the actual post-closing adjustments paid by Holdings or any of its Subsidiaries
shall constitute Net Sale Proceeds on such date received by Holdings and/or any
of its Subsidiaries from such sale, lease, transfer or other disposition.
"New Bank" shall mean each Person listed on Schedule I-A or I-B (as in
effect on the Restatement Effective Date) that is not a Continuing Bank.
"New Borrower Consent" shall mean a New Borrower Consent in the form
of Exhibit M, which shall be executed by each then existing Credit Party
(excluding any U.K. Borrowers which are not otherwise Credit Parties in the case
of New Borrower Consents delivered pursuant to clause (v) of Section 6) in
accordance with the requirements of Section 6.
"New Credit Party" shall mean each Credit Party which was not a Credit
Party under, and as defined in, the Original Credit Agreement on the Original
Effective Date.
"Non-Borrower U.K. Subsidiaries Guaranty" shall mean, on and after the
execution and delivery thereof, the Subsidiaries Guaranty in the form of Exhibit
H-2, as the same may be amended, modified or supplemented from time to time.
"Non-Borrower U.S. Subsidiaries Guaranty" shall have the meaning
provided in Section 5.01(h).
"Non-Borrower U.S. Subsidiary Guarantor" shall mean each Wholly-Owned
Domestic Subsidiary of BFPH as of the Restatement Effective Date (other than the
U.S. Borrowers, the Receivables Subsidiary, RGP and Treasure Chest of Nevada)
and any Wholly-Owned Domestic Subsidiary of Holdings created after the
Restatement Effective Date pursuant to Section 9.11 (to the extent same does not
become a U.S. Borrower or a Domestic U.K. Borrower hereunder pursuant to Section
6).
"Non-Continuing Bank" shall have the meaning provided in Section
13.20.
"Non-Defaulting Bank" shall mean and include each Bank other than a
Defaulting Bank.
"Non-Facility Letter of Credit" shall mean any standby letter of
credit (other than a Standby Letter of Credit) issued by a financial institution
reasonably acceptable to the Administrative Agent for the account of any
Borrower.
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"Non-U.K. U.S. Borrowers" shall mean each U.S. Borrower that is not a
U.K. Borrower.
"Non-U.K. U.S. Borrowers Guaranty" shall mean the guaranty of the
Non-U.K. U.S. Borrowers pursuant to Section 15 of this Agreement.
"Non-U.K. Sub-Commitment" means, for any Bank at any time, such Bank's
Commitment minus, in the case of a Bank that is, or whose Affiliate is, a U.K.
Bank, such Bank's or such Affiliate's U.K. Sub-Commitment.
"Note" shall mean each U.S. Borrowers' Revolving Note, each U.K.
Borrowers' Revolving Note, the U.S. Borrowers' Swingline Note and the U.K.
Borrowers' Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section 1.03.
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent
located at 130 Liberty Street, New York, New York 10006, Attention: Gregory
Shefrin, or such other office as the Administrative Agent may hereafter
designate in writing as such to the other parties hereto; provided that in the
case of U.K. Letters of Credit, the "Notice Office" shall mean the office
specified above, with a copy of the respective notice to be delivered at the
same time as otherwise required pursuant to the terms of this Agreement to the
office of the Administrative Agent located at Bankers Trust Company London, 1
Appold Street, Broadgate, London EC2A2HE, Attention: Elizabeth Keegan/Loans
Agency Department.
"Obligation Currency" shall have the meaning provided in Section
13.19(a).
"Obligations" shall mean all amounts owing to the Agents, the
Collateral Agent, any Issuing Bank or any Bank pursuant to the terms of this
Agreement or any other Credit Document.
"Olwen" shall have the meaning provided in the first paragraph of this
Agreement.
"Original Banks" shall mean each Person which was a Bank under, and as
defined in, the Original Credit Agreement.
"Original Credit Agreement" shall have the meaning provided in the
first recital of this Agreement.
"Original Effective Date" shall mean the Effective Date (as defined in
the Original Credit Agreement).
"Original Letter of Credit" shall have the meaning provided in Section
2.01(d).
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"Original Loans" shall mean the Loans under, and is defined in, the
Original Credit Agreement.
"Original Transaction" shall mean the Transaction under, and as
defined in, the Original Credit Agreement.
"Overnight LIBOR Rate" on any date shall mean the offered quotation to
first-class banks in the London interbank Eurodollar market by BTCo for Pounds
Sterling overnight deposits of amounts in immediately available funds comparable
to the outstanding principal amount of the Sterling Swingline Loan of BTCo as of
11:00 A.M. (London time) on such date; provided, that in the event the
Administrative Agent has made any determination pursuant to Section 1.10(a)(i)
in respect of Sterling Loans, or in the circumstances described in clause (i) to
the proviso to Section 1.10(b) in respect of Sterling Loans, the Overnight LIBOR
Rate determined pursuant to this definition shall instead be the rate determined
by BTCo as the all-in-cost of funds for BTCo to fund such Sterling Swingline
Loan.
"Parent" shall mean and include Holdings and BFPH.
"Parent Guaranty" shall mean the guaranty of each of the Parents
pursuant to Section 14 of this Agreement.
"Participant" shall have the meaning provided in Section 2.04(a).
"Payment Office" shall mean (i) in respect of Dollar Loans, U.S.
Letters of Credit, Fees (other than Letter of Credit Fees and Facing Fees with
respect to U.K. Letters of Credit prior to the occurrence of a Sharing Event)
and, except as provided in clause (ii) below, all other amounts owing under this
Agreement and the other Credit Documents, the office of the Administrative Agent
located at One Bankers Trust Plaza, New York, New York 10006, and (ii) in the
case of Sterling Loans and, prior to the occurrence of a Sharing Event, U.K.
Letters of Credit and Letter of Credit Fees and Facing Fees with respect to U.K.
Letters of Credit, the office of the Administrative Agent located at Midland
Bank Plc, London Chaps Code 404804, Account Name: Bankers Trust Company London,
Account #00491302, Reference: Loans Agency/Big Flower, or, in each case, such
other office as the Administrative Agent may hereafter designate in writing as
such to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" shall mean either or both of the Dollar Percentage and
the U.K. Percentage, as the context may require, or, after the occurrence of a
Sharing Event, the RL Percentage.
"Permitted Acquired Debt" shall mean Indebtedness of any Subsidiary of
Holdings acquired pursuant to a Permitted Acquisition, which Indebtedness
existed at the time of the consummation of any such acquisition and was not
created in contemplation thereof (and the provisions of which were not altered
in contemplation thereof), so long as (x) Holdings and
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its Subsidiaries (other than the Subsidiary being so acquired) have no liability
with respect to any such Indebtedness and (y) any Liens securing such
Indebtedness apply only to assets of the Subsidiary so acquired (and so long as
additional assets of such Subsidiary are not granted as security following, or
in contemplation of, the respective Permitted Acquisition).
"Permitted Acquired Subsidiary Preferred Stock" shall mean any
Preferred Stock of any Subsidiary of Holdings acquired pursuant to a Permitted
Acquisition, which Preferred Stock existed at the time of the consummation of
any such acquisition and was not created in contemplation thereof (and the
provisions of which were not altered in contemplation thereof), so long as (x)
Holdings and its Subsidiaries (other than the Subsidiary being so acquired) have
no liability with respect to any such Preferred Stock, (y) such Preferred Stock
does not have ordinary voting rights for the election of directors and (z) such
Preferred Stock is not secured.
"Permitted Acquisition" shall mean the acquisition by Holdings, BFPH
or any Wholly-Owned Subsidiary of Holdings or BFPH of assets constituting part
of or an entire business, division or product line of any Person not already a
Subsidiary of Holdings, or of 100% of the capital stock of any such Person (in
each case, together with any related assets used in the business, division or
product line of the Person so acquired), which Person shall, as a result of such
acquisition, become a Wholly-Owned Subsidiary of Holdings, PROVIDED that (A) the
consideration paid by Holdings, BFPH or such Wholly-Owned Subsidiary, as the
case may be, consists solely of cash (including proceeds of Revolving Loans) or
common stock, the issuance of any Qualified Preferred Stock otherwise permitted
in Section 9.12, the issuance of Indebtedness otherwise permitted in Section
9.04 and the assumption/acquisition of any Permitted Acquired Debt (calculated
at face value) or Permitted Acquired Subsidiary Preferred Stock (calculated on a
fair market value basis (as determined in good faith by Holdings, BFPH or such
Wholly-Owned Subsidiary)) relating to such business, division, product line or
Person which is permitted to remain outstanding in accordance with the
requirements of Section 9.04, (B) the assets acquired, or the business of the
Person whose stock is acquired, shall be in a Permitted Business, and (C) in the
case of the acquisition of 100% of the capital stock of any Person, such Person
shall own no capital stock of any other Person unless (x) such Person owns 100%
of the capital stock of such other Person, (y)(1) such Person and/or its
Wholly-Owned Subsidiaries own 80% of the consolidated assets of such Person and
its Subsidiaries and (2) any non-Wholly-Owned Subsidiary of such Person was a
non-Wholly-Owned Subsidiary of such Person prior to the date of such Permitted
Acquisition of such Person or (z) such capital stock constitutes a DE MINIMIS
holding of such Person in such other Person for investment purposes. For
purposes of determining compliance with the immediately preceding sentence,
Indebtedness acquired pursuant to any Permitted Acquisition and repaid promptly
after (and in any event within 30 days after the date of) the consummation of
the respective Permitted Acquisition shall not be included as outstanding
Indebtedness of Holdings or its Subsidiaries for purposes of determining
compliance with Section 8.13 and the covenants contained in Section 9, but shall
instead be treated as consideration (paid in cash or, if satisfied through the
issuance of common stock or Qualified Preferred Stock as permitted above,
consideration paid in common stock or Qualified Preferred Stock, as the case may
be) paid in connection with such Permitted Acquisition. Notwithstanding
anything to the contrary contained above, (x) a Permitted Acquisition of 100% of
the capital stock of a Person may be effected by means of a two-step transaction
(I.E., by way of
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consummation of stock purchases pursuant to a tender offer, followed by a
subsequent merger or compulsory share acquisition), but only so long as such
acquisition is effected by means of a Two-Step Permitted Acquisition (complying
with all requirements of the definition thereof) and, in any event, all
requirements set forth above in this definition of Permitted Acquisition shall
in any event be satisfied, except that the requirement of 100% ownership of
capital stock of the Target need not be satisfied until the earlier to occur of
the consummation of the subsequent merger or compulsory share acquisition
referenced in the definition of Two-Step Permitted Acquisition or the date which
occurs 135 days after the consummation of the first step of the Two-Step
Permitted Acquisition, (y) the requirements contained above, in the definition
of Two-Step Permitted Acquisition and in Section 8.13 that 100% of the capital
stock of a Person be acquired pursuant to a Permitted Acquisition shall be
deemed modified to the extent that the respective Person to be acquired has
outstanding Permitted Acquired Subsidiary Preferred Stock which will remain
outstanding after giving affect to the respective Permitted Acquisition, in each
case so long as the amount of Permitted Acquired Subsidiary Preferred Stock at
any time outstanding complies with the applicable requirements of Section
9.12(d), and no violation of Section 9.04 or any other provision of this
Agreement shall occur as a result of the assumption of the Permitted Acquired
Subsidiary Preferred Stock pursuant to the respective Permitted Acquisition and
(z) any acquisition shall be a Permitted Acquisition only if all requirements of
Sections 8.13 and 9.02(vi) applicable to Permitted Acquisitions are met with
respect thereto.
"Permitted Basket Indebtedness" shall mean (x) unsecured Indebtedness
incurred by any Borrower and/or any Guarantor and (y) Indebtedness of Foreign
Subsidiaries, which Indebtedness as described in this clause (y) may, but shall
not be required to be, secured by assets of (including capital stock owned by)
any Foreign Subsidiary (excluding U.K. Subsidiaries) (other than capital stock
owned by a Borrower or a Guarantor) and may be guaranteed (on an unsecured
basis) by any Borrower or any Guarantor.
"Permitted Business" shall mean the printing, marketing, advertising
sales and advertising services businesses conducted by Holdings and its
Subsidiaries on the Restatement Effective Date, and any printing, marketing,
advertising sales and advertising services business and reasonable extensions
thereof engaged in by Holdings and its Subsidiaries in the future (including
data collection and related businesses).
"Permitted CapEx Amount" shall have the meaning provided in Section
9.07(a).
"Permitted Conversion" shall mean the conversion into Holdings Common
Stock of Convertible Subordinated Debentures received by any holder of
Convertible QUIPS in exchange for such holder's Convertible QUIPS in accordance
with the terms of the Convertible Subordinated Debenture Indenture.
"Permitted Debt" shall mean and include Permitted Secured
Indebtedness, Permitted Refinancing Indebtedness and Permitted Subordinated
Indebtedness.
"Permitted Holders" shall mean and include (i) R. Theodore Ammon, his
estate, spouse, heirs, ancestors, lineal descendants, legatees, legal
representatives, or the trustee of any bona fide trust of which one or more of
the foregoing are the sole beneficiaries or grantors
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thereof (collectively, the "Ammon Permitted Holders") and (ii) any entity
controlled directly or indirectly, by the Ammon Permitted Holders whether
through the ownership of voting securities, by contract or otherwise.
"Permitted Liens" shall have the meaning provided in Section 9.01.
"Permitted Refinancing Indebtedness" shall mean any Indebtedness of
BFPH and its Subsidiaries issued or given in exchange for, or the proceeds of
which are used to, extend, refinance, renew, replace, substitute or refund
Existing Indebtedness or any Indebtedness issued to so extend, refinance, renew,
replace, substitute or refund any such Indebtedness, so long as (a) such
Indebtedness has a weighted average life to maturity greater than or equal to
the weighted average life to maturity of the Indebtedness being refinanced, (b)
such refinancing or renewal does not (i) increase the amount of such
Indebtedness outstanding immediately prior to such refinancing or renewal or
(ii) add guarantors, obligors or security from that which applied to such
Indebtedness being refinanced or renewed, (c) such refinancing or renewal
Indebtedness has substantially the same (or, from the perspective of the Banks,
more favorable) subordination provisions, if any, as applied to the Indebtedness
being renewed or refinanced, and (d) all other terms of such refinancing or
renewal (including, without limitation, with respect to the amortization
schedules, redemption provisions, maturities, covenants, defaults and remedies),
are not, taken as a whole, materially less favorable to the respective borrower
than those previously existing with respect to the Indebtedness being
refinancing or renewed.
"Permitted Secured Indebtedness" shall mean any Indebtedness for
borrowed money incurred by BFPH, any Borrower or one or more Subsidiary
Guarantors (which Indebtedness may be guaranteed by BFPH, any Borrower or one or
more Subsidiary Guarantors, but not by any other Subsidiary of Holdings), so
long as no Default or Event of Default is then in existence or would exist
immediately after giving effect to the respective incurrence of such
Indebtedness.
"Permitted Subordinated Indebtedness" shall mean any general unsecured
subordinated Indebtedness for borrowed money incurred by Holdings or BFPH in an
aggregate principal amount not to exceed $100,000,000 at any time outstanding,
all of the terms and conditions of which (including, without limitation, the
maturity thereof, the interest rate applicable thereto, amortization, defaults,
remedies, voting rights, subordination provisions, etc.), and the documentation
therefor, shall be reasonably satisfactory to the Agents and the Required Banks
(it being understood that, after the Agents have approved the relevant
documentation with respect to any Permitted Subordinated Indebtedness, such
documentation shall be distributed to the Banks and, if any Bank has not
objected to the terms of the relevant documentation within 5 Business Days after
its receipt thereof, such documentation shall be deemed satisfactory to such
Bank); PROVIDED, that in any event, unless the Required Banks otherwise
expressly consent in writing prior to the incurrence thereof, (i) no such
Indebtedness shall be secured by any asset of Holdings or any of its
Subsidiaries and (ii) such Indebtedness shall have substantially the same (or,
from the perspective of the Banks, more favorable) subordination provisions as
are contained in the 8-7/8% Senior Subordinated Notes Indenture. The incurrence
of Permitted Subordinated Indebtedness shall be deemed to be a representation
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and warranty by Holdings or BFPH that all conditions thereto have been satisfied
in all material respects and that same is permitted in accordance with the terms
of this Agreement, which representation and warranty shall be deemed to be a
representation and warranty for all purposes hereunder, including, without
limitation, Sections 6 and 10.
"Permitted Transaction" shall mean (i) any Permitted Acquisition
effected in accordance with the requirements of Sections 8.13 and 9.02, (ii) any
acquisition effected pursuant to, and in accordance with the terms of, Section
9.02(vii) and (iii) Investments made pursuant to, and in accordance with the
terms of, Section 9.05(vii).
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Pismo" shall have the meaning provided in the first paragraph of this
Agreement.
"Plan" shall mean (i) any single-employer plan, as defined in Section
4001(a)(15) of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute to by), Holdings or a Subsidiary of
Holdings or an ERISA Affiliate and that is subject to Title IV of ERISA, and
(ii) each such plan for the five year period immediately following the latest
date on which Holdings, a Subsidiary of Holdings or an ERISA Affiliate
maintained, contributed to or had an obligation to contribute to such plan if,
for purposes of this clause (ii), Holdings, any Subsidiary of Holdings or any
ERISA Affiliate could currently incur any liability under such plan.
"Pledge Agreements" shall mean each of the U.S. Pledge Agreement, the
U.S. Charge Over Shares and Notes and the U.K. Charge Over Shares and Notes.
"Pledged Securities" shall mean "Pledged Securities" as defined in the
relevant Pledge Agreement.
"Pounds Sterling" and "L" shall mean (i) freely transferable lawful
money of the United Kingdom and (ii) in the event that the Pound Sterling is
replaced by a European currency of the European Union (the "Euro"), Euros having
a corresponding value, calculated in accordance with the relevant provisions of
the treaty on the European Union.
"Preferred Stock," as applied to the capital stock of any Person,
means capital stock of such Person (other than common stock of such Person) of
any class or classes (however designed) that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of capital
stock of any other class of such Person.
"Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the
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lowest or best rate actually charged to any customer. BTCo may make commercial
loans or other loans at rates of interest at, above or below the Prime Lending
Rate.
"PRO FORMA Basis" shall mean, in connection with any calculation of
compliance with any financial covenant or financial term, the calculation
thereof after giving effect on a pro forma basis to (w) the assumption,
incurrence or issuance of any Indebtedness or Preferred Stock (other than
revolving Indebtedness, except to the extent same is incurred to finance the
Original Transaction or the Transaction, to refinance other outstanding
Indebtedness or Preferred Stock or to finance Permitted Acquisitions) after the
first day of the relevant Calculation Period as if such Indebtedness had been
incurred or Preferred Stock issued (and the proceeds thereof applied) on the
first day of the relevant Calculation Period, (x) the permanent repayment of any
Indebtedness (other than revolving Indebtedness except to the extent paid with
Permitted Debt or Qualified Preferred Stock) or Preferred Stock after the first
day of the relevant Calculation Period as if such Indebtedness had been retired
or redeemed on the first day of the relevant Calculation Period, (y) the
consummation of any Asset Sale after the first day of the relevant Calculation
Period as if such Asset Sale had been consummated on the first day of the
relevant Calculation Period and (z) the Permitted Acquisition, if any, then
being consummated (it being understood that, if the respective Permitted
Acquisition is a Two-Step Permitted Acquisition, pro forma effect shall only be
given to that portion of the respective Permitted Acquisition which has actually
been consummated, except as expressly required pursuant to Section 8.13 for
purposes of showing the effects, on a PRO FORMA Basis, both before and after
giving effect to the second step of the respective Two-Step Permitted
Acquisition) as well as any other Permitted Acquisition consummated after the
first day of the relevant Calculation Period and on or prior to the date of the
respective Permitted Acquisition then being effected, with the following rules
to apply in connection therewith:
(i) all Indebtedness and Preferred Stock (x) (other than revolving
Indebtedness, except to the extent same is incurred to finance the Original
Transaction or the Transaction, to refinance other outstanding Indebtedness
or Preferred Stock, or to finance Permitted Acquisitions) assumed, incurred
or issued after the first day of the relevant Calculation Period (whether
incurred to finance a Permitted Acquisition, to refinance Indebtedness or
Preferred Stock or otherwise) shall be deemed to have been incurred or
issued (and the proceeds thereof applied) on the first day of the
respective Calculation Period and remain outstanding through the date of
determination and (y) (other than revolving Indebtedness except to the
extent paid with Permitted Debt or Qualified Preferred Stock) permanently
retired or redeemed after the first day of the relevant Calculation Period
shall be deemed to have been retired or redeemed on the first day of the
respective Calculation Period and remain retired through the date of
determination;
(ii) all Indebtedness or Preferred Stock assumed to be outstanding
pursuant to preceding clause (i) shall be deemed to have borne interest or
dividends at (x) the rate applicable thereto, in the case of fixed rate
indebtedness or Preferred Stock or (y) the rates which would have been
applicable thereto during the respective period when same was deemed
outstanding, in the case of floating rate Indebtedness or Preferred Stock
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(although interest or dividend expense with respect to any Indebtedness or
Preferred Stock for periods while same was actually outstanding during the
respective period shall be calculated using the actual rates applicable
thereto while same was actually outstanding); and
(iii) in making any determination of Consolidated EBITDA, PRO FORMA
effect shall be given to the Original Transaction and the Transaction, any
Permitted Acquisition (in the case of any Two-Step Permitted Acquisition,
to the extent same has theretofore been consummated, except as otherwise
expressly required in making calculations pursuant to Section 8.13) and any
Asset Sale for the periods described above, taking into account, in the
case of any Permitted Acquisition, cost savings and expenses which would
otherwise be accounted for as an adjustment pursuant to Article 11 of
Regulation S-X under the Securities Act, as if such cost savings or
expenses were realized on the first day of the respective period.
"Projections" shall have the meaning provided in Section 5.01(n).
"Purchased Interest" shall have the meaning provided in the
Receivables Pooling Agreement.
"Qualified Preferred Stock" shall mean any Preferred Stock of
Holdings, the express terms of which shall provide that dividends thereon shall
not be required to be paid at any time (and to the extent) that such payment
would be prohibited by the terms of this Agreement or any other agreement of
Holdings or any of its Subsidiaries relating to outstanding indebtedness and
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any event
(including any change of control event), cannot mature (excluding any maturity
as the result of an optional redemption by the issuer thereof) and is not
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, and
is not redeemable, or required to be repurchased, at the sole option of the
holder thereof (including, without limitation, upon the occurrence of an change
of control event), in whole or in part, on or prior to the tenth anniversary of
the date of issuance of such Preferred Stock.
"Quarterly Payment Date" shall mean the last Business Day of each
March, June, September and December, occurring after the Restatement Effective
Date.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. Section 6901 ET SEQ.
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Receivables Amendment Conditions" means, with respect to any
amendment or modification of any Receivables Document, the requirement that the
following shall be true after giving effect to such amendment or modification:
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(A) the Receivables Maximum Funding Amount shall not be less than
$100 million except to the extent that such amount is less than $100 million due
to a shrinkage of receivables of BFPH's Subsidiaries which are sellers of
Receivables Facility Assets pursuant to the Receivables Facility after the
Original Effective Date;
(B) the scheduled maturities of the Investor Certificates and the
Purchased Interests shall not be earlier than the scheduled maturities of
Investor Certificates issued under the Receivables Facility;
(C) the weighted average of the PER ANNUM interest rates payable
in respect of Investor Certificates and Purchased Interests would not exceed the
PER ANNUM interest rates applicable to the Receivables Facility (as applicable
after the first anniversary of the closing of the Receivables Facility and, if
fixed rate financing is to be made available pursuant to the Receivables
Facility, calculated on a swapped equivalent basis);
(D) the Receivables Subsidiary would be required to apply all
funds available to it (after giving effect to the allocation of funds to
reserves required under the terms of the Receivables Documents and to the
payment of interest, principal and other amounts owed under the Receivables
Documents) to pay the purchase price for accounts receivables (including any
deferred portion of the purchase price) or to make Dividends to Treasure Chest;
(E) if any early amortization event that is not in the Receivables
Facility shall be added to the Receivables Documents or any early amortization
event that is in the Receivables Documents is made materially more restrictive,
such additional early amortization event or change in an existing early
amortization event shall not be adverse in any material respect to the interests
of Holdings and its Subsidiaries, taken as a whole (as determined in good faith
by Holdings); PROVIDED that the inclusion of an early amortization event from
the Receivables Facility in the documentation for another series of Investor
Certificates or Purchased Interests shall not be construed as the addition of an
early amortization event for purposes hereof;
(F) the degree of recourse to Holdings or its Subsidiaries (other
than the Receivables Subsidiary) under or in respect of the Receivables
Documents shall not be increased in any material respect (as determined in good
faith by Holdings) and in no event shall Holdings or any of its Subsidiaries
(other than the Receivables Subsidiary) have recourse liability (except pursuant
to Standard Securitization Undertakings) for the payment of any Receivables
Facility Assets or any Investor Certificates or Purchased Interests;
(G) if additional covenants are included in the Receivables
Documents or existing covenants in the Receivables Documents are made materially
more restrictive, such additional covenants or changes to existing covenants
shall not be adverse in any material respect to the interests of Holdings and
its Subsidiaries taken as a whole (as determined in good faith by Holdings);
(H) if additional representations and warranties are included in
the Receivables Documents or existing representations and warranties are made
materially more restrictive, such additional representations and warranties
shall not be adverse in any material
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respect to the interest of Holdings and its Subsidiaries taken as a whole (as
determined in good faith by Holdings); and
(I) the provisions of the Receivables Facility shall not conflict
with the relevant requirements of Sections 8.16, 9.02, 9.04 and 9.05;
PROVIDED that, notwithstanding anything to the contrary contained in the
definition, any changes to the Receivables Documents which relate to Holdings'
or any Subsidiary's servicing or origination or Receivables Facility Assets that
are transferred to the Receivable Subsidiary pursuant to the Receivable
Documents shall be permitted.
"Receivables Documents" shall mean all documentation relating to any
Receivables Facility, including, without limitation, the Receivables Pooling
Agreement and the documentation delivered in connection therewith (including any
documentation relating to a series of certificates or purchased interests issued
and sold pursuant thereto).
"Receivables Facility" shall mean the receivables facility in effect
on the Original Effective Date, pursuant to which (x) BFPH's Subsidiaries from
time to time sell or otherwise transfer accounts receivable and related assets
to the Receivables Subsidiary and (y) the Receivables Subsidiary shall sell or
otherwise transfer accounts receivable and related assets (or interests therein)
to the Receivables Purchasers, as more fully set forth in the Receivables
Documents; PROVIDED that the Receivables Facility may be replaced or
supplemented, or successively replaced or supplemented, after the Original
Effective Date so long as the Receivables Amendment Conditions are satisfied (in
which event such replacement facility shall be deemed to be the Receivables
Facility hereunder).
"Receivables Facility Assets" shall mean all accounts receivable
(whether now existing or arising in the future) of any of the Domestic
Subsidiaries of BFPH (other than the Receivables Subsidiary) which are
transferred to the Receivables Subsidiary pursuant to the Receivables Facility,
and any assets directly related thereto, including, without limitation, (i)
Transferred Assets (as defined in Section 2.1 of the Receivables Pooling
Agreement as originally in effect), (ii) all collateral given by the respective
account debtor or on its behalf (but not by Holdings or any of its Subsidiaries)
securing such accounts receivable, (iii) all contracts and all guarantees (but
not by Holdings or any of its Subsidiaries) or other obligations directly
related to such accounts receivable, (iv) other related assets which are
customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving accounts receivable (which may include amounts, which do not
constitute proceeds of any account receivable included in the Receivables
Facility, paid by an account receivable obligor which are credited to a bank
account established under the Receivables Facility, so long as such amounts,
upon identification by the servicer under the Receivables Facility as not
constituting proceeds of an account receivable included in the Receivables
Facility, may be released from any Lien granted under the Receivables Facility),
and (v) proceeds of all of the foregoing.
"Receivables Facility Financing Costs" shall mean, for any period, the
total consolidated interest and fee expense of Holdings and its Subsidiaries
which would have existed
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for such period pursuant to the Receivables Facility if same were structured as
a secured lending arrangement rather than as a facility for the sale of
Receivables Facility Assets; PROVIDED that such total consolidated interest and
fee expense shall be net of consolidated interest and fee expense arising in
respect of amounts on deposit in any principal funding or equalization account
established pursuant to the Receivables Facility which, if same were structured
as a secured lending arrangement rather than a facility for the sale of
Receivables Facility Assets, would collateralize the Indebtedness issued
thereunder.
"Receivables Facility Threshold Amount" shall mean $150.0 million;
PROVIDED that, (A) on each date upon which a mandatory commitment reduction is
required pursuant to Section 3.03(b) of this Agreement as a result of the
incurrence of Attributed Receivables Facility Indebtedness in excess of the
Receivables Facility Threshold Amount as theretofore in effect, the Receivables
Facility Threshold Amount shall be increased (on the date of, and after giving
effect to, the respective mandatory commitment reduction) by the amount of the
mandatory commitment reduction required on such date pursuant to Section 3.03(b)
to the extent required as a result of the respective incurrence of Attributed
Receivables Facility Indebtedness and (B) to the extent any Permitted
Acquisition made after the Original Effective Date is financed with Attributed
Receivables Facility Indebtedness actually incurred and extended with respect to
the accounts receivables of the entity being acquired pursuant to the respective
Permitted Acquisition, and so long as Holdings certifies to the Administrative
Agent the amount of Attributed Receivables Facility Indebtedness being so
incurred in connection with the respective Permitted Acquisition, the
Receivables Facility Threshold Amount shall be increased by the amount of
Attributed Receivables Facility Indebtedness being incurred as described in this
clause (B) in connection with such Permitted Acquisition; PROVIDED FURTHER, that
the maximum aggregate increases to the Receivables Facility Threshold Amount
pursuant to clause (B) of the immediately preceding proviso from all Permitted
Acquisitions effected after the Original Effective Date shall be $25 million.
"Receivables Maximum Funding Amount" shall mean the sum of (x) with
respect to outstanding Investors Certificates and Purchased Interests that have
fixed principal amounts, such principal amounts plus (y) with respect to
Investors Certificates or Purchased Interests that have variable principal
amounts, the Receivables Stated Amounts thereof.
"Receivables Pooling Agreement" shall mean the Big Flower Receivables
Master Trust Pooling and Servicing Agreement, dated as of October 4, 1996, among
BFP Receivables Corporation, BFPH and Manufacturers and Traders Trust Company,
as Trustee, as amended or modified from time to time.
"Receivables Purchasers" shall mean and include (i) Manufacturers and
Traders Trust Company, as Trustee under the Receivables Pooling Agreement, and
its successors in that capacity, (ii) the purchaser or purchasers of any
interest in the Receivables Facility Assets under or in connection with any
Receivables Facility and (iii) the respective successors and assigns of the
foregoing Receivables Purchasers.
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"Receivables Sellers" at any time shall mean any U.S. Borrower and any
Subsidiary Guarantor which is, at such time, a Person which is selling or
transferring Receivables Facility Assets to the Receivables Subsidiary.
"Receivables Stated Amount" means, with respect to an Investor
Certificate or Purchased Interest, the maximum amount of the funding commitment
with respect thereto.
"Receivables Subsidiary" shall mean a Wholly-Owned Subsidiary of
Treasure Chest which engages in no activities other than in connection with the
financing of accounts receivable and which is designated (as provided below) as
the Receivables Subsidiary (a) no portion of the Indebtedness or any other
obligations (contingent or otherwise) of which (i) is guaranteed by Holdings or
any other Subsidiary of Holdings (excluding guarantees of obligations (other
than the principal of, and interest on, Indebtedness)) pursuant to Standard
Securitization Undertakings, (ii) is recourse to or obligates Holdings or any
other Subsidiary of Holdings in any way other than pursuant to Standard
Securitization Undertakings or (iii) subjects any property or asset of Holdings
or any other Subsidiary of Holdings, directly or indirectly, contingently or
otherwise, to the satisfaction thereof, other than pursuant to Standard
Securitization Undertakings, (b) with which neither Holdings nor any of its
Subsidiaries has any contract, agreement, arrangement or understanding (other
than pursuant to the Receivables Documents (including with respect to fees
payable in the ordinary course of business in connection with the servicing of
accounts receivable and related assets)) on terms less favorable to Holdings or
such Subsidiary than those that might be obtained at the time from persons that
are not Affiliates of Holdings, and (c) to which neither Holdings nor any other
Subsidiary of Holdings has any obligation to maintain or preserve such entity's
financial condition or cause such entity to achieve certain levels of operating
results. Any such designation shall be evidenced to the Administrative Agent by
filing with the Administrative Agent an officer's certificate of Holdings
certifying that, to the best of such officer's knowledge and belief after
consultation with counsel, such designation complied with the foregoing
conditions.
"Refinancing" shall mean the Refinancing of the Existing U.K. Credit
Facility on the Restatement Effective Date in accordance with the requirements
of Section 5.01(g).
"Refinancing Documents" shall mean all documents entered into in
connection with the Refinancing pursuant to the requirements of Section 5.01(g).
"Register" shall have the meaning provided in Section 13.16.
"Registration Statement" shall mean the Registration Statement of BFPH
on Form S-3 and Exhibits, as amended, Registration Number 333-27375.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
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"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing or
migration into the environment.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan other than those events as to which the 30-day
notice period is waived by statute, under subsection .13, .14, .16, .18, .19 or
.20 of PBGC Regulation Section 2615 or otherwise.
"Reporting Company" shall mean a company required to file Form 10-K
Reports and Form 10-Q Reports under the Exchange Act.
"Required Banks" shall mean Non-Defaulting Banks, the sum of whose
Commitments as of any date of determination (or after the termination thereof,
outstanding Individual Exposures) represent greater than 50% of the excess of
the Total Commitment at such time over the Commitments of Defaulting Banks (or
after the termination thereof, the sum of the then total Individual Exposures of
all Non-Defaulting Banks at such time).
"Required Investment Grade Rating" shall mean a rating of (i) BBB or
better assigned by S&P or (ii) Baa2 or better assigned by Moody's.
"Restatement Effective Date" shall have the meaning provided in
Section 13.10.
"Restricted Subsidiaries" shall mean, (x) all of the Subsidiaries of
Holdings and its Subsidiaries in existence on the Restatement Effective Date and
(y) any Subsidiary (other than an Unrestricted Subsidiary) that is created,
established or acquired after the Restatement Effective Date.
"Returns" shall have the meaning provided in Section 7.09.
"Revolving Loan" shall have the meaning provided in Section 1.01(a).
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"Revolving Note" shall mean and include each U.S. Borrowers' Revolving
Note and each U.K. Borrowers'
"RL Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Commitment of such
Bank at such time and the denominator of which is the Total Commitment at such
time. Notwithstanding anything to the contrary contained above, if the RL
Percentage of any Bank is to be determined after the Total Commitment has been
terminated, then the RL Percentages of the Banks shall be determined immediately
prior (and without giving effect) to such termination.
"RGP" shall mean RGP Limited Partnership, a limited partnership
organized and existing under the laws of the State of Nevada.
"S&P" shall mean Standard & Poors Ratings Group.
"Scheduled Existing Indebtedness" shall have the meaning provided in
Section 5.01(l).
"SEC" shall have the meaning provided in Section 8.01(h).
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b).
"Secured Creditors" shall have the meaning assigned that term in the
Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Security Documents" shall mean the U.S. Security Documents and the
U.K. Security Documents.
"Sharing Event" shall mean (i) the occurrence of any Event of Default
with respect to any Borrower pursuant to Section 10.05, (ii) the declaration of
the termination of the Total Commitment, or the acceleration of the maturity of
any Loans, in each case pursuant to the last paragraph of Section 10 or (iii)
the failure of any Borrower to pay any principal of, or interest on, Loans or
any Letter of Credit Outstandings on the Final Maturity Date.
"Shell Corporation" shall mean, subject to the provisions of Section
8.11(e), any corporation established to effect a Permitted Acquisition which has
not yet occurred, so long as the aggregate amount of assets at any time held by
all Shell Corporations at any time in existence does not exceed $100,000, it
being understood that at the time of the consummation of the respective
Permitted Acquisition or at such time as the assets of any corporation which was
a Shell Corporation exceed $100,000, such corporation shall cease to be a Shell
Corporation.
"Solvent Entity" shall have the meaning provided in Section 7.05(c).
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"Special Purpose Leasing Trusts" shall mean (i) Big Flower Leasing
Trust 1998-A, a special purpose Delaware business trust and a direct
Wholly-Owned Subsidiary of the Special Unrestricted Leasing Subsidiary, (ii) Big
Flower Leasing Trust 1998-B, a special purpose Delaware business trust and a
direct Wholly-Owned Subsidiary of the Special Unrestricted Leasing Subsidiary
and (iii) Big Flower Leasing Trust 1998-C, a special purpose Delaware business
trust and a direct Wholly-Owned Subsidiary of the Special Unrestricted Leasing
Subsidiary.
"Special Unrestricted Leasing Subsidiary" shall mean Big Flower
Leasing L.L.C., a Delaware limited liability company and a direct subsidiary of
Treasure Chest, Webcraft and BF Digital and an indirect Wholly-Owned Subsidiary
of BFPH.
"Specified Default" shall mean any Default under Section 10.01 or
10.05.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by Holdings or any Subsidiary
thereof in connection with a Receivables Facility which are reasonably customary
in an accounts receivable transaction (including, without limitation, all such
representations, warranties, covenants and indemnities included in the
Receivables Documents, as in effect on the Original Effective Date).
"Standby Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Start Date" shall have the meaning provided in the definition of
Applicable Margin.
"Stated Amount" of each Letter of Credit shall, at any time, mean the
maximum amount available to be drawn thereunder (in each case determined without
regard to whether any conditions to drawing could then be met, but after giving
effect to all previous drawings made thereunder), PROVIDED that, except as
provided in the definition of U.K. L/C Stated Amount, the "Stated Amount" of
each Letter of Credit denominated in Pounds Sterling shall be, on any date of
calculation, the Dollar Equivalent of the maximum amount available to be drawn
in Pounds Sterling thereunder (determined without regard to whether any
conditions to drawing could then be met).
"Sterling Equivalent" shall mean, at any time for the determination
thereof, the amount of Pounds Sterling which could be purchased with the amount
of Dollars involved in such computation at the spot rate of exchange therefor as
quoted by the Administrative Agent as of 11:00 A.M. (London time) on the date
two Business Days prior to the date of any determination thereof for purchase on
such date (or, in the case of any determination pursuant to Section 1.15 or
13.19 or Section 26 of any Subsidiaries Guaranty, on the date of determination).
"Sterling Euro Rate" shall mean (i) the rate per annum that appears on
page 3750 of the Dow Jones Telerate Screen (or any successor page) for Pounds
Sterling deposits with maturities comparable to the Interest Period applicable
to the Sterling Revolving Loans subject to the respective Borrowing as of 11:00
A.M. (London time) on the date of the proposed commencement of such Interest
Period or (ii) if such a rate does not appear on page 3750 of the
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Dow Jones Telerate Screen (or any successor page), the offered quotation to
first-class banks in the London interbank Eurodollar market by BTCo for Pounds
Sterling deposits of amounts in immediately available funds comparable to the
outstanding principal amount of the Sterling Revolving Loan of BTCo with
maturities comparable to the Interest Period applicable to such Sterling
Revolving Loan as of 11:00 A.M. (London time) on the date of the proposed
commencement of such Interest Period; PROVIDED, that in the event the
Administrative Agent has made any determination pursuant to Section 1.10(a)(i)
in respect of Sterling Revolving Loans, or in the circumstances described in
clause (i) to the proviso to Section 1.10(b) in respect of Sterling Revolving
Loans, the Sterling Euro Rate determined pursuant to this definition shall
instead be the rate determined by BTCo as the all-in-cost of funds for BTCo to
fund such Sterling Revolving Loan with maturities comparable to the Interest
Period applicable thereto.
"Sterling Loan" shall mean each Sterling Revolving Loan and each
Sterling Swingline Loan.
"Sterling Revolving Loan" shall have the meaning provided in Section
1.01(a).
"Sterling Swingline Loan" shall have the meaning provided in Section
1.01(b).
"Sub-Commitments" shall mean, with respect to any Bank, the Non-U.K.
Sub-Commitment, if any, of such Bank and the U.K. Sub-Commitment of such Bank
(or its Affiliate which is acting as a U.K. Bank).
"Subordinated Intercompany Note" shall mean a promissory note in the
form of Exhibit L evidencing any loan or advance made by any U.K. Borrower to
Holdings to the extent permitted by Section 9.05(v)(z).
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time. Notwithstanding
the foregoing (and except for purposes of Sections 7.16 through 7.19, inclusive,
and the definitions of Unrestricted Subsidiary and Wholly-Owned Unrestricted
Subsidiary contained herein), an Unrestricted Subsidiary shall be deemed not to
be a Subsidiary of Holdings or any of its other Subsidiaries for purposes of
this Agreement. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" in this Credit Agreement shall refer to a Subsidiary or
Subsidiaries of BFPH or Holdings, as the case may be.
"Subsidiary Guarantor" shall mean and include (i) each Non-Borrower
U.S. Subsidiary Guarantor, (ii) each Non-U.K. U.S. Borrower, (iii) on and after
the date any Domestic U.K. Borrower becomes a party hereto pursuant to, and in
accordance with the terms of, Section 6, such Domestic U.K. Borrower and (iv) on
and after the execution and delivery of the Non-Borrower U.K. Subsidiaries
Guaranty, each U.K. Subsidiary Guarantor.
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"Sub-Tranche" shall mean and include each of (i) the U.K.
Sub-Commitments and the extensions of credit made from time to time pursuant
thereto and (ii) the Non-U.K. Sub-Commitments and the extensions of credit made
from time to time pursuant thereto.
"SULS Loan Agreement" shall mean the demand promissory note, dated as
of April 1, 1998, between Bankers Trust Company, various lenders from time to
time party thereto and the Special Unrestricted Leasing Subsidiary, providing
for loans in an aggregate principal amount not to exceed $17,500,000 at any time
outstanding and any refinancing (or successive refinancing) thereof which does
not increase the principal amount thereof from the amount outstanding at the
time of such refinancing.
"Swingline Expiry Date" shall mean the date which is two Business Days
prior to the Final Maturity Date.
"Swingline Loan" shall have the meaning provided in Section 1.01(b).
"Target" shall have the meaning provided such term in the definition
of Two-Step Permitted Acquisition.
"Tax Sharing Agreements" shall mean any tax sharing or tax allocation
agreements entered into by Holdings or any of its Subsidiaries.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Test Period" shall mean each period of four consecutive fiscal
quarters then last ended, in each case taken as one accounting period.
"Tested Asset Sale" shall have the meaning provided in Section
9.02(xiv).
"Total Commitment" shall mean, at any time, the sum of the Commitments
of each of the Banks at such time.
"Total Non-U.K. Sub-Commitment" at any time shall mean the sum of the
Non-U.K. Sub-Commitments of all the Banks; PROVIDED that at no time shall the
Total Non-U.K. Sub-Commitment exceed the Total Commitment as then in effect.
"Total U.K. Sub-Commitment" at any time shall mean the sum of the U.K.
Sub-Commitments of all the U.K. Banks; PROVIDED that at no time shall the Total
U.K. Sub-Commitment exceed the Total Commitment as then in effect.
"Total Unutilized Commitment" shall mean, at any time, an amount equal
to the remainder of (x) the then Total Commitment, less (y) the Aggregate
Exposure at such time.
"Trade Letter of Credit" shall have the meaning provided in Section
2.01(a).
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"Tranche" shall mean the respective facilities and commitments
utilized in making Loans hereunder, with there being two separate Tranches
(I.E., Revolving Loans and Swingline Loans).
"Transaction" shall mean, collectively, (i) the consummation of the
Refinancing, (ii) the amendment and restatement of the Original Credit Agreement
(including the repayment of all amounts owing under the Original Credit
Agreement), (iii) the entering into of the Credit Documents and the occurrence
of the initial Credit Events hereunder on the Restatement Effective Date and
(iv) the payment of fees and expenses in connection and in accordance with the
foregoing.
"Treasure Chest" shall have the meaning provided in the first
paragraph of this Agreement.
"Treasure Chest of Nevada" shall mean Treasure Chest Advertising
Company of Nevada, Inc., a corporation organized and existing under the laws of
the State of Nevada.
"Troypeak" shall have the meaning provided in the first paragraph of
this Agreement.
"Trust Agreement" shall mean the Amended and Restated Trust Agreement,
dated as of October 14, 1997, among Holdings, The Bank of New York, as property
trustee thereunder, The Bank of New York (Delaware), as Delaware trustee, and
various administrative trustees thereunder, as the same may be amended, modified
or supplemented from time to time in accordance with the terms hereof and
thereof.
"Two-Step Permitted Acquisition" shall mean the acquisition by
Holdings or any Wholly-Owned Subsidiary of Holdings of 100% of the capital stock
of any Person (a "Target") not already a Subsidiary of Holdings by way of (x) a
tender offer for the capital stock of such Target and (y) a subsequent merger of
the Target with and into a Wholly-Owned Subsidiary of Holdings or a subsequent
compulsory acquisition of all remaining outstanding shares of capital stock of
the Target; PROVIDED that (i) any such Two-Step Permitted Acquisition shall be
effected in accordance with clauses (A) and (B) of the proviso to the definition
of Permitted Acquisition, (ii) the subsequent merger or compulsory share
acquisition to be effected as part of such Two-Step Permitted Acquisition shall
be consummated as soon as practicable after the consummation of the tender offer
portion thereof but in any event within 135 days thereafter, (iii) upon the
consummation of the tender offer portion of any such Two-Step Permitted
Acquisition, Holdings or its respective Wholly-Owned Subsidiary shall have
acquired sufficient shares of the outstanding capital stock of the respective
Target to effect (without any vote by any other stockholders of Target) the
subsequent merger (as a result of which the Target shall become a Wholly-Owned
Subsidiary of Holdings) or compulsory share acquisition within 135 days after
the consummation of said tender offer and (iv) prior to the consummation of the
tender offer portion of any Two-Step Permitted Acquisition, Holdings or its
respective Subsidiary shall have available to it sufficient Committed Financing
to effect such Two-Step Permitted Acquisition (and to make all payments owing in
connection with both steps thereof). Notwithstanding anything to the contrary
contained above, Permitted Acquired Subsidiary Preferred Stock may be acquired
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pursuant to a Two-Step Permitted Acquisition (and remain outstanding thereafter)
to the extent contemplated by clause (y) of the last sentence of the definition
of Permitted Acquisition contained herein.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, I.E., whether a Base Rate Loan, a Eurodollar
Loan or a Sterling Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"U.K. Bank" means (i) each Person listed on Schedule I-B, and (ii)
each additional Person that becomes a U.K. Bank party hereto in accordance with
Section 1.13 and/or 13.04. A U.K. Bank shall cease to be a "U.K. Bank" when it
has assigned all of its U.K. Sub-Commitments in accordance with Section 1.13
and/or 13.04. For purposes of this Agreement, "Bank" includes each U.K. Bank
unless the context otherwise requires.
"U.K. Borrowers" shall mean and include BFL, Olwen, Troypeak, Pismo,
Broadcast, BFDSL and each other Subsidiary of Holdings that (x) becomes a party
to this Agreement after the Restatement Effective Date pursuant to Section 6 and
(y) is designated as a "U.K. Borrower" in the Election to Become a Borrower
executed and delivered by such Subsidiary pursuant to Section 6.
"U.K. Borrowers' Loan" shall mean each U.K. Borrowers' Revolving Loan
and each U.K. Borrowers' Swingline Loan.
"U.K. Borrowers' Revolving Loan" shall mean each Revolving Loan made
to the U.K. Borrowers (or any of them), including after giving effect to any
conversion thereof into a Dollar Revolving Loan pursuant to Section 1.15(a), and
each Mandatory Borrowing made in respect of any U.K. Borrowers' Swingline Loan.
"U.K. Borrowers' Revolving Note" shall have the meaning provided in
Section 1.05(a).
"U.K. Borrowers' Swingline Loan" shall mean any Swingline Loan
extended to the U.K. Borrowers (or any of them), pursuant to Section 1.01(b),
including after giving effect to any conversion thereof into a Dollar Swingline
Loan pursuant to Section 1.15(b).
"U.K. Borrowers' Swingline Note" shall have the meaning provided in
Section 1.05(a).
"U.K. Charge Over Shares and Notes" shall have the meaning provided in
Section 5.01(i).
"U.K. Credit Party" shall mean and include each U.K. Borrowers and
each U.K. Subsidiary Guarantor.
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"U.K. Guaranteed Obligations" shall mean (i) the principal and
interest on each U.K. Borrowers' Revolving Note and the U.K. Borrowers'
Swingline Note issued by each U.K. Borrower to each Bank, and each U.K.
Borrowers' Loan (and Dollar Loans resulting from a conversion pursuant to
Section 1.15) made, under this Agreement and all reimbursement obligations and
Unpaid Drawings with respect to U.K. Letters of Credit, together with all the
other obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities
(including, without limitation, indemnities, fees and interest thereon) of the
U.K. Borrowers (or any of them) to each Bank (including, without limitation,
each U.K. Bank), the Agents and the Collateral Agent now existing or hereafter
incurred under, arising out of or in connection with this Agreement or any other
Credit Document and the due performance and compliance with all the terms,
conditions and agreements contained in the Credit Documents by the U.K.
Borrowers and (ii) all obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due)
and liabilities of the U.K. Borrowers (or any of them) or any of their
respective Subsidiaries owing under any Interest Rate Protection Agreement
entered into by the U.K. Borrowers (or any of them) or any of their respective
Subsidiaries with any Bank or any affiliate thereof (even if such Bank
subsequently ceases to be a Bank under this Agreement for any reason) so long as
such Bank or affiliate participate in such Interest Rate Protection Agreement,
and their subsequent assigns, if any, whether now in existence or hereafter
arising, and the due performance and compliance with all terms, conditions and
agreements contained therein.
"U.K. L/C Stated Amount" of each U.K. Letter of Credit shall, at any
time, mean the maximum amount available to be drawn thereunder (expressed in
Pounds Sterling) (in each case determined without regard to whether any
conditions to drawing could then be met, but after giving effect to all previous
drawings made thereunder).
"U.K. Letter of Credit" shall mean each Letter of Credit denominated
in Pounds Sterling issued for the joint and several account of the U.K.
Borrowers pursuant to Section 2.01.
"U.K. Letter of Credit Outstandings" shall mean, at any time, the sum
of (i) the aggregate Stated Amount of all outstanding U.K. Letters of Credit at
such time and (ii) the amount of all Unpaid Drawings with respect to U.K.
Letters of Credit at such time.
"U.K. Percentage" of any U.K. Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the U.K. Sub-Commitment of
such U.K. Bank at such time and the denominator of which is the aggregate amount
of U.K. Sub-Commitments of all U.K. Banks at such time, PROVIDED that if the
U.K. Percentage of any U.K. Bank is to be determined after the Total Commitment
has been terminated, then the U.K. Percentages of the U.K. Banks shall be
determined immediately prior (and without giving effect) to such termination.
"U.K. Security Documents" shall mean and include each U.K. Charge Over
Shares and Notes and each U.K. Charge of Shares and Notes.
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"U.K. Sub-Commitment" shall mean, as to any U.K. Bank, (i) the amount
set forth opposite such U.K. Bank's name in Schedule I-B directly below the
column entitled "U.K. Sub-Commitment", as same may be (x) reduced from time to
time pursuant to Section 3.02, 3.03 and/or 10 or (y) adjusted from time to time
as a result of assignments to or from such U.K. Bank pursuant to Section 1.13 or
13.04(b). The U.K. Sub-Commitment of each U.K. Bank is a sub-limit of the
Commitment of the respective U.K. Bank (or its respective Affiliate which is a
Bank with the related Commitment) and not an additional commitment and, in no
event, may exceed at any time the amount of the Commitment of such U.K. Bank (or
its respective Affiliate which is a Bank with the related Commitment).
"U.K. Subsidiary" shall mean each Subsidiary of Holdings organized
under the laws of England or Wales.
"U.K. Subsidiary Guarantor" shall mean each Wholly-Owned Subsidiary of
Holdings that is a U.K. Subsidiary and that is or becomes a party to the
Non-Borrower U.K. Subsidiaries Guaranty.
"Unfunded Current Liability" of any Plan means the amount, if any, by
which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year each exceeds the fair market
value of the assets allocable thereto, determined in accordance with Statement
of Financial Accounting Standards No. 87, based upon the actuarial assumptions
used by the Plan's actuary in the most recent annual valuation of the Plan.
"United States" and "U.S." shall each mean the United States of
America.
"Unpaid Drawing" shall have the meaning provided for in Section
2.05(a).
"Unrestricted Subsidiary" shall mean (i) the Special Purpose Leasing
Trust, (ii) the Special Unrestricted Leasing Subsidiary and (iii) any
Subsidiary of Holdings or BFPH that is acquired or created after the Restatement
Effective Date and designated by Holdings or BFPH as an Unrestricted Subsidiary
hereunder by written notice to the Administrative Agent, PROVIDED that Holdings
or BFPH shall only be permitted to so designate a new Unrestricted Subsidiary
after the Restatement Effective Date and so long as (i) no Default or Event of
Default exists or would result therefrom and (ii) 100% of the capital stock of
such newly-designated Unrestricted Subsidiary is owned by Holdings, BFPH or
another Unrestricted Subsidiary and all of the provisions of Section 9.11 shall
have been complied with in respect of such newly-designated Unrestricted
Subsidiary and such Unrestricted Subsidiary shall be capitalized (to the extent
capitalized by Holdings, BFPH or any of their respective Subsidiaries) through
Investments as permitted by, and in compliance with, Section 9.05(vii), with any
assets owned by such Unrestricted Subsidiary at the time of the initial
designation thereof to be treated as Investments pursuant to Section 9.05(vii),
PROVIDED that at the time of the initial Investment by Holdings or BFPH in such
Subsidiary (x) Holdings or BFPH shall designate such entity as an Unrestricted
Subsidiary in a written notice to the Administrative Agent and (y) such entity
and Holdings and/or BFPH shall have entered into tax sharing and management
services agreements on a basis which is satisfactory to the Administrative
Agent. Additionally, neither Holdings nor BFPH may
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designate any Subsidiary created or acquired pursuant to a Permitted Acquisition
as an Unrestricted Subsidiary.
"Unutilized Commitment" with respect to any Bank, at any time, shall
mean such Bank's Commitment at such time, if any, less the sum of (i) the
aggregate outstanding principal amount of Revolving Loans made by such Bank
(including any Affiliate of any such Bank acting as a U.K. Bank) (for this
purpose (x) at all times prior to the occurrence of a Sharing Event and the
automatic conversion of Sterling Revolving Loans pursuant to Section 1.15, using
the Dollar Equivalent of each Sterling Revolving Loan then outstanding and (y)
at all times after the occurrence of any Sharing Event, giving effect to the
conversions of Dollar obligations rquired by Section 1.15) and (ii) such Bank's
L/C Participation Percentage of the Stated Amount of each Letter of Credit and
any Unpaid Drawings relating thereto.
"U.S. Bank" shall mean (i) each Person listed on Part A of Schedule I
that has a Non-U.K. Sub-Commitment and (ii) each additional Person that becomes
a U.S. Bank party hereto in accordance with Section 1.13 and/or 13.04. A U.S.
Bank shall cease to be a "U.S. Bank" when it has assigned all of its Non-U.K.
Sub-Commitment in accordance with Section 1.13 and/or 13.04. For purposes of
this Agreement, "Bank" includes each U.S. Bank unless the context otherwise
requires.
"U.S. Borrowers" shall mean and include Treasure Chest, Webcraft, BF
Digital and each other Subsidiary of Holdings that (x) becomes the party to this
Agreement after the Restatement Effective Date pursuant to Section 6 and (y) is
a Domestic Subsidiary.
"U.S. Borrowers' Loan" shall mean each U.S. Borrowers' Revolving Loan
and each U.S. Borrowers' Swingline Loan.
"U.S. Borrowers' Revolving Loan" shall mean each Revolving Loan
originally made to the U.S. Borrowers (or any of them) pursuant to Section
1.01(a), and each Mandatory Borrowing made in respect of any U.S. Borrowers'
Swingline Loan.
"U.S. Borrowers' Revolving Note" shall have the meaning provided in
Section 1.05(a).
"U.S. Borrowers' Swingline Loan" shall mean each Swingline Loan
extended to the U.S. Borrowers (or any of them) pursuant to Section 1.01(b).
"U.S. Borrowers' Swingline Note" shall have the meaning provided in
Section 1.05(a).
"U.S. Charge Over Shares and Notes" shall have the meaning provided in
Section 5.01(i).
"U.S. Guaranteed Obligations" shall mean (i) the principal and
interest on each U.S. Borrowers' Revolving Note and the U.S. Borrowers'
Swingline Note issued to each Bank,
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and each U.S. Borrowers' Loan made, under this Agreement and all reimbursement
obligations and Unpaid Drawings with respect to U.S. Letters of Credit, together
with all the other obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due)
and liabilities (including, without limitation, indemnities, fees and interest
thereon) of the U.S. Borrowers (or any of them) to each Bank, the Agents and the
Collateral Agent now existing or hereafter incurred under, arising out of or in
connection with this Agreement or any other Credit Document and the due
performance and compliance with all the terms, conditions and agreements
contained in the Credit Documents by the U.S. Borrowers and (ii) all obligations
(including obligations which, but for the automatic stay under Section 362(a) of
the Bankruptcy Code, would become due) and liabilities of either Parent, the
U.S. Borrowers (or any of them) or any of their respective Subsidiaries owing
under any Interest Rate Protection Agreement entered into by the U.S. Borrowers
(or any of them) or any of their respective Subsidiaries with any Bank or any
affiliate thereof (even if such Bank subsequently ceases to be a Bank under this
Agreement for any reason) so long as such Bank or affiliate participate in such
Interest Rate Protection Agreement, and their subsequent assigns, if any,
whether now in existence or hereafter arising, and the due performance and
compliance with all terms, conditions and agreements contained therein.
"U.S. Letter of Credit" shall mean each Letter of Credit denominated
in Dollars issued for the joint and several account of the U.S. Borrowers
pursuant to Section 2.01.
"U.S. Letter of Credit Outstandings" shall mean, at any time, the sum
of (i) the aggregate Stated Amount of all outstanding U.S. Letters of Credit at
such time and (ii) the amount of all Unpaid Drawings with respect to U.S.
Letters of Credit at such time.
"U.S. Pledge and Security Agreement" shall have the meaning provided
in Section 5.01(i).
"U.S. Security Documents" shall mean the U.S. Pledge and Security
Agreement and any other pledge agreement entered into pursuant to Section 8.15.
"U.S. Subsidiary Guarantor" shall mean and include each Non-Borrower
U.S. Subsidiary Guarantor and each Domestic U.K. Borrower.
"Voting Stock" shall mean, as to any Person, any class or classes of
capital stock of such Person pursuant to which the holders thereof have the
general voting power under ordinary circumstances to elect at least a majority
of the Board of Directors of such Person.
"Webcraft" shall have the meaning provided in the first paragraph of
this Agreement.
"Wholly-Owned Domestic Subsidiary" shall mean any Wholly-Owned
Subsidiary which is not a Foreign Subsidiary.
"Wholly-Owned Foreign Subsidiary" shall mean any Wholly-Owned
Subsidiary which is not a Domestic Subsidiary.
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"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint venture
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time; PROVIDED
that (x) a Person which would constitute a Wholly-Owned Subsidiary but for the
existence of Permitted Acquired Subsidiary Preferred Stock of such Person which
remains outstanding shall be a Wholly-Owned Subsidiary and (y) other than in the
definition of Wholly-Owned Unrestricted Subsidiary, no Unrestricted Subsidiary
shall be considered a Wholly-Owned Subsidiary. Unless otherwise qualified, all
references to a "Wholly-Owned Subsidiary" or to "Wholly-Owned Subsidiaries" in
this Credit Agreement shall refer to a Wholly-Owned Subsidiary or Wholly-Owned
Subsidiaries of BFPH or Holdings, as the case may be.
"Wholly-Owned Unrestricted Subsidiary" shall mean any Wholly-Owned
Subsidiary which is an Unrestricted Subsidiary.
SECTION 12. THE AGENTS.
12.01 APPOINTMENT. The Banks hereby designate BTCo as Administrative
Agent (for purposes of this Section 12, the term "Agent" shall include BTCo in
its capacity as Administrative Agent hereunder and Collateral Agent pursuant to
the Security Documents) and Credit Suisse First Boston as Documentation Agent to
act as specified herein and in the other Credit Documents. Each Bank hereby
irrevocably authorizes, and each holder of any Note by the acceptance of such
Note shall be deemed irrevocably to authorize, the Agent and the Documentation
Agent to take such action on its behalf under the provisions of this Agreement,
the other Credit Documents and any other instruments and agreements referred to
herein or therein and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of the
Agent or Documentation Agent by the terms hereof and thereof and such other
powers as are reasonably incidental thereto. Each of the Agent and the
Documentation Agent may perform any of its duties hereunder by or through its
respective officers, directors, agents, employees or affiliates.
12.02 NATURE OF DUTIES. The Agent and the Documentation Agent shall
not have any duties or responsibilities except those expressly set forth in this
Agreement and the Security Documents. The Co-Agents, in their capacity as such,
shall not have any duties or responsibilities pursuant to this Agreement or any
of the Security Documents. None of the Agent, the Documentation Agent or the
Co-Agents nor any of their respective officers, directors, agents, employees or
affiliates shall be liable for any action taken or omitted by it or them
hereunder or under any other Credit Document or in connection herewith or
therewith, unless caused by its or their gross negligence or willful misconduct.
The duties of the Agent, the Documentation Agent and the Co-Agents shall be
mechanical and administrative in nature; the Agent, the Documentation Agent and
the Co-Agents shall not have by reason of this Agreement or any other Credit
Document a fiduciary relationship in respect of any Bank or the holder of any
Note; and nothing in this Agreement or any other Credit Document, expressed or
implied, is intended to or shall be so construed as to impose upon the Agent,
the Documentation Agent and
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the Co-Agents any obligations in respect of this Agreement or any other Credit
Document except as expressly set forth herein or therein.
12.03 LACK OF RELIANCE ON THE AGENT, THE DOCUMENTATION AGENT AND THE
CO-AGENTS. Independently and without reliance upon the Agent, the Documentation
Agent and the Co-Agents, each Bank and the holder of each Note, to the extent it
deems appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of Holdings and its
Subsidiaries in connection with the making and the continuance of the Loans and
the taking or not taking of any action in connection herewith and (ii) its own
appraisal of the credit worthiness of Holdings and its Subsidiaries and, except
as expressly provided in this Agreement, the Agent, the Documentation Agent and
the Co-Agents shall not have any duty or responsibility, either initially or on
a continuing basis, to provide any Bank or the holder of any Note with any
credit or other information with respect thereto, whether coming into its
possession before the making of the Loans or at any time or times thereafter.
None of the Agent, the Documentation Agent, the Co-Agents or any of their
respective affiliates nor any of their respective officers, directors, agents,
or employees shall be responsible to any Bank or the holder of any Note for, or
be required or have any duty to ascertain, inquire or verify the accuracy of,
(i) any recitals, statements, information, representations or warranties herein
or in any document, certificate or other writing delivered in connection
herewith, (ii) the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of this
Agreement or any other Credit Document, (iii) the financial condition of
Holdings and any of its Subsidiaries, (iv) the performance or observance of any
of the terms, provisions or conditions of this Agreement or any other Credit
Document, (v) the satisfaction of any of the conditions precedent set forth in
Section 5 or 6, or (vi) the existence or possible existence of any Default or
Event of Default.
12.04 CERTAIN RIGHTS OF THE AGENT, THE DOCUMENTATION AGENT AND THE
CO-AGENTS. If the Agent, the Documentation Agent or the Co-Agents shall request
instructions from the Required Banks with respect to any act or action
(including failure to act) in connection with this Agreement or any other Credit
Document, such Agent, Documentation Agent or Co-Agent shall be entitled to
refrain from such act or taking such action unless and until the Agent shall
have received instructions from the Required Banks, and such Agent,
Documentation Agent or Co-Agent shall not incur liability to any Person by
reason of so refraining. Without limiting the foregoing, no Bank or the holder
of any Note shall have any right of action whatsoever against such Agent,
Documentation Agent or Co-Agent as a result of the Agent acting or refraining
from acting hereunder or under any other Credit Document in accordance with the
instructions of the Required Banks.
12.05 RELIANCE. The Agent, Documentation Agent and Co-Agents shall
be entitled to rely, and shall be fully protected (and shall have no liability
to any person) in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
any Person that such Agent, Documentation Agent or Co-Agent believed, in the
absence of gross negligence or willful misconduct, to be the proper Person, and,
with respect to all legal matters pertaining to this Agreement and any other
Credit Document and its duties hereunder and
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thereunder, upon advice of counsel selected by such Agent, Documentation Agent
or Co-Agent (which may be counsel for the Credit Parties).
12.06 INDEMNIFICATION. To the extent each of the Agent, the
Documentation Agent or any Co-Agent is not reimbursed and indemnified by the
Credit Agreement Parties, the Banks will reimburse and indemnify such Agent,
Documentation Agent or Co-Agent, in proportion to their respective "percentages"
as used in determining the Required Banks (determined as if there were no
Defaulting Banks at such time), for and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, costs,
expenses or disbursements of whatsoever kind or nature which may be imposed on,
asserted against or incurred by such Agent, Documentation Agent or Co-Agent in
performing its respective duties hereunder or under any other Credit Document,
or in any way relating to or arising out of this Agreement or any other Credit
Document; PROVIDED that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Agent's, Documentation
Agent's or Co-Agent's gross negligence or willful misconduct.
12.07 THE AGENT, DOCUMENTATION AGENT AND THE CO-AGENTS IN THEIR
INDIVIDUAL CAPACITIES. With respect to its obligation to make Loans or issue or
participate in any Letter of Credit under this Agreement, each of the Agent,
Documentation Agent and Co-Agents shall have the rights and powers specified
herein for a "Bank" and may exercise the same rights and powers as though it
were not performing the duties specified herein; and the term "Banks," "Required
Banks," "holders of Notes" or any similar terms shall, unless the context
clearly otherwise indicates, include the Agent, the Documentation Agent and the
Co-Agents in their individual capacity. Each of the Agent, the Documentation
Agent and the Co-Agents may accept deposits from, lend money to, and generally
engage in any kind of banking, trust or other business with any Credit Party or
any Affiliate of any Credit Party as if they were not performing the duties
specified herein, and may accept fees and other consideration from any Credit
Party for services in connection with this Agreement and otherwise without
having to account for the same to the Banks.
12.08 HOLDERS. The Agent may deem and treat the payee of any Note as
the owner thereof for all purposes hereof unless and until a written notice of
the assignment, transfer or endorsement thereof, as the case may be, shall have
been filed with the Agent. Any request, authority or consent of any Person who,
at the time of making such request or giving such authority or consent, is the
holder of any Note shall be conclusive and binding on any subsequent holder,
transferee, assignee or indorsee, as the case may be, of such Note or of any
Note or Notes issued in exchange therefor.
12.09 RESIGNATION BY THE AGENT, DOCUMENTATION AGENT AND THE
CO-AGENTS. (a) The Agent may resign from the performance of all its functions
and duties hereunder and/or under the other Credit Documents at any time by
giving 20 Business Days' prior written notice to the Banks and the Credit
Agreement Parties. Such resignation shall take effect upon the appointment of a
successor Agent pursuant to clauses (b) and (c) below or as otherwise provided
below.
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(b) Upon any such notice of resignation, the Required Banks shall
appoint a successor Agent hereunder or thereunder who shall be a commercial bank
or trust company reasonably acceptable to the Credit Agreement Parties.
(c) If a successor Agent shall not have been so appointed within such
20 Business Day period, the Agent, with the consent of the Credit Agreement
Parties (which consent will not be unreasonably withheld or delayed), shall then
appoint a commercial bank or trust company as successor Agent who shall serve as
Agent hereunder or thereunder until such time, if any, as the Required Banks
appoint a successor Agent as provided above.
(d) If no successor Agent has been appointed pursuant to clause (b)
or (c) above by the 30th Business Day after the date such notice of resignation
was given by the Agent, the Agent's resignation shall become effective and the
Banks shall thereafter perform all the duties of the Agent hereunder and/or
under any other Credit Document until such time, if any, as the Required Banks
appoint a successor Agent as provided above.
(e) The Documentation Agent may resign from the performance of all
its functions and duties hereunder and/or under the other Credit Documents at
any time by giving five Business Days' prior written notice to the Banks. Such
resignation shall take effect at the end of such five Business Day period.
(f) Each Co-Agent may resign from the performance of all its
functions and duties hereunder and/or under the other Credit Documents at any
time by giving five Business Days' prior written notice to the Banks. Such
resignation shall take effect at the end of such five Business Day period.
SECTION 13. MISCELLANEOUS.
13.01 PAYMENT OF EXPENSES, ETC. The Credit Agreement Parties jointly
and severally agree that they shall: (i) whether or not the transactions herein
contemplated are consummated, pay all reasonable out-of-pocket costs and
expenses of the Agents (including, without limitation, the reasonable fees and
disbursements of White & Case LLP and local counsel, if any, and all appraisal
fees, trustee's fees, documentary and recording taxes, title insurance and
recording, filing and other expenses) in connection with the preparation,
execution and delivery of this Agreement and the other Credit Documents and the
documents and instruments referred to herein and therein and any amendment,
waiver or consent relating hereto or thereto, of the Agents in connection with
its syndication efforts with respect to this Agreement and of the Agents and
each of the Banks in connection with the enforcement of this Agreement and the
other Credit Documents and the documents and instruments referred to herein and
therein (including, without limitation, the reasonable fees and disbursements of
counsel for the Agents and, following and during the continuation of an Event of
Default in connection with the enforcement of this Agreement and the other
Credit Documents, for each of the Banks); (ii) pay and hold each of the Agents
and each of the Banks harmless from and against any and all present and future
stamp, excise and other similar taxes with respect to the foregoing matters and
save
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each of the Agents and each of the Banks harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other than
to the extent attributable to such Bank) to pay such taxes; and (iii) indemnify
the Agents and each Bank, and each of their respective officers, directors,
employees, representatives and agents from and hold each of them harmless
against any and all liabilities, obligations (including removal or remedial
actions), losses, damages, penalties, claims, actions, judgments, suits, costs,
expenses and disbursements (including reasonable attorneys' fees and
disbursements) incurred by, imposed on or assessed against any of them as a
result of, or arising out of, or in any way related to, or by reason of, (a) any
investigation, litigation or other proceeding (whether or not any Agent or any
Bank is a party thereto) related to the entering into and/or performance of this
Agreement or any other Credit Document or the use of any Letter of Credit or the
proceeds of any Loans hereunder or the consummation of any transactions
contemplated herein (including, without limitation, the Transaction) or in any
other Credit Document or the exercise of any of their rights or remedies
provided herein or in the other Credit Documents, or (b) the actual, alleged or
threatened Release of Hazardous Materials in the air, surface water or
groundwater or on the surface or subsurface of any Real Property owned, leased
or at any time operated by any Credit Party or any of its Subsidiaries, the
Release, generation, storage, transportation, handling or arrangement for
disposal of Hazardous Materials by Holdings, its Subsidiaries or their
respective predecessors at any location, whether or not owned, leased or
operated by any Credit Party or any of its Subsidiaries, the non-compliance of
any Real Property with any Environmental Law (including applicable permits
thereunder) applicable to any Real Property, or any Environmental Claim relating
to any Credit Party, any of its Subsidiaries, its operations or any Real
Property owned or at any time operated by any Credit Party or any of its
Subsidiaries, including, in each case, without limitation, the reasonable fees
and disbursements of counsel and other reasonably necessary consultants incurred
in connection with any such investigation, litigation or other proceeding (but
excluding any losses, liabilities, claims, damages or expenses to the extent
incurred by reason of the gross negligence or willful misconduct of the Person
to be indemnified). To the extent that the undertaking to indemnify, pay or
hold harmless any Agent or any Bank set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the Credit
Agreement Parties shall make the maximum contribution to the payment and
satisfaction of each of the indemnified liabilities which is permissible under
applicable law.
13.02 RIGHT OF SETOFF. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Bank is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind to any Credit
Party or any of its Subsidiaries or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and apply any and all
deposits (general or special) and any other Indebtedness at any time held or
owing by such Bank (including, without limitation, by branches and agencies of
such Bank wherever located) to or for the credit or the account of any Credit
Party or any of its Subsidiaries against and on account of the Obligations and
liabilities of such Credit Party or such Subsidiary to such Bank under this
Agreement or under any of the other Credit Documents, including, without
limitation, all interests in
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Obligations purchased by such Bank pursuant to Section 13.06(b), and all other
claims of any nature or description arising out of or connected with this
Agreement or any other Credit Document, irrespective of whether or not such Bank
shall have made any demand hereunder and although said Obligations, liabilities
or claims, or any of them, shall be contingent or unmatured.
13.03 NOTICES. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to Holdings, BFPH,
Treasure Chest, Webcraft, BF Digital, BFL, Olwen, Troypeak, Pismo, Broadcast or
BFDSL, at such Person's address specified opposite its signature below; if to
any other Borrower, at such Person's address specified in its Election to Become
a Borrower; if to the Documentation Agent or any Bank, at its address specified
opposite its name on Schedule II below; and if to the Administrative Agent, at
its Notice Office; or, as to any Credit Party or the Administrative Agent, at
such other address as shall be designated by such party in a written notice to
the other parties hereto and, as to each Bank, at such other address as shall be
designated by such Bank in a written notice to the Credit Agreement Parties and
the Administrative Agent. All such notices and communications shall, when
mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight
courier, be effective two days after deposited in the mails, delivered to the
telegraph company, cable company or overnight courier, as the case may be, or
sent by telex or telecopier, except that notices and communications to any
Credit Agreement Party and either of the Agents shall not be effective until
received by such Credit Agreement Party and such Agent.
13.04 BENEFIT OF AGREEMENT. (a) This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; PROVIDED, HOWEVER, no Credit Agreement Party
may assign or transfer any of its rights, obligations or interest hereunder or
under any other Credit Document without the prior written consent of each of the
Banks, except that (i) any U.S. Borrower may assign or transfer its rights,
obligations and interests hereunder to another U.S. Borrower with the consent of
the Required Banks (whereupon such assigning U.S. Borrower shall cease to be a
Borrower hereunder and shall be relieved of its obligations hereunder), so long
as concurrently with any such assignment such assigning U.S. Borrower (x)
executes a counterpart of the Non-Borrower U.S. Subsidiaries Guaranty or (y) is
sold in accordance with the requirements of Section 9.02, (ii) any U.K. Borrower
may assign or transfer its rights, obligations and interests hereunder to
another U.K. Borrower with the consent of the Majority U.K. Banks (whereupon
such assigning U.K. Borrower shall cease to be a U.K. Borrower hereunder and
shall be relieved of its obligations as such hereunder), so long as concurrently
with any such assignment, such assigning U.K. Borrower is sold in accordance
with the requirements of Section 9.02 and (iii) any U.S. Borrower may merge into
or consolidate with any other U.S. Borrower and any U.K. Borrower may merge into
or consolidate with any other U.K. Borrower, in each case in accordance with the
requirements of Section 9.02(ix) and, PROVIDED FURTHER, that, although any Bank
may transfer, assign or grant participations in its rights hereunder, such Bank
shall remain a "Bank" for all purposes hereunder (and may not transfer or assign
all or any portion of its Commitments hereunder except as provided in Section
13.04(b)) and the transferee, assignee or participant, as the case may be, shall
not constitute a "Bank" hereunder and, PROVIDED FURTHER, that no Bank
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shall transfer or grant any participation under which the participant shall have
rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would (i) extend
the final scheduled maturity of any Loan, Note or Letter of Credit (unless such
Letter of Credit is not extended beyond the Final Maturity Date) in which such
participant is participating, or reduce the rate or extend the time of payment
of interest or Fees thereon (except in connection with a waiver of applicability
of any post-default increase in interest rates) or reduce the principal amount
thereof, or increase the amount of the participant's participation over the
amount thereof then in effect (it being understood that a waiver of any Default
or Event of Default or of a mandatory reduction in the Total Commitment shall
not constitute a change in the terms of such participation, and that an increase
in any Commitment or Loan shall be permitted without the consent of any
participant if the participant's participation is not increased as a result
thereof), (ii) consent to the assignment or transfer by any Credit Agreement
Party of any of its rights and obligations under this Agreement (except in the
circumstances permitted by the exception to the first proviso to this sentence)
or (iii) release all or substantially all of the Collateral under all of the
Security Documents (except as expressly provided in the Credit Documents)
supporting the Obligations hereunder in which such participant is participating.
In the case of any such participation, the participant shall not have any rights
under this Agreement or any of the other Credit Documents (the participant's
rights against such Bank in respect of such participation to be those set forth
in the agreement executed by such Bank in favor of the participant relating
thereto) and all amounts payable by the Borrowers hereunder shall be determined
as if such Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together
with one or more other Banks) may (x) assign all or a portion of its Commitment
(and related outstanding Obligations hereunder) to (i) its parent company and/or
any affiliate of such Bank which is at least 50% owned by such Bank or its
parent company or to one or more Banks or (ii) in the case of any Bank that is a
fund that invests in bank loans, any other fund that invests in bank loans and
is managed by the same investment advisor of such Bank or by an Affiliate of
such investment advisor or (y) assign all, or if less than all, a portion equal
to at least $5,000,000 in the aggregate for the assigning Bank or assigning
Banks, of such Commitment (or, if the Commitment has terminated, its outstanding
Obligations) hereunder to one or more Eligible Transferees (treating (A) any
fund that invests in bank loans and (B) any other fund that invests in bank
loans and is managed by the same investment advisor as such fund or by an
Affiliate of such investment advisor, as a single Eligible Transferee), each of
which assignees shall become a party to this Agreement as a Bank by execution of
an Assignment and Assumption Agreement, PROVIDED that, (i) the assignment by any
Bank of its U.K. Sub-Commitment (or any portion thereof) shall constitute the
assignment of a like amount of such Bank's (or its respective Affiliate's)
Commitment, (ii) any assignment of all or any portion of the Commitment of any
Bank shall be required to be accompanied by the assignment of all or such
portions of the U.K. Sub-Commitment and/or Non-U.K. Sub-Commitment of such Bank
(or its respective Affiliate) as is equal, in the aggregate, to the amount of
the Commitment being so assigned, (iii) any assignment of all or any portion of
the Commitment and related outstanding Obligations (or, if the Commitment has
terminated, any assignment of Obligations originally extended pursuant to the
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Commitments) shall be made on a basis such that the respective assignee
participates in Revolving Loans, and in Letter of Credit Outstandings, in
accordance with the Commitment (and Sub-Commitments described above) so assigned
(or if the Commitment has terminated, on the same basis as participated in by
the Banks with Commitments (and Sub-Commitments described above) prior to the
termination thereof), (iv) at such time Schedules I-A and, if applicable, I-B
shall be deemed modified to reflect the Commitment of such new Bank and of the
existing Banks, (v) upon surrender of the old Notes, new Notes will be issued to
such new Bank and to the assigning Bank upon the request of such new Bank or
assigning Bank, such new Notes to be in conformity with the requirements of
Section 1.05 (with appropriate modifications) to the extent needed to reflect
the revised Commitment, (vi) the consent of the Administrative Agent and each
Issuing Bank shall be required in connection with any assignment to an Eligible
Transferee pursuant to clause (y) above (which consent shall not be unreasonably
withheld), (vii) the consent of Holdings (so long as no Event of Default is then
in existence) shall be required in connection with any assignment to an Eligible
Transferee pursuant to clause (y) above (which consent shall not be unreasonably
withheld or delayed) and (viii) the Administrative Agent shall receive at the
time of each such assignment, from the assigning or assignee Bank, the payment
of a non-refundable assignment fee of $3,500; and, PROVIDED FURTHER, that such
transfer or assignment shall not be effective until recorded by the
Administrative Agent on the Register pursuant to Section 13.16. To the extent
of any assignment pursuant to this Section 13.04(b), the assigning Bank shall be
relieved of its obligations hereunder with respect to its assigned Commitment.
At the time of each assignment pursuant to this Section 13.04(b) to a Person
which is not already a Bank hereunder and which is not a United States person
(as such term is defined in Section 7701(a)(30) of the Code) for Federal income
tax purposes, the respective assignee Bank shall provide to the U.S. Borrowers
and the Administrative Agent the appropriate Internal Revenue Service Forms
(and, if applicable, a Section 4.04(b)(ii) Certificate) described in Section
4.04(b)). To the extent that an assignment of all or any portion of a Bank's
Commitment and related outstanding Obligations pursuant to Section 1.13 or this
Section 13.04(b) would, at the time of such assignment, result in increased
costs under Section 1.10, 1.11, 2.06 or 4.04 from those being charged by the
respective assigning Bank prior to such assignment, then the Borrowers shall not
be obligated to pay such increased costs (although the Borrowers shall be
obligated to pay any other increased costs of the type described above resulting
from changes or occurrences of the types described in said Sections after the
date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Bank or
BTCo from pledging its Loans and Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Bank from such Federal Reserve Bank and, with
the consent of the Administrative Agent, any Bank which is a fund may pledge all
or any portion of its Notes or Loans to its trustee in support of its
obligations to its trustee. No pledge pursuant to this clause (c) shall release
the transferor Bank from any of its obligations hereunder.
13.05 NO WAIVER REMEDIES CUMULATIVE. No failure or delay on the part
of any Agent or any Bank or any holder of any Note in exercising any right,
power or privilege hereunder or under any other Credit Document and no course of
dealing between any Credit Agreement Party or any other Credit Party and any
Agent or any Bank or the holder of any Note shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power or privilege
hereunder or under any other Credit Document preclude any other or further
exercise thereof or the exercise of any other right, power or
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privilege hereunder or thereunder. The rights, powers and remedies herein or in
any other Credit Document expressly provided are cumulative and not exclusive of
any rights, powers or remedies which any Agent or any Bank or the holder of any
Note would otherwise have. No notice to or demand on any Credit Party in any
case shall entitle any Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of any Agent
or any Bank or the holder of any Note to any other or further action in any
circumstances without notice or demand.
13.06 PAYMENTS PRO RATA. (a) Except as otherwise provided in this
Agreement, the Administrative Agent agrees that promptly after its receipt of
each payment from or on behalf of any Credit Party in respect of any Obligations
of such Credit Party, it shall distribute such payment to the Banks (other than
any Bank that has consented in writing to waive its PRO RATA share of any such
payment) PRO RATA based upon their respective shares, if any, of the Obligations
with respect to which such payment was received.
(b) Except to the extent that this Agreement provides for payments to
be allocated to the Banks with particular Obligations, prior to the occurrence
of a Sharing Event, if any Bank (a "Benefitted Bank") shall at any time receive
any payment of all or part of its Loans or the other Obligations owing to it, or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 10.05, or otherwise), in a greater proportion
than any such payment to or collateral received by any other Bank, if any, in
respect of such other Bank's Loans or the other Obligations owing to such other
Bank, or interest thereon, such Benefitted Banks shall purchase for cash from
the other Banks a participating interest in such portion of each such other
Bank's Loans and/or other Obligations owing to each such other Banks, or shall
provide such other Banks with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such Benefitted Bank to share
the excess payment or benefits of such collateral or proceeds ratably with each
of the Banks; PROVIDED, HOWEVER, that if all or any portion of such excess
payment or benefits is thereafter recovered from such Benefitted Bank, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 13.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Banks as opposed to Defaulting Banks.
13.07 CALCULATIONS; COMPUTATIONS. (a) The financial statements to
be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with generally accepted accounting principles in the United States
consistently applied throughout the periods involved (except as set forth in the
notes thereto or as otherwise disclosed in writing by Holdings to the Banks),
PROVIDED that (i) except as otherwise specifically provided herein, all
computations of Available Basket Amount, Consolidated Cumulative 25% Net Income,
the Applicable Margin and all computations determining compliance with Section 9
shall utilize accounting principles
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and policies in conformity with those used to prepare the historical financial
statements delivered to the Banks pursuant to Section 7.05(a) (with the
foregoing generally accepted accounting principles, subject to the preceding
proviso, herein called "GAAP"), (ii) to the extent expressly required pursuant
to the provisions of this Agreement, certain calculations shall be made on a PRO
FORMA Basis, (iii) for all purposes of this Agreement, all Attributed
Receivables Facility Indebtedness shall be included as Indebtedness in the
consolidated financial statements of Holdings and its Subsidiaries, and shall be
considered Indebtedness of a Subsidiary of Holdings hereunder, regardless of any
differing treatment pursuant to generally acceptable accounting principles, (iv)
for purposes of determining compliance with any incurrence tests set forth in
Sections 8 and/or 9 (excluding Sections 9.08 and 9.09), any amounts so incurred
or expended (to the extent incurred or expended in a currency other than
Dollars) shall be converted into Dollars on the basis of the Dollar Equivalent
of such amounts as in effect on the date of such incurrence or expenditure under
any provision of any such Section that has an aggregate Dollar limitation
provided for therein (and to the extent the respective incurrence test regulates
the aggregate amount outstanding at any time and it is expressed in terms of
Dollars, all outstanding amounts originally incurred or spent in currencies
other than Dollars shall be converted into Dollars on the basis of the Dollar
Equivalent of such amounts as in effect on the date any new incurrence or
expenditures made under any provision of any such Section that regulates the
Dollar amount outstanding at any time), and (v) for purposes of calculating
financial terms, all covenants and related definitions, all such calculations
based on the operations of Holdings and its Restricted Subsidiaries on a
consolidated basis shall be made without giving effect to the operations of any
Unrestricted Subsidiaries.
(b) All computations of Eurodollar interest, Commitment Commission
and other Fees hereunder shall be made on the basis of a year of 360 days for
the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest, Commitment Commission or Fees
are payable. All computations of Base Rate, Sterling Euro Rate and Overnight
LIBOR Rate interest hereunder shall be made on the basis of a year of 365/366
days for the actual number of days (including the first day but excluding the
last day) occurring in the period for which such interest is payable.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH CREDIT AGREEMENT PARTY HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND
IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF
THE AFORESAID COURTS. IF FOR ANY REASON ANY CREDIT AGREEMENT PARTY SHALL CEASE
TO BE LOCATED AT THE ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, EACH CREDIT
AGREEMENT PARTY AGREES TO DESIGNATE
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A DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY TO ACT AS ITS AGENT TO RECEIVE,
ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY,
SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY
BE SERVED IN ANY SUCH ACTION OR PROCEEDING ON THE TERMS SATISFACTORY TO THE
ADMINISTRATIVE AGENT. NOTHING HEREIN SHALL AFFECT THE RIGHTS OF THE AGENTS
UNDER THIS AGREEMENT, ANY BANK OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER JURISDICTION.
(b) EACH CREDIT AGREEMENT PARTY HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.09 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with each Credit Agreement
Party and the Administrative Agent.
13.10 EFFECTIVENESS. This Agreement shall become effective on the
date (the "Restatement Effective Date") on which (i) Holdings, BFPH, Treasure
Chest, Webcraft, BF Digital, BFL, Olwen, Troypeak, Pismo, Broadcast, BFDSL, the
Agents, the Co-Agents, each Continuing Bank (which must constitute the Required
Banks under, and as defined in, the Original Credit Agreement) and each New Bank
shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered the same to the Administrative Agent at
its Notice Office or, in the case of the Banks, shall have given to the
Administrative Agent telephonic (confirmed in writing), written, telex or
facsimile notice (actually received) at such office that the same has been
signed and mailed to it and (ii) the conditions contained in Section 5 are met
to the satisfaction of the Administrative Agent and the Required Banks
(determined immediately after the occurrence of the Restatement Effective Date).
Unless the Administrative Agent has received actual notice from any Bank that
the conditions contained in Section 5 have
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not been met to its satisfaction, upon the satisfaction of the condition
described in clause (i) of the immediately preceding sentence and upon the
Administrative Agent's good faith determination that the conditions described in
clause (ii) of the immediately preceding sentence have been met or waived with
the consent of the Required Banks, then the Restatement Effective Date shall be
deemed to have occurred, regardless of any subsequent determination that one or
more of the conditions thereto had not been met (although the occurrence of the
Restatement Effective Date shall not release any Credit Party from any liability
for failure to satisfy one or more of the applicable conditions contained in
Section 5). The Administrative Agent will give Holdings and each Bank prompt
written notice of the occurrence of the Restatement Effective Date.
13.11 HEADINGS DESCRIPTIVE. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
13.12 AMENDMENT OR WAIVER; ETC. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks, PROVIDED that no such change, waiver, discharge or termination
shall, without the consent of each Bank (other than a Defaulting Bank) (with
Obligations being directly affected thereby), (i) extend the final scheduled
maturity of any Loan or Note or extend the stated maturity of any Letter of
Credit beyond the Final Maturity Date, or reduce the rate or extend the time of
payment of interest (other than as a result of any waiver of the applicability
of any post-default increase in interest rates) or Fees thereon, or reduce the
principal amount thereof (except to the extent repaid in cash), (ii) release all
or substantially all of the Collateral (except as expressly provided in the
Credit Documents) under all the Security Documents, (iii) amend, modify or waive
any provision of this Section 13.12, (iv) reduce the percentage specified in the
definition of Required Banks (it being understood that, with the consent of the
Required Banks, additional extensions of credit pursuant to this Agreement may
be included in the determination of the Required Banks on substantially the same
basis as the extensions of Commitments are included on the Effective Date), (v)
consent to the assignment or transfer by any Borrower of any of its rights and
obligations under this Agreement (except in the circumstances permitted by the
exception to the first proviso to the first sentence of Section 13.04(a)) or
(vi) amend, waive or modify the approval rights of the Banks in respect of a
nine or twelve-month Interest Period as provided in Section 1.09; PROVIDED
FURTHER, that no such change, waiver, discharge or termination shall (v)
increase the Commitment of any Bank over the amount thereof then in effect
without the consent of such Bank (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default
or of a mandatory reduction in the Total Commitment shall not constitute an
increase of the Commitment of any Bank, and that an increase in the available
portion of any Commitment of any Bank shall not constitute an increase in the
Commitment of such Bank), (w) without the consent of the respective Issuing Bank
or Issuing Banks, amend, modify or waive any provision of Section 2 with respect
to Letters of Credit issued by it or alter its rights or obligations with
respect to Letters of Credit issued by it, (x) without the consent of BTCo,
amend, modify or waive any provision of Sections 1.01(b), (c) and (d) or alter
its rights and obligations with respect
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to Swingline Loans (including, without limitation, the obligations of the other
Banks to fund Mandatory Borrowings), (y) without the consent of the respective
Agent, amend, modify or waive any provision of Section 12 as same applies to
such Agent or any other provision as same relates to the rights or obligations
of such Agent and (z) without the consent of the Collateral Agent, amend, modify
or waive any provision relating to the rights or obligations of the Collateral
Agent.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (vii), inclusive, of the first proviso to Section 13.12(a),
the consent of the Required Banks is obtained but the consent of one or more of
such other Banks whose consent is required is not obtained, then Holdings shall
have the right, so long as all non-consenting Banks whose individual consent is
required are treated as described in either clauses (A) or (B) below, to either
(A) replace each such non-consenting Bank or Banks with one or more Replacement
Banks pursuant to Section 1.13 so long as at the time of such replacement, each
such Replacement Bank consents to the proposed change, waiver, discharge or
termination or (B) terminate the Commitment (and related U.K. Sub-Commitment, if
any) of such non-consenting Bank (if such Bank's consent is required as a result
of its Commitment) and repay outstanding Revolving Loans of such Bank which gave
rise to the need to obtain such Bank's consent, in accordance with Sections
3.02(b) and/or 4.01(v), PROVIDED that, unless the Commitments (and related U.K.
Sub-Commitments) terminated, and the Revolving Loans repaid, pursuant to the
preceding clause (B) are immediately replaced in full at such time through the
addition of new Banks or the increase of the Commitments (and related U.K.
Sub-Commitments) and/or outstanding Revolving Loans of existing Banks (who in
each case must specifically consent thereto), then in the case of any action
pursuant to preceding clause (B), the Required Banks (determined before giving
effect to the proposed action) shall specifically consent thereto, PROVIDED
FURTHER, that in any event the Borrower shall not have the right to replace a
Bank, terminate its Commitment or repay its Revolving Loans solely as a result
of the exercise of such Bank's rights (and the withholding of any required
consent by such Bank) pursuant to the second proviso to Section 13.12(a).
13.13 SURVIVAL. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 2.06, 4.04, 13.01, 13.06 and 13.16 shall
survive the execution, delivery and termination of this Agreement, the Notes and
any Letters of Credit, and the making and repayment of the Loans.
13.14 DOMICILE OF LOANS AND COMMITMENTS. Each Bank may transfer and
carry its Loans and Commitments at, to or for the account of any office,
Subsidiary or Affiliate of such Bank. Notwithstanding anything to the contrary
contained herein, to the extent that a transfer of Loans or Commitments pursuant
to this Section 13.14 would, at the time of such transfer, result in increased
costs under Section 1.10, 1.11, 2.06 or 4.04 from those being charged by the
respective Bank prior to such transfer, then the Borrowers shall not be
obligated to pay such increased costs (although the Borrowers shall be obligated
to pay any other increased costs of the type described above resulting from
changes after the date of the respective transfer).
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13.15 CONFIDENTIALITY. (a) Subject to the provisions of clause (b)
of this Section 13.15, each Bank agrees that it will use its best efforts not to
disclose without the prior consent of Holdings (other than to its Affiliates,
employees, auditors, advisors or counsel or to another Bank if the Bank or such
Bank's holding or parent company in its sole discretion determines that any such
party should have access to such information, provided such Persons shall be
subject to the provisions of this Section 13.15 to the same extent as such Bank)
any information with respect to Holdings or any of its Subsidiaries which is now
or in the future furnished pursuant to this Agreement or any other Credit
Document and which is designated by any Credit Agreement Party to the Banks in
writing as confidential, PROVIDED that any Bank may disclose any such
information (a) as has become generally available to the public, (b) as may be
required or appropriate in any report, statement or testimony submitted to any
municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Bank or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or similar organizations (whether in the United
States or elsewhere) or their successors, (c) as may be required or appropriate
in respect to any summons or subpoena or in connection with any litigation, (d)
in order to comply with any law, order, regulation or ruling applicable to such
Bank, (e) to the Agents or the Collateral Agent and (f) to any prospective or
actual transferee or participant in connection with any contemplated transfer or
participation of any of the Notes or Commitments or any interest therein by such
Bank, PROVIDED, that such prospective transferee agrees to provisions
substantially the same as to those contained in this Section.
(b) Each Credit Party hereby acknowledges and agrees that each Bank
may share with any of its affiliates any information related to Holdings or any
of its Subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of Holdings and its Subsidiaries),
provided such Persons shall be subject to the provisions of this Section 13.15
to the same extent as such Bank.
13.16 REGISTER. Each Borrower hereby designates the Administrative
Agent to serve as such Borrower's agent, solely for purposes of this Section
13.16, to maintain a register (the "Register") on which it will record the
Commitments (and related U.K. Sub-Commitments, if any) from time to time of each
of the Banks, the Revolving Loans made by each of the Banks and each repayment
in respect of the principal amount of the Revolving Loans of each Bank. Failure
to make any such recordation, or any error in such recordation, shall not affect
any Borrower's obligations in respect of such Revolving Loans. With respect to
any Bank, the transfer of the Commitments (and related U.K. Sub-Commitments, if
any) of such Bank and the rights to the principal of, and interest on, any
Revolving Loan made pursuant to such Commitments shall not be effective until
such transfer is recorded on the Register maintained by the Administrative Agent
with respect to ownership of such Commitments (and related U.K. Sub-Commitments,
if any) and Revolving Loans and prior to such recordation all amounts owing to
the transferor with respect to such Commitments (and related U.K.
Sub-Commitments) and Revolving Loans shall remain owing to the transferor. The
registration of assignment or transfer of all or part of the Commitments (and
related U.K. Sub-Commitments, if any) and the Revolving Loans shall be recorded
by the Administrative Agent on the Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to Section 13.04(b). Concurrently with the
delivery of such an Assignment
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and Assumption Agreement to the Administrative Agent for acceptance and
registration of assignment or transfer of all or part of a Revolving Loan, or as
soon thereafter as practicable, the assigning or transferor Bank shall surrender
the Revolving Note evidencing such Revolving Loan, and thereupon one or more new
Revolving Notes in the same aggregate principal amount shall be issued to the
assigning or transferor Bank and/or the new Bank. Each Borrower jointly and
severally agrees to indemnify the Administrative Agent from and against any and
all losses, claims, damages and liabilities of whatsoever nature which may be
imposed on, asserted against or incurred by the Administrative Agent in
performing its duties under this Section 13.16, PROVIDED that no Borrower shall
have any obligation to indemnify the Administrative Agent for any loss, claim,
damage, liability or expense to the extent resulting from the gross negligence
or wilful misconduct of the Administrative Agent.
13.17 POWERS-OF ATTORNEY; ETC. (a) Holdings, BFPH and each U.S.
Borrower is hereby authorized by, and on behalf of, each (other) U.S. Borrower
to give Notices of Borrowing, Notices of Conversion and other notices and
directions in connection with the extensions of credit and repayments thereof to
be made pursuant to this Agreement to the U.S. Borrowers (including without
limitation notices as to the application of proceeds of such extensions of
credit). Each U.S. Borrower hereby grants to Holdings, BFPH and each other U.S.
Borrower an irrevocable power-of attorney, in such U.S. Borrower's name, to take
the actions contemplated above in this Section 13.17(a). Furthermore, each U.S.
Borrower agrees that the Agents and the Banks may at any time rely upon any
notices, instructions or other information furnished by Holdings, BFPH, any U.S.
Borrower, and shall not be required to have any writing in connection with the
matters described above signed by any other U.S. Borrower.
(b) Holdings, BFPH and each U.K. Borrower is hereby authorized by, and
on behalf of, each (other) U.K. Borrower to give Notices of Borrowing, Notices
of Conversion and other notices and directions in connection with the extensions
of credit and repayments thereof to be made pursuant to this Agreement to the
U.K. Borrowers (including without limitation notices as to the application of
proceeds of such extensions of credit). Each U.K. Borrower hereby grants to
Holdings, BFPH and each other U.K. Borrower an irrevocable power-of attorney, in
such U.K. Borrower's name, to take the actions contemplated above in this
Section 13.17(b). Furthermore, each U.K. Borrower agrees that the Agents and
the Banks may at any time rely upon any notices, instructions or other
information furnished by Holdings, BFPH or any U.K. Borrower, and shall not be
required to have any writing in connection with the matters described above
signed by any other U.K. Borrower.
13.18 LIMITATION ON ADDITIONAL AMOUNTS, ETC. Notwithstanding
anything to the contrary contained in Section 1.11 of this Agreement, unless a
Bank gives notice to Holdings or the respective Borrower that it is obligated to
pay an amount under such Section within six months after the later of (x) the
date the Bank incurs the respective loss, expense or liability or (y) the date
such Bank has actual knowledge of its incurrence of the respective loss, expense
or liability, then such Bank shall only be entitled to be compensated for such
amount by the relevant Borrower pursuant to said Section 1.11, to the extent the
loss, expense or liability is incurred or suffered on or after the date which
occurs six months prior to such Bank giving notice to such Borrower that it is
obligated to pay the respective amounts pursuant to said Section 1.11. This
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Section 13.18 shall have no applicability to any Section of this Agreement other
than said Section 1.11.
13.19 JUDGMENT CURRENCY. (a) The Credit Parties' obligations
hereunder and under the other Credit Documents to make payments in the
respective Applicable 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, the Collateral Agent or the respective Bank
of the full amount of the Obligation Currency expressed to be payable to the
Administrative Agent, the Collateral Agent or such Bank under this Agreement or
the other Credit Documents. If for the purpose of obtaining or enforcing
judgment against any Credit Party 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 Sterling Equivalent or the Dollar Equivalent thereof, as the case
may be, 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 of the day on which the
judgment is given (such Business 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 Borrowers covenant and agree to pay, or cause to be paid, 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 or exchange prevailing on the Judgment Currency Conversion
Date.
(c) For purposes of determining the Sterling Equivalent or the Dollar
Equivalent or any other rate of exchange for this Section, such amounts shall
include any premium and costs payable in connection with the purchase of the
Obligation Currency.
13.20 ADDITIONS OF NEW BANKS; TERMINATION OF COMMITMENTS OF
NON-CONTINUING BANKS, ETC. (a) On and as of the occurrence of the Restatement
Effective Date in accordance with Section 13.10 hereof, each New Bank shall
become a "Bank" under, and for all purposes of, this Agreement and the other
Credit Documents.
(b) The parties hereto acknowledge that each Original Bank has been
offered the opportunity to participate in this Agreement, after the occurrence
of the Restatement Effective Date, as a Continuing Bank thereunder, but that no
Original Bank is obligated to be a Continuing Bank. By their execution and
delivery hereof, Holdings, BFPH, the Borrowers and the Required Banks
(determined immediately before the occurrence of the Restatement Effective Date)
consent to the voluntary repayment by BFPH of all outstanding Original Loans and
other Obligations
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owing to each Original Bank and to the voluntary termination by BFPH of the
Revolving Loan Commitment (under, and as defined in, the Original Credit
Agreement) of each Bank which has not elected to become a Continuing Bank (each
such Bank, a "Non-Continuing Bank"), in each case to be effective on, and
contemporaneously with the occurrence of, the Restatement Effective Date in
accordance with the provisions of Section 13.20(c).
(c) Notwithstanding anything to the contrary contained in the
Original Credit Agreement or any Credit Document, Holdings, BFPH, the Borrowers
and each of the Banks hereby agree that (i) all of the Original Loans
outstanding on the Restatement Effective Date shall be repaid in full on the
Restatement Effective Date, together with interest thereon and all accrued fees
(and any other amounts) owing under the Original Credit Agreement and (ii) in
the event that any Original Bank shall fail to execute a counterpart of this
Agreement prior to the occurrence of the Restatement Effective Date, such
Original Bank shall be deemed to be a Non-Continuing Bank and the Revolving Loan
Commitment (under, and as defined in, the Original Credit Agreement) of such
Original Bank shall be terminated, effective upon the occurrence of the
Restatement Effective Date, and such Original Bank shall no longer constitute a
"Bank" under this Agreement and the other Credit Documents, PROVIDED that all
indemnities of the Credit Parties under the Original Credit Agreement and the
other Credit Documents (as in effect prior to the Restatement Effective Date)
for the benefit of such Original Bank shall continue to apply to such Original
Bank, and shall be deemed incorporated herein by reference.
SECTION 14. PARENT GUARANTY.
14.01 THE PARENT GUARANTY. In order to induce the Banks to enter
into this Agreement and to extend credit hereunder and in recognition of the
direct benefits to be received by each Parent from the proceeds of the Loans and
the issuance of the Letters of Credit, each Parent hereby agrees with the Banks
as follows: each Parent hereby, jointly and severally, unconditionally and
irrevocably, guarantees, as primary obligor and not merely as surety the full
and prompt payment when due, whether upon maturity, acceleration or otherwise,
of any and all of the Guaranteed Obligations of each of the Borrowers to the
Guaranteed Creditors. If any or all of the Guaranteed Obligations of the
Borrowers to the Guaranteed Creditors becomes due and payable hereunder, each
Parent unconditionally and jointly and severally promises to pay such
indebtedness to the Guaranteed Creditors, or order, on demand, together with any
and all expenses which may be incurred by the Guaranteed Creditors in collecting
any of the Guaranteed Obligations. This Parent Guaranty is a continuing one and
all liabilities to which it applies or may apply under the terms hereof shall be
conclusively presumed to have been created in a reliance hereon. If claim is
ever made upon any Guaranteed Creditor for repayment or recovery of any amount
or amounts received in payment or on account of any of the Guaranteed
Obligations and any of the aforesaid payees repays all or part of said amount by
reason of (i) any judgment, decree or order of any court or administrative body
having jurisdiction over such payee or any of its property or (ii) any
settlement or compromise of any such claim effected by such payee with any such
claimant (including the Borrowers), then and in such event each Parent agrees
that any such judgment, decree, order, settlement or compromise shall be binding
upon such Parent, notwithstanding any revocation of this Parent Guaranty or any
other instrument evidencing any liability of the Borrowers, and each Parent
shall be and remain liable to the
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aforesaid payees hereunder for the amount so repaid or recovered to the same
extent as if such amount had never originally been received by any such payee.
14.02 BANKRUPTCY. Additionally, each Parent, jointly and severally,
unconditionally and irrevocably, guarantees the payment of any and all of the
Guaranteed Obligations of the Borrowers to the Guaranteed Creditors whether or
not due or payable by the Borrowers upon the occurrence of any of the events
specified in Section 10.05, and unconditionally promises to pay such
indebtedness to the Guaranteed Creditors, or order, on demand, in lawful money
of the United States.
14.03 NATURE OF LIABILITY. The liability of each Parent hereunder is
exclusive and independent of any security for or other guaranty of the
Guaranteed Obligations of the Borrowers whether executed by such Parent, any
other guarantor or by any other party, and the liability of each Parent
hereunder is not affected or impaired by (a) any direction as to application of
payment by the Borrowers or by any other party, or (b) any other continuing or
other guaranty, undertaking or maximum liability of a guarantor or of any other
party as to the Guaranteed Obligations of the Borrowers, or (c) any payment on
or in reduction of any such other guaranty or undertaking, or (d) any
dissolution, termination or increase, decrease or change in personnel by the
Borrowers, or (e) any payment made to the Guaranteed Creditors on the Guaranteed
Obligations which any such Guaranteed Creditor repays to the Borrowers pursuant
to court order in any bankruptcy, reorganization, arrangement, moratorium or
other debtor relief proceeding, and each Parent waives any right to the deferral
or modification of its obligations hereunder by reason of any such proceeding.
14.04 INDEPENDENT OBLIGATION. No invalidity, irregularity or
unenforceability of all or any part of the Guaranteed Obligations or of any
security therefor shall affect, impair or be a defense to this Parent Guaranty,
and this Parent Guaranty shall be primary, absolute and unconditional
notwithstanding the occurrence of any event or the existence of any other
circumstances which might constitute a legal or equitable discharge of a surety
or guarantor except payment in full of the Guaranteed Obligations. The
obligations of each Parent hereunder are independent of the obligations of any
Borrower, any other guarantor or any other Person, and a separate action or
actions may be brought and prosecuted against each Parent whether or not action
is brought against any Borrower, any other guarantor or any other Person and
whether or not any Borrower, any other guarantor or any other Person be joined
in any such action or actions. Each Parent waives, to the full extent permitted
by law, the benefit of any statute of limitations affecting its liability
hereunder or the enforcement thereof. Any payment by the Borrowers or other
circumstance which operates to toll any statute of limitations as to the
Borrowers shall operate to toll the statute of limitations as to each Parent.
14.05 AUTHORIZATION. Each Parent authorizes the Guaranteed Creditors
without notice or demand (except as shall be required by applicable statute and
cannot be waived), and without affecting or impairing its liability hereunder,
from time to time to:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any of the
Guaranteed Obligations
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(including any increase or decrease in the rate of interest thereon), any
security therefor, or any liability incurred directly or indirectly in respect
thereof, and this Parent Guaranty made shall apply to the Guaranteed Obligations
as so changed, extended, renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(c) exercise or refrain from exercising any rights against any
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrowers or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may subordinate the
payment of all or any part thereof to the payment of any liability (whether due
or not) of any Borrower to its creditors other than the Guaranteed Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrowers to the Guaranteed Creditors regardless
of what liability or liabilities of the Borrowers remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement, any other Credit Document or any of the
instruments or agreements referred to herein or therein, or otherwise amend,
modify or supplement this Agreement, any other Credit Document or any of such
other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of any
Parent from its liabilities under this Guaranty.
14.06 RELIANCE. It is not necessary for the Guaranteed Creditors to
inquire into the capacity or powers of the Borrowers or the officers, directors,
partners or agents acting or purporting to act on their behalf, and any
Guaranteed Obligations made or created in reliance upon the professed exercise
of such powers shall be guaranteed hereunder.
14.07 SUBORDINATION. Any of the indebtedness of the Borrowers now or
hereafter owing to any Parent is hereby subordinated to the Guaranteed
Obligations of the Borrowers owing to the Guaranteed Creditors; and if the
Administrative Agent so requests at a time when an Event of Default exists, all
such indebtedness of the Borrowers to any Parent shall be collected, enforced
and received by such Parent for the benefit of the Guaranteed Creditors and be
paid over to the Administrative Agent on behalf of the Guaranteed Creditors on
account
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of the Guaranteed Obligations of the Borrowers to the Guaranteed Creditors, but
without affecting or impairing in any manner the liability of such Parent under
the other provisions of this Parent Guaranty. Prior to the transfer by any
Parent of any note or negotiable instrument evidencing any of the indebtedness
of any Borrower to such Parent, such Parent shall mark such note or negotiable
instrument with a legend that the same is subject to this subordination.
Without limiting the generality of the foregoing, each Parent hereby agrees with
the Guaranteed Creditors that it will not exercise any right of subrogation
which it may at any time otherwise have as a result of this Parent Guaranty
(whether contractual, under Section 509 of the Bankruptcy Code or otherwise)
until all Guaranteed Obligations have been irrevocably paid in full in cash.
14.08 WAIVER. (a) Each Parent waives any right (except as shall be
required by applicable statute and cannot be waived) to require any Guaranteed
Creditor to (i) proceed against any Borrower, any other guarantor or any other
party, (ii) proceed against or exhaust any security held from any Borrower, any
other guarantor or any other party or (iii) pursue any other remedy in any
Guaranteed Creditor's power whatsoever. Each Parent waives any defense based on
or arising out of any defense of any Borrower, any other guarantor or any other
party, other than payment in full of the Guaranteed Obligations, based on or
arising out of the disability of any Borrower, any other guarantor or any other
party, or the unenforceability of the Guaranteed Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of the
Borrowers other than payment in full of the Guaranteed Obligations. The
Guaranteed Creditors may, at their election, foreclose on any security held by
the Agent, the Collateral Agent or any other Guaranteed Creditor by one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Guaranteed Creditors may have
against any Borrower or any other party, or any security, without affecting or
impairing in any way the liability of any Parent hereunder except to the extent
the Guaranteed Obligations have been paid. Each Parent waives any defense
arising out of any such election by the Guaranteed Creditors, even though such
election operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of such Parent against any Borrower or any
other party or any security.
(b) Each Parent waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Parent
Guaranty, and notices of the existence, creation or incurring of new or
additional Guaranteed Obligations. Each Parent assumes all responsibility for
being and keeping itself informed of the Borrowers' financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Guaranteed Obligations and the nature, scope and extent of the risks which
such Parent assumes and incurs hereunder, and agrees that the Guaranteed
Creditors shall have no duty to advise any Parent of information known to them
regarding such circumstances or risks.
(c) Until such time as the Guaranteed Obligations have been paid in
full in cash or Cash Equivalents, each Parent hereby waives all rights of
subrogation which it may at any time otherwise have as a result of this Parent
Guaranty (whether contractual, under Section 509
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of the Bankruptcy Code, or otherwise) to the claims of the Guaranteed Creditors
against any Borrower or any other guarantor of the Guaranteed Obligations and
all contractual, statutory or common law rights of reimbursement, contribution
or indemnity from any Borrower or any other guarantor which it may at any time
otherwise have as a result of this Parent Guaranty.
14.09 PAYMENT. All payments made by any Parent pursuant to this
Section 14 shall be made in the respective Applicable Currency in which the
Guaranteed Obligations are then due and payable (giving effect, in the
circumstances contemplated by Section 1.15, to any conversion occurring pursuant
thereto). All payments made by any Parent pursuant to this Section 14 will be
made without setoff, counterclaim or other defense, and shall be subject to the
provisions of Section 4.04.
SECTION 15. Non-U.K. U.S. Borrowers Guaranty.
15.01 THE NON-U.K. U.S. BORROWERS GUARANTY. In order to induce the
Banks to enter into this Agreement and to extend credit hereunder and in
recognition of the direct benefits to be received by each Non-U.K. U.S. Borrower
from the proceeds of the Loans and the issuance of the Letters of Credit, each
Non-U.K. U.S. Borrower hereby agrees with the Banks as follows: each Non-U.K.
U.S. Borrower hereby, jointly and severally, unconditionally and irrevocably,
guarantees, as primary obligor and not merely as surety the full and prompt
payment when due, whether upon maturity, acceleration or otherwise, of any and
all of the U.K. Guaranteed Obligations to the Guaranteed Creditors. If any or
all of the U.K. Guaranteed Obligations to the Guaranteed Creditors becomes due
and payable hereunder, each Non-U.K. U.S. Borrower unconditionally and jointly
and severally promises to pay such indebtedness to the Guaranteed Creditors, or
order, on demand, together with any and all expenses which may be incurred by
the Guaranteed Creditors in collecting any of the U.K. Guaranteed Obligations.
This Non-U.K. U.S. Borrowers Guaranty is a continuing one and all liabilities to
which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in a reliance hereon. If claim is ever made upon
any Guaranteed Creditor for repayment or recovery of any amount or amounts
received in payment or on account of any of the U.K. Guaranteed Obligations and
any of the aforesaid payees repays all or part of said amount by reason of (i)
any judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property or (ii) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including the U.K. Borrowers), then and in such event each Non-U.K. U.S.
Borrower agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon such Non-U.K. U.S. Borrower, notwithstanding any
revocation of this Non-U.K. U.S. Borrowers Guaranty or any other instrument
evidencing any liability of the U.K. Borrowers, and each Non-U.K. U.S. Borrower
shall be and remain liable to the aforesaid payees hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by any such payee.
15.02 BANKRUPTCY. Additionally, each Non-U.K. U.S. Borrower, jointly
and severally, unconditionally and irrevocably, guarantees the payment of any
and all of the U.K. Guaranteed Obligations to the Guaranteed Creditors whether
or not due or payable by the U.K. Borrowers upon the occurrence of any of the
events specified in Section 10.05, and
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unconditionally promises to pay such indebtedness to the Guaranteed Creditors,
or order, on demand, in lawful money of the United States.
15.03 NATURE OF LIABILITY. The liability of each Non-U.K. U.S.
Borrower hereunder is exclusive and independent of any security for or other
guaranty of the U.K. Guaranteed Obligations whether executed by such Non-U.K.
U.S. Borrower, any other guarantor or by any other party, and the liability of
each Non-U.K. U.S. Borrower hereunder is not affected or impaired by (a) any
direction as to application of payment by the U.K. Borrowers or by any other
party, or (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the U.K. Guaranteed
Obligations, or (c) any payment on or in reduction of any such other guaranty or
undertaking, or (d) any dissolution, termination or increase, decrease or change
in personnel by the U.K. Borrowers, or (e) any payment made to the Guaranteed
Creditors on the U.K. Guaranteed Obligations which any such Guaranteed Creditor
repays to the U.K. Borrowers pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
each Non-U.K. U.S. Borrower waives any right to the deferral or modification of
its obligations hereunder by reason of any such proceeding.
15.04 INDEPENDENT OBLIGATION. No invalidity, irregularity or
unenforceability of all or any part of the U.K. Guaranteed Obligations or of any
security therefor shall affect, impair or be a defense to this Non-U.K. U.S.
Borrowers Guaranty, and this Non-U.K. U.S. Borrowers Guaranty shall be primary,
absolute and unconditional notwithstanding the occurrence of any event or the
existence of any other circumstances which might constitute a legal or equitable
discharge of a surety or guarantor except payment in full of the U.K. Guaranteed
Obligations. The obligations of each Non-U.K. U.S. Borrower hereunder are
independent of the obligations of any other guarantor, any other party or any
U.K. Borrower, and a separate action or actions may be brought and prosecuted
against each Non-U.K. U.S. Borrower whether or not action is brought against any
other guarantor, any other party or the U.K. Borrowers and whether or not any
other guarantor, any other party or the U.K. Borrowers be joined in any such
action or actions. Each Non-U.K. U.S. Borrower waives, to the full extent
permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement thereof. Any payment by the U.K.
Borrowers or other circumstance which operates to toll any statute of
limitations as to the U.K. Borrowers shall operate to toll the statute of
limitations as to each Non-U.K. U.S. Borrower.
15.05 AUTHORIZATION. Each Non-U.K. U.S. Borrower authorizes the
Guaranteed Creditors without notice or demand (except as shall be required by
applicable statute and cannot be waived), and without affecting or impairing its
liability hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any of the
U.K. Guaranteed Obligations (including any increase or decrease in the rate of
interest thereon), any security therefor, or any liability incurred directly or
indirectly in respect thereof, and this Non-U.K. U.S. Borrowers Guaranty made
shall apply to the U.K. Guaranteed Obligations as so changed, extended, renewed
or altered;
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(b) take and hold security for the payment of the U.K. Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, the U.K. Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(c) exercise or refrain from exercising any rights against any U.K.
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
U.K. Borrowers or other obligors;
(e) settle or compromise any of the U.K. Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may subordinate the
payment of all or any part thereof to the payment of any liability (whether due
or not) of any U.K. Borrower to its creditors other than the Guaranteed
Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the U.K. Borrowers to the Guaranteed Creditors
regardless of what liability or liabilities of the U.K. Borrowers remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement, any other Credit Document or any of the
instruments or agreements referred to herein or therein, or otherwise amend,
modify or supplement this Agreement, any other Credit Document or any of such
other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of any
Non-U.K. U.S. Borrower from its liabilities under this Non-U.K. U.S. Borrowers
Guaranty.
15.06 RELIANCE. It is not necessary for the Guaranteed Creditors to
inquire into the capacity or powers of the U.K. Borrowers or the officers,
directors, partners or agents acting or purporting to act on their behalf, and
any U.K. Guaranteed Obligations made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.
15.07 SUBORDINATION. Any of the indebtedness of the U.K. Borrowers
now or hereafter owing to any Non-U.K. U.S. Borrower is hereby subordinated to
the U.K. Guaranteed Obligations owing to the Guaranteed Creditors; and if the
Administrative Agent so requests at a time when an Event of Default exists, all
such indebtedness of the U.K. Borrowers to any Non-U.K. U.S. Borrower shall be
collected, enforced and received by such Non-U.K. U.S. Borrower for the benefit
of the Guaranteed Creditors and be paid over to the Administrative Agent on
behalf of the Guaranteed Creditors on account of the U.K. Guaranteed Obligations
to the Guaranteed Creditors, but without affecting or impairing in any manner
the liability of any Non-U.K. U.S. Borrower under the other provisions of this
Non-U.K. U.S. Borrowers Guaranty.
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Prior to the transfer by any Non-U.K. U.S. Borrower of any note or negotiable
instrument evidencing any of the indebtedness of any U.K. Borrower to such
Non-U.K. U.S. Borrower, such Non-U.K. U.S. Borrower shall mark such note or
negotiable instrument with a legend that the same is subject to this
subordination. Without limiting the generality of the foregoing, each Non-U.K.
U.S. Borrower hereby agrees with the Guaranteed Creditors that it will not
exercise any right of subrogation which it may at any time otherwise have as a
result of this Non-U.K. U.S. Borrowers Guaranty (whether contractual, under
Section 509 of the Bankruptcy Code or otherwise) until all U.K. Guaranteed
Obligations have been irrevocably paid in full in cash.
15.08 WAIVER. (a) Each Non-U.K. U.S. Borrower waives any right
(except as shall be required by applicable statute and cannot be waived) to
require any Guaranteed Creditor to (i) proceed against any U.K. Borrower, any
other guarantor or any other party, (ii) proceed against or exhaust any security
held from any U.K. Borrower, any other guarantor or any other party or (iii)
pursue any other remedy in any Guaranteed Creditor's power whatsoever. Each
Non-U.K. U.S. Borrower waives any defense based on or arising out of any defense
of any U.K. Borrower, any other guarantor or any other party, other than payment
in full of the U.K. Guaranteed Obligations, based on or arising out of the
disability of any U.K. Borrower, any other guarantor or any other party, or the
unenforceability of the U.K. Guaranteed Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of the U.K. Borrowers
other than payment in full of the U.K. Guaranteed Obligations. The Guaranteed
Creditors may, at their election, foreclose on any security held by the
Administrative Agent, the Collateral Agent or any other Guaranteed Creditor by
one or more judicial or nonjudicial sales, whether or not every aspect of any
such sale is commercially reasonable (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Guaranteed Creditors
may have against any U.K. Borrower or any other party, or any security, without
affecting or impairing in any way the liability of any Non-U.K. U.S. Borrower
hereunder except to the extent the U.K. Guaranteed Obligations have been paid.
Each Non-U.K. U.S. Borrower waives any defense arising out of any such election
by the Guaranteed Creditors, even though such election operates to impair or
extinguish any right of reimbursement or subrogation or other right or remedy of
such Non-U.K. U.S. Borrower against any U.K. Borrowers or any other party or any
security.
(b) Each Non-U.K. U.S. Borrower waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Guaranty, and notices of the existence, creation or incurring of new or
additional U.K. Guaranteed Obligations. Each Non-U.K. U.S. Borrower assumes all
responsibility for being and keeping itself informed of the U.K. Borrowers'
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the U.K. Guaranteed Obligations and the nature, scope and
extent of the risks which such Non-U.K. U.S. Borrower assumes and incurs
hereunder, and agrees that the Guaranteed Creditors shall have no duty to advise
any Non-U.K. U.S. Borrower of information known to them regarding such
circumstances or risks.
(c) Until such time as the U.K. Guaranteed Obligations have been paid
in full in cash or Cash Equivalents, each Non-U.K. U.S. Borrower hereby waives
all rights of
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subrogation which it may at any time otherwise have as a result of this Non-U.K.
U.S. Borrowers Guaranty (whether contractual, under Section 509 of the
Bankruptcy Code, or otherwise) to the claims of the U.K. Guaranteed Creditors
against any U.K. Borrower or any other guarantor of the U.K. Guaranteed
Obligations and all contractual, statutory or common law rights of
reimbursement, contribution or indemnity from any U.K. Borrower or any other
guarantor which it may at any time otherwise have as a result of this Non-U.K.
U.S. Borrowers Guaranty.
15.09 PAYMENT. All payments made by any Non-U.K. U.S. Borrower
pursuant to this Section 15 shall be made in the respective Applicable Currency
in which the U.K. Guaranteed Obligations are then due and payable (giving
effect, in the circumstances contemplated by Section 1.15, to any conversion
occurring pursuant thereto). All payments made by any Non-U.K. U.S. Borrower
pursuant to this Section 15 will be made without setoff, counterclaim or other
defense, and shall be subject to the provisions of Section 4.04.
SECTION 16. Domestic U.K. Borrowers Guaranty.
16.01 THE DOMESTIC U.K. BORROWERS GUARANTY. In order to induce the
Banks to enter into this Agreement and to extend credit hereunder and in
recognition of the direct benefits to be received by each Domestic U.K. Borrower
from the proceeds of the Loans and the issuance of the Letters of Credit, each
Domestic U.K. Borrower hereby agrees with the Banks as follows: each Domestic
U.K. Borrower hereby, jointly and severally, unconditionally and irrevocably,
guarantees, as primary obligor and not merely as surety the full and prompt
payment when due, whether upon maturity, acceleration or otherwise, of any and
all of the U.S. Guaranteed Obligations to the Guaranteed Creditors. If any or
all of the U.S. Guaranteed Obligations to the Guaranteed Creditors becomes due
and payable hereunder, each Domestic U.K. Borrower unconditionally and jointly
and severally promises to pay such indebtedness to the Guaranteed Creditors, or
order, on demand, together with any and all expenses which may be incurred by
the Guaranteed Creditors in collecting any of the U.S. Guaranteed Obligations.
This Domestic U.K. Borrowers Guaranty is a continuing one and all liabilities to
which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in a reliance hereon. If claim is ever made upon
any Guaranteed Creditor for repayment or recovery of any amount or amounts
received in payment or on account of any of the U.S. Guaranteed Obligations and
any of the aforesaid payees repays all or part of said amount by reason of (i)
any judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property or (ii) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including the U.S. Borrowers), then and in such event each Domestic U.K.
Borrower agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon such Domestic U.K. Borrower, notwithstanding any
revocation of this Domestic U.K. Borrowers Guaranty or any other instrument
evidencing any liability of the U.S. Borrowers, and each Domestic U.K. Borrower
shall be and remain liable to the aforesaid payees hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by any such payee.
16.02 BANKRUPTCY. Additionally, each Domestic U.K. Borrower, jointly
and severally, unconditionally and irrevocably, guarantees the payment of any
and all of the U.S.
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Guaranteed Obligations to the Guaranteed Creditors whether or not due or payable
by the U.S. Borrowers upon the occurrence of any of the events specified in
Section 10.05, and unconditionally promises to pay such indebtedness to the
Guaranteed Creditors, or order, on demand, in lawful money of the United States.
16.03 NATURE OF LIABILITY. The liability of each Domestic U.K.
Borrower hereunder is exclusive and independent of any security for or other
guaranty of the U.S. Guaranteed Obligations whether executed by such Domestic
U.K. Borrower, any other guarantor or by any other party, and the liability of
each Domestic U.K. Borrower hereunder is not affected or impaired by (a) any
direction as to application of payment by the U.S. Borrowers or by any other
party, or (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the U.S. Guaranteed
Obligations, or (c) any payment on or in reduction of any such other guaranty or
undertaking, or (d) any dissolution, termination or increase, decrease or change
in personnel by the U.S. Borrowers, or (e) any payment made to the Guaranteed
Creditors on the U.S. Guaranteed Obligations which any such Guaranteed Creditor
repays to the U.S. Borrowers pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
each Domestic U.K. Borrower waives any right to the deferral or modification of
its obligations hereunder by reason of any such proceeding.
16.04 INDEPENDENT OBLIGATION. No invalidity, irregularity or
unenforceability of all or any part of the U.S. Guaranteed Obligations or of any
security therefor shall affect, impair or be a defense to this Domestic U.K.
Borrowers Guaranty, and this Domestic U.K. Borrowers Guaranty shall be primary,
absolute and unconditional notwithstanding the occurrence of any event or the
existence of any other circumstances which might constitute a legal or equitable
discharge of a surety or guarantor except payment in full of the U.S. Guaranteed
Obligations. The obligations of each Domestic U.K. Borrower hereunder are
independent of the obligations of any other guarantor, any other party or any
U.S. Borrower, and a separate action or actions may be brought and prosecuted
against each U.S. Borrower whether or not action is brought against any other
guarantor, any other party or the U.S. Borrowers and whether or not any other
guarantor, any other party or the U.S. Borrowers be joined in any such action or
actions. Each Domestic U.K. Borrower waives, to the full extent permitted by
law, the benefit of any statute of limitations affecting its liability hereunder
or the enforcement thereof. Any payment by the U.S. Borrowers or other
circumstance which operates to toll any statute of limitations as to the U.S.
Borrowers shall operate to toll the statute of limitations as to each Domestic
U.K. Borrower.
16.05 AUTHORIZATION. Each Domestic U.K. Borrower authorizes the
Guaranteed Creditors without notice or demand (except as shall be required by
applicable statute and cannot be waived), and without affecting or impairing its
liability hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any of the
U.S. Guaranteed Obligations (including any increase or decrease in the rate of
interest thereon), any security therefor, or any liability incurred directly or
indirectly in respect thereof, and this Domestic U.K.
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Borrowers Guaranty made shall apply to the U.S. Guaranteed Obligations as so
changed, extended, renewed or altered;
(b) take and hold security for the payment of the U.S. Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, the U.S. Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(c) exercise or refrain from exercising any rights against any U.S.
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
U.S. Borrowers or other obligors;
(e) settle or compromise any of the U.S. Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may subordinate the
payment of all or any part thereof to the payment of any liability (whether due
or not) of any U.S. Borrower to its creditors other than the Guaranteed
Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the U.S. Borrowers to the Guaranteed Creditors
regardless of what liability or liabilities of the U.S. Borrowers remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement, any other Credit Document or any of the
instruments or agreements referred to herein or therein, or otherwise amend,
modify or supplement this Agreement, any other Credit Document or any of such
other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of any
Domestic U.K. Borrower from its liabilities under this Domestic U.K. Borrowers
Guaranty.
16.06 RELIANCE. It is not necessary for the Guaranteed Creditors to
inquire into the capacity or powers of the U.S. Borrowers or the officers,
directors, partners or agents acting or purporting to act on their behalf, and
any U.S. Guaranteed Obligations made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.
16.07 SUBORDINATION. Any of the indebtedness of the U.S. Borrowers
now or hereafter owing to any Domestic U.K. Borrower is hereby subordinated to
the U.S. Guaranteed Obligations owing to the Guaranteed Creditors; and if the
Administrative Agent so requests at a time when an Event of Default exists, all
such indebtedness of the U.S. Borrowers to any Domestic U.K. Borrower shall be
collected, enforced and received by such Domestic U.K. Borrower for the benefit
of the Guaranteed Creditors and be paid over to the Administrative
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Agent on behalf of the Guaranteed Creditors on account of the U.S. Guaranteed
Obligations to the Guaranteed Creditors, but without affecting or impairing in
any manner the liability of any Domestic U.K. Borrower under the other
provisions of this Domestic U.K. Borrowers Guaranty. Prior to the transfer by
any Domestic U.K. Borrower of any note or negotiable instrument evidencing any
of the indebtedness of any U.S. Borrower to such Domestic U.K. Borrower, such
Domestic U.K. Borrower shall mark such note or negotiable instrument with a
legend that the same is subject to this subordination. Without limiting the
generality of the foregoing, each Domestic U.K. Borrower hereby agrees with the
Guaranteed Creditors that it will not exercise any right of subrogation which it
may at any time otherwise have as a result of this Domestic U.K. Borrowers
Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or
otherwise) until all U.S. guaranteed Obligations have been irrevocably paid in
full in cash.
16.08 WAIVER. (a) Each Domestic U.K. Borrower waives any right
(except as shall be required by applicable statute and cannot be waived) to
require any Guaranteed Creditor to (i) proceed against any U.S. Borrower, any
other guarantor or any other party, (ii) proceed against or exhaust any security
held from any U.S. Borrower, any other guarantor or any other party or (iii)
pursue any other remedy in any Guaranteed Creditor's power whatsoever. Each
Domestic U.K. Borrower waives any defense based on or arising out of any defense
of any U.S. Borrower, any other guarantor or any other party, other than payment
in full of the U.S. Guaranteed Obligations, based on or arising out of the
disability of any U.S. Borrower, any other guarantor or any other party, or the
unenforceability of the U.S. Guaranteed Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of the U.S. Borrowers
other than payment in full of the U.S. Guaranteed Obligations. The Guaranteed
Creditors may, at their election, foreclose on any security held by the
Administrative Agent, the Collateral Agent or any other Guaranteed Creditor by
one or more judicial or nonjudicial sales, whether or not every aspect of any
such sale is commercially reasonable (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Guaranteed Creditors
may have against any U.S. Borrower or any other party, or any security, without
affecting or impairing in any way the liability of any Domestic U.K. Borrower
hereunder except to the extent the U.S. Guaranteed Obligations have been paid.
Each Domestic U.K. Borrower waives any defense arising out of any such election
by the Guaranteed Creditors, even though such election operates to impair or
extinguish any right of reimbursement or subrogation or other right or remedy of
such Domestic U.K. Borrower against any U.S. Borrowers or any other party or any
security.
(b) Each Domestic U.K. Borrower waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Guaranty, and notices of the existence, creation or incurring of new or
additional U.S. Guaranteed Obligations. Each Domestic U.K. Borrower assumes all
responsibility for being and keeping itself informed of the U.S. Borrowers'
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the U.S. Guaranteed Obligations and the nature, scope and
extent of the risks which such Domestic U.K. Borrower assumes and incurs
hereunder, and agrees that the Guaranteed Creditors shall have no duty to advise
any Domestic U.K. Borrower of information known to them regarding such
circumstances or risks.
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(c) Until such time as the U.S. Guaranteed Obligations have been paid
in full in cash or Cash Equivalents, each Domestic U.K. Borrower hereby waives
all rights of subrogation which it may at any time otherwise have as a result of
this Domestic U.K. Borrowers Guaranty (whether contractual, under Section 509 of
the Bankruptcy Code, or otherwise) to the claims of the U.S. Guaranteed
Creditors against any U.S. Borrower or any other guarantor of the U.S.
Guaranteed Obligations and all contractual, statutory or common law rights of
reimbursement, contribution or indemnity from any U.S. Borrower or any other
guarantor which it may at any time otherwise have as a result of this Domestic
U.K.Borrowers Guaranty.
16.09 PAYMENT. All payments made by any Domestic U.K. Borrower
pursuant to this Section 16 shall be made in Dollars. All payments made by any
Domestic U.K. Borrower pursuant to this Section 16 will be made without setoff,
counterclaim or other defense, and shall be subject to the provisions of Section
4.04.
SECTION 17. NATURE OF BORROWERS' OBLIGATIONS.
17.01. NATURE OF OBLIGATIONS. Notwithstanding anything to the
contrary contained elsewhere in this Agreement, it is understood and agreed by
the various parties to this Agreement that (i) all Obligations to repay
principal of, interest on, and all other amounts with respect to, outstanding
U.S. Borrowers' Revolving Loans, U.S. Borrowers' Swingline Loans and U.S. Letter
of Credit Outstandings (including, without limitation, all fees, indemnities,
taxes and other Obligations in connection therewith or in connection with the
related Commitments and/or Non-U.K. Sub-Commitments) shall constitute the joint
and several obligations of all of the U.S. Borrowers and (ii) all Obligations to
repay principal of, interest on, and all other amounts with respect to, any
outstanding U.K. Borrowers' Revolving Loans, U.K. Borrowers' Swingline Loans and
U.K. Letter of Credit Outstandings (including, without limitation, all fees,
indemnities, taxes and other Obligations in connection therewith or in
connection with the related U.K. Sub-Commitments) shall constitute the joint and
several obligations of all of the U.K. Borrowers. In addition to the direct
obligations of the respective Borrowers with respect to Obligations as described
above, (x) all of the Obligations referred to in clause (i) above shall be shall
be guaranteed pursuant to, and in accordance with the terms of, the Parent
Guaranty, the Domestic U.K. Borrowers Guaranty and the Non-Borrower U.S.
Subsidiaries Guaranty and (y) all of the Obligations referred to in clause (ii)
above shall be shall be guaranteed pursuant to, and in accordance with the terms
of, the Parent Guaranty, the Non-U.K. U.S. Borrowers Guaranty, the Non-Borrower
U.S. Subsidiaries Guaranty and, after the execution and delivery thereof, the
Non-Borrower U.K. Subsidiaries Guaranty. As used herein, the term
"Co-Borrowers" means, with respect to any of the Obligations as described in
clauses (i) and (ii) of the first sentence of this Section 17.01 (collectively,
"Co-Borrower Obligations"), the respective Persons which are jointly and
severally obligated as the respective Borrower of such Sub-Tranche. Each
Borrower and each Co-Borrower acknowledges and agrees that it is receiving
direct benefits as a result of the extensions of credit to them hereunder, and
that the Banks may proceed against any or all the respective Co-Borrowers (or
the respective Borrower) with respect to any Co-Borrower Obligations hereunder
for the payment in full thereof.
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17.02. INDEPENDENT OBLIGATION. With respect to Co-Borrower
Obligations, the obligations of each Co-Borrower with respect thereto are
independent of the obligations of the other Co-Borrower or any other guarantor,
and a separate action or actions may be brought and prosecuted against each
Co-Borrower, whether or not the other Co-Borrower or any other guarantor is
joined in any such action or actions. Each Co-Borrower waives, to the fullest
extent permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement thereof. Any payment by any Co-Borrower
or other circumstance which operates to toll any statute of limitations as to
such Co-Borrower shall, to the fullest extent permitted by law, operate to toll
the statute of limitations as to each Co-Borrower.
17.03. AUTHORIZATION. With respect to the Co-Borrower Obligations,
each of the respective Co-Borrowers authorizes the Agents, the Collateral Agent
and the Banks without notice or demand (except as shall be required by
applicable statute and cannot be waived), and without affecting or impairing its
liability hereunder, from time to time to: (a) exercise or refrain from
exercising any rights against any other Co-Borrower or any guarantor or others
or otherwise act or refrain from acting; (b) release or substitute any other
Co-Borrower, endorsers, guarantors or other obligors; (c) settle or compromise
any of the Obligations of any other Co-Borrower or any other Credit Party, any
security therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may subordinate the
payment of all or any part thereof to the payment of any liability (whether due
or not) of any Co-Borrower to its creditors other than the Banks; (d) apply any
sums paid by any other Co-Borrower or any other Person, howsoever realized to
any liability or liabilities of such Co-Borrower or other Person regardless of
what liability or liabilities of such Co-Borrower or other Person remain unpaid;
and/or (e) consent to or waive any breach of, or act, omission or default under,
this Agreement or any of the instruments or agreements referred to herein, or
otherwise, by any other Co-Borrower or any other Person.
17.04. RELIANCE. It is not necessary for any Agent or any other Bank
to inquire into the capacity or powers of any Co-Borrower or any of its
Subsidiaries or the officers, directors, partners or agent acting or purporting
to act on its behalf, and any Obligations made or created in reliance upon the
professed exercise of such powers shall constitute the obligations of the
respective Borrower (or Co-Borrowers) hereunder.
17.05. CONTRIBUTION; SUBROGATION. No Co-Borrower shall have any
rights of contribution or subrogation with respect to any other Co-Borrower as a
result of payments made by it hereunder, in each case unless and until all
Obligations have been repaid in full.
17.06. WAIVER. Each Co-Borrower waives any right to require any
Agent, the Collateral Agent or the Banks to (i) proceed against any other
Co-Borrower, any guarantor or any other party, (ii) proceed against or exhaust
any security held from other Co-Borrower, any guarantor or any other party or
(iii) pursue any other remedy in any Agent's, the Collateral Agent's or the
Banks' power whatsoever. Each Co-Borrower waives any defense based on or
arising out of any defense of any other Co-Borrower, any guarantor or any other
party other than payment in full in cash of the respective Obligations,
including, without limitation, any defense based on or arising out of the
disability of any other Co-Borrower, any guarantor or any other
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party, or the unenforceability of the Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of any other
Co-Borrower, in each case other than as a result of the payment in full in cash
of the respective Obligations. The Agents, the Collateral Agent and the Banks
may, at their election, foreclose on any security held by any Agent, the
Collateral Agent or the Secured Creditors by one or more judicial or
non-judicial sales, whether or not every aspect of any such sale is commercially
reasonable, or exercise any other right or remedy any Agent, the Collateral
Agent and the Banks may have against any Co-Borrower or any other party, or any
security, without affecting or impairing in any way the liability of any
Co-Borrower hereunder except to the extent the respective Obligations have been
paid in full in cash. Each Co-Borrower waives, to the fullest extent permitted
by law, any defense arising out of any such election by any Agent, the
Collateral Agent and the Banks even though such election operates to impair or
extinguish any right of reimbursement or subrogation or other right or remedy of
such Co-Borrower against any other Co-Borrower or any other guarantor or party
or any security.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
3 East 54th Street BIG FLOWER HOLDINGS, INC.,
17th Floor as a Guarantor
New York, NY 10022
Tel: (212) 521-1621
Fax: (212) 521-1640 By________________________________
Attention: Secretary Title:
3 East 54th Street BIG FLOWER PRESS HOLDINGS,
17th Floor INC., as a Guarantor
New York, NY 10022
Tel: (212) 521-1621
Fax: (212) 521-1640 By________________________________
Attention: Secretary Title:
3 East 54th Street TREASURE CHEST,
17th Floor ADVERTISING COMPANY, INC.,
New York, NY 10022 as a Borrower and a Guarantor
Tel: (212) 521-1621
Fax: (212) 521-1640 By________________________________
Attention: Secretary Title:
3 East 54th Street WEBCRAFT, INC.,
17th Floor as a Borrower and a Guarantor
New York, NY 10022
Tel: (212) 521-1621
Fax: (212) 521-1640 By________________________________
Attention: Secretary Title:
3 East 54th Street BIG FLOWER DIGITAL
17th Floor SERVICES, INC.,
New York, NY 10022 as a Borrower and a Guarantor
Tel: (212) 521-1621
Fax: (212) 521-1640 By________________________________
Attention: Secretary Title:
3 East 54th Street BIG FLOWER LIMITED,
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17th Floor as a Borrower
New York, NY 10022
Tel: (212) 521-1621
Fax: (212) 521-1640 By________________________________
Attention: Secretary Title:
3 East 54th Street OLWEN DIRECT MAIL LIMITED,
17th Floor as a Borrower
New York, NY 10022
Tel: (212) 521-1621
Fax: (212) 521-1640 By________________________________
Attention: Secretary Title:
3 East 54th Street TROYPEAK LIMITED,
17th Floor as a Borrower
New York, NY 10022
Tel: (212) 521-1621
Fax: (212) 521-1640 By________________________________
Attention: Secretary Title:
3 East 54th Street PISMO LIMITED,
17th Floor as a Borrower
New York, NY 10022
Tel: (212) 521-1621
Fax: (212) 521-1640 By_______________________________
Attention: Secretary Title:
3 East 54th Street BIG FLOWER DIGITAL SERVICES
17th Floor LIMITED, as a Borrower
New York, NY 10022
Tel: (212) 521-1621
Fax: (212) 521-1640 By_______________________________
Attention: Secretary Title:
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3 East 54th Street BROADCAST SYSTEMS
17th Floor SOFTWARE LIMITED,
New York, NY 10022 as a Borrower
Tel: (212) 521-1621
Fax: (212) 521-1640 By_________________________________
Attention: Secretary Title:
BANKERS TRUST COMPANY,
Individually and as
One Bankers Trust Plaza Administrative Agent
130 Liberty Street
New York, NY 10006
Tel: (212) 250-2500 By_________________________________
Fax: (212) 250-7218 Title:
Attention: Gregory Shefrin
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CREDIT SUISSE FIRST BOSTON,
Individually
11 Madison Avenue
New York, NY 10010
Tel: (212) 325-9157 By_______________________________
Fax: (212) 325-8309 Title:
Attention: Chris T. Horgan
By_______________________________
Title:
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CREDIT SUISSE FIRST BOSTON,
as Documentation Agent
By____________________________
Title:
By____________________________
Title:
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ABN
AMRO BANK N.V.,
NEW YORK BRANCH
By____________________________
Title:
By____________________________
Title:
BANK OF AMERICA NT & SA
By____________________________
Title:
By____________________________
Title:
BANKBOSTON, N.A.
By____________________________
Title:
BANK OF MONTREAL
By____________________________
Title:
THE BANK OF NEW YORK
By____________________________
Title:
BANQUE PARIBAS
By____________________________
Title:
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CORESTATES BANK, N.A.
By____________________________
Title:
CAISSE NATIONALE DE CREDIT AGRICOLE
By____________________________
Title:
CITY NATIONAL BANK
By____________________________
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By____________________________
Title:
DAI-ICHI KANGYO BANK, LIMITED
By____________________________
Title:
DRESDNER BANK AG, NEW YORK
AND GRAND CAYMAN BRANCHES
By____________________________
Title:
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By____________________________
Title:
THE FUJI BANK, LIMITED
NEW YORK BRANCH
By____________________________
Title:
GIROCREDIT BANK AG DER
SPARKASSEN, GRAND
CAYMAN ISLAND BRANCH
By____________________________
Title:
By____________________________
Title:
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By____________________________
Title:
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
NEW YORK BRANCH
By____________________________
Title:
NATIONSBANK, N.A.
By____________________________
Title:
180
<PAGE>
SUMITOMO BANK OF CALIFORNIA
By____________________________
Title:
THE TOKAI BANK, LIMITED
By____________________________
Title:
UNION BANK OF CALIFORNIA, N.A.
By____________________________
Title:
THE YASUDA TRUST & BANKING CO.,
LTD.,NY BRANCH
By____________________________
Title:
THE IMPERIAL BANK OF JAPAN,
By____________________________
Title:
181
<PAGE>
CREDIT AGRICOLE INDOSUEZ
By____________________________
Title:
182
<PAGE>
FIRST UNION NATIONAL BANK
By____________________________
Title:
183
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF BIG FLOWER HOLDINGS, INC. AND SUBSIDIARIES
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001048662
<NAME> BIG FLOWER HOLDINGS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 4,761
<SECURITIES> 0
<RECEIVABLES> 167,952
<ALLOWANCES> 10,605
<INVENTORY> 53,779
<CURRENT-ASSETS> 243,733
<PP&E> 590,407
<DEPRECIATION> 164,629
<TOTAL-ASSETS> 1,205,180
<CURRENT-LIABILITIES> 231,432
<BONDS> 0
115,000
0
<COMMON> 197
<OTHER-SE> 86,935
<TOTAL-LIABILITY-AND-EQUITY> 1,205,180
<SALES> 796,772
<TOTAL-REVENUES> 796,772
<CGS> 605,001
<TOTAL-COSTS> 605,001
<OTHER-EXPENSES> 146,640
<LOSS-PROVISION> 1,194
<INTEREST-EXPENSE> 26,547
<INCOME-PRETAX> 17,390
<INCOME-TAX> 7,999
<INCOME-CONTINUING> 9,391
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,391
<EPS-PRIMARY> 0.48
<EPS-DILUTED> 0.46
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF BIG FLOWER PRESS HOLDINGS, INC. AND
SUBSIDIARIES AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000924146
<NAME> BIG FLOWER PRESS HOLDINGS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 4,754
<SECURITIES> 0
<RECEIVABLES> 167,940
<ALLOWANCES> 10,605
<INVENTORY> 53,779
<CURRENT-ASSETS> 243,595
<PP&E> 586,037
<DEPRECIATION> 164,108
<TOTAL-ASSETS> 1,194,794
<CURRENT-LIABILITIES> 230,910
<BONDS> 0
0
0
<COMMON> 10
<OTHER-SE> 188,416
<TOTAL-LIABILITY-AND-EQUITY> 1,194,794
<SALES> 796,772
<TOTAL-REVENUES> 796,772
<CGS> 605,001
<TOTAL-COSTS> 605,001
<OTHER-EXPENSES> 143,594
<LOSS-PROVISION> 1,194
<INTEREST-EXPENSE> 26,791
<INCOME-PRETAX> 20,192
<INCOME-TAX> 9,289
<INCOME-CONTINUING> 10,903
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,903
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
