Credit Agreement - Marvel Enterprises Inc., HSBC Bank USA and HSBC Securities (USA) Inc.
EXECUTION COPY
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$80,000,000
CREDIT AGREEMENT,
dated as of November 30, 2001,
among
MARVEL ENTERPRISES, INC.,
as the Borrower,
VARIOUS FINANCIAL INSTITUTIONS AND OTHER PERSONS
FROM TIME TO TIME PARTIES HERETO,
as the Lenders
and
HSBC BANK USA,
as the Administrative Agent for the Lenders.
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HSBC SECURITIES (USA) INC.,
as Sole Lead Arranger and Sole Bookrunner
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TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms....................................................2
SECTION 1.2. Use of Defined Terms............................................24
SECTION 1.3. Cross-References................................................25
SECTION 1.4. Accounting and Financial Determinations.........................25
ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT
SECTION 2.1. Commitments.....................................................25
SECTION 2.1.1. Letter of Credit Commitment..........................25
SECTION 2.1.2. Term Loan Commitment.................................26
SECTION 2.2. Reduction of the Commitment Amounts.............................26
SECTION 2.2.1. Optional.............................................26
SECTION 2.3. Borrowing Procedures............................................26
SECTION 2.3.1. Term Loan Borrowing Procedure........................26
SECTION 2.4. Continuation and Conversion Elections...........................27
SECTION 2.5. Funding.........................................................27
SECTION 2.6. Letters of Credit...............................................27
SECTION 2.6.1. Letter of Credit Issuance Procedure..................27
SECTION 2.6.2. Other Lenders' Participation.........................28
SECTION 2.6.3. Disbursements........................................28
SECTION 2.6.4. Reimbursement........................................28
SECTION 2.6.5. Deemed Disbursements.................................29
SECTION 2.6.6. Nature of Reimbursement Obligations..................29
SECTION 2.7. Term Notes......................................................30
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments; Application.........................30
SECTION 3.1.1. Repayments and Prepayments...........................30
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SECTION 3.1.2. Application..........................................33
SECTION 3.2. Interest Provisions.............................................34
SECTION 3.2.1. Rates................................................34
SECTION 3.2.2. Post-Maturity and Default Rates......................34
SECTION 3.2.3. Payment Dates........................................34
SECTION 3.3. Fees............................................................35
SECTION 3.3.1. Commitment Fee.......................................35
SECTION 3.3.2. Agent's Fee..........................................35
SECTION 3.3.3. Letter of Credit Fee.................................35
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO Rate Lending Unlawful......................................36
SECTION 4.2. Deposits Unavailable............................................36
SECTION 4.3. Increased LIBO Rate Loan Costs, Etc.............................36
SECTION 4.4. Funding Losses..................................................37
SECTION 4.5. Increased Capital Costs.........................................37
SECTION 4.6. Taxes...........................................................37
SECTION 4.7. Payments, Computations, Etc.....................................40
SECTION 4.8. Sharing of Payments.............................................41
SECTION 4.9. Setoff..........................................................41
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
SECTION 5.1. Initial Credit Extension........................................42
SECTION 5.1.1. Resolutions, Etc.....................................42
SECTION 5.1.2. Closing Date Certificate.............................42
SECTION 5.1.3. Payment of Outstanding Indebtedness, Etc.............42
SECTION 5.1.4. Closing Fees, Expenses, Etc..........................43
SECTION 5.1.5. Financial Information, Etc...........................43
SECTION 5.1.6. [Intentionally Deleted]..............................43
SECTION 5.1.7. Opinions of Counsel..................................43
SECTION 5.1.8. Filing Agent, Etc....................................43
SECTION 5.1.9. Guaranties...........................................43
SECTION 5.1.10. Solvency, Etc.......................................44
SECTION 5.1.11. Security Agreements.................................44
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SECTION 5.1.12. Foreign Pledge Agreements...........................45
SECTION 5.1.13. Intellectual Property Security Agreement............45
SECTION 5.1.14. Insurance...........................................45
SECTION 5.1.15. Delivery of Term Notes..............................45
SECTION 5.1.16. Required Consents and Approvals.....................45
SECTION 5.1.17. Perfection Certificate..............................45
SECTION 5.2. All Credit Extensions...........................................45
SECTION 5.2.1. Compliance with Warranties, No Default, Etc..........45
SECTION 5.2.2. Credit Extension Request, Etc........................46
SECTION 5.2.3. Credit Extensions Exceeding $70,000,000..............46
SECTION 5.2.4. Satisfactory Legal Form..............................46
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1. Organization, Etc...............................................46
SECTION 6.2. Due Authorization, Non-Contravention, Etc.......................47
SECTION 6.3. Government Approval, Regulation, Etc............................47
SECTION 6.4. Validity, Etc...................................................47
SECTION 6.5. Financial Information...........................................47
SECTION 6.6. No Material Adverse Change......................................48
SECTION 6.7. Litigation, Labor Controversies, Etc............................48
SECTION 6.8. Subsidiaries....................................................48
SECTION 6.9. Ownership of Properties.........................................48
SECTION 6.10. Taxes..........................................................48
SECTION 6.11. Pension and Welfare Plans......................................49
SECTION 6.12. Environmental Warranties.......................................49
SECTION 6.13. Accuracy of Information........................................50
SECTION 6.14. Regulations U and X............................................50
SECTION 6.15. Issuance of Subordinated Debt; Status of Obligations as Senior
Indebtedness, Etc..................................................50
SECTION 6.16. Solvency.......................................................51
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SECTION 6.17. Capitalization.................................................51
SECTION 6.18. Compliance with Laws; Authorizations...........................51
SECTION 6.19. No Contractual or Other Restrictions...........................51
SECTION 6.20. Intellectual Property..........................................51
SECTION 6.21. Priority of Security Interests.................................51
SECTION 6.22. Material Contracts.............................................52
SECTION 6.23. Ownership Change...............................................52
SECTION 6.24. Immaterial Subsidiaries........................................52
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants...........................................52
SECTION 7.1.1. Financial Information, Reports, Notices, Etc.........52
SECTION 7.1.2. Maintenance of Existence; Compliance with Laws, Etc..54
SECTION 7.1.3. Maintenance of Properties............................54
SECTION 7.1.4. Insurance............................................55
SECTION 7.1.5. Books and Records....................................55
SECTION 7.1.6. Environmental Law Covenant...........................55
SECTION 7.1.7. Use of Proceeds......................................56
SECTION 7.1.8. Future Guarantors, Security, Etc.....................56
SECTION 7.1.9. Conduct of Business; Separate Existence;
Maintenance of Authorizations.......................................56
SECTION 7.1.10. Collateral Accounts, Etc............................56
SECTION 7.2. Negative Covenants..............................................57
SECTION 7.2.1. Business Activities..................................57
SECTION 7.2.2. Indebtedness.........................................57
SECTION 7.2.3. Liens................................................58
SECTION 7.2.4. Financial Condition and Operations...................59
SECTION 7.2.5. Investments..........................................61
SECTION 7.2.6. Restricted Payments, Etc.............................62
SECTION 7.2.7. Capital Expenditures, Etc............................63
SECTION 7.2.8. No Prepayment of Debt................................63
SECTION 7.2.9. Issuance of Capital Securities.......................63
SECTION 7.2.10. Consolidation, Merger, Etc..........................63
SECTION 7.2.11. Permitted Dispositions..............................64
SECTION 7.2.12. Modification of Certain Agreements..................64
SECTION 7.2.13. Transactions with Affiliates........................65
SECTION 7.2.14. Restrictive Agreements, Etc.........................65
SECTION 7.2.15. Sale and Leaseback..................................65
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SECTION 7.2.16. Limit on Rental Obligations.........................65
SECTION 7.2.17. Changes to Fiscal Year; Accounting Method...........65
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default....................................66
SECTION 8.1.1. Non-Payment of Obligations...........................66
SECTION 8.1.2. Breach of Warranty...................................66
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations.66
SECTION 8.1.4. Non-Performance of Other Covenants and Obligations...66
SECTION 8.1.5. Default on Other Indebtedness........................66
SECTION 8.1.6. Judgments............................................67
SECTION 8.1.7. Pension Plans........................................67
SECTION 8.1.8. Change in Control....................................67
SECTION 8.1.9. Bankruptcy, Insolvency, Etc..........................67
SECTION 8.1.10. Impairment of Security, Etc.........................68
SECTION 8.1.11. Failure of Subordination............................68
SECTION 8.1.12. Loss of Material License or Royalty;
Other Material Contracts............................................68
SECTION 8.2. Action if Bankruptcy............................................68
SECTION 8.3. Action if Other Event of Default................................69
ARTICLE IX
THE ADMINISTRATIVE AGENT, ETC.
SECTION 9.1. Actions.........................................................69
SECTION 9.2. Funding Reliance, Etc...........................................69
SECTION 9.3. Exculpation.....................................................70
SECTION 9.4. Successor.......................................................70
SECTION 9.5. Term Loans by HSBC..............................................71
SECTION 9.6. Credit Decisions................................................71
SECTION 9.7. Copies, Etc.....................................................71
SECTION 9.8. Reliance by Administrative Agent................................71
SECTION 9.9. Defaults........................................................72
SECTION 9.10. Arranger.......................................................72
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ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Waivers, Amendments, Etc.......................................72
SECTION 10.2. Notices; Time..................................................73
SECTION 10.3. Payment of Costs and Expenses..................................73
SECTION 10.4. Indemnification................................................74
SECTION 10.5. Survival.......................................................75
SECTION 10.6. Severability...................................................75
SECTION 10.7. Headings.......................................................76
SECTION 10.8. Execution in Counterparts, Effectiveness, Etc..................76
SECTION 10.9. Governing Law; Entire Agreement................................76
SECTION 10.10. Successors and Assigns........................................76
SECTION 10.11. Sale and Transfer of Credit Extensions; Participations
in Credit Extensions..........................................76
SECTION 10.11.1. Assignments........................................76
SECTION 10.11.2. Participations.....................................78
SECTION 10.12. Other Transactions............................................79
SECTION 10.13. Certain Collateral and Other Matters;
Rate Protection Agreements....................................79
SECTION 10.14. Forum Selection and Consent to Jurisdiction...................80
SECTION 10.15. Waiver of Jury Trial..........................................80
SCHEDULE I - Disclosure Schedule
SCHEDULE II - Percentages; LIBOR Office; Domestic Office
SCHEDULE III - Capitalization and Ownership
SCHEDULE IV - Existing Letters of Credit
EXHIBIT A - Form of Term Note
EXHIBIT B-1 - Form of Borrowing Request
EXHIBIT B-2 - Form of Issuance Request
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EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Borrower Closing Date Certificate
EXHIBIT E - Form of Compliance Certificate
EXHIBIT F-1 - Form of Subsidiary Guaranty
EXHIBIT F-2 - Form of Perlmutter Guaranty
EXHIBIT G - Form of Pledge and Security Agreement
EXHIBIT H - Form of Lender Assignment Agreement
EXHIBIT I - Perfection Certificate
EXHIBIT J - Form of Perlmutter Security Agreement
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of November 30, 2001, is among MARVEL
ENTERPRISES, INC., a Delaware corporation (the "Borrower"), the various
financial institutions and other Persons from time to time parties hereto (the
"Lenders"), HSBC BANK USA ("HSBC"), as administrative agent (in such capacity,
the "Administrative Agent") for the Lenders and HSBC SECURITIES (USA) INC.
("HSI"), as sole Lead Arranger and sole Bookrunner (in such capacity, the
"Arranger").
W I T N E S S E T H:
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WHEREAS, the Borrower desires to
(a) roll over the Existing Letters of Credit (such capitalized term,
and all other capitalized terms used in these recitals without definition,
to have the meaning set forth in Section 1.1 below) so that the Existing
Letters of Credit are deemed outstanding under and governed by this
Agreement (the "Rollover Financing"); and
(b) purchase from time to time until the Term Loan Commitment
Termination Date a portion of the Borrower's own $250,000,000 original
principal amount of 12% Senior Notes due 2009 (the "Senior Notes") (such
purchases, collectively, the "Senior Notes Purchase Transactions");
WHEREAS, in connection with the Rollover Financing and the Senior Notes
Purchase Transactions and to provide for a portion of the financing thereof, the
Borrower desires to obtain, pursuant to this Agreement, from the Lenders,
(a) a Term Loan Commitment pursuant to which Borrowings of Term Loans
may be made, in a maximum aggregate outstanding principal amount not to
exceed $60,000,000, to the Borrower in Borrowings from time to time from
and after the Closing Date but prior to the Term Loan Commitment
Termination Date; and
(b) a Letter of Credit Commitment pursuant to which Letters of Credit,
in a maximum outstanding Stated Amount not to exceed $20,000,000 (including
and taking into account all Existing Letters of Credit), may be issued for
the account of the Borrower from time to time from and after the Closing
Date but prior to the Letter of Credit Commitment Termination Date;
with the proceeds of the Credit Extensions to be used for the purposes set forth
in Section 7.1.7;
WHEREAS, all Credit Extensions and Rate Protection Agreements with the
Lenders (at the time of creation thereof) are and shall be secured by, among
other things, the Pledge and Security Agreement and the other Loan Documents and
shall be guaranteed pursuant to the Subsidiary Guaranty and the Perlmutter
Guaranty (which, in turn, is secured by the Perlmutter Security Agreement); and
WHEREAS, the Lenders and the Issuer are willing, on the terms and subject
to the conditions hereinafter set forth, to extend the Commitments and make Term
Loans to the Borrower and issue (or participate in) Letters of Credit;
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NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Administrative Agent" is defined in the preamble and includes each other
Person appointed as the successor Administrative Agent pursuant to Section 9.4.
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person. "Control" of a Person means the power, directly or indirectly,
(a) to vote 10% or more of the Capital Securities (on a fully diluted
basis) of such Person having ordinary voting power for the election of
directors, managing members or general partners (as applicable); or
(b) to direct or cause the direction of the management and policies of
such Person (whether by contract or otherwise).
"Agreement" means, on any date, this Credit Agreement as originally in
effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated or otherwise modified from time to time and
in effect on such date.
"Alternate Base Rate" means, on any date and with respect to all Base Rate
Term Loans, a fluctuating rate of interest per annum (rounded upward, if
necessary, to the next highest 1/16 of 1%) equal to the higher of
(a) the Base Rate in effect on such day; and
(b) the Federal Funds Rate in effect on such day plus 1/2 of 1%.
Changes in the rate of interest on that portion of any Term Loans
maintained as Base Rate Term Loans will take effect simultaneously with each
change in the Alternate Base Rate. The Administrative Agent will give notice
promptly to the Borrower and the Lenders of changes in the Alternate Base Rate;
provided that the failure to give such notice shall not affect the Alternate
Base Rate in effect after such change.
"Applicable Margin" means, with respect to Base Rate Term Loans, 2.50% and,
with respect to LIBO Rate Term Loans, 3.50%.
"Arranger" is defined in the preamble.
"Assignee Lender" is defined in Section 10.11.1.
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"Assignor Lender" is defined in Section 10.11.1.
"Authorized Officer" means, relative to any Obligor, those of its officers,
general partners or managing members (as applicable) whose signatures and
incumbency shall have been certified to the Administrative Agent, the Lenders
and the Issuer pursuant to Section 5.1.1 or as updated by the Borrower from time
to time and certified in the manner provided above.
"Base Rate" means, at any time, the rate of interest then most recently
established by the Administrative Agent in New York as its base rate for Dollars
loaned in the United States. The Base Rate is not necessarily intended to be the
lowest rate of interest determined by the Administrative Agent in connection
with extensions of credit.
"Base Rate Term Loan" means a Term Loan bearing interest at a fluctuating
rate determined by reference to the Alternate Base Rate.
"Beneficial Owner" (including, with correlative meaning, "Beneficially
Owned") has the meaning set forth in Rule 13d-3 under the Exchange Act.
"Beneficially Owned Directly" means Beneficially Owned without taking into
account any agreement or other arrangement or understanding (including the
Stockholders' Agreement).
"Borrower" is defined in the preamble.
"Borrower Closing Date Certificate" means the closing date certificate
executed and delivered by an Authorized Officer of the Borrower and each U.S.
Subsidiary pursuant to the terms of this Agreement, substantially in the form of
Exhibit D hereto.
"Borrowing" means Term Loans of the same type and, in the case of LIBO Rate
Term Loans, having the same Interest Period made by all Lenders required to make
such Term Loans on the same Business Day and pursuant to the same Borrowing
Request in accordance with Section 2.1.
"Borrowing Request" means a Loan request and certificate duly executed by
an Authorized Officer of the Borrower substantially in the form of Exhibit B-1
hereto.
"Business Day" means
(a) any day which is neither a Saturday or Sunday nor a legal holiday
on which banks are authorized or required to be closed in New York, New
York; and
(b) relative to the making, continuing, prepaying or repaying of any
LIBO Rate Term Loans, any day which is a Business Day described in clause
(a) above and which is also a day on which dealings in Dollars are carried
on in the London interbank eurodollar market.
"Capital Expenditures" means, for any period, the aggregate amount of (a)
all expenditures of the Borrower and its Subsidiaries for fixed or capital
assets made during such period which, in accordance with GAAP, would be
classified as capital expenditures including, in any event, capitalized software
costs and capitalized product development costs, and (b) Capitalized Lease
Liabilities incurred by the Borrower and its Subsidiaries during such period.
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"Capital Securities" means, with respect to any Person, all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital, whether now outstanding or
issued after the Effective Date.
"Capitalized Lease Liabilities" means, with respect to any Person, all
monetary obligations of such Person and its Subsidiaries under any leasing or
similar arrangement which have been (or, in accordance with GAAP, should be)
classified as capitalized leases, and for purposes of each Loan Document the
amount of such obligations shall be the capitalized amount thereof, determined
in accordance with GAAP, and the stated maturity thereof shall be the date of
the last payment of rent or any other amount due under such lease prior to the
first date upon which such lease may be terminated by the lessee without payment
of a premium or a penalty.
"Cash Collateralize" means, with respect to a Letter of Credit, the deposit
of immediately available funds into a cash collateral account maintained with
(or on behalf of) the Administrative Agent on terms satisfactory to the
Administrative Agent in an amount equal to the Stated Amount of, and all Letter
of Credit Fees related to, such Letter of Credit.
"Cash Equivalent Investment" means, at any time:
(a) any direct obligation of (or unconditionally guaranteed by) the
United States or a State thereof (or any agency or political subdivision
thereof, to the extent such obligations are supported by the full faith and
credit of the United States or a State thereof) maturing not more than one
year after such time;
(b) commercial paper maturing not more than 270 days from the date of
issue, which is issued by
(i) a corporation (other than an Affiliate of any Obligor)
organized under the laws of any State of the United States or of the
District of Columbia and rated A-1 or higher by S&P or P-1 or higher
by Moody's, or
(ii) any Lender (or its holding company);
(c) any certificate of deposit, time deposit or bankers acceptance,
maturing not more than one year after its date of issuance, which is issued
by either
(i) any bank organized under the laws of the United States (or
any State thereof) and which has (x) a credit rating of A2 or higher
from Moody's or A or higher from S&P and (y) a combined capital and
surplus greater than $500,000,000, or
(ii) any Lender; or
(d) any repurchase agreement having a term of 30 days or less entered
into with any Lender or any commercial banking institution satisfying the
criteria set forth in clause (c)(i) which
(i) is secured by a fully perfected security interest in any
obligation of the type described in clause (a), and
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(ii) has a market value at the time such repurchase agreement is
entered into of not less than 100% of the repurchase obligation of
such commercial banking institution thereunder.
"Cash Reserve Accounts" means the special segregated accounts subject to
the Pledge and Security Agreement in the name of the Borrower or any of its U.S.
Subsidiaries and for the benefit of the Administrative Agent and the Lenders
each entitled "Cash Reserve Account", which account shall be maintained by the
Borrower or any of its U.S. Subsidiaries, as applicable, with the Administrative
Agent at all times until the Termination Date.
"Casualty Event" means the damage, destruction or condemnation, as the case
may be, of property of any Person or any of its Subsidiaries.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change in Control" means
(a) the failure of an Excluded Stockholder at any time to directly or
indirectly own beneficially on a fully diluted basis at least 25% of the
Voting Securities of the Borrower;
(b) any "person" or "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act), other than an Excluded Stockholder or
Excluded Group, becomes the Beneficial Owner of more than 35% of the total
voting power of the Voting Securities of the Borrower on a fully diluted
basis and such ownership represents a greater percentage of the total
voting power of the Voting Securities of the Borrower, on a fully diluted
basis, than is held by the Excluded Stockholders on such date: provided
that the Persons party to the Stockholders' Agreement on the Closing Date
and their Affiliates shall not constitute a "group" for purposes of this
clause (b) solely as a result of being a party to the Stockholders'
Agreement so long as no Person party to the Stockholders' Agreement
Beneficially Owns Directly a greater percentage of the voting power of the
Voting Securities of the Borrower than is Beneficially Owned Directly by
the Excluded Stockholders; or
(c) individuals who on the Closing Date constitute the board of
directors of the Borrower (together with any new directors whose election
to such board of directors or whose nomination by such board of directors
for election by the Borrower's stockholders was approved (i) by a vote of
at least a majority of the members of such board of directors then in
office who either were members of such board of directors on the Closing
Date or whose election or nomination for election was previously so
approved, (ii) pursuant to the terms of the Stockholders' Agreement so long
as no Person party to the Stockholders' Agreement Beneficially Owns
Directly a greater percentage of the voting power of the Voting Securities
of the Borrower than is Beneficially Owned Directly by the Excluded
Stockholders, or (iii) by an Excluded Stockholder) cease for any reason to
constitute a majority of the members of the board of directors of the
Borrower then in office; or
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(d) the occurrence of any "Change of Control" (or similar term) under
(and as defined in) the Senior Notes Indenture or any Sub Debt Document.
"Closing Date" means the date of the initial Credit Extension hereunder,
but in no event shall such date be later than November 30, 2001.
"Code" means the Internal Revenue Code of 1986, and the regulations
thereunder, in each case as amended, reformed or otherwise modified from time to
time.
"Commitment" means, as the context may require, the Term Loan Commitment,
Letter of Credit Commitment or LC Participation Commitment.
"Commitment Amount" means, as the context may require, the Term Loan
Commitment Amount or the Letter of Credit Commitment Amount.
"Commitment Termination Event" means
(a) the occurrence of any Event of Default with respect to the
Borrower described in clauses (a) through (d) of Section 8.1.9; or
(b) the occurrence and continuance of any other Event of Default and
either
(i) the declaration of all or any portion of the Term Loans to be
due and payable pursuant to Section 8.3, or
(ii) the giving of notice by the Administrative Agent, acting at
the direction of the Required Lenders, to the Borrower that the
Commitments have been terminated.
"Compliance Certificate" means a certificate duly completed and executed by
an Authorized Officer of the Borrower, substantially in the form of Exhibit E
hereto or in such other form as the Administrative Agent and the Borrower shall
agree, together with such changes thereto as the Administrative Agent may from
time to time reasonably request for the purpose of monitoring the Borrower's
compliance with the financial covenants contained herein.
"Contingent Liability" means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the Indebtedness of any
other Person (other than by endorsements of instruments in the course of
collection), or guarantees the payment of dividends or other distributions upon
the Capital Securities of any other Person. The amount of any Person's
obligation under any Contingent Liability shall (subject to any limitation set
forth therein) be deemed to be the outstanding principal amount of the debt,
obligation or other liability guaranteed thereby.
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit C hereto.
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"Controlled Group" means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Borrower, are
treated as a single employer under Section 414(b) or 414(c) of the Code or
Section 4001 of ERISA.
"Credit Extension" means, as the context may require,
(a) the making of a Term Loan by a Lender; or
(b) the issuance of any Letter of Credit, or the extension of any
Stated Expiry Date of any existing Letter of Credit, by the Issuer.
"Default" means any Event of Default or any condition, occurrence or event
which, after notice or lapse of time or both, would constitute an Event of
Default.
"Designated Permitted Liens" means any Lien permitted pursuant to clauses
(a), (c) and (f) through (k) of Section 7.2.3; provided that, in the case of
clauses (f) through (k) thereof, "Designated Permitted Liens" shall be deemed to
include only Liens existing as of the Closing Date.
"Disbursement" is defined in Section 2.6.3.
"Disbursement Date" is defined in Section 2.6.3.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented, amended and restated or
otherwise modified from time to time by the Borrower with the prior written
consent of the Required Lenders.
"Disposition" (or similar words such as "Dispose") means any sale,
transfer, lease, contribution or other conveyance (including by way of merger)
of, or the granting of options, warrants or other rights to, any of the
Borrower's or its Subsidiaries' assets (including accounts receivable and
Capital Securities of Subsidiaries) to any other Person (other than to another
Obligor) in a single transaction or series of transactions.
"Dollar" and the sign "$" mean lawful money of the United States.
"Domestic Office" means the office of a Lender designated as its "Domestic
Office" on Schedule II hereto or in a Lender Assignment Agreement, or such other
office within the United States as may be designated from time to time by notice
from such Lender to the Administrative Agent and the Borrower.
"EBITDA" means, for any applicable period for the Borrower and its
Subsidiaries, the sum of
(a) Net Income for such period, plus
(b) to the extent deducted in determining such Net Income, the sum of
(i) amounts attributable to amortization, (ii) income tax expense, (iii)
Interest Expense (including Letter of Credit fees), (iv) amounts
attributable to depreciation of assets and non-cash foreign currency
exchange, (v) all non-cash extraordinary and non-cash non-recurring losses
or charges, including charges related to the adoption of FASB 142, and
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(vi) non-operating charges incurred in such period to the extent scheduled
to be paid beyond such period, minus
(c) non-operating charges incurred in a prior period to the extent
paid in such period.
"Effective Date" means the date this Agreement becomes effective pursuant
to Section 10.8.
"Eligible Assignee" means
(a) prior to post-Closing Date syndication that is successful (as
notified in writing by the Administrative Agent to the Borrower), each
Lender and, to the extent approved in writing by the Administrative Agent
(which approval shall not be unreasonably withheld or delayed), any
Affiliate of a Lender, any commercial bank or other financial institution,
any fund that invests in loans (and any Related Fund) and any other Person;
and
(b) after post-Closing Date successful syndication (as notified in
writing by the Administrative Agent to the Borrower) (i) each Lender, (ii)
to the extent approved in writing by the Administrative Agent (which
approval shall not be unreasonably withheld or delayed), any Affiliate of a
Lender, and (iii) to the extent approved in writing by the Administrative
Agent (which approval shall not be unreasonably withheld or delayed) and so
long as no Default or Event of Default has occurred or is continuing, to
the extent approved in writing by the Borrower (which approval shall not be
unreasonably withheld or delayed), to any commercial bank or other
financial institution, any fund that invests in loans (and any Related
Fund) and any other Person.
"Environmental Laws" means all applicable United States federal, state or
local statutes, laws, ordinances, codes, rules, regulations and guidelines
(including consent decrees and administrative orders) relating to protection of
the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to Sections of ERISA also refer to any successor Sections thereto.
"Event of Default" is defined in Section 8.1.
"Excess Free Cash Flow" means, for any Fiscal Year, the excess (if any), of
(a) Free Cash Flow for such Fiscal Year
minus
(b) $20,000,000.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Group" means a "group" (within the meaning of Section 13(d) or
14(d)(2) of the Exchange Act) that includes one or more of the Excluded
Stockholders; provided that a majority of
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the voting power of the Voting Securities of the Borrower Beneficially Owned by
such group is Beneficially Owned Directly by such Excluded Stockholder(s).
"Excluded Stockholder" means (a) the Personal Guarantor or any of his
Affiliates and (b) the spouse or any one or more lineal descendants of the
Personal Guarantor and their spouses and any trust established solely for the
benefit of any one or more of such Persons and each of their respective
Affiliates; provided that each such Person included in this clause (b) shall
only be deemed to be an Excluded Stockholder to the extent such Person's Capital
Securities of the Borrower were received directly or indirectly from the
Personal Guarantor.
"Exemption Certificate" is defined in clause (e) of Section 4.6.
"Existing Letters of Credit" means, collectively, the letters of credit
issued by the Issuer prior to the Closing Date and listed on Schedule IV hereto,
as such letters of credit may be amended, supplemented, amended and restated or
otherwise modified from time to time.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to
(a) 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
(b) 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 it.
"Fee Letter" means the confidential letter, dated September 28, 2001,
between the Arranger and the Borrower.
"Filing Agent" is defined in Section 5.1.9.
"Filing Statements" is defined in Section 5.1.9.
"Fiscal Quarter" means a quarter ending on the last day of March, June,
September or December.
"Fiscal Year" means any period of twelve consecutive calendar months ending
on December 31; references to a Fiscal Year with a number corresponding to any
calendar year (e.g., the "2001 Fiscal Year") refer to the Fiscal Year ending on
December 31 of such calendar year.
"Foreign Pledge Agreement" means any supplemental pledge agreement governed
by the laws of a jurisdiction other than the United States or a State thereof
executed and delivered by the Borrower or any of its Subsidiaries pursuant to
the terms of this Agreement, in form and substance reasonably satisfactory to
the Administrative Agent, as may be necessary or desirable under the laws of
organization or incorporation of a Subsidiary to further protect or perfect the
Lien on and security interest in any Capital Securities of a Foreign Subsidiary.
"Foreign Subsidiary" means any Subsidiary that is not a U.S. Subsidiary.
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"Free Cash Flow" means, for any Fiscal Quarter of the Borrower, an amount
equal to (a) EBITDA for the Borrower and its Subsidiaries for such Fiscal
Quarter, minus (b) the sum of (i) Capital Expenditures incurred or made by the
Borrower and its Subsidiaries during such Fiscal Quarter, plus (ii) taxes
actually paid in cash by the Borrower and its Subsidiaries during such Fiscal
Quarter, plus (c) increases (or minus decreases) in the Working Capital of the
Borrower and its Subsidiaries from the prior Fiscal Quarter.
"F.R.S. Board" means the Board of Governors of the Federal Reserve System
or any successor thereto.
"GAAP" is defined in Section 1.4.
"Governmental Authority" means the government of the United States, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other Person exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Guarantor" means, as the context may require, (a) each Subsidiary that has
executed and delivered to the Administrative Agent a Subsidiary Guaranty and (b)
the Personal Guarantor in his capacity as "Guarantor" under the Perlmutter
Guaranty.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource Conservation and
Recovery Act, as amended; or
(c) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance (including any petroleum product) within
the meaning of any other Environmental Laws.
"Hedging Obligations" means, with respect to any Person, all liabilities of
such Person under currency exchange agreements, interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements, and all other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates or currency exchange rates.
"herein", "hereof", "hereto", "hereunder" and similar terms contained in
any Term Loan Document refer to such Loan Document as a whole and not to any
particular Section, paragraph or provision of such Loan Document.
"HSBC" is defined in the preamble.
"HSI" is defined in the preamble.
"Immaterial Subsidiary" means, individually or collectively, as applicable,
MEI Holding Company S Corp, MEI Holding Company F Corp. and Marvel Restaurant
Venture Corp.
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"Impermissible Qualification" means any qualification or exception to the
opinion or certification of any independent public accountant as to any
financial statement of the Borrower
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of material
matters relevant to such financial statement; or
(c) which relates to the treatment or classification of any item in
such financial statement and which, as a condition to its removal, would
require an adjustment to such item the effect of which would be to cause
the Borrower to be in Default.
"including" and "include" means including without limiting the generality
of any description preceding such term, and, for purposes of each Loan Document,
the parties hereto agree that the rule of ejusdem generis shall not be
applicable to limit a general statement, which is followed by or referable to an
enumeration of specific matters, to matters similar to the matters specifically
mentioned.
"Indebtedness" of any Person means as of a particular date, without
duplication:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments;
(b) all obligations, contingent or otherwise, relative to the amount
available to be drawn under all letters of credit, whether or not drawn,
and banker's acceptances issued for the account of such Person;
(c) all Capitalized Lease Liabilities of such Person;
(d) for purposes of Section 8.1.5 only, all other items which, in
accordance with GAAP, would be included as liabilities on the balance sheet
of such Person as of the date at which Indebtedness is to be determined;
(e) net Hedging Obligations of such Person;
(f) whether or not so included as liabilities in accordance with GAAP,
all obligations of such Person to pay the deferred purchase price of
property or services (excluding trade accounts payable in the ordinary
course of business which are not overdue for a period of more than 90 days
or, if overdue for more than 90 days, as to which a dispute exists and
adequate reserves in conformity with GAAP have been established on the
books of such Person), and indebtedness secured by (or for which the holder
of such indebtedness has an existing right, contingent or otherwise, to be
secured by) a Lien on property owned or being acquired by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse;
(g) obligations arising under Synthetic Leases;
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(h) all obligations under any preferred stock or other instrument
which has any mandatory repayment, prepayment, redemption, repurchase or
acquisition or similar provision; and
(i) all Contingent Liabilities of such Person in respect of any of the
foregoing.
The Indebtedness of any Person shall include the Indebtedness of any other
Person (including any partnership in which such Person is a general partner) to
the extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such Person, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"Indemnified Liabilities" is defined in Section 10.4.
"Indemnified Parties" is defined in Section 10.4.
"Intellectual Property Security Agreement" means any intellectual property
security agreement executed and delivered by any Obligor in substantially the
form of Exhibit E to the Pledge and Security Agreement, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Interest Coverage Ratio" means, as of the last day of any Fiscal Quarter,
the ratio computed for the period consisting of such Fiscal Quarter and each of
the three immediately preceding Fiscal Quarters of:
(a) EBITDA (for such Fiscal Quarter and each of the three immediately
preceding Fiscal Quarters)
to
(b) an amount equal to Interest Expense for such Fiscal Quarter
multiplied by 4.
"Interest Expense" means, for any Fiscal Quarter of the Borrower, the
aggregate interest expense (both accrued and paid during such period to the
Borrower and its Subsidiaries) of the Borrower and its Subsidiaries for such
Fiscal Quarter, including the portion of any payments made during such Fiscal
Quarter in respect of Capitalized Lease Liabilities allocable to interest
expense less, to the extent included, amortization of debt discount and debt
issuance fees.
"Interest Period" means, relative to any LIBO Rate Term Loan, the period
beginning on (and including) the date on which such LIBO Rate Term Loan is made
or continued as, or converted into, a LIBO Rate Term Loan pursuant to Section
2.3 or 2.4 and shall end on (but exclude) the day which numerically corresponds
to such date one, two or three months thereafter (or, if such month has no
numerically corresponding day, on the last Business Day of such month), as the
Borrower may select in its relevant notice pursuant to Section 2.3 or 2.4;
provided, however, that
(a) the Borrower shall not be permitted to select Interest Periods to
be in effect at any one time which have expiration dates occurring on more
than six different dates;
(b) if such Interest Period would otherwise end on a day which is not
a Business Day, such Interest Period shall end on the next following
Business Day (unless such next following Business Day is the first Business
Day of a calendar month, in which case such
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Interest Period shall end on the Business Day next preceding such
numerically corresponding day); and
(c) no Interest Period for any Term Loan may end later than the Stated
Maturity Date for such Term Loan, and Interest Periods shall fall on
payment dates for Term Loans.
"Investment" means, relative to any Person,
(a) any loan, advance or extension of credit made by such Person to
any other Person, including the purchase by such Person of any bonds,
notes, debentures or other debt securities of any other Person;
(b) Contingent Liabilities in favor of any other Person; and
(c) any Capital Securities held by such Person in any other Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property at the time of such Investment.
"ISP Rules" is defined in Section 10.9.
"Issuance Request" means a Letter of Credit request and certificate duly
executed by an Authorized Officer of the Borrower, substantially in the form of
Exhibit B-2 hereto.
"Issuer" means HSBC in its capacity as Issuer of the Letters of Credit. At
the request (and with the written approval) of HSBC and with the Borrower's
consent (not to be unreasonably withheld or delayed), another Lender or an
Affiliate of HSBC may issue one or more Letters of Credit hereunder.
"LC Participant" means each Lender having an LC Participation Commitment.
"LC Participation Commitment" means, relative to each Lender, such Lender's
obligation (if any) to purchase a participation interest in each issued Letter
of Credit pursuant to Section 2.6.2.
"LC Participation Percentage" means, relative to any Lender, the applicable
percentage relating to participation interests in Letters of Credit set forth
opposite its name on Schedule II hereto under the LC Participation Commitment
column or set forth in a Lender Assignment Agreement under the LC Participation
Commitment column, as such percentage may be adjusted from time to time pursuant
to Lender Assignment Agreements executed by such Lender and its Assignee Lender
and delivered pursuant to Section 10.11.1. A Lender shall not have any LC
Participation Commitment if its percentage under the LC Participation Commitment
column is zero.
"Lender Assignment Agreement" means an assignment agreement substantially
in the form of Exhibit H hereto.
"Lenders" is defined in the preamble.
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"Lender's Environmental Liability" means any and all losses, liabilities,
obligations, penalties, claims, litigation, demands, defenses, costs, judgments,
suits, proceedings, damages (including consequential damages), disbursements or
expenses of any kind or nature whatsoever (including reasonable attorneys' fees
at trial and appellate levels and experts' fees and disbursements and expenses
incurred in investigating, defending against or prosecuting any litigation,
claim or proceeding) which may at any time be imposed upon, incurred by or
asserted or awarded against the Administrative Agent, any Lender or any Issuer
or any of such Person's Affiliates, shareholders, directors, officers,
employees, and agents in connection with or arising from:
(a) any Hazardous Material on, in, under or affecting all or any
portion of any property of the Borrower or any of its Subsidiaries, the
groundwater thereunder, or any surrounding areas thereof to the extent
caused by Releases from the Borrower's or any of its Subsidiaries' or any
of their respective predecessors' properties;
(b) any misrepresentation, inaccuracy or breach of any warranty,
contained or referred to in Section 6.12;
(c) any violation or claim of violation by the Borrower or any of its
Subsidiaries of any Environmental Laws; or
(d) the imposition of any lien for damages caused by or the recovery
of any costs for the cleanup, release or threatened release of Hazardous
Material by the Borrower or any of its Subsidiaries, or in connection with
any property owned or formerly owned by the Borrower or any of its
Subsidiaries.
"Letter of Credit" is defined in Section 2.1.1.
"Letter of Credit Commitment" means the Issuer's obligation to issue
Letters of Credit pursuant to Section 2.1.1.
"Letter of Credit Commitment Amount" means, on any date, a maximum amount
of $20,000,000, as such amount may be permanently reduced from time to time
pursuant to Section 2.2.
"Letter of Credit Commitment Termination Date" means the later of
(a) November 30, 2002 and
(b) the date of any extension made pursuant to Section 2.1.1.
"Letter of Credit Outstandings" means, on any date, an amount equal to the
sum of (a) the then aggregate amount which is undrawn and available under all
issued and outstanding Letters of Credit, and (b) the then aggregate amount of
all unpaid and outstanding Reimbursement Obligations.
"Leverage Ratio" means, as of the last day of any Fiscal Quarter, the ratio
of
(a) the excess of (i) Total Debt outstanding on the last day of such
Fiscal Quarter minus (ii) the total aggregate amount maintained in the Cash
Reserve Accounts on the last day of such Fiscal Quarter
to
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(b) EBITDA computed for the period consisting of such Fiscal Quarter
and each of the three immediately preceding Fiscal Quarters.
"LIBO Rate" means, relative to any Interest Period, either (a) the rate of
interest per annum determined by the Administrative Agent (rounded upward to the
nearest 1/16 of 1%) appearing on the Dow Jones Market Screen 3740 or 3750 (or,
if more than one rate appears on such screen, the arithmetic mean for all such
rates rounded upward to the nearest 1/16 of 1%) as the London interbank offered
rate for deposits in Dollars at approximately 11:00 A.M. London, England time,
on the second full Business Day preceding the first day of such Interest Period,
and in an amount approximately equal to the amount of the Administrative Agent's
LIBO Rate Loan and for a period approximately equal to such Interest Period or
(b) if such rate is for any reason not available, the rate per annum equal to
the rate at which the Administrative Agent or its designee is offered deposits
in such currency at or about 11:00 A.M. London, England time, two Business Days
prior to the beginning of such Interest Period in the interbank eurodollar
market where the eurodollar and foreign currency and exchange operations in
respect of its LIBO Rate Term Loans are then being conducted for settlement in
immediately available funds, for delivery on the first day of such Interest
Period for the number of days comprised therein, and in an amount comparable to
the amount of its LIBO Rate Loan to be outstanding during such Interest Period.
"LIBO Rate Loan" means a Term Loan bearing interest, at all times during an
Interest Period applicable to such Term Loan, at a rate of interest determined
by reference to the LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" means, relative to any Term Loan to be made,
continued or maintained as, or converted into, a LIBO Rate Loan for any Interest
Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/16 of
1%) determined pursuant to the following formula:
LIBO Rate = LIBO Rate
(Reserve Adjusted) ------------------------------------------------
1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate Term
Loans will be determined by the Administrative Agent on the basis of the LIBOR
Reserve Percentage in effect two Business Days before the first day of such
Interest Period.
"LIBOR Office" means the office of a Lender designated as its "LIBOR
Office" on Schedule II hereto or in a Lender Assignment Agreement, or such other
office designated from time to time by notice from such Lender to the Borrower
and the Administrative Agent, whether or not outside the United States, which
shall be making or maintaining the LIBO Rate Term Loans of such Lender.
"LIBOR Reserve Percentage" means, relative to any Interest Period for LIBO
Rate Term Loans, the reserve percentage (expressed as a decimal) equal to the
maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the F.R.S. Board and
then applicable to assets or liabilities consisting of or including
"Eurocurrency Liabilities", as currently defined in Regulation D of the F.R.S.
Board, having a term approximately equal or comparable to such Interest Period.
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"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property, or other priority or preferential
arrangement of any kind or nature whatsoever that has the same practical effect
as a security interest, to secure payment of a debt or performance of an
obligation.
"Loan Documents" means, collectively, this Agreement, the Term Notes, the
Letters of Credit, each Rate Protection Agreement, the Fee Letter, each
agreement pursuant to which the Administrative Agent is granted a Lien to secure
the Obligations (including without limitation the Security Agreements), the
Perlmutter Guaranty, the Subsidiary Guaranty, and each other agreement,
certificate, document or instrument delivered in connection with any Loan
Document, whether or not specifically mentioned herein or therein, in each case
as amended, supplemented, amended and restated or otherwise modified from time
to time.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospective financial condition of the Borrower and its
Subsidiaries taken as a whole, (b) the rights and remedies of any Secured Party
under any Loan Document or (c) the ability of any Obligor or Personal Guarantor
to perform its Obligations under any Loan Document.
"Material Contracts" means all contracts to which the Borrower or any of
its Subsidiaries is a party and which have been disclosed in the Borrower's
public filings as material contracts.
"Mexican Subsidiary" means Compania de Juguettes Mexicanos S. A. de C.V.
"Moody's" means Moody's Investors Service, Inc.
"Net Cash Proceeds" means, with respect to any Casualty Event, the amount
of any insurance proceeds or condemnation awards received by the Borrower, or
any of its Subsidiaries in connection with such Casualty Event in excess of
$2,000,000, individually or in the aggregate over the course of a Fiscal Year
(net of all reasonable and customary collection expenses thereof), but excluding
any proceeds or awards required to be paid to a creditor (other than the
Lenders) which holds a first priority Lien permitted by clause (d) of Section
7.2.3 on the property which is the subject of such Casualty Event.
"Net Debt Proceeds" means, with respect to the sale or issuance after the
Closing Date by the Borrower or any of its Subsidiaries to any Person of any
Indebtedness permitted with the prior written consent of the Required Lenders,
the excess of:
(a) the gross cash proceeds received by the Borrower or such
Subsidiary from such sale or issuance, over
(b) all reasonable and customary underwriting commissions and legal,
investment banking, brokerage and accounting and other professional fees,
sales commissions and disbursements actually incurred in connection with
such sale or issuance which have not been paid to Affiliates of the
Borrower or any of its Subsidiaries in connection therewith.
"Net Disposition Proceeds" means with respect to any Disposition of any
assets of the Borrower or any of its Subsidiaries permitted pursuant to clause
(c) of Section 7.2.11, the excess of (a) the gross cash proceeds received by the
Borrower or such Subsidiary from such Disposition, over
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(b) the sum of (i) all reasonable fees and expenses with respect to legal,
investment banking, brokerage and accounting and other professional fees, sales
commissions and disbursements and all other reasonable fees, expenses and
charges, in each case actually incurred in connection with such Disposition
which have not been paid to Affiliates of the Borrower or any of its
Subsidiaries, (ii) all Taxes actually paid or estimated by the Borrower (in good
faith) to be payable in cash in connection with such Disposition, (iii)
reasonable reserves established in accordance with GAAP against any liabilities
associated with such Disposition and retained by the Borrower or any of its
Subsidiaries, provided that a reduction of any such reserves shall be deemed Net
Disposition Proceeds occurring on the date of such reduction and provided
further that such reserves, for purposes of this clause (iii) only, shall be an
amount equal to or less than 25% of the gross proceeds received from such
Disposition, and (iv) the amount of any Indebtedness which is secured by any
such assets and which is required to be, and is, repaid in connection with the
Disposition; provided, however, that Net Disposition Proceeds shall include the
excess, if any, of the estimated taxes payable in connection with such
Disposition over the actual amount of taxes paid, immediately after the payment
of such taxes.
"Net Equity Proceeds" means with respect to the sale or issuance after the
Closing Date by the Borrower to any Person of any Capital Securities, warrants
or options or the exercise of any such warrants or options, the excess of:
(a) the gross cash proceeds received by such Person from such sale,
exercise or issuance, over
(b) all reasonable underwriting commissions and legal, investment
banking, brokerage and accounting and other professional fees, sales
commissions and disbursements actually incurred in connection with such
sale or issuance which have not been paid to Affiliates of the Borrower in
connection therewith.
"Net Income" means, for any period, the aggregate of all amounts (exclusive
of all amounts in respect of any extraordinary gains but including extraordinary
losses, such losses not to exceed an amount equal to 10% of EBITDA for the most
recently completed Fiscal Quarter) which would be included as net income on the
consolidated financial statements of the Borrower and its Subsidiaries for such
period.
"Non-Excluded Taxes" means any Taxes other than net income and franchise
Taxes imposed with respect to any Secured Party by any Governmental Authority
under the laws of which such Secured Party is organized or in which it maintains
its applicable lending office.
"Non-U.S. Lender" and "Non-U.S. LC Participant" means any Lender or LC
Participant that is not a "United States person", as defined under Section
7701(a)(30) of the Code.
"Obligations" means all obligations (monetary or otherwise, whether
absolute or contingent, matured or unmatured) of the Borrower and each other
Obligor and the Personal Guarantor arising under or in connection with a Loan
Document, including Reimbursement Obligations and the principal of and premium,
if any, and interest (including interest accruing during (or which would have
accrued but for) the pendency of any proceeding of the type described in Section
8.1.9, whether or not allowed in such proceeding) on the Term Loans and/or
Reimbursement Obligations.
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"Obligor" means, as the context may require, the Borrower and each other
Person (other than a Secured Party and the Personal Guarantor) obligated under
any Loan Document.
"Organic Document" means, relative to any Obligor, as applicable, its
certificate of incorporation, by-laws, certificate of partnership, partnership
agreement, certificate of formation, limited liability agreement, operating
agreement and all shareholder agreements, voting trusts and similar arrangements
applicable to any of such Obligor's partnership interests, limited liability
company interests or authorized shares of Capital Securities.
"Other Taxes" means any and all stamp, documentary or similar Taxes, or any
other excise or property Taxes or similar levies that arise on account of any
payment made or required to be made under any Loan Document or from the
execution, delivery, registration, recording or enforcement of any Loan
Document.
"Participant" is defined in Section 10.11.2.
"PBGC" means the Pension Benefit Guaranty Corporation and any Person
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in Section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer
plan as defined in Section 4001(a)(3) of ERISA), and to which the Borrower or
any corporation, trade or business that is, along with the Borrower, a member of
a Controlled Group, may have liability, including any liability by reason of
having been a substantial employer within the meaning of Section 4063 of ERISA
at any time during the preceding five years, or by reason of being deemed to be
a contributing sponsor under Section 4069 of ERISA.
"Perfection Certificate" means the Perfection Certificate to be executed
and delivered by an Authorized Officer of each Obligor that is a party to the
Pledge and Security Agreement pursuant to the terms of this Agreement,
substantially in the form of Exhibit I hereto, as amended, supplemented, amended
and restated or otherwise modified from time to time.
"Perlmutter Guaranty" means the guaranty to be duly executed and delivered
by the Personal Guarantor pursuant to the terms of this Agreement, substantially
in the form of Exhibit F-2 hereto, as amended, supplemented, amended and
restated or otherwise modified from time to time.
"Perlmutter Security Agreement" means the security agreement to be duly
executed and delivered by the Personal Guarantor, substantially in the form of
Exhibit J hereto (and including any and all control agreements executed in
connection therewith or pursuant thereto), as amended, supplemented, amended and
restated or otherwise modified from time to time.
"Permitted Acquisition" means an acquisition (whether pursuant to an
acquisition of Capital Securities, assets or otherwise) by the Borrower or any
Subsidiary from any Person of a business as to in which the Required Lenders
have consented in writing and, in any event, the following conditions are
satisfied:
(a) immediately before and after giving effect to such acquisition no
Default shall have occurred and be continuing or would result therefrom
(including under Section 7.2.1);
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(b) such acquisition has been approved and recommended by the board of
directors or general partner (or similar entity) of the Person to be
acquired or which owns the assets to be acquired;
(c) the Borrower shall have furnished to the Administrative Agent
(which shall promptly distribute the same to the Lenders), prior to the
consummation of such acquisition, pro forma projections and other details
(with reasonable assumptions) prepared in good faith upon reasonable
assumptions with respect to the Person, Persons, or assets to be acquired
demonstrating pro forma compliance with all covenants through the Stated
Maturity Date;
(d) the Administrative Agent (on behalf of the Lenders) shall have
been provided a first-priority security interest in such acquired property
(subject to Permitted Liens, if any, encumbering such acquired property
only) as soon as possible, but in any event within 30 days of the
acquisition of such property;
(e) the Borrower or such Subsidiary will use its best efforts to
ensure that the documentation for such acquisition shall permit the
Administrative Agent to obtain a Lien on such documentation; and
(f) the Borrower shall have delivered to the Administrative Agent a
Compliance Certificate for the period of four full Fiscal Quarters
immediately preceding such acquisition (prepared in good faith and in a
manner and using such methodology which is consistent with the most recent
financial statements delivered pursuant to Section 7.1.1) giving pro forma
effect to the consummation of such acquisition and evidencing compliance
with the covenants set forth in Section 7.2.4.
"Permitted Lien" means a Lien permitted pursuant to Section 7.2.3.
"Person" means any natural person, corporation, limited liability company,
partnership, joint venture, association, trust or unincorporated organization,
Governmental Authority or any other legal entity, whether acting in an
individual, fiduciary or other capacity.
"Personal Guarantor" means Mr. Isaac Perlmutter.
"Pledge and Security Agreement" means the pledge and security agreement to
be duly executed and delivered by an Authorized Officer of the Borrower and each
of the Borrower's U.S. Subsidiaries, substantially in the form of Exhibit G
hereto (and including any and all control agreements executed in connection
therewith or pursuant thereto), together with any supplemental Foreign Pledge
Agreements delivered pursuant to the terms of this Agreement, in each case as
amended, supplemented, amended and restated or otherwise modified from time to
time.
"Pledged Subsidiary" means each Subsidiary in respect of which the
Administrative Agent has been granted a security interest in or a pledge of (a)
any of the Capital Securities of such Subsidiary or (b) any intercompany notes
of such Subsidiary owing to the Borrower or another Subsidiary.
"Projections" means the financial projections for the Borrower and its
Subsidiaries through December, 2004 heretofore delivered to the Administrative
Agent and dated November 11, 2001.
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"Quarterly Payment Date" means the last day of March, June, September and
December, or, if any such day is not a Business Day, the next succeeding
Business Day.
"Rate Protection Agreement" means, collectively, any interest rate swap,
cap, collar or similar agreement entered into by the Borrower or any of its
Subsidiaries under which the counterparty of such agreement is (or at the time
such agreement was entered into, was) a Lender or an Affiliate of a Lender.
"Refinancing" is defined in the first recital.
"Register" is defined in clause (b) of Section 2.7.
"Reimbursement Obligation" is defined in Section 2.6.4.
"Related Fund" means, with respect to any Lender which is a fund that
invests in loans, any other fund that invests in loans and is controlled by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor.
"Release" means a "release", as such term is defined in CERCLA.
"Replacement Lender" is defined in clause (f) of Section 10.11.1.
"Required Lenders" means, (a) at any time that there is more than one
Lender and/or LC Participant and any Lender or LC Participant holds greater than
50% of the Total Exposure Amount, such Lender and/or LC Participant plus at
least one other Lender and/or LC Participant, and (b) at any other time, Lenders
and/or LC Participants holding, in the aggregate, greater than 50% of the Total
Exposure Amount.
"Resource Conservation and Recovery Act" means the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901, et seq., as amended.
"Restricted Payment" means the declaration or payment of any dividend
(other than dividends payable solely in Capital Securities of the Borrower or
any Subsidiary) on, or the making of any payment or distribution on account of,
or setting apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of any class of Capital
Securities of the Borrower or any Subsidiary or any warrants or options to
purchase any such Capital Securities, whether now or hereafter outstanding, or
the making of any other distribution in respect thereof, either directly or
indirectly, whether in cash or property, obligations of the Borrower or any
Subsidiary or otherwise.
"S&P" means Standard & Poor's Rating Services, a division of McGraw-Hill,
Inc.
"SEC" means the Securities and Exchange Commission.
"Secured Parties" means, collectively, the Lenders, the Issuer, the
Administrative Agent, each counterparty to a Rate Protection Agreement that is
(or at the time such Rate Protection Agreement was entered into, was) a Lender
or an Affiliate thereof and (in each case), each of their respective successors,
transferees and assigns.
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"Security Agreement" means, as the context may require, the Pledge and
Security Agreement and the Perlmutter Security Agreement and each other
document, including supplements with respect to intellectual property, pursuant
to which a Lien may be granted by any Subsidiary of the Borrower, the Personal
Guarantor or any Affiliates thereof to the Administrative Agent for the benefit
of the Lenders, in each case as amended, supplemented, amended and restated or
otherwise modified from time to time.
"Senior Leverage Ratio" means, as of the last day of any Fiscal Quarter,
the ratio of
(a) Total Debt (other than Subordinated Debt) outstanding on the last
day of such Fiscal Quarter
to
(b) EBITDA computed for the period consisting of such Fiscal Quarter
and each of the three immediately preceding Fiscal Quarters.
"Senior Notes" is defined in the second recital.
"Senior Notes Indenture" means the Indenture, dated as of February 25, 1999
for 12% Senior Notes due 2009, between the Borrower, as Issuer, MEI Holding
Company F Corp., MEI Holding Company S Corp., MEI Holding Company FHF Corp.,
MRV, Inc., Malibu Comics Entertainment, Inc., Marvel Characters, Inc., Marvel
Entertainment Group, Inc. and Marvel Restaurant Venture Crop., as Guarantors,
and the Trustee, pursuant to which the Senior Notes shall have been issued, as
the same may be amended, supplemented, amended and restated or otherwise
modified from time to time in accordance with Section 7.2.12.
"Senior Notes Obligations" means all obligations (monetary or otherwise,
whether absolute or contingent, matured or unmatured) of the Borrower arising
under or in connection with the Senior Notes Indenture.
"Senior Notes Purchase Transactions" is defined in clause (b) of the first
recital.
"Solvent" means, with respect to any Person and its Subsidiaries on a
particular date, that on such date (a) the fair value of the property of such
Person and its Subsidiaries on a consolidated basis is greater than the total
amount of liabilities, including contingent liabilities, of such Person and its
Subsidiaries on a consolidated basis, (b) the present fair salable value of the
assets of such Person and its Subsidiaries on a consolidated basis in not less
than the amount that will be required to pay the probable liability of such
Person and its Subsidiaries on a consolidated basis on its debts as they become
absolute and matured, (c) such Person does not intend to, and does not believe
that it or its Subsidiaries will, incur debts or liabilities beyond the ability
of such Person and its Subsidiaries to pay as such debts and liabilities mature
(taking into account the timing and amounts of cash to be received by it and the
amounts to be payable on or in respect of its obligations), and (d) such Person
and its Subsidiaries on a consolidated basis is not engaged in business or a
transaction, and such Person and its Subsidiaries on a consolidated basis in not
about to engage in business or transaction, for which the property of such
Person and its Subsidiaries on a consolidated basis would constitute an
unreasonably small capital to carry out its businesses as conducted or as
proposed to be conducted, including the capital needs of the Borrower on a
consolidated basis (taking into account, in each case, the particular capital
requirements of the businesses conducted by the Borrower and the
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projected capital requirements and capital availability of such businesses). The
amount of contingent liabilities at any time shall be computed as the amount
that, in light of all the facts and circumstances existing at such time, can
reasonably be expected to become an actual or matured liability.
"Stated Amount" means, on any date and with respect to a particular Letter
of Credit, the total amount then available to be drawn under such Letter of
Credit.
"Stated Expiry Date" is defined in Section 2.6.
"Stated Maturity Date" means, with respect to all Term Loans, December 31,
2004.
"Stockholders' Agreement" means the agreement, dated as of October 1, 1998,
among the Borrower, the secured creditors of Marvel Entertainment Group, Inc.
party thereto, the Personal Guarantor and certain of his affiliates, Mr. Avi
Arad and the affiliates of Mr. Mark Dickstein party thereto.
"Sub Debt Documents" means, collectively, the loan agreements, indentures,
note purchase agreements, promissory notes, guarantees, and other instruments
and agreements evidencing the terms of Subordinated Debt, as amended,
supplemented, amended and restated or otherwise modified in accordance with
Section 7.2.12.
"Subordinated Debt" means unsecured Indebtedness of the Borrower
subordinated in right of payment to the Obligations pursuant to documentation
containing redemption and other prepayment events, maturities, amortization
schedules, covenants, events of default, remedies, acceleration rights,
subordination provisions and other material terms satisfactory to the
Administrative Agent.
"Subordination Provisions" is defined in Section 8.1.11.
"Subsidiary" means, with respect to any Person, any other Person of which
more than 50% of the outstanding Voting Securities of such other Person
(irrespective of whether at the time Capital Securities of any other class or
classes of such other Person shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more other Subsidiaries of
such Person, or by one or more other Subsidiaries of such Person. Unless the
context otherwise specifically requires, the term "Subsidiary" shall be a
reference to a Subsidiary of the Borrower.
"Subsidiary Guarantor" means each Subsidiary that has executed and
delivered to the Administrative Agent a Subsidiary Guaranty.
"Subsidiary Guaranty" means the subsidiary guaranty to be duly executed and
delivered by an Authorized Officer of each U.S. Subsidiary in favor of the
Administrative Agent for the benefit of the Secured Parties pursuant to the
terms of this Agreement, substantially in the form of Exhibit F-1 hereto, as
amended, supplemented, amended and restated or otherwise modified from time to
time.
"Surviving Provisions" is defined in Section 10.5.
"Synthetic Lease" means, as applied to any Person, any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) (a) that is not a capital lease in accordance
with GAAP and (b) in respect of which the lessee retains or obtains
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ownership of the property so leased for federal income tax purposes, other than
any such lease under which that Person is the lessor.
"Taxes" means all income, stamp or other taxes, duties, levies, imposts,
charges, assessments, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority,
and all interest, penalties or similar liabilities with respect thereto.
"Term Loan" is defined in Section 2.1.2.
"Term Loan Commitment" means, relative to any Lender, such Lender's
obligation (if any) to make Term Loans pursuant to clause (a) of Section 2.1.2.
"Term Loan Commitment Amount" means, on any date, $60,000,000, as such
amount may be permanently reduced form time to time in accordance with Section
2.2.1.
"Term Loan Commitment Termination Date" means the earliest of
(a) January 31, 2002 (if the Term Loans have not been made on or prior
to such date); and
(b) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in clause (a) or (b), the Term
Loan Commitments shall terminate automatically and without any further action.
"Term Note" means a promissory note of the Borrower payable to any Lender,
in substantially the form of Exhibit A hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from outstanding
Term Loans, and also means all other promissory notes accepted from time to time
in substitution therefor or renewal thereof.
"Term Percentage" means, relative to any Lender, the applicable percentage
relating to Term Loans set forth opposite its name on Schedule II hereto under
the Term Loan Commitment column or set forth in a Lender Assignment Agreement
under the Term Loan Commitment column, as such percentage may be adjusted from
time to time pursuant to Lender Assignment Agreements executed by such Lender
and its Assignee Lender and delivered pursuant to Section 10.11.1. A Lender
shall not have any Term Loan Commitment if its percentage under the Term Loan
Commitment column is zero.
"Termination Date" means the date on which all Obligations have been paid
in full in cash, all Letters of Credit have been terminated or expired (or been
Cash Collateralized), all Rate Protection Agreements have been terminated and
all Commitments shall have terminated.
"Total Debt" means, on any date, the outstanding principal amount of all
Indebtedness of the Borrower and its Subsidiaries of the type referred to in
clause (a) (which, in the case of the Term Loans, shall be deemed to equal the
average daily amount of the Term Loans outstanding for the Fiscal Quarter ending
on or immediately preceding the date of determination), clause (b) (which, in
the case of Letter of Credit Outstandings shall be deemed to equal the average
daily amount of Letter of Credit Outstandings for the Fiscal Quarter ending on
or immediately preceding the date of
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determination), clause (c), clause (g) and clause (h), in each case of the
definition of "Indebtedness" (exclusive of intercompany Indebtedness between the
Borrower and its Subsidiaries) and any Contingent Liability in respect of any of
the foregoing.
"Total Exposure Amount" means, on any date of determination (and without
duplication), the outstanding principal amount of all Term Loans, the aggregate
amount of all Letter of Credit Outstandings and the unfunded amount of the
Commitments.
"Trustee" means IBJ Whitehall Bank & Trust Company (and its successors), as
Trustee under the Senior Notes Indenture.
"type" means, relative to any Term Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of New York; provided that if, with respect to any Filing Statement or
by reason of any provisions of law, the perfection or the effect of perfection
or non-perfection of the security interests granted to the Administrative Agent
pursuant to the applicable Loan Document is governed by the Uniform Commercial
Code as in effect in a jurisdiction of the United States other than New York,
then "UCC" means the Uniform Commercial Code as in effect from time to time in
such other jurisdiction for purposes of the provisions of each Loan Document and
any Filing Statement relating to such perfection or effect of perfection or
non-perfection.
"United States" or "U.S." means the United States of America, its fifty
states and the District of Columbia.
"U.S. Subsidiary" means any Subsidiary, other than any Immaterial
Subsidiary, that is incorporated or organized under the laws of the United
States or a state thereof.
"Voting Securities" means, with respect to any Person, securities of any
class of Capital Securities of such Person entitling the holder thereof (whether
at all times or only so long as no senior class of stock or other relevant
equity interest has voting power by reason of any contingency) to vote in the
election of directors, managers or other voting members of the governing body of
such Person.
"Welfare Plan" means a "welfare plan", as such term is defined in Section
3(1) of ERISA.
"wholly owned Subsidiary" means any Subsidiary all of the outstanding
Capital Securities of which (other than any director's qualifying shares or
investments by foreign nationals mandated by applicable laws) is owned directly
or indirectly by the Borrower.
"Working Capital" means, at any date, the sum of (a) consolidated current
assets of the Borrower and its Subsidiaries at such date minus (b) consolidated
current liabilities of the Borrower and its Subsidiaries at such date.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in each other Loan Document and the
Disclosure Schedule, and each notice and other communication delivered from time
to time in connection with any Loan Document.
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SECTION 1.3. Cross-References. Unless otherwise specified, references in a
Loan Document to any Article or Section are references to such Article or
Section of such Loan Document, and references in any Article, Section or
definition to any clause are references to such clause of such Article, Section
or definition.
SECTION 1.4. Accounting and Financial Determinations. Unless otherwise
specified, all accounting terms used in each Loan Document shall be interpreted,
and all accounting determinations and computations thereunder (including under
Section 7.2.4 and the definitions used in such calculations) shall be made, in
accordance with those generally accepted accounting principles ("GAAP") applied
in the preparation of the financial statements referred to in clause (a) of
Section 5.1.5; provided that if, after the Effective Date, there occurs any
change in GAAP that affects in any material respect the calculation of any
covenant contained in Section 7.2.4, the Lenders and the Borrower shall
negotiate in good faith amendments to the provisions of this Agreement that
relate to the calculation of such covenants with the intent of having the
respective positions of the Lenders and the Borrower after such change in GAAP
conform as nearly as possible to their respective positions as of the Effective
Date and, until any such amendments have been agreed upon, the covenants in
Section 7.2.4 shall be calculated as if no such change in GAAP has occurred.
Unless otherwise expressly provided, all financial covenants and defined
financial terms shall be computed on a consolidated basis for the Borrower and
its Subsidiaries, in each case without duplication.
ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT
SECTION 2.1. Commitments. On the terms and subject to the conditions of
this Agreement, the Lenders and the Issuer severally agree to make Credit
Extensions as set forth below.
SECTION 2.1.1. Letter of Credit Commitment. From time to time on any
Business Day occurring from and after the Effective Date but prior to the Letter
of Credit Commitment Termination Date, the Issuer agrees that it will
(a) issue one or more standby letters of credit (each, a "Letter of
Credit") for the account of the Borrower or any Subsidiary Guarantor in the
Stated Amount requested by the Borrower on such day; or
(b) extend the Stated Expiry Date of an existing Letter of Credit
previously issued hereunder;
provided that the Issuer shall not be required to issue any Letter of Credit if,
after giving effect thereto, the aggregate amount of all Letter of Credit
Outstandings would exceed the Letter of Credit Commitment Amount; provided
further that, from and after the Closing Date, the Existing Letters of Credit
shall be deemed to be issued under this Agreement and shall for all purposes be
governed by, and constitute Letters of Credit under, this Agreement.
No Stated Expiry Date shall extend beyond the earliest of (i) the Letter of
Credit Commitment Termination Date, (ii) five days prior to the Stated Maturity
Date and (iii) unless otherwise agreed to by the Issuer in its sole discretion,
one year from the date of such extension. The Letter of Credit Commitment
Termination Date may be extended annually for up to an additional
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one-year period upon not less than ten nor more than twenty Business Days' prior
written notice to the Administrative Agent so long as no Default has occurred
and is continuing; provided that the final Letter of Credit Commitment
Termination Date shall be no later than five days prior to the Stated Maturity
Date.
SECTION 2.1.2. Term Loan Commitment. From time to time on any Business Day
occurring after the Effective Date but prior to the Term Loan Commitment
Termination Date, each Lender that has a Term Loan Commitment agrees that it
will make loans (relative to such Lender, its "Term Loans") to the Borrower
equal to such Lender's Term Loan Percentage of the aggregate amount of the
Borrowing of Term Loans requested by the Borrower to be made on such day,
provided that (a) the aggregate principal amount of all Term Loans outstanding
at any time shall not exceed the Term Loan Commitment Amount and (b) the
aggregate principal amount of all Term Loans outstanding at any time from any
Lender with a Term Loan Commitment shall not exceed its Term Percentage or the
Term Loan Commitment Amount. No amounts paid or prepaid with respect to Term
Loans may be reborrowed. Notwithstanding anything else to the contrary contained
in any Loan Document, the Administrative Agent may divide the Term Loan
Commitment into two separate commitments on terms and conditions consistent with
the Surviving Provisions; provided that the aggregate amount of such separate
commitments shall not exceed $60,000,000.
SECTION 2.2. Reduction of the Commitment Amounts. The Commitment Amounts
are subject to reduction from time to time as set forth below.
SECTION 2.2.1. Optional. The Borrower may, from time to time on any
Business Day occurring after the Effective Date, voluntarily reduce the unused
amount of the Letter of Credit Commitment Amount or the Term Loan Commitment
Amount on the Business Day so specified by the Borrower; provided, however, that
all such reductions shall require at least one Business Day's prior written
notice to the Administrative Agent and be permanent, and any partial reduction
of any Commitment Amount shall be in a minimum amount of $1,000,000 and in an
integral multiple of $1,000,000.
SECTION 2.3. Borrowing Procedures. Term Loans shall be made by the Lenders
with a Term Loan Commitment in accordance with Section 2.3.1.
SECTION 2.3.1. Term Loan Borrowing Procedure. By delivering a Borrowing
Request to the Administrative Agent on or before 11:00 a.m., New York City time,
on a Business Day, the Borrower may from time to time irrevocably request, on
one Business Day's prior written notice in the case of Base Rate Term Loans, or
three Business Days' prior written notice in the case of LIBO Rate Term Loans,
and in either case not more than five Business Days' prior written notice, that
a Borrowing be made, in the case of LIBO Rate Term Loans, in a minimum amount of
$5,000,000 and an integral multiple of $1,000,000, and in the case of Base Rate
Term Loans, in a minimum amount of $1,000,000 and an integral multiple of
$500,000 or, in either case, in the unused amount of the applicable Commitment;
provided, however, that all of the initial Term Loans shall be made as Base Rate
Term Loans. On the terms and subject to the conditions of this Agreement, each
Borrowing shall be comprised of the type of Term Loans, and shall be made on the
Business Day, specified in such Borrowing Request. On or before 11:00 a.m. on
such Business Day each Lender that has a Commitment to make Term Loans shall
deposit with the Administrative Agent same day funds in an amount equal to such
Lender's Term Percentage of the requested Borrowing. Such deposit will be made
to an account which the Administrative Agent shall specify from time to time by
notice to the Lenders. To the extent funds are received from the Lenders, the
Administrative Agent shall make
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such funds available to the Borrower by wire transfer to the accounts the
Borrower shall have specified in its Borrowing Request. No Lender's obligation
to make any Term Loan shall be affected by any other Lender's failure to make
any Term Loan.
SECTION 2.4. Continuation and Conversion Elections. By delivering a
Continuation/Conversion Notice to the Administrative Agent on or before 11:00
a.m., New York City time, on a Business Day, the Borrower may from time to time
irrevocably elect, on not less than one Business Day's prior written notice in
the case of Base Rate Term Loans, or three Business Days' prior written notice
in the case of LIBO Rate Term Loans, and in either case not more than five
Business Days' prior written notice, that all, or any portion in an aggregate
minimum amount of $1,000,000 and an integral multiple of $1,000,000 be, in the
case of Base Rate Term Loans, converted into LIBO Rate Term Loans or be, in the
case of LIBO Rate Term Loans, converted into Base Rate Term Loans or continued
as LIBO Rate Term Loans (in the absence of delivery of a Continuation/Conversion
Notice with respect to any LIBO Rate Loan at least three Business Days (but not
more than five Business Days) before the last day of the then current Interest
Period with respect thereto, such LIBO Rate Loan shall, on such last day,
automatically convert to a Base Rate Loan); provided, however, that (a) each
such conversion or continuation shall be prorated among the applicable
outstanding Term Loans of all Lenders that have made such Term Loans, and (b) no
portion of the outstanding principal amount of any Term Loans may be continued
as, or be converted into, LIBO Rate Term Loans when (i) any Event of Default has
occurred and is continuing or (ii) unless the Administrative Agent otherwise
consents in writing, any Default has occurred and is continuing.
SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Term Loans hereunder by
causing one of its foreign branches or Affiliates (or an international banking
facility created by such Lender) to make or maintain such LIBO Rate Loan;
provided, however, that such LIBO Rate Loan shall nonetheless be deemed to have
been made and to be held by such Lender, and the obligation of the Borrower to
repay such LIBO Rate Loan shall nevertheless be to such Lender for the account
of such foreign branch, Affiliate or international banking facility. In
addition, the Borrower hereby consents and agrees that, for purposes of any
determination to be made for purposes of Section 4.1, 4.2, 4.3 or 4.4, it shall
be conclusively assumed that each Lender elected to fund all LIBO Rate Term
Loans by purchasing Dollar deposits in its LIBOR Office's interbank eurodollar
market.
SECTION 2.6. Letters of Credit. Letters of Credit shall be issued by the
Issuer and participated in by LC Participants in accordance with the provisions
set forth below in the subsections of this Section 2.6.
SECTION 2.6.1. Letter of Credit Issuance Procedure. By delivering to the
Administrative Agent an Issuance Request on or before 11:00 a.m., New York City
time, on a Business Day, the Borrower may from time to time irrevocably request
on not less than three nor more than ten Business Days' prior written notice, in
the case of an initial issuance of a Letter of Credit, and not less than five
Business Days' prior written notice, in the case of a request for the extension
of the Stated Expiry Date of a Letter of Credit (in each case, unless a shorter
notice period is agreed to in writing by the Issuer, in its sole discretion),
that the Issuer issue, or extend the Stated Expiry Date of, a Letter of Credit
in such form as may be requested by the Borrower and approved by the Issuer,
which approval shall not be unreasonably withheld or delayed, solely for the
purposes described in Section 7.1.7. Each Letter of Credit shall by its terms be
stated to expire on a date (its "Stated Expiry Date") no later than the earliest
to occur of (a) the Letter of Credit Commitment Termination Date,
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(b) five days prior to the Stated Maturity Date or (c) (unless otherwise agreed
to by an Issuer, in its sole discretion), one year from the date of its
issuance. The Issuer will make available to the beneficiary thereof the original
of the Letter of Credit which it issues.
SECTION 2.6.2. Other Lenders' Participation. Upon the issuance of each
Letter of Credit, and without further action, each LC Participant (other than
the Issuer) shall be deemed to have irrevocably purchased, to the extent of its
LC Participation Percentage, a participation interest in such Letter of Credit
(including the Contingent Liability and any Reimbursement Obligation with
respect thereto), and such LC Participant shall, to the extent of its LC
Participation Percentage, be responsible for reimbursing within one Business Day
the Issuer for Reimbursement Obligations which have not been reimbursed by the
Borrower in accordance with Section 2.6 (and for Reimbursement Obligations which
have been reimbursed by the Borrower but which have been required to be
disgorged, returned or restored by the Issuer). In addition, such LC Participant
shall, to the extent of its LC Participation Percentage, be entitled to receive
a ratable portion of the Letter of Credit fees payable pursuant to Section 3.3.1
with respect to each Letter of Credit and of interest payable pursuant to
Section 3.2 with respect to any Reimbursement Obligation. To the extent that any
LC Participant has reimbursed the Issuer for a Disbursement, such LC Participant
shall be entitled to receive its ratable portion of any amounts subsequently
received (from the Borrower or otherwise) in respect of such Disbursement.
SECTION 2.6.3. Disbursements. The Issuer will notify the Borrower and the
Administrative Agent promptly of the presentment for payment of any Letter of
Credit issued by the Issuer, together with notice of the date (the "Disbursement
Date") such payment shall be made (each such payment, a "Disbursement"). Subject
to the terms and provisions of such Letter of Credit and this Agreement, the
Issuer shall make such payment to the beneficiary (or its designee) of such
Letter of Credit. Prior to 11:00 a.m. on the first Business Day following the
Disbursement Date, the Borrower will reimburse the Administrative Agent, for the
account of the Issuer, for all amounts which the Issuer has disbursed under such
Letter of Credit, together with interest thereon (not counting the date of
reimbursement made in accordance with Section 4.7) at a rate per annum equal to
the rate per annum then in effect for Base Rate Term Loans (with the then
Applicable Margin for Term Loans accruing on such amount) pursuant to Section
3.2 for the period from the Disbursement Date through the date of such
reimbursement. Without limiting in any way the foregoing and notwithstanding
anything to the contrary contained herein or in any separate application for any
Letter of Credit, the Borrower hereby acknowledges and agrees that it shall be
obligated to reimburse the Issuer upon each Disbursement of a Letter of Credit,
and it shall be deemed to be the obligor for purposes of each such Letter of
Credit issued hereunder (whether the account party on such Letter of Credit is
the Borrower or a Subsidiary Guarantor).
SECTION 2.6.4. Reimbursement. The obligation (a "Reimbursement Obligation")
of the Borrower under Section 2.6.3 to reimburse the Issuer with respect to each
Disbursement (including interest thereon), and, upon the failure of the Borrower
to reimburse the Issuer, each LC Participant's obligation under Section 2.6.2 to
reimburse the Issuer, shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower or such LC Participant, as the case may be, may have or have
had against the Issuer or any Lender, including any defense based upon the
failure of any Disbursement to conform to the terms of the applicable Letter of
Credit (if, in the Issuer's good faith opinion, such Disbursement is determined
to be appropriate) or any non-application or misapplication by the beneficiary
of the proceeds of such Letter of Credit; provided, however, that after paying
in full its Reimbursement Obligation hereunder, nothing herein shall adversely
affect the right of the Borrower or such LC
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Participant, as the case may be, to commence any proceeding against the Issuer
for any wrongful Disbursement made by such Issuer under a Letter of Credit as a
result of acts or omissions constituting gross negligence or willful misconduct
on the part of the Issuer.
SECTION 2.6.5. Deemed Disbursements. Upon the occurrence and during the
continuation of any Default under Section 8.1.9 or upon notification by the
Administrative Agent (acting at the direction of the Required Lenders) to the
Borrower of its obligations under this Section, following the occurrence and
during the continuation of any other Event of Default,
(a) the aggregate Stated Amount of all Letters of Credit shall,
without demand upon or notice to the Borrower or any other Person, be
deemed to have been paid or disbursed by the Issuer of such Letters of
Credit (notwithstanding that such amount may not in fact have been paid or
disbursed); and
(b) the Borrower shall be immediately obligated to reimburse the
Issuer for the amount deemed to have been so paid or disbursed by the
Issuer.
Amounts payable by the Borrower pursuant to this Section shall be deposited in
immediately available funds with the Administrative Agent and held as collateral
security for the Reimbursement Obligations. When all Defaults giving rise to the
deemed disbursements under this Section have been cured or waived the
Administrative Agent shall return to the Borrower all amounts then on deposit
with the Administrative Agent pursuant to this Section which have not been
applied to the satisfaction of the Reimbursement Obligations.
SECTION 2.6.6. Nature of Reimbursement Obligations. The Borrower, each
other Obligor and, to the extent set forth in Section 2.6.2, each LC Participant
shall assume all risks of the acts, omissions or misuse of any Letter of Credit
by the beneficiary thereof. The Issuer shall not be responsible for:
(a) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any Letter of Credit or any document submitted by any party in
connection with the application for and issuance of a Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged;
(b) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder
or the proceeds thereof in whole or in part, which may prove to be invalid
or ineffective for any reason;
(c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;
(d) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise; or
(e) any loss or delay in the transmission or otherwise of any document
or draft required in order to make a Disbursement under a Letter of Credit.
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None of the foregoing shall affect, impair or prevent the vesting of any of the
rights or powers granted to the Issuer or any LC Participant hereunder. In
furtherance and not in limitation or derogation of any of the foregoing, any
action taken or omitted to be taken by the Issuer in good faith shall be binding
upon each Obligor and each such Secured Party, and shall not put the Issuer
under any resulting liability to any Obligor or any Secured Party, as the case
may be.
SECTION 2.7. Term Notes. (a) The Borrower agrees that, upon the request to
the Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a Term Note evidencing the Term Loans made by, and payable to the
order of, such Lender in a maximum principal amount equal to such Lender's Term
Percentage of the original Term Loan Commitment Amount. The Borrower hereby
irrevocably authorizes each Lender to make (or cause to be made) appropriate
notations on the grid attached to such Lender's Term Note (or on any
continuation of such grid), which notations, if made, shall evidence, inter
alia, the date of, the outstanding principal amount of, and the interest rate
and Interest Period applicable to, the Term Loans evidenced thereby. Such
notations shall, to the extent not inconsistent with notations made by the
Administrative Agent in the Register, be conclusive and binding on each Obligor
absent manifest error; provided, however, that the failure of any Lender to make
any such notations shall not limit or otherwise affect any Obligations of any
Obligor.
(b) The Borrower hereby designates the Administrative Agent to serve as the
Borrower's agent, solely for the purpose of this clause, to maintain a register
(the "Register") on which the Administrative Agent will record each Lender's
Term Loan Commitment, the Term Loans made by each Lender and each repayment in
respect of the principal amount of the Term Loans, annexed to which the
Administrative Agent shall retain a copy of each Lender Assignment Agreement
delivered to the Administrative Agent pursuant to Section 10.11.1. Failure to
make any recordation, or any error in such recordation, shall not affect any
Obligor's or Personal Guarantor's Obligations. The entries in the Register shall
be conclusive, in the absence of manifest error, and the Borrower, the
Administrative Agent and the Lenders shall treat each Person in whose name a
Term Loan is registered (or, if applicable, to which a Term Note has been
issued) as the owner thereof for the purposes of all Loan Documents,
notwithstanding notice or any provision herein to the contrary. Any assignment
or transfer of a Commitment or the Term Loans made pursuant hereto shall be
registered in the Register only upon delivery to the Administrative Agent of a
Lender Assignment Agreement that has been executed by the requisite parties
pursuant to Section 10.11.1. No assignment or transfer of a Lender's Term Loan
Commitment or Term Loans shall be effective unless such assignment or transfer
shall have been recorded in the Register by the Administrative Agent as provided
in this Section.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments; Application. The Borrower agrees
that the Term Loans shall be repaid and prepaid pursuant to the following terms.
SECTION 3.1.1. Repayments and Prepayments. The Borrower shall repay in full
the unpaid principal amount of each Term Loan upon the Stated Maturity Date
therefor. Prior thereto, payments and prepayments of the Term Loans shall or may
be made as set forth below.
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(a) From time to time on any Business Day, the Borrower may make a
voluntary prepayment, in whole or in part, of the outstanding principal
amount of any Term Loans; provided, however, that (i) any such prepayment
of the Term Loans shall be applied to the remaining amortization payments
for the Term Loans in such amounts as the Borrower shall determine; (ii)
all such voluntary prepayments shall require at least one but no more than
five Business Days' prior written notice to the Administrative Agent; and
(iii) all such voluntary partial prepayments shall be, in the case of LIBO
Rate Term Loans, in an aggregate minimum amount of $1,000,000 and an
integral multiple of $1,000,000 and, in the case of Base Rate Term Loans,
in an aggregate minimum amount of $1,000,000 and an integral multiple of
$500,000.
(b) On each date when the sum of (i) the aggregate outstanding
principal amount of all Letter of Credit Outstandings exceeds the Letter of
Credit Commitment Amount (as it may be reduced from time to time pursuant
to this Agreement), the Borrower shall Cash Collateralize all Letter of
Credit Outstandings, in an aggregate amount equal to such excess.
(c) On the Stated Maturity Date and on each Quarterly Payment Date
occurring during any period set forth below, the Borrower shall make a
scheduled repayment of the aggregate outstanding principal amount, if any,
of all Term Loans in an amount equal to the product of (i) the aggregate
principal amount of all Term Loans outstanding on the Term Loan Commitment
Termination Date multiplied by (ii) the percentage set forth below opposite
the Stated Maturity Date or such Quarterly Payment Date, as applicable:
Percentage of Required
Period Principal Repayment
------ -------------------
01/01/2002 through (and .0417%
including) 12/31/2002
01/01/2003 through (and .083%
including) 12/31/2003
01/01/2004 through (and .125%
including) 9/30/2004
Stated Maturity Date for the then outstanding
Term Loans principal amount of all
Term Loans, if any.
(d) Concurrently with the receipt by the Borrower or any of its
Subsidiaries of any (i) Net Debt Proceeds or (ii) Net Equity Proceeds, in
each case in an aggregate amount that, together with prior receipts of Net
Debt Proceeds or Net Equity Proceeds, as the case may be, is equal to or
greater than $500,000, the Borrower shall deliver to the Administrative
Agent a calculation in reasonable detail of the amount of such Net Debt
Proceeds or Net Equity Proceeds, as the case may be, and apply an amount
equal to 100% of such proceeds to the prepayment of the outstanding
principal amount of the Term Loans in accordance with Section 3.1.2;
provided that, subsequent to the date of any such application of Net Debt
Proceeds or Net Equity Proceeds, as the case may be, no further application
of such proceeds
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in accordance with this clause (d) shall be required until, from time to
time, the aggregate amount of Net Debt Proceeds or Net Equity Proceeds, as
the case may be, received by the Borrower or any of its Subsidiaries
following such date is equal to or greater than $500,000.
(e) Concurrently with the receipt by the Borrower or any of its
Subsidiaries of Net Disposition Proceeds in an aggregate amount that,
together with prior receipts of Net Disposition Proceeds, is equal to or
greater than $500,000, the Borrower shall deliver to the Administrative
Agent a calculation in reasonable detail of the amount of such Net
Disposition Proceeds, and apply an amount equal to 100% of such Net
Disposition Proceeds to the prepayment of the outstanding principal amount
of the Term Loans in accordance with Section 3.1.2; provided, however, that
no prepayment from Net Disposition Proceeds shall be required under this
clause if (i) the Borrower informs the Administrative Agent in writing no
later than five Business Days following the receipt of such Net Disposition
Proceeds of its or such Subsidiary's good faith intention to apply such Net
Disposition Proceeds to the purchase of assets to be used in the same
business segment of the Borrower or such Subsidiary as the disposed assets,
and the Borrower or such Subsidiary in fact (x) uses such Net Disposition
Proceeds (as confirmed in a certificate delivered to the Administrative
Agent within five Business Days after such use) to purchase such assets or
property within 180 days following the receipt of such Net Disposition
Proceeds or (y) enters into a definitive purchase agreement for the
purchase of such assets or property with such proceeds (as certified by the
Borrower in writing to the Administrative Agent) within 180 days following
the receipt of such Net Disposition Proceeds and such purchase is in fact
completed within 270 days of receipt of such Net Disposition Proceeds, with
the amount of such Net Disposition Proceeds unused after such 180-day or
270-day period, as applicable, being applied to the prepayment of the
outstanding principal amount of the Term Loans in accordance with Section
3.1.2 and to such Cash Collateralization, (ii) the Disposition is pursuant
to a lease having a term of six years or less in which the Borrower or such
Subsidiary is the lessor or (iii) the Disposition is pursuant to a license
granted in the ordinary course of the Borrower's or such Subsidiary's
business; and provided further that, subsequent to the date of any such
application of Net Disposition Proceeds, no further application of such
proceeds in accordance with this clause (e) shall be required until, from
time to time, the aggregate amount of Net Disposition Proceeds received by
the Borrower or any of its Subsidiaries following such date is equal to or
greater than $500,000.
(f) On each day on which a Compliance Certificate is required to be
delivered with the relevant financial information pursuant to clause (b) of
Section 7.1.1, the Borrower shall deliver to the Administrative Agent a
calculation in reasonable detail of the Excess Free Cash Flow (if any) for
the Fiscal Year last ended and make a mandatory prepayment of the Term
Loans in an amount equal to Excess Free Cash Flow; provided, however, that
(i) no prepayment of Excess Free Cash Flow shall exceed $10,000,000 in any
Fiscal Quarter, (ii) the aggregate amount of prepayments of Excess Free
Cash Flow made in any Fiscal Year shall not exceed $20,000,000, and (iii)
no prepayment of Excess Free Cash Flow shall be required for a one-year
period following the Closing Date. The amount of any such Excess Free Cash
Flow shall be applied to the prepayment of the outstanding principal amount
of the Term Loans in accordance with Section 3.1.2.
(g) Concurrently with the receipt by the Borrower or any of its
Subsidiaries of any Net Cash Proceeds from any Casualty Event, the
aggregate amount of which is in excess of $500,000, the Borrower shall
deliver to the Administrative Agent a calculation in
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reasonable detail of the amount of such Net Cash Proceeds, and apply an
amount equal to 100% of such Net Cash Proceeds to the prepayment of the
outstanding principal amount of the Term Loans in accordance with Section
3.1.2; provided, however, that (i) no such prepayment from such Net Cash
Proceeds shall be required under this clause if the Borrower informs the
Administrative Agent in writing no later than 30 days following the
occurrence of the Casualty Event resulting in such Net Cash Proceeds of its
or such Subsidiary's good faith intention to apply such Net Cash Proceeds
to the rebuilding or replacement of the damaged, destroyed or condemned
assets or property and the Borrower or such Subsidiary in fact (A) uses
such Net Cash Proceeds (as confirmed in a certificate delivered to the
Administrative Agent at the time of such application) to rebuild or replace
such assets or property within 180 days following the receipt of such Net
Cash Proceeds or (B) enters into a definitive purchase or construction
agreement to replace or rebuild such assets or property with such proceeds
(as certified by the Borrower in writing to the Administrative Agent)
within 180 days following the receipt of such Net Cash Proceeds and such
purchase or construction is in fact completed within 270 days of receipt of
such Net Cash Proceeds, with the amount of such Net Cash Proceeds unused
after such 180-day or 270-day period, as applicable, being applied to the
prepayment of the Term Loans pursuant to Section 3.1.2 and (ii) subsequent
to the date of any such application of Net Cash Proceeds, no further
application of such proceeds in accordance with this clause (g) shall be
required until, from time to time, the aggregate amount of Net Cash
Proceeds from any Casualty Event received by the Borrower or any of its
Subsidiaries following such date is equal to or greater than $500,000;
provided further, however, that at any time when any Default or Event of
Default shall have occurred and be continuing, all Net Cash Proceeds shall
be deposited in an account maintained with the Administrative Agent (over
which the Administrative Agent shall have a first priority perfected
security interest) for the prepayment of the Term Loans in accordance with
Section 3.1.2 and to Cash Collateralize Letter of Credit Obligations and to
pay other Obligations. Any Net Cash Proceeds remaining in such account
shall be distributed to the Borrower or such Subsidiary for such rebuilding
or replacement whenever no Default or Event of Default is then continuing.
(h) Immediately upon any acceleration of the Stated Maturity Date of
any Term Loans pursuant to Section 8.2 or Section 8.3, the Borrower shall
repay all the Term Loans and Cash Collateralize Letter of Credit
Obligations and to pay other Obligations, unless, pursuant to Section 8.3,
only a portion of all the Term Loans is so accelerated (in which case the
portion so accelerated shall be so repaid).
Each prepayment of any Term Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 4.4.
SECTION 3.1.2. Application. Amounts prepaid pursuant to Section 3.1.1 shall
be applied as set forth in this Section.
(a) Subject to clause (b), each prepayment or repayment of the
principal of the Term Loans shall be applied, to the extent of such
prepayment or repayment, first, to the principal amount thereof being
maintained as Base Rate Term Loans, and second, subject to the terms of
Section 4.4, to the principal amount thereof being maintained as LIBO Rate
Term Loans.
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(b) Each prepayment of the Term Loans made pursuant to clauses (d),
(e), (f), and (g) of Section 3.1.1 shall be applied (i) first, to a
mandatory prepayment of the installments of the Term Loans in the inverse
order of their maturities, until all Term Loans are paid in full, and (ii)
second, once all Term Loans have been repaid in full, to Cash Collateralize
all Letter of Credit Obligations (with a concurrent reduction of the Letter
of Credit Commitment Amount in accordance with Section 2.2.2) and to pay
all other Obligations.
SECTION 3.2. Interest Provisions. Interest on the outstanding principal
amount of Term Loans shall accrue and be payable in accordance with the terms
set forth below.
SECTION 3.2.1. Rates. Subject to Section 2.3.1, pursuant to an
appropriately delivered Borrowing Request or Continuation/Conversion Notice, the
Borrower may elect that Term Loans comprising a Borrowing accrue interest at a
rate per annum:
(a) on that portion maintained from time to time as a Base Rate Loan,
equal to the sum of the Alternate Base Rate from time to time in effect
plus the Applicable Margin; and
(b) on that portion maintained as a LIBO Rate Loan, during each
Interest Period applicable thereto, equal to the sum of the LIBO Rate
(Reserve Adjusted) for such Interest Period plus the Applicable Margin.
All LIBO Rate Term Loans shall bear interest from and including the first day of
the applicable Interest Period to (but not including) the last day of such
Interest Period at the interest rate determined as applicable to such LIBO Rate
Loan.
SECTION 3.2.2. Post-Maturity and Default Rates. After the date any
principal amount of any Term Loan or Reimbursement Obligation is due and payable
(whether on the Stated Maturity Date, upon acceleration or otherwise), or after
any other monetary Obligation of the Borrower shall have become due and payable
(taking into account any applicable grace period), or upon the occurrence and
continuance of an Event of Default, the Borrower shall pay interest (after as
well as before judgment) on all Obligations at a rate per annum equal to (a) in
the case of LIBO Rate Term Loans only, (i) interest (after as well as before
judgment) on the principal amount of all outstanding LIBO Rate Term Loans at a
rate per annum equal to the LIBO Rate (Reserve Adjusted) from time to time in
effect, plus, the Applicable Margin for LIBO Rate Term Loans, plus, 2% per
annum, until the expiration of the applicable Interest Period in effect at such
time, and (ii) thereafter, in accordance with clause (b) of this Section 3.2.2;
and (b) in the case of Base Rate Term Loans and all other monetary Obligations,
interest (after as well as before judgment) on (i) the principal amount of all
outstanding Base Rate Term Loans, (ii) all unpaid interest and fees payable
hereunder and (iii) any other amounts due and payable, in each case at a rate
per annum equal to the Alternate Base Rate from time to time in effect, plus,
the Applicable Margin for Base Rate Term Loans, plus, 2% per annum.
SECTION 3.2.3. Payment Dates. Interest accrued on each Term Loan shall be
payable, without duplication:
(a) on the Stated Maturity Date therefor;
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(b) on the date of any payment or prepayment, in whole or in part, of
principal outstanding on such Term Loan on the principal amount so paid or
prepaid;
(c) with respect to Base Rate Term Loans, on each Quarterly Payment
Date occurring after the Effective Date;
(d) with respect to LIBO Rate Term Loans, on the last day of each
applicable Interest Period (and on any Quarterly Payment Date falling
during such Interest Period);
(e) with respect to any Base Rate Term Loans converted into LIBO Rate
Term Loans on a day when interest would not otherwise have been payable
pursuant to clause (c), on the date of such conversion; and
(f) on that portion of any Term Loans the Stated Maturity Date of
which is accelerated pursuant to Section 8.2 or Section 8.3, immediately
upon such acceleration.
Interest accrued on Term Loans or other monetary Obligations after the date such
amount is due and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise) shall be payable upon demand.
SECTION 3.3. Fees. The Borrower agrees to pay the fees set forth below. All
such fees shall be non-refundable.
SECTION 3.3.1. Commitment Fee. The Borrower agrees to pay to the
Administrative Agent, for the pro rata account of the Issuer and each LC
Participant, a commitment fee in an amount equal to 0.50% per annum, multiplied
by, in the case of the Issuer and each LC Participant, the average daily unused
amount of the Letter of Credit Commitment Amount, such fees being payable
monthly in arrears on the first Business Day of each calendar month and on the
Stated Maturity Date (and on demand thereafter) and computed on a 360-day basis.
Outstanding Letters of Credit shall count as usage for purposes of computing the
foregoing fee.
SECTION 3.3.2. Agent's Fee. The Borrower agrees to pay to the
Administrative Agent and the Arranger, for their own accounts, the fees and
other considerations in the amounts and on the dates set forth in the Fee
Letter.
SECTION 3.3.3. Letter of Credit Fee. The Borrower agrees to pay to the
Administrative Agent, for the pro rata account of the Issuer and each LC
Participant, a Letter of Credit fee per annum in an amount equal to the
Applicable Margin for Term Loans maintained as LIBO Rate Term Loans, multiplied
by the Stated Amount of each outstanding Letter of Credit, such fees being
payable quarterly in arrears on each Quarterly Payment Date following the date
of issuance of each Letter of Credit and on the Stated Expiry Date for each
Letter of Credit (calculated on a 360-day basis). The Borrower further agrees to
pay to the Issuer in full upon the issuance of each Letter of Credit a fronting
fee in an amount equal to 0.25% per annum multiplied by the face amount of such
Letter of Credit (calculated on a 360-day basis), together with the Issuer's
customary administrative, amendment, drawing, transfer and other fees in
connection therewith.
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ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO Rate Lending Unlawful. If any Lender shall determine in
good faith (which determination shall, upon notice thereof to the Borrower and
the Administrative Agent, be conclusive and binding on the Borrower) that the
introduction of or any change in or in the interpretation of any law makes it
unlawful, or any Governmental Authority asserts that it is unlawful, for such
Lender to make or continue any Term Loan as, or to convert any Term Loan into, a
LIBO Rate Term Loan, the obligations of such Lender to make, continue or convert
any such LIBO Rate Term Loan shall, upon such determination, forthwith be
suspended until such Lender shall notify the Administrative Agent that the
circumstances causing such suspension no longer exist, and all outstanding LIBO
Rate Term Loans payable to such Lender shall automatically convert into Base
Rate Term Loans at the end of the then current Interest Periods with respect
thereto or sooner, if required by such law or assertion.
SECTION 4.2. Deposits Unavailable. If the Administrative Agent shall have
determined that
(a) Dollar deposits in the relevant amount and for the relevant
Interest Period are not available to it in its relevant market; or
(b) by reason of circumstances affecting it's relevant market,
adequate means do not exist for ascertaining the interest rate applicable
hereunder to LIBO Rate Term Loans;
then, upon notice from the Administrative Agent to the Borrower and the Lenders,
the obligations of all Lenders under Section 2.3 and Section 2.4 to make or
continue any Term Loans as, or to convert any Term Loans into, LIBO Rate Term
Loans shall forthwith be suspended until the Administrative Agent shall notify
the Borrower and the Lenders that the circumstances causing such suspension no
longer exist.
SECTION 4.3. Increased LIBO Rate Loan Costs, Etc. The Borrower agrees to
reimburse each Lender and the Issuer for any increase in the cost to such Lender
or the Issuer of, or any reduction in the amount of any sum receivable by such
Secured Party in respect of, such Secured Party's Commitments and the making of
Credit Extensions hereunder (including the making, continuing or maintaining (or
of its obligation to make or continue) any Term Loans as, or of converting (or
of its obligation to convert) any Term Loans into, LIBO Rate Term Loans and the
obligation to issue and/or participate in Letters of Credit) that arise in
connection with any change in, or the introduction, adoption, effectiveness,
interpretation, reinterpretation or phase-in after the Closing Date of, any law
or regulation, directive, guideline, decision or request (whether or not having
the force of law) of any Governmental Authority, except for such changes with
respect to increased capital costs and Taxes which are governed by Sections 4.5
and 4.6, respectively. Each affected Secured Party shall promptly notify the
Administrative Agent and the Borrower in writing of the occurrence of any such
event, stating the reasons therefor and the additional amount required fully to
compensate such Secured Party for such increased cost or reduced amount. Such
additional amounts shall be payable by the Borrower directly to such Secured
Party within five days of its receipt of such notice, and such notice shall, in
the absence of manifest error, be conclusive and binding on the Borrower.
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SECTION 4.4. Funding Losses. In the event any Lender shall incur any loss
or expense (including any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Lender to make or
continue any portion of the principal amount of any Term Loan as, or to convert
any portion of the principal amount of any Term Loan into, a LIBO Rate Term
Loan) as a result of
(a) any conversion or repayment or prepayment of the principal amount
of any LIBO Rate Term Loan on a date other than the scheduled last day of
the Interest Period applicable thereto, whether pursuant to Article III or
otherwise;
(b) any Term Loans not being made as LIBO Rate Term Loans in
accordance with the Borrowing Request therefor as a direct or indirect
result of any act or failure to act by the Borrower; or
(c) any Term Loans not being continued as, or converted into, LIBO
Rate Term Loans in accordance with the Continuation/Conversion Notice
therefor as a direct or indirect result of any act or failure to act by the
Borrower;
then, upon the written notice of such Lender to the Borrower (with a copy to the
Administrative Agent), the Borrower shall, within five days of its receipt
thereof, pay directly to such Lender such amount as will (in the reasonable
determination of such Lender) reimburse such Lender for such loss or expense.
Such written notice shall, in the absence of manifest error, be conclusive and
binding on the Borrower.
SECTION 4.5. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any Governmental Authority affects
or would affect the amount of capital required or expected to be maintained by
any Secured Party or any Person controlling such Secured Party, and such Secured
Party determines (in good faith but in its sole and absolute discretion) that
the rate of return on its or such controlling Person's capital as a consequence
of the Commitments or the Credit Extensions made, or the Letters of Credit
issued or participated in, by such Secured Party is reduced to a level below
that which such Secured Party or such controlling Person could have achieved but
for the occurrence of any such circumstance, then upon notice from time to time
by such Secured Party to the Borrower and the Administrative Agent, the Borrower
shall within five days following receipt of such notice pay directly to such
Secured Party additional amounts sufficient to compensate such Secured Party or
such controlling Person for such reduction in rate of return. A statement of
such Secured Party as to any such additional amount or amounts shall, in the
absence of manifest error, be conclusive and binding on the Borrower. In
determining such amount, such Secured Party may use any method of averaging and
attribution that it (in its reasonable discretion) shall deem applicable.
SECTION 4.6. Taxes. The Borrower covenants and agrees as follows with
respect to Taxes.
(a) Any and all payments by the Borrower under each Loan Document
shall be made without setoff, counterclaim or other defense, and free and
clear of, and without deduction or withholding for or on account of, any
Taxes. In the event that any Taxes are required by law to be deducted or
withheld from any payment required to be made by any Obligor to or on
behalf of any Secured Party under any Loan Document, then:
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(i) subject to clause (f), if such Taxes are Non-Excluded Taxes,
the amount of such payment shall be increased as may be necessary so
that such payment is made, after withholding or deduction for or on
account of such Non-Excluded Taxes, in an amount that is not less than
the full amount provided for in such Loan Document; and
(ii) the Borrower shall withhold the full amount of such Taxes
from such payment (as increased pursuant to clause (a)(i)) and shall
pay such amount to the Governmental Authority imposing such Taxes in
accordance with applicable law.
(b) In addition, the Borrower shall pay all Other Taxes imposed to the
relevant Governmental Authority imposing such Other Taxes in accordance
with applicable law.
(c) As promptly as practicable after the payment of any Taxes or Other
Taxes, and in any event within 45 days of any such payment being due, the
Borrower shall furnish to the Administrative Agent a copy of an official
receipt (or a certified copy thereof) evidencing the payment of such Taxes
or Other Taxes to the extent such a receipt is issued therefor, or other
written proof of payment thereof that is reasonably satisfactory to the
Administrative Agent. The Administrative Agent shall make copies thereof
available to any Lender or LC Participant upon request therefor.
(d) Subject to clause (f), the Borrower shall indemnify each Secured
Party for any Non-Excluded Taxes and Other Taxes, and for the full amount
of Taxes of any kind imposed or asserted by any Governmental Authority on
amounts payable under this Section 4.6(a), (b) or (d), levied, imposed or
assessed on (and whether or not paid directly by) such Secured Party,
whether or not such Non-Excluded Taxes or Other Taxes are correctly or
legally asserted by the relevant Governmental Authority. Promptly upon
having knowledge that any such Non-Excluded Taxes or Other Taxes have been
levied, imposed or assessed, and promptly upon notice thereof by any
Secured Party, the Borrower shall pay such Non-Excluded Taxes or Other
Taxes directly to the relevant Governmental Authority (provided, however,
that no Secured Party shall be under any obligation to provide any such
notice to the Borrower). In addition, the Borrower shall indemnify each
Secured Party for any incremental Non-Excluded Taxes that may become
payable by such Secured Party as a result of any failure of the Borrower to
pay any Non-Excluded Taxes when due to the appropriate Governmental
Authority or to deliver to the Administrative Agent, pursuant to clause
(c), documentation evidencing the payment of Non-Excluded Taxes or Other
Taxes. With respect to indemnification for Non-Excluded Taxes and Other
Taxes actually paid by any Secured Party or the indemnification provided in
the immediately preceding sentence, such indemnification shall be made
within 30 days after the date such Secured Party makes written demand
therefor. The Borrower acknowledges that any payment made to any Secured
Party or to any Governmental Authority in respect of the indemnification
obligations of the Borrower provided in this clause shall constitute a
payment in respect of which the provisions of clause (a) and this clause
shall apply.
(e) Each Non-U.S. Lender or LC Participant, on or prior to the date on
which such non-U.S. Lender or LC Participant becomes a Lender or LC
Participant hereunder (and from time to time thereafter upon the request of
the Borrower or the Administrative Agent, but only for so long as such
non-U.S. Lender or LC Participant is legally entitled to do so), shall
deliver to the Borrower and the Administrative Agent either (i) two duly
completed
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copies of either (x) Internal Revenue Service Form W-8BEN or (y) Internal
Revenue Service Form W-8ECI, or in either case an applicable successor
form; or (ii) in the case of a Non-U.S. Lender or LC Participant that is
not legally entitled to deliver either form listed in clause (e)(i), (x) a
certificate to the effect that such Non-U.S. Lender or LC Participant is
not (A) a "bank" within the meaning of Section 881(c)(3)(A) of the Code,
(B) a "10 percent shareholder" of the Borrower within the meaning of
Section 871(h)(3)(B) of the Code, or (C) a controlled foreign corporation
related to the Borrower within the meaning of Section 864(d)(4) of the Code
(referred to as an "Exemption Certificate") and (y) two duly completed
copies of Internal Revenue Service Form W-8BEN or applicable successor
form, certifying that such Non-U.S. Lender or LC Participant is exempt from
or entitled to a reduced rate of United States withholding tax on payments
pursuant to this Agreement or any other Loan Document or, in the case of a
Non-U.S. Lender or LC Participant that has certified that it is not a
"bank" as described above, certifying that such Non-U.S. Lender or LC
Participant is a foreign corporation, partnership, estate or trust. If the
forms provided by a Lender or LC Participant at the time such Lender or LC
Participant first become a party to this Agreement indicate a United States
interest withholding tax rate in excess of zero, withholding tax at such
rate shall be considered excluded from Non-Excluded Taxes unless and until
such Lender or LC Participant provides the appropriate forms certifying
that a lesser rate applies, whereupon withholding tax at such lesser rate
only shall be considered excluded from Non-Excluded Taxes; provided,
however, that, if at the date of the assignment pursuant to which a Lender
becomes a party to this Agreement, the Assignor Lender was entitled to
payments under clause (a) of this Section 4.6 in respect of United States
withholding tax with respect to interest paid at such date, then, to such
extent, the term Non-Excluded Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts
otherwise includable in Non-Excluded Taxes) United States withholding tax,
if any, applicable with respect to the Assignee Lender on such date.
(f) The Borrower shall not be obligated to gross up any payments to
any Lender or LC Participant pursuant to clause (a)(i), or to indemnify any
Lender or LC Participant pursuant to clause (d), in respect of United
States federal withholding taxes to the extent imposed as a result of (i)
the failure of such Lender or LC Participant to deliver to the Borrower the
form or forms and/or an Exemption Certificate, as applicable to such Lender
or LC Participant, pursuant to clause (e), (ii) such form or forms and/or
Exemption Certificate not establishing a complete exemption from U.S.
federal withholding tax or the information or certifications made therein
by the Lender or LC Participant being untrue or inaccurate on the date
delivered in any material respect, or (iii) the Lender designating a
successor lending office at which it maintains its Term Loans which has the
effect of causing such Lender to become obligated for tax payments in
excess of those in effect immediately prior to such designation; provided,
however, that the Borrower shall be obligated to gross up any payments to
any such Lender pursuant to clause (a)(i), and to indemnify any such Lender
or LC Participant pursuant to clause (d), in respect of United States
federal withholding taxes if (i) any such failure to deliver a form or
forms or an Exemption Certificate or the failure of such form or forms or
Exemption Certificate to establish a complete exemption from U.S. federal
withholding tax or inaccuracy or untruth contained therein resulted from a
change in any applicable statute, treaty, regulation or other applicable
law or any interpretation of any of the foregoing occurring after the
Closing Date, which change rendered such Lender or LC Participant no longer
legally entitled to deliver such form or forms or Exemption Certificate or
otherwise ineligible for a complete exemption from U.S. federal withholding
tax, or rendered the information or certifications made in such form or
forms or Exemption
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Certificate untrue or inaccurate in a material respect, (ii) the
redesignation of the Lender's lending office was made at the request of the
Borrower or (iii) the obligation to gross up payments to any such Lender
pursuant to clause (a)(i) or to indemnify any such Lender or LC Participant
pursuant to clause (d) is with respect to an Assignee Lender that becomes
an Assignee Lender as a result of an assignment made at the request of the
Borrower.
(g) Any Lender or LC Participant claiming any additional amounts
payable pursuant to this Section 4.6 agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions)
to change the jurisdiction of its lending office if the making of such
change would avoid the need for, or reduce the amount of, any such
additional amounts that may thereafter accrue and would not, in the
reasonable judgment of such Lender or LC Participant, be otherwise
disadvantageous to such Lender or LC Participant.
(h) In the event any Secured party, in its sole discretion, determines
that it has finally and irrevocably received or been granted a credit
against or release or remission for, or repayment or refund of, any tax
paid or payable by it in respect of or calculated with reference to the
deduction or withholding giving rise to any payment to or on behalf of such
Secured Party pursuant to this Section 4.6 (a) or (d), such Secured Party,
to the extent that it determines that it can do so without prejudice to the
retention of the amount of such credit, relief, remission, refund or
repayment, shall pay to the Borrower such amount as such Secured Party
shall, in its sole discretion, has determined to be attributable to such
deduction or withholding and which will leave such Secured Party (after
such payment) in no worse position than it would have been in if the
Borrower had not been required to make such deduction or withholding. All
determinations as to the amount and timing of the receipt or grant of any
such credit, relief, remission, refund or repayment shall be made by the
relevant Secured Party in its sole good faith discretion. Nothing herein
contained shall interfere with the right of a Secured Party to arrange its
Tax affairs in whatever manner it thinks fit nor oblige any Lender to claim
any Tax credit or to disclose any information relating to its Tax affairs
or any computations in respect thereof or require any Lender to do anything
that would prejudice its ability to benefit from any other credits,
reliefs, remissions or repayments to which it may be entitled.
SECTION 4.7. Payments, Computations, Etc. Unless otherwise expressly
provided in a Loan Document, all payments by the Borrower pursuant to each Loan
Document shall be made by the Borrower to the Administrative Agent for the pro
rata account of the Secured Parties entitled to receive such payment. All
payments shall be made without setoff, deduction or counterclaim not later than
11:00 a.m. on the date due in same day or immediately available funds to such
account as the Administrative Agent shall specify from time to time by notice to
the Borrower. Funds received after that time shall be deemed to have been
received by the Administrative Agent on the next succeeding Business Day. The
Administrative Agent shall promptly remit in same day funds to each Secured
Party its share, if any, of such payments received by the Administrative Agent
for the account of such Secured Party. All interest (including interest on LIBO
Rate Term Loans) and fees shall be computed on the basis of the actual number of
days (including the first day but excluding the last day) occurring during the
period for which such interest or fee is payable over a year comprised of 360
days (or, in the case of interest on a Base Rate Loan (calculated at other than
the Federal Funds Rate), 365 days or, if appropriate, 366 days). Payments due on
other than a Business Day shall (except as otherwise required by clause (c) of
the definition of "Interest Period") be made on the next succeeding Business Day
and such extension of time shall be included in computing interest and
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fees in connection with that payment. The Cash Reserve Accounts may be debited
by the Administrative Agent from time to time when any Obligations are due and
owning, and the Borrower hereby expressly authorizes such debiting.
SECTION 4.8. Sharing of Payments. If any Secured Party shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Credit Extension or Reimbursement
Obligation (other than pursuant to the terms of Sections 4.3, 4.4, 4.5 or 4.6)
in excess of its pro rata share of payments obtained by all Secured Parties,
such Secured Party shall purchase from the other Secured Parties such
participations in Credit Extensions made by them as shall be necessary to cause
such purchasing Secured Party to share the excess payment or other recovery
ratably (to the extent such other Secured Parties were entitled to receive a
portion of such payment or recovery) with each of them; provided, however, that
if all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Secured Party, the purchase shall be rescinded
and each Secured Party which has sold a participation to the purchasing Secured
Party shall repay to the purchasing Secured Party the purchase price to the
ratable extent of such recovery together with an amount equal to such selling
Secured Party's ratable share (according to the proportion of (a) the amount of
such selling Secured Party's required repayment to the purchasing Secured Party
to (b) total amount so recovered from the purchasing Secured Party) of any
interest or other amount paid or payable by the purchasing Secured Party in
respect of the total amount so recovered. The Borrower agrees that any Secured
Party purchasing a participation from another Secured Party pursuant to this
Section may, to the fullest extent permitted by law, exercise all its rights of
payment (including pursuant to Section 4.9) with respect to such participation
as fully as if such Secured Party were the direct creditor of the Borrower in
the amount of such participation. If under any applicable bankruptcy, insolvency
or other similar law any Secured Party receives a secured claim in lieu of a
setoff to which this Section applies, such Secured Party shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Secured Parties entitled under this Section to
share in the benefits of any recovery on such secured claim.
SECTION 4.9. Setoff. Each Secured Party shall, upon the occurrence and
during the continuance of any Default described in clauses (a) through (d) of
Section 8.1.9 or, with the consent of the Required Lenders, upon the occurrence
and during the continuance of any other Event of Default, have the right to
appropriate and apply to the payment of the Obligations owing to it (whether or
not then due), and (as security for such Obligations) the Borrower hereby grants
to each Secured Party a continuing security interest in, any and all balances,
credits, deposits, accounts or moneys of the Borrower then or thereafter
maintained with such Secured Party; provided, however, that any such
appropriation and application shall be subject to the provisions of Section 4.8.
Each Secured Party agrees promptly to notify the Borrower and the Administrative
Agent after any such setoff and application made by such Secured Party;
provided, however, that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of each Secured Party under
this Section are in addition to other rights and remedies (including other
rights of setoff under applicable law or otherwise) which such Secured Party may
have.
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ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
SECTION 5.1. Initial Credit Extension. The obligations of the Lenders and,
if applicable, the Issuer to fund the initial Credit Extension shall be subject
to the prior or concurrent satisfaction of each of the conditions precedent set
forth in this Article.
SECTION 5.1.1. Resolutions, Etc. The Administrative Agent shall have
received from each Obligor, as applicable, with counterparts for each Lender,
(a) a certified true copy of a good standing certificate, certificate of
incorporation and by-laws, dated a date reasonably close to the Closing Date,
for each such Person and (b) a certificate, dated the Closing Date, duly
executed and delivered by such Person's Secretary or Assistant Secretary,
managing member or general partner, as applicable, as to
(i) resolutions of each such Person's Board of Directors (or other
managing body, in the case of other than a corporation) then in full force
and effect without modification or rescission authorizing, to the extent
relevant, all aspects of the Senior Notes Purchase Transactions applicable
to such Person and the execution, delivery and performance of each Loan
Document to be executed by such Person and the transactions contemplated
hereby and thereby;
(ii) the incumbency and signatures of those of its officers, managing
member or general partner, as applicable, authorized to act with respect to
each Loan Document to be executed by such Person; and
(iii) the full force and validity of each Organic Document of such
Person and copies thereof;
upon which certificates each Secured Party may conclusively rely until it shall
have received a further certificate of the Secretary, Assistant Secretary,
managing member or general partner, as applicable, of any such Person canceling
or amending the prior certificate of such Person.
SECTION 5.1.2. Closing Date Certificate. The Administrative Agent shall
have received, with counterparts for each Lender, the Borrower Closing Date
Certificate, dated the Closing Date and duly executed and delivered by an
Authorized Officer of the Borrower, in which certificate the Borrower shall
agree and acknowledge that the statements made therein shall be deemed to be
true and correct representations and warranties in all material respects of the
Borrower as of such date, and, at the time each such certificate is delivered,
such statements shall in fact be true and correct in all material respects. All
documents and agreements required to be appended to the Borrower Closing Date
Certificate shall be in form and substance reasonably satisfactory to the
Administrative Agent.
SECTION 5.1.3. Payment of Outstanding Indebtedness, Etc. All Indebtedness
identified in Item 7.2.2(b) of the Disclosure Schedule, together with all
interest, all prepayment premiums and other amounts due and payable with respect
thereto, shall have been paid in full from the proceeds of the initial Credit
Extension (or, in the case of the Existing Letters of Credit, shall have been
rolled over to become outstanding under this Agreement) and the commitments in
respect of such Indebtedness shall have been terminated, and all Liens securing
payment of any such Indebtedness have been released and the Administrative Agent
shall have received all Uniform Commercial Code
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Form UCC-3 termination statements or other instruments as may be suitable or
appropriate in connection therewith.
SECTION 5.1.4. Closing Fees, Expenses, Etc. The Administrative Agent shall
have received for its own account, and for the account of each Lender, as the
case may be, all fees, costs and expenses due and payable pursuant to Sections
3.3 and, if then invoiced, 10.3.
SECTION 5.1.5. Financial Information, Etc. The Administrative Agent shall
have received, with counterparts for each Lender,
(a) audited consolidated financial statements of the Borrower and its
Subsidiaries for the 1999 Fiscal Year and 2000 Fiscal Year;
(b) a pro forma consolidated balance sheet of the Borrower and its
Subsidiaries, as of the date of the initial Credit Extension certified by
the chief financial or accounting Authorized Officer of the Borrower,
giving effect to the consummation of the Senior Notes Purchase Transactions
contemplated by this Agreement, which shall be satisfactory to the
Administrative Agent; and
(c) the Projections.
SECTION 5.1.6. [Intentionally Deleted].
SECTION 5.1.7. Opinions of Counsel. The Administrative Agent shall have
received opinions, dated the Closing Date and addressed to the Administrative
Agent and all Lenders, from
(a) Allen S. Lipson, general counsel for the Obligors, in form and
substance reasonably satisfactory to the Administrative Agent;
(b) Paul, Hastings, Janofsky & Walker LLP, New York counsel to the
Obligors, in form and substance reasonably satisfactory to the
Administrative Agent; and
(c) Shipman & Sosensky, LLC, counsel to the Personal Guarantor, in
form and substance reasonably satisfactory to the Administrative Agent.
SECTION 5.1.8. Filing Agent, Etc. All Uniform Commercial Code financing
statements or other similar financing statements and Uniform Commercial Code
(Form UCC-3) termination statements required pursuant to the Loan Documents
(collectively, the "Filing Statements") shall have been delivered to CT
Corporation System or another similar filing service company acceptable to the
Administrative Agent (the "Filing Agent"). The Filing Agent shall have
acknowledged in a writing satisfactory to the Administrative Agent and its
counsel (a) the Filing Agent's receipt of all Filing Statements, (b) that the
Filing Statements have either been submitted for filing in the appropriate
filing offices or will be submitted for filing in the appropriate offices within
ten days following the Closing Date and (c) that the Filing Agent will notify
the Administrative Agent and its counsel of the results of such submissions
within 30 days following the Closing Date.
SECTION 5.1.9. Guaranties. The Administrative Agent shall have received,
with counterparts for each Lender, the Subsidiary Guaranty and Perlmutter
Guaranty, dated as of the
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Closing Date, duly executed and delivered by an Authorized Officer of each U.S.
Subsidiary or by the Personal Guarantor, as applicable.
SECTION 5.1.10. Solvency, Etc. The Administrative Agent shall have
received, with counterparts for each Lender, a certificate as to solvency duly
executed and delivered by the chief financial or accounting Authorized Officer
of the Borrower, dated as of the Closing Date, in form and substance
satisfactory to the Administrative Agent.
SECTION 5.1.11. Security Agreements. The Administrative Agent shall have
received, with counterparts for each Lender, the Pledge and Security Agreement
and the Perlmutter Security Agreement, dated the Closing Date, duly executed and
delivered by an Authorized Officer of the Borrower and each U.S. Subsidiary or
the Personal Guarantor, as applicable, together with
(a) (i) certificates evidencing all of the issued and outstanding
Capital Securities owned by (x) the Borrower in its U.S. Subsidiaries and
(y) each U.S. Subsidiary in its U.S. Subsidiaries and (ii) certificates
evidencing 65% of the issued and outstanding Voting Securities of each
Foreign Subsidiary directly owned by the Borrower or any U.S. Subsidiary,
which certificates in each case shall be accompanied by undated instruments
of transfer duly executed in blank, or, if any Capital Securities are
uncertificated Capital Securities, confirmation and evidence satisfactory
to the Administrative Agent that the security interest therein has been
transferred to and perfected by the Administrative Agent for the benefit of
the Secured Parties in accordance with Articles 8 and 9 of the UCC and all
laws otherwise applicable to the perfection of the pledge of such Capital
Securities; and
(b) all promissory notes (including intercompany notes in which the
Borrower or any U.S. Subsidiary has an interest), if any, evidencing
Indebtedness payable to the Borrower or any U.S. Subsidiary duly endorsed
in blank, together with Filing Statements (or similar instruments) in
respect of such promissory notes executed by the Borrower or a U.S.
Subsidiary, as applicable, to be filed in such jurisdictions as the
Administrative Agent may reasonably request;
(c) executed copies of Filing Statements naming the Borrower, each
U.S. Subsidiary and the Personal Guarantor as a debtor and the
Administrative Agent as the secured party, or other similar instruments or
documents to be filed under the UCC of all jurisdictions as may be
necessary or, in the reasonable opinion of the Administrative Agent,
desirable to perfect the security interests of the Administrative Agent
pursuant to such Security Agreements;
(d) executed copies of proper UCC Form UCC-3 termination statements,
if any, necessary to release all Liens and other rights of any Person (i)
in any collateral described in any Security Agreement previously granted by
any Person, and (ii) securing any of the Indebtedness identified in Item
7.2.2(b) of the Disclosure Schedule, together with such other UCC Form
UCC-3 termination statements as the Administrative Agent may reasonably
request from such Obligors;
(e) certified copies of UCC Requests for Information or Copies (Form
UCC-11), or a similar search report certified by a party acceptable to the
Administrative Agent, dated a date reasonably near to the Closing Date,
listing all effective financing statements which name the Borrower or any
U.S. Subsidiary (under its present name and any previous names)
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as the debtor, together with copies of such financing statements (none of
which shall cover any collateral described in any Loan Document); and
(f) the Administrative Agent and its counsel shall be satisfied that
(i) the Lien granted to the Administrative Agent, for the benefit of the
Secured Parties in the collateral (other than motor vehicles, motor vehicle
trailers, fixtures, and investment property not constituting Capital
Securities pledged pursuant to the Pledge and Security Agreement) described
above is a first (subject to Designated Permitted Liens) priority (or local
equivalent thereof) security interest; and (ii) no Lien (other than
Designated Permitted Liens) exists on any of the collateral described above
other than the Lien created in favor of the Administrative Agent, for the
benefit of the Secured Parties, pursuant to a Loan Document.
SECTION 5.1.12. Foreign Pledge Agreements. All Foreign Pledge Agreements
shall have been duly executed and delivered by all parties thereto and shall
remain in full force and effect, and all Liens granted to the Administrative
Agent thereunder shall be duly perfected to provide the Administrative Agent
with a security interest in and Lien on all collateral granted thereunder free
and clear of other Liens, except to the extent consented to in writing by the
Administrative Agent.
SECTION 5.1.13. Intellectual Property Security Agreement. The
Administrative Agent shall have received the Intellectual Property Security
Agreement, dated as of the Closing Date, duly executed and delivered by each
Obligor that has delivered the Pledge and Security Agreement.
SECTION 5.1.14. Insurance. The Administrative Agent shall have received a
reasonably satisfactory broker's letter stating that the Borrower's insurance
coverage is sufficient and customary as provided therein and complies with the
requirements of the Loan Documents.
SECTION 5.1.15. Delivery of Term Notes. The Administrative Agent shall have
received, for the account of each Lender that has requested a Term Note, such
Lender's Term Note duly executed and delivered by an Authorized Officer of the
Borrower.
SECTION 5.1.16. Required Consents and Approvals. All required material
consents and approvals shall have been duly obtained and be in full force and
effect with respect to the transactions contemplated hereby and the continuing
operations of the Borrower from (a) all relevant Governmental Authorities and
(b) any other Person whose consent or approval is so required to effect the
transactions, including, without limitation all consents as to Collateral
assignments of license arrangements, and all applicable waiting periods shall
have expired without any action being taken by any competent authority that
could restrain, prevent or otherwise impose any adverse conditions on the
transactions and related financing contemplated hereby.
SECTION 5.1.17. Perfection Certificate. The Administrative Agent shall have
received the Perfection Certificate, dated as of the Closing Date, duly executed
and delivered by an Authorized Officer of the Borrower.
SECTION 5.2. All Credit Extensions. The obligation of each Lender and the
Issuer to make any Credit Extension shall be subject to and the satisfaction of
each of the conditions precedent set forth below.
SECTION 5.2.1. Compliance with Warranties, No Default, Etc. Both before and
after giving effect to any Credit Extension (but, if any Default of the nature
referred to in Section 8.1.5
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shall have occurred with respect to any other Indebtedness, without giving
effect to the application, directly or indirectly, of the proceeds thereof) the
following statements shall be true and correct:
(a) the representations and warranties set forth in each Loan Document
shall, in each case, be true and correct in all material respects with the
same effect as if then made (unless stated to relate solely to an earlier
date, in which case such representations and warranties shall be true and
correct in all material respects as of such earlier date); and
(b) no Default shall have then occurred and be continuing.
SECTION 5.2.2. Credit Extension Request, Etc. The Administrative Agent
shall have received a Borrowing Request if Term Loans are being requested, or an
Issuance Request if a Letter of Credit is being requested or extended. Each of
the delivery of a Borrowing Request or Issuance Request and the acceptance by
the Borrower of the proceeds of such Credit Extension shall constitute a
representation and warranty by the Borrower that on the date of such Credit
Extension (both immediately before and after giving effect to such Credit
Extension and the application of the proceeds thereof) the statements made in
Section 5.2.1 are true and correct in all material respects. Concurrently with
the delivery of each such Borrowing Request or Issuance Request, the Borrower
shall deliver a duly executed certificate as to the Senior Notes to be
purchased, directly or indirectly, using the proceeds of such Credit Extension,
the discount obtained on such Senior Notes, and any other information reasonably
requested by the Administrative Agent.
SECTION 5.2.3. Credit Extensions Exceeding $70,000,000. If fulfilling a
Borrowing Request or an Issuance Request shall result in Credit Extensions
outstanding in an aggregate amount exceeding $70,000,000, the Administrative
Agent shall have received a certificate duly executed by the Borrower stating
that there is no restriction (including under the Senior Notes Indenture)
prohibiting or that would be violated by such extension, accompanied by duly
certified true copies of any and all consents under the Senior Notes Indenture
required to permit any such extension.
SECTION 5.2.4. Satisfactory Legal Form. All documents executed or submitted
pursuant hereto by or on behalf of any Obligor or Personal Guarantor shall be
reasonably satisfactory in form and substance to the Administrative Agent and
its counsel, and the Administrative Agent and its counsel shall have received
all information, approvals, opinions, documents or instruments as the
Administrative Agent or its counsel may reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Secured Parties to enter into this Agreement and to
make Credit Extensions hereunder, the Borrower represents and warrants to each
Secured Party as set forth in this Article.
SECTION 6.1. Organization, Etc. Each Obligor is validly organized and
existing and in good standing under the laws of the state or jurisdiction of its
incorporation or organization, is duly qualified to do business and is in good
standing as a foreign entity in each jurisdiction where the nature of its
business requires such qualification, except where the failure to so qualify or
be in good standing would not result in a Material Adverse Effect, and has full
corporate power and authority
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and holds all requisite governmental licenses, permits and other governmental
approvals to enter into and perform its Obligations under each Loan Document to
which it is a party.
SECTION 6.2. Due Authorization, Non-Contravention, Etc. The execution,
delivery and performance by each Obligor of each Loan Document executed or to be
executed by it, each Obligor's participation in the consummation of all aspects
of the Senior Notes Purchase Transactions, and the execution, delivery and
performance by the Borrower or (if applicable) any Obligor of the agreements
executed and delivered by it in connection with the transactions contemplated
herein are in each case within such Person's corporate powers, have been duly
authorized by all necessary action, and do not
(a) contravene or result in a default under (i) any Obligor's Organic
Documents, (ii) any contractual restriction binding on or affecting any
Obligor, (iii) any court decree or order binding on or affecting any
Obligor or (iv) any law or governmental regulation binding on or affecting
any Obligor; or
(b) result in, or require the creation or imposition of, any Lien on
any Obligor's properties (except as permitted by this Agreement).
SECTION 6.3. Government Approval, Regulation, Etc. No authorization or
approval or other action by, and no notice to or filing with, any Governmental
Authority or other Person (other than those that have been, or on the Effective
Date will be, duly obtained or made and which are, or on the Effective Date will
be, in full force and effect) is required for the consummation of the
transactions contemplated herein or the due execution, delivery or performance
by any Obligor of any Loan Document to which it is a party, or for the due
execution, delivery and/or performance of documents evidencing the transactions
contemplated herein, in each case by the parties thereto. Neither the Borrower
nor any of its Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
SECTION 6.4. Validity, Etc. This Agreement and the other documents which
evidence the transactions contemplated herein have been duly executed and
delivered and constitute, and each other Loan Document executed by the Borrower
will, on the due execution and delivery thereof, constitute, the legal, valid
and binding obligations of the Borrower, enforceable against the Borrower in
accordance with their respective terms; and each Loan Document executed by each
other Obligor will, on the due execution and delivery thereof by such Obligor,
constitute the legal, valid and binding obligation of such Obligor enforceable
against such Obligor in accordance with its terms (except, in any case, as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws from time to time in effect affecting creditors'
rights generally and by general principles of equity).
SECTION 6.5. Financial Information. The financial statements of the
Borrower and its Subsidiaries furnished to the Administrative Agent and each
Lender pursuant to Section 5.1.5 have been prepared in accordance with GAAP
consistently applied, and present fairly the consolidated financial condition of
the Persons covered thereby as at the dates thereof and the results of their
operations for the periods then ended. All balance sheets, all statements of
income and of cash flow and all other financial information of each of the
Borrower and its Subsidiaries furnished pursuant to
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Section 7.1.1 have been and will for periods following the Effective Date be
prepared in accordance with GAAP consistently applied with the financial
statements delivered pursuant to Section 5.1.5, and do or will present fairly
the consolidated financial condition of the Persons covered thereby as at the
dates thereof and the results of their operations for the periods then ended.
There are no material liabilities of the Borrower or any of its Subsidiaries of
any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable, or otherwise, and there is no existing condition, situation or set
of circumstances which could reasonably be expected to result in such a
liability, other than those liabilities provided for or disclosed in the most
recently delivered financial statements.
SECTION 6.6. No Material Adverse Change. There has been no material adverse
change in the business, assets, revenues, debt service capacity, tax position,
environmental liability, financial condition, operations or prospective
financial position of the Borrower and its Subsidiaries taken as a whole since
December 31, 2000, except that we note the items disclosed in Item 6.7 of the
Disclosure Schedule to the extent such items may be deemed to have caused such a
material adverse change.
SECTION 6.7. Litigation, Labor Controversies, Etc. There is no pending or,
to the knowledge of the Borrower or any of its Subsidiaries, threatened in
writing litigation, action, proceeding or labor controversy
(a) except as disclosed in Item 6.7 of the Disclosure Schedule,
affecting the Borrower any of its Subsidiaries or any other Obligor, or any
of their respective properties, businesses, assets or revenues, which could
reasonably be expected to have a Material Adverse Effect, and no adverse
development has occurred in any labor controversy, litigation, arbitration
or governmental investigation or proceeding disclosed in Item 6.7; or
(b) which purports to affect the legality, validity or enforceability
of any Loan Document, the other documents evidencing the transactions
contemplated herein and the other transactions contemplated herein.
SECTION 6.8. Subsidiaries. The Borrower has no Subsidiaries, except those
Subsidiaries which are identified in Item 6.8 of the Disclosure Schedule, or
which are permitted to have been organized or acquired in accordance with
Section 7.2.5 or 7.2.10.
SECTION 6.9. Ownership of Properties. The Borrower and each of its
Subsidiaries owns (a) in the case of owned real property, good and marketable
fee title to, and (b) in the case of owned personal property, good and valid
title to, or, in the case of leased real or personal property, valid and
enforceable leasehold interests (as the case may be) in, all of its material
properties and assets, real and personal, tangible and intangible, of any nature
whatsoever, free and clear in each case of all Liens or claims, except for
Permitted Liens.
SECTION 6.10. Taxes. (a) The Borrower and each of its Subsidiaries has
filed all United States federal Tax returns and all other material Tax returns
and reports required by law to have been filed by it and has paid all Taxes
thereby shown to be due and owing, except any such Taxes which are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books.
(b) The Borrower and its Subsidiaries will have net operating losses
for United States federal, state and local franchise and income tax purposes of
at least $90 million, as of
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December 31, 2001, after taking into account any cancellation of indebtedness
income incurred as a result of all the Senior Notes Purchase Transactions.
SECTION 6.11. Pension and Welfare Plans. During the twelve-consecutive-
month period prior to the Effective Date and prior to the date of any Credit
Extension hereunder, no steps have been taken to terminate any Pension Plan, and
no contribution failure has occurred with respect to any Pension Plan sufficient
to give rise to a Lien under Section 302(f) of ERISA. No condition exists or
event or transaction has occurred with respect to any Pension Plan which might
result in the incurrence by the Borrower or any member of the Controlled Group
of any material liability, fine or penalty. Except as disclosed in Item 6.11 of
the Disclosure Schedule, neither the Borrower nor any member of the Controlled
Group has any contingent liability with respect to any post-retirement benefit
under a Welfare Plan, other than liability for continuation coverage described
in Part 6 of Title I of ERISA.
SECTION 6.12. Environmental Warranties. Except as set forth in Item 6.12 of
the Disclosure Schedule:
(a) all facilities and property (including underlying groundwater)
owned or leased by the Borrower or any of its Subsidiaries have been, and
continue to be, owned or leased by the Borrower and its Subsidiaries in
material compliance with all Environmental Laws;
(b) there have been no past, and there are no pending or, to the
knowledge of any officer of the Borrower, threatened (i) claims,
complaints, notices or requests for information received by the Borrower or
any of its Subsidiaries with respect to any alleged violation of any
Environmental Law, or (ii) complaints, notices or inquiries to the Borrower
or any of its Subsidiaries regarding potential liability under any
Environmental Law;
(c) to the knowledge of any officer of the Borrower, there have been
no Releases of Hazardous Materials at, on or under any property now or
previously owned or leased by the Borrower or any of its Subsidiaries that
have, or could reasonably be expected to have, a Material Adverse Effect;
(d) the Borrower and its Subsidiaries have been issued and are in
material compliance with all permits, certificates, approvals, licenses and
other authorizations relating to Environmental Laws;
(e) no property now or previously owned or leased by the Borrower or
any of its Subsidiaries is listed or, to the knowledge of any officer of
the Borrower, proposed for listing (with respect to owned property only) on
the National Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list of sites requiring investigation or cleanup;
(f) to the knowledge of any officer of the Borrower, there are no
underground storage tanks, active or abandoned, including petroleum storage
tanks, on or under any property now or previously owned or leased by the
Borrower or any of its Subsidiaries with respect to which environmental
cleanup costs could be expected to have, singly or in the aggregate, a
Material Adverse Effect;
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(g) to the knowledge of any officer of the Borrower, neither the
Borrower nor any Subsidiary has directly transported or directly arranged
for the transportation of any Hazardous Material to any location which is
listed on the National Priorities List pursuant to CERCLA, on the CERCLIS
or on any similar state list or which is the subject of federal, state or
local enforcement actions or other investigations which may lead to claims
against the Borrower or such Subsidiary for any remedial work, damage to
natural resources or personal injury, including claims under CERCLA which
could reasonably be expected to have a Material Adverse Effect;
(h) there are no polychlorinated biphenyls or friable asbestos present
at any property now or previously owned or leased by the Borrower or any
Subsidiary with respect to which environmental cleanup costs could be
expected to have, singly or in the aggregate, a Material Adverse Effect;
and
(i) no conditions exist at, on or under any property now or previously
owned or leased by the Borrower which, with the passage of time, or the
giving of notice or both, would give rise to material liability under any
Environmental Law which could reasonably be expected to have a Material
Adverse Effect.
SECTION 6.13. Accuracy of Information. None of the factual information
heretofore or contemporaneously furnished in writing to any Secured Party by or
on behalf of any Obligor in connection with any Loan Document or any transaction
contemplated hereby contains any untrue statement of a material fact, or omits
to state any material fact necessary to make any information not misleading, and
no other factual information hereafter furnished in connection with any Loan
Document by or on behalf of any Obligor to any Secured Party will contain any
untrue statement of a material fact or will omit to state any material fact
necessary to make any information not misleading on the date as of which such
information is dated or certified. The Borrower has furnished to the
Administrative Agent true and complete copies of the Stockholders' Agreement and
the Senior Notes Indenture. The Projections have been prepared in good faith and
based on reasonable assumptions.
SECTION 6.14. Regulations U and X. No Obligor is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock, and no
proceeds of any Credit Extensions will be used to purchase or carry margin stock
or otherwise for a purpose which violates, or would be inconsistent with, F.R.S.
Board Regulation U or Regulation X. Terms for which meanings are provided in
F.R.S. Board Regulation U or Regulation X or any regulations substituted
therefor, as from time to time in effect, are used in this Section with such
meanings.
SECTION 6.15. Issuance of Subordinated Debt; Status of Obligations as
Senior Indebtedness, Etc. The subordination provisions of any Subordinated Debt
contained in any Sub Debt Documents are enforceable against the holders of the
Subordinated Debt by the holder of any "Senior Indebtedness" or similar term
referring to the Obligations (as defined in the Sub Debt Documents). All
Obligations, including those to pay principal of and interest (including
post-petition interest, whether or not allowed as a claim under bankruptcy or
similar laws) on the Term Loans and Reimbursement Obligations, and fees and
expenses in connection therewith, constitute "Senior Indebtedness" or similar
term relating to the Obligations (as defined in the Sub Debt Documents) and all
such Obligations are entitled to the benefits of the subordination created by
the Sub Debt Documents. The Borrower acknowledges that the Administrative Agent,
each Lender and each Issuer and LC Participant is entering into this Agreement
and is extending its Commitments in reliance upon such form of subordination
provisions in any Sub Debt Documents.
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SECTION 6.16. Solvency. After giving effect to the initial Credit Extension
and the consummation of the Senior Note Purchase Transactions, each of the
Borrower and its Subsidiaries is Solvent.
SECTION 6.17. Capitalization. Attached as Schedule III hereto is a true,
complete and accurate description as of the date of the initial Credit Extension
of the equity capital structure of the Borrower accompanied by a statement of
authorized and issued Capital Securities for the Borrower as of the date hereof.
SECTION 6.18. Compliance with Laws; Authorizations. Except as disclosed in
Item 6.18 of the Disclosure Schedule, the Borrower and its Subsidiaries are in
compliance in all material respects with all applicable statutes, rules,
regulations, orders and restrictions of any Governmental Authority having
jurisdiction over the conduct of its businesses or the ownership of its
properties, including, without limitation, those relating to public health and
safety, except to the extent that non-compliance could not reasonably be
expected to have a Material Adverse Effect. Neither the Borrower nor any of its
Subsidiaries has received any notice to the effect that its operations are not
in material compliance with any of the requirements of applicable federal, state
and local health and safety statutes and regulations which non-compliance could
be reasonably expected to have a Material Adverse Effect. The Borrower and its
Subsidiaries have obtained all authorizations necessary and appropriate to own
and operate their businesses and property and hold under lease their property,
where applicable, and all such authorizations are in full force and effect,
except where the failure to so obtain such authorizations or to so keep such
authorizations in full force and effect could not be reasonably expected to have
a Material Adverse Effect.
SECTION 6.19. No Contractual or Other Restrictions. No Subsidiary is a
party to any agreement or other contractual arrangement that limits its ability
to (a) pay dividends to, or otherwise make Investments in or other payments to,
the Borrower or (b) grant Liens solely in favor of the Administrative Agent
other than non-material agreements and contractual arrangements which impose
limitations on a Subsidiary's ability to grant Liens thereon in favor of the
Administrative Agent.
SECTION 6.20. Intellectual Property. Each of the Borrower and its
Subsidiaries owns and possesses or licenses (as the case may be) all such
patents, patent rights, trademarks, trademark rights, trade names, trade name
rights, service marks, service mark rights and copyrights as the Borrower
considers necessary for the conduct of the businesses of the Borrower and its
Subsidiaries as now conducted without, individually or in the aggregate, any
infringement upon rights of other Persons, in each case except as could not
reasonably be expected to result in a Material Adverse Effect, and there is no
individual patent, patent right, trademark, trademark right, trade name, trade
name right, service mark, service mark right or copyright the loss of which
could reasonably be expected to result in a Material Adverse Effect, except as
may be disclosed in Item 6.21 of the Disclosure Schedule.
SECTION 6.21. Priority of Security Interests. The Liens granted to the
Administrative Agent in the Collateral (as defined in the Security Agreements)
are first (subject to, on the Closing Date, Designated Permitted Liens, and
thereafter, Permitted Liens, and other than motor vehicles, motor vehicle
trailers, fixtures, and investment property not constituting Capital Securities
pledged pursuant to the Pledge and Security Agreement) priority (or the local
equivalent thereof) security interests and no Liens exist on any of the
collateral described above other than the Liens created in favor of the
Administrative Agent pursuant to a Loan Document and the Permitted Liens.
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SECTION 6.22. Material Contracts. Neither the Borrower nor any Subsidiary
is, to the knowledge of the Borrower or such Subsidiary, in breach of, or in
default under, any Material Contract, and no Material Contract is scheduled to
expire or terminate prior to the Stated Maturity Date.
SECTION 6.23. Ownership Change. The transactions contemplated by this
Agreement, or any other transaction contemplated by the Borrower or any of its
Subsidiaries, will not result in an "ownership change" (as defined in Section
382 of the Code) with respect to any Borrower or any of its Subsidiaries except
to the extent otherwise permitted under Section 7.2.10 or Section 7.2.11 or the
application of the "separate return limitation year" limitations under the
Federal income tax consolidated return regulations with respect to any Borrower
or any of its Subsidiaries.
SECTION 6.24. Immaterial Subsidiaries. None of the Immaterial Subsidiaries
hold, directly or indirectly, any assets or property.
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants. The Borrower covenant and agrees with
each Lender, the Issuer, each LC Participant and the Administrative Agent that
until the Termination Date has occurred, the Borrower will, and will cause its
Subsidiaries to, perform or cause to be performed the obligations set forth
below.
SECTION 7.1.1. Financial Information, Reports, Notices, Etc. The Borrower
will furnish or cause to be furnished to the Administrative Agent (with
sufficient copies for each Lender) copies of the following financial statements,
reports, notices and information (all in form reasonably satisfactory to the
Administrative Agent):
(a) promptly after becoming available and in any event within 50 days
after the end of each of the first three Fiscal Quarters of each Fiscal
Year, an unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such Fiscal Quarter and consolidated
statements of income and cash flow of the Borrower and its Subsidiaries for
such Fiscal Quarter and for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Quarter,
accompanied by unaudited consolidating statements as of the end of such
Fiscal Quarter, and including (in each case), in comparative form, the
figures for the corresponding Fiscal Quarter in, and year to date portion
of, the immediately preceding Fiscal Year, certified as complete and
correct in accordance with GAAP (subject to normal year end adjustment and
absence of footnotes) as described in Section 1.4 by the chief financial
or accounting Authorized Officer of the Borrower;
(b) promptly after becoming available and in any event within 105 days
after the end of each Fiscal Year, a copy of the consolidated balance sheet
of the Borrower and its Subsidiaries, and the related consolidated
statements of income and cash flow of the Borrower and its Subsidiaries for
such Fiscal Year, accompanied by unaudited consolidating statements as of
the end of such Fiscal Year, setting forth in comparative form the figures
for the immediately preceding Fiscal Year, audited (without any
Impermissible Qualification) by Ernst & Young or other independent public
accountants of nationally recognized standing, which shall include a
calculation of the financial covenants set forth in Section 7.2.4 in
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accordance with GAAP as described in Section 1.4 and stating that, in
performing the examination necessary to deliver the audited financial
statements of the Borrower, either no knowledge was obtained of any Event
of Default or, if such knowledge was obtained, the nature thereof;
(c) concurrently with the delivery of the financial information
pursuant to clauses (a) and (b), a Compliance Certificate, executed by the
chief financial or accounting Authorized Officer of the Borrower, setting
forth calculations with respect to the financial covenants set forth in
Section 7.2.4 and stating that no Default has occurred and is continuing
(or, if a Default has occurred, specifying the details of such Default and
the action that the Borrower or an Obligor has taken or proposes to take
with respect thereto) and setting forth the status of the dissolution or
liquidation of the Immaterial Subsidiaries; provided, however, that the
Borrower shall also deliver to the Administrative Agent such a Compliance
Certificate no later than 15 days after the last day of the 2001 Fiscal
Year;
(d) as soon as possible and in any event within three Business Days
after an officer of the Borrower or any other Obligor obtains knowledge of
the occurrence of a Default, a statement of an Authorized Officer of the
Borrower setting forth details of such Default and the action which the
Borrower or such Obligor has taken and proposes to take with respect
thereto;
(e) as soon as possible and in any event within three Business Days
after an officer of the Borrower or any other Obligor obtains knowledge of
(i) the occurrence of any material adverse development with respect to any
litigation, action, proceeding or labor controversy described in Item 6.7
of the Disclosure Schedule or (ii) the commencement of any litigation,
action, proceeding or labor controversy of the type and materiality
described in Section 6.7, notice thereof and, to the extent the
Administrative Agent reasonably requests, information reasonably relating
thereto;
(f) promptly after the filing thereof, copies of all periodic and
other reports, prospectuses and registration statements (other than the
exhibits thereto and any registration statement on Form S-8 or its
equivalent) which the Borrower or any Subsidiary files with the SEC or any
national securities exchange;
(g) promptly but, in any event, within three Business Days after a
Designated Officer becoming aware of (i) the institution of any steps by
any Person to terminate any Pension Plan; provided, however, that the
foregoing language of clause (g)(i) of Section 7.1.1. shall not apply with
respect to the standard termination of any Pension Plan pursuant to Section
4041(b) of ERISA where the aggregate contribution of Borrower and any other
member of the Borrower's Controlled Group needed to make such plan
sufficient for the purposes of the PBGC termination provisions does not
exceed $500,000, (ii) the failure to make a required contribution to any
Pension Plan if such failure is sufficient to give rise to a Lien under
Section 302(f) of ERISA, (iii) the taking of any action with respect to a
Pension Plan which could result in the requirement that any Obligor furnish
a bond or other security to the PBGC or such Pension Plan, or (iv) the
occurrence of any event with respect to any Pension Plan which could result
in the incurrence by any Obligor of any material liability, fine or
penalty, notice thereof and copies of all documentation relating thereto;
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(h) promptly upon receipt thereof, copies of all "management letters"
submitted to the Borrower or any other Obligor by the independent public
accountants referred to in clause (b) in connection with each audit made by
such accountants;
(i) promptly following the mailing or receipt of any notice or report
delivered under the terms of any Subordinated Debt or the Senior Notes
Indenture, copies of such notice or report;
(j) within 90 days after the end of each Fiscal Year, updated
projections in reasonable detail through the Stated Maturity Date, prepared
in good faith upon reasonable stated assumptions, all in form satisfactory
to the Administrative Agent;
(k) such other financial and other information regarding or related,
directly or indirectly, to the business of the Borrower or any of its
Subsidiaries as any Lender, Issuer or LC Participant through the
Administrative Agent may from time to time reasonably request (including
information and reports in such detail as the Administrative Agent may
reasonably request with respect to the terms of and information provided
pursuant to the Compliance Certificate); and
(l) within three Business Days after the end of each Fiscal Quarter, a
certificate in form and substance satisfactory to the Administrative Agent,
executed by the chief financial or accounting Authorized Officer of the
Borrower, setting forth the amount held in each of the Cash Reserve
Accounts as of the last Business Day of such Fiscal Quarter.
SECTION 7.1.2. Maintenance of Existence; Compliance with Laws, Etc. The
Borrower will, and will cause each of its Subsidiaries to (a) preserve and
maintain its legal existence (except as otherwise permitted by Section 7.2.10),
and (b) comply in all material respects with all applicable laws, rules,
regulations and orders, including (i) any such applicable laws, rules,
regulations and orders with respect to any Pension Plan, and (ii) the payment
(before the same become delinquent), of (A) all U.S. federal income taxes and
all other material Taxes imposed upon the Borrower or its Subsidiaries or upon
their property except to the extent being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
have been set aside on the books of the Borrower or its Subsidiaries, as
applicable, unless and until any Lien resulting therefrom attaches to its
property and becomes enforceable against its other creditors, and (B) at or
before maturity or before they become delinquent, as the case may be, in
accordance with industry practice (subject, where applicable, to specified grace
periods), all their material payment obligations of whatever nature and any
additional costs that are imposed as a result of any failure to so pay,
discharge or otherwise satisfy such obligations, except when the amount or
validity of such obligations and costs is currently being contested in good
faith by appropriate proceeding and reserves, if applicable, in conformity with
GAAP with respect thereto have been provided on the books of the Borrower or its
Subsidiaries, as the case may be, unless and until any Lien resulting therefrom
attaches to its property and becomes enforceable against its other creditors.
SECTION 7.1.3. Maintenance of Properties. The Borrower will, and will cause
each of its Subsidiaries to, maintain, preserve, protect and keep its and their
respective properties in good repair, working order and condition (ordinary wear
and tear excepted), and make necessary repairs, renewals and replacements so
that the business carried on by the Borrower and its Subsidiaries at that time
may be properly conducted at all times, unless the failure to maintain such
property would not have a Material Adverse Effect.
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SECTION 7.1.4. Insurance. The Borrower will, and will cause each of its
Subsidiaries to:
(a) maintain insurance on its property with financially sound and
reputable insurance companies against loss and damage in at least the
amounts (and with only those deductibles) customarily maintained, and
against such risks as are typically insured against in the same general
area, by Persons of comparable size engaged in the same or similar business
as the Borrower and its Subsidiaries; and
(b) maintain all worker's compensation, employer's liability insurance
or similar insurance as may be required under the laws of any state or
jurisdiction in which it may be engaged in business.
Without limiting the foregoing, all insurance policies required pursuant to this
Section shall (i) name the Administrative Agent on behalf of the Secured Parties
as mortgagee (in the case of property insurance) or additional insured (in the
case of liability insurance), as applicable, and provide that no cancellation or
modification of the policies will be made without thirty days' prior written
notice to the Administrative Agent and (ii) be in addition to any requirements
to maintain specific types of insurance contained in the other Loan Documents
(including hazard insurance and business interruption insurance).
SECTION 7.1.5. Books and Records. The Borrower will, and will cause each of
its Subsidiaries to, keep books and records in accordance with GAAP which
accurately reflect all of its business affairs and transactions and permit each
Secured Party or any of their respective representatives, at reasonable times
and intervals upon reasonable notice to the Borrower, to visit each Obligor's
offices, to discuss such Obligor's financial matters with its officers and
employees, and its independent public accountants (and the Borrower hereby
authorizes such independent public accountant to discuss each Obligor's
financial matters with each Secured Party or their representatives whether or
not any representative of such Obligor is present) and to examine (and photocopy
extracts from) any of its books, records and accounts including any "management
letters" prepared by independent accountants. The Borrower shall pay any fees of
such independent public accountant incurred in connection with any Secured
Party's exercise of its rights pursuant to this Section.
SECTION 7.1.6. Environmental Law Covenant. The Borrower will, and will
cause each of its Subsidiaries to,
(a) use and operate all of its and their facilities and properties in
material compliance with all Environmental Laws, keep all necessary
permits, approvals, certificates, licenses and other authorizations
relating to environmental matters in effect and remain in material
compliance therewith, and handle all Hazardous Materials in material
compliance with all applicable Environmental Laws; and
(b) promptly notify the Administrative Agent and provide copies upon
receipt of all written claims, complaints, notices or inquiries relating to
the condition of its facilities and properties in respect of, or as to
compliance with, Environmental Laws, and shall promptly resolve any
non-compliance with Environmental Laws and keep its property free of any
Lien imposed by any Environmental Law.
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SECTION 7.1.7. Use of Proceeds. The Borrower will apply the proceeds of the
Term Loans (a) to partially finance the Senior Notes Purchase Transactions and
(b) for issuing Letters of Credit for the account of the Borrower to replace the
Indebtedness identified in Item 7.2.2(b) of the Disclosure Schedule and for
working capital and general corporate purposes.
SECTION 7.1.8. Future Guarantors, Security, Etc. The Borrower will, and
will cause each U.S. Subsidiary to, execute any documents, Filing Statements,
agreements and instruments, and take all further action (including filing
mortgages) that may be required under applicable law, or that the Administrative
Agent may reasonably request, in order to effectuate the transactions
contemplated by the Loan Documents and in order to grant, preserve, protect and
perfect the validity and first priority (subject to Permitted Liens) of the
Liens created or intended to be created by the Loan Documents on substantially
all assets of the Borrower and its Subsidiaries. The Borrower will cause any
subsequently acquired or organized U.S. Subsidiary to execute a Subsidiary
Guaranty (or a supplement thereto) and the Pledge and Security Agreement in
favor of the Secured Parties. In addition, from time to time, the Borrower will,
at its cost and expense, promptly secure the Obligations by pledging or
creating, or causing to be pledged or created, perfected Liens with respect to
its and its U.S. Subsidiaries assets and properties, it being agreed that it is
the intent of the parties that the Obligations shall be secured by, among other
things, substantially all the assets of the Borrower and its U.S. Subsidiaries
(including real and personal property acquired subsequent to the Effective
Date); provided that neither the Borrower nor its Subsidiaries shall be required
to pledge more than 65% of the Voting Securities of any Foreign Subsidiary or to
grant a Lien that would cause a breach by the Borrower or any of its
Subsidiaries of any obligation to any Person the incurrence of which is
permitted by this Agreement (including under Section 7.2.2 and 7.2.14 hereof).
Such Liens will be created under the Loan Documents in form and substance
reasonably satisfactory to the Administrative Agent, and the Borrower shall
deliver or cause to be delivered to the Administrative Agent all such
instruments and documents (including legal opinions, title insurance policies
and lien searches) as the Administrative Agent shall reasonably request to
evidence compliance with this Section.
SECTION 7.1.9. Conduct of Business; Separate Existence; Maintenance of
Authorizations. The Borrower will, and will cause each of its Subsidiaries to,
(a) carry on and conduct its business in the same manner as it is currently
conducted; (b) do all things necessary to remain duly organized, validly
existing and in good standing in its jurisdiction of organization and maintain
all requisite authority to conduct its business in each jurisdiction in which
its business is conducted; and (c) do all things reasonably necessary to renew,
extend and continue in effect all authorizations which may at any time and from
time to time be necessary to operate and own the business and assets of the
Borrower and its Subsidiaries in compliance with all applicable laws and
regulations, except in each case where the failure to so comply could not
reasonably be expected to have a Material Adverse Effect. The Borrower will
liquidate or dissolve each of the Immaterial Subsidiaries as soon as reasonably
practicable.
SECTION 7.1.10. Collateral Accounts, Etc. The Borrower will, and will cause
each of its Subsidiaries to, (a) deposit all of their respective cash receipts
from current and future licensing or royalty contracts and other activities of
such Obligor directly into the Cash Reserve Accounts; and (b) maintain an
aggregate amount equal to at least $10,000,000 in the Cash Reserve Accounts as
of the last Business Day of each Fiscal Quarter (such amount to exclude any
proceeds resulting, directly or indirectly, from any Credit Extension).
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SECTION 7.2. Negative Covenants. The Borrower covenants and agrees with
each Lender, the Issuer, each LC Participant and the Administrative Agent that
until the Termination Date has occurred, the Borrower will, and will cause its
Subsidiaries to, perform or cause to be performed the obligations set forth
below.
SECTION 7.2.1. Business Activities. The Borrower will not, and will not
permit any of its Subsidiaries to, engage in any business activity except those
business activities engaged in on the date of this Agreement and activities
reasonably incidental thereto.
SECTION 7.2.2. Indebtedness. The Borrower will not, and will not permit any
of its Subsidiaries to, create, incur, assume or permit to exist any
Indebtedness, other than:
(a) Indebtedness in respect of the Obligations;
(b) until the Closing Date, Indebtedness that is to be repaid in full
as further identified in Item 7.2.2(b) of the Disclosure Schedule;
(c) Indebtedness existing as of the Effective Date which is identified
in Item 7.2.2(c) of the Disclosure Schedule, and refinancing of such
Indebtedness; provided that (i) the principal amount (as such amount may
have been reduced following the Effective Date) thereof is not increased,
(ii) the maturity date thereof is not shortened, and (iii) the covenant and
default provisions thereof are not materially more restrictive on the
Borrower than the covenant and default provisions contained in this
Agreement;
(d) unsecured Indebtedness (i) incurred in the ordinary course of
business of the Borrower and its Subsidiaries (including open accounts
extended by suppliers on normal trade terms in connection with purchases of
goods and services which are not overdue for a period of more than 90 days
or, if overdue for more than 90 days, as to which a dispute exists and
adequate reserves in conformity with GAAP have been established on the
books of the Borrower or such Subsidiary) and (ii) in respect of
performance, surety or appeal bonds provided in the ordinary course of
business, but excluding (in each case), Indebtedness incurred through the
borrowing of money or Contingent Liabilities in respect thereof;
(e) Indebtedness (i) in respect of industrial revenue bonds or other
similar governmental or municipal bonds, (ii) evidencing the deferred
purchase price of newly acquired property or incurred to finance the
acquisition of equipment of the Borrower and its Subsidiaries (pursuant to
purchase money mortgages or otherwise, whether owed to the seller or a
third party) used in the ordinary course of business of the Borrower and
its Subsidiaries (provided that such Indebtedness is incurred within 60
days of the acquisition of such property) and (iii) Capitalized Lease
Liabilities; provided that the aggregate amount of all Indebtedness
outstanding pursuant to this clause shall not at any time exceed
$1,250,000;
(f) Indebtedness of any Subsidiary (other than an Immaterial
Subsidiary) owing to the Borrower or any other Subsidiary, which
Indebtedness, if incurred by a Foreign Subsidiary owing to the Borrower or
a Subsidiary Guarantor, shall not (when aggregated with the amount of
Investments made by the Borrower and the Subsidiary Guarantors in Foreign
Subsidiaries (other than the Mexican Subsidiary) under clause (e)(i) of
Section 7.2.5), exceed $500,000; provided, however, that (i) Indebtedness
incurred by Foreign Subsidiaries (other than the Mexican Subsidiary)
related to Investments made by the Borrower in such Foreign
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<PAGE>
Subsidiaries under clause (k)(i) of Section 7.2.5 shall not exceed
$3,000,000 in the aggregate outstanding at any time and (ii) Indebtedness
incurred by the Mexican Subsidiary related to Investments made by the
Borrower in the Mexican Subsidiary under clause (k)(ii) of Section 7.2.5
shall not exceed $300,000 per month;
(g) Indebtedness of a Person existing at the time such Person became a
Subsidiary of the Borrower, but only if such Indebtedness was not created
or incurred in contemplation of such Person becoming a Subsidiary and the
aggregate outstanding amount of all Indebtedness existing pursuant to this
clause does not exceed $1,250,000 at any time;
(h) Indebtedness evidenced by the Senior Notes in an aggregate
principal amount not exceeding $250,000,000, less the amount of any Senior
Notes purchased by the Borrower;
(i) unsecured Subordinated Debt from the Personal Guarantor to the
Borrower in an aggregate principal amount not to exceed $25,000,000 at any
time outstanding pursuant to Sub Debt Documents satisfactory in form and
substance to the Administrative Agent (including without limitation as to
its equity conversion terms); and
(j) other Indebtedness of the Borrower in an aggregate amount at any
time outstanding not to exceed $2,500,000;
provided, however, that no Indebtedness otherwise permitted by clauses (c), (e),
(g), (i), and (j), shall be assumed, created or otherwise incurred if a Default
has occurred and is then continuing or would result therefrom.
SECTION 7.2.3. Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Lien upon any of
its property (including Capital Securities of any Person), revenues or assets,
whether now owned or hereafter acquired, except:
(a) Liens securing payment of the Obligations;
(b) until the Closing Date, Liens securing payment of Indebtedness of
the type described in clause (b) of Section 7.2.2;
(c) Liens existing as of the Effective Date and disclosed in Item
7.2.3(c) of the Disclosure Schedule securing Indebtedness described in
clause (c) of Section 7.2.2, and refinancings of such Indebtedness;
provided that no such Lien shall encumber any additional property and the
amount of Indebtedness secured by such Lien is not increased from that
existing on the Effective Date (as such Indebtedness may have been
permanently reduced subsequent to the Effective Date);
(d) Liens securing Indebtedness of the type permitted under clause (e)
of Section 7.2.2; provided that (i) such Lien is granted within 60 days
after such Indebtedness is incurred, (ii) the Indebtedness secured thereby
does not exceed 80% of the lesser of the cost or the fair market value of
the applicable property, improvements or equipment at the time of such
acquisition (or construction) and (iii) such Lien secures only the assets
that are the subject of the Indebtedness referred to in such clause;
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(e) Liens securing Indebtedness permitted by clause (g) of Section
7.2.2; provided that such Liens existed prior to such Person becoming a
Subsidiary and were not created in anticipation thereof;
(f) Liens in favor of carriers, warehousemen, mechanics, materialmen
and landlords granted in the ordinary course of business for amounts not
overdue or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall
have been set aside on its books;
(g) Liens incurred or deposits made in the ordinary course of business
in connection with worker's compensation, unemployment insurance or other
forms of governmental insurance or benefits, or to secure performance of
tenders, statutory obligations, bids, leases or other similar obligations
(other than for borrowed money) entered into in the ordinary course of
business or to secure obligations on surety and appeal bonds or performance
bonds;
(h) judgment Liens in existence for less than 45 days after the entry
thereof or with respect to which execution has been stayed or the payment
of which is covered in full (subject to a customary deductible) by
insurance maintained with responsible insurance companies and which do not
otherwise result in an Event of Default under Section 8.1.6;
(i) easements, rights-of-way, zoning restrictions, minor defects or
irregularities in title and other similar encumbrances not interfering in
any material respect with the value or use of the property to which such
Lien is attached;
(j) Liens for Taxes not at the time delinquent or thereafter payable
without penalty or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall
have been set aside on its books; and
(k) other Liens in an aggregate amount not exceeding $100,000.
SECTION 7.2.4. Financial Condition and Operations. The Borrower will not
permit any of the events set forth below to occur.
(a) The Borrower will not permit the Leverage Ratio as of the last day
of any Fiscal Quarter occurring during any period set forth below to be
greater than the ratio set forth opposite such period:
<TABLE>
<CAPTION>
Maximum Leverage
Period Ratio
-------------------------------------------------------- --------------------------
<S> <C> <C>
10/01/01 through (and including) 12/31/01 5.80:1
01/01/02 through (and including) 06/30/02 5.50:1
07/01/02 through (and including) 09/30/02 4.25:1
10/01/02 through (and including) 12/31/02 3.75:1
</TABLE>
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<TABLE>
<CAPTION>
Maximum Leverage
Period Ratio
-------------------------------------------------------- --------------------------
<S> <C>
01/01/03 through (and including) 12/31/03 3.00:1
01/01/04 and thereafter 2.00:1
</TABLE>
(b) The Borrower will not permit the Senior Leverage Ratio as of the
last day of any Fiscal Quarter occurring during any period set forth below
to be greater than the ratio set forth opposite such period:
<TABLE>
<CAPTION>
Maximum Senior Leverage
Period Ratio
-------------------------------------------------------- --------------------------
<S> <C>
10/01/01 through (and including) 12/31/01 2.50:1
01/01/02 through (and including) 06/30/02 2.25:1
07/01/02 through (and including) 09/30/02 1.75:1
10/01/02 through (and including) 12/31/02 1.50:1
01/01/03 through (and including) 12/31/03 1.00:1
01/01/04 and thereafter 0.0
</TABLE>
(c) The Borrower will not permit the Interest Coverage Ratio as of the
last day of any Fiscal Quarter occurring during any period set forth below
to be less than the ratio set forth opposite such period:
<TABLE>
<CAPTION>
Minimum Interest
Period Coverage Ratio
-------------------------------------------------------- --------------------------
<S> <C>
10/01/01 through (and including) 12/31/01 1.25:1
01/01/02 through (and including) 06/30/02 1.50:1
07/01/02 through (and including) 09/30/02 2.00:1
10/01/02 through (and including) 12/31/02 2.25:1
01/01/03 through (and including) 12/31/03 2.75:1
01/01/04 and thereafter 3.00:1
</TABLE>
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(d) The Borrower will not permit Free Cash Flow for any Fiscal Year
set forth below to be less than the amount set forth opposite such Fiscal
Year:
<TABLE>
<CAPTION>
Fiscal Year Minimum Free Cash Flow
----------- ----------------------
<S> <C>
2001 $35,000,000
2002 $35,000,000
2003 $45,000,000
2004 $50,000,000
</TABLE>
SECTION 7.2.5. Investments. The Borrower will not, and will not permit any
of its Subsidiaries to, purchase, make, incur, assume or permit to exist any
Investment in any other Person, except:
(a) Investments existing on the Effective Date and identified in Item
7.2.5(a) of the Disclosure Schedule;
(b) Cash Equivalent Investments;
(c) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(d) Investments permitted as Capital Expenditures pursuant to Section
7.2.7;
(e) Investments by way of contributions to capital or purchases of
Capital Securities (i) by the Borrower in any Subsidiaries (other than any
Immaterial Subsidiary) or by any Subsidiary in other Subsidiaries (other
than any Immaterial Subsidiary); provided that the aggregate amount of
intercompany loans made pursuant to clause (f) of Section 7.2.2 to
Subsidiaries that are not Subsidiary Guarantors and Investments under this
clause made by the Borrower and Subsidiary Guarantors in Subsidiaries that
are not Subsidiary Guarantors shall not exceed $500,000 at any time, or
(ii) by any Subsidiary in the Borrower;
(f) Investments constituting (i) accounts receivable arising, (ii)
trade debt granted, or (iii) deposits made in connection with the purchase
price of goods or services, in each case in the ordinary course of
business;
(g) Investments by way of the acquisition of Capital Securities
constituting Permitted Acquisitions in an aggregate amount not to exceed
$5,000,000 over the term of this Agreement or $2,5000,000 in any Fiscal
Year; provided that (i) such Investments shall result in the acquisition of
a wholly owned U.S. Subsidiary and (ii) upon making such Investments, the
provisions of Section 7.1.8 are complied with;
(h) Investments comprising purchases of Senior Notes, provided that
(i) such purchases utilize the proceeds of Term Loans in accordance with
the requirements of this Agreement or (ii) subject to clause (b) of Section
7.2.8 commencing three months after the
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Term Loan Commitment Amount has been fully drawn but prior to the date that
is twelve months after the Closing Date, and subject to the prior written
consent of the Administrative Agent, such purchases may utilize up to
$7,500,000 in the aggregate of the Borrower's own cash;
(i) revolving credit advances by the Borrower to (x) the trust created
under the Avoidance Litigation Trust Agreement, dated as of October 1,
1998, by and among John J. Gibbons, as chapter 11 trustee, the Borrower and
other parties thereto, in an aggregate principal amount not to exceed
$1,100,000 outstanding at any time and (y) the trust created under the
MAFCO Litigation Trust Agreement, dated as of October 1, 1998, by and among
John J. Gibbons, as chapter 11 trustee, the Borrower and other parties
thereto, in an aggregate principal amount not to exceed $1,000,000
outstanding at any time;
(j) Investments in any Person received in return for the licensing or
sublicensing of use of any intellectual property of such Person by the
Borrower or a Subsidiary in the ordinary course of business on customary
terms; provided that any such Investment in an Affiliate must be made on an
arm's-length basis on terms at least as favorable to Borrower or such
Subsidiary as could have been obtained from a third party that was not an
Affiliate;
(k) short-term loans or advances to (i) Foreign Subsidiaries (other
than the Mexican Subsidiary) in the ordinary course of business on
customary terms to pay invoices from suppliers in an aggregate amount not
to exceed $3,000,000 outstanding at any time and (ii) the Mexican
Subsidiary in the ordinary course of business not to exceed $300,000 per
month; and
(l) other Investments (except in Immaterial Subsidiaries, it being
understood and agreed that, notwithstanding any other provision of this
Agreement, the Immaterial Subsidiaries shall not acquire or receive any
assets or liablilities) in an amount not to exceed $2,500,000 in the
aggregate at any time outstanding;
provided, however, that
(i) any Investment which when made complies with the requirements
of the definition of the term "Cash Equivalent Investment" may
continue to be held notwithstanding that such Investment if made
thereafter would not comply with such requirements; and
(ii) no Investment otherwise permitted by clauses (d), (g), (h),
or (l) shall be permitted to be made if any Default has occurred and
is continuing or would result therefrom.
SECTION 7.2.6. Restricted Payments, Etc. The Borrower will not, and will
not permit any of its Subsidiaries to, declare or make a Restricted Payment, or
make any deposit for any Restricted Payment, other than (a) Restricted Payments
made by Subsidiaries to the Borrower or wholly owned Subsidiaries and (b) the
payment of cash in lieu of the issuance of fractional shares upon (i) the
conversion or exchange of any preferred stock of the Borrower which was
outstanding on the Closing Date or issued in payment of dividends on any such
preferred stock, (ii) the payment of dividends payable in shares of the
Borrower's Capital Securities, or (iii) the exercise of any option, warrant or
other right to acquire the Borrower's Capital Securities; provided that, (x) for
subclauses (i) through
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(iii), the aggregate amount of cash paid in lieu of the issuance of fractional
shares shall not exceed $2,000,000 and (y) no Immaterial Subsidiary shall at any
time receive, directly or indirectly, any Restricted Payment.
SECTION 7.2.7. Capital Expenditures, Etc. The Borrower will not, and will
not permit its Subsidiaries to, make or commit to make Capital Expenditures in
an aggregate amount which exceed $6,000,000 in any Fiscal Year.
SECTION 7.2.8. No Prepayment of Debt. The Borrower will not, and will not
permit any of its Subsidiaries to,
(a) make any payment or prepayment of principal of, or premium or
interest on, any Subordinated Debt or the Senior Notes (i) other than the
stated, scheduled date for payment of interest set forth in the applicable
Sub Debt Documents or the Senior Notes Indenture, or (ii) which would
violate the terms of this Agreement or the applicable Sub Debt Document;
(b) redeem, retire, purchase, defease or otherwise acquire any
Subordinated Debt or any Senior Notes, other than purchases or other
acquisitions of the Senior Notes (i) using proceeds of the Term Loans;
provided that any such purchase or acquisition shall be made at a discount
as agreed in the Fee Letter, and (ii) using up to $7,500,000 of the
Borrower's own cash; provided that any purchase or acquisition pursuant to
subclause (ii) shall (A) occur no earlier than the date that is three
months after the Term Loan Commitment has been fully utilized but prior to
the date which is 12 months after the Closing Date, (B) be subject to (x)
no Default having occurred and being continuing or resulting therefrom, (y)
the Borrower being in compliance with the Projections and (z) the written
consent of the Administrative Agent, such consent not to be unreasonably
delayed or withheld; and (C) be subject to the payment by the Borrower to
the Arranger at the time of each such purchase of a fee in the amount set
forth in the Fee Letter; or
(c) make any deposit (including the payment of amounts into a sinking
fund or other similar fund) for any of the foregoing purposes.
Furthermore, neither the Borrower nor any Subsidiary will designate any
Indebtedness other than the Obligations as "Designated Senior Debt" (or any
analogous term) in any Sub Debt Document.
SECTION 7.2.9. Issuance of Capital Securities. The Borrower will not permit
any of its Subsidiaries to issue any Capital Securities (whether for value or
otherwise) to any Person other than (in the case of Subsidiaries) (a) to the
Borrower, (b) another wholly owned Subsidiary or (c) director's qualifying
shares.
SECTION 7.2.10. Consolidation, Merger, Etc. The Borrower will not, and will
not permit any of its Subsidiaries to, liquidate or dissolve, consolidate with,
or merge into or with, any other Person, or purchase or otherwise acquire all or
substantially all of the assets of any Person (or any division thereof), except
(a) any Subsidiary may liquidate or dissolve voluntarily into, and may
merge with and into, the Borrower or any other Subsidiary (provided,
however, that a Subsidiary Guarantor may only liquidate or dissolve into,
or merge with and into, the Borrower or
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another Subsidiary Guarantor), and the assets or Capital Securities of any
Subsidiary may be purchased or otherwise acquired by the Borrower or any
other Subsidiary (provided, however, that the assets or Capital Securities
of any Subsidiary Guarantor may only be purchased or otherwise acquired by
the Borrower or another Subsidiary Guarantor); provided further that in no
event shall any Pledged Subsidiary consolidate with or merge with and into
any Subsidiary other than another Pledged Subsidiary unless after giving
effect thereto, the Administrative Agent shall have a perfected pledge of,
and security interest in and to, at least the same percentage of the issued
and outstanding interests of Capital Securities (on a fully diluted basis)
of the surviving Person as the Administrative Agent had immediately prior
to such merger or consolidation in form and substance satisfactory to the
Administrative Agent and its counsel, pursuant to such documentation and
opinions as shall be necessary in the opinion of the Administrative Agent
to create, perfect or maintain the collateral position of the Secured
Parties therein; and
(b) so long as no Default has occurred and is continuing or would
occur after giving effect thereto, the Borrower or any of its Subsidiaries
may (to the extent permitted by clause (g) of Section 7.2.5) purchase all
or substantially all of the assets or Capital Securities of any Person (or
any division thereof), or acquire such Person by merger.
SECTION 7.2.11. Permitted Dispositions. The Borrower will not, and will not
permit any of its Subsidiaries to, Dispose of any of the Borrower's or such
Subsidiaries' assets (including accounts receivable and Capital Securities of
Subsidiaries) to any Person in one transaction or series of transactions unless
(a) such Disposition consists of inventory or obsolete property Disposed of in
the ordinary course of its business, (b) such Disposition is permitted by
Section 7.2.10, (c) (i) such Disposition is for fair market value and the
consideration received consists of no less than 90% cash, (ii) immediately prior
to and immediately after giving effect to such Disposition, no Default shall
have occurred or would result therefrom, and (iii) the Net Disposition Proceeds
from such Disposition are applied pursuant to Sections 3.1.1 and 3.1.2, (d) such
Disposition is pursuant to a lease having a term of six years or less in which
the Borrower or such Subsidiary is the lessor, (e) such Disposition is pursuant
to a license granted in the ordinary course of the Borrower's business or (f)
such Disposition is from a Subsidiary to the Borrower or from the Borrower to a
Subsidiary Guarantor.
SECTION 7.2.12. Modification of Certain Agreements. The Borrower will not,
and will not permit any of its Subsidiaries to, consent to any amendment,
supplement, waiver or other modification of, or enter into any forbearance from
exercising any rights with respect to the terms or provisions contained in, or
applicable to,
(a) the Sub Debt Documents or the Senior Notes, other than any
amendment, supplement, waiver or modification for which no fee is payable
to the holders of the Subordinated Debt or the Senior Notes and which (i)
extends the date or reduces the amount of any required repayment,
prepayment or redemption of the principal of such Subordinated Debt or such
Senior Notes, (ii) reduces the rate or extends the date for payment of the
interest, premium (if any) or fees payable on such Subordinated Debt or
such Senior Notes or (iii) makes the covenants, events of default or
remedies in such Sub Debt Documents or such Senior Notes Documents less
restrictive on the Borrower; or
(b) any acquisition agreement relating to any Permitted Acquisition.
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SECTION 7.2.13. Transactions with Affiliates. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into or cause or permit to
exist any arrangement, transaction or contract (including for the purchase,
lease or exchange of property or the rendering of services) with any of its
other Affiliates, unless such arrangement, transaction or contract (a) is on
fair and reasonable terms no less favorable to the Borrower or such Subsidiary
than it could obtain in an arm's-length transaction with a Person that is not an
Affiliate and (b) is of the kind which would be entered into by a prudent Person
in the position of the Borrower or such Subsidiary with a Person that is not one
of its Affiliates. The foregoing restriction does not limit and shall not apply
to agreements and transactions described in Item 7.2.13 of the Disclosure
Schedule.
SECTION 7.2.14. Restrictive Agreements, Etc. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into any agreement prohibiting
(a) the creation or assumption of any Lien upon its properties,
revenues or assets, whether now owned or hereafter acquired other than
license agreements entered into in the ordinary course of business where
the Borrower or any of its Subsidiaries is a licensee which agreement
expressly prohibits the creation of a Lien on the assets or properties
subject to such license agreement;
(b) the ability of any Obligor to amend or otherwise modify any Loan
Document; or
(c) the ability of any Subsidiary to make any payments, directly or
indirectly, to the Borrower, including by way of dividends, advances,
repayments of loans, reimbursements of management and other intercompany
charges, expenses and accruals or other returns on investments.
The foregoing prohibitions shall not apply to restrictions contained (i) in any
Loan Document, or (ii) in the case of clauses (a) and (c), any agreement of a
Foreign Subsidiary governing the Indebtedness permitted by clause (f)(ii) of
Section 7.2.2.
SECTION 7.2.15. Sale and Leaseback. The Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly enter into any
agreement or arrangement providing for the sale or transfer by it of any
property (now owned or hereafter acquired) to a Person and the subsequent lease
or rental of such property or other similar property from such Person.
SECTION 7.2.16. Limit on Rental Obligations. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into at any time any
arrangement which does not create a Capitalized Lease Liability and which
involves the leasing by the Borrower or any of its Subsidiaries from any lessor
of any real or personal property (or any interest therein), except arrangements
which, together with all other such arrangements which shall then be in effect,
will not require the payment of an aggregate amount of rentals by the Borrower
and its Subsidiaries in excess of (excluding escalations resulting from a rise
in the consumer price or similar index) 10% of gross revenues for the Borrower
and its Subsidiaries for any Fiscal Year.
SECTION 7.2.17. Changes to Fiscal Year; Accounting Method. The Borrower
will not, and will not permit any of its Subsidiaries to, change (a) its Fiscal
Year or (b) its method of accounting as set forth in Section 1.4.
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ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default. Each of the following events or
occurrences described in Section 8.1 shall constitute an "Event of Default".
SECTION 8.1.1. Non-Payment of Obligations. The Borrower shall default in
the payment or prepayment when due of
(a) any principal of or interest on any Term Loan, or any
Reimbursement Obligation or any deposit of cash for collateral purposes
pursuant to Section 2.6.5; or
(b) any interest on any Term Loan, any fee described in Article III or
any other monetary Obligation, and such default shall continue unremedied
for a period of three days for interest and five days for fees and all
other monetary Obligations after such amount was due.
SECTION 8.1.2. Breach of Warranty. Any representation or warranty of any
Obligor or the Personal Guarantor made or deemed to be made in any Loan Document
(including any certificates delivered pursuant to Article V) is or shall be
incorrect when made or deemed to have been made in any material respect.
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations. The
Borrower shall default in the due performance or observance of any of its
obligations under Section 7.1.1, Section 7.1.7 or Section 7.2 or any Obligor or
the Personal Guarantor shall default in the due performance or observance of its
obligations under (a) Article IV of the Subsidiary Guaranty or Article IV of the
Perlmutter Guaranty, to the extent such provisions correspond to Section 7.1.1,
Section 7.1.7 or Section 7.2, (b) Section 4,5,8,10,11,12,13,14,16,17,18 or 19 of
the Pledge and Security Agreement or (c) Section 3,6,7, or 8 of the Perlmutter
Security Agreement; provided, however, that if (i) such default under clause (b)
or (c) does not otherwise cause a Lien to cease to be a perfected first priority
Lien and (ii) such default under clause (b) or (c) is otherwise cured by such
Obligor or the Personal Guarantor within 10 days of the date of such default,
then, and only then, no Event of Default pursuant to clause (b) or (c) shall be
deemed to have occurred.
SECTION 8.1.4. Non-Performance of Other Covenants and Obligations. (a) A
default shall occur under Section 7.1.10 which shall not have been cured by the
Borrower or the Personal Guarantor pursuant to the Personal Guaranty within 10
days of the date of such default, or (b) any Obligor or the Personal Guarantor
shall default in the due performance and observance of any other agreement
contained in any Loan Document executed by it, and such default shall continue
unremedied for a period of 30 days after notice thereof shall have been given to
the Borrower by the Administrative Agent.
SECTION 8.1.5. Default on Other Indebtedness. A default shall occur in the
payment of any amount when due (subject to any applicable grace period), whether
by acceleration or otherwise, of any principal or stated amount of, or interest
or fees on, any Indebtedness (other than Indebtedness described in Section 8.1.1
but including in any event the Senior Notes and the Senior Notes Indenture) of
the Borrower or any Subsidiary Guarantor or the Personal Guarantor having a
principal or stated amount, individually or in the aggregate, in excess of
$1,000,000, or a default shall occur in the performance or observance of any
obligation or condition with respect to such Indebtedness if the
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effect of such default is to accelerate the maturity of any such Indebtedness or
such default shall continue unremedied for any applicable period of time
sufficient to permit the holder or holders of such Indebtedness, or any trustee
or agent for such holders, to cause or declare such Indebtedness to become due
and payable or to require such Indebtedness to be prepaid, redeemed, purchased
or defeased, or require an offer to purchase or defease such Indebtedness to be
made, prior to its expressed maturity.
SECTION 8.1.6. Judgments. Any judgment or order against the Borrower or any
Subsidiary Guarantor for the payment of money individually or in the aggregate
in excess of $1,000,000 (exclusive of any amounts fully covered by insurance
(less any applicable deductible) and as to which the insurer has acknowledged
its responsibility to cover such judgment or order) shall be rendered against
the Borrower or any of its Subsidiaries and such judgment shall not have been
vacated or discharged or stayed or bonded or a letter of credit posted pending
appeal within 30 days after the entry thereof or enforcement proceedings shall
have been commenced by any creditor upon such judgment or order.
SECTION 8.1.7. Pension Plans. Any of the following events shall occur with
respect to any Pension Plan
(a) the institution of any steps by the Borrower, any member of its
Controlled Group or any other Person to terminate a Pension Plan if, as a
result of such termination, the Borrower or any such member could be
required to make a contribution to such Pension Plan, or could reasonably
expect to incur a liability or obligation to such Pension Plan or any other
Person, in each case, in excess of $1,000,000; or
(b) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under section 302(f) of ERISA.
SECTION 8.1.8. Change in Control. Any Change in Control shall occur.
SECTION 8.1.9. Bankruptcy, Insolvency, Etc. The Borrower, any Subsidiary
Guarantor or the Personal Guarantor shall
(a) become Insolvent or generally fail to pay, or admit in writing its
inability or unwillingness generally to pay, debts as they become due;
(b) apply for, consent to, or acquiesce in the appointment of a
trustee, receiver, sequestrator or other custodian for any substantial part
of the property of any thereof, or make a general assignment for the
benefit of creditors;
(c) in the absence of such application, consent or acquiescence in or
permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for a substantial part of the property of
any thereof, and such trustee, receiver, sequestrator or other custodian
shall not be discharged within 60 days; provided that the Borrower, each
Subsidiary Guarantor and the Personal Guarantor hereby expressly authorizes
each Secured Party to appear in any court conducting any relevant
proceeding during such 60-day period to preserve, protect and defend their
rights under the Loan Documents;
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(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law or any dissolution, winding up or liquidation
proceeding, in respect thereof, and, if any such case or proceeding is not
commenced by the Borrower, any Subsidiary or the Personal Guarantor, such
case or proceeding shall be consented to or acquiesced in by the Borrower,
such Subsidiary Guarantor or the Personal Guarantor, as the case may be, or
shall result in the entry of an order for relief or shall remain for 60
days undismissed; provided that the Borrower, each Subsidiary Guarantor and
the Personal Guarantor hereby expressly authorizes each Secured Party to
appear in any court conducting any such case or proceeding during such
60-day period to preserve, protect and defend their rights under the Loan
Documents; or
(e) take any action authorizing, or in furtherance of, any of the
foregoing.
SECTION 8.1.10. Impairment of Security, Etc. Any Loan Document or any Lien
granted thereunder shall (except in accordance with its terms), in whole or in
part, terminate, cease to be effective or cease to be the legally valid, binding
and enforceable obligation of any Obligor or the Personal Guarantor party
thereto; any Obligor, the Personal Guarantor or any other party shall, directly
or indirectly, contest in any manner such effectiveness, validity, binding
nature or enforceability; or, except as permitted under any Loan Document, any
Lien securing any Obligation shall, in whole or in part, cease to be a perfected
first priority Lien.
SECTION 8.1.11. Failure of Subordination. Unless otherwise waived or
consented to by the Administrative Agent, the Lenders and the Issuers in
writing, the subordination provisions relating to any Subordinated Debt (the
"Subordination Provisions") shall fail to be enforceable by the Administrative
Agent, the Lenders and the Issuers in accordance with the terms thereof, or the
monetary Obligations shall fail to constitute "Senior Indebtedness" (or similar
term) referring to the Obligations; or the Borrower or any of its Subsidiaries
shall, directly or indirectly, disavow or contest in any manner (a) the
effectiveness, validity or enforceability of any of the Subordination
Provisions, (b) that the Subordination Provisions exist for the benefit of the
Administrative Agent, the Lenders and the Issuers or (c) that all payments of
principal of or premium and interest on the Subordinated Debt, or realized from
the liquidation of any property of any Obligor, shall be subject to any of such
Subordination Provisions.
SECTION 8.1.12. Loss of Material License or Royalty; Other Material
Contracts. Any Material Contract which is a license or royalty agreement of the
Borrower or any of its Subsidiaries shall be terminated or otherwise cancelled
due to the default thereunder of the Borrower or such Subsidiary and the
Administrative Agent determines in good faith that the loss of such Material
Contract would have a Material Adverse Effect.
SECTION 8.2. Action if Bankruptcy. If any Event of Default described in
clauses (a) through (d) of Section 8.1.9 with respect to the Borrower shall
occur, the Commitments (if not theretofore terminated) shall automatically
terminate and the outstanding principal amount of all outstanding Term Loans and
all other Obligations (including Reimbursement Obligations) shall automatically
be and become immediately due and payable, without notice or demand to any
Person and each Obligor shall automatically and immediately be obligated to Cash
Collateralize all Letter of Credit Outstandings.
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SECTION 8.3. Action if Other Event of Default. If any Event of Default
(other than any Event of Default described in clauses (a) through (d) of Section
8.1.9 with respect to the Borrower) shall occur for any reason, whether
voluntary or involuntary, and be continuing, the Administrative Agent, upon the
direction of the Required Lenders, shall by notice to the Borrower declare all
or any portion of the outstanding principal amount of the Term Loans and other
Obligations (including Reimbursement Obligations) to be due and payable and/or
the Commitments (if not theretofore terminated) to be terminated, whereupon the
full unpaid amount of such Term Loans and other Obligations which shall be so
declared due and payable shall be and become immediately due and payable,
without further notice, demand or presentment, and/or, as the case may be, the
Commitments shall terminate and the Borrower shall automatically and immediately
be obligated to Cash Collateralize all Letter of Credit Outstandings.
ARTICLE IX
THE ADMINISTRATIVE AGENT, ETC.
SECTION 9.1. Actions. Each Lender hereby appoints HSBC as its
Administrative Agent under and for purposes of each Loan Document. Each Lender
authorizes the Administrative Agent to act on behalf of such Lender under each
Loan Document and, in the absence of other written instructions from the
Required Lenders received from time to time by the Administrative Agent (with
respect to which the Administrative Agent agrees that it will comply, except as
otherwise provided in this Section or as otherwise advised by counsel in order
to avoid contravention of applicable law), to exercise such powers hereunder and
thereunder as are specifically delegated to or required of the Administrative
Agent by the terms hereof and thereof, together with such powers as may be
incidental thereto. Each Lender hereby indemnifies (which indemnity shall
survive any termination of this Agreement) the Administrative Agent and
Arranger, pro rata according to such Lender's proportionate Total Exposure
Amount, from and against any and all liabilities, obligations, losses, damages,
claims, costs or expenses of any kind or nature whatsoever which may at any time
be imposed on, incurred by, or asserted against, the Administrative Agent or the
Arranger in any way relating to or arising out of any Loan Document, (including
attorneys' fees), and as to which the Administrative Agent or the Arranger is
not reimbursed by the Borrower; provided, however, that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, claims, costs or expenses which are determined by a court of competent
jurisdiction in a final proceeding to have resulted from the Administrative
Agent's or the Arranger's gross negligence or wilful misconduct. The
Administrative Agent shall not be required to take any action under any Loan
Document, or to prosecute or defend any suit in respect of any Loan Document,
unless it is indemnified hereunder to its satisfaction. If any indemnity in
favor of the Administrative Agent shall be or become, in the Administrative
Agent's determination, inadequate, the Administrative Agent may call for
additional indemnification from the Lenders and cease to do the acts indemnified
against hereunder until such additional indemnity is given.
SECTION 9.2. Funding Reliance, Etc. Unless the Administrative Agent shall
have been notified in writing by any Lender by 3:00 p.m. on the Business Day
prior to a Borrowing that such Lender will not make available the amount which
would constitute its Percentage of such Borrowing on the date specified
therefor, the Administrative Agent may assume that such Lender has made such
amount available to the Administrative Agent and, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If and to the
extent that such Lender shall not have made such amount available to the
Administrative Agent, such Lender and the Borrower severally agree to repay the
Administrative Agent forthwith on demand such corresponding amount together with
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interest thereon, for each day from the date the Administrative Agent made such
amount available to the Borrower to the date such amount is repaid to the
Administrative Agent, at the interest rate applicable at the time to Term Loans
comprising such Borrowing (in the case of the Borrower) and (in the case of a
Lender), at the Federal Funds Rate (for the first two Business Days after which
such amount has not been repaid), and thereafter at the interest rate applicable
to Term Loans comprising such Borrowing.
SECTION 9.3. Exculpation. None of the Administrative Agent, the Arranger or
any of their directors, officers, employees or agents shall be liable to any
Secured Party for any action taken or omitted to be taken by it under any Loan
Document, or in connection therewith, except for its own wilful misconduct or
gross negligence, nor responsible for any recitals or warranties herein or
therein, nor for the effectiveness, enforceability, validity or due execution of
any Loan Document, nor for the creation, perfection or priority of any Liens
purported to be created by any of the Loan Documents, or the validity,
genuineness, enforceability, existence, value or sufficiency of any collateral
security, nor to make any inquiry respecting the performance by any Obligor or
the Personal Guarantor of its Obligations. Any such inquiry which may be made by
the Administrative Agent shall not obligate it to make any further inquiry or to
take any action. The Administrative Agent shall be entitled to rely upon advice
of counsel concerning legal matters and upon any notice, consent, certificate,
statement or writing which the Administrative Agent believes to be genuine and
to have been presented by a proper Person. None of the Administrative Agent, the
Arranger or any of their respective directors, officers, employees or agents
shall be responsible for or have any duty to ascertain, inquire into or verify
(a) any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder (other than a statement, warranty or
representation made by the Administrative Agent in writing), (b) the performance
or observance of any of the covenants or agreements of any Obligor or the
Personal Guarantor under the Loan Document, including, without limitation, any
agreement by an Obligor or the Personal Guarantor to furnish information
directly to each Lender, (c) the satisfaction of any condition specified in
Article V, expect receipt of items required to be delivered solely to the
Administrative Agent, (d) the existence or possible existence of any Default or
Event of Default, or (e) the financial condition of any Obligor or the Personal
Guarantor. Any such inquiry which may be made by the Administrative Agent or the
Issuer shall not obligate it to make any further inquiry or to take any action.
The Administrative Agent and the Issuer shall be entitled to rely upon advice of
counsel concerning legal matters and upon any notice, consent, certificate,
statement or writing which the Administrative Agent or the Issuer, as
applicable, believe to be genuine and to have been presented by a proper Person.
SECTION 9.4. Successor. The Administrative Agent may resign as such at any
time upon at least 30 days' prior notice to the Borrower and all Lenders. If the
Administrative Agent at any time shall resign, the Required Lenders may appoint
another Lender as a successor Administrative Agent which shall thereupon become
the Administrative Agent hereunder. If no successor Administrative Agent shall
have been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent's giving
notice of resignation, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent, which shall be one of the
Lenders or a commercial banking institution organized under the laws of the
United States (or any State thereof) or a United States branch or agency of a
commercial banking institution, and having a combined capital and surplus of at
least $250,000,000; provided, however, that if, such retiring Administrative
Agent is unable to find a commercial banking institution which is willing to
accept such appointment and which meets the qualifications set forth above, the
retiring Administrative Agent's resignation shall nevertheless
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thereupon become effective and the Lenders shall assume and perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Required Lenders appoint a successor as provided for above. Upon the acceptance
of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall be entitled to
receive from the retiring Administrative Agent such documents of transfer and
assignment as such successor Administrative Agent may reasonably request, and
shall thereupon succeed to and become vested with all rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under the Loan
Documents. After any retiring Administrative Agent's resignation hereunder as
the Administrative Agent, the provisions of this Article shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Administrative Agent under the Loan Documents, and Section 10.3 and Section 10.4
shall continue to inure to its benefit.
SECTION 9.5. Term Loans by HSBC. HSBC shall have the same rights and powers
with respect to (a) the Credit Extensions made by it or any of its Affiliates,
and (b) the Term Notes held by it or any of its Affiliates as any other Lender
and may exercise the same as if it were not the Administrative Agent. HSBC and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of business with the Borrower or any Subsidiary or Affiliate of the
Borrower as if HSBC were not the Administrative Agent hereunder.
SECTION 9.6. Credit Decisions. Each Lender acknowledges that it has,
independently of the Administrative Agent and each other Lender, and based on
such Lender's review of the financial information of the Borrower, the Loan
Documents (the terms and provisions of which being satisfactory to such Lender)
and such other documents, information and investigations as such Lender has
deemed appropriate, made its own credit decision to extend its Commitments. Each
Lender also acknowledges that it will, independently of the Administrative Agent
and each other Lender, and based on such other documents, information and
investigations as it shall deem appropriate at any time, continue to make its
own credit decisions as to exercising or not exercising from time to time any
rights and privileges available to it under the Loan Documents.
SECTION 9.7. Copies, Etc. The Administrative Agent shall give prompt notice
to each Lender of each notice or request required to be given to the
Administrative Agent by the Borrower pursuant to the terms of the Loan Documents
(unless concurrently delivered to the Lenders by the Borrower). The
Administrative Agent will distribute to each Lender each document or instrument
received (and copies of all other communications received), in each case from
the Borrower for distribution to the Lenders by the Administrative Agent in
accordance with the terms of the Loan Documents.
SECTION 9.8. Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely upon any certification, notice or other communication
(including any thereof by telephone, telecopy, telegram or cable) believed by it
to be genuine and correct and to have been signed or sent by or on behalf of the
proper Person, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Administrative Agent. As to any
matters not expressly provided for by the Loan Documents, the Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, thereunder in accordance with instructions given by the Required Lenders
or all of the Lenders as is required in such circumstance, and such instructions
of such Lenders and any action taken or failure to act pursuant thereto shall be
binding on all Secured Parties. For purposes of applying amounts in accordance
with this Section, the Administrative Agent shall be entitled to rely upon any
Secured Party that has entered into a Rate
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Protection Agreement with any Obligor for a determination (which such Secured
Party agrees to provide or cause to be provided upon request of the
Administrative Agent) of the outstanding Obligations owed to such Secured Party
under any Rate Protection Agreement. Unless it has actual knowledge evidenced by
way of written notice from any such Secured Party and the Borrower to the
contrary, the Administrative Agent, in acting in such capacity under the Loan
Documents, shall be entitled to assume that no Rate Protection Agreements or
Obligations in respect thereof are in existence or outstanding between any
Secured Party and any Obligor.
SECTION 9.9. Defaults. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default unless the Administrative
Agent has received a written notice from a Lender or the Borrower specifying
such Default and stating that such notice is a "Notice of Default". In the event
that the Administrative Agent receives such a notice of the occurrence of a
Default, the Administrative Agent shall give prompt notice thereof to the
Lenders. The Administrative Agent shall (subject to Section 10.1) take such
action with respect to such Default as shall be directed by the Required
Lenders; provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default as it shall deem advisable in the best interest of the Secured
Parties except to the extent that this Agreement expressly requires that such
action be taken, or not be taken, only with the consent or upon the
authorization of the Required Lenders or all Lenders.
SECTION 9.10. Arranger. The parties acknowledge and agree that the Arranger
shall be credited as, and may publicize that it is, the Arranger. Without in any
respect limiting the rights, privileges, powers, immunities, indemnities and
other benefits granted to the Secured Parties, the parties further acknowledge
and agree that (a) the Arranger shall not have by reason of its designation as
such, any power, duty, responsibility or liability whatsoever under this
Agreement or any Loan Document or in respect of financing the transaction
contemplated hereby and (b) the Arranger shall nevertheless be entitled to each
of the protections and immunities granted to the Administrative Agent under
Sections 9.3, 9.5, 9.6 and 9.8 (with respect to the first sentence thereof) as
fully as if it were expressly referred to therein.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Waivers, Amendments, Etc. The provisions of each Loan
Document may from time to time be amended, modified or waived, if such
amendment, modification or waiver is in writing and consented to by the Borrower
and the Required Lenders; provided, however, that no such amendment,
modification or waiver shall:
(a) modify this Section without the consent of all Lenders;
(b) increase the aggregate amount of any Credit Extensions required to
be made by a Lender pursuant to its Commitments, extend the final Term Loan
Commitment Termination Date of Credit Extensions made (or participated in)
by a Lender or extend the final Stated Maturity Date for any Lender's Loan,
in each case without the consent of such Lender (it being agreed, however,
that any vote to rescind any acceleration made pursuant to Section 8.2 and
Section 8.3 of amounts owing with respect to the Term Loans and other
Obligations shall only require the vote of the Required Lenders);
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(c) reduce the principal amount of or rate of interest on any Lender's
Loan, reduce any fees described in Article III payable to any Lender or
extend the date on which interest or fees are payable in respect of such
Lender's Term Loans, in each case without the consent of such Lender
directly affected thereby;
(d) reduce the percentage set forth in the definition of "Required
Lenders" or modify any requirement hereunder that any particular action be
taken by all Lenders without the consent of all Lenders;
(e) increase the Stated Amount of any Letter of Credit unless
consented to by the Issuer of such Letter of Credit;
(f) except as otherwise expressly provided in a Loan Document
(including as to permitted Dispositions and Section 7.2.10), release (i)
the Borrower from its Obligations under the Loan Documents or any Guarantor
from its obligations under a Guaranty or (ii) all or substantially all of
the collateral under the Loan Documents, in each case without the consent
of all Lenders; or
(g) affect adversely the interests, rights or obligations of the
Administrative Agent (in its capacity as the Administrative Agent) or any
Issuer (in its capacity as Issuer), unless consented to by the
Administrative Agent or such Issuer, as the case may be.
No failure or delay on the part of any Secured Party in exercising any power or
right under any Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power or right preclude any other or
further exercise thereof or the exercise of any other power or right. No notice
to or demand on any Obligor or the Personal Guarantor in any case shall entitle
it to any notice or demand in similar or other circumstances. No waiver or
approval by any Secured Party under any Loan Document shall, except as may be
otherwise stated in such waiver or approval, be applicable to subsequent
transactions. No waiver or approval hereunder shall require any similar or
dissimilar waiver or approval thereafter to be granted hereunder. All remedies
shall be cumulative, and not exclusive of any and all other remedies, whether
provided pursuant to the Loan Documents or at law or otherwise.
SECTION 10.2. Notices; Time. All notices and other communications provided
under each Loan Document shall be in writing or by facsimile and addressed,
delivered or transmitted, if to the Borrower or the Administrative Agent, at its
address or facsimile number set forth below its signature in this Agreement, and
if to a Lender or Issuer to the applicable Person at its address or facsimile
number set forth on Schedule II hereto or set forth in the Lender Assignment
Agreement, or at such other address or facsimile number as may be designated by
such party in a notice to the other parties. Any notice, if mailed and properly
addressed with postage prepaid or if properly addressed and sent by pre-paid
courier service, shall be deemed given when received; any notice, if transmitted
by facsimile, shall be deemed given when the confirmation of transmission
thereof is received by the transmitter. The parties hereto agree that delivery
of an executed counterpart of a signature page to this Agreement and each other
Loan Document by facsimile shall be effective as delivery of an original
executed counterpart of this Agreement or such other Loan Document. Unless
otherwise indicated, all references to the time of a day in a Loan Document
shall refer to New York City time.
SECTION 10.3. Payment of Costs and Expenses. The Borrower agrees to pay on
demand all out-of-pocket expenses of the Administrative Agent (including the
reasonable fees, out-of-pocket
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expenses and other charges of Shearman & Sterling, counsel to the Administrative
Agent and of local counsel, if any, who may be retained by or on behalf of the
Administrative Agent) in connection with
(a) the negotiation, preparation, execution, delivery and ongoing
administration (including analyzing and/or providing legal advice) of each
Loan Document, including schedules and exhibits, and any amendments,
waivers, consents, supplements or other modifications to any Loan Document
as may from time to time hereafter be required, whether or not the
transactions contemplated hereby or thereby are consummated;
(b) the filing, recording, refiling and rerecording of any Loan
Document (including the Filing Statements) and all amendments, supplements,
amendment and restatements and other modifications to any thereof, searches
made following the Effective Date in jurisdictions where Filing Statements
(or other documents evidencing Liens in favor of the Secured Parties) have
been recorded and any and all other documents or instruments of further
assurance required to be filed or recorded by the terms of any Loan
Document;
(c) the preparation and review of the form of any document or
instrument relevant to any Loan Document; and
(d) the syndication of the Term Loans.
The Borrower further agrees to pay, and to save each Secured Party and the
Arranger harmless from all liability for, any stamp or other taxes which may be
payable in connection with the execution or delivery of each Loan Document, the
Credit Extensions or the issuance of the Term Notes. The Borrower also agrees to
reimburse each Secured Party and the Arranger upon demand for all reasonable
out-of-pocket expenses (including reasonable attorneys' fees and legal expenses
of counsel to each of them) in connection with (x) the negotiation of any
restructuring or "work-out" with the Borrower, whether or not consummated, of
any Obligations and (y) the enforcement of any Obligations.
SECTION 10.4. Indemnification. In consideration of the execution and
delivery of this Agreement and the financing arrangements contemplated hereby,
the Borrower hereby indemnifies, exonerates and holds each Secured Party and the
Arranger and each of their respective officers, directors, employees and agents
(collectively, the "Indemnified Parties") free and harmless from and against any
and all actions, causes of action, suits, losses, costs, liabilities and
damages, and expenses incurred in connection therewith (irrespective of whether
any such Indemnified Party is a party to the action for which indemnification
hereunder is sought), including reasonable attorneys' fees and disbursements,
whether incurred in connection with actions between or among the parties hereto
or the parties hereto and third parties (collectively, the "Indemnified
Liabilities"), incurred by the Indemnified Parties or any of them as a result
of, or arising out of, or relating to
(a) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Credit Extension,
including all Indemnified Liabilities arising in connection with the Senior
Notes Purchase Transactions;
(b) the entering into and performance of any Loan Document by any of
the Indemnified Parties (including any action brought by or on behalf of
the Borrower as the result of any determination by the Required Lenders
pursuant to Article V not to fund any
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Credit Extension, provided that any such action is resolved in favor of
such Indemnified Party);
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by any Obligor or any Subsidiary
thereof of all or any portion of the Capital Securities or assets of any
Person, whether or not an Indemnified Party is party thereto;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the Release by any Obligor or any
Subsidiary thereof of any Hazardous Material;
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by any Obligor or any Subsidiary thereof of any
Hazardous Material (including any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under any Environmental Law),
regardless of whether caused by, or within the control of, such Obligor or
Subsidiary; or
(f) each Lender's Environmental Liability (the indemnification herein
shall survive repayment of the Obligations and any transfer of the property
of any Obligor or its Subsidiaries by foreclosure or by a deed in lieu of
foreclosure for any Lender's Environmental Liability, regardless of whether
caused by, or within the control of, such Obligor or such Subsidiary);
except for Indemnified Liabilities arising for the account of a particular
Indemnified Party by reason of the relevant Indemnified Party's gross negligence
or wilful misconduct. Each Obligor and its successors and assigns hereby waive,
release and agree not to make any claim or bring any cost recovery action
against, any Indemnified Party under CERCLA or any state equivalent, or any
similar law now existing or hereafter enacted. It is expressly understood and
agreed that to the extent that any Indemnified Party is strictly liable under
any Environmental Laws, each Obligor's obligation to such Indemnified Party
under this indemnity shall likewise be without regard to fault on the part of
any Obligor with respect to the violation or condition which results in
liability of an Indemnified Party. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, each Obligor agrees to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
SECTION 10.5. Survival. The obligations of the Borrower under Sections 4.3,
4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders under Section
9.1, shall in each case survive any assignment from one Lender to another (in
the case of Sections 10.3 and 10.4) and the occurrence of the Termination Date,
and the provisions of the third and fourth sentences of the third paragraph of
the Commitment Letter dated September 28, 2001 between the Borrower and the
Arranger shall survive the execution and delivery of this Agreement (the
"Surviving Provisions"). The representations and warranties made by each Obligor
and the Personal Guarantor in each Loan Document shall survive the execution and
delivery of such Loan Document.
SECTION 10.6. Severability. Any provision of any Loan Document which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of
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such Loan Document or affecting the validity or enforceability of such provision
in any other jurisdiction.
SECTION 10.7. Headings. The various headings of each Loan Document are
inserted for convenience only and shall not affect the meaning or interpretation
of such Loan Document or any provisions thereof.
SECTION 10.8. Execution in Counterparts, Effectiveness, Etc. This Agreement
may be executed by the parties hereto in several counterparts, each of which
shall be an original and all of which shall constitute together but one and the
same agreement. This Agreement shall become effective when counterparts hereof
executed on behalf of the Borrower, the Administrative Agent and each Lender (or
notice thereof satisfactory to the Administrative Agent), shall have been
received by the Administrative Agent.
SECTION 10.9. Governing Law; Entire Agreement. EACH LOAN DOCUMENT (OTHER
THAN THE LETTERS OF CREDIT, TO THE EXTENT SPECIFIED BELOW AND EXCEPT AS
OTHERWISE EXPRESSLY SET FORTH IN A LOAN DOCUMENT) WILL EACH BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK). EACH LETTER OF CREDIT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN
SUCH LETTER OF CREDIT, OR IF NO LAWS OR RULES ARE DESIGNATED, THE INTERNATIONAL
STANDBY PRACTICES (ISP98--INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NUMBER
590 (THE "ISP RULES")) AND, AS TO MATTERS NOT GOVERNED BY THE ISP RULES, THE
INTERNAL LAWS OF THE STATE OF NEW YORK. The Loan Documents and the Surviving
Provisions constitute the entire understanding among the parties hereto with
respect to the subject matter thereof and supersede any prior agreements,
written or oral, with respect thereto.
SECTION 10.10. Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that the Borrower may not assign or
transfer its rights or obligations hereunder without the consent of all Lenders.
SECTION 10.11. Sale and Transfer of Credit Extensions; Participations in
Credit Extensions. Each Lender may assign, or sell participations in, its Term
Loans, Letters of Credit and Commitments to one or more other Persons in
accordance with the terms set forth below.
SECTION 10.11.1. Assignments. From and after the earlier of the public
disclosure of this Agreement or the contemplated Senior Notes Purchase
Transactions and January 31, 2002, any Lender, pursuant to a Lender Assignment
Agreement, may at any time assign and delegate to one or more Eligible Assignees
(each Person described in either of the foregoing clauses as being the Person to
whom such assignment and delegation is to be made, being hereinafter referred to
as an "Assignee Lender"), all or any fraction of such Lender's Term Loans,
Letter of Credit Outstandings and Commitments in a minimum aggregate amount of
$5,000,000 (or, if less, the entire remaining amount of such Lender's Term
Loans, Letter of Credit Outstandings and Commitments). Each Obligor, the
Personal Guarantor and the Administrative Agent shall be entitled to continue to
deal
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solely and directly with a Lender in connection with the interests so assigned
and delegated to an Assignee Lender until
(a) notice of such assignment and delegation, together with (i)
payment instructions, (ii) the Internal Revenue Service forms or other
statements contemplated or required to be delivered pursuant to Section
4.6, if applicable, and (iii) addresses and related information with
respect to such Assignee Lender, shall have been delivered to the Borrower
and the Administrative Agent by such assignor Lender and such Assignee
Lender;
(b) such Assignee Lender shall have executed and delivered to the
Borrower and the Administrative Agent a Lender Assignment Agreement,
accepted by the Administrative Agent; and
(c) the processing fees described below shall have been paid.
From and after the date that the Administrative Agent accepts such Lender
Assignment Agreement and such assignment is registered with the Register
pursuant to clause (b) of Section 2.7, (x) the Assignee Lender thereunder shall
be deemed automatically to have become a party hereto and to the extent that
rights and obligations hereunder have been assigned and delegated to such
Assignee Lender in connection with such Lender Assignment Agreement, shall have
the rights and obligations of a Lender under the Loan Documents, and (y) the
assignor Lender, to the extent that rights and obligations hereunder have been
assigned and delegated by it in connection with such Lender Assignment
Agreement, shall be released from its obligations hereunder and under the other
Loan Documents. Within five Business Days after its receipt of notice that the
Administrative Agent has received and accepted an executed Lender Assignment
Agreement (and if requested by the Assignee Lender), but subject to clause (c),
the Borrower shall execute and deliver to the Administrative Agent (for delivery
to the relevant Assignee Lender) a new Term Note evidencing such Assignee
Lender's assigned Term Loans and Commitments and, if the assignor Lender has
retained Term Loans and Commitments hereunder (and if requested by such Lender),
a replacement Term Note in the principal amount of the Term Loans and
Commitments retained by the assignor Lender hereunder (such Term Note to be in
exchange for, but not in payment of, the Term Note then held by such assignor
Lender). Each such Term Note shall be dated the date of the predecessor Term
Note. The assignor Lender shall mark each predecessor Term Note "exchanged" and
deliver each of them to the Borrower. Accrued interest on that part of each
predecessor Term Note evidenced by a new Term Note, and accrued fees, shall be
paid as provided in the Lender Assignment Agreement. Accrued interest on that
part of each predecessor Term Note evidenced by a replacement Term Note shall be
paid to the assignor Lender. Accrued interest and accrued fees shall be paid at
the same time or times provided in the predecessor Term Note and in this
Agreement. Such assignor Lender or such Assignee Lender must also pay a
processing fee in the amount of $3,500 to the Administrative Agent upon delivery
of any Lender Assignment Agreement; provided that no such processing fee shall
be required in connection with any such assignment and delegation (i) by a
Lender to its Affiliate or to a Related Fund, (ii) by a Lender to a Federal
Reserve Bank (or, if such Lender is an investment fund, to the trustee under the
indenture to which such fund is a party in support of its obligations to such
trustee) or (iii) if the non-payment of the processing fee is otherwise
consented to in writing by the Administrative Agent. Any attempted assignment
and delegation not made in accordance with this Section shall be null and void.
Notwithstanding anything to the contrary set forth above, any Lender may
(without requesting the consent of the Borrower or the Administrative Agent)
pledge its Term Loans to a Federal Reserve Bank in support of borrowings made by
such Lender from such Federal Reserve Bank.
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In the event that S&P or Moody's shall, after the date that any Person
becomes a Lender, downgrade the long-term certificate of deposit ratings of such
Lender, and the resulting ratings shall be below BBB- or Baa3, respectively, or
the equivalent, then the Borrower and the Issuer shall each have the right, but
not the obligation, upon notice to such Lender and the Administrative Agent, to
replace such Lender with a financial institution (a "Replacement Lender")
acceptable to the Borrower and the Administrative Agent (such consents not to be
unreasonably withheld or delayed; provided that no such consent shall be
required if the Replacement Lender is an existing Lender), and upon any such
downgrading of any Lender's long-term certificate of deposit rating, each such
Lender hereby agrees to transfer and assign (in accordance with Section 10.11.1)
all of its Commitments and other rights and obligations under the Loan Documents
(including Reimbursement Obligations) to such Replacement Lender; provided,
however, that (i) such assignment shall be without recourse, representation or
warranty (other than that such Lender owns the Commitments, Term Loans and Term
Notes being assigned, free and clear of any Liens) and (ii) the purchase price
paid by the Replacement Lender shall be in the amount of such Lender's Term
Loans and its Percentage of outstanding Reimbursement Obligations, together with
all accrued and unpaid interest and fees in respect thereof, plus all other
amounts (other than the amounts (if any) demanded and unreimbursed under
Sections 4.2, 4.3, 4.5 and 4.6, which shall be paid by the Borrower), owing to
such Lender hereunder. Upon any such termination or assignment, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of any provisions of this Agreement which by their terms survive the
termination of this Agreement.
SECTION 10.11.2. Participations. Any Lender may sell to one or more
commercial banks or other Persons (each of such commercial banks and other
Persons being herein called a "Participant") participating interests in any of
the Term Loans, Commitments, or other interests of such Lender hereunder;
provided, however, that
(a) no participation contemplated in this Section shall relieve such
Lender from its Commitments or its other obligations under any Loan
Document;
(b) such Lender shall remain solely responsible for the performance of
its Commitments and such other obligations;
(c) each Obligor, the Personal Guarantor and the Administrative Agent
shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under each Loan Document;
(d) no Participant, unless such Participant is an Affiliate of such
Lender or is itself a Lender, shall be entitled to require such Lender to
take or refrain from taking any action under any Loan Document, except that
such Lender may agree with any Participant that such Lender will not,
without such Participant's consent, take any actions of the type described
in clause (a), (b), (c) or (f) of Section 10.1 with respect to Obligations
participated in by such Participant;
(e) the Borrower shall not be required to pay any amount under this
Agreement that is greater than the amount which it would have been required
to pay had no participating interest been sold;
(f) such Lender shall, as agent of the Borrower solely for the purpose
of this Section, record in book entries maintained by such Lender the name
of its Participants and
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the amount such Participant's are entitled to receive in respect of any
participating interests sold pursuant to this Section; and
(g) such participating interest shall be in a minimum aggregate amount
of $5,000,000 (or, if less, the entire remaining amount of such Lender's
Term Loans, Commitments, or other interests of such Lender).
The Borrower acknowledges and agrees that each Participant, for purposes of
Sections 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 7.1.1, 10.3 and 10.4, shall be considered
a Lender. Each Participant shall only be indemnified for increased costs
pursuant to Section 4.3, 4.5 or 4.6 if and to the extent that the Lender which
sold such participating interest to such Participant concurrently is entitled to
make, and does make, a claim on the Borrower for such increased costs. Any
Lender that sells a participating interest in any Term Loan, Commitment or other
interest to a Participant under this Section shall (x) as agent for the Borrower
solely for purposes of this Section 10.11.2, record in book entries maintained
by such Lender, the name and amount of the participating interest of each
Participant entitled to receive payments in respect of such participating
interest, and (y) indemnify and hold harmless the Borrower and the
Administrative Agent from and against any taxes, penalties, interest or other
costs or losses (including reasonable attorneys' fees and expenses) incurred or
payable by the Borrower or the Administrative Agent as a result of the failure
of the Borrower or the Administrative Agent to comply with its obligations to
deduct or withhold any Taxes from any payments made pursuant to this Agreement
to such Lender or the Administrative Agent, as the case may be, which Taxes
would not have been incurred or payable if such Participant had been a Non-U.S.
Lender that was entitled to deliver to the Borrower, the Administrative Agent or
such Lender, and did in fact so deliver, a duly completed and valid Form W-8BEN
or W-8ECI (or applicable successor form) entitling such Participant to receive
payments under this Agreement without deduction or withholding of any United
States federal taxes.
SECTION 10.12. Other Transactions. Nothing contained herein shall preclude
the Administrative Agent, the Issuer or any other Lender from engaging in any
transaction, in addition to those contemplated by the Loan Documents, with the
Borrower or any of its Affiliates in which the Borrower or such Affiliate is not
restricted hereby from engaging with any other Person.
SECTION 10.13. Certain Collateral and Other Matters; Rate Protection
Agreements. The Administrative Agent is authorized on behalf of all the Lenders,
without the necessity of any notice to or further consent from the Lenders, from
time to time to take any action with respect to any collateral security or the
Loan Documents which may be necessary to perfect and maintain perfected the
security interest in and Liens upon the collateral security granted pursuant to
the Loan Documents. In addition:
(a) the Lenders irrevocably authorize the Administrative Agent to
release any security interest or Lien granted to or held by the
Administrative Agent upon any real or personal collateral and satisfy of
record any mortgage (in which case the Lenders hereby authorize the
Administrative Agent to execute, and the Administrative Agent agrees, if
requested by the Borrower in writing and at the Borrower's sole expense, to
execute, reasonable releases (including UCC-3 termination statements and
satisfaction of the Mortgages, as may be applicable) in connection with
this Agreement) (i) on the Termination Date; (ii) constituting real and
personal property sold or to be sold or disposed of as part of or in
connection with any Disposition (including any Permitted Disposition or a
Permitted Sale and Leaseback Transaction) made in compliance with the terms
of this Agreement;
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(iii) constituting property in which the Borrower or any Subsidiary of the
Borrower owned no interest at the time the security interest and/or Lien
was granted or at any time thereafter; (iv) constituting property leased to
the Borrower or any Subsidiary of the Borrower under a lease which has
expired or been terminated in a transaction permitted under this Agreement
or is about to expire and which has not been, and is not intended by the
Borrower or such Subsidiary to be, renewed or extended; (v) consisting of
an instrument evidencing Indebtedness or other debt instrument, if the
Indebtedness evidenced thereby has been paid in full; or (vi) if approved,
authorized or ratified in writing by the Required Lenders or, if required
by Section 10.1, each Lender. Upon request by the Administrative Agent at
any time, each Lender will confirm in writing the Administrative Agent's
authority to release particular types or items of collateral pursuant to
this Section 10.13; and
(b) each Lender which enters into arrangements with the Borrower in
respect of Rate Protection Agreements hereby agrees to supply the
Administrative Agent in writing on each Quarterly Payment Date with the
amount of any termination obligations of the Borrower thereunder and any
net payments owing by the Borrower thereunder.
SECTION 10.14. Forum Selection and Consent to Jurisdiction. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, ANY LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE LENDERS, ANY ISSUER OR
THE BORROWER IN CONNECTION HEREWITH OR THEREWITH MAY BE BROUGHT AND MAINTAINED
IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE BORROWER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR NOTICES
SPECIFIED IN SECTION 10.2. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR
HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED
BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS.
SECTION 10.15. Waiver of Jury Trial. THE ADMINISTRATIVE AGENT, EACH LENDER,
THE ISSUER AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE TO THE FULLEST EXTENT
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PERMITTED BY LAW ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, EACH
LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, SUCH LENDER, THE ISSUER
OR THE BORROWER IN CONNECTION THEREWITH. THE BORROWER ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND
EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT, EACH
LENDER AND THE ISSUER ENTERING INTO THE LOAN DOCUMENTS.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
MARVEL ENTERPRISES, INC.
By /s/ Allen Lipson
------------------------------
Title: Executive Vice President
Address: 10 E. 40th Street
9th Floor
New York, New York 10018
Facsimile No.: (917) 472-2244
Attention: Allen S. Lipson
HSBC BANK USA,
as the Administrative Agent
By /s/ Vivek Khanna
----------------------------------
Title: Vice President
Address: 452 Fifth Avenue
New York, New York 10018
Facsimile No.: (212) 525-5048
Attention: Paul Harrington
<PAGE>
LENDERS
-------
HSBC BANK USA, as Lender
By /s/ Vivek Khanna
----------------------------------
Title: Vice President
<PAGE>
SCHEDULE I
DISCLOSURE SCHEDULE TO CREDIT AGREEMENT
ITEM 6.7. Litigation.
ITEM 6.8. Existing Subsidiaries.
ITEM 6.11. Employee Benefit Plans.
ITEM 6.12. Environmental Matters.
ITEM 6.18 Compliance with Laws.
ITEM 6.21 Intellectual Property.
ITEM 7.2.2(b) Indebtedness to be Paid.
CREDITOR OUTSTANDING PRINCIPAL AMOUNT
-------- ----------------------------
ITEM 7.2.3(c) Ongoing Liens.
ITEM 7.2.5(a) Ongoing Investments
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE II
PERCENTAGES;
LIBOR OFFICE;
DOMESTIC OFFICE
---------------
PERCENTAGES
-----------
NAME AND NOTICE DOMESTIC LC PARTICIPATION TERM LOAN
ADDRESS OF LENDER LIBO OFFICE OFFICE COMMITMENT COMMITMENT
----------------- ----------- -------- ---------------- ----------
<S> <C> <C> <C> <C>
</TABLE>
<PAGE>
SCHEDULE III
CAPITALIZATION AND OWNERSHIP