AMENDED AND RESTATED
LOAN AGREEMENT
among
CSS INDUSTRIES, INC.
and
CSS MANAGEMENT LLC,
as Borrowers
THE LENDING INSTITUTIONS LISTED HEREIN,
PNC BANK, NATIONAL ASSOCIATION,
as Administrative Agent,
PNC CAPITAL MARKETS, INC.,
as Lead Arranger,
and
CITIZENS BANK OF PENNSYLVANIA,
FLEET NATIONAL BANK, and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Managing Agents
DATED AS OF APRIL 23, 2004
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS AND INTERPRETATION................................................................1
1.1 Terms Defined.................................................................................1
1.2 Accounting Principles........................................................................18
SECTION 2. THE LOAN.....................................................................................18
2.1 Revolving Line of Credit.....................................................................18
2.2 Letters of Credit............................................................................19
2.3 Voluntary Reduction or Increase of Commitment................................................24
2.4 Advances, Conversions, Renewals and Payments.................................................25
2.5 Interest.....................................................................................28
2.6 Fees.........................................................................................30
2.7 Prepayments..................................................................................31
2.8 Use of Proceeds..............................................................................32
2.9 Special Provisions Governing LIBOR Based Rate Advances.......................................32
2.10 Capital Requirements, Etc....................................................................35
2.11 Mandatory Prepayments/Commitment Reductions..................................................36
2.12 Net Payments.................................................................................37
2.13 Maturity Date Extension......................................................................38
2.14 Change of Lending Office.....................................................................39
2.15 Replacement of a Lender in Certain Circumstances.............................................39
2.16 Borrowers' Representative....................................................................39
SECTION 3. EFFECTIVENESS AND CONDITIONS PRECEDENT TO ADVANCES...........................................40
3.1 Conditions Precedent to Effectiveness........................................................40
3.2 Effective Date; Transitional Arrangements....................................................43
3.3 Conditions Precedent to all Advances.........................................................43
3.4 Waiver of Rights.............................................................................45
3.5 Delivery of Documents........................................................................45
SECTION 4. REPRESENTATIONS AND WARRANTIES...............................................................45
4.1 Corporate Organization and Validity..........................................................45
4.2 Places of Business...........................................................................46
4.3 Pending Litigation...........................................................................46
4.4 Title to Properties..........................................................................46
4.5 Governmental Consent.........................................................................46
4.6 Taxes........................................................................................46
4.7 Financial Statements.........................................................................47
4.8 Full Disclosure..............................................................................47
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4.9 Subsidiaries.................................................................................47
4.10 Guarantees, Indebtedness, etc................................................................47
4.11 Government Regulations, etc..................................................................48
4.12 Business Interruptions.......................................................................49
4.13 Names........................................................................................49
4.14 Other Associations...........................................................................50
4.15 Environmental Matters........................................................................50
4.16 Regulation O.................................................................................52
4.17 Capital Stock................................................................................52
4.18 Solvency.....................................................................................52
4.19 Interrelatedness of the Borrower and the Guarantors..........................................52
4.20 Anti-Terrorism Laws..........................................................................52
SECTION 5. AFFIRMATIVE COVENANTS........................................................................53
5.1 Payment of Taxes and Claims..................................................................53
5.2 Maintenance of Properties and Corporate Existence............................................54
5.3 Litigation...................................................................................55
5.4 Taxes........................................................................................55
5.5 Employee Benefit Plans.......................................................................55
5.6 Financial and Business Information...........................................................56
5.7 Officers' Certificates.......................................................................57
5.8 Inspection...................................................................................58
5.9 Tax Returns and Reports......................................................................58
5.10 Information to Participants and Assignees....................................................58
5.11 Material Adverse Developments................................................................58
5.12 Additional Parties; Release of Certain Obligations...........................................59
5.13 Performance of Obligations...................................................................59
5.14 Further Assurances...........................................................................60
5.15 Evidence of Intercompany Indebtedness........................................................60
5.16 Tax Shelter Regulations......................................................................60
SECTION 6. NEGATIVE COVENANTS...........................................................................60
6.1 Mergers......................................................................................61
6.2 Acquisitions.................................................................................61
6.3 Liens and Encumbrances.......................................................................62
6.4 Transactions With Affiliates or Subsidiaries.................................................63
6.5 Guarantees...................................................................................63
6.6 Dividends and Redemptions....................................................................64
6.7 Loans and Investments........................................................................64
6.8 Amendment or Waivers of Certain Documents....................................................65
6.9 Sale and Lease-Backs.........................................................................65
6.10 Business Conducted...........................................................................66
6.11 Indebtedness.................................................................................66
6.12 Restrictions on Fundamental Changes; Asset Sales.............................................66
6.13 Agreements Regarding Dividends...............................................................67
6.14 Miscellaneous Covenants......................................................................67
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SECTION 7. FINANCIAL COVENANTS..........................................................................68
7.1 Fixed Charge Coverage Ratio..................................................................68
7.2 Minimum Consolidated Net Worth...............................................................68
7.3 Ratio of Consolidated Funded Debt to Consolidated Capitalization.............................68
7.4 Consolidated Capital Expenditures............................................................68
SECTION 8. DEFAULT......................................................................................68
8.1 Events of Default............................................................................68
8.2 Rights and Remedies on Default...............................................................71
8.3 Nature of Remedies...........................................................................72
8.4 Set-Off......................................................................................72
SECTION 9. THE ADMINISTRATIVE AGENT.....................................................................72
9.1 Appointment and Authorization................................................................72
9.2 General Immunity.............................................................................73
9.3 Consultation with Counsel....................................................................73
9.4 Documents....................................................................................73
9.5 Rights as a Lender...........................................................................73
9.6 Responsibility of the Administrative Agent...................................................73
9.7 Collections and Disbursements................................................................74
9.8 Indemnification..............................................................................75
9.9 Expenses.....................................................................................76
9.10 No Reliance..................................................................................76
9.11 Reporting....................................................................................76
9.12 Resignation of the Administrative Agent......................................................76
9.13 Action on Instructions of Lenders............................................................77
9.14 Several Obligations..........................................................................77
9.15 Amendments...................................................................................77
9.16 Notice of Default............................................................................78
SECTION 10. MISCELLANEOUS................................................................................78
10.1 GOVERNING LAW................................................................................78
10.2 Integrated Agreement.........................................................................79
10.3 Omission or Delay Not Waiver.................................................................79
10.4 Time.........................................................................................79
10.5 Expenses of the Administrative Agent and Lenders.............................................79
10.6 Brokerage....................................................................................79
10.7 Notices; Lending Offices.....................................................................80
10.8 Headings.....................................................................................81
10.9 Survival.....................................................................................81
10.10 Successors and Assigns.......................................................................82
10.11 Counterparts.................................................................................84
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10.12 Modification.................................................................................84
10.13 Signatories..................................................................................84
10.14 Third Parties................................................................................84
10.15 Indemnification..............................................................................85
10.16 Discharge of Taxes, the Borrowers' Obligations, Etc..........................................86
10.17 Withholding and Other Tax Liabilities........................................................86
10.18 Submission To Jurisdiction; Waivers..........................................................87
10.19 Waivers......................................................................................87
10.20 Severability.................................................................................88
10.21 Independence of Representations, Warranties and Covenants....................................88
10.22 Obligations Several; Independent Nature of Lenders' Rights...................................88
10.23 Prior Understandings.........................................................................89
10.24 Confidentiality..............................................................................89
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AMENDED AND RESTATED LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT (this "Agreement") is dated as
of this 23rd day of April, 2004 by and among CSS INDUSTRIES, INC., a Delaware
corporation (the "Company"), CSS MANAGEMENT LLC, a Delaware limited liability
company (the "Subsidiary Borrower" and, together with the Company, the
"Borrowers"), the lending institutions listed in Annex I attached hereto and
incorporated herein by reference (each a "Lender" and collectively, the
"Lenders"), and PNC BANK, NATIONAL ASSOCIATION, a national banking association,
as administrative agent for the Lenders (in such capacity, the "Administrative
Agent").
BACKGROUND
A. The Company, the lenders from time to time party thereto, the
Administrative Agent, PNC Capital Markets, Inc., as Lead Arranger and Fleet
National Bank and Wachovia Bank, National Association (as successor to First
Union National Bank), as Co-Documentation Agents, entered into that certain Loan
Agreement dated as of April 30, 2001 (as amended and modified prior to the date
hereof, the "Existing Loan Agreement").
B. The Company has requested and the Lenders and other parties hereto
have agreed to modify and amend the credit facilities established under the
Existing Loan Agreement and to amend and restate the Existing Loan Agreement on
the terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree that, upon the Effective Date, the Existing Loan Agreement shall be
and hereby is amended and restated to read in full as follows:
Section 1. DEFINITIONS AND INTERPRETATION.
1.1 Terms Defined. As used in this Agreement, the following
terms have the following respective meanings:
"Accounts": All of the "accounts" (as that term is defined in
the Uniform Commercial Code as in effect from time to time in the Commonwealth
of Pennsylvania) of the Company and each of its Subsidiaries, whether now
existing or hereafter arising.
"Accounts Receivable Securitization": The trade receivables
purchase facility between the Company and Market Street Funding Corporation on
terms pursuant to which the Company and certain of its Subsidiaries will sell or
grant a security interest in its accounts receivable or an undivided interest
therein, provided, that the aggregate Capital (as such term is defined in the
Accounts Receivable Securitization Documents) shall not exceed $100,000,000.
"Accounts Receivable Securitization Documents": The Receivable
Purchase Agreement among the Company, the Bankruptcy Remote Subsidiary, Market
Street Funding Corporation and PNC and any other documents executed in
connection with the Accounts Receivable Securitization as modified, amended or
restated from time to time.
"Acquisition Advances": Advances under the Revolving Credit to
fund Permitted Acquisitions excluding the amount of such Advances which are
determined by Administrative Agent, in its reasonable discretion, to be used to
fund the working capital needs of the acquired Person.
"Acquisition Amount": As defined in Section 6.2.
"Adjustment Amount": As of each date of determination hereof,
the sum of (i) 100% of the outstanding portion of the aggregate amount of
Acquisition Advances, if any, made during the immediately preceding twelve (12)
month period plus (ii) 75% of the outstanding portion of the aggregate amount of
Acquisition Advances, if any, made during the twelve month period commencing on
the date which occurred 24 months prior to the determination date and ending one
day before the date which occurred 12 months prior to the determination date
plus (iii) 50% of the outstanding portion of the aggregate amount of Acquisition
Advances, if any, made during the twelve month period commencing on the date
which occurred 36 months prior to the determination date and ending on the date
which occurred one day before the date which occurred 24 months prior to the
determination date plus (iv) 25% of the outstanding portion of the aggregate
amount of Acquisition Advances, if any, made during the twelve month period
commencing on the date which occurred 48 months prior to the determination date
and ending on the date which occurred one day before the date which occurred 36
months prior to the determination date.
"Adjusted LIBO Rate": As applied to a LIBOR Based Rate
Advance, for any LIBOR Interest Period, the rate per annum (rounded upwards, if
necessary to the next 1/100 of 1%) determined pursuant to the following formula:
Adjusted LIBO Rate = LIBO Rate
(1 - Reserve Percentage)
For purposes hereof, "LIBO Rate", with respect to a LIBOR Interest Period, shall
mean the interest rate per annum determined by the Administrative Agent in
accordance with its usual procedures (which determination shall be conclusive
absent manifest error) to be the average of the London interbank offered rates
of interest per annum for U.S. Dollars appearing on the Moneyline Telerate
Service display page 3750 or such other display page of the Moneyline Telerate
Service as may replace such page evidencing quotes by the British Bankers'
Association (or appropriate successor or, if the British Bankers' Association or
its successor ceases to provide such quotes, a comparable replacement determined
by the Administrative Agent) at approximately 11:00 a.m., London time, two (2)
Business Days prior to the first day of such LIBOR Interest Period for an amount
comparable to such Advance and having a borrowing date and a maturity comparable
to such LIBOR Interest Period.
The LIBO Rate shall be adjusted with respect to any LIBOR Based Rate Advance in
Dollars outstanding on the effective date of any change in the Reserve
Percentage as of such effective date. The Administrative Agent shall give prompt
notice to the Borrowers' Representative of the LIBO Rate as determined or
adjusted in accordance herewith, which determination shall be conclusive absent
manifest error.
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"Advance(s)": Any monies advanced or credit extended to the
Borrowers by any Lender under the Revolving Credit, including without
limitation, cash Advances, Swing Line Advances and the issuance by Fronting
Lender of Letters of Credit.
"Affected Lender": As defined in Section 2.15.
"Affiliate": With respect to any Person (the "Specified
Person"), (a) any Person which directly or indirectly controls, or is controlled
by, or is under common control with, the Specified Person, and (b) any director
or officer (or, in the case of a Person which is not a corporation, any
individual having analogous powers) of the Specified Person or of a Person who
is an Affiliate of the Specified Person within the meaning of the preceding
clause (a); provided, however, that no Lender nor any Affiliate of any Lender
shall be deemed to be an Affiliate of the Company or any of its Subsidiaries.
For purposes of the preceding sentence, "control" of a Person shall mean (i) the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by contract or otherwise, and (ii) in any case
shall include direct or indirect ownership (beneficially or of record) of, or
direct or indirect power to vote, 25% or more of the outstanding shares of any
class of Capital Stock of such Person (or in the case of a Person that is not a
corporation, 25%. or more of any class of equity interest).
"Alternate Base Rate": A rate of interest equal to the greater
of (i) the Prime Rate or (ii) one half of one (0.5%) percent per annum in excess
of the Federal Funds Open Rate. The calculation and determination of the rates
described in subsections (i) and (ii) above shall be made daily by the
Administrative Agent and such determination shall, absent manifest error, be
final, conclusive and binding upon all parties hereto. Changes in the Alternate
Base Rate shall become effective on the same day as the Administrative Agent
changes its Prime Rate or a change occurs in the Federal Funds Open Rate,
depending upon which rate is applicable on that day to the Alternate Base Rate.
"Alternate Base Rate Advance": Any Advance on which interest
accrues at the Alternate Base Rate.
"Anti-Terrorism Laws": Any law relating to terrorism or money
laundering, including Executive Order No. 13224 and the USA Patriot Act.
"Applicable Available Commitment Fee Percentage": The
Applicable Commitment Fee Percentage determined by reference to the table set
forth on Annex II based upon the Company's compliance with the Interest Coverage
Ratio at the levels set forth in such table as such Interest Coverage Ratio is
shown on the Quarterly Compliance Certificate delivered in accordance with
Section 5.7. The Applicable Commitment Fee Percentage shall be applied on:
(a) the first day of the calendar month immediately
following the calendar month in which the Administrative Agent receives the
Quarterly Compliance Certificate delivered in respect of the first three fiscal
quarters in any fiscal year, or
(b) with respect to the Quarterly Compliance
Certificate delivered in respect of the last fiscal quarter in any fiscal year,
the earlier to occur of (i) the first day of the calendar month immediately
following the calendar month in which the Administrative Agent shall have
received from the Company such Quarterly Compliance Certificate or (ii) the
first day of the calendar month immediately following the calendar month in
which the date 45 days after the end of the fiscal year of the Company most
recently ended occurs
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provided, however, that no such changes shall occur (x) until the Company has
delivered its Quarterly Compliance Certificate for the fiscal quarter ending
March 31, 2004 and (y) unless no Default or Event of Default shall have occurred
and be continuing. Upon the occurrence and during the continuance of a Default
or an Event of Default, the Applicable Available Commitment Fee Percentage may,
in the discretion of the Administrative Agent or at the direction of the
Majority Lenders, be increased (and shall automatically be so increased if the
Default or Event of Default is a payment Default) to the margin described as
Level III on Annex II (in addition to institution of the Default Rate, if
applicable) and shall be applied retroactively to the date of the occurrence of
such Default or Event of Default (or in the event of a Default in respect of the
obligation to deliver a Quarterly Compliance Certificate for the last fiscal
quarter in each fiscal year, the first day of the calendar month immediately
following the calendar month in which the date 45 days after the end of the last
fiscal year of the Company occurs). The Administrative Agent, Lenders and
Borrowers acknowledge that, on the date hereof, the Applicable Available
Commitment Fee Percentage is the margin described as Level I on Annex II, which
Level shall remain applicable at all times through the first day of the calendar
month immediately following the calendar month in which the Administrative Agent
shall have received from the Borrower the Quarterly Compliance Certificate for
the quarter ended March 31, 2004.
"Applicable Base Rate Margin": As set forth in Annex II.
"Applicable LIBO Rate Margin": As set forth in Annex II.
"Applicable Margins": The respective Applicable Base Rate
Margin or Applicable LIBO Rate Margin determined by reference to the table set
forth on Annex II based upon the Company's compliance with the Interest Coverage
Ratio at the levels set forth in such table as such Interest Coverage Ratio is
shown on the Quarterly Compliance Certificate delivered in accordance with
Section 5.7. The Applicable Margin shall be applied on:
(a) the first day of the calendar month immediately
following the calendar month in which the Administrative Agent receives the
Quarterly Compliance Certificate delivered in respect of the first three fiscal
quarters in any fiscal year or,
(b) with respect to the Quarterly Compliance
Certificate delivered in respect of the last fiscal quarter in any fiscal year,
the earlier to occur of (i) the first day of the calendar month immediately
following the calendar month in which the Administrative Agent shall have
received from the Company such Quarterly Compliance Certificate or (ii) the
first day of the calendar month immediately following the calendar month in
which the date 45 days after the end of the fiscal year of the Company most
recently ended occurs;
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provided, however, that no such changes shall occur (x) until the Company has
delivered its Quarterly Compliance Certificate for the fiscal quarter ending
March 31, 2004 and (y) unless no Default or Event of Default shall have occurred
and be continuing. Upon the occurrence and during the continuance of a Default
or an Event of Default, the Applicable Margin may, in the discretion of the
Administrative Agent or at the direction of the Majority Lenders, be increased
(and shall automatically be so increased if the Default or Event of Default is a
payment default) to the margins described as Level III on Annex II (in addition
to institution of the Default Rate, if applicable) and shall be applied
retroactively to the date of the occurrence of such Default or Event of Default
(or in the event of a Default in respect of the obligation to deliver a
Quarterly Compliance Certificate for the last fiscal quarter in each fiscal
year, the first day of the calendar month immediately following the calendar
month in which the date 45 days after the end of the latest fiscal year of the
Company occurs). The Administrative Agent, Lenders and Borrowers acknowledge
that, on the date hereof, the Applicable Margin is the margin described as Level
I on Annex II above, which Level shall remain applicable at all times through
the first day of the calendar month immediately following the calendar month in
which the Administrative Agent shall have received from the Company the
Quarterly Compliance Certificate for the quarter ended March 31, 2004 (unless a
Default or an Event of Default earlier occurs in which case the Applicable
Margin shall be adjusted as set forth above).
"Asset Sale": The sale, transfer or other disposition by the
Company to any Person other than a Restricted Subsidiary or by any Subsidiary of
the Company to any Person other than the Company or a Restricted Subsidiary of
(a) any of the existing or future Capital Stock (other than an original issue of
the Capital Stock of a Person where the issued Capital Stock is issued to one of
the Borrowers or a Restricted Subsidiary) of any Subsidiary of the Company or
(b) any other Property, now owned or hereafter acquired, of any nature
whatsoever in any transaction or series of related transactions (including any
or all assets and business of any division or line of business and further
including intangible assets) of the Company or any of its Subsidiaries,
excluding sales, transfers or other dispositions of inventory or other Property
in the ordinary course of business of the Company or any of its Subsidiaries or
the trade-in or replacement of assets in the ordinary course of business of the
Company or any of its Subsidiaries.
"Authorized Officer": With respect to any Borrower, any
executive officer of such Borrower or the corporate controller of such Borrower.
Unless otherwise qualified, all references to an "Authorized Officer" in this
Agreement shall refer to an Authorized Officer of the Borrowers' Representative.
"Available Commitment": $50,000,000, as the same may be
increased or reduced pursuant to Section 2.3.
"Available Commitment Fee": As defined in Section 2.6(a).
"Bankruptcy Remote Subsidiary": Means the wholly-owned
Subsidiary of the Company created in connection with an Accounts Receivable
Securitization whose only material creditors are the purchaser or lender related
to such Accounts Receivable Securitization and the Company or any Subsidiary of
the Company that is the originator and seller or contributor of accounts
receivable to such Subsidiary in connection with an Accounts Receivable
Securitization.
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"Blocked Person": As defined in Section 4.20(ii).
"Borrowers' Representative": As defined in Section 2.16.
"Borrowing": The making, pursuant to a Notice of Borrowing and
the terms of this Agreement, of a cash Advance to the Borrowers from all of the
Lenders on a pro rata basis on a given date (or resulting from conversions on a
given date) having, in the case of LIBOR Based Rate Advances, the same LIBOR
Interest Periods.
"Business Day": A day other than Saturday or Sunday when banks
are generally open for business in Philadelphia, Pennsylvania, provided, that
when used in connection with a LIBOR Based Rate Advance, the term "Business Day"
shall also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market.
"Capital Stock": Any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing. Unless
otherwise qualified, references to Capital Stock herein shall refer to Capital
Stock of the Company.
"Cash Proceeds": With respect to any Equity Offering, the
aggregate cash payments received by the Company and/or any of its Subsidiaries
from such Equity Offering.
"Change of Control": If (a) any "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act), excluding Jack
Farber and/or any member(s) of his immediately family, and/or any trust under
which Jack Farber and/or any member(s) of his immediate family hold the legal
and equitable interests, is or becomes the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities that such person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than 50% of the total
voting power of the issued and outstanding voting Capital Stock of the Company
normally entitled to vote in the election of directors of the Company or (b)
during any consecutive two-year period, individuals who at the beginning of such
period constituted the Board of Directors of Company (together with any new
directors whose election to the Board of Directors or whose nomination for
election by the stockholders of the Company was approved by a vote of a majority
of the directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors then in office.
"Closing": As defined in Section 3.2.
"Code": As defined in Section 2.12(b).
"Commitment and Acceptance": A Commitment and Acceptance among
a Lender, the Administrative Agent and the Borrowers substantially in the form
of Exhibit G, as amended, supplemented or otherwise modified from time to time.
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"Consolidated Amortization Expense": For any Person, for any
period, the consolidated amortization expense of such Person for such period,
determined on a consolidated basis for such Person and its consolidated
Subsidiaries.
"Consolidated Capital Expenditures": For any Person, for any
period, the aggregate gross increase during that period in the property, plant
or equipment reflected in the consolidated balance sheet of such Person and its
consolidated Subsidiaries, but excluding expenditures made in connection with
the replacement, substitution or restoration of assets (a) to the extent
financed from insurance proceeds paid on account of the loss of or damage to the
assets being replaced or restored or (b) with awards of compensation arising
from the taking by eminent domain or condemnation of the assets being replaced;
provided, however, that "Consolidated Capital Expenditures" shall in any event
exclude the purchase price paid in connection with Permitted Acquisitions to the
extent allocable to property, plant and equipment.
"Consolidated Capitalization": For any Person, at any time,
the sum of such Person's (a) Consolidated Funded Debt plus (b) Consolidated Net
Worth, determined on a consolidated basis for such Person and its consolidated
Subsidiaries.
"Consolidated Depreciation Expense": For any Person, for any
period, the consolidated depreciation expense of such Person for such period,
determined on a consolidated basis for such Person and its consolidated
Subsidiaries.
"Consolidated EBITDA": For any Person, for any period, the
difference between (a) the sum of the amounts for such period of (i)
Consolidated Net Income, plus (ii) Consolidated Tax Expense, plus (iii)
Consolidated Interest Expense, plus (iv) Consolidated Amortization Expense, plus
(v) Consolidated Depreciation Expense, plus (vi) all non-cash charges resulting
from the application of Financial Accounting Standard No. 142 plus (vii) all
Consolidated Option Expense (with respect to clauses (ii) through (vii) of this
definition, to the extent such amounts were deducted in computing Consolidated
Net Income) and (b) the amounts for such period of after-tax net gains on sales
of fixed assets and other after-tax extraordinary gains to the extent included
in Consolidated Net Income, excluding sales in the ordinary course of business
not to exceed $300,000 in the aggregate for any fiscal year, all as determined
on a consolidated basis for such Person and its consolidated Subsidiaries.
"Consolidated Funded Debt": For any Person, on any date,
without duplication, the aggregate outstanding principal amount of (i)
Indebtedness recorded on a balance sheet of such Person prepared in accordance
with GAAP, (ii) the items described in clause (c) of the definition of
"Indebtedness" whether or not recorded on a balance sheet of such Person and
(iii) all Capital (as that term is defined in the Accounts Receivable
Securitization Documents) under the Accounts Receivable Securitization; in each
case of such Person and its consolidated Subsidiaries, all determined on a
consolidated basis after elimination of all intercompany items.
"Consolidated Interest Expense": For any Person, for any
period, the total interest expense of such Person and its consolidated
Subsidiaries, as would be shown on an income statement prepared in accordance
with GAAP, and in any event including interest in respect of the Revolving
Credit and Discount (as that term is defined in the Accounts Receivable
Securitization Documents) payable in respect of the Accounts Receivable
Securitization whether or not such interest is shown on such income statement.
7
"Consolidated Net Income": For any Person, for any period, the
net income (or loss) of such Person and its Subsidiaries on a consolidated basis
for such period taken as a single accounting period determined on a consolidated
basis for such Person and its consolidated Subsidiaries; provided, however, that
there shall be excluded (a) the income (or loss) of any other Person (other than
Subsidiaries of such Person) in which any third Person (other than such Person
or any of its Subsidiaries) has a joint interest, except to the extent of the
amount of cash dividends or other cash distributions actually paid to such
Person or any of its Subsidiaries by such other Person during such period
(subject to clause (c) below), (b) the income (or loss) of any other Person
accrued prior to the date it becomes a consolidated Subsidiary of such Person or
is merged into or consolidated with such Person or any of its consolidated
Subsidiaries or such other Person's assets are acquired by such Person or any of
its consolidated Subsidiaries, except (with respect to a Subsidiary previously
accounted for on the equity basis of accounting) to the extent of the income (or
loss) actually paid to such Person or any of its Subsidiaries by such other
Person relating to such period in cash, and (c) the income of any consolidated
Subsidiary of such Person to the extent that the declaration or payment of
dividends or similar distributions by that consolidated Subsidiary of that
income is not at the time permitted by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that consolidated Subsidiary, except to
the extent of the cash dividends or cash distributions actually paid to such
Person or any of its Subsidiaries by such other Person during such period;
provided, however, that income generated in connection with a waiver of any of
the provisions hereof shall not be included for any purposes hereof.
"Consolidated Net Worth": As of the date of determination, all
items which in conformity with GAAP would be included under shareholders' equity
on a consolidated balance sheet of the Company and its Subsidiaries at such date
plus an amount equal to the lesser of (x) the amount paid after the Effective
Date for purchases by the Company of its Capital Stock under its existing share
repurchase program and (y) $25,000,000.
"Consolidated Option Expense": For any Person, for any period,
the consolidated non-cash charges related to the fair value of stock options for
such period, determined on a consolidated basis for such Person and its
consolidated Subsidiaries.
"Consolidated Rental Payments": For any period, the aggregate
amount of all rents paid or to be incurred under all operating leases of the
Company and the Subsidiaries of the Company as lessees (net of sublease income)
during such period.
"Consolidated Tax Expense": For any Person, for any period,
the consolidated income tax expense and/or benefit of such Person for such
period, determined on a consolidated basis for such Person and its consolidated
Subsidiaries less any tax expense associated with gains on sales (excluding
sales in the ordinary course of business) of fixed assets and other
extraordinary gains to the extent such gains are included in Consolidated Net
Income.
8
"Consolidated Total Assets": For any Person, all of the assets
of such Person as would be shown on such Person's balance sheet prepared in
accordance with GAAP, determined on a consolidated basis for such Person and its
consolidated Subsidiaries.
"Default": Any event, act, condition or occurrence, which with
notice, or lapse of time or both, would constitute an Event of Default
hereunder.
"EBITDA": Shall have the meaning ascribed to the term
"Consolidated EBITDA" as set forth herein except the calculation of EBITDA
(including the calculation of each of its components) shall be done on an
unconsolidated basis.
"Effective Date": As defined in Section 3.2.
"Employee Benefit Plan": As defined in Section 4.11(c).
"Engagement Letter": As defined in Section 10.23.
"Environmental Authorizations": As defined in Section 4.15(a).
"Environmental Laws" The common law and all applicable
Federal, state, local and foreign laws or regulations, codes, orders, decrees,
judgments or injunctions issued, promulgated, approved or entered thereunder,
now or hereafter in effect, relating to pollution or protection of the
environment or to health or safety as either relates to any Hazardous Materials,
including, without limitation, laws relating to (a) emissions, discharges,
releases or threatened releases of Hazardous Materials into the environment
(including ambient air, indoor air, surface water, ground water, land surface or
subsurface strata), (b) the manufacture, processing, distribution, use,
generation, treatment, storage, disposal, transport, shipping or handling of
Hazardous Materials, and (c) underground and above-ground storage tanks, and
related piping, and emissions, discharges, releases or threatened releases
therefrom.
"Equity Offering" The sale by the Company or any of its
Subsidiaries of any of its Capital Stock in any public or private transaction,
except (a) any nonredeemable Capital Stock of the Company issued in exchange for
or upon conversion of any Indebtedness of the Company or any of its
Subsidiaries, (b) any issuance in connection with the exercise of any stock
options, (c) the issuance of nonredeemable Capital Stock in connection with a
Permitted Acquisition or (d) any Capital Stock issued in connection with
employee incentive plans or dividend reinvestment plans.
"ERISA": The Employee Retirement Income Security Act of 1972,
as the same may be amended, from time to time.
"Event of Default": As defined in Section 8.1.
"Exchange Act": The Securities Exchange Act of 1934, as
amended, together with all rules and regulations promulgated in connection
therewith.
9
"Executive Order No. 13224": Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001, as the same has been, or
shall hereafter be, renewed, extended, amended or replaced.
"Existing Letters of Credit": Those Letters of Credit
described on Schedule 1.1(a) attached hereto and incorporated herein by
reference.
"Existing Loan Agreement": As defined in the Background
hereto.
"Existing Debt of the Company": The Indebtedness of the
Company and its Subsidiaries as set forth on Schedule 4.10 attached hereto.
"Expenses": As defined in Section 10.5.
"Federal Funds Effective Rate": For any day, the rate per
annum (based on a year of 360 days and actual days elapsed and rounded upward to
the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or
any successor) on such day as being the weighted average of the rates on
overnight federal funds transactions arranged by federal funds brokers on the
previous trading day, as computed and announced by such Federal Reserve Bank (or
any successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such all day shall be the Federal Funds
Effective Rate for the last day on which such rate was announced.
"Federal Funds Open Rate": For any day, the rate per annum
determined by the Administrative Agent in accordance with its usual procedures
(which determination shall be conclusive absent manifest error) to be the "open"
rate for federal funds transactions as of the opening of business for federal
funds transactions among members of the Federal Reserve System arranged by
federal funds brokers on such day, as quoted by Garvin Guybutler, any successor
entity thereto, or any other broker selected by the Administrative Agent, as set
forth on the applicable Telerate display page; provided, however, that if such
day is not a Business Day, the Federal Funds "open" rate for such day shall be
the Open Rate on the immediately preceding Business Day, or if no such rate
shall be quoted by a federal funds broker at such time, such other rate as
determined by the Administrative Agent in accordance with its usual procedures.
"Financial Statements": The financial statements of the
Company previously furnished to the Administrative Agent, as more fully
described on Schedule 1.1(b) attached hereto and incorporated herein by
reference.
"Fixed Charge Coverage Ratio": For any period, the ratio of
(a) the sum of the Company's (i) Consolidated EBITDA for such period plus (ii)
Consolidated Rental Payments for such period to (b) the sum of the Company's (i)
current portion of principal on all long-term Indebtedness (excluding the
Revolving Credit) determined at the beginning of such period, plus (ii)
Consolidated Interest Expense (including interest in respect of the Revolving
Credit and discount payable in respect of the Accounts Receivable
Securitization) for such period, plus (iii) Consolidated Tax Expense for such
period, plus (iv) Consolidated Rental Payments for such period, plus (v) cash
dividends paid by the Company to the holders of its Capital Stock during such
period.
10
"Fronting Fee": As defined in Section 2.6(b)(ii).
"Fronting Lender": PNC (or an Affiliate of PNC, if
applicable), as the issuer of Letters of Credit under this Agreement.
"GAAP": Generally accepted accounting principles applied in a
manner consistent with the most recent audited financial statements of the
Company prepared as of March 31, 2003 and furnished to the Administrative Agent.
"Governmental Authority": Any government or political
subdivision or any agency, authority, bureau, central bank, commission,
department or instrumentality of either, or any court, tribunal, grand jury or
arbitrator (to the extent binding on the Company or any of its Subsidiaries), in
each case whether foreign or domestic.
"Guarantee(s)": Guarantees substantially in the form of
Exhibit A attached hereto and incorporated herein by reference.
"Guarantors": Each of Paper Magic Group, Inc., a Pennsylvania
corporation, Berwick Delaware, Inc., a Delaware corporation, Berwick Offray LLC,
a Pennsylvania limited liability company, Cleo Inc, a Tennessee corporation,
Cleo Delaware, Inc., a Delaware corporation, Philadelphia Industries, Inc., a
Delaware corporation, LLM Holdings, Inc., a Delaware corporation, The Paper
Magic Group, Inc., a Delaware corporation, Don Post Studios, Inc., a Delaware
corporation, Paper Magic Group (Hong Kong) Limited, a Hong Kong limited company
(unless released as a Guarantor pursuant to Section 5.12), Lion Ribbon Company,
Inc., a Delaware corporation and Crystal Creative Products, Inc., an Ohio
corporation and each Person which executes a Guarantee after the Effective Date.
"Hazardous Materials": Any pollutant, contaminant, hazardous
or toxic substance, hazardous material, hazardous waste, hazardous constituent,
asbestos or asbestos-containing material, petroleum, including crude oil and any
fraction thereof, or other chemicals, substances or materials subject to
regulation under any Environmental Law.
"Hedge Agreement": Any contract or agreement providing for any
rate swap transaction, basis swap, forward rate transaction, commodity swap,
commodity option, equity or equity index swap, equity or equity index option,
bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap transaction,
cross-currency rate swap, currency swap or any other similar transaction entered
into to protect against the risk of fluctuation in interest rates or foreign
exchange rates.
"Indebtedness": With respect to any Person, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) the
deferred purchase price of assets or services which in accordance with GAAP
would be shown as a liability on the balance sheet of such Person, (c) the face
amount of all outstanding letters of credit issued for the account of such
Person and, without duplication, all drafts drawn thereunder, (d) all
Indebtedness of a second Person secured by any Lien on any Property owned by
such first Person, whether or not such Indebtedness has been assumed by such
11
first Person, limited to the fair market value of the Property subject to such
Lien, (e) all capitalized lease obligations of such Person, (f) all obligations
of such Person to pay a specified purchase price for goods or services whether
or not delivered or accepted, i.e., take-or-pay and similar obligations, (g) all
obligations of such Person under interest rate agreements, (h) without
duplication, all contingent obligations of such Person required to be reflected
as a liability on the balance sheet of such Person prepared in accordance with
GAAP, (i) all obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments required to be reflected as a liability on the
balance sheet of such Person prepared in accordance with GAAP, (j) all
obligations of such Person upon which interest charges are customarily paid, and
(k) current obligations of such Person to purchase, redeem, retire, defease or
otherwise acquire for value any Capital Stock of such Person (with redeemable
preferred stock being valued at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends); provided, however,
that Indebtedness shall not include trade payables, accrued expenses, accrued
dividends, deferred compensation, accrued income taxes, deferred income taxes
and minority interests in Subsidiaries of such Person.
"Intercompany Notes": As defined in Section 5.15.
"Intercreditor Agreement": The Intercreditor Agreement dated
as of December 13, 2002 between the Administrative Agent, the Swing Line Lender,
the Fronting Lender, the Lenders and the Noteholders, as the same has been and
may hereafter be modified, amended, supplemented or restated.
"Interest Coverage Ratio": For any period of four consecutive
fiscal quarters, the ratio of Consolidated EBITDA to Consolidated Interest
Expense of the Company during such period.
"Interest Rate Determination Date": With respect to a LIBOR
Based Rate Advance, the date which is two (2) Business Days prior to the
commencement of the LIBOR Interest Period for such Borrowing.
"Inventory": All of the "inventory" (as that term is defined
in of the Uniform Commercial Code as in effect from time to time in the
Commonwealth of Pennsylvania) of the Company and its Subsidiaries, whether now
existing or hereinafter acquired or created.
"Investments": Investments of any Person shall mean (i) any
direct or indirect purchase or other acquisition of any Capital Stock, evidence
of Indebtedness or other security issued by any other Person, (ii) any loan,
advance (other than advance to employees for travel expenses, drawing accounts
and similar expenditures extended in the ordinary course and consistent with
past practice) or extension of credit (other than accounts receivable created in
the ordinary course) to, or contribution to the capital of any other Person,
including any guarantee or Indebtedness of any other Person and any joint
venture, (iii) any commitment or option to make an investment if, in the case of
an option, the consideration therefor exceeds $1,000,000 and (iv) any capital
contribution to any other Person; and any of the foregoing shall be considered
an Investment whether such investment is acquired by purchase, exchange,
issuance of stock or other securities, merger, reorganization or any other
method. Notwithstanding the foregoing, non-speculative Hedge Agreements shall
not be considered Investments.
12
"Knowledge": Whenever used in this Agreement, the actual
knowledge of any executive officer of the Company or of the president of any of
the Subsidiaries.
"L/C Commitment": $20,000,000.
"L/C Fees": As defined in Section 2.6(b)(i).
"Lender(s)": The lending institutions listed on Annex I
attached hereto and incorporated herein by reference and any assignees thereof
in accordance with Section 10.10 hereof.
"Letter of Credit or Letters of Credit": (a) Standby letter or
letters of credit, and (b) commercial letter or letters of credit, in each case
issued or to be issued by the Fronting Lender for the account of the Borrowers
pursuant to Section 2.2 herein.
"LIBOR Based Rate": As defined in Section 2.5(b)(i).
"LIBOR Based Rate Advance": Any Advance on which interest
accrues at the LIBOR Based Rate.
"LIBOR Interest Period": As defined in Section 2.5(b)(ii).
"Lien": Other than as expressly excluded in the next sentence,
any interest in Property securing an obligation owed to, or a claim by, a Person
other than the owner of the Property, whether such interest is based on the
common law, statute or contract, and including, but not limited to, the security
interest or lien arising from a mortgage, encumbrance, pledge, conditional sale
or trust receipt or a lease, consignment or bailment for security purposes. The
term "Lien" shall include without limitation, reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances affecting Property other than
Property which is leased by the Company or any of its Subsidiaries or for which
the Company or any of its Subsidiaries has an unexercised option to purchase
such Property and other than those which would not materially adversely
interfere with the Company's or any of its Subsidiaries' use of the Property and
would not materially detract from the value of the Property. For the purposes of
this Agreement, the Company and each of its Subsidiaries shall be deemed to be
the owner of any Property which it has acquired or holds subject to a
conditional sale agreement or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person for security
purposes.
"Loan Documents": This Agreement, the Revolving Credit Notes,
the Swing Line Note, the Guarantees, the Intercreditor Agreement and all
agreements, instruments and documents executed and/or delivered in connection
herewith or therewith, all as may be amended, supplemented, replaced, restated
or superseded from time to time.
"Losses": Of any Person, the losses, liabilities, claims
(including those based upon negligence, strict or absolute liability and
liability in tort), damages, expenses, obligations, penalties, actions,
judgments, Liens, penalties, fines, suits, costs or disbursements of any kind or
nature whatsoever (including reasonable fees and expenses of counsel in
connection with any Proceeding commenced or threatened, whether or not such
Person shall be designated a party thereto) at any time (including following the
payment of the Obligations and/or the termination of the Revolving Credit)
incurred by, imposed on or asserted against such Person.
13
"Majority Lenders": The Lenders holding Pro Rata Percentages
aggregating more than 66 2/3% of the total Revolving Credit.
"Mandatory Loan": As defined in Section 2.4(b)(iii)(B).
"Material Adverse Effect": With respect to the Company and its
Subsidiaries, (a) any material adverse effect (both before and after giving
effect to the transactions contemplated by this Agreement and the other Loan
Documents) with respect to the business, assets, properties, financial
condition, stockholders' equity, contingent liabilities, prospects, material
agreements or results of operations of the Company and its Subsidiaries, taken
as one enterprise on a consolidated basis, or (b) any fact or circumstance that,
singly or in the aggregate with any other fact or circumstance, has a reasonable
likelihood of resulting in or leading to (i) a material adverse effect hereunder
or under any other Loan Document or the inability of the Lenders to enforce in
any material respect their rights purported to be granted hereunder or under any
other Loan Document, or (ii) a material adverse effect on the ability of the
Company and its Subsidiaries taken as a whole on a consolidated basis to effect
(including hindering or unduly delaying) the transactions contemplated by this
Agreement and the other Loan Documents on the terms contemplated hereby and
thereby.
"Material Subsidiary": As of the last day of the immediately
preceding fiscal year of the Company, any Subsidiary of the Company (other than
CSS Funding LLC) which either (i) owns five percent (5%) or more of the assets
of the Company and its consolidated Subsidiaries or (ii) for the immediately
preceding fiscal year had net income representing 5% or more of the Consolidated
Net Income of the Company.
"Maturity Date": April 23, 2009 as the same may be extended
pursuant to Section 2.13.
"Moody's": Moody's Investors Service, Inc.
"Net Cash Proceeds from Equity Offerings": With respect to any
Equity Offering, the Cash Proceeds resulting therefrom net of customary and
reasonable expenses of such offering.
"New Lender Joinder": A New Lender Joinder among a proposed
Lender, the Administrative Agent and the Borrowers substantially in the form of
Exhibit H, as amended, supplemented or otherwise modified from time to time.
"Noteholders": The note purchasers from time to time parties
to the Note Purchase Agreement.
"Note Purchase Agreement": The Note Purchase Agreement dated
as of December 12, 2002 among the Company and the Noteholders, as the same has
been and may hereafter be modified, amended, supplemented or restated.
14
"Note Purchase Documents": The Note Purchase Agreement, the
notes issued pursuant to the terms thereof and the Intercreditor Agreement.
"Notes": The Revolving Credit Notes and the Swing Line Note.
"Notice of Borrowing": As defined in Section 2.4(b)(ii).
"Obligations": All existing and future liabilities and
obligations of every kind or nature at any time owing by the Borrowers to any
one or more of the Lenders, the Fronting Lender or to the Administrative Agent,
whether joint or several, related or unrelated, primary or secondary, matured or
contingent, due or to become due, and whether principal, interest, fees or
Expenses, including, without limitation, liabilities and obligations in respect
of the Revolving Credit, whether related to cash Advances or Letters of Credit
(whether drawn or undrawn), and under Hedge Agreements to which any Lender is a
party.
"Offered Amount": As defined in Section 2.3(b).
"Over-Limit Amount": As defined in Section 2.3.
"Outstandings": At any time, the sum of the (a) aggregate
amount of all cash Advances outstanding hereunder, and (b) face amount of all
Letters of Credit and all outstanding Reimbursement Obligations.
"Permitted Acquisitions": As defined in Section 6.2.
"Permitted Liens": As defined in Section 6.3.
"Person": An individual, partnership, corporation, limited
liability company, limited liability partnership, trust, unincorporated
association or organization, joint venture or any other entity.
"PNC": PNC Bank, National Association.
"Prime Rate": That rate so designated by the Administrative
Agent from time to time as its prime rate of interest, which is not necessarily
the lowest or best rate of interest charged by the Administrative Agent.
"Proposed New Lender": As defined in Section 2.3(b).
"Pro Rata Percentages": As defined in Section 2.1(a)(i).
"Pro Rata Shares": As defined in Section 2.1(a)(i).
"Proceeding": Any claim, action, judgment, suit, hearing,
governmental investigation, arbitration (to the extent binding on the Company or
any of its Subsidiaries) or proceeding, including by or before any Governmental
Authority.
"Property": Any existing or future interest of the Company or
any of its Subsidiaries (other than the Bankruptcy Remote Subsidiary) in any
existing or future property or asset of any kind or nature, whether real,
personal or mixed, or tangible or intangible, now owned or hereafter acquired or
created (including without limitation the Capital Stock of any Subsidiary of the
Company).
15
"Quarterly Compliance Certificate": As defined in Section 5.8.
"Real Property": All right, title and interest of the Company
or any of its Subsidiaries (including any leasehold estate) in and to any parcel
of real property owned, leased or operated by the Company or any of its
Subsidiaries together with, in each case, all improvements and appurtenant
fixtures, equipment, personal property, easements and other property and rights
incidental to the ownership, lease or operation thereof.
"Reduced Level": As defined in Section 2.11(c).
"Regular Advances": Advances other than Swing Line Advances.
"Regulation D": Regulation D of the Board of Governors of the
Federal Reserve System, comprising Part 204 of Title 12, Code of Federal
Regulations, as amended, and any successor thereto.
"Regulations": As defined in Section 2.12(b).
"Reimbursement Obligations": As defined in Section 2.2(c).
"Requested Increase": As defined in Section 2.3(b).
"Reserve": For any day, that reserve (expressed as a decimal)
which is in effect (whether or not actually incurred) with respect to a Lender
(or any Affiliate of such Lender if applicable pursuant to Section 2.9(e)) on
such day, as prescribed by the Board of Governors of the Federal Reserve System
(or any successor or any other banking authority to which a Lender (or any
Affiliate of such Lender if applicable pursuant to Section 2.9(e)) is subject
including any board or governmental or administrative agency of the United
States or any other jurisdiction to which a Lender (or any Affiliate of such
Lender if applicable pursuant to Section 2.9(e)) is subject), for determining
the maximum reserve requirement (including without limitation any basic,
supplemental, marginal or emergency reserves) for Eurocurrency Liabilities as
defined in Regulation D.
"Reserve Percentage": For a Lender (or any Affiliate of such
Lender if applicable pursuant to Section 2.9(e)) on any day, that percentage
(expressed as a decimal) which is in effect on such day, prescribed by the Board
of Governors of the Federal Reserve System (or any successor or any other
banking authority to which a Lender (or any Affiliate of such Lender if
applicable pursuant to Section 2.9(e)) is subject, including any board or
governmental or administrative agency of the United States or any other
jurisdiction to which a Lender (or any Affiliate of such Lender if applicable
pursuant to Section 2.9(e)) is subject), for determining the maximum reserve
requirement (including without limitation any basic, supplemental, marginal or
emergency reserves) for (a) deposits of United States dollars or (b)
Eurocurrency Liabilities as defined in Regulation D, in each case applicable to
a LIBOR Based Rate Advance(s) subject to an Adjusted LIBO Rate. The Adjusted
LIBO Rate shall be adjusted automatically on and as of the effective day of any
change in the Reserve Percentage.
16
"Restricted Subsidiary": Any Guarantor and any other Material
Subsidiary which is not by name included in the definition of "Guarantors"
hereunder and any other Material Subsidiary which does not, as permitted by
Section 5.12(b), become a Guarantor after the date hereof, or as provided by
Section 5.12(c), is released as a Guarantor after the date hereof.
"Revolving Credit": As defined in Section 2.1.
"Revolving Credit Notes": As defined in Section 2.1(c)(i).
"S&P": Standard & Poor's Corporation, a division of The
McGraw-Hill Companies, Inc.
"Securities Act": The Securities Act of 1933, as amended,
together with all rules and regulations promulgated in connection therewith.
"Subsidiary": With respect to any Person at any time, (a) any
corporation more than fifty (50%) percent of whose voting stock is legally and
beneficially owned by such Person or owned by a corporation more than fifty
(50%) percent of whose voting stock is legally and beneficially owned by such
Person; (b) any trust of which a majority of the beneficial interest is at such
time owned directly or indirectly, beneficially or of record, by such Person or
one or more Subsidiaries of such Person; and (c) any partnership, joint venture
or other entity of which ownership interests having ordinary voting power to
elect a majority of the board of directors or other Persons performing similar
functions are at such time owned directly or indirectly, beneficially or of
record, by, or which is otherwise controlled directly, indirectly or through one
or more intermediaries by, such Person or one or more Subsidiaries of such
Person.
"Swing Line Advances": Advances under the Swing Line
Commitment made by the Swing Line Lender to the Borrowers pursuant to Section
2.1(b).
"Swing Line Commitment": The amount set forth opposite the
Swing Line Lender's name on Annex I attached hereto directly below the column
entitled "Swing Line Commitment", as the same may be reduced from time to time
pursuant to Section 8.
"Swing Line Lender": PNC, in its capacity as such, and its
permitted successors and assigns in such capacity.
"Swing Line Note": As defined in Section 2.1(c)(ii).
"Taxes": As defined in Section 2.12(a)
"Transferee": As defined in Section 10.10(d).
"USA Patriot Act": The Uniting Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.
17
"Withholding Certificate": As defined in Section 2.12(b).
1.2 Accounting Principles. Where the character or amount of
any asset or liability or item of income or expense is required to be determined
or any consolidation or other accounting computation is required to be made for
the purposes of this Agreement, this shall be done in accordance with GAAP, to
the extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.
SECTION 2. THE LOAN.
2.1 Revolving Line of Credit. Subject to the terms and
conditions of this Agreement, the Lenders hereby establish for the benefit of
the Borrowers a revolving line of credit (collectively, the "Revolving Credit")
which shall include Advances extended by the Lenders to or for the benefit of
the Borrowers from time to time hereunder, in aggregate principal amount at any
time outstanding, not to exceed the then Available Commitment in effect from
time to time.
(a) (i) Each Lender agrees severally to make Regular
Advances to the Borrowers as a part of the Revolving Credit, subject to the
terms of this Agreement, up to the lesser of the amounts (the "Pro Rata Shares")
or percentages (the "Pro Rata Percentages") of the Revolving Credit opposite its
name on Annex I attached hereto and incorporated herein by reference.
(ii) Regular Advances under the Revolving Credit (A)
shall be made at any time and from time to time on and after the Effective Date
and prior to the Maturity Date, (B) may be made as Alternate Base Rate Advances
or, at the Borrowers' option and subject to the terms hereof, as LIBOR Based
Rate Advances or, at the Borrowers' option and subject to the terms hereof, as
Letters of Credit; provided that all Advances made by all of the Lenders
pursuant to the same Borrowing shall, unless otherwise specifically provided
herein, consist entirely of Advances of the same type, (C) may be repaid and
reborrowed in accordance with the provisions hereof, (D) shall not, when
aggregated with a Lender's Pro Rata Percentage of other Advances then
outstanding, exceed for such Lender, at any time outstanding, the Pro Rata Share
of such Lender, at such time and (E) shall not be made if, at the time the
requested Advance is to be made, the aggregate Outstandings, after giving effect
to the Advance requested by the relevant Notice of Borrowing, would exceed the
Available Commitment in effect at such time.
(b) (i) The Swing Line Lender may, in its sole and
absolute discretion, make Swing Line Advances to the Borrowers as a part of the
Revolving Credit, subject to the terms of this Agreement, up to the Swing Line
Commitment.
(ii) Swing Line Advances under the Revolving Credit
(A) shall be made at any time and from time to time on and after the Effective
Date and prior to the Maturity Date, (B) shall be made only in cash and as
Alternate Base Rate Advances and shall not be entitled to be converted into
LIBOR Based Rate Advances so long as they remain Swing Line Advances, (C) shall
be repaid on the earlier of (x) the Maturity Date or (y) the seventh day after
the date such Swing Line Advance was made and may be reborrowed in accordance
with the provisions hereof, (D) shall not be made if the aggregate principal
18
amount of Swing Line Advances and the Swing Line Lender's Pro Rata Percentage of
all other Advances then outstanding, after giving effect to the Swing Line
Advance requested by the relevant Notice of Borrowing, would exceed the Swing
Line Lender's Pro Rata Share and (E) shall not be made if the aggregate
principal amount of Swing Line Advances and all other Advances then outstanding,
after giving effect to the Swing Line Advance requested by the relevant Notice
of Borrowing, would exceed the Available Commitment in effect at such time. In
no event shall the aggregate principal amount of Swing Line Advances outstanding
at any time exceed the Swing Line Commitment.
(c) (i) At Closing, the Borrowers shall execute and
deliver their promissory note to each Lender in the principal amount of such
Lender's Pro Rata Share, each in the form attached hereto as Exhibit B-1 (as
amended, replaced, restated or superseded from time to time, collectively the
"Revolving Credit Notes") to evidence their unconditional obligation to repay
each Lender for all Advances made under the Revolving Credit, with interest as
herein and therein provided. Each Advance under the Revolving Credit shall be
deemed evidenced by the Revolving Credit Notes, which are deemed incorporated
herein by reference and made a part hereof.
(ii) At Closing, the Borrowers shall execute and
deliver their promissory note to the Swing Line Lender in the principal amount
of the Swing Line Commitment, in the form attached hereto as Exhibit B-2 (as
amended, replaced, restated or superseded from time to time, the "Swing Line
Note") to evidence their unconditional obligation to repay the Swing Line Lender
for all Swing Line Advances made under the Revolving Credit, with interest as
herein and therein provided. Each Swing Line Advance under the Revolving Credit
shall be deemed evidenced by the Swing Line Note, which is deemed incorporated
herein by reference and made a part hereof.
(d) The term of the Revolving Credit shall expire on the
Maturity Date unless earlier terminated in accordance with the terms hereof. On
such date, unless having been sooner accelerated by the Administrative Agent
pursuant to the terms hereof, the Revolving Credit shall be terminated and all
of the Obligations shall be due and payable in full, and as of which date, no
further Advances shall be available from the Lenders.
2.2 Letters of Credit.
(a) As part of the Revolving Credit and subject to its
terms and conditions and the customary terms, conditions and procedures of the
Fronting Lender, the Fronting Lender, shall, at the request of the
Administrative Agent and on behalf of and for the benefit of the Lenders, make
available to one of the Borrowers (either for its own account or, at such
Borrower's request, as a co-applicant with any of the Restricted Subsidiaries,
each of which is authorized to request the issuance of a Letter of Credit)
Letters of Credit which shall not exceed, in the aggregate at any one time
outstanding, the L/C Commitment. All Letters of Credit issued under the
Revolving Credit shall reduce dollar for dollar the amount available to be
borrowed by the Borrower under the Available Commitment. No standby Letter of
Credit shall be issued with an expiry date later than the earlier of: (i) one
(1) year from the date of issuance and (ii) the Maturity Date. No commercial
Letter of Credit shall be issued with an expiry date later than the earlier of:
(i) one hundred twenty (120) days from the date of issuance and (ii) the
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Maturity Date. The Borrowers shall, and shall cause any Restricted Subsidiary
which is a co-applicant as to any Letter of Credit to, execute and deliver to
the Fronting Lender all letter of credit agreements and other documents,
instruments and agreements customarily required by the Fronting Lender for such
purposes. All such documents, instruments and agreements shall be in form and
substance satisfactory to the Fronting Lender. The Existing Letters of Credit
shall be deemed to have been issued pursuant to this Agreement and shall be
Letters of Credit for all purposes hereunder.
(b) Immediately upon the issuance of any Letter of Credit,
the Fronting Lender is deemed to have granted to each Lender, and each Lender is
hereby deemed to have irrevocably acquired, an individual participating interest
(without recourse or warranty), in accordance with each Lender's respective Pro
Rata Percentage, in all of the Fronting Lender's rights and liabilities with
respect to such Letter of Credit. Each Lender shall be directly, irrevocably and
unconditionally obligated to the Fronting Lender, according to its Pro Rata
Percentage, to reimburse the Fronting Lender for any draws made at any time
without regard to the occurrence of a Default or Event of Default (including
without limitation, following the commencement of any bankruptcy,
reorganization, receivership, liquidation or dissolution proceeding with respect
to any Borrower) under any Letter of Credit outstanding under the L/C Commitment
not immediately reimbursed by the Borrowers.
(c) In the event of any request for drawing under any
Letter of Credit by the beneficiary thereof, the Fronting Lender shall promptly
notify the Borrowers' Representative and the Borrowers shall immediately
reimburse the Fronting Lender on the day when such drawing is honored, by either
a cash payment by the Borrowers, or in the absence of such payment by the
Borrowers, by the Lenders automatically making, or having been deemed to have
made, (without further request or approval of the Borrowers) a cash Advance
under the Revolving Credit on such date which shall accrue interest at the
Alternate Base Rate. All Advances which constitute a reimbursement for a draw
under a Letter of Credit shall be shared by the Lenders in accordance with their
respective Pro Rata Percentages. If, for any reason, proceeds of Advances are
not received by the Fronting Lender on the date a drawing under a Letter of
Credit is honored in an amount equal to the amount of such drawing, the
Borrowers shall reimburse the Fronting Lender, on the Business Day immediately
following the date of such drawing, in an amount in same day funds equal to the
excess of the amount of such drawing over the amount of such proceeds, if any,
that are so received, plus accrued interest on such amount at the Alternate Base
Rate. The Borrowers' reimbursement obligation for draws under Letters of Credit
along with their obligation to pay L/C Fees and Fronting Fees shall herein be
referred to collectively as the Borrowers' "Reimbursement Obligations". All of
the Borrowers' Reimbursement Obligations hereunder with respect to Letters of
Credit shall apply unconditionally and absolutely to, and shall be joint and
several with respect to, Letters of Credit issued hereunder on behalf of any
Borrower, as a co-applicant with any of the Restricted Subsidiaries as if such
Letters of Credit had been issued for the account of such Borrower alone and the
term "Reimbursement Obligations" as used throughout this Agreement and the other
Loan Documents shall be deemed to include the Borrowers' Reimbursement
Obligations and their obligation to pay L/C Fees and Fronting Fees with respect
to all such Letters of Credit.
20
(d) (i) In the event that the Borrowers shall fail to
reimburse the Fronting Lender as provided in Section 2.2(c) in an amount equal
to the amount of the drawing honored by the Fronting Lender under a Letter of
Credit, the Fronting Lender shall promptly notify each Lender of the
unreimbursed amount of such drawing and of such Lender's participation therein
based on such Lender's Pro Rata Percentage. Each Lender shall make available to
the Fronting Lender an amount equal to its respective participation in same day
funds, at the office of the Fronting Lender specified in such notice, not later
than 1:00 p.m. (Philadelphia time) on the Business Day after the date notified
by the Fronting Lender. In the event that any Lender fails to make available to
such Fronting Lender the amount of such Lender's participation based on such
Lender's Pro Rata Percentage in such Letter of Credit, as provided in this
Section 2.2(d), the Fronting Lender shall be entitled to recover such amount on
demand from such Lender together with interest at the overnight Federal Funds
Effective Rate for the first three (3) days and at the Alternate Base Rate for
each day thereafter. The Fronting Lender shall distribute to each other Lender
which has paid all amounts payable by it under this Section 2.2(d) with respect
to any Letter of Credit, such other Lender's share, based on such Lender's Pro
Rata Percentage, of all payments received by the Fronting Lender from the
Borrowers in reimbursement of drawings honored by the Fronting Lender under such
Letter of Credit, when such payments are received. Nothing in this Section
2.2(d) shall be deemed to relieve any Lender from its obligation to pay all
amounts payable by it under this Section 2.2(d) with respect to any Letter of
Credit issued by the Fronting Lender or to prejudice any rights that the
Borrowers or any other Lender may have against a Lender as a result of any
default by such Lender hereunder and no Lender shall be responsible for the
failure of any other Lender to pay its respective participation, based on its
Pro Rata Percentage, payable under this Section 2.2(d).
(ii) In connection with the failure of any Lender to
make available to the Fronting Lender the amount of such Lender's participation
in any Letter of Credit, such Lender hereby agrees to protect, indemnify, and
save the Fronting Lender harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including, without
limitation, reasonable attorneys' fees, allocated costs of internal counsel and
the costs (including judgments) in connection with any related litigation) which
the Fronting Lender may incur or be subject to as a consequence, direct or
indirect, of the failure of such Lender to make available its participation in
such Letter of Credit.
Notwithstanding anything to the contrary contained in this
Section 2.2(d), each Lender providing its participation in any Letter of Credit
shall have no obligation to indemnify the Fronting Lender in respect of any
liability incurred by the Fronting Lender arising solely out of the gross
negligence or willful misconduct of the Fronting Lender.
(e) The obligation of the Borrowers to reimburse the
Fronting Lender for drawings made under the Letters of Credit and the
obligations of the Lenders to the Fronting Lender under Section 2.2(d) shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances including, without limitation,
the following circumstances:
(i) any lack of validity or enforceability of any
Letter of Credit;
21
(ii) the existence of any claim, setoff, defense or
other right that the Borrowers or any Affiliate of any of the Borrowers or any
other Person may have at any time against a beneficiary or any transferee of any
Letter of Credit (or any Persons for whom any such beneficiary or transferee may
be acting), the Fronting Lender, any Lender or any other Person, whether in
connection with this Agreement, the transactions contemplated herein or any
unrelated transaction;
(iii) any draft, demand, certificate or any other
document presented under any Letter of Credit proving to be forged, fraudulent
or invalid in any respect or any statement therein being untrue or inaccurate in
any respect;
(iv) payment by the Fronting Lender under any Letter
of Credit against presentation of a demand, draft or certificate or other
document that does not comply with the terms of such Letter of Credit unless the
Fronting Lender shall have acted in the absence of good faith or with willful
misconduct or gross negligence in issuing such payment; or
(v) the fact that a Default or Event of Default shall
have occurred and be continuing.
(f) If by reason of (i) any change after the Effective
Date in applicable law, regulation, rule, decree or regulatory requirement or
any change in the interpretation or application by any judicial or regulatory
authority of any law, regulation, rule, decree or regulatory requirement or (ii)
compliance by the Fronting Lender or any Lender with any direction, reasonable
request or requirement (whether or not having the force of law) of any
governmental or monetary authority including, without limitation, Regulation D:
(A) the Fronting Lender or any Lender shall be subject
to any tax or other levy or charge of any nature or to any variation thereof
(except for changes in the rate of any tax on the net income of the Fronting
Lender or any Lender or its applicable lending office) or to any penalty with
respect to the maintenance or fulfillment of its obligations under this Section
2.2, whether directly or by such being imposed on or suffered by the Fronting
Lender or any Lender;
(B) any reserve, deposit or similar requirement is or
shall be applicable, imposed or modified in respect of any Letter of Credit
issued by the Fronting Lender or participations therein purchased by any Lender;
or
(C) there shall be imposed on the Fronting Lender or
any Lender any other condition regarding this Section 2.2, any Letter of Credit
or any participation therein;
and the result of the foregoing is to directly or indirectly increase the cost
to the Fronting Lender or any Lender of issuing, creating, making or maintaining
any Letter of Credit or of purchasing or maintaining any participation therein,
or to reduce the amount receivable in respect thereof by the Fronting Lender or
any Lender, then and in any such case the Fronting Lender or such Lender shall,
within 90 days after the additional cost is incurred or the amount received is
reduced, notify the Borrowers' Representative and the Borrowers shall pay on
demand such amounts as may be necessary to compensate the Fronting Lender or
such Lender on an after-tax basis for such additional cost or reduced receipt,
together with interest on such amount from the date demanded until payment in
full thereof at a rate per annum equal at all times to the Alternate Base Rate.
22
A certificate signed by an officer of the Lender as to the amount of such
increased cost or reduced receipt showing in reasonable detail the basis for the
calculation thereof, submitted to the Borrowers' Representative and the
Administrative Agent by the Fronting Lender or any Lender, as the case may be,
shall, except for manifest error, be final, conclusive and binding for all
purposes.
(g) In addition to amounts payable as elsewhere provided
in this Section 2.2, without duplication, the Borrowers hereby agree to protect,
indemnify, pay and save the Fronting Lender harmless from and against any and
all claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees and reasonable allocated costs of internal
counsel) which the Fronting Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of the Letters of Credit or (ii) the
failure of the Fronting Lender to honor a drawing under any Letter of Credit as
a result of any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto government or Governmental Authority (all such acts
or omissions herein called "Government Acts").
As between the Borrowers and the Fronting Lender, the
Borrowers assume all risks of the acts and omissions of, or misuse of the
Letters of Credit issued by the Fronting Lender by, the respective beneficiaries
of such Letters of Credit. In furtherance and not in limitation of the
foregoing, the Fronting Lender shall not be responsible: (i) for the form,
validity, sufficiency, accuracy, genuineness or legal effects of any document
submitted by any party in connection with the application for and issuance of
such Letters of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, that may prove to
be invalid or ineffective for any reason; (iii) for failure of the beneficiary
of any such Letter of Credit to comply fully with conditions required in order
to draw upon such Letter of Credit; (iv) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they are in cipher, unless any of the
foregoing are caused by the Fronting Lender's gross negligence or willful
misconduct; (v) for errors in interpretation of technical terms; (vi) for any
loss or delay in the transmission of any document required in order to make a
drawing under any such Letter of Credit or of the proceeds thereof, unless
caused by the Fronting Lender's gross negligence or willful misconduct; (vii)
for the misapplication by the beneficiary of any such Letter of Credit of the
proceeds of any drawing under such Letter of Credit; and (viii) for any
consequences arising from causes beyond the control of the Fronting Lender,
including, without limitation, any Government Acts. None of the above shall
affect, impair, or prevent the vesting of any of the Fronting Lender's rights or
powers hereunder.
In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by the
Fronting Lender in connection with the Letters of Credit issued by it or the
related certificates, if taken or omitted in good faith, shall not create any
liability on the part of the Fronting Lender to the Borrowers.
Notwithstanding anything to the contrary contained in this
Section 2.2(g), the Borrowers shall have no obligation to indemnify the Fronting
Lender in respect of any liability incurred by the Fronting Lender arising
solely out of the gross negligence or willful misconduct of the Fronting Lender.
23
2.3 Voluntary Reduction or Increase of Commitment.
(a) The Borrowers may, at any time, without premium or
penalty, permanently reduce the Available Commitment then available. The
exercise of the foregoing option shall be evidenced by the Borrowers'
Representative giving the Administrative Agent written notice of the Borrowers'
election to do so (as evidenced for the purposes of this Section by a written
acknowledgment of receipt executed by such officer of the Administrative Agent
as the Administrative Agent may designate to the Borrowers' Representative in
writing) of such reduction request. Such notice shall be irrevocable and shall
specify the extent to which the reduction should be applied to the Available
Commitment, the date upon which such reduction shall be effective (which
effective date shall be a Business Day and shall be no less than 5 days after
receipt of such notice by the Administrative Agent) and the amount thereof,
which shall be in integral multiples of $1,000,000. In the event of such a
reduction in the Available Commitment, Advances in an aggregate outstanding
principal amount that is in excess of the Available Commitment, as so reduced
(the "Over-Limit Amount"), shall be simultaneously paid on the effective date of
such reduction, with interest accrued on the amount so paid or prepaid to the
date of such reduction. On the effective date of such reduction, the Borrowers
shall cash collateralize Letters of Credit, on terms satisfactory to the
Administrative Agent, in the amount, if any, by which the Over-Limit Amount
exceeds the amount of non-Letter of Credit Advances then outstanding and shall
execute such documents, instruments and agreements as the Administrative Agent
shall deem necessary to perfect a security interest in such cash collateral. A
reduction in the Available Commitment shall reduce each Lender's Pro Rata Share
in accordance with its respective Pro Rata Percentage.
(b) The Borrowers may at any time and from time to time,
subject to clause (d) of this Section 2.3, request an increase in the Available
Commitment of the Lenders by sending a written notice thereof from the
Borrowers' Representative to the Administrative Agent. Such notice shall specify
the total amount of the increase requested by the Borrowers (the "Requested
Increase"), which amount shall be at least $10,000,000 and not exceed
$25,000,000. The Administrative Agent shall notify each Lender of the Requested
Increase upon receipt of the Borrowers' notice thereof. Each Lender shall
respond in writing to the Borrowers (with a copy simultaneously sent to the
Administrative Agent), within thirty (30) days of receipt of notice from the
Administrative Agent of a Requested Increase (or such shorter period as the
Administrative Agent and the Borrowers shall agree), stating the maximum amount,
if any, by which such Lender is willing to increase its Pro Rata Share (the
"Offered Amount"). If the total of the Offered Amount for all of the Lenders is
greater that the Requested Increase, the Requested Increase shall be allocated
among the offering Lenders as the Borrowers and the Administrative Agent shall
agree or, absent any such agreement, pro rata based on each Lender's then
existing Pro Rata Percentage. Any Lender that increases its Pro Rata Share shall
execute and deliver a Commitment and Acceptance. If the total of the Offered
Amount for all the Lenders is equal to or less than the Requested Increase, (x)
unless the Borrowers and Administrative Agent shall otherwise agree, each
Lender's Pro Rata Share shall increase by its Offered Amount and (y) the
Borrowers may offer the difference, if any, between the Requested Increase and
the amount of the increase in the Pro Rata Shares pursuant to clause (x) above
24
to one or more new lenders reasonably acceptable to the Administrative Agent
(each, a "Proposed New Lender"). If the Borrowers request that a Proposed New
Lender join this Agreement and provide Advances hereunder, the Borrowers'
Representative shall, at least seven (7) days prior to the date (or such other
period as the Administrative Agent and the Borrowers shall agree) on which the
Proposed New Lender proposes to join the Agreement, notify the Administrative
Agent of the name of the Proposed New Lender and the amount of its proposed Pro
Rata Share and deliver a duly completed New Lender Joinder with respect to such
Proposed New Lender. Upon the consent of the Administrative Agent to a Proposed
New Lender joining this Agreement, which consent shall not be unreasonably
withheld, such Proposed New Lender shall join this Agreement pursuant to the
provisions of Section 10.10(e), including that its minimum Pro Rata Share be
$5,000,000 or such lesser amount as the Administrative Agent shall agree. The
Borrowers may make multiple requests for Requested Increases during the period
from the Effective Date to the Maturity Date provided, that the Available
Commitment shall not be increased pursuant to such requests by more than
$25,000,000 in the aggregate.
(c) Following any increase in the Available Commitment
pursuant to clause (b) of this Section 2.3, the Administrative Agent shall send
to the Lenders and the Borrowers a revised Annex I setting forth the new Pro
Rata Shares and Pro Rata Percentages of the Lenders. Such revised Annex I shall
replace the existing Annex I if no Lender objects thereto within 10 days of its
receipt thereof.
(d) Notwithstanding anything to the contrary in this
Section 2.3, (i) the Borrowers may not request an increase in the Available
Commitment if at the time of such request a Default or Event of Default shall
exist and (ii) no increase in the Available Commitment (including by way of
addition of a Proposed New Lender) shall become effective if on the date that
such increase would become effective, a Default or Event of Default shall exist.
2.4 Advances, Conversions, Renewals and Payments.
(a) (i) Except to the extent otherwise set forth in this
Agreement, all payments of principal and of interest on the Revolving Credit,
the Available Commitment Fee, the L/C Fees, all other charges, Expenses and any
other Obligations of the Borrower hereunder, shall be made to the Administrative
Agent at its main Philadelphia banking office, 1600 Market Street, Philadelphia,
Pennsylvania (or such other office as may be designated by the Administrative
Agent to the Borrowers in writing), in immediately available funds in lawful
money of the United States of America. The Administrative Agent shall have the
unconditional right and discretion to charge any Borrower's operating account
with the Administrative Agent (or any of the Company's Subsidiaries' operating
account with the Administrative Agent, if so directed by the Borrowers'
Representative or if an Event of Default has occurred hereunder) for all of the
Borrowers' Obligations as they become due from time to time under this
Agreement, including without limitation, interest, principal, fees and
reimbursement of Expenses.
(ii) So long as no Event of Default is outstanding,
the Borrowers shall have the option to designate whether payments (including
prepayments) shall be applied to Acquisition Advances or to other Advances. If
no such designation is made or if an Event of Default is outstanding, such
application shall be made by the Administrative Agent.
25
(b) (i) Advances (except Letters of Credit) which may be
made by the Lenders from time to time under the Revolving Credit shall be made
available by crediting such proceeds to any Borrower's operating account with
the Administrative Agent or to such other Persons or accounts as may be
specified by the Borrowers' Representative to the Administrative Agent in
writing.
(ii) All Regular Advances (except Letters of Credit)
requested by the Borrowers must be in the minimum amount of (A) $2,000,000
(unless the Swing Line Lender shall refuse to, or is unable, to make a Swing
Line Advance for a lesser amount in which case such minimum amount shall be
$500,000) and integral multiples of $100,000 in excess of such amount for
Alternate Base Rate Advances (unless otherwise agreed by the Administrative
Agent in its sole and absolute discretion) and (B) $5,000,000 and integral
multiples of $100,000 in excess of such amount for LIBOR Based Rate Advances.
All Swing Line Advances must be in the minimum amount of $50,000 and in integral
multiples of $10,000. All Advances must be requested:
(A) For all Alternate Base Rate Advances (other than
Swing Line Advances) by eleven o'clock (11:00) A.M., Philadelphia time, on the
date such Advance is to be made;
(B) For all Swing Line Advances by two o'clock (2:00)
P.M., Philadelphia time, on the date such Swing Line Advance is to be made; and
(C) For all LIBOR Based Rate Advances or any Letter of
Credit, by ten o'clock (10:00) A.M., Philadelphia time, at least three (3)
Business Days before such Advance is to be made.
All requests for an Advance are to be made by telephone immediately confirmed in
writing by letter, facsimile or telex in the form attached hereto as Exhibit C
and made a part hereof ("Notice of Borrowing") which form is to be executed by
an Authorized Officer of the Borrowers' Representative. Such request may be sent
by telecopy or facsimile transmission provided that receipt of such request
shall not be effective unless confirmed via telephone by the Administrative
Agent. Once made, Advance requests are irrevocable. Each request must indicate
the amount of such Advance, the date of such Advance, and whether or not the
requested Advance is a LIBOR Based Rate Advance or an Alternate Base Rate
Advance or a conversion or renewal of an existing Advance, and in the case of a
LIBOR Based Rate Advance, must specify the applicable LIBOR Interest Period.
Upon receiving a request for an Advance in accordance with this subparagraph
(ii) on the date of such request, the Administrative Agent shall promptly notify
all Lenders of the request.
(iii) (A) Each Lender shall advance its applicable Pro
Rata Percentage of a requested Regular Advance (and in the case of a Swing Line
Advance, the Swing Line Lender shall advance the amount of the requested Swing
Line Advance) to the Administrative Agent by remitting federal funds immediately
available to the Administrative Agent pursuant to the Administrative Agent's
instructions prior to three o'clock (3:00) p.m. Philadelphia time on the date of
the Advance. Subject to the satisfaction of the terms and conditions hereof and
receipt by the Administrative Agent of all required funds from the other
Lenders, the Administrative Agent shall make the requested Advance available to
the Borrowers by crediting such amount to such account as the Borrowers'
Representative has advised the Administrative Agent as soon as is reasonably
practicable thereafter on the day the requested Advance is to be made.
26
(B) (1) The Swing Line Lender shall, so long as and to
the extent that amounts are available to be borrowed under the Available
Commitment (whether or not any conditions precedent thereto can be or are met)
and to the extent any Swing Line Advances are not repaid by the Borrowers with
their own funds, require each other Lender, and each other Lender hereby agrees,
subject to this Section 2.4(b)(iii)(B), on such date (which shall be a Business
Day) as designated by the Swing Line Lender in writing to the Borrowers and the
other Lenders, to make a Regular Advance, which shall be an Alternate Base Rate
Advance, in an amount equal to such Lender's Pro Rata Percentage of the amount
of the Swing Line Advances specified in such notice (each a "Mandatory Loan").
If Alternate Base Rate Advances are made by the Lenders other than the Swing
Line Lender under the immediately preceding sentence, each such Lender shall
make the amount of its Regular Advance available to the Administrative Agent, in
same day funds, at the Administrative Agent's office, not later than 2:00 p.m.
(Philadelphia time) on the Business Day next succeeding the date such notice is
given. The conversion of Swing Line Advances to Regular Advances will not
require the Borrowers to comply with the conditions set forth in Section 3
hereof or the notice requirements of Section 2.4(b) hereof or require any other
action on the part of the Borrowers. The proceeds of such Regular Advances shall
be immediately delivered to the Swing Line Lender (and not to the Borrowers) and
applied to repay the outstanding Swing Line Advances. On the day such Regular
Advances are made, the Swing Line Lender's Swing Line Advances shall be deemed
to be paid with the proceeds of a Regular Advance made by the Lenders and such
portion of the Swing Line Advances deemed to be so paid shall no longer be
outstanding as Swing Line Advances, shall no longer be due under the Swing Line
Note and shall be due under the respective Revolving Credit Notes issued to the
Lenders to the extent of each Lender's Pro Rata Share. If any portion of any
such amount paid to the Swing Line Lender should be recovered by or on behalf of
the Borrowers from the Swing Line Lender in bankruptcy, by assignment for the
benefit of creditors or otherwise, the loss of the amount so recovered shall be
ratably shared among all of the Lenders in the manner contemplated by Section
9.7 hereof. Each Lender's obligation to make the Regular Advances referred to in
this paragraph shall be absolute and unconditional and shall not be affected by
any circumstance, including, without limitation, (i) any setoff, counterclaim,
recoupment, defense or other right which such Lender may have against the Swing
Line Lender, the Borrowers or any other Person for any reason whatsoever; (ii)
the occurrence or continuance of a Default or an Event of Default; (iii) the
occurrence of any Material Adverse Effect with respect to the Company and its
Subsidiaries; (iv) any breach of this Agreement or any of the other Loan
Documents by the Company or any of its Subsidiaries or any other Lender; or (v)
any other circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing.
(2) In the event that any Mandatory Loan cannot
for any reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the Bankruptcy
Code with respect to any Borrower), then each Lender hereby agrees that it shall
forthwith purchase (as of the date the Mandatory Loan would otherwise have
27
occurred, but adjusted for any principal payments received by the Swing Line
Lender relating to the Swing Line Advance from the Borrowers on or after such
date and prior to such purchase) from the Swing Line Lender, such participations
in the outstanding Swing Line Advances as shall be necessary to cause such
Lenders to share in such Swing Line Advances ratably based upon their respective
Pro Rata Percentages; provided, however, that (x) all interest payable on the
Swing Line Advances shall be for the account of the Swing Line Lender until the
date as of which the respective participation required to be purchased is paid
and, to the extent attributable to the purchased participation, shall be payable
to the participant from and after such date and (y) at the time any purchase of
participations pursuant to this sentence is actually made, the purchasing Lender
shall be required to pay the Swing Line Lender interest on the principal amount
of the participation purchased for each day from and including the day in which
the Mandatory Loan would otherwise have occurred to but excluding the date of
payment for such participation, at a rate per annum equal to (I) the overnight
Federal Funds Effective Rate for the first three (3) days and (II) at the
Alternate Base Rate for each day thereafter.
(3) A copy of each notice given by the Swing Line
Lender to the Lenders pursuant to Section 2.4(b)(iii)(B)(1) shall be promptly
delivered by the Swing Line Lender to the Administrative Agent and the
Borrowers. Upon the making of a Regular Advance by a Lender pursuant to this
Section 2.4(b)(iii)(B), the amount so funded shall become due under such
Lender's Revolving Credit Note and shall no longer be owed under the Swing Line
Note.
(C) Neither the Administrative Agent nor any other
Lender shall be obligated, for any reason whatsoever, to advance the share of
any other Lender (including, any Lender's share of funding obligations with
respect to Letters of Credit). If such corresponding amount is not made
available to the Administrative Agent by such Lender on the date the Advance is
made and the Administrative Agent elects (at its sole and absolute discretion,
without any obligation to do so) to make such Lender's share of the Advance
available to the Borrowers, the Administrative Agent shall be entitled to
recover such amount on demand from such Lender, or from the Borrowers, together
with interest thereon in respect of each day during the period commencing on the
date such amount was made available to the Borrowers and ending on (but
excluding) the date the Administrative Agent recovers such amount, at a rate per
annum equal to the Federal Funds Effective Rate, for each such day (or, if such
day is not a Business Day, for the next preceding Business Day). The
Administrative Agent shall also be entitled to recover any and all losses and
damages (including without limitation, reasonable attorneys' fees and costs)
from any Lender failing to so advance upon demand of the Administrative Agent.
The Administrative Agent may set off the obligations of a Lender under this
paragraph against any distributions or payments of the Obligations which the
Administrative Agent would otherwise make available to such Lender. To the
extent any Lender fails to provide its respective Pro Rata Percentage of any
requested Advance, such Lender's Pro Rata Percentage of all payments of the
Obligations shall decrease to reflect the actual percentage which its actual
outstanding Advances bears to the total outstanding Advances of all Lenders.
2.5 Interest. The unpaid principal balance of the Revolving
Credit shall bear interest, subject to the terms hereof, on one of the two bases
selected by the Borrowers from among the borrowing options set forth below, it
being understood that subject to the provisions hereof, the Borrowers may select
different options to apply simultaneously to different parts of the outstanding
Revolving Credit.
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(a) Alternate Base Rate Option. Interest on the
outstanding Alternate Base Rate Advances under the Revolving Credit will accrue
at the rate equal to the sum of (A) the Alternate Base Rate plus (B) the
Applicable Base Rate Margin. Interest on all Alternate Base Rate Advances shall
be payable quarterly, in arrears, on the first day of each January, April, July
and October beginning on July 1, 2004.
(b) LIBO Rate Option.
(i) Interest on the outstanding LIBOR Based Rate
Advances under the Revolving Credit shall accrue at the rate (the "LIBOR Based
Rate") equal to the sum of (A) the Adjusted LIBO Rate as determined by the
Administrative Agent on the Interest Rate Determination Date plus (B) the
Applicable LIBO Rate Margin.
(ii) Those portions of the Revolving Credit subject to
this option shall be selected and outstanding for either a one (1) month, two
(2) month, three (3) month, or six (6) month period from the date such LIBOR
Based Rate Advance is made or renewed or an Advance is converted to a LIBOR
Based Rate Advance ("LIBOR Interest Period") and must be repaid in full on the
last day of such applicable period with all accrued and unpaid interest thereon.
Interest shall also be due and payable, for LIBOR Based Rate Advances having a
LIBOR Interest Period of three (3) months or greater, on each date occurring at
three-month intervals after the first day of such LIBOR Based Rate Advance
Period. No LIBOR Interest Period may end after the Maturity Date. Subject to all
of the terms and conditions applicable to a request for a new Advance which the
Borrowers desire to select as a LIBOR Based Rate Advance, the Borrowers may
convert any Advance to a LIBOR Based Rate Advance or extend a LIBOR Based Rate
Advance as of the last day of the LIBOR Interest Period to a new LIBOR Based
Rate Advance.
(iii) No more than seven (7) portions (tranches) of
principal of LIBOR Based Rate Advances may be outstanding at any one time.
(iv) The initial LIBOR Interest Period for any
Borrowing of LIBOR Based Rate Advances shall commence on the date of such
Borrowing (including the date of any conversion from a Borrowing of an Alternate
Base Rate Advance) and each LIBOR Interest Period occurring thereafter
(including continuations thereof) in respect of such Borrowing shall commence on
the date on which the next preceding LIBOR Interest Period expires.
(v) If any LIBOR Interest Period relating to a
Borrowing of LIBOR Based Rate Advances begins on a date for which there is no
numerically corresponding date in the calendar month in which such LIBOR
Interest Period ends, such LIBOR Interest Period shall end on the last Business
Day of such calendar month.
(vi) If any LIBOR Interest Period would otherwise
expire on a day which is not a Business Day, such LIBOR Interest Period shall
expire on the next succeeding Business Day; provided that if any LIBOR Interest
Period in respect of a LIBOR Based Rate Advance would otherwise expire on a day
which is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such LIBOR Interest Period shall expire on
the next preceding Business Day.
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(c) Calculation of Interest. Interest shall be calculated
on the basis of a 360 day year (or a year of 365 or 366 days, as the case may
be, in the case of all Advances based on the Prime Rate) and charged on the
actual days elapsed.
(d) Failure to Specify Rate. All Advances for which an
interest rate option is not specifically designated by the Borrowers, pursuant
to the terms hereof, or not requested in conformity with the terms hereof, shall
be Alternate Base Rate Advances.
(e) Default Rate. After the occurrence and during the
continuance of an Event of Default hereunder, the per annum effective rate of
interest on all Advances may, in the discretion of the Administrative Agent or
at the direction of the Majority Lenders, be increased (and shall be
automatically so increased if the Event of Default is a payment default) by two
(2%) percentage points and may be applied retroactively to the date of the
occurrence of such Event of Default. Upon an acceleration of the obligations by
the Administrative Agent and/or the Lenders hereunder, the Administrative Agent
may (and shall, at the direction of the Majority Lenders), automatically and
without prior notice to the Borrowers, convert each LIBOR Based Rate Advance to
an Alternate Base Rate Advance. The Administrative Agent will subsequently give
notice to the Borrowers of such conversion.
(f) Continuation of Interest Charges. All rates of
interest charged on Advances under the Revolving Credit shall, until such
Advances are paid, continue to accrue at the applicable contract rate provided
in this Agreement and be paid even after the occurrence of any Default or Event
of Default, or after maturity, acceleration, recovery of judgment, bankruptcy,
insolvency proceedings of any kind or the happening of any event or occurrence
similar or dissimilar.
(g) Applicable Interest Limitations. In no contingency or
event whatsoever shall the aggregate of all amounts deemed interest hereunder
and charged or collected pursuant to the terms of this Agreement exceed the
highest rate permissible under any law which a court of competent jurisdiction
shall, in a final determination, deem applicable hereto. In the event that such
court determines the Lenders have charged or received interest hereunder in
excess of the highest applicable rate, the Lenders shall apply and set off such
excess interest received by the Lenders against other Obligations due or to
become due and such rate shall automatically be reduced to the maximum rate
permitted by such law.
2.6 Fees.
(a) So long as the Revolving Credit is outstanding and has
not been terminated, the Borrowers shall unconditionally pay to the
Administrative Agent, for the ratable benefit of the Lenders, a non-refundable
fee (the "Available Commitment Fee") at a rate per annum equal to the Applicable
Available Commitment Fee Percentage from time to time in effect on the average
daily unused amount of the Available Commitment (giving effect to any reductions
or increases therein) of such Lender during the preceding quarter (or shorter
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period commencing with the date hereof or ending with the Maturity Date or any
date on which the Available Commitment of such Lender shall be terminated). All
Available Commitment Fees shall be computed and paid on a quarterly basis in
arrears on the first day of each January, April, July and October, beginning on
July 1, 2004, in each case for the actual number of days elapsed over a year of
360 days. The Available Commitment Fee due to each Lender shall commence to
accrue on the date hereof, and shall cease to accrue on the Maturity Date and
the termination of the Available Commitment of such Lender as provided herein.
Solely for the purposes of calculating the distributive share of the Available
Commitment Fee to be remitted to each Lender, the daily unused Available
Commitment shall be determined (the "Fee Determination") as if no Swing Line
Advances were outstanding during such period and the share of such fee owing to
the Swing Line Lender shall be reduced to the extent necessary for each Lender
(other than the Swing Line Lender) to receive its share of such fee based on
such Fee Determination.
(b) (i) The Borrowers shall pay to the Administrative
Agent, for the ratable benefit of the Lenders, non-refundable letter of credit
fees equal to (A) one quarter of one (.25%) percent of the face amount of each
commercial letter of credit, which shall be paid upon negotiation of the letter
of credit and (B) for each day, the Applicable LIBO Rate Margin multiplied by
the aggregate undrawn face amount of the outstanding standby letters of credit
(collectively, the "L/C Fees") which shall be computed and paid on a quarterly
basis, in arrears, on the first day of each January, April, July and October,
beginning on July 1, 2004, in each case for the actual number of days elapsed
over a 360 day year.
(ii) In addition to the foregoing, the Borrowers shall
pay to the Fronting Lender, for its own account, (A) a fee (the "Fronting Fee")
equal to one eighth of one (1/8%) percent per annum of the aggregate face amount
of the outstanding Letters of Credit which shall be computed and paid on a
quarterly basis, in arrears, on the first day of each January, April, July and
October, beginning on July 1, 2004, in each case for the actual number of days
elapsed over a 360 day year, and (B) customary issuance, amendment, extension,
cancellation and administration fees and charges for each Letter of Credit, due
and payable upon demand of the Fronting Lender.
2.7 Prepayments.
(a) The Borrowers shall have the right at any time and at
its option from time to time to prepay the Advances in whole or in part without
premium or penalty, subject to reimbursement of the Lender's re-deployment costs
of prepayments of LIBOR Based Rate Advances in accordance with Section 2.9.
Whenever the Borrowers desire to prepay any part of the Advances, the Borrowers'
Representative shall provide a prepayment notice to the Administrative Agent by
eleven o'clock (11:00) A.M., Philadelphia time, at least one (1) Business Day
prior to the date of prepayment of any LIBOR Based Rate Advances and no later
than two o'clock (2:00) P.M., Philadelphia time, on the date of prepayment of
any Alternate Base Rate Advances, setting forth (i) the date, which shall be a
Business Day, on which the proposed prepayment is to be made; (ii) a statement
indicating the application of the prepayment between the Regular Advances and
the Swing Line Advances and (iii) the total principal amount of such prepayment,
the amount of which shall not be less than $1,000,000 in the case of Regular
Advances and $10,000 in the case of Swing Line Advances.
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(b) All prepayment notices shall be irrevocable. The
principal amount of the Advances for which a prepayment notice is given,
together with interest on such principal amount except with respect to Alternate
Base Rate Advances, shall be due and payable on the date specified in such
prepayment notice as the date on which the proposed prepayment is to be made.
Unless the Borrowers' Representative indicates otherwise in the prepayment
notice, prepayments shall be applied, first, to reduce Alternate Base Rate
Advances and, second, to reduce LIBOR Based Rate Advances. Any prepayment
hereunder shall be subject to the Borrowers' obligation to indemnify the Lenders
under Section 10.15.
2.8 Use of Proceeds. The proceeds of the Lenders' Advances
shall be used by the Borrowers solely: (i) to provide Letters of Credit to be
used by the Company and its Restricted Subsidiaries solely in the ordinary
course of its business and (ii) for working capital needs and general corporate
purposes, including the funding of Permitted Acquisitions, permitted dividends
and permitted stock repurchases, not otherwise prohibited under this Agreement.
2.9 Special Provisions Governing LIBOR Based Rate Advances.
Notwithstanding other provisions of this Agreement, the following provisions
shall govern with respect to LIBOR Based Rate Advances as to the matters
covered:
(a) On the Interest Rate Determination Date the
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties hereto) the interest
rate which shall apply to the LIBOR Based Rate Advances for which an interest
rate is then being determined for the applicable LIBOR Interest Period and shall
promptly give notice thereof (in writing or by telephone confirmed in writing or
by facsimile) to the Borrowers and to each Lender.
(b) In the event that (x) in the case of clause (i) below,
the Administrative Agent or (y) in the case of clause (ii) or (iii) below, any
Lender, shall have determined (which determination shall, absent manifest error,
be final, conclusive and binding upon all parties hereto):
(i) at any time that a LIBO Rate is to be determined
by the Administrative Agent that, by reason of any changes arising on or after
the Effective Date affecting the interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the applicable interest rate on the basis
provided for in the definition of Adjusted LIBO Rate;
(ii) at any time that such Lender shall incur
increased costs or reductions in the amounts received or receivable hereunder
with respect to any Lender on its obligation to make LIBOR Based Rate Advances
(which increase in cost or reduction in receivables shall be calculated in
accordance with such Lender's reasonable averaging and attribution methods)
because of (x) any change since the Effective Date (including changes proposed
or published prior to the Effective Date but not reflected in the pricing of the
Advances) in any applicable law or governmental (or quasi-governmental or other
body or entity accorded the status of a rule or regulation making authority)
rule, regulation, guideline or order, whether or not having the force of law, or
in the interpretation or administration thereof and including the introduction
of any new law or governmental rule, regulation, guideline or order, such as,
for example, but not limited to: (A) a change in the basis of taxation of
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payments to any Lender of the principal of or interest on the Revolving Credit
Notes or any other amounts payable hereunder (except for changes in the rate of
tax on, or determined by reference to, the net income or profits of such Lender)
or (B) a change in official reserve requirements, but, in all events, excluding
reserves required under Regulation D to the extent included in the computation
of the LIBO Rate and/or (y) other circumstances since the date of this Agreement
affecting such Lender or the interbank Eurodollar market or the position of such
Lender in such market; or
(iii) at any time that the making or continuance of
any LIBOR Based Rate Advance has become unlawful by compliance by such Lender in
good faith with any applicable law or governmental (or quasi-governmental or
other body or entity accorded the status of a rule or regulation making
authority) rule, regulation, guideline or order (or would conflict with any such
governmental rule, regulation, guideline or order not having the force of law
even though the failure to comply therewith would not be unlawful), or has
become impracticable as a result of a contingency occurring after the Effective
Date which materially and adversely affects the interbank eurodollar market;
then, and in any such event, the Administrative Agent in the case of clause (i)
above or such Lender in the case of clause (ii) or (iii) above shall on such
date give notice (by telephone confirmed in writing or by facsimile) to the
Borrowers of the Advance(s) affected and, in the case of clause (ii) or (iii) to
the Administrative Agent, of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in
the case of clause (i) above, LIBOR Based Rate Advances shall no longer be
available until such time as the Administrative Agent notifies the Borrowers and
the Lenders that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing given by the
Borrowers with respect to the borrowing of or conversion into (including
continuance of) LIBOR Based Rate Advances which have not yet been incurred shall
be deemed rescinded by the Borrowers, (y) in the case of clause (ii) above, the
Borrowers shall pay to such Lender, upon written demand therefor, such
additional amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as such Lender in its reasonable
discretion shall determine) as shall be required to compensate such Lender on an
after-tax basis for such increased costs or reductions in amounts receivable
hereunder (a written certificate signed by an officer of such Lender as to the
additional amounts owed to such Lender, showing in reasonable detail the basis
for the calculation thereof, submitted to the Borrowers by such Lender shall,
absent manifest error, be final, conclusive and binding upon all parties hereto)
and (z) in the case of clause (iii) above, the Borrowers shall take one of the
actions specified in Section 2.9(c) as promptly as possible and, in any event,
within the time period required under Section 2.9(c) or, if earlier, the time
period required by law. All demands for payment hereunder shall be given no more
than ninety (90) days after the occurrence of the change in law or other event
giving rise to such demand; provided however, that failure to deliver notice on
a timely basis shall not constitute a waiver of any Lender's right to receive
payment for any costs relating to the 90-day period preceding the date of demand
and any costs incurred after the giving of such notice.
(c) At any time that any LIBOR Based Rate Advance is
affected by the circumstances described in Section 2.9(b)(ii) or (iii), the
Borrowers may (and in the case of a LIBOR Based Rate Advance affected pursuant
to Section 2.9(b)(iii) shall) either (i) if a Notice of Borrowing has been given
with respect to the affected LIBOR Based Rate Advance, cancel said Notice of
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Borrowing by giving the Administrative Agent telephonic notice (confirmed
promptly in writing or by facsimile) thereof on the same date that the Borrowers
were notified by a Lender pursuant to Section 2.9(b)(ii) or (iii), or (ii) if
the affected LIBOR Based Rate Advance is then outstanding, upon at least three
(3) Business Days' notice to the Administrative Agent, require the affected
Lender to convert each such LIBOR Based Rate Advance into an Alternate Base Rate
Advance or prepay such LIBOR Based Rate Advance on the last day of the current
LIBOR Interest Period therefor unless earlier payment is required by law;
provided that if more than one Lender is affected at any time, then all affected
Lenders must be treated the same pursuant to this Section 2.9(c); and provided,
further, that the Borrowers shall compensate any such affected Lenders as set
forth in Section 2.9(f).
(d) Anything herein to the contrary notwithstanding, if,
on any Interest Rate Determination Date, no LIBO Rate is available by reason of
any changes arising on or after the Effective Date affecting the interbank
Eurodollar market or adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of LIBO
Rate, the Administrative Agent shall give the Borrowers and each Lender prompt
notice thereof and the Advances requested to be made as LIBOR Based Rate
Advances shall, subject to the applicable notice requirements, be made as
Alternate Base Rate Advances.
(e) Each Lender agrees that, as promptly as practicable
after it has actual knowledge of the occurrence of any event or the existence of
a condition that would cause it to be an affected Lender under Section
2.9(b)(ii) or (iii), it will, to the extent not inconsistent with such Lender's
internal policies, use reasonable efforts to make, fund or maintain the affected
LIBOR Based Rate Advances of such Lender through another lending office of such
Lender if as a result thereof the additional moneys which would otherwise be
required to be paid in respect of such Advances pursuant to Section 2.9(b)(ii)
would be materially reduced or the illegality or other adverse circumstances
which would otherwise require prepayment of such Advances pursuant to Section
2.9(b)(iii) would cease to exist, and if, as determined by such Lender, in its
reasonable discretion, the making, funding or maintaining of such Advances
through such other lending office would not otherwise be disadvantageous to such
Lender. The Borrowers hereby agree to promptly pay all reasonable out-of-pocket
expenses incurred by any Lender in utilizing another lending office of such
Lender pursuant to this Section 2.9(e).
(f) The Borrowers shall compensate each Lender, upon
written request by that Lender, for all reasonable losses, expenses and
liabilities (including, without limitation, such factors as any interest paid by
that Lender to lenders of funds borrowed by it to make or carry its LIBOR Based
Rate Advances and any loss sustained by the Lender in connection with
re-deployment of such funds (based upon the difference between the amount earned
in connection with the re-deployment of such funds and the amount payable by the
Borrowers if such funds had been borrowed or remained outstanding, but not for
loss of profit)) which that Lender may sustain with respect to the Borrowers'
LIBOR Based Rate Advances: (i) if for any reason attributable to the Borrowers,
a Borrowing of any LIBOR Based Rate Advance does not occur on a date specified
therefor in a Notice of Borrowing or a telephonic request for borrowing or
conversion, or a successive LIBOR Interest Period does not commence after notice
therefor is given or is deemed to have been given pursuant to Section 2.4 (b)
(whether or not withdrawn by the Borrowers or deemed withdrawn pursuant to
clause (x) of the last paragraph of Section 2.9(b)); or (ii) if any prepayment
or repayment (in accordance with Section 2.7 or this Section 2.9, by
34
acceleration or otherwise) or conversion of any of such Lender's LIBOR Based
Rate Advances occurs on a date which is not the last day of the LIBOR Interest
Period applicable to that advance; or (iii) if any prepayment or repayment of
any such Lender's LIBOR Based Rate Advances is not made on any date specified in
a notice of prepayment or repayment given by the Borrowers; or (iv) as a
consequence of (x) any other failure by the Borrowers to repay such Lender's
LIBOR Based Rate Advances when required by the terms of this Agreement or (y)
any election made pursuant to Section 2.9(c). Compensation owing under this
Section 2.9(f) shall be equal to the amount of interest which would have accrued
on the amount of principal prepaid or repaid or converted or not borrowed for
the period from the date of such prepayment or repayment or conversion or
failure to borrow to the last day of the then current LIBOR Interest Period for
the relevant LIBOR Based Rate Advance (or, in the case of a failure to borrow,
the LIBOR Interest Period for such LIBOR Based Rate Advance which would have
commenced on the date of such failure to borrow) at the applicable rate of
interest for such LIBOR Based Rate Advance provided for herein minus any amount
such Lender, in good faith and in its sole discretion (absent manifest error),
determines is realizable upon the re-deployment of such funds. A certificate
signed by an officer of the Lender as to the amount of such losses, expenses and
liabilities, showing in reasonable detail the calculation thereof and submitted
to the Borrowers by such Lender shall, absent manifest error, be final,
conclusive and binding of all purposes.
(g) Any Lender may make, carry or transfer LIBOR Based
Rate Advances at, to, or for the account of any of its branch offices or the
office of an Affiliate of that Lender; provided that any increased costs
associated therewith shall be borne by such Lender except as provided in Section
2.9(e) above.
(h) During the continuance of a Default or an Event of
Default, the Borrowers may not elect to have an Advance made or maintained as,
or converted into, a LIBOR Based Rate Advance after the expiration of any LIBOR
Interest Period then in effective for that Advance.
(i) Calculation of all amounts payable to the Lender under
this Section 2.9 in respect of LIBOR Based Rate Advances shall be made as though
the Lender had actually funded its relevant LIBOR Based Rate Advance through the
purchase of a Eurodollar deposit bearing interest at the LIBO Rate applicable to
such LIBOR Based Rate Advance of such Eurodollar deposit from an offshore office
of the applicable Lender to a domestic office of such Lender in the United
States of America; provided, however, that the Lenders may fund each of their
LIBOR Based Rate Advances in any manner they deem fit and the foregoing
assumption shall be utilized only for the calculation of amounts payable under
this Section 2.9.
2.10 Capital Requirements, Etc. If the adoption or
effectiveness after the Effective Date of any applicable law or governmental (or
quasi-governmental or other body or entity accorded the status of a rule or
regulation making authority) rule or regulation regarding capital adequacy, or
any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by such Lender
or such Lender's direct or indirect parent with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency (including in each case any such
change proposed or published prior to the date hereof but not reflected in the
35
pricing of the Advances), has or would have the effect of reducing the rate of
return on such Lender's or such Lender's parent's capital or assets as a
consequence of such Lender's obligations hereunder to a level below that which
such Lender or such Lender's parent could have achieved but for such adoption,
effectiveness or change or as a consequence of an increase in the amount of
capital required to be maintained by such Lender (including in each case,
without limitation, with respect to any Lender's commitment hereunder or any
Advance), then from time to time, within fifteen (15) days after demand by such
Lender (with a copy to the Administrative Agent), the Borrowers shall pay to
such Lender such additional amount or amounts as will compensate, on an
after-tax basis, such Lender or such Lender's parent, as the case may be, for
such reduction. Each Lender, upon determining in good faith that any additional
amounts will be payable pursuant to this Section 2.10, will give prompt written
notice thereof to the Borrowers, which notice shall set forth in reasonable
detail the basis of the calculation of such additional amounts, although any
delay in giving any notice shall not release or diminish any of the Borrowers'
obligations to pay additional amounts pursuant to this Section 2.10.
2.11 Mandatory Prepayments/Commitment Reductions.
(a) (i) The Borrowers shall immediately prepay the
outstanding principal amount of the Advances (exclusive of undrawn Letters of
Credit) in accordance with Section 2.3 on any date on which the Outstandings
exceed the Available Commitment in effect at such time, in the amount of such
excess.
(ii) The Borrowers shall immediately prepay to the
Swing Line Lender the outstanding principal amount of the Swing Line Advances on
any date on which the aggregate outstanding principal amount of such Swing Line
Advances exceed the Swing Line Commitment in effect at such time, in the amount
of such excess.
(b) Immediately upon funds being made available to the
Company or any of its Subsidiaries constituting Net Cash Proceeds from Equity
Offerings, an amount equal to 50% of such Net Cash Proceeds from Equity
Offerings shall be applied to, and shall constitute a prepayment of, the
Advances as provided in Section 2.11(d).
(c) During the first calendar quarter of each calendar
year during the term hereof the Borrowers shall cause the aggregate outstanding
principal balance of Advances (exclusive of undrawn Letters of Credit) under the
Revolving Credit and any outstanding Capital (as that term is defined in the
Accounts Receivable Securitization Documents) under the Accounts Receivable
Securitization to be less than an amount equal to $35,000,000 plus the
applicable Adjustment Amount for a consecutive thirty (30) day period in such
first calendar quarter (the "Reduced Level"). If, as of March 1 of each year the
Borrowers have not completed their compliance with this covenant for such year,
the Borrowers shall, on such date, reduce outstanding Advances (exclusive of
undrawn Letters of Credit) to the applicable Reduced Level or (if at or below
such Reduced Level on such date) maintain the outstanding advances (exclusive of
undrawn Letters of Credit) at or below the applicable Reduced Level for a
sufficient number of days to complete its compliance with this covenant for such
year.
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(d) With respect to each prepayment of Advances required
by Section 2.11(a), (b), (c) or (d) other than Alternate Base Rate Advances, the
Borrowers' Representative shall give the Administrative Agent one (1) Business
Day's notice and may designate the types of Advances and the specific Borrowing
or Borrowings which are to be prepaid. In the absence of a designation by the
Borrowers' Representative, the Administrative Agent shall make such designation
in its sole discretion. All prepayments shall include payment of accrued
interest on the principal amount so prepaid, shall be applied to the payment of
interest, Expenses, fees and charges before application to principal and shall
include amounts payable, if any, under Section 2.9(f). On the effective date of
any such prepayment, the Borrowers shall cash collateralize Letters of Credit,
on terms and conditions satisfactory to the Administrative Agent, in the amount,
if any, by which the amount of such prepayment exceeds the outstanding cash
Advances and shall execute such documents, instruments and agreements as the
Administrative Agent shall deem necessary to perfect a security interest in such
cash collateral.
(e) The amount required to be applied in accordance with
Sections 2.11(b) shall permanently reduce the Available Commitment on a
dollar-for-dollar basis. A reduction in the Available Commitment shall reduce
each Lender's Pro Rata Share in accordance with its respective Pro Rata
Percentage.
2.12 Net Payments. (a) Except as otherwise required by law,
all payments made by the Borrowers to any Lender or the Administrative Agent
under this Agreement and/or any Loan Document shall be made free and clear of,
and without reduction for or on account of, any present or future income, stamp
or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding income, bank shares and franchise taxes
imposed by any jurisdiction in which such Lender's principal or lending office
is located or in which such Lender is engaged in a trade or business or any
political subdivision or taxing authority thereof or therein (such non-excluded
taxes being called "Taxes"). If any Taxes are required to be withheld from any
amounts payable to the Administrative Agent or any Lender under this Agreement
and/or any Loan Document, the Borrowers shall timely remit such Taxes to the
Governmental Authority imposing the same and the amounts so payable to such
Lender shall be increased to the extent necessary to yield to such Lender (after
payment of all Taxes) interest or any such other amounts payable at the rates or
in the amounts specified in this Agreement and/or any Loan Document. Whenever
any Tax is payable by the Borrowers, as promptly as possible thereafter, the
Borrowers shall send to the Administrative Agent, for its own account or the
account of such Lender, as the case may be, a certified copy of an original
official receipt received by the Borrowers showing payment thereof. Without
prejudice to the foregoing, if any Lender or the Administrative Agent is
required to make any payment on account of Taxes, the Borrowers will, upon
notification by the Lender or the Administrative Agent, promptly indemnify such
Person against such Taxes. Notwithstanding the foregoing provisions of this
Section 2.12(a), the Borrowers will have no obligation to indemnify any Lender
or the Administrative Agent, in respect of any Taxes that would not have been
payable had (i) such Lender, assignee of such Lender or participant of a Lender
(or each interestholder in such Lender, assignee or participant, where such
Lender, assignee or participant is a pass-through entity for purposes of the
U.S. withholding tax rules) provided to the Borrowers and the Administrative
Agent, the applicable Withholding Certificate. For purposes of this Section
2.12, the term "Taxes" includes interest, penalties and expenses payable or
incurred in connection therewith. The Lender shall submit a certification or
37
otherwise provide written notice to the Borrowers within a reasonable period of
time after becoming aware of any Taxes for which it is entitled to payments of
additional amounts under this Section 2.12(a). All demands for payment hereunder
shall be given no more than 90 days after the occurrence of the event giving
rise to such demand; provided however, that failure to deliver notice on a
timely basis shall not constitute a waiver of any Lender's right to receive
payment for any costs relating to the 90-day period preceding the date of demand
and any costs incurred after the giving of such notice.
(b) Each Lender or assignee or participant of a Lender
that is not incorporated under the laws of the United States of America or a
state thereof (and, upon the written request of the Administrative Agent, each
other Lender or assignee or participant of a Lender) agrees that it will deliver
to the Borrowers and the Administrative Agent two (2) duly completed appropriate
valid Withholding Certificates (as defined under Section 1.1441-1(c)(16) of the
Income Tax Regulations (the "Regulations") certifying its status (i.e., U.S. or
foreign person) and, if appropriate, making a claim of reduced, or exemption
from, U.S. withholding tax on the basis of an income tax treaty or an exemption
provided by the Internal Revenue Code of 1986 (as amended, the "Code"). The term
"Withholding Certificate" means a Form W-9; a form W-8BEN; a form W-8ECI; a form
W-8IMY and the related statements and certifications as required under Section
1.1441-1(e)(3) of the Regulations; a statement described in Section
1.871-14(c)(2) of the Regulations; or any other certificates under the Code or
Regulations that certify or establish the status of a payee or beneficial owner
as a U.S. or foreign person. Each Lender, assignee or participant required to
deliver to the Borrowers and the Administrative Agent a valid Withholding
Certificate pursuant to the preceding sentence shall deliver such valid
Withholding Certificate as follows: (A) each Lender which is a party hereto on
the Effective Date shall deliver such valid Withholding Certificate at least
five (5) Business Days prior to the first date on which any interest or fees are
payable by the Borrowers hereunder for the account of such Lender; (B) each
assignee or participant shall deliver such valid Withholding Certificate at
least five (5) Business Days before the effective date of such assignment or
participation (unless the Administrative Agent in its sole discretion shall
permit such assignee or participant to deliver such Withholding Certificate less
than five (5) Business Days before such date in which case it shall be due on
the date specified by the Administrative Agent). Each Lender, assignee or
participant which so delivers a valid Withholding Certificate further undertakes
to deliver to the Borrowers and the Administrative Agent two (2) additional
copies of such Withholding Certificate so delivered by it, and such amendments
thereto or extensions or renewals thereof as may reasonably requested by the
Borrowers or the Administrative Agent. Notwithstanding the submission of a
Withholding Certificate claiming a reduced rate of, or exemption from, U.S.
withholding tax, the Administrative Agent shall be entitled to withhold United
States federal income taxes at the full 30% withholding rate if in its
reasonable judgment it is required to do so under the due diligence imposed upon
a withholding agent under Section 1.1441-7(b) of the Regulations. Further, the
Administrative Agent is indemnified under Section 1.1441-6(b) of the Regulations
against any claims and demands of any Lender or assignee or participant of a
Lender for the amount of any tax it deducts or withholds in accordance with
regulations under Section 1441 of the Code.
2.13 Maturity Date Extension. Not more than 120 days nor less
than 60 days prior to each anniversary hereof the Borrowers may request in
writing that the then effective Maturity Date be extended for an additional year
and the Lenders shall use their best efforts to respond to such request within
30 days of receipt thereof. The then effective Maturity Date shall be extended
as requested, but only if (i) no Default or Event of Default shall have occurred
and be continuing on the effective date of such extension and (ii) all of the
Lenders consent to such extension.
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2.14 Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Sections 2.10 or
2.12 that affects fewer than all the Lenders, it will, if requested by the
Borrowers, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Advances affected by
such event with the object of avoiding the consequences of such event; provided,
that such designation is made on terms that, in the sole judgment of such
Lender, cause such Lender and its lending offices to suffer no economic, legal,
regulatory or other disadvantage, and provided, further, that, nothing in this
Section shall affect or delay the required performance of any of the obligations
of the Borrowers or the rights of any Lender pursuant to Sections 2.10 or 2.12.
2.15 Replacement of a Lender in Certain Circumstances. If an
event occurs giving rise to the operation of Section 2.10 or 2.12, and the event
affects fewer than all the Lenders, (each, an "Affected Lender"), the Borrowers
may (a) request one or more of the other Lenders to acquire and assume all or
part of such Affected Lender's Pro Rata Share or (b) replace such Affected
Lender by designating another lender or financial institution that is willing to
acquire the Affected Lender's Pro Rata Share; provided, that (i) such
replacement does not conflict with any applicable law or governmental rule or
regulation, (ii) no Default or Event of Default shall have occurred and be
continuing at the time of such replacement, (iii) the replacement lender or
financial institution shall purchase, at par, the Pro Rata Share, accrued
interest and other amounts owing to such Affected Lender on a pro rata basis as
of the date of replacement, (iv) the Borrowers shall be liable to such Affected
Lender under Section 2.9 if any LIBOR Based Rate Advances owing to such Affected
Lender shall be prepaid (or purchased) other than on the last day of the LIBOR
Interest Period relating thereto and shall pay any such amounts to such Affected
Lender on the date of such replacement, (v) the replacement lender or financial
institution, if not already a Lender, shall be satisfactory to the
Administrative Agent, (vi) the replaced Lender shall be obligated to make such
replacement in accordance with the provisions of Section 10.10 (provided that
the Borrower or replacement Lender shall be obligated to pay the assignment fee
according to Section 10.10(b)(i)(D)) and (vii) the Borrower shall pay all
additional amounts (if any) required pursuant to Sections 2.10 or 2.12, as the
case may be, to the extent such additional amounts are incurred on or prior to
the consummation of such replacement.
2.16 Borrowers' Representative. Each of the Borrowers hereby
appoints the Company as its non-exclusive representative, and grants to the
Company an irrevocable power of attorney to act as its attorney-in-fact, with
regard to all matters relating to this Agreement and each of the other Loan
Documents, including, without limitation, execution and delivery of any Notice
of Borrowing, and amendments, supplements, waivers or other modifications hereto
or thereto, receipt of any notices hereunder or thereunder and receipt of
service of process in connection herewith or therewith and making all elections
as to interest rates and interest payment dates. (In such capacity, the Company
is herein referred to as the "Borrowers' Representative.") The Administrative
Agent and the Lenders shall be entitled to rely exclusively on the Borrowers'
Representative's authority so to act in each instance without inquiry or
39
investigation, and each of the Borrowers hereby agrees to indemnify and hold
harmless the Administrative Agent and the Lenders for any losses, costs, delays,
errors, claims, penalties or charges arising from or out of the Borrowers'
Representative's actions pursuant to this Section 2.16 and the Administrative
Agent's and the Lenders' reliance thereon and hereon. Notice from the Borrowers'
Representative shall be deemed to be notice from all of the Borrowers and notice
to the Borrowers' Representative shall be deemed to be notice to all of the
Borrowers. Nothing in this Section 2.16 shall vitiate or be held contrary to the
Borrowers' representations and covenants regarding the Loans or the net worth or
solvency of the Borrowers made herein or in any of the Loan Documents.
SECTION 3. EFFECTIVENESS AND CONDITIONS PRECEDENT TO ADVANCES.
3.1 Conditions Precedent to Effectiveness. The effectiveness
of this Agreement is subject to satisfaction of the following conditions
precedent (all documents, instruments and agreements to be in form and substance
satisfactory to the Administrative Agent and the Administrative Agent's
counsel):
(a) Resolutions, Opinions, and Other Documents. The
Borrowers shall have delivered to the Administrative Agent the following:
(i) this Agreement, the Revolving Credit Notes, and
the Swing Line Note all properly executed;
(ii) each of the other Loan Documents to be executed
by the Borrowers or by any other Person pursuant to the terms hereof;
(iii) Guarantees properly executed by each of the
Guarantors;
(iv) certified copies of (A) resolutions of each
Borrower's board of directors authorizing the execution of this Agreement, the
Revolving Credit Notes, the Swing Line Note to be issued hereunder and each of
the other Loan Documents, and (B) each Borrower's Articles or Certificate of
Incorporation or Formation and By-laws or Operating Agreement;
(v) certified copies of (A) resolutions of each
Guarantor's board of directors authorizing the execution of the Guarantees and
(B) each Guarantor's Articles or Certificate of Incorporation and By-laws or
Operating Agreement;
(vi) an incumbency certificate for each Borrower
identifying the parties executing this Agreement, the Revolving Credit Notes,
the Swing Line Note and the other Loan Documents with specimen signatures;
(vii) an incumbency certificate for each Guarantor
identifying the parties executing the Guarantees, with specimen signatures;
(viii) a written opinion of the Borrowers' and
Guarantors' counsel addressed to the Administrative Agent and the Lenders;
40
(ix) certification by the chief financial officer or
vice president of finance of the Company that there has not occurred any
material adverse change in the business, assets, operations, properties,
financial condition, contingent liabilities, prospects or material agreements of
the Company and its Subsidiaries taken as a whole, since March 31, 2003 as
reflected on the applicable Financial Statements of the Company delivered to the
Administrative Agent;
(x) payment of all fees set forth in the Fee Letter
(referred to in Section 10.23) due on the Effective Date and Expenses associated
with the Revolving Credit;
(xi) Uniform Commercial Code, judgment, federal and
state tax lien searches against each Borrower and Restricted Subsidiary at the
Borrowers' sole cost and expense, showing that the Property of each Borrower and
Restricted Subsidiary is not subject to any Liens except for Permitted Liens,
and certificates of good standing showing each Borrower and Restricted
Subsidiary to be in good standing in each jurisdiction in which it is qualified
to do business; and
(xii) copies of all other documents, instruments,
agreements, opinions and certificates as the Administrative Agent may reasonably
request.
(b) Absence of Certain Events. As of the Effective Date,
(i) no Default or Event of Default hereunder shall have occurred and be
continuing and (ii) there shall not have occurred any event or condition having
a Material Adverse Effect with respect to the Company and its Subsidiaries since
March 31, 2003, as reflected on the applicable Financial Statements delivered to
the Administrative Agent.
(c) Warranties and Representations at Closing. The
warranties and representations contained in Section 4 as well as any other
Section of this Agreement shall be true and correct in all material respects on
the Effective Date with the same effect as though made on and as of that date.
The Borrowers shall not have taken any action or permitted any condition to
exist which would have been prohibited by any Section hereof. All warranties and
representations contained in this Agreement, unless expressly stated to the
contrary, are deemed to have been made to the Administrative Agent and Lenders
immediately following completion of Closing hereunder.
(d) Compliance with this Agreement. The Borrowers shall
have performed and complied with all agreements, covenants and conditions
contained herein which are required to be performed or complied with by the
Borrowers before or at the Effective Date, including, without limitation, the
provisions of Sections 5, 6 and 7 hereof.
(e) Officers' Certificate. The Administrative Agent shall
receive a certificate dated the Effective Date and signed by the chief financial
officer or vice president of finance of the Company certifying that all of the
conditions precedent to the Borrowings to occur on the Effective Date have been
fulfilled.
41
(f) Indebtedness; Liens, etc. (i) The Borrowers and each
of the Guarantors shall have received all necessary consents or waivers or shall
have amended, supplemented or otherwise modified, repaid, redeemed or defeased
its outstanding Indebtedness in a manner and on terms satisfactory to the
Administrative Agent such that there exists no default or potential default
(including, without limitation, as a result of the consummation of the
transactions contemplated by any Borrowing hereunder) with respect to such
Indebtedness or under any note, evidence of indebtedness, mortgage, deed of
trust, security document or other agreement relating to such Indebtedness and
such indentures, notes, evidences of indebtedness, mortgages, deeds of trust or
other agreements, other than as limited by the Note Purchase Agreement, relating
to such Indebtedness shall not contain any restriction on the ability of any of
the Borrowers or the Guarantors to enter into this Agreement, the Guarantees or
the other Loan Documents to which it is entering or, other than as limited by
the Note Purchase Agreement, the granting of any Lien in favor of the Lenders,
nor do such agreements, documents or instruments contain any provision giving
rise to the creation of any Lien in favor of any Person as a result of any
Borrowing hereunder.
(ii) The Administrative Agent and the Lenders shall be
satisfied, in their reasonable discretion, with all Indebtedness of any of the
Borrowers and the Restricted Subsidiaries outstanding on the Effective Date and
not reflected on the Financial Statements.
(g) Consents, etc. All material consents of any
Governmental Authority and third-party consents (including, without limitation,
all material approvals and consents required in connection with any
Environmental Law or other environmental statutes, rules or regulations), if
any, in connection with the transactions contemplated by this Agreement and the
other Loan Documents (including any consents and approvals that are necessary
for the Borrowers to borrow and for each of the Guarantors to perform its
obligations hereunder and to perform in a full and timely manner all of its
obligations under the other Loan Documents) and otherwise referred to herein or
therein to be completed on or before the Effective Date, shall have been
obtained and delivered to the Administrative Agent, and shall remain in effect
and all applicable waiting periods shall have expired without any action being
taken by any competent authority which restrains, prevents or imposes, in the
judgment of the Administrative Agent or the Majority Lenders, materially adverse
conditions upon the consummation of the transactions contemplated by this
Agreement. There shall not exist any judgment, order, injunction or other
restraint issued or filed with respect to the making of the Advances hereunder.
(h) Environmental Review. At or prior to the Effective
Date, there shall have been delivered to the Administrative Agent all
environmental reports, investigations, studies, audits, assessments or reviews
in the possession of the Company or any Subsidiary, as set forth in Schedule
3.1(h) attached hereto and made a part hereof, in relation to the current
business or operations of the Company or any of its Subsidiaries or any Real
Property, Property or facilities now owned, operated, leased or controlled by
the Company or any of its Subsidiaries which contain information pertaining to
any event(s) or conditions) which have, or to the best of the Borrowers' present
Knowledge are reasonably likely to cause, a Material Adverse Effect.
(i) Compliance with Laws. The Company and each of its
Subsidiaries shall be in compliance with all applicable statutes, regulations
and ordinances of the United States of America and each other country and
jurisdiction, and of each state, city, town, municipality, country, and each
agency thereof (including, without any limitation, ERISA laws, Environmental
Laws and margin regulations), a violation of which would cause a Material
Adverse Effect.
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3.2 Effective Date; Transitional Arrangements. (a) Subject to
the satisfaction of the conditions of Section 3.1, this amendment and
restatement of the Existing Loan Agreement shall become effective on such date
(the "Effective Date") and at such time as may be mutually agreeable to the
parties contemporaneously with the execution hereof ("Closing") at the offices
of the Administrative Agent's counsel, Ballard Spahr Andrews & Ingersoll, LLP,
in Philadelphia, Pennsylvania.
(b) On the Effective Date, without the necessity of
further action by any party: (i) the outstanding principal amount of the
"Regular Advances" and "Swing Line Advances" (each as defined in the Existing
Loan Agreement) owed to the Lenders shall be converted and continued as Regular
Advances and Swing Line Advances, respectively, as if made by the Lenders
pursuant to this Agreement in accordance with the Pro Rata Percentages set forth
on Annex I hereto; and (ii) each Existing Letter of Credit shall continue in
full force and effect as a Letter of Credit issued under this Agreement for so
long as such Letter of Credit remains outstanding or any draft thereunder has
not been reimbursed, and all Advances shall be entitled to the security and
subject to the provisions set forth in this Agreement. Each Lender agrees to
participate in all such Letters of Credit in accordance with the terms of this
Agreement as if each such Letter of Credit were issued hereunder.
(c) Except as otherwise provided in this Agreement, the
Existing Loan Agreement and the promissory notes issued thereunder shall be
superseded by this Agreement, the Notes and the other Loan Documents and shall
be of no further force or effect and such promissory notes issued under the
Existing Loan Agreement shall be surrendered by the Lenders to the
Administrative Agent and returned to the Company.
(d) All interest and all commitment, facility and other
fees and expenses owing or accruing under or in respect of the Existing Loan
Agreement shall be calculated as of the Effective Date (prorated in the case of
any fractional periods), and shall be paid on such date in accordance with the
method specified in the Existing Loan Agreement, as if it were still in effect.
3.3 Conditions Precedent to all Advances. The obligation of
the Lenders to make Advances hereunder after the Effective Date is subject, at
the time of making each such Advance, to the satisfaction of the following
conditions precedent (all documents, instruments and agreements to be in form
and substance satisfactory to the Administrative Agent and the Administrative
Agent's counsel):
(a) Agreements Effective. This Agreement, the Revolving
Credit Notes, the Swing Line Note and each of the other Loan Documents shall be
effective;
(b) Notice of Borrowing. With respect to any Advance, the
Administrative Agent shall have received, in accordance with the provisions of
Section 2.4 hereof, prior to the making of any such Advance, an originally
executed Notice of Borrowing signed by an Authorized Officer, in writing,
delivered to the Administrative Agent (the furnishing by the Borrowers of each
such Notice of Borrowing shall be deemed to constitute a representation and
warranty of the Borrowers to the effect that the other conditions set forth in
this Section 3 are satisfied in all material respects as of the date of delivery
and will be satisfied on the date such Advances are made).
43
(c) No Default; Representations and Warranties. At the
time of the making of each Advance and also after giving effect thereto, (i)
there shall exist no Default or Event of Default and (ii) all representations
and warranties contained herein and in the other Loan Documents in effect at
such time (as amended or modified from time to time, including by the delivery
of amendments or supplements (in form, scope and substance satisfactory to the
Administrative Agent and the Majority Lenders) to the schedules and exhibits to
this Agreement and/or the other Loan Documents) shall be true and correct in all
material respects with the same effect as though such representations and
warranties had been made on and as of such date, unless such representation and
warranty expressly indicates that it is being made as of any other specific
date, in which case, on and as of such other date.
(d) Material Adverse Change, etc. (i) No event or
condition shall have occurred or become known or would result from any Borrowing
on the date of any such Borrowing and the use of the proceeds therefrom that has
resulted or would result, singly or in the aggregate, in a Material Adverse
Effect.
(ii) There shall not exist any judgment, order,
injunction or other restraint issued or filed prohibiting, limiting or otherwise
adversely affecting the making of any Advances hereunder.
(e) Fees. The Borrowers shall have paid to the
Administrative Agent, the Lenders and the Fronting Lender, all fees payable to
the Administrative Agent, the Lenders and/or the Fronting Lender to the extent
due hereunder and all costs and Expenses (including legal fees and expenses )
payable to the Administrative Agent, the Lenders and/or the Fronting Lender
hereunder.
(f) Litigation. There shall be no Proceeding pending or,
to the best of Borrowers' Knowledge, threatened with respect to the Company or
any of its Subsidiaries or any Property of any such Person that, in the
reasonable judgment of the Administrative Agent, would, singly or in the
aggregate, have a Material Adverse Effect. No injunction or other restraining
order to be issued shall be pending or noticed with respect to any Proceeding
seeking to enjoin or otherwise prevent the consummation of, or to recover any
damages or obtain relief as a result of, this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby.
(g) Margin Rules. Neither the making of any Advance nor
the use of the proceeds therefrom will violate the provisions of Regulation T, U
or X or any other regulation of the Board of Governors of the Federal Reserve
System or the provisions of Section 7 of the Exchange Act.
The acceptance of the proceeds of each Borrowing of
Advances shall constitute a representation and warranty
by the Borrowers to each of the Lenders that all of the applicable conditions
specified in Section 3 and in any other provision of this Agreement or any of
the other Loan Documents have been satisfied or waived.
44
3.4 Waiver of Rights. By completing the Closing hereunder or
by making Advances hereunder, the Administrative Agent does not thereby waive a
breach of any warranty or representation made by the Borrowers hereunder or in
any agreement, document, or instrument delivered to the Administrative Agent or
otherwise referred to herein, and all of the Administrative Agent's claims and
rights resulting from any breach or misrepresentation by the Borrowers are
specifically reserved by the Administrative Agent.
3.5 Delivery of Documents. All of the certificates and other
agreements, documents, instruments and papers referred to in this Section 3,
unless otherwise specified, shall be delivered to the Administrative Agent at
its office (or such other location as may be specified by the Administrative
Agent) for the account of each of the Lenders and in sufficient counterparts for
each of the Lenders (and the Administrative Agent shall furnish such
counterparts to the Lenders).
SECTION 4. REPRESENTATIONS AND WARRANTIES.
To induce the Lenders to make the Advances under the Revolving
Credit to the Borrowers, the Borrowers warrant and represent to the
Administrative Agent and the Lenders that:
4.1 Corporate Organization and Validity.
(a) The Borrowers and the Restricted Subsidiaries are
corporations or limited liability companies duly organized and validly existing
under the laws of their respective states (or countries or other jurisdictions,
as applicable) of incorporation or formation, are duly qualified, are validly
existing and in good standing and have lawful power and authority to engage in
the business each conducts in each state and each foreign country where the
nature and extent of their businesses require qualification, except when the
failure to so qualify would not have a Material Adverse Effect.
(b) The making and performance of this Agreement and the
other Loan Documents does not violate any law, government rule or regulation,
court or administrative order or other such order having the effect of law, or
the charter, minutes or bylaw provisions of any of the Borrowers or the
Restricted Subsidiaries or violate or result in a default (immediately or with
the passage of time) under any contract, agreement or instrument to which any
such Person is a party, or by which any such Person or its Property is bound.
None of the Borrowers or the Restricted Subsidiaries is in violation of any term
of any agreement or instrument to which any such Person is a party or by which
it or its Property may be bound or of its charter, minutes or its bylaws, which
violation has had a Material Adverse Effect.
(c) Each of the Borrowers and the Guarantors has all
requisite corporate power and authority to enter into and perform under this
Agreement and each of the Loan Documents (as applicable) and to incur the
obligations herein provided for, and has taken all proper and necessary
corporate action to authorize the execution, delivery and performance of this
Agreement and the other Loan Documents (as applicable).
45
(d) This Agreement, the Revolving Credit Notes, the Swing
Line Note, the Guarantees and all of the other Loan Documents, when delivered,
will be valid and binding upon the Borrowers and the Guarantors (as applicable)
and enforceable in accordance with their respective terms.
4.2 Places of Business. As of the Effective Date, the only
places of business of the Borrowers and the Restricted Subsidiaries and the
places where each keeps and intends to keep its Property and records concerning
its Property, are at the addresses listed in Schedule 4.2 attached hereto and
made part hereof.
4.3 Pending Litigation. There are no judgments or judicial or
administrative orders against or binding upon the Company or any of its
Subsidiaries, proceedings or investigations (civil or criminal) pending, or to
the Knowledge of the Borrowers threatened, against or affecting the Company or
any of its Subsidiaries in any court or before any governmental authority or
arbitration board or tribunal which would cause a Material Adverse Effect,
except as shown in Schedule 4.3 attached hereto and made part hereof. Neither
the Company nor any of its Subsidiaries is in default with respect to any order
of any court, Governmental Authority, regulatory agency or arbitration board or
tribunal which would cause a Material Adverse Effect.
4.4 Title to Properties. Each of the Borrowers and the
Restricted Subsidiaries has good and marketable title in fee simple (or its
equivalent under applicable law) to all the Property it respectively purports to
own, free from Liens and free from the claims of any other Person, except for
those Liens set forth on Schedule 4.4 attached hereto and made part hereof and
for other Permitted Liens.
4.5 Governmental Consent. Neither the nature of the Company's
or any of its Subsidiaries' respective businesses or Property, nor any
relationship between such entities and any other Person, nor any circumstance
affecting any such entities in connection with the issuance or delivery of this
Agreement, the Revolving Credit Notes, the Swing Line Note, the Guarantees or
the other Loan Documents is such as to require a consent, approval or
authorization of, or filing, registration or qualification with, any
Governmental Authority on the part of any such party in conjunction with the
execution and delivery of this Agreement or the issuance or delivery of the
Revolving Credit Notes, the Swing Line Note, the Guarantees, or the other Loan
Documents, other than such of the foregoing as have been obtained or made.
4.6 Taxes. All tax returns required to be filed (except for
those tax returns which, if not filed, would not have a Material Adverse Effect)
by the Company and each of its Subsidiaries in any jurisdiction, have in fact
been filed or extensions have been obtained, and all taxes, assessments, fees
and other governmental charges upon any such Person, or upon any of such
Person's respective Property, income or franchises, which are due and payable,
have been paid, except for those taxes being contested in good faith with due
diligence by appropriate proceedings for which appropriate reserves have been
maintained pursuant to GAAP and except for those taxes which, if not paid, would
not cause a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries is aware of any proposed additional tax assessment or tax to be
assessed against or applicable to such Person (except for those tax assessments
which would not cause a Material Adverse Effect).
46
4.7 Financial Statements. The Financial Statements (complete
copies of which have been delivered to the Administrative Agent for distribution
to the Lenders), were prepared in accordance with GAAP (excluding footnotes for
unaudited statements) are complete in all material respects and present fairly
the financial position of the Company and its Subsidiaries as of such dates and
the results of their operations for such periods provided, however, that interim
financial statements are subject to normal year end audit adjustments. The
fiscal year for the Company and each of its Subsidiaries ends on March 31.
4.8 Full Disclosure. Neither the Financial Statements nor any
written statement furnished by, or on behalf of, the Company to the
Administrative Agent and/or Lenders in connection with the Revolving Credit
contained in any Financial Statements or documents, instruments, agreements or
certificates relating to the Company and its Subsidiaries contains any untrue
statement of a material fact or omits a material fact necessary to make the
statements contained therein or herein not misleading. There is no fact known to
the Borrowers which the Borrowers have not disclosed to the Administrative Agent
in writing, which would cause a Material Adverse Effect. The projections and pro
forma financial information contained in any materials provided by the Borrowers
to the Administrative Agent or any Lender are based upon good faith estimates
and assumptions believed by the Borrowers to be reasonable at the time made, it
being recognized by the Lenders that such projections as to future events are
not to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ from the projected results.
4.9 Subsidiaries. Other than the parties listed on Schedule
4.9 attached hereto and made part hereof, the Company has, as of the Effective
Date, no actively operating Subsidiaries. The jurisdiction of incorporation or
formation of each of such Subsidiaries is also set forth on Schedule 4.9.
4.10 Guarantees, Indebtedness, etc.
(a) As of the Effective Date, none of the Borrowers or
the Restricted Subsidiaries owns or holds equity (excepting the stock of its
Subsidiaries) or long term debt investments in, has any outstanding advances to,
or serves as guarantor, surety or accommodation maker for the obligations of, or
has any outstanding borrowings from any Person, which, in the case of any such
equity, investment, advance, guarantee or borrowing, involves the expenditure of
money or incurrence of an obligation, as the case may be, of at least $1,000,000
except as described in Schedule 4.10 attached hereto and made part hereof.
(b) Neither the Company nor any of its Subsidiaries is a
party to any contract or agreement, or subject to any charter or other corporate
restriction, which would cause a Material Adverse Effect.
(c) Except as otherwise specifically provided in this
Agreement and in the Note Purchase Agreement, neither the Company nor any of its
Subsidiaries has agreed or consented to cause or permit any of its Property,
whether now owned or hereafter acquired, to be subject in the future (upon the
happening of a contingency or otherwise) to a Lien not permitted by this
Agreement.
47
4.11 Government Regulations, etc.
(a) Assuming each of the Lenders is acquiring its Note or
Notes hereunder and its interests hereunder for its own account, for investment
and not with a view toward distribution, nor with the assets of any Employee
Benefit Plan subject to Part 4, Title I of ERISA, the use of the proceeds of,
and the Borrower's issuance of the Revolving Credit Notes and the Swing Line
Note, will not directly or indirectly violate or result in a violation of the
Securities Act of 1933 or the Securities Exchange Act of 1934, as amended, or
any regulations issued pursuant thereto, including, without limitation,
Regulations U, T and X of the Board of Governors of the Federal Reserve System,
12 C.F.R., Chapter II. The Borrowers do not own or intend to carry or purchase
any "margin security" within the meaning of said Regulations, except in
conformity with said Regulations.
(b) Each of the Borrowers and the Restricted Subsidiaries
has obtained all licenses, permits, franchises or other governmental
authorizations necessary for the ownership of its Property and for the conduct
of its business, except for those which, if not obtained, would not cause a
Material Adverse Effect.
(c) Assuming none of the Lenders is acquiring its Note or
Notes hereunder or its interests hereunder with the assets of any employee
benefit plan subject to Part 4, Title I of ERISA, as of the date hereof, no
employee benefit plan, as defined in Section 3(2) of ERISA, (other than a
multi-employer plan described in Section 3(37) of ERISA) ("Employee Benefit
Plan") maintained by the Company or any of its Subsidiaries, or under which any
such Person could have any liability under ERISA or the Internal Revenue Code
(i) has failed to meet the minimum funding standards established in Section 302
of ERISA for which such Person continues to be liable, (ii) except as set forth
on Schedule 4.11(c), has failed to comply, in any material respect, with any
applicable requirement of ERISA and of the Internal Revenue Code, including all
applicable rulings and regulations thereunder for which it continues to be
responsible, or (iii) has, to its Knowledge, engaged in or been involved in a
Prohibited Transaction (as defined in ERISA or the Internal Revenue Code) under
ERISA or the Internal Revenue Code, except to the extent that a failure to
comply with the foregoing would not present a reasonable likelihood of having a
Material Adverse Effect. Except set forth on Schedule 4.11(c) attached hereto
and made a part hereof, no Employee Benefit Plan maintained by the Borrower or
any of its Subsidiaries has been terminated within the one (1) year period prior
to the date hereof. Neither the Company nor any of its Subsidiaries has assumed,
or received notice of a claim asserted against such Person, withdrawal liability
(as defined in the Multi-employer Pension Plan Amendments Act of 1980, as
amended) with respect to any multi-employer pension plan in which it
participates. Other than as shown on Schedule 4.11(c), neither the Company nor
any of its Subsidiaries is a member of any Controlled Group (as defined in
Sections 414(b),(c),(m) and (o) of the Internal Revenue Code and Section
4001(a)(14) of ERISA). Each of the Company and its Subsidiaries has timely made
all contributions when due with respect to any multi-employer pension plan in
which it participates and no event has occurred triggering a claim against such
Person for withdrawal liability with respect to any multi-employer pension plan
in which such Person participates.
(d) None of the Borrowers or the Restricted Subsidiaries
is in violation of any applicable statute, regulation or ordinance of the United
States of America or any other country or jurisdiction, or of any state, city,
town, municipality, county or of any other jurisdiction, or of any agency
thereof, (including without limitation, Environmental Laws and regulations), a
violation of which would cause a Material Adverse Effect.
48
(e) The Borrowers and all of the Restricted Subsidiaries
are current with all reports and all documents required to be filed with any
state or federal securities commission or similar agency, if any, and are in
full compliance in all material respects with all applicable rules and
regulations of such commissions.
(f) None of the Borrowers or the Restricted Subsidiaries
are, or will be after giving effect to the transactions contemplated hereby,
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act or to any federal or state statute or regulation limiting its
ability to incur indebtedness for money borrowed or guarantee such indebtedness
as contemplated by this Agreement or any other Loan Document.
(g) None of the Borrowers or the Restricted Subsidiaries
is, or after giving effect to the transactions contemplated hereby will be, an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
4.12 Business Interruptions. Within five (5) years prior to
the date hereof, neither the business, Property or operations of any of the
Borrowers or the Restricted Subsidiaries have been materially and adversely
affected in any way by any casualty, strike, lockout, combination of workers,
order of any Governmental Authority, directed against such Persons. To the best
of the Borrowers' Knowledge, as of the Effective Date, except as set forth on
Schedule 4.12 attached hereto and made part hereof, there are no pending or
threatened labor disputes, strikes, lockouts or similar occurrences or
grievances affecting the businesses being operated by any of the Borrowers or
the Restricted Subsidiaries which are reasonably expected to have or result in a
Material Adverse Effect.
4.13 Names.
(a) Within five (5) years prior to the Effective Date,
none of the Borrowers or the Restricted Subsidiaries has conducted business
under or used any other name (whether corporate or assumed) except for the names
shown on Schedule 4.13(a) attached hereto and made part hereof. As of the
Effective Date, the Borrowers and the Restricted Subsidiaries are, respectively,
the sole owners of each of their names listed on such Schedule 4.13(a) and any
and all business done and all invoices issued in such trade names are the
applicable party's sales, business and invoices. As of the Effective Date, each
trade name of any of the Borrowers and the Restricted Subsidiaries represents a
division or trading style of such entities and not a separate corporate
subsidiary, affiliated, or independent entity.
(b) As of the Effective Date, all federally registered
trademarks, patents or copyrights of any of the Borrowers and the Restricted
Subsidiaries are listed on Schedule 4.13(b) attached hereto and made part
hereof. Schedule 4.13(b) shall also list all agreements for the license to use
third party-owned trademarks, patents and copyrights. The Borrowers and/or the
Restricted Subsidiaries, and to the best of Borrowers' Knowledge, each third
party identified on such Schedule 4.13(b) is the sole owner of such Property
except to the extent any other Person has or claims rights in such Property as
also described on such Schedule 4.13(b). To the best of the Borrowers'
Knowledge, none of the Borrowers or the Restricted Subsidiaries is in violation
in any material respect of any intellectual property rights of any other Person
with respect to such Property.
49
4.14 Other Associations. As of the Effective Date, none of the
Borrowers or the Restricted Subsidiaries is engaged in any joint venture or
partnership with any other Person except as described on Schedule 4.14 attached
hereto and made part hereof.
4.15 Environmental Matters. Except as disclosed on Schedule
4.15 attached hereto and made part hereof, or as would not have, singly or in
the aggregate, a Material Adverse Effect:
(a) The Company and each of its Subsidiaries has
obtained all permits, licenses and other authorizations (collectively
"Environmental Authorizations") that are required with respect to the use,
ownership and operation of their business, Real Property and other Property
under any Environmental Law and each such Environmental Authorization is in
full force and effect.
(b) The Company and each of its Subsidiaries is in
compliance with all terms and conditions of the Environmental Authorizations
specified in Section 4.15(a) above, and is also in compliance with, and not
subject to liability under, any Environmental Law applicable to it and its
respective businesses, operations, Real Property and other Property.
(c) There is no civil, criminal or administrative action,
suit, demand, claim, hearing, notice of violation, investigation, proceeding,
written notice or demand letter or request for information pending or, to the
Knowledge of the Borrowers, are any such actions or any investigations
threatened against the Company or any of its Subsidiaries under any
Environmental Law.
(d) There are no past or present events, conditions,
circumstances, activities, practices, incidents, actions or current plans which
could reasonably be expected to materially interfere with or prevent compliance
by the Company or any of its Subsidiaries with any Environmental Law, or which
could reasonably be expected to give rise to any liability under any
Environmental Law, including, without limitation, liability under the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended ("CERCLA"), or similar applicable state, local or foreign laws for
response or corrective action, or which could reasonably be expected to form the
basis of any suit, proceeding, hearing, notice of violation, or notice of
potential liability or responsibility, based on or primarily related to the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport, shipping or handling, or the arrangement for treatment or
disposal or the emission, discharge, release or threatened release into the
environment, of any Hazardous Materials.
50
(e) Neither the Company nor any of its Subsidiaries has
received written notice that it has been identified as a potentially responsible
party or any request for information under CERCLA or any comparable state law,
nor has any such Person received any written notification that any Hazardous
Materials that it or any of its respective predecessors in interest has used,
generated, stored, treated, handled, transported or disposed of, or arranged for
transport or treatment of, or arranged for disposal or treatment of, has been
found at any site at which any Governmental Authority or private party is
conducting or plans to conduct an investigation or other action pursuant to any
Environmental Law.
(f) There have been no releases (i.e., any past or
present releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, disposing or dumping into the
environment) of Hazardous Materials by the Company or any of its Subsidiaries or
to the Borrowers' Knowledge after due inquiry, any of their respective
predecessors in interest, at, on, upon, under, into or from any of the Real
Properties. To the Knowledge of the Borrowers, there have been no such releases
at, on, upon, under, from or into any real property in the vicinity of any of
the Real Properties that, through soil, air, surface water or groundwater
migration or contamination, has become located on, in or under such Real
Properties.
(g) There is no friable asbestos or friable
asbestos-containing material in, on, or at any of the Real Properties or any
facility or equipment owned or operated by the Company or any of its
Subsidiaries.
(h) No Real Property of the Company or any of its
Subsidiaries is (i) listed or proposed for listing on the National Priorities
List under CERCLA or (ii) listed in the Comprehensive Environmental Response,
Compensation, Liability Information System List promulgated pursuant to CERCLA,
or on any comparable list published by any Governmental Authority.
(i) No regulated underground storage tanks or related
piping are located at, under or on the Real Property, or, to the best of the
Borrowers' Knowledge, located in the vicinity of such Real Property.
(j) Except as listed on Schedule 3.1(h), no environmental
reports, investigations, studies, audits, assessments or reviews in the
possession of the Company or any of its Subsidiaries with respect to the current
business or operations of the Company or any of its Subsidiaries or any Real
Property or other Property or facility now owned, operated, leased or controlled
by the Company or any of its Subsidiaries contain information pertaining to any
event(s) or conditions) which have or, to the best of the Borrowers' present
Knowledge, are reasonably likely to cause a Material Adverse Effect. No
environmental reports, investigations, studies, audits, assessments or reviews
in the possession of the Company or any of its Subsidiaries with respect to the
current or prior business or Property of the Company or any of its Subsidiaries
or any Real Property or other Property or facility now, or to the best of
Borrowers' Knowledge, previously owned, leased, operated or controlled by the
Company or any of its Subsidiaries, contain information pertaining to events or
conditions which would be, or otherwise are, reasonably likely to have or cause
a Material Adverse Effect.
(k) No Lien has been recorded under any Environmental Law
with respect to any facility, inventory, Real Property or other Property
presently owned, operated, leased or controlled by the Company or any of its
Subsidiaries.
51
4.16 Regulation O. No director, executive officer or principal
shareholder of any Borrower is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms "director" (when
used with reference to a Lender), "executive officer" and "principal
shareholder" have the respective meanings assigned thereto in Regulation O
issued by the Board of Governors of the Federal Reserve System.
4.17 Capital Stock. The authorized and outstanding Capital
Stock of each of the Borrowers and the Restricted Subsidiaries is, as of the
Effective Date, as set forth on Schedule 4.17 attached hereto and made part
hereof. All of the Capital Stock of each such Person has been duly and validly
authorized and, to the extent outstanding, is issued and is fully paid and
non-assessable and has been sold and delivered to the holders thereof in
compliance with, or under valid exemption from, all federal and state laws and
the rules and regulations of all regulatory bodies thereof governing the sale
and delivery of securities. As of the Effective Date hereof, except for the
rights and obligations set forth in Schedule 4.17, there are no subscriptions,
warrants, options, calls, commitments, rights or agreements by which any of the
Borrowers or the Restricted Subsidiaries or any of their respective shareholders
are bound relating to the issuance, transfer, voting or redemption of shares of
its Capital Stock or any pre-emptive rights held by any Person with respect to
the shares of Capital Stock of such parties. As of the Effective Date hereof,
none of the Borrowers or the Restricted Subsidiaries has issued any securities
that remain outstanding that are convertible into or exchangeable for shares of
its Capital Stock or any options, warrants or other rights to acquire such
shares or securities convertible into or exchangeable for such shares except as
shown on Schedule 4.17.
4.18 Solvency. After giving effect to the creation of the
Revolving Credit and the transactions described herein and therein, the Company
and its Subsidiaries, on a consolidated basis, are solvent, are able to pay
their respective debts as they become due and have capital sufficient to carry
on their respective business and all businesses in which any such Persons are
about to engage, and now own Property having a value both at fair valuation and
at present fair salable value greater than the amount required to pay such
entity's debts. After giving effect to the creation of the Revolving Credit and
the transactions described herein and therein, the Company and its Subsidiaries,
on a consolidated basis, will not be rendered insolvent by the execution and
delivery of this Agreement or any of the other agreements, documents or
instruments executed in connection with this Agreement (including, without
limitation, the Guarantees) or by the transactions contemplated hereunder or
thereunder.
4.19 Interrelatedness of the Borrower and the Guarantors. The
business operations of the Borrowers and the Guarantors are related and have a
common business purpose. To permit their uninterrupted and continuous
operations, such companies now require and will from time to time hereafter
require funds for general business purposes. The proceeds of Advances under the
Revolving Credit will directly or indirectly benefit the Borrowers and each of
the Guarantors severally and jointly, regardless of which entity requests or
receives part or all of the proceeds of such Advances from the Borrowers.
4.20 Anti-Terrorism Laws.
(a) General. None of the Company or its Subsidiaries is
in violation of any Anti-Terrorism Law nor does it engage in or conspire to
engage in any transaction that evades or avoids, or has the purpose of evading
or avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law.
52
(b) Executive Order No. 13224. Neither the Company nor
any of its Subsidiaries or its respective Affiliates or, to the Company's
Knowledge, agents acting or benefiting in any capacity in connection with the
Advances made hereunder or other transactions contemplated hereby, is any of the
following (each a "Blocked Person"):
(i) a Person that is listed in the annex to, or is
otherwise subject to the provisions of, Executive Order No. 13224;
(ii) a Person owned or controlled by, or acting for
or on behalf of, any Person that is listed in the annex to, or is otherwise
subject to the provisions of, Executive Order No. 13224;
(iii) a Person or entity with which any Lender is
prohibited from dealing or otherwise engaging in any transaction by any
Anti-Terrorism Law;
(iv) a Person or entity that commits, threatens or
conspires to commit or supports "terrorism" as defined in Executive Order No.
13224;
(v) a Person or entity that is named as a "specially
designated national" on the most current list published by the U.S. Treasury
Department Office of Foreign Asset Control at its official website or any
replacement website or other replacement official publication of such list; or
(vi) a person or entity who is a Subsidiary or
Affiliate of a Person or entity listed above.
To the Company's Knowledge, neither the Company, any of its
Subsidiaries nor any of its or their Affiliates or agents acting in any capacity
in connection with the Advances made hereunder or other transactions
contemplated hereby (x) conducts any business with, or engages in making or
receiving any contribution of funds, goods or services to or for the benefit of
any Blocked Person, or (y) deals in, or otherwise engages in any transaction
relating to, any property or interests in property blocked pursuant to Executive
Order No. 13224.
SECTION 5. AFFIRMATIVE COVENANTS.
The Borrowers covenant that until all of the Borrowers'
Obligations to the Lenders and the Administrative Agent hereunder are paid and
satisfied in full and the Revolving Credit has been terminated (it being
understood that the Company shall cause each of its Subsidiaries (or, as the
case may be, the Restricted Subsidiaries) to observe and comply in a timely
manner with each provision of the covenants in this Section 5 to the extent
applicable to such Subsidiary (or, as the case may be, such Restricted
Subsidiary)):
5.1 Payment of Taxes and Claims. The Company shall, and shall
cause each of its Subsidiaries to, pay, before they become delinquent,
53
(a) all taxes, assessments and governmental charges or
levies imposed upon it or upon any such party's Property, and
(b) all claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other like Persons, which, if unpaid,
would result in the imposition of a Lien upon its Property; provided, however,
that the Company and its Subsidiaries shall not be required to pay any such tax,
assessment, charge, levy or claim if the amount, applicability or validity
thereof shall at the time be contested in good faith and by appropriate
proceedings by such party, and if such party shall have set aside on its books
adequate reserves in respect thereof, if so required in accordance with GAAP;
which deferment of payment is permissible so long as no Lien has been entered
and such party's title to, and its right to use, its Property are not materially
adversely affected thereby.
5.2 Maintenance of Properties and Corporate Existence.
(a) Property. The Borrowers shall, and shall cause each
of the Restricted Subsidiaries to, maintain its Property in good condition
(normal wear and tear and fire and other insured casualty excepted) and make all
necessary renewals, replacements, additions, betterments and improvements
thereto and will pay and discharge when due the cost of repairs and maintenance
to its Property, and will pay all rentals when due for all real estate leased by
such parties.
(b) Property Insurance. The Borrowers shall, and shall
cause each of the Restricted Subsidiaries to, maintain and deliver to the
Administrative Agent, upon the Administrative Agent's request, evidence of
business interruption insurance and insurance on all insurable tangible Property
against fire, flood, casualty and such other hazards as may be reasonably
acceptable to the Administrative Agent in such amounts, with such deductibles
and with such insurers as are customary for companies in the same or similar
business located in the same or similar area.
(c) General and Products Liability Insurance. The
Borrowers shall, and shall cause each of the Restricted Subsidiaries to,
maintain general liability and products liability insurance in such amounts as
is customary for companies in the same or similar businesses located in the same
or similar area and shall deliver to the Administrative Agent upon the
Administrative Agent's request, evidence of such insurance.
(d) Financial Records. The Borrowers shall, and shall
cause each of the Restricted Subsidiaries to, keep in all material respects
current and accurate books of records and accounts in which full and correct
entries will be made of all of its business transactions, and will reflect in
its financial statements adequate accruals and appropriations to reserves, all
in accordance with GAAP. The Borrowers and the Restricted Subsidiaries shall not
change their respective fiscal year end dates without the prior written consent
of the Administrative Agent.
(e) Corporate Existence and Rights. Except for mergers,
consolidations and liquidations permitted under this Agreement, the Borrowers
shall, and shall cause each of the Restricted Subsidiaries to, do (or cause to
be done) all things necessary to preserve and keep in full force and effect
their respective existence, good standing, rights and franchises unless any
Borrower's or Restricted Subsidiary's failure to do so would not have a Material
Adverse Effect.
54
(f) Compliance with Law. The Borrowers shall, and shall
cause each of the Restricted Subsidiaries to, comply with all laws, ordinances,
governmental rules and regulations to which it is subject, and will obtain all
licenses, permits, franchises or other governmental authorizations necessary to
the ownership of its Property or to the conduct of its businesses, a violation
of which or failure to obtain would have a Material Adverse Effect.
5.3 Litigation. The Company shall, and shall cause each of its
Subsidiaries to, give immediate notice to the Administrative Agent of any
litigation or governmental investigation affecting the Company or any of its
Subsidiaries except for litigation with potential liability to any such party of
less than $5,000,000 or litigation which is fully covered by insurance
(exclusive of a deductible not to exceed $5,000,000).
5.4 Taxes. Subject to Sections 2.12 and 10.17, the Borrowers
shall, and shall cause each of the Restricted Subsidiaries to, pay all taxes
(other than bank shares taxes and taxes based upon or measured by any Lender's
income or revenues or any personal property tax), if any, in connection with the
issuance of the Revolving Credit Notes, the Swing Line Note and the Guarantees
(as applicable). The obligations of each such party hereunder shall survive the
payment of such party's Obligations hereunder and the termination of this
Agreement.
5.5 Employee Benefit Plans. The Company shall, and shall cause
each of its Subsidiaries to, (a) fund all of its Employee Benefit Plans in a
manner that will satisfy the minimum funding standards of Section 302 of ERISA
(unless failure to do the same would not have a Material Adverse Effect) and
will promptly satisfy any accumulated funding deficiency that arises under
Section 302 of ERISA, (b) furnish the Administrative Agent, promptly after the
filing of the same, with copies of all reports (with all attachments thereto)
required, by statute, regulation, administrative consent or order or similar
written understanding, to be filed with the United States Department of Labor,
the Pension Benefit Guaranty Corporation ("PBGC") or the Internal Revenue
Service ("IRS") with respect to all Employee Benefit Plan(s) to the extent such
reports contain information pertaining to events or conditions which would be,
or otherwise are, reasonably likely to have a Material Adverse Effect, or
reports which any such party, or any member of a Controlled Group of which the
Company or any of its Subsidiaries has Knowledge (with respect to any assertions
of termination liability under Title IV of ERISA or, withdrawal liability, as
defined in ERISA), may receive from the United States Department of Labor, the
IRS or the PBGC, with respect to any such Employee Benefit Plan(s), and (c)
promptly advise the Administrative Agent of the occurrence of any Reportable
Event (as defined in Section 4043 of ERISA) which requires the giving of notice
to the PBGC or any Prohibited Transaction, of which the Company or any of its
Subsidiaries has Knowledge, with respect to any such Employee Benefit Plan(s)
and the action which such party proposes to take with respect thereto. The
Company and each of its Subsidiaries will make all contributions when due with
respect to any multi-employer pension plan in which it participates and will
promptly advise the Administrative Agent (i) upon its receipt of notice of the
assertion against such party of a claim for withdrawal liability, (ii) upon the
Company's Knowledge of the occurrence of any event which would trigger the
assertion of a claim for withdrawal liability against the Company or any of its
Subsidiaries, or (iii) upon the Company's Knowledge of the occurrence of any
event which, to the best of the Company's Knowledge, would, after the date
hereof, place the Company or any of its Subsidiaries in a Controlled Group
(other than as shown on Schedule 4.11(c) hereto) as a result of which any member
(including such party) thereof may be subject to a claim for withdrawal
liability, whether liquidated or contingent.
55
5.6 Financial and Business Information. The Borrowers shall
deliver to the Administrative Agent and to each of the Lenders the following:
(a) Financial Statements and Covenant Reports. Such data,
reports, statements and information, financial or otherwise, as the
Administrative Agent may reasonably request (except for information for which an
attorney/client privilege has been reasonably claimed or asserted by the
Company) with sufficient copies for all Lenders, including, without limitation:
(i) within forty-five (45) days after the end of each
of the first three quarterly accounting periods in each fiscal year of the
Company as at the end of such quarter setting forth in comparative form the
corresponding figures for the corresponding periods of the previous fiscal year,
(A) on a consolidated and consolidating basis for the Company and its
Subsidiaries (x) a balance sheet and (y) a statement of income, and, (B) on a
consolidated basis for the Company and its Subsidiaries a cash flow statement in
reasonable detail and certified by the chief financial officer, treasurer or
vice president of finance of the Company to have been prepared in accordance
with GAAP (without footnotes);
(ii) within ninety (90) days after the end of each
fiscal year of the Company as at the end of such fiscal year, setting forth in
each case in comparative form the corresponding figures as at the end of the
previous fiscal year (A) on a consolidated and consolidating basis for the
Company and its Subsidiaries, (x) a balance sheet and (y) a statement of income
and, (B) on a consolidated basis, for the Company and its Subsidiaries a cash
flow statement and a retained earnings statement all in reasonable detail,
audited and certified without qualifications, except those which are acceptable
to the Administrative Agent, (as to the consolidated statements) by independent
public accountants of recognized standing, selected by the Company and
satisfactory to the Administrative Agent, to have been prepared in accordance
with GAAP, and such independent public accountants shall also certify without
qualifications, except those which are acceptable to the Administrative Agent,
that in making the examinations necessary to their certification mentioned above
they have reviewed the terms of this Agreement and the accounts and conditions
of the Borrowers during the accounting period covered by the certificate and
that such review did not disclose the existence of any condition or event which
constitutes an Event of Default (or if such conditions or events existed,
describing them);
(iii) within sixty (60) days following the end of
each fiscal year an internally prepared budget of projected expenses and
revenues for the current fiscal year; and
(iv) promptly following the request of the
Administrative Agent, a copy of each management letter from the independent
public accountants which certified the financial statements referred to in
clause (ii) above.
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(b) Notice of Event of Default. Promptly upon becoming
aware of the existence of any condition or event which constitutes a Default or
an Event of Default under this Agreement, a written notice specifying the nature
and period of existence thereof and what action the Borrowers are taking (and
propose to take) with respect thereto;
(c) Notice of Claimed Default. Immediately upon receipt
by the Company or any of its Subsidiaries of a notice of default, oral or
written, given to such party by any creditor for borrowed money or holding
Indebtedness of such party which has an outstanding principal balance in excess
of $1,000,000, a copy of such notice (or a written explanation, if given orally)
along with an explanation of what action the Company or such Subsidiary is
taking (and proposes to take) with respect thereto; and
(d) Securities and Other Reports. If and as long as the
Company or any of its Subsidiaries is a publicly traded company, promptly upon
its becoming available, one copy of each financial statement, report, notice or
proxy statement sent by such party to stockholders generally, and a copy of each
regular or periodic report, and any registration statement, or prospectus or any
other document, in respect thereof filed by such party with any securities
exchange or with all federal or state securities and exchange commissions or any
successor agency. In addition to the foregoing, the Company shall, promptly upon
its becoming available, deliver to the Administrative Agent one copy of each
regular or periodic report and any registration statement or prospectus and any
other document filed by the Company or any of its Subsidiaries with any
securities exchange or with all federal or state securities and exchange
commissions or any successor agency.
5.7 Officers' Certificates. Along with the set of financial
statements delivered to the Administrative Agent at the end of each calendar
quarter and fiscal year pursuant to Section 5.6(a) hereof, the Company shall
deliver to the Administrative Agent a certificate (in the form of Exhibit D
attached hereto and made a part hereof) (the "Quarterly Compliance Certificate")
from the chief financial officer, treasurer or vice president of finance of the
Company (and as to certificates accompanying the annual statements of the
Company, also certified by the Company's independent certified public
accountant) in form and substance satisfactory to the Administrative Agent
setting forth, to the best of such officer's knowledge after due investigation:
(a) Covenant Compliance. The information (including
detailed calculations) required in order to establish whether the Borrower is in
compliance with the requirements of Sections 5, 6 and 7, as of the end of the
period covered by the financial statements then being furnished (and any
exhibits appended thereto) under Section 5.6; and
(b) Event of Default. That the signer has reviewed the
relevant terms of this Agreement and has made (or caused to be made under his
supervision) a review of the transactions and conditions of the Company from the
beginning of the accounting period covered by the income statements being
delivered therewith to the date of the certificate, and that such review has not
disclosed the existence during such period of any condition or event which
constitutes a Default or an Event of Default or if any such condition or event
existed or exists, specifying the nature and period of existence thereof and
what action the Company has taken or proposes to take with respect thereto.
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5.8 Inspection. So long as the Borrowers are indebted to the
Lenders, and subject in all events to the provisions of Section 10.24 hereof,
the Borrowers and each of the Restricted Subsidiaries will, on not less than
twenty-four (24) hours prior notice, permit any of the Administrative Agent's
officers or other representatives (at its own expense, prior to the occurrence
of an Event of Default) to visit and inspect during business hours any of the
locations of the Borrowers and each of the Restricted Subsidiaries, to examine
and audit all of such parties' books of account, records, reports and other
papers (to the extent not subject to an attorney-client privilege), to make
copies and extracts therefrom and to discuss such parties, affairs, finances and
accounts with its officers, employees and independent certified public
accountants. Representatives of each Lender may accompany the Administrative
Agent during each such inspection and visit. Representatives of any Lender may
visit with executive officers of the Company as they may mutually agree.
5.9 Tax Returns and Reports. Subject to Section 10.24, at the
Administrative Agent's request from time to time, the Borrowers and each of the
Restricted Subsidiaries shall immediately furnish the Administrative Agent with
copies of the annual federal and state income tax returns of each such party for
such years such parties have not been audited and may be subject to audit. The
Lenders and the Administrative Agent shall not disclose any such returns or
other written financial information to any third party (except as permitted in
Section 5.10) without the prior written consent of the Borrowers, or unless
required by law or so compelled by order of a court of competent jurisdiction.
The Borrowers further agree that if requested by the Administrative Agent, they
shall immediately furnish the Administrative Agent with copies of all reports
filed with any Governmental Authority or agency, board or commission and shall
supply such information with respect to each of the Restricted Subsidiaries
which becomes a publicly traded company.
5.10 Information to Participants and Assignees. Subject to
Section 10.24 hereof, the Administrative Agent and each Lender may divulge to
any actual or prospective participant, assignee or co-lender it may obtain with
respect to the Revolving Credit, or any portion thereof, all information, and
furnish to such Person copies of reports, financial statements, certificates,
and documents obtained under any provision of this Agreement or any of the other
Loan Documents. The Administrative Agent and the Lenders shall not divulge the
contents of any written financial information to any other Person other than as
set forth above without the prior written consent of the Borrowers, or unless
required by law or so compelled by an order of a court of competent
jurisdiction.
5.11 Material Adverse Developments. The Company agrees that
immediately upon becoming aware of any development or other information outside
the ordinary course of business (excluding matters of a general economic,
financial or political nature) which materially and adversely affects its, or
any of its Subsidiaries' Property, businesses, prospects, or financial
condition, in all cases taken as a whole on a consolidated basis, or such
parties, ability to perform under this Agreement or any of the other Loan
Documents (as applicable), it shall give to the Administrative Agent telephonic
or telegraphic notice specifying the nature of such development or information
and such anticipated effect. In addition, such verbal communication shall be
confirmed by written notice thereof to the Administrative Agent on the same day
such verbal communication is made.
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5.12 Additional Parties; Release of Certain Guarantors. (a) In
the event that any Person, other than the Bankruptcy Remote Subsidiary or any
Person which is already a Guarantor, becomes a Material Subsidiary of the
Borrower after the Effective Date (each such Material Subsidiary referred to
herein as an "Additional Party" and collectively as the "Additional Parties"),
then, promptly after such Person becomes a Material Subsidiary of the Company
(but in any event prior to any capitalization (other than de minimis
capitalization) of, or contribution of assets to, such Material Subsidiary by
the Company), the Company shall cause such Material Subsidiary to execute and
deliver all such agreements, guarantees, suretyship agreements, documents and
certificates (including any amendments to the Loan Documents) and do such other
acts and things as the Administrative Agent may reasonably request in order to
have such Subsidiary guarantee and act as surety for the Obligations and effect
fully the purposes of this Agreement and the other Loan Documents and to provide
for payment of the obligations in accordance with the terms of this Agreement
and the other Loan Documents. Without limiting the generality of the foregoing,
in such event, such Additional Party shall execute and deliver to the
Administrative Agent a Guarantee (upon the execution of which, such Additional
Party shall become a Guarantor for all of the Obligations and for all purposes
hereunder and under the other Loan Documents).
(b) Notwithstanding the provisions of Section 5.12(a), if
any such Additional Party is organized under the laws of any jurisdiction other
than any state of the United States of America, the Company need not cause such
Additional Party to become a Guarantor hereunder so long as the Company and/or
such other of its Subsidiaries have pledged to the Administrative Agent as
collateral for the Obligations and, to the extent required by the Note Purchase
Agreement, for the obligations created pursuant thereto, at least 65% of the
issued and outstanding Capital Stock of such Additional Party and, together with
such Additional Party, have executed such agreements, documents and certificates
(including amendments and acknowledgments to any of the Loan Documents), and
done such other acts and things as the Administrative Agent may reasonably
request in order (i) to effectuate and evidence such pledge, (ii) to confirm
that such Additional Party is a Restricted Subsidiary for all purposes hereunder
and under the other Loan Documents and (iii) to evidence that the foregoing does
not result in an Event of Default and is otherwise in compliance with and does
not cause a default under the Note Purchase Agreement. If at any time
thereafter, less than 65% of the issued and outstanding Capital Stock of any
such Restricted Subsidiary which has not become a Guarantor pursuant to the
foregoing provisions of this Section 5.12(b) is pledged to the Administrative
Agent, the Company shall cause such Restricted Subsidiary to comply with the
provisions of Section 5.12(a) and become a Guarantor hereunder and under the
other Loan Documents.
(c) At the Company's request, any Guarantor which is
organized under the laws of any jurisdiction other than any state of the United
States of America shall be released from its Guarantee upon receipt of notice
from the Administrative Agent of compliance, to the Administrative Agent's
satisfaction, with the requirements of Section 5.12(b) providing for the pledge
to the Administrative Agent as collateral for the Obligations of at least 65% of
the issued and outstanding Capital Stock of such Guarantor mutatis mutandis as
if such Guarantor were an Additional Party as provided in Section 5.12(b).
59
5.13 Performance of Obligations. The Borrowers shall, and
shall cause each of the Restricted Subsidiaries to, perform in all material
respects all of their obligations under the terms of the Accounts Receivable
Securitization Documents, the Note Purchase Documents and each other mortgage,
indenture, security agreement, other debt instrument and material contract by
which it is bound or to which it is a party, except where such nonperformance
would not, singly or in the aggregate, have a Material Adverse Effect.
5.14 Further Assurances. At any time and from time to time
upon the reasonable request of the Administrative Agent, the Borrowers shall,
and shall cause each of the Restricted Subsidiaries to, execute and deliver such
further documents, instruments and agreements, and do such other acts and things
as the Administrative Agent may reasonably request, in order to effect fully the
purposes of this Agreement and the other Loan Documents and to provide for
payment of the Obligations in accordance with the terms of this Agreement and
the other Loan Documents.
5.15 Evidence of Intercompany Indebtedness. All Indebtedness
owing at any time and from time to time from any of the Borrowers to any of the
Company's Subsidiaries or any of the Company's Subsidiaries to any of the
Borrowers, or to any other such Subsidiary (except for intercompany balances of
the type disclosed in Item 1 of Schedule 4.10 due to or from, and among any of,
the Borrowers and/or the Restricted Subsidiaries) shall be evidenced by a master
promissory note or notes (the "Intercompany Notes"), in form and substance
satisfactory to the Administrative Agent. All Intercompany Notes, in the case of
any such existing Indebtedness, shall have been executed, or shall
contemporaneously herewith be executed by the applicable obligor(s). True and
correct copies of all Intercompany Notes (including all amendments, replacements
and additions executed from time to time) shall be delivered to the
Administrative Agent promptly upon execution thereof accompanied by a
certificate executed by an Authorized Officer of the Borrowers' Representative
to the effect that such copies are true and correct copies of the original
instruments and that all such intercompany Indebtedness is then evidenced by
such Intercompany Notes.
5.16 Tax Shelter Regulations. Neither the Company nor any of
its Subsidiaries intends to treat any Loan made hereunder or other transactions
under this Agreement as being a "reportable transaction" (within the meaning of
Treasury Regulation Section 1.6011-4). In the event either the Company or any of
its Subsidiaries determines to take any action inconsistent with such intention,
it will promptly (1) notify the Administrative Agent thereof, and (2) deliver to
the Administrative Agent a duly completed copy of IRS Form 8886 or any successor
form. If the Company or any of its Subsidiaries so notifies the Administrative
Agent, the Company or such Subsidiary acknowledges that the Lenders may treat
the Loans as part of a transaction that is subject to Treasury Regulation
Section 301.6112-1 and the Administrative Agent will maintain the lists and
other records required by such Treasury Regulation.
SECTION 6. NEGATIVE COVENANTS.
The Borrowers covenant that until all of the Borrowers'
obligations hereunder to the Lenders are paid and satisfied in full and the
Revolving Credit has been terminated that (it being understood that the Company
shall cause each of its Subsidiaries (or, as the case may be, the Restricted
Subsidiaries) to observe and comply in a timely manner with each provision of
the covenants in this Section 6 to the extent applicable to such Subsidiary (or,
as the case may be, such Restricted Subsidiary)):
60
6.1 Mergers. The Borrowers shall not, nor shall they cause or
permit any of the Restricted Subsidiaries to, merge or consolidate or otherwise
combine with or into any other Person other than the merger of a Subsidiary of
the Company into a Restricted Subsidiary (or into another Person which thereby
becomes a Restricted Subsidiary to the extent such merger is consummated
contemporaneously with and as part of a transaction permitted under Section 6.2)
or into one of the Borrowers, or commence a dissolution or liquidation other
than a liquidation or dissolution of a Restricted Subsidiary pursuant to which
all Property thereof is directly and promptly transferred into one of the
Borrowers or another Restricted Subsidiary.
6.2 Acquisitions. The Borrowers shall not, nor shall they
cause or permit any of the Restricted Subsidiaries to, acquire all or a material
portion of the stock, securities or other Property of any nature (other than
inventory or supplies purchased in the ordinary course of business of the
purchaser) of any Person in any transaction or in any series of related
transactions or enter into any sale and leaseback transaction except as
permitted by Section 6.9, provided, however, that the Borrowers and the
Restricted Subsidiaries may consummate any such transaction (a "Permitted
Acquisition") only if: (i) no Default or Event of Default hereunder has occurred
and is outstanding or would otherwise be caused by, or would exist after giving
effect to, the consummation of such acquisition; (ii) the aggregate
consideration (exclusive of the working capital needs of the acquired entity)
for all such acquisitions in a given year shall not exceed an amount (the
"Acquisition Amount") equal to thirty (30%) percent of the prior fiscal year-end
Consolidated Net Worth, plus a carryover only into the following year commencing
with a carryover from the fiscal year ended March 31, 2004 to the fiscal year
ended March 31, 2005, of fifty (50%) percent of the previous year's unused
Acquisition Amount, exclusive of any carryover amount from a previous year, (for
purposes of calculating the amount to be carried into any other year, the amount
of acquisitions in any year shall first be counted against the Acquisition
Amount (exclusive of any carryover amount from the previous year)) and, for the
avoidance of doubt, the parties acknowledge and agree that the Borrowers shall
be entitled to a carryover amount to the fiscal year ended March 31, 2005 of
[$33,129,450]; (iii) the aggregate consideration in all acquisitions following
the Effective Date until termination of the Revolving Credit shall not exceed
forty (40%) percent of the Consolidated Net Worth as of the end of the year
immediately preceding the year of determination; (iv) the acquiring Person must
acquire, in the case of a stock acquisition, at least 80% of the issued and
outstanding Capital Stock of the Person being acquired (provided, however, that
if the acquiring Person acquires less than 100% of the issued and outstanding
Capital Stock of the acquired Person, the owners of the unacquired shares must
be bound by a shareholders agreement reasonably satisfactory to the
Administrative Agent which shall include, at a minimum, "drag along" rights in
respect of such minority shares); (v) the Borrowers and the Restricted
Subsidiaries shall not assume any new contingent liabilities which would cause,
or be reasonably likely to cause, a Material Adverse Effect; (vi) the business
of the acquired entity shall be generally similar to the lines of business of
the Borrowers and the Guarantors; (vii) any Person acquired by the Company (and
becoming a Material Subsidiary) shall comply with the provisions of Section
5.12; (viii) the Administrative Agent shall have received a satisfactory
certificate (substantially in the form of Exhibit E attached hereto and made
part hereof) prepared and signed by the chief financial officer or vice
president of finance of the Company showing the cost of acquiring the applicable
Person exclusive of amounts attributable to the working capital requirements of
61
such Person and (after taking into effect the proposed acquisition) pro forma
covenant compliance with the financial covenants set forth in Section 7 herein
immediately following the applicable acquisition and projected compliance with
such covenants for no fewer than the next four (4) succeeding fiscal quarters of
the Company, setting forth in reasonable detail the calculations used in
presenting such costs and projections and with such supporting information as
may be reasonably requested by the Administrative Agent; and (ix) the
Administrative Agent shall have received a satisfactory officer's certificate
from an Authorized Officer of the Borrowers' Representative to the effect that
the conditions set forth in clauses (i) through (viii) have been satisfied as of
the date of the acquisition.
6.3 Liens and Encumbrances. (a) Except as provided in the Note
Purchase Agreement, the Borrowers shall not, nor shall they cause or permit any
of the Restricted Subsidiaries to: (i) execute a negative pledge agreement with
any Person covering any of its Property, or (ii) create or cause or authorize or
agree or consent to cause or permit, assume or suffer to exist or remain in
effect (upon the happening of a contingency or otherwise), its Property, whether
now owned or hereafter acquired, to be subject to a Lien or be subject to any
claim except for the following (the "Permitted Liens"):
(1) Liens securing taxes, assessments or governmental
charges or levies or the claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords, and other like Persons, or Liens evidencing consignment
or bailment arrangements with any of the Borrowers or the Restricted
Subsidiaries as consignee or bailee, provided the payment thereof is not at the
time required by Section 5.1;
(2) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance, social security and other like laws and in connection with leases or
trade contracts;
(3) Purchase money security interests (attaching solely
to the fixed asset purchased and securing only the obligation incurred to
finance such purchase) from any of the Borrowers or the Restricted Subsidiaries
to Persons providing financing for permitted Consolidated Capital Expenditures
provided that each such financing obligation incurred by one of the Borrowers
shall not exceed the lesser of (A) cost or (B) appraised fair market value;
(4) Existing Liens described on Schedule 4.4 hereto;
(5) Liens (other than on Accounts and/or Inventory)
deemed to be assumed or taken subject to by any of the Borrowers or the
Restricted Subsidiaries in connection with Permitted Acquisitions on Property of
the acquired entity as of the date of the Permitted Acquisition;
(6) Liens which are not otherwise permitted pursuant to
this Section, securing Indebtedness not exceeding $1,000,000 in the aggregate
outstanding at any one time;
(7) Trademark license agreements under which any of the
Borrowers or the Restricted Subsidiaries, as licensee, is prohibited from
granting a security interest in such licenses or in inventory with the licensed
mark to be sold by any of the Borrowers or the Restricted Subsidiaries provided,
that at no time shall the value of all licensed inventory exceed the lesser of
(i) twenty (20%) percent of the total value of any Borrower's or Restricted
Subsidiary's Inventory or (ii) $20,000,000 and, provided, further, that such
restriction on the granting of a security interest contained in any such license
shall only extend to cover the subject license agreement and the licensed
inventory and that in no event shall such lien restriction apply to the proceeds
of any licensed inventory generated from time to time, including, without
limitation, any Accounts generated from the sale of such licensed inventory; and
62
(8) Liens in connection with Asset Sales permitted under
Section 6.12(b)(v).
(b) If the Company or any of its Subsidiaries shall
create or assume any Lien upon any of its Property or income or profits
therefrom, other than Liens permitted under this Section 6.3, and without having
such provisions be deemed for any purpose to represent a consent by any Lender
or Lenders to such Lien, it shall make or cause to be made effective provisions
whereby the obligations will be secured by such Lien equally and ratably with
any and all other indebtedness secured thereby.
6.4 Transactions With Affiliates or Subsidiaries. The
Borrowers shall not, nor shall they cause or permit any of the Restricted
Subsidiaries to, enter into any transaction of any kind or nature with any
Affiliate, including, without limitation, the purchase, sale, transfer or
exchange of Property, or the loaning or giving of funds to any Affiliate or any
Subsidiary, excepting (a) sales of Property (including the sale of receivables
and related accounts to the Bankruptcy Remote Subsidiary) and/or services and
co-licensing or co-marketing arrangements or agreements pursuant to the
reasonable requirements of any Borrower's or Restricted Subsidiary's business
and upon terms substantially the same and no less favorable to such party as it
would obtain in a comparable arm's length transaction with any Person not an
Affiliate, and so long as such transaction is not otherwise prohibited
hereunder, (b) loans and transfers of Property by any Borrower to any Restricted
Subsidiary and loans and transfers of Property by any Restricted Subsidiary to
any Borrower or other Restricted Subsidiary, (c) loans by any Borrower or
Restricted Subsidiary to any of the Company's Subsidiaries (other than a
Borrower or Restricted Subsidiary) after the date hereof in an aggregate amount
as to all such loans under this clause (c) not to exceed $20,000,000 at any time
outstanding in the aggregate after the Effective Date, provided, however, that a
loan may be made by a Borrower or a Restricted Subsidiary to any of the
Company's Subsidiaries (other than a Borrower or Restricted Subsidiary) which,
when aggregated with all then outstanding loans referenced in this clause (c),
would exceed $20,000,000 so long as the recipient of such loan unconditionally
guarantees and becomes surety for all of the Borrowers' Obligations on terms and
conditions and under a written guaranty satisfactory to the Administrative Agent
within sixty (60) days of the funding of such loan, (d) the de minimis transfer
by a Borrower or Restricted Subsidiary of its Property to any of the Company's
Subsidiaries and (e) transactions expressly permitted pursuant to Sections 6.5,
6.6 and 6.7(k) hereof and payment of compensation in the ordinary course.
6.5 Guarantees. Excepting (a) the endorsement in the ordinary
course of business of negotiable instruments for deposit or collection, (b) the
Guarantees, (c) guarantees by any Borrower or Restricted Subsidiary of operating
leases of any Subsidiary entered into in the ordinary course of business, (d)
indemnification obligations to directors and officers under applicable law or
set forth in the certificate of incorporation and/or by-laws of the Company or
any of its Subsidiaries, (e) guarantees by any Borrower or Restricted Subsidiary
for the Indebtedness of any Borrower or Restricted Subsidiary, (f) additional
guarantees by any Borrower and/or Restricted Subsidiary for the Indebtedness of
any Person which, together with Indebtedness permitted under Section 6.11(b)(iv)
below shall not exceed $20,000,000 at any one time outstanding, and (g)
guaranties issued in connection with the Accounts Receivable Securitization, the
Borrowers shall not, nor shall they cause or permit any of the Restricted
Subsidiaries to, become or be liable in any manner, directly or indirectly,
primarily or secondarily, whether as guarantor, surety, accommodation maker, or
otherwise for the existing or future, matured or contingent indebtedness or
obligations of any kind or nature of any Person.
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6.6 Dividends and Redemptions. (a) The Company shall not, nor
shall it cause or permit any of its Subsidiaries (other than the Bankruptcy
Remote Subsidiary) to, directly or indirectly: declare, pay, authorize or make
any form of dividend (except for stock dividends or stock splits) or return any
capital, in cash or property, to its shareholders, their successors or assigns
or repurchase, redeem or retire any of the Capital Stock of the Company, except
(A) as expressly permitted by Section 6.1 hereof, (B) dividends payable to the
Company or any Restricted Subsidiary by any Subsidiary of the Company, and (C)
if, after giving effect to such dividend, distribution to shareholders,
repurchase, redemption or retirement the Company is in compliance with Section
7.2.
(b) Notwithstanding the provisions of paragraph (a)
above, (i) dividends or redemptions, etc. otherwise permitted as set forth above
shall not be made so long as any Default or Event of Default is then outstanding
or would be outstanding after taking into effect such dividend, redemption or
setting aside of funds, and (ii) no dividend may be declared or paid or
redemption made if the Borrowers are not then in compliance with the covenants
set forth in Sections 5.6 and 5.7.
6.7 Loans and Investments. The Borrowers shall not, nor shall
they cause or permit any of the Restricted Subsidiaries to, make or have
outstanding Investments in, any Person, other than (a) Investments in commercial
paper maturing in one (1) year or less from the date of issuance rated at the
time of purchase either A-1 by S&P, P-1 by Moody's or other similar nationally
recognized credit rating agency of similar standing; (b) Investments in direct
obligations of the United States of America, or any agency or instrumentality
thereof, maturing in five (5) years or less from the date of acquisition
thereof; (c) Investments in certificates of deposit maturing within one (1) year
from the date of origin issued by, or money market funds on deposit with, a
Lender; (d) Investments in repurchase agreements secured by direct obligations
of the United States of America, or any agency thereof, maturing in twelve (12)
months or less and having a market value at the time such repurchase agreement
is entered into at least equal to the amount of the repurchase obligations
thereunder, entered into with a Lender, (e) loans and guarantees permitted under
Sections 6.4 and 6.5 above, (f) Investments which are Permitted Acquisitions,
(g) by any Borrower or Restricted Subsidiary as permitted under Sections 6.2,
(h) Investments in any Restricted Subsidiary and Investments in any other
Subsidiary of the Company as such Investments existed as of the Effective Date,
(i) permitted Investments in connection with Asset Sales permitted pursuant to
Section 6.12(b)(i)(C) and Investments resulting from Asset Sales permitted
pursuant to Section 6.12(b)(v), (j) other Investments not to exceed $5,000,000
in the aggregate outstanding at any one time, (k) loans to its employees or
directors made by any Borrower or Restricted Subsidiary for the purpose of
enabling such employees or directors to exercise stock options up to an
aggregate loan balance of $7,500,000 at any time outstanding (as to all loans
permitted under this clause (k)), and (l) Investments in the Bankruptcy Remote
Subsidiary from the sale of Assets to the Bankruptcy Remote Subsidiary as part
of the Accounts Receivable Securitization.
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6.8 Amendment or Waivers of Certain Documents. (a) The
Borrowers shall not, nor shall they cause or permit any of the Restricted
Subsidiaries to, amend, modify, supplement or otherwise change the terms of
their respective certificates of incorporation or bylaws or any agreement
entered into by any of the Borrowers or the Restricted Subsidiaries with respect
to its respective Capital Stock (other than any amendment, modification,
supplement or change which individually, or together with all amendments,
modifications, waivers or changes made, would not be adverse to the Borrowers
and the Restricted Subsidiaries taken as a whole, the Administrative Agent or
the Lenders) without the prior written consent of the Administrative Agent,
which consent shall not be unreasonably withheld.
(b) The Borrowers shall not, nor shall they cause or
permit any of the Restricted Subsidiaries to, amend, modify, supplement or
otherwise change, or waive compliance with or consent to a departure from, any
of the terms or provisions of any Existing Debt of the Company, or any other
material agreement, including, without limitation, the Accounts Receivable
Securitization Documents, of any of the Borrowers or the Restricted Subsidiaries
(other than any amendments, modifications, supplements, changes, waivers and
consents which individually, or together with all other amendments,
modifications, supplements, changes, waivers and consents made, would not be
adverse to any of the Borrowers or the Restricted Subsidiaries, the
Administrative Agent or the Lenders) without the prior written consent of the
Administrative Agent, which consent shall not be unreasonably withheld.
(c) Neither the Company nor any Subsidiary shall enter
into, suffer to exist or become or remain subject to any agreement or instrument
to which any such Person is a party or by which any such Person or its Property
may be subject or bound, except for the Loan Documents, that would prohibit or
restrict in any manner, directly or indirectly, or require the consent of any
Person to, any amendment to, or waiver or consent to departure from the terms
of, any of the Loan Documents.
6.9 Sale and Lease-Backs. The Borrowers shall not, nor shall
they cause or permit any of the Restricted Subsidiaries to, directly or
indirectly, become or thereafter remain liable as lessee or as guarantor or
surety with respect to the lessee's obligations under any lease, whether an
operating lease or a capital lease, of any property (whether real or personal or
mixed), whether now owned or hereafter acquired, (i) which any of the Borrowers
or the Restricted Subsidiaries has sold or transferred or is to sell or transfer
to any other Person or (ii) which any of the Borrowers or the Restricted
Subsidiaries intends to use for substantially the same purpose as any other
property which has been or is to be sold or transferred by any such Borrower or
Restricted Subsidiary to any Person in connection with such lease, if in the
case of clause (i) or (ii) above, such sale and such lease are part of the same
transaction or a series of related transactions or such sale and such lease
occur within one (1) year of each other or are with the same other Person,
provided, however, that notwithstanding the limitations of this Section 6.9,
Cleo Inc may enter such as a sale and lease-back transaction with respect to the
Real Property located at 4025 Viscount, Memphis, Tennessee.
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6.10 Business Conducted. The Borrowers shall not, nor shall
they cause or permit any of the Restricted Subsidiaries to, engage, directly or
indirectly, in any line of business substantially different from the business
conducted by it immediately prior to the Effective Date, or engage in business
or lines of business which are not reasonably and substantially related thereto.
6.11 Indebtedness. The Borrowers shall not, nor shall they
cause or permit any of the Restricted Subsidiaries to (a) make any prepayments
of any nature whatsoever (or deposit money or other Property for the purpose
thereof) on any existing or future long-term Indebtedness to any Person except
(x) the conversion of Indebtedness to equity so long as the entire amount of the
portion of the Indebtedness so prepaid is so converted and (y) required
prepayments of the Indebtedness incurred under the Note Purchase Documents and
prepayments of such Indebtedness in the event of a Change of Control (as defined
in the Note Purchase Agreement) or (b) hereafter incur or be or become liable
for Indebtedness except for (i) Indebtedness to the Lenders pursuant to this
Agreement, (ii) purchase money financing supported by Liens permitted pursuant
to Sections 6.3(a)(3) or 6.3(a)(5) above and Indebtedness secured by the
existing Liens described in Section 6.3(a)(4), (iii) Indebtedness permitted
under Section 6.4(b), and (iv) additional Indebtedness in an aggregate principal
amount, together with all obligations described in Section 6.5(f) herein, not
exceeding $20,000,000 at any one time outstanding, provided that Indebtedness of
Restricted Subsidiaries which are not Guarantors incurred other than to one or
more of the Borrowers or the Restricted Subsidiaries shall not exceed an
aggregate principal amount of $10,000,000 at any one time outstanding.
6.12 Restrictions on Fundamental Changes; Asset Sales. The
Borrowers shall not, nor shall they cause or permit any of the Company's
Subsidiaries to, (a) materially alter its corporate, partnership, capital or
legal structure other than alterations of the structure of (i) Restricted
Subsidiaries as permitted in Sections 6.1, 6.2, 6.9 and 6.12(a) above, (ii) any
Subsidiaries which are not Restricted Subsidiaries so long as (A) such
alteration would not give rise to a Material Adverse Effect and (B) no Default
or Event of Default has occurred or is continuing or would occur after taking
into effect such alteration or (b) make or effect any Asset Sale excepting (i)
Asset Sales made (A) at a time when no Default of Event or Default is
outstanding hereunder or would be outstanding after taking into effect such
Asset Sale, (B) the consideration received shall be an amount at least
substantially equal to the fair market value of the Property which is the
subject of the Asset Sale, as certified to the Administrative Agent by the
Company's chief financial officer or vice president of finance; (C) at least 50%
of the consideration received therefrom shall be cash; (D) such Asset Sales are
not to an Affiliate of the seller; and (E) the assets sold in all transactions
permitted hereby after the Effective Date (exclusive of the transaction referred
to in the proviso of Section 6.9) shall have an aggregate book value of not more
than $17,500,000; (ii) transactions permitted under Section 6.1, 6.2 or Section
6.4 above; (iii) the Company and any of its Subsidiaries may from time to time
abandon any personal Property of the Company or such Subsidiary which is not the
business of the Company or such Subsidiary and cannot be sold; (iv) at a time
when no Default or Event of Default is outstanding hereunder or would be
outstanding after taking into effect such Asset Sale, sales of minority
interests of Capital Stock of any Subsidiary of the Company (other than a
Restricted Subsidiary) to any employees thereof; (v) Asset Sales in connection
with the Accounts Receivable Securitization; and (vi) sales or transfers of
accounts receivable of the Company or any of its Subsidiaries made in connection
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with any agreement, including but not limited to credit insurance, that seeks to
limit the risk of default by or bankruptcy of any customer of the Company or any
of its Subsidiaries on any such accounts receivable owed to the Company or any
of its Subsidiaries for merchandise delivered or services rendered by the
Company or any of its Subsidiaries to such customer; provided that (A) no
Default or Event of Default has occurred and is continuing at the time of such
sale or transfer and (B) the consideration received for such accounts receivable
shall be an amount at least substantially equal to the fair market value of the
accounts receivable which is the subject of the Asset Sale, as certified to the
Administrative Agent by the Company's chief financial officer or vice president
of finance.
6.13 Agreements Regarding Dividends. No Borrower or Restricted
Subsidiary shall create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind (whether arising
by operation of law, by agreement, by its articles or certificate of
incorporation, bylaws or other constituent documents of such Person, or
otherwise) on the ability of any Subsidiary of the Company to (i) pay dividends
or make any other distribution on any of such Subsidiary's Capital Stock owned
by the Company or any other Subsidiary of the Company, (ii) make loans or
advances to, or guarantee any Indebtedness or any other obligation of, the
Company or any other Subsidiary of the Company or (iii) transfer any of its
Property to the Company or any other Subsidiary of the Company, except
restrictions pursuant to (A) the Loan Documents, (B) applicable law, (C) the
Accounts Receivable Securitization Documents and (D) the Note Purchase
Agreement.
6.14 Miscellaneous Covenants.
(a) The Borrowers shall not, nor shall they cause or
permit any of the Restricted Subsidiaries to, become or be a party to any Hedge
Agreement entered into purely for speculative purposes or to any contract or
agreement which materially impairs such party's ability to perform under this
Agreement, or under any other instrument, agreement or document to which such
Borrower or Restricted Guaranty is a party or by which it is or may be bound.
(b) The Borrowers shall not, nor shall they cause or
permit any of the Restricted Subsidiaries to, carry or purchase any "margin
security" within the meaning of Regulations U, T or X of the Board of Governors
of the Federal Reserve System, 12 C.F.R., Chapter II except in accordance with
such Regulations.
(c) The Company and its Subsidiaries and their respective
Affiliates and agents shall not knowingly (a) conduct any business or engage in
any transaction or dealing with any Blocked Person, including the making of or
receiving any contribution of funds, goods or services to or for the benefit of
any Blocked Person; (b) deal in, or otherwise engage in any transaction relating
to, any property or interests in property blocked pursuant to Executive Order
No. 13224; or (c) engage in or conspire to engage in any transaction that evades
or avoids, or has the purpose of evading or avoiding, or attempts to violate,
any of the prohibitions set forth in Executive Order No. 13224 or the USA
Patriot Act. The Company shall deliver to the Administrative Agent any
certification or other evidence requested from time to time by the
Administrative Agent, on its own behalf or on behalf of any Lender, in its sole
discretion, confirming the Company's compliance with this Section 6.14(c).
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SECTION 7. FINANCIAL COVENANTS.
The Company shall comply with the following financial
covenants (each to be measured as of the end of each of the Company's fiscal
quarters during the applicable respective measurement periods:
7.1 Fixed Charge Coverage Ratio. The Company shall have and
maintain a Fixed Charge Coverage Ratio of not less than 1.50 to 1 (measured on a
rolling four quarter basis).
7.2 Minimum Consolidated Net Worth. The Company shall have and
maintain a minimum Consolidated Net Worth of not less than $220,972,000 as of
December 31, 2003. For the subsequent fiscal quarter ending March 31, 2004, the
Company shall have and maintain a minimum Consolidated Net Worth of not less
than $220,972,000 plus an amount equal to fifty (50%) percent of the Company's
Consolidated Net Income for the fiscal quarter ending March 31, 2004 (with no
adjustment for losses). For each subsequent fiscal quarter thereafter, the
Company shall maintain, minimum Consolidated Net Worth in an amount not less
than the sum of the preceding fiscal year-end's minimum Consolidated Net Worth
requirement plus an amount equal to fifty (50%) percent of the Company's current
year-to-date Consolidated Net Income through the end of such fiscal quarter
(with no adjustment for losses).
7.3 Ratio of Consolidated Funded Debt to Consolidated
Capitalization. The Company shall have and maintain at all times from and after
the Effective Date a ratio of Consolidated Funded Debt to Consolidated
Capitalization equal to or less than .50 to 1.
7.4 Consolidated Capital Expenditures. The Company shall not
incur Consolidated Capital Expenditures during any consecutive four fiscal
quarter period in excess of $20,000,000 (measured on a rolling four quarter
basis).
SECTION 8. DEFAULT
8.1 Events of Default. Each of the following events shall
constitute an event of default (an "Event of Default"):
(a) Payments. The Borrowers fail to make any payment of
principal or interest under the Revolving Credit on its due date; or
(b) Other Charges. The Borrowers fail to pay any other
charges, fees, Expenses or other monetary obligations owing to any Lender or the
Administrative Agent or the Fronting Lender arising out of or incurred in
connection with this Agreement when such payment is due and payable and such
breach is not cured within five (5) days of the Borrowers' receipt of notice
from the Administrative Agent of such breach; or
(c) Particular Covenant Defaults. The Borrowers fail to
perform or observe any covenant or undertaking contained in this Agreement,
(other than with respect to the covenants contained in Sections 5.7(b), 6.1
through 6.15 and Sections 7.1 through 7.4 inclusive, as to which no notice and
cure period shall be applicable), and such breach is not cured within fifteen
(15) days of the Borrowers' receipt of notice thereof from the Administrative
Agent, or if such breach could not be cured by the Borrowers due to
circumstances beyond the Borrowers' control within such fifteen (15) day period,
for such longer period as may be necessary for the Borrowers to cure such
default (in no event to exceed a total of thirty (30) days from any such notice)
so long as the Borrowers are diligently taking all necessary steps to cure any
such default(s); or
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(d) Financial Information. Any statement, report,
financial statement, or certificate made and delivered by the Borrowers or any
of their respective officers, employees or agents, to the Administrative Agent
or any Lender, is not true and correct, in all material respects, when made
(provided, however, that an Event of Default shall not be deemed to have
occurred hereunder because interim financial statements are subject to normal
and recurring year end adjustments in the ordinary course); or
(e) Uninsured Loss. There shall occur any uninsured
damage to or loss, theft, or destruction of any portion of any Property of any
of the Borrowers or the Restricted Subsidiaries in excess of $5,000,000; or
(f) Warranties or Representations. Any warranty,
representation or other statement by or on behalf of any of the Borrowers or the
Restricted Subsidiaries contained in or pursuant to this Agreement, or in any of
the Loan Documents or in any other existing or future agreement between the
Company and/or any of the Company's Subsidiaries, on the one hand, and the
Administrative Agent and/or any one or more of the Lenders, on the other hand,
is false, erroneous, or misleading in any material respect when made; or
(g) Agreements with Others. Any of the Borrowers or the
Restricted Subsidiaries shall (i) default beyond any grace period under any
agreement(s) with any creditor(s) of any such Borrower or Restricted Subsidiary
or holder(s) of Indebtedness from any such Borrower or Restricted Subsidiary
which has an aggregate outstanding principal balance of $1,000,000, if the
effect of such default is to cause or enable the holder(s) of such party's
obligations to declare any such obligation of such party to become due (whether
or not actually accelerated) prior to its maturity date or prior to its
regularly scheduled date of payment or (ii) fail to pay any Indebtedness at
final maturity; or
(h) Other Agreements with Lenders. Any of the Borrowers
or the Restricted Subsidiaries materially breaches or violates the terms of, or
if a default (subject to any cure periods contained therein) or an Event of
Default occurs under any other existing or future agreement (related or
unrelated) between any of the Borrowers and/or Restricted Subsidiaries, on the
one hand, and the Administrative Agent and/or any or all of the Lenders, on the
other hand; or
(i) Judgments. Any final, non-appealable judgment for the
payment of $5,000,000 or more or final, non-appealable judgments aggregating
$5,000,000 or more (not acknowledged, in writing, by the applicable Borrower's
or Restricted Subsidiary's insurance company as unconditionally covered by
insurance or not stayed within five (5) days of entry) shall be rendered by a
court of competent jurisdiction against any of the Borrowers or the Restricted
Subsidiaries; or
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(j) Assignment for Benefit of Creditors, etc. Any of the
Borrowers or the Restricted Subsidiaries makes or proposes an assignment for the
benefit of creditors generally or offers a composition or extension to
creditors; or
(k) Bankruptcy, Dissolution, etc. Any action is taken for
the dissolution or liquidation of any of the Borrowers or the Restricted
Subsidiaries not otherwise permitted hereunder, or if there shall be commenced
any case or proceeding for reorganization or liquidation of any of Borrower's or
Restricted Subsidiary's debts under the Bankruptcy Code or any other state or
federal law, now or hereafter enacted for the relief of debtors, whether
instituted by or against such party, provided that as to any such action or
proceeding commenced against any Borrower or Restricted Subsidiary, such
Borrower or Restricted Subsidiary shall have forty-five (45) days to have such
action or proceeding dismissed, it being understood that prior to such
dismissal, the Lenders and the Administrative Agent shall not be obligated to
make Advances to or for the benefit of the Borrowers; or
(l) Receiver. There shall be appointed a receiver,
liquidator, custodian, trustee or similar official or fiduciary for (i) any
Borrower or Restricted Subsidiary, (ii) a substantial part of any Borrower's or
Restricted Subsidiary's Property or (iii) for such part of the Property of any
Borrower or Restricted Subsidiary, such control over which would give rise to a
Material Adverse Effect; or
(m) Execution Process, etc. There shall be issued any
execution or distraint process against any Borrower or Restricted Subsidiary, or
any Property of any Borrower or Restricted Subsidiary, which execution is not
released, stayed or dismissed within fifteen (15) days of its entry, it being
understood that nothing herein shall in any way impair the Administrative
Agent's and the Lenders' rights to immediately effect an offset against any
asset of any Borrower or Restricted Subsidiary; or
(n) Termination of Business. Any Borrower or Restricted
Subsidiary ceases any material portion of its respective business operations as
presently conducted unless, in the case of a Restricted Subsidiary, such
Restricted Subsidiary immediately merges into or consolidates with or is
dissolved or liquidated into a Borrower or another Restricted Subsidiary; or
(o) Pension Benefits, etc. Any Borrower or Restricted
Subsidiary fails to comply with ERISA so that grounds exist to permit the
appointment of a trustee under ERISA to administer such Borrower's or Restricted
Subsidiary's employee plans or to allow the Pension Benefit Guaranty Corporation
to institute proceedings to appoint a trustee to administer such plan(s), or to
permit the entry of a Lien to secure any deficiency or claim; or
(p) Transfer of Stock. The Company shall not be the owner
(directly or indirectly) of at least 100% of all of the issued and outstanding
voting stock of each other Borrower and Restricted Subsidiary (or 80% in the
case of Restricted Subsidiaries formed in connection with Permitted
Acquisitions), provided, however, that the foregoing shall not prohibit mergers,
dissolutions or stock dividends expressly permitted by Sections 6.1 or 6.4
hereof; or
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(q) Investigations. Evidence shall be received by the
Administrative Agent or any Lender that any Borrower or Restricted Subsidiary is
or has been engaged in any type of activity which, in the Administrative Agent's
reasonable judgment, could result in the forfeiture of Property of any Borrower
or Restricted Subsidiary to any Governmental Authority other than a forfeiture
under Environmental Laws or products liability law which would not give rise to
a Material Adverse Effect; or
(r) Guarantees. Any Guarantee ceases to be effective or
any Guarantor disclaims liability under such Guarantee or attempts to revoke or
otherwise terminate its respective Guarantee for any reason and to any extent,
except to the extent of a merger, consolidation or liquidation permitted
hereunder; or
(s) Change of Control. There shall occur any Change of
Control.
8.2 Rights and Remedies on Default.
(a) Upon the occurrence of a Default or an Event of
Default, the Administrative Agent may, in its discretion, or shall, upon the
direction of the Majority Lenders, withhold or cease making Advances under the
Revolving Credit.
(b) In addition to all other rights, options and remedies
granted or available to the Administrative Agent under this Agreement or the
other Loan Documents (each of which is also then exercisable by the
Administrative Agent), the Administrative Agent may, in its discretion, or
shall, upon the direction of Majority Lenders, upon the occurrence and during
the continuance of an Event of Default, terminate the Revolving Credit,
accelerate the Obligations (other than any Obligations under any Hedge Agreement
which may be accelerated only by the Lender which is a party thereto pursuant to
the terms of such Hedge Agreement) and exercise any rights and remedies
available hereunder or under any of the other Loan Documents, at law or in
equity to enforce the Lenders, and the Administrative Agent's rights and collect
the obligations, all without demand, notice, presentment or protest or further
action of any kind (it also being understood that the occurrence of any of the
events or conditions set forth in subparagraphs (j), (k) or (1) of Section 8.1
above shall automatically cause an acceleration of the Obligations).
Nevertheless, if at any time within sixty (60) days after acceleration of the
Obligations, (i) the Borrowers shall pay all accrued and unpaid interest and all
payments on account of the principal Obligations, which shall have become due
otherwise than by acceleration (with interest, to the extent permitted by law,
on overdue interest, at the Alternate Base Rate) and all other fees or Expenses
then owed hereunder and (ii) all Defaults and Events of Default (other than
non-payment of principal of and accrued interest on the Advances and the
Revolving Credit Notes due and payable solely by virtue of acceleration) shall
be remedied or waived pursuant to Section 9.15, then the Majority Lenders, by
written notice to the Borrowers, may (in their absolute and sole discretion)
rescind and annul the acceleration and its consequences; but such action shall
not affect any subsequent Default or Event of Default or impair any right
consequent thereto. The provisions of the immediately preceding sentence are
intended merely to bind the Lenders to a decision that may be made at the
election of the Lenders and are not intended in any manner or under any
circumstances whatsoever to benefit the Borrowers or any of the Guarantors and
do not grant in any manner or under any circumstances whatsoever any Borrower or
Guarantor the right to require the Lenders to rescind or annul any acceleration
hereunder, even if the conditions set forth herein are met.
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(c) Upon the occurrence and during the continuance of an
Event of Default and in addition to all other rights and remedies available to
the Administrative Agent, the Borrowers shall, upon demand of the Administrative
Agent, be obligated to deliver to the Administrative Agent, on behalf of all
Lenders, cash in the amount of all outstanding Letters of Credit which cash
shall be held by the Administrative Agent in an account subject to its control
and applied from time to time to reimburse any draws made under such Letters of
Credit until all Letters of Credit have expired or been terminated and all
Obligations have been satisfied at which time any balance remaining shall be
returned to the Borrowers.
8.3 Nature of Remedies. All rights and remedies granted the
Administrative Agent and/or the Lenders hereunder and under any of the other
Loan Documents, or otherwise available at law or in equity, shall be deemed
concurrent and cumulative, and not alternative remedies, and the Administrative
Agent and/or the Lenders may proceed with any number of remedies at the same
time until all Obligations are satisfied in full. The exercise of any one right
or remedy shall not be deemed a waiver or release of any other right or remedy,
and the Administrative Agent, upon the occurrence of an Event of Default, may
proceed against the Borrowers, at any time, under any agreement, document or
instrument, with any available remedy and in any order.
8.4 Set-Off. If any bank account of any Borrower with the
Administrative Agent, any Lender or any participant is attached or otherwise
liened or levied upon by any third party, the Administrative Agent and/or such
Lender (and/or any participant) need not await the running of any applicable
grace period hereunder, but the Administrative Agent and/or such Lender (and/or
such participant) as agent for the Lenders and the Administrative Agent shall
have and be deemed to have the immediate right of set-off and may apply the
funds or amount thus set-off against any of the Obligations. Any such funds
shall be held for the ratable benefit of all Lenders and shall be remitted to
the Administrative Agent for distribution to all Lenders in accordance with each
Lender's Pro Rata Percentage (subject to such sharing agreements as the
Administrative Agent may reasonably determine to effectuate the terms of this
Agreement).
SECTION 9. THE ADMINISTRATIVE AGENT.
9.1 Appointment and Authorization. Each Lender, and each
subsequent holder of any of the Revolving Credit Notes by its acceptance
thereof, hereby irrevocably appoints and authorizes the Administrative Agent to
take such action on its behalf and to exercise such powers under this Agreement
as are delegated to the Administrative Agent by the terms hereof, together with
such powers as are reasonably incidental thereto. The Administrative Agent will
handle all transactions relating to the Revolving Credit and all other
Obligations, including without limitation, all transactions with respect to
Letters of Credit, this Agreement, and all of the other Loan Documents, in
accordance with its usual banking practices. The Borrowers are hereby authorized
by the Lenders to deal solely with the Administrative Agent in all transactions
which affect the Lenders under this Agreement and the Loan Documents. The
rights, privileges and remedies accorded to the Administrative Agent hereunder
shall be exercised by the Administrative Agent on behalf of all of the Lenders.
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9.2 General Immunity. In performing its duties as the
Administrative Agent hereunder, the Administrative Agent will take the same care
as it takes in connection with loans in which it alone is interested, using
reasonable and prudent banking practices. However, neither the Administrative
Agent nor any of its directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or them hereunder or in
connection herewith except as such actions or omissions are caused from its or
their own gross negligence or willful misconduct unless such action was taken or
omitted to be taken by the Administrative Agent at the direction of the Majority
Lenders.
9.3 Consultation with Counsel. The Administrative Agent may
consult with legal counsel and other experts selected by it and shall not be
liable for any action taken or suffered in good faith by it in accordance with
the advice of such counsel.
9.4 Documents. The Administrative Agent shall not be under a
duty to examine into or pass upon the effectiveness, genuineness or validity of
this Agreement or any of the Revolving Credit Notes or any of the other Loan
Documents, and the Administrative Agent shall be entitled to assume that the
same are valid, effective and genuine and what they purport to be. In addition,
the Administrative Agent shall not be liable for failing to make any inquiry
concerning the accuracy, performance or observance of any of the terms,
provisions or conditions of such instrument, document or agreement. The
Administrative Agent shall furnish to the Lenders copies of all notices and
other documents (including financial statements) received from the Borrowers
hereunder.
9.5 Rights as a Lender. With respect to its Pro Rata Share of
the Revolving Credit, the Administrative Agent shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not the Administrative Agent, and the term "Lender" or "Lenders" shall, unless
the context otherwise indicates, include the Administrative Agent in its
capacity as a Lender. Subject to the provisions of this Agreement, the
Administrative Agent and any Lender may accept deposits from, lend money to and
generally engage in any kind of banking or trust business with the Company and
any of its Affiliates and Subsidiaries as if it were not the Administrative
Agent.
9.6 Responsibility of the Administrative Agent. It is
expressly understood and agreed that the obligations of the Administrative Agent
hereunder are only those expressly set forth in this Agreement and that the
Administrative Agent shall be entitled to assume that no Event of Default, and
no event that, with notice, or lapse of time or both would, if unremedied,
constitute an Event of Default, has occurred and is continuing, unless the
Administrative Agent has actual knowledge of such fact. Except to the extent the
Administrative Agent is required by the Lenders pursuant to the express terms
hereof to take a specific action, the Administrative Agent shall be entitled to
use its discretion with respect to exercising or refraining from exercising any
rights which may be vested in it by, or with respect to taking or refraining
from taking any action or actions that it may he able to take under or in
respect of, this Agreement and the Loan Documents. The Administrative Agent
shall incur no liability under or in respect of this Agreement and the other
Loan Documents by acting upon any notice, consent, certificate, warranty or
other paper or instrument believed by it to be genuine or authentic or to be
signed by the proper party or parties, or with respect to anything that it may
do or refrain from doing in the reasonable exercise of its judgment, or that may
seem to it to be necessary or desirable under the circumstances. It is agreed
among the Administrative Agent and the Lenders that the Administrative Agent
shall have no responsibility to carry out audits or otherwise examine the books
and records or properties of the Company or any of the Company's Subsidiaries,
except as the Administrative Agent in its sole discretion deems appropriate or
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unless directed to do so by the Majority Lenders. The relationship between the
Administrative Agent and each Lender is and shall be that of agent and principal
only and nothing herein shall be construed to constitute the Administrative
Agent a joint venturer with any Lender, a trustee or fiduciary for any of the
Lenders or for the holder of a participation herein nor impose on the
Administrative Agent duties and obligations other than those set forth herein.
Nothing contained in this Section 9.6 is intended to relieve the Administrative
Agent from liability for its gross negligence or its willful misconduct unless
any act, omission or conduct of the Administrative Agent is or has been directed
by the Majority Lenders.
9.7 Collections and Disbursements.
(a) The Administrative Agent will have the right to
collect and receive all payments of the Obligations, and to collect and receive
all reimbursements for draws made under the Letters of Credit, together with all
fees, charges or other amounts due under this Agreement and the Loan Documents,
and the Administrative Agent will remit to each Lender, according to its Pro
Rata Percentage, all such payments actually received by the Administrative Agent
(subject to any required clearance procedures) on the same Business Day of
receipt thereof (provided such payments shall have been received by the
Administrative Agent prior to 1:00 p.m., Philadelphia time, on such Business
Day) otherwise on the next Business Day.
(b) If any such payment received by the Administrative
Agent is rescinded or otherwise required to be returned for any reason at any
time, whether before or after termination of this Agreement and the Loan
Documents, each Lender will, upon written notice from the Administrative Agent
promptly pay over to the Administrative Agent its Pro Rata Percentage of the
amount so rescinded or returned, together with interest and other fees thereon
if also required to be rescinded or returned.
(c) On the same Business Day on which notice is given to
the Lenders by the Administrative Agent (or on the next following Business Day
if such notice is not given by the Administrative Agent prior to 1:00 p.m.,
Philadelphia time) with respect to any payment which has been made on account of
any Letter of Credit, which notice shall state the date and amount of such
payment, each Lender (other than the Fronting Lender) shall remit to the
Fronting Lender its Pro Rata Percentage of the payment in respect of such Letter
of Credit. The obligations of the Lenders hereunder are unconditional, not
subject to setoff and irrevocable and may not be terminated at any time.
(d) All payments by the Administrative Agent and the
Lenders to each other hereunder shall be in lawful money of the United States of
America and at all times maintain proper books of account and records reflecting
the interest of each Lender in the Revolving Credit and the Letters of Credit,
in a manner customary to the Administrative Agent's keeping of such records,
which books and records shall be available for inspection by each Lender at
reasonable times during normal business hours, at such Lender's sole expense.
The Administrative Agent may treat the payees of any Revolving Credit Note as
the holder thereof until written notice of the transfer thereof shall have been
received by the Administrative Agent.
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(e) The Lenders and any subsequent holder by acceptance
of a Revolving Credit Note agree among themselves that (i) with respect to all
amounts received by them which are applicable to the payment of principal of or
interest on the Revolving Credit Notes and amounts payable in respect of any
fees or commissions hereunder, equitable adjustment will be made so that, in
effect, all such amounts will be shared among the Lenders pro rata based on
their respective Pro Rata Share of the Obligations with respect to which such
payment was received, whether received by voluntary payment, by the exercise of
the right of setoff or banker's lien, by counterclaim or cross action or by the
enforcement of any or all of the Revolving Credit Notes, (ii) if any of them
shall exercise any right of counterclaim, setoff, banker's lien or similar right
with respect to amounts owed by the Borrower or any Guarantor hereunder or under
the Revolving Credit Notes that Lender or holder, as the case may be, shall
apportion the amount recovered as a result of the exercise of such right pro
rata in accordance with each Lender's Pro Rata Percentage, and (iii) if any of
them shall thereby through the exercise of any right of counterclaim, setoff,
banker's lien or otherwise or as adequate protection of a deposit treated as
cash collateral under the Bankruptcy Code, receive payment or rejection of a
proportion of the aggregate amount of principal and interest due with respect to
the Revolving Credit Notes held by a Lender or holder, or any other amount
payable hereunder which is greater than the proportion received by any other
holder of the Revolving Credit Notes in respect of the aggregate amount of
principal and interest due with respect to the Revolving Credit Notes held by it
or any other amount payable hereunder that Lender or that holder of the
Revolving Credit Notes receiving such proportionately greater payments shall (y)
notify each other Lender and the Administrative Agent of such receipt and (z)
purchase for cash, without recourse or warranty, participations (which it shall
be deemed to have done simultaneously upon the receipt of such payment) in the
Revolving Credit Notes held by the other holders so that all such recoveries of
principal and interest with respect to the Revolving Credit Notes shall be
proportionate to their respective Pro Rata Percentages; provided, however, that
if all or part of such proportionately greater payment received by such
purchasing holder is thereafter recovered from such holder, those purchases
shall be rescinded and the purchase prices paid for such participations shall be
returned to that holder to the extent of such recovery, but without interest.
The Borrower expressly consents to the foregoing arrangement.
9.8 Indemnification. The Lenders severally and not jointly
hereby each indemnify the Administrative Agent ratably according to the
respective amounts of their Pro Rata Percentages to the extent not paid or
otherwise reimbursed by the Borrowers, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by or asserted against the Administrative Agent in any way relating
to or arising out of this Agreement, any other Loan Document or the Revolving
Credit or any action taken or omitted by the Administrative Agent under or
related to this Agreement, any other Loan Document or the Revolving Credit,
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct unless such action was taken or omitted to be
taken by the Administrative Agent at the direction of the Majority Lenders. The
Administrative Agent shall have the right to deduct, from any amounts to be paid
by the Administrative Agent to any Lender hereunder, any amounts owing to the
Administrative Agent by such Lender by virtue of this paragraph.
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9.9 Expenses.
(a) All out-of-pocket costs and out-of-pocket expenses
incurred by the Administrative Agent for which the Borrowers are responsible
hereunder and not reimbursed on demand by the Borrowers, in connection with the
analysis, negotiation, preparation, consummation, amendment, administration,
refinancing, termination, work-out, forbearance and enforcement of the Loan
Documents, the Revolving Credit or the Obligations (including, without
limitation, reasonable counsel and expert fees and expenditures to enforce,
protect, preserve, analyze, negotiate and defend the Administrative Agent's and
each Lender's rights and interest under the Loan Documents) shall be shared and
paid on demand by the Lenders pro rata based on their respective Pro Rata
Percentages.
(b) The Administrative Agent may deduct from payments or
distributions to be made to the Lenders such funds as may be necessary to pay or
reimburse the Administrative Agent for such costs or expenses.
9.10 No Reliance. Each Lender has entered into this Agreement
and the Loan Documents solely upon its own independent investigation and is not
relying upon any information supplied by or any representations made by the
Administrative Agent. Each Lender shall continue to make its own analysis and
evaluation of the Borrowers and the Guarantors. The Administrative Agent makes
no representation or warranty and assumes no responsibility with respect to the
financial condition, prospects or results of operations of any of the Borrowers
or the Guarantors, any obligor or any account debtor of any Borrower; the
accuracy, sufficiency or currency of any information concerning the financial
condition, prospects or results of operations of the Company or any of its
Subsidiaries; the sufficiency, authenticity, legal effect, validity or
enforceability of the Loan Documents; or with regard to any other matters,
whether similar or dissimilar. The Administrative Agent assumes no
responsibility or liability with respect to the collectibility of the
obligations or the performance by the Company or any of its Subsidiaries of any
obligation under the Loan Documents.
9.11 Reporting. During the term of this Agreement, the
Administrative Agent will promptly furnish each Lender with copies of all
financial statements and reports with respect to any of the Borrowers or the
Restricted Subsidiaries actually received by the Administrative Agent pursuant
to Section 5 of this Agreement. The Administrative Agent will promptly notify
the Lenders when it receives actual knowledge of any Event of Default under the
Loan Documents.
9.12 Resignation of the Administrative Agent. The
Administrative Agent may resign at any time upon giving thirty (30) days prior
written notice thereof to the Lenders and the Borrowers. Upon the resignation of
the Administrative Agent, the Lenders (exclusive of the Administrative Agent)
shall have the right to appoint a successor to the Administrative Agent by
majority vote of the Lenders (exclusive of the Administrative Agent and based
upon the percentages of the total Pro Rata Shares of such other Lenders). Upon
the acceptance of its appointment as a successor to the Administrative Agent
hereunder, by such successor to the Administrative Agent, such successor to the
Administrative Agent shall thereupon succeed to and become vested with all
rights, powers, obligations and duties of the retiring Administrative Agent and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent's resignation as
Administrative Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent.
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9.13 Action on Instructions of Lenders. With respect to any
provision of this Agreement or any of the other Loan Documents, or any issue
arising hereunder or thereunder, concerning which the Administrative Agent is
authorized to act or withhold action by direction of the Lenders (or, if
applicable, the Majority Lenders), the Administrative Agent shall in all cases
be fully protected in so acting, or in so refraining from acting, hereunder or
thereunder in accordance with written instructions signed by the Lenders (or, if
applicable, the Majority Lenders). Such instructions and any action taken or
failure to act pursuant thereto shall be binding on all Lenders and on all
holders of the Revolving Credit Notes.
9.14 Several Obligations. The obligations of each Lender
hereunder and under each of the other Loan Documents are several, and neither
the Administrative Agent nor any other Lender shall be responsible for the
obligations and commitments of any other Lender.
9.15 Amendments.
(a) Except as expressly provided herein, the
Administrative Agent shall have the sole and exclusive right to, service,
administer and monitor the Revolving Credit and the Loan Documents, including
without limitation, the right to exercise all rights, privileges and options
under the Loan Documents, including the credit judgment with respect to the
making of Advances and the determination as to the basis on which and the extent
to which Advances may be made.
(b) Notwithstanding anything to the contrary contained in
subparagraph (a) above, prior to an acceleration of the Obligations, the
Administrative Agent shall not, without the prior written consent of all
Lenders: (i) extend the Maturity Date or any payment date under the Revolving
Credit Notes or under this Agreement, including without limitation, any
mandatory prepayment date under Section 2.11 hereof, (ii) decrease any interest
rate on the Revolving Credit (unless otherwise expressly provided for herein) or
any fee (except fees that are solely for the account of the Fronting Lender)
chargeable to the Borrowers by the Lenders and/or the Administrative Agent
and/or the Fronting Lender hereunder or elsewhere, (iii) change the Available
Commitment or the Pro Rata Share or Pro Rata Percentage of any of the Lenders
except by permitted assignments (or unless otherwise expressly provided for
herein), (iv) release any obligor from the Obligations (including releasing any
Guarantor from its obligations under its respective Guarantee), except in
connection with termination of the Revolving Credit and full payment and
satisfaction of all obligations (v) change the definition of Majority Lenders,
(vi) consent to the assignment or delegation by any of the Borrowers or the
Guarantors of its respective obligations under any Loan Document, (vii) change
the definition of Available Commitment, (viii) change the definition of
Outstandings; or (ix) modify this Subsection 9.15(b) or any of Sections 2.9(f),
2.10, 2.12, 8.4, 10.5, 10.10 or 10.15.
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(c) Notwithstanding anything to the contrary contained in
subparagraph (a) above, prior to an acceleration of the obligations, the
Administrative Agent shall not, without the prior written consent of the
Majority Lenders: (i) enter into any written amendment to any of the Loan
Documents; (ii) waive the Borrowers' compliance with the terms and conditions of
the Loan Documents or any Event of Default hereunder or thereunder; or (iii)
consent to the Borrowers taking any action which, if taken, would constitute an
Event of Default under this Agreement or under any of the Loan Documents.
(d) After an acceleration of the Obligations, the
Administrative Agent shall have the sole and exclusive right, after consultation
(to the extent reasonably practicable under the circumstances) with all Lenders,
to exercise or refrain from exercising any and all rights, remedies, privileges
and options under the Loan Documents or available at law or in equity, to
protect the rights of the Lenders and collect the obligations, including without
limitation, instituting and pursuing all legal actions brought against the
Borrower or to collect the Obligations, or defending any and all actions brought
by the Borrowers; incurring Expenses or otherwise making expenditures to protect
the Revolving Credit or the Lenders' rights or remedies; modifying the Revolving
Credit or the Loan Documents; and releasing or settling any amounts owing under
the Obligations. Notwithstanding this subsection (d), after an acceleration of
the Obligations, the Administrative Agent may not, without the prior written
consent of the Majority Lenders, enter into a written agreement with the
Borrowers which provides that the obligations are not immediately due and
payable or which provides that the Administrative Agent will forebear from
exercising its remedies hereunder, and may not without the prior written consent
of all of the Lenders (i) compromise or satisfy the Obligations for less than
payment in full; (ii) reduce any rate of interest charged to any outstanding
Advance; or (iii) release the Borrowers or any of the Guarantors from its
obligations hereunder or under the Guarantees (as applicable).
9.16 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless it has received notice from a Lender or the Borrowers
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Agent shall give notice thereof
to the Lenders. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Majority
Lenders; provided, that unless and until the Administrative Agent shall have
received such directions, it may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.
SECTION 10. MISCELLANEOUS.
10.1 GOVERNING LAW. THIS AGREEMENT, AND ALL OF THE OTHER LOAN
DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE
LAWS OF THE COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS THEREOF.
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10.2 Integrated Agreement. This Agreement, the Revolving
Credit Notes and the other Loan Documents shall be construed as integrated and
complementary of each other, and as augmenting and not restricting Lenders'
and/or the Administrative Agent's rights and remedies. If, after applying the
foregoing, an inconsistency still exists, the provisions of this Agreement shall
constitute an amendment to such inconsistent document and shall control.
10.3 Omission or Delay Not Waiver. No omission or delay by the
Administrative Agent or any Lender in exercising any right or power under this
Agreement or any of the other Loan Documents will impair such right or power or
be construed to be a waiver of any Default, or Event of Default or an
acquiescence therein, and any single or partial exercise of any such right or
power will not preclude other or further exercise thereof or the exercise of any
other right, and as to the Borrowers, no waiver will be valid unless in writing
and signed by the Administrative Agent and then only to the extent specified.
10.4 Time. Unless otherwise expressly set forth herein,
whenever the Borrowers shall be required to make any payment or perform any act
on a day which is not a Business Day, such payment may be made, or such act may
be performed, on the next succeeding Business Day. Time is of the essence in the
Borrowers', the Administrative Agent's and each Lender's performance under all
provisions of this Agreement and all Loan Documents.
10.5 Expenses of the Administrative Agent and Lenders. At
Closing and from time to time thereafter, the Borrowers will pay promptly upon
demand of the Administrative Agent all reasonable out-of-pocket costs, fees and
expenses (a) of the Administrative Agent in connection with (i) the analysis,
negotiation, preparation, execution, administration and delivery of this
Agreement and the other Loan Documents and the documents and instruments
referred to herein and therein and any amendment, amendment and restatement,
supplement, waiver or consent relating hereto or thereto, whether or not any
such amendment, amendment and restatement, supplement, waiver or consent is
executed or becomes effective (including, without limitation, search costs, the
reasonable fees, expenses and disbursements of counsel for the Administrative
Agent, and reasonable charges of any expert consultant to the Administrative
Agent) and (ii) the syndication of the commitments and (b) the Administrative
Agent and each of the Lenders in connection with the enforcement of any
Obligations of, or the collection of any payments owing from, any of the
Borrowers or the Guarantors under this Agreement and/or the other Loan Documents
to which they are a party, or protection or defense of the rights of the Lenders
and/or the Administrative Agent under the Loan Documents, following the
occurrence of any Event of Default or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement and the
other Loan Documents in the nature of a "work-out" or of any insolvency or
bankruptcy proceedings, or otherwise (including the reasonable fees and
disbursements of counsel for the Administrative Agent and each of the Lenders
and reasonable allocated costs of internal counsel) (collectively, the
"Expenses");
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10.6 Brokerage. Except as otherwise provided herein, this
transaction was brought about and entered into by the Administrative Agent, the
Lenders and the Borrower acting as principals and without any brokers, agents or
finders being the effective procuring cause hereof. Each of the Borrowers, the
Administrative Agent and the Lenders represents that it has not committed any
party hereunder to the payment of any brokerage fee, commission or charge in
connection with this transaction. If any such claim is made on any of the
Borrowers, Administrative Agent or the Lenders by any broker, finder or agent or
other Person (unless such broker, finder, agent or other similar Person is
engaged by the affected party), the party or parties (each, a "Responsible
Party") which committed the affected party to the payment of such fees hereby
agrees to indemnify, defend and save the affected party or parties harmless
against such claim and further will defend, with counsel satisfactory to the
affected party or parties, any action or actions to recover on such claim, at
the sole cost and expense of the Responsible Party, including such affected
party's counsel fees and costs. Each of the Borrowers further agrees that, if it
is the Responsible Party, until any such claim or demand is adjudicated in the
affected party's favor, the amount demanded shall be deemed a liability of the
Borrower under this Agreement.
10.7 Notices; Lending Offices. (a) All notices, requests and
demands to or upon the respective parties hereto (i) to be effective shall be in
writing (including electronic transmission, facsimile transmission or posting on
a secured Web site), and if any such notice, request or demand is regarding an
Event of Default shall be transmitted by hand delivery, mail or facsimile
transmission and (ii) unless otherwise expressly provided herein, shall be
deemed to have been duly given or made when delivered by hand, or three days
after being deposited in the mail, postage prepaid, or, in the case of facsimile
transmission notice, when sent during normal business hours with electronic
confirmation or otherwise when received, or in the case of electronic
transmission, when received and in the case of posting on a secured Web site,
upon receipt of (x) in each instance, notice of such posting and (y) rights to
access such Web site, addressed as follows in the case of the Borrowers, and the
Administrative Agent, and as set forth in Annex I in the case of the other
parties hereto, or to such other address as may be hereafter notified by the
respective parties hereto and any future holders of the Notes:
If to the Administrative Agent to:
PNC Bank, National Association
1600 Market Street
Philadelphia, PA 19103
Attention: Robert J. Giannone, Vice President
Telecopy No: (215) 585-6987
With copies to:
PNC Bank, National Association
PNC Firstside Center
500 First Avenue, 4th Floor
Pittsburgh, PA 15219
Attention: Lisa Pierce
Telecopy No: (412) 762-8672
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street
Philadelphia, PA 19103
Attention: Carl H. Fridy, Esquire
Telecopy No: (215) 864-8999
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If to any Borrower or Guarantor to:
CSS Industries, Inc.
1845 Walnut Street, Suite 800
Philadelphia, PA 19102
Attention: Clifford E. Pietrafitta
Telecopy No.: (215) 569-9979
With copies to:
Stephen V. Dubin, Esquire
CSS Industries, Inc.
1845 Walnut Street, Suite 800
Philadelphia, PA 19102
Telecopy No: (215) 569-9979
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103
Attention: Howard Shecter, Esquire
Telecopy No. (215) 963-5442
(b) Any notice sent by the Administrative Agent, any
Lender or the Borrowers by any of the above methods shall be deemed to be given
when so received. Any notice sent by overnight carrier shall be presumed to have
been received the day after it was sent, if by hand delivery by 5:00 p.m.
Philadelphia, PA time on the day sent, and if by facsimile, no such presumption
shall be raised.
(c) The Administrative Agent shall be fully entitled to
rely upon any facsimile transmission or other writing purported to be sent by
any Authorized Officer (whether requesting an Advance or otherwise) as being
genuine and authorized.
10.8 Headings. The headings of any paragraph or Section of
this Agreement are for convenience only and shall not be used to interpret any
provision of this Agreement.
10.9 Survival. All warranties, representations, and covenants
made by the Borrowers herein, or in any agreement referred to herein or on any
certificate, document or other instrument delivered by it or on its behalf under
this Agreement or any of the other Loan Documents, shall be considered to have
been relied upon by the Administrative Agent and the Lenders, and shall survive
the delivery to the Lenders of the Revolving Credit Notes, regardless of any
investigation made by the Lenders or on their behalf. All statements in any such
certificate or other instrument prepared and/or delivered for the benefit of the
Administrative Agent and any/all Lenders shall constitute warranties and
representations by the Borrowers hereunder. Except as otherwise expressly
provided herein, all covenants made by the Borrowers hereunder or under any
other agreement or instrument shall be deemed continuing until all obligations
are satisfied in full and the Revolving Credit is terminated.
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10.10 Successors and Assigns.
(a) This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties and the
obligations of the Borrowers hereunder and under the other Loan Documents shall
be joint and several. None of the Borrowers or the Guarantors may transfer,
assign or delegate any of its duties or obligation hereunder or under any of the
other Loan Documents.
(b) (i) Notwithstanding any other provision of this
Agreement, each Lender may assign all or any part of, or any interest in, such
Lender's rights and benefits hereunder, under the Revolving Credit Notes and
under the other Loan Documents, as well as all obligations related to such
assigned rights and interest, provided that each such assignment:
(A) must (unless the assignment is to an Affiliate of
the assigning Lender that is a U.S. person within the meaning of Section 7701(a)
of the Code) be approved by the Borrowers (such approval not to be unreasonably
withheld or delayed); provided, however, that if a Default or Event of Default
has occurred hereunder, the approval of the Borrower shall not be required,
(B) shall, if not an assignment of the entire
commitment of the applicable Lender, be in a minimum amount of $5,000,000),
(C) must be evidenced by an Assignment Agreement in
the form of Exhibit F attached hereto and made a part hereof, a true and correct
copy of which shall be delivered to the Administrative Agent,
(D) shall be accompanied by the unconditional payment
by the assigning Lender to the Administrative Agent of an assignment fee equal
to $3,500 except if the assignment is made to an Affiliate of the assigning
Lender or to another Lender, and
(E) shall be effective upon the Administrative
Agent's receipt of written notice from the assignor and assignee Lenders of such
assignment and compliance with subparagraphs (A), (B), (C) and (D) above.
(ii) Each Lender may at any time enter into
participation agreements with one or more participating lenders whereby such
Lender may allocate certain percentages of its Pro Rata Share of the Revolving
Credit to such participant(s), provided that no participant shall have, except
as provided below, any voting or consent rights on any issue with respect to
this Agreement, the other Loan Documents or the Revolving Credit. No participant
(unless and only to the extent such participant is itself a Lender) shall be
entitled to require the Lender from whom its participation interest was
obtained, to take or refrain from taking any action under this Agreement or any
other Loan Document, except that such Lender may agree with such participant
that such Lender will not, without such participant's consent, agree to any
modification, amendment or waiver of this Agreement described in Section
9.15(b)(i)-(viii). Notwithstanding the foregoing, any such participant shall be
considered to be a "Lender" for purposes of Sections 2.2(f), 2.9, 2.10, 2.12,
8.4, 10.5 and 10.15 with respect to its participation; provided, however, that
no participant shall be entitled to receive any greater amount pursuant to
Sections 2.2(f), 2.9, 2.10 or 2.12 than the transferor Lender would have been
entitled to receive in respect of the participation effected by such transferor
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Lender had no participation occurred. The Borrowers acknowledge that, for the
convenience of all parties, this Agreement is being entered into with the
Lenders only and that its obligations under this Agreement are, to the extent
expressly provided for in this Section 10.10(b)(ii), undertaken for the benefit
of, and as an inducement to, any such participating lenders as well as the
Lenders. Any grant of a participation by any Lender shall not discharge, reduce
or otherwise affect said Lender's obligation, in accordance with its Pro Rata
Percentage, under this Agreement to fund Advances, which obligations shall
remain primary and absolute. Such grants of participations shall not affect or
diminish the rights of the granting Lender to reimbursement or other payments
which may become due to said Lender under this Agreement and such reimbursements
and other payments will be calculated as if said Lender had not granted any such
participation. Except as provided for herein, no participant shall have, by
virtue of any participation, any rights or benefits under this Agreement or
claims of any kind against the Administrative Agent or any Lender or the
Borrowers other than the Lender from whom the participation has been obtained.
(c) Nothing in this Section 10.10 shall prevent or
prohibit any Lender from pledging its Advances hereunder to a Federal Reserve
Bank in support of borrowings made by such Lender from such Federal Reserve
Bank.
(d) Subject to the provisions of Section 10.24 hereof,
the Company on its own behalf and on behalf of each of its Subsidiaries
authorizes each Lender to disclose to any participant or assignee (each, a
"Transferee") and any prospective Transferee any and all information in such
Lender's possession concerning the Company or any of its Subsidiaries which has
been delivered to such Lender by the Company or any such Subsidiary in
connection with such Lender's credit evaluation of the Company and its
Subsidiaries. In addition, subject to Section 10.24 hereof, the Administrative
Agent may furnish any information concerning the Company or any of its
Subsidiaries in the Administrative Agent's possession to any Affiliate of the
Administrative Agent. The Company shall and shall cause each of its Subsidiaries
to assist any Lender in effectuating any assignment or participation pursuant to
this Section 10.10 (including during syndication) in whatever manner such Lender
reasonably deems necessary, including the participation in meetings with
prospective Transferee.
(e) Any Proposed New Lender shall, at least seven (7)
days before the effective date of such Lender's joinder hereto, complete and
deliver to the Administrative Agent a New Lender Joinder. Such New Lender
Joinder shall include, among other things, a joinder to this Agreement and
otherwise be satisfactory to the Administrative Agent and the Borrowers. Upon
the effective date of such joinder, such Proposed New Lender shall be a party
hereto and shall be one of the Lenders hereunder for all purposes except as
provided below. Such Proposed New Lender's rights and the rights of any existing
Lender which increases its Pro Rata Share according to Section 2.3(b) shall be
limited in the following respects: (i) on the effective date of such joinder or
increase, the Borrowers shall repay all outstanding Advances that are Alternate
Base Rate Advances, if any, and reborrow a like amount of the Alternate Base
Rate Advances from the Lenders, including the Proposed New Lender, according to
their new Pro Rata Percentages and (ii) such Proposed New Lender or existing
Lender which increases it Pro Rata Share shall not participate in any LIBOR
Based Rate Advances (except, with respect to an existing lender, with respect to
its existing interest) which are outstanding on the effective date of such
joinder or increase but shall participate in all new Advances made to the
Borrowers after the effective date of such joinder or increase in accordance
with its new Pro Rata Percentage, including, without limitation, new LIBOR Based
Rate Advances and renewals and conversions of LIBOR Based Rate Advances. If the
Borrowers should (i) renew after the effective date of such joinder or increase
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any Advances that are LIBOR Based Rate Advances existing on such effective date
or (ii) convert after the date of such joinder or increase any Advances that are
LIBOR Based Rate Advances existing on such effective date, the Borrowers shall
be deemed to repay the applicable Advances on the conversion or renewal date, as
the case may be, and then reborrow a similar amount on such date so that the
Proposed New Lender and any Lender that increases its Pro Rata Share shall
participate in such Advances after such renewal or conversion date in accordance
with its Pro Rata Percentage. Simultaneously, with the execution and delivery of
such joinder or the increase in a Lender's Pro Rata Share, the Borrowers shall
execute a new Revolving Credit Note for such Proposed New Lender or existing
Lender. Notwithstanding the foregoing, upon the occurrence of an Event of
Default prior to the date on which such Proposed New Lender or such existing
Lender that is increasing its Pro Rata Share is holding Advances that are LIBOR
Based Rate Advances equal to its pro rata share (in accordance with its then Pro
Rata Percentage without giving effect to any termination of the Available
Commitment), such Lender shall, upon notice from the Administrative Agent, on or
after the date on which the Advances are accelerated or become due following
such Event of Default, pay to the Administrative Agent (for the account of the
other Lenders, to which the Administrative Agent shall pay their pro rata share
thereof promptly after receipt) a sum equal to such Lender's pro rata share of
each Advance that is a LIBOR Based Rate Advance then outstanding with respect to
which such Lender does not then hold its pro rata share in accordance with its
Pro Rata Percentage; such payment by such Lender shall constitute an Alternate
Base Rate Advance hereunder.
10.11 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original and, all of which,
taken together, shall constitute one fully executed document.
10.12 Modification. No modification hereof or any agreement
referred to herein shall be binding or enforceable unless in writing and signed
by the Borrowers, the Administrative Agent and the Lenders required by Section
9.15 hereof.
10.13 Signatories. Each individual signatory hereto represents
and warrants that he is duly authorized to execute this Agreement on behalf of
his principal and that he executes the Agreement in such capacity and not as a
party.
10.14 Third Parties. No rights are intended to be created
hereunder or under any of the other Loan Documents for the benefit of any third
party donee, creditor or incidental beneficiary of the Borrowers. Nothing
contained in this Agreement shall be construed as a delegation to the
Administrative Agent or any Lender of the Borrowers' duty of performance,
including, without limitation, the Borrowers' duties under any account or
contract with any other Person.
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10.15 Indemnification. (a) The Borrowers agree to indemnify
each of the Lenders and the Administrative Agent and their respective officers,
directors, employees, representatives, agents, attorneys-in-fact and Affiliates
and each other Person, if any, controlling any of them or any of their
Affiliates within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act (each, an "Indemnitee" and collectively, the
"Indemnities") from, and hold each of them harmless against, any and all Losses
resulting from, arising out of, in any way related to or by reason of, (i) the
execution, delivery, performance, administration or enforcement of any Loan
Document, (ii) the Lenders' or the Administrative Agent's agreement to make the
Advances, (iii) the use or intended use of the proceeds of any Advances
hereunder (iv) the consummation of any other transactions contemplated in any
Loan Document, (v) the performance by the Administrative Agent of their duties
hereunder or (vi) any inaccuracy in any material respect, or any untrue
statement or alleged untrue statement of any material fact, made in any report,
exhibit, schedule or publication in connection with the transactions
contemplated hereby furnished to the Administrative Agent or the Lenders by or
on behalf of the Borrowers, or by reason of the omission or the alleged omission
therefrom of a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, whether or not
such Indemnitee is a party and whether or not such Proceeding is initiated or
brought by or on behalf of the Borrowers; provided, however, that the Borrowers
shall not be liable under the foregoing indemnification provision to an
Indemnitee to the extent that any such Loss is judicially determined by a court
of competent jurisdiction in a final non-appealable judgment to have resulted
solely by reason of the gross negligence or willful misconduct of such
Indemnitee. To the extent that the undertaking to indemnify and hold harmless
set forth in this Section 10.15 is unenforceable because it is violative of any
law or public policy or otherwise, the Borrowers shall contribute the maximum
portion that it is permitted to pay and satisfy under applicable law to the
payment and satisfaction of all indemnified liabilities incurred by any of the
Indemnities.
(b) The Borrowers agree on their own behalf and on behalf
of the Guarantors that no Indemnitee shall have any liability (whether direct or
indirect, in contract or tort or otherwise) for any Losses to any of the
Borrowers or the Guarantors or any such entities, security holders or creditors
resulting from, arising out of, in any way related to or by reason of (i) the
execution, delivery, performance, administration or enforcement of any Loan
Document, (ii) the Lenders' or the Administrative Agent's agreement to make the
Advances, (iii) the use or intended use of the proceeds of any Advances
hereunder or (iv) the consummation of any other transactions contemplated in any
Loan Document, except to the extent that any Losses judicially determined by a
court of competent jurisdiction in a final non-appealable judgment to have
resulted solely by reason of the gross negligence or willful misconduct of such
Indemnitee.
(c) Each Indemnitee shall give prompt notice to the
Borrowers of any action commenced against it in respect of which indemnity may
be sought hereunder, but failure to so notify the Borrowers shall not relieve
them from any liability which they may otherwise have hereunder. The Borrowers
may participate at their own expense in the defense of such action.
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(d) In the event that any Indemnitee is requested or
required to appear as a witness in any Proceeding brought by or on behalf of or
against the Borrowers or any Affiliate of the Borrowers in which such Indemnitee
is not named as a defendant, the Borrowers agree to reimburse each Indemnitee
for all reasonable expenses incurred by each Indemnitee in connection with such
Indemnitee's appearing and preparing to appear as such a witness, including,
without limitation, the reasonable fees and disbursements of each Indemnitee's
legal counsel, and to compensate such Indemnitee in an amount to be mutually
agreed upon.
(e) The Borrowers agree on their own behalf and on behalf
of each of the Guarantors that, without the prior written consent of the
Administrative Agent and the Majority Lenders, no such entity will settle,
compromise or consent to the entry of any judgment in any pending or threatened
Proceeding in respect of which indemnification could be sought under the
indemnification provisions of this Section 10.15 (whether or not any Indemnitee
is an actual or potential party to such Proceeding), unless such settlement,
compromise or consent includes an unconditional written release in form, scope
and substance satisfactory to the Administrative Agent and the Majority Lenders,
of each Indemnitee from all liability arising out of such Proceeding and does
not include any statement as to an admission of fault, culpability or failure to
act by or on behalf of any Indemnitee.
10.16 Discharge of Taxes, the Borrowers' Obligations, Etc. The
Administrative Agent, in its sole discretion, shall have the right at any time,
and from time to time, on one day's notice to the Borrowers (unless the
Administrative Agent deems immediate action to be necessary under the
circumstances), if the Borrowers fail to do so, to: (a) pay for the performance
of any of the Borrowers' obligations hereunder, and (b) discharge taxes or
Liens, at any time levied or placed on any Borrower's or Guarantor's Property in
violation of this Agreement unless such Borrower or Guarantor is in good faith
with due diligence by appropriate proceedings contesting such taxes or Liens and
maintaining proper reserves therefor in accordance with GAAP. Such expenses and
advances shall be added to the Revolving Credit and shall bear interest at the
Alternate Base Rate until reimbursed to the Administrative Agent. Such payments
and advances made by the Administrative Agent shall not be construed as a waiver
by the Administrative Agent or the Lenders of an Event of Default under this
Agreement.
10.17 Withholding and Other Tax Liabilities. The
Administrative Agent, in its sole discretion and without any duty to exercise
such rights or monitor such obligation of the Borrowers, shall have the right to
withhold or direct the Lenders to withhold any Advances from time to time unless
the Borrowers shall, at the Administrative Agent's request, have given to the
Administrative Agent evidence, reasonably satisfactory to the Administrative
Agent, that the Borrowers have properly deposited or paid, as required by law,
all withholding taxes and all federal, state, city, county or other taxes due up
to and including the date of the requested Advance. Copies of deposit slips
showing payment shall likewise constitute satisfactory evidence for such
purpose. In the event that any Lien, assessment or tax liability against the
Company or any of the Company's Subsidiaries shall arise in favor of any taxing
authority, whether or not notice thereof shall be filed or recorded as may be
required by law, the Administrative Agent shall have the right, on one day's
notice to Borrowers (unless the Administrative Agent deems immediate action to
be necessary under the circumstances) (but shall not be obligated, nor shall the
Administrative Agent or any Lender hereby assume the duty) to pay any such Lien,
assessment or tax liability by virtue of which such charge shall have arisen;
provided, however, that the Administrative Agent shall not pay any such tax,
assessment or Lien before its due date or if the amount, applicability or
validity thereof is being contested in good faith and by appropriate proceedings
by the Company or such Subsidiary. In order to pay any such Lien, assessment or
tax liability, the Administrative Agent shall not be obliged to wait until said
Lien, assessment or tax liability is filed before taking such action as
hereinabove set forth. Any sum or sums which the Administrative Agent (shared
ratably by the Lenders) shall have paid for the discharge of any such Lien shall
be added to the Revolving Credit and shall be paid by the Borrowers to the
Administrative Agent with interest thereon, upon demand, and the Administrative
Agent shall be subrogated to all rights of such taxing authority against the
Company or such Subsidiary.
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10.18 Submission To Jurisdiction; Waivers. Each of the
Borrowers hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement or the Notes, or for recognition
and enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the Commonwealth of Pennsylvania, the courts of
the United States of America for the Eastern District of Pennsylvania, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to such
Borrower at its address set forth in Section 9.2 or at such other address of
which the Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
(e) waives, and without limiting the provisions of
Section 5.8(c), each of the Agent and the Banks waives, any right it may have to
claim or recover in any legal action or proceeding referred to in this Section
any special, exemplary, punitive or consequential damages.
10.19 Waivers.
(a) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. The scope of
this waiver is intended to be all-encompassing of any and all disputes that may
be filed in any court and that relate to the subject matter of this transaction,
including without limitation, contract, claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Each party hereto
acknowledges that this waiver is a material inducement to enter into a business
relationship, that each has already relied on the waiver in entering into this
Agreement, and that each will continue to rely on the waiver in their related
future dealings. Each party hereto further warrants and represents that each has
reviewed this waiver with its legal counsel, and that each knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, REPLACEMENTS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE
ADVANCES. In the event of litigation, this Agreement may be filed as a written
consent to a trial by the court.
87
(b) (i) The Borrowers, on their own behalf and on behalf
of the Guarantors, hereby waive, to the maximum extent not prohibited by law,
any right they may have to claim or recover any special, exemplary, punitive or
consequential damages from the Administrative Agent or the Lenders in any
Proceeding in connection with, arising out of, or in any way related to the
transactions contemplated herein or in any other Loan Document.
(ii) The Agent and each of the Lenders waives, to the
maximum extent not prohibited by law, any right it may have to claim or recover
any special, exemplary, punitive or consequential damages from any of the
Borrowers or the Guarantors in any Proceeding in connection with, arising out
of, or in any way related to the transactions contemplated herein or in any
other Loan Document to the extent the foregoing is not in derogation of the
Administrative Agent's or any of the Lender's rights to claim or recover any
amounts under Sections 2.2(g), 2.9, 2.10, 2.12, 10.5, 10.6, 10.15 or for any
other Obligations expressly provided for in this Agreement or any of the other
Loan Documents.
(c) The Borrowers, on their own behalf and on behalf of
the Guarantors, hereby waive promptness, diligence, notice of acceptance and any
other notice with respect to any of the obligations and any requirement that any
Lender protect, secure, perfect or insure any Lien or any property subject
thereto or exhaust any right to take any action against any other obligor or any
other Person or any collateral or other direct or indirect security for any of
the obligations.
10.20 Severability. Each provision of this Agreement shall be
severable from every other provision of this Agreement. If any provision is
determined to be invalid or unenforceable, such determination shall not affect
or limit the validity or enforceability of all other provisions.
10.21 Independence of Representations, Warranties and
Covenants. The representations, warranties and covenants contained herein shall
be independent of each other and no exception to any representation, warranty or
covenant shall be deemed to be an exception to any other representation,
warranty or covenant contained herein unless expressly provided, nor shall any
such exception be deemed to permit any action or omission that would be in
contravention of applicable law.
88
10.22 Obligations Several; Independent Nature of Lenders'
Rights. The obligation of each Lender hereunder is several, no Lender shall be
responsible for the obligation or commitment of any other Lender hereunder, and
the Administrative Agent shall not be responsible for any obligations of any
Lender. Nothing contained in this Agreement and no action taken by the Lenders
pursuant hereto shall be deemed to constitute the Lenders to be a partnership,
an association, a joint venture or any other kind of entity. The amounts payable
at any time hereunder to each Lender shall be a separate and independent debt,
and each Lender shall be entitled to protect and enforce its rights arising out
of this Agreement, and it shall not be necessary for any other Lender to be
joined as an additional party in any Proceeding for such purpose.
10.23 Prior Understandings. This Agreement and the other Loan
Documents supersede all prior and contemporaneous understandings and agreements,
whether written or oral, among the parties hereto relating to the transactions
provided for herein and therein, except (a) the letter (the "Engagement Letter")
agreement dated March 9, 2004 among PNC and the Company (other than the Term
Sheet (as defined in the Engagement Letter) and (b) the Fee Letter (as defined
in the Engagement Letter) shall remain in effect, to the extent not conflicting
herewith.
10.24 Confidentiality. The Administrative Agent and each
Lender agree to keep confidential all material non-public information provided
to it by or on behalf of the Borrowers and/or the Guarantors pursuant to this
Agreement or the other Loan Documents that is designated by the provider of such
information in writing as confidential; provided that nothing herein shall
prevent the Administrative Agent or any Lender from disclosing any such
information (a) to the Administrative Agent or any other Lender, (b) to any
assignee, proposed assignee, participant or proposed participant which agrees to
comply with the provisions of this subsection, (c) to its Affiliates, employees,
directors, agents, attorneys, accountants and other professional advisors, (d)
upon the request or demand of any Governmental Authority having jurisdiction
over such Person, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
requirement of applicable law, (f) which has been publicly disclosed other than
in breach of this Agreement, or (g) in connection with the exercise of any
remedy or other enforcement of the rights of the Administrative Agent and/or the
Lenders hereunder.
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IN WITNESS WHEREOF, the undersigned parties have executed this
Agreement the day and year first above written.
CSS INDUSTRIES, INC., a
Delaware corporation
By: ___________________________________
Name:
Title:
CSS MANAGEMENT LLC., a
Delaware limited liability company
By: ___________________________________
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION, as the
Administrative Agent
By: ___________________________________
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION, as a
Lender
By: ___________________________________
Name:
Title:
WACHOVIA BANK, NATIONAL
ASSOCIATION, as a Lender
By: ___________________________________
Name:
Title:
FLEET NATIONAL BANK, as a Lender
By: ___________________________________
Name:
Title:
CITIZENS BANK OF PENNSYLVANIA, as a
Lender
By: ___________________________________
Name:
Title:
UNION PLANTERS BANK
By: ___________________________________
Name:
Title:
EXHIBIT AND SCHEDULE LIST
Annex I -- Lenders, Pro Rata Shares, Pro Rata Percentages
Annex II -- Applicable Margins
Exhibit A -- Form of Guarantee
Exhibit B-1 -- Form of Revolving Credit Note
Exhibit B-2 -- Form of Swing Line Note
Exhibit C -- Form of Notice of Borrowing
Exhibit D -- Form of Quarterly Compliance Certificate
Exhibit E -- Form of Certificate regarding Permitted Acquisitions
Exhibit F -- Form of Assignment Agreement
Exhibit G -- Form of Commitment and Acceptance
Exhibit H -- Form of New Lender Joinder
Schedule 1.1(a) -- Existing Letters of Credit
Schedule 1.1(b) -- Financial Statements
Schedule 3.1(h) -- Material Environmental Investigations, Studies, Audits,
Etc.
Schedule 4.2 -- Places of Business
Schedule 4.3 -- Judgments, Proceedings, Litigation and Orders
Schedule 4.4 -- Existing Liens and Claims
Schedule 4.9 -- Subsidiaries and Affiliates and Jurisdictions of
Incorporation
Schedule 4.10 -- Existing Guarantees, Investments and Borrowings
Schedule 4.11(c) -- ERISA Matters
Schedule 4.12 -- Business Interruptions
Schedule 4.13(a) -- Schedule of Names
Schedule 4.13(b) -- Trademarks, Patents and Copyrights
Schedule 4.14 -- Other Associations
Schedule 4.15 -- Environmental Matters
Schedule 4.17 -- Capital Stock
|
ANNEX I
Pro Rata Swing Line
Lenders Percentage Pro Rata Share Commitment
------- ---------- -------------- ----------
PNC Bank, National Association 30% $15,000,000 $10,000,000
Wachovia Bank, National Association 20% $10,000,000
Fleet National Bank 20% $10,000,000
Citizens Bank of Pennsylvania 20% $10,000,000
United Planters Bank 10% $ 5,000,000
-----------------------------------------------
100% $50,000,000
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ANNEX II
APPLICABLE MARGINS
----------------------------------------------------------------------------------------------------------------
COMPLIANCE LEVELS
----------------------------------------------------------------------------------------------------------------
BASIS FOR DETERMINATION I II III
----------------------------------------------------------------------------------------------------------------
Interest Coverage Ratio Greater than or equal Less than 10.00 to 1 but Less than 7.5 to 1
to 10.00 to 1 greater than or equal to
7.5 to 1
----------------------------------------------------------------------------------------------------------------
Applicable Base Rate Margin -.50% -.25% 0%
----------------------------------------------------------------------------------------------------------------
Applicable LIBO Rate Margin .75% 1.00% 1.25%
----------------------------------------------------------------------------------------------------------------
Applicable Available .225% .275% .325%
Commitment Fee Percentage
----------------------------------------------------------------------------------------------------------------
|
