|
EXECUTION COPY
=============================================================================
CREDIT AGREEMENT
dated as of
March 23, 2005
among
ST. JOHN KNITS INTERNATIONAL, INCORPORATED,
The Lenders Party Hereto
and
JPMORGAN CHASE BANK, N.A.
as Administrative Agent
___________________________
J.P. MORGAN SECURITIES INC.,
as Sole Lead Arranger and Sole Bookrunner
==============================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Defined
Terms.................................................1
SECTION 1.02. Classification of Loans and
Borrowings.......................25
SECTION 1.03. Terms
Generally..............................................25
SECTION 1.04. Accounting Terms;
GAAP.......................................26
ARTICLE II
The Credits
SECTION 2.01.
Commitments..................................................26
SECTION 2.02. Loans and
Borrowings.........................................26
SECTION 2.03. Requests for
Borrowings......................................27
SECTION 2.04. Swingline
Loans..............................................28
SECTION 2.05. Letters of
Credit............................................29
SECTION 2.06. Funding of
Borrowings........................................33
SECTION 2.07. Interest
Elections...........................................34
SECTION 2.08. Termination and Reduction of
Commitments.....................36
SECTION 2.09. Repayment of Loans; Evidence of
Debt.........................36
SECTION 2.10. Amortization of Term
Loans...................................37
SECTION 2.11. Prepayment of
Loans..........................................39
SECTION 2.12.
Fees.........................................................40
SECTION 2.13.
Interest.....................................................42
SECTION 2.14. Alternate Rate of
Interest...................................43
SECTION 2.15. Increased
Costs..............................................43
SECTION 2.16. Break Funding
Payments.......................................44
SECTION 2.17.
Taxes........................................................45
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs..46
SECTION 2.19. Mitigation Obligations; Replacement of
Lenders...............48
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization;
Powers.........................................49
SECTION 3.02. Authorization;
Enforceability................................49
SECTION 3.03. Governmental Approvals; No
Conflicts.........................49
SECTION 3.04. Financial Condition; No Material Adverse
Change..............50
-i-
<PAGE>
SECTION 3.05.
Properties...................................................50
SECTION 3.06. Litigation and Environmental
Matters.........................50
SECTION 3.07. Compliance with Laws and
Agreements..........................51
SECTION 3.08. Investment and Holding Company
Status........................51
SECTION 3.09.
Taxes........................................................51
SECTION 3.10.
ERISA........................................................51
SECTION 3.11.
Disclosure...................................................52
SECTION 3.12.
Subsidiaries.................................................52
SECTION 3.13.
Insurance....................................................52
SECTION 3.14. Labor
Matters................................................52
SECTION 3.15.
Solvency.....................................................53
SECTION 3.16. Senior
Indebtedness..........................................53
ARTICLE IV
Conditions
SECTION 4.01. Effective
Date...............................................53
SECTION 4.02. Each Credit
Event............................................55
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other
Information...................56
SECTION 5.02. Notices of Material
Events...................................58
SECTION 5.03. Information Regarding
Collateral.............................58
SECTION 5.04. Existence; Conduct of
Business...............................59
SECTION 5.05. Payment of
Obligations.......................................59
SECTION 5.06. Maintenance of
Properties....................................59
SECTION 5.07.
Insurance....................................................59
SECTION 5.08. Casualty and
Condemnation....................................60
SECTION 5.09. Books and Records; Inspection
Rights.........................60
SECTION 5.10. Compliance with
Laws.........................................60
SECTION 5.11. Use of Proceeds and Letters of
Credit........................60
SECTION 5.12. Additional
Subsidiaries......................................60
SECTION 5.13. Further
Assurances...........................................61
SECTION 5.14. Interest Rate
Protection.....................................61
SECTION 5.15. Redemption; Redemption
Reserve...............................61
-ii-
<PAGE>
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness; Certain Equity
Securities......................62
SECTION 6.02.
Liens........................................................64
SECTION 6.03. Fundamental
Changes..........................................65
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions....66
SECTION 6.05. Asset
Sales..................................................69
SECTION 6.06. Sale and Leaseback
Transactions..............................71
SECTION 6.07. Swap
Agreements..............................................71
SECTION 6.08. Restricted Payments; Certain Payments of
Indebtedness........71
SECTION 6.09. Transactions with
Affiliates.................................73
SECTION 6.10. Restrictive
Agreements.......................................73
SECTION 6.11. Amendment of Material
Documents..............................74
SECTION 6.12. Capital
Expenditures.........................................74
SECTION 6.13. Leverage
Ratio...............................................74
SECTION 6.14. Fixed Charge Coverage
Ratio..................................74
SECTION 6.15. Interest Expense Coverage
Ratio..............................75
SECTION 6.16. Fiscal
Year..................................................75
ARTICLE VII
Events of Default
ARTICLE VIII
The Administrative Agent
ARTICLE IX
Miscellaneous
SECTION 9.01.
Notices......................................................80
SECTION 9.02. Waivers;
Amendments..........................................81
SECTION 9.03. Expenses; Indemnity; Damage
Waiver...........................83
SECTION 9.04. Successors and
Assigns.......................................84
SECTION 9.05.
Survival.....................................................87
SECTION 9.06. Counterparts; Integration;
Effectiveness.....................88
SECTION 9.07.
Severability.................................................88
SECTION 9.08. Right of
Setoff..............................................88
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process...88
SECTION 9.10. WAIVER OF JURY
TRIAL.........................................89
-iii-
<PAGE>
SECTION 9.11.
Headings.....................................................89
SECTION 9.12.
Confidentiality..............................................89
SECTION 9.13. Interest Rate
Limitation.....................................90
SECTION 9.14. USA Patriot
Act..............................................91
SECTION 9.15. Waiver Under Existing Credit
Agreement.......................91
SCHEDULES:
Schedule 1.01 -- Mortgaged Property
Schedule 2.01 -- Commitments
Schedule 3.03 -- Cross Defaults and Other Matters
Schedule 3.05 -- Real Property
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries
Schedule 3.13 -- Insurance
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.04 -- Investments
Schedule 6.10 -- Existing Restrictions
EXHIBITS:
Exhibit A -- Form of Assignment and Assumption
Exhibit B -- Form of Guarantee and Collateral Agreement
Exhibit C -- Form of Perfection Certificate
Exhibit D -- Forms of Opinions
-iv-
<PAGE>
CREDIT AGREEMENT dated as of March 23, 2005,
among ST. JOHN KNITS INTERNATIONAL,
INCORPORATED, the LENDERS party hereto, and JPMORGAN
CHASE BANK, N.A., as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers
to
whether such Loan, or the Loans comprising such Borrowing, are
bearing
interest at a rate determined by reference to the Alternate Base
Rate.
"Acquisition Consideration" means all consideration paid or
otherwise
delivered in connection with Permitted Acquisitions (including
the principal
amount of any Indebtedness and the aggregate liquidation
preference of any
Permitted Acquisition Preferred Stock issued as deferred
purchase price and
the fair market value of any other non-cash consideration, but
excluding
common stock issued by the Borrower), plus the aggregate
principal amount of
all unsecured Indebtedness otherwise incurred and all secured or
unsecured
Indebtedness otherwise assumed, in each case in connection with,
or resulting
from, Permitted Acquisitions (including Indebtedness of any
acquired Persons
outstanding at the time of Permitted Acquisitions).
"Adjusted LIBO Rate" means, with respect to any Eurodollar
Borrowing for
any Interest Period, an interest rate per annum (rounded
upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate
for such
Interest Period multiplied by (b) the Statutory Reserve
Rate.
"Administrative Agent" means JPMorgan Chase Bank, N.A., in
its
capacity as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative
Questionnaire
in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another
Person
that directly, or indirectly through one or more intermediaries,
Controls or
is Controlled by or is under common Control with the Person
specified.
"Aircraft JV" means the joint venture owned 50% by St. John
Knits,
Inc. and 50% by Ocean Air Charters, a corporation owned by
Robert E. Gray and
Marie Gray.
"Alternate Base Rate" means, for any day, a rate per annum equal
to
the greater of (a) the Prime Rate in effect on such day and (b)
the Federal
Funds Effective
1
<PAGE>
Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base
Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate
shall be effective from and including the effective date of such
change in the
Prime Rate or the Federal Funds Effective Rate,
respectively.
"Applicable Percentage" means, with respect to any Revolving
Lender,
the percentage of the total Revolving Commitments represented by
such Lender's
Revolving Commitment. If the Revolving Commitments have
terminated or expired,
the Applicable Percentages shall be determined based upon the
Revolving
Commitments most recently in effect, giving effect to any
assignments.
"Applicable Rate" means, for any day (a) with respect to any ABR
Loan
or Eurodollar Loan that is a Term Loan, the applicable rate per
annum set
forth in the table below under the caption "Term Loan ABR
Spread" or "Term
Loan Eurodollar Spread", as the case may be, and (b) with
respect to any ABR
Loan or Eurodollar Loan that is a Revolving Loan, the applicable
rate per
annum set forth in the table below under the caption "Revolving
ABR Spread" or
"Revolving Eurodollar Spread", as the case may be, in each case
based upon the
Leverage Ratio as of the most recent determination date;
provided that, until
delivery of the Borrower's consolidated financial statements for
the fiscal
quarter ending April 30, 2005, the Applicable Rate in respect of
each Class of
Loans shall be determined by reference to Category 1 in the
relevant table
below:
Term Loan
Term Loan Term Loan
ABR Eurodollar
Leverage Ratio: Spread Spread
--------------- --------- ----------
Category 1
Ratio is greater than 2.75 to 1.00 1.50% 2.50%
Category 2
Ratio is less than or equal to 2.75 to 1.00 1.25% 2.25%
Revolving Loan
Term Loan Term Loan
ABR Eurodollar
Leverage Ratio: Spread Spread
--------------- --------- ----------
Category 1
Ratio is greater than 2.75 to 1.00 1.50% 2.50%
Category 2
Ratio is less than or equal to 2.75 to 1.00 1.25% 2.25%
Category 3
Ratio is less than or equal to 2.50 to 1.00 1.00% 2.00%
2
<PAGE>
For purposes of the foregoing, (i) the Leverage Ratio shall
be
determined as of the end of each fiscal quarter of the
Borrower's fiscal year
based upon the Borrower's consolidated financial statements
delivered pursuant
to Section 5.01(a) or (b) and (ii) each change in the Applicable
Rate
resulting from a change in the Leverage Ratio shall be effective
during the
period commencing on and including the date that is three
Business Days after
the date of delivery to the Administrative Agent of such
consolidated
financial statements indicating such change and ending on the
date immediately
preceding the effective date of the next such change; provided
that the
Leverage Ratio shall be deemed to be in Category 1 of each table
above (A) at
any time that an Event of Default has occurred and is continuing
or (B) if the
Borrower fails to deliver the consolidated financial statements
required to be
delivered pursuant to Section 5.01(a) or (b), during the period
from the
expiration of the time for delivery thereof until such
consolidated financial
statements are delivered.
"Approved Fund" has the meaning assigned to such term in
Section
9.04.
"Assignment and Assumption" means an Assignment and
Assumption
entered into by a Lender and an assignee (with the consent of
any party whose
consent is required by Section 9.04), and accepted by the
Administrative
Agent, in the form of Exhibit A or any other form approved by
the
Administrative Agent.
"Board" means the Board of Governors of the Federal Reserve
System of
the United States of America.
"Borrower" means St. John Knits International, Incorporated,
a
Delaware corporation.
"Borrowing" means (a) Loans of the same Class and Type,
made,
converted or continued on the same date and, in the case of
Eurodollar Loans,
as to which a single Interest Period is in effect, or (b) a
Swingline Loan.
"Borrowing Request" means a request by the Borrower for a
Borrowing
in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or
other
day on which commercial banks in New York City are authorized or
required by
law to remain closed; provided that, when used in connection
with a Eurodollar
Loan, 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 Expenditures" means, for any period, (a) the additions
to
property, plant and equipment and other capital expenditures of
the Borrower
and its consolidated Subsidiaries that are (or would be) set
forth in a
consolidated statement of cash flows of the Borrower for such
period prepared
in accordance with GAAP and (b) Capital Lease Obligations
incurred by the
Borrower and its consolidated Subsidiaries during such
period.
3
<PAGE>
"Capital Lease Obligations" of any Person means the obligations
of
such Person to pay rent or other amounts under any lease of (or
other
arrangement conveying the right to use) real or personal
property, or a
combination thereof, which obligations are required to be
classified and
accounted for as capital leases on a balance sheet of such
Person under GAAP,
and the amount of such obligations shall be the capitalized
amount thereof
determined in accordance with GAAP.
"Change in Control" means, at any time, (a) the acquisition
of
ownership, directly or indirectly, beneficially or of record, by
any Person,
other than the Borrower, of any Equity Interest in the Company,
(b) prior to
an IPO, the failure by the Vestar Group to collectively own,
directly or
indirectly, beneficially and of record, Equity Interests in the
Borrower
representing at least 51% of each of the aggregate ordinary
voting power and
the aggregate equity value represented by the issued and
outstanding Equity
Interests in the Borrower, (c) after an IPO, the acquisition of
ownership,
directly or indirectly, beneficially or of record, by any Person
or group
(within the meaning of the Securities Exchange Act of 1934 and
the rules of
the Securities and Exchange Commission thereunder as in effect
on the
Effective Date) other than the Control Group, of Equity
Interests representing
more than 30% of the aggregate ordinary voting power or the
aggregate equity
value represented by the issued and outstanding Equity Interests
in the
Borrower; or (d) occupation of a majority of the seats (other
than vacant
seats) on the board of directors of the Borrower by Persons who
were neither
(i) nominated by members of the Vestar Group or the board of
directors of the
Borrower nor (ii) appointed by directors so nominated.
"Change in Law" means (a) the adoption of any law, rule or
regulation
after the date of this Agreement, (b) any change in any law,
rule or
regulation or in the interpretation or application thereof by
any Governmental
Authority after the date of this Agreement or (c) compliance by
any Lender or
the Issuing Bank (or, for purposes of Section 2.15(b), by any
lending office
of such Lender or by such Lender's or the Issuing Bank's holding
company, if
any) with any request, guideline or directive (whether or not
having the force
of law) of any Governmental Authority made or issued after the
date of this
Agreement.
"Class" when used in reference to any Loan or Borrowing, refers
to
whether such Loan, or the Loans comprising such Borrowing, are
Revolving
Loans, Term Loans or Swingline Loans and, when used in reference
to any
Commitment, refers to whether such Commitment is a Revolving
Commitment or a
Term Loan Commitment.
"Code" means the Internal Revenue Code of 1986, as amended from
time
to time.
"Collateral" means any and all "Collateral", as defined in
any
applicable Security Document.
"Collateral Agent" means JPMorgan Chase Bank, N.A., in its
capacity
as collateral agent under the Security Documents for the Secured
Parties. The
terms "Administrative Agent" and "Collateral Agent" are used
interchangeably
in this
4
<PAGE>
Agreement and shall not be construed to distinguish separate
roles, functions
or duties, or to deprive the "Collateral Agent" from any rights
or immunities
accorded to the "Administrative Agent" hereunder.
"Collateral and Guarantee Requirement" means the requirement
that:
(a) the Collateral Agent shall have received from each Loan
Party either (i) a counterpart of the Guarantee and
Collateral
Agreement duly executed and delivered on behalf of such Loan
Party or
(ii) in the case of any Person that becomes a Loan Party after
the
Effective Date, a supplement to the Guarantee and Collateral
Agreement, in the form specified therein, duly executed and
delivered
on behalf of such Loan Party;
(b) all outstanding Equity Interests of each Subsidiary
owned by or on behalf of any Loan Party shall have been
pledged
pursuant to the Guarantee and Collateral Agreement (except that
the
Loan Parties shall not be required to pledge (i) more than 65%
of the
outstanding voting Equity Interests of any Foreign Subsidiary or
(ii)
any Equity Interests of any Foreign Subsidiary if less than 80%
of
the Equity Interests of such Foreign Subsidiary are owned by the
Loan
Parties, to the extent that, and for so long as, such Loan
Parties
are restricted from pledging such Equity Interests owned by
them
pursuant to any contractual obligation among the holders of
the
Equity Interests in such Foreign Subsidiary (but only to the
extent
the restrictions in such contract are effective under applicable
law
to restrict the pledging of such Equity Interests)) and the
Collateral Agent shall have received certificates or other
instruments representing all such Equity Interests, if any,
together
with stock powers or other instruments of transfer with
respect
thereto endorsed in blank;
(c) all Indebtedness of each of the Borrower and the
Subsidiaries that is owing to any Loan Party shall be evidenced
by a
promissory note and shall have been pledged pursuant to the
Guarantee
and Collateral Agreement and the Collateral Agent shall have
received
all such promissory notes, together with instruments of transfer
with
respect thereto endorsed in blank;
(d) all documents and instruments, including Uniform
Commercial Code financing statements, required by law or
reasonably
requested by the Collateral Agent to be filed, registered or
recorded
to create the Liens intended to be created by the Guarantee
and
Collateral Agreement and perfect such Liens to the extent
required
by, and with the priority required by, the Guarantee and
Collateral
Agreement, shall have been filed, registered or recorded or
delivered
to the Collateral Agent for filing, registration or
recording;
(e) the Collateral Agent shall have received (i)
counterparts of a Mortgage with respect to each Mortgaged
Property
duly executed and delivered by the record owner of such
Mortgaged
Property, (ii) a policy or policies of title insurance issued by
a
nationally recognized title insurance company insuring the Lien
of
each such Mortgage as a valid first Lien on the Mortgaged
Property
5
<PAGE>
described therein, free of any other Liens except as
expressly
permitted by Section 6.02, together with such endorsements,
coinsurance and reinsurance as the Collateral Agent or the
Required
Lenders may reasonably request and (iii) such surveys,
abstracts,
appraisals, legal opinions and other documents as the
Collateral
Agent or the Required Lenders may reasonably request with
respect to
any such Mortgage or Mortgaged Property;
(f) each Loan Party shall have obtained all material
consents and approvals required to be obtained by it in
connection
with the execution and delivery of all Security Documents to
which it
is a party, the performance of its obligations thereunder and
the
granting by it of the Liens thereunder; and
(g) all warehousemen, bailees, agents or processors which
have in their possession or control any Inventory (as defined in
the
Guarantee and Collateral Agreement) constituting Collateral
(except
(i) Inventory located outside of the United States and (ii)
other
Inventory with a book value not exceeding $5,000,000 in
aggregate for
all such Inventory of the Loan Parties) at any one time shall
have
been notified of the Liens created by the Security Documents in
such
Inventory and shall have agreed in writing, in form and
substance
reasonably satisfactory to the Collateral Agent, (i) that
such
warehouseman, agent, bailee or processor holds the Inventory for
the
benefit of the Collateral Agent subject to the Liens created by
the
Security Documents and shall act upon the instructions of
the
Collateral Agent without further consent from any Loan Party,
and
(ii) to waive and release any Lien held by it with respect to
such
Inventory, whether arising by operation of law or otherwise.
"Commitment" means a Revolving Commitment or a Term Loan
Commitment,
or any combination thereof (as the context requires).
"Company" means St. John Knits, Inc., a California
corporation.
"Consolidated EBITDA" means, for any period, Consolidated Net
Income
for such period, plus, without duplication and to the extent
deducted from
revenues in determining Consolidated Net Income, the sum of (a)
the aggregate
amount of consolidated interest expense for such period, (b) the
aggregate
amount of letter of credit fees accrued during such period, (c)
the aggregate
amount of income tax expense for such period, (d) all amounts
attributable to
depreciation and amortization for such period, (e) all
extraordinary charges
and non-cash, non-recurring charges during such period, (f)
non-cash expenses
resulting from the grant of stock and stock options and other
compensation to
management personnel of the Borrower or the Subsidiaries
pursuant to a written
plan or agreement or the treatment of such options under
variable plan
accounting, (g) step-up in inventory valuation as a result of
purchase
accounting for Permitted Acquisitions, (h) non-cash write-offs
and
amortization of financing costs by the Borrower and the
Subsidiaries during
such period, (i) losses derived from the Company's partnership
interest in the
Aircraft JV incurred, during the fiscal periods ending on or
prior to April
30, 2006, and the write-off of such investment, (j) expenses
related to the
Transactions (including redemption premiums in connection with
the
Redemption), (k)
6
<PAGE>
restructuring costs related to the shutdown of the non-apparel
wholesale
business, including inventory reserves, severance costs and
facilities-related
charges incurred during the fiscal periods ending on or prior to
October 31,
2005, in an aggregate amount not to exceed $5,000,000, (l)
write-offs of
employee loans, including any accrued interest thereon, relating
to severance
agreements, in an aggregate amount not to exceed $1,000,000, (m)
restructuring
charges incurred in connection with the closing and
restructuring of retail
stores, in an aggregate amount not to exceed $5,000,000, (n)
rent expense, to
the extent that such rent expense is in respect of deferred rent
payments that
are payable more than 12 months after the end of such period and
(o) severance
payments in an aggregate amount not to exceed $2,000,000, and
minus, without
duplication (i) to the extent added to revenues in determining
Consolidated
Net Income for such period, all extraordinary gains during such
period and
(ii) any rent paid during such period, to the extent the amount
thereof was
(or would have been) eligible to add back in calculating
Consolidated EBITDA
for the period expensed, as provided in clause (n) above, all as
determined on
a consolidated basis with respect to the Borrower and the
Subsidiaries in
accordance with GAAP. Solely for purposes of calculating the
Leverage Ratio,
if during any period (each, a "Reference Period") (or, in the
case of pro
forma calculations, during the period from the last day of such
Reference
Period to and including the date as of which such calculation is
made) either
the Borrower or any Subsidiary shall have made a Material
Disposition or
Material Acquisition, Consolidated EBITDA for such Reference
Period shall be
calculated after giving pro forma effect thereto as if such
Material
Disposition or Material Acquisition occurred on the first day of
such
Reference Period; provided that such pro forma calculations
shall give effect
to operating expense reductions and other cost savings only to
the extent that
such reductions and savings would be permitted to be reflected
in a pro forma
financial statement prepared in compliance with Article 11 of
Regulation S-X
under the Securities Act of 1933, as amended, and the rules and
regulations of
the SEC thereunder. As used in this definition, "Material
Acquisition" means
any Permitted Acquisition or series of related Permitted
Acquisitions that
involves consideration (including any non-cash consideration)
with a fair
market value in excess of $2,500,000; and "Material Disposition"
means any
disposition or series of related dispositions of assets
(including the Equity
Interests of a Subsidiary) that involves consideration
(including any non-cash
consideration) with a fair market value in excess of
$2,500,000.
"Consolidated Interest Expense" means, for any period, the sum
of (a)
the interest expense (including, without limitation, imputed
interest expense
on account of Capital Lease Obligations, but excluding non-cash
amortization
of financing costs), both expensed and capitalized, accrued or
paid by the
Borrower and the Subsidiaries during such period (net of
interest income), and
determined on a consolidated basis in accordance with GAAP, (b)
the aggregate
dividends paid in cash with respect to any Gray Preferred Stock
during such
period and (c) the aggregate dividends accrued or paid with
respect to any
Permitted Acquisition Preferred Stock during such period.
"Consolidated Lease Expense" means, for any period, all rent
payment
obligations (excluding any applicable property taxes) of the
Borrower and the
Subsidiaries during such period under agreements for the lease,
hire or use of
any real
7
<PAGE>
property (other than Capital Lease Obligations), as determined
on a
consolidated basis for the Borrower and the Subsidiaries in
accordance with
GAAP.
"Consolidated Net Income" means, for any period, net income or
loss
of the Borrower and the Subsidiaries for such period determined
on a
consolidated basis in accordance with GAAP, provided that there
shall be
excluded (a) the income of any Person in which any other Person
(other than
the Borrower or any of the Subsidiaries or any director holding
qualifying
shares in compliance with applicable law) has a joint interest,
except income
shall be included to the extent of the amount of dividends or
other
distributions actually paid to the Borrower or any of the
Subsidiaries by such
Person during such period and (b) the income (or loss) of any
Person accrued
prior to the date it becomes a Subsidiary or is merged into or
consolidated
with the Borrower or any of the Subsidiaries or the date that
Person's assets
are acquired by the Borrower or any of the Subsidiaries.
"Control" means the possession, directly or indirectly, of the
power
to direct or cause the direction of the management or policies
of a Person,
whether through the ability to exercise voting power, by
contract or
otherwise. "Controlling" and "Controlled" have meanings
correlative thereto.
"Control Group" means (a) Robert E. Gray, Marie Gray and Kelly
A.
Gray and any of their respective spouses, direct descendants and
their
spouses, trusts solely for the benefit of the foregoing
individuals and any
corporations or partnerships owned solely by any of the
foregoing individuals
and (b) the Vestar Group.
"Default" means any event or condition which constitutes an
Event of
Default or which upon notice, lapse of time or both would,
unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and
the
environmental matters disclosed in Schedule 3.06.
"Disqualified Stock" means, with respect to any Person, any
Equity
Interest which by its terms (or by the terms of any security
into which it is
convertible or for which it is exchangeable or exercisable) or
upon the
happening of any event:
(a) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise prior to the date that is
one
year after the Term Loan Maturity Date;
(b) is convertible or exchangeable for Indebtedness or
Disqualified Stock (excluding Equity Interests convertible
or
exchangeable solely at the option of the Borrower or any
Subsidiary;
provided that any such conversion or exchange shall be deemed
an
issuance of Disqualified Stock, as applicable) prior to the date
that
is one year after the Term Loan Maturity Date; or
8
<PAGE>
(c) is redeemable, or subject to mandatory purchase by the
Borrower or any Subsidiary, at the option of the holder thereof,
in
whole or in part prior to the date that is one year after the
Term
Loan Maturity Date.
"dollars" or "$" refers to lawful money of the United States
of
America.
"Effective Date" means the date on which the conditions
specified in
Section 4.01 are satisfied (or waived in accordance with Section
9.02).
"Environmental Laws" means all laws, rules, regulations,
codes,
ordinances, orders, decrees, judgments, injunctions, notices or
binding
agreements issued, promulgated or entered into by or with any
Governmental
Authority, relating in any way to the environment, preservation
or reclamation
of natural resources, or the management, release or threatened
release of any
Hazardous Material.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of
environmental
remediation, fines, penalties or indemnities), of the Borrower
or any
Subsidiary directly or indirectly resulting from or based upon
(a) violation
of any Environmental Law, (b) the generation, use, handling,
transportation,
storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any
Hazardous Materials, (d) the release or threatened release of
any Hazardous
Materials into the environment or (e) any contract, agreement or
other
consensual arrangement pursuant to which liability is assumed or
imposed with
respect to any of the foregoing.
"Equity Interests" means shares of capital stock,
partnership
interests, membership interests in a limited liability company,
beneficial
interests in a trust or other equity ownership interests in a
Person.
"ERISA" means the Employee Retirement Income Security Act of
1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or
not
incorporated) that, together with the Borrower, is treated as a
single
employer under Section 414(b) or (c) of the Code or, solely for
purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as
a single
employer under Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section
4043(c) of ERISA or the regulations issued thereunder with
respect to a Plan
(other than an event for which the 30-day notice period is
waived); (b) the
existence with respect to any Plan of an "accumulated funding
deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA),
whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or
Section
303(d) of ERISA of an application for a waiver of the minimum
funding standard
with respect to any Plan; (d) the incurrence by the Borrower or
any of its
ERISA Affiliates of any liability under Title IV of ERISA with
respect to the
termination of any Plan; (e) the receipt by the Borrower or any
ERISA
Affiliate from the PBGC or a plan administrator of any notice
relating to an
intention to terminate any Plan or Plans or to appoint a trustee
to administer
any Plan; (f) the
9
<PAGE>
incurrence by the Borrower or any of its ERISA Affiliates of any
liability
with respect to the withdrawal or partial withdrawal from any
Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any
ERISA Affiliate
of any notice, or the receipt by any Multiemployer Plan from the
Borrower or
any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal
Liability or a determination that a Multiemployer Plan is, or is
expected to
be, insolvent or in reorganization, within the meaning of Title
IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers
to whether such Loan, or the Loans comprising such Borrowing,
are bearing
interest at a rate determined by reference to the Adjusted LIBO
Rate.
"Event of Default" has the meaning assigned to such term in
Article
VII.
"Excess Cash Flow" means, for any period, the sum (without
duplication) of:
(a) the consolidated net income (or loss) of the Borrower
and its consolidated Subsidiaries for such period, adjusted
to
exclude any gains or losses attributable to Prepayment Events;
plus
(b) depreciation, amortization and other non-cash charges or
losses deducted in determining such consolidated net income (or
loss)
for such period; plus
(c) the sum of (i) the amount, if any, by which Net Working
Capital decreased during such period plus (ii) the amount, if
any, by
which the consolidated deferred revenues of the Borrower and
its
consolidated Subsidiaries increased during such period plus
(iii) the
aggregate principal amount of Capital Lease Obligations and
other
Long-Term Indebtedness incurred during such period to finance
Capital
Expenditures, to the extent that mandatory principal payments
in
respect of such Indebtedness would not be excluded from clause
(f)
below when made; minus
(d) the sum of (i) any non-cash income or gains included in
determining such consolidated net income (or loss) for such
period
plus (ii) the amount, if any, by which Net Working Capital
increased
during such period plus (iii) the amount, if any, by which
the
consolidated deferred revenues of the Borrower and its
consolidated
Subsidiaries decreased during such period; minus
(e) Capital Expenditures for such period; minus
(f) the aggregate principal amount of Long-Term Indebtedness
repaid or prepaid by the Borrower and its consolidated
Subsidiaries
during such period, excluding (i) Indebtedness in respect of
Revolving Loans and Letters of Credit to the extent not
accompanied
by a reduction of the Revolving Credit Commitments, (ii) Term
Loans
prepaid pursuant to Section 2.11(c) or (d), (iii) repayments
or
prepayments of Long-Term Indebtedness financed by incurring
other
Long-Term
10
<PAGE>
Indebtedness, to the extent that mandatory principal payments
in
respect of such other Long-Term Indebtedness would not be
excluded
when made, (iv) Long-Term Indebtedness owed to the Borrower or
a
Subsidiary, (v) Long-Term Indebtedness permitted by clause
(viii) of
Section 6.01(a) and (vi) the Redemption; minus
(g) the aggregate amount of Restricted Payments under
clauses (iv) through (viii) of Section 6.08(a) made during
such
period; minus
(h) for the first period for which Excess Cash Flow is
required to be calculated pursuant to Section 2.11(d), the
excess, if
any, of (i) the sum of the aggregate amount of cash payments
made in
order to effect the Redemption and the Share Repurchase and to
prepay
on the Effective Date the principal of loans outstanding under
the
Existing Credit Agreement, plus payments made by the Borrower to
pay
fees and expenses (not exceeding $3,000,000) in connection with
the
Transactions, minus (ii) the aggregate principal amount of the
Term
Loans made during the Term Loan Availability Period.
"Excluded Taxes" means, with respect to the Administrative
Agent, any
Lender, the Issuing Bank or any other recipient of any payment
to be made by
or on account of any obligation of the Borrower hereunder, (a)
income or
franchise taxes imposed on (or measured by) its net income by
the United
States of America, or by the jurisdiction under the laws of
which such
recipient is organized or in which its principal office is
located or, in the
case of any Lender, in which its applicable lending office is
located, (b) any
branch profits taxes imposed by the United States of America or
any similar
tax imposed by any other jurisdiction in which the Borrower is
located and (c)
in the case of a Foreign Lender (other than an assignee pursuant
to a request
by the Borrower under Section 2.19(b)), any withholding tax that
is imposed on
amounts payable to such Foreign Lender at the time such Foreign
Lender becomes
a party to this Agreement (or designates a new lending office)
or is
attributable to such Foreign Lender's failure to comply with
Section 2.17(e),
except to the extent that such Foreign Lender (or its assignor,
if any) was
entitled, at the time of designation of a new lending office (or
assignment),
to receive additional amounts from the Borrower with respect to
such
withholding tax pursuant to Section 2.17(a).
"Existing Credit Agreement" means the Amended and Restated
Credit
Agreement dated as of July 7, 1999, as amended and restated as
of May 30,
2003, among the Borrower, the lenders party thereto, and
JPMorgan Chase Bank,
N.A., as Administrative Agent.
"Existing Letters of Credit" means the letters of credit
issued
pursuant to the Existing Credit Agreement that are outstanding
thereunder on
the Effective Date.
"Federal Funds Effective Rate" means, for any day, the
weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%)
of the rates
on overnight Federal funds transactions with members of the
Federal Reserve
System arranged by Federal funds brokers, as published on the
next succeeding
Business Day by the Federal
11
<PAGE>
Reserve Bank of New York, or, if such rate is not so published
for any day
that is a Business Day, the average (rounded upwards, if
necessary, to the
next 1/100 of 1%) of the quotations for such day for such
transactions
received by the Administrative Agent from three Federal funds
brokers of
recognized standing selected by it.
"Financial Officer" means the chief financial officer,
principal
accounting officer, treasurer or controller of the Borrower.
"Fixed Charge Coverage Ratio" means, for any period, the ratio
of (a)
Consolidated EBITDA for such period plus Consolidated Lease
Expense for such
period minus Capital Expenditures for such period to (b) Fixed
Charges for
such period.
"Fixed Charges" means, for any period, the sum of (a)
Consolidated
Lease Expense for such period, (b) Consolidated Interest Expense
for such
period, (c) scheduled principal payments of Long-Term
Indebtedness of the
Borrower or any Subsidiary to any Person other than the Borrower
or any wholly
owned Subsidiary, that became payable during such period
(whether or not paid)
and (d) the aggregate liquidation preference of all Permitted
Acquisition
Preferred Stock that matured or became subject to mandatory
repurchase,
redemption, conversion or exchange during such period (whether
or not
repurchased, redeemed, converted or exchanged).
"Foreign Lender" means any Lender that is organized under the
laws of
a jurisdiction other than that in which the Borrower is located.
For purposes
of this definition, the United States of America, each State
thereof and the
District of Columbia shall be deemed to constitute a single
jurisdiction.
"Foreign Subsidiary" means any Subsidiary that is organized
under the
laws of a jurisdiction other than the United States of America
or any State
thereof or the District of Columbia.
"Funded Indebtedness" means, as of any date of determination,
an
amount equal to (a) Total Indebtedness outstanding on such date
(excluding the
Subordinated Debt and Indebtedness in respect of the Revolving
Exposure) plus
(b) the average Revolving Exposure for the twelve months ended
on such date
(or, if such date is not the last day of a month, then for the
twelve months
most recently ended) determined based on the daily average of
the Revolving
Exposure; provided that, for purposes of clause (b), Letters of
Credit are
deemed not to be part of the Revolving Exposure.
"GAAP" means generally accepted accounting principles in the
United
States of America in effect from time to time.
"Governmental Authority" means the government of the United
States of
America, any other nation or any political subdivision thereof,
whether state
or local, and any agency, authority, instrumentality, regulatory
body, court,
central bank or other entity exercising executive, legislative,
judicial,
taxing, regulatory or administrative powers or functions of or
pertaining to
government.
12
<PAGE>
"Gray Common Stock" means common stock of the Borrower owned
by
Robert E. Gray, Marie Gray or Kelly A. Gray.
"Gray Preferred Stock" means preferred stock of the Borrower
issued
pursuant to clause (i) of the proviso to Section 6.01(b), which
preferred
stock shall not be Disqualified Stock; provided that Gray
Preferred Stock may
mature or be mandatorily redeemable after September 30,
2012.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor
guaranteeing or having
the economic effect of guaranteeing any Indebtedness or other
obligation of
any other Person (the "primary obligor") in any manner, whether
directly or
indirectly, and including any obligation of the guarantor,
direct or indirect,
(a) to purchase or pay (or advance or supply funds for the
purchase or payment
of) such Indebtedness or other obligation or to purchase (or to
advance or
supply funds for the purchase of) any security for the payment
thereof, (b) to
purchase or lease property, securities or services for the
purpose of assuring
the owner of such Indebtedness or other obligation of the
payment thereof, (c)
to maintain working capital, equity capital or any other
financial statement
condition or liquidity of the primary obligor so as to enable
the primary
obligor to pay such Indebtedness or other obligation or (d) as
an account
party in respect of any letter of credit or letter of guaranty
issued to
support such Indebtedness or obligation; provided that the term
Guarantee
shall not include endorsements for collection or deposit in the
ordinary
course of business.
"Guarantee and Collateral Agreement" means the Guarantee and
Collateral Agreement among the Loan Parties and the
Administrative Agent,
substantially in the form of Exhibit B.
"Hazardous Materials" means all explosive or radioactive
substances
or wastes and all hazardous or toxic substances, wastes or other
pollutants,
including petroleum or petroleum distillates, asbestos or
asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes
and all other substances or wastes of any nature regulated
pursuant to any
Environmental Law.
"Indebtedness" of any Person means, without duplication, (a)
all
obligations of such Person for borrowed money or with respect to
deposits or
advances of any kind, (b) all obligations of such Person
evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of
such Person
upon which interest charges are customarily paid, (d) all
obligations of such
Person under conditional sale or other title retention
agreements relating to
property acquired by such Person, (e) all obligations of such
Person in
respect of the deferred purchase price of property or services
(excluding
current accounts payable incurred in the ordinary course of
business), (f) all
Indebtedness of others secured by (or for which the holder of
such
Indebtedness has an existing right, contingent or otherwise, to
be secured by)
any Lien on property owned or acquired by such Person, whether
or not the
Indebtedness secured thereby has been assumed, (g) all
Guarantees by such
Person of Indebtedness of others, (h) all Capital Lease
Obligations of such
Person, (i) all obligations, contingent or otherwise, of such
Person as an
account party in respect of letters of credit and letters of
guaranty, (j) all
obligations, contingent or
13
<PAGE>
otherwise, of such Person in respect of bankers' acceptances,
and (k) with
respect to the Borrower only, the aggregate liquidation
preference of all
outstanding Permitted Acquisition Preferred Stock. The
Indebtedness of any
Person shall include the Indebtedness of any other entity
(including any
partnership in which such Person is a general partner) to the
extent such
Person is liable therefor as a result of such Person's ownership
interest in
or other relationship with such entity, except to the extent the
terms of such
Indebtedness provide that such Person is not liable
therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Information Memorandum" means the Confidential Information
Memorandum dated February 2005 relating to the Borrower and the
Transactions.
"Interest Election Request" means a request by the Borrower
to
convert or continue a Borrowing in accordance with Section
2.07.
"Interest Payment Date" means (a) with respect to any ABR Loan
(other
than a Swingline Loan), the last day of each March, June,
September and
December, (b) with respect to any Eurodollar Loan, the last day
of the
Interest Period applicable to the Borrowing of which such Loan
is a part and,
in the case of a Eurodollar Borrowing with an Interest Period of
more than
three months' duration, each day prior to the last day of such
Interest Period
that occurs at intervals of three months' duration after the
first day of such
Interest Period and (c) with respect to any Swingline Loan, the
day that such
Loan is required to be repaid.
"Interest Period" means with respect to any Eurodollar
Borrowing, the
period commencing on the date of such Borrowing and ending on
the numerically
corresponding day in the calendar month that is one, two, three
or six months
(or, subject to the availability to each Lender participating in
such
Borrowing, nine or twelve months) thereafter, as the Borrower
may elect;
provided that (i) if any Interest Period would end on a day
other than a
Business Day, such Interest Period shall be extended to the next
succeeding
Business Day unless such next succeeding Business Day would fall
in the next
calendar month, in which case such Interest Period shall end on
the next
preceding Business Day and (ii) any Interest Period that
commences on the last
Business Day of a calendar month (or on a day for which there is
no
numerically corresponding day in the last calendar month of such
Interest
Period) shall end on the last Business Day of the last calendar
month of such
Interest Period. For purposes of this definition, the date of a
Borrowing
initially shall be the date on which such Borrowing is made and
thereafter
shall be the effective date of the most recent conversion or
continuation of
such Borrowing.
"IPO" means the issuance by the Borrower of shares of its
common
stock to the public pursuant to a bona fide underwritten public
offering,
resulting in at least 20% of the Borrower's outstanding shares
of common stock
being held by the public.
"Irvine Facility JV" means St. John-Varian Development Company,
the
partnership owned 50% by St. John Knits, Inc. and 50% by Varian
Associates.
14
<PAGE>
"Issuing Bank" means JPMorgan Chase Bank, N.A., in its capacity
as
the issuer of Letters of Credit hereunder, and its successors in
such capacity
as provided in Section 2.05(i). The Issuing Bank may, in its
discretion,
arrange for one or more Letters of Credit to be issued by
Affiliates of the
Issuing Bank, in which case the term "Issuing Bank" shall
include any such
Affiliate with respect to Letters of Credit issued by such
Affiliate.
"LC Disbursement" means a payment made by the Issuing Bank
pursuant
to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the
aggregate
undrawn and unexpired amount of all outstanding Letters of
Credit at such time
plus (b) the aggregate amount of all LC Disbursements that have
not yet been
reimbursed by or on behalf of the Borrower at such time. The LC
Exposure of
any Revolving Lender at any time shall be its Applicable
Percentage of the
total LC Exposure at such time.
"Lenders" means the Persons listed on Schedule 2.01 and any
other
Person that shall have become a party hereto pursuant to an
Assignment and
Assumption, other than any such Person that ceases to be a party
hereto
pursuant to an Assignment and Assumption. Unless the context
otherwise
requires, the term "Lenders" includes the Swingline Lender.
"Letter of Credit" means any Standby LC or Trade LC issued
pursuant
to this Agreement. As of the Effective Date, each Existing
Letter of Credit
shall be deemed to be a Letter of Credit hereunder as though
issued hereunder
on the Effective Date.
"Leverage Ratio" means, on any date, the ratio of (a) Funded
Indebtedness as of such date to (b) Consolidated EBITDA for the
period of four
consecutive fiscal quarters of the Borrower ended as of such
date (or, if such
date is not the last day of a fiscal quarter, ended on the last
day of the
fiscal quarter of the Borrower most recently ended prior to such
date), all
determined on a consolidated basis in accordance with GAAP.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for
any
Interest Period, the rate appearing on Page 3750 of the Dow
Jones Market
Service (or on any successor or substitute page of such Service,
or any
successor to or substitute for such Service, providing rate
quotations
comparable to those currently provided on such page of such
Service, as
determined by the Administrative Agent from time to time for
purposes of
providing quotations of interest rates applicable to dollar
deposits in the
London interbank market) at approximately 11:00 a.m., London
time, two
Business Days prior to the commencement of such Interest Period,
as the rate
for dollar deposits with a maturity comparable to such Interest
Period. In the
event that such rate is not available at such time for any
reason, then the
"LIBO Rate" with respect to such Eurodollar Borrowing for such
Interest Period
shall be the rate at which dollar deposits of $5,000,000 and for
a maturity
comparable to such Interest Period are offered by the principal
London office
of the Administrative Agent in immediately available funds
in
15
<PAGE>
the London interbank market at approximately 11:00 a.m., London
time, two
Business Days prior to the commencement of such Interest
Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed
of
trust, lien, pledge, hypothecation, encumbrance, charge or
security interest
in, on or of such asset, (b) the interest of a vendor or a
lessor under any
conditional sale agreement, capital lease or title retention
agreement (or any
financing lease having substantially the same economic effect as
any of the
foregoing) relating to such asset and (c) in the case of
securities, any
purchase option, call or similar right of a third party with
respect to such
securities.
"Loan Documents" means this Agreement, the promissory notes, if
any,
executed and delivered pursuant to Section 2.09(e), the
Guarantee and
Collateral Agreement and the other Security Documents.
"Loan Parties" means the Borrower and the Subsidiary Loan
Parties.
"Loans" means the loans made by the Lenders to the Borrower
pursuant
to this Agreement.
"Long-Term Indebtedness" means any Indebtedness that, in
accordance
with GAAP, constitutes (or, when incurred, constituted) a
long-term liability.
"Material Adverse Effect" means a material adverse effect on (a)
the
business, assets, operations or condition, financial or
otherwise, of the
Borrower and the Subsidiaries taken as a whole, (b) the ability
of any Loan
Party to perform any of its material obligations under any Loan
Document or
(c) the material rights of, or material benefits available to,
the Lenders
under any Loan Document.
"Material Indebtedness" means Indebtedness (other than the Loans
and
Letters of Credit), or exposure in respect of one or more Swap
Agreements, of
any one or more of the Borrower and its Subsidiaries in an
aggregate principal
amount exceeding $7,500,000. For purposes of determining
Material
Indebtedness, the "principal amount" of the exposure of the
Borrower or any
Subsidiary in respect of any Swap Agreement at any time shall be
the maximum
aggregate amount (giving effect to any netting agreements) that
the Borrower
or such Subsidiary would be required to pay if such Swap
Agreement were
terminated at such time.
"Moody's" means Moody's Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust, assignment of leases
and
rents, leasehold mortgage or other security document granting a
Lien on any
Mortgaged Property to secure the Obligations. Each Mortgage
shall be
reasonably satisfactory in form and substance to the Collateral
Agent.
"Mortgaged Property" means, initially, each parcel of real
property
and the improvements thereto owned by a Loan Party and
identified on Schedule
16
<PAGE>
1.01, andincludes each other parcel of real property and
improvements thereto
with respect to which a Mortgage is granted pursuant to Section
5.12 or 5.13.
"Multiemployer Plan" means a multiemployer plan as defined in
Section
4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any event (a) the cash
proceeds
received in respect of such event including (i) any cash
received in respect
of any non-cash proceeds, but only as and when received, (ii) in
the case of a
casualty, insurance proceeds, and (iii) in the case of a
condemnation or
similar event, condemnation awards and similar payments, net of
(b) the sum of
(i) all reasonable fees and out-of-pocket expenses paid by the
Borrower and
the Subsidiaries to third parties (other than Affiliates) in
connection with
such event, (ii) in the case of a sale, transfer or other
disposition of an
asset (including pursuant to a sale and leaseback transaction or
a casualty or
other damage or condemnation or similar proceeding), the amount
of all
payments required to be made by the Borrower and the
Subsidiaries as a result
of such event to repay Indebtedness (other than Loans) secured
by such asset
or otherwise subject to mandatory prepayment as a result of such
event, and
(iii) the amount of all taxes paid (or reasonably estimated to
be payable) by
the Borrower and the Subsidiaries, and the amount of any
reserves established
by the Borrower and the Subsidiaries to fund contingent
liabilities reasonably
estimated to be payable, in each case during the year that such
event occurred
or the next succeeding year and that are directly attributable
to such event
(as determined reasonably and in good faith by the chief
financial officer of
the Borrower).
"Net Working Capital" means, at any date, (a) the sum of the
consolidated current assets and non-current deferred income tax
assets of the
Borrower and its consolidated Subsidiaries as of such date
(excluding cash and
Permitted Investments) minus (b) the sum of the consolidated
current
liabilities and non-current deferred income tax liabilities of
the Borrower
and its consolidated Subsidiaries as of such date (excluding
current
liabilities in respect of Indebtedness). Net Working Capital at
any date may
be a positive or negative number. Net Working Capital increases
when it
becomes more positive or less negative and decreases when it
becomes less
positive or more negative.
"Obligations" has the meaning assigned to such term in the
Guarantee
and Collateral Agreement.
"Other Taxes" means any and all current or future stamp or
documentary taxes or any other excise or property taxes, charges
or similar
levies arising from any payment made under any Loan Document or
from the
execution, delivery or enforcement of, or otherwise with respect
to, any Loan
Document.
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and
defined in ERISA and any successor entity performing similar
functions.
"Perfection Certificate" means a certificate in the form of
Exhibit C
or any other form approved by the Administrative Agent.
17
<PAGE>
"Permitted Acquisition" means any acquisition by the Borrower or
a
Subsidiary of all or substantially all the assets of, or 80% or
more of the
Equity Interests in, a Person or division or line of business of
a Person if,
immediately after giving effect thereto, (a) no Default has
occurred and is
continuing or would result therefrom, (b) all transactions
related thereto are
consummated in accordance with applicable laws, (c) all the
Equity Interests
in each Subsidiary formed for the purpose of or resulting from
such
acquisition shall be owned directly by the Borrower or a
Subsidiary of the
Borrower and all actions required to be taken with respect to
such acquired or
newly formed Subsidiary under Sections 5.12 and 5.13, if any,
have been taken,
(d) the Borrower and its Subsidiaries are in compliance, on a
pro forma basis
after giving effect to such acquisition, with the covenants
contained in
Sections 6.13, 6.14 and 6.15 recomputed as at the last day of
the most
recently ended fiscal quarter of the Borrower for which
financial statements
are available, as if such acquisition (and any related
incurrence or repayment
of Indebtedness, with any new Indebtedness being deemed to be
amortized over
the applicable testing period in accordance with its terms, and
assuming that
any Revolving Loans borrowed in connection with such acquisition
are repaid
with excess cash balances when available) had occurred on the
first day of
each relevant period for testing such compliance and (e) the
Borrower has
delivered to the Administrative Agent an officers' certificate
to the effect
set forth in clauses (a), (b), (c) and (d) above, together with
all relevant
financial information for the Person or assets to be
acquired.
"Permitted Acquisition Preferred Stock" means preferred stock of
the
Borrower which is Disqualified Stock and which is issued as
non-cash
consideration in connection with a Permitted Acquisition.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or
are being contested in compliance with Section 5.05;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in
the
ordinary course of business and securing obligations that are
not
overdue by more than 30 days or are being contested in
compliance
with Section 5.05;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation,
unemployment
insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal
bonds,
performance bonds and other obligations of a like nature, in
each
case in the ordinary course of business;
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Article
VII;
(f) easements, zoning restrictions, rights-of-way and
similar encumbrances on real property imposed by law or arising
in
the ordinary course of business that
18
<PAGE>
do not secure any monetary obligations and do not materially
detract
from the value of the affected property or interfere with
the
ordinary conduct of business of the Borrower or any Subsidiary;
and
(g) landlords' and lessors' and other like Liens on assets
leased by the Borrower or any Subsidiary or assets located
on
premises leased by the Borrower or any Subsidiary, in each
case
arising under leases in respect of rent not in default;
provided that the term "Permitted Encumbrances" shall not
include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of
and interest on which are unconditionally guaranteed by, the
United
States of America (or by any agency thereof to the extent
such
obligations are backed by the full faith and credit of the
United
States of America), in each case maturing within one year from
the
date of acquisition thereof;
(b) investments in commercial paper maturing within 360 days
from the date of acquisition thereof and having, at such date
of
acquisition, the highest credit rating obtainable from S&P
or from
Moody's;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the
date
of acquisition thereof issued or guaranteed by or placed with,
and
money market deposit accounts issued or offered by, any
domestic
office of any commercial bank organized under the laws of the
United
States of America or any State thereof which has a combined
capital
and surplus and undivided profits of not less than
$500,000,000;
(d) fully collateralized repurchase agreements with a term
of not more than 30 days for securities described in clause (a)
above
and entered into with a financial institution satisfying the
criteria
described in clause (c) above; and
(e) investments in money market or mutual funds
substantially all the assets of which are comprised of
securities of
the types described in any of clauses (a) through (d) above.
"Person" means any natural person, corporation, limited
liability
company, trust, investment fund, joint venture, association,
company,
partnership, Governmental Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of
ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which
the Borrower
or any ERISA Affiliate is (or, if such plan were terminated,
would under
Section 4069 of ERISA be deemed to be) an "employer" as defined
in Section
3(5) of ERISA.
19
<PAGE>
"Prepayment Event" means:
(a) any sale, transfer or other disposition (including
pursuant to a sale and leaseback transaction) of any property
or
asset of the Borrower or any Subsidiary, other than Specified
Asset
Realizations and dispositions described in clauses (a), (b), (d)
or
(h) of Section 6.05; or
(b) any casualty or other insured damage to, or any taking
under power of eminent domain or by condemnation or similar
proceeding of, any property or asset of the Borrower or any
Subsidiary, but only to the extent that the Net Proceeds
therefrom
have not been applied to repair, restore or replace such
property or
asset within 360 days after such event; or
(c) any Specified Asset Realization; or
(d) the incurrence by the Borrower or any Subsidiary of any
Indebtedness, other than Indebtedness permitted under Section
6.01.
"Prime Rate" means the rate of interest per annum publicly
announced
from time to time by JPMorgan Chase Bank, N.A. as its prime rate
in effect at
its principal office in New York City; each change in the Prime
Rate shall be
effective from and including the date such change is publicly
announced as
being effective.
"Redemption" means the redemption by the Borrower of all the
Subordinated Debt in accordance with the terms thereof.
"Redemption Reserve" means a reserve fund established by the
Borrower
on or prior to the Effective Date and maintained until the
Redemption is
consummated, pursuant to arrangements reasonably satisfactory to
the
Administrative Agent.
"Register" has the meaning set forth in Section 9.04.
"Related Parties" means, with respect to any specified Person,
such
Person's Affiliates and the respective directors, trustees,
officers,
employees, agents and advisors of such Person and such Person's
Affiliates.
"Required Lenders" means, at any time, Lenders having
Revolving
Exposures, Term Loans and unused Commitments representing more
than 50% of the
sum of the total Revolving Exposures, outstanding Term Loans and
unused
Commitments at such time.
"Restricted Payment" means any dividend or other
distribution
(whether in cash, securities or other property) with respect to
any Equity
Interests in the Borrower or any Subsidiary, or any payment
(whether in cash,
securities or other property), including any sinking fund or
similar deposit,
on account of the purchase, redemption, retirement, acquisition,
cancelation
or termination of any Equity Interests in the Borrower or any
Subsidiary or
any option, warrant or other right to acquire any such Equity
Interests in the
Borrower or any Subsidiary.
20
<PAGE>
"Revolving Availability Period" means the period from and
including
the Effective Date to but excluding the earlier of the Revolving
Maturity Date
and the date of termination of the Revolving Commitments.
"Revolving Commitment" means, with respect to each Lender,
the
commitment, if any, of such Lender to make Revolving Loans and
to acquire
participations in Letters of Credit and Swingline Loans
hereunder, expressed
as an amount representing the maximum aggregate amount of such
Lender's
Revolving Exposure hereunder, as such commitment may be (a)
reduced from time
to time pursuant to Section 2.08 and (b) reduced or increased
from time to
time pursuant to assignments by or to such Lender pursuant to
Section 9.04.
The initial amount of each Lender's Revolving Commitment is set
forth on
Schedule 2.01, or in the Assignment and Assumption pursuant to
which such
Lender shall have assumed its Revolving Commitment, as
applicable. The initial
aggregate amount of the Lenders' Revolving Commitments is
$45,000,000.
"Revolving Exposure" means, with respect to any Lender at any
time,
the sum of the outstanding principal amount of such Lender's
Revolving Loans
and its LC Exposure and Swingline Exposure at such time.
"Revolving Lender" means a Lender with a Revolving Commitment
or, if
the Revolving Commitments have terminated or expired, a Lender
with Revolving
Exposure.
"Revolving Loan" means a Loan made pursuant to clause (b) of
Section
2.01.
"Revolving Maturity Date" means March 23, 2010.
"S&P" means Standard & Poor's Ratings Group, Inc.
"Secured Parties" shall have the meaning assigned to such term
in the
Guarantee and Collateral Agreement.
"Security Documents" means the Guarantee and Collateral
Agreement,
the Mortgages and each other security agreement or other
instrument or
document executed and delivered pursuant to Section 5.12 or 5.13
to secure any
of the Obligations.
"Senior Subordinated Notes" means the 12.5% Senior Subordinated
Notes
due 2009 issued by the Borrower in an aggregate principal amount
of
$100,000,000.
"Share Repurchase" means the repurchase by the Borrower on
the
Effective Date of shares of Gray Common Stock for an aggregate
purchase price
in cash not in excess of $13,500,000.
"Specified Asset Realization" means (a) any sale, transfer or
other
disposition of any Equity Interests in the Aircraft JV or the
Irvine Facility
JV, (b) any sale, transfer or other disposition of all or any
substantial part
of the assets that are owned
21
<PAGE>
by the Aircraft JV or the Irvine Facility JV as of the Effective
Date
(including any improvements to any such assets or replacements
thereof) or (c)
any casualty or other insured damage to, or any taking under
power of eminent
domain or by condemnation or similar proceeding of, any assets
described in
clause (b) above, but only to the extent that the Net Proceeds
therefrom are
not applied to repair or restore such assets promptly, and in
any event within
360 days; provided that clause (a) and (b) above shall not
include any sale
made pursuant to clause (j) of Section 6.05.
"Specified Reinvestment" means (a) the acquisition of real
property,
equipment or other tangible assets to be used in the business of
the Borrower
and the Subsidiaries or (ii) the purchase of Equity Interests of
a Person in
the same or a similar line of business in connection with a
Permitted
Acquisition; provided that (i) in the case of a sale made
pursuant to clause
(j) or (k) of Section 6.05, a "Specified Reinvestment" shall be
limited to
real property and improvements thereto to be used for purposes
similar to
those of the sold assets and (ii) in the case of a sale made
pursuant to
clause (j) of Section 6.05, any such real property must be
located in the
United States.
"Standby LC" means any irrevocable standby letter of credit
in
support of certain obligations of the Borrower available against
sight drafts
and payable at sight, issued by the Issuing Bank for the account
of the
Borrower pursuant to Section 2.05 hereof.
"Standby LC Disbursement" means a payment made by the Issuing
Bank
pursuant to a Standby LC.
"Standby LC Exposure" means, at any time, the sum of (a) the
aggregate undrawn and unexpired amount of all outstanding
Standby LCs at such
time plus (b) the aggregate amount of all Standby LC
Disbursements that have
not yet been reimbursed by or on behalf of the Borrower at such
time. The
Standby LC Exposure of any Revolving Lender at any time shall be
its
Applicable Percentage of the total Standby LC Exposure at such
time.
"Statutory Reserve Rate" means a fraction (expressed as a
decimal),
the numerator of which is the number one and the denominator of
which is the
number one minus the aggregate of the maximum reserve
percentages (including
any marginal, special, emergency or supplemental reserves)
expressed as a
decimal established by the Board to which the Administrative
Agent is subject
for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities"
in Regulation D of the Board). Such reserve percentages shall
include those
imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to
constitute eurocurrency funding and to be subject to such
reserve requirements
without benefit of or credit for proration, exemptions or
offsets that may be
available from time to time to any Lender under such Regulation
D or any
comparable regulation. The Statutory Reserve Rate shall be
adjusted
automatically on and as of the effective date of any change in
any reserve
percentage.
"Stockholders' Agreement" means the Stockholders' Agreement
dated as
of July 7, 1999, to be amended on or about March 23, 2005, among
the Company,
the
22
<PAGE>
Borrower, Vestar/Gray, Vestar/SJK, Robert E. Gray, Marie Gray,
Kelly A. Gray,
the Gray Family Trust and the Kelly Ann Gray Trust.
"Subordinated Debt" means the Senior Subordinated Notes and
the
Indebtedness represented thereby.
"Subordinated Debt Documents" means the Indenture dated as of
July 7,
1999, under which the Senior Subordinated Notes were issued and
all other
instruments, agreements and other documents evidencing or
governing the Senior
Subordinated Notes or providing for any Guarantee or other right
in respect
thereof.
"subsidiary" means, with respect to any Person (the "parent") at
any
date, any corporation, limited liability company, partnership,
association or
other entity the accounts of which would be consolidated with
those of the
parent in the parent's consolidated financial statements if such
financial
statements were prepared in accordance with GAAP as of such
date, as well as
any other corporation, limited liability company, partnership,
association or
other entity of which securities or other ownership interests
representing
more than 50% of the equity or more than 50% of the ordinary
voting power or,
in the case of a partnership, more than 50% of the general
partnership
interests are, as of such date, owned, controlled or held by the
parent or one
or more subsidiaries of the parent or by the parent and one or
more
subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
"Subsidiary Loan Party" means any Subsidiary (including the
Company)
other than any Foreign Subsidiary.
"Supermajority Lenders" means, at any time, Lenders having
Revolving
Exposures, Term Loans and unused Commitments representing more
than 66 2/3% of
the sum of the total Revolving Exposures, outstanding Term Loans
and unused
Commitments at such time.
"Swap Agreement" means any agreement with respect to any
swap,
forward, future or derivative transaction or option or similar
agreement
involving, or settled by reference to, one or more rates,
currencies,
commodities, equity or debt instruments or securities, or
economic, financial
or pricing indices or measures of economic, financial or pricing
risk or value
or any similar transaction or any combination of these
transactions; provided
that no phantom stock or similar plan providing for payments
only on account
of services provided by current or former directors, officers,
employees or
consultants of the Borrower or the Subsidiaries shall be a Swap
Agreement.
"Swingline Exposure" means, at any time, the aggregate
principal
amount of all Swingline Loans outstanding at such time. The
Swingline Exposure
of any Lender at any time shall be its Applicable Percentage of
the total
Swingline Exposure at such time.
"Swingline Lender" means JPMorgan Chase Bank, N.A., in its
capacity
as lender of Swingline Loans hereunder.
23
<PAGE>
"Swingline Loan" means a Loan made pursuant to Section 2.04.
"Taxes" means any and all present or future taxes, levies,
imposts,
duties, deductions, charges or withholdings imposed by any
Governmental
Authority.
"Term Loan" means a Loan made pursuant to clause (a) of Section
2.01.
"Term Loan Availability Period" means the period from and
including
the Effective Date to and including the earlier of the date that
is 90 days
after the Effective Date and the date of termination of the Term
Loan
Commitments.
"Term Loan Commitment" means, with respect to each Lender,
the
commitment, if any, of such Lender to make Term Loans hereunder
during the
Term Loan Availability Period, expressed as an amount
representing the maximum
aggregate principal amount of Term Loans to be made by such
Lender hereunder,
as such commitment may be (a) reduced from time to time pursuant
to Section
2.08 and (b) reduced or increased from time to time pursuant to
assignments by
or to such Lender pursuant to Section 9.04. The initial amount
of each
Lender's Term Loan Commitment is set forth on Schedule 2.01, or
in the
Assignment and Assumption pursuant to which such Lender shall
have assumed its
Term Loan Commitment, as applicable. The initial aggregate
amount of the
Lenders' Term Loan Commitments is $210,000,000.
"Term Loan Lender" means a Lender with a Term Loan Commitment or
an
outstanding Term Loan.
"Term Loan Maturity Date" means March 23, 2012.
"Test Period" means a period of twelve consecutive months
beginning
on the Effective Date or an anniversary thereof and ending on
the day prior to
the immediately succeeding anniversary of the Effective
Date.
"Total Indebtedness" means, as of any date of determination,
without
duplication, the aggregate principal amount of Indebtedness of
the Borrower
and the Subsidiaries outstanding as of such date, determined on
a consolidated
basis in accordance with GAAP.
"Trade LC" means any irrevocable trade letter of credit
available
against sight or time drafts and payable at sight, issued by the
Issuing Bank
for the account of the Borrower pursuant to Section 2.05
hereof.
"Trade LC Disbursement" means a payment made by the Issuing
Bank
pursuant to a Trade LC.
"Trade LC Exposure" means, at any time, the sum of (a) the
aggregate
undrawn and unexpired amount of all outstanding Trade LCs at
such time plus
(b) the aggregate amount of all Trade LC Disbursements that have
not yet been
reimbursed by or on behalf of the Borrower at such time. The
Trade LC Exposure
of any Revolving
24
<PAGE>
Lender at any time shall be its Applicable Percentage of the
total Trade LC
Exposure at such time.
"Transactions" means (a) the Redemption, (b) the Share
Repurchase,
(c) the execution, delivery and performance by each Loan Party
of the Loan
Documents to which it is to be a party, the borrowing of Loans,
the issuance
of Letters of Credit hereunder and the use of the proceeds
thereof and (d) the
payment of fees and expenses in connection with the
foregoing.
"Type", when used in reference to any Loan or Borrowing, refers
to
whether the rate of interest on such Loan, or on the Loans
comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate
or the
Alternate Base Rate.
"Vestar" means Vestar Capital Partners III, L.P.
"Vestar/Gray" means Vestar/Gray Investors LLC, a Delaware
limited
liability company.
"Vestar/SJK" means Vestar/SJK Investors LLC, a Delaware
limited
liability company.
"Vestar Group" means Vestar and its Affiliates.
"Vestar Management Agreement" means the Management Agreement
dated as
of July 7, 1999, among Vestar, the Borrower and the Company.
"Withdrawal Liability" means liability to a Multiemployer Plan
as a
result of a complete or partial withdrawal from such
Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of
ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For
purposes of
this Agreement, Loans may be classified and referred to by Class
(e.g., a
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by
Class and Type
(e.g., a "Eurodollar Revolving Loan"). Borrowings also may be
classified and
referred to by Class (e.g., a "Revolving Borrowing") or by Type
(e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a
"Eurodollar Revolving
Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein
shall
apply equally to the singular and plural forms of the terms
defined. Whenever
the context may require, any pronoun shall include the
corresponding
masculine, feminine and neuter forms. The words "include",
"includes" and
"including" shall be deemed to be followed by the phrase
"without limitation".
The word "will" shall be construed to have the same meaning and
effect as the
word "shall". Unless the context requires otherwise (a) any
definition of or
reference to any agreement, instrument or other document herein
shall be
construed as referring to such agreement, instrument or other
document as from
time to time amended, supplemented or otherwise modified
(subject to any
restrictions on such amendments, supplements or modifications
set forth
herein), (b) any reference herein to any Person shall be
construed to include
such Person's
25
<PAGE>
successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and
words of similar import, shall be construed to refer to this
Agreement in its
entirety and not to any particular provision hereof, (d) all
references herein
to Articles, Sections, Exhibits and Schedules shall be construed
to refer to
Articles and Sections of, and Exhibits and Schedules to, this
Agreement and
(e) the words "asset" and "property" shall be construed to have
the same
meaning and effect and to refer to any and all tangible and
intangible assets
and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise
expressly
provided herein, all terms of an accounting or financial nature
shall be
construed in accordance with GAAP, as in effect from time to
time; provided
that, if the Borrower notifies the Administrative Agent that the
Borrower
requests an amendment to any provision hereof to eliminate the
effect of any
change occurring after the date hereof in GAAP or in the
application thereof
on the operation of such provision (or if the Administrative
Agent notifies
the Borrower that the Required Lenders request an amendment to
any provision
hereof for such purpose), regardless of whether any such notice
is given
before or after such change in GAAP or in the application
thereof, then such
provision shall be interpreted on the basis of GAAP as in effect
and applied
immediately before such change shall have become effective until
such notice
shall have been withdrawn or such provision amended in
accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions
set
forth herein, each Lender agrees (a) to make Term Loans to the
Borrower on the
Effective Date and on not more than one other date during the
Term Loan
Availability Period in an aggregate principal amount not
exceeding (on any day
that such Lender is to make any such Term Loans) its Term Loan
Commitment and
(b) to make Revolving Loans to the Borrower from time to time
during the
Revolving Availability Period in an aggregate principal amount
that will not
result in such Lender's Revolving Exposure exceeding such
Lender's Revolving
Commitment. Within the foregoing limits and subject to the terms
and
conditions set forth herein, the Borrower may borrow, prepay and
reborrow
Revolving Loans. Amounts repaid in respect of Term Loans may not
be
reborrowed.
SECTION 2.02. Loans and Borrowings. (a) Each Loan (other than
a
Swingline Loan) shall be made as part of a Borrowing consisting
of Loans of
the same Class and Type made by the Lenders ratably in
accordance with their
respective Commitments of the applicable Class. The failure of
any Lender to
make any Loan required to be made by it shall not relieve any
other Lender of
its obligations hereunder; provided that the Commitments of the
Lenders are
several and no Lender shall be responsible for any other
Lender's failure to
make Loans as required.
26
<PAGE>
(b) Subject to Section 2.14, each Revolving Borrowing and
Term
Borrowing shall be comprised entirely of ABR Loans or Eurodollar
Loans as the
Borrower may request in accordance herewith. Each Swingline Loan
shall be an
ABR Loan. Each Lender at its option may make any Eurodollar Loan
by causing
any domestic or foreign branch or Affiliate of such Lender to
make such Loan;
provided that any exercise of such option shall not affect the
obligation of
the Borrower to repay such Loan in accordance with the terms of
this Agreement
and shall not result in any increased costs under Section 2.15
or any
obligation by the Borrower to make any payment under Section
2.17 in excess of
the amounts, if any, that such Lender would be entitled to claim
under Section
2.15 or 2.17, as applicable, without giving effect to such
change in lending
office.
(c) At the commencement of each Interest Period for any
Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that
is an integral
multiple of $100,000 and not less than $2,500,000. At the time
that each ABR
Revolving Borrowing is made, such Borrowing shall be in an
aggregate amount
that is an integral multiple of $100,000 and not less than
$1,000,000;
provided that an ABR Revolving Borrowing may be in an aggregate
amount that is
equal to the entire unused balance of the total Revolving
Commitments or that
is required to finance the reimbursement of an LC Disbursement
as contemplated
by Section 2.05(e). Each Swingline Loan shall be in an amount
that is an
integral multiple of $100,000 and not less than $250,000.
Borrowings of more
than one Type and Class may be outstanding at the same time;
provided that
there shall not at any time be more than a total of ten
Eurodollar Borrowings
outstanding.
(d) Notwithstanding any other provision of this Agreement,
the
Borrower shall not be entitled to request, or to elect to
convert or continue,
any Borrowing if the Interest Period requested with respect
thereto would end
after the Revolving Maturity Date or Term Loan Maturity Date, as
applicable.
SECTION 2.03. Requests for Borrowings. To request a Borrowing,
the
Borrower shall notify the Administrative Agent of such request
by telephone
(a) in the case of a Eurodollar Borrowing, not later than 2:00
p.m., New York
City time, three Business Days before the date of the proposed
Borrowing or
(b) in the case of an ABR Borrowing, not later than 2:00 p.m.,
New York City
time, one Business Day before the date of the proposed
Borrowing; provided
that any such notice of an ABR Revolving Borrowing to finance
the
reimbursement of an LC Disbursement as contemplated by Section
2.05(e) may be
given not later than 1:00 p.m., New York City time, on the date
of the
proposed Borrowing. Each such telephonic Borrowing Request shall
be
irrevocable and shall be confirmed promptly by hand delivery or
telecopy to
the Administrative Agent of a written Borrowing Request in a
form approved by
the Administrative Agent and signed by the Borrower. Each such
telephonic and
written Borrowing Request shall specify the following
information in
compliance with Section 2.02:
(i) whether the requested Borrowing is to be a Term Loan
Borrowing or a Revolving Borrowing;
27
<PAGE>
(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a Business
Day;
(iv) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a
period
contemplated by the definition of the term "Interest Period";
and
(vi) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the
requirements of Section 2.06.
If no election as to the Type of Borrowing is specified, then
the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is
specified with
respect to any requested Eurodollar Revolving Borrowing, then
the Borrower
shall be deemed to have selected an Interest Period of one
month's duration.
Promptly following receipt of a Borrowing Request in accordance
with this
Section, the Administrative Agent shall advise each Lender of
the details
thereof and of the amount of such Lender's Loan to be made as
part of the
requested Borrowing.
SECTION 2.04. Swingline Loans. (a) Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make
Swingline
Loans to the Borrower from time to time during the Revolving
Availability
Period, in an aggregate principal amount at any time outstanding
that will not
result in (i) the aggregate principal amount of outstanding
Swingline Loans
exceeding $5,000,000 or (ii) the sum of the total Revolving
Exposures
exceeding the total Revolving Commitments; provided that the
Swingline Lender
shall not be required to make a Swingline Loan to refinance an
outstanding
Swingline Loan. Within the foregoing limits and subject to the
terms and
conditions set forth herein, the Borrower may borrow, prepay and
reborrow
Swingline Loans.
(b) To request a Swingline Loan, the Borrower shall notify
the
Administrative Agent of such request by telephone (confirmed by
telecopy), not
later than 2:00 p.m., New York City time, on the day of a
proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify
the requested
date (which shall be a Business Day) and amount of the requested
Swingline
Loan. The Administrative Agent will promptly advise the
Swingline Lender of
any such notice received from the Borrower. The Swingline Lender
shall make
each Swingline Loan available to the Borrower by means of a
credit to the
general deposit account of the Borrower with the Swingline
Lender (or, in the
case of a Swingline Loan made to finance the reimbursement of an
LC
Disbursement as provided in Section 2.05(e), by remittance to
the Issuing
Bank) by 4:00 p.m., New York City time, on the requested date of
such
Swingline Loan.
(c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m., New York City
time, on any
Business
28
<PAGE>
Day require the Revolving Lenders to acquire participations on
such Business
Day in all or a portion of the Swingline Loans outstanding. Such
notice shall
specify the aggregate amount of Swingline Loans in which
Revolving Lenders
will participate. Promptly upon receipt of such notice, the
Administrative
Agent will give notice thereof to each Revolving Lender,
specifying in such
notice such Lender's Applicable Percentage of such Swingline
Loan or Loans.
Each Revolving Lender hereby absolutely and unconditionally
agrees, upon
receipt of notice as provided above, to pay to the
Administrative Agent, for
the account of the Swingline Lender, such Lender's Applicable
Percentage of
such Swingline Loan or Loans. Each Revolving Lender acknowledges
and agrees
that its obligation to acquire participations in Swingline Loans
pursuant to
this paragraph is absolute and unconditional and shall not be
affected by any
circumstance whatsoever, including the occurrence and
continuance of a Default
or reduction or termination of the Commitments, and that each
such payment
shall be made without any offset, abatement, withholding or
reduction
whatsoever. Each Revolving Lender shall comply with its
obligation under this
paragraph by wire transfer of immediately available funds, in
the same manner
as provided in Section 2.06 with respect to Loans made by such
Lender (and
Section 2.06 shall apply, mutatis mutandis, to the payment
obligations of the
Revolving Lenders), and the Administrative Agent shall promptly
pay to the
Swingline Lender the amounts so received by it from the
Revolving Lenders. The
Administrative Agent shall notify the Borrower of any
participations in any
Swingline Loan acquired pursuant to this paragraph, and
thereafter payments in
respect of such Swingline Loan shall be made to the
Administrative Agent and
not to the Swingline Lender. Any amounts received by the
Swingline Lender from
the Borrower (or other party on behalf of the Borrower) in
respect of a
Swingline Loan after receipt by the Swingline Lender of the
proceeds of a sale
of participations therein shall be promptly remitted to the
Administrative
Agent; any such amounts received by the Administrative Agent
shall be promptly
remitted by the Administrative Agent to the Revolving Lenders
that shall have
made their payments pursuant to this paragraph and to the
Swingline Lender, as
their interests may appear. The purchase of participations in a
Swingline Loan
pursuant to this paragraph shall not relieve the Borrower of any
default in
the payment thereof.
SECTION 2.05. Letters of Credit. (a) General. Subject to the
terms
and conditions set forth herein, the Borrower may request the
issuance of
Letters of Credit for its own account, in a form reasonably
acceptable to the
Administrative Agent and the Issuing Bank, at any time and from
time to time
during the Revolving Availability Period. In the event of any
inconsistency
between the terms and conditions of this Agreement and the terms
and
conditions of any form of letter of credit application or other
agreement
submitted by the Borrower to, or entered into by the Borrower
with, the
Issuing Bank relating to any Letter of Credit, the terms and
conditions of
this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension;
Certain
Conditions. To request the issuance of a Letter of Credit (or
the amendment,
renewal or extension of an outstanding Letter of Credit), the
Borrower shall
hand deliver or telecopy (or transmit by electronic
communication, if
arrangements for doing so have been approved by the Issuing
Bank) to the
Issuing Bank and the Administrative Agent
29
<PAGE>
(reasonably in advance of the requested date of issuance,
amendment, renewal
or extension) a notice requesting the issuance of a Letter of
Credit, or
identifying the Letter of Credit to be amended, renewed or
extended, and
specifying the date of issuance, amendment, renewal or extension
(which shall
be a Business Day), the date on which such Letter of Credit is
to expire
(which shall comply with paragraph (c) of this Section), the
amount of such
Letter of Credit, the name and address of the beneficiary
thereof and such
other information as shall be necessary to prepare, amend, renew
or extend
such Letter of Credit. If requested by the Issuing Bank, the
Borrower also
shall submit a letter of credit application on the Issuing
Bank's standard
form in connection with any request for a Letter of Credit. A
Letter of Credit
shall be issued, amended, renewed or extended only if (and upon
issuance,
amendment, renewal or extension of each Letter of Credit the
Borrower shall be
deemed to represent and warrant that), after giving effect to
such issuance,
amendment, renewal or extension (i) the LC Exposure shall not
exceed
$35,000,000 and (ii) the total Revolving Exposures shall not
exceed the total
Revolving Commitments.
(c) Expiration Date. Each Letter of Credit shall expire at or
prior
to the close of business on the earlier of (i) the date one year
after the
date of the issuance of such Letter of Credit (or, in the case
of any renewal
or extension thereof, one year after such renewal or extension)
and (ii) the
date that is five Business Days prior to the Revolving Maturity
Date.
(d) Participations. By the issuance of a Letter of Credit (or
an
amendment to a Letter of Credit increasing the amount thereof)
and without any
further action on the part of the Issuing Bank or the Lenders,
the Issuing
Bank hereby grants to each Revolving Lender, and each Revolving
Lender hereby
acquires from the Issuing Bank, a participation in such Letter
of Credit equal
to such Lender's Applicable Percentage of the aggregate amount
available to be
drawn under such Letter of Credit. In consideration and in
furtherance of the
foregoing, each Revolving Lender hereby absolutely and
unconditionally agrees
to pay to the Administrative Agent, for the account of the
Issuing Bank, such
Lender's Applicable Percentage of each LC Disbursement made by
the Issuing
Bank and not reimbursed by the Borrower on the date due as
provided in
paragraph (e) of this Section, or of any reimbursement payment
required to be
refunded to the Borrower for any reason. Each Lender
acknowledges and agrees
that its obligation to acquire participations pursuant to this
paragraph in
respect of Letters of Credit is absolute and unconditional and
shall not be
affected by any circumstance whatsoever, including any
amendment, renewal or
extension of any Letter of Credit or the occurrence and
continuance of a
Default or reduction or termination of the Commitments, and that
each such
payment shall be made without any offset, abatement, withholding
or reduction
whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC
Disbursement
in respect of a Letter of Credit, the Borrower shall reimburse
such LC
Disbursement by paying to the Administrative Agent an amount
equal to such LC
Disbursement not later than 2:00 p.m., New York City time, on
(i) the Business
Day that the Borrower shall have received notice of such LC
Disbursement, if
such notice is received prior to 12:00 noon, New York City time,
on the day of
receipt, or (ii) the Business Day immediately
30
<PAGE>
following the day that the Borrower receives such notice, if
such notice is
not received prior to such time on the day of receipt; provided
that the
Borrower may, subject to the conditions to borrowing set forth
herein, request
in accordance with Section 2.03 or 2.04 that such payment be
financed with an
ABR Revolving Borrowing or Swingline Loan in an equivalent
amount and, to the
extent so financed, the Borrower's obligation to make such
payment shall be
discharged and replaced by the resulting ABR Revolving Borrowing
or Swingline
Loan. If the Borrower fails to make such payment when due and
such payment has
not been refinanced with such an ABR Revolving Borrowing or
Swingline Loan,
the Administrative Agent shall notify each Revolving Lender of
the applicable
LC Disbursement, the payment then due from the Borrower in
respect thereof and
such Lender's Applicable Percentage thereof. Promptly following
receipt of
such notice, each Revolving Lender shall pay to the
Administrative Agent its
Applicable Percentage of the payment then due from the Borrower,
in the same
manner as provided in Section 2.06 with respect to Loans made by
such Lender
(and Section 2.06 shall apply, mutatis mutandis, to the payment
obligations of
the Revolving Lenders), and the Administrative Agent shall
promptly pay to the
Issuing Bank the amounts so received by it from the Revolving
Lenders.
Promptly following receipt by the Administrative Agent of any
payment from the
Borrower pursuant to this paragraph, the Administrative Agent
shall distribute
such payment to the Issuing Bank or, to the extent that
Revolving Lenders have
made payments pursuant to this paragraph to reimburse the
Issuing Bank, then
to such Lenders and the Issuing Bank as their interests may
appear. Any
payment made by a Revolving Lender pursuant to this paragraph to
reimburse the
Issuing Bank for any LC Disbursement (other than the funding of
ABR Revolving
Loans or a Swingline Loan as contemplated above) shall not
constitute a Loan
and shall not relieve the Borrower of its obligation to
reimburse such LC
Disbursement.
(f) Obligations Absolute. The Borrower's obligation to reimburse
LC
Disbursements as provided in paragraph (e) of this Section shall
be absolute,
unconditional and irrevocable, and shall be performed strictly
in accordance
with the terms of this Agreement under any and all circumstances
whatsoever
and irrespective of (i) any lack of validity or enforceability
of any Letter
of Credit or this Agreement, or any term or provision therein,
(ii) any draft
or other document presented under a Letter of Credit proving to
be forged,
fraudulent or invalid in any respect or any statement therein
being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank
under a Letter of
Credit against presentation of a draft or other document that
does not comply
with the terms of such Letter of Credit, or (iv) any other event
or
circumstance whatsoever, whether or not similar to any of the
foregoing, that
might, but for the provisions of this Section, constitute a
legal or equitable
discharge of, or provide a right of setoff against, the
Borrower's obligations
hereunder. Neither the Administrative Agent, the Lenders nor the
Issuing Bank,
nor any of their Related Parties, shall have any liability or
responsibility
by reason of or in connection with the issuance or transfer of
any Letter of
Credit or any payment or failure to make any payment thereunder
(irrespective
of any of the circumstances referred to in the preceding
sentence), or any
error, omission, interruption, loss or delay in transmission or
delivery of
any draft, notice or other communication under or relating to
any Letter of
Credit (including any document required to make a drawing
thereunder), any
error in interpretation of technical terms or any consequence
arising from
causes beyond the control of the Issuing Bank.
31
<PAGE>
Notwithstanding the foregoing provisions of this paragraph (f)
the Issuing
Bank shall not be excused from liability to the Borrower to the
extent of any
direct damages (as opposed to consequential damages, claims in
respect of
which are hereby waived by the Borrower to the extent permitted
by applicable
law) suffered by the Borrower that are caused by the Issuing
Bank's failure to
exercise care when determining whether drafts and other
documents presented
under a Letter of Credit comply with the terms thereof. The
parties hereto
expressly agree that, in the absence of gross negligence or
wilful misconduct
on the part of the Issuing Bank, the Issuing Bank shall be
deemed to have
exercised care in each such determination. In furtherance of the
foregoing and
without limiting the generality thereof, the parties agree that,
with respect
to documents presented which appear on their face to be in
substantial
compliance with the terms of a Letter of Credit, the Issuing
Bank may, in its
sole discretion, either accept and make payment upon such
documents without
responsibility for further investigation, regardless of any
notice or
information to the contrary, or refuse to accept and make
payment upon such
documents if such documents are not in strict compliance with
the terms of
such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall,
promptly
following its receipt thereof, examine all documents purporting
to represent a
demand for payment under a Letter of Credit. The Issuing Bank
shall promptly
notify the Administrative Agent and the Borrower by telephone
(confirmed by
telecopy) of such demand for payment and whether the Issuing
Bank has made or
will make an LC Disbursement thereunder; provided that any
failure to give or
delay in giving such notice shall not relieve the Borrower of
its obligation
to reimburse the Issuing Bank and the Revolving Lenders with
respect to any
such LC Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC
Disbursement
in full on the date such LC Disbursement is made, the unpaid
amount thereof
shall bear interest, for each day from and including the date
such LC
Disbursement is made to but excluding the date that the Borrower
reimburses
such LC Disbursement, at the rate per annum then applicable to
ABR Revolving
Loans; provided that, if the Borrower fails to reimburse such LC
Disbursement
when due pursuant to paragraph (e) of this Section, then Section
2.13(c) shall
apply. Interest accrued pursuant to this paragraph shall be for
the account of
the Issuing Bank, except that interest accrued on and after the
date of
payment by any Revolving Lender pursuant to paragraph (e) of
this Section to
reimburse the Issuing Bank shall be for the account of such
Lender to the
extent of such payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be
replaced
at any time by written agreement among the Borrower, the
Administrative Agent,
the replaced Issuing Bank and the successor Issuing Bank. The
Administrative
Agent shall notify the Lenders of any such replacement of the
Issuing Bank. At
the time any such replacement shall become effective, the
Borrower shall pay
all unpaid fees accrued for the account of the replaced Issuing
Bank pursuant
to Section 2.12(b). From and after the effective date of any
such replacement,
(i) the successor Issuing Bank shall have all the rights and
obligations of
the Issuing Bank under this Agreement with respect to Letters of
Credit to be
issued thereafter and (ii) references herein to the term
"Issuing Bank" shall
be deemed to refer to such successor or to any previous Issuing
Bank, or to
such
32
<PAGE>
successor and all previous Issuing Banks, as the context shall
require. After
the replacement of an Issuing Bank hereunder, the replaced
Issuing Bank shall
remain a party hereto and shall continue to have all the rights
and
obligations of an Issuing Bank under this Agreement with respect
to Letters of
Credit issued by it prior to such replacement, but shall not be
required to
issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur
and
be continuing, on the Business Day that the Borrower receives
notice from the
Administrative Agent or the Required Lenders (or, if the
maturity of the Loans
has been accelerated, Revolving Lenders with LC Exposure
representing greater
than 50% of the total LC Exposure) demanding the deposit of cash
collateral
pursuant to this paragraph, the Borrower shall deposit in an
account with the
Administrative Agent, in the name of the Administrative Agent
and for the
benefit of the Lenders, an amount in cash equal to 100% of the
LC Exposure as
of such date plus any accrued and unpaid interest thereon;
provided that the
obligation to deposit such cash collateral shall become
effective immediately,
and such deposit shall become immediately due and payable,
without demand or
other notice of any kind, upon the occurrence of any Event of
Default with
respect to the Borrower described in clause (h) or (i) of
Article VII. The
Borrower also shall deposit cash collateral pursuant to this
paragraph as and
to the extent required by Section 2.11(b). Each such deposit
shall be held by
the Administrative Agent as collateral for the payment and
performance of the
obligations of the Borrower under this Agreement. The
Administrative Agent
shall have exclusive dominion and control, including the
exclusive right of
withdrawal, over such account. Other than any interest earned on
the
investment of such deposits, which investments shall be made at
the option and
sole discretion of the Administrative Agent and at the
Borrower's risk and
expense, such deposits shall not bear interest; provided that,
unless the
Borrower and the Administrative Agent otherwise agree, such
investments shall
be made only in cash equivalents. Interest or profits, if any,
on such
investments shall accumulate in such account. Moneys in such
account shall be
applied by the Administrative Agent to reimburse the Issuing
Bank for LC
Disbursements for which it has not been reimbursed and, to the
extent not so
applied, shall be held for the satisfaction of the reimbursement
obligations
of the Borrower for the LC Exposure at such time or, if the
maturity of the
Loans has been accelerated (but subject to the consent of
Revolving Lenders
with LC Exposure representing greater than 50% of the total LC
Exposure), be
applied to satisfy other obligations of the Borrower under this
Agreement. If
the Borrower is required to provide an amount of cash collateral
hereunder as
a result of the occurrence of an Event of Default, such amount
(to the extent
not applied as aforesaid) shall be returned to the Borrower
within three
Business Days after all Events of Default have been cured or
waived. If the
Borrower is required to provide an amount of cash collateral
hereunder
pursuant to Section 2.11(b), such amount (to the extent not
applied as
aforesaid) shall be returned to the Borrower as and to the
extent that, after
giving effect to such return, the Borrower would remain in
compliance with
Section 2.11(b) and no Default shall have occurred and be
continuing.
SECTION 2.06. Funding of Borrowings. (a) Each Lender shall make
each
Loan to be made by it hereunder on the proposed date thereof by
wire transfer
of immediately available funds by 12:00 noon (or, in the case of
an ABR
Revolving Loan
33
<PAGE>
made to finance an LC Disbursement as contemplated by Section
2.05(e), 3:00
p.m.), New York City time, to the account of the Administrative
Agent most
recently designated by it for such purpose by notice to the
Lenders; provided
that Swingline Loans shall be made as provided in Section 2.04.
The
Administrative Agent will make such Loans available to the
Borrower by
promptly crediting the amounts so received, in like funds, to an
account of
the Borrower maintained with the Administrative Agent in New
York City and
designated by the Borrower in the applicable Borrowing Request;
provided that
(i) ABR Revolving Loans made to finance the reimbursement of an
LC
Disbursement as provided in Section 2.05(e) shall be remitted by
the
Administrative Agent to the Issuing Bank and (ii) Term Loans
made after the
Effective Date shall be deposited in the Redemption Reserve to
the extent
required by Section 5.15.
(b) Unless the Administrative Agent shall have received notice
from a
Lender prior to the proposed date of any Borrowing that such
Lender will not
make available to the Administrative Agent such Lender's share
of such
Borrowing, the Administrative Agent may assume that such Lender
has made such
share available on such date in accordance with paragraph (a) of
this Section
and may, in reliance upon such assumption, make available to the
Borrower a
corresponding amount. In such event, if a Lender has not in fact
made its
share of the applicable Borrowing available to the
Administrative Agent, then
the applicable Lender and the Borrower severally agree to pay to
the
Administrative Agent forthwith on demand such corresponding
amount with
interest thereon, for each day from and including the date such
amount is made
available to the Borrower to but excluding the date of payment
to the
Administrative Agent, at (i) in the case of such Lender, the
greater of the
Federal Funds Effective Rate and a rate determined by the
Administrative Agent
in accordance with banking industry rules on interbank
compensation or (ii) in
the case of the Borrower, the interest rate applicable to ABR
Loans. If such
Lender pays such amount to the Administrative Agent, then such
amount shall
constitute such Lender's Loan included in such Borrowing.
SECTION 2.07. Interest Elections. (a) Each Revolving Borrowing
and
Term Borrowing initially shall be of the Type specified in the
applicable
Borrowing Request and, in the case of a Eurodollar Borrowing,
shall have an
initial Interest Period as specified in such Borrowing Request.
Thereafter,
the Borrower may elect to convert such Borrowing to a different
Type or to
continue such Borrowing and, in the case of a Eurodollar
Borrowing, may elect
Interest Periods therefor, all as provided in this Section. The
Borrower may
elect different options with respect to different portions of
the affected
Borrowing, in which case each such portion shall be allocated
ratably among
the Lenders holding the Loans comprising such Borrowing, and the
Loans
comprising each such portion shall be considered a separate
Borrowing. This
Section shall not apply to Swingline Borrowings, which may not
be converted or
continued.
(b) To make an election pursuant to this Section, the Borrower
shall
notify the Administrative Agent of such election by telephone by
the time that
a Borrowing Request would be required under Section 2.03 if the
Borrower were
requesting a Revolving Borrowing of the Type resulting from such
election to
be made on the effective date of such election. Each such
telephonic Interest
Election Request shall be irrevocable and shall be confirmed
promptly by hand
delivery or telecopy to the
34
<PAGE>
Administrative Agent of a written Interest Election Request in a
form approved
by the Administrative Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request
shall
specify the following information in compliance with Section
2.02 and
paragraph (f) of this Section:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect
to
different portions thereof, the portions thereof to be allocated
to
each resulting Borrowing (in which case the information to
be
specified pursuant to clauses (iii) and (iv) below shall be
specified
for each resulting Borrowing);
(ii) the effective date of the election made pursuant to
such Interest Election Request, which shall be a Business
Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing,
the Interest Period to be applicable thereto after giving effect
to
such election, which shall be a period contemplated by the
definition
of the term "Interest Period".
If any such Interest Election Request requests a Eurodollar
Borrowing but does
not specify an Interest Period, then the Borrower shall be
deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request,
the
Administrative Agent shall advise each Lender of the details
thereof and of
such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest
Election
Request with respect to a Eurodollar Borrowing prior to the end
of the
Interest Period applicable thereto, then, unless such Borrowing
is repaid as
provided herein, at the end of such Interest Period such
Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary
provision hereof,
if an Event of Default has occurred and is continuing and the
Administrative
Agent, at the request of the Required Lenders, so notifies the
Borrower, then,
so long as an Event of Default is continuing (i) no outstanding
Borrowing may
be converted to or continued as a Eurodollar Borrowing and (ii)
unless repaid,
each Eurodollar Borrowing shall be converted to an ABR Borrowing
at the end of
the Interest Period applicable thereto.
(f) A Borrowing of any Class may not be converted to or
continued as
a Eurodollar Borrowing if after giving effect thereto (i) the
Interest Period
therefor would commence before and end after a date on which any
principal of
the Loans of such Class is scheduled to be repaid and (ii) the
sum of the
aggregate principal amount of outstanding Eurodollar Borrowings
of such Class
with Interest Periods ending on or prior to such scheduled
repayment date plus
the aggregate principal amount of outstanding
35
<PAGE>
ABR Borrowings of such Class would be less than the aggregate
principal amount
of Loans of such Class required to be repaid on such scheduled
repayment date.
SECTION 2.08. Termination and Reduction of Commitments. (a)
Unless
previously terminated, (i) the Term Loan Commitments shall
terminate at 5:00
p.m., New York City time, on the last day of the Term Loan
Availability Period
and (ii) the Revolving Commitments shall terminate on the
Revolving Maturity
Date. The Term Loan Commitment of each Lender shall be reduced
by an amount
equal to the principal amount of each Term Loan made by such
Lender, effective
upon the funding of such Term Loan by such Lender.
(b) The Borrower may at any time terminate, or from time to
time
reduce, the Commitments of either Class; provided that (i) each
reduction of
the Commitments shall be in an amount that is an integral
multiple of $100,000
and not less than $2,500,000, (ii) the Borrower shall not
terminate or reduce
the Term Loan Commitments if doing so would violate Section 5.15
and (iii) the
Borrower shall not terminate or reduce the Revolving Commitments
if, after
giving effect to any concurrent prepayment of the Revolving
Loans in
accordance with Section 2.11, the sum of the Revolving Exposures
would exceed
the total Revolving Commitments.
(c) In the event that, on the date on which any prepayment would
be
required pursuant to Section 2.11(c) or 2.11(d), no Term
Borrowings remain
outstanding or the amount of the prepayment required by Section
2.11(c) or
2.11(d), as the case may be, exceeds the aggregate principal
amount of Term
Borrowings then outstanding, the Term Loan Commitments or (if no
Term Loan
Commitments remain in effect) the Revolving Commitments shall be
reduced by an
amount equal to the excess of the required prepayment over the
principal
amount, if any, of Term Borrowings actually prepaid.
(d) The Borrower shall notify the Administrative
| 
