Exhibit 99.1
CREDIT AND GUARANTY AGREEMENT
DATED AS OF FEBRUARY 6, 2004
AMONG
CONNETICS CORPORATION,
CERTAIN SUBSIDIARIES OF CONNETICS CORPORATION,
AS GUARANTORS,
VARIOUS LENDERS,
AND
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
AS LEAD ARRANGER, SYNDICATION AGENT AND ADMINISTRATIVE AGENT,
-------------------------------------------------------------------------------
$30,000,000 SENIOR SECURED BRIDGE LOAN FACILITY
-------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS AND INTERPRETATION............................................ 1
1.1. DEFINITIONS.......................................................... 1
1.2. ACCOUNTING TERMS..................................................... 21
1.3. INTERPRETATION, ETC.................................................. 21
SECTION 2. LOANS AND LETTERS OF CREDIT............................................... 21
2.1. TERM LOANS........................................................... 21
2.2. PRO RATA SHARES...................................................... 22
2.3. USE OF PROCEEDS...................................................... 22
2.4. EVIDENCE OF DEBT; REGISTER; LENDERS' BOOKS AND RECORDS; NOTES........ 22
2.5. INTEREST ON LOANS.................................................... 23
2.6. CONVERSION/CONTINUATION.............................................. 24
2.7. DEFAULT INTEREST..................................................... 25
2.8. FEES................................................................. 25
2.9. REPAYMENT OF TERM LOANS.............................................. 25
2.10. VOLUNTARY PREPAYMENTS............................................... 26
2.11. MANDATORY PREPAYMENTS............................................... 26
2.12. GENERAL PROVISIONS REGARDING PAYMENTS............................... 27
2.13. RATABLE SHARING..................................................... 29
2.14. MAKING OR MAINTAINING EURODOLLAR RATE LOANS......................... 29
2.15. INCREASED COSTS; CAPITAL ADEQUACY................................... 31
2.16. TAXES; WITHHOLDING, ETC............................................. 32
2.17. OBLIGATION TO MITIGATE.............................................. 34
2.18. REMOVAL OR REPLACEMENT OF A LENDER.................................. 35
SECTION 3. CONDITIONS PRECEDENT...................................................... 36
SECTION 4. REPRESENTATIONS AND WARRANTIES............................................ 39
4.1. ORGANIZATION; REQUISITE POWER AND AUTHORITY; QUALIFICATION........... 39
4.2. CAPITAL STOCK AND OWNERSHIP.......................................... 39
4.3. DUE AUTHORIZATION.................................................... 40
4.4. NO CONFLICT.......................................................... 40
4.5. GOVERNMENTAL CONSENTS................................................ 40
4.6. BINDING OBLIGATION................................................... 40
4.7. [RESERVED]........................................................... 40
4.8. PROJECTIONS.......................................................... 40
4.9. NO MATERIAL ADVERSE CHANGE........................................... 41
4.10. [RESERVED].......................................................... 41
4.11. ADVERSE PROCEEDINGS, ETC............................................ 41
4.12. PAYMENT OF TAXES.................................................... 41
4.13. PROPERTIES.......................................................... 41
4.14. ENVIRONMENTAL MATTERS............................................... 42
ii
4.15. NO DEFAULTS......................................................... 42
4.16. MATERIAL CONTRACTS.................................................. 42
4.17. GOVERNMENTAL REGULATION............................................. 43
4.18. MARGIN STOCK........................................................ 43
4.19. EMPLOYEE MATTERS.................................................... 43
4.20. EMPLOYEE BENEFIT PLANS.............................................. 43
4.21. CERTAIN FEES........................................................ 44
4.22. SOLVENCY............................................................ 44
4.23. ACQUISITION AGREEMENT............................................... 44
4.24. COMPLIANCE WITH STATUTES, ETC....................................... 45
4.25. DISCLOSURE.......................................................... 45
SECTION 5. AFFIRMATIVE COVENANTS..................................................... 45
5.1. FINANCIAL STATEMENTS AND OTHER REPORTS............................... 45
5.2. EXISTENCE............................................................ 49
5.3. PAYMENT OF TAXES AND CLAIMS.......................................... 49
5.4. MAINTENANCE OF PROPERTIES............................................ 49
5.5. INSURANCE............................................................ 49
5.6. INSPECTIONS.......................................................... 50
5.7. [RESERVED]........................................................... 50
5.8. COMPLIANCE WITH LAWS................................................. 50
5.9. ENVIRONMENTAL........................................................ 50
5.10. SUBSIDIARIES........................................................ 52
5.11. FURTHER ASSURANCES.................................................. 52
SECTION 6. NEGATIVE COVENANTS........................................................ 52
6.1. INDEBTEDNESS......................................................... 52
6.2. LIENS................................................................ 54
6.3. EQUITABLE LIEN....................................................... 55
6.4. NO FURTHER NEGATIVE PLEDGES.......................................... 55
6.5. RESTRICTED JUNIOR PAYMENTS........................................... 56
6.6. RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS............................. 56
6.7. INVESTMENTS.......................................................... 56
6.8. FINANCIAL COVENANTS.................................................. 57
6.9. FUNDAMENTAL CHANGES; DISPOSITION OF ASSETS; ACQUISITIONS............. 58
6.10. DISPOSAL OF SUBSIDIARY INTERESTS.................................... 59
6.11. SALES AND LEASE-BACKS............................................... 59
6.12. TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES....................... 60
6.13. CONDUCT OF BUSINESS................................................. 60
6.14. AMENDMENTS OR WAIVERS OF ACQUISITION AGREEMENT...................... 60
6.15. FISCAL YEAR......................................................... 60
SECTION 7. GUARANTY.................................................................. 60
7.1. GUARANTY OF THE OBLIGATIONS.......................................... 60
7.2. CONTRIBUTION BY GUARANTORS........................................... 60
iii
7.3. PAYMENT BY GUARANTORS................................................ 61
7.4. LIABILITY OF GUARANTORS ABSOLUTE..................................... 62
7.5. WAIVERS BY GUARANTORS................................................ 64
7.6. GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC................. 64
7.7. SUBORDINATION OF OTHER OBLIGATIONS................................... 65
7.8. CONTINUING GUARANTY.................................................. 65
7.9. AUTHORITY OF GUARANTORS OR COMPANY................................... 65
7.10. FINANCIAL CONDITION OF COMPANY...................................... 65
7.11. BANKRUPTCY, ETC..................................................... 66
7.12. DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR........................ 66
SECTION 8. EVENTS OF DEFAULT......................................................... 67
8.1. EVENTS OF DEFAULT.................................................... 67
SECTION 9. AGENTS.................................................................... 69
9.1. APPOINTMENT OF AGENTS................................................ 69
9.2. POWERS AND DUTIES.................................................... 70
9.3. GENERAL IMMUNITY..................................................... 70
9.4. AGENTS ENTITLED TO ACT AS LENDER..................................... 71
9.5. LENDERS' REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENT.............. 71
9.6. RIGHT TO INDEMNITY................................................... 71
9.7. SUCCESSOR ADMINISTRATIVE AGENT....................................... 72
9.8. COLLATERAL DOCUMENTS AND GUARANTY.................................... 72
SECTION 10. MISCELLANEOUS............................................................ 73
10.1. NOTICES............................................................. 73
10.2. EXPENSES............................................................ 73
10.3. INDEMNITY........................................................... 74
10.4. SET-OFF............................................................. 75
10.5. AMENDMENTS AND WAIVERS.............................................. 75
10.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS.............................. 76
10.7. INDEPENDENCE OF COVENANTS........................................... 79
10.8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.............. 79
10.9. NO WAIVER; REMEDIES CUMULATIVE...................................... 80
10.10. MARSHALLING; PAYMENTS SET ASIDE.................................... 80
10.11. SEVERABILITY....................................................... 80
10.12. OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS......... 80
10.13. HEADINGS........................................................... 81
10.14. APPLICABLE LAW..................................................... 81
10.15. CONSENT TO JURISDICTION............................................ 81
10.16. WAIVER OF JURY TRIAL............................................... 81
10.17. CONFIDENTIALITY.................................................... 82
10.18. USURY SAVINGS CLAUSE............................................... 83
10.19. COUNTERPARTS....................................................... 83
10.20. EFFECTIVENESS...................................................... 83
iv
APPENDICES: A Term Loan Commitments
B Notice Addresses
SCHEDULES: 4.1 Jurisdictions of Organization and Qualification
4.2 Capital Stock and Ownership
4.13 Real Estate Assets
4.17 Material Contracts
6.1 Certain Indebtedness
6.2 Certain Liens
6.7 Certain Investments
6.12 Certain Affiliate Transactions
EXHIBITS: A Conversion/Continuation Notice
B Term Loan Note
C Compliance Certificate
D Opinions of Counsel
E Assignment Agreement
F Certificate Re Non-bank Status
G Closing Date Certificate
H Counterpart Agreement
I Pledge and Security Agreement
v
CREDIT AND GUARANTY AGREEMENT
This CREDIT AND GUARANTY AGREEMENT, dated as of February 6, 2004, is
entered into by and among CONNETICS CORPORATION, a Delaware corporation
("COMPANY"), ANY SUBSIDIARY OF COMPANY THAT BECOMES A GUARANTOR PURSUANT TO
SECTION 5.10, as Guarantors, the Lenders party hereto from time to time and
XXXXXXX XXXXX CREDIT PARTNERS L.P. ("GSCP"), as Lead Arranger, Sole Book Runner,
Syndication Agent (in such capacities, "SYNDICATION AGENT"), as Administrative
Agent (together with its permitted successors in such capacity, "ADMINISTRATIVE
Agent") and as Collateral Agent (together with its permitted successor in such
capacity, "COLLATERAL AGENT").
RECITALS:
WHEREAS, capitalized terms used in these Recitals shall have the
respective meanings set forth for such terms in Section 1.1 hereof;
WHEREAS, Lenders have agreed to extend a senior secured bridge loan
facility consisting of a $30,000,000 aggregate principal amount of Term Loans,
the proceeds of which will be used to acquire (the "ACQUISITION") the U.S.
rights (but not the liabilities) to the project Soriatane (the "ACQUIRED
BUSINESS") from Xxxxxxx-XxXxxxx, Inc. pursuant to that certain Sale and Purchase
Agreement dated as of February 2, 2004 between Company and Xxxxxxx-XxXxxxx, Inc.
(the "ACQUISITION AGREEMENT");
WHEREAS, Company has agreed to secure all of its Obligations by
granting to Collateral Agent, for the benefit of Secured Parties, a First
Priority Lien on substantially all of its assets, including a pledge of all of
the Capital Stock of each of its Domestic Subsidiaries and 65% of all the
Capital Stock of each of its Foreign Subsidiaries; and
WHEREAS, Guarantors have agreed to guarantee the obligations of Company
hereunder and to secure their respective Obligations by granting to Collateral
Agent, for the benefit of Secured Parties, a First Priority Lien on
substantially all of their respective assets, including a pledge of all of the
Capital Stock of each of their respective Domestic Subsidiaries, if any, and 65%
of all the Capital Stock of each of their respective Foreign Subsidiaries, if
any.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION
1.1. DEFINITIONS. The following terms used herein, including in the
preamble, recitals, exhibits and schedules hereto, shall have the following
meanings:
"ACQUIRED BUSINESS" as defined in the recitals hereto.
"ACQUISITION" as defined in the recitals hereto.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar Rate
Loan, the rate per annum obtained by dividing (and rounding upward to the next
whole multiple of 1/16 of 1%) (i) (a) the rate per annum (rounded to the nearest
1/100 of 1%) equal to the rate determined by Administrative Agent to be the
offered rate which appears on the page of the Telerate Screen which displays an
average British Bankers Association Interest Settlement Rate (such page
currently being page number 3740 or 3750, as applicable) for deposits (for
delivery on the first day of such period) with a term equivalent to such period
in Dollars, determined as of approximately 11:00 a.m. (London, England time) on
such Interest Rate Determination Date, or (b) in the event the rate referenced
in the preceding clause (a) does not appear on such page or service or if such
page or service shall cease to be available, the rate per annum (rounded to the
nearest 1/100 of 1%) equal to the rate determined by Administrative Agent to be
the offered rate on such other page or other service which displays an average
British Bankers Association Interest Settlement Rate for deposits (for delivery
on the first day of such period) with a term equivalent to such period in
Dollars, determined as of approximately 11:00 a.m. (London, England time) on
such Interest Rate Determination Date, or (c) in the event the rates referenced
in the preceding clauses (a) and (b) are not available, the rate per annum
(rounded to the nearest 1/100 of 1%) equal to the offered quotation rate to
first class banks in the London interbank market by GSCP for deposits (for
delivery on the first day of the relevant period) in Dollars of amounts in same
day funds comparable to the principal amount of the applicable Loan of
Administrative Agent, in its capacity as a Lender, for which the Adjusted
Eurodollar Rate is then being determined with maturities comparable to such
period as of approximately 11:00 a.m. (London, England time) on such Interest
Rate Determination Date, by (ii) an amount equal to (a) one minus (b) the
Applicable Reserve Requirement.
"ADMINISTRATIVE AGENT" as defined in the preamble hereto.
"ADVERSE PROCEEDING" means any action, suit, proceeding
(whether administrative, judicial or otherwise), governmental investigation or
arbitration (whether or not purportedly on behalf of Company or any of its
Subsidiaries) at law or in equity, or before or by any Governmental Authority,
domestic or foreign (including any Environmental Claims), whether pending or, to
the knowledge of Company or any of its Subsidiaries, threatened against or
affecting Company or any of its Subsidiaries or any property of Company or any
of its Subsidiaries.
"AFFECTED LENDER" as defined in Section 2.14(b).
"AFFECTED LOANS" as defined in Section 2.14(b).
"AFFILIATE" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms
2
"controlling", "controlled by" and "under common control with"), as applied to
any Person, means the possession, directly or indirectly, of the power (i) to
vote 5% or more of the Securities having ordinary voting power for the election
of directors of such Person or (ii) to direct or cause the direction of the
management and policies of that Person, whether through the ownership of voting
securities or by contract or otherwise.
"AGENT" means each of Syndication Agent, Administrative Agent
and Collateral Agent.
"AGGREGATE AMOUNTS DUE" as defined in Section 2.13.
"AGGREGATE PAYMENTS" as defined in Section 7.2.
"AGREEMENT" means this Credit and Guaranty Agreement, dated as
of February 6, 2004, as it may be amended, supplemented or otherwise modified
from time to time.
"APPLICABLE MARGIN" means (i) 2.50% per annum with respect to
Term Loans that are Base Rate Loans and (ii) 3.50% per annum with respect to
Term Loans that are Eurodollar Rate Loans.
"APPLICABLE RESERVE REQUIREMENT" means, at any time, for any
Eurodollar Rate Loan, the maximum rate, expressed as a decimal, at which
reserves (including, without limitation, any basic marginal, special,
supplemental, emergency or other reserves) are required to be maintained with
respect thereto against "Eurocurrency liabilities" (as such term is defined in
Regulation D) under regulations issued from time to time by the Board of
Governors of the Federal Reserve System or other applicable banking regulator.
Without limiting the effect of the foregoing, the Applicable Reserve Requirement
shall reflect any other reserves required to be maintained by such member banks
with respect to (i) any category of liabilities which includes deposits by
reference to which the applicable Adjusted Eurodollar Rate or any other interest
rate of a Loan is to be determined, or (ii) any category of extensions of credit
or other assets which include Eurodollar Rate Loans. A Eurodollar Rate Loan
shall be deemed to constitute Eurocurrency liabilities and as such shall be
deemed subject to reserve requirements without benefits of credit for proration,
exceptions or offsets that may be available from time to time to the applicable
Lender. The rate of interest on Eurodollar Rate Loans shall be adjusted
automatically on and as of the effective date of any change in the Applicable
Reserve Requirement.
"ASSET SALE" means a sale, lease or sub-lease (as lessor or
sublessor), sale and leaseback, assignment, conveyance, transfer or other
disposition to, or any exchange of property with, any Person (other than Company
or any Guarantor Subsidiary), in one transaction or a series of transactions, of
all or any part of Company' or any of its Subsidiaries' businesses, assets or
properties of any kind, whether real, personal, or mixed and whether tangible or
intangible, whether now owned or hereafter acquired, including, without
limitation, the Capital Stock of any of Company's Subsidiaries, other than (i)
inventory (or other assets) sold or leased in the
3
ordinary course of business (excluding any such sales by operations or divisions
discontinued or to be discontinued), and (ii) sales of other assets for
aggregate consideration of less than $100,000 with respect to any transaction or
series of related transactions.
"ASSIGNMENT AGREEMENT" means an Assignment and Assumption
Agreement substantially in the form of Exhibit E, with such amendments or
modifications as may be approved by Administrative Agent.
"AUTHORIZED OFFICER" means, as applied to any Person, any
individual holding the position of chairman of the board (if an officer), chief
executive officer, president or one of its executive vice presidents or vice
presidents (or the equivalent thereof), and such Person's chief financial
officer or treasurer.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy," as now and hereafter in effect, or any successor statute.
"BASE RATE" means, for any day, a rate per annum equal to the
greater of (i) the Prime Rate in effect on such day and (ii) the Federal Funds
Effective Rate in effect on such day plus -1/2 of 1%. Any change in the Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall
be effective on the effective day of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.
"BASE RATE LOAN" means a Term Loan bearing interest at a rate
determined by reference to the Base Rate.
"BENEFICIARY" means each Agent, Issuing Bank, Lender and
Lender Counterparty.
"BUSINESS DAY" means (i) any day excluding Saturday, Sunday
and any day which is a legal holiday under the laws of the State of New York or
is a day on which banking institutions located in such state are authorized or
required by law or other governmental action to close and (ii) with respect to
all notices, determinations, fundings and payments in connection with the
Adjusted Eurodollar Rate or any Eurodollar Rate Loans, the term "BUSINESS DAY"
shall mean any day which is a Business Day described in clause (i) and which is
also a day for trading by and between banks in Dollar deposits in the London
interbank market.
"CAPITAL LEASE" means, as applied to any Person, any lease of
any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"CAPITAL STOCK" means any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other than
a corporation), including, without limitation, partnership interests and
membership interests, and any and all warrants, rights or options to purchase or
other arrangements or rights to acquire any of the foregoing.
4
"CASH" means money, currency or a credit balance in any demand
or Deposit Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, a rating of at least
A-1 from S&P or at least P-1 from Xxxxx'x; (iii) commercial paper maturing no
more than one year from the date of creation thereof and having, at the time of
the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Xxxxx'x; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (v) shares of any money market mutual fund that (a)
has substantially all of its assets invested continuously in the types of
investments referred to in clauses (i) and (ii) above, (b) has net assets of not
less than $500,000,000, and (c) has the highest rating obtainable from either
S&P or Xxxxx'x.
"CERTIFICATE RE NON-BANK STATUS" means a certificate
substantially in the form of Exhibit F.
"CHANGE OF CONTROL" means, at any time, (i) any Person or
"group" (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) (a)
shall have acquired beneficial ownership of 15% or more on a fully diluted basis
of the voting and/or economic interest in the Capital Stock of Company or (b)
shall have obtained the power (whether or not exercised) to elect a majority of
the members of the board of directors (or similar governing body) of Company;
(iii) the majority of the seats (other than vacant seats) on the board of
directors (or similar governing body) of Company cease to be occupied by Persons
who either (a) were members of the board of directors of Company on the Closing
Date or (b) were nominated for election by the board of directors of Company, a
majority of whom were directors on the Closing Date or whose election or
nomination for election was previously approved by a majority of such directors;
or (iv) any "change of control" or similar event under the Convertible Notes
shall occur.
"CLOSING DATE" means the date on which the Term Loans are
made.
"CLOSING DATE CERTIFICATE" means a Closing Date Certificate
substantially in the form of Exhibit G.
5
"COLLATERAL" means, collectively, all of the real, personal
and mixed property (including Capital Stock) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for the Obligations.
"COLLATERAL AGENT" as defined in the preamble hereto.
"COLLATERAL DOCUMENTS" means the Pledge and Security Agreement
and all other instruments, documents and agreements delivered by any Credit
Party pursuant to this Agreement or any of the other Credit Documents in order
to grant to Collateral Agent, for the benefit of Lenders, a Lien on any real,
personal or mixed property of that Credit Party as security for the Obligations.
"COLLATERAL QUESTIONNAIRE" means a certificate in form
satisfactory to Collateral Agent that provides information with respect to the
personal or mixed property of each Credit Party.
"COMPANY" as defined in the preamble hereto.
"COMPLIANCE CERTIFICATE" means a Compliance Certificate
substantially in the form of Exhibit C.
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, an
amount determined for Company and its Subsidiaries on a consolidated basis equal
to (i) the sum, without duplication, of the amounts for such period of (a)
Consolidated Net Income, (b) Consolidated Interest Expense, (c) provisions for
taxes based on income, (d) total depreciation expense, (e) total amortization
expense, (f) other non-Cash items reducing Consolidated Net Income (excluding
any such non-Cash item to the extent that it represents an accrual or reserve
for potential Cash items in any future period or amortization of a prepaid Cash
item that was paid in a prior period), and (g) Transaction Costs, minus (ii)
other non-Cash items increasing Consolidated Net Income for such period
(excluding any such non-Cash item to the extent it represents the reversal of an
accrual or reserve for potential Cash item in any prior period).
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
aggregate of all expenditures of Company and its Subsidiaries during such period
determined on a consolidated basis that, in accordance with GAAP, are or should
be included in "purchase of property and equipment" or similar items reflected
in the consolidated statement of cash flows of Company and its Subsidiaries.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of Company and its Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of Company
and its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and net costs under Interest Rate
6
Agreements, but excluding, however, any amounts referred to in Section 2.8
payable on or before the Closing Date.
"CONSOLIDATED NET INCOME" means, for any period, (i) the net
income (or loss) of Company and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in conformity with
GAAP, minus (ii) (a) the income (or loss) of any Person (other than a Subsidiary
of Company) in which any other Person (other than Company or any of its
Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Company or any of its
Subsidiaries by such Person during such period, (b) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of Company or is merged
into or consolidated with Company or any of its Subsidiaries or that Person's
assets are acquired by Company or any of its Subsidiaries, (c) the income of any
Subsidiary of Company to the extent that the declaration or payment of dividends
or similar distributions by that Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Subsidiary, (d) any after-tax gains or losses attributable to Asset Sales
or returned surplus assets of any Pension Plan, and (e) (to the extent not
included in clauses (a) through (d) above) any net extraordinary gains or net
extraordinary losses.
"CONTRACTUAL OBLIGATION" means, as applied to any Person, any
provision of any Security issued by that Person or of any indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"CONTRIBUTING GUARANTORS" as defined in Section 7.2.
"CONVERSION/CONTINUATION DATE" means the effective date of a
continuation or conversion, as the case may be, as set forth in the applicable
Conversion/Continuation Notice.
"CONVERSION/CONTINUATION NOTICE" means a
Conversion/Continuation Notice substantially in the form of Exhibit A-2.
"CONVERTIBLE NOTES" means $90,000,000 principal amount of
2.25% convertible senior notes due May 30, 2008.
"COUNTERPART AGREEMENT" means a Counterpart Agreement
substantially in the form of Exhibit H delivered by a Credit Party pursuant to
Section 5.10.
"CREDIT DOCUMENT" means any of this Agreement, the Notes, if
any, the Collateral Documents and all other documents, instruments or agreements
executed and delivered by a Credit Party for the benefit of any Agent or any
Lender in connection herewith.
"CREDIT PARTY" means each Person (other than any Agent,
Issuing Bank or any Lender or any other representative thereof) from time to
time party to a Credit Document.
7
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement, each of which is for the purpose of
hedging the foreign currency risk associated with Company' and its Subsidiaries'
operations and not for speculative purposes.
"DEFAULT" means a condition or event that, after notice or
lapse of time or both, would constitute an Event of Default.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"DOMESTIC SUBSIDIARY" means any Subsidiary organized under the
laws of the United States of America, any State thereof or the District of
Columbia.
"ELIGIBLE ASSIGNEE" means (i) any Lender, any Affiliate of any
Lender and any Related Fund (any two or more Related Funds being treated as a
single Eligible Assignee for all purposes hereof), and (ii) any commercial bank,
insurance company, investment or mutual fund or other entity that is an
"accredited investor" (as defined in Regulation D under the Securities Act) and
which extends credit or buys loans as one of its businesses; provided, no
Affiliate of Company shall be an Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is or was sponsored, maintained or
contributed to by, or required to be contributed by, Company, any of its
Subsidiaries or any of their respective ERISA Affiliates.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice
of violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any Governmental Authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law; (ii) in connection with any
Hazardous Material or any actual or alleged Hazardous Materials Activity; or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future
foreign or domestic, federal or state (or any subdivision of either of them),
statutes, ordinances, orders, rules, regulations, judgments, Governmental
Authorizations, or any other requirements of Governmental Authorities relating
to (i) environmental matters, including those relating to any Hazardous
Materials Activity; (ii) the generation, use, storage, transportation or
disposal of Hazardous Materials; or (iii) occupational safety and health,
industrial hygiene, land use or the protection of human, plant or animal health
or welfare, in each case in any manner applicable to Company or any of its
Subsidiaries or any Facility.
8
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member; and (iii) any member of an affiliated service group within the meaning
of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member. Any former ERISA Affiliate of Company or any of
its Subsidiaries shall continue to be considered an ERISA Affiliate of Company
or any such Subsidiary within the meaning of this definition with respect to the
period such entity was an ERISA Affiliate of Company or such Subsidiary and with
respect to liabilities arising after such period for which Company or such
Subsidiary could be liable under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder with
respect to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with Section
412(d) of the Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan or the failure to make any required contribution to
a Multiemployer Plan; (iii) the provision by the administrator of any Pension
Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate
such plan in a distress termination described in Section 4041(c) of ERISA; (iv)
the withdrawal by Company, any of its Subsidiaries or any of their respective
ERISA Affiliates from any Pension Plan with two or more contributing sponsors or
the termination of any such Pension Plan resulting in liability to Company, any
of its Subsidiaries or any of their respective Affiliates pursuant to Section
4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any event or condition which
might constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (vi) the imposition of liability
on Company, any of its Subsidiaries or any of their respective ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal of Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefore, or the
receipt by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which could give rise to the imposition on
Company, any of its Subsidiaries or any of their respective ERISA Affiliates of
fines, penalties, taxes or related charges under
9
Chapter 43 of the Internal Revenue Code or under Section 409, Section 502(c),
(i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan;
(ix) the assertion of a material claim (other than routine claims for benefits)
against any Employee Benefit Plan other than a Multiemployer Plan or the assets
thereof, or against Company, any of its Subsidiaries or any of their respective
ERISA Affiliates in connection with any Employee Benefit Plan; (x) receipt from
the Internal Revenue Service of notice of the failure of any Pension Plan (or
any other Employee Benefit Plan intended to be qualified under Section 401(a) of
the Internal Revenue Code) to qualify under Section 401(a) of the Internal
Revenue Code, or the failure of any trust forming part of any Pension Plan to
qualify for exemption from taxation under Section 501(a) of the Internal Revenue
Code; or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n)
of the Internal Revenue Code or pursuant to ERISA with respect to any Pension
Plan.
"ESCROW ACCOUNT" as defined in Section 3.1(d).
"EURODOLLAR RATE LOAN" means a Term Loan bearing interest at a
rate determined by reference to the Adjusted Eurodollar Rate.
"EVENT OF DEFAULT" means each of the conditions or events set
forth in Section 8.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"FACILITY" means any real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or heretofore
owned, leased, operated or used by Company or any of its Subsidiaries or any of
their respective predecessors or Affiliates.
"FAIR SHARE CONTRIBUTION AMOUNT" as defined in Section 7.2.
"FAIR SHARE" as defined in Section 7.2.
"FEDERAL FUNDS EFFECTIVE RATE" means for any day, the rate per
annum (expressed, as a decimal, rounded upwards, if necessary, to the next
higher 1/100 of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers on such day, as published by the Federal Reserve Bank
of New York on the Business Day next succeeding such day; provided, (i) if such
day is not a Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Business Day as so published on
the next succeeding Business Day, and (ii) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Rate for such day shall be
the average rate charged to Administrative Agent, in its capacity as a Lender,
on such day on such transactions as determined by Administrative Agent.
"FINANCIAL OFFICER CERTIFICATION" means, with respect to the
financial statements for which such certification is required, the certification
of the chief financial officer of Company that such financial statements fairly
present, in all material respects, the financial
10
condition of Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end adjustments.
"FIRST PRIORITY" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that such Lien
is the only Lien to which such Collateral is subject, other than any Permitted
Lien.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Company and its
Subsidiaries ending on December 31 of each calendar year during any part of
which any amount is due under the Term Loan.
"FOREIGN SUBSIDIARY" means any Subsidiary that is not a
Domestic Subsidiary.
"FUNDING GUARANTORS" as defined in Section 7.2.
"GAAP" means, subject to the limitations on the application
thereof set forth in Xxxxxxx 0.0, Xxxxxx Xxxxxx generally accepted accounting
principles in effect as of the date of determination thereof.
"GOVERNMENTAL ACTS" means any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto government or
Governmental Authority.
"GOVERNMENTAL AUTHORITY" means any federal, state, municipal,
national or other government, governmental department, commission, board,
bureau, court, agency or instrumentality or political subdivision thereof or any
entity or officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with a state of the United States, the United
States, or a foreign entity or government.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
Governmental Authority.
"GRANTOR" as defined in the Pledge and Security Agreement.
"GUARANTEED OBLIGATIONS" as defined in Section 7.1.
"GUARANTOR" means each Guarantor Subsidiary.
"GUARANTOR SUBSIDIARY" means each Domestic Subsidiary of
Company.
"GUARANTY" means the guaranty of each Guarantor set forth in
Section 7.
11
"HAZARDOUS MATERIALS" means any chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
Governmental Authority or which may or could pose a hazard to the health and
safety of the owners, occupants or any Persons in the vicinity of any Facility
or to the indoor or outdoor environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current,
proposed or threatened activity, event or occurrence involving any Hazardous
Materials, including the use, manufacture, possession, storage, holding,
presence, existence, location, Release, threatened Release, discharge,
placement, generation, transportation, processing, construction, treatment,
abatement, removal, remediation, disposal, disposition or handling of any
Hazardous Materials, and any corrective action or response action with respect
to any of the foregoing.
"HEDGE AGREEMENT" means an Interest Rate Agreement or a
Currency Agreement entered into in the ordinary course of Company' or any of its
Subsidiaries' businesses.
"HIGHEST LAWFUL RATE" means the maximum lawful interest rate,
if any, that at any time or from time to time may be contracted for, charged, or
received under the laws applicable to any Lender which are presently in effect
or, to the extent allowed by law, under such applicable laws which may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"INCREASED-COST LENDERS" as defined in Section 2.18.
"INDEBTEDNESS", as applied to any Person, means, without
duplication, (i) all indebtedness for borrowed money; (ii) that portion of
obligations with respect to Capital Leases that is properly classified as a
liability on a balance sheet in conformity with GAAP; (iii) notes payable and
drafts accepted representing extensions of credit whether or not representing
obligations for borrowed money; (iv) any obligation owed for all or any part of
the deferred purchase price of property or services (excluding any such
obligations incurred under ERISA), which purchase price is (a) due more than six
months from the date of incurrence of the obligation in respect thereof or (b)
evidenced by a note or similar written instrument; (v) all indebtedness secured
by any Lien on any property or asset owned or held by that Person regardless of
whether the indebtedness secured thereby shall have been assumed by that Person
or is nonrecourse to the credit of that Person; (vi) the face amount of any
letter of credit issued for the account of that Person or as to which that
Person is otherwise liable for reimbursement of drawings; (vii) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another; (viii) any obligation of
such Person the primary purpose or intent of which is to provide assurance to an
obligee that the obligation of the obligor thereof will be paid or discharged,
or any agreement relating thereto will be complied with, or the holders thereof
will be protected (in whole or in part) against loss in respect thereof; (ix)
any liability of such Person for an obligation of another through any agreement
(contingent or otherwise) (a) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the
12
form of loans, advances, stock purchases, capital contributions or otherwise) or
(b) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described under
subclauses (a) or (b) of this clause (ix), the primary purpose or intent thereof
is as described in clause (viii) above; and (x) all obligations of such Person
in respect of any exchange traded or over the counter derivative transaction,
including, without limitation, any Interest Rate Agreement and Currency
Agreement, whether entered into for hedging or speculative purposes.
"INDEMNIFIED LIABILITIES" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, claims (including Environmental Claims), costs (including the costs
of any investigation, study, sampling, testing, abatement, cleanup, removal,
remediation or other response action necessary to remove, remediate, clean up or
xxxxx any Hazardous Materials Activity), expenses and disbursements of any kind
or nature whatsoever (including the reasonable fees and disbursements of counsel
for Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person, whether or not any such
Indemnitee shall be designated as a party or a potential party thereto, and any
fees or expenses incurred by Indemnitees in enforcing this indemnity), whether
direct, indirect or consequential and whether based on any federal, state or
foreign laws, statutes, rules or regulations (including securities and
commercial laws, statutes, rules or regulations and Environmental Laws), on
common law or equitable cause or on contract or otherwise, that may be imposed
on, incurred by, or asserted against any such Indemnitee, in any manner relating
to or arising out of (i) this Agreement or the other Credit Documents or the
transactions contemplated hereby or thereby (including the Lenders' agreement to
make Term Loans or the use or intended use of the proceeds thereof, or any
enforcement of any of the Credit Documents (including any sale of, collection
from, or other realization upon any of the Collateral or the enforcement of the
Guaranty)); (ii) the statements contained in the commitment letter delivered by
any Lender to Company with respect to the transactions contemplated by this
Agreement; or (iii) any Environmental Claim or any Hazardous Materials Activity
relating to or arising from, directly or indirectly, any past or present
activity, operation, land ownership, or practice of Company or any of its
Subsidiaries.
"INDEMNITEE" as defined in Section 10.3.
"INTEREST PAYMENT DATE" means with respect to (i) any Base
Rate Loan, each March 31, June 30, September 30 and December 31 of each year,
commencing on the first such date to occur after the Closing Date and the Term
Loan Maturity Date; and (ii) any Eurodollar Rate Loan, the last day of each
Interest Period applicable to such Loan; provided, in the case of each Interest
Period of longer than three months "Interest Payment Date" shall also include
each date that is three months, or an integral multiple thereof, after the
commencement of such Interest Period.
"INTEREST PERIOD" means, in connection with a Eurodollar Rate
Loan, an interest period of one-, two-, three- or six-months, as selected by
Company in the applicable Closing Date Certificate or Conversion/Continuation
Notice, (i) initially, commencing on the Closing
13
Date or Conversion/Continuation Date thereof, as the case may be; and (ii)
thereafter, commencing on the day on which the immediately preceding Interest
Period expires; provided, (a) if an Interest Period would otherwise expire on a
day that is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day unless no further Business Day occurs in such month, in
which case such Interest Period shall expire on the immediately preceding
Business Day; (b) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall, subject to
clauses (c) and (d), of this definition, end on the last Business Day of a
calendar month; and (c) no Interest Period shall extend beyond the Term Loan
Maturity Date.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate hedging agreement or other similar agreement or arrangement, each of which
is for the purpose of hedging the interest rate exposure associated with
Company' and its Subsidiaries' operations and not for speculative purposes.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the date that is two Business Days prior to the first day of
such Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter, and any
successor statute.
"INVESTMENT" means (i) any direct or indirect purchase or
other acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any of the Securities of any other Person (other than a Guarantor
Subsidiary); (ii) any direct or indirect redemption, retirement, purchase or
other acquisition for value, by any Subsidiary of Company from any Person (other
than Company or any Guarantor Subsidiary), of any Capital Stock of such Person;
and (iii) any direct or indirect loan, advance (other than advances to employees
for moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by
Company or any of its Subsidiaries to any other Person (other than Company or
any Guarantor Subsidiary), including all indebtedness and accounts receivable
from that other Person that are not current assets or did not arise from sales
to that other Person in the ordinary course of business. The amount of any
Investment shall be the original cost of such Investment plus the cost of all
additions thereto, without any adjustments for increases or decreases in value,
or write-ups, write-downs or write-offs with respect to such Investment.
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
provided, in no event shall any corporate Subsidiary of any Person be considered
to be a Joint Venture to which such Person is a party.
"LEAD ARRANGER" as defined in the preamble hereto.
14
"LENDER" means each financial institution listed on the
signature pages hereto as a Lender, and any other Person that becomes a party
hereto pursuant to an Assignment Agreement.
"LENDER COUNTERPARTY" means each Lender or any Affiliate of a
Lender counterparty to a Hedge Agreement (including any Person who is a Lender
(and any Affiliate thereof) as of the Closing Date but subsequently, whether
before or after entering into a Hedge Agreement, ceases to be a Lender)
including, without limitation, each such Affiliate that enters into a joinder
agreement with Collateral Agent.
"LIEN" means (i) any lien, mortgage, pledge, assignment,
security interest, charge or encumbrance of any kind (including any agreement to
give any of the foregoing, any conditional sale or other title retention
agreement, and any lease in the nature thereof) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing and
(ii) in the case of Securities, any purchase option, call or similar right of a
third party with respect to such Securities.
"LOAN" means a Term Loan made under this Agreement as either a
Base Rate Loan or a Eurodollar Rate Loan.
"MARGIN STOCK" as defined in Regulation U of the Board of
Governors of the Federal Reserve System as in effect from time to time.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
and/or material adverse developments, other than effects or developments
affecting the Company's industry generally, with respect to (i) the business
operations, properties, assets, condition (financial or otherwise) or prospects
of Company and its Subsidiaries taken as a whole; (ii) a significant portion of
the industry or business segment in which Company or its Subsidiaries operate or
rely upon if such effect or development is reasonably likely to have a material
adverse effect on Company and its Subsidiaries taken as a whole; (iii) the
ability of any Credit Party to fully and timely perform its Obligations; (iv)
the legality, validity, binding effect or enforceability against a Credit Party
of a Credit Document to which it is a party; or (v) the rights, remedies and
benefits available to, or conferred upon, any Agent and any Lender or any
Secured Party under any Credit Document.
"MATERIAL CONTRACT" means any contract or other arrangement to
which Company or any of its Subsidiaries is a party (other than the Credit
Documents) for which breach, nonperformance, cancellation or failure to renew
could reasonably be expected to have a Material Adverse Effect.
"MAXIMUM CASH BALANCE" has the meaning assigned to that term
in Section 6.8(a).
"MOODY'S" means Xxxxx'x Investor Services, Inc.
15
"MORTGAGE" means a Mortgage substantially in the form of
Exhibit J, as it may be amended, supplemented or otherwise modified from time to
time.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is
a "multiemployer plan" as defined in Section 3(37) of ERISA.
"NAIC" means The National Association of Insurance
Commissioners, and any successor thereto.
"NARRATIVE REPORT" means, with respect to the financial
statements for which such narrative report is required, a narrative report
describing the operations of Company and its Subsidiaries in the form, if any,
prepared for presentation to senior management thereof for the applicable month,
Fiscal Quarter or Fiscal Year.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset
Sale, an amount equal to: (i) Cash payments (including any Cash received by way
of deferred payment pursuant to, or by monetization of, a note receivable or
otherwise, but only as and when so received) received by Company or any of its
Subsidiaries from such Asset Sale, minus (ii) any bona fide direct costs
incurred in connection with such Asset Sale, including (a) income or gains taxes
payable by the seller as a result of any gain recognized in connection with such
Asset Sale, (b) payment of the outstanding principal amount of, premium or
penalty, if any, and interest on any Indebtedness (other than the Loans) that is
secured by a Lien on the stock or assets in question and that is required to be
repaid under the terms thereof as a result of such Asset Sale and (c) a
reasonable reserve for any indemnification payments (fixed or contingent)
attributable to seller's indemnities and representations and warranties to
purchaser in respect of such Asset Sale undertaken by Company or any of its
Subsidiaries in connection with such Asset Sale.
"NET INSURANCE/CONDEMNATION PROCEEDS" means an amount equal
to: (i) any Cash payments or proceeds received by Company or any of its
Subsidiaries (a) under any casualty insurance policy in respect of a covered
loss thereunder or (b) as a result of the taking of any assets of Company or any
of its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, minus (ii) (a) any
actual and reasonable costs incurred by Company or any of its Subsidiaries in
connection with the adjustment or settlement of any claims of Company or such
Subsidiary in respect thereof, and (b) any bona fide direct costs incurred in
connection with any sale of such assets as referred to in clause (i)(b) of this
definition, including income taxes payable as a result of any gain recognized in
connection therewith.
"NON-US LENDER" as defined in Section 2.16(c).
"NOTE" means a Term Loan Note.
"NOTICE" means any notice given by Company under this
Agreement including, without limitation, a Conversion/Continuation Notice.
16
"OBLIGATIONS" means all obligations of every nature of each
Credit Party from time to time owed to the Agents (including former Agents), the
Lenders or any of them and Lender Counterparties, under any Credit Document or
Hedge Agreement (including, without limitation, with respect to a Hedge
Agreement, obligations owed thereunder to any person who was a Lender or an
Affiliate of a Lender at the time such Hedge Agreement was entered into),
whether for principal, interest (including interest which, but for the filing of
a petition in bankruptcy with respect to such Credit Party, would have accrued
on any Obligation, whether or not a claim is allowed against such Credit Party
for such interest in the related bankruptcy proceeding), payments for early
termination of Hedge Agreements, fees, expenses, indemnification or otherwise.
"OBLIGEE GUARANTOR" as defined in Section 7.7.
"ORGANIZATIONAL DOCUMENTS" means (i) with respect to any
corporation, its certificate or articles of incorporation or organization, as
amended, and its by-laws, as amended, (ii) with respect to any limited
partnership, its certificate of limited partnership, as amended, and its
partnership agreement, as amended, (iii) with respect to any general
partnership, its partnership agreement, as amended, and (iv) with respect to any
limited liability company, its articles of organization, as amended, and its
operating agreement, as amended. In the event any term or condition of this
Agreement or any other Credit Document requires any Organizational Document to
be certified by a secretary of state or similar governmental official, the
reference to any such "Organizational Document" shall only be to a document of a
type customarily certified by such governmental official.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"PERMITTED LIENS" means each of the Liens permitted pursuant
to Section 6.2.
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Governmental Authorities.
"PLEDGE AND SECURITY AGREEMENT" means the Pledge and Security
Agreement to be executed by Company and each Guarantor substantially in the form
of Exhibit I, as it may be amended, supplemented or otherwise modified from time
to time.
"PRIME RATE" means the rate of interest quoted in The Wall
Street Journal, Money Rates Section as the Prime Rate (currently defined as the
base rate on corporate loans posted by at least 75% of the nation's thirty (30)
largest banks), as in effect from time to time.
17
The Prime Rate is a reference rate and does not necessarily represent the lowest
or best rate actually charged to any customer. Any Agent or any other Lender may
make commercial loans or other loans at rates of interest at, above or below the
Prime Rate.
"PRINCIPAL OFFICE" means, for the Administrative Agent's
"Principal Office" as set forth on Appendix B, or such other office as such
Person may from time to time designate in writing to Company, Administrative
Agent and each Lender.
"PROJECTIONS" as defined in Section 4.8.
"PRO RATA SHARE" means the percentage obtained by dividing (a)
the Term Loan Exposure of that Lender by (b) the aggregate Term Loan Exposure of
all Lenders.
"REAL ESTATE ASSET" means, at any time of determination, any
interest (fee, leasehold or otherwise) then owned by any Credit Party in any
real property.
"REGISTER" as defined in Section 2.4(b).
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"RELATED FUND" means, with respect to any Lender that is an
investment fund, any other investment fund that invests in commercial loans and
that is managed or advised by the same investment advisor as such Lender or by
an Affiliate of such investment advisor.
"RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of any Hazardous Material into the indoor or
outdoor environment (including the abandonment or disposal of any barrels,
containers or other closed receptacles containing any Hazardous Material),
including the movement of any Hazardous Material through the air, soil, surface
water or groundwater.
"REPLACEMENT LENDER" as defined in Section 2.18.
"REQUISITE LENDERS" means one or more Lenders having or
holding Term Loan Exposure and representing more than 50% of the sum of the
aggregate Term Loan Exposure of all Lenders.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company or Company now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock to the holders of that class; (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of stock
of Company or Company now or hereafter outstanding; (iii) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of
18
stock of Company or Company now or hereafter outstanding; and (iv) any payment
or prepayment of principal of, premium, if any, or interest on, or redemption,
purchase, retirement, defeasance (including in-substance or legal defeasance),
sinking fund or similar payment with respect to the Convertible Notes.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw Hill Corporation.
"SECURED PARTIES" has the meaning assigned to that term in the
Pledge and Security Agreement.
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SOLVENT" means, with respect to any Credit Party, that as of
the date of determination, both (i) (a) the sum of such Credit Party's debt
(including contingent liabilities) does not exceed the present fair saleable
value of such Credit Party's present assets; (b) such Credit Party's capital is
not unreasonably small in relation to its business as contemplated on the
Closing Date and reflected in the Projections or with respect to any transaction
contemplated or undertaken after the Closing Date; and (c) such Person has not
incurred and does not intend to incur, or believe (nor should it reasonably
believe) that it will incur, debts beyond its ability to pay such debts as they
become due (whether at maturity or otherwise); and (ii) such Person is "solvent"
within the meaning given that term and similar terms under applicable laws
relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability (irrespective of whether such contingent liabilities
meet the criteria for accrual under Statement of Financial Accounting Standard
No.5).
"SUBJECT TRANSACTION" as defined in Section 6.8(d).
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, limited liability company, association, joint venture
or other business entity of which more than 50% of the total voting power of
shares of stock or other ownership interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Person or Persons
(whether directors, managers, trustees or other Persons performing similar
functions) having the
19
power to direct or cause the direction of the management and policies thereof is
at the time owned or controlled, directly or indirectly, by that Person or one
or more of the other Subsidiaries of that Person or a combination thereof;
provided, in determining the percentage of ownership interests of any Person
controlled by another Person, no ownership interest in the nature of a
"qualifying share" of the former Person shall be deemed to be outstanding.
"SYNDICATION AGENT" as defined in the preamble hereto.
"TAX" means any present or future tax, levy, impost, duty,
assessment, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied, collected,
withheld or assessed; provided, "Tax on the overall net income" of a Person
shall be construed as a reference to a tax imposed by the jurisdiction in which
that Person is organized or in which that Person's applicable principal office
(and/or, in the case of a Lender, its lending office) is located or in which
that Person (and/or, in the case of a Lender, its lending office) is deemed to
be doing business on all or part of the net income, profits or gains (whether
worldwide, or only insofar as such income, profits or gains are considered to
arise in or to relate to a particular jurisdiction, or otherwise) of that Person
(and/or, in the case of a Lender, its applicable lending office).
"TERM LOAN" means a Term Loan made by a Lender to Company
pursuant to Section 2.1(a).
"TERM LOAN COMMITMENT" means the commitment of a Lender to
make or otherwise fund a Term Loan and " TERM LOAN COMMITMENTS" means such
commitments of all Lenders in the aggregate. The amount of each Lender's Term
Loan Commitment, if any, is set forth on Appendix A or in the applicable
Assignment Agreement, subject to any adjustment or reduction pursuant to the
terms and conditions hereof. The aggregate amount of the Term Loan Commitments
as of the Closing Date is $30,000,000.
"TERM LOAN EXPOSURE" means, with respect to any Lender, as of
any date of determination, the outstanding principal amount of the Term Loans of
such Lender; provided, at any time prior to the making of the Term Loans, the
Term Loan Exposure of any Lender shall be equal to such Lender's Term Loan
Commitment.
"TERM LOAN MATURITY DATE" means the earlier of (i) 364 days
following the Closing Date, and (ii) the date that all Term Loans shall become
due and payable in full hereunder, whether by acceleration or otherwise.
"TERM LOAN NOTE" means a promissory note in the form of
Exhibit B, as it may be amended, supplemented or otherwise modified from time to
time.
"TERMINATED LENDER" as defined in Section 2.18.
20
"TRANSACTION COSTS" means the fees, costs and expenses payable
by Company or any of its Subsidiaries on or before the Closing Date in
connection with the transactions contemplated by the Credit Documents and the
Acquisition Agreement.
"TYPE OF LOAN" means, a Base Rate Loan or a Eurodollar Rate
Loan.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"UNADJUSTED EURODOLLAR RATE COMPONENT" means that component of
the interest costs to Company in respect of a Eurodollar Rate Loan that is based
upon the rate obtained pursuant to clause (i) of the definition of Adjusted
Eurodollar Rate.
1.2. ACCOUNTING TERMS. Except as otherwise expressly provided herein,
all accounting terms not otherwise defined herein shall have the meanings
assigned to them in conformity with GAAP. Financial statements and other
information required to be delivered by Company to Lenders pursuant to Section
5.1(a), 5.1(b) and 5.1(c) shall be prepared in accordance with GAAP as in effect
at the time of such preparation (and delivered together with the reconciliation
statements provided for in Section 5.1(e), if applicable). Subject to the
foregoing, calculations in connection with the definitions, covenants and other
provisions hereof shall utilize accounting principles and policies in conformity
with GAAP.
1.3. INTERPRETATION, ETC. Any of the terms defined herein may, unless
the context otherwise requires, be used in the singular or the plural, depending
on the reference. References herein to any Section, Appendix, Schedule or
Exhibit shall be to a Section, an Appendix, a Schedule or an Exhibit, as the
case may be, hereof unless otherwise specifically provided. The use herein of
the word "include" or "including", when following any general statement, term or
matter, shall not be construed to limit such statement, term or matter to the
specific items or matters set forth immediately following such word or to
similar items or matters, whether or not no limiting language (such as "without
limitation" or "but not limited to" or words of similar import) is used with
reference thereto, but rather shall be deemed to refer to all other items or
matters that fall within the broadest possible scope of such general statement,
term or matter.
SECTION 2. LOANS AND LETTERS OF CREDIT
2.1. TERM LOANS.
(a) Term Loan Commitments. Subject to the terms and conditions
hereof, each Lender severally agrees to make, on the Closing Date, a Term Loan
to Company in an amount equal to such Lender's Term Loan Commitment. Company may
make only one borrowing under the Term Loan Commitment which shall be on the
Closing Date. Any amount borrowed under this Section 2.1(a) and subsequently
repaid or prepaid may not be reborrowed. Subject to Sections 2.10 and 2.11, all
amounts owed hereunder with respect to the Term Loans shall be paid in full no
later than the Term Loan Maturity Date. Each Lender's Term Loan Commitment shall
21
terminate immediately and without further action on the Closing Date after
giving effect to the funding of such Lender's Term Loan Commitment on such date.
(b) Borrowing Mechanics for Term Loans.
(i) Company shall deliver to Administrative Agent a
fully executed Closing Date Certificate no later than two Business Days
prior to the Closing Date; provided that if the borrowings of the Term
Loans on the Closing Date are Base Rate Loans, Company shall deliver a
fully executed Closing Date Certificate no later than one Business Day
prior to the Closing Date. Promptly upon receipt by Administrative
Agent of such Certificate, Administrative Agent shall notify each
Lender of the proposed borrowing.
(ii) Each Lender shall make its Term Loan available
to Administrative Agent not later than 12:00 p.m. (New York City time)
on the Closing Date, by wire transfer of same day funds in Dollars, at
Administrative Agent's Principal Office. Upon satisfaction or waiver of
the conditions precedent specified herein, Administrative Agent shall
make the proceeds of the Term Loans available to Company on the Closing
Date by causing an amount of same day funds in Dollars equal to the
proceeds of all such Loans received by Administrative Agent from
Lenders to be credited to the account of Company at Administrative
Agent's Principal Office or to such other account as may be designated
in writing to Administrative Agent by Company.
2.2. PRO RATA SHARES. All Loans shall be made, and all participations
purchased, by Lenders simultaneously and proportionately to their respective Pro
Rata Shares, it being understood that no Lender shall be responsible for any
default by any other Lender in such other Lender's obligation to make a Loan
requested hereunder or purchase a participation required hereby nor shall any
Term Loan Commitment of any Lender be increased or decreased as a result of a
default by any other Lender in such other Lender's obligation to make a Loan
requested hereunder or purchase a participation required hereby.
2.3. USE OF PROCEEDS. The proceeds of the Term Loans made on the
Closing Date shall be funded in the Escrow Account. Amounts withdrawn by Company
from the Escrow Account shall be applied by Company to fund a portion of the
amount necessary to finance the Acquisition. No portion of the proceeds of any
Loans shall be used in any manner that causes or might cause such Loan or the
application of such proceeds to violate Regulation T, Regulation U or Regulation
X of the Board of Governors of the Federal Reserve System or any other
regulation thereof or to violate the Exchange Act.
2.4. EVIDENCE OF DEBT; REGISTER; LENDERS' BOOKS AND RECORDS; NOTES.
(a) Lenders' Evidence of Debt. Each Lender shall maintain on
its internal records an account or accounts evidencing the Obligations of
Company to such Lender, including the amounts of the Loans made by it and each
repayment and prepayment in respect
22
thereof. Any such recordation shall be conclusive and binding on Company, absent
manifest error; provided, that the failure to make any such recordation, or any
error in such recordation, shall not affect Company's Obligations in respect of
any applicable Loans; and provided further, in the event of any inconsistency
between the Register and any Lender's records, the recordations in the Register
shall govern.
(b) Register. Administrative Agent shall maintain at its
Principal Office a register for the recordation of the names and addresses of
Lenders and the Loans of each Lender from time to time (the "REGISTER"). The
Register shall be available for inspection by Company or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
Administrative Agent shall record in the Register the Loans, and each repayment
or prepayment in respect of the principal amount of the Loans, and any such
recordation shall be conclusive and binding on Company and each Lender, absent
manifest error; provided, failure to make any such recordation, or any error in
such recordation, shall not affect Company's Obligations in respect of any Loan.
Company hereby designates GSCP to serve as Company's agent solely for purposes
of maintaining the Register as provided in this Section 2.4, and Company hereby
agrees that, to the extent GSCP serves in such capacity, GSCP and its officers,
directors, employees, agents and affiliates shall constitute "Indemnitees."
(c) Notes. If so requested by any Lender by written notice to
Company (with a copy to Administrative Agent) at least two Business Days prior
to the Closing Date, or at any time thereafter, Company shall execute and
deliver to such Lender (and/or, if applicable and if so specified in such
notice, to any Person who is an assignee of such Lender pursuant to Section
10.6) on the Closing Date (or, if such notice is delivered after the Closing
Date, promptly after Company's receipt of such notice) a Note or Notes to
evidence such Lender's Term Loan.
2.5. INTEREST ON LOANS.
(a) Except as otherwise set forth herein, the Loans shall bear
interest on the unpaid principal amount thereof from the date made through
repayment (whether by acceleration or otherwise) thereof as follows:
(i) if a Base Rate Loan, at the Base Rate plus the
Applicable Margin; or
(ii) if a Eurodollar Rate Loan, at the Adjusted
Eurodollar Rate plus the Applicable Margin.
(b) The basis for determining the rate of interest with
respect to any Loan, and the Interest Period with respect to any Eurodollar Rate
Loan, shall be selected by Company and notified to Administrative Agent and
Lenders pursuant to the Closing Date Certificate or in the applicable
Conversion/Continuation Notice, as the case may be. If on any day a Loan is
outstanding with respect to which a Conversion/Continuation Notice has not been
delivered to
23
Administrative Agent in accordance with the terms hereof specifying the
applicable basis for determining the rate of interest, then for that day such
Loan shall be a Base Rate Loan.
(c) In connection with Eurodollar Rate Loans there shall be no
more than three (3) Interest Periods outstanding at any time. In the event
Company fails to specify between a Base Rate Loan or a Eurodollar Rate Loan in
the applicable Conversion/Continuation Notice, such Loan (if outstanding as a
Eurodollar Rate Loan) will be automatically converted into a Base Rate Loan on
the last day of the then-current Interest Period for such Loan (or if
outstanding as a Base Rate Loan will remain as, or (if not then outstanding)
will be made as, a Base Rate Loan). In the event Company fails to specify an
Interest Period for any Eurodollar Rate Loan in the applicable
Conversion/Continuation Notice, Company shall be deemed to have selected an
Interest Period of one month. As soon as practicable after 10:00 a.m. (New York
City time) on each Interest Rate Determination Date, Administrative Agent shall
determine, in accordance with the terms of this Agreement, (which determination
shall, absent manifest error, be final, conclusive and binding upon all parties)
the interest rate that shall apply to the Eurodollar Rate Loans for which an
interest rate is then being determined for the applicable Interest Period and
shall promptly give notice thereof (in writing or by telephone confirmed in
writing) to Company and each Lender.
(d) Interest payable pursuant to Section 2.5(a) shall be
computed (i) in the case of Base Rate Loans on the basis of a 365-day or 366-day
year, as the case may be, and (ii) in the case of Eurodollar Rate Loans, on the
basis of a 360-day year, in each case for the actual number of days elapsed in
the period during which it accrues. In computing interest on any Loan, the date
of the making of such Loan or the first day of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted from a Eurodollar
Rate Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be included, and the date of payment of such
Loan or the expiration date of an Interest Period applicable to such Loan or,
with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the
date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the
case may be, shall be excluded; provided, if a Loan is repaid on the same day on
which it is made, one day's interest shall be paid on that Loan.
(e) Except as otherwise set forth herein, interest on each
Loan shall be payable in arrears on and to (i) each Interest Payment Date
applicable to that Loan; (ii) upon any prepayment of that Loan, whether
voluntary or mandatory, to the extent accrued on the amount being prepaid; and
(iii) at maturity, including final maturity; provided, however, with respect to
any voluntary prepayment of a Base Rate Loan, accrued interest shall instead be
payable on the applicable Interest Payment Date.
2.6. CONVERSION/CONTINUATION.
(a) Subject to Section 2.14 and so long as no Default or Event
of Default shall have occurred and then be continuing, Company shall have the
option:
24
(i) to convert at any time all or any part of any
Term Loan equal to $1,000,000 and integral multiples of $1,000,000 in
excess of that amount from one Type of Loan to another Type of Loan;
provided, a Eurodollar Rate Loan may only be converted on the
expiration of the Interest Period applicable to such Eurodollar Rate
Loan unless Company shall pay all amounts due under Section 2.14 in
connection with any such conversion; or
(ii) upon the expiration of any Interest Period
applicable to any Eurodollar Rate Loan, to continue all or any portion
of such Loan equal to $1,000,000 and integral multiples of $1,000,000
in excess of that amount as a Eurodollar Rate Loan.
(b) Company shall deliver a Conversion/Continuation Notice to
Administrative Agent no later than 10:00 a.m. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). Except as otherwise provided herein, a
Conversion/Continuation Notice for conversion to, or continuation of, any
Eurodollar Rate Loans (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Company shall be bound to effect a conversion or continuation in accordance
therewith.
2.7. DEFAULT INTEREST. Upon the occurrence and during the continuance
of an Event of Default, the principal amount of all Loans outstanding and, to
the extent permitted by applicable law, any interest payments on the Loans or
any fees or other amounts owed hereunder, shall thereafter bear interest
(including post-petition interest in any proceeding under the Bankruptcy Code or
other applicable bankruptcy laws) payable on demand at a rate that is 2% per
annum in excess of the interest rate otherwise payable hereunder with respect to
the applicable Loans (or, in the case of any such fees and other amounts, at a
rate which is 2% per annum in excess of the interest rate otherwise payable
hereunder for Base Rate Loans); provided, in the case of Eurodollar Rate Loans,
upon the expiration of the Interest Period in effect at the time any such
increase in interest rate is effective such Eurodollar Rate Loans shall
thereupon become Base Rate Loans and shall thereafter bear interest payable upon
demand at a rate which is 2% per annum in excess of the interest rate otherwise
payable hereunder for Base Rate Loans. Payment or acceptance of the increased
rates of interest provided for in this Section 2.7 is not a permitted
alternative to timely payment and shall not constitute a waiver of any Event of
Default or otherwise prejudice or limit any rights or remedies of Administrative
Agent or any Lender.
2.8. FEES. Company agrees to pay to Agents such fees in the amounts and
at the times separately agreed upon.
2.9. REPAYMENT OF TERM LOANS. Subject to the provisions of Section 2.10
and 2.11, all outstanding principal amounts of the Term Loans shall be repaid in
full on the Term Loan Maturity Date.
25
2.10. VOLUNTARY PREPAYMENTS. Any time and from time to time:
(1) with respect to Base Rate Loans, Company
may prepay any such Loans on any Business Day in whole or in
part, in an aggregate minimum amount of $1,000,000 and
integral multiples of $1,000,000 in excess of that amount; and
(2) with respect to Eurodollar Rate Loans,
Company may prepay any such Loans on any Business Day in whole
or in part in an aggregate minimum amount of $1,000,000 and
integral multiples of $1,000,000 in excess of that amount.
(ii) All such prepayments shall be made:
(1) upon not less than one Business Day's
prior written or telephonic notice in the case of Base Rate
Loans; and
(2) upon not less than three Business Days'
prior written or telephonic notice in the case of Eurodollar
Rate Loans.
in each case given to Administrative Agent by 12:00 p.m. (New York City time) on
the date required and, if given by telephone, promptly confirmed in writing to
Administrative Agent (and Administrative Agent will promptly transmit such
telephonic or original notice for Term Loans by telefacsimile or telephone to
each Lender). Upon the giving of any such notice, the principal amount of the
Loans specified in such notice shall become due and payable on the prepayment
date specified therein.
2.11. MANDATORY PREPAYMENTS.
(a) Asset Sales. No later than the first Business Day
following the date of receipt by Company or any of its Subsidiaries of any Net
Asset Sale Proceeds, Company shall prepay the Term Loans to the extent then
outstanding in an aggregate amount equal to such Net Asset Sale Proceeds.
(b) Insurance/Condemnation Proceeds. No later than the first
Business Day following the date of receipt by Company or any of its
Subsidiaries, or Administrative Agent as loss payee, of any Net
Insurance/Condemnation Proceeds, Company shall prepay the Term Loans to the
extent then outstanding in an aggregate amount equal to such Net
Insurance/Condemnation Proceeds; provided, (i) so long as no Default or Event of
Default shall have occurred and be continuing, and (ii) to the extent that
aggregate Net Insurance/Condemnation Proceeds from the Closing Date through the
applicable date of determination do not exceed $1,000,000, Company shall have
the option, directly or through one
26
or more of its Subsidiaries to invest such Net Insurance/Condemnation Proceeds
within ninety days of receipt thereof in long term productive assets of the
general type used in the business of Company and its Subsidiaries, which
investment may include the repair, restoration or replacement of the applicable
assets thereof.
(c) Issuance of Equity Securities. On the date of receipt by
Company of any Cash proceeds from a capital contribution to, or the issuance of
any Capital Stock of, Company or any of its Subsidiaries (other than pursuant to
any employee stock or stock option compensation plan), Company shall prepay the
Term Loans to the extent then outstanding in an aggregate amount equal to 100%
of such proceeds, net of underwriting discounts and commissions and other
reasonable costs and expenses associated therewith, including reasonable legal
fees and expense.
(d) Issuance of Debt. On the date of receipt by Company or any
of its Subsidiaries of any Cash proceeds from the incurrence of any Indebtedness
of Company or any of its Subsidiaries (other than with respect to any
Indebtedness permitted to be incurred pursuant to Section 6.1), Company shall
prepay the Term Loans to the extent then outstanding in an aggregate amount
equal to 100% of such proceeds, net of underwriting discounts and commissions
and other reasonable costs and expenses associated therewith, including
reasonable legal fees and expenses.
(e) Maximum Cash. On any date where the aggregate amount of
Cash and Cash Equivalents of Company and its Subsidiaries exceeds the Maximum
Cash Balance, Company shall immediately prepay the Term Loans to the extent then
outstanding in an aggregate amount equal to 100% of the amount that such Cash
and Cash Equivalents exceeds the Maximum Cash Balance.
(f) Escrow. On the date of receipt by Company of any amounts
released or refunded from the Escrow Account that are not utilized to finance
the Acquisition, Company shall prepay the Term Loans in an aggregate amount
equal to 100% of such amounts.
(g) Prepayment Certificate. Concurrently with any prepayment
of the Loans pursuant to Sections 2.14(a) through 2.14(d), Company shall deliver
to Administrative Agent a certificate of an Authorized Officer demonstrating the
calculation of the amount of the applicable net proceeds. In the event that
Company shall subsequently determine that the actual amount received exceeded
the amount set forth in such certificate, Company shall promptly make an
additional prepayment of the Loans in an amount equal to such excess, and
Company shall concurrently therewith deliver to Administrative Agent a
certificate of an Authorized Officer demonstrating the derivation of such
excess.
2.12. GENERAL PROVISIONS REGARDING PAYMENTS.
(a) All payments by Company of principal, interest, fees and
other Obligations shall be made in Dollars in same day funds, without defense,
setoff or counterclaim, free of any
27
restriction or condition, and delivered to Administrative Agent not later than
12:00 p.m. (New York City time) on the date due at Administrative Agent's
Principal Office for the account of Lenders; funds received by Administrative
Agent after that time on such due date shall be deemed to have been paid by
Company on the next succeeding Business Day.
(b) All payments in respect of the principal amount of any
Loan shall be accompanied by payment of accrued interest on the principal amount
being repaid or prepaid.
(c) Administrative Agent shall promptly distribute to each
Lender at such address as such Lender shall indicate in writing, such Lender's
applicable Pro Rata Share of all payments and prepayments of principal and
interest due hereunder, together with all other amounts due thereto, including,
without limitation, all fees payable with respect thereto, to the extent
received by Administrative Agent.
(d) Notwithstanding the foregoing provisions hereof, if any
Conversion/Continuation Notice is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
(e) Subject to the provisos set forth in the definition of
"Interest Period", whenever any payment to be made hereunder shall be stated to
be due on a day that is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder.
(f) Company hereby authorizes Administrative Agent to charge
Company's accounts with Administrative Agent in order to cause timely payment to
be made to Administrative Agent of all principal, interest, fees and expenses
due hereunder (subject to sufficient funds being available in its accounts for
that purpose).
(g) Administrative Agent shall deem any payment by or on
behalf of Company hereunder that is not made in same day funds prior to 12:00
p.m. (New York City time) to be a non-conforming payment. Any such payment shall
not be deemed to have been received by Administrative Agent until the later of
(i) the time such funds become available funds, and (ii) the applicable next
Business Day. Administrative Agent shall give prompt telephonic notice to
Company and each applicable Lender (confirmed in writing) if any payment is
non-conforming. Any non-conforming payment may constitute or become a Default or
Event of Default in accordance with the terms of Section 8.1(a). Interest shall
continue to accrue on any principal as to which a non-conforming payment is made
until such funds become available funds (but in no event less than the period
from the date of such payment to the next succeeding applicable Business Day) at
the rate determined pursuant to Section 2.7 from the date such amount was due
and payable until the date such amount is paid in full.
(h) If an Event of Default shall have occurred and not
otherwise been waived, and the maturity of the Obligations shall have been
accelerated pursuant to Section 8.1, all
28
payments or proceeds received by Agents hereunder in respect of any of the
Obligations, shall be applied in accordance with the application arrangements
described in Section 7.2 of the Pledge and Security Agreement.
2.13. RATABLE SHARING. Lenders hereby agree among themselves that,
except as otherwise provided in the Collateral Documents with respect to amounts
realized from the exercise of rights with respect to Liens on the Collateral, if
any of them shall, whether by voluntary payment (other than a voluntary
prepayment of Loans made and applied in accordance with the terms hereof),
through the exercise of any right of set-off or banker's lien, by counterclaim
or cross action or by the enforcement of any right under the Credit Documents or
otherwise, or as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code, receive payment or reduction of a proportion of the
aggregate amount of principal, interest, amounts payable in respect of fees and
other amounts then due and owing to such Lender hereunder or under the other
Credit Documents (collectively, the "AGGREGATE AMOUNTS DUE" to such Lender)
which is greater than the proportion received by any other Lender in respect of
the Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (a) notify Administrative Agent and each
other Lender of the receipt of such payment and (b) apply a portion of such
payment to purchase participations (which it shall be deemed to have purchased
from each seller of a participation simultaneously upon the receipt by such
seller of its portion of such payment) in the Aggregate Amounts Due to the other
Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by
all Lenders in proportion to the Aggregate Amounts Due to them; provided, if all
or part of such proportionately greater payment received by such purchasing
Lender is thereafter recovered from such Lender upon the bankruptcy or
reorganization of Company or otherwise, those purchases shall be rescinded and
the purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without interest.
Company expressly consents to the foregoing arrangement and agrees that any
holder of a participation so purchased may exercise any and all rights of
banker's lien, set-off or counterclaim with respect to any and all monies owing
by Company to that holder with respect thereto as fully as if that holder were
owed the amount of the participation held by that holder.
2.14. MAKING OR MAINTAINING EURODOLLAR RATE LOANS.
(a) Inability to Determine Applicable Interest Rate. In the
event that Administrative Agent shall have determined (which determination shall
be final and conclusive and binding upon all parties hereto), on any Interest
Rate Determination Date with respect to any Eurodollar Rate Loans, that by
reason of circumstances affecting the London interbank market adequate and fair
means do not exist for ascertaining the interest rate applicable to such Loans
on the basis provided for in the definition of Adjusted Eurodollar Rate,
Administrative Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to Company and each Lender of such
determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Administrative Agent notifies Company
and Lenders that the circumstances giving rise to such notice no longer exist,
and (ii) any Conver-
29
sion/Continuation Notice given by Company with respect to the Loans in respect
of which such determination was made shall be deemed to be rescinded by Company.
(b) Illegality or Impracticability of Eurodollar Rate Loans.
In the event that on any date any Lender shall have determined (which
determination shall be final and conclusive and binding upon all parties hereto
but shall be made only after consultation with Company and Administrative Agent)
that the making, maintaining or continuation of its Eurodollar Rate Loans (i)
has become unlawful as a result of compliance by such Lender in good faith with
any law, treaty, governmental rule, regulation, guideline or order (or would
conflict with any such treaty, governmental rule, regulation, guideline or order
not having the force of law even though the failure to comply therewith would
not be unlawful), or (ii) has become impracticable, as a result of contingencies
occurring after the date hereof which materially and adversely affect the London
interbank market or the position of such Lender in that market, then, and in any
such event, such Lender shall be an "AFFECTED LENDER" and it shall on that day
give notice (by telefacsimile or by telephone confirmed in writing) to Company
and Administrative Agent of such determination (which notice Administrative
Agent shall promptly transmit to each other Lender). Thereafter (1) the
obligation of the Affected Lender to make Loans as, or to convert Loans to,
Eurodollar Rate Loans shall be suspended until such notice shall be withdrawn by
the Affected Lender, (2) to the extent such determination by the Affected Lender
relates to a Eurodollar Rate Loan then being requested by Company pursuant to a
Conversion/Continuation Notice, the Affected Lender shall make such Loan as (or
continue such Loan as or convert such Loan to, as the case may be) a Base Rate
Loan, (3) the Affected Lender's obligation to maintain its outstanding
Eurodollar Rate Loans (the "AFFECTED LOANS") shall be terminated at the earlier
to occur of the expiration of the Interest Period then in effect with respect to
the Affected Loans or when required by law, and (4) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such termination.
Notwithstanding the foregoing, to the extent a determination by an Affected
Lender as described above relates to a Eurodollar Rate Loan then being requested
by Company pursuant to a Conversion/Continuation Notice, Company shall have the
option, subject to the provisions of Section 2.14(c), to rescind such
Conversion/Continuation Notice as to all Lenders by giving notice (by
telefacsimile or by telephone confirmed in writing) to Administrative Agent of
such rescission on the date on which the Affected Lender gives notice of its
determination as described above (which notice of rescission Administrative
Agent shall promptly transmit to each other Lender). Except as provided in the
immediately preceding sentence, nothing in this Section 2.14(b) shall affect the
obligation of any Lender other than an Affected Lender to make or maintain Loans
as, or to convert Loans to, Eurodollar Rate Loans in accordance with the terms
hereof.
(c) Compensation for Breakage or Non-Commencement of Interest
Periods. Company shall compensate each Lender, upon written request by such
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including any interest paid
by such Lender to Lenders of funds borrowed by it to make or carry its
Eurodollar Rate Loans and any loss, expense or liability sustained by such
Lender in connection with the liquidation or re-employment of such funds but
excluding loss of anticipated profits) which such Lender may sustain: (i) if for
any reason a conversion to or continuation of
30
any Eurodollar Rate Loan does not occur on a date specified therefor in a
Conversion/Continuation Notice or a telephonic request for conversion or
continuation; (ii) if any prepayment or other principal payment of, or any
conversion of, any of its Eurodollar Rate Loans occurs on a date prior to the
last day of an Interest Period applicable to that Loan; or (iii) if any
prepayment of any of its Eurodollar Rate Loans is not made on any date specified
in a notice of prepayment given by Company.
(d) Booking of Eurodollar Rate Loans. Any Lender may make,
carry or transfer Eurodollar Rate Loans at, to, or for the account of any of its
branch offices or the office of an Affiliate of such Lender.
(e) Assumptions Concerning Funding of Eurodollar Rate Loans.
Calculation of all amounts payable to a Lender under this Section 2.14 and under
Section 2.15 shall be made as though such Lender had actually funded each of its
relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of such
Lender to a domestic office of such Lender in the United States of America;
provided, however, each Lender may fund each of its Eurodollar Rate Loans in any
manner it sees fit and the foregoing assumptions shall be utilized only for the
purposes of calculating amounts payable under this Section 2.14 and under
Section 2.15.
2.15. INCREASED COSTS; CAPITAL ADEQUACY.
(a) Compensation For Increased Costs and Taxes. Subject to the
provisions of Section 2.16 (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender (which term shall include
Issuing Bank for purposes of this Section 2.15(a)) shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law): (i)
subjects such Lender (or its applicable lending office) to any additional Tax
(other than any Tax on the overall net income of such Lender) with respect to
this Agreement or any of the other Credit Documents or any of its obligations
hereunder or thereunder or any payments to such Lender (or its applicable
lending office) of principal, interest, fees or any other amount payable
hereunder; (ii) imposes, modifies or holds applicable any reserve (including any
marginal, emergency, supplemental, special or other reserve), special deposit,
compulsory loan, FDIC insurance or similar requirement against assets held by,
or deposits or other liabilities in or for the account of, or advances or loans
by, or other credit extended by, or any other acquisition of funds by, any
office of such Lender (other
31
than any such reserve or other requirements with respect to Eurodollar Rate
Loans that are reflected in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to a Tax matter) on
or affecting such Lender (or its applicable lending office) or its obligations
hereunder or the London interbank market; and the result of any of the foregoing
is to increase the cost to such Lender of agreeing to make, making or
maintaining Loans hereunder or to reduce any amount received or receivable by
such Lender (or its applicable lending office) with respect thereto; then, in
any such case, Company shall promptly pay to such Lender, upon receipt of the
statement referred to in the next sentence, such additional amount or amounts
(in the form of an increased rate of, or a different method of calculating,
interest or otherwise as such Lender in its sole discretion shall determine) as
may be necessary to compensate such Lender for any such increased cost or
reduction in amounts received or receivable hereunder. Such Lender shall deliver
to Company (with a copy to Administrative Agent) a written statement, setting
forth in reasonable detail the basis for calculating the additional amounts owed
to such Lender under this Section 2.15(a), which statement shall be conclusive
and binding upon all parties hereto absent manifest error.
(b) Capital Adequacy Adjustment. In the event that any Lender
(which term shall include Issuing Bank for purposes of this Section 2.15(b))
shall have determined that the adoption, effectiveness, phase-in or
applicability after the Closing Date of any law, rule or regulation (or any
provision thereof) regarding capital adequacy, or any change therein or in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or its applicable lending office) with any
guideline, request or directive regarding capital adequacy (whether or not
having the force of law) of any such Governmental Authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on the capital of such Lender or any corporation controlling such Lender as a
consequence of, or with reference to, such Lender's Loans or participations
therein or other obligations hereunder with respect to the Loans to a level
below that which such Lender or such controlling corporation could have achieved
but for such adoption, effectiveness, phase-in, applicability, change or
compliance (taking into consideration the policies of such Lender or such
controlling corporation with regard to capital adequacy), then from time to
time, within five Business Days after receipt by Company from such Lender of the
statement referred to in the next sentence, Company shall pay to such Lender
such additional amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction. Such Lender
shall deliver to Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to Lender under this Section 2.15(b), which statement
shall be conclusive and binding upon all parties hereto absent manifest error.
2.16. TAXES; WITHHOLDING, ETC.
(a) Payments to Be Free and Clear. All sums payable by any
Credit Party hereunder and under the other Credit Documents shall (except to the
extent required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net income
of any Lender) imposed, levied, collected, withheld or
32
assessed by or within the United States of America or any political subdivision
in or of the United States of America or any other jurisdiction from or to which
a payment is made by or on behalf of any Credit Party or by any federation or
organization of which the United States of America or any such jurisdiction is a
member at the time of payment.
(b) Withholding of Taxes. If any Credit Party or any other
Person is required by law to make any deduction or withholding on account of any
such Tax from any sum paid or payable by any Credit Party to Administrative
Agent or any Lender (which term shall include Issuing Bank for purposes of this
Section 2.16(b)) under any of the Credit Documents: (i) Company shall notify
Administrative Agent of any such requirement or any change in any such
requirement as soon as Company becomes aware of it; (ii) Company shall pay any
such Tax before the date on which penalties attach thereto, such payment to be
made (if the liability to pay is imposed on any Credit Party) for its own
account or (if that liability is imposed on Administrative Agent or such Lender,
as the case may be) on behalf of and in the name of Administrative Agent or such
Lender; (iii) the sum payable by such Credit Party in respect of which the
relevant deduction, withholding or payment is required shall be increased to the
extent necessary to ensure that, after the making of that deduction, withholding
or payment, Administrative Agent or such Lender, as the case may be, receives on
the due date a net sum equal to what it would have received had no such
deduction, withholding or payment been required or made; and (iv) within thirty
days after paying any sum from which it is required by law to make any deduction
or withholding, and within thirty days after the due date of payment of any Tax
which it is required by clause (ii) above to pay, Company shall deliver to
Administrative Agent evidence satisfactory to the other affected parties of such
deduction, withholding or payment and of the remittance thereof to the relevant
taxing or other authority; provided, no such additional amount shall be required
to be paid to any Lender under clause (iii) above except to the extent that any
change after the date hereof (in the case of each Lender listed on the signature
pages hereof on the Closing Date) or after the effective date of the Assignment
Agreement pursuant to which such Lender became a Lender (in the case of each
other Lender) in any such requirement for a deduction, withholding or payment as
is mentioned therein shall result in an increase in the rate of such deduction,
withholding or payment from that in effect at the date hereof or at the date of
such Assignment Agreement, as the case may be, in respect of payments to such
Lender.
(c) Evidence of Exemption From U.S. Withholding Tax. Each
Lender that is not a United States Person (as such term is defined in Section
7701(a)(30) of the Internal Revenue Code) for U.S. federal income tax purposes
(a "NON-US LENDER") shall deliver to Administrative Agent for transmission to
Company, on or prior to the Closing Date (in the case of each Lender listed on
the signature pages hereof on the Closing Date) or on or prior to the date of
the Assignment Agreement pursuant to which it becomes a Lender (in the case of
each other Lender), and at such other times as may be necessary in the
determination of Company or Administrative Agent (each in the reasonable
exercise of its discretion), (i) two original copies of Internal Revenue Service
Form W-8BEN or W-8ECI (or any successor forms), properly completed and duly
executed by such Lender, and such other documentation required under the
Internal Revenue Code and reasonably requested by Company to establish that such
Lender is
33
not subject to deduction or withholding of United States federal income tax with
respect to any payments to such Lender of principal, interest, fees or other
amounts payable under any of the Credit Documents, or (ii) if such Lender is not
a "bank" or other Person described in Section 881(c)(3) of the Internal Revenue
Code and cannot deliver either Internal Revenue Service Form W-8BEN or W-8ECI
pursuant to clause (i) above, a Certificate re Non-Bank Status together with two
original copies of Internal Revenue Service Form W-8 (or any successor form),
properly completed and duly executed by such Lender, and such other
documentation required under the Internal Revenue Code and reasonably requested
by Company to establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to any payments to
such Lender of interest payable under any of the Credit Documents. Each Lender
required to deliver any forms, certificates or other evidence with respect to
United States federal income tax withholding matters pursuant to this Section
2.16(c) hereby agrees, from time to time after the initial delivery by such
Lender of such forms, certificates or other evidence, whenever a lapse in time
or change in circumstances renders such forms, certificates or other evidence
obsolete or inaccurate in any material respect, that such Lender shall promptly
deliver to Administrative Agent for transmission to Company two new original
copies of Internal Revenue Service Form W-8BEN or W-8ECI , or a Certificate re
Non-Bank Status and two original copies of Internal Revenue Service Form W-8, as
the case may be, properly completed and duly executed by such Lender, and such
other documentation required under the Internal Revenue Code and reasonably
requested by Company to confirm or establish that such Lender is not subject to
deduction or withholding of United States federal income tax with respect to
payments to such Lender under the Credit Documents, or notify Administrative
Agent and Company of its inability to deliver any such forms, certificates or
other evidence. Company shall not be required to pay any additional amount to
any Non-US Lender under Section 2.16(b)(iii) if such Lender shall have failed
(1) to deliver the forms, certificates or other evidence referred to in the
second sentence of this Section 2.16(c), or (2) to notify Administrative Agent
and Company of its inability to deliver any such forms, certificates or other
evidence, as the case may be; provided, if such Lender shall have satisfied the
requirements of the first sentence of this Section 2.16(c) on the Closing Date
or on the date of the Assignment Agreement pursuant to which it became a Lender,
as applicable, nothing in this last sentence of Section 2.16(c) shall relieve
Company of its obligation to pay any additional amounts pursuant this Section
2.16 in the event that, as a result of any change in any applicable law, treaty
or governmental rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to withholding as
described herein.
2.17. OBLIGATION TO MITIGATE. Each Lender (which term shall include
Issuing Bank for purposes of this Section 2.17) agrees that, as promptly as
practicable after the officer of such Lender responsible for administering its
Loans becomes aware of the occurrence of an event or the existence of a
condition that would cause such Lender to become an Affected Lender or that
would entitle such Lender to receive payments under Section 2.14, 2.15 or 2.16,
it will, to the extent not inconsistent with the internal policies of such
Lender and any applicable legal or regulatory restrictions, use reasonable
efforts to (a) make, issue, fund or maintain its Term
34
Loans, including any Affected Loans, through another office of such Lender, or
(b) take such other measures as such Lender may deem reasonable, if as a result
thereof the circumstances which would cause such Lender to be an Affected Lender
would cease to exist or the additional amounts which would otherwise be required
to be paid to such Lender pursuant to Section 2.14, 2.15 or 2.16 would be
materially reduced and if, as determined by such Lender in its sole discretion,
the making, issuing, funding or maintaining of such Loans through such other
office or in accordance with such other measures, as the case may be, would not
otherwise adversely affect such Loans or the interests of such Lender; provided,
such Lender will not be obligated to utilize such other office pursuant to this
Section 2.17 unless Company agrees to pay all incremental expenses incurred by
such Lender as a result of utilizing such other office as described in clause
(i) above. A certificate as to the amount of any such expenses payable by
Company pursuant to this Section 2.17 (setting forth in reasonable detail the
basis for requesting such amount) submitted by such Lender to Company (with a
copy to Administrative Agent) shall be conclusive absent manifest error.
2.18. REMOVAL OR REPLACEMENT OF A LENDER. Anything contained herein to
the contrary notwithstanding, in the event that: (a) (i) any Lender (an
"INCREASED-COST LENDER") shall give notice to Company that such Lender is an
Affected Lender or that such Lender is entitled to receive payments under
Section 2.14, 2.15 or 2.16, (ii) the circumstances which have caused such Lender
to be an Affected Lender or which entitle such Lender to receive such payments
shall remain in effect, and (iii) such Lender shall fail to withdraw such notice
within five Business Days after Company's request for such withdrawal; or (b) in
connection with any proposed amendment, modification, termination, waiver or
consent with respect to any of the provisions hereof as contemplated by Section
10.5(b), the consent of Requisite Lenders shall have been obtained but the
consent of one or more of such other Lenders (each a "NON-CONSENTING LENDER")
whose consent is required shall not have been obtained; then, with respect to
each such Increased-Cost Lender or Non-Consenting Lender (the "TERMINATED
LENDER"), Company may, by giving written notice to Administrative Agent and any
Terminated Lender of its election to do so, elect to cause such Terminated
Lender (and such Terminated Lender hereby irrevocably agrees) to assign its
outstanding Loans in full to one or more Eligible Assignees (each a "REPLACEMENT
LENDER") in accordance with the provisions of Section 10.6 and Terminated Lender
shall pay any fees payable thereunder in connection with such assignment;
provided, (1) on the date of such assignment, the Replacement Lender shall pay
to Terminated Lender an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued interest on, all outstanding Loans of the
Terminated Lender, (B) an amount equal to all unreimbursed drawings that have
been funded by such Terminated Lender, together with all then unpaid interest
with respect thereto at such time and (C) an amount equal to all accrued, but
theretofore unpaid fees owing to such Terminated Lender pursuant to Section 2.8;
(2) on the date of such assignment, Company shall pay any amounts payable to
such Terminated Lender pursuant to Section 2.14(c), 2.15 or 2.16; or otherwise
as if it were a prepayment and (3) in the event such Terminated Lender is a
Non-Consenting Lender, each Replacement Lender shall consent, at the time of
such assignment, to each matter in respect of which such Terminated Lender was a
Non-Consenting Lender. Upon the prepayment of all amounts owing to any
Terminated Lender, such Terminated Lender shall no longer constitute a "Lender"
for purposes
35
hereof; provided, any rights of such Terminated Lender to indemnification
hereunder shall survive as to such Terminated Lender.
SECTION 3. CONDITIONS PRECEDENT
The obligation of any Lender to make a Term Loan on the Closing Date is
subject to the satisfaction, or waiver in accordance with Section 10.5, of the
following conditions on or before the Closing Date:
(a) Credit Documents. Administrative Agent shall have received
sufficient copies of each Credit Document originally executed and delivered by
each applicable Credit Party for each Lender.
(b) Organizational Documents; Incumbency. Administrative Agent
shall have received (i) sufficient copies of each Organizational Document
executed and delivered by each Credit Party, as applicable, and, to the extent
applicable, certified as of a recent date by the appropriate governmental
official, for each Lender, each dated the Closing Date or a recent date prior
thereto; (ii) signature and incumbency certificates of the officers of such
Person executing the Credit Documents to which it is a party; (iii) resolutions
of the Board of Directors or similar governing body of each Credit Party
approving and authorizing the execution, delivery and performance of this
Agreement and the other Credit Documents and the Acquisition Agreement,
certified as of the Closing Date by its secretary or an assistant secretary as
being in full force and effect without modification or amendment; (iv) a good
standing certificate from the applicable Governmental Authority of each Credit
Party's jurisdiction of incorporation, organization or formation and in each
jurisdiction in which it is qualified as a foreign corporation or other entity
to do business, each dated a recent date prior to the Closing Date; and (v) such
other documents as Administrative Agent may reasonably request.
(c) Organizational and Capital Structure. The organizational
structure and capital structure of Company and its Subsidiaries shall be as set
forth on Schedule 4.1.
(d) Escrow. On or prior to the Closing Date, Company shall
have established an escrow arrangement reasonably satisfactory to Administrative
Agent pursuant to which the proceeds of the Term Loans shall be deposited in an
escrow account (the "ESCROW ACCOUNT"). The proceeds of the Term Loans in the
Escrow Account shall be used by the Company to fund a portion of the amount
necessary to consummate the Acquisition or to repay the Term Loans pursuant to
Section 2.11(e).
(e) Acquisition Agreement. Administrative Agent shall have
received a fully executed or conformed copy of the Acquisition Agreement and any
documents executed in connection therewith. The Acquisition Agreement shall be
in full force and effect, shall include terms and provisions reasonably
satisfactory to Administrative Agent and no provision thereof shall have been
modified or waived in any respect determined by Administrative Agent to be
material, in each case without the consent of Administrative Agent.
36
(f) Transaction Costs. On or prior to the Closing Date,
Company shall have delivered to Administrative Agent Company's reasonable best
estimate of the Transactions Costs (other than fees payable to any Agent).
(g) Governmental Authorizations and Consents. Each Credit
Party shall have obtained all Governmental Authorizations and all consents of
other Persons, in each case that are necessary or advisable in connection with
the transactions contemplated by the Credit Documents and the Acquisition
Agreement and each of the foregoing shall be in full force and effect and in
form and substance reasonably satisfactory to Syndication Agent and
Administrative Agent. All applicable waiting periods shall have expired without
any action being taken or threatened by any competent authority which would
restrain, prevent or otherwise impose adverse conditions on the transactions
contemplated by the Credit Documents or the Acquisition Agreement or the
financing thereof and no action, request for stay, petition for review or
rehearing, reconsideration, or appeal with respect to any of the foregoing shall
be pending, and the time for any applicable agency to take action to set aside
its consent on its own motion shall have expired.
(h) Personal Property Collateral. In order to create in favor
of Collateral Agent, for the benefit of Secured Parties, a valid, perfected
First Priority security interest in the personal property Collateral, Collateral
Agent shall have received:
(i) evidence satisfactory to Collateral Agent of the
compliance by each Credit Party of their obligations under the Pledge
and Security Agreement and the other Collateral Documents (including,
without limitation, their obligations to execute and deliver UCC
financing statements, originals of securities, instruments and chattel
paper and any agreements governing deposit and/or securities accounts
as provided therein);
(ii) A completed Collateral Questionnaire dated the
Closing Date and executed by an Authorized Officer of each Credit
Party, together with all attachments contemplated thereby, including
(A) the results of a recent search, by a Person satisfactory to
Collateral Agent, of all effective UCC financing statements (or
equivalent filings) made with respect to any personal or mixed property
of any Credit Party in the jurisdictions specified in the Collateral
Questionnaire, together with copies of all such filings disclosed by
such search, and (B) UCC termination statements (or similar documents)
duly executed by all applicable Persons for filing in all applicable
jurisdictions as may be necessary to terminate any effective UCC
financing statements (or equivalent filings) disclosed in such search
(other than any such financing statements in respect of Permitted
Liens);
(iii) opinions of counsel (which counsel shall be
reasonably satisfactory to Collateral Agent) with respect to the
creation and perfection of the security interests in favor of
Collateral Agent in such Collateral and such other matters governed by
the laws of each jurisdiction in which any Credit Party or any personal
property Collateral is
37
located as Collateral Agent may reasonably request, in each case in
form and substance reasonably satisfactory to Collateral Agent; and
(iv) evidence that each Credit Party shall have taken
or caused to be taken any other action, executed and delivered or
caused to be executed and delivered any other agreement, document and
instrument (including without limitation, any intercompany notes
evidencing Indebtedness permitted to be incurred pursuant to Section
6.1(b)) and made or caused to be made any other filing and recording
(other than as set forth herein) reasonably required by Collateral
Agent.
(i) No Litigation. There shall not exist any action, suit,
investigation, litigation or proceeding or other legal or regulatory
developments, pending or threatened in any court or before any arbitrator or
Governmental Authority that, in the reasonable opinion of Administrative Agent
and Syndication Agent, singly or in the aggregate, materially impairs the
Acquisition, the financing thereof or any of the other transactions contemplated
by the Credit Documents or the Acquisition Agreement, or that could have a
Material Adverse Effect.
(j) Financial Statements; Projections. Lenders shall have
received from Company pro forma consolidated and consolidating balance sheets of
Company and its Subsidiaries as of November 30, 2003 and reflecting the
consummation of the Acquisition, the related financings and the other
transactions contemplated by the Credit Documents to occur on or prior to the
Closing Date, which pro forma financial statements shall be in form and
substance satisfactory to Administrative Agent and Syndication Agent, and (iii)
the Projections.
(k) Evidence of Insurance. Collateral Agent shall have
received a certificate from Company's insurance broker or other evidence
satisfactory to it that all insurance required to be maintained pursuant to
Section 5.5 is in full force and effect, together with endorsements naming the
Collateral Agent, for the benefit of Lenders, as additional insured and loss
payee thereunder to the extent required under Section 5.5.
(l) Opinions of Counsel to Credit Parties. Lenders and their
respective counsel shall have received originally executed copies of the
favorable written opinions of Xxxxxxxx & Xxxxxxxx LLP, counsel for Credit
Parties, in the form of Exhibit D, dated as of the Closing Date and otherwise in
form and substance reasonably satisfactory to Administrative Agent and
Syndication Agent (and each Credit Party hereby instructs such counsel to
deliver such opinions to Agents and Lenders).
(m) Fees. Company shall have paid to Syndication Agent,
Administrative Agent and Documentation Agent, the fees payable on the Closing
Date referred to in Section 2.8.
(n) Closing Date Certificate. Company shall have delivered to
Syndication Agent and Administrative Agent an originally executed Closing Date
Certificate, together with all attachments thereto.
38
(o) Closing Date. Lenders shall have made the Term Loans to
Company on or before March 17, 2004.
(p) Completion of Proceedings. All partnership, corporate and
other proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent or Syndication Agent and its counsel shall be
satisfactory in form and substance to Administrative Agent and Syndication Agent
and such counsel, and Administrative Agent, Syndication Agent and such counsel
shall have received all such counterpart originals or certified copies of such
documents as Administrative Agent or Syndication Agent may reasonably request.
Each Lender, by delivering its signature page to this Agreement and funding a
Loan on the Closing Date, shall be deemed to have acknowledged receipt of, and
consented to and approved, each Credit Document and each other document required
to be approved by any Agent, Requisite Lenders or Lenders, as applicable on the
Closing Date.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make the
Term Loans on the Closing Date, each Credit Party represents and warrants to
each Lender on the Closing Date that the following statements are true and
correct:
4.1. ORGANIZATION; REQUISITE POWER AND AUTHORITY; QUALIFICATION. Each
of Company and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization as identified
in Schedule 4.1, (b) has all requisite power and authority to own and operate
its properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Credit Documents to which it is a party and to
carry out the transactions contemplated thereby, and (c) is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had, and could not be reasonably expected to have, a Material Adverse Effect.
4.2. CAPITAL STOCK AND OWNERSHIP. The Capital Stock of each Subsidiary
has been duly authorized and validly issued and is fully paid and
non-assessable. Except as set forth on Schedule 4.2, as of the date hereof,
there is no existing option, warrant, call, right, commitment or other agreement
to which any Subsidiary is a party requiring, and there is no membership
interest or other Capital Stock of any Subsidiary outstanding which upon
conversion or exchange would require, the issuance by Company or any of its
Subsidiaries of any additional membership interests or other Capital Stock of
any Subsidiary or other Securities convertible into, exchangeable for or
evidencing the right to subscribe for or purchase, a membership interest or
other Capital Stock of any Subsidiary. Schedule 4.2 correctly sets forth the
ownership interest of each Subsidiary as of the Closing Date.
39
4.3. DUE AUTHORIZATION. The execution, delivery and performance of the
Credit Documents have been duly authorized by all necessary action on the part
of each Credit Party that is a party thereto.
4.4. NO CONFLICT. The execution, delivery and performance by Credit
Parties of the Credit Documents to which they are parties and the consummation
of the transactions contemplated by the Credit Documents do not and will not (a)
violate any provision of any law or any governmental rule or regulation
applicable to Company or any of its Subsidiaries, any of the Organizational
Documents of Company or any of its Subsidiaries, or any order, judgment or
decree of any court or other agency of government binding on Company or any of
its Subsidiaries except to the extent such violation could not be reasonably
expected to have a Material Adverse Effect; (b) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any Contractual Obligation of Company or any of its Subsidiaries except to
the extent such conflict, breach or default could not reasonably be expected to
have a Material Adverse Effect; (c) result in or require the creation or
imposition of any Lien upon any of the properties or assets of Company or any of
its Subsidiaries (other than any Liens created under any of the Credit Documents
in favor of Collateral Agent, on behalf of Secured Parties); or (d) require any
approval of stockholders, members or partners or any approval or consent of any
Person under any Contractual Obligation of Company or any of its Subsidiaries,
except for such approvals or consents which will be obtained on or before the
Closing Date and disclosed in writing to Lenders and except for any such
approvals or consents the failure of which to obtain will not have a Material
Adverse Effect.
4.5. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
Credit Parties of the Credit Documents to which they are parties and the
consummation of the transactions contemplated by the Credit Documents do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any Governmental Authority except for filings and
recordings with respect to the Collateral to be made, or otherwise delivered to
Collateral Agent for filing and/or recordation, as of the Closing Date.
4.6. BINDING OBLIGATION. Each Credit Document has been duly executed
and delivered by each Credit Party that is a party thereto and is the legally
valid and binding obligation of such Credit Party, enforceable against such
Credit Party in accordance with its respective terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally or by equitable principles relating
to enforceability.
4.7. [RESERVED].
4.8. PROJECTIONS. On and as of the Closing Date, the Projections of
Company and its Subsidiaries for the period Fiscal Year 2004 through and
including Fiscal Year 2008 delivered to the Administrative Agent (the
"PROJECTIONS") are based on good faith estimates and assumptions made by the
management of Company; provided, the Projections are not to be viewed as facts
and that actual results during the period or periods covered by the Projections
may differ from
40
such Projections and that the differences may be material; provided further, as
of the Closing Date, management of Company believed that the Projections were
reasonable and attainable.
4.9. NO MATERIAL ADVERSE CHANGE. Since December 31, 2002, no event,
circumstance or change has occurred that has caused or evidences, either in any
case or in the aggregate, a Material Adverse Effect.
4.10. [RESERVED].
4.11. ADVERSE PROCEEDINGS, ETC. There are no Adverse Proceedings,
individually or in the aggregate, that could reasonably be expected to have a
Material Adverse Effect. Neither Company nor any of its Subsidiaries (a) is in
violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, or (b) is subject to or in default with respect to any
final judgments, writs, injunctions, decrees, rules or regulations of any court
or any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
4.12. PAYMENT OF TAXES. Except as otherwise permitted under Section
5.3, all tax returns and reports of any Credit Party required to be filed by any
of them have been timely filed, and all taxes shown on such tax returns to be
due and payable and all assessments, fees and other governmental charges upon
any Credit Party and upon their respective properties, assets, income,
businesses and franchises which are due and payable have been paid when due and
payable. Company knows of no proposed tax assessment against Company or any
Credit Party which is not being actively contested by Company or such Credit
Party in good faith and by appropriate proceedings; provided, such reserves or
other appropriate provisions, if any, as shall be required in conformity with
GAAP shall have been made or provided therefor.
4.13. PROPERTIES.
(a) Title. Each of Company and its Subsidiaries has (i) good,
sufficient and legal title to (in the case of fee interests in real property),
(ii) valid leasehold interests in (in the case of leasehold interests in real or
personal property), and (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in the most
recent financial statements delivered pursuant to Section 5.1, in each case
except for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under Section 6.9. Except
as permitted by this Agreement, all such properties and assets are free and
clear of Liens.
(b) Real Estate. As of the Closing Date, Schedule 4.13
contains a true, accurate and complete list of (i) all Real Estate Assets, and
(ii) all leases, subleases or assignments of leases (together with all
amendments, modifications, supplements, renewals or extensions of any thereof)
affecting each Real Estate Asset of any Credit Party, regardless of whether such
Credit
41
Party is the landlord or tenant (whether directly or as an assignee or successor
in interest) under such lease, sublease or assignment. Each agreement listed in
clause (ii) of the immediately preceding sentence is in full force and effect
and Company does not have knowledge of any default that has occurred and is
continuing thereunder, and each such agreement constitutes the legally valid and
binding obligation of each applicable Credit Party, enforceable against such
Credit Party in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally or by equitable principles.
4.14. ENVIRONMENTAL MATTERS. Neither Company nor any of its
Subsidiaries nor any of their respective Facilities or operations are subject to
any outstanding written order, consent decree or settlement agreement with any
Person relating to any Environmental Law, any Environmental Claim, or any
Hazardous Materials Activity that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. Neither Company nor
any of its Subsidiaries has received any letter or request for information under
Section 104 of the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. Section 9604) or any comparable state law. There are
and, to each of Company' and its Subsidiaries' knowledge, have been, no
conditions, occurrences, or Hazardous Materials Activities which could
reasonably be expected to form the basis of an Environmental Claim against
Company or any of its Subsidiaries that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. Neither Company nor
any of its Subsidiaries nor, to any Credit Party's knowledge, any predecessor of
Company or any of its Subsidiaries has filed any notice under any Environmental
Law indicating past or present treatment of Hazardous Materials at any Facility,
and none of Company' or any of its Subsidiaries' operations involves the
generation, transportation, treatment, storage or disposal of hazardous waste,
as defined under 40 C.F.R. Parts 260-270 or any state equivalent. Compliance
with all current or reasonably foreseeable future requirements pursuant to or
under Environmental Laws could not be reasonably expected to have, individually
or in the aggregate, a Material Adverse Effect. No event or condition has
occurred or is occurring with respect to Company or any of its Subsidiaries
relating to any Environmental Law, any Release of Hazardous Materials, or any
Hazardous Materials Activity which individually or in the aggregate has had, or
could reasonably be expected to have, a Material Adverse Effect.
4.15. NO DEFAULTS. Neither Company nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations, and no
condition exists which, with the giving of notice or the lapse of time or both,
could constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, could not reasonably be expected
to have a Material Adverse Effect.
4.16. MATERIAL CONTRACTS. Schedule 4.16 contains a true, correct and
complete list of all the Material Contracts in effect on the Closing Date, and
except as described thereon, all such Material Contracts are in full force and
effect and no defaults currently exist thereunder.
42
4.17. GOVERNMENTAL REGULATION. Neither Company nor any of its
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act or the Investment Company Act of 1940 or
under any other federal or state statute or regulation which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of the Obligations unenforceable. Neither Company nor any of its Subsidiaries is
a "registered investment company" or a company "controlled" by a "registered
investment company" or a "principal underwriter" of a "registered investment
company" as such terms are defined in the Investment Company Act of 1940.
4.18. MARGIN STOCK. Neither Company nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock. No
part of the proceeds of the Loans made to such Credit Party will be used to
purchase or carry any such margin stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock or for any purpose that
violates, or is inconsistent with, the provisions of Regulation T, U or X of
said Board of Governors.
4.19. EMPLOYEE MATTERS. Neither Company nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
Material Adverse Effect. There is (a) no unfair labor practice complaint pending
against Company or any of its Subsidiaries, or to the best knowledge of Company,
threatened against any of them before the National Labor Relations Board and no
grievance or arbitration proceeding arising out of or under any collective
bargaining agreement that is so pending against Company or any of its
Subsidiaries or to the best knowledge of Company, threatened against any of
them, (b) no strike or work stoppage in existence or threatened involving
Company or any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect, and (c) to the best knowledge of Company, no union
representation question existing with respect to the employees of Company or any
of its Subsidiaries and, to the best knowledge of Company, no union organization
activity that is taking place, except (with respect to any matter specified in
clause (a), (b) or (c) above, either individually or in the aggregate) such as
is not reasonably likely to have a Material Adverse Effect.
4.20. EMPLOYEE BENEFIT PLANS. Company, each of its Subsidiaries and
each of their respective ERISA Affiliates are in compliance with all applicable
provisions and requirements of ERISA and the Internal Revenue Code and the
regulations and published interpretations thereunder with respect to each
Employee Benefit Plan, and have performed all their obligations under each
Employee Benefit Plan. Each Employee Benefit Plan which is intended to qualify
under Section 401(a) of the Internal Revenue Code has received a favorable
determination letter from the Internal Revenue Service indicating that such
Employee Benefit Plan is so qualified and nothing has occurred subsequent to the
issuance of such determination letter which would cause such Employee Benefit
Plan to lose its qualified status. No liability to the PBGC (other than required
premium payments), the Internal Revenue Service, any Employee Benefit Plan or
any trust established under Title IV of ERISA has been or is expected to be
incurred by Company, any of its Subsidiaries or any of their ERISA Affiliates.
No ERISA Event has occurred or is
43
reasonably expected to occur. Except to the extent required under Section 4980B
of the Internal Revenue Code or similar state laws, no Employee Benefit Plan
provides health or welfare benefits (through the purchase of insurance or
otherwise) for any retired or former employee of Company, any of its
Subsidiaries or any of their respective ERISA Affiliates. The present value of
the aggregate benefit liabilities under each Pension Plan sponsored, maintained
or contributed to by Company, any of its Subsidiaries or any of their ERISA
Affiliates, (determined as of the end of the most recent plan year on the basis
of the actuarial assumptions specified for funding purposes in the most recent
actuarial valuation for such Pension Plan), did not exceed the aggregate current
value of the assets of such Pension Plan. As of the most recent valuation date
for each Multiemployer Plan for which the actuarial report is available, the
potential liability of Company, its Subsidiaries and their respective ERISA
Affiliates for a complete withdrawal from such Multiemployer Plan (within the
meaning of Section 4203 of ERISA), when aggregated with such potential liability
for a complete withdrawal from all Multiemployer Plans, based on information
available pursuant to Section 4221(e) of ERISA is zero. Company, each of its
Subsidiaries and each of their ERISA Affiliates have complied with the
requirements of Section 515 of ERISA with respect to each Multiemployer Plan and
are not in material "default" (as defined in Section 4219(c)(5) of ERISA) with
respect to payments to a Multiemployer Plan.
4.21. CERTAIN FEES. No broker's or finder's fee or commission will be
payable with respect hereto or any of the transactions contemplated hereby.
4.22. SOLVENCY. Each Credit Party is and, upon the incurrence of any
Obligation by such Credit Party on any date on which this representation and
warranty is made, will be, Solvent.
4.23. ACQUISITION AGREEMENT.
(a) Delivery. Company has delivered to Administrative Agent
complete and correct copies of (i) the Acquisition Agreement and of all exhibits
and schedules thereto as of the date hereof and (ii) copies of any material
amendment, restatement, supplement or other modification to or waiver of the
Acquisition Agreement entered into prior to the date hereof.
(b) Representations and Warranties. Except to the extent
otherwise expressly set forth herein or in the schedules hereto, and subject to
the qualifications set forth therein, each of the representations and warranties
given by any Credit Party in the Acquisition Agreement is true and correct in
all material respects as of the Closing Date (or as of any earlier date to which
such representation and warranty specifically relates). Notwithstanding anything
in the Acquisition Agreement to the contrary, the representations and warranties
of each Credit Party set forth in this Section 4.23 shall, solely for purposes
hereof, survive the Closing Date for the benefit of Lenders.
(c) Governmental Approvals. All Governmental Authorizations
and all other authorizations, approvals and consents of any other Person
required by the Acquisition Agreement or to consummate the Acquisition have been
obtained and are in full force and effect.
44
4.24. COMPLIANCE WITH STATUTES, ETC. Each of Company and its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all Governmental
Authorities, in respect of the conduct of its business and the ownership of its
property (including compliance with all applicable Environmental Laws with
respect to any Real Estate Asset or governing its business and the requirements
of any permits issued under such Environmental Laws with respect to any such
Real Estate Asset or the operations of Company or any of its Subsidiaries),
except such non-compliance that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
4.25. DISCLOSURE. No representation or warranty of any Credit Party
contained in any Credit Document or in any other documents, certificates or
written statements furnished to Lenders by or on behalf of Company or any of its
Subsidiaries for use in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a material
fact (known to Company or Company, in the case of any document not furnished by
either of them) necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which the same were
made. Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by
Company or Company to be reasonable at the time made, it being recognized by
Lenders that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may differ from the projected results. There are no facts known (or
which should upon the reasonable exercise of diligence be known) to Company or
Company (other than matters of a general economic nature) that, individually or
in the aggregate, could reasonably be expected to result in a Material Adverse
Effect and that have not been disclosed herein or in such other documents,
certificates and statements furnished to Lenders for use in connection with the
transactions contemplated hereby.
SECTION 5. AFFIRMATIVE COVENANTS
Each Credit Party covenants and agrees that until payment in full of
all Obligations each Credit Party shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 5.
5.1. FINANCIAL STATEMENTS AND OTHER REPORTS. Company will deliver to
Administrative Agent and Lenders:
(a) Monthly Reports. As soon as available, and in any event
within thirty days after the end of each month ending after the Closing Date,
the consolidated balance sheet of Company and its Subsidiaries as at the end of
such month and the related consolidated statements of income, stockholders'
equity and cash flows of Company and its Subsidiaries for such month and for the
period from the beginning of the then current Fiscal Year to the end of such
month, setting forth in each case in comparative form the corresponding figures
for the corresponding periods of the previous Fiscal Year and the corresponding
figures from the
45
Projections for the current Fiscal Year, to the extent prepared on a monthly
basis, all in reasonable detail, together with a Financial Officer Certification
and a Narrative Report with respect thereto;
(b) Quarterly Financial Statements. As soon as available, and
in any event within forty-five days after the end of each of the first three
Fiscal Quarters of each Fiscal Year, the consolidated and consolidating balance
sheets of Company and its Subsidiaries as at the end of such Fiscal Quarter and
the related consolidated (and with respect to statements of income,
consolidating) statements of income, stockholders' equity and cash flows of
Company and its Subsidiaries for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal Quarter,
setting forth in each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding figures
from the Projections for the current Fiscal Year, all in reasonable detail,
together with a Financial Officer Certification and a Narrative Report with
respect thereto;
(c) Annual Financial Statements. As soon as available, and in
any event within ninety days after the end of each Fiscal Year, (i) the
consolidated and consolidating balance sheets of Company and its Subsidiaries as
at the end of such Fiscal Year and the related consolidated (and with respect to
statements of income, consolidating) statements of income, stockholders' equity
and cash flows of Company and its Subsidiaries for such Fiscal Year, setting
forth in each case in comparative form the corresponding figures for the
previous Fiscal Year and the corresponding figures from the Projections for the
Fiscal Year covered by such financial statements, in reasonable detail, together
with a Financial Officer Certification and a Narrative Report with respect
thereto; and (ii) with respect to such consolidated financial statements a
report thereon of Ernst & Young LLP or other independent certified public
accountants of recognized national standing selected by Company (which report
shall be unqualified as to going concern and scope of audit, and shall state
that such consolidated financial statements fairly present, in all material
respects, the consolidated financial position of Company and its Subsidiaries as
at the dates indicated and the results of their operations and their cash flows
for the periods indicated in conformity with GAAP applied on a basis consistent
with prior years (except as otherwise disclosed in such financial statements)
and that the examination by such accountants in connection with such
consolidated financial statements has been made in accordance with generally
accepted auditing standards) together with a written statement by such
independent certified public accountants stating (1) that their audit
examination has included a review of the terms of the Credit Documents, (2)
whether, in connection therewith, any condition or event that constitutes a
Default or an Event of Default has come to their attention and, if such a
condition or event has come to their attention, specifying the nature and period
of existence thereof, and (3) that nothing has come to their attention that
causes them to believe that the information contained in any Compliance
Certificate is not correct or that the matters set forth in such Compliance
Certificate are not stated in accordance with the terms hereof;
(d) Compliance Certificate. Together with each delivery of
financial statements of Company and its Subsidiaries pursuant to Sections 5.1(b)
and 5.1(c), a duly executed and completed Compliance Certificate;
46
(e) Statements of Reconciliation after Change in Accounting
Principles. If, as a result of any change in accounting principles and policies
from those used in the preparation of the consolidated financial statements of
Company and its Subsidiaries delivered pursuant to Section 5.1(b) or 5.1(c) will
differ in any material respect from the consolidated financial statements that
would have been delivered pursuant to such subdivisions had no such change in
accounting principles and policies been made, then, together with the first
delivery of such financial statements after such change, one or more statements
of reconciliation for all such prior financial statements in form and substance
satisfactory to Administrative Agent;
(f) Notice of Default. Promptly upon any officer of Company or
Company obtaining knowledge (i) of any condition or event that constitutes a
Default or an Event of Default or that notice has been given to Company or
Company with respect thereto; (ii) that any Person has given any notice to
Company or any of its Subsidiaries or taken any other action with respect to any
event or condition set forth in Section 8.1(b); or (iii) of the occurrence of
any event or change that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect, a certificate of its Authorized Officers
specifying the nature and period of existence of such condition, event or
change, or specifying the notice given and action taken by any such Person and
the nature of such claimed Event of Default, Default, default, event or
condition, and what action Company has taken, is taking and proposes to take
with respect thereto;
(g) Notice of Litigation. Promptly upon any officer of Company
or Company obtaining knowledge of (i) the institution of, or non-frivolous
threat of, any Adverse Proceeding not previously disclosed in writing by Company
to Lenders, or (ii) any material development in any Adverse Proceeding that, in
the case of either (i) or (ii) if adversely determined, could be reasonably
expected to have a Material Adverse Effect, or seeks to enjoin or otherwise
prevent the consummation of, or to recover any damages or obtain relief as a
result of, the transactions contemplated hereby, written notice thereof together
with such other information as may be reasonably available to Company or Company
to enable Lenders and their counsel to evaluate such matters;
(h) ERISA. (i) Promptly upon becoming aware of the occurrence
of or forthcoming occurrence of any ERISA Event, a written notice specifying the
nature thereof, what action Company, any of its Subsidiaries or any of their
respective ERISA Affiliates has taken, is taking or proposes to take with
respect thereto and, when known, any action taken or threatened by the Internal
Revenue Service, the Department of Labor or the PBGC with respect thereto; and
(ii) with reasonable promptness, copies of (1) each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) filed by Company, any of
its Subsidiaries or any of their respective ERISA Affiliates with the Internal
Revenue Service with respect to each Pension Plan; (2) all notices received by
Company, any of its Subsidiaries or any of their respective ERISA Affiliates
from a Multiemployer Plan sponsor concerning an ERISA Event; and (3) copies of
such other documents or governmental reports or filings relating to any Employee
Benefit Plan as Administrative Agent shall reasonably request;
47
(i) [Reserved];
(j) Insurance Report. As soon as practicable and in any event
by the last day of each Fiscal Year, a report in form and substance satisfactory
to Administrative Agent outlining all material insurance coverage maintained as
of the date of such report by Company and any Guarantor and all material
insurance coverage planned to be maintained by Company and any Guarantor in the
immediately succeeding Fiscal Year;
(k) Notice of Change in Board of Directors. With reasonable
promptness, written notice of any change in the board of directors (or similar
governing body) of Company or Company;
(l) Notice Regarding Material Contracts. Promptly, and in any
event within ten Business Days (i) after any Material Contract of Company or any
Guarantor is terminated or amended in a manner that is materially adverse to
Company or such Guarantor, as the case may be, or (ii) any new Material Contract
is entered into, a written statement describing such event, with copies of such
material amendments or new contracts, delivered to Administrative Agent (to the
extent such delivery is permitted by the terms of any such Material Contract,
provided, no such prohibition on delivery shall be effective if it were
bargained for by Company or its applicable Guarantor with the intent of avoiding
compliance with this Section 5.1(l)), and an explanation of any actions being
taken with respect thereto;
(m) Environmental Reports and Audits. As soon as practicable
following receipt thereof, copies of all environmental audits and reports with
respect to environmental matters at any Facility or which relate to any
environmental liabilities of Company or any Guarantor which, in any such case,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect;
(n) Information Regarding Collateral. (a) Company will furnish
to Collateral Agent prompt written notice of any change (i) in any Credit
Party's corporate name, (ii) in any Credit Party's identity or corporate
structure or (iii) in any Credit Party's Federal Taxpayer Identification Number.
Company agrees not to effect or permit any change referred to in the preceding
sentence unless all filings have been made under the Uniform Commercial Code or
otherwise that are required in order for Collateral Agent to continue at all
times following such change to have a valid, legal and perfected security
interest in all the Collateral and for the Collateral at all times following
such change to have a valid, legal and perfected security interest as
contemplated in the Collateral Documents. Company also agrees promptly to notify
Collateral Agent if any material portion of the Collateral is damaged or
destroyed; and
(o) Other Information. (A) Promptly upon their becoming
available, copies of (i) all financial statements, reports, notices and proxy
statements sent or made available generally by Company to its security holders
acting in such capacity or by any Subsidiary of Company to its security holders
other than Company or another Subsidiary of Company, (ii) all regular and
periodic reports and all registration statements and prospectuses, if any, filed
by Company or any
48
of its Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory authority, (iii)
all press releases and other statements made available generally by Company or
any of its Subsidiaries to the public concerning material developments in the
business of Company or any of its Subsidiaries, and (B) such other information
and data with respect to Company or any of its Subsidiaries as from time to time
may be reasonably requested by Administrative Agent or any Lender.
5.2. EXISTENCE. Except as otherwise permitted under Section 6.9, each
Credit Party will, and will cause each of its Subsidiaries to, at all times
preserve and keep in full force and effect its existence and all rights and
franchises, licenses and permits material to its business; provided, no Credit
Party or any of its Subsidiaries shall be required to preserve any such
existence, right or franchise, licenses and permits if such Person's board of
directors (or similar governing body) shall determine that the preservation
thereof is no longer desirable in the conduct of the business of such Person,
and that the loss thereof is not disadvantageous in any material respect to such
Person or to Lenders.
5.3. PAYMENT OF TAXES AND CLAIMS. Each Credit Party will, and will
cause each of its Subsidiaries to, pay all Taxes imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty or fine accrues thereon, and all claims (including
claims for labor, services, materials and supplies) for sums that have become
due and payable and that by law have or may become a Lien upon any of its
properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided, no such Tax or claim need be paid if it
is being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted, so long as (a) adequate reserve or other appropriate
provision, as shall be required in conformity with GAAP shall have been made
therefor, and (b) in the case of a Tax or claim which has or may become a Lien
against any of the Collateral, such contest proceedings conclusively operate to
stay the sale of any portion of the Collateral to satisfy such Tax or claim. No
Credit Party will, nor will it permit any of its Subsidiaries to, file or
consent to the filing of any consolidated income tax return with any Person
(other than Company or any of its Subsidiaries).
5.4. MAINTENANCE OF PROPERTIES. Each Credit Party will, and will cause
each of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties used or useful in the business of Company and its Subsidiaries and
from time to time will make or cause to be made all appropriate repairs,
renewals and replacements thereof.
5.5. INSURANCE. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by Persons of
established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms
49
and conditions as shall be customary for such Persons. Without limiting the
generality of the foregoing, Company will maintain or cause to be maintained
replacement value casualty insurance on the Collateral under such policies of
insurance, with such insurance companies, in such amounts, with such
deductibles, and covering such risks as are at all times carried or maintained
under similar circumstances by Persons of established reputation engaged in
similar businesses. Each such policy of insurance shall (i) name Collateral
Agent, on behalf of Lenders as an additional insured thereunder as its interests
may appear and (ii) in the case of each casualty insurance policy, contain a
loss payable clause or endorsement, satisfactory in form and substance to
Collateral Agent, that names Collateral Agent, on behalf of Lenders as the loss
payee thereunder and provides for at least thirty days' prior written notice to
Collateral Agent of any modification or cancellation of such policy.
5.6. INSPECTIONS. Each Credit Party will, and will cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of any Credit Party and any of its
respective Subsidiaries, to inspect, copy and take extracts from its and their
financial and accounting records, and to discuss its and their affairs, finances
and accounts with its and their officers and independent public accountants, all
upon reasonable notice and at such reasonable times during normal business hours
and as often as may reasonably be requested, provided that each person making
such visit or inspection will agree in a written agreement consistent with the
provisions of Section 10.17 to keep any information disclosed during such visit
or inspection confidential and not to disclose such information (other than
Administrative Agent and its Affiliates).
5.7. [RESERVED].
5.8. COMPLIANCE WITH LAWS. Each Credit Party will comply, and shall
cause each of its Subsidiaries and all other Persons, if any, on or occupying
any Facilities to comply, with the requirements of all applicable laws, rules,
regulations and orders of any Governmental Authority (including all
Environmental Laws), noncompliance with which could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
5.9. ENVIRONMENTAL.
(a) Environmental Disclosure. Company will, subject to any
applicable confidentiality restrictions, deliver to Administrative Agent and
Lenders:
(i) as soon as practicable following receipt thereof,
copies of all environmental audits, investigations, analyses and
reports of any kind or character, whether prepared by personnel of
Company or any of its Subsidiaries or by independent consultants,
governmental authorities or any other Persons, with respect to
significant environmental matters at any Facility or with respect to
any Environmental Claims;
(ii) promptly upon the occurrence thereof, written
notice describing in reasonable detail (1) any Release required to be
reported to any federal, state or local
50
governmental or regulatory agency under any applicable Environmental
Laws, (2) any remedial action taken by Company or any other Person in
response to (A) any Hazardous Materials Activities the existence of
which has a reasonable possibility of resulting in one or more
Environmental Claims having, individually or in the aggregate, a
Material Adverse Effect, or (B) any Environmental Claims that,
individually or in the aggregate, have a reasonable possibility of
resulting in a Material Adverse Effect, and (3) Company or Company's
discovery of any occurrence or condition on any real property adjoining
or in the vicinity of any Facility that could cause such Facility or
any part thereof to be subject to any material restrictions on the
ownership, occupancy, transferability or use thereof under any
Environmental Laws;
(iii) as soon as practicable following the sending or
receipt thereof by Company or any of its Subsidiaries, a copy of any
and all written communications with respect to (1) any Environmental
Claims that, individually or in the aggregate, have a reasonable
possibility of giving rise to a Material Adverse Effect, (2) any
Release required to be reported to any federal, state or local
governmental or regulatory agency, and (3) any request for information
from any governmental agency that suggests such agency is investigating
whether Company or any of its Subsidiaries may be potentially
responsible for any Hazardous Materials Activity;
(iv) prompt written notice describing in reasonable
detail (1) any proposed acquisition of stock, assets, or property by
Company or any of its Subsidiaries that could reasonably be expected to
(A) expose Company or any of its Subsidiaries to, or result in,
Environmental Claims that could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect or (B)
affect the ability of Company or any of its Subsidiaries to maintain in
full force and effect all material Governmental Authorizations required
under any Environmental Laws for their respective operations and (2)
any proposed action to be taken by Company or any of its Subsidiaries
to modify current operations in a manner that could reasonably be
expected to subject Company or any of its Subsidiaries to any
additional material obligations or requirements under any Environmental
Laws; and
(v) with reasonable promptness, such other documents
and information as from time to time may be reasonably requested by
Administrative Agent in relation to any matters disclosed pursuant to
this Section 5.9(a).
(b) Hazardous Materials Activities, Etc. Each Credit Party
shall promptly take, and shall cause each of its Subsidiaries promptly to take,
any and all actions necessary to (i) cure any violation of applicable
Environmental Laws by such Credit Party or its Subsidiaries that could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, and (ii) make an appropriate response to any Environmental Claim
against such Credit Party or any of its Subsidiaries and discharge any
obligations it may have to any Person thereunder where failure to do so could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
51
5.10. SUBSIDIARIES. In the event that any Person becomes a Domestic
Subsidiary of Company, Company shall (a) promptly cause such Domestic Subsidiary
to become a Guarantor hereunder and a Grantor under the Pledge and Security
Agreement by executing and delivering to Administrative Agent and Collateral
Agent a Counterpart Agreement, and (b) take all such actions and execute and
deliver, or cause to be executed and delivered, all such documents, instruments,
agreements, and certificates as are similar to those described in Sections
3.1(b), 3.1(h), and 3.1(l). In the event that any Person becomes a Foreign
Subsidiary of Company, and the ownership interests of such Foreign Subsidiary
are owned by Company or by any Domestic Subsidiary thereof, Company shall, or
shall cause such Domestic Subsidiary to, deliver, all such documents,
instruments, agreements, and certificates as are similar to those described in
Sections 3.1(b), and Company shall take, or shall cause such Domestic Subsidiary
to take, all of the actions referred to in Section 3.1(h)(i) necessary to grant
and to perfect a First Priority Lien in favor of Collateral Agent, for the
benefit of Secured Parties, under the Pledge and Security Agreement in 65% of
such ownership interests. With respect to each such Subsidiary, Company shall
promptly send to Administrative Agent written notice setting forth with respect
to such Person (i) the date on which such Person became a Subsidiary of Company,
and (ii) all of the data required to be set forth in Schedules 4.1 and 4.2 with
respect to all Subsidiaries of Company; provided, such written notice shall be
deemed to supplement Schedule 4.1 and 4.2 for all purposes hereof.
5.11. FURTHER ASSURANCES. At any time or from time to time upon the
request of Administrative Agent, each Credit Party will, at its expense,
promptly execute, acknowledge and deliver such further documents and do such
other acts and things as Administrative Agent or Collateral Agent may reasonably
request in order to effect fully the purposes of the Credit Documents. In
furtherance and not in limitation of the foregoing, each Credit Party shall take
such actions as Administrative Agent or Collateral Agent may reasonably request
from time to time to ensure that the Obligations are guarantied by the
Guarantors and are secured by substantially all of the assets of Company, and
its Subsidiaries and all of the outstanding Capital Stock of Company and its
Subsidiaries (subject to limitations contained in the Credit Documents with
respect to Foreign Subsidiaries).
SECTION 6. NEGATIVE COVENANTS
Each Credit Party covenants and agrees that, until payment in full of
all Obligations such Credit Party shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 6.
6.1. INDEBTEDNESS. No Credit Party shall, nor shall it permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or guaranty,
or otherwise become or remain directly or indirectly liable with respect to any
Indebtedness, except:
(a) the Obligations;
52
(b) Indebtedness of any Guarantor Subsidiary to Company or to
any other Guarantor Subsidiary, or of Company to any Guarantor Subsidiary;
provided, (i) all such Indebtedness shall be evidenced by promissory notes and
all such notes shall be subject to a First Priority Lien pursuant to the Pledge
and Security Agreement, (ii) all such Indebtedness shall be unsecured and
subordinated in right of payment to the payment in full of the Obligations
pursuant to the terms of the applicable promissory notes or an intercompany
subordination agreement that in any such case, is reasonably satisfactory to
Administrative Agent, and (iii) any payment by any such Guarantor Subsidiary
under any guaranty of the Obligations shall result in a pro tanto reduction of
the amount of any Indebtedness owed by such Subsidiary to Company or to any of
its Subsidiaries for whose benefit such payment is made;
(c) the Convertible Notes;
(d) Indebtedness incurred by Company or any of its
Subsidiaries arising from agreements providing for indemnification, adjustment
of purchase price or similar obligations, or from guaranties or letters of
credit, surety bonds or performance bonds securing the performance of Company or
any such Subsidiary pursuant to such agreements, in connection with permitted
dispositions of any business, assets or Subsidiary of Company or any of its
Subsidiaries;
(e) Indebtedness which may be deemed to exist pursuant to any
guaranties, performance, surety, statutory, appeal or similar obligations
incurred in the ordinary course of business;
(f) Indebtedness in respect of netting services, overdraft
protections and otherwise in connection with deposit accounts;
(g) guaranties in the ordinary course of business of the
obligations of suppliers, customers, franchisees and licensees of Company and
its Subsidiaries;
(h) guaranties by Company of Indebtedness of a Guarantor
Subsidiary or guaranties by a Subsidiary of Company of Indebtedness of Company
or a Guarantor Subsidiary with respect, in each case, to Indebtedness otherwise
permitted to be incurred pursuant to this Section 6.1;
(i) Indebtedness described in Schedule 6.1, but not any
extensions, renewals or replacements of such Indebtedness except (i) renewals
and extensions expressly provided for in the agreements evidencing any such
Indebtedness as the same are in effect on the date of this Agreement and (ii)
refinancings and extensions of any such Indebtedness if the terms and conditions
thereof are not less favorable to the obligor thereon or to the Lenders than the
Indebtedness being refinanced or extended, and the average life to maturity
thereof is greater than or equal to that of the Indebtedness being refinanced or
extended; provided, such Indebtedness permitted under the immediately preceding
clause (i) or (ii) above shall not (A) include Indebtedness of an obligor that
was not an obligor with respect to the Indebtedness being extended, renewed or
refinanced, (B) exceed in a principal amount the Indebtedness being
53
renewed, extended or refinanced or (C) incurred, created or assumed if any
Default or Event of Default has occurred and is continuing or would result
therefrom;
(j) Indebtedness with respect to Capital Leases in an
aggregate amount not to exceed at any time $1,000,000;
(k) purchase money Indebtedness in an aggregate amount not to
exceed at any time $500,000; provided, any such Indebtedness (i) shall be
secured only by the asset acquired in connection with the incurrence of such
Indebtedness, and (ii) shall constitute not less than 90% of the aggregate
consideration paid with respect to such asset;
(l) other Indebtedness of Company and its Subsidiaries, which
is unsecured and subordinated to the Obligations in a manner satisfactory to
Administrative Agent in an aggregate amount not to exceed at any time
$1,000,000; and
(m) any Indebtedness secured by a Permitted Lien.
6.2. LIENS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC of any State or under any similar recording or notice
statute, except:
(a) Liens in favor of Collateral Agent for the benefit of
Secured Parties granted pursuant to any Credit Document;
(b) Liens for Taxes if obligations with respect to such Taxes
are being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted;
(c) statutory Liens of landlords, banks (and rights of
set-off), of carriers, warehousemen, mechanics, repairmen, workmen and
materialmen, and other Liens imposed by law (other than any such Lien imposed
pursuant to Section 401 (a)(29) or 412(n) of the Internal Revenue Code or by
ERISA), in each case incurred in the ordinary course of business (i) for amounts
not yet overdue or (ii) for amounts that are overdue and that (in the case of
any such amounts overdue for a period in excess of five days) are being
contested in good faith by appropriate proceedings, so long as such reserves or
other appropriate provisions, if any, as shall be required by GAAP shall have
been made for any such contested amounts;
(d) Liens incurred in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations
54
(exclusive of obligations for the payment of borrowed money or other
Indebtedness), so long as no foreclosure, sale or similar proceedings have been
commenced with respect to any portion of the Collateral on account thereof;
(e) easements, rights-of-way, restrictions, encroachments, and
other minor defects or irregularities in title, in each case which do not and
will not interfere in any material respect with the ordinary conduct of the
business of Company or any of its Subsidiaries;
(f) any interest or title of a lessor or sublessor under any
lease of real estate;
(g) purported Liens evidenced by the filing of precautionary
UCC financing statements relating solely to operating leases of personal
property entered into in the ordinary course of business;
(h) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection with the
importation of goods;
(i) any zoning or similar law or right reserved to or vested
in any governmental office or agency to control or regulate the use of any real
property;
(j) licenses of patents, trademarks and other intellectual
property rights granted by Company or any of its Subsidiaries in the ordinary
course of business and not interfering in any respect with the ordinary conduct
of the business of Company or such Subsidiary;
(k) Liens described in Schedule 6.2;
(l) Liens securing Indebtedness permitted pursuant to 6.1(k);
provided, any such Lien shall encumber only the asset acquired with the proceeds
of such Indebtedness; and
(n) other Liens on assets other than the Collateral securing
Indebtedness in an aggregate amount not to exceed $500,000 at any time
outstanding.
6.3. EQUITABLE LIEN. If any Credit Party or any of its Subsidiaries
shall create or assume any Lien upon any of its properties or assets, whether
now owned or hereafter acquired, other than Permitted Liens, it shall make or
cause to be made effective provisions whereby the Obligations will be secured by
such Lien equally and ratably with any and all other Indebtedness secured
thereby as long as any such Indebtedness shall be so secured; provided,
notwithstanding the foregoing, this covenant shall not be construed as a consent
by Requisite Lenders to the creation or assumption of any such Lien not
otherwise permitted hereby.
6.4. NO FURTHER NEGATIVE PLEDGES. Except with respect to (a) specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to a permitted Asset Sale and (b)
restrictions by reason of customary provisions restricting assignments,
subletting or other transfers contained in leases, licenses and
55
similar agreements entered into in the ordinary course of business (provided
that such restrictions are limited to the property or assets secured by such
Liens or the property or assets subject to such leases, licenses or similar
agreements, as the case may be) no Credit Party nor any of its Subsidiaries
shall enter into any agreement prohibiting the creation or assumption of any
Lien upon any of its properties or assets, whether now owned or hereafter
acquired.
6.5. RESTRICTED JUNIOR PAYMENTS. No Credit Party shall, nor shall it
permit any of its Subsidiaries or Affiliates through any manner or means or
through any other Person to, directly or indirectly, declare, order, pay, make
or set apart, or agree to declare, order, pay, make or set apart, any sum for
any Restricted Junior Payment except that Company may make regularly scheduled
payments of interest in respect of the Convertible Notes in accordance with the
terms of, and only to the extent required by, and subject to the subordination
provisions contained in, the indenture or other agreement pursuant to which the
Convertible Notes were issued.
6.6. RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. Except as provided
herein, no Credit Party shall, nor shall it permit any of its Subsidiaries to,
create or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary of
Company to (a) pay dividends or make any other distributions on any of such
Subsidiary's Capital Stock owned by Company or any other Subsidiary of Company,
(b) repay or prepay any Indebtedness owed by such Subsidiary to Company or any
other Subsidiary of Company, (c) make loans or advances to Company or any other
Subsidiary of Company, or (d) transfer any of its property or assets to Company
or any other Subsidiary of Company other than restrictions (i) in agreements
evidencing Indebtedness permitted by Section 6.1(k) that impose restrictions on
the property so acquired and (ii) by reason of customary provisions restricting
assignments, subletting or other transfers contained in leases, licenses, joint
venture agreements and similar agreements entered into in the ordinary course of
business, and (iii) that are or were created by virtue of any transfer of,
agreement to transfer or option or right with respect to any property, assets or
Capital Stock not otherwise prohibited under this Agreement.
6.7. INVESTMENTS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including without limitation any Joint Venture, except:
(a) Investments in Cash and Cash Equivalents;
(b) equity Investments owned as of the Closing Date in any
Subsidiary and Investments made after the Closing Date in wholly-owned Guarantor
Subsidiaries of Company;
(c) Investments (i) in any Securities received in satisfaction
or partial satisfaction thereof from financially troubled account debtors and
(ii) deposits, prepayments and other credits to suppliers made in the ordinary
course of business consistent with the past practices of Company and its
Subsidiaries;
(d) intercompany loans to the extent permitted under Section
6.1(b);
56
(e) Consolidated Capital Expenditures permitted by Section
6.8(c);
(f) loans and advances to employees of Company and its
Subsidiaries made in the ordinary course of business in an aggregate principal
amount not to exceed $300,000 in the aggregate;
(g) Investments made in connection with the Acquisition;
(h) Investments described in Schedule 6.7; and
(i) other Investments in Foreign Subsidiaries that exist as of
the Closing Date in an aggregate amount not to exceed at any time $300,000.
Notwithstanding the foregoing, in no event shall any Credit Party make any
Investment which results in or facilitates in any manner any Restricted Junior
payment not otherwise permitted under the terms of Section 6.5.
6.8. FINANCIAL COVENANTS.
(a) Maximum Cash Balance. Company shall not permit the
aggregate amount of Cash and Cash Equivalents of Company and its Subsidiaries
(the "MAXIMUM CASH BALANCE") as at the end of (i) the month ending March 31,
2004 to exceed $25,000,000 and (ii) any month, beginning with the month ending
April 30, 2004 to exceed $20,000,000; provided that to the extent that the
aggregate amount of Cash and Cash Equivalents of Company and its Subsidiaries
exceeds the Maximum Cash Balance, Company shall apply such excess to prepay the
Term Loans in accordance with Section 2.11(e).
(b) Minimum Consolidated Adjusted EBITDA. Company shall not
permit Consolidated Adjusted EBITDA as at the end of any Fiscal Quarter,
beginning with the Fiscal Quarter ending March 31, 2004, for the four Fiscal
Quarter period then ended to be less than the corresponding amount set forth
below:
CONSOLIDATED ADJUSTED
FISCAL QUARTER ENDING EBITDA
-----------------------------------------------
March 31, 2004 $ 7,023,600
-----------------------------------------------
June 30, 2004 $ 7,079,700
-----------------------------------------------
September 30, 2004 $ 8,475,400
-----------------------------------------------
December 31, 2004 $ 12,858,800
(c) Maximum Consolidated Capital Expenditures. Company shall
not, and shall not permit its Subsidiaries to, make or incur Consolidated
Capital Expenditures for any Fiscal Quarter in excess of the corresponding
amount for such Fiscal Quarter set forth below; provided that the purchase of
any inventory in connection with the Acquired Business shall not be deemed to
be Consolidated Capital Expenditures for purposes of this Agreement:
57
FISCAL QUARTER ENDING CONSOLIDATED CAPITAL EXPENDITURE
---------------------------------------------------------
March 31, 2004 $ 1,200,000
---------------------------------------------------------
June 30, 2004 $ 1,200,000
---------------------------------------------------------
September 30, 2004 $ 2,700,000
---------------------------------------------------------
December 31, 2004 $ 2,700,000
(d) Certain Calculations. With respect to any period during
which an Asset Sale has occurred (each, a "SUBJECT TRANSACTION"), for purposes
of determining compliance with the financial covenants set forth in this Section
6.8, Consolidated Adjusted EBITDA shall be calculated with respect to such
period on a pro forma basis (including pro forma adjustments arising out of
events which are directly attributable to a specific transaction, are factually
supportable and are expected to have a continuing impact, in each case
determined on a basis consistent with Article 11 of Regulation S-X promulgated
under the Securities Act and as interpreted by the staff of the Securities and
Exchange Commission, which would include cost savings resulting from head count
reduction, closure of facilities and similar restructuring charges, which pro
forma adjustments shall be certified by the chief financial officer of Company)
using the historical audited financial statements of any business sold or to be
sold and the consolidated financial statements of Company and its Subsidiaries
which shall be reformulated as if such Subject Transaction, and any Indebtedness
incurred or repaid in connection therewith, had been consummated or incurred or
repaid at the beginning of such period (and assuming that such Indebtedness
bears interest during any portion of the applicable measurement period prior to
the relevant acquisition at the weighted average of the interest rates
applicable to outstanding Loans incurred during such period).
6.9. FUNDAMENTAL CHANGES; DISPOSITION OF ASSETS; ACQUISITIONS. No
Credit Party shall, nor shall it permit any of its Subsidiaries to, enter into
any transaction of merger or consolidation, or liquidate, wind-up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell, lease or
sub-lease (as lessor or sublessor), exchange, transfer or otherwise dispose of,
in one transaction or a series of transactions, all or any part of its business,
assets or property of any kind whatsoever, whether real, personal or mixed and
whether tangible or intangible, whether now owned or hereafter acquired, or
acquire by purchase or otherwise (other than purchases or other acquisitions of
inventory, materials and equipment and Capital Expenditures in the ordinary
course of business) the business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any Person or any division or line of
business or other business unit of any Person, except:
(a) any Subsidiary of Company may be merged with or into
Company or any Guarantor Subsidiary, or be liquidated, wound up or dissolved, or
all or any part of its business, property or assets may be conveyed, sold,
leased, transferred or otherwise disposed of, in one
58
transaction or a series of transactions, to Company or any Guarantor Subsidiary;
provided, in the case of such a merger, Company or such Guarantor Subsidiary, as
applicable shall be the continuing or surviving Person;
(b) sales or other dispositions of assets that do not
constitute Asset Sales;
(c) Asset Sales, the proceeds of which (valued at the
principal amount thereof in the case of non-Cash proceeds consisting of notes or
other debt Securities and valued at fair market value in the case of other
non-Cash proceeds) (i) are less than $500,000 with respect to any single Asset
Sale or series of related Asset Sales and (ii) when aggregated with the proceeds
of all other Asset Sales made within the same Fiscal Year, are less than
$1,000,000; provided (1) the consideration received for such assets shall be in
an amount at least equal to the fair market value thereof (determined in good
faith by the board of directors of Company (or similar governing body)), (2) no
less than 100% thereof shall be paid in Cash, and (3) the Net Asset Sale
Proceeds thereof shall be applied to prepay the Term Loans as required by
Section 2.11(a);
(d) disposals of obsolete, worn out or surplus property;
(e) the Acquisition;
(f) sublessees of real property leased by a Credit Party
existing as of the date of this Agreement; and
(g) Investments made in accordance with Section 6.7.
6.10. DISPOSAL OF SUBSIDIARY INTERESTS. Except for any sale of all of
its interests in the Capital Stock of any of its Subsidiaries in compliance with
the provisions of Section 6.9, no Credit Party shall, nor shall it permit any of
its Subsidiaries to, (a) directly or indirectly sell, assign, pledge or
otherwise encumber or dispose of any Capital Stock of any of its Subsidiaries,
except to qualify directors if required by applicable law; or (b) permit any of
its Subsidiaries directly or indirectly to sell, assign, pledge or otherwise
encumber or dispose of any Capital Stock of any of its Subsidiaries, except to
another Credit Party (subject to the restrictions on such disposition otherwise
imposed hereunder), or to qualify directors if required by applicable law.
6.11. SALES AND LEASE-BACKS. No Credit Party shall, nor shall it permit
any of its Subsidiaries to, directly or indirectly, become or remain liable as
lessee or as a guarantor or other surety with respect to any lease of any
property (whether real, personal or mixed), whether now owned or hereafter
acquired, which such Credit Party (a) has sold or transferred or is to sell or
to transfer to any other Person (other than Company or any of its Subsidiaries),
or (b) intends to use for substantially the same purpose as any other property
which has been or is to be sold or transferred by such Credit Party to any
Person (other than Company or any of its Subsidiaries) in connection with such
lease or (c) will be used for substantially the same purpose as property leased
by a Credit Party as of the date of this Agreement.
59
6.12. TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. No Credit Party
shall, nor shall it permit any of its Subsidiaries to, directly or indirectly,
enter into or permit to exist any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
holder of 5% or more of any class of Capital Stock of Company or any of its
Subsidiaries or with any Affiliate of Company or of any such holder, on terms
that are less favorable to Company or that Subsidiary, as the case may be, than
those that might be obtained at the time from a Person who is not such a holder
or Affiliate; provided, the foregoing restriction shall not apply to (a) any
transaction between Company and any Guarantor Subsidiary; (b) reasonable and
customary fees paid to members of the board of directors (or similar governing
body) of Company and its Subsidiaries; (c) compensation arrangements for
officers and other employees of Company and its Subsidiaries entered into in the
ordinary course of business; and (d) transactions described in Schedule 6.12.
6.13. CONDUCT OF BUSINESS. From and after the Closing Date, no Credit
Party shall, nor shall it permit any of its Subsidiaries to, engage in any
business other than (i) the businesses engaged in by such Credit Party on the
Closing Date and similar or related businesses and (ii) such other lines of
business as may be consented to by Requisite Lenders.
6.14. AMENDMENTS OR WAIVERS OF ACQUISITION AGREEMENT. No Credit Party
shall nor shall it permit any of its Subsidiaries to, agree to any material
amendment, restatement, supplement or other modification to, or waiver of, any
of its material rights under the Acquisition Agreement after the Closing Date
without in each case obtaining the prior written consent of Requisite Lenders to
such amendment, restatement, supplement or other modification or waiver, which
consent shall not be unreasonably withheld, conditioned or delayed.
6.15. FISCAL YEAR. No Credit Party shall, nor shall it permit any of
its Subsidiaries to change its Fiscal Year-end from December 31.
SECTION 7. GUARANTY
7.1. GUARANTY OF THE OBLIGATIONS. Subject to the provisions of Section
7.2, Guarantors jointly and severally hereby irrevocably and unconditionally
guaranty to Administrative Agent for the ratable benefit of the Beneficiaries
the due and punctual payment in full of all Obligations when the same shall
become due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. Section 362(a)) (collectively, the "GUARANTEED OBLIGATIONS").
7.2. CONTRIBUTION BY GUARANTORS. All Guarantors desire to allocate
among themselves (collectively, the "CONTRIBUTING GUARANTORS"), in a fair and
equitable manner, their obligations arising under this Guaranty. Accordingly, in
the event any payment or distribution is made on any date by a Guarantor (a
"FUNDING GUARANTOR") under this Guaranty such that its Aggregate Payments
exceeds its Fair Share as of such date, such Funding Guarantor shall be entitled
to a
60
contribution from each of the other Contributing Guarantors in an amount
sufficient to cause each Contributing Guarantor's Aggregate Payments to equal
its Fair Share as of such date. "FAIR SHARE" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (a)
the ratio of (i) the Fair Share Contribution Amount with respect to such
Contributing Guarantor to (ii) the aggregate of the Fair Share Contribution
Amounts with respect to all Contributing Guarantors multiplied by (b) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty in respect of the obligations Guaranteed. "FAIR
SHARE CONTRIBUTION AMOUNT" means, with respect to a Contributing Guarantor as of
any date of determination, the maximum aggregate amount of the obligations of
such Contributing Guarantor under this Guaranty that would not render its
obligations hereunder or thereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any comparable applicable provisions of state law; provided, solely for
purposes of calculating the "FAIR SHARE CONTRIBUTION AMOUNT" with respect to any
Contributing Guarantor for purposes of this Section 7.2, any assets or
liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder shall not be considered as assets or liabilities of such
Contributing Guarantor. "AGGREGATE PAYMENTS" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (1)
the aggregate amount of all payments and distributions made on or before such
date by such Contributing Guarantor in respect of this Guaranty (including,
without limitation, in respect of this Section 7.2), minus (2) the aggregate
amount of all payments received on or before such date by such Contributing
Guarantor from the other Contributing Guarantors as contributions under this
Section 7.2. The amounts payable as contributions hereunder shall be determined
as of the date on which the related payment or distribution is made by the
applicable Funding Guarantor. The allocation among Contributing Guarantors of
their obligations as set forth in this Section 7.2 shall not be construed in any
way to limit the liability of any Contributing Guarantor hereunder. Each
Guarantor is a third party beneficiary to the contribution agreement set forth
in this Section 7.2.
7.3. PAYMENT BY GUARANTORS. Subject to Section 7.2, Guarantors hereby
jointly and severally agree, in furtherance of the foregoing and not in
limitation of any other right which any Beneficiary may have at law or in equity
against any Guarantor by virtue hereof, that upon the failure of Company to pay
any of the Guaranteed Obligations when and as the same shall become due, whether
at stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section
362(a)), Guarantors will upon demand pay, or cause to be paid, in Cash, to
Administrative Agent for the ratable benefit of Beneficiaries, an amount equal
to the sum of the unpaid principal amount of all Guaranteed Obligations then due
as aforesaid, accrued and unpaid interest on such Guaranteed Obligations
(including interest which, but for Company's becoming the subject of a case
under the Bankruptcy Code, would have accrued on such Guaranteed Obligations,
whether or not a claim is allowed against Company for such interest in the
related bankruptcy case) and all other Guaranteed Obligations then owed to
Beneficiaries as aforesaid.
61
7.4. LIABILITY OF GUARANTORS ABSOLUTE. Each Guarantor agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Guaranteed Obligations. In furtherance of the foregoing and without limiting the
generality thereof, each Guarantor agrees as follows:
(a) this Guaranty is a guaranty of payment when due and not of
collectability. This Guaranty is a primary obligation of each Guarantor and not
merely a contract of surety;
(b) Administrative Agent may enforce this Guaranty upon the
occurrence of an Event of Default notwithstanding the existence of any dispute
between Company and any Beneficiary with respect to the existence of such Event
of Default;
(c) the obligations of each Guarantor hereunder are
independent of the obligations of Company and the obligations of any other
guarantor (including any other Guarantor) of the obligations of Company, and a
separate action or actions may be brought and prosecuted against such Guarantor
whether or not any action is brought against Company or any of such other
guarantors and whether or not Company is joined in any such action or actions;
(d) payment by any Guarantor of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge any
Guarantor's liability for any portion of the Guaranteed Obligations which has
not been paid. Without limiting the generality of the foregoing, if
Administrative Agent is awarded a judgment in any suit brought to enforce any
Guarantor's covenant to pay a portion of the Guaranteed Obligations, such
judgment shall not be deemed to release such Guarantor from its covenant to pay
the portion of the Guaranteed Obligations that is not the subject of such suit,
and such judgment shall not, except to the extent satisfied by such Guarantor,
limit, affect, modify or abridge any other Guarantor's liability hereunder in
respect of the Guaranteed Obligations;
(e) any Beneficiary, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or enforceability
hereof or giving rise to any reduction, limitation, impairment, discharge or
termination of any Guarantor's liability hereunder, from time to time may (i)
renew, extend, accelerate, increase the rate of interest on, or otherwise change
the time, place, manner or terms of payment of the Guaranteed Obligations; (ii)
settle, compromise, release or discharge, or accept or refuse any offer of
performance with respect to, or substitutions for, the Guaranteed Obligations or
any agreement relating thereto and/or subordinate the payment of the same to the
payment of any other obligations; (iii) request and accept other guaranties of
the Guaranteed Obligations and take and hold security for the payment hereof or
the Guaranteed Obligations; (iv) release, surrender, exchange, substitute,
compromise, settle, rescind, waive, alter, subordinate or modify, with or
without consideration, any security for payment of the Guaranteed Obligations,
any other guaranties of the Guaranteed Obligations, or any other obligation of
any Person (including any other Guarantor) with respect to the Guaranteed
Obligations; (v) enforce and apply any security now or hereafter held by or for
the benefit of such Beneficiary in respect hereof or the Guaranteed Obligations
and direct the
62
order or manner of sale thereof, or exercise any other right or remedy that such
Beneficiary may have against any such security, in each case as such Beneficiary
in its discretion may determine consistent herewith or the applicable Hedge
Agreement and any applicable security agreement, including foreclosure on any
such security pursuant to one or more judicial or nonjudicial sales, whether or
not every aspect of any such sale is commercially reasonable, and even though
such action operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of any Guarantor against Company or any
security for the Guaranteed Obligations; and (vi) exercise any other rights
available to it under the Credit Documents or the Hedge Agreements; and
(f) this Guaranty and the obligations of Guarantors hereunder
shall be valid and enforceable and shall not be subject to any reduction,
limitation, impairment, discharge or termination for any reason (other than
payment in full of the Guaranteed Obligations), including the occurrence of any
of the following, whether or not any Guarantor shall have had notice or
knowledge of any of them: (i) any failure or omission to assert or enforce or
agreement or election not to assert or enforce, or the stay or enjoining, by
order of court, by operation of law or otherwise, of the exercise or enforcement
of, any claim or demand or any right, power or remedy (whether arising under the
Credit Documents or the Hedge Agreements, at law, in equity or otherwise) with
respect to the Guaranteed Obligations or any agreement relating thereto, or with
respect to any other guaranty of or security for the payment of the Guaranteed
Obligations; (ii) any rescission, waiver, amendment or modification of, or any
consent to departure from, any of the terms or provisions (including provisions
relating to events of default) hereof, any of the other Credit Documents, any of
the Hedge Agreements or any agreement or instrument executed pursuant thereto,
or of any other guaranty or security for the Guaranteed Obligations, in each
case whether or not in accordance with the terms hereof or such Credit Document,
such Hedge Agreement or any agreement relating to such other guaranty or
security; (iii) the Guaranteed Obligations, or any agreement relating thereto,
at any time being found to be illegal, invalid or unenforceable in any respect;
(iv) the application of payments received from any source (other than payments
received pursuant to the other Credit Documents or any of the Hedge Agreements
or from the proceeds of any security for the Guaranteed Obligations, except to
the extent such security also serves as collateral for indebtedness other than
the Guaranteed Obligations) to the payment of indebtedness other than the
Guaranteed Obligations, even though any Beneficiary might have elected to apply
such payment to any part or all of the Guaranteed Obligations; (v) any
Beneficiary's consent to the change, reorganization or termination of the
corporate structure or existence of Company or any of its Subsidiaries and to
any corresponding restructuring of the Guaranteed Obligations; (vi) any failure
to perfect or continue perfection of a security interest in any collateral which
secures any of the Guaranteed Obligations; (vii) any defenses, set-offs or
counterclaims which Company may allege or assert against any Beneficiary in
respect of the Guaranteed Obligations, including failure of consideration,
breach of warranty, payment, statute of frauds, statute of limitations, accord
and satisfaction and usury; and (viii) any other act or thing or omission, or
delay to do any other act or thing, which may or might in any manner or to any
extent vary the risk of any Guarantor as an obligor in respect of the Guaranteed
Obligations.
63
7.5. WAIVERS BY GUARANTORS. Each Guarantor hereby waives, for the
benefit of Beneficiaries: (a) any right to require any Beneficiary, as a
condition of payment or performance by such Guarantor, to (i) proceed against
Company, any other guarantor (including any other Guarantor) of the Guaranteed
Obligations or any other Person, (ii) proceed against or exhaust any security
held from Company, any such other guarantor or any other Person, (iii) proceed
against or have resort to any balance of any Deposit Account or credit on the
books of any Beneficiary in favor of Company or any other Person, or (iv) pursue
any other remedy in the power of any Beneficiary whatsoever; (b) any defense
arising by reason of the incapacity, lack of authority or any disability or
other defense of Company or any other Guarantor including any defense based on
or arising out of the lack of validity or the unenforceability of the Guaranteed
Obligations or any agreement or instrument relating thereto or by reason of the
cessation of the liability of Company or any other Guarantor from any cause
other than payment in full of the Guaranteed Obligations; (c) any defense based
upon any statute or rule of law which provides that the obligation of a surety
must be neither larger in amount nor in other respects more burdensome than that
of the principal; (d) any defense based upon any Beneficiary's errors or
omissions in the administration of the Guaranteed Obligations, except behavior
which amounts to bad faith; (e) (i) any principles or provisions of law,
statutory or otherwise, which are or might be in conflict with the terms hereof
and any legal or equitable discharge of such Guarantor's obligations hereunder,
(ii) the benefit of any statute of limitations affecting such Guarantor's
liability hereunder or the enforcement hereof, (iii) any rights to set-offs,
recoupments and counterclaims, and (iv) promptness, diligence and any
requirement that any Beneficiary protect, secure, perfect or insure any security
interest or lien or any property subject thereto; (f) notices, demands,
presentments, protests, notices of protest, notices of dishonor and notices of
any action or inaction, including acceptance hereof, notices of default
hereunder, the Hedge Agreements or any agreement or instrument related thereto,
notices of any renewal, extension or modification of the Guaranteed Obligations
or any agreement related thereto, notices of any extension of credit to Company
and notices of any of the matters referred to in Section 7.4 and any right to
consent to any thereof; and (g) any defenses or benefits that may be derived
from or afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms hereof.
7.6. GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC. Until the
Guaranteed Obligations shall have been indefeasibly paid in full each Guarantor
hereby waives any claim, right or remedy, direct or indirect, that such
Guarantor now has or may hereafter have against Company or any other Guarantor
or any of its assets in connection with this Guaranty or the performance by such
Guarantor of its obligations hereunder, in each case whether such claim, right
or remedy arises in equity, under contract, by statute, under common law or
otherwise and including without limitation (a) any right of subrogation,
reimbursement or indemnification that such Guarantor now has or may hereafter
have against Company with respect to the Guaranteed Obligations, (b) any right
to enforce, or to participate in, any claim, right or remedy that any
Beneficiary now has or may hereafter have against Company, and (c) any benefit
of, and any right to participate in, any collateral or security now or hereafter
held by any Beneficiary. In addition, until the Guaranteed Obligations shall
have been indefeasibly paid in full each Guarantor shall withhold exercise of
any right of contribution such Guarantor may have against
64
any other guarantor (including any other Guarantor) of the Guaranteed
Obligations, including, without limitation, any such right of contribution as
contemplated by Section 7.2. Each Guarantor further agrees that, to the extent
the waiver or agreement to withhold the exercise of its rights of subrogation,
reimbursement, indemnification and contribution as set forth herein is found by
a court of competent jurisdiction to be void or voidable for any reason, any
rights of subrogation, reimbursement or indemnification such Guarantor may have
against Company or against any collateral or security, and any rights of
contribution such Guarantor may have against any such other guarantor, shall be
junior and subordinate to any rights any Beneficiary may have against Company,
to all right, title and interest any Beneficiary may have in any such collateral
or security, and to any right any Beneficiary may have against such other
guarantor. If any amount shall be paid to any Guarantor on account of any such
subrogation, reimbursement, indemnification or contribution rights at any time
when all Guaranteed Obligations shall not have been finally and indefeasibly
paid in full, such amount shall be held in trust for Administrative Agent on
behalf of Beneficiaries and shall forthwith be paid over to Administrative Agent
for the benefit of Beneficiaries to be credited and applied against the
Guaranteed Obligations, whether matured or unmatured, in accordance with the
terms hereof.
7.7. SUBORDINATION OF OTHER OBLIGATIONS. Any Indebtedness of Company or
any Guarantor now or hereafter held by any Guarantor (the "OBLIGEE GUARANTOR")
is hereby subordinated in right of payment to the Guaranteed Obligations, and
any such indebtedness collected or received by the Obligee Guarantor after an
Event of Default has occurred and is continuing shall be held in trust for
Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over
to Administrative Agent for the benefit of Beneficiaries to be credited and
applied against the Guaranteed Obligations but without affecting, impairing or
limiting in any manner the liability of the Obligee Guarantor under any other
provision hereof.
7.8. CONTINUING GUARANTY. This Guaranty is a continuing guaranty and
shall remain in effect until all of the Guaranteed Obligations shall have been
paid in full. Each Guarantor hereby irrevocably waives any right to revoke this
Guaranty as to future transactions giving rise to any Guaranteed Obligations.
7.9. AUTHORITY OF GUARANTORS OR COMPANY. It is not necessary for any
Beneficiary to inquire into the capacity or powers of any Guarantor or Company
or the officers, directors or any agents acting or purporting to act on behalf
of any of them.
7.10. FINANCIAL CONDITION OF COMPANY. The Term Loans may be made to
Company, and any Hedge Agreements may be entered into from time to time, in each
case without notice to or authorization from any Guarantor regardless of the
financial or other condition of Company at the time of any such grant or
continuation or at the time such Hedge Agreement is entered into, as the case
may be. No Beneficiary shall have any obligation to disclose or discuss with any
Guarantor its assessment, or any Guarantor's assessment, of the financial
condition of Company. Each Guarantor has adequate means to obtain information
from Company on a continuing basis concerning the financial condition of Company
and its ability to perform its obligations under the Credit Documents and the
Hedge Agreements, and each Guarantor assumes the responsibility for
65
being and keeping informed of the financial condition of Company and of all
circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations.
Each Guarantor hereby waives and relinquishes any duty on the part of any
Beneficiary to disclose any matter, fact or thing relating to the business,
operations or conditions of Company now known or hereafter known by any
Beneficiary.
7.11. BANKRUPTCY, ETC. (a) So long as any Guaranteed Obligations remain
outstanding, no Guarantor shall, without the prior written consent of
Administrative Agent acting pursuant to the instructions of Requisite Lenders,
commence or join with any other Person in commencing any bankruptcy,
reorganization or insolvency case or proceeding of or against Company or any
other Guarantor. The obligations of Guarantors hereunder shall not be reduced,
limited, impaired, discharged, deferred, suspended or terminated by any case or
proceeding, voluntary or involuntary, involving the bankruptcy, insolvency,
receivership, reorganization, liquidation or arrangement of Company or any other
Guarantor or by any defense which Company or any other Guarantor may have by
reason of the order, decree or decision of any court or administrative body
resulting from any such proceeding.
(a) Each Guarantor acknowledges and agrees that any interest
on any portion of the Guaranteed Obligations which accrues after the
commencement of any case or proceeding referred to in clause (a) above (or, if
interest on any portion of the Guaranteed Obligations ceases to accrue by
operation of law by reason of the commencement of such case or proceeding, such
interest as would have accrued on such portion of the Guaranteed Obligations if
such case or proceeding had not been commenced) shall be included in the
Guaranteed Obligations because it is the intention of Guarantors and
Beneficiaries that the Guaranteed Obligations which are guaranteed by Guarantors
pursuant hereto should be determined without regard to any rule of law or order
which may relieve Company of any portion of such Guaranteed Obligations.
Guarantors will permit any trustee in bankruptcy, receiver, debtor in
possession, assignee for the benefit of creditors or similar person to pay
Administrative Agent, or allow the claim of Administrative Agent in respect of,
any such interest accruing after the date on which such case or proceeding is
commenced.
(b) In the event that all or any portion of the Guaranteed
Obligations are paid by Company, the obligations of Guarantors hereunder shall
continue and remain in full force and effect or be reinstated, as the case may
be, in the event that all or any part of such payment(s) are rescinded or
recovered directly or indirectly from any Beneficiary as a preference,
fraudulent transfer or otherwise, and any such payments which are so rescinded
or recovered shall constitute Guaranteed Obligations for all purposes hereunder.
7.12. DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR. If all of the
Capital Stock of any Guarantor or any of its successors in interest hereunder
shall be sold or otherwise disposed of (including by merger or consolidation) in
accordance with the terms and conditions hereof, the Guaranty of such Guarantor
or such successor in interest, as the case may be, hereunder shall automatically
be discharged and released without any further action by any Beneficiary or any
other Person effective as of the time of such Asset Sale.
66
SECTION 8. EVENTS OF DEFAULT
8.1. EVENTS OF DEFAULT. If any one or more of the following conditions
or events shall occur:
(a) Failure to Make Payments When Due. Failure by Company to
pay (i) when due any installment of principal of any Loan, whether at stated
maturity, by acceleration, by notice of voluntary prepayment, by mandatory
prepayment or otherwise; or (ii) any interest on any Loan or any fee or any
other amount due hereunder within five days after the date due; or
(b) Default in Other Agreements. (i) Failure of any Credit
Party or any of their respective Subsidiaries to pay when due any principal of
or interest on or any other amount payable in respect of one or more items of
Indebtedness (other than Indebtedness referred to in Section 8.1(a)) in an
individual principal amount of $500,000 or more or with an aggregate principal
amount of $1,000,000 or more, in each case beyond the grace period, if any,
provided therefor; or (ii) breach or default by any Credit Party with respect to
any other material term of (1) one or more items of Indebtedness in the
individual or aggregate principal amounts referred to in clause (i) above or (2)
any loan agreement, mortgage, indenture or other agreement relating to such
item(s) of Indebtedness, in each case beyond the grace period, if any, provided
therefor, if the effect of such breach or default is to cause, or to permit the
holder or holders of that Indebtedness (or a trustee on behalf of such holder or
holders), to cause, that Indebtedness to become or be declared due and payable
(or redeemable) prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be; or
(c) Breach of Certain Covenants. Failure of any Credit Party
to perform or comply with any term or condition contained in Section 2.3,
Section 5.2 or Section 6; or
(d) Breach of Representations, etc. Any representation,
warranty, certification or other statement made or deemed made by any Credit
Party in any Credit Document or in any statement or certificate at any time
given by any Credit Party or any of its Subsidiaries in writing pursuant hereto
or thereto or in connection herewith or therewith shall be false in any material
respect as of the date made or deemed made; or
(e) Other Defaults Under Credit Documents. Any Credit Party
shall default in the performance of or compliance with any term contained herein
or any of the other Credit Documents, other than any such term referred to in
any other Section of this Section 8.1, and such default shall not have been
remedied or waived within thirty days after the earlier of (i) an officer of
such Credit Party becoming aware of such default or (ii) receipt by Company of
notice from Administrative Agent or any Lender of such default; or
(f) Involuntary Bankruptcy; Appointment of Receiver, etc.. (i)
A court of competent jurisdiction shall enter a decree or order for relief in
respect of Company or any of its Subsidiaries in an involuntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, which decree or order is not
67
stayed; or any other similar relief shall be granted under any applicable
federal or state law; or (ii) an involuntary case shall be commenced against
Company or any of its Subsidiaries under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect; or
a decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or other
officer having similar powers over Company or any of its Subsidiaries, or over
all or a substantial part of its property, shall have been entered; or there
shall have occurred the involuntary appointment of an interim receiver, trustee
or other custodian of Company or any of its Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Company or any of its Subsidiaries, and any such event described in
this clause (ii) shall continue for sixty days without having been dismissed,
bonded or discharged; or
(g) Voluntary Bankruptcy; Appointment of Receiver, etc.. (i)
Company or any of its Subsidiaries shall have an order for relief entered with
respect to it or shall commence a voluntary case under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary
case, under any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of its property; or Company or any of its Subsidiaries shall make any
assignment for the benefit of creditors; or (ii) Company or any of its
Subsidiaries shall be unable, or shall fail generally, or shall admit in writing
its inability, to pay its debts as such debts become due; or the board of
directors (or similar governing body) of Company or any of its Subsidiaries (or
any committee thereof) shall adopt any resolution or otherwise authorize any
action to approve any of the actions referred to herein or in Section 8.1(f); or
(h) Judgments and Attachments. Any money judgment, writ or
warrant of attachment or similar process involving (i) in any individual case an
amount in excess of $500,000 or (ii) in the aggregate at any time an amount in
excess of $1,000,000 (in either case to the extent not adequately covered by
insurance as to which a solvent and unaffiliated insurance company has
acknowledged coverage) shall be entered or filed against Company or any of its
Subsidiaries or any of their respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of sixty days (or in any event
later than five days prior to the date of any proposed sale thereunder); or
(i) Dissolution. Any order, judgment or decree shall be
entered against any Credit Party decreeing the dissolution or split up of such
Credit Party and such order shall remain undischarged or unstayed for a period
in excess of thirty days; or
(j) Employee Benefit Plans. (i) There shall occur one or more
ERISA Events which individually or in the aggregate results in or might
reasonably be expected to result in liability of Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in excess of $500,000
during the term hereof; or (ii) there exists any fact or circumstance that
reasonably
68
could be expected to result in the imposition of a Lien or security interest
under Section 412(n) of the Internal Revenue Code or under ERISA.
(k) Change of Control. A Change of Control shall occur; or
(l) Guaranties, Collateral Documents and other Credit
Documents. At any time after the execution and delivery thereof, (i) the
Guaranty for any reason, other than the satisfaction in full of all Obligations,
shall cease to be in full force and effect (other than in accordance with its
terms) or shall be declared to be null and void or any Guarantor shall repudiate
its obligations thereunder, (ii) this Agreement or any Collateral Document
ceases to be in full force and effect (other than by reason of a release of
Collateral in accordance with the terms hereof or thereof or the satisfaction in
full of the Obligations in accordance with the terms hereof) or shall be
declared null and void, or Collateral Agent shall not have or shall cease to
have a valid and perfected Lien in any Collateral purported to be covered by the
Collateral Documents with the priority required by the relevant Collateral
Document, in each case for any reason other than the failure of Collateral Agent
or any Secured Party to take any action within its control, or (iii) any Credit
Party shall contest the validity or enforceability of any Credit Document in
writing or deny in writing that it has any further liability, including with
respect to future advances by Lenders, under any Credit Document to which it is
a party;
THEN, (1) upon the occurrence of any Event of Default described in Section
8.1(f) or 8.1(g), automatically, and (2) upon the occurrence of any other Event
of Default, at the request of (or with the consent of) Requisite Lenders, upon
notice to Company by Administrative Agent, each of the following shall
immediately become due and payable, in each case without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by each Credit Party: (I) the unpaid principal amount of and accrued
interest on the Loans, and (II) all other Obligations; and (C) Administrative
Agent may cause Collateral Agent to enforce any and all Liens and security
interests created pursuant to Collateral Documents.
SECTION 9. AGENTS
9.1. APPOINTMENT OF AGENTS. GSCP is hereby appointed Syndication Agent
hereunder, and each Lender hereby authorizes Syndication Agent to act as its
agent in accordance with the terms hereof and the other Credit Documents. GSCP
is hereby appointed Administrative Agent hereunder and under the other Credit
Documents and each Lender hereby authorizes Administrative Agent to act as its
agent in accordance with the terms hereof and the other Credit Documents. Each
Agent hereby agrees to act upon the express conditions contained herein and the
other Credit Documents, as applicable. The provisions of this Section 9 are
solely for the benefit of Agents and Lenders and no Credit Party shall have any
rights as a third party beneficiary of any of the provisions thereof. In
performing its functions and duties hereunder, each Agent shall act solely as an
agent of Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for Company or any
of its Subsidiaries. Syndication Agent, without consent of or notice to any
party hereto,
69
may assign any and all of its rights or obligations hereunder to any of its
Affiliates. As of the Closing Date, GSCP, in its capacity as Syndication Agent
shall not have any obligations but shall be entitled to all benefits of this
Section 9.
9.2. POWERS AND DUTIES. Each Lender irrevocably authorizes each Agent
to take such action on such Lender's behalf and to exercise such powers, rights
and remedies hereunder and under the other Credit Documents as are specifically
delegated or granted to such Agent by the terms hereof and thereof, together
with such powers, rights and remedies as are reasonably incidental thereto. Each
Agent shall have only those duties and responsibilities that are expressly
specified herein and the other Credit Documents. Each Agent may exercise such
powers, rights and remedies and perform such duties by or through its agents or
employees. No Agent shall have, by reason hereof or any of the other Credit
Documents, a fiduciary relationship in respect of any Lender; and nothing herein
or any of the other Credit Documents, expressed or implied, is intended to or
shall be so construed as to impose upon any Agent any obligations in respect
hereof or any of the other Credit Documents except as expressly set forth herein
or therein.
9.3. GENERAL IMMUNITY.
(a) No Responsibility for Certain Matters. No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectability or sufficiency hereof or any other
Credit Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by any Agent to Lenders or by or on behalf of any
Credit Party to any Agent or any Lender in connection with the Credit Documents
and the transactions contemplated thereby or for the financial condition or
business affairs of any Credit Party or any other Person liable for the payment
of any Obligations, nor shall any Agent be required to ascertain or inquire as
to the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained in any of the Credit Documents or as to the
use of the proceeds of the Loans or as to the existence or possible existence of
any Event of Default or Default or to make any disclosures with respect to the
foregoing. Anything contained herein to the contrary notwithstanding,
Administrative Agent shall not have any liability arising from confirmations of
the amount of outstanding Loans or the component amounts thereof.
(b) Exculpatory Provisions. No Agent nor any of its officers,
partners, directors, employees or agents shall be liable to Lenders for any
action taken or omitted by any Agent under or in connection with any of the
Credit Documents except to the extent caused by such Agent's gross negligence or
willful misconduct. Each Agent shall be entitled to refrain from any act or the
taking of any action (including the failure to take an action) in connection
herewith or any of the other Credit Documents or from the exercise of any power,
discretion or authority vested in it hereunder or thereunder unless and until
such Agent shall have received instructions in respect thereof from Requisite
Lenders (or such other Lenders as may be required to give such instructions
under Section 10.5) and, upon receipt of such instructions from Requisite
Lenders (or such other Lenders, as the case may be), such Agent shall be
entitled to act
70
or (where so instructed) refrain from acting, or to exercise such power,
discretion or authority, in accordance with such instructions. Without prejudice
to the generality of the foregoing, (i) each Agent shall be entitled to rely,
and shall be fully protected in relying, upon any communication, instrument or
document believed by it to be genuine and correct and to have been signed or
sent by the proper Person or Persons, and shall be entitled to rely and shall be
protected in relying on opinions and judgments of attorneys (who may be
attorneys for Company and its Subsidiaries), accountants, experts and other
professional advisors selected by it; and (ii) no Lender shall have any right of
action whatsoever against any Agent as a result of such Agent acting or (where
so instructed) refraining from acting hereunder or any of the other Credit
Documents in accordance with the instructions of Requisite Lenders (or such
other Lenders as may be required to give such instructions under Section 10.5).
9.4. AGENTS ENTITLED TO ACT AS LENDER. The agency hereby created shall
in no way impair or affect any of the rights and powers of, or impose any duties
or obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans, each Agent shall have the same
rights and powers hereunder as any other Lender and may exercise the same as if
it were not performing the duties and functions delegated to it hereunder, and
the term "Lender" shall, unless the context clearly otherwise indicates, include
each Agent in its individual capacity. Any Agent and its Affiliates may accept
deposits from, lend money to, own securities of, and generally engage in any
kind of banking, trust, financial advisory or other business with Company or any
of its Affiliates as if it were not performing the duties specified herein, and
may accept fees and other consideration from Company for services in connection
herewith and otherwise without having to account for the same to Lenders.
9.5. LENDERS' REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENT.
(a) Each Lender represents and warrants that it has made its
own independent investigation of the financial condition and affairs of Company
and its Subsidiaries in connection with the Loans hereunder and that it has made
and shall continue to make its own appraisal of the creditworthiness of Company
and its Subsidiaries. No Agent shall have any duty or responsibility, either
initially or on a continuing basis, to make any such investigation or any such
appraisal on behalf of Lenders or to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter, and no Agent shall have
any responsibility with respect to the accuracy of or the completeness of any
information provided to Lenders.
(b) Each Lender, by delivering its signature page to this
Agreement and funding its Term Loan on the Closing Date shall be deemed to have
acknowledged receipt of, and consented to and approved, each Credit Document and
each other document required to be approved by any Agent, Requisite Lenders or
Lenders, as applicable on the Closing Date.
9.6. RIGHT TO INDEMNITY. Each Lender, in proportion to its Pro Rata
Share, severally agrees to indemnify each Agent, to the extent that such Agent
shall not have been reimbursed by any Credit Party, for and against any and all
liabilities, obligations, losses, damages, penalties,
71
actions, judgments, suits, costs, expenses (including counsel fees and
disbursements) or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against such Agent in exercising its powers,
rights and remedies or performing its duties hereunder or under the other Credit
Documents or otherwise in its capacity as such Agent in any way relating to or
arising out of this Agreement or the other Credit Documents; provided, no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Agent's gross negligence or willful misconduct. If any
indemnity furnished to any Agent for any purpose shall, in the opinion of such
Agent, be insufficient or become impaired, such Agent may call for additional
indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished; provided, in no event shall this
sentence require any Lender to indemnify any Agent against any liability,
obligation, loss, damage, penalty, action, judgment, suit, cost, expense or
disbursement in excess of such Lender's Pro Rata Share thereof; and provided
further, this sentence shall not be deemed to require any Lender to indemnify
any Agent against any liability, obligation, loss, damage, penalty, action,
judgment, suit, cost, expense or disbursement described in the proviso in the
immediately preceding sentence.
9.7. SUCCESSOR ADMINISTRATIVE AGENT Administrative Agent may resign at
any time by giving thirty days' prior written notice thereof to Lenders and
Company, and Administrative Agent may be removed at any time with or without
cause by an instrument or concurrent instruments in writing delivered to Company
and Administrative Agent and signed by Requisite Lenders. Upon any such notice
of resignation or any such removal, Requisite Lenders shall have the right, upon
five Business Days' notice to Company, to appoint a successor Administrative
Agent. Upon the acceptance of any appointment as Administrative Agent hereunder
by a successor Administrative Agent, that successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Administrative Agent and the retiring or
removed Administrative Agent shall promptly (i) transfer to such successor
Administrative Agent all sums, Securities and other items of Collateral held
under the Collateral Documents, together with all records and other documents
necessary or appropriate in connection with the performance of the duties of the
successor Administrative Agent under the Credit Documents, and (ii) execute and
deliver to such successor Administrative Agent such amendments to financing
statements, and take such other actions, as may be necessary or appropriate in
connection with the assignment to such successor Administrative Agent of the
security interests created under the Collateral Documents, whereupon such
retiring or removed Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring or removed Administrative Agent's
resignation or removal hereunder as Administrative Agent, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent hereunder.
9.8. COLLATERAL DOCUMENTS AND GUARANTY.
(a) Agents under Collateral Documents and Guaranty. Each
Lender hereby further authorizes Administrative Agent or Collateral Agent, as
applicable, on behalf of and for the benefit of Lenders, to be the agent for and
representative of Lenders with respect to the
72
Guaranty, the Collateral and the Collateral Documents. Subject to Section 10.5,
without further written consent or authorization from Lenders, Administrative
Agent or Collateral Agent, as applicable may execute any documents or
instruments necessary to (i) release any Lien encumbering any item of Collateral
that is the subject of a sale or other disposition of assets permitted hereby or
to which Requisite Lenders (or such other Lenders as may be required to give
such consent under Section 10.5) have otherwise consented or (ii) release any
Guarantor from the Guaranty pursuant to Section 7.12 or with respect to which
Requisite Lenders (or such other Lenders as may be required to give such consent
under Section 10.5) have otherwise consented.
(b) Right to Realize on Collateral and Enforce Guaranty.
Anything contained in any of the Credit Documents to the contrary
notwithstanding, Company, Administrative Agent, Collateral Agent and each Lender
hereby agree that (i) no Lender shall have any right individually to realize
upon any of the Collateral or to enforce the Guaranty, it being understood and
agreed that all powers, rights and remedies hereunder may be exercised solely by
Administrative Agent, on behalf of Lenders in accordance with the terms hereof
and all powers, rights and remedies under the Collateral Documents may be
exercised solely by Collateral Agent, and (ii) in the event of a foreclosure by
Collateral Agent on any of the Collateral pursuant to a public or private sale,
Collateral Agent or any Lender may be the purchaser of any or all of such
Collateral at any such sale and Collateral Agent, as agent for and
representative of Secured Parties (but not any Lender or Lenders in its or their
respective individual capacities unless Requisite Lenders shall otherwise agree
in writing) shall be entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the Collateral sold
at any such public sale, to use and apply any of the Obligations as a credit on
account of the purchase price for any collateral payable by Collateral Agent at
such sale.
SECTION 10. MISCELLANEOUS
10.1. NOTICES. Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be given to a
Credit Party, Syndication Agent, Collateral Agent, or Administrative Agent shall
be sent to such Person's address as set forth on Appendix B or in the other
relevant Credit Document, and in the case of any Lender, the address as
indicated on Appendix B or otherwise indicated to Administrative Agent in
writing. Each notice hereunder shall be in writing and may be personally served,
telexed or sent by telefacsimile or United States mail or courier service and
shall be deemed to have been given when delivered in person or by courier
service and signed for against receipt thereof, upon receipt of telefacsimile or
telex, or three Business Days after depositing it in the United States mail with
postage prepaid and properly addressed; provided, no notice to any Agent shall
be effective until received by such Agent.
10.2. EXPENSES. Whether or not the transactions contemplated hereby
shall be consummated, Company agrees to pay promptly (a) all the actual and
reasonable costs and expenses of preparation of the Credit Documents and any
consents, amendments, waivers or other
73
modifications thereto; (b) all the costs of furnishing all opinions by counsel
for Company and the other Credit Parties; (c) the reasonable fees, expenses and
disbursements of counsel to Agents (in each case including allocated costs of
internal counsel) in connection with the negotiation, preparation, execution and
administration of the Credit Documents and any consents, amendments, waivers or
other modifications thereto and any other documents or matters requested by
Company; (d) all the actual costs and reasonable expenses of creating and
perfecting Liens in favor of Collateral Agent, for the benefit of Lenders
pursuant hereto, including filing and recording fees, expenses and taxes, stamp
or documentary taxes, search fees, title insurance premiums and reasonable fees,
expenses and disbursements of counsel to each Agent and of counsel providing any
opinions that any Agent or Requisite Lenders may request in respect of the
Collateral or the Liens created pursuant to the Collateral Documents; (e) all
the actual costs and reasonable fees, expenses and disbursements of any
auditors, accountants, consultants or appraisers; (f) all the actual costs and
reasonable expenses (including the reasonable fees, expenses and disbursements
of any appraisers, consultants, advisors and agents employed or retained by
Collateral Agent and its counsel) in connection with the custody or preservation
of any of the Collateral; (g) all other actual and reasonable costs and expenses
incurred by each Agent in connection with the syndication of the Loans and Term
Loan Commitments and the negotiation, preparation and execution of the Credit
Documents and any consents, amendments, waivers or other modifications thereto
and the transactions contemplated thereby; and (h) after the occurrence of a
Default or an Event of Default, all costs and expenses, including reasonable
attorneys' fees (including allocated costs of internal counsel) and costs of
settlement, incurred by any Agent and Lenders in enforcing any Obligations of or
in collecting any payments due from any Credit Party hereunder or under the
other Credit Documents by reason of such Default or Event of Default (including
in connection with the sale of, collection from, or other realization upon any
of the Collateral or the enforcement of the Guaranty) or in connection with any
refinancing or restructuring of the credit arrangements provided hereunder in
the nature of a "work-out" or pursuant to any insolvency or bankruptcy cases or
proceedings.
10.3. INDEMNITY.
(a) In addition to the payment of expenses pursuant to Section
10.2, whether or not the transactions contemplated hereby shall be consummated,
each Credit Party agrees to defend (subject to Indemnitees' selection of
counsel), indemnify, pay and hold harmless, each Agent and Lender and the
officers, partners, directors, trustees, employees, agents and Affiliates of
each Agent and each Lender (each, an "INDEMNITEE"), from and against any and all
Indemnified Liabilities; provided, no Credit Party shall have any obligation to
any Indemnitee hereunder with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise from the gross negligence or willful
misconduct of that Indemnitee. To the extent that the undertakings to defend,
indemnify, pay and hold harmless set forth in this Section 10.3 may be
unenforceable in whole or in part because they are violative of any law or
public policy, the applicable Credit Party shall contribute the maximum portion
that it is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of
them.
74
(b) To the extent permitted by applicable law, no Credit Party
shall assert, and each Credit Party hereby waives, any claim against Lenders,
Agents and their respective Affiliates, directors, employees, attorneys or
agents, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) (whether or not the
claim therefor is based on contract, tort or duty imposed by any applicable
legal requirement) arising out of, in connection with, arising out of, as a
result of, or in any way related to, this Agreement or any Credit Document or
any agreement or instrument contemplated hereby or thereby or referred to herein
or therein, the transactions contemplated hereby or thereby, any Loan or the use
of the proceeds thereof or any act or omission or event occurring in connection
therewith, and Company hereby waives, releases and agrees not to xxx upon any
such claim or any such damages, whether or not accrued and whether or not known
or suspected to exist in its favor.
10.4. SET-OFF. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Lender is hereby authorized by each
Credit Party at any time or from time to time subject to the consent of
Administrative Agent (such consent not to be unreasonably withheld or delayed),
without notice to any Credit Party or to any other Person (other than
Administrative Agent), any such notice being hereby expressly waived, to set off
and to appropriate and to apply any and all deposits (general or special,
including Indebtedness evidenced by certificates of deposit, whether matured or
unmatured, but not including trust accounts) and any other Indebtedness at any
time held or owing by such Lender to or for the credit or the account of any
Credit Party against and on account of the obligations and liabilities of any
Credit Party to such Lender hereunder and under the other Credit Documents,
including all claims of any nature or description arising out of or connected
hereto or with any other Credit Document, irrespective of whether or not (a)
such Lender shall have made any demand hereunder or (b) the principal of or the
interest on the Loans or any other amounts due hereunder shall have become due
and payable pursuant to Section 2 and although such obligations and liabilities,
or any of them, may be contingent or unmatured.
10.5. AMENDMENTS AND WAIVERS.
(a) Requisite Lenders' Consent. Subject to Section 10.5(b) and
10.5(c), no amendment, modification, termination or waiver of any provision of
the Credit Documents, or consent to any departure by any Credit Party therefrom,
shall in any event be effective without the written concurrence of the Requisite
Lenders.
(b) Affected Lenders' Consent. Without the written consent of
each Lender (other than a Defaulting Lender) or Agent, as applicable, that would
be affected thereby, no amendment, modification, termination, or consent shall
be effective if the effect thereof would:
(i) extend the Term Loan Maturity Date;
75
(ii) reduce the rate of interest on any Loan (other
than any waiver of any increase in the interest rate applicable to any
Loan pursuant to Section 2.7) or any fee payable hereunder;
(iii) extend the time for payment of any such
interest or fees;
(iv) reduce the principal amount of any Loan;
(v) amend, modify, terminate or waive any provision
of this Section 10.5(b) or Section 10.5(c);
(vi) amend the definition of "REQUISITE LENDERS" or
"PRO RATA SHARE"; provided, with the consent of Requisite Lenders,
additional extensions of credit pursuant hereto may be included in the
determination of "REQUISITE LENDERS" or "PRO RATA SHARE" on
substantially the same basis as the Term Loan Commitments and the Term
Loans are included on the Closing Date;
(vii) release all or substantially all of the
Collateral or all or substantially all of the Guarantors from the
Guaranty except as expressly provided in the Credit Documents;
(viii) consent to the assignment or transfer by any
Credit Party of any of its rights and obligations under any Credit
Document; or
(ix) amend, modify, terminate or waive any provision
of Section 9 as the same applies to any Agent, or any other provision
hereof as the same applies to the rights or obligations of any Agent,
in each case without the consent of such Agent.
(c) Execution of Amendments, etc. Administrative Agent may,
but shall have no obligation to, with the concurrence of any Lender, execute
amendments, modifications, waivers or consents on behalf of such Lender. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on any Credit
Party in any case shall entitle any Credit Party to any other or further notice
or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 10.5
shall be binding upon each Lender at the time outstanding, each future Lender
and, if signed by a Credit Party, on such Credit Party.
10.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) Generally. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of the parties hereto and the successors and assigns of Lenders. No
Credit Party's rights or obligations hereunder nor any interest therein may be
assigned or delegated by any Credit Party without the prior written consent of
all Lenders. Nothing in this Agreement, expressed or implied, shall be construed
to confer upon any Person (other than the parties hereto, their respective
successors and assigns
76
permitted hereby and, to the extent expressly contemplated hereby, Affiliates of
each of the Agents and Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) Register. Company, Administrative Agent and Lenders shall
deem and treat the Persons listed as Lenders in the Register as the holders and
owners of the corresponding Term Loan Commitments and Loans listed therein for
all purposes hereof, and no assignment or transfer of any such Term Loan
Commitment or Loan shall be effective, in each case, unless and until an
Assignment Agreement effecting the assignment or transfer thereof shall have
been delivered to and accepted by Administrative Agent and recorded in the
Register as provided in Section 10.6(e). Prior to such recordation, all amounts
owed with respect to the applicable Term Loan Commitment or Loan shall be owed
to the Lender listed in the Register as the owner thereof, and any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is listed in the Register as a Lender shall be
conclusive and binding on any subsequent holder, assignee or transferee of the
corresponding Term Loan Commitments or Loans.
(c) Right to Assign. Each Lender shall have the right at any
time to sell, assign or transfer all or a portion of its rights and obligations
under this Agreement, including, without limitation, all or a portion of its
Term Loan Commitment or Loans owing to it or other Obligation (provided,
however, that each such assignment shall be of a uniform, and not varying,
percentage of all rights and obligations under and in respect of any Loan and
any related Term Loan Commitments):
(i) to any Person meeting the criteria of clause (i)
of the definition of the term of "Eligible Assignee" upon the giving of
notice to Company and Administrative Agent; and
(ii) to any Person meeting the criteria of clause
(ii) of the definition of the term of "Eligible Assignee" and, (except
in the case of assignments made by or to GSCP), consented to by each of
Company and Administrative Agent (such consent not to be (x)
unreasonably withheld or delayed or, (y) in the case of Company,
required at any time an Event of Default shall have occurred and then
be continuing); provided, further each such assignment pursuant to this
Section 10.6(c)(ii) shall be in an aggregate amount of not less than
$1,000,000 (or such lesser amount as may be agreed to by Company and
Administrative Agent or as shall constitute the aggregate amount of the
Term Loans of the assigning Lender).
(d) Mechanics. The assigning Lender and the assignee thereof
shall execute and deliver to Administrative Agent an Assignment Agreement,
together with such forms, certificates or other evidence, if any, with respect
to United States federal income tax withholding matters as the assignee under
such Assignment Agreement may be required to deliver to Administrative Agent
pursuant to Section 2.16(c).
77
(e) Notice of Assignment. Upon its receipt of a duly executed
and completed Assignment Agreement, together with the processing and recordation
fee referred to in Section 10.6(d) (and any forms, certificates or other
evidence required by this Agreement in connection therewith), Administrative
Agent shall record the information contained in such Assignment Agreement in the
Register, shall give prompt notice thereof to Company and shall maintain a copy
of such Assignment Agreement.
(f) Representations and Warranties of Assignee. Each Lender,
upon execution and delivery hereof or upon executing and delivering an
Assignment Agreement, as the case may be, represents and warrants as of the
Closing Date or as of the applicable Effective Date (as defined in the
applicable Assignment Agreement) that (i) it is an Eligible Assignee; (ii) it
has experience and expertise in the making of or investing in commitments or
loans such as the Loans; and (iii) it will make or invest in, as the case may
be, its Loans for its own account in the ordinary course of its business and
without a view to distribution of such Loans within the meaning of the
Securities Act or the Exchange Act or other federal securities laws (it being
understood that, subject to the provisions of this Section 10.6, the disposition
of such Loans or any interests therein shall at all times remain within its
exclusive control).
(g) Effect of Assignment. Subject to the terms and conditions
of this Section 10.6, as of the "Effective Date" specified in the applicable
Assignment Agreement: (i) the assignee thereunder shall have the rights and
obligations of a "Lender" hereunder to the extent such rights and obligations
hereunder have been assigned to it pursuant to such Assignment Agreement and
shall thereafter be a party hereto and a "Lender" for all purposes hereof; (ii)
the assigning Lender thereunder shall, to the extent that rights and obligations
hereunder have been assigned thereby pursuant to such Assignment Agreement,
relinquish its rights (other than any rights which survive the termination
hereof under Section 10.8) and be released from its obligations hereunder (and,
in the case of an Assignment Agreement covering all or the remaining portion of
an assigning Lender's rights and obligations hereunder, such Lender shall cease
to be a party hereto; provided, anything contained in any of the Credit
Documents to the contrary notwithstanding, such assigning Lender shall continue
to be entitled to the benefit of all indemnities hereunder as specified herein
with respect to matters arising out of the prior involvement of such assigning
Lender as a Lender hereunder); and (iii) if any such assignment occurs after the
issuance of any Note hereunder, the assigning Lender shall, upon the
effectiveness of such assignment or as promptly thereafter as practicable,
surrender its applicable Notes to Administrative Agent for cancellation, and
thereupon Company shall issue and deliver new Notes, if so requested by the
assignee and/or assigning Lender, to such assignee and/or to such assigning
Lender, with appropriate insertions, to reflect the outstanding Loans of the
assignee and/or the assigning Lender.
(h) Participations. Each Lender shall have the right at any
time to sell one or more participations to any Person (other than Company, any
of its Subsidiaries or any of its Affiliates) in all or any part of its Loans or
in any other Obligation. The holder of any such participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except with
respect to
78
any amendment, modification or waiver that would (i) extend the final Term Loan
Maturity Date, or reduce the rate or extend the time of payment of interest or
fees on the Term Loans (except in connection with a waiver of applicability of
any post-default increase in interest rates) or reduce the principal amount
thereof, or increase the amount of the participant's participation over the
amount thereof then in effect (it being understood that a waiver of any Default
or Event of Default shall not constitute a change in the terms of such
participation, and that an increase in any Loan shall be permitted without the
consent of any participant if the participant's participation is not increased
as a result thereof), (ii) consent to the assignment or transfer by any Credit
Party of any of its rights and obligations under this Agreement or (iii) release
all or substantially all of the Collateral under the Collateral Documents
(except as expressly provided in the Credit Documents) supporting the Loans
hereunder in which such participant is participating. Company agrees that each
participant shall be entitled to the benefits of Sections 2.14(c), 2.15 and 2.16
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (c) of this Section; provided, (i) a
participant shall not be entitled to receive any greater payment under Section
2.15 or 2.16 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such participant, unless the sale of the
participation to such participant is made with Company's prior written consent
and (ii) a participant that would be a Non-US Lender if it were a Lender shall
not be entitled to the benefits of Section 2.16 unless Company is notified of
the participation sold to such participant and such participant agrees, for the
benefit of Company, to comply with Section 2.16 as though it were a Lender. To
the extent permitted by law, each participant also shall be entitled to the
benefits of Section 10.4 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.13 as though it were a Lender.
(i) Certain Other Assignments. In addition to any other
assignment permitted pursuant to this Section 10.6, (i) any Lender may assign
and/or pledge all or any portion of its Loans, the other Obligations owed by or
to such Lender, and its Notes, if any, to secure obligations of such Lender
including, without limitation, any Federal Reserve Bank as collateral security
pursuant to Regulation A of the Board of Governors of the Federal Reserve System
and any operating circular issued by such Federal Reserve Bank; provided, no
Lender, as between Company and such Lender, shall be relieved of any of its
obligations hereunder as a result of any such assignment and pledge, and
provided further, in no event shall the applicable Federal Reserve Bank, pledgee
or trustee be considered to be a "Lender" or be entitled to require the
assigning Lender to take or omit to take any action hereunder.
10.7. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.
10.8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof and the making of any Loan. Notwithstanding
anything herein or implied by law to the contrary, the
79
agreements of each Credit Party set forth in Sections 2.14(c), 2.15, 2.16, 10.2,
10.3 and 10.4 and the agreements of Lenders set forth in Sections 2.13, 9.3(b)
and 9.6 shall survive the payment of the Loans and the termination hereof.
10.9. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part
of any Agent or any Lender in the exercise of any power, right or privilege
hereunder or under any other Credit Document shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other power, right or
privilege. The rights, powers and remedies given to each Agent and each Lender
hereby are cumulative and shall be in addition to and independent of all rights,
powers and remedies existing by virtue of any statute or rule of law or in any
of the other Credit Documents or any of the Hedge Agreements. Any forbearance or
failure to exercise, and any delay in exercising, any right, power or remedy
hereunder shall not impair any such right, power or remedy or be construed to be
a waiver thereof, nor shall it preclude the further exercise of any such right,
power or remedy.
10.10. MARSHALLING; PAYMENTS SET ASIDE. Neither any Agent nor any
Lender shall be under any obligation to marshal any assets in favor of any
Credit Party or any other Person or against or in payment of any or all of the
Obligations. To the extent that any Credit Party makes a payment or payments to
Administrative Agent or Lenders (or to Administrative Agent, on behalf of
Lenders), or Administrative Agent or Lenders enforce any security interests or
exercise their rights of setoff, and such payment or payments or the proceeds of
such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or setoff had not occurred.
10.11. SEVERABILITY. In case any provision in or obligation hereunder
or any Note shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.12. OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS. The
obligations of Lenders hereunder are several and no Lender shall be responsible
for the obligations or Term Loan Commitment of any other Lender hereunder.
Nothing contained herein or in any other Credit Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out hereof and it
80
shall not be necessary for any other Lender to be joined as an additional party
in any proceeding for such purpose.
10.13. HEADINGS. Section headings herein are included herein for
convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.
10.14. APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT
OF LAWS PRINCIPLES THEREOF.
10.15. CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST ANY CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT
DOCUMENT, OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX XXXX. BY
EXECUTING AND DELIVERING THIS AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (a) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (b)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (c) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS
ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 10.1; (d) AGREES THAT SERVICE AS
PROVIDED IN CLAUSE (c) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER
THE APPLICABLE CREDIT PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND
OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (e)
AGREES AGENTS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS
OF ANY OTHER JURISDICTION.
10.16. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES
TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR
ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN
TRANSACTION OR THE LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
81
TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND
ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT
THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT
EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH
PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION
10.16 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR
ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE LOANS MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
10.17. CONFIDENTIALITY. Each Lender shall hold all non-public
information regarding Company and its Subsidiaries and their businesses
identified as such by Company and obtained by such Lender pursuant to the
requirements hereof in accordance with such Lender's customary procedures for
handling confidential information of such nature, it being understood and agreed
by Company that, in any event, a Lender may make (i) disclosures of such
information to Affiliates of such Lender and to their agents and advisors (and
to other persons authorized by a Lender or Agent to organize, present or
disseminate such information in connection with disclosures otherwise made in
accordance with this Section 10.17), (ii) disclosures of such information
reasonably required by any bona fide or potential assignee, transferee or
participant in connection with the contemplated assignment, transfer or
participation by such Lender of any Loans or any participations therein or by
any direct or indirect contractual counterparties (or the professional advisors
thereto) in Hedge Agreements (provided, such counterparties and advisors are
advised of and agree to be bound by the provisions of this Section 10.17), (iii)
disclosure to any rating agency when required by it, provided that, prior to any
disclosure, such rating agency shall undertake in writing to preserve the
confidentiality of any confidential information relating to the Credit Parties
received by it from any of the Agents or any Lender, and (iv) disclosures
required or requested by any governmental agency or representative thereof or by
the NAIC or pursuant to legal or judicial process; provided, unless specifically
prohibited by applicable law or court order, each Lender shall make reasonable
efforts to notify Company of any request by any governmental agency or
representative thereof (other than any such request in connection with any
examination of the financial condition or other routine examination of such
Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information.
82
10.18. USURY SAVINGS CLAUSE. Notwithstanding any other provision
herein, the aggregate interest rate charged with respect to any of the
Obligations, including all charges or fees in connection therewith deemed in the
nature of interest under applicable law shall not exceed the Highest Lawful
Rate. If the rate of interest (determined without regard to the preceding
sentence) under this Agreement at any time exceeds the Highest Lawful Rate, the
outstanding amount of the Loans made hereunder shall bear interest at the
Highest Lawful Rate until the total amount of interest due hereunder equals the
amount of interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect. In
addition, if when the Loans made hereunder are repaid in full the total interest
due hereunder (taking into account the increase provided for above) is less than
the total amount of interest which would have been due hereunder if the stated
rates of interest set forth in this Agreement had at all times been in effect,
then to the extent permitted by law, Company shall pay to Administrative Agent
an amount equal to the difference between the amount of interest paid and the
amount of interest which would have been paid if the Highest Lawful Rate had at
all times been in effect. Notwithstanding the foregoing, it is the intention of
Lenders and Company to conform strictly to any applicable usury laws.
Accordingly, if any Lender contracts for, charges, or receives any consideration
which constitutes interest in excess of the Highest Lawful Rate, then any such
excess shall be cancelled automatically and, if previously paid, shall at such
Lender's option be applied to the outstanding amount of the Loans made hereunder
or be refunded to Company.
10.19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
10.20. EFFECTIVENESS. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
Company and Administrative Agent of written or telephonic notification of such
execution and authorization of delivery thereof.
- -[Remainder of page intentionally left blank]
83
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
CONNETICS CORPORATION
By: /s/ XXXX X. XXXXXXX
---------------------
Name: Xxxx X. Xxxxxxx
Title: CFO
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
as Lead Arranger, Syndication Agent,
Administrative Agent, Collateral Agent and a
Lender
By: /s/ Illegible
-------------------------------------
Authorized Signatory
APPENDIX A
TO CREDIT AND GUARANTY AGREEMENT
TERM LOAN COMMITMENTS
PRO
LENDER TERM LOAN COMMITMENT RATA SHARE
-------------------------------------------------------------------------
Xxxxxxx Sachs Credit Partners L.P. $ 30,000,000 100%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
TOTAL $ 30,000,000 100%
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
XXXXXXXX X-0
XXXXXXXX X
TO CREDIT AND GUARANTY AGREEMENT
NOTICE ADDRESSES
CONNETICS CORPORATION
0000 Xxxx Xxxxxxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Telecopier: (000) 000-0000
with a copy to:
CONNETICS CORPORATION
0000 Xxxx Xxxxxxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopier: (000) 000-0000
with a second copy to:
XXXXXXXX & XXXXXXXX LLP
0000 Xxxxxxxx Xxxxx
000 00xx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxx
Telecopier: (000) 000-0000
1
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
as Lead Arranger, Syndication Agent, Administrative Agent,
Collateral Agent and a Lender
Administrative Agent's Principal Office:
Xxxxxxx Sachs Credit Partners L.P.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxx
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxx Sachs Credit Partners L.P.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx
Telecopier: (000) 000-0000
2
EXHIBIT A TO
CREDIT AND GUARANTY AGREEMENT
CONVERSION/CONTINUATION NOTICE
Reference is made to the Credit and Guaranty Agreement, dated as of
February [ ], 2004 (as it may be amended, supplemented or otherwise modified,
the "CREDIT AGREEMENT"; the terms defined therein and not otherwise defined
herein being used herein as therein defined), by and among CONNETICS
CORPORATION, a Delaware corporation ("COMPANY"), CERTAIN SUBSIDIARIES OF
COMPANY, as Guarantors, the Lenders party thereto from time to time and XXXXXXX
SACHS CREDIT PARTNERS L.P. ("GSCP"), as Lead Arranger, Sole Book Runner,
Syndication Agent, as Administrative Agent and as Collateral Agent.
Pursuant to Section 2.6 of the Credit Agreement, Company desires to
convert or to continue the following Loans, each such conversion and/or
continuation to be effective as of [MM/DD/YY]:
2. TERM LOANS:
$[___,___,___] Eurodollar Rate Loans to be continued with Interest
Period of ____ month(s)
$[___,___,___] Base Rate Loans to be converted to Eurodollar Rate
Loans with Interest Period of ____ month(s)
$[___,___,___] Eurodollar Rate Loans to be converted to Base Rate
Loans
Company hereby certifies that as of the date hereof, no event has
occurred and is continuing or would result from the consummation of the
conversion and/or continuation contemplated hereby that would constitute an
Event of Default or a Default.
Date: [MM/DD/YY] CONNETICS CORPORATION
By: _______________________________
Title:
EXHIBIT A-1
EXHIBIT B TO
CREDIT AND GUARANTY AGREEMENT
TERM LOAN NOTE
$[1][___,___,___]
[2][MM/DD/YY] New York, New York
FOR VALUE RECEIVED, CONNETICS CORPORATION, a Delaware corporation
("COMPANY"), promises to pay [NAME OF LENDER] ("PAYEE") or its registered
assigns the principal amount of [1][DOLLARS] ($[___,___,___][1]) in the
installments referred to below.
Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Credit and Guaranty Agreement, dated as of February [ ], 2004 (as it may be
amended, supplemented or otherwise modified, the "CREDIT AGREEMENT"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined), by and among CONNETICS CORPORATION, a Delaware corporation
("COMPANY"), CERTAIN SUBSIDIARIES OF COMPANY, as Guarantors, the Lenders party
thereto from time to time and XXXXXXX XXXXX CREDIT PARTNERS L.P. ("GSCP"), as
Lead Arranger, Sole Book Runner, Syndication Agent, as Administrative Agent and
as Collateral Agent.
This Note is one of the "Term Loan Notes" in the aggregate principal
amount of $30,000,000 and is issued pursuant to and entitled to the benefits of
the Credit Agreement, to which reference is hereby made for a more complete
statement of the terms and conditions under which the Term Loan evidenced hereby
was made and is to be repaid.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Principal Office of Administrative Agent or at such other place as shall be
designated in writing for such purpose in accordance with the terms of the
Credit Agreement. Unless and until an Assignment Agreement effecting the
assignment or transfer of the obligations evidenced hereby shall have been
accepted by Administrative Agent and recorded in the Register, Company, each
Agent and Lenders shall be entitled to deem and treat Payee as the owner and
holder of this Note and the obligations evidenced hereby. Payee hereby agrees,
by its acceptance hereof, that before disposing of this Note or any part hereof
it will make a notation hereon of all principal payments previously made
hereunder and of the date to which interest hereon has been paid; provided, the
failure to make a notation of any payment made on this Note shall not limit or
otherwise affect the obligations of Company hereunder with respect to payments
of principal of or interest on this Note.
This Note is subject to mandatory prepayment and to prepayment at the
option of Company, each as provided in the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES THEREOF.
------------------
[1] Lender's Term Loan Commitment
[2] Date of Issuance
EXHIBIT B-1
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligations of Company,
which are absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
Company promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in the Credit Agreement, incurred in the
collection and enforcement of this Note. Company and any endorsers of this Note
hereby consent to renewals and extensions of time at or after the maturity
hereof, without notice, and hereby waive diligence, presentment, protest, demand
notice of every kind and, to the full extent permitted by law, the right to
plead any statute of limitations as a defense to any demand hereunder.
EXHIBIT B-2
IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
CONNETICS CORPORATION
By: _______________________________
Title:
EXHIBIT B-3
EXHIBIT C TO
CREDIT AND GUARANTY AGREEMENT
COMPLIANCE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFIES AS FOLLOWS:
1. I am the Chief Financial Officer of CONNETICS CORPORATION
("COMPANY").
2. I have reviewed the terms of that certain Credit and Guaranty
Agreement, dated as of February [ ], 2004 (as it may be amended, supplemented or
otherwise modified, the "CREDIT AGREEMENT"; the terms defined therein and not
otherwise defined herein being used herein as therein defined), by and among
CONNETICS CORPORATION, a Delaware corporation ("COMPANY"), CERTAIN SUBSIDIARIES
OF COMPANY, as Guarantors, the Lenders party thereto from time to time and
XXXXXXX XXXXX CREDIT PARTNERS L.P. ("GSCP"), as Lead Arranger, Sole Book Runner,
Syndication Agent, as Administrative Agent and as Collateral Agent, and I have
made, or have caused to be made under my supervision, a review in reasonable
detail of the transactions and condition of Company and its Subsidiaries during
the accounting period covered by the attached financial statements.
3. The examination described in paragraph 2 above did not
disclose, and I have no knowledge of, the existence of any condition or event
which constitutes an Event of Default or Default during or at the end of the
accounting period covered by the attached financial statements or as of the date
of this Certificate, except as set forth in a separate attachment, if any, to
this Certificate, describing in detail, the nature of the condition or event,
the period during which it has existed and the action which Company has taken,
is taking, or proposes to take with respect to each such condition or event.
The foregoing certifications, together with the computations set forth
in the Annex A hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered [MM/DD/YY] pursuant to
Section 5.1(d) of the Credit Agreement.
CONNETICS CORPORATION
By:___________________________________
Title: Chief Financial Officer
ANNEX A TO
COMPLIANCE CERTIFICATE
FOR THE FISCAL [QUARTER] [YEAR] ENDING [MM/DD/YY].
1. Consolidated Adjusted EBITDA: (i) - (ii) = $[___,___,___]
(i) (a) Consolidated Net Income: $[___,___,___]
(b) Consolidated Interest Expense: $[___,___,___]
(c) provisions for taxes based on income: $[___,___,___]
(d) total depreciation expense: $[___,___,___]
EXHIBIT C-1
(e) total amortization expense: $[___,___,___]
(f) other non-cash items reducing
Consolidated Net Income[*]: $[___,___,___]
(ii) other non-cash items increasing
Consolidated Net Income[**]: $[___,___,___]
2. Consolidated Capital Expenditures: $[___,___,___]
3. Consolidated Interest Expense: $[___,___,___]
4. Consolidated Net Income: (i) - (ii) = $[___,___,___]
(i) the net income (or loss) of Company
and its Subsidiaries on a
consolidated basis for such period
taken as a single accounting period
determined in conformity with GAAP: $[___,___,___]
(ii) (a) the income (or loss) of any Person
(other than a Subsidiary of
Company) in which any other Person
(other than Company or any of its
Subsidiaries) has a joint interest,
except to the extent of the amount
of dividends or other distributions
actually paid to Company or any of
its Subsidiaries by such Person
during such period: $[___,___,___]
(b) the income (or loss) of any Person
accrued prior to the date it
becomes a Subsidiary of Company or
is merged into or consolidated with
Company or any of its Subsidiaries
or that Person's assets are
acquired by Company or any of its
Subsidiaries: $[___,___,___]
(c) the income of any Subsidiary of
Company to the extent that the
declaration or payment of dividends
or similar distributions by that
Subsidiary of that income is not at
the time permitted by operation of
the terms of its charter or any
agreement, instrument, judgment,
decree, order, statute, rule or
governmental regulation applicable
to that Subsidiary: $[___,___,___]
(d) any after-tax gains or losses
attributable to Asset
------------------
[*] Excluding any such non-Cash item to the extent that it represents an
accrual or reserve for potential Cash items in any future period or
amortization of a prepaid Cash item that was paid in a prior period.
[**] Excluding any such non-Cash item to the extent it represents the
reversal of an accrual or reserve for potential Cash item in any prior
period.
EXHIBIT C-2
Sales or returned surplus assets of
any Pension Plan: $[___,___,___]
(e) to the extent not included in
clauses (ii)(a) through (d) above,
any net extraordinary gains or net
extraordinary losses: $[___,___,___]
5. Maximum Cash Balance
Actual: $[___,___,___]
Required: $[___,___,___]
6. Consolidated Adjusted EBITDA
Actual: $[___,___,___]
Required : $[___,___,___]
7. Maximum Consolidated Capital Expenditures
Actual: $[___,___,___]
Required : $[___,___,___]
EXHIBIT C-3
EXHIBIT E TO
CREDIT AND GUARANTY AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (the "ASSIGNMENT") is dated as
of the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the "ASSIGNOR") and [Insert name of Assignee] (the
"ASSIGNEE"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit and Guaranty Agreement identified below (as
it may be amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below, the interest in and to all of
the Assignor's rights and obligations under the Credit Agreement and any other
documents or instruments delivered pursuant thereto that represents the amount
and percentage interest identified below of all of the Assignor's outstanding
rights and obligations under the respective facilities identified below
(including, to the extent included in any such facilities, letters or credit and
swingline loans) (the "ASSIGNED INTEREST"). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and the Credit Agreement, without representation or warranty by the Assignor.
1. Assignor: ______________________
2. Assignee: ______________________ [and is an Affiliate/
Approved Fund[*****]]
3. Borrower: Connetics Corporation
4. Administrative Agent: Xxxxxxx Sachs Credit Partners L.P., as the
administrative agent under the Credit
Agreement
5. Credit Agreement: The $30,000,000 Credit and Guaranty Agreement
dated as of February [ ], 2004 among
CONNETICS CORPORATION, a Delaware
corporation, CERTAIN SUBSIDIARIES OF COMPANY,
as Guarantors, the Lenders party thereto from
time to time and XXXXXXX XXXXX CREDIT
PARTNERS L.P., as Lead Arranger, Sole Book
Runner, Syndication Agent, as Administrative
Agent and as Collateral Agent.
6. Assigned Interest:
___________________________
[*****]Select as applicable.
EXHIBIT E-1
Aggregate Amount of Percentage Assigned of
Term Loans Amount of Term Loans Term Loans
Facility Assigned for all Lenders Assigned [****** ]
-----------------------------------------------------------------------------------------------------
Term Loans $______________ $______________ ____________%
------------------------------------------------------------------------------------------------
____________ $______________ $______________ ____________%
------------------------------------------------------------------------------------------------
____________ $______________ $______________ ____________%
------------------------------------------------------------------------------------------------
Effective Date: ______________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND
WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
7. Notice and Wire Instructions:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
Notices: Notices:
_________________________ ________________________
_________________________ ________________________
_________________________ ________________________
Attention: Attention:
Telecopier: Telecopier:
with a copy to: with a copy to:
_________________________ ________________________
_________________________ ________________________
_________________________ ________________________
Attention: Attention:
Telecopier: Telecopier:
Wire Instructions: Wire Instructions:
The terms set forth in this Assignment are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:_______________________
Title:
________________________________
[******]Set forth, to at least 9 decimals, as a percentage of the
Commitment/Loans of all Lenders thereunder.
EXHIBIT E-2
ASSIGNEE
[NAME OF ASSIGNEE]
By:________________________
Title:
[Consented to and][********] Accepted:
XXXXXXX SACHS CREDIT PARTNERS L.P., as
Administrative Agent
By:_______________________
Title:
[Consented to:][*********]
CONNETICS CORPORATION
By:_______________________
Title:
---------------
[********]To be added only if the consent of the Administrative Agent is
required by the terms of the Credit Agreement.
[*********]To be added only if the consent of the Company is required by the
terms of the Credit Agreement.
EXHIBIT X-0
XXXXX 0
XXXXXXXX XXXXX AND CONDITIONS FOR ASSIGNMENT
AND ASSUMPTION AGREEMENT
1. Representations and Warranties.
1.1 Assignor. The Assignor (a) represents and warrants
that (i) it is the legal and beneficial owner of the
Assigned Interest, (ii) the Assigned Interest is free
and clear of any lien, encumbrance or other adverse
claim and (iii) it has full power and authority, and
has taken all action necessary, to execute and
deliver this Assignment and to consummate the
transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements,
warranties or representations made in or in
connection with any Credit Document, (ii) the
execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document
delivered pursuant thereto, other than this
Assignment (herein collectively the "CREDIT
DOCUMENTS"), or any collateral thereunder, (iii) the
financial condition of the Company, any of its
Subsidiaries or Affiliates or any other Person
obligated in respect of any Credit Document or (iv)
the performance or observance by the Borrower, any of
its Subsidiaries or Affiliates or any other Person of
any of their respective obligations under any Credit
Document.
1.2 Assignee. The Assignee (a) represents and warrants
that (i) it has full power and authority, and has
taken all action necessary, to execute and deliver
this Assignment and to consummate the transactions
contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it meets all requirements of
an Eligible Assignee under the Credit Agreement,
(iii) from and after the Effective Date, it shall be
bound by the provisions of the Credit Agreement and,
to the extent of the Assigned Interest, shall have
the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement and such
other documents and information as it has deemed
appropriate to make its own credit analysis and
decision to enter into this Assignment and to
purchase the Assigned Interest on the basis of which
it has made such analysis and decision, and (v) if it
is a Non-US Lender, attached to the Assignment is any
documentation required to be delivered by it pursuant
to the terms of the Credit Agreement, duly completed
and executed by the Assignee; and (b) agrees that (i)
it will, independently and without reliance on the
Administrative Agent, the Assignor or any other
Lender, and based on such documents and information
as it shall deem appropriate at that time, continue
to make its own credit decisions in taking or not
taking action under the Credit Documents, and (ii) it
will perform in accordance with their terms all of
the obligations which by the terms of the Credit
Documents are required to be performed by it as a
Lender.
2. Payments. From and after the Effective Date, the Administrative Agent
shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the
Assignor for amounts which have accrued to but excluding the Effective
Date and to the Assignee for amounts which have accrued from and after
the Effective Date.
3. General Provisions. This Assignment shall be binding upon, and inure to
the benefit of, the parties hereto and their respective successors and
assigns. This Assignment may be executed in any number of counterparts,
which together shall constitute one instrument. Delivery of an executed
counterpart of a signature page of this Assignment by telecopy shall be
effective as delivery of a manually executed counterpart of this
Assignment. This Assignment shall be governed by, and construed in
accordance with, the internal laws of the State of New York without
regard to conflict of laws principles thereof.
EXHIBIT E-4
EXHIBIT F TO
CREDIT AND GUARANTY AGREEMENT
CERTIFICATE RE NON-BANK STATUS
Reference is made to the Credit and Guaranty Agreement, dated as of
February [ ], 2004 (as it may be amended, supplemented or otherwise modified,
the "CREDIT AGREEMENT"; the terms defined therein and not otherwise defined
herein being used herein as therein defined), by and among CONNETICS
CORPORATION, a Delaware corporation ("COMPANY"), CERTAIN SUBSIDIARIES OF
COMPANY, as Guarantors, the Lenders party thereto from time to time and XXXXXXX
XXXXX CREDIT PARTNERS L.P. ("GSCP"), as Lead Arranger, Sole Book Runner,
Syndication Agent, as Administrative Agent and as Collateral Agent. Pursuant to
Section 2.20(c) of the Credit Agreement, the undersigned hereby certifies that
it is not a "bank" or other Person described in Section 881(c)(3) of the
Internal Revenue Code of 1986, as amended.
[NAME OF LENDER]
By: ____________________________
Name:
Title:
EXHIBIT F-1
EXHIBIT G TO
CREDIT AND GUARANTY AGREEMENT
CLOSING DATE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFY AS FOLLOWS:
1. We are, respectively, the chief executive officer and the chief
financial officer of CONNETICS CORPORATION, ("COMPANY").
2. Pursuant to Section 2.1 of the Credit and Guaranty Agreement, dated
as of February [ ], 2004 (as it may be amended, supplemented or otherwise
modified, the "CREDIT AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among CONNETICS
CORPORATION, a Delaware corporation ("COMPANY"), CERTAIN SUBSIDIARIES OF
COMPANY, as Guarantors, the Lenders party thereto from time to time and XXXXXXX
SACHS CREDIT PARTNERS L.P. ("GSCP"), as Lead Arranger, Sole Book Runner,
Syndication Agent, as Administrative Agent and as Collateral Agent, Company
requests that Lenders make the following Loans to Company on February [ ], 2004
(the "Closing Date"):
(a) Term Loans: $ 30,000,000
[ ] Base Rate Loans: $[___,___,___]
[ ] Eurodollar Rate Loans,
with an Initial Interest Period
of [____] Month(s): $[___,___,___]
3. We have reviewed the terms of Section 3 of the Credit Agreement and
the definitions and provisions contained in such Credit Agreement relating
thereto, and in our opinion we have made, or have caused to be made under our
supervision, such examination or investigation as is necessary to enable us to
express an informed opinion as to the matters referred to herein.
4. Based upon our review and examination described in paragraph 3
above, we certify, on behalf of Company, that as of the date hereof:
(i) as of the Closing Date, the representations and
warranties contained in each of the Credit Documents are true, correct
and complete in all respects on and as of the Closing Date to the same
extent as though made on and as of such date, except to the extent such
representations and warranties specifically relate to an earlier date,
in which case such representations and warranties are true, correct and
complete in all respects on and as of such earlier date; and
(ii) as of the Closing Date, no event has occurred and is
continuing or would result from the consummation of the borrowing
contemplated hereby that would constitute an Event of Default or a
Default.
5. Attached as Annex A hereto are true and complete (and, where
applicable, executed and conformed) copies of each of the Acquisition Agreement,
and we have reviewed the terms of the Acquisition Agreement and in our opinion
we have made, or have caused to be made under our supervision, such examination
or investigation as is necessary to enable us to express an informed opinion as
to the matters referred to in paragraph 6.
6. Each Credit Party has requested Xxxxxxxx & Xxxxxxxx LLP to deliver
to Agents and Lenders on the Closing Date favorable written opinions setting
forth substantially the matters in the opinions designated in
EXHIBIT G-1
Exhibit D annexed to the Credit Agreement, and as to such other matters as
Syndication Agent and Administrative Agent may reasonably request.
7. [Attached hereto as Annex B are true, complete and correct copies of
(a) pro forma consolidated and consolidating balance sheets of Company and its
Subsidiaries as at the Closing Date, prepared in accordance with GAAP and
reflecting the consummation of the Acquisition, the related financings and the
other transactions contemplated by the Credit Documents and the Acquisition
Agreement, and (b) the Projections.]
[Remainder of page intentionally left blank.]
EXHIBIT G-2
The foregoing certifications are made and delivered as of February [ ],
2004.
CONNETICS CORPORATION
___________________________
Title: Chief Executive Officer
CONNETICS CORPORATION
___________________________
Title: Chief Financial Officer
EXHIBIT G-3
EXHIBIT H TO
CREDIT AND GUARANTY AGREEMENT
COUNTERPART AGREEMENT
This COUNTERPART AGREEMENT, dated [MM/DD/YY] (this "COUNTERPART
AGREEMENT") is delivered pursuant to that certain Credit and Guaranty Agreement,
dated as of February [ ], 2004 (as it may be amended, supplemented or otherwise
modified, the "CREDIT AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among CONNETICS
CORPORATION, a Delaware corporation ("COMPANY"), CERTAIN SUBSIDIARIES OF
COMPANY, as Guarantors, the Lenders party thereto from time to time and XXXXXXX
SACHS CREDIT PARTNERS L.P. ("GSCP"), as Lead Arranger, Sole Book Runner,
Syndication Agent, as Administrative Agent and as Collateral Agent.
SECTION 1. Pursuant to Section 5.10 of the Credit Agreement, the
undersigned hereby:
(a) agrees that this Counterpart Agreement may be
attached to the Credit Agreement and that by the execution and delivery
hereof, the undersigned becomes a Guarantor under the Credit Agreement
and agrees to be bound by all of the terms thereof;
(b) represents and warrants that each of the
representations and warranties set forth in the Credit Agreement and
each other Credit Document and applicable to the undersigned is true
and correct both before and after giving effect to this Counterpart
Agreement, except to the extent that any such representation and
warranty relates solely to any earlier date, in which case such
representation and warranty is true and correct as of such earlier
date;
(c) no event has occurred or is continuing as of the date
hereof, or will result from the transactions contemplated hereby on the
date hereof, that would constitute an Event of Default or a Default;
(d) agrees to irrevocably and unconditionally guaranty
the due and punctual payment in full of all Obligations when the same
shall become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts that
would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss. 362(a)) and in
accordance with Section 7 of the Credit Agreement; and
(e) the undersigned hereby (i) agrees that this
counterpart may be attached to the Pledge and Security Agreement, (ii)
agrees that the undersigned will comply with all the terms and
conditions of the Security Agreement as if it were an original
signatory thereto, (iii) grants to Secured Party (as such term is
defined in the Pledge and Security Agreement) a security interest in
all of the undersigned's right, title and interest in and to all
"Collateral" (as such term is defined in the Pledge and Security
Agreement) of the undersigned, in each case whether now or hereafter
existing or in which the undersigned now has or hereafter acquires an
interest and wherever the same may be located and (iv) delivers to
Collateral Agent supplements to all schedules attached to the Pledge
and Security Agreement. All such Collateral shall be deemed to be part
of the "Collateral" and hereafter subject to each of the terms and
conditions of the Pledge and Security Agreement.
SECTION 2. The undersigned agrees from time to time, upon request of
Administrative Agent, to take such additional actions and to execute and deliver
such additional documents and instruments as Administrative Agent may request to
effect the transactions contemplated by, and to carry out the intent of, this
Agreement. Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated, except by an instrument in
EXHIBIT H-1
writing signed by the party (including, if applicable, any party required to
evidence its consent to or acceptance of this Agreement) against whom
enforcement of such change, waiver, discharge or termination is sought. Any
notice or other communication herein required or permitted to be given shall be
given in pursuant to Section 10.1 of the Credit Agreement, and all for purposes
thereof, the notice address of the undersigned shall be the address as set forth
on the signature page hereof. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
EXHIBIT H-2
IN WITNESS WHEREOF, the undersigned has caused this Counterpart
Agreement to be duly executed and delivered by its duly authorized officer as of
the date above first written.
[NAME OF SUBSIDIARY]
By:______________________
Name:
Title:
Address for Notices:
______________
______________
______________
Attention:
Telecopier
with a copy to:
______________
______________
______________
Attention:
Telecopier
ACKNOWLEDGED AND ACCEPTED,
as of the date above first written:
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
as Administrative Agent
By:_____________________
Name:
Title:
XXXXXXX SACHS CREDIT PARTNERS L.P.,
as Collateral Agent
By:_____________________
Name:
Title:
EXHIBIT H-3
EXHIBIT I TO
CREDIT AND GUARANTY AGREEMENT
FORM OF PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT
DATED AS OF FEBRUARY [ ], 2004
BETWEEN
EACH OF THE GRANTORS PARTY HERETO
AND
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
AS THE COLLATERAL AGENT
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS; GRANT OF SECURITY....................................... 1
1.1 GENERAL DEFINITIONS........................................... 1
1.2 DEFINITIONS; INTERPRETATION................................... 8
SECTION 2. GRANT OF SECURITY.................................................... 8
2.1 GRANT OF SECURITY............................................. 8
2.2 CERTAIN LIMITED EXCLUSIONS.................................... 9
SECTION 3. SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE..................... 9
3.1 SECURITY FOR OBLIGATIONS...................................... 9
3.2 CONTINUING LIABILITY UNDER COLLATERAL......................... 9
SECTION 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS......................... 10
4.1 Generally..................................................... 10
4.2 EQUIPMENT AND INVENTORY....................................... 12
4.3 RECEIVABLES................................................... 13
4.4 INVESTMENT RELATED PROPERTY................................... 16
4.5 [RESERVED].................................................... 21
4.6 LETTER OF CREDIT RIGHTS....................................... 21
4.7 INTELLECTUAL PROPERTY......................................... 21
4.8 COMMERCIAL TORT CLAIMS........................................ 24
SECTION 5. ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES; ................. ..
ADDITIONAL GRANTORS........................................... 24
5.1 FURTHER ASSURANCES............................................ 24
5.2 ADDITIONAL GRANTORS........................................... 25
SECTION 6. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT.......................... 26
6.1 POWER OF ATTORNEY............................................. 26
6.2 NO DUTY ON THE PART OF COLLATERAL AGENT OR SECURED PARTIES.... 27
SECTION 7. REMEDIES............................................................. 27
7.1 GENERALLY..................................................... 27
7.2 APPLICATION OF PROCEEDS....................................... 28
7.3 SALES ON CREDIT............................................... 29
7.4 [RESERVED].................................................... 29
7.5 INVESTMENT RELATED PROPERTY................................... 29
7.6 INTELLECTUAL PROPERTY......................................... 29
7.7 CASH PROCEEDS................................................. 31
SECTION 8. COLLATERAL AGENT..................................................... 32
SECTION 9. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS...................... 32
SECTION 10. STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM...................... 33
SECTION 11. MISCELLANEOUS....................................................... 33
i
This PLEDGE AND SECURITY AGREEMENT, dated as of February [ ],
2004 (this "AGREEMENT"), between EACH OF THE UNDERSIGNED, whether as an original
signatory hereto or as an Additional Grantor (as herein defined) (each, a
"GRANTOR"), and XXXXXXX XXXXX CREDIT PARTNERS L.P., as collateral agent for the
Secured Parties (as herein defined) (in such capacity as collateral agent, the
"COLLATERAL AGENT").
RECITALS:
WHEREAS, reference is made to that certain Credit and Guaranty
Agreement, dated as of the date hereof (as it may be amended, restated,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
by and among CONNETICS CORPORATION, a Delaware corporation ("COMPANY"), ANY
SUBSIDIARY OF COMPANY THAT BECOMES A GUARANTOR PURSUANT TO SECTION 5.10 OF THE
CREDIT AGREEMENT, as Guarantors, the Lenders party thereto from time to time and
XXXXXXX SACHS CREDIT PARTNERS L.P. ("GSCP"), as Lead Arranger, Sole Book Runner,
Syndication Agent, as Administrative Agent (together with its permitted
successors in such capacity, "ADMINISTRATIVE AGENT") and as Collateral Agent;
WHEREAS, subject to the terms and conditions of the Credit Agreement,
certain Grantors may enter into one or more Hedge Agreements with one or more
persons (the "LENDER COUNTERPARTS");
WHEREAS, in consideration of the extensions of credit and other
accommodations of Lenders and Lender Counterparties as set forth in the Credit
Agreement and the Hedge Agreements, respectively, each Grantor has agreed to
secure such Grantor's obligations under the Credit Documents and the Hedge
Agreements as set forth herein; and
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, each Grantor and the Collateral Agent
agree as follows:
SECTION 1. DEFINITIONS; GRANT OF SECURITY.
1.1 GENERAL DEFINITIONS. In this Agreement, the following terms
shall have the following meanings:
"ACCOUNT DEBTOR" shall mean each Person who is obligated on a
Receivable or any Supporting Obligation related thereto.
"ACCOUNTS" shall mean all "accounts" as defined in Article 9
of the UCC.
"AGREEMENT" shall have the meaning set forth in the preamble.
"ADDITIONAL GRANTORS" shall have the meaning assigned in
Section 5.3.
"ASSIGNED AGREEMENTS" shall mean all agreements and contracts
to which such Grantor is a party as of the date hereof, or to which such Grantor
becomes a party after the date hereof, including, without limitation, each
Material Contract, as each such agreement may be amended, supplemented or
otherwise modified from time to time.
"BANKRUPTCY CODE" shall mean Title 11 of the United States
Code entitled "Bankruptcy", as now and hereafter in effect, or any successor
statute.
"CASH PROCEEDS" shall have the meaning assigned in Section
7.7.
"CHATTEL PAPER" shall mean all "chattel paper" as defined in
Article 9 of the UCC, including, without limitation, "electronic chattel paper"
or "tangible chattel paper", as each term is defined in Article 9 of the UCC.
"COLLATERAL" shall have the meaning assigned in Section 2.1.
"COLLATERAL AGENT" shall have the meaning set forth in the
preamble.
"COLLATERAL RECORDS" shall mean books, records, ledger cards,
files, correspondence, customer lists, blueprints, technical specifications,
manuals, computer software, computer printouts, tapes, disks and related data
processing software and similar items that at any time evidence or contain
information relating to any of the Collateral or are otherwise necessary or
helpful in the collection thereof or realization thereupon.
"COLLATERAL SUPPORT" shall mean all property (real or
personal) assigned, hypothecated or otherwise securing any Collateral and shall
include any security agreement or other agreement granting a lien or security
interest in such real or personal property.
"COMMERCIAL TORT CLAIMS" shall mean all "commercial tort
claims" as defined in Article 9 of the UCC, including, without limitation, all
commercial tort claims listed on Schedule 4.8 (as such schedule may be amended
or supplemented from time to time).
"COMMODITIES ACCOUNTS" (i) shall mean all "commodity accounts"
as defined in Article 9 of the UCC and (ii) shall include, without limitation,
all of the accounts listed on Schedule 4.4 under the heading "COMMODITIES
ACCOUNTS" (as such schedule may be amended or supplemented from time to time).
"COMPANY" shall have the meaning set forth in the preamble.
"CONTROLLED FOREIGN CORPORATION" shall mean "controlled
foreign corporation" as defined in the Tax Code.
"COPYRIGHT LICENSES" shall mean any and all agreements
providing for the granting of any right in or to Copyrights (whether such
Grantor is licensee or licensor thereunder) including, without limitation, each
agreement referred to in Schedule 4.7(B) (as such schedule may be amended or
supplemented from time to time).
"COPYRIGHTS" shall mean all United States, and foreign
copyrights (including Community designs), including but not limited to
copyrights in software and databases, and all Mask Works (as defined under 17
U.S.C. 901 of the U.S. Copyright Act), whether registered or unregistered, and,
with respect to any and all of the foregoing:
2
(i) all registrations and applications therefor including, without limitation,
the registrations and applications referred to in Schedule 4.7(A) (as such
schedule may be amended or supplemented from time to time), (ii) all extensions
and renewals thereof, (iii) all rights corresponding thereto throughout the
world, (iv) all rights to xxx for past, present and future infringements
thereof, and (v) all Proceeds of the foregoing, including, without limitation,
licenses, royalties, income, payments, claims, damages and proceeds of suit.
"CREDIT AGREEMENT" shall have the meaning set forth in the
recitals.
"DEPOSIT ACCOUNTS" (i) shall mean all "deposit accounts" as
defined in Article 9 of the UCC and (ii) shall include, without limitation, all
of the accounts listed on Schedule 4.4 under the heading "Deposit Accounts" (as
such schedule may be amended or supplemented from time to time).
"DOCUMENTS" shall mean all "documents" as defined in Article 9
of the UCC.
"EQUIPMENT" shall mean: (i) all "equipment" as defined in
Article 9 of the UCC, (ii) all machinery, manufacturing equipment, data
processing equipment, computers, office equipment, furnishings, furniture,
appliances, fixtures and tools (in each case, regardless of whether
characterized as equipment under the UCC) and (iii) all accessions or additions
thereto, all parts thereof, whether or not at any time of determination
incorporated or installed therein or attached thereto, and all replacements
therefor, wherever located, now or hereafter existing, including any fixtures.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
"GENERAL INTANGIBLES" (i) shall mean all "general intangibles"
as defined in Article 9 of the UCC, including "payment intangibles" also as
defined in Article 9 of the UCC and (ii) shall include, without limitation, all
interest rate or currency protection or hedging arrangements, all tax refunds,
all licenses, permits, concessions and authorizations, all Assigned Agreements
and all Intellectual Property (in each case, regardless of whether characterized
as general intangibles under the UCC).
"GOODS" (i) shall mean all "goods" as defined in Article 9 of
the UCC and (ii) shall include, without limitation, all Inventory and Equipment
(in each case, regardless of whether characterized as goods under the UCC).
"GRANTORS" shall have the meaning set forth in the preamble.
"HEALTH-CARE INSURANCE RECEIVABLE" shall mean all
"health-care-insurance receivable" as defined in Article 9 of the UCC.
"INDEMNITEE" shall mean the Collateral Agent, and its and its
Affiliates' officers, partners, directors, trustees, employees, agents.
"INSTRUMENTS" shall mean all "instruments" as defined in
Article 9 of the UCC.
3
"INSURANCE" shall mean (i) all insurance policies covering any
or all of the Collateral (regardless of whether the Collateral Agent is the loss
payee thereof) and (ii) any key man life insurance policies.
"INTELLECTUAL PROPERTY" shall mean, collectively, the
Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the
Trademarks, the Trademark Licenses, the Trade Secrets, and the Trade Secret
Licenses.
"INVENTORY" shall mean (i) all "inventory" as defined in
Article 9 of the UCC and (ii) all goods held for sale or lease or to be
furnished under contracts of service or so leased or furnished, all raw
materials, work in process, finished goods, and materials used or consumed in
the manufacture, packing, shipping, advertising, selling, leasing, furnishing or
production of such inventory or otherwise used or consumed in any Grantor's
business; all goods in which any Grantor has an interest in mass or a joint or
other interest or right of any kind; and all goods which are returned to or
repossessed by any Grantor, all computer programs embedded in any goods and all
accessions thereto and products thereof (in each case, regardless of whether
characterized as inventory under the UCC).
"INVESTMENT ACCOUNTS" shall mean the Collateral Account,
Securities Accounts, Commodities Accounts and Deposit Accounts.
"INVESTMENT RELATED PROPERTY" shall mean: (i) all "investment
property" (as such term is defined in Article 9 of the UCC) and (ii) all of the
following (regardless of whether classified as investment property under the
UCC): all Pledged Equity Interests, Pledged Debt, the Investment Accounts and
certificates of deposit.
"LENDER" shall have the meaning set forth in the recitals.
"LETTER OF CREDIT RIGHT" shall mean "letter-of-credit right"
as defined in Article 9 of the UCC.
"MONEY" shall mean "money" as defined in the UCC.
"PATENT LICENSES" shall mean all agreements providing for the
granting of any right in or to Patents (whether such Grantor is licensee or
licensor thereunder) including, without limitation, each agreement referred to
in Schedule 4.7(D) (as such schedule may be amended or supplemented from time to
time).
"PATENTS" shall mean all United States and foreign patents and
certificates of invention, or similar industrial property rights, and
applications for any of the foregoing, including, but not limited to: (i) each
patent and patent application referred to in Schedule 4.7(C) hereto (as such
schedule may be amended or supplemented from time to time), (ii) all reissues,
divisions, continuations, continuations-in-part, extensions, renewals, and
reexaminations thereof, (ii) all rights corresponding thereto throughout the
world, (ii) all inventions and improvements described therein, (iv) all rights
to xxx for past, present and future infringements thereof, (v) all licenses,
claims, damages, and proceeds of suit arising therefrom, and (v) all Proceeds of
the foregoing, including, without limitation, licenses, royalties, income,
payments, claims, damages, and proceeds of suit.
"PERMITTED SALE" shall mean those sales, transfers or
assignments permitted by the Credit Agreement.
4
"PERSON" shall mean and include natural persons, corporations,
limited partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governmental authorities.
"PLEDGE SUPPLEMENT" shall mean any supplement to this
agreement in substantially the form of Exhibit A.
"PLEDGED DEBT" shall mean all Indebtedness owed to such
Grantor, including, without limitation, all Indebtedness described on Schedule
4.4(A) under the heading "Pledged Debt" (as such schedule may be amended or
supplemented from time to time), issued by the obligors named therein, the
instruments evidencing such Indebtedness, and all interest, cash, instruments
and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
Indebtedness.
"PLEDGED EQUITY INTERESTS" shall mean all Pledged Stock,
Pledged LLC Interests, Pledged Partnership Interests and Pledged Trust
Interests.
"PLEDGED LLC INTERESTS" shall mean all interests in any
limited liability company owned by Grantor including, without limitation, all
limited liability company interests listed on Schedule 4.4(A) under the heading
"Pledged LLC Interests" (as such schedule may be amended or supplemented from
time to time) and the certificates, if any, representing such limited liability
company interests and any interest of such Grantor on the books and records of
such limited liability company or on the books and records of any securities
intermediary pertaining to such interest and all dividends, distributions, cash,
warrants, rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such limited liability company
interests.
"PLEDGED PARTNERSHIP INTERESTS" shall mean all interests in
any general partnership, limited partnership, limited liability partnership or
other partnership owned by Grantor including, without limitation, all
partnership interests listed on Schedule 4.4(A) under the heading "Pledged
Partnership Interests" (as such schedule may be amended or supplemented from
time to time) and the certificates, if any, representing such partnership
interests and any interest of such Grantor on the books and records of such
partnership or on the books and records of any securities intermediary
pertaining to such interest and all dividends, distributions, cash, warrants,
rights, options, instruments, securities and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such partnership interests.
"PLEDGED STOCK" shall mean all shares of capital stock owned
by such Grantor, including, without limitation, all shares of capital stock
described on Schedule 4.4(A) under the heading "Pledged Stock" (as such schedule
may be amended or supplemented from time to time), and the certificates, if any,
representing such shares and any interest of such Grantor in the entries on the
books of the issuer of such shares or on the books of any securities
intermediary pertaining to such shares, and all dividends, distributions, cash,
warrants, rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares.
5
"PLEDGED TRUST INTERESTS" shall mean all interests in a
Delaware business trust or other trust owned by Grantor including, without
limitation, all trust interests listed on Schedule 4.4(A) under the heading
"Pledged Trust Interests" (as such schedule may be amended or supplemented from
time to time) and the certificates, if any, representing such trust interests
and any interest of such Grantor on the books and records of such trust or on
the books and records of any securities intermediary pertaining to such interest
and all dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of such
trust interests.
"PROCEEDS" shall mean: (i) all "proceeds" as defined in
Article 9 of the UCC, (ii) payments or distributions made with respect to any
Investment Related Property and (iii) whatever is receivable or received when
Collateral or proceeds are sold, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary.
"RECEIVABLES" shall mean all rights to payment, whether or not
earned by performance, for goods or other property sold, leased, licensed,
assigned or otherwise disposed of, or services rendered or to be rendered,
including, without limitation all such rights constituting or evidenced by any
Account, Chattel Paper, Instrument, General Intangible or Investment Related
Property, together with all of Grantor's rights, if any, in any goods or other
property giving rise to such right to payment and all Collateral Support and
Supporting Obligations related thereto and all Receivables Records.
"RECEIVABLES RECORDS" shall mean (i) all original copies of
all documents, instruments or other writings or electronic records or other
Records evidencing the Receivables, (ii) all books, correspondence, credit or
other files, Records, ledger sheets or cards, invoices, and other papers
relating to Receivables, including, without limitation, all tapes, cards,
computer tapes, computer discs, computer runs, record keeping systems and other
papers and documents relating to the Receivables, whether in the possession or
under the control of Grantor or any computer bureau or agent from time to time
acting for Grantor or otherwise, (iii) all evidences of the filing of financing
statements and the registration of other instruments in connection therewith,
and amendments, supplements or other modifications thereto, notices to other
creditors or secured parties, and certificates, acknowledgments, or other
writings, including, without limitation, lien search reports, from filing or
other registration officers, (iv) all credit information, reports and memoranda
relating thereto and (v) all other written or nonwritten forms of information
related in any way to the foregoing or any Receivable.
"RECORD" shall have the meaning specified in Article 9 of the
UCC.
"SECURED OBLIGATIONS" shall have the meaning assigned in
Section 3.1.
"SECURED PARTIES" shall mean the Lenders and the Lender
Counterparties and shall include, without limitation, all former Lenders and
Lender Counterparties to the extent that any Obligations owing to such Persons
were incurred while such Persons were Lenders or Lender Counterparties and such
Obligations have not been paid or satisfied in full.
"SECURITIES" shall mean any stock, shares, partnership
interests, voting trust certificates, certificates of interest or participation
in any profit-sharing agreement or arrangement, options, warrants, bonds,
debentures, notes, or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments commonly
known as "securities" or any certificates of interest, shares or participations
in
6
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACCOUNTS" (i) shall mean all "securities accounts"
as defined in Article 8 of the UCC and (ii) shall include, without limitation,
all of the accounts listed on Schedule 4.4(A) under the heading "Securities
Accounts" (as such schedule may be amended or supplemented from time to time).
"SUPPORTING OBLIGATION" shall mean all "supporting
obligations" as defined in Article 9 of the UCC.
"TAX CODE" shall mean the United States Internal Revenue Code
of 1986, as amended from time to time.
"TRADEMARK LICENSES" shall mean any and all agreements
providing for the granting of any right in or to Trademarks (whether such
Grantor is licensee or licensor thereunder) including, without limitation, each
agreement referred to in Schedule 4.7(F) (as such schedule may be amended or
supplemented from time to time).
"TRADEMARKS" shall mean all United States, and foreign
trademarks, trade names, corporate names, company names, business names,
fictitious business names, Internet domain names, service marks, certification
marks, collective marks, logos, other source or business identifiers, designs
and general intangibles of a like nature, all registrations and applications for
any of the foregoing including, but not limited to: (i) the registrations and
applications referred to in Schedule 4.7(E) (as such schedule may be amended or
supplemented from time to time), (ii) all extensions or renewals of any of the
foregoing, (iii) all of the goodwill of the business connected with the use of
and symbolized by the foregoing, (iv) the right to xxx for past, present and
future infringement or dilution of any of the foregoing or for any injury to
goodwill, and (v) all Proceeds of the foregoing, including, without limitation,
licenses, royalties, income, payments, claims, damages, and proceeds of suit.
"TRADE SECRET LICENSES" shall mean any and all agreements
providing for the granting of any right in or to Trade Secrets (whether such
Grantor is licensee or licensor thereunder) including, without limitation, each
agreement referred to in Schedule 4.7(G) (as such schedule may be amended or
supplemented from time to time).
"TRADE SECRETS" shall mean all trade secrets and all other
confidential or proprietary information and know-how whether or not such Trade
Secret has been reduced to a writing or other tangible form, including all
documents and things embodying, incorporating, or referring in any way to such
Trade Secret, including but not limited to: (i) the right to xxx for past,
present and future misappropriation or other violation of any Trade Secret, and
(ii) all Proceeds of the foregoing, including, without limitation, licenses,
royalties, income, payments, claims, damages, and proceeds of suit.
"UCC" shall mean the Uniform Commercial Code as in effect from
time to time in the State of New York or, when the context implies, the Uniform
Commercial Code as in effect from time to time in any other applicable
jurisdiction.
"UNITED STATES" shall mean the United States of America.
7
1.2 DEFINITIONS; INTERPRETATION. All capitalized terms used herein
(including the preamble and recitals hereto) and not otherwise defined herein
shall have the meanings ascribed thereto in the Credit Agreement or, if not
defined therein, in the UCC. References to "Sections," "Exhibits" and
"Schedules" shall be to Sections, Exhibits and Schedules, as the case may be, of
this Agreement unless otherwise specifically provided. Section headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect. Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference. The use herein of the word "include" or "including", when following
any general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not nonlimiting
language (such as "without limitation" or "but not limited to" or words of
similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that fall within the broadest possible scope
of such general statement, term or matter. If any conflict or inconsistency
exists between this Agreement and the Credit Agreement, the Credit Agreement
shall govern. All references herein to provisions of the UCC shall include all
successor provisions under any subsequent version or amendment to any Article of
the UCC.
SECTION 2. GRANT OF SECURITY.
2.1 GRANT OF SECURITY. Each Grantor hereby grants to the
Collateral Agent a security interest in and continuing lien on all of such
Grantor's right, title and interest in, to and under all personal property of
such Grantor including, but not limited to the following, in each case whether
now owned or existing or hereafter acquired or arising and wherever located (all
of which being hereinafter collectively referred to as the "COLLATERAL"):
(a) Accounts;
(b) Chattel Paper;
(c) Documents;
(d) General Intangibles;
(e) Goods;
(f) Instruments;
(g) Insurance;
(h) Intellectual Property;
(i) Investment Related Property;
(j) Letter of Credit Rights;
(k) Money;
(l) Receivables and Receivable Records;
8
(m) Commercial Tort Claims;
(n) to the extent not otherwise included above, all
Collateral Records, Collateral Support and Supporting
Obligations relating to any of the foregoing; and
(o) to the extent not otherwise included above, all
Proceeds, products, accessions, rents and profits of
or in respect of any of the foregoing.
2.2 CERTAIN LIMITED EXCLUSIONS. Notwithstanding anything herein to
the contrary, in no event shall the security interest granted under Section 2.1
hereof attach to (a) any lease, license, contract, property rights or agreement
to which any Grantor is a party or any of its rights or interests thereunder if
and for so long as the grant of such security interest shall constitute or
result in (i) the abandonment, invalidation or unenforceability of any right,
title or interest of any Grantor therein or (ii) in a breach or termination
pursuant to the terms of, or a default under, any such lease, license, contract
property rights or agreement (other than to the extent that any such term would
be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the
UCC (or any successor provision or provisions) of any relevant jurisdiction or
any other applicable law (including the Bankruptcy Code) or principles of
equity), provided however that such security interest shall attach immediately
at such time as the condition causing such abandonment, invalidation or
unenforceability shall be remedied and to the extent severable, shall attach
immediately to any portion of such Lease, license, contract, property rights or
agreement that does not result in any of the consequences specified in (i) or
(ii) above; or (b) in any of the outstanding capital stock of a Controlled
Foreign Corporation in excess of 65% of the voting power of all classes of
capital stock of such Controlled Foreign Corporation entitled to vote; provided
that immediately upon the amendment of the Tax Code to allow the pledge of a
greater percentage of the voting power of capital stock in a Controlled Foreign
Corporation without adverse tax consequences, the Collateral shall include, and
the security interest granted by each Grantor shall attach to, such greater
percentage of capital stock of each Controlled Foreign Corporation.
SECTION 3. SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE.
3.1 SECURITY FOR OBLIGATIONS. This Agreement secures, and the
Collateral is collateral security for, the prompt and complete payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a) (and
any successor provision thereof)), of all Obligations with respect to every
Grantor (the "SECURED OBLIGATIONS").
3.2 CONTINUING LIABILITY UNDER COLLATERAL. Notwithstanding
anything herein to the contrary, (i) each Grantor shall remain liable for all
obligations under the Collateral and nothing contained herein is intended or
shall be a delegation of duties to the Collateral Agent or any Secured Party,
(ii) each Grantor shall remain liable under each of the agreements included in
the Collateral, including, without limitation, any agreements relating to
Pledged Partnership Interests or Pledged LLC Interests, to perform all of the
obligations undertaken by it thereunder all in accordance with and pursuant to
the terms and provisions thereof and neither the Collateral Agent nor any
Secured Party shall have any obligation or liability under any of such
agreements by reason of or arising out of this Agreement or any other document
related thereto nor shall the Collateral Agent nor any Secured Party have any
obligation to make any inquiry as to the nature or sufficiency of any payment
received by it or have any obligation to take any action to collect or
9
enforce any rights under any agreement included in the Collateral, including,
without limitation, any agreements relating to Pledged Partnership Interests or
Pledged LLC Interests, and (iii) the exercise by the Collateral Agent of any of
its rights hereunder shall not release any Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral.
SECTION 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS.
4.1 GENERALLY.
(a) Representations and Warranties. Each Grantor hereby
represents and warrants, on the Closing Date that:
(i) it owns the Collateral purported to be owned
by it or otherwise has the rights it purports to have in each item of
Collateral and, as to all Collateral whether now existing or hereafter
acquired, will continue to own or have such rights in each item of the
Collateral, in each case free and clear of any and all Liens, rights or
claims of all other Persons other than Permitted Liens;
(ii) it has indicated on Schedule 4.1(A)(as such
schedule may be amended or supplemented from time to time): (w) the
type of organization of such Grantor, (x) the jurisdiction of
organization of such Grantor, (y) its organizational identification
number and (z) the jurisdiction where the chief executive office or its
sole place of business is (or the principal residence if such Grantor
is a natural person), and for the one-year period preceding the date
hereof has been, located.
(iii) the full legal name of such Grantor is as
set forth on Schedule 4.1(A) and it has not done in the last five (5)
years, and does not do, business under any other name (including any
trade-name or fictitious business name) except for those names set
forth on Schedule 4.1(B) (as such schedule may be amended or
supplemented from time to time);
(iv) except as provided on Schedule 4.1(C), it
has not changed its name, jurisdiction of organization, chief executive
office or sole place of business (or principal residence if such
Grantor is a natural person) or its corporate structure in any way
(e.g., by merger, consolidation, change in corporate form or otherwise)
within the past five (5) years;
(v) it has not within the last five (5) years
become bound (whether as a result of merger or otherwise) as debtor
under a security agreement entered into by another Person, which has
not heretofore been terminated;
(vi) upon the filing of all UCC financing
statements naming each Grantor as "debtor" and the Collateral Agent as
"secured party" and describing the Collateral in the filing offices set
forth opposite such Grantor's name on Schedule 4.1(E) hereof (as such
schedule may be amended or supplemented from time to time), upon
consent of the issuer with respect to Letter of Credit Rights, and to
the extent not subject to Article 9 of the UCC, upon recordation of the
security interests granted hereunder in Patents, Trademarks and
Copyrights in the applicable intellectual property registries,
including but not limited to the United States Patent and Trademark
Office and the United States Copyright Office, the security interests
granted to the Collateral Agent hereunder constitute valid and
perfected first priority Liens (subject in the case of priority
10
only to Permitted Liens and to the rights of the United States
government (including any agency or department thereof) with respect to
United States government Receivables) on all of the Collateral;
(vii) all actions and consents, including all
filings, notices, registrations and recordings necessary or desirable
for the exercise by the Collateral Agent of the voting or other rights
provided for in this Agreement or the exercise of remedies in respect
of the Collateral have been made or obtained;
(viii) other than the financing statements filed in
favor of the Collateral Agent, no effective UCC financing statement,
fixture filing or other instrument similar in effect under any
applicable law covering all or any part of the Collateral is on file in
any filing or recording office except for (x) financing statements for
which proper termination statements have been delivered to the
Collateral Agent for filing and (y) financing statements filed in
connection with Permitted Liens;
(ix) no authorization, approval or other action
by, and no notice to or filing with, any Governmental Authority or
regulatory body is required for either (i) the pledge or grant by any
Grantor of the Liens purported to be created in favor of the Collateral
Agent hereunder or (ii) the exercise by Collateral Agent of any rights
or remedies in respect of any Collateral (whether specifically granted
or created hereunder or created or provided for by applicable law),
except (A) for the filings contemplated by clause (vi) above and (B) as
may be required, in connection with the disposition of any Investment
Related Property, by laws generally affecting the offering and sale of
Securities;
(x) all information supplied by any Grantor with
respect to any of the Collateral (in each case taken as a whole with
respect to any particular Collateral) is accurate and complete in all
material respects;
(xi) none of the Collateral constitutes, or is
the Proceeds of, "farm products" (as defined in the UCC);
(xii) it does not own any "as extracted
collateral" (as defined in the UCC) or any timber to be cut;
(xiii) Except as described on Schedule 4.1(D), such
Grantor has not become bound as a debtor, either by contract or by
operation of law, by a security agreement previously entered into by
another Person; and
(xiv) Such Grantor has been duly organized as an
entity of the type as set forth opposite such Grantor's name on
Schedule 4.1(A) solely under the laws of the jurisdiction as set forth
opposite such Grantor's name on Schedule 4.1(A) and remains duly
existing as such. Such Grantor has not filed any certificates of
domestication, transfer or continuance in any other jurisdiction.
(b) Covenants and Agreements. Each Grantor hereby
covenants and agrees that:
(i) except for the security interest created by
this Agreement, it shall not create or suffer to exist any Lien upon or
with respect to any of the Collateral, except
11
Permitted Liens, and such Grantor shall defend the Collateral against
all Persons at any time claiming any interest therein;
(ii) it shall not produce, use or permit any
Collateral to be used unlawfully or in violation of any provision of
this Agreement or any applicable statute, regulation or ordinance or
any policy of insurance covering the Collateral;
(iii) it shall not change such Grantor's name,
identity, corporate structure (e.g., by merger, consolidation, change
in corporate form or otherwise) sole place of business (or principal
residence if such Grantor is a natural person), chief executive office,
type of organization or jurisdiction of organization or establish any
trade names unless it shall have (a) notified the Collateral Agent in
writing, by executing and delivering to the Collateral Agent a
completed Pledge Supplement, substantially in the form of Exhibit A
attached hereto, together with all Supplements to Schedules thereto, at
least thirty (30) days prior to any such change or establishment,
identifying such new proposed name, identity, corporate structure, sole
place of business (or principal residence if such Grantor is a natural
person), chief executive office, jurisdiction of organization or trade
name and providing such other information in connection therewith as
the Collateral Agent may reasonably request and (b) taken all actions
necessary or advisable to maintain the continuous validity, perfection
and the same or better priority of the Collateral Agent's security
interest in the Collateral intended to be granted and agreed to hereby;
(iv) upon such Grantor or any officer of such
Grantor obtaining knowledge thereof, it shall promptly notify the
Collateral Agent in writing of any event that may have a Material
Adverse Effect on the value of the Collateral or any portion thereof,
the ability of any Grantor or the Collateral Agent to dispose of the
Collateral or any portion thereof, or the rights and remedies of the
Collateral Agent in relation thereto, including, without limitation,
the levy of any legal process against the Collateral or any portion
thereof;
(v) it shall not take or permit any action which
could impair the Collateral Agent's rights in the Collateral; and
(vi) it shall not sell, transfer or assign (by
operation of law or otherwise) any Collateral except as Permitted
Sales.
4.2 EQUIPMENT AND INVENTORY.
(a) Representations and Warranties. Each Grantor
represents and warrants, on the Closing Date that:
(i) all of the Equipment and Inventory included
in the Collateral is kept for the past four (4) years only at the
locations specified in Schedule 4.2 (as such schedule may be amended or
supplemented from time to time);
(ii) any Goods now or hereafter produced by any
Grantor included in the Collateral have been and will be produced in
compliance with the requirements of the Fair Labor Standards Act, as
amended; and
12
(iii) none of the Inventory or Equipment is in the
possession of an issuer of a negotiable document (as defined in Section
7-104 of the UCC) therefor or, except as set forth in Schedule 4.2,
otherwise in the possession of a bailee or a warehouseman.
(b) Covenants and Agreements. Each Grantor covenants and
agrees that:
(i) it shall keep the Equipment, Inventory
(other than Inventory that has been sold in the ordinary course of
business) and any Documents evidencing any Equipment and Inventory in
the locations specified on Schedule 4.2 (as such schedule may be
amended or supplemented from time to time) unless it shall have (a)
notified the Collateral Agent in writing, by executing and delivering
to the Collateral Agent a completed Pledge Supplement, substantially in
the form of Exhibit A attached hereto, together with all Supplements to
Schedules thereto, at least thirty (30) days prior to any change in
locations, identifying such new locations and providing such other
information in connection therewith as the Collateral Agent may
reasonably request and (b) taken all actions necessary or advisable to
maintain the continuous validity, perfection and the same or better
priority of the Collateral Agent's security interest in the Collateral
intended to be granted and agreed to hereby, or to enable the
Collateral Agent to exercise and enforce its rights and remedies
hereunder, with respect to such Equipment and Inventory;
(ii) it shall keep correct and accurate records
of the Inventory, as is customarily maintained under similar
circumstances by Persons of established reputation engaged in similar
business, and in any event in conformity with GAAP;
(iii) it shall not deliver any Document evidencing
any Equipment and Inventory to any Person other than the issuer of such
Document to claim the Goods evidenced therefor or the Collateral Agent;
(iv) if any Equipment or Inventory is in
possession or control of any third party, each Grantor shall join with
the Collateral Agent in notifying the third party of the Collateral
Agent's security interest and obtaining an acknowledgment from the
third party that it is holding the Equipment and Inventory for the
benefit of the Collateral Agent; and
(v) with respect to any item of Equipment which
is covered by a certificate of title under a statute of any
jurisdiction under the law of which indication of a security interest
on such certificate is required as a condition of perfection thereof,
upon the reasonable request of the Collateral Agent, (A) provide
information with respect to any such Equipment and (B) deliver to the
Collateral Agent copies of all such applications or other documents
filed during such calendar quarter and copies of all such certificates
of title issued during such calendar quarter indicating the security
interest created hereunder in the items of Equipment covered thereby.
4.3 RECEIVABLES.
(a) Representations and Warranties. Each Grantor
represents and warrants, on the Closing Date that:
(i) each Receivable (a) is and will be the
legal, valid and binding obligation
13
of the Account Debtor in respect thereof, representing an unsatisfied
obligation of such Account Debtor, (b) is and will be enforceable in
accordance with its terms, subject to the laws of bankruptcy and
creditors rights generally, (c) is not and will not be subject to any
setoffs, defenses, taxes, counterclaims (except with respect to
refunds, returns and allowances in the ordinary course of business with
respect to damaged merchandise) and (d) is and will be in compliance
with all applicable laws, whether federal, state, local or foreign;
(ii) none of the Account Debtors in respect of
any Receivable in excess of $250,000 individually or $1,000,000 in the
aggregate is the government of the United States, any agency or
instrumentality thereof, any state or municipality or any foreign
sovereign. No Receivable in excess of $250,000 individually or
$1,000,000 in the aggregate requires the consent of the Account Debtor
in respect thereof in connection with the pledge hereunder, except any
consent which has been obtained;
(iii) no Receivable is evidenced by, or
constitutes, an Instrument or Chattel Paper which has not been
delivered to, or otherwise subjected to the control of, the Collateral
Agent to the extent required by, and in accordance with Section 4.3(c);
and
(iv) each Grantor has delivered to the Collateral
Agent a complete and correct copy of each standard form of document
under which a Receivable may arise.
(b) Covenants and Agreements: Each Grantor hereby
covenants and agrees that:
(i) it shall keep and maintain at its own cost
and expense satisfactory and complete records of the Receivables,
including, but not limited to, the originals of all documentation with
respect to all Receivables and records of all payments received and all
credits granted on the Receivables, all merchandise returned and all
other dealings therewith;
(ii) it shall xxxx conspicuously, in form and
manner reasonably satisfactory to the Collateral Agent, all Chattel
Paper, Instruments and other evidence of Receivables (other than any
delivered to the Collateral Agent as provided herein), as well as the
Receivables Records with an appropriate reference to the fact that the
Collateral Agent has a security interest therein;
(iii) it shall perform in all material respects
all of its obligations with respect to the Receivables;
(iv) it shall not amend, modify, terminate or
waive any provision of any Receivable in any manner which could
reasonably be expected to have a Material Adverse Effect on the value
of such Receivable as Collateral. Other than in the ordinary course of
business as generally conducted by it on and prior to the date hereof,
and except as otherwise provided in subsection (v) below, following an
Event of Default, such Grantor shall not (w) grant any extension or
renewal of the time of payment of any Receivable, (x) compromise or
settle any dispute, claim or legal proceeding with respect to any
Receivable for less than the total unpaid balance thereof, (y) release,
wholly or partially, any Person liable for the payment thereof, or (z)
allow any credit or discount thereon;
14
(v) except as otherwise provided in this
subsection, each Grantor shall continue to collect all amounts due or
to become due to such Grantor under the Receivables and any Supporting
Obligation and diligently exercise each material right it may have
under any Receivable any Supporting Obligation or Collateral Support,
in each case, at its own expense, and in connection with such
collections and exercise, such Grantor shall take such action as such
Grantor or the Collateral Agent may deem necessary or advisable.
Notwithstanding the foregoing, the Collateral Agent shall have the
right at any time to notify, or require any Grantor to notify, any
Account Debtor of the Collateral Agent's security interest in the
Receivables and any Supporting Obligation and, in addition, at any time
following the occurrence and during the continuation of an Event of
Default, the Collateral Agent may: (1) direct the Account Debtors under
any Receivables to make payment of all amounts due or to become due to
such Grantor thereunder directly to the Collateral Agent; (2) notify,
or require any Grantor to notify, each Person maintaining a lockbox or
similar arrangement to which Account Debtors under any Receivables have
been directed to make payment to remit all amounts representing
collections on checks and other payment items from time to time sent to
or deposited in such lockbox or other arrangement directly to the
Collateral Agent; and (3) enforce, at the expense of such Grantor,
collection of any such Receivables and to adjust, settle or compromise
the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done. If the Collateral Agent
notifies any Grantor that it has elected to collect the Receivables in
accordance with the preceding sentence, any payments of Receivables
received by such Grantor shall be forthwith (and in any event within
two (2) Business Days) deposited by such Grantor in the exact form
received, duly indorsed by such Grantor to the Collateral Agent if
required, and until so turned over, all amounts and proceeds (including
checks and other instruments) received by such Grantor in respect of
the Receivables, any Supporting Obligation or Collateral Support shall
be received in trust for the benefit of the Collateral Agent hereunder
and shall be segregated from other funds of such Grantor and such
Grantor shall not adjust, settle or compromise the amount or payment of
any Receivable, or release wholly or partly any Account Debtor or
obligor thereof, or allow any credit or discount thereon; and
(vi) it shall use its best efforts to keep in
full force and effect any Supporting Obligation or Collateral Support
relating to any Receivable.
(c) Delivery and Control of Receivables. With respect to
any Receivables in excess of $250,000 individually or $1,000,000 in the
aggregate that is evidenced by, or constitutes, Chattel Paper or Instruments,
each Grantor shall cause each originally executed copy thereof to be delivered
to the Collateral Agent (or its agent or designee) appropriately indorsed to the
Collateral Agent or indorsed in blank: (i) with respect to any such Receivables
in existence on the date hereof, on or prior to the date hereof and (ii) with
respect to any such Receivables hereafter arising, within ten (10) days of such
Grantor acquiring rights therein. With respect to any Receivables in excess of
$250,000 individually or $1,000,000 in the aggregate which would constitute
"electronic chattel paper" under Article 9 of the UCC, each Grantor shall take
all steps necessary to give the Collateral Agent control over such Receivables
(within the meaning of Section 9-105 of the UCC): (i) with respect to any such
Receivables in existence on the date hereof, on or prior to the date hereof and
(ii) with respect to any such Receivables hereafter arising, within ten (10)
days of such Grantor acquiring rights therein. Any Receivable not otherwise
required to be delivered or subjected to the control of the Collateral Agent in
accordance with this subsection (c) shall be delivered or subjected to such
control upon request of the Collateral Agent.
15
4.4 INVESTMENT RELATED PROPERTY
4.4.1 INVESTMENT RELATED PROPERTY GENERALLY
(a) Covenants and Agreements. Each Grantor hereby
covenants and agrees that:
(i) in the event it acquires rights in any
Investment Related Property after the date hereof, it shall deliver to
the Collateral Agent a completed Pledge Supplement, substantially in
the form of Exhibit A attached hereto, together with all Supplements to
Schedules thereto, reflecting such new Investment Related Property and
all other Investment Related Property. Notwithstanding the foregoing,
it is understood and agreed that the security interest of the
Collateral Agent shall attach to all Investment Related Property
immediately upon any Grantor's acquisition of rights therein and shall
not be affected by the failure of any Grantor to deliver a supplement
to Schedule 4.4 as required hereby;
(ii) except as provided in the next sentence, in
the event such Grantor receives any dividends, interest or
distributions on any Investment Related Property, or any securities or
other property upon the merger, consolidation, liquidation or
dissolution of any issuer of any Investment Related Property, then (a)
such dividends, interest or distributions and securities or other
property shall be included in the definition of Collateral without
further action and (b) such Grantor shall immediately take all steps,
if any, necessary or advisable to ensure the validity, perfection,
priority and, if applicable, control of the Collateral Agent over such
Investment Related Property (including, without limitation, delivery
thereof to the Collateral Agent) and pending any such action such
Grantor shall be deemed to hold such dividends, interest,
distributions, securities or other property in trust for the benefit of
the Collateral Agent and shall segregate such dividends, distributions,
Securities or other property from all other property of such Grantor.
Notwithstanding the foregoing, so long as no Event of Default shall
have occurred and be continuing, the Collateral Agent authorizes each
Grantor to retain all ordinary cash dividends and distributions paid in
the normal course of the business of the issuer and consistent with the
past practice of the issuer and all scheduled payments of interest;
(iii) each Grantor consents to the grant by each
other Grantor of a Security Interest in all Investment Related Property
to the Collateral Agent.
(b) Delivery and Control.
(i) Each Grantor agrees that with respect to any
Investment Related Property in which it currently has rights it shall
comply with the provisions of this Section 4.4.1(b) on or before the
Credit Date and with respect to any Investment Related Property
hereafter acquired by such Grantor it shall comply with the provisions
of this Section 4.4.1(b) immediately upon acquiring rights therein, in
each case in form and substance satisfactory to the Collateral Agent.
With respect to any Investment Related Property that is represented by
a certificate or that is an "instrument" (other than any Investment
Related Property credited to a Securities Account) it shall cause such
certificate or instrument to be delivered to the Collateral Agent,
indorsed in blank by an "effective indorsement" (as defined in Section
8-107 of the UCC), regardless of whether such certificate constitutes a
"certificated security" for purposes of the UCC. With
16
respect to any Investment Related Property that is an "uncertificated
security" for purposes of the UCC (other than any "uncertificated
securities" credited to a Securities Account), it shall cause the
issuer of such uncertificated security to register the Collateral Agent
as the registered owner thereof on the books and records of the issuer.
(c) Voting and Distributions.
(i) So long as no Event of Default shall have
occurred and be continuing:
(1) except as otherwise provided under the covenants and
agreements relating to investment related property in this
Agreement or elsewhere herein or in the Credit Agreement, each
Grantor shall be entitled to exercise or refrain from
exercising any and all voting and other consensual rights
pertaining to the Investment Related Property or any part
thereof for any purpose not inconsistent with the terms of
this Agreement or the Credit Agreement;
(2) the Collateral Agent shall promptly execute and deliver (or
cause to be executed and delivered) to each Grantor all
proxies, and other instruments as such Grantor may from time
to time reasonably request for the purpose of enabling such
Grantor to exercise the voting and other consensual rights
when and to the extent which it is entitled to exercise
pursuant to clause (1) above; and
(3) Upon the occurrence and during the continuation of an Event of
Default:
(A) all rights of each Grantor to exercise or refrain
from exercising the voting and other consensual
rights which it would otherwise be entitled to
exercise pursuant hereto shall cease and all such
rights shall thereupon become vested in the
Collateral Agent who shall thereupon have the sole
right to exercise such voting and other consensual
rights; and
(B) in order to permit the Collateral Agent to exercise
the voting and other consensual rights which it may
be entitled to exercise pursuant hereto and to
receive all dividends and other distributions which
it may be entitled to receive hereunder: (1) each
Grantor shall promptly execute and deliver (or cause
to be executed and delivered) to the Collateral Agent
all proxies, dividend payment orders and other
instruments as the Collateral Agent may from time to
time reasonably request and (2) the each Grantor
acknowledges that the Collateral Agent may utilize
the power of attorney set forth in Section 6.1.
4.4.2 PLEDGED EQUITY INTERESTS
(a) Representations and Warranties. Each Grantor hereby
represents and warrants, on the Closing Date and on each Credit Date, that:
17
(i) Schedule 4.4(A) (as such schedule may be
amended or supplemented from time to time) sets forth under the
headings "Pledged Stock, "Pledged LLC Interests," "Pledged Partnership
Interests" and "Pledged Trust Interests," respectively, all of the
Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests and
Pledged Trust Interests owned by any Grantor and such Pledged Equity
Interests constitute the percentage of issued and outstanding shares of
stock, percentage of membership interests, percentage of partnership
interests or percentage of beneficial interest of the respective
issuers thereof indicated on such Schedule owned by such Grantor;
(ii) except as set forth on Schedule 4.4(B), it
has not acquired any equity interests of another entity or
substantially all the assets of another entity within the past five (5)
years;
(iii) it is the record and beneficial owner of the
Pledged Equity Interests free of all Liens, rights or claims of other
Persons other than Permitted Liens and there are no outstanding
warrants, options or other rights to purchase, or shareholder, voting
trust or similar agreements outstanding with respect to, or property
that is convertible into, or that requires the issuance or sale of, any
Pledged Equity Interests to Grantor;
(iv) without limiting the generality of Section
4.1(a)(v), no consent of any Person including any other general or
limited partner, any other member of a limited liability company, any
other shareholder or any other trust beneficiary is necessary or
desirable in connection with the creation, perfection or first priority
status of the security interest of the Collateral Agent in any Pledged
Equity Interests or the exercise by the Collateral Agent of the voting
or other rights provided for in this Agreement or the exercise of
remedies in respect thereof;
(v) none of the Pledged LLC Interests nor
Pledged Partnership Interests are or represent interests in issuers
that: (a) are registered as investment companies or (b) are dealt in or
traded on securities exchanges or markets; and
(vi) all of the Pledged LLC Interests and Pledged
Partnership Interests are or represent interests in issuers that have
opted to be treated as securities under the uniform commercial code of
any jurisdiction.
(b) Covenants and Agreements. Each Grantor hereby
covenants and agrees that:
(i) without the prior written consent of the
Collateral Agent, it shall not vote to enable or take any other action
to: (a) amend or terminate any partnership agreement, limited liability
company agreement, certificate of incorporation, by-laws or other
organizational documents in any way that materially changes the rights
of such Grantor with respect to any Investment Related Property or
adversely affects the validity, perfection or priority of the
Collateral Agent's security interest, (b) permit any issuer of any
Pledged Equity Interest to issue any additional stock, partnership
interests, limited liability company interests or other equity
interests of any nature or to issue securities convertible into or
granting the right of purchase or exchange for any stock or other
equity interest of any nature of such issuer, (c) waive any default
under or breach of any terms of organizational document relating to the
issuer of any Pledged Equity Interest or
18
the terms of any Pledged Debt, or (d) cause any issuer of any Pledged
Partnership Interests or Pledged LLC Interests which are not securities
(for purposes of the UCC) on the date hereof to elect or otherwise take
any action to cause such Pledged Partnership Interests or Pledged LLC
Interests to be treated as securities for purposes of the UCC;
provided, however, notwithstanding the foregoing, if Grantor becomes
aware that any issuer of any Pledged Partnership Interests or Pledged
LLC Interests takes any such action in violation of the foregoing in
this clause (d), such Grantor shall promptly notify the Collateral
Agent in writing of any such election or action and, in such event,
shall take all steps reasonably necessary or advisable to establish the
Collateral Agent's "control" thereof;
(ii) it shall comply with all of its obligations
under any partnership agreement or limited liability company agreement
relating to Pledged Partnership Interests or Pledged LLC Interests and
shall enforce all of its rights with respect to any Investment Related
Property;
(iii) without the prior written consent of the
Collateral Agent, it shall not permit any issuer of any Pledged Equity
Interest to merge or consolidate unless (i) such issuer creates a
security interest that is perfected by a filed financing statement
(that is not effective solely under section 9-508 of the UCC) in
collateral in which such new debtor has or acquires rights, and (ii)
all the outstanding capital stock or other equity interests of the
surviving or resulting corporation, limited liability company,
partnership or other entity is, upon such merger or consolidation,
pledged hereunder and no cash, securities or other property is
distributed in respect of the outstanding equity interests of any other
constituent Grantor; provided that if the surviving or resulting
Grantors upon any such merger or consolidation involving an issuer
which is a Controlled Foreign Corporation, then such Grantor shall only
be required to pledge equity interests in accordance with Section 2.2;
and
(iv) each Grantor consents to the grant by each
other Grantor of a security interest in all Investment Related Property
to the Collateral Agent and, without limiting the foregoing, consents
to the transfer of any Pledged Partnership Interest and any Pledged LLC
Interest to the Collateral Agent or its nominee following an Event of
Default and to the substitution of the Collateral Agent or its nominee
as a partner in any partnership or as a member in any limited liability
company with all the rights and powers related thereto.
(v) it shall notify the Collateral Agent of any
default under any Pledged Debt that has caused, either in any case or
in the aggregate, a Material Adverse Effect.
4.4.3 PLEDGED DEBT
(a) Representations and Warranties. Each Grantor hereby
represents and warrants, on the Closing Date and each Credit Date, that:
(i) Schedule 4.4 (as such schedule may be
amended or supplemented from time to time) sets forth under the heading
"Pledged Debt" all of the Pledged Debt owned by any Grantor and all of
such Pledged Debt has been duly authorized, authenticated or issued,
and delivered and is the legal, valid and binding
19
obligation of the issuers thereof and is not in default and constitutes
all of the issued and outstanding inter-company Indebtedness;
(b) Covenants and Agreements. Each Grantor hereby
covenants and agrees that:
(i) it shall notify the Collateral Agent of any
default under any Pledged Debt that has caused, either in any
individual case or in the aggregate, a Material Adverse Effect.
4.4.4 INVESTMENT ACCOUNTS
(a) Representations and Warranties. Each Grantor hereby
represents and warrants, on the Closing Date and each Credit Date, that:
(i) Schedule 4.4 hereto (as such schedule may be
amended or supplemented from time to time) sets forth under the
headings "Securities Accounts" and "Commodities Accounts,"
respectively, all of the Securities Accounts and Commodities Accounts
in which each Grantor has an interest. Each Grantor is the sole
entitlement holder of each such Securities Account and Commodity
Account, and such Grantor has not consented to, and is not otherwise
aware of, any Person having "control" (within the meanings of Sections
8-106 and 9-106 of the UCC) over, or (other than the Collateral Agent
pursuant thereto) any other interest in, any such Securities Account or
Commodity Account or securities or other property credited thereto; and
(ii) Schedule 4.4 hereto (as such schedule may be
amended or supplemented from time to time) sets forth under the
headings "Deposit Accounts" all of the Deposit Accounts in which each
Grantor has an interest. Each Grantor is the sole account holder of
each such Deposit Account and such Grantor has not consented to, and is
not otherwise aware of, any Person having either sole dominion and
control (within the meaning of common law) or "control" (within the
meanings of Section 9-104 of the UCC) over, or (other than the
Collateral Agent pursuant hereto) any other interest in, any such
Deposit Account or any money or other property deposited therein.
(b) Covenant and Agreement. Each Grantor hereby covenants
and agrees with the Collateral Agent and each other Secured Party that it shall
not close or terminate any Investment Account without the prior consent of the
Collateral Agent and unless a successor or replacement account has been
established with the consent of the Collateral Agent with respect to which
successor or replacement account a control agreement has been entered into by
the appropriate Grantor, Collateral Agent and securities intermediary or
depository institution at which such successor or replacement account is to be
maintained in accordance with the provisions of Section 4.4.4(c).
(c) Delivery and Control. In addition to the foregoing,
if any issuer of any Investment Related Property is located in a jurisdiction
outside of the United States, each Grantor shall take such additional actions,
including, without limitation, causing the issuer to register the pledge on its
books and records or making such filings or recordings, in each case as may be
necessary or advisable, under the laws of such issuer's jurisdiction to insure
the validity, perfection and priority of the security interest of the Collateral
Agent. Upon the occurrence of an Event of Default, the Collateral Agent shall
have the right, without notice to any Grantor, to transfer all or any portion of
the Investment Related Property to its name or the name of its
20
nominee or agent. In addition, the Collateral Agent shall have the right at any
time, without notice to any Grantor, to exchange any certificates or instruments
representing any Investment Related Property for certificates or instruments of
smaller or larger denominations.
4.5 [RESERVED]
4.6 LETTER OF CREDIT RIGHTS.
(a) Representations and Warranties. Each Grantor hereby
represents and warrants, on the Closing Date that:
(i) all material letters of credit to which such
Grantor has rights is listed on Schedule 4.6 (as such schedule may be
amended or supplemented from time to time) hereto; and
(ii) it has obtained the consent of each issuer
of any material letter of credit to the assignment of the proceeds of
the letter of credit to the Collateral Agent.
(b) Covenants and Agreements. Each Grantor hereby
covenants and agrees that with respect to any material letter of credit
hereafter arising it shall obtain the consent of the issuer thereof to the
assignment of the proceeds of the letter of credit to the Collateral Agent and
shall deliver to the Collateral Agent a completed Pledge Supplement,
substantially in the form of Exhibit A attached hereto, together with all
Supplements to Schedules thereto.
4.7 INTELLECTUAL PROPERTY.
(a) Representations and Warranties. Except as disclosed
in Schedule 4.7(H) (as such schedule may be amended or supplemented from time to
time), each Grantor hereby represents and warrants, on the Closing Date that:
(i) Schedule 4.7 (as such schedule may be
amended or supplemented from time to time) sets forth a true and
complete list of (i) all United States, state and foreign registrations
of and applications for Patents, Trademarks, and Copyrights owned by
each Grantor and (ii) all Patent Licenses, Trademark Licenses, Trade
Secret Licenses and Copyright Licenses material to the business of such
Grantor;
(ii) it is the sole and exclusive owner of the
entire right, title, and interest in and to all Intellectual Property
listed on Schedule 4.7 (as such schedule may be amended or supplemented
from time to time), and owns or has the valid right to use all other
Intellectual Property used in or necessary to conduct its business,
free and clear of all Liens, claims, encumbrances and licenses, except
for Permitted Liens and the licenses set forth on Schedule 4.7(B), (D),
(F) and (G) (as each may be amended or supplemented from time to time);
(iii) all Intellectual Property is subsisting and
has not been adjudged invalid or unenforceable, in whole or in part,
and each Grantor has performed all acts and has paid all renewal,
maintenance, and other fees and taxes required to maintain each and
every registration and application of Copyrights, Patents and
Trademarks in full force and effect;
21
(iv) all Intellectual Property is valid and
enforceable; no holding, decision, or judgment has been rendered in any
action or proceeding before any court or administrative authority
challenging the validity of, such Grantor's right to register, or such
Grantor's rights to own or use, any Intellectual Property and no such
action or proceeding is pending or, to the best of such Grantor's
knowledge, threatened;
(v) all registrations and applications for
Copyrights, Patents and Trademarks are standing in the name of each
Grantor, and none of the Trademarks, Patents, Copyrights or Trade
Secrets has been licensed by any Grantor to any Affiliate or third
party, except as disclosed in Schedule 4.7(B), (D), (F), or (G) (as
each may be amended or supplemented from time to time);
(vi) each Grantor has been using appropriate
statutory notice of registration in connection with its use of
registered Trademarks, proper marking practices in connection with the
use of Patents, and appropriate notice of copyright in connection with
the publication of Copyrights material to the business of such Grantor;
(vii) each Grantor uses adequate standards of
quality in the manufacture, distribution, and sale of all products sold
and in the provision of all services rendered under or in connection
with all Trademark Collateral and has taken all action necessary to
insure that all licensees of the Trademark Collateral owned by such
Grantor use such adequate standards of quality;
(viii) the conduct of such Grantor's business does
not infringe upon or otherwise violate any trademark, patent,
copyright, trade secret or other intellectual property right owned or
controlled by a third party; no claim has been made that the use of any
Intellectual Property owned or used by Grantor (or any of its
respective licensees) violates the asserted rights of any third party;
(ix) to the best of each Grantor's knowledge, no
third party is infringing upon or otherwise violating any rights in any
Intellectual Property owned or used by such Grantor, or any of its
respective licensees;
(x) no settlement or consents, covenants not to
xxx, nonassertion assurances, or releases have been entered into by
Grantor or to which Grantor is bound that adversely affect Grantor's
rights to own or use any Intellectual Property; and
(xi) each Grantor has not made a previous
assignment, sale, transfer or agreement constituting a present or
future assignment, sale, transfer or agreement of any Intellectual
Property that has not been terminated or released. There is no
effective financing statement or other document or instrument now
executed, or on file or recorded in any public office, granting a
security interest in or otherwise encumbering any part of the
Intellectual Property, other than in favor of the Collateral Agent.
(b) Covenants and Agreements. Each Grantor hereby
covenants and agrees as follows:
(i) it shall not do any act or omit to do any
act whereby any of the Intellectual Property which is material to the
business of Grantor may lapse, or become abandoned, dedicated to the
public, or unenforceable, or which would adversely affect the validity,
grant, or enforceability of the security interest granted therein;
22
(ii) it shall not, with respect to any Trademarks
which are material to the business of any Grantor, cease the use of any
of such Trademarks or fail to maintain the level of the quality of
products sold and services rendered under any of such Trademark at a
level at least substantially consistent with the quality of such
products and services as of the date hereof, and each Grantor shall
take all steps necessary to insure that licensees of such Trademarks
use such consistent standards of quality;
(iii) it shall, within thirty (30) days of the
creation or acquisition of any Copyrightable work which is material to
the business of Grantor, apply to register the Copyright in the United
States Copyright Office;
(iv) it shall promptly notify the Collateral
Agent if it knows or has reason to know that any item of the
Intellectual Property that is material to the business of any Grantor
may become (a) abandoned or dedicated to the public or placed in the
public domain, (b) invalid or unenforceable, or (c) subject to any
adverse determination or development (including the institution of
proceedings) in any action or proceeding in the United States Patent
and Trademark Office, the United States Copyright Office, any state
registry, any foreign counterpart of the foregoing, or any court;
(v) it shall take all reasonable steps in the
United States Patent and Trademark Office, the United States Copyright
Office, any state registry or any foreign counterpart of the foregoing,
to pursue any application and maintain any registration of each
Trademark, Patent, and Copyright owned by any Grantor and material to
its business which is now or shall become included in the Intellectual
Property including, but not limited to, those items on Schedule 4.7(A),
(C) and (E) (as each may be amended or supplemented from time to time);
(vi) in the event that any Intellectual Property
owned by or exclusively licensed to any Grantor is infringed,
misappropriated, or diluted by a third party, such Grantor shall
promptly take all reasonable actions to stop such infringement,
misappropriation, or dilution and protect its rights in such
Intellectual Property including, but not limited to, the initiation of
a suit for injunctive relief and to recover damages;
(vii) it shall promptly (but in no event more than
thirty (30) days after any Grantor obtains knowledge thereof) report to
the Collateral Agent (i) the filing of any application to register any
Intellectual Property with the United States Patent and Trademark
Office, the United States Copyright Office, or any state registry or
foreign counterpart of the foregoing (whether such application is filed
by such Grantor or through any agent, employee, licensee, or designee
thereof) and (ii) the registration of any Intellectual Property by any
such office, in each case by executing and delivering to the Collateral
Agent a completed Pledge Supplement, substantially in the form of
Exhibit A attached hereto, together with all Supplements to Schedules
thereto;
(viii) it shall, promptly upon the reasonable
request of the Collateral Agent, execute and deliver to the Collateral
Agent any document required to acknowledge, confirm, register, record,
or perfect the Collateral Agent's interest in any part of the
Intellectual Property, whether now owned or hereafter acquired;
(ix) except with the prior consent of the
Collateral Agent or as permitted under the Credit Agreement, each
Grantor shall not execute, and there will not
23
be on file in any public office, any financing statement or other
document or instruments, except financing statements or other documents
or instruments filed or to be filed in favor of the Collateral Agent
and each Grantor shall not sell, assign, transfer, license, grant any
option, or create or suffer to exist any Lien upon or with respect to
the Intellectual Property, except for the Lien created by and under
this Agreement and the other Credit Documents;
(x) it shall hereafter use best efforts so as
not to permit the inclusion in any contract to which it hereafter
becomes a party of any provision that could or might in any way
materially impair or prevent the creation of a security interest in, or
the assignment of, such Grantor's rights and interests in any property
included within the definitions of any Intellectual Property acquired
under such contracts;
(xi) it shall take all steps reasonably necessary
to protect the secrecy of all Trade Secrets, including, without
limitation, entering into confidentiality agreements with employees and
labeling and restricting access to secret information and documents;
(xii) it shall use proper statutory notice in
connection with its use of any of the Intellectual Property; and
(xiii) it shall continue to collect, at its own
expense, all amounts due or to become due to such Grantor in respect of
the Intellectual Property or any portion thereof. In connection with
such collections, each Grantor may take (and, at the Collateral Agent's
reasonable direction, shall take) such action as such Grantor or the
Collateral Agent may deem reasonably necessary or advisable to enforce
collection of such amounts. Notwithstanding the foregoing, the
Collateral Agent shall have the right at any time, to notify, or
require any Grantor to notify, any obligors with respect to any such
amounts of the existence of the security interest created hereby.
4.8 COMMERCIAL TORT CLAIMS
(a) Representations and Warranties. Each Grantor hereby
represents and warrants, on the Closing Date and on each Credit Date, that
Schedule 4.8 (as such schedule may be amended or supplemented from time to time)
sets forth all Commercial Tort Claims of each Grantor in excess of $250,000
individually or $1,000,000 in the aggregate; and
(b) Covenants and Agreements. Each Grantor hereby
covenants and agrees that with respect to any Commercial Tort Claim in excess of
$250,000 individually or $1,000,000 in the aggregate hereafter arising it shall
deliver to the Collateral Agent a completed Pledge Supplement, substantially in
the form of Exhibit A attached hereto, together with all Supplements to
Schedules thereto, identifying such new Commercial Tort Claims.
SECTION 5. ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES; ADDITIONAL
GRANTORS.
5.1 FURTHER ASSURANCES.
(a) Each Grantor agrees that from time to time, at the
expense of such Grantor, that it shall promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that the Collateral Agent may reasonably
24
request, in order to create and/or maintain the validity, perfection or priority
of and protect any security interest granted hereby or to enable the Collateral
Agent to exercise and enforce its rights and remedies hereunder with respect to
any Collateral. Without limiting the generality of the foregoing, each Grantor
shall:
(i) file such financing or continuation
statements, or amendments thereto, and execute and deliver such other
agreements, instruments, endorsements, powers of attorney or notices,
as may be necessary or desirable, or as the Collateral Agent may
reasonably request, in order to perfect and preserve the security
interests granted or purported to be granted hereby;
(ii) take all actions necessary to ensure the
recordation of appropriate evidence of the liens and security interest
granted hereunder in the Intellectual Property with any intellectual
property registry in which said Intellectual Property is registered or
in which an application for registration is pending including, without
limitation, the United States Patent and Trademark Office, the United
States Copyright Office, the various Secretaries of State, and the
foreign counterparts on any of the foregoing;
(iii) at any reasonable time, upon request by the
Collateral Agent, assemble the Collateral and allow inspection of the
Collateral by the Collateral Agent, or persons designated by the
Collateral Agent; and
(iv) at the Collateral Agent's request, appear in
and defend any action or proceeding that may affect such Grantor's
title to or the Collateral Agent's security interest in all or any part
of the Collateral.
(b) Each Grantor hereby authorizes the Collateral Agent
to file a Record or Records, including, without limitation, financing or
continuation statements, and amendments thereto, in any jurisdictions and with
any filing offices as the Collateral Agent may determine, in its sole
discretion, are necessary or advisable to perfect the security interest granted
to the Collateral Agent herein. Such financing statements may describe the
Collateral in the same manner as described herein or may contain an indication
or description of collateral that describes such property in any other manner as
the Collateral Agent may determine, in its sole discretion, is necessary,
advisable or prudent to ensure the perfection of the security interest in the
Collateral granted to the Collateral Agent herein, including, without
limitation, describing such property as "all assets" or "all personal property,
whether now owned or hereafter acquired." Each Grantor shall furnish to the
Collateral Agent from time to time statements and schedules further identifying
and describing the Collateral and such other reports in connection with the
Collateral as the Collateral Agent may reasonably request, all in reasonable
detail.
(c) Each Grantor hereby authorizes the Collateral Agent
to modify this Agreement after obtaining such Grantor's approval of or signature
to such modification by amending Schedule 4.7 (as such schedule may be amended
or supplemented from time to time) to include reference to any right, title or
interest in any existing Intellectual Property or any Intellectual Property
acquired or developed by any Grantor after the execution hereof or to delete any
reference to any right, title or interest in any Intellectual Property in which
any Grantor no longer has or claims any right, title or interest.
5.2 ADDITIONAL GRANTORS. From time to time subsequent to the date
hereof, additional Persons may become parties hereto as additional Grantors
(each, an "ADDITIONAL
25
GRANTOR"), by executing a Counterpart Agreement. Upon delivery of any such
counterpart agreement to the Collateral Agent, notice of which is hereby waived
by Grantors, each Additional Grantor shall be a Grantor and shall be as fully a
party hereto as if Additional Grantor were an original signatory hereto. Each
Grantor expressly agrees that its obligations arising hereunder shall not be
affected or diminished by the addition or release of any other Grantor
hereunder, nor by any election of Collateral Agent not to cause any Subsidiary
of Company to become an Additional Grantor hereunder. This Agreement shall be
fully effective as to any Grantor that is or becomes a party hereto regardless
of whether any other Person becomes or fails to become or ceases to be a Grantor
hereunder.
SECTION 6. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT.
6.1 POWER OF ATTORNEY ....Each Grantor hereby irrevocably appoints
the Collateral Agent (such appointment being coupled with an interest) as such
Grantor's attorney-in-fact, with full authority in the place and stead of such
Grantor and in the name of such Grantor, the Collateral Agent or otherwise, from
time to time in the Collateral Agent's discretion to take any action and to
execute any instrument that the Collateral Agent may deem reasonably necessary
or advisable to accomplish the purposes of this Agreement, including, without
limitation, the following:
(a) upon the occurrence and during the continuance of any
Event of Default, to obtain and adjust insurance required to be maintained by
such Grantor or paid to the Collateral Agent pursuant to the Credit Agreement;
(b) upon the occurrence and during the continuance of any
Event of Default, to ask for, demand, collect, xxx for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(c) upon the occurrence and during the continuance of any
Event of Default, to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clause (b) above;
(d) upon the occurrence and during the continuance of any
Event of Default, to file any claims or take any action or institute any
proceedings that the Collateral Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of the
Collateral Agent with respect to any of the Collateral;
(e) to prepare and file any UCC financing statements
against such Grantor as debtor;
(f) to prepare, sign, and file for recordation in any
intellectual property registry, appropriate evidence of the lien and security
interest granted herein in the Intellectual Property in the name of such Grantor
as debtor;
(g) to take or cause to be taken all actions necessary to
perform or comply or cause performance or compliance with the terms of this
Agreement, including, without limitation, access to pay or discharge taxes or
Liens (other than Permitted Liens) levied or placed upon or threatened against
the Collateral, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by the Collateral Agent in its sole
discretion, any such payments made by the Collateral Agent to become obligations
of such Grantor to the Collateral Agent, due and payable immediately without
demand; and
26
(h) upon the occurrence and during the continuance of an
Event of Default, generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and completely
as though the Collateral Agent were the absolute owner thereof for all purposes,
and to do, at the Collateral Agent's option and such Grantor's expense, at any
time or from time to time, all acts and things that the Collateral Agent deems
reasonably necessary to protect, preserve or realize upon the Collateral and the
Collateral Agent's security interest therein in order to effect the intent of
this Agreement, all as fully and effectively as such Grantor might do.
6.2 NO DUTY ON THE PART OF COLLATERAL AGENT OR SECURED PARTIES.
The powers conferred on the Collateral Agent hereunder are solely to protect the
interests of the Secured Parties in the Collateral and shall not impose any duty
upon the Collateral Agent or any Secured Party to exercise any such powers. The
Collateral Agent and the Secured Parties shall be accountable only for amounts
that they actually receive as a result of the exercise of such powers, and
neither they nor any of their officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except for
their own gross negligence or willful misconduct.
SECTION 7. REMEDIES.
7.1 GENERALLY.
(a) If any Event of Default shall have occurred and be
continuing, the Collateral Agent may exercise in respect of the Collateral, in
addition to all other rights and remedies provided for herein or otherwise
available to it at law or in equity, all the rights and remedies of the
Collateral Agent on default under the UCC (whether or not the UCC applies to the
affected Collateral) to collect, enforce or satisfy any Secured Obligations then
owing, whether by acceleration or otherwise, and also may pursue any of the
following separately, successively or simultaneously:
(i) require any Grantor to, and each Grantor
hereby agrees that it shall at its expense and promptly upon request of
the Collateral Agent forthwith, assemble all or part of the Collateral
as directed by the Collateral Agent and make it available to the
Collateral Agent at a place to be designated by the Collateral Agent
that is reasonably convenient to both parties;
(ii) enter onto the property where any Collateral
is located and take possession thereof with or without judicial
process;
(iii) prior to the disposition of the Collateral,
store, process, repair or recondition the Collateral or otherwise
prepare the Collateral for disposition in any manner to the extent the
Collateral Agent deems appropriate; and
(iv) without notice except as specified below or
under the UCC, sell, assign, lease, license (on an exclusive or
nonexclusive basis) or otherwise dispose of the Collateral or any part
thereof in one or more parcels at public or private sale, at any of the
Collateral Agent's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and
upon such other terms as the Collateral Agent may deem commercially
reasonable.
27
(b) The Collateral Agent or any Secured Party may be the
purchaser of any or all of the Collateral at any public or private (to the
extent to the portion of the Collateral being privately sold is of a kind that
is customarily sold on a recognized market or the subject of widely distributed
standard price quotations) sale in accordance with the UCC and the Collateral
Agent, as collateral agent for and representative of the Secured Parties, shall
be entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral sold at any such sale
made in accordance with the UCC, to use and apply any of the Secured Obligations
as a credit on account of the purchase price for any Collateral payable by the
Collateral Agent at such sale. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by applicable
law) all rights of redemption, stay and/or appraisal which it now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted. Each Grantor agrees that, to the extent notice of sale shall
be required by law, at least ten (10) days notice to such Grantor of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Collateral Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Collateral Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. Each Grantor agrees that it would not be commercially unreasonable
for the Collateral Agent to dispose of the Collateral or any portion thereof by
using Internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capability of doing so,
or that match buyers and sellers of assets. Each Grantor hereby waives any
claims against the Collateral Agent arising by reason of the fact that the price
at which any Collateral may have been sold at such a private sale was less than
the price which might have been obtained at a public sale, even if the
Collateral Agent accepts the first offer received and does not offer such
Collateral to more than one offeree. If the proceeds of any sale or other
disposition of the Collateral are insufficient to pay all the Secured
Obligations, Grantors shall be liable for the deficiency and the fees of any
attorneys employed by the Collateral Agent to collect such deficiency. Each
Grantor further agrees that a breach of any of the covenants contained in this
Section will cause irreparable injury to the Collateral Agent, that the
Collateral Agent has no adequate remedy at law in respect of such breach and, as
a consequence, that each and every covenant contained in this Section shall be
specifically enforceable against such Grantor, and such Grantor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no default has occurred giving rise
to the Secured Obligations becoming due and payable prior to their stated
maturities. Nothing in this Section shall in any way alter the rights of the
Collateral Agent hereunder.
(c) The Collateral Agent may sell the Collateral without
giving any warranties as to the Collateral. The Collateral Agent may
specifically disclaim or modify any warranties of title or the like. This
procedure will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral.
(d) The Collateral Agent shall have no obligation to
marshal any of the Collateral.
7.2 APPLICATION OF PROCEEDS. Except as expressly provided
elsewhere in this Agreement, all proceeds received by the Collateral Agent in
respect of any sale, any collection from, or other realization upon all or any
part of the Collateral shall be applied in full or in part by the Collateral
Agent against, the Secured Obligations in the following order of priority:
first, to the payment of all costs and expenses of such sale, collection or
other realization, including
28
reasonable compensation to the Collateral Agent and its agents and counsel, and
all other expenses, liabilities and advances made or incurred by the Collateral
Agent in connection therewith, and all amounts for which the Collateral Agent is
entitled to indemnification hereunder (in its capacity as the Collateral Agent
and not as a Lender) and all advances made by the Collateral Agent hereunder for
the account of the applicable Grantor, and to the payment of all costs and
expenses paid or incurred by the Collateral Agent in connection with the
exercise of any right or remedy hereunder or under the Credit Agreement, all in
accordance with the terms hereof or thereof; second, to the extent of any excess
of such proceeds, to the payment of all other Secured Obligations for the
ratable benefit of the Lenders and the Lender Counterparties; and third, to the
extent of any excess of such proceeds, to the payment to or upon the order of
such Grantor or to whosoever may be lawfully entitled to receive the same or as
a court of competent jurisdiction may direct.
7.3 SALES ON CREDIT. If Collateral Agent sells any of the
Collateral upon credit, Grantor will be credited only with payments actually
made by purchaser and received by Collateral Agent and applied to indebtedness
of the purchaser. In the event the purchaser fails to pay for the Collateral,
Collateral Agent may resell the Collateral and Grantor shall be credited with
proceeds of the sale.
7.4 [RESERVED] INVESTMENT RELATED PROPERTY.
Each Grantor recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws, the
Collateral Agent may be compelled, with respect to any sale of all or any part
of the Investment Related Property conducted without prior registration or
qualification of such Investment Related Property under the Securities Act
and/or such state securities laws, to limit purchasers to those who will agree,
among other things, to acquire the Investment Related Property for their own
account, for investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges that any such private sale may be at prices
and on terms less favorable than those obtainable through a public sale without
such restrictions (including a public offering made pursuant to a registration
statement under the Securities Act) and, notwithstanding such circumstances,
each Grantor agrees that any such private sale shall be deemed to have been made
in a commercially reasonable manner and that the Collateral Agent shall have no
obligation to engage in public sales and no obligation to delay the sale of any
Investment Related Property for the period of time necessary to permit the
issuer thereof to register it for a form of public sale requiring registration
under the Securities Act or under applicable state securities laws, even if such
issuer would, or should, agree to so register it. If the Collateral Agent
determines to exercise its right to sell any or all of the Investment Related
Property, upon written request, each Grantor shall and shall cause each issuer
of any Pledged Stock to be sold hereunder, each partnership and each limited
liability company from time to time to furnish to the Collateral Agent all such
information as the Collateral Agent may request in order to determine the number
and nature of interest, shares or other instruments included in the Investment
Related Property which may be sold by the Collateral Agent in exempt
transactions under the Securities Act and the rules and regulations of the
Securities and Exchange Commission thereunder, as the same are from time to time
in effect.
7.6 INTELLECTUAL PROPERTY.
(a) Anything contained herein to the contrary
notwithstanding, upon the occurrence and during the continuation of an Event of
Default:
29
(i) the Collateral Agent shall have the right
(but not the obligation) to bring suit or otherwise commence any action
or proceeding in the name of any Grantor, the Collateral Agent or
otherwise, in the Collateral Agent's sole discretion, to enforce any
Intellectual Property, in which event such Grantor shall, at the
request of the Collateral Agent, do any and all lawful acts and execute
any and all documents required by the Collateral Agent in aid of such
enforcement and such Grantor shall promptly, upon demand, reimburse and
indemnify the Collateral Agent as provided in Section 10 hereof in
connection with the exercise of its rights under this Section, and, to
the extent that the Collateral Agent shall elect not to bring suit to
enforce any Intellectual Property as provided in this Section, each
Grantor agrees to use all reasonable measures, whether by action, suit,
proceeding or otherwise, to prevent the infringement or other violation
of any of such Grantor's rights in the Intellectual Property by others
and for that purpose agrees to diligently maintain any action, suit or
proceeding against any Person so infringing as shall be necessary to
prevent such infringement or violation;
(ii) upon written demand from the Collateral
Agent, each Grantor shall grant, assign, convey or otherwise transfer
to the Collateral Agent an absolute assignment of all of such Grantor's
right, title and interest in and to the Intellectual Property and shall
execute and deliver to the Collateral Agent such documents as are
necessary or appropriate to carry out the intent and purposes of this
Agreement;
(iii) each Grantor agrees that such an assignment
and/or recording shall be applied to reduce the Secured Obligations
outstanding only to the extent that the Collateral Agent (or any
Secured Party) receives cash proceeds in respect of the sale of, or
other realization upon, the Intellectual Property;
(iv) within five (5) Business Days after written
notice from the Collateral Agent, each Grantor shall make available to
the Collateral Agent, to the extent within such Grantor's power and
authority, such personnel in such Grantor's employ on the date of such
Event of Default as the Collateral Agent may reasonably designate, by
name, title or job responsibility, to permit such Grantor to continue,
directly or indirectly, to produce, advertise and sell the products and
services sold or delivered by such Grantor under or in connection with
the Trademarks, Trademark Licenses, such persons to be available to
perform their prior functions on the Collateral Agent's behalf and to
be compensated by the Collateral Agent at such Grantor's expense on a
per diem, pro-rata basis consistent with the salary and benefit
structure applicable to each as of the date of such Event of Default;
and
(v) the Collateral Agent shall have the right to
notify, or require each Grantor to notify, any obligors with respect to
amounts due or to become due to such Grantor in respect of the
Intellectual Property, of the existence of the security interest
created herein, to direct such obligors to make payment of all such
amounts directly to the Collateral Agent, and, upon such notification
and at the expense of such Grantor, to enforce collection of any such
amounts and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as such Grantor
might have done;
(1) all amounts and proceeds (including checks and other
instruments) received by Grantor in respect of amounts due to
such Grantor in respect of the Collateral or any portion
thereof shall be received in trust for the benefit of the
Collateral Agent hereunder, shall be segregated from other
funds of such Grantor and shall
30
be forthwith paid over or delivered to the Collateral Agent in
the same form as so received (with any necessary endorsement)
to be held as cash Collateral and applied as provided by
Section 7.7 hereof; and
(2) Grantor shall not adjust, settle or compromise the amount or
payment of any such amount or release wholly or partly any
obligor with respect thereto or allow any credit or discount
thereon.
(b) If (i) an Event of Default shall have occurred and,
by reason of cure, waiver, modification, amendment or otherwise, no longer be
continuing, (ii) no other Event of Default shall have occurred and be
continuing, (iii) an assignment or other transfer to the Collateral Agent of any
rights, title and interests in and to the Intellectual Property shall have been
previously made and shall have become absolute and effective, and (iv) the
Secured Obligations shall not have become immediately due and payable, upon the
written request of any Grantor, the Collateral Agent shall promptly execute and
deliver to such Grantor, at such Grantor's sole cost and expense, such
assignments or other transfer as may be necessary to reassign to such Grantor
any such rights, title and interests as may have been assigned to the Collateral
Agent as aforesaid, subject to any disposition thereof that may have been made
by the Collateral Agent; provided, after giving effect to such reassignment, the
Collateral Agent's security interest granted pursuant hereto, as well as all
other rights and remedies of the Collateral Agent granted hereunder, shall
continue to be in full force and effect; and provided further, the rights, title
and interests so reassigned shall be free and clear of any other Liens granted
by or on behalf of the Collateral Agent and the Secured Parties.
(c) Solely for the purpose of enabling the Collateral
Agent to exercise rights and remedies under this Section 7 and at such time as
the Collateral Agent shall be lawfully entitled to exercise such rights and
remedies, each Grantor hereby grants to the Collateral Agent, to the extent it
has the right to do so, an irrevocable, nonexclusive license (exercisable
without payment of royalty or other compensation to such Grantor), subject, in
the case of Trademarks, to sufficient rights to quality control and inspection
in favor of such Grantor to avoid the risk of invalidation of said Trademarks,
to use, operate under, license, or sublicense any Intellectual Property now
owned or hereafter acquired by such Grantor, and wherever the same may be
located.
7.7 CASH PROCEEDS. In addition to the rights of the Collateral
Agent specified in Section 4.3, upon the occurrence and during the continuance
of an Event of Default with respect to payments of Receivables, all proceeds of
any Collateral received by any Grantor consisting of cash, checks and other
non-cash items (collectively, "CASH PROCEEDS") shall, at the request of the
Collateral Agent, be held by such Grantor in trust for the Collateral Agent,
segregated from other funds of such Grantor, and shall, forthwith upon receipt
by such Grantor, unless otherwise provided pursuant to Section 4.4(a)(ii), be
turned over to the Collateral Agent in the exact form received by such Grantor
(duly indorsed by such Grantor to the Collateral Agent, if required) and held by
the Collateral Agent. Any Cash Proceeds received by the Collateral Agent
(whether from a Grantor or otherwise): (i) if no Event of Default shall have
occurred and be continuing, shall be held by the Collateral Agent for the
ratable benefit of the Secured Parties, as collateral security for the Secured
Obligations (whether matured or unmatured) and (ii) if an Event of Default shall
have occurred and be continuing, may, in the sole discretion of the Collateral
Agent, (A) be held by the Collateral Agent for the ratable benefit of the
Secured Parties, as collateral security for the Secured Obligations (whether
matured or unmatured) and/or (B) then or at any time thereafter may be applied
by the Collateral Agent against the Secured Obligations then due and owing.
31
SECTION 8. COLLATERAL AGENT.
The Collateral Agent has been appointed to act as Collateral Agent
hereunder by Lenders and, by their acceptance of the benefits hereof, the other
Secured Parties. The Collateral Agent shall be obligated, and shall have the
right hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided, the
Collateral Agent shall, after payment in full of all Obligations under the
Credit Agreement and the other Credit Documents, exercise, or refrain from
exercising, any remedies provided for herein in accordance with the instructions
of the holders of a majority of the aggregate notional amount (or, with respect
to any Hedge Agreement that has been terminated in accordance with its terms,
the amount then due and payable (exclusive of expenses and similar payments but
including any early termination payments then due) under such Hedge Agreement)
under all Hedge Agreements. In furtherance of the foregoing provisions of this
Section, each Secured Party, by its acceptance of the benefits hereof, agrees
that it shall have no right individually to realize upon any of the Collateral
hereunder, it being understood and agreed by such Secured Party that all rights
and remedies hereunder may be exercised solely by the Collateral Agent for the
benefit of Secured Parties in accordance with the terms of this Section.
Collateral Agent may resign at any time by giving thirty (30) days' prior
written notice thereof to Lenders and the Grantors, and Collateral Agent may be
removed at any time with or without cause by an instrument or concurrent
instruments in writing delivered to the Grantors and Collateral Agent signed by
the Requisite Lenders. Upon any such notice of resignation or any such removal,
Requisite Lenders shall have the right, upon five (5) Business Days' notice to
the Collateral Agent, following receipt of the Grantors' consent (which shall
not be unreasonably withheld or delayed and which shall not be required while an
Event of Default exists), to appoint a successor Collateral Agent. Upon the
acceptance of any appointment as Collateral Agent hereunder by a successor
Collateral Agent, that successor Collateral Agent under this Agreement. Upon the
acceptance of any appointment as Administrative Agent under the terms of the
Credit Agreement by a successor Administrative Agent, that successor
Administrative Agent shall thereby also be deemed the successor Collateral Agent
and such successor Collateral Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring or removed
Collateral Agent under this Agreement, and the retiring or removed Collateral
Agent under this Agreement shall promptly (i) transfer to such successor
Collateral Agent all sums, Securities and other items of Collateral held
hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Collateral Agent under this Agreement, and (ii) execute and deliver to such
successor Collateral Agent such amendments to financing statements, and take
such other actions, as may be necessary or appropriate in connection with the
assignment to such successor Collateral Agent of the security interests created
hereunder, whereupon such retiring or removed Collateral Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring or removed Collateral Agent's resignation or removal hereunder as the
Collateral Agent, the provisions of this Agreement shall inure to its benefit as
to any actions taken or omitted to be taken by it under this Agreement while it
was the Collateral Agent hereunder.
SECTION 9. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the
Collateral and shall remain in full force and effect until the payment in full
of all Secured Obligations, be binding upon each Grantor, its successors and
assigns, and inure, together with the rights and remedies of the Collateral
Agent hereunder, to the benefit of the Collateral Agent and its successors,
32
transferees and assigns. Without limiting the generality of the foregoing, but
subject to the terms of the Credit Agreement, any Lender may assign or otherwise
transfer any Loans held by it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to
Lenders herein or otherwise. Upon the payment in full of all Secured Obligations
the security interest granted hereby shall terminate hereunder and of record and
all rights to the Collateral shall revert to Grantors. Upon any such termination
the Collateral Agent shall, at Grantors' expense, execute and deliver to
Grantors such documents as Grantors shall reasonably request to evidence such
termination.
SECTION 10. STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM.
The powers conferred on the Collateral Agent hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, the Collateral Agent shall have no duty as to
any Collateral or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to any Collateral. The
Collateral Agent shall be deemed to have exercised reasonable care in the
custody and preservation of Collateral in its possession if such Collateral is
accorded treatment substantially equal to that which the Collateral Agent
accords its own property. Neither the Collateral Agent nor any of its directors,
officers, employees or agents shall be liable for failure to demand, collect or
realize upon all or any part of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or otherwise. If any Grantor fails to perform
any agreement contained herein, the Collateral Agent may itself perform, or
cause performance of, such agreement, and the expenses of the Collateral Agent
incurred in connection therewith shall be payable by each Grantor under Section
10.2 of the Credit Agreement.
SECTION 11. MISCELLANEOUS.
Any notice required or permitted to be given under this Agreement shall
be given in accordance with Section 10.1 of the Credit Agreement. No failure or
delay on the part of the Collateral Agent in the exercise of any power, right or
privilege hereunder or under any other Credit Document shall impair such power,
right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement and
the other Credit Documents are cumulative to, and not exclusive of, any rights
or remedies otherwise available. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or would otherwise be within the limitations of, another covenant
shall not avoid the occurrence of a Default or an Event of Default if such
action is taken or condition exists. This Agreement shall be binding upon and
inure to the benefit of the Collateral Agent and Grantors and their respective
successors and assigns. No Grantor shall, without the prior written consent of
the Collateral Agent given in accordance with the Credit Agreement, assign any
right, duty or obligation hereunder. This Agreement and the other Credit
Documents embody the entire agreement and understanding between Grantors and the
Collateral Agent and supersede all prior agreements and understandings between
such parties relating to the subject matter hereof and thereof. Accordingly, the
Credit Documents may not be contradicted by
33
evidence of prior, contemporaneous or subsequent oral agreements of the parties.
There are no unwritten oral agreements between the parties. This Agreement may
be executed in one or more counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS
CONFLICTS OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 AND SECTION 5-1402 OF THE
NEW YORK GENERAL OBLIGATION LAWS).
34
IN WITNESS WHEREOF, each Grantor and the Collateral Agent have caused
this Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
CONNETICS CORPORATION
By:______________________________________
___________________________________
Name:
Title:
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
as the Collateral Agent
By:______________________________________
___________________________________
Name:
Title:
35
