EXHIBIT 10.24
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CREDIT AGREEMENT
Dated as of December 31, 2003
among
LTFMF AZ REAL ESTATE, LLC and
THE OTHER BORROWERS SIGNATORY HERETO
FROM TIME TO TIME,
as Borrowers,
LTFMF REAL ESTATE HOLDINGS, LLC
as a Credit Party,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
GECC CAPITAL MARKETS GROUP, INC., as Sole Lead Arranger and Syndication Agent
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TABLE OF CONTENTS
Page
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1. AMOUNT AND TERMS OF CREDIT ....................................................................... 2
1.1 Term Loans........................................................................................ 2
1.2 Prepayments....................................................................................... 4
1.3 Use of Proceeds................................................................................... 6
1.4 Interest.......................................................................................... 6
1.5 Fees.............................................................................................. 7
1.6 Receipt of Payments............................................................................... 8
1.7 Application and Allocation of Payments............................................................ 8
1.8 Loan Account and Accounting....................................................................... 8
1.9 Indemnity......................................................................................... 9
1.10 Access............................................................................................ 9
1.11 Taxes............................................................................................. 10
1.12 Capital Adequacy; Increased Costs; Illegality..................................................... 11
1.13 Single Loan....................................................................................... 12
1.14 Joinder of Additional Borrowers................................................................... 12
1.15. Joinder of Additional Lenders..................................................................... 13
2. CONDITIONS PRECEDENT.............................................................................. 14
2.1 Closing Conditions................................................................................ 14
2.2 Conditions to Each Loan........................................................................... 15
3. REPRESENTATIONS AND WARRANTIES.................................................................... 16
3.1 Corporate Existence; Compliance with Law.......................................................... 16
3.2 Executive Offices, Collateral Locations, FEIN..................................................... 17
3.3 Corporate Power, Authorization, Enforceable Obligations........................................... 17
3.4 Financial Statements and Projections.............................................................. 18
3.5 Material Adverse Effect........................................................................... 18
3.6 Ownership of Property; Liens...................................................................... 18
3.7 Labor Matters..................................................................................... 19
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness......................... 20
3.9 Government Regulation............................................................................. 20
3.10 Margin Regulations................................................................................ 20
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3.11 Taxes............................................................................................. 20
3.12 ERISA............................................................................................. 21
3.13 No Litigation..................................................................................... 22
3.14 Brokers........................................................................................... 22
3.15 Intellectual Property............................................................................. 22
3.16 Full Disclosure................................................................................... 23
3.17 Environmental Matters............................................................................. 23
3.18 Insurance......................................................................................... 24
3.19 Trade Relations.................................................................................. 24
3.20 Agreements and Other Documents.................................................................... 24
3.21 Solvency.......................................................................................... 25
3.22 Status of Borrowers............................................................................... 25
4. FINANCIAL STATEMENTS AND INFORMATION.............................................................. 25
4.1 Reports and Notices............................................................................... 25
4.2 Communication with Accountants.................................................................... 25
5. AFFIRMATIVE COVENANTS............................................................................. 25
5.1 Maintenance of Existence and Conduct of Business.................................................. 25
5.2 Payment of Charges................................................................................ 26
5.3 Books and Records................................................................................. 26
5.4 Insurance; Damage to or Destruction of Collateral................................................. 26
5.5 Compliance with Laws.............................................................................. 28
5.6 Supplemental Disclosure........................................................................... 28
5.7 Intellectual Property............................................................................. 29
5.8 Environmental Matters............................................................................. 29
5.9 Landlords' Agreements, Mortgagee Agreements, and Bailee Letters Purchases......................... 29
5.10 Real Estate Purchases............................................................................. 30
5.11 Further Assurances................................................................................ 30
6. NEGATIVE COVENANTS................................................................................ 30
6.1 Mergers, Subsidiaries, Etc........................................................................ 30
6.2 Investments; Loans and Advances................................................................... 31
6.3 Indebtedness...................................................................................... 31
6.4 Employee Loans and Affiliate Transactions......................................................... 32
6.5 Capital Structure and Business.................................................................... 32
6.6 Guaranteed Indebtedness........................................................................... 32
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6.7 Liens............................................................................................. 33
6.8 Sale of Stock and Assets.......................................................................... 33
6.9 ERISA............................................................................................. 33
6.10 Financial Covenants............................................................................... 33
6.11 Hazardous Materials............................................................................... 33
6.12 Sale-Leasebacks................................................................................... 33
6.13 Cancellation of Indebtedness...................................................................... 33
6.14 Restricted Payments............................................................................... 33
6.15 Change of Corporate Name or Location; Change of Fiscal Year....................................... 34
6.16 No Impairment of Intercompany Transfers........................................................... 34
6.17 No Speculative Transactions....................................................................... 34
6.18 Leases; Real Estate Purchases..................................................................... 34
6.19 Changes Relating to Subordinated Debt; or Facility Leases......................................... 34
7. TERM.............................................................................................. 34
7.1 Termination....................................................................................... 34
7.2 Survival of Obligations Upon Termination of Financing Arrangements................................ 34
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES............................................................ 35
8.1 Events of Default................................................................................. 35
8.2 Remedies.......................................................................................... 37
8.3 Waivers by Credit Parties......................................................................... 37
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT............................................... 38
9.1 Assignment and Participations..................................................................... 38
9.2 Appointment of Agent.............................................................................. 40
9.3 Agent's Reliance, Etc............................................................................. 41
9.4 GE Capital and Affiliates......................................................................... 42
9.5 Lender Credit Decision............................................................................ 42
9.6 Indemnification................................................................................... 42
9.7 Successor Agent................................................................................... 43
9.8 Setoff and Sharing of Payments.................................................................... 43
9.9 Advances; Payments; Non-Funding Lenders; Information; Actions in Concert.......................... 44
10. SUCCESSORS AND ASSIGNS............................................................................ 46
11. MISCELLANEOUS..................................................................................... 46
11.1 Complete Agreement; Modification of Agreement..................................................... 46
11.2 Amendments and Waivers............................................................................ 47
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11.3 Fees and Expenses................................................................................. 48
11.4 No Waiver......................................................................................... 50
11.5 Remedies.......................................................................................... 50
11.6 Severability...................................................................................... 50
11.7 Conflict of Terms................................................................................. 50
11.8 Confidentiality................................................................................... 50
11.9 Governing Law..................................................................................... 51
11.10 Notices........................................................................................... 52
11.11 Section Titles.................................................................................... 52
11.12 Counterparts...................................................................................... 52
11.13 Waiver Of Jury Trial.............................................................................. 52
11.14 Press Releases and Related Matters................................................................ 53
11.15 Reinstatement..................................................................................... 53
11.16 Advice of Counsel................................................................................. 53
11.17 No Strict Construction............................................................................ 53
12. CROSS-GUARANTY.................................................................................... 53
12.1 Cross-Guaranty.................................................................................... 53
12.2 Waivers by Borrowers.............................................................................. 54
12.3 Benefit of Guaranty............................................................................... 54
12.4 Subordination of Subrogation, Etc................................................................. 54
12.5 Election of Remedies.............................................................................. 55
12.6 Limitation........................................................................................ 55
12.7 Contribution with Respect to Guaranty Obligations................................................. 55
12.8 Liability Cumulative.............................................................................. 56
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INDEX OF APPENDICES
Annex A (Recitals) - Definitions
Annex B (Section 2) - Closing Checklist and Facility Funding Checklist
Annex C (Section 4.1) - Financial Statements and Projections -- Reporting
Annex D (Section 6.10) - Financial Covenants
Annex E (Section 9.9(a)) - Lenders' Wire Transfer Information
Annex F (Section 11.10) - Notice Addresses
Annex G (from Annex A -
"Commitments") - Commitments as of the Closing Date
Exhibit 1.1(b) - Form of Notice of Borrowing
Exhibit 1.1(c) - Form of Note
Exhibit 1.14(a) - Form of Joinder Agreement
Exhibit 1.15 - Form of Acknowledgment Agreement
Exhibit 4.1 - Form of Compliance Certificate
Exhibit 9.1(a) - Form of Assignment Agreement
Schedule 1.1(b) - Agent's Representatives
Disclosure Schedule 3.1 - Type of Entity; State of Organization
Disclosure Schedule 3.2 - Executive Offices, Collateral Locations, FEIN
Disclosure Schedule 3.4(a) - Financial Statements
Disclosure Schedule ERROR! REFERENCE SOURCE NOT FOUND. - Projections
Disclosure Schedule 3.6 - Real Estate and Leases
Disclosure Schedule 3.7 - Labor Matters
Disclosure Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding Stock
Disclosure Schedule 3.11 - Tax Matters
Disclosure Schedule 3.12 - ERISA Plans
Disclosure Schedule 3.13 - Litigation
Disclosure Schedule 3.15 - Intellectual Property
Disclosure Schedule 3.17 - Hazardous Materials
Disclosure Schedule 3.18 - Insurance
Disclosure Schedule 3.20 - Material Agreements
Disclosure Schedule 5.1 - Corporate and Trade Names
Disclosure Schedule 6.3 - Indebtedness
Disclosure Schedule 6.4(a) - Transactions with Affiliates
Disclosure Schedule 6.7 - Existing Liens
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This CREDIT AGREEMENT (as amended, supplemented, restated, or otherwise
modified from time to time, this "Agreement"), dated as of December 31, 2003, is
among LTFMF AZ REAL ESTATE, LLC, a Delaware limited liability company ("LTFAZ")
and the other borrowers signatory hereto from time to time (together with LTFAZ,
"Borrowers"); LTFMF REAL ESTATE HOLDINGS, LLC, a Delaware limited liability
company ("Holdings"); GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation ("GE Capital"), as Lender and as Agent for Lenders (together with
any successor in such capacity, "Agent"); and the other lenders signatory hereto
from time to time (together with GE Capital in its capacity as lender and their
successors and assigns, "Lenders").
RECITALS
WHEREAS, Borrowers have requested that Lenders extend term credit
facilities to Borrowers of up to $35,000,000 in the aggregate for the purpose of
refinancing a portion of Borrowers' costs to acquire land and construct
improvements for the Facilities and for other purposes permitted hereunder; and
for these purposes, Lenders are willing to make certain term loans to Borrowers
of up to such amount upon the terms and conditions set forth herein;
WHEREAS, Borrowers have agreed to secure all of their obligations under
the Loan Documents by granting to Agent, for the benefit of Agent and Lenders,
security interests in and liens upon all of their existing and after-acquired
personal and real property, including Borrowers' interests in the Facilities and
the Facility Leases;
WHEREAS, Holdings is willing to pledge to Agent, for the benefit of
Agent and Lenders, all of the Stock of Borrowers held by it and to grant to
Agent, for the benefit of Agent and Lenders, security interests in and liens
upon all of Holdings' existing and after-acquired personal and real property, in
each case to secure the obligations of Borrowers under the Loan Documents, and
Holdings is willing to guarantee the obligations of Borrowers under the Loan
Documents;
WHEREAS, Life Time Fitness, Inc., a Minnesota corporation ("LTF") is
willing to pledge to Agent, for the benefit of Agent and Lenders, all of the
Stock of Holdings held by it to secure the obligations of Borrowers under the
Loan Documents; and
WHEREAS, capitalized terms used in this Agreement, including the
Preamble and Recitals of this Agreement, shall have the meanings ascribed to
them in Annex A and, for purposes of this Agreement and the other Loan
Documents, the rules of construction set forth in Annex A shall govern. All
Annexes, Disclosure Schedules, Exhibits and other attachments hereto or
expressly identified to this Agreement (collectively, "Appendices") are
incorporated herein by reference and, taken together with this Agreement, shall
constitute but a single agreement. These Recitals shall be construed as part of
this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the parties hereto agree as follows:
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1. AMOUNT AND TERMS OF CREDIT
1.1. Term Loans.
(a) Subject to the terms and conditions hereof, each
Lender agrees to make available to Borrowers from time to time until
the Commitment Termination Date its Pro Rata Share Available of up to
five term loans (each, a "Term Loan"). Any Lender's Pro Rata Share
Outstanding of all Term Loans shall not exceed such Lender's
Commitment. The obligations of each Lender hereunder shall be several
and not joint. Until the Commitment Termination Date, Borrowers may
borrow under this Section 1.1(a) once for each Facility owned by any
Borrower; provided that the amount of the Term Loan for any Facility
shall not exceed Borrowing Availability and the following conditions
have been satisfied or provided for in a manner satisfactory to Agent
or waived in writing by Agent, as of the funding date of such Term
Loan:
(i) the Collateral Documents and other Loan
Documents related to such Term Loan shall have been duly
executed by and delivered to the applicable Borrower, each
other Credit Party signatory hereto, Agent and Lenders; and
Agent shall have received such documents, instruments,
agreements and legal opinions as Agent shall reasonably
request in connection with such Term Loan and such Facility,
including those listed in the Facility Funding Checklist, each
in form and substance reasonably satisfactory to Agent;
(ii) Agent shall have received (A) satisfactory
evidence that the Credit Parties and LTF have obtained all
required consents and approvals of all Persons, including all
requisite Governmental Authorities, to the execution, delivery
and performance of the Loan Documents and Related Transactions
Documents related to such Facility and such Term Loan or (B)
officer's certificates in form and substance reasonably
satisfactory to Agent affirming that no such consents or
approvals are required;
(iii) Agent shall have received satisfactory
evidence that such Facility's Initial Fixed Charge Ratio is
not less than 1.00 to 1.00 calculated as of the Term Loan
funding date and as of the last day of the Fiscal Month
including the Term Loan funding date, that such Facility's
membership level is not less than 3500 members as of the Term
Loan funding date, and that after giving effect to such Term
Loan the aggregate principal amount of the Term Loans would
not exceed the Maximum Amount;
(iv) the Credit Parties shall have reimbursed
Agent for all reasonable fees, costs and expenses related to
such Term Loan presented as of the Term Loan funding date;
(v) Agent shall have completed its business and
legal due diligence with respect to such Facility with results
reasonably satisfactory to Agent; and
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(vi) Agent shall have received satisfactory
evidence that the applicable Borrower is Solvent.
(b) Each Term Loan advance made after the Closing Date
shall be made on notice by Borrower Representative on behalf of the
applicable Borrower to one of the representatives of Agent identified
in Schedule 1.1(b) at the address specified therein. Any such notice
must be given at least thirty days prior to the proposed funding date
of the applicable Term Loan. Each such notice (a "Notice of Borrowing")
must be given in writing (by telecopy or overnight courier)
substantially in the form of Exhibit 1.1(b), and shall include the
information required in such Exhibit and such other information as may
be required by Agent.
(c) Except as provided in Section 1.8, the applicable
Borrower shall execute and deliver to each Lender a promissory note to
evidence such Lender's Pro Rata Share Advanced with respect to any Term
Loan advanced to such Borrower (the "Notes"). Each Note shall be
substantially in the form of Exhibit 1.1(c), dated the funding date of
the applicable Term Loan and in the original principal amount of the
applicable Lender's Pro Rata Share Advanced. Each Note shall represent
the primary obligation of the applicable Borrower (but shall also be
guaranteed by all other Borrowers pursuant to Section 12) to pay the
applicable Lender's Pro Rata Share Advanced of the unpaid principal
amount of the applicable Term Loan, together with interest thereon as
prescribed in Section 1.4.
(d) The monthly installments for each Note shall be in
equal amounts of principal and interest sufficient to amortize the
outstanding balance of such Note over a fifteen-year period, as set
forth in the amortization schedule of such Note. The monthly payment of
principal and interest for each Term Loan shall be equal to the
aggregate amount of monthly installments under the Notes related to
such Term Loan. Each Term Loan shall be repaid in consecutive monthly
installments made on the first Business Day of each month commencing on
(i) the first full calendar month following the funding date of such
Term Loan, if the funding date of such Term Loan occurred on or before
the fifteenth calendar day of the month, and (ii) the second full
calendar month following the funding date of such Term Loan, if the
funding date of such Term occurred after the fifteenth calendar day of
the month, and, in either case, continuing until the Maturity Date. On
the Maturity Date, Borrowers shall completely repay the Term Loans,
together with all accrued interest and other amounts due under this
Agreement. No payment with respect to the Term Loans may be reborrowed.
(e) Each payment of principal and interest with respect
to any Term Loan shall be paid to Agent for the benefit of each Lender,
in proportion to each Lender's Pro Rata Share Outstanding of such Term
Loan and as set forth in the Notes related to such Term Loan.
(f) Agent shall be entitled to rely upon and shall be
fully protected in relying upon any Notice of Borrowing or similar
notice believed by Agent to be genuine. Agent may assume that each
Person executing and delivering any notice in accordance herewith
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was duly authorized, unless the responsible individual acting thereon
for Agent has actual knowledge to the contrary. Each Borrower hereby
designates Holdings as its representative and agent on its behalf for
the purposes of issuing Notices of Borrowing, giving instructions with
respect to the disbursement of the proceeds of the Term Loans, giving
and receiving all other notices and consents under any Loan Document
and taking all other actions (including in respect of compliance with
covenants) on behalf of any Borrower or Borrowers under the Loan
Documents. Borrower Representative hereby accepts such appointment.
Agent and each Lender may regard any notice or other communication
pursuant to any Loan Document from Borrower Representative as a notice
or communication from all Borrowers and may give any notice or
communication required or permitted to be given to any Borrower or
Borrowers hereunder to Borrower Representative on behalf of such
Borrower or Borrowers. Each Borrower agrees that each notice, election,
representation and warranty, covenant, agreement and undertaking made
on its behalf by Borrower Representative shall be deemed for all
purposes to have been made by such Borrower and shall be binding upon
and enforceable against such Borrower to the same extent as if the same
had been made directly by such Borrower.
1.2. Prepayments.
(a) Voluntary Prepayments. Borrowers may at any time on
at least five days' prior written notice by Borrower Representative to
Agent voluntarily prepay all or part of the Term Loans; provided that
any such prepayments shall be in a minimum amount of $1,000,000 and
integral multiples of $500,000 in excess of such amount. In addition,
Borrowers may at any time on at least ten days' prior written notice by
Borrower Representative to Agent terminate the Commitment prior to the
Commitment Termination Date; provided that upon such termination, all
Term Loans and other Obligations shall be immediately due and payable
in full. Any such voluntary prepayment and any such termination of the
Commitment prior to the Commitment Termination Date must be accompanied
by the payment of the Fees required by Section 1.5(c), if any. Upon any
such termination of the Commitment, each Borrower's right to request
Term Loan advances shall simultaneously be terminated. Any partial
prepayments of the Term Loans of any Borrower shall be applied to
prepay the scheduled installments of such Borrower's Term Loans in
inverse order of maturity.
(b) Mandatory Prepayments.
(i) Immediately upon receipt by any Borrower of
proceeds of any asset disposition or any sale of Stock of any
Subsidiary of such Borrower, Borrowers shall prepay the Term
Loans in an amount equal to all such proceeds, net of (A)
commissions and other reasonable and customary transaction
costs, fees and expenses properly attributable to such
transaction and payable by Borrowers in connection therewith
(in each case, paid to non-Affiliates), (B) transfer taxes,
(C) amounts payable to holders of senior Liens (to the extent
such Liens constitute Permitted Encumbrances), if any, and (D)
an appropriate reserve for income taxes in accordance with
GAAP in connection therewith. Any such prepayment shall be
applied first, to Fees and reimbursable expenses of Agent and
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Lenders then due and payable pursuant to any of the Loan
Documents; second, to interest then due and payable on the
Term Loan related to such assets; third, to prepay the
scheduled principal installments of the Term Loan related to
such assets in inverse order of maturity, until such Term Loan
has been prepaid in full; fourth, to interest then due and
payable on such Borrower's Ratable Share of the other Term
Loans; fifth, to prepay the scheduled principal installments
of such Borrower's Ratable Share of the other Term Loans in
inverse order of maturity, until such Ratable Share has been
prepaid in full; sixth, to interest then due and payable on
the Ratable Shares of the Term Loans of each other Borrower,
pro rata; and seventh, to prepay the scheduled principal
installments of the Ratable Shares of the Term Loans of each
other Borrower, pro rata, in inverse order of maturity, until
such Ratable Shares have been prepaid in full.
(ii) If any Borrower issues or sells debt
securities, no later than the Business Day following the date
of receipt of the proceeds thereof, the issuing Borrower shall
prepay the Term Loans in an amount equal to all such proceeds,
net of underwriting discounts and commissions and other
reasonable costs paid to non-Affiliates in connection
therewith. Any such prepayment shall be applied first, to Fees
and reimbursable expenses of Agent and Lenders then due and
payable pursuant to any of the Loan Documents; second, to
interest then due and payable on such Borrower's Ratable Share
of the Term Loans; third, to prepay the scheduled principal
installments of such Borrower's Ratable Share of the Term
Loans in inverse order of maturity, until such Ratable Share
has been prepaid in full; fourth, to interest then due and
payable on the Ratable Shares of the Term Loans of each other
Borrower, pro rata; and fifth, to prepay the scheduled
principal installments of the Ratable Shares of the Term Loans
of each other Borrower, pro rata, in inverse order of
maturity, until such Ratable Shares have been prepaid in full.
(iii) If any Facility fails to achieve a Fixed
Charge Ratio of not less than 1.20 to 1.00 as of a date after
the funding date of the Term Loan related to such Facility but
not later than eighteen months after such funding date, then
the Deposits related to such Facility shall be used to prepay
such Term Loan. Any such prepayment shall be applied first, to
interest then due and payable on the Term Loan related to such
Facility and second, to prepay the scheduled principal
installments of the Term Loan related to such Facility in
inverse order of maturity, until such Term Loan has been
prepaid in full.
(c) Application of Prepayments from Insurance and
Condemnation Proceeds. Prepayments from insurance or condemnation
proceeds in accordance with Section 5.4(c) and the Mortgages,
respectively, shall be applied as follows: insurance proceeds from
casualties or losses to any Facility shall be applied to scheduled
installments of the Term Loan related to such Facility in inverse order
of maturity, and insurance proceeds from casualties or losses to any
other assets of any Borrower shall be applied to scheduled installments
of such Borrower's Ratable Share of the Term Loans in inverse order of
maturity, until such Ratable Share has been prepaid in full. If
insurance or condemnation
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proceeds received by any Borrower exceed the outstanding principal
balances of the Term Loans to that Borrower, together with accrued
interest thereon to the date of application, and (i) if a Default or an
Event of Default does not exist, such excess proceeds shall be paid to
such Borrower or (ii) if a Default or an Event of Default has occurred
and is continuing, the allocation and application of such excess
proceeds shall be determined by Agent, subject to the approval of
Requisite Lenders. The application of such proceeds in accordance with
this Section 1.2(c) shall not be subject to the fee described in
Section 1.5(c).
(d) No Implied Consent. Nothing in this Section 1.2 shall
be construed to constitute Agent's or any Lender's consent to any
transaction that is not permitted by other provisions of this Agreement
or the other Loan Documents.
(e) No Reborrowing. No payment with respect to the Term
Loans may be reborrowed.
1.3. Use of Proceeds. Borrowers shall utilize the proceeds of each
Term Loan solely for refinancing a portion of Borrowers' costs to acquire land
and construct improvements for the Facility related to such Term Loan (and to
pay any related transaction expenses), for the related Refinancings (including
any related transaction expenses), and for Borrowers' general corporate needs.
1.4. Interest.
(a) Borrowers shall pay interest to Agent, for the
ratable benefit of Lenders, in accordance with the Term Loans being
made by each Lender, in arrears on each Payment Date, at the Interest
Rate applicable to such Term Loan.
(b) If any payment on any Term Loan becomes due and
payable on a day other than a Business Day, the maturity thereof will
be extended to the next succeeding Business Day.
(c) All computations of Fees calculated on a per annum
basis and interest shall be made by Agent on the basis of a 360-day
year, in each case for the actual number of days occurring in the
period for which such interest and Fees are payable. Each determination
by Agent of an interest payment amount and Fees hereunder shall be
final, binding and conclusive on Borrowers, absent manifest error.
(d) So long as an Event of Default has occurred and is
continuing under Section 8.1(a), (j) or (k) or after all of the
Obligations become immediately due and payable under Section 8.2 or so
long as any other Default or Event of Default has occurred and is
continuing and at the election of Agent (or upon the written request of
Requisite Lenders) confirmed by written notice from Agent to Borrower
Representative, the Interest Rate shall be increased by 2% per annum
above the Interest Rate otherwise applicable (the "Default Rate"), and
all outstanding Obligations shall bear interest at the Default Rate.
Interest at the Default Rate shall accrue from the initial date of such
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Default or Event of Default until that Default or Event of Default is
cured or waived and shall be payable upon demand.
(e) Notwithstanding anything to the contrary set forth in
this Section 1.4, if a court of competent jurisdiction determines in a
final order that the rate of interest payable hereunder exceeds the
highest rate of interest permissible under law (the "Maximum Lawful
Rate"), then so long as the Maximum Lawful Rate would be so exceeded,
the rate of interest payable hereunder shall be equal to the Maximum
Lawful Rate; provided, however, that if at any time thereafter the rate
of interest payable hereunder is less than the Maximum Lawful Rate,
Borrowers shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Agent, on
behalf of Lenders, is equal to the total interest that would have been
received had the interest rate payable hereunder been (but for the
operation of this Section 1.4(e)) the interest rate payable since the
Closing Date as otherwise provided in this Agreement. Thereafter,
interest hereunder shall be paid at the rate of interest and in the
manner provided in Section 1.4(a) through (d), unless and until the
rate of interest again exceeds the Maximum Lawful Rate, and at that
time this Section 1.4(e) shall again apply. In no event shall the total
interest received by any Lender pursuant to the terms of this Agreement
exceed the amount that such Lender could lawfully have received had the
interest due hereunder been calculated for the full term hereof at the
Maximum Lawful Rate. If the Maximum Lawful Rate is calculated pursuant
to this Section 1.4(e), such interest shall be calculated at a daily
rate equal to the Maximum Lawful Rate divided by the actual number of
days in the year in which such calculation is made. Notwithstanding the
provisions of this Section 1.4(e), if a court of competent jurisdiction
shall finally determine that a Lender has received interest hereunder
in excess of the Maximum Lawful Rate, Agent shall, to the extent
permitted by applicable law, promptly apply such excess in the order
specified in Section 1.7 and thereafter shall refund any excess to
Borrowers or as a court of competent jurisdiction may otherwise order.
1.5. Fees.
(a) Borrowers shall pay to GE Capital, individually, the
Fees specified in that certain fee letter dated December 31, 2003
between LTF and GE Capital (the "Fee Letter") at the times specified
for payment therein.
(b) As additional compensation for Lenders, Borrowers
shall pay to Agent, for the ratable benefit of such Lenders, in
arrears, on the first Business Day of each month prior to the
Commitment Termination Date and on the Commitment Termination Date, a
Fee for Borrowers' non-use of available funds (the "Unused Facility
Fee"). The Unused Facility Fee shall be an amount equal to 0.50% per
annum (calculated on the basis of a 360-day year for actual days
elapsed) multiplied by the difference between (x) the Maximum Amount
(as it may be increased or decreased from time to time in accordance
with this Agreement) and (y) the average for the period of the
aggregate daily principal balances of the Term Loans outstanding during
the period for which such Unused Facility Fee is due.
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(c) If Borrowers pay after acceleration or prepay all or
any portion of the Term Loans or, prior to the Commitment Termination
Date, reduce or terminate the Commitment, whether voluntarily or
involuntarily and whether before or after acceleration of the
Obligations, or if any of the Commitments are otherwise terminated
prior to the Commitment Termination Date, then Borrowers shall pay to
Agent, for the benefit of Lenders, as liquidated damages and
compensation for the costs of being prepared to make funds available
hereunder, the following amounts:
(i) if such payment or prepayment occurs prior
to the third anniversary of the Closing Date, the Prepayment
Premium plus the Make Whole Amount; and
(ii) if such payment or prepayment occurs on or
after the third anniversary of the Closing Date, the Make
Whole Amount.
Borrowers agree that the Prepayment Premium and the Make Whole Amount
are reasonable calculations of Lenders' lost profits in view of the
difficulties and impracticality of determining actual damages resulting
from an early termination of the Commitments and repayment of the Term
Loans.
1.6. Receipt of Payments. Borrowers shall make each payment under
this Agreement not later than 2:00 p.m. (New York time) on the day when due in
immediately available funds in Dollars to the Collection Account. For purposes
of computing interest and Fees as of any date, all payments shall be deemed
received on the Business Day on which immediately available funds therefor are
received in the Collection Account prior to 2:00 p.m. (New York time). Payments
received after 2:00 p.m. (New York time) on any Business Day or on a day that is
not a Business Day shall be deemed received on the following Business Day.
1.7. Application and Allocation of Payments. So long as no Default
or Event of Default has occurred and is continuing, (i) payments matching
specific scheduled payments then due shall be applied to those scheduled
payments; (ii) voluntary prepayments shall be applied as determined by Borrower
Representative, subject to the provisions of Section 1.2(a); and (iii) mandatory
prepayments shall be applied as set forth in Section 1.2(b) and (c). All
payments and prepayments applied to a particular Term Loan shall be applied
ratably to the portion thereof held by each Lender as determined by its Pro Rata
Share Outstanding of such Term Loan. As to any other payment, and as to all
payments made when a Default or an Event of Default has occurred and is
continuing or following the Maturity Date, each Borrower hereby irrevocably
waives the right to direct the application of any and all payments received from
or on behalf of such Borrower, and each Borrower hereby irrevocably agrees that
Agent shall have the continuing exclusive right to apply any and all such
payments against the Obligations of Borrowers as Agent may deem advisable
notwithstanding any previous entry by Agent in the Loan Account or any other
books and records. In the absence of a specific determination by Agent with
respect thereto, payments shall be applied to amounts then due and payable in
the following order: first, to Fees and Agent's and Lenders' expenses
reimbursable hereunder; second, to interest on the Term Loans, ratably in
proportion to the interest accrued as to each Term Loan; third, to principal
payments on the Term Loans, ratably to the aggregate, combined
8
principal balance of the Term Loans; and fourth, to all other Obligations,
including expenses of Lenders to the extent reimbursable under Section 11.3.
1.8. Loan Account and Accounting. Agent shall maintain a loan
account (the "Loan Account") on its books to record: (a) all Term Loan advances,
(b) all payments made by Borrowers and (c) all other debits and credits as
provided in this Agreement with respect to the Term Loans or any other
Obligations. All entries in the Loan Account shall be made in accordance with
Agent's customary accounting practices as in effect from time to time. The
balance in the Loan Account, as recorded on Agent's most recent printout or
other written statement, shall be presumptive evidence of the amounts due and
owing to Agent and Lenders by each Borrower, absent manifest error; provided
that any failure to so record or any error in so recording shall not limit or
otherwise affect any Borrower's duty to pay the Obligations. Agent shall render
to Borrower Representative a monthly accounting of transactions with respect to
the Term Loans setting forth the balance of the Loan Account as to each Borrower
for the immediately preceding month. Unless Borrower Representative notifies
Agent in writing of any objection to any such accounting (specifically
describing the basis for such objection), within thirty days after the date
thereof, each and every such accounting shall (absent manifest error) be deemed
final, binding and conclusive on Borrowers in all respects as to all matters
reflected therein. Only those items expressly objected to in such notice shall
be deemed to be disputed by Borrowers. Notwithstanding any provision in this
Agreement to the contrary, any Lender may elect (which election may be revoked)
to dispense with the issuance of Notes to that Lender and may rely on the Loan
Account as evidence of the amount of Obligations from time to time owing to it.
1.9. Indemnity. Each Credit Party that is a signatory hereto shall
jointly and severally indemnify and hold harmless each of Agent, Lenders and
their respective Affiliates, and each such Person's respective officers,
directors, employees, attorneys, agents and representatives (each, an
"Indemnified Person"), from and against any and all suits, actions, proceedings,
claims, damages, losses, liabilities and expenses (including reasonable
attorneys' fees and disbursements and other costs of investigation or defense,
including those incurred upon any appeal) that may be instituted or asserted
against or incurred by any such Indemnified Person as the result of credit
having been extended, suspended or terminated under this Agreement and the other
Loan Documents and the administration of such credit, and in connection with or
arising out of the transactions contemplated hereunder and thereunder and any
actions or failures to act in connection therewith, including any and all
Environmental Liabilities and legal costs and expenses arising out of or
incurred in connection with disputes between or among any parties to any of the
Loan Documents (collectively, the "Indemnified Liabilities"); provided that no
Credit Party shall be liable for any indemnification to an Indemnified Person to
the extent that any such suit, action, proceeding, claim, damage, loss,
liability or expense results from that Indemnified Person's gross negligence or
willful misconduct. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY
OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY
BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY
THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR
9
TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION
CONTEMPLATED HEREUNDER OR THEREUNDER.
1.10. Access. During normal business hours, from time to time upon
three Business Day's prior notice as frequently as Agent determines to be
appropriate, each Credit Party shall (a) provide Agent and any of its officers,
employees and agents access to its properties, facilities, advisors and
employees (including officers) and to the Collateral, (b) permit Agent and any
of its officers, employees and agents to inspect, audit and make extracts from
any such Person's books and records, and (c) permit Agent and its officers,
employees and agents to inspect, review, evaluate and make test verifications of
the Collateral or any part thereof. If a Default or an Event of Default has
occurred and is continuing or if access is necessary to preserve or protect the
Collateral as determined by Agent, each Credit Party shall provide such access
to Agent and to each Lender at all times and without advance notice.
Furthermore, so long as an Event of Default has occurred and is continuing,
Borrowers shall provide Agent and each Lender with access to their lessees. Each
Credit Party shall make available to Agent and its counsel, as quickly as is
possible under the circumstances, originals or copies of all books and records
that Agent may reasonably request. Each Credit Party shall deliver any document
or instrument necessary for Agent, as it may from time to time reasonably
request, to obtain records from any service bureau or other Person that
maintains records for such Person and shall maintain duplicate records or
supporting documentation on media, including computer tapes and discs owned by
such Person.
1.11. Taxes.
(a) Any and all payments by each Borrower hereunder
(including any payments made pursuant to Section 12) or under the Notes
shall be made, in accordance with this Section 1.11, free and clear of
and without deduction for any and all present or future Taxes. If any
Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder (including any sum payable
pursuant to Section 12) or under the Notes, (i) the sum payable shall
be increased as much as shall be necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section 1.11) Agent or Lenders, as applicable,
receive an amount equal to the sum they would have received had no such
deductions been made, (ii) such Borrower shall make such deductions,
and (iii) such Borrower shall pay the full amount deducted to the
relevant taxing or other authority in accordance with applicable law.
Within thirty days after the date of any payment of Taxes, Borrower
Representative shall furnish to Agent the original or a certified copy
of a receipt evidencing payment thereof. Agent and Lenders shall not be
obligated to return or refund any amounts received pursuant to this
Section 1.11.
(b) Each Credit Party shall jointly and severally
indemnify and, within ten days of demand therefor, pay Agent and each
Lender for the full amount of Taxes from or in respect of any sum
payable hereunder (including any Taxes imposed by any jurisdiction on
amounts payable under this Section 1.11) paid by Agent or such Lender,
as appropriate, and any liability (including penalties, interest and
expenses) arising
10
therefrom or with respect thereto, whether or not such Taxes were
correctly or legally asserted.
(c) Each Lender organized under the laws of a
jurisdiction outside the United States (a "Foreign Lender") as to which
payments to be made under this Agreement or under the Notes are exempt
from United States withholding tax under an applicable statute or tax
treaty shall provide to Borrower Representative and Agent a properly
completed and executed IRS Form W-8ECI or Form W-8BEN or other
applicable form, certificate or document prescribed by the IRS or the
United States certifying as to such Foreign Lender's entitlement to
such exemption (a "Certificate of Exemption"). Any foreign Person that
seeks to become a Lender under this Agreement shall provide a
Certificate of Exemption to Borrower Representative and Agent prior to
becoming a Lender hereunder. No foreign Person may become a Lender
hereunder if such Person fails to deliver a Certificate of Exemption in
advance of becoming a Lender.
1.12. Capital Adequacy; Increased Costs; Illegality.
(a) If any Lender shall determine that any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy, reserve requirements or similar
requirements or compliance by any Lender with any request or directive
regarding capital adequacy, reserve requirements or similar
requirements (whether or not having the force of law), in each case,
adopted after the Closing Date, from any central bank or other
Governmental Authority increases or would have the effect of increasing
the amount of capital, reserves or other funds required to be
maintained by such Lender and thereby reducing the rate of return on
such Lender's capital as a consequence of its obligations hereunder,
then Borrowers shall from time to time upon demand by such Lender (with
a copy of such demand to Agent) pay to Agent, for the account of such
Lender, additional amounts sufficient to compensate such Lender for
such reduction. A certificate as to the amount of that reduction and
showing the basis of the computation thereof submitted by such Lender
to Borrower Representative and to Agent shall be final, conclusive and
binding for all purposes, absent manifest error.
(b) Due to either (i) the introduction of or any change
in any law or regulation (or any change in the interpretation thereof)
or (ii) the compliance with any guideline or request from any central
bank or other Governmental Authority (whether or not having the force
of law), in each case adopted after the Closing Date, if there shall be
any increase in the cost to any Lender of agreeing to make or making,
funding or maintaining any Term Loan, then Borrowers shall from time to
time, upon demand by such Lender (with a copy of such demand to Agent),
pay to Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost. A
certificate as to the amount of such increased cost submitted by such
Lender to Borrower Representative and to Agent shall be conclusive and
binding on Borrowers for all purposes, absent manifest error. Each
Lender agrees that, as promptly as practicable after it becomes aware
of any circumstances referred to above which would result in any such
increased cost and to the extent not inconsistent with such Lender's
internal policies of general application, the affected Lender shall use
reasonable commercial efforts to
11
minimize costs and expenses incurred by it and payable to it by
Borrowers pursuant to this Section 1.12(b).
(c) Within fifteen days after receipt by Borrower
Representative of written notice and demand from any Lender (an
"Affected Lender") for payment of additional amounts or increased costs
as provided in Section 1.11(a) and Section 1.12(a) and (b), Borrower
Representative may, at its option, notify Agent and such Affected
Lender of its intention to replace the Affected Lender. So long as a
Default or an Event of Default has not occurred and is not continuing,
Borrower Representative, with the consent of Agent and at Borrowers'
expense, may obtain a replacement Lender (a "Replacement Lender") for
the Affected Lender, which Replacement Lender must be reasonably
satisfactory to Agent. If Borrowers obtain a Replacement Lender within
ninety days following notice of their intention to do so, the Affected
Lender must sell and assign its Term Loans and Commitments to such
Replacement Lender for an amount equal to the principal balance of all
Term Loans held by the Affected Lender and all accrued interest and
Fees with respect thereto through the date of such sale; provided that
Borrowers shall have reimbursed such Affected Lender for the additional
amounts or increased costs that it is entitled to receive under this
Agreement through the date of such sale and assignment; provided,
further, that such replacement shall not be deemed a "prepayment" of
the Term Loans held by the Affected Lender for purposes of Section
1.5(c). Notwithstanding the foregoing, Borrowers shall not have the
right to obtain a Replacement Lender if the Affected Lender rescinds
its demand for increased costs or additional amounts within fifteen
days following its receipt of Borrowers' notice of intention to replace
such Affected Lender. Furthermore, if Borrowers give a notice of
intention to replace and do not so replace such Affected Lender within
ninety days thereafter, Borrowers' rights under this Section 1.12(c)
shall terminate and Borrowers shall promptly pay all increased costs or
additional amounts demanded by such Affected Lender pursuant to Section
1.11(a) and Section 1.12(a) and (b).
1.13. Single Loan. All Term Loans to each Borrower and all of the
other Obligations of each Borrower arising under this Agreement and the other
Loan Documents shall constitute one general obligation of such Borrower secured,
until the Termination Date, by all of the Collateral.
1.14. Joinder of Additional Borrowers. Any Person who is required to
become a Borrower hereunder, pursuant to Section 6.1(b), must (a) become a party
to this Agreement, (b) assume all of the Obligations as a Borrower and (iii) be
bound by all the terms, conditions, representations and warranties under the
Loan Documents. Without limiting the foregoing, such Person promises to be
jointly and severally liable along with the other Borrowers for the repayment of
the Obligations. Further, such Person shall provide the following to Agent, each
in form and substance satisfactory to Agent in its sole discretion:
(a) a joinder agreement in substantially the form of
Exhibit 1.14(a) (a "Joinder Agreement");
(b) updated Schedules to this Agreement and the
Perfection Certificate;
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(c) a Power of Attorney (as defined in the Security
Agreement executed by Borrowers in favor of Agent, for the benefit of
Agent and Lenders) executed by such Person;
(d) an amendment to the Holdings Pledge Agreement,
pledging 100% of the outstanding Stock of such Person to Agent, on
behalf of Agent and Lenders, to secure the Obligations, accompanied by
share certificates representing all of the outstanding Stock being
pledged pursuant to such amendment and stock powers for such share
certificates executed in blank;
(e) evidence that Agent (for the benefit of itself and
Lenders) has a valid and perfected first-priority security interest in
the Collateral attributable to such Person, including (i) such
documents duly executed by such Person (including financing statements
under the Code and other applicable documents under the laws of any
jurisdiction with respect to the perfection of Liens) as Agent may
request in order to perfect its security interest in the Collateral
attributable to such Person and (ii) copies of Code search reports
listing all effective financing statements that name such Person as
debtor, together with copies of such financing statements, none of
which shall cover the Collateral, except for those relating to the
Prior Lender Obligations (which shall be terminated on the date such
Person becomes a Borrower);
(f) such Person's (i) charter or similar document and all
amendments thereto, (ii) good standing certificate (including
verification of tax status) in its state of organization and (iii) good
standing certificates (including verification of tax status) and
certificates of qualification to conduct business in each jurisdiction
where its ownership or lease of property or the conduct of its business
requires such qualification, each dated a recent date prior to the date
such Person becomes a Borrower and certified by the applicable
Secretary of State or other authorized Governmental Authority;
(g) such Person's bylaws, operating agreement or similar
document, together with all amendments thereto and resolutions of such
Person's Board of Directors or other governing body, approving and
authorizing the execution, delivery and performance of the Loan
Documents to which Person is a party, the Related Transactions, and the
assumption of the Obligations, each certified as of the date such
Person becomes a Borrower by such Person's corporate secretary or an
assistant secretary as being in full force and effect without any
modification or amendment;
(h) signature and incumbency certificates of the officers
of such Person executing any of the Loan Documents, certified as being
true, accurate, correct and complete as of the date such Person becomes
a Borrower by such Person's corporate secretary, an assistant secretary
or another officer of such Person who did not execute any of the other
Loan Documents;
(i) evidence that such Person is Solvent; and
13
(j) such other certificates, documents, opinions,
agreements and information as Agent or any Lender may reasonably
request.
1.15. Joinder of Additional Lenders. Borrowers may request that the
aggregate Commitment be increased one time on or before April 30, 2004 to an
amount not exceeding $75,000,000. Agent will use reasonable efforts to cause
such increase by offering such increase to Lenders currently party hereto or
other Persons reasonably satisfactory to Agent and Borrowers (each, an
"Additional Lender"). Such increase in the Commitments shall be subject to the
satisfaction of the following conditions as of the date of such increase:
(a) neither a Default nor an Event of Default shall have
occurred or be continuing;
(b) such increase shall be in an amount at least equal to
$5,000,000;
(c) after giving effect to such increase, the aggregate
Commitment shall not exceed $75,000,000;
(d) Agent shall have received an acknowledgement
agreement executed by each Additional Lender, the Credit Parties, Agent
and each existing Lender in the form of Exhibit 1.15 (the
"Acknowledgement Agreement");
(e) Borrowers shall have executed and delivered Notes to
each Lender and each Additional Lender to replace the existing Notes
for each outstanding Term Loan as of such date, in accordance with the
Acknowledgement Agreement;
(f) Borrowers shall have executed and delivered
amendments to the Mortgages to provide each Additional Lender's name
and address and to acknowledge each Additional Lender's rights in the
Collateral secured thereby, if such amendments are required by
applicable law;
(g) Credit Parties or LTF shall have paid the Fees
specified in the Fee Letter and required by Section 1.5 and shall have
reimbursed Agent for all fees, costs and expenses presented as of the
date of such increase and not previously paid or reimbursed; and
(h) each Additional Lender shall have made the amount of
such Additional Lender's Pro Rata Share Outstanding of existing Term
Loans (as set forth in the Acknowledgment Agreement) available to Agent
in same day funds by wire transfer to Agent's account as set forth in
Annex E not later than 3:00 p.m. (New York time) on the date of such
increase, to be disbursed by Agent to Lenders other than Additional
Lenders in accordance with the Acknowledgment Agreement.
On and after the date of such increase, Additional Lenders shall be considered
"Lenders" hereunder and parties to this Agreement, for purposes of this
Agreement and each other Loan Document, and Annexes F and G shall be replaced in
their entireties by Annexes F and G to the Acknowledgment Agreement.
14
2. CONDITIONS PRECEDENT
2.1. Closing Conditions. No Lender shall be obligated to make any
Term Loan on the Closing Date or to take, fulfill, or perform any other action
under this Agreement, until the following conditions have been satisfied or
provided for in a manner satisfactory to Agent or waived in writing by Agent and
Lenders:
(a) Loan Documents. This Agreement or counterparts hereof
shall have been duly executed by and delivered to LTFAZ, each other
Credit Party signatory hereto, Agent and Lenders; and Agent shall have
received such documents, instruments, agreements and legal opinions as
Agent shall reasonably request in connection with the transactions
contemplated by the Loan Documents and the Related Transactions,
including those listed in the Closing Checklist, each in form and
substance reasonably satisfactory to Agent.
(b) Approvals. Agent shall have received (i) satisfactory
evidence that the Credit Parties and LTF have obtained all required
consents and approvals of all Persons, including all requisite
Governmental Authorities, to the execution, delivery and performance of
this Agreement and the other Loan Documents and the consummation of the
Related Transactions or (ii) officer's certificates in form and
substance reasonably satisfactory to Agent affirming that no such
consents or approvals are required.
(c) Payment of Fees. Credit Parties or LTF shall have
paid the Fees required to be paid on the Closing Date in the respective
amounts specified in Section 1.5 (including the Fees specified in the
Fee Letter) and shall have reimbursed Agent for all fees, costs and
expenses of closing presented as of the Closing Date.
(d) Capital Structure; Other Indebtedness. The capital
structure of each Credit Party and the terms and conditions of all
Indebtedness of each Credit Party shall be acceptable to Agent in its
sole discretion.
(e) Due Diligence. Agent shall have completed its
business and legal due diligence with results reasonably satisfactory
to Agent.
(f) Solvency. Agent shall have received satisfactory
evidence that each Credit Party and LTF are Solvent.
2.2. Conditions to Each Loan. Except as otherwise expressly
provided herein, no Lender shall be obligated to make any Term Loan related to a
Facility on or after the Closing Date, if, as of the funding date of such Term
Loan:
(a) any representation or warranty by any Credit Party or
LTF contained herein or in any other Loan Document, as applicable, is
untrue or incorrect as of such date, except to the extent that such
representation or warranty expressly relates to an earlier date and
except for changes therein expressly permitted or expressly
contemplated by this Agreement, and Agent or Requisite Lenders have
determined not to make such
15
Term Loan as a result of the fact that such warranty or representation
is untrue or incorrect;
(b) any event or circumstance having a Material Adverse
Effect has occurred since the date hereof as determined by the
Requisite Lenders and Agent, and Requisite Lenders have determined not
to make such Term Loan as a result of the fact that such event or
circumstance has occurred;
(c) any Default or Event of Default has occurred and is
continuing or would result after giving effect to such Term Loan, and
Agent or Requisite Lenders have determined or, if GE Capital has at
least 66 2/3% of the Commitments of all Lenders, any Lender has
determined not to make such Term Loan as a result of that Default or
Event of Default;
(d) after giving effect to such Term Loan, the
outstanding principal amount of the Term Loans would exceed the Maximum
Amount; or
(e) the conditions to funding such Term Loan set forth in
Section 1.1(a) have not been met.
The request and acceptance by any Borrower of the proceeds of any Term Loan
shall be deemed to constitute, as of the date thereof, (i) a representation and
warranty by Borrowers that the conditions in this Section 2.2 have been
satisfied, (ii) an affirmation by Borrowers of the representations and
warranties contained in the Loan Documents and Related Transactions Documents
delivered pursuant to the Facility Funding Checklist and (ii) a reaffirmation by
Borrowers of the cross-guaranty provisions set forth in Section 12 and of the
granting and continuance of Agent's Liens, on behalf of itself and Lenders,
pursuant to the Collateral Documents.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Term Loans, the Credit Parties executing
this Agreement, jointly and severally, make the following representations and
warranties to Agent and each Lender with respect to all Credit Parties, each and
all of which shall survive the execution and delivery of this Agreement.
3.1. Corporate Existence; Compliance with Law.
(a) Each Credit Party:
(i) is a corporation, limited liability company
or limited partnership duly organized, validly existing and in
good standing under the laws of its respective jurisdiction of
incorporation or organization set forth in Disclosure Schedule
3.1;
(ii) is duly qualified to conduct business and is
in good standing in each other jurisdiction where its
ownership or lease of property or the conduct of
16
its business requires such qualification, except where the
failure to be so qualified would not result in exposure to
losses, damages or liabilities in excess of $100,000;
(iii) has the requisite power and authority and
the legal right to own, pledge, mortgage or otherwise encumber
and operate its properties, to lease the property it operates
under lease and to conduct its business as now, heretofore and
proposed to be conducted;
(iv) subject to specific representations
regarding Environmental Laws, has all material licenses,
permits, consents or approvals from or by, has made all
material filings with and has given all material notices to
all Governmental Authorities having jurisdiction to the extent
required for such ownership, operation and conduct; and
(v) is in compliance with its charter and bylaws
or partnership or operating agreement, as applicable.
(b) Subject to specific representations set forth herein
regarding ERISA, Environmental Laws, tax laws and other laws, each
Credit Party is and will remain in compliance with all applicable
provisions of all laws and regulations, including all applicable Bank
Secrecy Act ("BSA") laws, regulations and government guidances on BSA
compliance and on the prevention and detection of money laundering
violations. Without in any way limiting the foregoing, each Credit
Party has taken and will take all necessary steps to ensure that no
Person who owns a controlling interest in or otherwise controls such
Credit Party is or shall be (i) listed on the Specially Designated
Nationals and Blocked Person List maintained by the Office of Foreign
Assets Control ("OFAC"), Department of the Treasury and/or any other
similar lists maintained by OFAC pursuant to any authorizing statute,
Executive Order or regulation or (ii) a person designated under Section
1(b), (c) or (d) of Executive Order No. 13224 (September 23, 2001), any
related enabling legislation or any other similar Executive Order.
3.2. Executive Offices; Collateral Locations; FEIN. As of the
Closing Date, the current location of each Credit Party's chief executive office
and the warehouses and premises at which any Collateral is located are set forth
in Disclosure Schedule 3.2, and none of such locations has changed within the
twelve months preceding the Closing Date. In addition, Disclosure Schedule 3.2
lists the federal employer identification number of each Credit Party.
3.3. Corporate Power; Authorization; Enforceable Obligations. The
execution, delivery and performance by each Credit Party and LTF of the Loan
Documents and the Related Transactions Documents to which it is a party and the
creation of all Liens provided for therein:
(a) are within such Person's power;
(b) have been duly authorized by all necessary corporate,
limited liability company or limited partnership action;
17
(c) do not contravene any provision of such Person's
charter, bylaws or partnership or operating agreement, as applicable;
(d) do not violate any law or regulation, or any order or
decree of any court or Governmental Authority;
(e) do not conflict with or result in the breach or
termination of, constitute a default under or accelerate or permit the
acceleration of any performance required by any indenture, mortgage,
deed of trust, lease, agreement or other instrument to which such
Person is a party or by which such Person or any of its property is
bound;
(f) do not result in the creation or imposition of any
Lien upon any of the property of such Person other than those in favor
of Agent, on behalf of itself and Lenders, pursuant to the Loan
Documents; and
(g) do not require the consent or approval of any
Governmental Authority or any other Person, except those referred to in
Section 2.1(b), all of which will have been duly obtained, made or
complied with prior to the Closing Date. Each of the Loan Documents
shall be duly executed and delivered by each Credit Party that is a
party thereto and each such Loan Document shall constitute a legal,
valid and binding obligation of such Credit Party enforceable against
it in accordance with its terms.
3.4. Financial Statements and Projections. Except for the
Projections, all Financial Statements concerning LTF, the Credit Parties and
their Subsidiaries that are referred to below have been prepared in accordance
with GAAP consistently applied throughout the periods covered (except as
disclosed therein and except, with respect to unaudited Financial Statements,
for the absence of footnotes and normal year-end audit adjustments) and present
fairly in all material respects the financial position of the Persons covered
thereby as at the dates thereof and the results of their operations and cash
flows for the periods then ended.
(a) Financial Statements. The following Financial
Statements attached hereto as Disclosure Schedule 3.4(a) have been
delivered on the date hereof:
(i) the audited consolidated and consolidating
balance sheets at December 31, 2001 and 2002 and the related
statements of income and cash flows of LTF and its
Subsidiaries for the Fiscal Years then ended, together with
the unqualified opinion of LTF's independent auditors rendered
with respect thereto;
(ii) the unaudited balance sheets at October 31,
2003 and the related statements of income of LTF and its
Subsidiaries for the Fiscal Month then ended.
(b) Projections. The Projections delivered on the date
hereof and attached hereto as Disclosure Schedule 3.4(b) have been
prepared by the Credit Parties and LTF in light of the past operations
of their businesses and reflect projections for the period from
November 1, 2003 through December 31, 2007 on a month-by-month basis.
The Projections are based upon estimates and assumptions stated
therein, all of which the Credit Parties believe to be reasonable and
fair in light of current conditions and current
18
facts known to the Credit Parties and, as of the Closing Date, reflect
the Credit Parties' good faith and reasonable estimates of the future
financial performance of the Credit Parties and LTF and of the other
information projected therein for the period set forth therein.
3.5. Material Adverse Effect. Between December 31, 2002 and the
Closing Date, (a) no Credit Party has incurred any obligations, contingent or
noncontingent liabilities, liabilities for Charges, long-term leases or unusual
forward or long-term commitments that are not reflected in the Financial
Statements attached hereto as Disclosure Schedule 3.4(a) and that, alone or in
the aggregate, could reasonably be expected to have a Material Adverse Effect,
(b) no contract, lease or other agreement or instrument has been entered into by
any Credit Party or has become binding upon any Credit Party's assets and no law
or regulation applicable to any Credit Party has been adopted that has had or
could reasonably be expected to have a Material Adverse Effect, (c) no Credit
Party is in default and to the best of Borrowers' knowledge no third party is in
default under any material contract, lease or other agreement or instrument that
alone or in the aggregate could reasonably be expected to have a Material
Adverse Effect and that are not reflected in the Projections attached hereto as
Disclosure Schedule 3.4(b), and (d) no event has occurred, that alone or
together with other events, could reasonably be expected to have a Material
Adverse Effect.
3.6. Ownership of Property; Liens. As of the Closing Date, the real
estate listed in Disclosure Schedule 3.6 (the "Real Estate") constitutes all of
the real property owned by Borrowers. Each Borrower owns good and marketable fee
simple title to all of its Real Estate as described on Disclosure Schedule 3.6.
Disclosure Schedule 3.6 further describes any Real Estate with respect to which
any Borrower is a lessor, sublessor or assignor as of the Closing Date.
Borrowers do not lease, sublease or use any real property owned by any other
Person. Each Credit Party also has good and marketable title to, or valid
leasehold interests in, all of its personal property and assets, which are only
located on or in the Real Estate. As of the Closing Date, none of the properties
and assets of any Credit Party are subject to any Liens other than Permitted
Encumbrances, and there are no facts, circumstances or conditions known to any
Credit Party that may result in any Liens (including Liens arising under
Environmental Laws) on the Collateral other than Permitted Encumbrances. Each
Borrower has received all deeds, assignments, waivers, consents, nondisturbance
and attornment or similar agreements, bills of sale and other documents and has
duly effected all recordings, filings and other actions necessary to establish,
protect and perfect such Borrower's right, title and interest in and to all such
Real Estate and other properties and assets. Disclosure Schedule 3.6 also
describes any purchase options, rights of first refusal or other similar
contractual rights pertaining to any Real Estate. As of the Closing Date, no
portion of the Real Estate has suffered any material damage by fire or other
casualty loss that has not heretofore been repaired and restored in all material
respects to its original condition or otherwise remedied. As of the Closing
Date, all material permits required to have been issued or appropriate to enable
the Real Estate to be lawfully occupied and used for all of the purposes for
which it is currently occupied and used have been lawfully issued and are in
full force and effect.
3.7. Labor Matters. As of the Closing Date:
19
(a) no strikes or other material labor disputes against
any Credit Party are pending or, to any Credit Party's knowledge,
threatened;
(b) hours worked by and payment made to employees of each
Credit Party comply with the Fair Labor Standards Act and each other
federal, state, local or foreign law applicable to such matters;
(c) all payments due from any Credit Party for employee
health and welfare insurance have been paid or accrued as a liability
on the books of such Credit Party;
(d) except as set forth in Disclosure Schedule 3.7, no
Credit Party is a party to or bound by any collective bargaining
agreement, management agreement, consulting agreement, employment
agreement, bonus, restricted stock, stock option, or stock appreciation
plan or agreement or any similar plan, agreement or arrangement (and
true and complete copies of any agreements described on Disclosure
Schedule 3.7 have been delivered to Agent);
(e) there is no organizing activity involving any Credit
Party pending or, to any Credit Party's knowledge, threatened or
proposed by any labor union or group of employees;
(f) there are no representation proceedings pending or,
to any Credit Party's knowledge, threatened with the National Labor
Relations Board, and no labor organization or group of employees of any
Credit Party has made a pending demand for recognition; and
(g) except as set forth in Disclosure Schedule 3.7, there
are no material complaints or charges against any Credit Party pending
or, to the knowledge of any Credit Party, threatened to be filed with
any Governmental Authority or arbitrator based on, arising out of, in
connection with or otherwise relating to the employment or termination
of employment by any Credit Party of any individual.
3.8. Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness. Except as set forth in Disclosure Schedule 3.8, as of the Closing
Date, the Credit Parties do not have any Subsidiaries that are not Credit
Parties, are not engaged in any joint venture or partnership with any other
Person, and are not Affiliates of any other Person that is not a Credit Party.
All of the issued and outstanding Stock of each Credit Party are owned by each
of the Stockholders and in the amounts set forth in Disclosure Schedule 3.8.
Except as set forth in Disclosure Schedule 3.8, there are no outstanding rights
to purchase, options, warrants or similar rights or agreements pursuant to which
any Credit Party may be required to issue, sell, repurchase or redeem any of its
Stock or other equity securities or any Stock or other equity securities of its
Subsidiaries. All outstanding Indebtedness and Guaranteed Indebtedness of each
Credit Party as of the Closing Date (except for the Obligations) is described in
Section 6.3 (including Disclosure Schedule 6.3).
3.9. Government Regulation. No Credit Party is an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for an "investment company," as
20
such terms are defined in the Investment Company Act of 1940. No Credit Party is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, or any other federal or state statute that restricts or
limits its ability to incur Indebtedness or to perform its obligations
hereunder. The making of the Term Loans by Lenders to Borrowers, the application
of the proceeds thereof and repayment thereof and the consummation of the
Related Transactions will not violate any provision of any such statute or any
rule, regulation or order issued by the Securities and Exchange Commission.
3.10. Margin Regulations. No Credit Party is engaged, nor will it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" as such terms are defined in Regulation U of the Federal Reserve Board as
now and from time to time hereafter in effect ("Margin Stock"). No Credit Party
owns any Margin Stock, and none of the proceeds of the Term Loans will be used,
directly or indirectly, for the purpose of purchasing or carrying any Margin
Stock, for the purpose of reducing or retiring any Indebtedness that was
originally incurred to purchase or carry any Margin Stock or for any other
purpose that might cause any of the Term Loans to be considered a "purpose
credit" within the meaning of Regulations T, U or X of the Federal Reserve
Board. No Credit Party will take or permit to be taken any action that might
cause any Loan Document to violate any regulation of the Federal Reserve Board.
3.11. Taxes. All tax returns, reports and statements, including
information returns, required by any Governmental Authority to be filed by any
Credit Party or, with respect to the Facilities, LTF have been filed with the
appropriate Governmental Authority and all Charges have been paid prior to the
date on which any fine, penalty, interest or late charge may be added thereto
for nonpayment thereof (or any such fine, penalty, interest, late charge or loss
has been paid), excluding Charges or other amounts being contested in accordance
with Section 5.2(b). Proper and accurate amounts have been withheld by each
Credit Party from its respective employees for all periods in full and complete
compliance with all applicable federal, state, local and foreign laws and such
withholdings have been timely paid to the respective Governmental Authorities.
Disclosure Schedule 3.11 sets forth as of the Closing Date those taxable years
for which any Credit Party's tax returns are currently being audited by the IRS
or any other applicable Governmental Authority, and any assessments or
threatened assessments in connection with such audit or otherwise currently
outstanding. Except as described in Disclosure Schedule 3.11, no Credit Party
or, with respect to the Facilities, LTF has executed or filed with the IRS or
any other Governmental Authority any agreement or other document extending, or
having the effect of extending, the period for assessment or collection of any
Charges. None of the Credit Parties or their respective predecessors are liable
for any Charges (a) under any agreement (including any tax sharing agreement),
or (b) to each Credit Party's knowledge, as a transferee. As of the Closing
Date, no Credit Party has agreed or been requested to make any adjustment under
IRC Section 481(a), by reason of a change in accounting method or otherwise,
which would have a Material Adverse Effect.
3.12. ERISA.
(a) Disclosure Schedule 3.12 lists (i) all ERISA
Affiliates and (ii) all Plans and separately identifies all Pension
Plans, including Title IV Plans, Xxxxxxxxxxxxx
00
Xxxxx, XXXXx and Welfare Plans, including all Retiree Welfare Plans.
Copies of all such listed Plans, together with a copy of the latest
IRS/DOL 5500-series form for each such Plan, have been delivered to
Agent. Except with respect to Multiemployer Plans, each Qualified Plan
has been determined by the IRS to qualify under Section 401 of the IRC,
the trusts created thereunder have been determined to be exempt from
tax under the provisions of Section 501 of the IRC, and nothing has
occurred that would cause the loss of such qualification or tax-exempt
status. Each Plan is in compliance with the applicable provisions of
ERISA and the IRC, including the timely filing of all reports required
under the IRC or ERISA, including the statement required by 29 C.F.R.
Section 2520.104-23. Neither any Credit Party nor ERISA Affiliate has
failed to make any contribution or pay any amount due as required by
either Section 412 of the IRC or Section 302 of ERISA or the terms of
any such Plan. Neither any Credit Party nor ERISA Affiliate has engaged
in a "prohibited transaction," as defined in Section 406 of ERISA and
Section 4975 of the IRC, in connection with any Plan that would subject
any Credit Party to a material tax on prohibited transactions imposed
by Section 502(i) of ERISA or Section 4975 of the IRC.
(b) Except as set forth in Disclosure Schedule 3.12,
(i) no Title IV Plan has any Unfunded Pension
Liability;
(ii) no ERISA Event or event described in Section
4062(e) of ERISA with respect to any Title IV Plan has
occurred or is reasonably expected to occur;
(iii) there are no pending, or to the knowledge of
any Credit Party, threatened claims (other than claims for
benefits in the normal course), sanctions, actions or
lawsuits, asserted or instituted against any Plan or any
Person as fiduciary or sponsor of any Plan;
(iv) no Credit Party or ERISA Affiliate has
incurred or reasonably expects to incur any liability as a
result of a complete or partial withdrawal from a
Multiemployer Plan;
(v) within the last five years, no Title IV Plan
of any Credit Party or ERISA Affiliate has been terminated,
whether or not in a "standard termination" as that term is
used in Section 4041(b)(1) of ERISA, nor has any Title IV Plan
of any Credit Party or any ERISA Affiliate (determined at any
time within the last five years) with Unfunded Pension
Liabilities been transferred outside of the "controlled group"
(within the meaning of Section 4001(a)(14) of ERISA) of any
Credit Party or ERISA Affiliate (determined at such time);
(vi) except in the case of any ESOP, Stock of all
Credit Parties and their ERISA Affiliates makes up, in the
aggregate, no more than 10% of fair market value of the assets
of any Plan, measured on the basis of fair market value as of
the latest valuation date of any Plan; and
22
(vii) no liability under any Title IV Plan has
been satisfied with the purchase of a contract from an
insurance company that is not rated AAA by the Standard &
Poor's Ratings Group or an equivalent rating by another
nationally-recognized rating agency.
3.13. No Litigation. No action, claim, lawsuit, demand,
investigation or proceeding is now pending or, to the knowledge of any Credit
Party, threatened against any Credit Party before any Governmental Authority or
before any arbitrator or panel of arbitrators (collectively, "Litigation") (a)
that challenges any Credit Party's right or power to enter into or perform any
of its obligations under the Loan Documents to which it is a party or the
validity or enforceability of any Loan Document or any action taken thereunder
or (b) that has a reasonable risk of being determined adversely to any Credit
Party and that, if so determined, could reasonably be expected to have a
Material Adverse Effect. Except as set forth on Disclosure Schedule 3.13, as of
the Closing Date there is no Litigation pending or, to any Credit Party's
knowledge, threatened, that seeks damages in excess of $100,000 or injunctive
relief against any Credit Party or that alleges criminal misconduct of any
Credit Party.
3.14. Brokers. No broker or finder brought about the obtaining,
making or closing of the Term Loans or the Related Transactions, and no Credit
Party or Affiliate thereof has any obligation to any Person in respect of any
finder's or brokerage fees in connection therewith.
3.15. Intellectual Property. As of the Closing Date, each Credit
Party owns or has rights to use all Intellectual Property necessary to continue
to conduct its business as now or heretofore conducted by it or proposed to be
conducted by it, and each Patent, Trademark, Copyright and License is listed,
together with application or registration numbers, as applicable, in Disclosure
Schedule 3.15. Each Credit Party conducts its business and affairs without
infringement of or interference with any intellectual property of any other
Person in any material respect. Except as set forth in Disclosure Schedule 3.15,
no Credit Party is aware of any infringement claim by any other Person with
respect to any Intellectual Property.
3.16. Full Disclosure. No information contained in the Loan
Documents, the Projections, the Financial Statements, the Related Transactions
Documents or other written reports from time to time delivered hereunder or any
written statement furnished by or on behalf of any Credit Party or LTF to Agent
or any Lender pursuant to the terms of this Agreement contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements contained herein or therein not
materially misleading in light of the circumstances under which they were made.
The Liens granted to Agent, on behalf of itself and Lenders, pursuant to the
Collateral Documents will at all times be fully-perfected first-priority Liens
in and to the Collateral described therein, subject, as to priority, only to
Permitted Encumbrances.
3.17. Environmental Matters.
(a) Except as set forth in Disclosure Schedule 3.17, with
respect to any Facility as of the funding date of such Facility:
23
(i) the Real Estate is free of contamination
from any Hazardous Material except for such contamination that
would not adversely impact the value or marketability of such
Real Estate and that would not result in Environmental
Liabilities that could reasonably be expected to exceed
$50,000;
(ii) no Credit Party and no Affiliate of any
Credit Party has caused or suffered to occur any Release of
Hazardous Materials on, at, in, under, above, to, from or
about the Real Estate that could reasonably be expected to
result in Environmental Liabilities;
(iii) the Credit Parties and the Affiliates of the
Credit Parties are and have been in compliance with all
Environmental Laws, except for such noncompliance that would
not result in Environmental Liabilities that could reasonably
be expected to exceed $50,000;
(iv) the Credit Parties and the Affiliates of the
Credit Parties have obtained, and are in compliance with, all
Environmental Permits required for the operations of their
respective businesses as presently conducted or as proposed to
be conducted, except where the failure to so obtain or comply
with such Environmental Permits would not result in
Environmental Liabilities that could reasonably be expected to
exceed $50,000, and all such Environmental Permits are valid,
uncontested and in good standing;
(v) no Credit Party and no Affiliate of any
Credit Party is involved in operations or knows of any facts,
circumstances or conditions, including any Releases of
Hazardous Materials, that are likely to result in any
Environmental Liabilities that could reasonably be expected to
exceed $50,000, and no Credit Party has permitted any current
or former tenant or occupant of the Real Estate to engage in
any such operations;
(vi) there is no Litigation arising under or
related to any Environmental Laws, Environmental Permits or
Hazardous Material that seeks damages, penalties, fines, costs
or expenses in excess of $50,000 or injunctive relief against,
or that alleges criminal misconduct by any Credit Party or any
Affiliate of a Credit Party;
(vii) no notice has been received by any Credit
Party or any Affiliate of a Credit Party identifying it as a
"potentially responsible party" or requesting information
under CERCLA or analogous state statutes, and to the knowledge
of the Credit Parties, there are no facts, circumstances or
conditions that may result in any Credit Party or any
Affiliate of a Credit Party being identified as a "potentially
responsible party" under CERCLA or analogous state statutes;
and
(viii) the Credit Parties have provided to Agent
copies of all existing environmental reports, reviews and
audits and all written information pertaining
24
to actual or potential Environmental Liabilities, in each case
relating to the Real Estate.
(b) Each Credit Party hereby acknowledges and agrees that
Agent (i) is not now, and has not ever been, in control of any of the
Real Estate or any Credit Party's affairs and (ii) does not have the
capacity through the provisions of the Loan Documents or otherwise to
influence any Credit Party's or any Credit Party's Affiliate's conduct
with respect to the ownership, operation or management of any of its
Real Estate or compliance with Environmental Laws or Environmental
Permits.
3.18. Insurance. Disclosure Schedule 3.18 lists all insurance
policies of any nature maintained, as of the Closing Date, for current
occurrences by each Credit Party or, with respect to the Facilities, by LTF, as
well as a summary of the terms of each such policy.
3.19. Trade Relations. As of the Closing Date, there exists no
actual or, to the knowledge of any Credit Party, threatened termination or
cancellation of, or any material adverse modification or change in the business
relationship of any Credit Party with any supplier material to its operations.
3.20. Agreements and Other Documents. As of the Closing Date, each
Credit Party has provided to Agent or its counsel, on behalf of Lenders,
accurate and complete copies (or summaries) of all of the following agreements
or documents to which it is subject and each of which is listed in Disclosure
Schedule 3.20: (a) supply agreements and purchase agreements not terminable by
such Credit Party within sixty days following written notice issued by such
Credit Party and involving transactions in excess of $1,000,000 per annum; (b)
leases of Equipment having a remaining term of one year or longer and requiring
aggregate rental and other payments in excess of $500,000 per annum; (c)
licenses and permits held by the Credit Parties or, with respect to the
operation of the Facilities, by LTF, the absence of which could reasonably be
expected to have a Material Adverse Effect; (d) instruments and documents
evidencing any Indebtedness or Guaranteed Indebtedness of such Credit Party and
any Lien granted by such Credit Party with respect thereto; and (e) instruments
and agreements evidencing the issuance of any equity securities, warrants,
rights or options to purchase equity securities of such Credit Party.
3.21. Solvency. Both before and after giving effect to (a) the Term
Loans to be made on the Closing Date or such other date as Term Loans requested
hereunder are made, (b) the disbursement of the proceeds of such Term Loans
pursuant to the instructions of Borrower Representative; (c) the Refinancings
and the consummation of the other Related Transactions; and (d) the payment and
accrual of all transaction costs in connection with the foregoing, each Credit
Party is and will be Solvent.
3.22. Status of the Credit Parties. Prior to the Closing Date, the
Credit Parties will not have engaged in any business or incurred any
Indebtedness or any other liabilities (except in connection with their corporate
formation, the Loan Documents and the Related Transactions). Holdings does not
have and will not acquire any right, title or interest in Inventory, Equipment
or
25
Accounts. As of the Closing Date, the Credit Parties do not have any
Indebtedness other than the Obligations.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1. Reports and Notices. Each Credit Party hereby agrees that from
and after the Closing Date and until the Termination Date, it shall deliver to
Agent or to Agent and Lenders, as required, the Financial Statements, notices,
Projections and other information at the times, to the Persons and in the manner
set forth in Annex C.
4.2. Communication with Accountants. Each Credit Party authorizes
Agent and each Lender to communicate directly with such Credit Party's
independent certified public accountants after an Event of Default has occurred
and during the period such Event of Default is continuing and authorizes and, at
Agent's request, shall instruct those accountants and advisors to disclose and
make available to Agent and each Lender any and all Financial Statements and
other supporting financial documents, schedules and information relating to any
Credit Party (including copies of any issued management letters) with respect to
the business, financial condition and other affairs of any Credit Party after an
Event of Default has occurred and during the period such Event of Default is
continuing.
5. AFFIRMATIVE COVENANTS
Each Credit Party jointly and severally agrees as to all Credit Parties
that from and after the date hereof and until the Termination Date:
5.1. Maintenance of Existence and Conduct of Business. Each Credit
Party shall: do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence and its rights and franchises;
continue to conduct its business substantially as now conducted or as otherwise
permitted hereunder; at all times maintain, preserve and protect all of its
assets and properties used or useful in the conduct of its business, and keep
the same in good repair, working order and condition in all material respects
(taking into consideration ordinary wear and tear) and from time to time make,
or cause to be made, all necessary or appropriate repairs, replacements and
improvements thereto consistent with industry practices; and transact business
only in such corporate and trade names as are set forth in Disclosure Schedule
5.1.
5.2. Payment of Charges.
(a) Subject to Section 5.2(b), the Credit Parties shall
pay and discharge or cause to be paid and discharged promptly all
Charges payable by them that could reasonably be expected to exceed
$100,000 in the aggregate, including (i) Charges imposed upon it, its
income and profits, or any of its property (real, personal or mixed)
and all Charges with respect to tax, social security and unemployment
withholding with respect to its employees, (ii) lawful claims for
labor, materials, supplies and services or otherwise, and (iii) all
storage or rental charges payable to warehousemen or bailees, in each
case, before any thereof shall become past due.
26
(b) Each Credit Party may in good faith contest, by
appropriate proceedings, the validity or amount of any Charges, Taxes
or claims described in Section 5.2(a); provided that (i) adequate
reserves with respect to such contest are maintained on the books of
such Credit Party, in accordance with GAAP; (ii) no Lien shall be
imposed to secure payment of such Charges (other than payments to
warehousemen and/or bailees) that is superior to any of the Liens
securing the Obligations and such contest is maintained and prosecuted
continuously and with diligence and operates to suspend collection or
enforcement of such Charges; (iii) none of the Collateral becomes
subject to forfeiture or loss as a result of such contest; (iv) such
Credit Party shall promptly pay or discharge such contested Charges,
Taxes or claims and all additional charges, interest, penalties and
expenses, if any, and shall deliver to Agent evidence reasonably
acceptable to Agent of such compliance, payment or discharge, if such
contest is terminated or discontinued adversely to such Credit Party or
the conditions set forth in this Section 5.2(b) are no longer met; (v)
such Credit Party shall promptly notify Agent of its intent to contest
such Charges, Taxes or Claims, and (vi) the nonpayment or nondischarge
thereof could not reasonably be expected to have or result in a
Material Adverse Effect.
5.3. Books and Records. Each Credit Party shall keep adequate books
and records with respect to its business activities in which proper entries,
reflecting all financial transactions, are made in accordance with GAAP and on a
basis consistent with the Financial Statements attached as Disclosure Schedule
3.4(a).
5.4. Insurance; Damage to or Destruction of Collateral.
(a) The Credit Parties shall, at their sole cost and
expense, maintain the policies of insurance described on Disclosure
Schedule 3.18 as in effect on the date hereof or otherwise in form and
amounts and with insurers reasonably acceptable to Agent. Such policies
of insurance (or the loss payable and additional insured endorsements
delivered to Agent) shall contain provisions pursuant to which the
insurer agrees to provide thirty days' prior written notice to Agent in
the event of any non-renewal, cancellation or amendment of any such
insurance policy. If any Credit Party at any time or times hereafter
shall fail to obtain or maintain any of the policies of insurance
required above or to pay all premiums relating thereto, Agent may at
any time or times thereafter obtain and maintain such policies of
insurance and pay such premiums and take any other action with respect
thereto that Agent deems advisable. Agent shall have no obligation to
obtain insurance for any Credit Party or pay any premiums therefor. By
doing so, Agent shall not be deemed to have waived any Default or Event
of Default arising from any Credit Party's failure to maintain such
insurance or pay any premiums therefor. All sums so disbursed,
including reasonable attorneys' fees, court costs and other charges
related thereto, shall be payable on demand by Borrowers to Agent and
shall be additional Obligations hereunder secured by the Collateral.
(b) Agent reserves the right at any time upon any change
in any Credit Party's risk profile (including any change in the tenant
or the risk profile of any tenant for any Facility or any change in any
laws affecting the potential liability of a Credit Party) to require
additional forms and limits of insurance to, in Agent's opinion,
adequately protect
27
both Agent's and Lenders' interests in all or any portion of the
Collateral and to ensure that each Credit Party is protected by
insurance in amounts and with coverage customary for its industry. If
reasonably requested by Agent, each Credit Party shall deliver to Agent
from time to time a report of a reputable insurance broker, reasonably
satisfactory to Agent, with respect to its insurance policies.
(c) Borrowers shall deliver to Agent, in form and
substance reasonably satisfactory to Agent, endorsements to (i) all
"All Risk" and business interruption insurance naming Agent, on behalf
of itself and Lenders, as loss payee, and (ii) all general liability
and other liability policies naming Agent, on behalf of itself and
Lenders, as additional insured. Borrower Representative shall promptly
notify Agent of any loss, damage, or destruction to the Collateral in
the amount of $250,000 or more, whether or not covered by insurance.
(i) Insurance Claims During an Event of Default.
Each Borrower irrevocably makes, constitutes and appoints
Agent (and all officers, employees or agents designated by
Agent), so long as any Event of Default has occurred and is
continuing, as such Borrower's true and lawful agent and
attorney-in-fact for the purpose of making, settling and
adjusting claims under such "All Risk" policies of insurance,
endorsing the name of such Borrower on any check or other item
of payment for the proceeds of such "All Risk" policies of
insurance and for making all determinations and decisions with
respect to such "All Risk" policies of insurance. Agent shall
have no duty to exercise any rights or powers granted to it
pursuant to the foregoing power-of-attorney. After deducting
from such proceeds the expenses incurred by Agent in the
collection or handling thereof, at its option, Agent may apply
or, upon the request of Requisite Lenders, Agent shall apply
such proceeds to the reduction of the Obligations, in
accordance with Section 1.2(c), or permit or require the
applicable Borrower to use such money, or any part thereof, to
replace, repair, restore or rebuild the Collateral in a
diligent and expeditious manner with materials and workmanship
of substantially the same quality as existed before the loss,
damage or destruction.
(ii) Insurance Claims Exceeding $1,000,000 Absent
an Event of Default. If the anticipated insurance proceeds
exceed $1,000,000 and an Event of Default has not occurred and
is not continuing, the applicable Borrower shall obtain
Agent's written consent with respect to the making, settling
and adjusting of claims under such "All Risk" policies of
insurance. Agent may apply such proceeds to the reduction of
the Obligations, in accordance with Section 1.2(c), or permit
or require the applicable Borrower to use such money, or any
part thereof, to replace, repair, restore or rebuild the
Collateral in a diligent and expeditious manner with materials
and workmanship of substantially the same quality as existed
before the loss, damage or destruction; provided that if Agent
elects to apply the proceeds of insurance to the reduction of
the Obligations, Borrower shall not be required to replace,
repair, restore or rebuild the Collateral, notwithstanding any
contrary provision of the applicable Mortgage or the
applicable Facility Lease. In its discretion, Agent may hold
all insurance
28
proceeds that are to be made available to any Borrower to
replace, restore, repair or rebuild the Collateral as
additional Collateral for the Obligations and/or may impose
usual and customary construction disbursement restrictions on
disbursement of such funds to any Borrower; provided that if
Agent elects to hold such insurance proceeds as additional
Collateral, it shall have no obligation to segregate such
proceeds from any other funds of any Person and any interest
earned on such proceeds shall be for the account of Agent.
(iii) Insurance Claims Up to $1,000,000 Absent an
Event of Default. If the anticipated insurance proceeds do not
exceed $1,000,000 and an Event of Default has not occurred and
is not continuing, the applicable Borrower may make, settle,
and adjust claims related thereto and may replace, restore,
repair or rebuild the Collateral; provided that if such
Borrower shall not have completed or entered into binding
agreements to complete such replacement, restoration, repair
or rebuilding within 180 days of the related casualty, such
Borrower shall pay the proceeds to Agent for application to
the Obligations, in accordance with Section 1.2(c).
Application of insurance proceeds in accordance with this Section 5.4(c) and
Section 1.2(c) shall reduce the balance of the applicable Term Loans to the
extent of such application, but shall not otherwise modify the Credit Parties'
Obligations hereunder.
5.5. Compliance with Laws. Each Credit Party shall comply with all
federal, state, local and foreign laws and regulations applicable to it,
including those relating to ERISA, labor matters and Environmental Laws and
Environmental Permits, except to the extent that the failure to comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
5.6. Supplemental Disclosure. From time to time as may be
reasonably requested by Agent (which request will not be made more frequently
than once each year absent the occurrence and continuance of a Default or an
Event of Default), the Credit Parties shall supplement each Disclosure Schedule
hereto, or any representation herein or in any other Loan Document, with respect
to any matter hereafter arising that, if existing or occurring at the date of
this Agreement, would have been required to be set forth or described in such
Disclosure Schedule or as an exception to such representation or that is
necessary to correct any information in such Disclosure Schedule or
representation which has been rendered inaccurate thereby (and, in the case of
any supplements to any Disclosure Schedule, such Disclosure Schedule shall be
appropriately marked to show the changes made therein); provided that (a) no
such supplement to any such Disclosure Schedule or representation shall amend,
supplement or otherwise modify any Disclosure Schedule or representation or be
or be deemed a waiver of any Default or Event of Default resulting from the
matters disclosed therein, except as consented to by Agent and Requisite Lenders
in writing and (b) no supplement shall be required or permitted as to
representations and warranties that relate solely to the Closing Date.
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5.7. Intellectual Property. Each Credit Party will conduct its
business and affairs without infringement of or interference with any
intellectual property of any other Person in any material respect.
5.8. Environmental Matters. Each Credit Party shall and shall cause
each Person within its control to (a) conduct its operations and keep and
maintain the Real Estate in compliance with all Environmental Laws and
Environmental Permits other than noncompliance that could not reasonably be
expected to have a Material Adverse Effect; (b) implement any and all
investigation, remediation, removal and response actions that are appropriate or
necessary to maintain the value and marketability of the Real Estate or to
otherwise comply with Environmental Laws and Environmental Permits pertaining to
the presence, generation, treatment, storage, use, disposal, transportation or
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of the Real Estate; (c) notify Agent promptly after such Credit Party
becomes aware of any violation of Environmental Laws or Environmental Permits or
any Release on, at, in, under, above, to, from or about the Real Estate that is
reasonably likely to result in Environmental Liabilities in excess of $50,000;
and (d) promptly forward to Agent a copy of any order, notice, request for
information or any communication or report received by such Credit Party in
connection with any such violation or Release or any other matter relating to
any Environmental Laws or Environmental Permits that could reasonably be
expected to result in Environmental Liabilities in excess of $50,000, in each
case whether or not the Environmental Protection Agency or any Governmental
Authority has taken or threatened any action in connection with any such
violation, Release or other matter. If Agent at any time has a reasonable basis
to believe that there may be a violation of any Environmental Laws or
Environmental Permits by any Credit Party or any Environmental Liability arising
thereunder, or a Release of Hazardous Materials on, at, in, under, above, to,
from or about any of the Real Estate that, in each case, could reasonably be
expected to have a Material Adverse Effect, then upon Agent's written request,
each Credit Party shall (i) cause the performance of such environmental audits,
including subsurface sampling of soil and groundwater, and preparation of such
environmental reports, at Borrowers' expense, as Agent may from time to time
reasonably request, which shall be conducted by reputable environmental
consulting firms reasonably acceptable to Agent and shall be in form and
substance reasonably acceptable to Agent, and (ii) permit Agent or its
representatives to have access to all Real Estate for the purpose of conducting
such environmental audits and testing as Agent deems appropriate, including
subsurface sampling of soil and groundwater. Borrowers shall reimburse Agent for
the costs of such audits and tests and the same will constitute a part of the
Obligations secured by the Collateral.
5.9. Landlords' Agreements, Mortgagee Agreements and Bailee
Letters. Each Credit Party shall obtain a landlord's agreement, mortgagee
agreement or bailee letter, as applicable, from the lessor of each leased
property, mortgagee of owned property or bailee with respect to any warehouse,
processor or converter facility or other location where Collateral is stored or
located, which agreement or letter shall contain a waiver or subordination of
all Liens or claims that the landlord, mortgagee or bailee may assert against
the Collateral at that location, and shall otherwise be reasonably satisfactory
in form and substance to Agent. No real property or warehouse space shall be
leased by any Credit Party and no Inventory shall be shipped to a processor or
converter without the prior written consent of Agent or, unless and until a
reasonably satisfactory landlord agreement or bailee letter, as appropriate,
shall first have been
30
obtained with respect to such location. Each Credit Party shall timely and fully
pay and perform its obligations under all leases and other agreements with
respect to each leased location or public warehouse where any Collateral is or
may be located.
5.10. Real Estate Purchases. To the extent otherwise permitted
hereunder, if any Credit Party proposes to acquire a fee ownership interest in
Real Estate after the Closing Date, it shall first provide to Agent a mortgage
or deed of trust granting Agent a first-priority Lien on such Real Estate,
together with environmental audits, mortgage title insurance commitment, real
property survey, local counsel opinions and, if required by Agent, supplemental
casualty insurance and flood insurance, and such other documents, instruments or
agreements reasonably requested by Agent, in each case, in form and substance
reasonably satisfactory to Agent.
5.11. Further Assurances. Each Credit Party executing this Agreement
agrees that it shall and shall cause each other Credit Party to, at such Credit
Party's expense and upon request of Agent, duly execute and deliver, or cause to
be duly executed and delivered, to Agent such further instruments and do and
cause to be done such further acts as may be necessary or proper, in the
reasonable opinion of Agent, to carry out more effectively the provisions and
purposes of the Loan Documents.
6. NEGATIVE COVENANTS
Each Credit Party jointly and severally agrees as to all Credit Parties
that from and after the date hereof and until the Termination Date:
6.1. Mergers, Subsidiaries, Etc.
(a) The Credit Parties shall not directly or indirectly,
by operation of law or otherwise, (a) form or acquire any Subsidiary,
or (b) merge with, consolidate with, acquire all or substantially all
of the assets or Stock of, or otherwise combine with or acquire, any
Person.
(b) Notwithstanding the prohibition of Section 6.1(a),
any Borrower may acquire a Facility and Holdings may form a
wholly-owned domestic Subsidiary to acquire a Facility (each, a
"Permitted Acquisition"), in each case subject to the following
conditions:
(i) in the case of a Permitted Acquisition by a
newly-formed Subsidiary, such Subsidiary shall become a
Borrower hereunder, pursuant to Section 1.14, and Holdings
shall pledge the Stock of such Subsidiary to Agent, for the
benefit of Agent and Lenders;
(ii) Agent shall receive at least thirty days'
prior written notice of such proposed Permitted Acquisition,
including the legal description of the real property to be
acquired;
(iii) no additional Indebtedness, Guaranteed
Indebtedness, contingent obligations or other liabilities
shall be incurred, assumed or otherwise reflected on
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a consolidated balance sheet of the Credit Parties after
giving effect to such Permitted Acquisition, except the Term
Loan related to such Facility;
(iv) the Facility acquired in such Permitted
Acquisition shall be free and clear of all Liens, other than
Permitted Encumbrances and a first-priority Lien granted to
Agent, for the benefit of itself and Lenders, in connection
with the Term Loan advance related to such Facility and
pursuant to any mortgage, deed of trust, or other Collateral
Documents required by Agent in its discretion; and
(v) at the time of such Permitted Acquisition
and after giving effect thereto and to the Term Loan related
to such Facility, no Default or Event of Default has occurred
and is continuing.
6.2. Investments; Loans and Advances. Except as otherwise expressly
permitted by this Section 6, the Credit Parties shall not make or permit to
exist any investment in, or make, accrue or permit to exist loans or advances of
money to, any Person, through the direct or indirect lending of money, holding
of securities or otherwise, except that: (a) each Credit Party may maintain its
existing investments in its Subsidiaries as of the Closing Date and (b) so long
as no Default or Event of Default has occurred and is continuing, any Credit
Party may make investments, subject to Control Letters in favor Agent, for the
benefit of itself and Lenders, in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
maturing within one year from the date of acquisition thereof, (ii) commercial
paper maturing no more than one year from the date of creation thereof and
currently having the highest rating obtainable from either Standard & Poor's
Ratings Group or Xxxxx'x Investors Service, Inc., (iii) certificates of deposit
maturing no more than one year from the date of creation thereof issued by
commercial banks incorporated under the laws of the United States of America,
each having combined capital, surplus and undivided profits of not less than
$300,000,000 and having a senior unsecured rating of "A" or better by a
nationally-recognized rating agency (an "A Rated Bank"), (iv) time deposits
maturing no more than thirty days from the date of creation thereof with A Rated
Banks and (v) mutual funds that invest solely in one or more of the investments
described in clauses (i) through (iv) above.
6.3. Indebtedness.
(a) The Credit Parties shall not create, incur, assume or
permit to exist any Indebtedness, except (without duplication) (i)
Indebtedness secured by purchase money security interests, (ii) the
Term Loans and the other Obligations, (iii) unfunded pension fund and
other employee benefit plan obligations and liabilities to the extent
they are permitted to remain unfunded under applicable law, (iv)
existing Indebtedness described in Disclosure Schedule 6.3 and
refinancings thereof or amendments or modifications thereto that do not
have the effect of increasing the principal amount thereof or changing
the amortization thereof (other than to extend the same) and that are
otherwise on terms and conditions no less favorable to any Credit
Party, Agent or any Lender, as determined by Agent, than the terms of
the Indebtedness being refinanced, amended or modified, and (v)
Indebtedness specifically permitted under Section 6.1.
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(b) The Credit Parties shall not directly or indirectly
voluntarily purchase, redeem, defease or prepay any principal of,
premium, if any, interest or other amount payable in respect of any
Indebtedness, other than (i) the Obligations; (ii) Indebtedness secured
by a Permitted Encumbrance if the asset securing such Indebtedness has
been sold or otherwise disposed of in accordance with Section 6.8(b) or
(c); (iii) existing Indebtedness described in Disclosure Schedule 6.3
upon any refinancing thereof in accordance with Section 6.3(a); and
(iv) as otherwise permitted in Section 6.14.
6.4. Employee Loans and Affiliate Transactions.
(a) Except as otherwise expressly permitted in this
Section 6, no Credit Party shall enter into or be a party to any
transaction with any other Credit Party or any Affiliate thereof except
in the ordinary course of and pursuant to the reasonable requirements
of such Credit Party's business and upon fair and reasonable terms that
are no less favorable to such Credit Party than would be obtained in a
comparable arm's length transaction with a Person not an Affiliate of
such Credit Party. In addition, if any such transaction or series of
related transactions involves payments in excess of $50,000 in the
aggregate, the terms of such transactions must be disclosed in advance
to Agent and Lenders. All such transactions existing as of the date
hereof are described in Disclosure Schedule 6.4(a).
(b) The Credit Parties shall not enter into any lending
or borrowing transaction with any employees of any Credit Party or of
any Affiliate of any Credit Party.
6.5. Capital Structure and Business. No Credit Party shall (a) make
any changes in any of its business objectives, purposes or operations that could
in any way adversely affect the repayment of the Term Loans or any of the other
Obligations or could reasonably be expected to have or result in a Material
Adverse Effect, (b) make any change in its capital structure as described in
Disclosure Schedule 3.8, including the issuance or sale of any shares of Stock
or other securities convertible into Stock or any revision of the terms of its
outstanding Stock, or (c) amend its charter or bylaws in a manner that would
adversely affect Agent or Lenders or such Credit Party's duty or ability to
repay the Obligations. No Credit Party shall engage in any business other than
the businesses currently engaged in by it or businesses reasonably related
thereto.
6.6. Guaranteed Indebtedness. The Credit Parties shall not create,
incur, assume or permit to exist any Guaranteed Indebtedness except (a) by
endorsement of instruments or items of payment for deposit to the general
account of any Credit Party, and (b) for Guaranteed Indebtedness incurred for
the benefit of any Borrower if the primary obligation is expressly permitted by
this Agreement.
6.7. Liens. The Credit Parties shall not create, incur, assume or
permit to exist any Lien on or with respect to its Real Estate or any of its
other properties or assets (whether now owned or hereafter acquired) except for
(a) Permitted Encumbrances, (b) Liens in existence on the date hereof and
summarized on Disclosure Schedule 6.7 securing the Indebtedness described
33
on Disclosure Schedule 6.3 and permitted refinancings, extensions and renewals
thereof, including extensions or renewals of any such Liens; provided that the
principal amount of the Indebtedness so secured is not increased and the Lien
does not attach to any other property, and (c) the Facility Leases. In addition,
no Credit Party shall become a party to any agreement, note, indenture or
instrument, or take any other action, that would prohibit the creation of a Lien
on any of its properties or other assets in favor of Agent, on behalf of itself
and Lenders, as additional collateral for the Obligations, except operating
leases, Capital Leases or Licenses which prohibit Liens upon the assets that are
subject thereto.
6.8. Sale of Stock and Assets. No Credit Party shall sell,
transfer, convey, assign or otherwise dispose of any of its properties or other
assets, including the Stock of any of their Subsidiaries (whether in a public or
a private offering or otherwise).
6.9. ERISA. No Credit Party shall, or shall cause or permit any
ERISA Affiliate to, cause or permit to occur an event that could result in the
imposition of a Lien under Section 412 of the IRC or Sections 302 or 4068 of
ERISA or cause or permit to occur an ERISA Event to the extent such ERISA Event
could reasonably be expected to have a Material Adverse Effect.
6.10. Financial Covenants. The Credit Parties shall not breach or
fail to comply with any of the Financial Covenants.
6.11. Hazardous Materials. No Credit Party shall cause or permit a
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of the Real Estate where such Release would (a) violate in any respect, or
form the basis for any Environmental Liabilities under, any Environmental Laws
or Environmental Permits or (b) otherwise adversely impact the value or
marketability of any of the Real Estate or any of the Collateral, other than
such violations or Environmental Liabilities that could not reasonably be
expected to have a Material Adverse Effect.
6.12. Sale-Leasebacks. No Credit Party shall engage in any
sale-leaseback, synthetic lease or similar transaction involving any of its
assets.
6.13. Cancellation of Indebtedness. No Credit Party shall cancel any
claim or debt owing to it, except for reasonable consideration negotiated on an
arm's-length basis and in the ordinary course of its business.
6.14. Restricted Payments. No Credit Party shall make any Restricted
Payment, except (a) dividends and distributions by Subsidiaries of any Borrower
paid to such Borrower and (b) scheduled payments of interest with respect to
Subordinated Debt; provided that (i) no Default or Event of Default has occurred
and is continuing or would result after giving effect to any such Restricted
Payment and (ii) the timing of such Restricted Payment is set at dates that
permit the delivery of Financial Statements necessary to determine current
compliance with the Financial Covenants prior to each such payment.
6.15. Change of Corporate Name or Location; Change of Fiscal Year.
No Credit Party shall (a) change its corporate name or trade name or (b) change
its chief executive office, principal place of business, corporate offices or
warehouses or locations at which Collateral is
34
held or stored, or the location of its records concerning the Collateral, in
each case without at least thirty days' prior written notice to Agent and after
Agent's written acknowledgment that any reasonable action requested by Agent in
connection therewith, including to continue the perfection of any Liens in favor
of Agent, on behalf of itself and Lenders, in any Collateral has been completed
or taken; provided that any such new location shall be in the continental United
States. Without limiting the foregoing, no Credit Party shall change its name,
identity or corporate structure in any manner that might make any financing or
continuation statement filed in connection herewith seriously misleading within
the meaning of Section 9-506 of the Code or any other then applicable provision
of the Code except upon prior written notice to Agent and Lenders and after
Agent's written acknowledgment that any reasonable action requested by Agent in
connection therewith, including to continue the perfection of any Liens in favor
of Agent, on behalf of itself and Lenders, in any Collateral has been completed
or taken. No Credit Party shall change its Fiscal Year.
6.16. No Impairment of Intercompany Transfers. No Credit Party shall
directly or indirectly enter into or become bound by any agreement, instrument,
indenture or other obligation (other than this Agreement and the other Loan
Documents) that could directly or indirectly restrict, prohibit or require the
consent of any Person with respect to the payment of dividends or distributions
or the making or repayment of intercompany loans by a Subsidiary of any Credit
Party to any Credit Party, or between Credit Parties.
6.17. No Speculative Transactions. No Credit Party shall engage in
any transaction involving commodity options, futures contracts or similar
transactions.
6.18. Leases; Real Estate Purchases. No Credit Party shall enter
into any operating lease for Equipment or Real Estate as lessee, or purchase a
fee simple ownership interest in Real Estate, except as permitted under Section
6.1 in connection with a Permitted Acquisition or with the prior written consent
of Agent.
6.19. Changes Relating to Subordinated Debt or Facility Leases. No
Credit Party shall change or amend the terms of any Subordinated Debt, any
agreement governing or related to such Subordinated Debt or any Facility Lease
without the prior written consent of Agent.
7. TERM
7.1. Termination. The financing arrangements contemplated hereby
shall be in effect until the Maturity Date, and the Term Loans and all other
Obligations shall be automatically due and payable in full on such date.
7.2. Survival of Obligations Upon Termination of Financing
Arrangements. Except as otherwise expressly provided in the Loan Documents, no
termination or cancellation (regardless of cause or procedure) of any financing
arrangement under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of the Credit Parties or the rights of Agent
and Lenders relating to any unpaid portion of the Term Loans or any other
Obligations, due or not due, liquidated, contingent or unliquidated, or any
transaction or event occurring prior to such termination, or any transaction or
event, the performance of which is required after the
35
Maturity Date. Except as otherwise expressly provided herein or in any other
Loan Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon the Credit Parties, and all rights of Agent
and each Lender, all as contained in the Loan Documents, shall not terminate or
expire, but rather shall survive any such termination or cancellation and shall
continue in full force and effect until the Termination Date; provided that the
provisions of Section 11, the payment obligations under Sections 1.11 and 1.12
and the indemnities contained in the Loan Documents shall survive the
Termination Date.
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
8.1. Events of Default. The occurrence of any one or more of the
following events (regardless of the reason therefor) shall constitute an "Event
of Default" hereunder:
(a) Any Borrower (i) fails to make any payment of
principal of, interest on or Fees owing in respect of the Term Loans or
the other Obligations when due and payable, or (ii) fails to pay or
reimburse Agent or Lenders for any expense reimbursable hereunder or
under any Loan Document within ten days following Agent's demand for
such reimbursement or payment of expenses.
(b) LTF fails to make any payment or reimbursement under
the Deposit Agreement or the Letter Agreement when due and payable.
(c) Any Credit Party fails or neglects to perform, keep
or observe any of the provisions of Sections 1.3, 5.4(a) and 6 or Annex
D or LTF fails or neglects to perform, keep or observe any of the
provisions of the Deposit Agreements.
(d) Any Credit Party fails or neglects to perform, keep
or observe any provision of Section 4 or any provision set forth in
Annex C, and the same shall remain unremedied for two Business Days or
more from the date such Person obtains actual knowledge or notification
from Agent of such failure or neglect.
(e) LTF fails or neglects to perform, keep or observe any
of the provisions of Sections 2 and 3 of the Letter Agreement within
ten days following Agent's demand for reimbursement or payment or any
provision of Section 6 of the Letter Agreement and the same shall
remain unremedied for five days or more.
(f) Any Credit Party or LTF fails or neglects to perform,
keep or observe any other provision of this Agreement or the other Loan
Documents (other than any provision embodied in or covered by any other
clause of this Section 8.1) and the same shall remain unremedied for
thirty days or more from the date such Person obtains actual knowledge
or notification from Agent of such failure or neglect.
(g) A default or breach occurs under any other agreement,
document or instrument to which any Credit Party is a party that is not
cured within any applicable grace period therefor, and such default or
breach (i) involves the failure to make any payment when due in respect
of any Indebtedness or Guaranteed Indebtedness (other than the
Obligations) of such Person, or (ii) causes, or permits any holder of
such Indebtedness
36
or Guaranteed Indebtedness or a trustee to cause any Indebtedness or
Guaranteed Indebtedness or a portion thereof to become due prior to its
stated maturity or prior to its regularly scheduled dates of payment,
or cash collateral in respect thereof to be demanded, in each case,
regardless of whether such default is waived, or such right is
exercised, by such holder or trustee.
(h) Any information contained in any Notice of Borrowing
is untrue or incorrect in any respect, or any representation or
warranty herein or in the other Loan Documents or in any written
statement, report, financial statement or certificate made or delivered
to Agent or any Lender by any Credit Party or LTF is untrue or
incorrect in any material respect as of the date when made or deemed
made.
(i) Assets of any Credit Party with a fair market value
of $250,000 or more are attached, seized, levied upon or subjected to a
writ or distress warrant or come within the possession of any receiver,
trustee, custodian or assignee for the benefit of creditors of such
Person and such condition continues for thirty days or more.
(j) A case or proceeding is commenced against any Credit
Party or LTF seeking a decree or order in respect of such Person (i)
under the Bankruptcy Code or any other applicable federal, state or
foreign bankruptcy or other similar law, (ii) appointing a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar
official) for such Person or for any substantial part of such Person's
assets, or (iii) ordering the winding-up or liquidation of the affairs
of such Person, and such case or proceeding shall remain undismissed or
unstayed for sixty days or more or a decree or order granting the
relief sought in such case or proceeding shall be entered by a court of
competent jurisdiction.
(k) Any Credit Party or LTF (i) files a petition seeking
relief under the Bankruptcy Code or any other applicable federal, state
or foreign bankruptcy or other similar law, (ii) consents to or fails
to contest in a timely and appropriate manner the institution of
proceedings thereunder or the filing of any such petition or the
appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) for
such Person or for any substantial part of such Person's assets, (iii)
makes an assignment for the benefit of creditors, (iv) takes any action
in furtherance of any of the foregoing; or (v) admits in writing its
inability to, or is generally unable to, pay its debts as such debts
become due.
(l) A final judgment or judgments for the payment of
money in excess of $250,000 in the aggregate at any time are
outstanding against any Credit Party and the same are not, within
thirty days after the entry thereof, discharged or execution thereof
stayed or bonded pending appeal, or such judgments are not discharged
prior to the expiration of any such stay.
(m) Any material provision of any Loan Document for any
reason ceases to be valid, binding and enforceable in accordance with
its terms (or any Credit Party or LTF shall challenge the
enforceability of any Loan Document or shall assert in writing, or
37
engage in any action or inaction based on any such assertion, that any
provision of any of the Loan Documents has ceased to be or otherwise is
not valid, binding and enforceable in accordance with its terms), or
any Lien created under any Loan Document ceases to be a valid and
perfected first-priority Lien (except as otherwise permitted herein or
therein) in any of the Collateral purported to be covered thereby.
(n) Any Change of Control occurs.
(o) Any event occurs, whether or not insured or
insurable, as a result of which revenue-producing activities cease or
are substantially curtailed at any Facility and such cessation or
curtailment continues for more than thirty days.
(p) Any "Event of Default" (as defined in the applicable
Facility Lease) occurs and is continuing under a Facility Lease.
8.2. Remedies.
(a) If any Default or Event of Default has occurred and
is continuing, without notice to any Credit Party or any other Person,
Agent may suspend (and at the written request of Requisite Lenders or,
if GE Capital has at least 66 2/3% of the Commitments of all Lenders,
at the written request of any Lender, Agent shall suspend) the Term
Loan facility with respect to additional Term Loan advances, whereupon
any additional Term Loan shall be made in Agent's sole discretion (or
in the sole discretion of Requisite Lenders or any Lender, if such
suspension occurred at their direction) so long as such Default or
Event of Default is continuing. If any Default or Event of Default has
occurred and is continuing, without notice to any Credit Party or any
other Person (except as otherwise expressly provided herein), Agent may
increase (and at the written request of Requisite Lenders shall
increase) the rate of interest applicable to the Term Loans to the
Default Rate.
(b) If any Event of Default has occurred and is
continuing, without notice to any Credit Party or any other Person,
Agent may: (i) (and at the written request of Requisite Lenders or, if
GE Capital has at least 66 2/3% of the Commitments of all Lenders, at
the written request of any Lender, Agent shall) terminate the Term Loan
facility with respect to further advances; (ii) (and at the written
request of Requisite Lenders shall) declare all or any portion of the
Obligations, including all or any portion of any Term Loan to be
forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are expressly waived by each
Credit Party; or (iii) (and at the written request of Requisite Lenders
shall) exercise any rights and remedies provided to Agent under the
Loan Documents or at law or equity, including all remedies provided
under the Code; provided that upon the occurrence of an Event of
Default specified in Section 8.1(j) or (k), the Term Loan facility
shall be immediately terminated and all of the Obligations, including
the aggregate Term Loans, shall become immediately due and payable
without declaration, notice or demand by any Person.
38
8.3. Waivers by Credit Parties. Except as otherwise provided in
this Agreement or by applicable law, each Credit Party waives (including for
purposes of Section 12) (a) presentment, demand and protest and notice of
presentment, dishonor, notice of intent to accelerate, notice of acceleration,
protest, default, nonpayment, maturity, release, compromise, settlement,
extension or renewal of any or all commercial paper, accounts, contract rights,
documents, instruments, chattel paper and guaranties at any time held by Agent
on which any Credit Party may in any way be liable, and hereby ratifies and
confirms whatever Agent may do in this regard, (b) all rights to notice and a
hearing prior to Agent's taking possession or control of, or to Agent's replevy,
attachment or levy upon, the Collateral or any bond or security that might be
required by any court prior to allowing Agent to exercise any of its remedies,
and (c) the benefit of all valuation, appraisal, marshaling and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1. Assignment and Participations.
(a) Subject to the terms of this Section 9.1, at any time
or times, any Lender may make an assignment to a Qualified Assignee of,
or sell participations in, the Loan Documents, the Term Loans, and any
Commitment or any portion thereof or interest therein, including any
Lender's rights, title, interests, remedies, powers or duties
thereunder. Any assignment by a Lender shall (i) require the consent of
Agent (which consent shall not be unreasonably withheld or delayed with
respect to a Qualified Assignee) and the execution of an assignment
agreement (an "Assignment Agreement") in substantially the form of
Exhibit 9.1(a) and otherwise in form and substance reasonably
satisfactory to, and acknowledged by, Agent; (ii) be conditioned on
such assignee Lender representing to the assigning Lender and Agent
that it is purchasing the applicable Term Loans to be assigned to it
for its own account, for investment purposes and not with a view to the
distribution thereof; (iii) result, in the case of a partial assignment
after giving effect to any such partial assignment, in the assignee
Lender having Commitments and/or Term Loans in an amount at least equal
to $5,000,000 and the assigning Lender having retained Commitments
and/or Term Loans in an amount at least equal to $5,000,000; and (iv)
include a payment to Agent of an assignment fee of $3500. In the case
of an assignment by a Lender under this Section 9.1, the assignee shall
have, to the extent of such assignment, the same rights, benefits and
obligations as all other Lenders hereunder. The assigning Lender shall
be relieved of its obligations hereunder with respect to its
Commitments or assigned portion thereof, as applicable, from and after
the date of such assignment. Each Borrower hereby acknowledges and
agrees that any assignment shall give rise to a direct obligation of
Borrowers to the assignee and that the assignee shall be considered to
be a "Lender." In all instances, each Lender's liability to make Term
Loans hereunder shall be several and not joint and shall be limited to
such Lender's Pro Rata Share Available of the applicable Commitment. In
the event Agent or any Lender assigns or otherwise transfers all or any
part of the Obligations, Agent or any such Lender shall so notify
Borrowers, and upon the request of Agent or such Lender, Borrowers
shall execute new Notes in exchange for the Notes, if any, being
assigned and, if required by applicable law, amendments to the
Mortgages to provide assignee's name and address and to acknowledge
assignee's rights in the
39
Collateral secured thereby. Notwithstanding the foregoing provisions of
this Section 9.1(a), any Lender may at any time pledge the Obligations
held by it and such Lender's rights under this Agreement and the other
Loan Documents to a Federal Reserve Bank, and any Lender that is an
investment fund may assign the Obligations held by it and such Lender's
rights under this Agreement and the other Loan Documents to another
investment fund managed by the same investment advisor; provided that
no such pledge to a Federal Reserve Bank shall release such Lender from
such Lender's obligations hereunder or under any other Loan Document.
(b) Any participation by a Lender of all or any part of
its Commitments or its Pro Rata Share Outstanding shall be made with
the understanding that all amounts payable by Borrowers hereunder shall
be determined as if that Lender had not sold such participation and
that the holder of any such participation shall not be entitled to
require such Lender to take or omit to take any action hereunder except
actions directly affecting (i) any reduction in the principal amount
of, or interest rate or Fees payable with respect to, any Term Loan in
which such holder participates, (ii) any extension of the scheduled
amortization of the principal amount of any Term Loan in which such
holder participates or the final maturity date thereof, and (iii) any
release of all or substantially all of the Collateral (other than in
accordance with the terms of this Agreement, the Collateral Documents
or the other Loan Documents). Solely for purposes of Sections 1.9,
1.11, 1.12 and 9.8, each Borrower acknowledges and agrees that a
participation shall give rise to a direct obligation of Borrowers to
the participant and the participant shall be considered to be a
"Lender." Except as set forth in the preceding sentence, the Credit
Parties shall not have any obligation or duty to any participant.
Neither Agent nor any Lender (other than the Lender selling a
participation) shall have any duty to any participant, and Agent and
any Lender may continue to deal solely with the Lender selling a
participation as if no such sale had occurred.
(c) Except as expressly provided in this Section 9.1, no
Lender, as between Borrowers and that Lender or Agent and that Lender,
shall be relieved of any of its obligations hereunder as a result of
any sale, assignment, transfer or negotiation of or granting of
participation in all or any part of the Term Loans, the Notes or the
other Obligations owed to such Lender.
(d) Each Credit Party shall assist any Lender permitted
to sell assignments or participations under this Section 9.1 as
reasonably required to enable the assigning or selling Lender to effect
any such assignment or participation, including the execution and
delivery of any and all agreements, notes and other documents and
instruments as shall be requested and, if requested by Agent, the
preparation of informational materials for, and the participation of
management in meetings with, potential assignees or participants. Each
Credit Party shall certify the correctness, completeness and accuracy
of all descriptions of the Credit Parties and their respective affairs
contained in any selling materials provided by them and all other
information provided by them and included in such materials, except
that any Projections delivered by the Credit Parties shall only be
certified by the Credit Parties as having been prepared by them in
compliance with the representations contained in Section 3.4(b).
40
(e) Any Lender may furnish any information concerning the
Credit Parties in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and
participants); provided that such Lender shall obtain from assignees or
participants confidentiality covenants substantially equivalent to
those contained in Section 11.8.
(f) Notwithstanding anything to the contrary contained
herein, any Lender (a "Granting Lender") may grant to a special purpose
funding vehicle (an "SPC"), identified as such in writing by the
Granting Lender to Agent and Borrowers, the option to provide to
Borrowers all or any part of any Term Loans that such Granting Lender
has made or would otherwise be obligated to make to Borrowers pursuant
to this Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to make any Term Loan; and (ii) if an SPC elects
not to exercise such option or otherwise fails to provide all or any
part of such Term Loan, the Granting Lender shall be obligated to make
such Term Loan pursuant to the terms hereof. The making of a Term Loan
by an SPC hereunder shall utilize the Commitment of the Granting Lender
to the same extent and as if such Term Loan were made by such Granting
Lender. No SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain
with the Granting Lender). Any SPC (i) with notice to, but without the
prior written consent of, Borrowers and Agent may assign all or a
portion of its interests in any Term Loans to the Granting Lender or to
any financial institutions (consented to by Agent) providing liquidity
and/or credit support to or for the account of such SPC to support the
funding or maintenance of the Term Loans and (ii) may disclose on a
confidential basis any non-public information relating to its Term
Loans to any rating agency, commercial paper dealer or provider of any
surety, guarantee or credit or liquidity enhancement to such SPC. This
Section 9.1(f) may not be amended without the prior written consent of
each Granting Lender, all or any of whose Term Loans are being funded
by an SPC at the time of such amendment. For the avoidance of doubt,
the Granting Lender for all purposes, including the approval of any
amendment or waiver of any provision of any Loan Document or the
obligation to pay any amount otherwise payable by the Granting Lender
under the Loan Documents, shall continue to be the Lender of record
hereunder.
9.2. Appointment of Agent.
(a) GE Capital is hereby appointed to act on behalf of
all Lenders as Agent under this Agreement and the other Loan Documents.
The provisions of this Section 9.2 are solely for the benefit of Agent
and Lenders, and no Credit Party nor any other Person shall have any
rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement and the other
Loan Documents, Agent shall act solely as an agent of Lenders and does
not assume and shall not be deemed to have assumed any obligation
toward or relationship of agency or trust with or for any Credit Party
or any other Person. Agent shall have no duties or responsibilities
except for those expressly set forth in this Agreement and the other
Loan Documents. The duties of Agent shall be mechanical and
administrative in nature and Agent shall not have, or be deemed to have
a fiduciary relationship in respect of any Lender, by reason of
41
this Agreement, any other Loan Document or otherwise. Except as
expressly set forth in this Agreement and the other Loan Documents,
Agent shall not have any duty to disclose, and shall not be liable for
failure to disclose, any information relating to any Credit Party or
any of their respective Subsidiaries and Affiliates that is
communicated to or obtained by Agent or any of its Affiliates in any
capacity. Neither Agent nor any of its Affiliates nor any of their
respective officers, directors, employees, agents or representatives
shall be liable to any Lender for any action taken or omitted to be
taken by it hereunder or under any other Loan Document or in connection
herewith or therewith, except for damages caused by its or their own
gross negligence or willful misconduct.
(b) If Agent shall request instructions from Requisite
Lenders, Supermajority Lenders or all affected Lenders with respect to
any act or action (including failure to act) in connection with this
Agreement or any other Loan Document, then Agent shall be entitled to
refrain from such act or taking such action unless and until Agent
shall have received instructions from Requisite Lenders, Supermajority
Lenders or all affected Lenders, as the case may be, and Agent shall
not incur liability to any Person by reason of so refraining. Agent
shall be fully justified in failing or refusing to take any action
hereunder or under any other Loan Document (a) if such action would, in
the opinion of Agent, be contrary to law or the terms of this Agreement
or any other Loan Document, (b) if such action would, in the opinion of
Agent, expose Agent to Environmental Liabilities or (c) if Agent shall
not first be indemnified to its satisfaction against any and all
liability and expense which may be incurred by it by reason of taking
or continuing to take any such action. Without limiting the foregoing,
no Lender shall have any right of action whatsoever against Agent as a
result of Agent acting or refraining from acting hereunder or under any
other Loan Document in accordance with the instructions of Requisite
Lenders, Supermajority Lenders or all affected Lenders, as applicable.
9.3. Agent's Reliance, Etc. Neither Agent nor any of its Affiliates
nor any of their respective directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or the other Loan Documents, except for damages
caused by its or their own gross negligence or willful misconduct. Without
limiting the generality of the foregoing, Agent
(a) may treat the payee of any Note as the holder thereof
until Agent receives written notice of the assignment or transfer
thereof signed by such payee and in form reasonably satisfactory to
Agent;
(b) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable
for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts;
(c) makes no warranty or representation to any Lender and
shall not be responsible to any Lender for any statements, warranties
or representations made in or in connection with this Agreement or the
other Loan Documents;
42
(d) shall not have any duty to ascertain or to inquire as
to the performance or observance of any of the terms, covenants or
conditions of this Agreement or the other Loan Documents on the part of
any Credit Party or LTF or to inspect the Collateral (including the
books and records related thereto) of any Credit Party or LTF;
(e) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; and
(f) shall not incur any liability under or in respect of
this Agreement or the other Loan Documents by acting upon any notice,
consent, certificate or other instrument or writing (which may be by
telecopy, telegram, cable or telex) believed by it to be genuine and
signed or sent by the proper party or parties.
9.4. GE Capital and Affiliates. With respect to its Commitments and
Pro Rata Share Outstanding of Term Loans hereunder, GE Capital shall have the
same rights and powers under this Agreement and the other Loan Documents as any
other Lender and may exercise the same as though it were not Agent; and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated, include GE
Capital in its individual capacity. GE Capital and its Affiliates may lend money
to, invest in and generally engage in any kind of business with any Credit
Party, any of their Affiliates and any Person who may do business with or own
securities of any Credit Party or any such Affiliate, all as if GE Capital were
not Agent and without any duty to account therefor to Lenders. GE Capital and
its Affiliates may accept fees and other consideration from any Credit Party and
LTF for services in connection with this Agreement or otherwise without having
to account for the same to Lenders. Each Lender acknowledges the potential
conflict of interest between GE Capital as a Lender holding disproportionate
interests in the Term Loans and GE Capital as Agent.
9.5. Lender Credit Decisions. Each Lender acknowledges that it has
made its own credit and financial analysis of the Credit Parties and LTF and its
own decision to enter into this Agreement, independently and without reliance
upon Agent or any other Lender and based on the Financial Statements referred to
in Section 3.4(a) and such other documents and information as it has deemed
appropriate. Each Lender also acknowledges that it will continue to make its own
credit decisions in taking or not taking action under this Agreement,
independently and without reliance upon Agent or any other Lender and based on
such documents and information as it shall deem appropriate at the time. Each
Lender acknowledges the potential conflict of interest of each other Lender as a
result of Lenders holding disproportionate interests in the Term Loans and
expressly consents to and waives any claim based upon such conflict of interest.
9.6. Indemnification. Lenders agree to indemnify Agent (to the
extent not reimbursed by the Credit Parties or LTF and without limiting the
obligations of the Credit Parties hereunder), ratably according to their
respective Pro Rata Shares, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against Agent in any way relating to or arising out
of this Agreement or any other Loan
43
Document or any action taken or omitted to be taken by Agent in connection
therewith; provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from Agent's gross negligence or
willful misconduct. Without limiting the foregoing, each Lender agrees to
reimburse Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including counsel fees) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
and each other Loan Document, to the extent that Agent is not reimbursed for
such expenses by the Credit Parties or LTF.
9.7. Successor Agent. Agent may resign at any time by giving not
less than thirty days' prior written notice thereof to Lenders and Borrower
Representative. Upon any such resignation, the Requisite Lenders shall have the
right to appoint a successor Agent. If a successor Agent shall not have been so
appointed by the Requisite Lenders and shall not have accepted such appointment
within thirty days after the resigning Agent's notice of resignation, then the
resigning Agent may, on behalf of Lenders, appoint a successor Agent, which
shall be a Lender, if a Lender is willing to accept such appointment, or
otherwise shall be a commercial bank or financial institution or a subsidiary of
a commercial bank or financial institution if such commercial bank or financial
institution is organized under the laws of the United States of America or of
any state thereof and has a combined capital and surplus of at least
$300,000,000. If no successor Agent has been appointed pursuant to the
foregoing, within thirty days after the date such notice of resignation was
given by the resigning Agent, such resignation shall become effective and the
Requisite Lenders shall thereafter perform all the duties of Agent hereunder
until such time, if any, as the Requisite Lenders appoint a successor Agent as
provided above. Any successor Agent appointed by Requisite Lenders hereunder
shall be subject to the approval of Borrower Representative, such approval not
to be unreasonably withheld or delayed; provided that such approval shall not be
required if a Default or an Event of Default has occurred and is continuing.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall succeed to and become vested with all the rights,
powers, privileges and duties of the resigning Agent. Upon the earlier of the
acceptance of any appointment as Agent hereunder by a successor Agent or the
effective date of the resigning Agent's resignation, the resigning Agent shall
be discharged from its duties and obligations under this Agreement and the other
Loan Documents, except that any indemnity rights or other rights in favor of
such resigning Agent shall continue. After any resigning Agent's resignation
hereunder, 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 acting as Agent under
this Agreement and the other Loan Documents.
9.8. Setoff and Sharing of Payments. 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 and during the continuance of any Event of
Default and subject to Section 9.9(f), each Lender is hereby authorized at any
time or from time to time, without notice to any Credit Party or to any other
Person, any such notice being hereby expressly waived, to offset and to
appropriate and to apply any and all balances held by it at any of its offices
for the account of any Borrower and any other properties or assets at any time
held or owing by that Lender or that holder to or for the credit or for the
account of any Borrower against and on account of any of the
44
Obligations that are not paid when due. Any Lender exercising a right of setoff
or otherwise receiving any payment on account of the Obligations in excess of
its Pro Rata Share Outstanding thereof shall purchase for cash (and the other
Lenders or holders shall sell) such participations in each such other Lender's
or holder's Pro Rata Share Outstanding of the Obligations as would be necessary
to cause such Lender to share the amount so offset or otherwise received with
each other Lender or holder in accordance with their respective Pro Rata Shares
Outstanding of the Obligations (other than offset rights exercised by any Lender
with respect to Sections 1.9, 1.11 or 1.12). To the fullest extent permitted by
law, each Borrower agrees that (a) any Lender may exercise its right to offset
with respect to amounts in excess of its Pro Rata Share Outstanding of the
Obligations and may sell participations in such amounts so offset to other
Lenders and holders and (b) any Lender so purchasing a participation in the Term
Loans made or other Obligations held by other Lenders or holders may exercise
all rights of offset, bankers' lien, counterclaim or similar rights with respect
to such participation as fully as if such Lender or holder were a direct holder
of the Term Loans and the other Obligations in the amount of such participation.
Notwithstanding the foregoing, if all or any portion of the offset amount or
payment otherwise received is thereafter recovered from the Lender that has
exercised the right of offset, the purchase of participations by that Lender
shall be rescinded and the purchase price restored without interest.
9.9. Advances; Payments; Non-Funding Lenders; Information; Actions
in Concert.
(a) Advances; Payments.
(i) Agent shall notify Lenders promptly after
receipt of a Notice of Borrowing by telecopy, telephone or
other similar form of transmission, of each Lender's Pro Rata
Share Advanced of such Term Loan, which shall not exceed such
Lender's Pro Rata Share Available. Each Lender shall make the
amount of such Lender's Pro Rata Share Advanced of such Term
Loan available to Agent in same day funds by wire transfer to
Agent's account as set forth in Annex E not later than 3:00
p.m. (New York time) on the requested funding date. After
receipt of such wire transfers (or, in the Agent's sole
discretion, before receipt of such wire transfers), subject to
the terms hereof, Agent shall make the requested Term Loan to
the Borrower designated by Borrower Representative in the
Notice of Borrowing. All payments by each Lender shall be made
without setoff, counterclaim or deduction of any kind.
(ii) On the second Business Day of each calendar
month or more frequently at Agent's election (each, a
"Settlement Date"), Agent shall advise each Lender by
telephone, telecopy or other similar form of transmission of
the amount of such Lender's Pro Rata Share Outstanding of
principal, interest and Fees paid for the benefit of Lenders
with respect to each applicable Term Loan. Provided that each
Lender has funded all payments or Term Loan advances required
to be made by it and has purchased all participations required
to be purchased by it under this Agreement and the other Loan
Documents as of such Settlement Date, Agent shall pay to each
Lender such Lender's Pro Rata Share Outstanding of principal,
interest and Fees paid by Borrowers since the previous
45
Settlement Date for the benefit of such Lender on the Term
Loans held by it. To the extent that any Lender (a
"Non-Funding Lender") has failed to fund all such payments and
Term Loan advances or failed to fund the purchase of all such
participations, Agent shall be entitled to set off the funding
short-fall against that Non-Funding Lender's Pro Rata Share
Outstanding of all payments received from Borrowers. Such
payments shall be made by wire transfer to such Lender's
account (as specified by such Lender in Annex E or the
applicable Assignment Agreement) on the Settlement Date.
(b) Each Lender's Pro Rata Share Available. Agent may
assume that each Lender will make its Pro Rata Share Available of each
Term Loan available to Agent on each funding date. If such Lender's Pro
Rata Share Advanced related thereto is not, in fact, paid to Agent by
such Lender when due, Agent will be entitled to recover such amount on
demand from such Lender without setoff, counterclaim or deduction of
any kind. If any Lender fails to pay the amount of its Pro Rata Share
Advanced forthwith upon Agent's demand, Agent shall promptly notify
Borrower Representative and Borrowers shall immediately repay such
amount to Agent. Nothing in this Section 9.9(b) or elsewhere in this
Agreement or the other Loan Documents shall be deemed to require Agent
to advance funds on behalf of any Lender or to relieve any Lender from
its obligation to fulfill its Commitments hereunder or to prejudice any
rights that Borrowers may have against any Lender as a result of any
default by such Lender hereunder. To the extent that Agent advances
funds to any Borrower on behalf of any Lender and is not reimbursed
therefor on the same Business Day as such advance is made, Agent shall
be entitled to retain for its account all interest accrued on such
advance until reimbursed by the applicable Lender.
(c) Return of Payments.
(i) If Agent pays an amount to a Lender under
this Agreement with the belief or expectation that a related
payment has been or will be received by Agent from Borrowers
and such related payment is not received by Agent, then Agent
will be entitled to recover such amount from such Lender on
demand without setoff, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any
amount received by Agent under this Agreement must be returned
to any Borrower or paid to any other Person pursuant to any
insolvency law or otherwise, then, notwithstanding any other
term or condition of this Agreement or any other Loan
Document, Agent will not be required to distribute any portion
thereof to any Lender. In addition, each Lender will repay to
Agent on demand any portion of such amount that Agent has
distributed to such Lender, together with interest at such
rate, if any, as Agent is required to pay to any Borrower or
such other Person, without setoff, counterclaim or deduction
of any kind.
(d) Non-Funding Lenders. The failure of any Non-Funding
Lender to make any Term Loan or any payment required by it hereunder on
the date specified therefor
46
shall not relieve any other Lender of its obligations to make such Term
Loan or payment on such date, but neither any other Lender nor Agent
shall be responsible for the failure of any Non-Funding Lender to make
a Term Loan advance or any other payment required hereunder.
Notwithstanding anything set forth herein to the contrary, a
Non-Funding Lender shall not have any voting or consent rights under or
with respect to any Loan Document or constitute a "Lender" or be
included in the calculation of "Requisite Lenders" hereunder for any
voting or consent rights under or with respect to any Loan Document. At
Borrower Representative's request, Agent or a Person reasonably
acceptable to Agent shall have the right with Agent's consent and in
Agent's sole discretion (but shall have no obligation) to purchase from
any Non-Funding Lender, and each Non-Funding Lender agrees that, at
Agent's request, it shall sell and assign to Agent or such Person, all
of the Commitments of that Non-Funding Lender for an amount equal to
the principal balance of all Term Loans held by such Non-Funding Lender
and all accrued interest and Fees with respect thereto through the date
of sale, such purchase and sale to be consummated pursuant to an
executed Assignment Agreement.
(e) Dissemination of Information. Agent shall use
reasonable efforts to provide Lenders with any notice of Default or
Event of Default received by Agent from, or delivered by Agent to, any
Credit Party, with notice of any Event of Default of which Agent has
actually become aware and with notice of any action taken by Agent
following any Event of Default; provided that Agent shall not be liable
to any Lender for any failure to do so, except to the extent that such
failure is attributable to Agent's gross negligence or willful
misconduct. Lenders acknowledge that the Credit Parties and LTF are
required to provide Financial Statements to Lenders in accordance with
Annex C and the Letter Agreement, respectively, and agree that Agent
shall have no duty to provide the same to Lenders.
(f) Actions in Concert. Anything in this Agreement to the
contrary notwithstanding, each Lender hereby agrees with each other
Lender that no Lender shall take any action to protect or enforce its
rights arising out of this Agreement or the Notes (including exercising
any rights of setoff) without first obtaining the prior written consent
of Agent and Requisite Lenders, it being the intent of Lenders that any
such action to protect or enforce rights under this Agreement and the
Notes shall be taken in concert and at the direction or with the
consent of Agent or Requisite Lenders.
10. SUCCESSORS AND ASSIGNS
This Agreement and the other Loan Documents shall be binding on and
shall inure to the benefit of each Credit Party, Agent, Lenders and their
respective successors and assigns (including, in the case of any Credit Party, a
debtor-in-possession on behalf of such Credit Party), except as otherwise
provided herein or therein. No Credit Party may assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder or under
any of the other Loan Documents without the prior express written consent of
Agent and Lenders. Any such purported assignment, transfer, hypothecation or
other conveyance by any Credit Party without the prior express written consent
of Agent and Lenders shall be void. The terms and provisions of this Agreement
are for the purpose of defining the relative rights and obligations of
47
each Credit Party, Agent and Lenders with respect to the transactions
contemplated hereby and no Person shall be a third party beneficiary of any of
the terms and provisions of this Agreement or any of the other Loan Documents.
11. MISCELLANEOUS
11.1. Complete Agreement; Modification of Agreement. The Loan
Documents constitute the complete agreement between the parties with respect to
the subject matter thereof and may not be modified, altered or amended except as
set forth in Section 11.2. Any letter of interest, commitment letter, or fee
letter (other than the Fee Letter) between any Credit Party and Agent or any
Lender or any of their respective Affiliates, predating this Agreement and
relating to a financing of substantially similar form, purpose or effect, shall
be superseded by this Agreement.
11.2. Amendments and Waivers.
(a) Except for actions expressly permitted to be taken by
Agent, no amendment, modification, termination or waiver of any
provision of this Agreement or any other Loan Document, or any consent
to any departure by any Credit Party or any other Person therefrom, in
any event shall be effective unless the same shall be in writing and
signed by the Credit Party and/or LTF signatory hereto or thereto, by
Agent and by Requisite Lenders, Supermajority Lenders or all affected
Lenders, as applicable. Except as set forth in Section 11.2(b) and (c)
below, all such amendments, modifications, terminations or waivers
requiring the consent of any Lenders shall require the prior written
consent of Requisite Lenders.
(b) No amendment, modification, termination or waiver of
or consent with respect to any provision of this Agreement that
increases the Borrowing Availability for any Facility shall be
effective unless the same shall be in writing and signed by Agent,
Supermajority Lenders and Borrowers. No amendment, modification,
termination or waiver of or consent with respect to any provision of
this Agreement that waives compliance with the conditions precedent set
forth in Section 2.2 to the making of any Term Loan shall be effective
unless the same shall be in writing and signed by Agent, Requisite
Lenders and Borrowers.
(c) No amendment, modification, termination or waiver,
unless in writing and signed by Agent and each Lender directly affected
thereby shall: (i) increase the principal amount of any Lender's
Commitment (which action shall be deemed to directly affect all
Lenders); (ii) reduce the principal of, rate of interest on or Fees
payable with respect to any Term Loan of any affected Lender; (iii)
extend any scheduled payment date (other than payment dates of
mandatory prepayments under Section 1.2(b)) or final maturity date of
the principal amount of any Term Loan of any affected Lender; (iv)
waive, forgive, defer, extend or postpone any payment of interest or
Fees as to any affected Lender; (v) release all or substantially all of
the Collateral or substitute any lien on and security interest in any
Facility for a lien on and security interest in any other Facility,
except as otherwise permitted herein or in the other Loan Documents
(which action shall
48
be deemed to directly affect all Lenders); (vi) change the percentage
of the Commitments or of the aggregate unpaid principal amount of the
Term Loans that shall be required for Lenders or any of them to take
any action hereunder; and (vii) amend or waive this Section 11.2 or the
definitions of the terms "Requisite Lenders" or "Supermajority Lenders"
insofar as such definitions affect the substance of this Section 11.2.
Furthermore, no amendment, modification, termination or waiver
affecting the rights or duties of Agent under this Agreement or any
other Loan Document shall be effective unless in writing and signed by
Agent, in addition to Lenders required hereinabove to take such action.
Each amendment, modification, termination or waiver shall be effective
only in the specific instance and for the specific purpose for which it
was given. No amendment, modification, termination or waiver shall be
required for Agent to take additional Collateral pursuant to any Loan
Document. No amendment, modification, termination or waiver of any
provision of any Note shall be effective without the written
concurrence of the holder of that Note. No notice to or demand on any
Credit Party or LTF in any case shall entitle such Person or any other
Person 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 11.2 shall be binding
upon each holder of the Notes at the time outstanding and each future
holder of the Notes.
(d) In connection with any proposed amendment,
modification, waiver or termination (a "Proposed Change"):
(i) requiring the consent of all affected
Lenders, if the consent of Requisite Lenders is obtained, but
the consent of other Lenders whose consent is required is not
obtained;
(ii) requiring the consent of Supermajority
Lenders, if the consent of Requisite Lenders is obtained, but
the consent of Supermajority Lenders is not obtained; or
(iii) requiring the consent of Requisite Lenders,
if the consent of Lenders holding 51% or more of the aggregate
Commitments of all Lenders is obtained, but the consent of
Requisite Lenders is not obtained,
then, so long as Agent is not a Lender whose consent is not obtained as
described above in this Section 11.2(d) (a "Non-Consenting Lender"), at
Borrower Representative's request, Agent or a Person reasonably
acceptable to Agent shall have the right with Agent's consent and in
Agent's sole discretion (but shall have no obligation) to purchase from
such Non-Consenting Lenders, and such Non-Consenting Lenders agree that
they shall, upon Agent's request, sell and assign to Agent or such
Person, all of the Commitments of such Non-Consenting Lenders for an
amount equal to the principal balance of all Term Loans held by the
Non-Consenting Lenders and all accrued interest and Fees with respect
thereto through the date of sale, such purchase and sale to be
consummated pursuant to an executed Assignment Agreement.
49
(e) Upon payment in full in cash and performance of all
of the Obligations (other than indemnification Obligations),
termination of the Commitments and a release of all claims against
Agent and Lenders, and so long as no suits, actions, proceedings or
claims are pending or threatened against any Indemnified Person
asserting any damages, losses or liabilities that are Indemnified
Liabilities, Agent shall deliver to Borrowers termination statements,
mortgage releases and other documents necessary or appropriate to
evidence the termination of the Liens securing payment of the
Obligations.
11.3. Fees and Expenses. Credit Parties shall reimburse Agent and,
with respect to Section 11.3(d), (e) and (f) below, all Lenders for all
reasonable fees, costs and expenses (including fees and expenses of all of its
counsel, advisors, consultants, auditors, environmental and management
consultants and appraisers) incurred in connection with:
(a) the negotiation and preparation of the Loan
Documents;
(b) the forwarding to Borrowers or any other Person on
behalf of Borrowers by Agent of the proceeds of any Term Loan
(including a wire transfer fee of $25 per wire transfer);
(c) any amendment, modification or waiver of, consent
with respect to or termination of any Loan Document or Related
Transactions Document or advice in connection with the syndication and
administration of the Term Loans made pursuant hereto or its rights
hereunder or thereunder;
(d) any litigation, contest, dispute, suit, proceeding or
action (whether instituted by Agent, any Lender, any Borrower or any
other Person and whether as a party, witness or otherwise) in any way
relating to the Collateral, any of the Loan Documents or any other
agreement to be executed or delivered in connection herewith or
therewith, including any litigation, contest, dispute, suit, case,
proceeding or action, and any appeal or review thereof, in connection
with a case commenced by or against any or all Borrowers or any other
Person that may be obligated to Agent by virtue of the Loan Documents;
including any such litigation, contest, dispute, suit, proceeding or
action arising in connection with any work-out or restructuring of the
Term Loans during the pendency of one or more Events of Default;
provided that in the case of reimbursement of counsel for Lenders other
than Agent, such reimbursement shall be limited to one counsel for all
such Lenders; provided further, that no Person shall be entitled to
reimbursement under this Section 11.3(d) in respect of any litigation,
contest, dispute, suit, proceeding or action to the extent any of the
foregoing results from such Person's gross negligence or willful
misconduct or, so long as a Default or an Event of Default has not
occurred and is not continuing, from disputes between or among Agent
and any Lender;
(e) any attempt to enforce any remedies of Agent against
any or all of the Credit Parties or any other Person that may be
obligated to Agent or any Lender by virtue of any of the Loan
Documents, including any such attempt to enforce any such remedies in
the course of any work-out or restructuring of the Term Loans during
the pendency of
50
one or more Events of Default; provided, that in the case of
reimbursement of counsel for Lenders other than Agent, such
reimbursement shall be limited to one counsel for all such Lenders;
(f) any workout or restructuring of the Term Loans during
the pendency of one or more Events of Default; and
(g) from and after an Event of Default, efforts to (i)
monitor the Term Loans or any of the other Obligations, (ii) evaluate,
observe or assess any of the Credit Parties, LTF, or their respective
affairs, and (iii) verify, protect, evaluate, assess, appraise,
collect, sell, liquidate or otherwise dispose of any of the Collateral;
including, in each case, all reasonable attorneys' and other professional and
service providers' fees arising from such services and other advice, assistance
or other representation, including those in connection with any appellate
proceedings, and all reasonable expenses, costs, charges and other fees incurred
by such counsel and others in connection with or relating to any of the events
or actions described in this Section 11.3, all of which shall be payable, on
demand, by Borrowers to Agent. Without limiting the generality of the foregoing,
such expenses, costs, charges and fees may include: fees, costs and expenses of
accountants, environmental advisors, appraisers, investment bankers, management
and other consultants and paralegals; court costs and expenses; photocopying and
duplication expenses; court reporter fees, costs and expenses; long distance
telephone charges; air express charges; telegram or telecopy charges;
secretarial overtime charges; and expenses for travel, lodging and food paid or
incurred in connection with the performance of such legal or other advisory
services.
11.4. No Waiver. Agent's or any Lender's failure, at any time or
times, to require strict performance by the Credit Parties or any other Person
of any provision of this Agreement or any other Loan Document shall not waive,
affect or diminish any right of Agent or such Lender thereafter to demand strict
compliance and performance herewith or therewith. Any suspension or waiver of an
Event of Default shall not suspend, waive or affect any other Event of Default
whether the same is prior or subsequent thereto and whether the same or of a
different type. Subject to the provisions of Section 11.2, none of the
undertakings, agreements, warranties, covenants and representations of any
Credit Party contained in this Agreement or any of the other Loan Documents and
no Default or Event of Default by any Credit Party shall be deemed to have been
suspended or waived by Agent or any Lender, unless such waiver or suspension is
by an instrument in writing signed by an officer of or other authorized employee
of Agent and the applicable required Lenders, and directed to Borrowers
specifying such suspension or waiver.
11.5. Remedies. Agent's and Lenders' rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
that Agent or any Lender may have under any other agreement, including the other
Loan Documents, by operation of law or otherwise. Recourse to the Collateral
shall not be required.
11.6. Severability. Wherever possible, each provision of this
Agreement and the other Loan Documents shall be interpreted in such a manner as
to be effective and valid under applicable law, but if any provision of this
Agreement or any other Loan Document shall be
51
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of this
Agreement or such other Loan Document.
11.7. Conflict of Terms. Except as otherwise provided in this
Agreement or any of the other Loan Documents by specific reference to the
applicable provisions of this Agreement, if any provision contained in this
Agreement conflicts with any provision in any of the other Loan Documents, the
provision contained in this Agreement shall govern and control.
11.8. Confidentiality. Agent and each Lender agree to use
commercially reasonable efforts (equivalent to the efforts Agent or such Lender
applies to maintaining the confidentiality of its own confidential information)
to maintain as confidential all confidential information provided to them by the
Credit Parties or LTF and designated as confidential for a period of two years
following receipt thereof, except that Agent and any Lender may disclose such
information (a) to Persons employed or engaged by Agent or such Lender in
evaluating, approving, structuring or administering the Term Loans and the
Commitments; (b) to any bona fide assignee or participant or potential assignee
or participant that has agreed to comply with the covenant contained in this
Section 11.8 (and any such bona fide assignee or participant or potential
assignee or participant may disclose such information to Persons employed or
engaged by them as described in clause (a) above); (c) as required or requested
by any Governmental Authority or reasonably believed by Agent or such Lender to
be compelled by any court decree, subpoena or legal or administrative order or
process; (d) as, on the advice of Agent's or such Lender's counsel, is required
by law; (e) in connection with the exercise of any right or remedy under the
Loan Documents or in connection with any litigation to which Agent or such
Lender is a party; or (f) that ceases to be confidential through no fault of
Agent or any Lender. Notwithstanding the foregoing, there is no restriction
(either express or implied) on any disclosure or dissemination of the federal
tax structure or the federal tax treatment of the Term Loans and related
Obligations. Further, each Credit Party, each Lender and Agent acknowledges that
it has no proprietary rights to any federal tax matter or federal income tax
idea or to any element of the federal tax structure of the Term Loans and
related Obligations.
11.9. Governing Law. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY
OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE
AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY
HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN XXX XXXX
XXXXXX, XXXX XX XXX XXXX, XXX XXXX SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES, AGENT AND LENDERS
PERTAINING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR TO ANY MATTER ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT; PROVIDED THAT
AGENT, LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE
COURTS MAY HAVE TO BE HEARD BY A
00
XXXXX XXXXXXX XXXXXXX XX XXX XXXX XXXXXX; PROVIDED FURTHER, THAT NOTHING IN THIS
AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR
TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL
OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER IN FAVOR OF AGENT. EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS
IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH
COURT, AND EACH CREDIT PARTY HEREBY WAIVES ANY OBJECTION THAT SUCH CREDIT PARTY
MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF
AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH CREDIT PARTY HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR
SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY
BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE
ADDRESS SET FORTH IN ANNEX F OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE
DEEMED COMPLETED UPON THE EARLIER OF SUCH CREDIT PARTY'S ACTUAL RECEIPT THEREOF
OR THREE DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.
11.10. Notices. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any Person by any
party hereto, or whenever any of the parties desires to give or serve upon any
Person any communication with respect to this Agreement, each such notice,
demand, request, consent, approval, declaration or other communication shall be
in writing and shall be deemed to have been validly served, given or delivered:
(a) upon the earlier of actual receipt and three Business Days after deposit in
the United States Mail, registered or certified mail, return receipt requested,
with proper postage prepaid; (b) upon transmission, when sent by telecopy or
other similar facsimile transmission (with such telecopy or facsimile promptly
confirmed by delivery of a copy by personal delivery or United States Mail as
otherwise provided in this Section 11.10); (c) one Business Day after deposit
with a reputable overnight courier with all charges prepaid; or (d) when
delivered, if hand-delivered by messenger, all of which shall be addressed to
the party to be notified and sent to the address or facsimile number indicated
in Annex F or to such other address (or facsimile number) as may be substituted
by notice given as herein provided. The giving of any notice required hereunder
may be waived in writing by the party entitled to receive such notice. Failure
or delay in delivering copies of any notice, demand, request, consent, approval,
declaration or other communication to any Person (other than Borrower
Representative or Agent) designated in Annex F to receive copies shall in no way
adversely affect the effectiveness of such notice, demand, request, consent,
approval, declaration or other communication.
11.11. Section Titles. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.
53
11.12. Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.
11.13. Waiver of Jury Trial. BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT
THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE,
TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE, AMONG AGENT, LENDERS AND ANY CREDIT PARTY ARISING OUT OF,
CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG
THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS RELATED THERETO.
11.14. Press Releases and Related Matters. Each Credit Party agrees
that neither it nor its Affiliates will in the future issue any press releases
or other public disclosure using the name of GE Capital or its Affiliates or
referring to this Agreement, the other Loan Documents or the Related
Transactions Documents without at least two Business Days' prior notice to GE
Capital and without the prior written consent of GE Capital unless (and only to
the extent that) such Credit Party or Affiliate is required to do so under law
and then, in any event, such Credit Party or Affiliate will consult with GE
Capital before issuing such press release or other public disclosure. Each
Credit Party consents to the publication by Agent or any Lender of a tombstone
or similar advertising material relating to the financing transactions
contemplated by this Agreement. Agent reserves the right to provide to industry
trade organizations information necessary and customary for inclusion in league
table measurements.
11.15. Reinstatement. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Borrower for liquidation or reorganization, should any Borrower become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of any
Borrower's assets and shall continue to be effective or to be reinstated, as the
case may be, if at any time payment and performance of the Obligations, or any
part thereof, pursuant to applicable law, is rescinded or reduced in amount or
must otherwise be restored or returned by any obligee of the Obligations,
whether as a "voidable preference," "fraudulent conveyance," or otherwise, all
as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.
11.16. Advice of Counsel. Each of the parties represents to each other
party hereto that it has discussed this Agreement and, specifically, the
provisions of Sections 11.9 and 11.13 with its counsel.
54
11.17. No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
12. CROSS-GUARANTY
12.1. Cross-Guaranty. Each Borrower hereby agrees that such Borrower is
jointly and severally liable for, and hereby absolutely and unconditionally
guarantees to Agent and Lenders and their respective successors and assigns, the
full and prompt payment (whether at stated maturity, by acceleration or
otherwise) and performance of all Obligations owed or hereafter owing to Agent
and Lenders by each other Borrower. Each Borrower agrees that its guaranty
obligation hereunder is a continuing guaranty of payment and performance and not
of collection, that its obligations under this Section 12 shall not be
discharged until payment and performance, in full, of the Obligations has
occurred and that its obligations under this Section 12 shall be absolute and
unconditional, irrespective of, and unaffected by, the following:
(a) the genuineness, validity, regularity, enforceability
or any future amendment of or change in this Agreement, any other Loan
Document or any other agreement, document or instrument to which any
Borrower is or may become a party;
(b) the absence of any action to enforce this Agreement
(including this Section 12) or any other Loan Document or the waiver or
consent by Agent and Lenders with respect to any of the provisions
thereof;
(c) the existence, value or condition of, or failure to
perfect its Lien against, any security for the Obligations or any
action, or the absence of any action, by Agent and Lenders in respect
thereof (including the release of any such security);
(d) the insolvency of any Credit Party; or
(e) any other action or circumstances that might
otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor.
Each Borrower shall be regarded, and shall be in the same position, as principal
debtor with respect to the Obligations guaranteed hereunder.
12.2. Waivers by Borrowers. Each Borrower expressly waives all rights
it may have now or in the future under any statute, at common law, at law or in
equity or otherwise to compel Agent or Lenders to xxxxxxxx assets or to proceed
in respect of the Obligations guaranteed hereunder against any other Credit
Party, any other Person or against any security for the payment and performance
of the Obligations before proceeding against, or as a condition to proceeding
against, such Borrower. It is agreed among each Borrower, Agent and Lenders that
the foregoing waivers are of the essence of the transaction contemplated by this
Agreement and the other Loan Documents and that, but for the provisions of this
Section 12 and such waivers, Agent and Lenders would decline to enter into this
Agreement.
55
12.3. Benefit of Guaranty. Each Borrower agrees that the provisions of
this Section 12 are for the benefit of Agent and Lenders and their respective
successors, transferees, endorsees and assigns, and nothing in this Agreement
shall impair, as between any other Borrower and Agent or Lenders, the
obligations of such other Borrower under the Loan Documents.
12.4. Subordination of Subrogation, Etc. Notwithstanding anything to
the contrary in this Agreement or in any other Loan Document, and except as set
forth in Section 12.7, each Borrower hereby expressly and irrevocably
subordinates to payment of the Obligations any and all rights at law or in
equity to subrogation, reimbursement, exoneration, contribution, indemnification
or set off and any and all defenses available to a surety, guarantor or
accommodation co-obligor until the Obligations are indefeasibly paid in full in
cash. Each Borrower acknowledges and agrees that this subordination is intended
to benefit Agent and Lenders and shall not limit or otherwise affect such
Borrower's liability hereunder or the enforceability of this Section 12 and that
Agent, Lenders and their respective successors and assigns are intended
third-party beneficiaries of the waivers and agreements set forth in this
Section 12.4.
12.5. Election of Remedies. If Agent or any Lender may, under
applicable law, proceed to realize its benefits under any of the Loan Documents
giving Agent or such Lender a Lien upon any Collateral, whether owned by any
Borrower or by any other Person, either by judicial foreclosure or by
non-judicial sale or enforcement, Agent or any Lender may, at its sole option,
determine which of its remedies or rights it may pursue without affecting any of
its rights and remedies under this Section 12. If, in the exercise of any of its
rights and remedies, Agent or any Lender shall forfeit any of its rights or
remedies, including its right to enter a deficiency judgment against any
Borrower or any other Person, whether because of any applicable laws pertaining
to "election of remedies" or the like, each Borrower hereby consents to such
action by Agent or such Lender and waives any claim based upon such action, even
if such action by Agent or such Lender shall result in a full or partial loss of
any rights of subrogation that each Borrower might otherwise have had but for
such action by Agent or such Lender. Any election of remedies that results in
the denial or impairment of the right of Agent or any Lender to seek a
deficiency judgment against any Borrower shall not impair any other Borrower's
obligation to pay the full amount of the Obligations. In the event Agent or any
Lender shall bid at any foreclosure or trustee's sale or at any private sale
permitted by law or the Loan Documents, Agent or such Lender may bid all or less
than the amount of the Obligations and the amount of such bid need not be paid
by Agent or such Lender, but shall be credited against the Obligations. The
amount of the successful bid at any such sale, whether Agent, Lender or any
other party is the successful bidder, shall be conclusively deemed to be the
fair market value of the Collateral and the difference between such bid amount
and the remaining balance of the Obligations shall be conclusively deemed to be
the amount of the Obligations guaranteed under this Section 12, notwithstanding
that any present or future law or court decision or ruling may have the effect
of reducing the amount of any deficiency claim to which Agent or any Lender
might otherwise be entitled but for such bidding at any such sale.
12.6. Limitation. Notwithstanding any provision herein contained to the
contrary, each Borrower's liability under this Section 12 (which liability is in
any event in addition to amounts for which such Borrower is primarily liable
under Section 1) shall be limited to an amount not to
56
exceed, as of any date of determination, the amount that could be claimed by
Agent and Lenders from such Borrower under this Section 12 without rendering
such claim voidable or avoidable under Section 548 of Chapter 11 of the
Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act,
Uniform Fraudulent Conveyance Act or similar statute or common law after taking
into account, among other things, such Borrower's right of contribution and
indemnification from each other Borrower under Section 12.7.
12.7. Contribution with Respect to Guaranty Obligations.
(a) To the extent that any Borrower shall make a payment
under this Section 12 of all or any of the Obligations (other than Term
Loans made to that Borrower for which it is primarily liable) (a
"Guarantor Payment") that, taking into account all other Guarantor
Payments then previously or concurrently made by any other Borrower,
exceeds the amount that such Borrower would otherwise have paid if each
Borrower had paid the aggregate Obligations satisfied by such Guarantor
Payment in the same proportion that such Borrower's Allocable Amount
(as determined immediately prior to such Guarantor Payment) bore to the
aggregate Allocable Amounts of each Borrower as determined immediately
prior to the making of such Guarantor Payment, then, following
indefeasible payment in full in cash of the Obligations and termination
of the Commitments, such Borrower shall be entitled to receive
contribution and indemnification payments from, and be reimbursed by,
each other Borrower for the amount of such excess, pro rata based upon
their respective Allocable Amounts in effect immediately prior to such
Guarantor Payment.
(b) This Section 12.7 is intended only to define the
relative rights of Borrowers and nothing set forth in this Section 12.7
is intended to or shall impair the obligations of Borrowers, jointly
and severally, to pay any amounts as and when the same shall become due
and payable in accordance with the terms of this Agreement, including
Section 12.1. Nothing contained in this Section 12.7 shall limit the
liability of any Borrower to pay the Term Loans made directly or
indirectly to such Borrower and accrued interest, Fees and expenses
with respect thereto for which such Borrower shall be primarily liable.
(c) The parties hereto acknowledge that the rights of
contribution and indemnification hereunder shall constitute assets of
Borrowers to which such contribution and indemnification are owing.
(d) The rights of the indemnifying Borrowers against
other Credit Parties under this Section 12.7 shall be exercisable upon
the full and indefeasible payment of the Obligations and the
termination of the Commitments.
12.8. Liability Cumulative. The liability of Borrowers under this
Section 12 is in addition to and shall be cumulative with all liabilities of
each Borrower to Agent and Lenders under this Agreement and the other Loan
Documents to which such Borrower is a party or in respect of any Obligations or
obligation of the other Borrowers, without any limitation as to
57
amount, unless the instrument or agreement evidencing or creating such other
liability specifically provides to the contrary.
[Remainder of page left blank.]
58
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
BORROWERS
LTFMF AZ REAL ESTATE, LLC,
a Delaware limited liability company
____________________________________
Xxxx X. Xxxx, Secretary
IN WITNESS WHEREOF, this Agreement has been duly executed by the
following Person in its capacity as a Credit Party and not as a Borrower as of
the date first written above.
LTFMF REAL ESTATE HOLDINGS, LLC,
a Delaware limited liability company
____________________________________
Xxxx X. Xxxx, Secretary
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Agent and Lender
By:_________________________________
Name:_______________________________
Duly Authorized Signatory
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
MARATHON STRUCTURED FINANCE
FUND, LTD.,
as Lender
By:_________________________________
Xxxxx Xxxx
Duly Authorized Signatory
ANNEX A (RECITALS)
TO
CREDIT AGREEMENT
1. DEFINITIONS
Capitalized terms used in this Agreement and the other Loan Documents
shall have (unless otherwise provided elsewhere in the Loan Documents) the
following respective meanings, and all references to Sections, Exhibits,
Schedules or Annexes in the following definitions shall refer to Sections,
Exhibits, Schedules or Annexes of or to the Agreement.
"Account Debtor" means any Person who may become obligated to
any Credit Party under, with respect to, or on account of, an Account.
"Accounting Changes" has the meaning ascribed thereto in
Annex D.
"Accounts" means all "accounts," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, including (a) all
accounts receivable, other receivables, book debts and other forms of
obligations (other than forms of obligations evidenced by Chattel Paper,
Documents or Instruments), whether arising out of goods sold or services
rendered by it or from any other transaction (including any such obligations
that may be characterized as an account or contract right under the Code), (b)
all of such Person's rights in, to and under all purchase orders or receipts for
goods or services, (c) all of such Person's rights to any goods represented by
any of the foregoing (including unpaid sellers' rights of rescission, replevin,
reclamation and stoppage in transit and rights to returned, reclaimed or
repossessed goods), (d) all monies due or to become due to such Person, under
all purchase orders and contracts for the sale of goods or the performance of
services or both by such Person or in connection with any other transaction
(whether or not yet earned by performance on the part of such Person), including
the right to receive the proceeds of said purchase orders and contracts, (e) all
health care insurance receivables and (f) all collateral security and guaranties
of any kind, given by any Account Debtor or any other Person with respect to any
of the foregoing.
"Acknowledgement Agreement" has the meaning ascribed to it in
Section 1.15(d).
"Additional Lender" has the meaning ascribed to it in Section
1.15.
"Affected Lender" has the meaning ascribed to it in Section
1.12(c).
"Affiliate" means, with respect to any Person, (a) each Person
that, directly or indirectly, owns or controls, whether beneficially, or as a
trustee, guardian or other fiduciary, 5% or more of the Stock having ordinary
voting power in the election of directors of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person, (c) each
of such Person's officers, directors, joint venturers and partners and (d) in
the case of Credit Parties, the immediate family members, spouses and lineal
descendants of individuals who are Affiliates of any Credit Party. For the
purposes of this definition, "control" of a Person shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of its
A-1
management or policies, whether through the ownership of voting securities, by
contract or otherwise; provided, however, that the term "Affiliate" shall
specifically exclude Agent and each Lender.
"Agent" has the meaning ascribed to it in the Preamble of this
Agreement.
"Agreement" has the meaning ascribed to it in the Preamble of
this Agreement.
"Allocable Amount" means, with respect to any Borrower and as
of any date of determination, the maximum amount of the claim that could then be
recovered from such Borrower under Section 12 without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or
under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law.
"Applicable Percentage" means (a) 3.0%, in the case of a
prepayment or payment after acceleration on or prior to the first anniversary of
the Closing Date, (b) 2.0%, in the case of a prepayment or payment after
acceleration after the first anniversary of the Closing Date but on or prior to
the second anniversary of the Closing Date, and (c) 1.0%, in the case of a
prepayment or payment after acceleration after the second anniversary of the
Closing Date but on or prior to the third anniversary of the Closing Date.
"Appendices" has the meaning ascribed to it in the Recitals to
this Agreement.
"A Rated Bank" has the meaning ascribed to it in Section 6.2.
"Assignment Agreement" has the meaning ascribed to it in
Section 9.1(a).
"Assignments of Leases" means each Assignment of Rents and
Leases of even date herewith executed by each Borrower that is a signatory
hereto in favor of Agent, on behalf of itself and Lenders, and any assignments
of rents and leases executed after the Closing Date by any Credit Party in favor
of Agent, on behalf of itself and Lenders (as required by any Loan Document), in
each case, as amended, supplemented, restated, or otherwise modified from time
to time.
"Bankruptcy Code" means Title 11 of the United States Code, as
amended from time to time, and any successor statute thereto.
"Borrower Representative" means Holdings in its capacity as
Borrower Representative pursuant to Section 1.1(f).
"Borrowers" has the meaning ascribed to it in the Preamble of
this Agreement.
"Borrowing Availability" means, for each Facility, (a) the
lesser of (i) the Commitment of all Lenders as of that date less the aggregate
principal amount of Term Loans advanced prior to such date and (ii) 65% of
Borrowers' total cost to acquire and improve the real property for such
Facility.
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"BSA" has the meaning ascribed to it in Section 3.1(b).
"Business Day" means any day that is not a Saturday, a Sunday
or a day on which banks are required or permitted to be closed in the State of
New York.
"Capital Expenditures" means, with respect to any Facility,
all expenditures (by the expenditure of cash or the incurrence of Indebtedness)
by LTF in connection with such Facility during any measuring period for any
fixed assets or improvements or for replacements, substitutions or additions
thereto, in each case that that have a useful life of more than one year and
that are required to be capitalized under GAAP.
"Capital Lease" means, with respect to any Person, any lease
of any property (whether real, personal or mixed) by such Person as lessee that,
in accordance with GAAP, would be required to be classified and accounted for as
a capital lease on a balance sheet of such Person.
"Capital Lease Obligation" means, with respect to any Capital
Lease of any Person, the amount of the obligation of the lessee thereunder that,
in accordance with GAAP, would appear on a balance sheet of such lessee in
respect of such Capital Lease.
"CERCLA" has the meaning ascribed to it in the definition of
Environmental Laws included in Annex A.
"Certificate of Exemption" has the meaning ascribed to it in
Section 1.11(c).
"Change of Control" means any event, transaction or occurrence
as a result of which (a) LTF ceases to own and control all of the economic and
voting rights associated with all of the outstanding capital Stock of Holdings
or (b) Holdings ceases to own and control all of the economic and voting rights
associated with all of the outstanding capital Stock of each Borrower.
"Charges" means all federal, state, county, city, municipal,
local, foreign or other governmental taxes (including taxes owed to the PBGC at
the time due and payable), levies, assessments, charges, liens, claims or
encumbrances upon or relating to (a) the Collateral, (b) the Obligations, (c)
the employees, payroll, income or gross receipts of any Credit Party, (d) any
Credit Party's ownership or use of any properties or other assets, or (e) any
other aspect of any Credit Party's business.
"Chattel Paper" means any "chattel paper," as such term is
defined in the Code, including electronic chattel paper, now owned or hereafter
acquired by any Credit Party, wherever located.
"Closing Date" means December 31, 2003.
"Closing Checklist" means the schedule, including all
appendices, exhibits or schedules thereto, listing certain documents and
information to be delivered in connection with
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this Agreement, the other Loan Documents and the transactions contemplated
thereunder, in substantially the form of Section 1 of Annex B.
"Code" means the Uniform Commercial Code as the same may, from
time to time, be enacted and in effect in the State of New York; provided, that
in the event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of, or remedies with respect to, Agent's or
any Lender's Lien on any Collateral is governed by the Uniform Commercial Code
as enacted and in effect in a jurisdiction other than the State of New York, the
term "Code" shall mean the Uniform Commercial Code as enacted and in effect in
such other jurisdiction solely for purposes of the provisions thereof relating
to such attachment, perfection, priority or remedies and for purposes of
definitions related to such provisions.
"Collateral" means the property covered by the Collateral
Documents and any other property, real or personal, tangible or intangible, now
existing or hereafter acquired, that may at any time be or become subject to a
security interest or Lien in favor of Agent, on behalf of itself and Lenders, to
secure the Obligations.
"Collateral Documents" means the Security Agreements, the
Pledge Agreements, the Mortgages, the Assignments of Leases, the Guaranty
Agreement and all similar agreements entered into by any Person guaranteeing
payment of or granting a Lien upon property as security for payment of the
Obligations, in each case as amended, supplemented, restated, or otherwise
modified from time to time.
"Collection Account" means that certain account of Agent,
account number 000-000-00 in the name of Agent at Bankers Trust Company in New
York, New York ABA No. 021 001 033, or such other account as may be specified in
writing by Agent as the "Collection Account."
"Commitment" means, (a) as to any Lender, the aggregate
commitment of such Lender to make Term Loans as set forth on Annex G or in the
most recent Assignment Agreement executed by such Lender and, (b) as to all
Lenders, the aggregate commitment of all Lenders to make Term Loans, which
aggregate commitment shall be $35,000,000 on the Closing Date, as such amount
may be adjusted, if at all, from time to time in accordance with this Agreement.
"Commitment Termination Date" means the earliest of (a)
December 31, 2004, (b) the date of termination of Lenders' obligations to make
Term Loans or permit existing Term Loans to remain outstanding pursuant to
Section 8.2(b) and (c) the date of indefeasible prepayment in full by Borrowers
of the Term Loans and the permanent reduction of all Commitments to $0.
"Compliance Certificate" has the meaning ascribed to it in
Annex C.
"Control Letter" means a letter agreement between Agent and
(i) the issuer of uncertificated securities with respect to uncertificated
securities in the name of any Credit Party or (ii) a securities intermediary
with respect to securities, whether certificated or uncertificated, securities
entitlements and other financial assets held in a securities account in the name
of any
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Credit Party whereby, among other things, the issuer or securities intermediary
disclaims any security interest in the applicable financial assets, acknowledges
the Lien of Agent, on behalf of itself and Lenders, on such financial assets and
agrees to follow the instructions or entitlement orders of Agent without further
consent by the affected Credit Party.
"Copyright License" means any and all rights now owned or
hereafter acquired by any Credit Party under any written agreement granting any
right to use any Copyright or Copyright registration.
"Copyrights" means all of the following now owned or hereafter
adopted or acquired by any Credit Party: (a) all copyrights and general
intangibles of like nature (whether registered or unregistered), all
registrations and recordings thereof and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any similar office or agency of the United
States, any state or territory thereof, or any other country or any political
subdivision thereof, and (b) all reissues, extensions or renewals thereof.
"Credit Parties" means Holdings, each Borrower and each
Subsidiary of Holdings or Borrower, if any.
"Default" means any event that, with the passage of time or
notice or both, would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning ascribed to it in Section
1.4(d).
"Deposit Agreement" means, with respect to each Facility, the
Deposit Agreement executed by LTF in favor Agent, on behalf of itself and
Lenders, pursuant to which LTF agrees to pay Deposits to Agent, for the benefit
of Agent and Lenders, to secure the Obligations related to such Facility.
"Deposits" means, with respect to any Facility for any Fiscal
Month, the deposits related to such Fiscal Month and paid by LTF to Agent in the
subsequent Fiscal Month, in accordance with the Deposit Agreement.
"Disclosure Schedules" means the Schedules prepared by
Borrowers and denominated as Disclosure Schedules 1.3 through 6.7 in the Index
of Appendices to this Agreement.
"Documents" means all "documents," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, wherever located.
"Dollars" or "$" means lawful currency of the United States of
America.
"EBITDA" means, with respect to any Facility for any
applicable period, LTF's net income or loss after taxes for such period
(excluding any after-tax gains or losses on the sale of assets other than the
sale of Inventory in the ordinary course of business and excluding other
after-tax extraordinary gains or losses); plus interest expense, income and
franchise tax expense,
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depreciation, amortization and lease payments related to the applicable Facility
Lease, in each case, to the extent deducted in determining LTF's net income for
such Facility for such period in accordance with GAAP.
"Environmental Indemnity Agreements" means each Environmental
Indemnity Agreement executed by LTF, Holdings, and any Borrower in favor of
Agent, for the benefit of Agent and Lenders, with respect to the Facilities, all
in form and substance reasonably satisfactory to Agent.
"Environmental Laws" means all applicable federal, state,
local and foreign laws, statutes, ordinances, codes, rules, standards and
regulations, now or hereafter in effect, and any applicable judicial or
administrative interpretation thereof, including any applicable judicial or
administrative order, consent decree, order or judgment, imposing liability or
standards of conduct for or relating to the regulation and protection of human
health, safety, the environment and natural resources (including ambient air,
surface water, groundwater, wetlands, land surface or subsurface strata,
wildlife, aquatic species and vegetation). Environmental Laws include the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
(42 U.S.C. Sections 9601 et seq.) ("CERCLA"); the Hazardous Materials
Transportation Authorization Act of 1994 (49 U.S.C. Sections 5101 et seq.); the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Sections 136 et
seq.); the Solid Waste Disposal Act (42 U.S.C. Sections 6901 et seq.); the
Toxic Substance Control Act (15 U.S.C. Sections 2601 et seq.); the Clean Air Act
(42 U.S.C. Sections 7401 et seq.); the Federal Water Pollution Control Act (33
U.S.C. Sections 1251 et seq.); the Occupational Safety and Health Act (29 U.S.C.
Sections 651 et seq.); the Safe Drinking Water Act (42 U.S.C. Sections 300(f)
et seq.), any and all regulations promulgated thereunder, all analogous state,
local and foreign counterparts or equivalents and any transfer of ownership
notification or approval statutes.
"Environmental Liabilities" means, with respect to any Person,
all liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws or Environmental Permits or in connection
with any Release or presence of a Hazardous Material whether on, at, in, under,
from, about or in the vicinity of any real or personal property.
"Environmental Permits" means all permits, licenses,
authorizations, certificates, approvals or registrations required by any
Governmental Authority under any Environmental Laws.
"Equipment" means all "equipment," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, wherever located
and, in any event, including all such Person's machinery and equipment,
including processing equipment, conveyors,
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machine tools, data processing and computer equipment, including embedded
software and peripheral equipment and all engineering, processing and
manufacturing equipment, office machinery, furniture, materials handling
equipment, tools, attachments, accessories, automotive equipment, trailers,
trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock and other
equipment of every kind and nature, trade fixtures and fixtures not forming a
part of real property, together with all additions and accessions thereto,
replacements therefor, all parts therefor, all substitutes for any of the
foregoing, fuel therefor, and all manuals, drawings, instructions, warranties
and rights with respect thereto, and all products and proceeds thereof and
condemnation awards and insurance proceeds with respect thereto.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any regulations promulgated thereunder.
"ERISA Affiliate" means, with respect to any Credit Party, any
trade or business (whether or not incorporated) that, together with such Credit
Party, are treated as a single employer within the meaning of Sections 414(b),
(c), (m) or (o) of the IRC.
"ERISA Event" means, with respect to any Credit Party or any
ERISA Affiliate of a Credit Party, (a) any event described in Section 4043(c) of
ERISA with respect to a Title IV Plan; (b) the withdrawal of any Credit Party or
any ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA during
a plan year in which it was a substantial employer, as defined in Section
4001(a)(2) of ERISA; (c) the complete or partial withdrawal of any Credit Party
or any ERISA Affiliate from any Multiemployer Plan; (d) the filing of a notice
of intent to terminate a Title IV Plan or the treatment of a plan amendment as a
termination under Section 4041 of ERISA; (e) the institution of proceedings to
terminate a Title IV Plan or Multiemployer Plan by the PBGC; (f) the failure by
any Credit Party or any ERISA Affiliate to make when due required contributions
to a Multiemployer Plan or Title IV Plan unless such failure is cured within
thirty days; (g) any other event or condition that might reasonably be expected
to constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan
or for the imposition of liability under Section 4069 or Section 4212(c) of
ERISA; (h) the termination of a Multiemployer Plan under Section 4041A of ERISA
or the reorganization or insolvency of a Multiemployer Plan under Section 4241
or Section 4245 of ERISA; (i) the loss of a Qualified Plan's qualification or
tax exempt status; or (j) the termination of a Plan described in Section 4064 of
ERISA.
"ESOP" means a Plan that is intended to satisfy the
requirements of Section 4975(e)(7) of the IRC.
"Event of Default" has the meaning ascribed to it in Section
8.1.
"Facility" means the land, buildings, improvements and other
real property interests in LTF prototypical fitness facilities to be located in
Tempe, Arizona; Gilbert, Arizona; Plano, Texas; Willowbrook, Texas; and Garland,
Texas or such other locations, in each case as agreed to by Agent and Lenders.
A-7
"Facility Funding Checklist" means the schedule, including all
appendices, exhibits or schedules thereto, listing certain documents and
information to be delivered in connection with this Agreement, the other Loan
Documents and the transactions contemplated thereunder with respect to any
Facility and the Term Loan related thereto, in Section 2 of Annex B.
"Facility Lease" means, with respect to any Facility, the
lease agreement by and between a Borrower and LTF, pursuant to which LTF leases
such Facility from the applicable Borrower on a triple net basis for a term
expiring at least fifteen years after the Closing Date and for a lease amount at
least equal to such Facility's Fixed Charges, which lease shall be
non-cancellable and cross-defaulted against all other Facility Leases.
"Fair Labor Standards Act" means the Fair Labor Standards Act,
29 U.S.C. Section 201 et seq.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System.
"Fee Letter" has the meaning ascribed to it in Section 1.5(a).
"Fees" means any and all fees payable to Agent or any Lender
pursuant to this Agreement or any other Loan Document.
"Financial Covenants" means the financial covenants set forth
in Annex D.
"Financial Statements" means the consolidated and
consolidating income statements, statements of cash flows and balance sheets of
the Credit Parties, LTF, and their respective Subsidiaries, as applicable,
delivered in accordance with Sections 3.4 and 4 and Annex C.
"Fiscal Month" means any of the monthly accounting periods of
the Credit Parties and LTF.
"Fiscal Year" means any of the annual accounting periods of
the Credit Parties and LTF ending on December 31 of each year.
"Fixed Charge Ratio" means, with respect to any Facility, the
ratio of EBITDA minus non-financed Capital Expenditures to Fixed Charges;
calculated at the end of each Fiscal Month (a) on a cumulative basis from the
first full month prior to funding the Term Loan related to such Facility until a
cumulative twelve months of scheduled principal payments on such Term Loan have
been made and (b) thereafter, based on the last twelve-month period then ended.
"Fixed Charges" means, with respect to any Facility for any
fiscal period, the sum of (a) the aggregate of all Interest Expense, (b)
scheduled payments of principal with respect to Indebtedness of the Borrower
that owns such Facility, including the related Term Loan, (c) income and
franchise tax expense determined in accordance with GAAP, and (d) payments with
respect to LTF's Capital Lease Obligations, in each case attributable to such
Facility for such
A-8
fiscal period and without duplication and, (e) to the extent such fiscal period
includes the Initial Calculation Period (or any portion thereof), interest and
principal attributable to the Term Loan related to such Facility and Capital
Lease Obligations attributable to such Facility, giving pro forma effect to such
Term Loan and the LTF Capital Leases related to such Facility.
"Foreign Lender" has the meaning ascribed to it in Section
1.11(c).
"Funded Debt" means, with respect to any Person, without
duplication, all Indebtedness for borrowed money evidenced by notes, bonds,
debentures, or similar evidences of Indebtedness that by its terms matures more
than one year from, or is directly or indirectly renewable or extendible at such
Person's option under a revolving credit or similar agreement obligating the
lender or lenders to extend credit over a period of more than one year from the
date of creation thereof, and specifically including Capital Lease Obligations,
current maturities of long-term debt, revolving credit and short-term debt
extendible beyond one year at the option of the debtor, and also including, in
the case of Borrowers, the Obligations and, without duplication, Guaranteed
Indebtedness consisting of guaranties of Funded Debt of other Persons.
"GAAP" means generally accepted accounting principles in the
United States of America consistently applied, as such term is further defined
in Annex D.
"GE Capital" has the meaning ascribed to it in the Preamble of
this Agreement.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Granting Lender" has the meaning ascribed to it in Section
9.1(f).
"Guaranteed Indebtedness" means as to any Person, any
obligation of such Person guaranteeing, providing comfort or otherwise
supporting any Indebtedness, lease, dividend, or other obligation (the "Primary
Obligation") of any other Person (the "Primary Obligor") in any manner,
including any obligation or arrangement of such Person to (a) purchase or
repurchase any Primary Obligation, (b) advance or supply funds (i) for the
purchase or payment of any Primary Obligation or (ii) to maintain working
capital or equity capital of the Primary Obligor or otherwise to maintain the
net worth or solvency or any balance sheet condition of the Primary Obligor, (c)
purchase property, securities or services primarily for the purpose of assuring
the owner of any Primary Obligation of the ability of the Primary Obligor to
make payment of the Primary Obligation, (d) protect the beneficiary of such
arrangement from loss (other than product warranties given in the ordinary
course of business) or (e) indemnify the owner of any Primary Obligation against
loss in respect thereof. The amount of any Guaranteed Indebtedness at any time
shall be deemed to be an amount equal to the lesser at such time of (x) the
stated or determinable amount of the Primary Obligation in respect of which such
Guaranteed Indebtedness is incurred and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Indebtedness, or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect thereof.
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"Guarantor Payment" has the meaning ascribed to it in Section
12.7.
"Guaranty Agreement" means the Guaranty of even date herewith
executed by Holdings in favor of Agent, on behalf of itself and Lenders,
guaranteeing the Obligations of Borrowers to Agent and Lenders.
"Hazardous Material" means any substance, material or waste
that is regulated by, or forms the basis of liability now or hereafter under any
Environmental Laws, including any material or substance that is (a) defined as a
"solid waste," "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "pollutant,"
"contaminant," "hazardous constituent," "special waste," "toxic substance" or
other similar term or phrase under any Environmental Laws or (b) petroleum or
any fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB's),
or any radioactive substance.
"Holdings" has the meaning ascribed to it in the Preamble of
this Agreement.
"Holdings Pledge Agreement" means the Pledge Agreement of even
date herewith executed by Holdings in favor of Agent, on behalf of itself and
Lenders, pledging all Stock of its Subsidiaries.
"Indebtedness" means, with respect to any Person, without
duplication, (a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property, payment for which is deferred six months or
more, but excluding obligations to trade creditors incurred in the ordinary
course of business that are unsecured and not overdue by more than six months
unless being contested in good faith, (b) all reimbursement and other
obligations with respect to letters of credit, bankers' acceptances and surety
bonds, whether or not matured, (c) all obligations evidenced by notes, bonds,
debentures or similar instruments, (d) all indebtedness created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Capital Lease Obligations and the present
value (discounted at the Interest Rate in effect on the Closing Date) of future
rental payments under all synthetic leases, (f) all obligations of such Person
under commodity purchase or option agreements or other commodity price hedging
arrangements, in each case whether contingent or matured, (g) all obligations of
such Person under any foreign exchange contract, currency swap agreement,
interest rate swap, cap or collar agreement or other similar agreement or
arrangement designed to alter the risks of that Person arising from fluctuations
in currency values or interest rates, in each case whether contingent or
matured, (h) all Indebtedness referred to above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property or other assets (including accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness, and (i) the
Obligations.
"Indemnified Liabilities" has the meaning ascribed to it in
Section 1.9.
"Indemnified Person" has the meaning ascribed to in Section
1.9.
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"Index Rate" means the highest per annum rate of interest
published by the Federal Reserve Board in the most current Federal Reserve
statistical release H.15 (519) entitled "Selected Interest Rates" as the 5-year
rate for U.S. Government Treasury Securities.
"Initial Calculation Period" means, with respect to any
Facility, the period from the first day of the Fiscal Month prior to the
applicable Term Loan funding date through (a) the last day of the Fiscal Month
including such funding date, if the funding date occurred on or before the
fifteenth calendar day of the month, or (b) the last day of the first full
Fiscal Month following such funding date, if the funding date occurred after the
fifteenth calendar day of the month.
"Initial Fixed Charge Ratio" means, with respect to any
Facility, the ratio of EBITDA plus Deposits minus non-financed Capital
Expenditures to Initial Fixed Charges, calculated at the end of each Fiscal
Month, (a) on a cumulative basis from the first full month prior to funding the
Term Loan related to such Facility until a cumulative twelve months scheduled
principal payments on such Term Loan have been made and (b) thereafter, based on
the last twelve-month period then ended.
"Initial Fixed Charges" means, with respect to any Facility
for any fiscal period, the sum of (a) the aggregate of all Interest Expense and
(b) scheduled payments of principal, in each case with respect to the Term Loan
related to such Facility for such fiscal period, and (c) to the extent such
fiscal period includes the Initial Calculation Period (or any portion thereof),
interest and principal attributable to the Term Loan related to such Facility,
giving pro forma effect to such Term Loan.
"Instruments" means all "instruments," as such term is defined
in the Code, now owned or hereafter acquired by any Credit Party, wherever
located, and, in any event, including all certificated securities, all
certificates of deposit, and all notes and other evidences of indebtedness,
other than instruments that constitute or are a part of a group of writings that
constitute Chattel Paper.
"Intellectual Property" means any and all Licenses, Patents,
Copyrights, Trademarks and the goodwill associated with such Trademarks.
"Interest Expense" means, with respect to any Facility for any
fiscal period, interest expense (whether cash or non-cash) attributable to such
Facility determined in accordance with GAAP for the relevant period ended on
such date, including such Facility's share of interest expense with respect to
any Funded Debt of the Borrower who owns such Facility and interest expense for
the relevant period that has been capitalized on the balance sheet of such
Borrower.
"Interest Rate" means a per annum rate equal to 4.5% plus the
Index Rate as of the funding date of the applicable Term Loan.
"Inventory" means all "inventory," as such term is defined in
the Code, now owned or hereafter acquired by any Borrower, wherever located, and
in any event including inventory, merchandise, goods and other personal property
that are held by or on behalf of any
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Borrower for sale or lease or are furnished or are to be furnished under a
contract of service or that constitute raw materials, work in process, finished
goods, returned goods or materials or supplies of any kind, nature or
description used or consumed or to be used or consumed in such Borrower's
business or in the processing, production, packaging, promotion, delivery or
shipping of the same, including other supplies and embedded software.
"IRC" means the Internal Revenue Code of 1986 and all
regulations promulgated thereunder.
"IRS" means the Internal Revenue Service.
"Joinder Agreement" has the meaning ascribed to it in Section
1.14(a).
"Lenders" has the meaning ascribed to it in the Preamble of
this Agreement.
"Letter Agreement" means the Letter Agreement, dated as of the
date hereof, between LTF and Agent, for the benefit of Agent and Lenders.
"License" means any Copyright License, Patent License,
Trademark License or other similar license of rights or interests now held or
hereafter acquired by any Credit Party.
"Lien" means any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of or agreement to give any financing statement perfecting a security interest
under the Code or comparable law of any jurisdiction).
"Litigation" has the meaning ascribed to it in Section 3.13.
"Loan Account" has the meaning ascribed to it in Section 1.8.
"Loan Documents" means this Agreement, the Notes, the
Collateral Documents, the Letter Agreement, the Environmental Indemnity
Agreements, the Deposit Agreements, the Joinder Agreements and all other
agreements, instruments, documents and certificates identified in the Closing
Checklist or the Facility Funding Checklist executed and delivered to, or in
favor of, Agent or any Lenders and including all other pledges, powers of
attorney, consents, assignments, contracts, notices, and all other written
matter whether heretofore, now or hereafter executed by or on behalf of any
Credit Party or any other Person and delivered to Agent or any Lender in
connection with this Agreement or the transactions contemplated thereby. Any
reference in this Agreement or any other Loan Document to a Loan Document shall
include all appendices, exhibits or schedules thereto, and all amendments,
restatements, supplements or other modifications thereto, and shall refer to
this Agreement or such Loan Document as the same may be in effect at any and all
times such reference becomes operative.
"LTF" has the meaning ascribed to it in the Recitals of this
Agreement.
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"LTFAZ" has the meaning ascribed to it in the Preamble of this
Agreement.
"LTF Pledge Agreement" means the Pledge Agreement of even date
herewith executed by LTF in favor of Agent, on behalf of itself and Lenders,
pledging all Stock of Holdings.
"Make Whole Amount" means, as of any date of prepayment or
payment after acceleration, an amount equal to the greater of (a) the aggregate
present value of the remaining installments of the Term Loans, discounted to
such date at the Reinvestment Rate, less the aggregate present value of the
remaining installments of the Term Loans, discounted to such date at the
Interest Rates applicable to each such Term Loan, and (b) zero.
"Margin Stock" has the meaning ascribed to in Section 3.10.
"Material Adverse Effect" means a material adverse effect on
(a) the business, assets, operations, prospects or financial or other condition
of the Credit Parties, taken as a whole, or LTF, (b) any Borrower's ability to
pay any of the Term Loans or any of the other Obligations in accordance with the
terms of this Agreement, (c) the Collateral or Agent's Liens, on behalf of
itself and Lenders, on the Collateral or the priority of such Liens, or (d)
Agent's or any Lender's rights and remedies under this Agreement and the other
Loan Documents.
"Maturity Date" means the earliest of (a) December 31, 2011
and (b) the date of termination of Lenders' obligations to permit existing Term
Loans to remain outstanding pursuant to Section 8.2(b).
"Maximum Amount" means, as of any date of determination, an
amount equal to the Commitment of all Lenders as of such date.
"Maximum Lawful Rate" has the meaning ascribed to it in
Section 1.4(e).
"Mortgages" means each of the mortgages, deeds of trust or
other real estate security documents executed by any Borrower in favor of Agent,
for the benefit of Agent and Lenders, with respect to the Real Estate, all in
form and substance reasonably satisfactory to Agent.
"Multiemployer Plan" means a "multiemployer plan," as defined
in Section 4001(a)(3) of ERISA, and to which any Credit Party or any ERISA
Affiliate is making, is obligated to make or has made or been obligated to make
contributions on behalf of participants who are or were employed by any of them.
"Non-Consenting Lender" has the meaning ascribed to it in
Section 11.2(d).
"Non-Funding Lender" has the meaning ascribed to it in Section
9.9(a)(ii).
"Note" has the meaning ascribed to it in Section 1.1(c).
"Notice of Borrowing" has the meaning ascribed to it in
Section 1.1(a).
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"Obligations" means all loans, advances, debts, liabilities
and obligations for the performance of covenants, tasks or duties or for payment
of monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable) owing by any Credit
Party to Agent or any Lender, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced by
any note, agreement or other instrument, arising under this Agreement or any of
the other Loan Documents. This term includes all principal, interest (including
all interest that accrues after the commencement of any case or proceeding by or
against any Credit Party in bankruptcy, whether or not allowed in such case or
proceeding), Fees, Charges, expenses, attorneys' fees and any other sum
chargeable to any Credit Party under this Agreement or any other Loan Document.
"OFAC" has the meaning ascribed to it in Section 3.1(b).
"Patent License" means rights under any written agreement now
owned or hereafter acquired by any Credit Party granting any right with respect
to any invention on which a Patent is in existence.
"Patents" means all of the following in which any Credit Party
now holds or hereafter acquires any interest: (a) all letters patent of the
United States or of any other country, all registrations and recordings thereof
and all applications for letters patent of the United States or of any other
country, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any state or territory thereof, or any other country or any
political subdivision thereof and (b) all reissues, continuations,
continuations-in-part or extensions thereof.
"Payment Date" means, as to any Term Loan, the first Business
Day of each month to occur while such Term Loan is outstanding, the Maturity
Date and the Termination Date; provided that if the funding date of such Term
Loan occurred after the fifteenth calendar day of the month, the first Business
Day of the first full calendar month following the funding date shall not be a
"Payment Date."
"Pay-off Letter" means, with respect to any Refinancing, a
letter reasonably satisfactory to Agent confirming that the Prior Lender
Obligations will be repaid in full from the proceeds of the related Term Loan
and all Liens upon any of the property of Borrowers in favor of the applicable
Prior Lender shall be terminated by such Prior Lender immediately upon such
payment.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means a Plan described in Section 3(2) of
ERISA.
"Perfection Certificate" means the Perfection Certificate,
dated as of the date hereof, executed by Borrowers in favor of Agent, for the
benefit of Agent and Lenders, together with all schedules thereto, as amended,
supplemented, restated, or otherwise modified from time to time.
"Permitted Acquisition" has the meaning ascribed to it in
Section 6.1(b).
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"Permitted Encumbrances" means the following encumbrances: (a)
Liens for taxes or assessments or other governmental Charges not yet due and
payable or which are being contested in accordance with Section 5.2(b); (b)
pledges or deposits of money securing statutory obligations under workmen's
compensation, unemployment insurance, social security or public liability laws
or similar legislation (excluding Liens under ERISA); (c) pledges or deposits of
money securing bids, tenders or contracts made in the ordinary course of
business; (d) inchoate and unperfected workers', mechanics' or similar liens
arising in the ordinary course of business and securing liabilities in an
outstanding aggregate amount not in excess of $100,000 at any time; (f) deposits
securing, or in lieu of, surety, appeal or customs bonds in proceedings to which
any Credit Party is a party; (g) any attachment or judgment lien not
constituting an Event of Default under Section 8.1(l); (h) zoning restrictions,
easements, licenses, or other restrictions on the use of any Real Estate or
other minor irregularities in title (including leasehold title) thereto, so long
as the same do not materially impair the use, value, or marketability of such
Real Estate; (i) presently existing or hereafter created Liens in favor of
Agent, on behalf of itself and Lenders; and (j) Liens expressly permitted under
Section 6.7(b).
"Person" means any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, limited liability company, institution, public benefit corporation,
other entity or government (whether federal, state, county, city, municipal,
local, foreign or otherwise, including any instrumentality, division, agency,
body or department thereof).
"Plan" means, at any time, an "employee benefit plan," as
defined in Section 3(3) of ERISA, that any Credit Party or any ERISA Affiliate
maintains, contributes to or has an obligation to contribute to or has
maintained, contributed to or had an obligation to contribute to at any time
within the past seven years on behalf of participants who are or were employed
by any Credit Party or any ERISA Affiliate.
"Pledge Agreements" means, collectively, the LTF Pledge
Agreement, the Holdings Pledge Agreement, and any pledge agreements executed
after the Closing Date by any Credit Party in favor of Agent, on behalf of
itself and Lenders (as required by any Loan Document), in each case, as amended,
supplemented, restated, or otherwise modified from time to time.
"Prepayment Premium" means an amount equal to the Applicable
Percentage multiplied by the sum of (i) the principal amount of the Term Loans
paid after acceleration or prepaid and (ii) the amount of the reduction of the
Commitment.
"Primary Obligation" has the meaning ascribed to it in the
definition of Guaranteed Indebtedness included in Annex A.
"Primary Obligor" has the meaning ascribed to it in the
definition of Guaranteed Indebtedness included in Annex A.
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"Prior Lender" means, with respect to any Facility, the lender
that provided construction financing for such Facility and held a security
interest in or Lien on the Facility prior to the Term Loan advance related to
such Facility.
"Prior Lender Obligations" means, with respect to any
Facility, the payment and performance obligations of any Person to a Prior
Lender under the loan documents evidencing the construction loan related to such
Facility and the Prior Lender's security interest in or Lien on the Facility.
"Pro Forma" means the unaudited consolidated and consolidating
balance sheet of LTF and the Credit Parties as of the last Fiscal Month for
which monthly financial statements were required by Annex C prior to the funding
date of any Facility, after giving pro forma effect to the Related Transactions.
"Projections" means LTF's and the Credit Parties' forecasted
consolidated and consolidating: (a) balance sheets; (b) income statements; (c)
cash flow statements; and (d) capitalization statements, all prepared on a
Subsidiary-by-Subsidiary or Facility-by-Facility basis, if applicable, and
otherwise consistent with the historical Financial Statements of LTF and its
Subsidiaries, together with appropriate supporting details and a statement of
underlying assumptions.
"Proposed Change" has the meaning ascribed to it in Section
11.2(d).
"Pro Rata Share" means, with respect to any Lender, (a) prior
to the Commitment Termination Date, the percentage obtained by dividing (i) the
Commitment of such Lender by (ii) the aggregate Commitments of all Lenders and
(b) on and after the Commitment Termination Date, the Pro Rata Share Outstanding
of all Term Loans.
"Pro Rata Share Advanced" means, with respect to any Lender,
the percentage obtained by dividing (i) the principal amount of the applicable
Term Loan advanced or to be advanced by such Lender by (ii) the principal amount
of such Term Loan.
"Pro Rata Share Available" means, with respect to any Lender,
the percentage obtained by dividing (i) the difference between the Commitment of
such Lender and the aggregate principal amount of the Term Loans held by such
Lender by (ii) the difference between the Maximum Amount and the aggregate
principal amount of the Term Loans held by all Lenders.
"Pro Rata Share Outstanding" means, with respect to any
Lender, (a) as to any Term Loan, the percentage obtained by dividing (i) the
outstanding principal amount of such Term Loan held by such Lender by (ii) the
outstanding principal amount of such Term Loan, and (b) as to all Term Loans
outstanding, the percentage obtained by dividing (i) the aggregate outstanding
principal amount of the Term Loans held by such Lender by (ii) the aggregate
outstanding principal amount of the Term Loans held by all Lenders.
"Qualified Plan" means a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.
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"Qualified Assignee" means (a) any Lender, any Affiliate of
any Lender and, with respect to any Lender that is an investment fund that
invests in commercial loans, 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, and (b) any
commercial bank, savings and loan association or savings bank or any other
entity which is an "accredited investor" (as defined in Regulation D under the
Securities Act of 1933) which extends credit or buys loans as one of its
businesses, including insurance companies, mutual funds, lease financing
companies and commercial finance companies, in each case, which has a rating of
BBB or higher from Standard & Poor's Ratings Group and a rating of Baa2 or
higher from Xxxxx'x Investors Service, Inc. at the date that it becomes a Lender
and which, through its applicable lending office, is capable of lending to
Borrowers without the imposition of any withholding or similar taxes; provided
that no Person determined by Agent, in its discretion, to be acting in the
capacity of a vulture fund or distressed debt purchaser shall be a Qualified
Assignee, and no Person or Affiliate of such Person (other than a Person that is
already a Lender) holding Stock issued by any Credit Party or LTF shall be a
Qualified Assignee.
"Ratable Share" means, with respect to any Borrower, the
aggregate principal amount of the Term Loans advanced to such Borrower and
evidenced by the Notes executed by such Borrower.
"Real Estate" has the meaning ascribed to it in Section 3.6.
"Refinancing" means, with respect to any Facility, the
repayment in full by Borrowers of the Prior Lender Obligations related to such
Facility on the funding date of the Term Loan related to such Facility.
"Reinvestment Rate" means, as of any date of prepayment or
payment after acceleration, a per annum rate equal to the sum of 0.50% and the
Yield of United States Treasury Notes with a maturity equal to the number of
months from such date to the Maturity Date. If no maturity exactly corresponds
to the number of months from such date to the Maturity Date, the Yield of the
United States Treasury Notes shall be interpolated on a straight-line basis,
utilizing the yields for the two maturities that most closely correspond to the
remaining term, as determined by Agent in its sole discretion, which
determination shall be final, binding and conclusive absent manifest error.
"Related Transactions" means, with respect to any Facility,
the Term Loan related to such Facility, the acquisition of the Facility by a
Borrower, the Refinancing, the execution of the Facility Lease, the payment of
all fees, costs and expenses associated with all of the foregoing and the
execution and delivery of the Related Transactions Documents.
"Related Transactions Documents" means, with respect to any
Facility, the related Loan Documents, the Deed evidencing the acquisition of
such Facility by a Borrower, the Facility Lease, the Pay-off Letter and all
other agreements or instruments executed in connection with the Related
Transactions.
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"Release" means any release, threatened release, spill,
emission, leaking, pumping, pouring, emitting, emptying, escape, injection,
deposit, disposal, discharge, dispersal, dumping, leaching or migration of
Hazardous Material in the indoor or outdoor environment, including the movement
of Hazardous Material through or in the air, soil, surface water, ground water
or property.
"Replacement Lender" has the meaning ascribed to it in Section
1.12(c).
"Requisite Lenders" means, (a) prior to the Commitment
Termination Date, Lenders having more than 66 2/3% of the Commitments of all
Lenders and, (b) on and after the Commitment Termination Date, Lenders having
more than 66 2/3% of the aggregate outstanding amount of all Term Loans.
"Restricted Payment" means, with respect to any Credit Party,
(a) the declaration or payment of any dividend or the incurrence of any
liability to make any other payment or distribution of cash or other property or
assets in respect of Stock; (b) any payment on account of the purchase,
redemption, defeasance, sinking fund or other retirement of such Person's Stock
or any other payment or distribution made in respect thereof, either directly or
indirectly; (c) any payment or prepayment of principal of, premium, if any, or
interest, fees or other charges on or with respect to, and any redemption,
purchase, retirement, defeasance, sinking fund or similar payment and any claim
for rescission with respect to, any Subordinated Debt; (d) any payment made to
redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire Stock of such Person
now or hereafter outstanding; (e) any payment of a claim for the rescission of
the purchase or sale of, or for material damages arising from the purchase or
sale of, any shares of such Person's Stock or of a claim for reimbursement,
indemnification or contribution arising out of or related to any such claim for
damages or rescission; (f) any payment, loan, contribution, or other transfer of
funds or other property to any Stockholder of such Person; and (g) any payment
of management fees (or other fees of a similar nature) by such Person to any
Stockholder of such Person or its Affiliates.
"Retiree Welfare Plan" means, at any time, a Welfare Plan that
provides for continuing coverage or benefits for any participant or any
beneficiary of a participant after such participant's termination of employment,
other than continuation coverage provided pursuant to Section 4980B of the IRC
and at the sole expense of the participant or the beneficiary of the
participant.
"Security Agreements" means the Security Agreements of even
date herewith executed by each Borrower that is a signatory hereto and Holdings
in favor of Agent, on behalf of itself and Lenders, and any other security
agreements executed after the Closing Date by any Credit Party (as required by
any Loan Document), in each case, as amended, supplemented, restated, or
otherwise modified from time to time.
"Settlement Date" has the meaning ascribed to it in Section
9.9(a)(ii).
"Solvent" means, with respect to any Person on a particular
date, that on such date (a) the fair value of the property of such Person is
greater than the total amount of liabilities,
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including contingent liabilities, of such Person; (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured; (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature; and (d) such Person is not engaged in
a business or transaction, and is not about to engage in a business or
transaction, for which such Person's property would constitute an unreasonably
small capital. The amount of contingent liabilities (such as litigation,
guaranties and pension plan liabilities) at any time shall be computed as the
amount that, in light of all the facts and circumstances existing at the time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"SPC" has the meaning ascribed to it in Section 9.1(f).
"Stock" means all shares, options, warrants, general or
limited partnership interests, membership interests or other equivalents
(regardless of how designated) of or in a corporation, partnership, limited
liability company or equivalent entity, whether voting or nonvoting, including
common stock, preferred stock or any other "equity security" (as such term is
defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934).
"Stockholder" means, with respect to any Person, each holder
of Stock of such Person.
"Subordinated Debt" means any Indebtedness of any Credit Party
subordinated to the Obligations in a manner and form satisfactory to Agent and
Lenders in their sole discretion, as to right and time of payment and as to any
other rights and remedies thereunder.
"Subsidiary" means, with respect to any Person, (a) any
corporation of which an aggregate of more than 50% of the outstanding Stock
having ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether, at the time, Stock of any other class
or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly,
owned legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of 50% or more of such Stock whether by proxy, agreement,
operation of law or otherwise, and (b) any partnership or limited liability
company in which such Person and/or one or more Subsidiaries of such Person
shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than 50% or of which any such Person is
a general partner or may exercise the powers of a general partner. Unless the
context otherwise requires, each reference to a Subsidiary shall be a reference
to a Subsidiary of a Borrower.
"Supermajority Lenders" means Lenders having (a) 80% or more
of the Commitments of all Lenders or, (b) after the Commitment Termination Date,
80% or more of the aggregate outstanding principal amount of Term Loans.
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"Taxes" means taxes, levies, imposts, deductions, Charges or
withholdings and all liabilities with respect thereto, excluding taxes imposed
on or measured by the net income of Agent or a Lender by the jurisdictions under
the laws of which Agent and Lenders are organized or conduct business or any
political subdivision thereof.
"Termination Date" means the date on which (a) the Term Loans
have been indefeasibly repaid in full, (b) all other Obligations have been
completely discharged and (c) Borrowers shall have no further right to borrow
any monies under this Agreement.
"Term Loan" has the meaning ascribed to it in Section 1.1(a).
"Title IV Plan" means a Pension Plan (other than a
Multiemployer Plan) that is covered by Title IV of ERISA and that any Credit
Party or ERISA Affiliate maintains, contributes to or has an obligation to
contribute to on behalf of participants who are or were employed by any of them.
"Trademark License" means rights under any written agreement
now owned or hereafter acquired by any Credit Party granting any right to use
any Trademark.
"Trademarks" means all of the following now owned or hereafter
existing or adopted or acquired by any Credit Party: (a) all trademarks, trade
names, corporate names, business names, trade styles, service marks, logos,
other source or business identifiers, prints and labels on which any of the
foregoing have appeared or appear, designs and general intangibles of like
nature (whether registered or unregistered), all registrations and recordings
thereof, and all applications in connection therewith, including registrations,
recordings and applications in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof; (b) all
reissues, extensions or renewals thereof; and (c) all goodwill associated with
or symbolized by any of the foregoing.
"Unfunded Pension Liability" means, at any time, the aggregate
amount, if any, of the sum of (a) the amount by which the present value of all
accrued benefits under each Title IV Plan exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, all determined as of the most recent valuation date for each such
Title IV Plan using the actuarial assumptions for funding purposes in effect
under such Title IV Plan, and (b) for a period of five years following a
transaction which might reasonably be expected to be covered by Section 4069 of
ERISA, the liabilities (whether or not accrued) that could be avoided by any
Credit Party or any ERISA Affiliate as a result of such transaction.
"Unused Facility Fee" has the meaning ascribed to it in
Section 1.5(b).
"Welfare Plan" means a Plan described in Section 3(i) of
ERISA.
2. RULES OF CONSTRUCTION
Rules of construction with respect to accounting terms used in
the Loan Documents shall be as set forth in Annex D. All other undefined terms
contained in any Loan Document shall,
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unless the context indicates otherwise, have the meanings provided for by the
Code as in effect in the State of New York to the extent the same are used or
defined therein. Unless otherwise specified, references in this Agreement or any
of the Appendices to a Section, subsection or clause refer to such Section,
subsection or clause as contained in this Agreement. The words "herein,"
"hereof" and "hereunder" and other words of similar import refer to this
Agreement as a whole, including all Annexes, Exhibits and Schedules, as the same
may from time to time be amended, restated, modified or supplemented, and not to
any particular section, subsection or clause contained in this Agreement or any
such Annex, Exhibit or Schedule.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including," "includes" and
"include" shall be deemed to be followed by the words "without limitation"; the
word "or" is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Loan Documents) or, in the case of governmental Persons, Persons succeeding to
the relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and any successor
statutes and regulations. Whenever any provision in any Loan Document refers to
the knowledge (or an analogous phrase) of any Person, such words are intended to
signify that such Person has actual knowledge or awareness of a particular fact
or circumstance or that such Person, if it had exercised reasonable diligence,
would have known or been aware of such fact or circumstance.
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ANNEX B (SECTION 2)
TO
CREDIT AGREEMENT
1. CLOSING CHECKLIST
In addition to, and not in limitation of, the conditions described in
Section 2.1, pursuant to Section 2.1(a), the following items must be received by
Agent in form and substance satisfactory to Agent on or prior to the Closing
Date:
A. Appendices. All Appendices to the Agreement.
B. Security Agreements. Duly executed originals of the Security
Agreements dated as of the Closing Date and all instruments, documents and
agreements executed pursuant thereto.
C. Insurance. Satisfactory evidence that the insurance policies
required by Section 5.4 are in full force and effect, together with appropriate
evidence showing loss payable and/or additional insured clauses or endorsements,
as requested by Agent, in favor of Agent, on behalf of itself and Lenders.
D. Security Interests and Code Filings. Evidence that Agent (for
the benefit of itself and Lenders) has a valid and perfected first-priority
security interest in the Collateral, including (i) such documents duly executed
by each Credit Party and LTF, as applicable, (including financing statements
under the Code and other applicable documents under the laws of any jurisdiction
with respect to the perfection of Liens) as Agent may request in order to
perfect its security interests in the Collateral and (ii) copies of Code search
reports listing all effective financing statements that name any Borrower as
debtor, together with copies of such financing statements, none of which shall
cover the Collateral, except for those relating to the Prior Lender Obligations
(all of which shall be terminated on the Closing Date).
E. Charter and Good Standing. For each Credit Party, such
Person's (a) charter or similar document and all amendments thereto, (b) good
standing certificate (including verification of tax status) in its state of
organization and (c) good standing certificates (including verification of tax
status) and certificates of qualification to conduct business in each
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification, each dated a recent date prior to the
Closing Date and certified by the applicable Secretary of State or other
authorized Governmental Authority. For LTF, its (a) charter or similar document
and all amendments thereto, (b) good standing certificate (including
verification of tax status) in its state of organization and (c) good standing
certificates (including verification of tax status) and certificates of
qualification to conduct business in Arizona and Texas, each dated a recent date
prior to the Closing Date and certified by the applicable Secretary of State or
other authorized Governmental Authority.
F. Bylaws and Resolutions. For each Credit Party and LTF, (a)
such Person's bylaws, operating agreement or similar document, together with all
amendments thereto and (b) resolutions of such Person's Board of Directors or
other governing body, approving and authorizing the execution, delivery and
performance of the Loan Documents to which such
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Person is a party and the Related Transactions, each certified as of the Closing
Date by such Person's corporate secretary or an assistant secretary as being in
full force and effect without any modification or amendment.
G. Incumbency Certificates. For each Credit Party and LTF,
signature and incumbency certificates of the officers of each such Person
executing any of the Loan Documents, certified as being true, accurate, correct
and complete as of the Closing Date by such Person's corporate secretary, an
assistant secretary or another officer of such Person who did not execute any of
the other Loan Documents.
H. Opinions of Counsel. Duly executed originals of opinions of
Xxxx Xxxx, General Counsel of LTF, and Faegre & Xxxxxx, LLP, counsel for the
Credit Parties and LTF, together with any local counsel opinions reasonably
requested by Agent, dated the Closing Date and accompanied by a letter addressed
to such counsel from the Credit Parties and LTF, authorizing and directing such
counsel to address its opinion to Agent, on behalf of Lenders, and to include in
such opinion an express statement to the effect that Agent and Lenders are
authorized to rely on such opinion.
I. Letter Agreement. Duly executed original of the Letter
Agreement.
J. Pledge Agreements. Duly executed originals of the Pledge
Agreements accompanied by share certificates representing all of the outstanding
Stock being pledged pursuant to such Pledge Agreement, stock powers for such
share certificates executed in blank and, with respect to any pledged limited
liability company interest, evidence that such limited liability company opted
in to Article 8 of the Code.
K. Holdings Guaranty. Duly executed original of the Guaranty
Agreement.
L. Accountants' Letters. A letter from the Credit Parties and LTF
to their independent auditors or independent certified public accountants,
authorizing such Persons to communicate with Agent and Lenders in accordance
with Section 4.2.
M. Fee Letter. Duly executed originals of the Fee Letter.
N. Officer's Certificate. Duly executed originals of a
certificate of the Chief Financial Officer or other similar officer of each
Credit Party and LTF, dated the Closing Date, stating that since December 31,
2002 (a) no event or condition has occurred or is existing which could
reasonably be expected to have a Material Adverse Effect; (b) there has been no
material adverse change in the industry in which such Person operates; (c) no
Litigation has been commenced which, if successful, would have a Material
Adverse Effect or could challenge any of the transactions contemplated by the
Loan Documents or the Related Transactions Documents; (d) there have been no
Restricted Payments made by any Borrower; and (e) there has been no material
increase in liabilities, liquidated or contingent, and no material decrease in
assets of such Person or any of its Subsidiaries.
O. Audited Financials; Financial Condition.
B-2
1. The Financial Statements, Projections and other
materials set forth in Section 3.4, certified by Borrower
Representative's Chief Financial Officer.
2. A certificate of the Chief Executive Officer and/or
the Chief Financial Officer of each Borrower, based on the Projections,
to the effect that (a) the Projections are based upon estimates and
assumptions stated therein, all of which such Borrower believes to be
reasonable and fair in light of current conditions and current facts
known to such Borrower and, as of the Closing Date, reflect such
Borrower's good faith and reasonable estimates of its future financial
performance and of the other information projected therein for the
period set forth therein, and (b) containing such other statements with
respect to the solvency of such Borrower and matters related thereto as
Agent shall request.
P. Other Documents. Such other certificates, documents and
agreements respecting any Credit Party as Agent, in its sole discretion, may
request
2. FACILITY FUNDING CHECKLIST
In addition to, and not in limitation of, the conditions described in
Section 2.2, pursuant to Section 1.1(a)(i), the following items must be received
by Agent in form and substance satisfactory to Agent on or prior to the funding
date of each Term Loan:
A. Notice of Borrowing. Duly executed originals of a Notice of
Borrowing.
B. Notes. Duly executed originals of the Notes for each
applicable Lender, dated the funding date.
C. Payoff Letter; Termination Statements. Copies of the duly
executed Pay-off Letter related to the applicable Facility, together with (a)
UCC-3 or other appropriate termination statements releasing all Liens of the
applicable Prior Lender upon personal property related to such Facility
(including any fixture filings related to the Real Estate), and (b) documents
evidencing the release of all Liens of the applicable Prior Lender upon any of
the Real Estate (including the applicable Facility).
D. Consents. Prior to the funding date of the first Term Loan
advanced by Lenders, a copy of a duly executed consent by the required parties
to that certain Second Amended and Restated Credit Agreement, dated as of July
19,2001, by and among LTF, Antares Capital Corporation, BNP Paribas, and the
other financial institutions party thereto (as amended, supplemented, restated
or otherwise modified from time to time) to the execution of the Loan Documents,
the creation of the Credit Parties, and the consummation of the Related
Transactions and the transactions contemplated by this Agreement; and a copy of
that certain Written Action of the Holders of the Series C Convertible Preferred
Stock and Series D Convertible Preferred Stock of Life Time Fitness, Inc., with
respect to the creation of the Credit Parties and the transactions contemplated
by this Agreement.
E. Letter of Direction; Use of Proceeds. A description of
Borrowers' sources and uses of funds as of the funding date, including the Term
Loan to be advanced on that date, and
B-3
duly executed originals of a letter of direction from Borrower Representative
addressed to Agent, on behalf of itself and Lenders, with respect to the
disbursement of the proceeds of the Term Loan.
F. Insurance. Satisfactory evidence that the insurance policies
required by Section 5.4 with respect to the applicable Facility are in full
force and effect, together with appropriate evidence showing loss payable and/or
additional insured clauses or endorsements, as requested by Agent, in favor of
Agent, on behalf of itself and Lenders.
G. Charter and Good Standing. For the applicable Borrower, a good
standing certificate (including verification of tax status) and certificate of
qualification to conduct business in the jurisdiction where the Facility is
located, dated a recent date prior to the funding date and certified by the
applicable Secretary of State or other authorized Governmental Authority. For
LTF, a good standing certificate (including verification of tax status) and
certificate of qualification to conduct business in the jurisdiction where the
Facility is located, dated a recent date prior to the funding date and certified
by the applicable Secretary of State or other authorized Governmental Authority.
H. Resolutions. For each Credit Party and LTF, resolutions of
such Person's Board of Directors or other governing body, approving and
authorizing the execution, delivery and performance of the Loan Documents to
which such Person is a party and the Related Transactions, each with respect to
the applicable Facility, certified as of the funding date by such Person's
corporate secretary or an assistant secretary as being in full force and effect
without any modification or amendment.
I. Opinions of Counsel. Duly executed originals of opinions of
Xxxx Xxxx, General Counsel of LTF, and Faegre & Xxxxxx, LLP, counsel for the
Credit Parties and LTF, together with any local counsel opinions reasonably
requested by Agent, dated the funding date and accompanied by a letter addressed
to such counsel from the Credit Parties and LTF, authorizing and directing such
counsel to address its opinion to Agent, on behalf of Lenders, and to include in
such opinion an express statement to the effect that Agent and Lenders are
authorized to rely on such opinion.
J. Officer's Certificate. Duly executed originals of a
certificate of the Chief Financial Officer or other similar officer of each
Credit Party and LTF, dated the funding date, stating that, since the Closing
Date, (a) no event or condition has occurred or is existing which could
reasonably be expected to have a Material Adverse Effect; (b) there has been no
material adverse change in the industry in which such Person operates; (c) no
Litigation has been commenced which, if successful, would have a Material
Adverse Effect or could challenge any of the transactions contemplated by the
Loan Documents or the Related Transactions Documents; (d) there have been no
Restricted Payments made by any Borrower; (e) there has been no material
increase in liabilities, liquidated or contingent, and no material decrease in
assets of such Person or any of its Subsidiaries; and (f) the representations
and warranties of such Person contained in any Loan Document are true and
correct as of the funding date, except to the extent that such representations
and warranties expressly relate to earlier dates and except for changes therein
expressly permitted or expressly contemplated by this Agreement.
B-4
K. Mortgage and Assignment of Leases. Mortgage and Assignment of
Leases covering all of the Real Estate and the Facility Lease related to the
applicable Facility, together with (a) a title insurance policy (including
Mechanics' Lien coverage), current as-built survey, zoning letters and a
certificate of occupancy; (b) evidence that counterparts of the Mortgage have
been recorded in all places to the extent necessary or desirable, in the
judgment of Agent, to create a valid and enforceable first-priority Lien
(subject to Permitted Encumbrances) on the Real Estate related to the applicable
Facility in favor of Agent, for the benefit of itself and Lenders (or in favor
of such other trustee as may be required or desired under local law); and (c) an
opinion of counsel in the state in which the applicable Facility is located from
counsel reasonably satisfactory to Agent.
L. Environmental Reports and Indemnity.
1. A Phase I Environmental Site Assessment Report,
consistent with American Society for Testing and Materials (ASTM)
Standard E 1527-94 and applicable state requirements, on the applicable
Facility, dated no more than six months prior to the funding date,
prepared by environmental engineers reasonably satisfactory to Agent.
2. Such environmental review and audit reports,
including Phase II reports, with respect to the applicable Facility as
Agent shall have requested.
3. Letters executed by the environmental firms preparing
such environmental reports, authorizing Agent and Lenders to rely on
such reports.
4. Duly executed original of an Environmental Agreement
for such Real Estate, dated the funding date.
M. Appraisal. An appraisal of each parcel of Real Estate related
to the applicable Facility.
N. Deposit Agreement. Duly executed originals of the Deposit
Agreement for such Facility, dated the funding date.
O. Cross-Guaranty. Duly executed originals of an acknowledgment
by each other Borrower, dated the funding date, acknowledging the Term Loan as
an Obligation guaranteed by each of them pursuant to Section 12 and reaffirming
the obligation of each of them under Section 12.
P. Guaranty. Duly executed original of an acknowledgment by
Holdings, dated the funding date, acknowledging the Term Loan as an Obligation
guaranteed by Holdings pursuant to the Guaranty Agreement and reaffirming the
obligation of Holdings under the Guaranty Agreement.
Q. Financial Condition. A certificate of the Chief Executive
Officer and/or the Chief Financial Officer of each Borrower, based on the Pro
Forma and Projections, to the effect that (a) such Borrower will be Solvent upon
the consummation of the Related Transaction for applicable Facility; (b) the Pro
Forma attached to such certificate fairly presents the financial condition of
B-5
such Borrower as of the date thereof after giving effect to the transactions
contemplated by the Loan Documents and the Related Transactions Documents with
respect to the Facility and was prepared by the Credit Parties and LTF giving
pro forma effect to the Related Transactions in accordance with GAAP, with only
such adjustments thereto as would be required in accordance with GAAP; and (c)
containing such other statements with respect to the solvency of such Borrower
and matters related thereto as Agent shall request.
R. Other Documents. Such other certificates, documents and
agreements respecting any Credit Party or any Affiliate of a Credit Party as
Agent, in its sole discretion, may request.
B-6
ANNEX C (SECTION 4.1)
TO
CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS -- REPORTING
The Credit Parties and LTF shall deliver or cause to be delivered to
Agent or to Agent and Lenders, as indicated, the following:
1. Monthly Financials. To Agent and Lenders, within thirty days after the
end of each Fiscal Month, financial information regarding the
Facilities and LTF and its Subsidiaries, certified by the Chief
Financial Officer of LTF, consisting of consolidated and consolidating
(a) unaudited balance sheets as of the close of such Fiscal Month and
the related statements of income for that portion of the Fiscal Year
ending as of the close of such Fiscal Month and (b) unaudited
statements of income for such Fiscal Month, setting forth in
comparative form the figures for the corresponding period in the prior
year and the figures contained in the Projections for such Fiscal Year,
all prepared in accordance with GAAP (subject to normal year-end
adjustments). Such financial information shall be accompanied by (i) a
statement in reasonable detail (each, a "Compliance Certificate")
showing the calculations used in determining compliance with the
applicable Financial Covenant for each Facility, in substantially the
form of Exhibit 4.1 and (ii) the certification of the Chief Financial
Officer of LTF that (A) such financial information presents fairly in
accordance with GAAP (subject to normal year-end adjustments) the
financial position and results of operations of the Facilities, LTF and
its Subsidiaries, on a consolidated and consolidating basis, in each
case as at the end of such Fiscal Month and for that portion of the
Fiscal Year then ended and (B) any other information presented is true,
correct and complete in all material respects and that there was no
Default or Event of Default in existence as of such time or, if a
Default or an Event of Default has occurred and is continuing,
describing the nature thereof and all efforts undertaken to cure such
Default or Event of Default.
2. Operating Plan. To Agent and Lenders, as soon as available, but not
later than thirty days after the end of each Fiscal Year, an annual
operating plan for the Facilities, LTF and its Subsidiaries, on a
consolidated and consolidating basis, approved by the Board of
Directors of LTF for the following Fiscal Year, which (i) includes a
statement of all of the material assumptions on which such plan is
based, (ii) includes monthly balance sheets and income statements for
the following year in form and substance consistent with, on the same
basis as, and in similar detail as the Projections delivered in
accordance with Section 3.4.
3. Annual Audited Financials. To Agent and Lenders, within ninety days
after the end of each Fiscal Year, audited Financial Statements for
LTF, the Credit Parties and their Subsidiaries on a consolidated and
(unaudited) consolidating basis, consisting of balance sheets and
statements of income and retained earnings and cash flows, setting
forth in comparative form in each case the figures for the previous
Fiscal Year, which Financial Statements shall be prepared in accordance
with GAAP and include an unqualified audit
C-1
opinion by an independent certified public accounting firm of national
standing or otherwise acceptable to Agent. Such Financial Statements
shall be accompanied by (a) a statement in reasonable detail showing
the calculations used in determining compliance with each of the
Financial Covenants, (b) a letter addressed to Agent, on behalf of
itself and Lenders, in form and substance reasonably satisfactory to
Agent and subject to standard qualifications required by
nationally-recognized accounting firms, signed by such accounting firm,
acknowledging that Agent and Lenders are entitled to rely upon such
accounting firm's opinion included in such audited Financial
Statements, (c) the annual letters to such accountants in connection
with their audit examination detailing contingent liabilities and
material litigation matters, and (d) the certification of the Chief
Executive Officer or Chief Financial Officer of LTF that all such
Financial Statements present fairly in accordance with GAAP the
financial position, results of operations and statements of cash flows
of LTF, the Credit Parties and their Subsidiaries on a consolidated and
consolidating basis, as at the end of such Fiscal Year and for the
period then ended, and that there was no Default or Event of Default in
existence as of such time or, if a Default or an Event of Default has
occurred and is continuing, describing the nature thereof and all
efforts undertaken to cure such Default or Event of Default.
4. Management Letters. To Agent and Lenders, within five Business Days
after receipt thereof by any Credit Party or LTF, copies of all
management letters, exception reports or similar letters or reports
received by such Person from its independent certified public
accountants.
5. Default Notices. To Agent and Lenders, as soon as practicable, and in
any event within five Business Days after an executive officer of any
Credit Party or LTF has actual knowledge of the existence of any
Default, Event of Default or other event that has had a Material
Adverse Effect, telephonic or telecopied notice specifying the nature
of such Default or Event of Default or other event, including the
anticipated effect thereof, which notice, if given telephonically,
shall be promptly confirmed in writing on the next Business Day.
6. SEC Filings and Press Releases. To Agent and Lenders, promptly upon
their becoming available, copies of: (i) all Financial Statements,
reports, notices and proxy statements made publicly available by any
Credit Party or LTF to its security holders; (ii) all regular and
periodic reports and all registration statements and prospectuses, if
any, filed by any Credit Party or LTF with any securities exchange or
with the Securities and Exchange Commission or any governmental or
private regulatory authority; and (iii) all press releases and other
statements made available by any Credit Party or LTF to the public
concerning material changes or developments in the business of any such
Person.
7. Subordinated Debt and Equity Notices. To Agent, as soon as practicable,
copies of all material written notices given or received by any Credit
Party or LTF with respect to any Subordinated Debt or Stock of such
Person, and, within two Business Days after any Credit Party or LTF
obtains knowledge of any matured or unmatured event of default with
respect to any Subordinated Debt, notice of such event of default.
C-2
8. Supplemental Schedules. To Agent, supplemental disclosures, if any,
required by Section 5.6.
9. Litigation. To Agent in writing, promptly upon learning thereof, notice
of any Litigation that (a) seeks damages in excess of $100,000, (ii)
seeks injunctive relief, (iii) is asserted or instituted against any
Plan, its fiduciaries or its assets or against any Credit Party or
ERISA Affiliate in connection with any Plan, (iv) alleges criminal
misconduct by any Credit Party or LTF or (v) alleges the violation of
any law regarding, or seeks remedies in connection with, any
Environmental Liabilities.
10. Insurance Notices. To Agent, disclosure of losses or casualties
required by Section 5.4.
11. Other Documents. To Agent and Lenders, such other financial and other
information respecting any Credit Party's or LTF's business or
financial condition as Agent or any Lender shall from time to time
reasonably request.
C-3
ANNEX D (SECTION 6.10)
TO
CREDIT AGREEMENT
FINANCIAL COVENANTS
The Credit Parties shall not breach or fail to comply with any of the following
Financial Covenants, each of which shall be calculated in accordance with GAAP
consistently applied:
1. INITIAL FIXED CHARGE RATIO. For the first eighteen full Fiscal Months
following funding of any Term Loan or until Agent shall receive
evidence satisfactory to Agent, in its sole discretion, that the
related Facility's Fixed Charge Ratio is not less than 1.20 to 1.00,
each Facility shall have an Initial Fixed Charge Ratio of not less than
1.00 to 1.00.
2. FIXED CHARGE RATIO. After the first eighteen full Fiscal Months
following funding of any Term Loan or sooner if Agent shall have
received evidence satisfactory to Agent, in its sole discretion, that
the related Facility's Fixed Charge Ratio is not less than 1.20 to
1.00, each Facility shall have a Fixed Charge Ratio of not less than
1.20 to 1.00.
Unless otherwise specifically provided herein, any accounting term used
in this Agreement shall have the meaning customarily given such term in
accordance with GAAP, and all financial computations hereunder shall be computed
in accordance with GAAP consistently applied. That certain items or computations
are explicitly modified by the phrase "in accordance with GAAP" shall in no way
be construed to limit the foregoing. If any Accounting Changes occur and such
changes result in a change in the calculation of the Financial Covenants,
standards or terms used in any Loan Document, then the Credit Parties, Agent and
Lenders agree to enter into negotiations in order to amend such provisions of
the Loan Documents so as to equitably reflect such Accounting Changes with the
desired result that the criteria for evaluating the Credit Parties', LTF's and
the Facilities' financial conditions shall be the same after such Accounting
Changes as if such Accounting Changes had not been made; provided, however, that
the agreement of Requisite Lenders to any required amendments of such provisions
shall be sufficient to bind all Lenders. "Accounting Changes" means (i) changes
in accounting principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board of the
American Institute of Certified Public Accountants (or any successor thereto or
any agency with similar functions), (ii) changes in accounting principles
concurred in by any Credit Party's or LTF's certified public accountants; (iii)
purchase accounting adjustments under A.P.B. 16 or 17 and EITF 88-16, and the
application of the accounting principles set forth in FASB 109, including the
establishment of reserves pursuant thereto and any subsequent reversal (in whole
or in part) of such reserves; and (iv) the reversal of any reserves established
as a result of purchase accounting adjustments. All such adjustments resulting
from expenditures made subsequent to the Closing Date (including capitalization
of costs and expenses or payment of pre-Closing Date liabilities) shall be
treated as expenses in the period the expenditures are made and deducted as part
of the calculation of EBITDA in such period. If Agent, Borrowers and Requisite
Lenders agree upon the required amendments, then after appropriate amendments
have been executed and the underlying Accounting Change with
D-1
respect thereto has been implemented, any reference to GAAP contained in the
Loan Documents shall, only to the extent of such Accounting Change, refer to
GAAP, consistently applied after giving effect to the implementation of such
Accounting Change. If Agent, Borrowers and Requisite Lenders cannot agree upon
the required amendments within thirty days following the date of implementation
of any Accounting Change, then all Financial Statements delivered and all
calculations of the Financial Covenants and other standards and terms in
accordance with the Loan Documents shall be prepared, delivered and made without
regard to the underlying Accounting Change. For purposes of Section 8.1, a
breach of a Financial Covenant contained in this Annex D shall be deemed to have
occurred as of any date of determination by Agent or as of the last day of any
specified measurement period, regardless of when the Financial Statements
reflecting such breach are delivered to Agent.
D-2
ANNEX E (SECTION 9.9(a))
TO
CREDIT AGREEMENT
WIRE TRANSFER INFORMATION
Name: General Electric Capital Corporation
Bank: Bankers Trust
Xxx Xxxxxx'x Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA #: 000000000
Account #: 00000000
Account Name: CFI Incoming Cash
Reference: Operations / Life Time Fitness
E-1
ANNEX F (SECTION 11.10)
TO
CREDIT AGREEMENT
NOTICE ADDRESSES
1. IF TO AGENT OR GE CAPITAL, AT
General Electric Capital Corporation
000 Xxxxxxx Xxxxx, Xxxxx 00
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx Xxxxx, Account Manager
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
E-Mail: xxxx.xxxxx@xx.xxx
with copies to:
General Electric Capital Corporation
Capital Funding, Inc.
000 X. Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X' Xxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
E-mail: xxxx.x'xxxxxx@xx.xxx
and
Husch & Eppenberger, LLC
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxxxx X. Rockers, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
E-Mail: xxxxxxxxxxx.xxxxxxx@xxxxx.xxx
2. If to any Borrower or to Holdings, to Borrower Representative, at
LTFMF Real Estate Holdings, LLC
0000 Xxxx Xxxx Xxxxxxx
Xxxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxx, General Counsel
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
E-Mail: xxxxx@xxxxxxxxxxxxxxx.xxx
F-1
with copies to:
Faegre & Xxxxxx, LLP
2200 Xxxxx Fargo Center
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
E-mail: xxxxxxxxx@xxxxxx.xxx
3. If to LTF, at
Life Time Fitness, Inc.
0000 Xxxx Xxxx Xxxxxxx
Xxxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxx, General Counsel
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
E-Mail: xxxxx@xxxxxxxxxxxxxxx.xxx
with copies to:
Faegre & Xxxxxx, LLP
2200 Xxxxx Fargo Center
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
E-mail: xxxxxxxxx@xxxxxx.xxx
4. If to Marathon Structured Finance Fund, Ltd. at
Marathon Structured Finance Fund, Ltd.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
E-Mail: xxxxx@xxxxxxxxxxxx.xxx
F-2
with copies to:
Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
E-Mail: xxxxxxx@xxxxxxx.xxx
F-3
ANNEX G (FROM ANNEX A - "COMMITMENTS")
TO
CREDIT AGREEMENT
COMMITMENTS
COMMITMENT LENDER
---------- ------
$25,000,000 GE Capital
$10,000,000 Marathon Structured Finance
Fund, Ltd.
$35,000,000 TOTAL
G-1
